Takeda Pharmaceutical Q1 2027 Earnings Report

Takeda Pharmaceutical EPS Results

• Actual EPS: $0.47
• Consensus EPS: $0.17
• Beat/Miss: Beat by +$0.31
• One Year Ago EPS: N/A

Takeda Pharmaceutical Revenue Results

• Actual Revenue: $7.50 billion
• Expected Revenue: $7.13 billion
• Beat/Miss: Beat by +$366.79 million
• YoY Revenue Growth: N/A

Takeda Pharmaceutical Announcement Details

• Quarter: Q1 2027
• Date: 7/30/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, July 30, 2026
• Conference Call Time: 6:00AM ET

Takeda Pharmaceutical (NYSE:TAK) Company Limited (NYSE: TAK) is a Tokyo-based, multinational biopharmaceutical company with roots dating back to 1781. The company researches, develops, manufactures and commercializes pharmaceutical and biopharmaceutical products for patients worldwide. Takeda is publicly listed and operates as a fully integrated R&D-driven healthcare company focused on delivering specialty medicines and therapies across a range of therapeutic areas.

Takeda’s main business activities encompass discovery and development of prescription medicines, clinical development and regulatory affairs, manufacturing of small molecules and biologics, and global commercial operations. The company concentrates on several core therapeutic areas, including oncology, gastroenterology, neuroscience, rare diseases and plasma-derived therapies, and maintains an active development pipeline aimed at advancing innovative treatments. In addition to internally discovered assets, Takeda has expanded its capabilities and portfolio through strategic acquisitions that broaden its rare-disease and specialty-care offerings.

Operating globally, Takeda serves patients and healthcare systems across North America, Europe, Asia and other regions through a network of research sites, manufacturing facilities and commercial offices. Leadership is headed by Christophe Weber, who serves as president and chief executive officer and has overseen the company’s transformation into a global specialty biopharma organization. Takeda emphasizes long-term investment in research and development, strategic collaborations, and patient-focused initiatives as central elements of its corporate strategy.

Takeda Pharmaceutical Q1 2027 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Q1 results were broadly on plan: Core revenue declined 0.5% and core operating profit fell 0.5% at constant exchange rates, while core EPS decreased 11.8% to JPY 154 due largely to an unfavorable comparison with the prior year’s tax benefit. Full-year guidance, including JPY 650–750 billion of free cash flow, was maintained.
• Positive Sentiment: The company reported continued resilience in its established portfolio, with core inline brands growing 2.3% at constant exchange rates. ENTYVIO grew 4%, new launches increased 22.6%, and transformation savings are intended to fund investments in upcoming products and the late-stage pipeline.
• Positive Sentiment: Takeda is preparing for a potentially significant launch cycle, with ORZEYFUL for narcolepsy type 1 and rusfertide for polycythemia vera expected to launch in the U.S. in the second half of 2026, followed by zasocitinib for psoriasis in the first half of 2027. ORZEYFUL has already received its first approval in China, while rusfertide has received FDA priority review.
• Positive Sentiment: Zasocitinib produced encouraging phase III psoriasis results, demonstrating statistical superiority to deucravacitinib across primary and key secondary endpoints, with more than 35% of patients achieving complete skin clearance at week 16. Management also highlighted promising data in difficult-to-treat areas and additional development opportunities in inflammatory bowel disease and other immune-mediated conditions.
• Negative Sentiment: Near-term financial performance remains pressured by mature-product erosion, including continued generic competition for Vyvanse, while operating cash flow was lower because of working-capital effects and free cash flow included a $200 million payment to Protagonist related to rusfertide rights. ENTYVIO biosimilar litigation is expected to take roughly three to five years, with U.S. entry timing still broadly anticipated around 2032.

Presentation

[Julie Kim, President and CEO at Takeda]

Thank you for joining us for today's earnings call focused on the first quarter of fiscal year 2026. We delivered a solid start to the fiscal year, and our performance this quarter demonstrates steady progress against our strategic priorities, keeping us firmly on track to achieve our full year guidance. These achievements reflect our continued execution against the two Horizon strategic roadmap we shared last quarter, which will position us for accelerated growth in the years ahead to expand impact for patients and set the stage for sustained value creation. Today, I will outline this quarter's progress against our priorities. Financially, we delivered a solid quarter and made steady progress against our fiscal year 2026 priorities.

[Julie Kim, President and CEO at Takeda]

In the first quarter, core revenue declined slightly at 0.5% at constant exchange rate, or CER, in line with our expectations as momentum across our core inline brands and existing new launch brands largely offset anticipated headwinds in our mature portfolio. Core operating profit declined 0.5% year-over-year at CER, reflecting the continued investment behind our upcoming launches and exciting late-stage pipeline, which we are partially offsetting by savings generated through our transformation program. Core EPS was JPY 154, a decrease of 11.8% at CER, mainly due to a favorable tax position in the prior year. Milano will walk you through the financial dynamics in more detail shortly, the key takeaway is that we are well on track towards our full year guidance. This quarter, we had strong execution across all Horizon One priorities.

[Julie Kim, President and CEO at Takeda]

We are ensuring the resilience of our existing portfolio with our core inline brands growing by 2.3% at CER. We also continue to execute against our transformation program. As an example, we have largely completed the implementation of our international business unit, which is bringing leadership and teams closer to patients and customers and supports more simplicity, speed, and efficiency. We'll do all of this without sacrificing quality to help us move at pace to bring life-transforming medicines to patients. Takeda's consistent and effective execution of our enterprise transformation is enabling us to fund our launches and advance our pipeline. It also represents a fundamental change in how we work today and how we will grow as a company in the future. We also made excellent progress across the pipeline this quarter.

