Takeda Pharmaceutical Co. Ltd. · TSE:4502

Takeda Pharmaceutical — Q1 2023 Earnings Presentation

49 slides from Takeda Pharmaceutical's earnings presentation, Jul 27, 2023

  1. Slide 1: Committed to Growth & Shareholder Returns

    TSE: 4502 Committed to Growth & Shareholder Returns FY2023 Q1 Earnings Announcement July 27th, 2023

  2. Slide 2: Important Notice

    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 (i

  3. Slide 3: Agenda

    Introduction Christophe Weber President & CEO Pipeline Update Andy Plump President, R&D AGENDA Financials Costa Saroukos Chief Financial Officer Q&A Session

  4. Slide 4: FY2023 Q1 Highlights: Executing Strategy for Long-Term Growth

    FY2023 Q1 Highlights: Executing Strategy for Long-Term Growth Strong Start to the Fiscal Year with Advances in Innovative Pipeline Build Growth & Launch Products +16% at CER Confidence in Long-Term Growth Profile • Revenue growth +3.7% at CER1 • QDENGA approvals in Argentina & Thailand underscore po

  5. Slide 5: Positive Momentum for QDENGA with Strong Initial Demand

    Positive Momentum for QDENGA with Strong Initial Demand in Endemic and Travel Markets Peak Sales Forecast $1.6-2B Endemic markets continue to be our highest priority, Strong launch in travel markets led by the EU making up ~80-85% of projected peak sales with setback in U.S. unfortunate but minimal

  6. Slide 6: Committed to Growth & Shareholder Returns

    Committed to Growth & Shareholder Returns Near-term Medium-term Long-term (FY2024-2025) (FY2026 - early 2030s) (FY2030s and beyond) Return to sales, profit & margin growth Continued expansion of Growth & Launch Products Further launches from innovative late-stage pipeline Limited Loss of Exclusivity

  7. Slide 7: Agenda

    Introduction Christophe Weber President & CEO Pipeline Update Andy Plump President, R&D AGENDA Financials Costa Saroukos Chief Financial Officer Q&A Session

  8. Slide 8: Major Updates To Our Pipeline Since Q4 FY22

    Major Updates To Our Pipeline Since Q4 FY22 HYQVIA • Ph3 ADVANCE-CIDP-1 data in Chronic Inflammatory Demyelinating Polyradiculoneuropathy published in JPNS 1 GAMMAGARD • GAMMAGARD LIQUID filed for treatment of CIDP in the U.S. GROWTH & LAUNCH EXKIVITY • Ph3 EXCLAIM-2 trial2 stopped for futility; dis

  9. Slide 9: First Oral Orexin Receptor Agonist Shows Significant Improvement in Narcolepsy Type 1

    First Oral Orexin Receptor 2 Agonist in Patients with Narcolepsy Type 1 Shows Significant Improvement in Daytime Wakefulness; Cataplexy Reduced or Abolished vs. Placebo1 TAK-994 • Patients were randomly assigned to twice-daily 30mg, 90mg, TAK-994 Phase 2b Results Placebo 30 mg 90 mg 180 mg Phase 2b

  10. Slide 10: Promising Late-stage Development Programs With Upcoming Inflections

    Promising Late-stage Development Programs With Upcoming Inflections FY23 FY24 FY25-27 Psoriatic Arthritis Psoriasis Psoriatic Arthritis Psoriasis Ph2b Readout Ph3 Start Ph3 Start Target Filling TAK-279 GASTROINTESTINAL Crohn’s Disease, Ulcerative Colitis, SLE, Others AND INFLAMMATION Ph2b Start fazi

  11. Slide 11: Agenda

    Introduction Christophe Weber President & CEO Pipeline Update Andy Plump President, R&D AGENDA Financials Costa Saroukos Chief Financial Officer Q&A Session

  12. Slide 12: Strong Start to the Fiscal Year; No Change to Full-Year Outlook

    Strong Start to the Fiscal Year; No Change to Full-Year Outlook FY2023 Q1 (APR -JUN) • Revenue JPY 1,058.6B (USD 7.3B)1 grew +3.7% at CER2, or +8.9% at actual exchange rates TOPLINE • Growth & Launch Products +16.2% at CER, represent 40% of total revenue PROFIT & • Core Operating Profit JPY 326.3B (

  13. Slide 13: Growth & Launch Products Driving Q1 Revenue Growth of +3.7% at CER

    Growth & Launch Products Driving Q1 Revenue Growth of +3.7% at CER; Delivering Core Operating Profit Margin of 30.8% FY2023 Q1 (APR-JUN) FINANCIAL RESULTS (SUMMARY) (BN YEN, except EPS) REPORTED CORE1 FY2023 Q1 ACTUAL % CHANGE FY2023 Q1 ACTUAL % CHANGE CER % CHANGE2 REVENUE 1,058.6 +8.9% 1,058.6 +8.

