Financial Data and Key Metrics Changes - Takeda reported year-to-date revenue growth of 4.5% at constant exchange rates (CER), with total revenue exceeding JPY 3.5 trillion, marking a 9.8% increase compared to the previous year [14][17] - Core operating profit reached JPY 1 trillion, reflecting a year-on-year increase of 16.3% or 10.1% at CER [17] - The core operating profit margin improved to 28.5%, an increase of 1.6 percentage points [14][15] - Reported operating profit grew by 86% to JPY 417.5 billion, with operating cash flow increasing by 90.8% year-on-year to JPY 835 billion [18][19] Business Line Data and Key Metrics Changes - Growth & Launch products, which represent 47% of total revenue, grew by 14.6% at CER year-to-date [19] - ENTYVIO experienced a growth rate of 6.6% at CER, impacted by shipment timing and a gross to net adjustment of approximately USD 50 million [20][21] - TAKHZYRO in the rare disease segment delivered 16.4% growth at CER [21] - Plasma-derived therapies, including immunoglobulin and albumin, grew by 11.9% and 2.2%, respectively [21] Market Data and Key Metrics Changes - The depreciation of the yen against major currencies contributed JPY 171.9 billion to revenue growth, resulting in a 9.8% increase on an actual FX basis [24] - ENTYVIO's year-to-date growth, excluding one-off adjustments, was 9.2%, indicating a strong underlying demand despite competitive pressures [78] Company Strategy and Development Direction - The company is focused on advancing its late-stage pipeline, with three Phase III data readouts expected in 2025 [15][16] - A share buyback of up to JPY 100 billion has been initiated, reflecting confidence in cash flow and performance [30][31] - The management change is strategically timed to align with upcoming product launches and board member transitions [9][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth for the next fiscal year, despite the residual impact of VYVANSE generic erosion [59] - The company anticipates continued growth from its Growth & Launch products, with a focus on innovation and addressing unmet medical needs [145] - The U.S. healthcare environment is evolving, with potential impacts from the IRA and pricing negotiations, but the company remains committed to its innovative pipeline [124][125] Other Important Information - The company has completed a licensing agreement for elritercept, a late-stage oncology program [15] - Management emphasized the importance of maintaining a strong patent position to mitigate risks from biosimilars entering the market [101] Q&A Session Summary Question: Clarification on accounting issues and R&D expenses - Management clarified that the negative impact on forecasts was due to adjustments in inventory valuation and that R&D expenses related to specific clinical trials would not be recurring [39][46] Question: Management change rationale - The timing for the management change was deemed appropriate to ensure stable leadership before new product launches and to synchronize with board transitions [56][58] Question: ENTYVIO growth concerns - Management noted that ENTYVIO's growth was affected by shipment timing and adjustments, but underlying demand remains strong [78][80] Question: Impact of IRA on clinical development - The inclusion of Otezla in the IRA does not change the company's clinical development plans but reinforces the need for differentiation in efficacy and safety [90][91] Question: Future margin improvement and dividends - Management indicated that core operating profit margins are expected to improve, and while dividend policies are stable, increases depend on future performance [99][100] Question: Biosimilar entry timing for ENTYVIO - Management believes that biosimilar entry will occur between 2030 and 2032, depending on patent litigation outcomes [101][102] Question: Share buyback rationale - The share buyback decision was based on generating more cash flow than planned and aligning with the capital allocation policy [110] Question: R&D spending and pipeline strategy - R&D spending is expected to increase in the fourth quarter, with new Phase III programs starting, and the strategy remains focused on high unmet medical needs [138][145]

Core Insights - Neurocrine Biosciences has amended its agreement with Takeda, obtaining exclusive worldwide rights to develop and commercialize osavampator, except in Japan where Takeda retains rights [1][2] - The collaboration aims to expedite the development of osavampator, a potential first-in-class treatment for major depressive disorder (MDD), with plans to initiate a Phase 3 program in the first half of 2025 [2][4] - Osavampator is designed for patients with MDD who have not responded to at least one antidepressant, addressing a significant unmet medical need [4][5] Company Overview - Neurocrine Biosciences is a biopharmaceutical company focused on developing treatments for neurological, neuroendocrine, and neuropsychiatric disorders, with a diverse portfolio including FDA-approved therapies and a robust pipeline [6] - The company has a history of collaboration with Takeda, initially partnering in 2020 to develop compounds for depression and schizophrenia, including osavampator [3] Product Details - Osavampator is an investigational AMPA positive allosteric modulator, which has shown positive topline data in a Phase 2 study for MDD [4] - The drug targets a significant patient population, as over 21 million people in the U.S. suffer from MDD, with approximately one-third not responding to existing antidepressants [5]

TSE: 4502 ISB Committed to Growth & Shareholder Returns FY2024 Q2 Earnings Announcement October 31st, 2024 Important Notice For the purposes of this notice, "presentation" means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed by Takeda Pharmaceutical Company Limited ("Takeda") regarding this presentation. This presentation (including any oral briefing and any question-and-answer in connection with it) is not intended to, and doe ...