[Julie Kim, President and CEO at Takeda]

We are pleased to have received our first approval for oveporexton in narcolepsy type 1 under the brand name ORZEYFUL in China. Approvals in U.S. and Japan are key milestones expected in Q2. I will speak more about the important milestones and progress towards launch for ORZEYFUL, rusfertide, and zasocitinib on the next slide. In oncology, we presented TAK-928 data at ASCO in first and second line non-small cell lung cancer, we initiated a phase III study of elritercept in first-line anemia-associated MDS. Taken together, our three priorities for FY 2026 remain firmly on track. Continue advancing preparations for the successful launch of ORZEYFUL, rusfertide, and zasocitinib, progress the next wave of our pipeline, continued execution of our transformation program to unlock new capabilities and efficiencies. We continue to build the foundation for our future growth by preparing to bring new medicines to patients.

[Julie Kim, President and CEO at Takeda]

With the first ORZEYFUL approval obtained in China, we eagerly look forward to bringing our first-in-class orexin agonist for narcolepsy type 1 to patients in the U.S. and Japan as well, with launches expected in the second half of 2026. ORZEYFUL has delivered transformative efficacy across a broad range of NT1 symptoms. At the SLEEP 2026 meeting, we presented additional ORZEYFUL phase III data, reinforcing the potential of this medicine to establish a new standard of care by improving measures of daily function, cognition, and nighttime sleep in patients with narcolepsy type 1. Rusfertide, our potential first-in-class hepcidin mimetic for polycythemia vera, has demonstrated rapid, stable and durable hematocrit control while reducing patient's reliance on phlebotomy. Rusfertide has obtained U.S. FDA priority review, and we expect a U.S. launch also in the second half of 2026.

[Julie Kim, President and CEO at Takeda]

Following Protagonist's opt-out from U.S. co-commercialization, we are excited to have sole responsibility for commercializing rusfertide globally. We are committed to maximizing its growth potential and impact on patients. Turning to the third of these transformative medicines, zasocitinib is our potential best-in-class oral treatment for psoriasis, delivering rapid and durable skin clearance in a convenient once-daily pill with no fasting restrictions. We are on track towards launching in the U.S. in the first half of 2027. Our confidence in its profile is stronger than ever. In our recent head-to-head phase III psoriasis study versus deucravacitinib, zasocitinib demonstrated statistical superiority for all primary and key secondary endpoints, with more than 35% of patients achieving PASI 100 or complete skin clearance at week 16.

[Julie Kim, President and CEO at Takeda]

We also shared new data this month from the pivotal phase III psoriasis studies demonstrating that zasocitinib achieved consistent high rates of skin clearance across the body, including hard to treat and high impact sites. Andy will talk more about this in a few minutes. Importantly, we are not just generating compelling data. We are continuing to lay the groundwork for successful launches. For ORZEYFUL, we have had Medical Science Liaisons in the field for more than a year. We've engaged payers and KOLs, and we've set up specialty pharmacy and patient support programs to facilitate an exceptional patient experience. For rusfertide, we are building HCP awareness of the importance of sustained hematocrit control and leveraging our established hematology commercial infrastructure to ensure we're ready for a successful launch.

[Julie Kim, President and CEO at Takeda]

For zasocitinib, payer discussions and broader pre-launch preparations are already underway, supporting our ambition not only to gain market share, but also to expand the oral treatment segment. Our efforts are planful. We believe they will enable us to ensure these transformative medicines will reach patients as quickly as possible, delivering on our commitments in Horizon One and positioning Takeda for accelerated long-term growth. These milestones reinforce the depth of our late-stage pipeline and reflect the sustained, disciplined commitment we have to faster AI-enabled discovery and development, strong market access, and best-in-class scientific, medical, manufacturing, technology, and commercial capabilities. Today, we are in Horizon One and fundamentally transforming Takeda from within. This includes optimizing our operations, strengthening our competitiveness, and successfully launching new medicines that will become our future growth drivers.

[Julie Kim, President and CEO at Takeda]

As I just shared, this phase is progressing well through our launch preparation, pipeline progress, core in-line brand resilience, and execution of our transformation. To provide an additional example, we recently announced a landmark collaboration with the Indonesian government to build plasma operations in the country, starting with establishing plasma donation centers and assessing the feasibility of potential future manufacturing capabilities. Partnerships like this support the growth of our PDT business and the competitive resilience of our core in-line brands while reinforcing our commitment to a sustainable global plasma ecosystem. Throughout this period, we are committed to a clear set of performance measures: returning to top-line growth, protecting our core operating profit margins while making substantial growth investments, and improving our return on equity to above 5%. The entire Takeda team is working diligently to execute on our priorities and establish a strong foundation in Horizon One.

[Julie Kim, President and CEO at Takeda]

Every milestone we accomplish reinforces our path of progress towards Horizon Two: growth acceleration. Our employees' relentless dedication and discipline will continue to set the stage for sustained value creation for patients and shareholders. With that, I will hand the call over to Milano to walk through our first-quarter financial results in more detail.

