We developed a new method that is a combination of the intranuclear cascade model and the distorted wave Born approximation (DWBA) calculation, and implemented into the particle and heavy ion transport code system (PHITS). The new method was applied to estimate the neutron spectra in reactions induced by protons incident on the 7 Li target at incident energies of 150, 246, and 389 MeV. The results obtained by PHITS using the new method reproduced observed sharp peaks in the neutron spectrum as a result of taking into account the transitions to discrete nuclear states by DWBA.