Takeda Pharmaceutical Company Limited Q2 FY2026 earnings call

• Financial Execution: First-half core revenue was JPY 2.4 trillion (-1% CER), with core operating profit at JPY 710.6 billion (+0.7% CER). Results are on track with expectations despite FX volatility.
• Transformation Program: The initiative is delivering savings that fund new launches and R&D. Procurement initiatives have yielded approximately JPY 30 billion in annualized savings. The program targets JPY 100 billion in gross savings for FY2026, with restructuring costs reduced to JPY 160 billion.
• Product Launches:
  • ORZEYFUL: Launched in Japan and China; U.S. launch anticipated in early November following DEA scheduling. Selected as one of TIME Magazine's best inventions of 2026.
  • MIMRYLO: Launched in the U.S. in August as a first-in-class hepcidin mimetic for polycythemia vera. Listed as a Category 1 recommendation in NCCN guidelines.
  • Zasocitinib: Regulatory submissions accepted by FDA (priority review) and EMA for psoriasis. Potential U.S. launch in Q4 FY2026.
• Pipeline Progress:
  • TAK-921: Positive Phase III data in advanced gastric cancer showed significant improvements in overall survival and progression-free survival. Filing planned for Japan in FY2027.
  • ENTYVIO: VERDICT study demonstrated that treat-to-target strategies reduce UC-related complications by ~70%.
  • Other Programs: Phase III initiation for elritercept in myelofibrosis; filing completed for TAK-881 in primary immunodeficiency.

• Core In-Line Brands: Represented 58% of total revenue. Grew by 0.5% at constant exchange rates (CER). Key drivers include ENTYVIO, immunoglobulin, and TAKHZYRO.
• New Launches: Represented 4% of total revenue. Grew by 17.3% at CER. Includes products launched within the past five years such as ORZEYFUL, MIMRYLO, and zasocitinib.
• Mature/Off-Patent Portfolio: Contributed to headwinds due to loss of exclusivity (e.g., VYVANSE) and mature franchise performance (e.g., hemophilia), partially offsetting growth from new launches and core brands.

• Revenue: Maintained guidance for low single-digit percent decline at CER. Raised absolute revenue forecast by JPY 60 billion, primarily due to favorable FX assumptions.
• Core Operating Profit: Raised guidance by JPY 30 billion to JPY 1.19 trillion, driven by transaction FX benefits and transformation savings.
• Core EPS: Raised guidance to reflect FX benefits; underlying business performance remains in line with initial expectations.
• Product Specifics: Reduced albumin forecast due to market dynamics; increased forecasts for VYVANSE and TRINTELLIX. Immunoglobulin outlook maintained with expected H2 rebound.

• FX Volatility: While current depreciation of the yen provided positive impacts, future currency fluctuations could affect reported results.
• Launch Execution: Success depends on securing payer coverage, physician adoption, and patient access for new launches like MIMRYLO and ORZEYFUL.
• Regulatory Delays: Potential delays in DEA scheduling for ORZEYFUL or regulatory decisions for zasocitinib could impact launch timelines.
• Pipeline Uncertainty: Lack of dose-response in zasocitinib’s Phase II UC trial introduces uncertainty regarding its path to Phase III; Crohn’s disease data is critical for final decision.
• Market Dynamics: Cost containment measures in China and competitive pressures in mature markets pose ongoing risks to albumin and immunoglobulin revenues.

Q: What are the early launch impressions for MIMRYLO and how does the lack of dose response in zasocitinib’s UC trial affect the Phase III decision? / A: Teresa Bitetti noted that while it is early days, reception from HCPs and patients has been very positive, with focus on education and ensuring access. Andy Plump clarified that zasocitinib showed robust efficacy at the 50mg dose but not at 75mg in UC. However, given mechanistic rationale favoring Crohn’s disease and consistent safety profiles, they view this as a path forward. They will wait for Crohn’s data at year-end to make a definitive Phase III decision, potentially positioning zasocitinib as a cornerstone for combination therapies.