Financial Data and Key Metrics Changes - First half revenue increased by 13.4% year-on-year, reaching almost ¥2.4 trillion, with a 5% growth at constant exchange rates [21] - Core operating profit rose by 22.3% year-on-year to ¥719.9 billion, or 12.9% at constant exchange rates [21] - Reported operating profit grew nearly 200% to ¥350.6 billion, aided by fewer impairments and one-time costs compared to the previous fiscal year [21] - Core EPS and reported EPS were ¥310 and ¥119, respectively [21] - Operating cash flow increased by 54.9% year-on-year to ¥451.3 billion, reflecting strong profit growth and improvements in working capital [21] Business Line Data and Key Metrics Changes - Growth & Launch products grew by 18.7% at constant exchange rates, now accounting for 47% of total revenue [6][10] - VYVANSE experienced a decline of 29% in the U.S. and 18% globally, with expectations of accelerated generic erosion in the second half [6] - ENTYVIO returned to double-digit growth, achieving a growth rate of 10% in the first half [15] - Newly launched products like FRUZAQLA and ADZYNMA exceeded revenue expectations, with FRUZAQLA achieving a 29% market share in the fourth line as of July [11][12] Market Data and Key Metrics Changes - The U.S. market for ENTYVIO is expected to grow at 11%, down from a previous estimate of 16%, due to competitive dynamics and pricing pressures [65] - The plasma business showed strong first-half growth of 14% year-on-year, although there was a decline in sales from Q1 to Q2 [48] - The company maintains full-year guidance of high single-digit growth for the PDT business overall [48] Company Strategy and Development Direction - The company is focused on driving efficiencies to improve margins, with a multi-year efficiency program aimed at improving core operating profit margin by 100 to 250 basis points each year [25] - R&D investments are being weighted towards the second half of the fiscal year to support multiple late-stage programs now in Phase 3 [7] - The company is expanding its late-stage pipeline with significant advancements in programs like TAK-861 for narcolepsy and mezagitamab for IgA nephropathy [8][38] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year guidance based on strong first-half performance and updated foreign exchange assumptions [9] - The company is optimistic about the future potential of its Growth & Launch products, despite challenges from generic erosion of VYVANSE [6][19] - Management expressed confidence in the long-term growth potential of ENTYVIO, projecting peak sales of $7.5 billion to $9 billion [18] Other Important Information - The company has initiated a global Phase 3 development program for TAK-861 in narcolepsy type 1, with strong enthusiasm among investigators [37] - The company is preparing for an R&D Day on December 12, focusing on late-stage pipeline programs and their commercial potential [40] Q&A Session Summary Question: Trends in the plasma business and mezagitamab market positioning - The plasma business showed strong first-half growth, but there was a decline in Q2 sales compared to Q1 due to planned upgrades and shutdowns [48] - Mezagitamab is expected to fit well into the treatment landscape for IgA nephropathy, with strong data suggesting it could be a best-in-class option [51][52] Question: ENTYVIO market outlook and competitive dynamics - The peak sales outlook for ENTYVIO did not initially contemplate combination therapy, but the company is exploring this avenue [58] - ENTYVIO remains the most frequently prescribed brand in the U.S. for IBD, with a strong safety and efficacy profile [59] Question: Guidance changes and overall company outlook - The guidance for ENTYVIO was lowered due to slower-than-expected growth and competitive pressures [65] - The company remains confident in its overall guidance despite anticipated challenges from VYVANSE's generic erosion [66]

Group 1 - Takeda Pharmaceutical is a significant player in various drug sectors, although it may not be as recognizable to investors as larger Western pharmaceutical companies [1] - The company has a focus on returning value to investors, indicating a potential for growth and investment opportunities [1] Group 2 - The article does not provide specific financial data or performance metrics related to Takeda Pharmaceutical [2][3]

Core Insights - Zacks emphasizes a ranking system focused on earnings estimates and revisions to identify winning stocks, while also considering trends in value, growth, and momentum [1][2] Value Investing - Value investing is highlighted as a preferred strategy for identifying strong stocks, utilizing fundamental analysis to find undervalued companies [2] Takeda Pharmaceutical Co. (TAK) - Takeda Pharmaceutical Co. (TAK) is currently rated as a strong buy with a Zacks Rank of 1 and an A grade in the Value category, indicating it is among the strongest value stocks available [3] - TAK's price-to-book (P/B) ratio is 0.91, which is lower than the industry average of 1.38, suggesting it may be undervalued [4] - The price-to-sales (P/S) ratio for TAK is 1.65, significantly lower than the industry average of 3.1, reinforcing the perception of undervaluation [5] - TAK's price-to-cash flow (P/CF) ratio stands at 7.53, compared to the industry average of 11.26, further indicating potential undervaluation [6] - Overall, TAK's strong value metrics and positive earnings outlook position it as an impressive value stock at this time [7]

