TAK - Earnings call transcript Q2 2022 | Takeda Pharmaceutical Company Limited

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Christopher O’Reilly

Before starting, I’d like to remind everyone that we’ll be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in the most recent Form 20-F and in our other SEC filings. Please also refer to the important notice on page 2 of the presentation.

So, from our side, as presenters and also the panel, we have President and CEO, Christophe Weber; and Andy Plump, President Research and Development; Costa Saroukos, Chief Financial Officer; and Masato Iwasaki, Japan General Affairs; and Ramona Sequeira, President of U.S. Portfolio Global and Unit Commercialization. Business President, And Business Therapies Julie Kim, Unit. Plasma-Derived

we Christophe, would you questions. Andy from will like and take we Now that, Costa, give after presentations. to And

start. to like we’d Now,

Christophe Weber

on you, the It’s Thank great be to you. pleasure thank and you, a phone join us Chris, to today. with everyone,

So, our discussed making in our the we’ll the the fiscal of transformation first are you we through of year. performance Takeda take half progress in as we

-- our So to please how is progressing And go towards #X. vision? are Slide this we

Our guided make Takeda come And have the is difference a and patients, life-transforming vision of to at employees to planet. discover by our together for patients. deliver with and first, the to pressure our treatments, despite a the our very commitment pandemic, commitment people strong

really by this during and I the has entire inspired pandemic. the So energized spirit organization and that determination shown feel

the in progress. And journey producing result. has company strong are Our of very results our of a transformation half evidence think been I our first our

Specifically, we on fundamentals. the have consistently delivered

more a revenue global of underlying XX% its brands XXXX. what our back in to of X.X% total half the that our at XX.X% has growth diverse revenue mean, the an prior the impressive you global now considering And for look first-ever growth underlying with Takeda’s first compared portfolio first half. back brands Takeda global plus future, revenue. importantly, XX%, of XX product to represent reported a global by XX driven transformation, This XX.X% growth when with launched I be year. this accelerated continued XX brands growth to for of Our in

brand new XX, as we represent half to of have our medium particularly markets. global for XX% which we portfolio. revenue term, And the brand acceleration didn’t Today, growth our expand the our we second in we XXXX, revenue. significant over the and year into a global near an of total single expecting in are global Before have

So XXXX operating to underlying strategy meet our And potential XX reflected continued today, year underlying are with track core by growth, brands. we financial profit very strong to confident share our in this our our full are our mid-single-digit the current of XX global and flow driven as we of our and broad and as guidance growth thanks remain generation, global we our confident in in on think strategy performance revenue we growth this and not is brands cash price. pipeline, dynamic, -- performance

XXX also initiating our We are JPY billion, of to to shareholders. a our commitment to to reflection delivering a up value share buyback

So what is Takeda we growth think clear it’s very strategy. strategy? Well, a growth

razor-sharp to We have focus bringing patients. on life-transforming treatment a

that indication, So will geographies our we least to XX will clear extension, the our bio-similar continue through It to this brands is label answered. very until in XX the brands ENTYVIO global the global significantly U.S. grow drive at in growth years, new competition in previously expansion coming face

that potential invest We in the life to patients. bring approximately continue of clinical transform all assets to stage pipeline will also the XX the

and around highly area built or flagship a are are single compound, pipeline strong Our not but focused unmet and high instead diversified need. portfolio product patient of in

even our modalities. to By pipeline our and that, are will than and therapy I standard categories considering experiencing remarkable focus come received a X a of setback, new In innovation entirely has testament true fact, some back targeting X/X more year. designation, breakthrough on to any Wave and we and

partnership Pharmaceuticals they continue our expand access U.S. into with collaboration FDA more patient in complement to of go pipeline that coming treatment of weeks. strategy. alpha-X time, with our to the the to cause is ambitious condition a disease, no aspiration. to for and EXKIVITY beginning therapy Committee to therapeutic to but same is At of we collaboration received treat bit an later, FDA approval a first-in-class which designed Arrowhead help focus RNA approval a scheduled the this Our Advisory for and which for One accelerate very need detail TAK-XXX, alone, currently, to on the develop the example will and is that for by liver quarter I’ll therapy. strategic the FDA in antitrypsin deliver approved underlying there an enormous area associated maribavir our pipeline sometimes is we a devastating on decision evaluate recommendation opportunities in

commercialize Hunter with great to Another this for and disease. outside rare agreement strategy JR-XXX company this is Hunter improved time of Pharmaceuticals cognitive treat with notable the a collaboration function to JR-XXX license our and way syndrome introduced program help this first JCR is is entered syndrome. example with of treatment Japan. an recent patients has that maintain of also here is a agreement new Japanese Takeda to a very What living in commercialize a the

brings we cell a novel therapy approach we platform solid acquisition collaboration, to are target Takeda tumor now malignancies. a the pipeline with partner Therapeutics of And of leveraging company, strengthen build-to-buy a GammaDelta among therapy seen have hematologic our gamma-delta we indicative in how this which This started further was it’s perceived of just think I week, and announced choice to might as too. novel Japanese XXXX, T global you immuno-oncology cells. and which to cell

plan clear is and So consistent. very our

support orexin focus XX a that, potential strategy remain said I Having strength leveraging global one is growth to that. the saying which brands, when but come to pipeline. Andy what Our organization, It in that goes of the leading without greater being experience is development which about. you science progress Our of innovative the treatment to can already, do I truly an is but strategic coming This announced as the has of will will years, compounds, that exciting edge with that shortly, important you want of narcolepsy know clinical the the II R&D us address a providing we on as investigational made. detail R&D signal driver and recently at of setbacks safety X. time, you an -- type for back tell over the allow challenges agonist TAK-XXX, setback studies momentum Takeda’s recent that is all emerged on same our growth on oral vision are developed address me in to Phase that our the

