Takeda Pharmaceutical Company Limited Q2 FY2024 earnings call

• Strong momentum of Growth & Launch product portfolio with 18.7% growth at constant exchange rate in first half, accounting for 47% of total revenue. • Progress in multiyear efficiency program on track, with R&D investment adjusted due to pipeline prioritization. • Late-stage pipeline advancing with multiple programs in Phase 3, e.g., TAK-861 Phase 3 trial for narcolepsy type 1 and mezagitamab proof-of-concept data for immunoglobulin A nephropathy. • Financial results: H1 revenue ¥2.4 trillion, up 13.4% year-on-year; core operating profit ¥719.9 billion, up 22.3% year-on-year; reported operating profit ¥350.6 billion, up nearly 200%.

Growth & Launch products grew 18.7% at constant exchange rate in the first half and now account for 47% of total revenue. VYVANSE declined 29% in the U.S. and 18% globally. PDT business had 14% year-over-year growth in the first half, with IG portfolio growing 16%, albumin business in single-digit growth, and positive margin expansion due to various factors like reducing donor compensation and investments in data/digital/technology.

• Raised full-year '24 management guidance, with revenue expected to be flat to slightly increasing, core operating profit to have mid-single-digit percentage decline, and core EPS approximately 10% decline on CER basis. Updated revenue forecast to ¥4.48 trillion, core operating profit to ¥1.05 trillion, core EPS to ¥456. • Revised foreign exchange assumptions with euro from ¥160 to ¥165, impacting revenue and core operating profit. • Free cash flow forecast range uplifted.

• Potential acceleration of VYVANSE generic erosion in the second half as generic supply normalizes, impacting revenue and profit growth. • Market competition in various therapeutic areas, e.g., IBD with new entrants, and uncertainties around regulatory approvals and competitive dynamics for late-stage pipeline programs.

Q: Steve Barker from Jefferies asked about plasma business quarter-to-quarter decline and mezagitamab's positioning in IgAN.

A: Giles Platford commented on PDT business growth and margin expansion, while Andy Plump and Ramona Sequeira discussed mezagitamab's data and positioning Q: Mike Nedelcovych from TD Cowen asked about ENTYVIO market updates and QDENGA competition A: Ramona Sequeira spoke about ENTYVIO peak sales outlook and QDENGA's competitive edge Q: Yamaguchi-san from Citi asked about ENTYVIO corporate guidance change and total company guidance change A: Julie Kim and Milano Furuta addressed ENTYVIO access improvement and total company guidance dynamics Q: Matsubara-san from JPMorgan asked about ENTYVIO market situation and TYK2 Phase 3 timing A: Julie Kim talked about ENTYVIO's market position and Andy Plump discussed TYK2 Phase 3 program progress Q: Tony Ren from Macquarie asked about zasocitinib's safety study and TAKHZYRO's future prospects A: Andy Plump explained zasocitinib's study design and Ramona Sequeira spoke about TAKHZYRO's position Q: Sakai-san from UBS Securities asked about PDT in Japan and Japanese business management A: Giles Platford commented on PDT's Japan investment and Christophe Weber discussed Japan business strategy Q: Miki Sogi from Bernstein asked about Entyvio growth sources and TYK2 positioning A: Julie Kim addressed Entyvio growth drivers and Christophe Weber spoke about TYK2 positioning