Takeda Pharmaceutical Company Limited Q2 FY2026 earnings call

• Strategic Execution: The company is executing its 'Horizon One' strategy, focusing on transforming Takeda for growth through successful product launches, pipeline advancement, and operational transformation.
• New Product Launches:
  • Orzaful launched in Japan and China for narcolepsy type 1; US launch expected in early November post-DEA scheduling.
  • Mimrylo launched in the US for polycythemia vera, receiving Category 1 NCCN guideline recommendation.
  • Zazocitinib filed for approval in the US and Europe for psoriasis, showing superior skin clearance data.
• Pipeline Progress:
  • TAC921 demonstrated positive overall survival and progression-free survival in advanced gastric cancer, supporting a planned filing in Japan in FY2027.
  • L-Ritercept initiated Phase III studies in myelofibrosis.
  • Antivio (Intivio) showed compelling data from the Verdict study, supporting treat-to-target strategies in ulcerative colitis.
• Transformation Program: Achieved approximately 30 billion yen in annualized savings to date. On track to achieve 100 billion yen in gross savings with restructuring costs of 160 billion yen (10 billion yen lower than originally forecast).
• Financial Health: Reported EPS increased 169% due to lower amortization/impairment expenses and favorable tax timing, though core EPS declined 1.2% at CER.

Core revenue was approximately 2.4 trillion yen, a decrease of 1% at constant exchange rates (CER), reflecting headwinds in mature/off-patent products partially offset by new launches. Core operating profit was 710.6 billion yen, an increase of 0.7% at CER. New launches contributed to growth but represented only 4% of total revenue; core inline brands accounted for 58% of revenue and grew 0.5% at CER.

• Revenue: Maintained guidance for a low single-digit percent decline at CER. Raised absolute revenue forecast by 60 billion yen primarily due to FX benefits.
• Operating Profit: Raised core operating profit guidance by 30 billion yen (to 1.19 trillion yen) driven by FX benefits and cost savings.
• EPS: Raised core EPS guidance, also reflecting FX benefits.
• Product Specifics: Reduced forecast for albumin due to market dynamics; increased forecasts for Vyvanse and Fritillates. Maintained outlook for immunoglobulin with expectations of a rebound in H2.

• FX Volatility: Significant impact from yen depreciation, which boosted reported figures but creates uncertainty for future translations.
• Launch Execution Risks: Early-stage launches (Orzaful, Mimrylo) face risks related to reimbursement timelines, payer coverage, and physician adoption.
• Pipeline Uncertainty: Zazocitinib's IBD program faces complexity due to lack of dose-response in UC data, requiring integration with upcoming Crohn's data for Phase III decisions.
• Competitive Pressure: Intense competition in key therapeutic areas, particularly in IBD and oncology, affecting pricing and market share.
• Regulatory Delays: Potential delays in DEA scheduling for Orzaful in the US or FDA/EMA decisions for Zazocitinib could impact launch timelines.

Q: Analyst asked about Mimrylo launch uptake and Zazocitinib UC dose-dependency issues.

A: Teresa Bittetti stated Mimrylo launch is proceeding as planned with strong HCP enthusiasm, though quantitative metrics are too early to share. Andy Plump clarified that Zazocitinib showed robust efficacy at the 50mg dose but not the 75mg dose in UC. He noted this lack of dose-response is complex but encouraged, and the decision for Phase III will depend on integrating these results with upcoming Crohn's disease data to determine the optimal path forward.

Q: Analyst asked if Zazocitinib UC data was comparable to other oral drugs and when TAC360 NT2 data would be disclosed.

A: Andy Plump confirmed Zazocitinib's clinical remission rates are directionally on par with other oral agents in the space. Regarding TAC360, he explained that while data is expected later in the fiscal year, specific disclosure plans (press release vs. congress) are not yet finalized and will depend on the strategic value of the data once available.

Q: Analyst questioned the meaningfulness of the low-dose Zazocitinib result given the lack of dose-response and asked about Mimrylo coverage mix.

A: Andy Plump argued the low-dose result is robust due to the effect size, consistency across endpoints, and mechanistic rationale suggesting higher doses may lose anti-inflammatory effects. Teresa Bittetti added that Mimrylo covers Medicare first, then commercial, with scripts flowing through prior auth. She indicated the patient mix is evenly distributed between low-risk phlebotomy patients and high-risk patients already on therapy.

Q: Analyst asked why confidence is higher for Zazocitinib in Crohn's vs. UC and why TAC360 is being studied in NT1 despite Orzaful's success.

A: Andy Plump cited genetic evidence (heterozygous TIK2 loss protects against Crohn's, homozygous needed for UC) and historical TIK2 inhibitor performance favoring Crohn's. Regarding TAC360, he stated the NT1 study is a small proof-of-concept to keep options open, as they remain highly confident in Orzaful as a best-in-class agent for NT1.

Q: Analyst asked how TAC921 differentiates from competitors like AstraZeneca's ADC and requested Orzaful pricing details in Japan/China.

A: Andy Plump and Teresa Bittetti highlighted TAC921's FC-silenced design offering better GI tolerability and strong efficacy in a refractory population, aiming for first-line combination trials rather than late-line use. Julie Kim clarified Orzaful is sold via private market in China pending NRDL listing next year, while Japan pricing is approximately $100,000 annually.