committed data. agonist development. our Phase I to continue oral to advancing I TAK-XXX, reinforce we currently to will orexin the that franchise, in multi-asset are including We orexin the And is analyze which want

pevonedistat the and primary survival statistical for endpoint to the resilience. PANTHER give announced also why strength III that in event Azacitidine. enemies free Phase clinical of achieve We with the did XX this and stage shared our our compared is strength programs approximately -- [ph] study that But pipeline and clinical diversity you not significance resilience I

potential therapies the are of think about new We not patients to dozens lose decade. of the next sight I And deliver to excited that. in we should

serenity, urgency other mind, are setbacks, we strategy. molecules. with sense to of our our They future have continue also, towards our setbacks in enough derailer but are not look to the a So these develop in of with pipeline breadth to

that I’m issued site a status in confirmation our has Hikari indicated we agreement an dialogue that point today warning month, very we commitment. voluntary now The pleased received that to letter site addressed to that Hikari. FDA mention earlier to manufacturing maintain ongoing successfully revised FDA Another this I is to with action report the an want for a manufacturing regarding

is ongoing change the a effort to closing site FDA the positive exchange development in the March of the in action in in status the indicated So XXXX. is warning observation status site letter official and address the

So with FDA speak to and I this think process. strong it upholding track standards record does quality close our throughout our collaboration the of

the want COVID-XX a against I head Japan. in COVID-XX. just slide, on is to next to Takeda you keen role contribution committed and to the fight the key play is update pandemic On really really our in

As a begin Japan as XXXX. we of and million as to the marketing holder for distributed million in XX distributing XX beginning an dose have the you expect and COVID-XX importing know, in Moderna Japan, early as vaccine additional operational

Japan in Novavax where to will million candidate be and with vaccines partnering manufacture develop manufactured. also are per dose to Japan, commercialize We COVID-XX it from facility in Hikari year and XXX up our

received the manufacturing to that vaccines XXXX distribution part to vaccines course, of of regulatory under program, pending I we notice the in you government approval. Novavax One reflect these thing of in subsidy the a Japan like be would note in including in factors, build the is early to government we to So Hikari. capacity will aim the of number -- pricing

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zoom by or until you a has this or slide, wins mutation. after. in It target provide important oral historically to our non-small that on much greater with you adult ExonXX cell detail tell limited is quarter. I will very factor recently, whose approved On right I the new can more next therapy just pipeline mutation will This And But want insertion Andy locally cancer for for effective underdiagnosed option. and we chemotherapy. FDA for are advanced lung by on have, to is pipeline progressed first after very EXKIVITY designed the unanimous Advisory and of ExonXX EGFR maribavir. very epidermal patients potential the demonstrated of EXKIVITY patients specifically metastatic -- treatment U.S. in has patients of the promise insertion approval disease growth and as been the a our with for recommendation receptor only excited treatment disease and the platinum-based Committee

EXKIVITY oral will landscape. of have patients treatment to for And access time, an the approval the effective So the first therapy. advanced

challenging infection transplant be solid and We treatment transform CMV stem If infection in cytomegalovirus excited recipients. FDA, estimated the the resistance. CMV incidence adult without very for transplant first recipients in also is patients way indicated refractory maribavir for infection very XX% than a disease greater are maribavir the to the cell an and with CMV transplant approved will treated. potential with rate transplant by organ and or with is about only

to are science in need. this We proud of area advance critical

two and treatment to approach need, So maribavir are and are examples patients limited areas who even or just focus have serious for EXKIVITY options. yet on how Takeda development. discovered be scientific of very they We

recent to our encouraged continuing in we diversified by pipeline. forward very are this are innovative we look milestones and development to So upcoming and

our we recent So talk about milestone.

how also talk about we are long-term pipeline. our Let building me

to the continue We plan a lives process, business. our transform and, the pipeline transform aggressive that has have building very a to in potential

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example. at our look oncology So pipeline, for

transformative the are has that multiple with first-in-class tumors. potential solid candidates to cancer advancing We and immunotherapy be people blood for

existing great there our orphan address We’re is rare promise but for is incredibly often in and an or option. also treatment with need. where investment to with disease in researching our compounds PDT pipeline rare areas developed vaccines. the XX% population, on of effective disease focused seeing product R&D therapies, U.S., pipeline approximately well that Takeda’s desperate as on patient as In need being unmet small vaccines dengue as R&D essentially we high very as plasma we focused of an a also our dedicated new also well as want capability, built improving mention areas I

growth ‘XX, last the effort year of is that we an pipeline. next increased this And ensure year. generation think We are is billion a to in potentially very compared to of it significant, we to position transformative this very a our and our R&D to potential representing why JPY which patent to are the fiscal therapies. deliver to in have We investment that of is XX.X% committed science, XXX is

progression, into future details In more Takeda on Takeda’s R&D-driven journey into and bring our So R&D company to our will accelerate out on to a positioned focus. pipeline reinvent long-term we before to global growth. business our set Andy you transformation values-based, truly conclude, XXXX, for globalization continues give to

progress. made have significant we think I very

leadership position core our gastroenterology and business therapy. oncology, genetic hematology, neuroscience, We have plasma-derived a and rare areas, gained in

any scale single XXXX, competitive organic completed our in to have that global have today largest not We that history us to foreign allowed that steady acquisition Prior establish global portfolio Japanese did Takeda the us a gave of margin grow helped XX brand. are growth. that and generating brands

global So XX dynamic will as the to several for momentum future. the unprecedented And scale, rebound and the our next of XX provided our success of this growth assets, us new with stage a regulatory of acquisition our clinical near-term the robust resource years. with the an pipeline approximately has potential build approval foundation, and provide and number which over brands

So planet. discover opportunity that treatments that growth is to a And vision and that, brings Takeda pipeline the us deliver With vision. back patients, progress. strategy our on our reflection to commitment you. our strategy with and guided would to like our by and our Andy think of people to R&D I I an focus provide Thank to life-transforming

