TSE: 4502
Committed to Growth & Shareholder Returns
FY2023 Earnings Announcement
May 9th, 2024
2
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This presentation and materials distributed in connection with this presentation include certain financial measures not presented in accordance with IFRS, such as Core Revenue, Core Operating Profit, Core Net Profit, Core EPS, Constant Exchange Rate ("CER") change, Net Debt, EBITDA, Adjusted EBITDA and Free Cash Flow. Takeda's management evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this presentation. These non-IFRS measures exclude certain income, cost and cash flow items which are included in, or are calculated differently from, the most closely comparable measures presented in accordance with IFRS. Takeda's non-IFRS measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared in accordance with IFRS (which we sometimes refer to as "reported" measures). Investors are encouraged to review the definitions and reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures, which are in the financial appendix appearing at the end of this presentation. Beginning in the first quarter of FY24, Takeda will (i) change its methodology for CER adjustments to results of subsidiaries in hyperinflation countries to present those results in a manner consistent
with IAS 29, Financial Reporting in Hyperinflation Economies, and (ii) re-name Free Cash Flow as currently calculated as "Adjusted Free Cash Flow" (with "Free Cash Flow" to be reported as Operating Cash Flow less Property, Plant and Equipment). For more information about the changes, including how the new methodology would have impacted Takeda's FY23 results, refer to the Financial Appendix.
The usefulness of Core Financial Measures to investors has significant limitations including, but not limited to, (i) they are not necessarily identical to similarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) they exclude financial information and events, such as the effects of non-cash expenses such as dispositions or amortization of intangible assets, that some may consider important in evaluating Takeda's performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in the future (however, it is Takeda's policy not to adjust out normal, recurring cash operating expenses necessary to operate our business) and (iv) they may not include all items which investors may consider important to an understanding of our results of operations, or exclude all items which investors may not consider to be so.
Exchange Rates
In this presentation, certain amounts presented in Japanese yen have been translated to US dollars solely for the convenience of the reader. Except where otherwise noted, these convenience translations have been made at an exchange rate of 1USD = 151.22 JPY, the Noon Buying Rate certified by the Federal Reserve Bank of New York on March 29, 2024. The rate and methodologies used for these convenience translations differ from the currency exchange rates and translation methodologies under IFRS used for the preparation of Takeda's consolidated financial statements. These translations should not be construed as a representation that the relevant Japanese yen amounts could be converted into U.S. dollars at this or any other rate.
Medical information
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AGENDA
Introduction &
Business Highlights
Pipeline Update
Financials
Q&A Session
Christophe Weber
President & CEO
Andy Plump
President, R&D
Milano Furuta
Chief Financial Officer
Better Health for People, Brighter Future for the World
Our vision is to discover and deliver life-transforming treatments, guided by our commitment to:
PATIENT | PEOPLE | PLANET | |
• Responsibly translate | • Accelerate | • Create an exceptional | • Protect our planet |
science into highly | access to | people experience | |
innovative, life-changing | improve lives | ||
medicines and vaccines | worldwide |
… A N D B Y U N L E A S H I N G T H E P O W E R O F D A T A A N D D I G I T A L
- We strive to transform Takeda into the most trusted, science-driven, digital biopharmaceutical company
We are guided by our values of Takeda-ism which incorporate
Integrity, Fairness, Honesty, and
Perseverance, with Integrity at the core. They are brought to life through actions based on Patient-Trust-
Reputation-Business,in that order.
4
FY2023 Results: Delivered or Exceeded Management Guidance
Strong Momentum of Growth & Launch Products
Important Evolution of our Innovative Pipeline
- Revenue growth +1.5% at CER1 with Loss of Exclusivity (LOE) impact mitigated by Growth & Launch products +12.8% at CER
- Core Operating Profit decline in-line with guidance; reflects LOE of high margin products and investment in R&D and DD&T
FY2023 RESULTS VS MANAGEMENT GUIDANCE2
FY2023 GUIDANCE | FY2023 | ||
CHANGE AT CER | RESULTS | ||
CORE REVENUE | Low-single-digit % decline | +1.5% | |
at CER | |||
CORE OPERATING PROFIT | Low-10s % decline | -13.3% | |
at CER | |||
CORE EPS | Low-20s % decline | -15.7% | |
at CER | |||
- Three new U.S. product approvals (FRUZAQLA, ADZYNMA, EOHILIA)
- Important lifecycle management milestones including:
- ENTYVIO PEN approval in the U.S.
