Financial Data and Key Metrics Changes - Revenue in H1 was just over JPY 2,200 billion, a decrease of 6.9% or 3.9% at constant exchange rates [11] - Core operating profit was JPY 639.2 billion, a year-on-year decrease of 11.2% at actual FX or 8.8% at constant rates [11] - Reported operating profit declined by 27.7% due to larger impairment losses this fiscal year [11] - Core EPS was JPY 279 and reported EPS was JPY 72, reflecting a 40% decline in reported net profit [11] Business Line Data and Key Metrics Changes - Growth on launch products grew 5.3% at constant exchange rates, representing over 50% of revenue [12] - ENTYVIO grew at 5.1% at constant rates, with a revision of full year forecast for NTDO to 6% at constant exchange rates [12][13] - TAKHZYRO grew steadily with 5.9% growth at constant rates [13] - Immunoglobulin and albumin are expected to grow at high single digits [15] Market Data and Key Metrics Changes - The U.S. market for ENTYVIO is seeing increased active pen patients, but revenue growth has been slightly below expectations [12][13] - The impact of Medicare Part D redesign is affecting several products in the U.S. [14] - The strength of the euro against the Brazilian real is impacting QDenga sales [16] Company Strategy and Development Direction - The company is entering a new business cycle with the Vyvanse generic impact mainly behind it, with potential launches for three new products [7] - The partnership with Innovent Biologics is expected to enhance the oncology pipeline significantly [8][34] - The company is focused on leveraging technology and AI to transform operations [7] Management's Comments on Operating Environment and Future Outlook - Management expects better growth rates for the full fiscal year despite H1 being impacted by loss of exclusivity [22] - The company is committed to maintaining cost discipline while investing for future growth [22] - Management acknowledges the challenges posed by foreign exchange fluctuations, particularly the euro's strength [20][68] Other Important Information - The company has revised its full year guidance for corporate profits and core EPS to reflect unfavorable changes in product mix and transaction FX dynamics [20] - The dividend outlook remains at JPY 200 per share for the full year [21] Q&A Session All Questions and Answers Question: Regarding the Innovent deal and R&D spending - Management emphasized commitment to investment in oncology while managing R&D expenses effectively, with a focus on achieving mid to long-term margins driven by top-line growth [64][66] Question: About the growth rate of ENTYVIO and competitive pressures - Management noted that ENTYVIO remains a market leader but faces intensified competition, particularly in Crohn's disease, impacting growth expectations [93][94] Question: On the gross margin trend and revised guidance - Management explained that the gross margin decline is primarily due to transaction effects and product mix changes, with expectations for lower gross margins in the second half [82][84] Question: About the Innovent partnership and data replicability - Management expressed confidence in the data from the Innovent partnership, noting significant due diligence was conducted to ensure data applicability in global trials [96]

TSE: 4502 Committed to Growth & Shareholder Returns FY2025 Q2 Earnings Announcement October 30th, 2025 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 does no ...

Core Insights - Takeda announced earnings results for the first half of fiscal year 2025, which ended on September 30, 2025, and provided an updated full-year outlook [1] Financial Performance - The results for the first half are in line with expectations for core business progress during this transitional year focused on new product launches [1] Management Commentary - CEO Christophe Weber highlighted that the updated full-year outlook reflects impairment charges [1]

Core Insights - The seventh Chushang Conference was held in Wuhan, where the "Chushang Social Responsibility Benchmark Enterprises" list was released, featuring 100 companies across five categories [1][2] - Notable companies on the list include Taikang Insurance Group, Xiaomi Technology, and Jiuzhoutong Pharmaceutical Group, many of which have strong ties to Wuhan [1][2] Company Developments - Taikang Insurance Group is constructing a financial center in Wuhan with a total investment of 6 billion yuan, expected to be operational by 2027, further solidifying its strategic foundation in Central China [1] - Xiaomi's new smart appliance factory in Wuhan has commenced operations, with a peak production capacity of 7 million air conditioners and an annual output value of nearly 14 billion yuan [2] - Jiuzhoutong Pharmaceutical Group, a leading private pharmaceutical company in China, is deeply involved in the health industry in Hubei, operating over 400 logistics centers and employing more than 5,000 delivery personnel [2] Social Responsibility Recognition - The "Chushang Social Responsibility Benchmark Enterprises" list includes companies recognized for their contributions in various categories such as comprehensive, technological innovation, green development, rural revitalization, and stable employment [3][5][6][7][9][11]