Andy Plump

our innovation everybody. year firmly much, Fiscal an that and will off we decade Christophe, from kick of very ‘XX inflection you hello, believe Thank be year to pipeline. continues a

anyone life-changing to headwinds tailwinds these pursuit would transformative from like would in I recent one time. medicines, pipeline color events. as on is expect and additional some or will dynamic. diverse experience And novel to provide time Our context of and and

let’s tailwinds first, the So events. or with start positive the

this As entered you celebrating. from our first heard EXKIVITY entities the This Wave worth importantly, Christophe, clinic. new EXKIVITY years just approved, be is after the a molecule it’s molecular of United X approved and approval the certainly States. to in was comes moment X And just

a anticipate anti-CMV advisory panel a and approval As had for month. decision we Christophe next we our FDA unanimous drug final mentioned, also recommending maribavir,

do and well. for our brands, to talk cycle continued and about let’s life our a So progress global management bit little which R&D efforts regional

we and fiscal written received package in For more FDA, We feedback resubmission. confidence a ENTYVIO on from potential thus year much clarity the data greater elements provides which needed regulatory for approval XXXX. recently for now subcutaneous, have

August additional an exclusivity VYVANSE received market also until in of for of United months pediatric States the now XXXX. We X from have We exclusivity FDA.

efforts expansions as R&D medium our vocinti to will life had ALOFISEL label for continue in well future and revenues in addition, and and the approval are short CABOMETYX for for cycle In Japan we Japan and in as management These respectively. China, drive to important Takeda term.

continue wherever originates. We unlock innovation invest and capabilities mechanisms novel and it to in to aim

barrier. to therapies for provide Christophe protein on patients step next-generation potential the our as JR-XXX, receptor EU cures both pairs may shoveling with was recombinant to an allowing exciting improvements strong antibody to bolster central the Our emphasis a neurologic just new designation by innovative partnerships symptoms in-licensing, in human treatment as went transferrin pipeline that prime function fusion well iduronate-X-sulfatase recently that future. as patients syndrome for potential of blood-brain and completed through granted in continues We or Hunter’s Hunter the This peripheral patients. address through, the could symptoms potentially

that to the our again, to cell And exercised technology we provide been just the acquisition has initiated this these And address We therapy then therapy This company build We XXXX. gene announced know include Therapeutics. with ambition. purchase this add the We help platform also partnerships we the week will really X some this therapy potentially to us And we that as rights constructs. progress continue collaborations really gene issues and Immusoft. company announced our first-generation build-to-buy to that and next-generation Poseida of Selecta, tools And finally, like yesterday, we Christophe was technologies. on GammaDelta of and collaboration well. a mentioned, our in made.

quarter. to the if that So I’ll next very forward the had events oppose mention of stall to of over we go some These are momentum. slide, also past headwinds I can some course, slide. that aware you’re mention before the our start Actually, please of we’ve that, or next

survival and present liver mentioned, the information primary TAK-XXX for we at an achieve much patients detail a And greater had call. signal, in importantly, in upcoming for did safety medical this conference. later a signal. addition, Phase study of the to endpoint myelodysplastic event-free PANTHER expect statistical significance high-risk with Christophe in was will we which This discuss safety III syndrome not As pevonedistat in

So is events, This deliver strong these is and is pipeline. our starting pipeline, value. to headwinds, these despite our despite

like discovered added new from new quarter, to This a over XX that vomiting. molecular development. treat conditions we And for past where also through. peptide just was a rare peptide nausea JR-XXX, the in Hunter continue molecules I diseases is in And like cutting-edge that to as syndrome, approximately have Takeda technologies we’ve and TAK-XXX, laboratories. went We result in entities invest used the

can first I’d to And if our experts we like why the remain please some regulatory XX. excited optimistic. So and orexin go through Slide and next to time walking many to wanted reiterate you franchise. I authorities spend

where in transformative in above test. than today by response, minutes against narcoleptics, including responses of less Importantly, minutes result see above X of we reference, placebo limit placebo. efficacy a wakefulness just upper multiple XX the of patient this of And we greater than standard up the seen populations, care the XX-minute type have maintenance test pushing shows X

In addition, the the China for our extension field authorities, strength orexin-X agonists. data and in feedback of XXXX X-week months. weeks, we’ve and and health securing U.S. X positive liver prime speak both designation in unfortunately, excitement in study the XXXX Phase over receptor designations we’ve EU designation to long-term trial. the past breakthrough regulatory significant These our all setback, received of IIb and the the over in a last faced But the signal TAK-XXX safety a few from

to we steps, making the result holistically on to signal, a with the benefit conjunction the protect trial safety. As regulators. patient prior to will us in safety studies next assess early decision of course, Ending a discontinued of this allow risk possible

decision enzymes. trial extension discontinued. clinically who being let stop monitored its Treatment a function as liver degree patient recent discontinued saw. tests. as stable. was asymptomatic function fact, the adverse event. closely had a remains the and identification a explaining saw what II significantly elevations based and We just was, in spend from moment we for this in exactly as was long-term patient smaller liver patient of extension well is raised So in patients This The Phase study serious The increases in to single me well on liver were additional as the the test trial of a

ensure close information and sites all understand with to fully clinical to cases. these in appropriate to principal and are necessary gather investigators We contact follow-up

we will are XXXX. analyze in meeting findings. the further risk-benefit data assessment the liver underlying medical This at the We and and results to mechanism working committed full now a made, to understand be these publishing are

therapy can the please. our leadership no minute Slide So a And future more way to in transformative to setback with go ever ambition determined this narcolepsy XX, achieve are deters to we develop and want to goal. deliver disorders. X type talking anything, other next anything, hypersomnolence I’ll about this a we our I for Orexin spend plans. our position and patients If underscore, in and than

pipeline our exploring We number are now differentiated in have for orexin of of best the part franchise. a that And molecules paths are we our acceleration.

