Hidemaru Yamaguchi

Hidemaru Yamaguchi asked about Takeda's strategy regarding the U.S. MFN policy and recent organizational changes, particularly how they will enhance U.S. marketing activities for upcoming product launches.

Answer

CEO-elect Julie Kim explained that Takeda is assessing the impact of IRA and CMMI projects on its portfolio, reiterating the company's opposition to MFN due to potential negative effects on innovation. Regarding organizational changes, Kim highlighted a focus on oncology and two geographic structures (U.S. and international) to drive commercial success, emphasizing ongoing work in marketing and sales excellence.

Hidemaru Yamaguchi (Citi) asked for Takeda's perspective on the Most Favored Nation (MFN) situation and broader U.S. medical policy, especially given recent settlements by other major companies. He also sought clarification on the organizational changes announced, particularly how the new strategic portfolio development and U.S. marketing activities would improve past performance, under Julie Kim's leadership.

Answer

Julie Kim (CEO-elect) explained that Takeda is assessing the impact of the IRA and CMMI demonstration projects, reiterating the company's opposition to MFN due to concerns about price controls and innovation. Regarding organizational changes, Kim outlined two key commercial structures: a dedicated oncology business unit to drive growth from new assets like Innovent and rusfertide, and a geographic focus for the U.S. and international markets to ensure successful launches. She emphasized ongoing efforts in marketing excellence, sales excellence, and commercial operations to enhance readiness and delivery.

Asked about the competitive differentiation of Takeda's orexin agonist, specifically regarding cataplexy data, and inquired about the company's U.S. investment strategy and potential adoption of new business models like direct-to-consumer (DTC).

Answer

The company emphasized that their orexin agonist, TAK-861, showed significant improvement in cataplexy, a key differentiator. Regarding U.S. strategy, they highlighted their existing large manufacturing footprint and stated that while they are aware of the DTC model, their specialized portfolio is not a natural fit for the current cash-pay DTC platforms.

Hidemaru Yamaguchi from Citigroup asked about the rationale and timing for CEO Christophe Weber's retirement announcement, questioning why it was happening before the Entyvio patent cliff. He also requested an outlook for the next fiscal year, noting the higher hurdle set by strong current-year results.

Answer

CEO Christophe Weber stated the 2026 timing is ideal, occurring after the main VYVANSE impact and before a new product launch wave, while also aligning with Board rotations. He expressed confidence in revenue and bottom-line growth for the next fiscal year, as the Growth & Launch Products are expected to offset the now-limited residual impact from VYVANSE.

Hidemaru Yamaguchi from Citi asked if the strong Q1 performance of the dengue vaccine, QDENGA, was due to any one-time factors or if it represents a new baseline. He also inquired if the Q1 earnings progress, excluding currency and VYVANSE, was in line with full-year expectations.

Answer

President and CEO Christophe Weber stated that QDENGA's strong start reflects significant underlying demand, with manufacturing capacity being the current limiting factor, and was not driven by one-time events. CFO Milano Furuta confirmed that overall Q1 progress was on track, with top-line performance as expected and R&D expenses phased for later in the year, thus justifying the unchanged guidance.

Hidemaru Yamaguchi of Citigroup asked if QDENGA's strong Q1 performance was influenced by any one-time factors, and whether the Q1 earnings progress, excluding currency and VYVANSE impacts, was in line with company expectations.

Answer

President and CEO Christophe Weber attributed QDENGA's strong start to high demand, with manufacturing capacity being the only limiting factor, and confirmed no special one-time items. CFO Milano Furuta stated that overall progress was on track, with the profit beat driven by R&D expense phasing that is expected to normalize over the year.

Hidemaru Yamaguchi of Citigroup inquired about the competitive landscape for orexin agonists, focusing on cataplexy data as a key differentiator. He also asked about Takeda's U.S. investment strategy, particularly regarding manufacturing and direct-to-consumer (DTC) business models.

Answer

R&D President Andrew Plump positioned TAK-861 (ovaprexin) as a potential best-in-class agent with significant cataplexy benefits, while declining to comment on competitor data directly. President and CEO Christophe Weber emphasized Takeda's existing heavy investment in U.S. manufacturing and R&D. U.S. Business Unit President Julie Kim explained that DTC models offer a way to lower patient costs but noted Takeda's specialized portfolio is not a primary fit, though opportunities for certain products are being evaluated.

Asked about the market performance and subcutaneous pen uptake for ENTYVIO, as well as the seemingly accelerated timeline for the go/no-go decision on the Orexin agonist program (TAK-861) and how data would be shared.

Answer

For ENTYVIO, Takeda remains the market leader in IBD bio-naive new patient starts, and while it's too early for specific pen uptake data, HCP awareness is high and PBM agreements are in place. The Orexin (TAK-861) program accelerated because Phase IIb studies completed enrollment in under 12 months, far ahead of the 18-month schedule. A decision to proceed to Phase III will be made before the end of the fiscal year (March), with the method of data presentation still under consideration.

Hidemaru Yamaguchi from Citigroup sought confirmation on the business and accounting model for Xocova in China, questioning how the forecasted JPY 46 billion revenue increase would be booked and what the profit structure would look like.

Answer

Masako Kudou, VP of Finance and Accounting, confirmed that sales in China are booked on Shionogi's P&L, though the profit margin is not as high as in Japan. She stated that while the specific model is confidential, the company has a target operating profit it aims to achieve in the region.

Hidemaru Yamaguchi from Citi asked about the domestic uptake of the COVID-19 treatment Xocova, questioning the reasons for the perceived imbalance in its usage compared to other drugs and seeking feedback from hospitals on its clinical efficacy and onset of effect.

Answer

Masako Kudou, VP of Finance and Accounting, explained that the current government purchase system requires a patient registration process that complicates uptake, a hurdle that will be removed upon full approval. An Unidentified Speaker added that clinical feedback has been positive, with doctors reporting improvements in individual symptoms like fever and sore throat, a reduction in the symptomatic period, and an advantage in preventing the worsening of the illness.

Hidemaru Yamaguchi of Citigroup asked if the delayed review of the oral COVID-19 drug S-217622 would necessitate a downward revision of the first-half forecast. He also sought a more precise timeline for the Phase 2/3 trial results and inquired about the potential for another subcommittee review.

Answer

Susumu Mitsumori, VP of Finance and Accounting, responded that the company has not yet given up on first-half approval and is not revising its plan. Takeki Uehara, Corporate Officer and SVP of Drug Development, confirmed the top-line data is expected between August and September and noted that the future regulatory pathway is still under discussion with authorities.