[Milano Furuta, Director and CFO at Takeda]

Thank you, Julie. Hello, everyone. Let me walk through our financial highlights for Q1 of fiscal year 2026. Overall, our Q1 results are on track towards full-year guidance. Revenue was JPY 1.22 trillion, an increase of 10.2% on actual FX basis, or a decline of 0.5% at constant exchange rates or CR. Operating profit was JPY 358.9 billion, up 11.5% at actual FX or -0.5% at CR, while reported operating profit was JPY 201.4 billion. Core EPS was JPY 154, with an 11.8% decline at CR as expected, mainly reflecting tax favorability in the prior year. Reported EPS was JPY 72. Operating cash flow was lower than prior year, reflecting changes in the working capital related to our trade receivables factoring program.

[Milano Furuta, Director and CFO at Takeda]

Adjusted free cash flow also reflects a payment of $200 million to Protagonist following their decision in April to opt out of a co-promotion agreement for rusfertide. As Julie highlighted, this means that Takeda now holds exclusive development and commercialization rights for rusfertide globally. Overall, we are on track to deliver JPY 650 billion-JPY 750 billion free cash flow for the full year. Slide 10 shows a revenue bridge versus prior year. At CR, core revenue declined 0.5% as growth from core in-line brands and new launches largely offset the decline from LOE and mature products, which includes the continued generic erosion of Vyvanse in the U.S. Core in-line brands represented 58% of total revenue and grew 2.3% at CR, which is on track with our expectations for Q1.

[Milano Furuta, Director and CFO at Takeda]

Our largest product, ENTYVIO, remains resilient with 4% growth at CR, while immunoglobulin and albumin were both impacted by phasing in the U.S., which was within expectation. Our new launches category is still small today, only 4% of total revenue, but it is growing strongly at 22.6% at CR, supported by FRUZAQLA, LIVTENCITY, ADZYNMA, and QDENGA. We are excited at the prospect of introducing new products to this category with the potential launches of ORZEYFUL and rusfertide later this year. FX was a big positive to our top line, adding JPY 118.2 billion to deliver 10.2% growth at actual exchange rates. Slide 11 shows a bridge for core operating profit. Consistent with our priorities in Horizon One, we have positioned FY 2026 as a year of growth investment funded by savings from our transformation program. The transformation program is firmly on track as Julie commented earlier.

[Milano Furuta, Director and CFO at Takeda]

Many of the initiatives were implemented at the end of the quarter, meaning the savings amount captured in Q1 results is still relatively limited. All the high-priority growth investments are on track, including launch readiness for ORZEYFUL, rusfertide, and zasocitinib, as well as progress of late-stage development programs such as TAK-928 and TAK-921. We continue to demonstrate cost discipline alongside targeted investments. You can see in the chart that gross profit was positive in Q1, primarily driven by favorable FX variance in cost of goods, as well as a one-time divestiture-related milestone. Reported operating profit on Slide 12. As you can see in this chart, the two main factors impacting year-on-year performance were lower amortization of intangible assets, mainly due to the completion of Vyvanse amortization in January 2026, and higher restructuring expenses related to the transformation program.

[Milano Furuta, Director and CFO at Takeda]

FX also provided a tailwind, resulting in 9.1% growth versus prior year at actual exchange rates. Slide 13 shows our full-year FY 2026 outlook, which is unchanged from May. Our Q1 performance was fully on track towards our targets for this year. I will close my section of the presentation by re-emphasizing our commitment to strict financial discipline through our two growth horizons. In particular, during this Horizon One, our focus is on returning to revenue growth, protecting operating profit, improving reported profits and ROE, and maintaining strong adjusted free cash flow. I look forward to sharing our ongoing progress towards these goals. Thank you, and I now pass to Andy for updates on the pipeline.

[Andy Plump, Director and President of Research & Development at Takeda]

Thank you, Milano, and hello to everyone on today's call. I want to frame this quarter simply. Takeda R&D is ready to convert pipeline progress into commercial performance that supports our two-horizon growth strategy. Over the coming months, we are poised to launch three transformative medicines: ORZEYFUL, rusfertide, and zasocitinib, each with the potential to redefine the standard of care in its field, and together, setting Takeda on a new growth trajectory. Let me begin with ORZEYFUL, which I believe is one of the most exciting stories in neuroscience today. Narcolepsy Type 1 is a lifelong disorder caused by the loss of orexin signaling, leading to disabling daytime and nighttime symptoms. At the 2025 World Sleep Congress, we presented groundbreaking results from two phase III studies that met all 14 primary and secondary endpoints, demonstrating statistically significant and clinically meaningful improvements.

[Andy Plump, Director and President of Research & Development at Takeda]

ORZEYFUL delivered transformative efficacy across the broad disease spectrum, including daytime symptoms like excessive daytime sleepiness and cataplexy, as well as nighttime symptoms, cognitive symptoms, functional improvements, and quality of life. ORZEYFUL doesn't just manage symptoms, it addresses the underlying orexin deficiency in NT1, offering patients a single, well-tolerated oral therapy that could restore how a majority of NT1 patients feel and function. We are on track to bring the first and only orexin agonist to patients living with NT1. As Julie mentioned, we have received our first approval in China, and we eagerly await decisions in the U.S. and Japan this quarter. At SLEEP 2026, we presented additional phase III data that I would describe as remarkable, with improvements spanning daily function, cognition, and nighttime sleep. Let me share a few of the highlights.