- HYQVIA and GAMMAGARD LIQUID approvals in CIDP
- Further endemic country approvals of QDENGA
- Zasocitinib (TAK-279) progress into Ph3 in psoriasis and Ph2b in ulcerative colitis and Crohn's disease; Ph3 in psoriatic arthritis to commence soon
- TAK-861 met primary and key secondary endpoints in Ph2b trial in narcolepsy type 1; Ph3 trials to start in H1 of FY24
- Data-drivendecisions to not pursue regulatory filing of ALOFISEL in the U.S., to voluntarily withdraw EXKIVITY globally, and to discontinue development of three Ph2 pipeline programs in oncology (modakafusp alfa, subasumstat, TAK-007)
DD&T: Data, Digital, and Technology
5 1. Constant Exchange Rate. Please refer to appendix slide A-1 for definition.
2. Please refer to appendix slide A-1 for definition of Core financial measures, and slides A-5 and A-7 for reconciliation.
Positioned for Return to Revenue & Profit Growth from FY2025 with Efficiency Program to Deliver Margin Expansion
- FY2024 expected to be final year of significant headwind of VYVANSE Loss of Exclusivity in the U.S.
Return to Sustainable
Revenue Growth
Advance Pipeline with | Drive Efficiencies to | Deliver Attractive | ||
Rigorous Prioritization | Improve Margins | Returns to Shareholders | ||
Growth & Launch Products
expected to represent
~50% of revenue
in FY2024 with double- digit % growth at CER
Limited LOE exposure after VYVANSE until early 2030s1
Prioritizing pipeline to
invest in 6 late-stage assets with potential to generate significant value
Deliver 100-250bps | Strong cashflow outlook |
Core Operating Profit margin | underpins proposed |
improvement each year | dividend increase to |
from FY2025 towards | 196 yen per share in |
low-to-mid 30s% target | FY2024 |
1. Major products expected to face generic/biosimilar competition between FY2024-2029 total less than 10% of FY2023 revenue: Gattex U.S. (FY25), Iclusig U.S. (FY26) , Trintellix U.S. (FY26), Vectibix JP (FY26), Vyvanse EU (FY28), Livtencity U.S. (FY28), Ninlaro U.S. (FY29)
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Note: Margin improvement target assumes constant FX rate
Enterprise-wide Program to Drive Efficiencies and Deliver 100-250bps of Core Operating Profit Margin Improvement Each Year From FY2025
Organizational Agility
Focus on agility and organizational simplicity,
reducing layers, broadening spans,
and refining operating models
Procurement Savings
Optimizing external spend through
procurement-led initiatives
Data, Digital & Technology
Targeting increased productivity and efficiency across the whole enterprise through digital, automation, & AI
Freeing up resources to:
- Advance prioritized pipeline
- Execute new product launches
- Continue building DD&T capabilities
- Offset inflation headwinds
While aiming to deliver 100-250bps of Core Operating Profit Margin improvement each year from FY2025 towards low-to-mid 30s% target
JPY 140B of restructuring costs expected to be booked in FY2024 primarily as a result of this program
7 Note: Margin improvement target assumes constant FX rate
Incorporating Data, Digital & Technology Across the Value Chain to Develop and Deliver Medicines to Patients more Efficiently
Developing digital skills & capabilities
Building In-house | Data Migration | Digital-ready | Strategic Alliances in | |||
Digital Capabilities | to the Cloud | Workforce | Digital Health | |||
• Innovation Capability Centers | • 96% of all data has been | • Preparing our workforce for a | • Engaging with digital health | |||
(ICCs) building internal | migrated to Cloud; anticipate | digital future through learning | ecosystem to add value across | |||
capabilities to reduce reliance | complete migration of all apps | opportunities on digital topics | our pipeline through | |||
on external vendors, boosting | and data by close of FY2024 | collaboration, investment and | ||||
efficiency and saving cost | partnership |
Integrating data-driven insights into our business operations
Digital Marketing | PDT Donor | Clinical Trials | Manufacturing | ||||
Tools | Interface | & Supply Chain | |||||
• Digital channels with | • | Improving donor experience | • Leveraging AI, internal & external | • Incorporating big data and AI to | |||