  14. Slide 14: Growth & Launch Products +16.2% at CER; Represent 40% of Total Revenue

    Growth & Launch Products +16.2% at CER; Represent 40% of Total Revenue FY2023 Q1 REVENUE PLASMA-DERIVED THERAPIES (PDT) GI RARE DISEASES IMMUNOLOGY ONCOLOGY NEUROSCIENCE OTHER % of Sales: 28% % of Sales: 18% % of Sales: 18% % of Sales: 10% % of Sales: 17% % of Sales: 9% Growth: +3% Growth: +2% Growt

  15. Slide 15: Delivered Q1 Topline Growth of +3.7% at CER or +8.9% incl. FX Tailwind

    Delivered Q1 Topline Growth of +3.7% at CER or +8.9% incl. FX Tailwind FY2023 Q1 REVENUE VS PRIOR YEAR (BN JPY) +8.9% 1,058.6 +3.7% at CER -20.5 972.5 Mainly VELCADE and DEXILANT FY2022 Q1 Growth & LOE impacted Coronavirus Vaccines Other FX FY2023 Q1 Revenue Launch Products products Revenue Graphs a

  16. Slide 16: Core O.P. Impacted by Product Mix, Investment in R&D and Data & Technology

    Core O.P. Impacted by Product Mix, Investment in R&D and Data & Technology FY2023 Q1 CORE OPERATING PROFIT VS PRIOR YEAR (BN JPY) +2.3% -2.0% at CER 326.3 319.1 FY2022 Q1 Core Growth & Launch LOE impacted products Investment in R&D Other Opex FX FY2023 Q1 Core Operating Profit Products, and Others &

  17. Slide 17: No Change to Full-year FY2023 Forecasts or Management Guidance

    No Change to Full-year FY2023 Forecasts or Management Guidance • Core Operating Profit Expected to Exceed JPY 1trn Despite Loss of Exclusivity and Coronavirus Vaccines Impact • Potential Upside to Reported & Core Forecasts if Current FX Rates Continue (BN YEN) REPORTED CORE CORE CHANGE AT CER FY2023

  18. Slide 18: Q&A Session

    Q&A SESSION C H RI S T O PH E WE BE R A N D Y PL U MP C O S T A S A RO U K O S Representative Director; Director; President, Director; President & CEO Research & Development Chief Financial Officer RA MO N A S E Q U E IRA J U L IE K I M GIL E S PL A T FO RD President, President, President, Plasma-De

  19. Slide 19: Appendix

    APPENDIX

  20. Slide 20: ENTYVIO Growth Continues to Drive Expansion of GI Franchise

    G AST R OENT ER OL OG Y (G I) ENTYVIO Growth Continues to Drive Expansion of GI Franchise Despite DEXILANT Loss of Exclusivity Headwind GI PORTFOLIO FY2023 Q1 Revenue JPY 192.0B (+7.1% growth) FY 2023 Q 1 R E V E NUE • FY23 Q1 net sales were +7.1% with single-digit market growth, impact of shipment

  21. Slide 21: Entyvio: Continuing Evidence Generation And Indication Expansion

    Entyvio: Continuing Evidence Generation And Indication Expansion PHASE 3 PUBLISHED/PRESENTED FILED APPROVED ENTYVIO® ENTYVIO® IV, H2H vs. adalimumab (VARSITY)1 IV (Global) ENTYVIO® ENTYVIO® Ulcerative colitis SC (US) SC (EU, JP) ENTYVIO® IV, Pediatric (Global) ENTYVIO® IV (Global) ENTYVIO® ENTYVIO®

  22. Slide 22: TAK-279: Phase 2B Indicates Potential For Best-in-class Oral Treatment For Psoriasis

    TAK-279: Phase 2B Indicates Potential For Best-in-class Oral Treatment Option For Psoriasis Patients achieving PASI 75, 90 or 100 at Week 121 Summary 100% • Robust efficacy: 33% of patients on 30mg 90% PASI 75 PASI 90 PASI 100 % patients achieving PASI scores achieving clear skin at 12 weeks (PASI 1