[Andy Plump, Director and President of Research & Development at Takeda]

Using the Functional Impacts of Narcolepsy Instrument, or FINI for short, we saw significant improvement across all functional domains with P values below 0.0001, including benefits to cognitive functioning, social activities, everyday activities, and daily responsibilities. These important benefits led to significant gains in work productivity, activity impairment, and quality of life. On cognition, we saw improvement versus placebo in attention, memory, and executive function, each with a very significant P value. On nighttime sleep, I want to dwell for a moment on the striking REM latency finding. REM latency is the time it takes to enter the first REM sleep stage after falling asleep. REM sleep disturbances can manifest as sleep paralysis, sleep-related hallucinations, and sleep disruptions. At baseline, our NT1 patients had a mean REM latency of about 50 minutes against a healthy control value of roughly 130 minutes.

[Andy Plump, Director and President of Research & Development at Takeda]

ORZEYFUL shifted mean REM latency into the normative range across all treatment groups in both the FirstLight, or 3001 study, and the RadiantLight, or 3002 study. This objective shift in sleep is unprecedented. To keep it simple, we are showing data from the RadiantLight study. Both trials produced similar results. As you can see, the objective REM shift is corroborated by the subjective assessments. We measured the subjective effects on REM link sleep using the NSSCT, or Narcolepsy Severity Scale for Clinical Trials, a validated instrument used in narcolepsy. ORZEYFUL significantly reduced hallucinations and sleep paralysis in all treatment groups, and it did so with no clinically meaningful disruption to sleep architecture. In practical terms, we are significantly improving, often normalizing, a patient's day and night. Now let me turn to zasocitinib, our next generation, highly selective and potent oral TYK2 inhibitor.

[Andy Plump, Director and President of Research & Development at Takeda]

Here too, the data speak for themselves. In our phase III head-to-head psoriasis study, zasocitinib significantly outperformed deucravacitinib. At week 16, more than 35% of zasocitinib-treated patients achieved complete skin clearance as measured by PASI 100. We have two key takeaway messages from these top-line results. One, this was a well-run trial with deucravacitinib having data consistent with past phase III trials. Two, this is the best 16-week efficacy in psoriasis that we have seen from a pill. zasocitinib is poised to be a leading oral option with a fantastic efficacy and safety profile. Full details will be shared at a medical meeting this fall. What gives us additional confidence is the performance in the hard-to-treat, high-impact areas like psoriasis of the scalp, palms, and soles, as demonstrated here by the high rates of skin clearance in the phase III LATITUDE programs, as well as statistically significant benefits to nails.

[Andy Plump, Director and President of Research & Development at Takeda]

These are the places where psoriasis can have greatest day-to-day impact for patients who are among the hardest to treat. The new psoriasis data continues to add to our library of outstanding phase III results. I'd like to take a moment to remind you that zasocitinib is far more than just a psoriasis story. As you can see here at the top, zasocitinib has studies underway across a broad range of immune-mediated diseases like psoriatic arthritis, Crohn's disease, ulcerative colitis, vitiligo, and hidradenitis suppurativa. Zasocitinib is a molecule we believe could redefine what is possible with a convenient once-daily oral therapy. We anticipate a phase II data readout for Crohn's disease and ulcerative colitis at the end of our FY 2026. Our orexin franchise continues to advance. ORZEYFUL has initiated the important 3003 phase III study, which will support filing in Europe.

[Andy Plump, Director and President of Research & Development at Takeda]

This potentially label-enabling trial will, for the first time, generate clinical data on direct switches from polypharmacy to ORZEYFUL. In addition, for the small number of patients who may benefit from dose escalation, the trial will include a higher dose option. Beyond ORZEYFUL, we are advancing TAK-360 in narcolepsy type 2 and idiopathic hypersomnia, and anticipate phase II data later this calendar year. The third of our imminent launches is rusfertide, a first-in-class hepcidin mimetic for polycythemia vera. Rusfertide delivers rapid, stable, and durable hematocrit control, addressing a major unmet medical need in PV. It is filed in the U.S. with an EU filing targeted later this fiscal year. We have an August PDUFA date and anticipate launch immediately thereafter. I want to be clear that our story does not end with these three assets. They are the starting acts of the most robust late-stage pipeline in Takeda's history.

[Andy Plump, Director and President of Research & Development at Takeda]

As we continue through Horizon One, we will advance the next wave of pipeline progress with key readouts and milestones. As Julie shared earlier, in oncology, elritercept has started two phase III trials in first- and second-line myelodysplastic syndrome and will soon start a pivotal trial in myelofibrosis. We presented important updates at ASCO in June for TAK-928, our PD-1/IL-2α-bias bispecific fusion protein. First, in patients with second-line plus IO-resistant non-squamous non-small cell lung cancer, an area of great unmet need, we showed a 42% overall survival rate at two years. We are planning for a pivotal phase III in this refractory population later this fiscal year. In first-line non-small cell lung cancer patients with less than 50% PD-L1 expression, we were excited to see outstanding early data for TAK-928 in combination with chemotherapy, with favorable safety data.

[Andy Plump, Director and President of Research & Development at Takeda]

We are looking forward to additional data cuts in the coming months as the trial matures. TAK-921, also known as arcotatug tavatecan, is an oncology program that has received less attention but remains highly promising. Strong progression-free survival data was announced from our partners at Innovent in June from a regional phase III trial in third-line gastric cancer. We plan on filing in Japan in FY 2027 using mature overall survival data from this trial. In PDT, TAK-881, our 20% next-generation facilitated sub-QIg is advancing towards a U.S. filing in primary immunodeficiency and filings in multiple indications in Europe and Japan. Let me close where I began. What you're seeing from Takeda R&D is the result of our sustained focus on pursuing science where we have the depth to lead and commitment to disciplined choices that allow us to advance programs with the most meaningful patient potential.

