Takeda(US:TAK)2023-02-03 04:54Financial Data and Key Metrics Changes - Core revenue for Q3 year-to-date was almost JPY3.1 trillion, reflecting a growth of 4.5% at constant exchange rates [3][24] - Reported revenue growth was 13.9%, with core operating profit growing 9.7% at constant exchange rates to JPY954.7 billion, resulting in a core operating profit margin of 31.1%, an increase of 1.5 percentage points year-over-year [22][24] - Core EPS growth was 17.1% at constant exchange rates, with actual core revenue growth close to 20% and core EPS growth of 37% due to favorable foreign exchange [24][27] Business Line Data and Key Metrics Changes - Growth and Launch products generated approximately JPY1.2 trillion, representing 39% of total revenue and growing at 20% year-to-date at constant exchange rates [25][47] - Neuroscience segment grew by 10%, driven by VYVANSE and TRINTELLIX, while the other segment declined due to regional loss of exclusivities in Japan and low market demand for COVID-19 vaccines [26][88] - PDT Immunology showed strong growth of 18%, including 19% growth in immunoglobulin and 20% growth in albumin, reflecting strong demand [50] Market Data and Key Metrics Changes - The U.S. filing for QDENGA received priority review, and LIVTENCITY showed durable antiviral efficacy in hematopoietic stem cell transplant patients [13][14] - The market for NUVAXOVID in Japan is experiencing lower demand than expected due to the current vaccination situation and prevalence of Omicron [26] Company Strategy and Development Direction - The company aims to create a diverse, equitable, and inclusive working environment, which has been critical in maintaining and developing talent [8] - Strategic investments are being made in long-term growth, including the acquisition of TYK2 inhibitors from Nimbus Therapeutics, which aligns with the company's strategy [10][37] - The company is focused on delivering sustainable growth and value to shareholders, with strong momentum from its commercial portfolio [29] Management's Comments on Operating Environment and Future Outlook - Management is tracking towards the high end of guidance for low single-digit core revenue growth and high single-digit core operating profit and core EPS growth on a constant exchange rate basis [9][23] - The company remains optimistic about its growth outlook, driven by the performance of its Growth and Launch products despite the loss of exclusivity for VELCADE [11][29] Other Important Information - The net debt balance improved from 2.8x to 2.5x, indicating steady deleveraging progress [27][69] - The company plans to maintain its capital allocation policy focused on investing for growth while ensuring competitive shareholder returns [66][69] Q&A Session All Questions and Answers Question: Gross profit margins on a quarter-to-quarter basis - Management noted that gross profit margin improved year-to-date, with a 0.5% increase on an actual basis and 0.1% on a constant exchange basis [56] Question: Market dynamics and pricing for PDT business - Management indicated that PDT growth is driven by volume and demand rather than price, with a slight reduction in donor compensation [90] Question: Concerns about achieving full-year core profit forecast - Management expressed confidence in achieving the full-year forecast of JPY1.18 trillion core operating profit, despite higher R&D and SG&A expenses in Q3 [81][82] Question: Expectations for dividend increases - Management stated that while there is a heightened expectation for increased dividends, they are focused on maintaining their capital allocation policy and will consider updates in the future [82]