Core Insights - Takeda Pharmaceutical Co. (TAK) is currently more attractive to value investors compared to Stevanato Group (STVN) based on various financial metrics and rankings [1][7] Valuation Metrics - TAK has a forward P/E ratio of 9.76, significantly lower than STVN's forward P/E of 38.35 [5] - TAK's PEG ratio is 0.29, indicating a favorable valuation in relation to its expected earnings growth, while STVN's PEG ratio is 5.50 [5] - TAK's P/B ratio stands at 0.94, compared to STVN's P/B of 4.65, further highlighting TAK's undervaluation [6] Earnings Estimates - TAK holds a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions, while STVN has a Zacks Rank of 4 (Sell) [3] - The stronger estimate revision activity for TAK suggests an improving earnings outlook compared to STVN [7] Value Grades - TAK has a Value grade of A, while STVN has a Value grade of C, reflecting the overall assessment of their valuation metrics [6]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Takeda Pharmaceutical Co. (TAK) as a strong value stock based on its favorable valuation metrics and earnings outlook [2][3][7] Valuation Metrics - Takeda Pharmaceutical Co. has a Price-to-Book (P/B) ratio of 0.94, which is attractive compared to the industry average of 1.45 [4] - The Price-to-Sales (P/S) ratio for TAK is 1.71, significantly lower than the industry's average P/S of 3.39, indicating potential undervaluation [5] - TAK's Price-to-Cash Flow (P/CF) ratio stands at 7.75, compared to the industry average of 11.92, suggesting a solid cash outlook [6] Investment Outlook - With a Zacks Rank of 1 (Strong Buy) and an "A" grade in the Value category, TAK is positioned as one of the strongest value stocks currently available [3][7] - The combination of favorable valuation metrics and a strong earnings outlook makes Takeda Pharmaceutical Co. an appealing investment opportunity for value investors [7]

Financial Data and Key Metrics - Revenue grew by 2.1% at constant exchange rate (CER) in Q1, driven by strong performance of Growth & Launch Products, which grew 17.8% at CER and now represent 46% of total revenue [3][4] - Core operating profit margin was 31.6% in Q1, benefiting from phasing of R&D investment, reduction in other OpEx, and temporarily lower-than-anticipated generic erosion of VYVANSE in the U.S. [4] - Reported operating profit declined by 1.3% to JPY 166.3 billion, impacted by restructuring expenses and impairment of soticlestat after Phase III study readouts [7] - Core EPS was JPY 176, while reported EPS was JPY 61 [8] - Operating cash flow was JPY 170.3 billion, and adjusted free cash flow was JPY 23.7 billion, reflecting significant business development activity [8] Business Line Performance - ENTYVIO growth accelerated to 7.6% at CER, supported by the launch of ENTYVIO Pen in the U.S., with 2 out of 3 patients having access as of July [10] - TAKHZYRO grew 19.8% at CER, capitalizing on its leading position in the expanding prophylaxis market for hereditary angioedema (HAE) [10] - Immunoglobulin portfolio grew 21.9%, while albumin declined 14.2% due to anticipated phasing of supply to China, with recovery expected later in the year [10] - FRUZAQLA and QDENGA showed strong initial uptake, with FRUZAQLA generating JPY 11.9 million in revenue and QDENGA now available in 21 countries [11] Market Performance - Growth & Launch Products grew 17.8% at CER, offsetting the loss of exclusivity impact from products like VYVANSE in the U.S. and AZILVA in Japan [9] - The depreciation of the yen versus major currencies provided an additional revenue tailwind of JPY 127.2 billion, resulting in 14.1% growth on an actual FX basis [9] - QDENGA saw strong demand in both endemic and non-endemic markets, with WHO pre-qualification and Gavi support expected to drive further awareness and access [11] Strategic Direction and Industry Competition - The company is focused on improving core operating profit margin through a multiyear efficiency program, targeting organizational agility, procurement savings, and leveraging data, digital, and technology [5] - Two option agreements were signed for mid- and late-stage programs: olverembatinib for chronic myeloid leukemia and ACI-24.060 for Alzheimer’s disease, complementing the existing pipeline [6] - The company is advancing its R&D pipeline, with significant opportunities in zasocitinib (TYK2 inhibitor) and TAK-861 (orexin 2 receptor agonist), both poised for near-term Phase III readouts [17] Management Commentary on Operating Environment and Future Outlook - Management expects VYVANSE generic erosion to align with projections in the coming quarters, while R&D investment will increase as multiple programs move into Phase III [4][12] - The company remains committed to transforming patients' lives while driving long-term business growth and profitability [6] - The full-year FY 2024 outlook remains unchanged, with continued monitoring of VYVANSE generic erosion, portfolio performance, and FX rates [13] Other Important Information - The company issued a new hybrid bond of JPY 460 billion in June and executed USD 3 billion of debt financing in July, both aimed at refinancing existing debt and smoothing out the debt maturity ladder [14] - The company introduced the term "adjusted free cash flow" in FY 2024, with the calculation remaining consistent with the previous year's free cash flow metric [8] Q&A Session Summary VYVANSE Generic Erosion and Plasma Business - VYVANSE demand declined by over 30% year-over-year, with further erosion expected as generic supply improves [27] - The plasma business saw strong growth, with donor fees remaining stable and margins improving due to optimized supply chain and manufacturing capacity utilization [28] Pipeline and Partnerships - The company ended its partnership with JCR for Hunter syndrome candidate JR-141 as part of pipeline prioritization [30] - The deal with AC Immune for Alzheimer’s disease reflects confidence in the amyloid beta target, with potential for earlier intervention and improved efficacy [31][32] ENTYVIO Growth and Market Share - ENTYVIO is expected to accelerate growth in the second half of the year, driven by improved access and the recent approval of the Crohn’s indication for ENTYVIO Pen [38][40] - The company maintains its leadership in first-line bio-naive IBD patients, with SKYRIZI impacting second-line and beyond [47] R&D Efficiency and Biosimilar Threats - The R&D organization is undergoing restructuring to improve productivity, with a focus on automation and leveraging data, digital, and technology [54][56] - The company expects ENTYVIO biosimilars to enter the market no earlier than 2030-2032, with no change to current assumptions [58] QDENGA and Immunoglobulin Performance - QDENGA is off to a strong start, with demand exceeding supply capacity, and the company is ramping up manufacturing to meet demand [61] - Immunoglobulin growth was strong in Q1, driven by the approval of CIDP indications and continued demand in primary immune deficiency markets [64][68] TYK2 Inhibitor and Competitive Landscape - The company believes TAK-279 has a differentiated profile and strong potential in IBD, with Phase III trials expected to read out in 2026 [43][44] - The slow uptake of BMS’s TYK2 inhibitor is not seen as indicative of TAK-279’s potential, given its differentiated profile and commercial strategy [67]