Core Viewpoint - The article discusses a significant licensing deal between Innovent Biologics and Takeda Pharmaceutical, valued at $11.4 billion, which includes an upfront payment of $1.2 billion and potential milestone payments of $10.2 billion. This deal is seen as a pivotal moment for the Chinese innovative drug sector, particularly in the context of the global oncology market [5][9]. Group 1: Transaction Details - The deal includes three drug candidates: IBI363, IBI343, and IBI3001, with the majority of the payment focused on IBI363 and IBI343. IBI3001 is only sold under an option agreement [7][9]. - IBI363 is a PD-1/IL-2α-bias dual antibody currently in the registration clinical development phase, targeting non-small cell lung cancer (NSCLC) [8]. - IBI343 is an ADC targeting CLDN18.2, with ongoing clinical studies for gastric and pancreatic cancers [8]. - IBI3001 is an ADC targeting EGFR/B7H3, currently in Phase I clinical trials [8]. Group 2: Strategic Implications - The unique "Co-Co" collaboration model allows Innovent to remain deeply involved in the global development of IBI363, sharing both costs and future profits with Takeda, which is a departure from traditional licensing agreements [11][12]. - This partnership is expected to enhance Innovent's capabilities in global clinical development and commercialization, aligning with its goal to become a leading global biopharmaceutical company by 2030 [13][16]. - The collaboration with Takeda, a well-established player in the oncology market, is seen as a strategic move to access the U.S. market and leverage Takeda's expertise [15][16]. Group 3: Product Potential - IBI363 is positioned as a potential cornerstone drug for next-generation cancer immunotherapy, with the ability to address PD-1 resistance and target "cold tumors" [18]. - The market potential for PD-1 resistant therapies is projected to reach billions, with IBI363 showing promising clinical data, including an objective response rate (ORR) of 36.7% in a specific dosage group [19][20]. - The drug's broad-spectrum applicability across various cancers, including colorectal and gastric cancers, further enhances its market potential [21].

Investment Rating - The report does not explicitly state an investment rating for the pharmaceutical and biotechnology industry, but it highlights significant developments that may influence future ratings [1]. Core Insights - The pharmaceutical and biotechnology sector saw a weekly increase of 0.58%, underperforming compared to the Wind All A index (3.47%) and the CSI 300 index (3.24%) [2][7]. - A major strategic collaboration was announced between Innovent Biologics and Takeda Pharmaceutical, with a total deal value potentially reaching $11.4 billion, including an upfront payment of $1.2 billion and milestone payments of up to $10.2 billion [2][10]. - The report emphasizes the importance of the upcoming commercial insurance innovative drug directory, which is expected to be released soon, and suggests monitoring the companies that will be included [2][11]. Weekly Market Review - The pharmaceutical and biotechnology sector's performance was mixed, with medical research outsourcing (5.47%), offline pharmacies (2.99%), and pharmaceutical distribution (1.97%) leading the gains, while other biological products (-1.91%), traditional Chinese medicine (-0.85%), and chemical preparations (-0.41%) lagged behind [2][7]. - Notable stock performances included Teva Pharmaceutical (22.3%), Bid Pharma (18.9%), and *ST Jingfeng (16.6%) as top gainers, while Tuo Jing Life (-18.6%), Xin Nuo Wei (-17.5%), and Shuo Tai Shen (-14.9%) were the biggest losers [2][10]. Industry News and Key Company Announcements - Innovent Biologics announced a significant global strategic partnership with Takeda to accelerate the development of new therapies, including three key drug candidates [2][10]. - Kangfang Biologics' AK112 injection has been proposed for inclusion in breakthrough therapy designation for treating triple-negative breast cancer [2][11]. - Summit Therapeutics announced a $500 million private placement to fund the clinical development of its drug candidate [2][11]. - Ipsen and ImCheck Therapeutics reached a final agreement for a €1 billion acquisition focused on a first-in-class monoclonal antibody for acute myeloid leukemia [2][13]. - Moderna decided to terminate the development of its CMV mRNA vaccine after failing to meet primary endpoints in a Phase III trial [2][13].