  23. Slide 23: TAKHZYRO Continues its Strong Momentum; LIVTENCITY Strong Market Penetration

    R AR E D ISEASES TAKHZYRO Continues its Strong Momentum; LIVTENCITY Strong Market Penetration in U.S. & Rapid Geographical Expansion RARE DISEASES PORTFOLIO FY2023 Q1 Revenue JPY 41.3B (+14.7% growth) FY 2023 Q 1 R E V E NUE • TAKHZYRO growth continues its strong FY2022 momentum, fueled by successfu

  24. Slide 24: PDT Portfolio Continues to Deliver Outstanding Growth

    P L ASM A - D ER IVED T H ER AP IES PDT Portfolio Continues to Deliver Outstanding Growth PDT IMMUNOLOGY PORTFOLIO Immunoglobulin Albumin FY 2023 Q 1 R E V E NUE FY2023 Q1 Revenue JPY 145.6B (+22.5% growth) FY2023 Q1 Revenue JPY 30.8B (+36.0% growth) (BN JPY) • Strong demand globally, especially in

  25. Slide 25: Oncology Growth Impacted by VELCADE Generics

    ONC OL OG Y Oncology Growth Impacted by VELCADE Generics; Portfolio Excluding VELCADE Grew +5% at CER ONCOLOGY PORTFOLIO FY 2023 Q 1 R E V E NUE • 40 markets are now reimbursed in 1L globally, including China National Reimbursement Drug List (NRDL) (BN JPY) -9% • Considerable 1L EU New Patient Start

  26. Slide 26: Neuroscience Franchise Showing Strong Growth Ahead of VYVANSE Loss of Exclusivity

    NEU R OSC IENC E Neuroscience Franchise Showing Strong Growth Ahead of Anticipated VYVANSE Loss of Exclusivity in August N EURO SCIENCE P O RTFOLIO FY 2023 Q 1 R E V E NUE FY2023 Q1 Revenue JPY 123.2B (+16.0% growth) (BN JPY) • U.S. growth in Q1 driven by the expanding ADHD adult population and by l

  27. Slide 27: Important Near-Term LCM Expansions Represent Significant Growth Opportunities

    Important Near-Term LCM Expansions Represent Significant Growth Opportunities FY23 FY24 ENTYVIO® maralixibat Target Filing SC CD (US) Target Filing ALGS, PFIC (Japan) GASTROINTESTINAL AND INFLAMMATION ALOFISEL® Target Filing Perianal Fistulas (US) ICLUSIG® Target Filing 1L Ph+ ALL (US) ONCOLOGY CABO

  28. Slide 28: FY2023: Multiple Potential Approvals For NMEs And Indication Expansions

    FY2023: Multiple Potential Approvals For NMEs And Indication Expansions UC U.S. approval ENTYVIO SC CD Japan approval U.S. approval1 QDENGA Dengue vaccine Endemic countries2 TAK-755 cTTP U.S. approval KEY POTENTIAL fruquintinib mCRC U.S. approval REGULATORY TAKHZYRO Pediatric HAE EU approval APPROVA

  29. Slide 29: Data-driven Decisions Will Further Inform Mid-stage Pipeline Development

    Data-driven Decisions Will Further Inform Mid-stage Pipeline Development FY23 FY24 GASTROINTESTINAL TAK-227 Celiac disease AND INFLAMMATION Narcolepsy TAK-861 (NT1 and NT2) NEUROSCIENCE danavorexton Postanesthesia Recovery Postanesthesia Recovery (TAK-925) Ph1 data presented at IARS subasumstat Soli

  30. Slide 30: Consolidated Development Pipeline By Phase

    Consolidated Development Pipeline By Phase PHASE 1 (14 NMEs + 1 LCM) PHASE 2 (18 NMEs + 1 LCM) TAK-647 TAK-279 TAK-101 TAK-951 NASH1 Psoriasis Celiac Disease Nausea & vomiting GASTROINTESTINAL AND INFLAMMATION TAK-279 TAK-227 zamaglutenase2 Psoriatic Arthritis Celiac Disease Celiac Disease TAK-920 T