multiple molecules So of have stages. preclinical well in these include X molecules before, additional as you heard as

as in differentiated for high the effect is the issues at formulation data TAK-XXX, labs. patients. daytime development in in agonist of provide idiopathic to IV narcolepsy obstructive apnea in will this from safety can First, research important as people And X provided excessive We being Phase This in believe our multiple are in short-acting our with as infusion healthy apnea inform the that setting X our anesthesia. are recovering risk plans. type as when a then sleep IV in single with Together, future obstructive dose additionally help and we ascending us initial there’s proof-of-concept initial PK results that note molecules setting. and patients type developing data Obstructive in orexin provide well these in I study. It’s oral volunteers type well on there’s post-anesthesia in sleep TAK-XXX. patients narcolepsy apnea. sleep-deprived sleep with levels. its respiratory to multiple a TAK-XXX, It’s currently as and profiles and differentiated explored both information as sleepiness longer-acting hypersomnia currently initial study and efficacy with narcolepsy X mechanism normal us compared narcolepsy This will will well

receptor on an current gathered We have deep we understanding design and pathway new an development army potential. and Orexin will of have incredibly transformative our future. We of molecules accelerate chemists of this working our the will scientists efficacious for mechanism now and know have we data. molecules knowledge, valuable Equipped the have with clinical agonist orexin-X with a

data-driven be for decision XXXX. R&D top We Takeda and a in steps has our will be continue these on programs priority will a organization. for position This make in and a next to to

ever are We working with knowledge build equipped and franchise. now harder this than to

on the We agonist will our field and continue orexin build foundation. our leadership in

orexin the We disorders. narcolepsy to fully and trials. We bringing to participating for dedicated, suffering want related their to are transformative dedicated, our patients agonist in sleep patients thank and clinical medicines other from physicians all

please. So we to can go slide, the next

Christophe maribavir, earlier you Advisory As after have expect for viral is you’re and and heard panel next as the we support at received CMV from the month. efficacy. robust common decision Committee infection unanimous FDA Xth in October most a seen and the aware, transplantation, we we

fact, twofold lower kidney greater tenfold standard with a and toxicity In significantly than to safety of profile, neutropenia related better injury. care, specifically than greater

about therapy excited very bringing to novel transplant patients. are We this

the lines of the slide, year. of including this EU side time see some in early on the left potential could You next approval the

with our time and shortly frontline ‘XX out see track half trial which of to transplant, thereafter. first You’ll is filing also stem read fiscal year post-hematopoietic on lines cell the for in

can we slide, to please. if So next the move

strategy can and Finally, to I position scheduled of GammaDelta in you the our year And as close recently Therapeutics. announced our XXXX. in This highlight want overall to first GammaDelta pipeline. see fiscal this quarter acquisition slide, in we oncology is

have that this? cells antitumor specific. potent is is T antigen activity not Gamma-delta what shown So

tumors, ambition. potential acquisition therapies cell solid range wide pipeline therapy oncology build of our So continues anticipate a our the we rich across including to help This should of and for tumors. advantages fulfill

slide, as to we move So please. next the

an let advance. exciting Costa, continues dynamic and have and to it we Before me say just pipeline, that it over handing to

mentioned we something earlier earlier, more highlight Beyond want be have we’ll programs, to one our of of. that stage doing more what and we

seen exciting that patients multiple on optimistic with R&D model TAK-XXX myeloma, prospects, we patients. data year. focused our on medical or the proof-of-concept We We be we believe for these this and is and highly right step treatments we sharing will function in conference data have have and cures at calendar refractory with a remain clinical potential for the with relapsing benefits

We continue new to brands and XX global growth drive our in through expansions. global indications

invest continue pipeline will our will now hand Costa XX new the of drive to it transform innovative entities to Saroukos. We molecular to I lives and that With have that, potential the patients. over of

Costa Saroukos

Thank This and year you, the full pleased throughout growth. everyone. underlying profit has I’m guidance of underlying of fiscal XXXX. acceleration line core that growth report Costa is Andy, hello, speaking. and of continued we’re first growth top And our Saroukos mid-single-digit year very confirming our operating half revenue to

driven Our as XX by first now, from acceleration underlying up grew half company was -- X.X% during which and XX% brands, our QX. at first revenue our represents in revenue. total core Christophe half, global was our This mentioned, XX.X% of X.X%, growth

on addition In we our of the maintaining delivered focused first half. margin underlying competitive profit an growth, XX.X% and top core operating to in margins remain line

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first me a turn slide. of walk results the you the financial to Let Please XX. in half summary through Slide next

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to bridge Slide shows profit. Moving which operating to reported core the XX, from

offset that see related adjust and the items operating not You the XXX.X asset In accounting JPY items items to portfolio we out amortization, billion. billion. XXX.X by was JPY can of reported operations business. the HX, purchase core intangible of diabetes this, of Japan main onetime were JPY XXX noncash to the of sale from From onetime billion related partially the profit gains the adjustment

of cash of This in half XXX balance our a JPY payment Free cash first offset spite September approximately first In with the debt. levels flow. over XXXX capital. JPY this settlement the remaining cash of the costs. covering year. fiscal XXXX the we and net of fiscal Furthermore, substantial litigation the XX made billion cash totaling of flow portfolio, year flow JPY dividend interest cash evolution the USD of an the shows and half to XX liquidity approximately the the debt prepayment, sale billion. phasing included the cash billion. half was of XX comfortably the abundant now year. year, prepayments our prepayments ended shows year This and USD half still first Operating Slide Japan X and Moving year debt XXXX out XXX.X includes from after Slide working at of we fiscal year by balance maturities significant XXX.X all or CapEx debt some was billion. for billion, healthy diabetes over in