Investment Rating - The report maintains a "Recommended" investment rating for the pharmaceutical industry [1] Core Insights - The report highlights the significant collaboration between Innovent Biologics and Takeda Pharmaceutical, which is seen as a positive trend for Chinese innovation going global. The deal includes an upfront payment of $1.2 billion and potential milestone payments, with a total deal value reaching up to $11.4 billion [2] - The report notes a surge in License-out transactions, with 103 deals and a total value of $92.03 billion in the first three quarters of 2025, marking a 77% increase compared to the total for 2024 [2] - The report emphasizes the recovery of the CDMO sector, with companies like Jiuzhou Pharmaceutical and Boteng achieving significant revenue growth in Q3 2025, indicating a positive trend in the industry [3] - The medical device market is showing a steady recovery, with a 29.8% year-on-year growth in the overall bidding market for medical devices in Q3 2025 [4] - The report discusses the increasing trend of oral immunomodulatory drugs, particularly in the treatment of psoriasis, with Johnson & Johnson's acquisition of Protagonist Therapeutics being a notable example [5] - The report also highlights the trends in respiratory infectious diseases, with an expected increase in cases in the coming months, which may impact medical testing and treatment medications [6] Summary by Sections 1. Pharmaceutical Market Tracking - The pharmaceutical industry has underperformed compared to the CSI 300 index, with a recent weekly decline of 0.95% and a monthly decline of 3.28% [21][25] 2. Pharmaceutical Sector Performance and Valuation - The pharmaceutical sector's recent performance has been below the CSI 300 index, with a 1-month decline of 3.28% and a 3-month increase of only 1.75% [39][42] 3. Recent Research Achievements - The report lists various recent research outputs from the team, including deep dive reports on the growth of the blood products industry and the potential of GLP-1 drugs [47] 4. Recent Industry Policies and News - The report outlines significant recent policies, including the promotion of instant settlement reforms by the National Medical Insurance Administration and the regulation of clinical research for biomedical technologies [49] - Recent news highlights include major collaborations and drug approvals, such as the partnership between Innovent Biologics and Takeda, and the approval of new drugs by various companies [50][51]

Investment Rating - The report maintains a positive outlook on the pharmaceutical sector, indicating an "Overweight" rating for the industry, suggesting it is expected to outperform the overall market in the next six months [30]. Core Insights - The pharmaceutical sector saw a weekly increase of 0.6%, while the Shanghai Composite Index rose by 2.9% during the same period. The pharmaceutical index ranked 25th among 31 sub-industries [3][5]. - Notable collaborations include a strategic partnership between Innovent Biologics and Takeda Pharmaceutical, valued at up to $11.4 billion, which includes an upfront payment of $1.2 billion [4][13]. - Key clinical trial results presented at the 2025 ESMO conference highlighted significant advancements in cancer treatments, with several companies reporting promising outcomes in their respective studies [4][14][17]. Market Performance - The pharmaceutical sector's overall valuation stands at 30.4 times earnings, ranking 9th among 31 primary industries [7][5]. - Various sub-sectors showed mixed performance, with medical devices and medical consumables performing relatively well, while traditional Chinese medicine and chemical preparations faced declines [7][5]. Key Events - The report notes that 99 A-share pharmaceutical companies released their Q3 2025 earnings, with a total revenue of 94.15 billion yuan, reflecting a year-on-year growth of 1.3% [19][21]. - Significant clinical trial results from companies like Kintor Pharmaceutical and Zai Lab were highlighted, showcasing their innovative approaches to cancer treatment [14][17][18]. Company Recommendations - The report recommends focusing on innovative drug companies and those with improving performance in medical devices and CXO sectors, listing companies such as Hengrui Medicine, Changchun High-tech, and Mindray Medical as key investment targets [4][19].