[Andy Plump, Director and President of Research & Development at Takeda]

ORZEYFUL, rusfertide, and zasocitinib are the leading edge of that strategy. Behind them is a pipeline with the depth to sustain this momentum well into the future. If we take a step back, we anticipate U.S. launch of ORZEYFUL in the second half of 2026, rusfertide launch in the second half of 2026, and zasocitinib launch in the first half of 2027. Three potential new standards of care launching in close succession, two of which carry breakthrough and fast track designations. This is the launch cadence that underpins our confidence in Takeda's growth trajectory. I have never been more confident in the science, in the team behind it, and in our ability to improve patients' lives and build a healthier world for generations. I look forward to sharing our continued progress with you. Thank you. With that, I'll turn it back to Julie to wrap up the presentation. Julie?

[Julie Kim, President and CEO at Takeda]

Thank you, Andy. As you have heard, the momentum across our R&D organization is translating directly into tangible milestones with the goal of bridging us from transformation to growth acceleration. We are also dedicated to operational discipline. Our enterprise transformation is already starting to unlock capital to reinvest in our pipeline and launches. In summary, we are delivering on our priorities in Horizon One towards a clear set of operational and financial goals. These milestones will enable us to secure a strong foundation that will advance us to Horizon Two, an era that will be defined by accelerated revenue growth, structural margin expansion, and sustained value creation. We know our shareholders are eager to discuss more details of this path forward. I am pleased to announce that we will host a capital markets day in Tokyo on December 11th, 2026.

[Julie Kim, President and CEO at Takeda]

At that event, the executive team and I will provide a deep dive into our pipeline progress and mid to long-term financial ambitions in line with our two Horizon strategic roadmap that will guide our growth through the end of the decade and beyond. We have the right strategy, a highly competitive portfolio, a united, deeply committed global team. I am proud of the progress we made this quarter. I am incredibly energized by the trajectory we are on. With that, I'll now turn the call over to Chris for Q&A.

[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

Now I'd like to take questions from the participants.

[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

If you want to ask a question, please use the Zoom beta raising hands.

[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

Please limit the number of questions per person.

[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

Maximum two, please state all the questions in the beginning.

[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

The first question is from Hidemaru Yamaguchi from Citigroup. Please unmute and ask your question.

[Hidemaru Yamaguchi, Analyst at Citigroup]

Hi, can you hear me? This is Hidemaru.

[Chris Weber, Former CEO at Takeda]

Yes, we can hear you.

[Hidemaru Yamaguchi, Analyst at Citigroup]

Thank you. Thank you very much. Thank you. My question to Hidemaru from Citigroup. I have two questions. The first question is the overall earnings. Milano mentioned gross margin on the Q1 seem to be relatively high compared to full year guidance. You talk about some product mix, but also you talk about some divestiture-related things. How much is contributing this divestiture thing, and is this just one-off or not? Can you give me comment on those gross margin prospect, Q1 and full year? The second question is that, you may not have answer yet, ORZEYFUL is now approved in China and also will be approved in the U.S. and Japan. Can you give me the overall strategy how you're going to push on this drug compared to the current therapy? Are you going to add-on or are you going to replace?

[Hidemaru Yamaguchi, Analyst at Citigroup]

Are you going to take the new patient? Are you going to take the share from the existing patients? How about the pricing strategy? If you have any kind of general strategy on a global basis on ORZEYFUL, please let me know. Thank you. Those are two questions.

[Chris Weber, Former CEO at Takeda]

Thank you, Hidemaru-san. The first question on breakdown of gross margin performance, Milano can take that. The second question on ORZEYFUL as we prepare for global launch, any additional commentary on positioning, where we'll get the patients, pricing, et cetera. Julie can comment on that one. Milano.

[Milano Furuta, Director and CFO at Takeda]

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[Milano Furuta, Director and CFO at Takeda]

Thank you very much, Hidemaru-san.

[Milano Furuta, Director and CFO at Takeda]

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[Milano Furuta, Director and CFO at Takeda]

According to the several points Hidemaru-san mentions, I'd like to give the response.

[Milano Furuta, Director and CFO at Takeda]

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[Milano Furuta, Director and CFO at Takeda]

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[Julie Kim, President and CEO at Takeda]

Thank you. Thank you, Hidemaru-san, for the question about ORZEYFUL positioning. Let me share a few thoughts with everyone on this. First, just a quick reminder why we're so excited about ORZEYFUL. It is the first in class and potentially best in class orexin agonist designed to treat the underlying orexin deficiency that causes NT1. As you saw from the information that we shared previously and Andy shared on the call today, the efficacy across broad disease spectrum is really impressive. We do anticipate that ORZEYFUL will redefine the standard of care in NT1. In terms of how we expect ORZEYFUL to be used, we studied it as a monotherapy. That is our anticipation, that ORZEYFUL is an effective monotherapy treatment. In terms of where the patients will come from, I would say there's two sources.

[Julie Kim, President and CEO at Takeda]

First and foremost, we will be addressing the patient need for individuals who are already diagnosed with NT1 and already on therapy. That will be the initial source of growth for ORZEYFUL. The second source of growth will come from improved diagnosis. This will take a bit longer time in order to drive better diagnosis, but that would be the second source of growth. I think your third question was on pricing for ORZEYFUL. Obviously we don't share pricing at this point ahead of launch. In general, our approach to pricing is to ensure appropriate value recognition for the transformative nature of the medicine, but at the same time support fast access as this is a significant breakthrough in treatment option for individuals with NT1. Thank you.