September is We continue ladder. latest debt our net snapshot EBITDA down XX adjusted of to ratio X.Xx. with to as maturity make And progress deleveraging. Slide of debt to the XX, had our come steady

interest. year in paid will XX-year as fiscal fiscal we we X primarily fiscal in fixed remaining the denominated X.X% JBIC year remaining most fiscal additional be proceeds year or all year XXX to the slide. first used refinance approximately the to of maturities. loan XXXX, issued ‘XX of as prepayments ‘XX billion XXXX year Furthermore, and shown of $X.X intend issuance this and debt, particular, in to ‘XX maturing year USD fiscal this towards on in remaining billion proceeds of called the This will be slide, at the shown October, neutral leverage billion of put maturities. due As We well previous prepayment off debt including in bonds XXXX of half JPY debt for yen as

complete, JBIC fixed our interest XX% X%. Our approximately weighted interest is once prepayment the will rates. at And rate of approximately average is be loan debt

result a X the in very billion XXX right over for our which the per next annum JPY we and flow maintaining this our refinancing, the dividend recent in to accelerated continued paydown debt years. As business. service making feel strong while cash have ability a investments of averages expectations profile, generation, debt comfortable With well-positioned and maturity also we’ll the

revenue, and are Slide EPS. XX, core for we to fiscal year year growth of guidance profit, underlying underlying confirming underlying now full Moving mid-single-digit our where XXXX core operating

operating forecast profit reported the EPS. reported EPS, also revenue, communicated related are tax regard previously are With provision we profit, fee of in to core Shire core to and a tax AbbVie the assessment from profit our operating reported updating reported our forecast break maintaining a and XXXX. to We net for reflect received

of As reported forecast our now JPY XXX. is year a full EPS consequence this,

impact core rates based as investment reminder, a our JPY the an well-established for share capital towards our EBITDA to and some potential of by per of assumption JPY The when full on business continue the therefore, R&D, year shareholder new addition dollar. with in EPS year. and the the our returns we low appropriate. JPY parallel upside investing have announced other the deleveraging policy. XX we forecast today, adjusted policy have XX is does on And of to of such in annually, to region XX, included As full buybacks on state to buybacks share Slide launches our dividend JPY net of priorities we share growth drivers in maintain have our if allocation buyback share language any In product revised debt XXX alongside of continuation not intention journey do our Xx FX see XXX Therapy Plasma-derived updated our On current March to to XXXX.

we products year X guidance by revenue low as put our in close XX, built mid-XXs over full JPY HX term. operating target this launch brands, well we XXX.X On investment, XX%. Slide like growth core forward we emphasizing believe on and X.X%, XX I’d of on position Underlying to towards us line, once year putting track new and the continue was to and Despite cash the margins continue to the in margins on margins R&D continue from Finally, of flow. to medium Wave our pipeline, billion again vaccines. profitability, in profit in on underlying year the our strong core a our through of We and with ramp-up are focus on us cooperating maximize out and mid-single-digit growth. full towards growth forecast momentum going will margins COVID-XX global to our track top profit we roll

cash Q&A. your open now net it Xx adjusted returning you billion will debt towards low debt flow, up of cash JPY course and and to the full target ratio shareholders. in while focus cash flow to for growth investing XXX billion also Thank down target, on remain for EBITDA XXX attention, we on drivers to JPY on and pay we Finally, to continue towards our year free

Operator

[Operator Instructions] First please. Yamaguchi-san, from Citi sir

Hidemaru Yamaguchi

[Foreign Language]

Costa Saroukos

Thank for your Yamaguchi-san, you, question.

drivers break for share down buyback. key it this me announcing Let in the the

share is that back thought considerable price a is this discount. shares significantly think to opportunity we undervalued. We an at Firstly, our buy

fact, XX% share it of trading our sell-side it’s our is we compare analyst In if even discounted. the with current recent average,

from truly shares we to also opportunity shareholders. back buy and in company it’s to our an So value deliver that standpoint, believe the

this we’re doing The strength. of point second of here is off highlight want a the I to position base

finally, year business, we Xx to results, acceleration utilize in confidence the continue message strength our cash of by saw our our think adjusted it our EBITDA buybacks of that, of do flow first year our do share some flow half our our and because driven buyback to seeing see at half the we our which to top fiscal to cash we in derailing flow, our on low our cash an also the grow. send brands, underscores of by debt want don’t global to target net You we’re cash of the this strong opportunity XXXX. will first XX this flow, strategy. the abundant X.X% share And in key X.X%, that an And Again, leverage growth on from that is is revenue to position.

molecular We entities and Andy our mentioned, have, in approximately new XX as have Christophe pipeline. we

many have XX the readouts months. in proof-of-concept next potential We

but not discount our reinforce revenue. of succeed, a price. just we And confident have is goals. given very we will our There why And our The at deliverable this that’s we’re we’re deliver. to shots is So the the some some in message, not, that will very this time, that will pipeline the right line onetime. many share on top felt confident

updated appropriate. decide allocation doing policy We to on able to buybacks when capital be our share have

situation this monitor to continue as we go. we’ll So

for question. thank your So very you much

Andy Plump

around you Yamaguchi-san, essentially toxicity had time for And, liver second for TAK-XXX, I can potential TAK-XXX two the for One if was and was questions. lines the paraphrase.

and we were on too an early. went for on TAK-XXX So XXXX. TAK-XXX, in can’t terms confidence first, of XXXX, an that it’s we the would now clinic can right answer in say we time the approval What reasonable end anticipating be expected is into launch in the give November of of line what with

XX and a we know the during clinic point, this terms to TAK-XXX TAK-XXX step We TAK-XXX. So that time But to COVID, time be in to about back months honest. hit lines. took have line of approximately after at X years. our went

terms regulatory We III of have the safety what signal our Phase patients. that going in of durations to to requirements number are be liver of in now we understand of a have study terms

more we as have we’ll information advance. So

And regarding this a potential In terms a have of think liver driving TAK-XXX. in to worked of very TAK-XXX let liver unexpected preclinically we understand our we’ve we deep toxicity finding. confidence is now signal, with what the say rapidly me that understanding

can so preclinically various And use essays we have to we that compare including the molecules, TAK-XXX.