  31. Slide 31: Consolidated Development Pipeline by Phase

    Consolidated Development Pipeline by Phase PHASE 3 (7 NMEs + 23 LCMs) FILED (2 NME + 16 LCMs) fazirsiran ENTYVIO® ENTYVIO® ALOFISEL® maralixibat ENTYVIO® VOCINTI® AATD Liver Disease Pediatric UC GvHD Prophylaxis Perianal Fistulas ALGS (JP) SC UC (US) H. Pylori (CN) in CD (US) GASTROINTESTINAL AND IN

  32. Slide 32: Glossary of Abbreviations

    Glossary of Abbreviations Regional Abbreviations: EMA European Medicines Agency mCRC metastatic colorectal cancer R/R relapsed/refractory CN: China; EU: Europe; JP: Japan; UK: United Kingdom; U.S.: ESS Epworth Sleepiness Scale mCRPC metastatic castrate-resistant prostate cancer RTU ready to use Unit

  33. Slide 33: Financial Appendix

    FINANCIAL APPENDIX Definition of Non-IFRS Measures Definition of Core Financial Measures, Constant Exchange Rate change, and Free Cash Flow A-1 Definition of EBITDA/Adjusted EBITDA and Net Debt A-2 Reconciliations and Other Financial Information FY2023 Q1 Reported Results with CER % Change A-3 FY202

  34. Slide 34: Definition of Core Financial Measures, CER Change, and Free Cash Flow

    Definition of Core Financial Measures, Constant Exchange Rate Change, and Free Cash Flow Core Revenue represents revenue adjusted to exclude significant items unrelated to Takeda’s core operations. Core Operating Profit represents net profit adjusted to exclude income tax expenses, the share of prof

  35. Slide 35: Definition of EBITDA/Adjusted EBITDA and Net Debt

    Definition of EBITDA/Adjusted EBITDA and Net Debt We present EBITDA and Adjusted EBITDA because we believe that these measures are useful to investors as they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We further

  36. Slide 36: FY2023 Q1 Reported Results with CER % Change

    FY2023 Q1 Reported Results with CER % Change vs. PY (Billion JPY) FY2022 Q1 FY2023 Q1 AER CER Amount of Change % CHANGE % CHANGE Revenue 972.5 1,058.6 86.2 8.9% 3.7% Cost of sales (292.9) (321.1) (28.2) (9.6)% (4.6)% Gross profit 679.6 737.5 57.9 8.5% 3.3% Margin 69.9 % 69.7 % (0.2) pp (0.3) pp SG&A

  37. Slide 37: FY2023 Q1 Core Results with CER % Change

    FY2023 Q1 Core Results with CER % Change vs. PY (Billion JPY) FY2022 Q1 FY2023 Q1 AER CER Amount of Change % CHANGE % CHANGE Revenue 972.5 1,058.6 86.2 8.9% 3.7% Cost of sales (278.2) (321.2) (43.0) (15.5)% (10.2)% Gross profit 694.3 737.4 43.1 6.2% 1.1% Margin 71.4 % 69.7 % (1.7) pp (1.8) pp SG&A e

  38. Slide 38: FY2023 Q1 Reconciliation from Reported to Core

    FY2023 Q1 Reconciliation from Reported to Core REPORTED TO CORE ADJUSTMENTS (Billion JPY) REPORTED Amortization of Impairment of Other CORE intangible intangible operating income/ Others assets assets expenses Revenue 1,058.6 1,058.6 Cost of sales (321.1) (0.1) (321.2) Gross profit 737.5 (0.1) 737.4

  39. Slide 39: FY2022 Q1 Reconciliation from Reported to Core

    FY2022 Q1 Reconciliation from Reported to Core REPORTED TO CORE ADJUSTMENTS (Billion JPY) REPORTED Amortization of Impairment of Other CORE intangible intangible operating income/ Others assets assets expenses Revenue 972.5 972.5 Cost of sales (292.9) 14.7 (278.2) Gross profit 679.6 14.7 694.3 SG&A

  40. Slide 40: FY2023 Q1 Free Cash Flow

    FY2023 Q1 Free Cash Flow (Billion JPY) FY2022 FY2023 vs. PY Q1 Q1 Net profit 105.0 89.4 (15.6) (14.9)% Depreciation, amortization and impairment loss 172.5 179.3 6.8 Decrease (increase) in trade working capital (124.2) (153.6) (29.4) Income taxes paid (24.9) (55.9) (31.0) Tax refunds and interest on