[Chris Weber, Former CEO at Takeda]

Thank you. Next question Shinichiro Muraoka from Morgan Stanley, Muraoka-san. Please ask your question.

[Shinichiro Muraoka, Analyst at Morgan Stanley]

Yes, this is Muraoka from Morgan Stanley. Thank you for this opportunity. First question is about 360 data presentation. Will that happen before the Capital Market Day, or it will happen at the same time as the Capital Market Day? 360 NT1 phase II has actually started. Can you please talk about the background? Do you want flexibility in terms of pricing strategy, or do you feel that a once-daily is going to be necessary? What is the background or the reason? That's my first question. The second question is ZASO UC and CD, how the information will be shared. I heard information will be shared at the end of the year.

[Shinichiro Muraoka, Analyst at Morgan Stanley]

Is this announcement going to be for both UC and CD together, is it going to be in the form of a press release, and can we expect this information maybe during the earnings announcement or the third quarter? How do you intend to share this information? That's the second question.

[Chris Weber, Former CEO at Takeda]

Thank you, Muraoka-san, for the questions. The first on TAK-360 data disclosure timing, would that be ahead of the Capital Markets Day in December? What is the positioning or the background behind studying TAK-360 in narcolepsy type 1? The second question on timing of zasocitinib UC and CD data, and also how that data would be presented. Will you announce the results of both studies simultaneously? Both of these questions, I'd like to call on Andy to comment on those, please.

[Andy Plump, Director and President of Research & Development at Takeda]

Great. Thanks, Chris, and thank you very much, Muraoka-san. This is Andy Plump. Firstly, with respect to TAK-360, I'll just remind everybody that TAK-360 is in the midst of three ongoing phase II studies, one in idiopathic hypersomnia, one in type 2 narcolepsy, and recently started one in type 1 narcolepsy. In terms of timing for the former two, IH and NT2, the study design is built around an adaptive design that allows us to rapidly pivot and explore both dose and dose regimen. We're testing both once a day and twice a day doses. In such a design, we don't have a clear end date. We will see data from that trial this year. The exact timing and whether it's available for the Capital Markets Day in December remains to be determined.

[Andy Plump, Director and President of Research & Development at Takeda]

In terms of the rationale for starting TAK-360 in type 1 narcolepsy, first I'll say that we are extremely confident, and you've seen the data for ORZEYFUL. We believe that ORZEYFUL is not just a first-in-class, but a best-in-class agent for type 1 narcolepsy. With that said, we are at the very front end of understanding what orexin agonists can do across a broad range of diseases, our interest is to continue to learn more and to continue to explore. With respect to zasocitinib and IBD, both the UC and Crohn's disease trials are going well. We expect to have data by the end of this fiscal year. In terms of how and where we present those data, that's still something that we're sorting through. Thank you.

[Analyst]

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[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

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[Chris Weber, Former CEO at Takeda]

Thank you for the question. The first one, ENTYVIO growing at 3.8% at constant exchange rate in the first quarter. Any comments on sort of prescription trends, how the performance is going for ENTYVIO? The second question on rusfertide, in particular, how you go positioning versus phlebotomy in terms of pricing strategy. I think both of those questions, Julie, I'd like to ask you to comment on those, please.

[Julie Kim, President and CEO at Takeda]

Thanks for the questions, Naomi-san. Let me tackle ENTYVIO first. When we look at ENTYVIO, as you know, it's been on the market for over a decade now, and we're pleased that we continue to be able to grow ENTYVIO. It's still the number one prescribed brand in IBD overall, particularly with first-line leadership in UC. When you look at the performance in the U.S., I would say a couple of things. Although sales were down in Q1 year-over-year at constant exchange rate, we do see overall demand growth. The decline is due to pricing mix and lower days on hand. When we look at the growth of pen, we continue to see very strong growth of ENTYVIO pen in the U.S. We're pleased with that continued progression.

[Julie Kim, President and CEO at Takeda]

For our markets outside of the U.S., here we continue to see strong growth with 6.7% growth in Europe, 10% in Japan, and the rest of our intercontinental markets at just about 36% growth. Again, very strong performance for ENTYVIO, driven by ENTYVIO subQ or the pen across all of our markets. For the full year, we do expect to be able to hit our guidance. Your second question in terms of rusfertide pricing. Again, we won't share details of pricing at this point, and I'll just reiterate that our approach to pricing is to make sure that we can receive appropriate value recognition for rusfertide, but also allowing rapid access for patients. We will balance that as we look to finalize pricing. Thank you.

[Analyst]

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[Chris Weber, Former CEO at Takeda]

Thank you, [Non-English content]. For the next question, I'd like to call on Mike Nedelcovych from TD Cowen. Please go ahead and ask your question.

[Mike Nedelcovych, Analyst at TD Cowen]

Hi. Thank you so much for the questions. I have two. My first is actually on mezagitamab. Back in December 2024, you laid out a peak sales ambition in ITP and IgAN of $1 billion-$3 billion. Have there been any developments in either mezagitamab's development or in the competitive landscape that make you more confident in one or the other end of that range? Are there any indications being explored that could be added to this target in the near future? That's my first question. My second question is on the risk of ENTYVIO biosimilars in the U.S. What's the roadmap from here to your estimated 2032 timeline? What is the next step that we should be monitoring? Is there any ENTYVIO pen IP that could extend exclusivity further than 2032? Thank you.