We’re of still work. a of doing process this in lot the

is for to months, to in share. different advancing and has reasons -- pharmacology a have of terms TAK-XXX, TAK-XXX over profile. respect comfortable very than has a different PK optimistic the It very this coming more patient have information different molecule with safety, molecule. And a to It We we’ll We be feel

Operator

Hashiguchi-san Securities. from next the Moving on to Daiwa question.

Kazuaki Hashiguchi

the inclusion administration changed safety across of and And TAK-XXX? And criteria, elevation? for TAK-XXX Yes. This the same is signal something of really it common assets franchise? or the TAK-XXX whole a dosage cause about is specific what the to the this you other Daiwa also, have saw is TAK-XXX elevation, I is you franchise in it and these in only Orexin that study design clinical for things any TAK-XXX program. have Hashiguchi, question is Securities. the LFT orexin

Andy Plump

you much. Hashiguchi-san, So thank very

is liver toxicity. action of mechanism the of first question the Your

previously, developing have and have that won’t beat understand think to understanding. we that on -- to is as profile of the our a understand causing competitive We next we We mentioned rapidly information. using we that we what generation we’re a information this. we share think better we TAK-XXX And a but compounds, toxicity reasons. just growing So I we’re think of -- advance for

definitively, class drug say a effect, a and believe small history to is this effect. that is strong that reason discovery drug is molecule idiosyncratic It’s or molecule-specific to You a very this long there’s class toxicities. effect, that to whether is hard a asked points development whether and this molecule a not effect this also have but molecule-specific of we these

You is TAK-XXX trials, and whether the learnings design altered TAK-XXX answer the then these and and taken we’ve asked no. our of study

and We have measures measures those adequate both in of safety surveillance studies.

but with know profile patient We have what believe something to carries won’t date. We risk have a don’t administrated, based we very very I TAK-XXX, we’re IV clinical same that understand. experience safety as optimistic on this the TAK-XXX be extensive more and reasons It’s share mentioned, we that PK clinical very pharmacology molecule, and experience the have acting. it our short a TAK-XXX. liability, going base that’s to of different that fully to to

I be we’ve will think what next with agencies we will longer say. to of safe larger numbers, to conversation want trials in will question key we steps, That’s yet as though, the to of regulatory that kind start patients, monitoring patient monitoring in a to a of put what proceed kind to durations be and had. place want therapy, in not

Operator

Mr. From please. Goldman Securities, Ueda

Akinori Ueda

[Foreign Language]

Christophe Weber

with quite perhaps a very pipeline Andy we our in I first Ueda-san. pipeline, many because a not of first that lot potential. assets I’ll take TAK-XXX it would as They very promising. have advanced, have and highlighted in add visible question like a our but was lot, to to we are TAK-XXX point which assets the were you as we on. you, and out can Thank high

TAK-XXX, in example. TAK-XXX, For example, oncology, for

that’s have not the So the looking assets value have I’m start is of lot pipeline. but milestone And that a to forward in yet. our been to have first will lot see fully the when a potentials, you to point mention of visible future

stress the will the that’s biosimilar, second ENTYVIO United the have The when XXXX And And the before. want date once that in case. mark face point case Not a out question only is I States. we growth to face ENTYVIO is biosimilar. worst worst

in can could many be multiple So XXXX. discuss when what patents But know, a we expiring, as the have -- you of possible date. we of them family

is enter. brands really led that growth our when until by will drive will the facing is XX global global brands ENTYVIO there reality biosimilars. these ENTYVIO but our within is uncertainty, So XX But biosimilar

that have ammunition in And lot the so to said we to have starting it’s really believe grow. we a we in need really continue continue to to pipeline part the partnering. to in-licensing, that of we Having later deliver the decade of our that, pipeline. And do

but looking there frankly, late they not know are all X, X, we We at stages, often overvalued. are many; that stage are

that’s you to early this And done part But promising or So second mid-stage. very with a we product the at a that’s launched a of beginning TAK-XXX it’s that of see a where and the prefer that tend we ‘XX, have we product partner that decade, ‘XX, take product. be of Arrowhead, could partnerships. like lot

deliver to So build value really will trying I pipeline, are want did do think which to is to to that’s Andy, what you we continue anything? this this progressively. add

Andy Plump

Nothing to add, Christophe.

Christophe Weber

to take? Costa, you want

Costa Saroukos

dividend Yes, Ueda-san, question. your for question. I’ll take you. the Thank

numerous share And annually. there’s per JPY We why. very reasons XXX the are with comfortable policy maintaining of dividend

one we spend. see that in has increased increased out. strategy you is target paying our by already We’ve We that First see XX%. We’ve R&D the about is and the that full R&D highlighted invested. QX, that

R&D that have. behind resources to the the uplifted already we we pipeline So deliver

is of flow abundant, maturities. prepay slides one XX, you’ve seen continued the Secondly, in significantly on our our cash and to we’ve position

already amount that if X you billion. So year, USD this we’ve ladder, at prepayments significant maturity already of look done

maturity on So when pay at down an annum the JPY compare of debt per average obligations, looking the yearly around billion we you are debt. to XXX

cash Our flow.