  41. Slide 41: FY2023 Q1 Net Debt to Adjusted EBITDA

    FY2023 Q1 Net Debt to Adjusted EBITDA NET DEBT/ADJUSTED EBITDA RATIO NET INCREASE (DECREASE) IN CASH FY2023 FY2022 FY2023 (Billion JPY) (Billion JPY) vs. PY Q1 Q1 Q1 *1 Cash & cash equivalents and Level 1 debt investments 159.7 Net cash from operating activities 84.2 92.4 8.2 9.7 % Book value debt o

  42. Slide 42: FY2022 Q4 Net Debt to Adjusted EBITDA

    FY2022 Q4 Net Debt to Adjusted EBITDA NET DEBT/ADJUSTED EBITDA RATIO NET INCREASE (DECREASE) IN CASH (Billion JPY) FY2022 (Billion JPY) FY2021 FY2022 vs. PY *1 Cash and cash equivalents 407.7 Net cash from operating activities 1,123.1 977.2 (145.9) (13.0)% Book value debt on consolidated statements

  43. Slide 43: FY2023 Q1 Net Profit to Adjusted EBITDA Bridge

    FY2023 Q1 Net Profit to Adjusted EBITDA Bridge FY2022 FY2023 (Billion JPY) vs. PY Q1 Q1 Net profit 105.0 89.4 (15.6) (14.9)% Income tax expenses 50.5 45.6 Depreciation and amortization 158.3 171.5 Interest expense, net 28.5 26.6 EBITDA 342.3 333.2 (9.1) (2.7)% Impairment losses 14.2 7.8 Other operat

  44. Slide 44: FY2023 Q1 Net Profit to Adjusted EBITDA LTM Bridge

    FY2023 Q1 Net Profit to Adjusted EBITDA LTM Bridge FY2022 FY2022 FY2023 FY2023 (Billion JPY) Full Year Q1 Q1 Q1 LTM*1 (Apr - Mar) (Apr - Jun) (Apr - Jun) (Jul - Jun) Net profit 317.0 105.0 89.4 301.4 Income tax expenses 58.1 50.5 45.6 53.2 Depreciation and amortization 664.4 158.3 171.5 677.6 Intere

  45. Slide 45: FY2023 Q1 CAPEX, Depreciation and Amortization and Impairment Losses

    FY2023 Q1 CAPEX, Depreciation and Amortization and Impairment Losses FY2022 FY2023 FY2023 (Billion JPY) vs. PY Q1 Q1 Forecast Capital expenditures*1 98.4 269.2 170.9 173.7% 480.0 - 530.0*3 Tangible assets 42.1 46.0 3.8 9.1% Intangible assets 56.3 223.3 167.0 296.9% Depreciation and amortization 158.

  46. Slide 46: FY2023 Full Year Detailed Forecast

    FY2023 Full Year Detailed Forecast FY2022 FY2023 (BN JPY) Forecast vs. PY Variances Actual (May 11, 2023) (4.7)% Growth & Launch Products momentum largely offsetting LOE impact (e.g. VYVANSE, Revenue 4,027.5 3,840.0 (187.5) AZILVA), with additional headwinds from lower coronavirus vaccines revenue a

  47. Slide 47: FY2023 Full Year Reconciliation from Reported to Core Operating Profit Forecast

    FY2023 Full Year Reconciliation from Reported Operating Profit to Core Operating Profit Forecast REPORTED TO CORE ADJUSTMENTS Other (Billion JPY) REPORTED Amortization of Impairment of CORE operating intangible intangible income assets assets (expenses) Revenue 3,840.0 3,840.0 Cost of sales Gross Pr

  48. Slide 48: FY2023 Full Year FX Rates Assumptions and Currency Sensitivity

    FY2023 Full Year FX Rates Assumptions and Currency Sensitivity Average Exchange Rates vs. JPY Impact of depreciation of yen from April 2023 to March 2024 (100 million JPY) Core FY2022 Q1 FY2023 Q1 FY2023 Operating Revenue Net Profit Operating Actual Actual Assumption Profit (IFRS) (IFRS) Profit (Apr

  49. Slide 49: © 2023 Takeda Pharmaceutical Company Limited. All rights reserved.

    © 2023 Takeda Pharmaceutical Company Limited. All rights reserved.

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