Core Insights - Takeda Pharmaceutical Company Limited reported a second-quarter 2025 adjusted net profit of 201.6 billion Japanese yen (approximately $1.31 billion), with earnings per American Depositary Share (EPADS) of 43 cents, missing analyst expectations of 44 cents [1][2] - Total sales for the quarter were $7.52 billion (1.18 trillion yen), falling short of consensus estimates of $8.08 billion [1][3] Financial Performance - First half 2025 sales decreased by 6.9% (-3.9% at constant currency) to 2.22 trillion yen, while core operating profit dropped 11.2% to 639.2 billion yen [3] - Neuroscience revenue significantly impacted the decline, with second quarter Neuroscience sales falling 33% to 97.5 billion yen [3] - Vaccine sales decreased by 21.1% to 20.2 billion yen, while cancer drug sales increased by 4.3% to 149.1 billion yen [3] Segment Performance - Gastrointestinal sales rose by 2% to 353.5 billion yen, while revenue from rare diseases fell by 2.7% to 184.1 billion yen [4] Outlook - Takeda updated its full-year 2025 outlook, revising core revenue guidance from 4.53 trillion yen to 4.50 trillion yen [5] - The company expects core operating profit of 1.13 trillion yen, down from prior guidance of 1.14 trillion yen, and core earnings of 479 yen, reduced from previous guidance of 485 yen [5] Stock Performance - Following the earnings report, TAK stock was trading 2.25% lower at $13.46 in premarket trading [6]

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]

Financial Data and Key Metrics Changes - Revenue in Q1 2025 was just over JPY 1,100 billion, a decrease of 8.4% or 3.7% at constant exchange rates [11] - Core operating profit decreased by 15.8% at actual FX or 11.9% at constant exchange rates, amounting to JPY 321.8 billion [11] - Reported operating profit increased by 11% to JPY 184.6 billion, mainly due to lower impairments and restructuring expenses [11][17] - Adjusted free cash flow was strong at JPY 190.1 billion [11] Business Line Data and Key Metrics Changes - Launch products, which represent 50% of revenue, grew by 5% at constant exchange rates [12] - In the GI segment, Entyvio grew by 4.9% at constant rates, with a 30% increase in active EntyvioPen patients in the U.S. [12][13] - TAKHZYRO continues to grow as a market leader in HAE prophylaxis, while the PDT portfolio experienced fluctuations typical of quarterly results [13] - QDenga was impacted by shipment timing and currency effects, but volume is increasing with expectations for strong growth [14] Market Data and Key Metrics Changes - The U.S. market saw a significant impact from Vyvanse's generic erosion, which was a main driver of the revenue decline [15][16] - The generic supply situation in the U.S. improved, leading to expectations of less headwind from Vyvanse in future quarters [15] - The appreciation of the Japanese yen against major currencies also posed a headwind this quarter [16] Company Strategy and Development Direction - The company views FY 2025 as pivotal due to a rapidly progressing late-stage pipeline, with positive results from pivotal Phase III studies of oviporexant [8][20] - The focus remains on late-stage development activities, with ambitions to file for up to five additional indications through FY 2029 [36] - The company is committed to maintaining a strong manufacturing presence in the U.S. and is exploring direct-to-consumer models for certain products [59][63] Management's Comments on Operating Environment and Future Outlook - Management anticipates that FY 2025 will be the last year of significant impact from Vyvanse erosion, with expectations for revenue growth to moderate in subsequent quarters [7][20] - The company is well-positioned to manage potential impacts from tariffs and is actively preparing for price negotiations related to Medicare [20][110] - Management remains confident in achieving full-year guidance despite the challenges faced in Q1 [42][46] Other Important Information - The company executed two leverage-neutral bond issuances to streamline its maturity profile [18] - The company plans to file for U.S. approval of oviporexant later this year, with regional filings to follow [27] - The company is exploring the potential of orexin agonists in various disorders beyond narcolepsy, including sleep-wake cycle disruptions and metabolism [77] Q&A Session Summary Question: Expectations for recovery in sales of specific products - Management acknowledged that Q1 was soft but does not reflect the underlying dynamics, expecting recovery as market access improves [42][44] Question: Additional benefits of new molecules in the pipeline - Management indicated that the new orexin agonist has potential for broader applications beyond narcolepsy, with ongoing development in various disorders [47][49] Question: Competitive landscape for