Eisai Co., Ltd. | Investor Relations

Q1	What sales of Zonegran and other products does Eisai Inc. forecast at this point?
A1	Eisai is taking over marketing of Zonegran from Elan, and currently forecasts 2005 annual sales of $dollar150 million in the U.S. In Europe, an application for approval was filed by Elan last November, and we expect to receive an approval within 2004.
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Q2	With respect to the financial result in Japan for 2003 fiscal period, why did operating income decline 2 billion yen from the previous year in spite of net sales growth of 10 billion yen? Do you have confidence in securing solid profits by "Japan Power"?
A2	The profitability in Japan for this fiscal year leveled out due to the expanded marketing expenses for Pariet. We will pursue steady improvement in profitability through more enhanced management efficiency.

Q3	What are the sales forecasts for Aricept and Aciphex for fiscal year 2004in the U.S.?
A3	Given the follow wind by the recent launch of a new product, Eisai Inc. will strive for a challenging target for the growth of Aricept. Meanwhile, we aim at continuing steady growth for Aciphex under the harsh and complicated market condition due to severe competition by OTC and generic version of omeprazole.
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Q4	What is the global sales forecast for Aricept?
A4	We anticipate 153 billion yen on the premise of increases in each local currency.

Q5	You presented that the consolidated selling, general and administrative expenses forecast for fiscal year 2004 is not likely to increase from the previous period. Is it because you intend to reduce promotional expenses for Aciphex?
A5	We have made prudent investments in Aciphex and Aricept promotional activities since their launches. We expect to secure a solid profit. Janssen, the co-promoter of Aciphex, is also performing efficient promotion.
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Q6	The 'costs of goods sold' rate for this fiscal year is forecasted to decline to 18.5%percent despite the negative influence from the NHI price revision. What is the biggest factor for your positive forecast?
A6	The biggest factor is improvement of product mix. Scale merits and concentration to pharmaceutical business will make further contributions. Moreover, we still continue every effort to lowering bulk drug costs.

Q7	With respect to the sales force structure in the U.S., sales representatives in charge of neurology are likely overlapping those covering CNS. Do you plan to review the structure from the efficiency point of view of?
A7	We believe the reformed structure is rather efficient. The sales forces covering neurology can promote Zonegran for epilepsy together with Aricept for Alzheimer's disease to neurologists, thereby creating synergy in promotion. The sales forces covering CNS put a focus on psychiatrists treating patients with Alzheimer's disease and add Rasagiline, which will be possibly launched later this year, as a treatment for Parkinson's. Although the scope of neurology and CNS look similar, the two therapeutic areas are divided in the U.S.
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Q8	With respect to the sales forecast for Pariet in Japan, do you have any special factor for expecting the doubled figure from the previous 14.6 billion yen to 30 billion yen for this fiscal year?
A8	We have good ground for challenging the target. . In order to achieve it, we are making programs designed for each marketing channels, and have already completed details of the program targeting the practitioners through discussion with wholesalers. We aim to steadily attain the targeted sales growth every quarter of this fiscal year.

Q9	Does the decline in export of Aricept and Pariet from Japan mean the shift from product export to drug substance/bulk tablet export to Europe and the U.S., thereby realizing the establishment of 'seamless value chain' especially in the U.S.?
A9	That's right. (For instance, the U.S. plant at RTP was mainly engaged in packaging process of formulated tablets of Aciphex, however, the expansion of RTP facility makes it possible to manufacture Aciphex from formulation through packaging with supplied drug substance.)
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Q10	Sales of Meridia was reported to have declined due to the incidence of 24 deaths. Will this affect the development of sibutramine (KES524) in Japan?
A10	The sibutramine sale was once temporally suspended but already resumed in Italy. The safety of sibutramine has been comprehensively re-examined by regulatory authorities and they have concluded that the risk/benefit profile of sibutramine remains acceptable. Eisai continues to develop it in Japan.

Q11	Generally, Japanese people are particularly sensitive about safety. Are there so many patients with such a high BMI requiring obesity therapy in Japan?
A11	A draft guideline of drug therapy for obesity was proposed by Japan Society for the Study of Obesity (JASSO) last December. We will conduct clinical trials with careful monitoring the sensitivity of all participants in accordance with the guideline.
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Q12	In the U.S., the Alzheimer's drug market is expanding driven by the launch of a new drug for the treatment of Alzheimer's disease, which is likely contributing to the boost of Aricept sales. How long will this boom last? The competitor seems to conceive a motive for marketing the product as a monotherapy replaced with the ongoing promotional strategy pushing the combination therapy with cholinesterase inhibitors. Are you concerned that the current bolster will eventually work against Aricept? Do you have any plan to address such a situation?
A12	Aricept is currently showing remarkable growth with a 40%percent rise in the total prescription number for fiscal year 2003 and also recorded a 45%percent rise in the new prescription number at its maximum. We hope the 40-50%percent range growth will continue, but it is difficult to forecast how long this trend will last at this point. We foresee the value of the new drug whether it really brings benefits to each patient will be determined in half-year to a year timeframe that means end of this year to next spring.

Q13	Three companies are challenging the patent of Aciphex. It seems unusual that so many companies file ANDAs against one drug. Do you think it was because Aciphex patent involves any flaw?
A13	No, we don't think so. We sometimes see multiple ANDA challenges against one drug. Eisai believes the patent of Aciphex will be valid until its expiration and will utilize all legal actions to protect the patent.
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Q14	Doctors have not necessarily prescribed generics for the benefit in health plans, but the recent intrusion of omeprazole generics into the preferred products list of health plans is likely threatening the position of Aciphex. Does the status of Aciphex tend to be ranked down to Tier III in health care plans?
A14	Currently, Aciphex is mostly considered a Tier II drug. We recognize that many managed care companies tend to rank down the tier of a brand drug if there is a generic competitor, thus having brand drugs faced with severer price competition. The point is whether Aciphex can expand its share in the market, and for 2003 fiscal year, the total prescription volume of Aciphex rose 5%percent year-on-year. Given the favorable trend that more and more specialists are prescribing Aciphex, we intend to continue the ongoing aggressive promotion. (Note: In the US, many health plans adopted tiered formularies and categorize drugs to one of three groups, Tier I, Tier II, Tier III, whereby Tier I requires least co-payment.)

Q15	Elan disclosed the details of Zonegran deal with Eisai. When the deal was completed on April 30, will you pay $dollar130 million to Elan? It is reported that net sales of Zonegran was about $dollar80 million for the previous year in the U.S., and Eisai estimates $dollar150 million sale for the fiscal year 2005. What sales do you anticipate for 2004?
A15	The deal was completed on April 27 and Eisai has acquired rights for Zonegran. Upon the deal closing, Elan neurology sales representatives of almost 100 have moved to Eisai Inc. Eisai Inc will put emphasis on the Zonegran business because it is the first product that the company markets exclusively. The initial investment of $dollar130 million was paid as announced. We aim at the sales target at the range from $dollar80 million to $dollar150 million for this period.
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Q16	How do you plan to amortize the initial payment of $dollar130 million?
A16	The actual amount to be amortized will be less than $dollar130 million as it includes the purchase of inventory in market and personnel expenses arising out of the offer of employment to Elan sales forces. The initial investment will be amortized over certain period of time subject to external auditor's opinion.