Core Insights - The strategic collaboration between Innovent Biologics and Takeda involves three innovative drugs, with a total transaction value exceeding $10 billion, marking a significant milestone for domestic companies in licensing-out agreements [1][3][12] - This partnership is one of the largest licensing deals in China's biotechnology sector to date, highlighting the growing value of Chinese innovative drugs in the global pharmaceutical market [1][12] Summary by Sections Transaction Details - The agreement includes an upfront payment of $1.2 billion (including a $100 million premium for nearly 30% equity stake) and potential milestone payments, bringing the total deal value to a maximum of $11.4 billion, along with sales revenue sharing [3][12] - This transaction sets a new record for licensing deals by Chinese biotech companies and aligns with Takeda's strategic focus on competing in the oncology market, similar to Merck's approach with its K drug [3][12] Drug Pipeline - The collaboration focuses on three key investigational drugs: IBI363 (PD-1/IL-2α-bias), IBI343 (CLDN18.2 ADC), and IBI3001 (EGFR/B7H3 ADC), all of which are at the forefront of tumor immunotherapy and antibody-drug conjugate (ADC) development [3][4] - IBI363 is a globally innovative PD-1/IL-2α-bias bispecific antibody fusion protein, currently undergoing a global Phase III clinical trial for advanced non-small cell lung cancer patients who have failed previous treatments [4][6] - IBI343 has received breakthrough therapy designations for three indications: third-line gastric cancer, second-line pancreatic cancer, and third-line pancreatic cancer, while IBI3001 is the first EGFR/B7H3 ADC currently in Phase I clinical trials [7][9] Market Context - The collaboration reflects a broader trend where global pharmaceutical giants are reassessing the value of Chinese innovative drugs, as evidenced by Merck's success with its K drug, which transformed its oncology business [12] - The partnership between Takeda and Innovent is positioned to compete in the multi-billion dollar global immunotherapy and ADC market, potentially reshaping the global pharmaceutical landscape over the next decade [12]

Core Insights - The collaboration between Innovent Biologics and Takeda Pharmaceutical aims to develop cancer treatment drugs, with a total deal value of $11.4 billion, marking the highest record for a biopharmaceutical licensing deal from China [2][4] - The partnership focuses on two late-stage therapies and one early-stage project, leveraging Innovent's innovative immune-oncology and antibody-drug conjugate (ADC) therapies [2][5] Group 1: Deal Structure and Strategic Importance - The deal involves a co-development model where both companies will share development costs and commercial rights, with a 40/60 cost-sharing ratio for IBI363 [9] - Takeda's leadership sees this collaboration as a way to enhance its oncology pipeline, balancing developments in hematologic and solid tumors [4][22] - Takeda has made significant investments in China over the past three years, with disclosed transaction amounts exceeding 100 billion RMB [4][23] Group 2: Product Details and Clinical Status - IBI363 is a dual-antibody product that targets PD-1/PD-L1 pathways and activates IL-2 pathways, showing promise in treating lung and colorectal cancers [5][8] - IBI343, an ADC, has demonstrated significant efficacy against advanced gastric cancer and pancreatic ductal adenocarcinoma [5][8] - Both products have entered Phase III clinical trials, indicating advanced stages of development [8] Group 3: Takeda's Global Strategy and Market Focus - Takeda's CEO, Christophe Weber, emphasizes the importance of bringing Chinese innovations to the global market, aligning with the company's "Takuvi China" strategy to make China its second-largest market by 2030 [15][22] - The company has shifted focus to oncology, neuroscience, and gastrointestinal diseases, prioritizing innovative biotherapeutics and ADCs [14][22] - Takeda's global presence spans over 80 countries, with a strong emphasis on research and development, investing over $5 billion annually [27][28] Group 4: Leadership and Future Outlook - Christophe Weber, the first non-Japanese CEO of Takeda, has been pivotal in the company's global expansion and innovation strategy [29][30] - The upcoming leadership transition to Julie Kim is expected to continue the momentum in commercializing rare disease and oncology products [32][33] - The collaboration with Innovent is viewed as a significant asset for Takeda's future growth, particularly in the context of increasing competition and innovation in the biopharmaceutical sector [11][22]