Core Insights - Takeda Pharmaceutical Company is showing signs of improvement despite previous revenue declines in key areas, with a focus on its "return to growth program" aimed at operational optimization and financial stability [2][4][17] - The company has seen revenue increases in the gastrointestinal and inflammation sectors, with significant contributions from products like Entyvio [9][10] - Takeda's long-term forecast appears brighter, but projections for FY2024 remain unfavorable, leading to a "Hold" rating for the stock [2][24] Business Overview - Takeda is one of Japan's largest pharmaceutical companies, with a diverse portfolio that includes oncology, gastrointestinal and inflammation, rare diseases, plasma-derived therapies, vaccines, and neurosciences [3] - The company has a large list of commercial products and a robust pipeline of candidates, with recent advancements in clinical trials and product approvals [2][3] Financial Performance - FY2023 was disappointing for Takeda, with a 54.51% decline in net profits despite a 5.86% increase in total revenues year-over-year [17][18] - The company reported a 10.9% increase in net debt, primarily due to refinancing efforts related to the acquisition of Shire [18] - For FY2024, Takeda expects flat or slightly declining total revenues, with a projected 10% decline in operating profits and mid-teens percentage decline in EPS [18][20] Product Performance - The gastrointestinal and inflammation sector is the largest revenue driver, with FY2023 revenues of JPY 1,216.2 billion, an 11.1% increase year-over-year [9] - The rare diseases sector generated JPY 770 billion in FY2023, with Takhzyro and Advate being significant contributors [11] - The oncology sector reported revenues of JPY 462.4 billion, with mixed performance across products, including a notable decline in Velcade [15] Strategic Initiatives - The "returning to growth program" aims to improve operating margins by 100-250 basis points annually from FY2025 onwards, leveraging AI to optimize operations [5][6] - The program is expected to carry a cost of JPY 140 billion in 2024, approximately $894 million, with anticipated improvements in product launches and clinical trial efficiencies [6][20] Market Outlook - Takeda's management anticipates that new product launches will account for 50% of revenues in FY2024, offsetting losses from declining sales of Vyvanse [20] - The company is focusing on expanding its vaccine portfolio, particularly with Qdenga, which is expected to see significant revenue growth [16] - Despite positive developments, the overall performance in FY2024 is not sufficient to justify a rating upgrade, maintaining a "Hold" rating for the stock [24][27]