personalized content accessed | through digital appointments | data to speed recruitment and | drive efficiencies in quality | ||||
by 6.7 million individual users | and AI-driven inquiry system | regulatory filings | control, using sensors and digital | ||||
• FDA approval of GAMMAGARD | |||||||
(including HCPs, donors and | • | Approx 1.3 million appointments | cameras to conduct predictive | ||||
LIQUID for CIDP based in part on | |||||||
patients), an increase of 3.4 | per month on average via digital | maintenance, root cause analysis, | |||||
real-world evidence from | |||||||
million since January 2023 | channels in FY23 | and deviation analysis | |||||
databases licensed by Takeda | |||||||
8
Growth & Launch Products Expected to Represent ~50% of Total Revenue in FY2024 with Double-digit Growth Outlook at CER
Balanced Portfolio Across Six Key Business Areas
FY2024
REVENUE FORECASTS AT CER 1
GROWTH
&
LAUNCH
PRODUCTS
GI
+16%
New Launch
RARE DISEASES
+10%
+54%
New Launch
Advate® / Adynovate
PLASMA-DERIVED | ONCOLOGY | VACCINES | NEUROSCIENCE |
THERAPIES (PDT) |
IMMUNOGLOBULIN
+5~15% | +37% | >200% |
ALBUMIN | |
Single-digit % | New Launch |
growth | |
Adcetris® (ex-N. America) |
OTHER KEY | Takecab/Vocinti® |
PRODUCTS | Gattex/Revestive® |
Vonvendi®
Elaprase® / Vpriv®/
Replagal®(EU,JP)
Glassia® | Ninlaro® / Iclusig® | Nuvaxovid® (JP) | Vyvanse® |
Aralast® | Leuprorelin | Trintellix®(US,JP) | |
Zejula®(JP) / Cabometyx®(JP) | |||
Vectibix®(JP) |
9 1. Constant Exchange Rate. Please refer to appendix slide A-1 for definition.
This slides shows Growth & Launch Products as categorized for FY2024 (ALOFISEL and EXKIVITY have been removed). For results of FY2023 Growth & Launch Products performance, please refer to slide 35.
Expect Return to Double-digit Revenue Growth in FY2024
Expect Return to Double-digit Revenue Growth in FY2024
Achieved double-digit global volume growth in FY2023 (+12%) despite U.S. market growth still behind pre-pandemic levels
- FY2023 global revenue grew +6.6% at CER, to JPY 800.9B ($5.3B)1; lower than volume growth due to price erosion and clawbacks ex.-U.S.
Stable #1 market share in U.S. bio-naïve new starts
- 1L share durable through competitive launches that have mostly competed in later lines of therapy and/or within class of alternative mechanisms of action (e.g. anti-TNFs, IL12/23s)
Remain confident in peak sales outlook of $7.5-9.0B
- Unique brand equity established >10 years
- Continued volume growth expected supported by new IV/SC flexibility with U.S. launch of ENTYVIO Pen in UC and Crohn's disease
- New and ongoing lifecycle management to enhance long-term growth
1. Please refer to disclaimer on Exchange Rates on slide 2
10 2. Source: Symphony PTD Claims data Dec 2023
Focus on Launch Success of ENTYVIO SC/Pen
SC/PEN launched in 50+ markets and driving incremental growth
- Launched ENTYVIO Pen in Crohn's disease in the U.S. in April 2024, following UC launch in Nov 2023, to unlock full market opportunity (SC represents 35-40% of the U.S. IBD market2)
- High level of interest for ENTYVIO Pen and establishing formulary access; 10% of ENTYVIO Pen prescribers are new to ENTYVIO, with another 20% returning after >1 year of not prescribing
- Overall ENTYVIO volume growth in EU outperforming the market at +14% largely driven by successful SC launches: >40% volume growth with no major access challenges; SC now makes up ~ ⅓ of total ENTYVIO volume in EU
ENTYVIO Pen U.S. National Payer Access3
(Commercial + Federal + Health Exchange)
Expected Effective July 1
Lives | 80% | 52% | 54% | 72% | |||||||
60% | |||||||||||
Covered% | 39% | ||||||||||
40% | |||||||||||
30% | |||||||||||
20% | 5% | 13% | 13% | ||||||||
0% | |||||||||||
Oct | Nov | Dec | Jan | Feb | Mar | Apr | Jul | ||||
L | L+1 | L+2 | L+3 | L+4 | L+5 | L+6 | L+9 | ||||
2023 | 2024 | (projection) |
3. Data derived from Managed Market Insights & Technology (MMIT). April 2024.
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Takeda Pharmaceutical Co. Ltd. published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 06:08:11 UTC.