[Chris Weber, Former CEO at Takeda]

Great. Thank you, Mike. The first question on how we're progressing with mezagitamab and thoughts on recent developments in these markets, I think Andy can take that question. The second on biosimilars for ENTYVIO and sort of route from here to 2032 in terms of biosimilar entry and whether the pen gives us any extended IP. Julie can answer that question, please.

[Andy Plump, Director and President of Research & Development at Takeda]

Mike, thank you. Thank you very much. This is Andy. As you know, we have two ongoing phase III studies for mezagitamab. One is in third line ITP, and the other is in IgAN. We just recently started a phase II program in antibody-mediated rejection. We have three indications that are going rapidly with mezagitamab. We do continue to look at additional indications, so stay tuned. I think to your question, the biggest development for us recently has been the recognition from our long-term extension data from our phase I-B, phase II proof of concept study that with short-term dosing, we're seeing a very durable effect. We've presented data, and I think I've shared it in previous earning calls, that with up to six months of therapy, we see sustained activity on clinical endpoints up to two years. This is really exciting.

[Andy Plump, Director and President of Research & Development at Takeda]

The confidence we have that this is a real effect and relates back to the underlying pharmacology of the drug and the biology of this disease, we think is real. We actually made an adaptation to the phase III design. Initially, the administration schedule was going to be six months off, six months off. We've now decided to administer mezagitamab for six months and then track patients thereafter to the primary endpoint at one year and at two years. We believe we have a product that not only is going to be differentiated in terms of its safety and efficacy, but also in terms of its administration schedule.

[Julie Kim, President and CEO at Takeda]

Thanks, Mike, for your questions. Let me just add a quick comment because I think you did also inquire about peak sales estimates for mezagitamab. We're not changing any peak sales at this point, but when we get to the Capital Markets Day in December, we will provide peak sales based on current assumptions and current landscape. Hold until then for that information. In terms of your second question regarding ENTYVIO and timing in relation to biosimilar entry. Our time frames here have not changed. When you look at the U.S., because I think your question was specific to the U.S., we expect it to still be roughly three to five years in litigation. We will defend our IP positions.

[Julie Kim, President and CEO at Takeda]

We feel very good about our IP position, this is something that we will continue to provide updates on, but no change in overall timeline.

[Mike Nedelcovych, Analyst at TD Cowen]

Thank you so much.

[Chris Weber, Former CEO at Takeda]

Thank you, Mike. For the next question, I'd like to call on Miki Sogi from Bernstein. Miki, please go ahead and ask your question.

[Miki Sogi, Analyst at Bernstein]

Thank you. I have two questions. The first one is to Andy about IBI363. On page 23, I see that you have achieved the proof of concept of this product for second-line non-squamous, non-small cell lung cancer and first-line non-small cell lung cancer. Are these the data that we have not seen? We should be expecting to see the data at ESMO this year? That's the first question. Second question is about the new product launches of oveporexton and rusfertide. To be honest with you, I'm a little bit surprised that you didn't really mention any commercial launch preparation during the presentation, despite the fact that launch or approval is imminent. I'd like to see what are the key operational KPI that you are currently thinking of for these product launches and hopefully we will get the update on that later on.

[Chris Weber, Former CEO at Takeda]

Thank you, Miki. The first question on TAK-928 POC achievements as we've marked on this slide, Andy can provide some color on that. The second question, ORZEYFUL rusfertide launch preparation, what the operational KPIs will be, et cetera. Julie can comment on that one, please.

[Andy Plump, Director and President of Research & Development at Takeda]

Great. Thank you, Miki. Just to remind everybody, IBI363, or what we now call TAK-928, is our PD-1 IL-2α-bias bispecific antibody that we've partnered with Innovent on. We're pursuing multiple indications in parallel. We've already started a phase III global program in IO refractory second-line squamous non-small cell lung cancer. To your question, Miki, we now have very encouraging phase I, II data out of our partners work at Innovent in both first-line non-small cell lung cancer and also second line adeno or non-squamous non-small cell lung cancer. Those data were actually presented by Innovent at ASCO, and I can just provide some high-level summary information. Firstly, in the refractory setting for patients with non-squamous or adeno non-small cell, we've seen really striking overall survival data. 42% overall survival data at two years.

[Andy Plump, Director and President of Research & Development at Takeda]

Of course it's difficult to compare study to study, but this is a population that at two years has an overall survival rate of approximately 20%. We're very excited to get that phase III study going. Then, of course, the largest population is going to be in frontline. We had data that we've presented. We have maturing data that was presented at ASCO by our partners at Innovent that suggest response rates of upwards of 80%. We'll continue to track maturing data, but we're preparing to start that phase III study later in this fiscal year.

[Miki Sogi, Analyst at Bernstein]

Andy, I have a follow-up question on the first line. I believe that the data that was presented at ASCO was dose escalation or dose selection phase, you are running, or Innovent is running the dose expansion phase, which is actually head-to-head against KEYTRUDA plus chemotherapy, I believe. I just wanted to see that if that dose expansion phase with comparator data will be presented at ESMO. Your POC you are referring to doesn't really include that data.

[Andy Plump, Director and President of Research & Development at Takeda]

Thank you very much. Of course, the phase III study will be done depending on the mutation burden. It will be done either against a PD-1 pembrolizumab with chemo or versus a PD-1 alone. In terms of the maturing data, Miki, we don't have specific plans to share today as to when those data will be available, we assure you that as those data mature, we will present them in rapid fashion.