JPY XXX line our that’s is performance, well. top by billion XXX growth and flow cash billion Our as every year, anywhere JPY the revenue to between driven plus on our

all. So tells all, it headline the it says

profile, time. payment dividends well We’re our facilitates comfortable positioned, maturity which of over

change any -- to the don’t whatsoever. So us dividend policy reason this have for see I to

We’re in a -- in flow pipeline we’ve for already cash strong the started on and our question. in R&D position, increase business, Difficulty] fulfill the of Thank needs. performance we’re strong to you, a your operations in Ueda-san, to [Technical investment

Julie Kim

strategy. regards question. I competitive shared, small indication is say initial is one. the pricing argenx for But what the has relatively that thanks pricing that to the don’t will a we In on comment Stacy,

As you know, Gravis. Myasthenia

watching we in closely will has be of product any the on the uptake impact see So Myasthenia if pricing the to Gravis.

reasonable you’ve far, seen, Phase their the seems out So as released they’ve in Myasthenia II Gravis. data also of that

again, be monitoring So closely. we will

Andy Plump

asking inspection I can indirectly, site the around strategy. on for take our about time And actually question lines you’re approvals. your regulatory

both firstly, with course very for and we but inspections, not inspections, So as we GCP record have And activities. routinely filings, respect and part GLP to our site for -- action. as of normal are GMP strong a site of part just of GCP, undergoing

review product issue not the a had site the we’ve positive Specifically, with have month, regulatory launch. we have the a we based respect -- high is inspections of And around we approvals maribavir, November, all different and that, Eohilia The that had, towards last PDUFA high we in as date confidence won’t to on very from that the you Eohilia and until coming delays maribavir. inspections, site have AdCom know, any suffer is it’s at in up process. with end confidence around in situation.

in an At responding still have date PDUFA terms been dialogue update for and lines As information you don’t missed FDA program. potential and we’ve that we provide to know, point, to forth requests. this of we April our in a in with time back

Operator

Barker Next Barker. question, Steve from Mr. Steve Jefferies.

Steve Barker

[Indiscernible]

Julie Kim

In levels. regards around Steve. plasma donation to Thanks, the your question

XX% growth So supply. we did patient targeting the for IG with approximately made to year, commitments we’ve of from support the correct. what of would yes, guide we beginning revenue and At a have that standpoint were growth we that you’re

with moment. this the to at reduce the we our we’re the particularly performance to far, able in the network like pandemic, ongoing those BioLife, across year, higher plasma that that manufacturing, given seen, to plasma our is than through So plasma efficiencies we entire challenges collections we of gained infrastructure, plus collect of meet year to donation need the from in plasma order And cost thus would given amount collections our in the the U.S. the commitments. through you’ve

to regards a to deliver the an so that prudent patients the much in November us I we still collection our year. where so is going little on a commitments on in we’ll into event pull of the we to targets made, more and for PDT bit scheduled targeting the do note for performance that we business. XX, to plug, are track the will we And it which investor detail have be are back revenue have for overall

Steve Barker

[Indiscernible]

Julie Kim

Correct. It have is a Yes. decision deliberate we that made.

Ramona Sequeira

Andy next as I’ll on comment maybe on ELAPRASE can to agreement, TAK-XXX well. the JCR jump ask and Steve, and I in

where dearth market. think Hunters, I is is there on So area, really of this a treatments an the

or ready no in excited So means very disclose symptoms get as we’ll all that yet about with this that part development, the we somatic high, on everything actually treatments, X JCR. impact has one there’s for to of on high to development, but a than of think what push can and population. look we right? in these the through then as we is clear have I amazing And that now give, have room product the the on We’re closer children molecule, think their an that development, to in on direction one there’s well and the these, TAK-XXX have doing market and as unmet new, we as risk to we’re at commercialization that need more JCR that co-positioning from of a standpoint other is

molecule on We’re TAK-XXX? you the as treat opportunity very to excited did and as to about somatic want symptoms. comment JCR the cognitive both Andy, well

Andy Plump

Ramona. Thanks,

an TAK-XXX would is IDS peripherally be Stephen, like in with a very need to replacement Just ELAPRASE. enzyme conjunction briefly, that therapy administered acting administered intrathecally

forecasts as because sales previously, that product. are reason. niche of our very very a it’s So And peak presented small TAK-XXX for we

to X the better right dialogue a the forward sense agencies X have We’ll in We’re with path next still now. over months. for

Seiji Wakao

capital? II which fiscal stage safety you the JPY II end TAK-XXX. it was This dose Wakao development, hear question, function again, first or trial continue low is Phase once to can My the it JPMorgan. me. The from So if you’re about to If dose, or my is hepatic going III? the from JPY the to the that year, what XXX second of it billion but made, billion buyback for XXX at dose? do Thank medium I signal, Phase hope billion. if from to operating going was And JPY you high do will And restart, you. cash Phase or of going is III? decision Phase is are a question, XXX you’re

Andy Plump

you X TAK-XXX. the for Wakao-san had So questions

around was the The our which first plans was the toxicity around clinical at we dose second regarding starting saw and the what development. would be

trial year now, and patient the information Right restart. us dose are trials. but stopped regarding safety question, blinded those still have set. relationship. question obviously, set those With yet, safety, of ensure been your regarding unblinded, we’ll first to on the trials. we to full there’s a disclosed safety respect some We’ve There paused So haven’t data data patient it’s those serious more We next provide response a who issue.

We are dosing not patients.

of any have to at the trial, a need look possibility, data is we Before possibility if restarting there really full a we set.

