Message from the President

I would like to report a summary of our Group's business results for the second quarter of the year ending March 31, 2025 (from April 1, 2024 to September 30, 2024) and express my sincere gratitude for your continuing support and understanding.

For the second quarter of the year ending March 31, 2025, our consolidated revenue was 180.7 billion JPY, an increase of 28.1 billion JPY year-on-year, mainly due to the expansion of revenue from the three key products of ORGOVYX®, a therapeutic agent for advanced prostate cancer, MYFEMBREE®, a therapeutic agent for uterine fibroids and endometriosis, and GEMTESA®, a therapeutic agent for overactive bladder, in the U.S. Core operating profit (loss) was 0.0 billion JPY, a loss of 65.8 billion JPY for the six months ended September 30, 2023, a significant improvement from the corresponding period of the previous year, due to the increase in revenue and significant reductions in selling, general and administrative expenses, as well as in research and development expenses. These reductions resulted from Group-wide streamlining efforts, including the reduction of research and development investments through selection and concentration, in addition to the manifestation of positive effects of business structure improvement through the restructuring of the group companies in North America. The net profit (loss) attributable to owners of the parent was a loss of 32.2 billion JPY, a loss of 67.7 billion JPY for the six months ended September 30, 2023, an improvement from the corresponding period of the previous year, due to an improvement in core operating profit (loss), despite financial expenses (foreign exchange loss) resulting from the valuation of foreign currency-denominated liabilities held by our overseas subsidiaries due to fluctuations in foreign exchange rates.

As for the consolidated financial forecasts for the fiscal year ending March 31, 2025, the revenue for the second quarter is progressing well, but we have decided not to revise the forecasts (revenue of 338.0 billion JPY, an increase of 23.4 billion JPY year-on-year; core operating profit of 1.0 billion JPY, a loss of 133.0 billion JPY for the previous fiscal year; net loss attributable to owners of the parent of 16.0 billion JPY, a loss of 315.0 billion JPY for the previous fiscal year) due to uncertain factors such as the success and scale of the asset divestiture plans currently under negotiation.

In research and development, in June 2024, the U.S. Food and Drug Administration (FDA) granted Fast Track* Designation to enzomenib (DSP-5336) for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with a mixed-lineage leukemia rearrangement (MLLr) or nucleophosmin 1 mutation (NPM1m) in the Oncology area, which is our priority disease areas. Together with nuvisertib (TP-3654), which we expect to become novel therapeutic option for myelofibrosis, we are advancing the clinical development with the aim of early market launch. In the Psychiatry & Neurology area, we are reviewing the NDA submission target for obtaining approval in Japan for the indication of Parkinson's disease for allogeneic iPS cell-derived dopaminergic neural progenitor cells, based on discussions with the PMDA. On the other hand, we will accelerate the ongoing Phase 1/2 study that is conducted in the U.S.

We believe it important to distribute surpluses in an appropriate manner reflecting any improvement in its performance. Accordingly, a performance-linked dividend hike will be considered in addition to consistent dividend payments. With regard to the financial forecasts for the fiscal year ending March 31, 2025, although revenue is expected to increase due to expanding sales of three key products, core operating profit is expected to be 1 billion JPY, which is significantly lower than the assumption stated in the Mid-term Business Plan 2027. Therefore, we regret to inform you that we plan to suspend dividends for the fiscal year ending March 31, 2025. We would like to extend its deepest apologies to our shareholders.

We will work together as one group globally to drive our business strategy and deliver results. We will make every effort to promptly recover our performance and deeply appreciate your kind understanding and continued support.

November 2024

• * A process designed to facilitate the development and expedite the review of investigational therapies to treat serious or life-threatening conditions and address an unmet medical need.