Seiji Wakao

Seiji Wakao questioned the clinical progress and outlook for Takeda's Plasma-Derived Therapies (PDT) business, including Q4 and next fiscal year projections, and specifically asked about immunoglobulin performance. Wakao also inquired about the expected presentation of Zasocitinib phase III data (e.g., AAD), key aspects to focus on, and its differentiation from competitors like icotracinib and aromatics programs.

Answer

CEO-elect Julie Kim acknowledged a slowdown in albumin demand in China due to government utilization guidelines, impacting growth. She maintained a mid-single-digit growth outlook for PDT this year, with immunoglobulin expected to be on forecast. President of R&D Andrew Plump suggested watching for Zasocitinib abstract releases for AAD in mid-February. He highlighted Zasocitinib's fast onset of action, clear skin efficacy (PASI 90/100), ease of once-daily oral administration without food effects, strong safety profile, and hitting all 44 primary and secondary endpoints in phase III, positioning it as a leading oral option in moderate to severe plaque psoriasis.

Seiji Wakao (JPMorgan Chase & Co.) asked for an assessment of Takeda's Plasma-Derived Therapies (PDT) business progress, noting it seemed slower than guidance, and requested an outlook for Q4 and the next fiscal year, specifically for immunoglobulin. He also inquired about the expected presentation of zasocitinib phase III data (e.g., AAD in March), key aspects to focus on, and how it differentiates from competitors like icotrokinra and orismilast.

Answer

Julie Kim (CEO-elect) attributed the PDT slowdown to decreased albumin demand in China due to utilization guidelines, expecting time for growth to return. She maintained a mid-single-digit growth outlook for PDT this year and a strong longer-term outlook, acknowledging a potential albumin shortfall but expecting to meet the overall PDT forecast. Kim confirmed steady long-term immunoglobulin growth and meeting short-term forecasts. Andrew Plump (President, R&D) advised watching for AAD abstracts in mid-February for zasocitinib data. He highlighted key aspects: fast onset, clear skin, and ease of administration (once-daily oral, well-tolerated, strong safety, no food interactions). Plump emphasized that zasocitinib hit all 44 primary and secondary endpoints in two phase III studies, positioning it as good or better than any other oral option for moderate to severe plaque psoriasis.

Inquired if the slow start to R&D spending in Q1 was planned and if it would affect the full-year outlook. Also asked about the status of discussions with the U.S. government regarding the Most Favored Nation (MFN) drug pricing policy.

Answer

The company explained that Q1 R&D spending was lower than a simple pro-rata calculation due to larger-than-planned savings from efficiency programs and program terminations, but that spending will ramp up and the full-year guidance is unchanged. Regarding MFN, they have not been contacted for negotiations and are awaiting specific details, while preparing for IRA negotiations for Entyvio.

Seiji Wakao from JPMorgan Chase & Co. asked for the rationale behind the newly announced share buyback. He also requested more specific timing for the Phase III data readouts for TAK-861 (oveporexton) and TAK-279 (zasocitinib).

Answer

Executive Milano Furuta explained the buyback aligns with their capital allocation policy of returning excess cash to shareholders after funding growth. Executive Andrew Plump provided timing updates: rusfertide data this quarter, oveporexton data mid-2025, and zasocitinib data by year-end.

Seiji Wakao of JPMorgan asked if the recent approval of SKYRIZI for ulcerative colitis would negatively impact ENTYVIO's market share. He also questioned why the gross margin is expected to decline from 68% in Q1 to the full-year target of 65.5%.

Answer

Julie Kim, President, U.S. Business Unit, responded that ENTYVIO maintains its strong leadership in first-line treatment, as new entrants like SKYRIZI primarily compete in the second-line and beyond setting. CFO Milano Furuta explained the gross margin will decline due to the accelerating erosion of high-margin products like VYVANSE and a sales recovery for lower-margin albumin.

Seiji Wakao from JPMorgan Chase & Co. asked about the potential impact of SKYRIZI's approval in ulcerative colitis on ENTYVIO's market share, and for the reasons behind the expected decline in gross margin from 68% in Q1 to the full-year target of 65.5%.

Answer

Executive Julie Kim responded that ENTYVIO maintains its strong first-line market share, with new entrants like SKYRIZI primarily impacting later lines of therapy. CFO Milano Furuta explained that the gross margin is expected to decline due to the accelerating erosion of high-margin products like VYVANSE and a recovery in sales of lower-margin products like albumin.

Seiji Wakao of JPMorgan Chase & Co. questioned if the slow start to R&D spending in Q1 was in line with the plan. He also asked about the status of any discussions with the U.S. government regarding the Most Favored Nation (MFN) drug pricing policy.

Answer

CFO Milano Furuta explained that Q1 R&D spend was impacted by savings from program terminations and efficiency efforts, which were larger than planned, but confirmed that pipeline development is on track and spending will ramp up as planned. U.S. Business Unit President Julie Kim stated that Takeda has not been contacted directly for MFN negotiations but is preparing for potential impacts and for the separate IRA Medicare price negotiations for Entyvio.

Inquired about the specific safety profile of TAK-861, particularly the cardiovascular risk, and asked for an explanation for the decline in gross margin in the third quarter and the outlook for the fourth quarter.

Answer

On TAK-861 safety, based on blinded data and DSMB reviews, there is no evidence of liver toxicity or visual disturbances, and the company does not believe cardiovascular risk will be a significant issue. The Q3 gross margin decline is consistent with internal forecasts and is primarily driven by the loss of exclusivity on high-margin products like VYVANSE and Velcade, which is not yet fully offset by the growth of newer products.

Seiji Wakao of JPMorgan Chase & Co. asked for a breakdown of the JPY 7.1 billion in COVID/influenza sales, specifically the contribution from Xocova versus inventory, and questioned the feasibility of the JPY 40-50 billion sales target for Xocova in China.

Answer

Toshinobu Iwasaki, Senior Executive Officer, confirmed that most of the JPY 7.1 billion was from Xocova sales, not inventory, due to expanding infection rates. Koji Hanasaki, Executive Officer, expressed confidence in the China sales plan, highlighting Xocova's high efficacy in viral exclusion compared to other approved drugs, which he believes will drive demand.

Seiji Wakao of JPMorgan asked for the expected timeline for the next regulatory review of S-217622. He also inquired about the application and approval timelines in China, Korea, and Vietnam, and whether approvals in the latter two countries depend on Japan's decision.

Answer

Ryuichi Kiyama, Senior Executive Officer, stated that a specific timeline cannot be provided as the regulatory pathway, including the use of the EUA framework, is under discussion. John Keller, SVP of R&D, added that there is a possibility for Korea to proceed with approval independently of Japan, while discussions with Chinese authorities are ongoing.