[Julie Kim, President and CEO at Takeda]

Thank you for the question, Sogi-san. Maybe I wasn't excited enough in my voice. I did talk about the launch preparation during the presentation, let me share in more detail so that you get a sense of what we've been doing. First, I will tackle ORZEYFUL. I'm assuming you're asking specifically about the U.S., although both China and Japan are also fully prepared. In China, we now have the approval, as you heard. One thing I do want to say about China is that the submission for NRDL approval, the window is only once per year. The approval came after that window, we won't be able to submit for NRDL until next year, meaning NRDL listing wouldn't be available until January of 2028.

[Julie Kim, President and CEO at Takeda]

Between now and then, we will focus on private market, and then the full launch will be after we receive, hopefully we receive NRDL listing. In the U.S., as I mentioned during the presentation, we've had our MSLs in the field now for over a year, focused on awareness and education around orexin and the mechanism of action. We've had our sales in the field, mapping accounts, getting introduced to the sleep centers, in particular. We've been running disease state education campaigns. We've been having payer meetings. Our specialty pharmacy network and patient support programs are ready to go. At this point, we are waiting for the FDA approval and then the subsequent DEA scheduling, and we'll be ready to go. For rusfertide, some very similar activities, again, in the field doing education and awareness.

[Julie Kim, President and CEO at Takeda]

As I've mentioned in previous calls, there is a sense of inertia in terms of the current level of treatment for polycythemia vera patients. They're viewed as a, quote-unquote, "good cancer patients." It's a lot of education we need to do to help shine a light on the burden that PV patients have. We're also doing end-to-end patient experience programs that are, again, ready to go, and of course, the payer engagements. All of that is in play. In terms of the metrics that we'll be looking at, it'll be things like patient numbers, payer coverage, and source of patients. Hopefully that addresses your question.

[Miki Sogi, Analyst at Bernstein]

Sure. Julie, I have one additional questions. What is the target of payer coverage after 12 month of launch? Commercial coverage.

[Julie Kim, President and CEO at Takeda]

Yeah. We are trying to secure commercial coverage as quickly as possible. At this point, I'm not going to share a target with you, but we want to make sure we have broad coverage.

[Miki Sogi, Analyst at Bernstein]

Thank you.

[Chris Weber, Former CEO at Takeda]

Thank you, Miki. I think we'll take one final question. We'll end with Stephen Barker from Jefferies. Steve, please go ahead and ask your questions.

[Stephen Barker, Analyst at Jefferies]

Thanks. Steve Barker from Jefferies. Congratulations on the China approval of ORZEYFUL. Could you clarify whether the approved label includes both the 1 milligram and 2 milligram tablet strengths? That is, do the physicians in China have the flexibility to prescribe either dose, or is the label focused on the 2 milligram BID regimen that was tested in RadiantLight? Follow-up question, is the same strength profile reflected in the U.S. and Japan applications, please? Thank you.

[Chris Weber, Former CEO at Takeda]

Thank you, Steve. Andy, would you like to answer those questions, please?

[Andy Plump, Director and President of Research & Development at Takeda]

Sure. Steve, the label hasn't been released yet in China, and of course, we're still in the process of discussing the label in the U.S. and Japan. We can't comment specifically what's on the label, but we can say that the expectation in China and the U.S. at least, we've not gotten to this point of discussions with Japan, is that physicians will have access to multiple doses for patients.

[Stephen Barker, Analyst at Jefferies]

Okay, great. If I can just follow up with a question about TAK-360. There's two aspects of what you presented today that caught my attention. You are testing it in NT1, which suggests that it has the potential to expand the market opportunity beyond ORZEYFUL. I was wondering if you could explain that. Then also the fact that you're evaluating both once daily and twice daily dosing, if you could explain that development choice as well, please.

[Andy Plump, Director and President of Research & Development at Takeda]

Just quickly in the interest of time, Steve. Again, we're fully confident in ORZEYFUL and in the profile that we've seen for ORZEYFUL, and we think it's going to be a best-in-class agent for type 1 narcolepsy. We also recognize that we're really at the front end of understanding what orexin biology can do across a range of diseases, understanding dose exposure, and clinical response. With TAK-360, given that it's relatively early in development, our goal is to be as thoughtful as possible within a disease, testing as broader range of doses and dose regimens, as well as across diseases to understand what the potential of that molecule is. Once we have all those data, we'll make decisions as to what doses we bring forward and what indications.

[Stephen Barker, Analyst at Jefferies]

Fantastic. Thank you very much.

[Chris Weber, Former CEO at Takeda]

Thank you, Steve, for your questions. That brings our Q&A session to a close, and I'd like to now hand over to Julie for some closing remarks.

[Julie Kim, President and CEO at Takeda]

Thank you everyone for joining us today and for your very thoughtful questions. I hope you are equally excited about our expected launches as we are, and I hope that many of you will join us later this year for our Capital Markets Day on December 11th here in Tokyo. I look forward to sharing our longer-term ambition with you and spending a bit more time on our strategic roadmap that will guide our growth through the end of the decade and beyond. Thank you again for your time, and have a wonderful rest of your day or evening

Participants

Executives

• Julie Kim, President and CEO

Analysts

• Milano Furuta, Director and CFO at Takeda
• Andy Plump, Director and President of Research & Development at Takeda
• Chris Weber, Former CEO at Takeda
• Hidemaru Yamaguchi, Analyst at Citigroup
• Shinichiro Muraoka, Analyst at Morgan Stanley
• Analyst
• Mike Nedelcovych, Analyst at TD Cowen
• Miki Sogi, Analyst at Bernstein
• Stephen Barker, Analyst at Jefferies