So in there are now. no right place plans

Costa Saroukos

the -- is the funding operating our the is you, Wakao-san from Andy, -- take -- can I we’re way for flow. buyback back share Maybe question. cash that The I’ll Thank

that, going we’re to and even a operating delivering top flow. seeing capital will comfortably we think more flow well. flow we’re our of as you’re We free But working cash unlocking targets. on stronger operating So -- cash be cash

strong targets impact you fund see cash well. flow, So we operating don’t deleveraging to the our question. as these for from an our to your and abundant we opportunity Thank have therefore,

Operator

Credit Suisse, please. Sakai-san,

Fumiyoshi Sakai

[Indiscernible]

Costa Saroukos

address much, this. can you I Thank Sakai-san. very

just Sakai-san. I thank said repeat before. So you I’ll very what much,

and I is at time, at that And a position of think the shares strength. think a price in we’re acquire is to the discount. the the a fact really well in undervalued is we we’re message now position same our an where opportunity share

is I it’s at is X our cash growth. [Indiscernible] look from message we buying for to underlying will but again, strong flow, from really showing we’re just think months, the the team leadership in strong We’re strategy. next window revenue And And key that week. me, a confident

will as at in confident policy. a we that signal deleveraging it’s updated return, continue We’re our to allocation language enhancing in capital and our shareholder our look of indicated

allocation here onetime, perhaps. our also So been from I agree, signal it updating a But was the capital policy. if has

Thank on we’ll to you this an very much. continue revisit basis. So ongoing

Ramona Sequeira

maybe on And U.S. pricing. the you. I Thank can take question

it high of getting So is closer very the level package. administration some today, appears to sort

pay that what’s the still of is of well. in pharma the the from the think means I up size as and package, air size force the

available difficult what’s challenge The exactly lowering happen. going and expressed a concretely costs. that administration making at don’t So know challenge for to this to the us will of because that in the it’s unpredictability U.S. we a our patient concretely I support we’re say to patient patients. for say for medicines pleased been has point out-of-pocket has patients out-of-pocket

patients making the predictability impact. out-of-pocket that. force be very we’ll within affordability at a And to hoping to that to that administration’s but do do as increasing Thank yet medicines options, our at as carefully, some we all solutions we’re believe pharma information, the we final be are. reducing medicines certainly, decision they’re passing expect be you. of administration soon looking any has so support from to there And the and assessing We’ve of will and provided But much more number they looking and definitely we we shared. of the the And we’re pay and U.S. more goal costs have you. on accessible in

Operator

Morgan Stanley, Muraoka-san.

Shinichiro Muraoka

because JPY for to company? it the to plasma you than X,XXX? contribute it year question. be think XX%, year, you collection, the Stanley. Novavax My hear deterioration. Japan cost the cost That’s cost cost hope wasn’t you JPY is the of about think of quarter, about do the to In X,XXX the ratio. down Morgan XXX lower ratio, normalizes, the improvement so of vaccine. can in once the this X-point Muraoka, than target the higher fully but understand sure question fiscal my would I or margin? second can collection miss collection. does first didn’t whole to full is is pricing understand, more I gross And performance but billion you that. question XX% is are the slowing than due This And second the lower target? I quite margin first JPY plasma goods me. next about I Do you gross the the of will What do for

according million. likely XXX U.K. this please And export in no production And can was Japan? the that filed There you agreement you also, So -- this government. Japanese you a it’s to me? with would of therefore, that have the in the so your think problem filing you clarify is Is would and Do capacity, outside for capacity the excess also to Japan. production understanding? excess the correct

Christophe Weber

question the Constantine for for first then and your Novavax Masato question.

Costa Saroukos

Sure. Thank core If you. results. understood it margin the was I Muraoka-san. Thank on the gross your you, question, around

gross headwinds by two first -- driven we predominantly of that’s in had some the margin the right, And has So the half year. you’re reasons.

first The one FX impact. is

cost been of FX costs euros. have impacted So has of because we goods the the lot manufacturing a in from

a So that had headwind.

another gross particular, margin overall higher the an improve was XX fees, for gross to of uptick fees. donor the that than overall brands the one addressing gross margin. in also now highlighted our that year standpoint, we second margin in margin. we’re XX gross therapies, was as half improving the a that the there company of expect we’ve is The no global the overall on have global And for second But we acceleration from total our the donor plasma-derived that And brands. reason longer see

we’re in think we So a comfortable position.

operating that confident XXX for profit JPY full year. core very deliver the we’re We’re going the to billion target

the In core first billion profit. operating in half even JPY at XXX run year, fact, year are rates to the the full XX%

we we’re comfortable a deliver position guidance. our to So in believe

is you and to This Iwasaki. your who over – So Representative -- Takeda thank Thank you, Masato I’ll is hand Iwasaki it Limited next? for Director Pharmaceutical question. Masato-san. Company

approval, Europe? those a also as pricing impact as in the think questions. were of the of So timing what I and well filing is filing

pricing as far yet. has buyer be the the The concerned, is it Japanese perspective. not fixed will been from As government our biggest

we we this collaborate them closely Novavax of have of supply sure no So early will delay decide we pricing. shared approval, be with consult very and specifically, that you filing, the product the on in Timing manufacturing. is make as is plan. need That not to we to Again, as but there really MHLW, well XXXX. as MHLW with

getting answers we’re that question. your that now. for hope I ready So right

Shinichiro Muraoka

don’t it’s supply million? Takeda Limited are we happen can the Novavax. we we is if Company million what doses options Japan. the for between are export excess Iwasaki the Masato Pharmaceutical XXX manufactured possible with – XXX with you. Representative be we manufacturing of we’re the and know to future, in to potential That’s if the but And Well, than of Yes, Japanese XXX going government, we more considering. discussing production, what’s to the capacity, difference one Director the us million checking versus produce that Thank outside capacity, to

Christophe Weber

And with made that will the is that’s express us manufacturing Japan Thank linked was that they at government that logically, in finance but you, capacity. preferential a That’s Masato. the it that that the remember the manufacturing to help that investment to said, of investment for why have the the what to they say financing add one translation, we capacity. price not of that, wanted us I the is will we time. government to help wanted element the

Operator

for I schedule. Thank to would that, much for today. despite Thank so for you. like continued ask With support. busy webinar We your your the you your close to participation

Costa Saroukos

everyone. Thanks, you. Thank

Christophe Weber

you. Thank

Takeda Pharmaceutical Company Limited (TAK) 29 Oct 212022 Q2 Earnings call transcript