narcolepsy treatments - Management expressed confidence in the competitive positioning of oviporexant, highlighting significant improvements in key symptoms [57][58] Question: Investment strategies in the U.S. market - Management confirmed ongoing investments in U.S. manufacturing and R&D, emphasizing the importance of the U.S. market for future growth [59][60] Question: Dynamics affecting Entyvio's market performance - Management noted challenges in transitioning patients to the pen formulation but expects improvements as access issues are addressed [86][88] Question: R&D spending outlook - Management clarified that Q1 spending was in line with plans, with expectations for increased R&D activities as new trials commence [72][106] Question: Most Favored Nation drug pricing policy discussions - Management is preparing for potential negotiations related to the MFN policy but has not yet been contacted for direct discussions [109][110] Question: Preparations for the launch of oviporexant - Management is focusing on building a sales team and utilizing digital technology for diagnostics leading up to the launch [113]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was just over JPY 1,100 billion, a decrease of 8.4% or 3.7% at constant exchange rates [9] - Core operating profit decreased by 15.8% at actual FX or 11.9% at constant exchange rates, amounting to JPY 321.8 billion [9] - Reported operating profit increased by 11% to JPY 184.6 billion [9] - Adjusted free cash flow was strong at JPY 190.1 billion [9] Business Line Data and Key Metrics Changes - Launch products, which represent 50% of revenue, grew by 5% at constant exchange rates [10] - In the GI segment, Entyvio grew by 4.9% at constant rates, with a 30% increase in active patients [10][11] - TAKHZYRO continues to grow as a market leader in HAE prophylaxis [11] - In oncology, prazacla is expanding with global launches [12] - QDenga was impacted by shipment timing and currency effects but is expected to deliver strong growth for the full year [12] Market Data and Key Metrics Changes - The U.S. market saw a significant impact from Vyvanse's generic erosion, which was a main driver of the revenue decline [13][14] - The generic supply situation in the U.S. improved, leading to expectations of less headwind from Vyvanse in future quarters [14] - The appreciation of the Japanese yen against major currencies also posed a headwind this quarter [14] Company Strategy and Development Direction - The company views FY 2025 as pivotal due to its rapidly progressing late-stage pipeline, including positive results from pivotal studies of oviporexton [6][7] - The focus remains on expanding the orexin franchise and exploring additional indications for orexin agonists [29][35] - The company plans to file for U.S. approval of oviporexton later this year, with regional filings to follow [25] Management's Comments on Operating Environment and Future Outlook - Management anticipates that the impact from Vyvanse's generic erosion will moderate in future quarters, with no change to the full-year outlook [6][18] - The company is well-positioned to manage potential tariff impacts and is actively preparing for future negotiations regarding drug pricing policies in the U.S. [18][110] Other Important Information - The company executed two leverage-neutral bond issuances to streamline its maturity profile [16] - The average annual maturity over the next three years is approximately JPY 220 billion, which is considered manageable [17] Q&A Session Summary Question: Expectations for recovery in sales of Entyvio, IG, Vyvanse, and QDenga - Management believes Q1 performance does not reflect underlying product dynamics and expects recovery as market access improves [43][45] Question: Additional benefits of new molecules in the pipeline - The company is exploring multiple indications for orexin agonists, with ongoing Phase IIb programs and plans for new molecules [48][49] Question: Competitive landscape for narcolepsy treatments - Management believes oviporexton is potentially best in class, with significant benefits across all symptoms of narcolepsy type one [57] Question: Investment strategy in the U.S. market - The company is highly invested in U.S. manufacturing and R&D, with plans to continue this trend [59][60] Question: Dynamics affecting Entyvio's market access - Management is addressing local access issues and expects improvements to drive growth for the Entyvio pen [86] Question: R&D spending outlook - R&D spending is expected to ramp up as new trials begin, with management maintaining full-year guidance [72][107] Question: Most favored nation drug pricing policy discussions - The company is preparing for potential negotiations related to the IRA Medicare price negotiations but has not been contacted directly yet [110]