Takeda Pharmaceutical Company - Earnings Call - Q2 2026
October 30, 2025
Transcript
Speaker 13
We are taking time out of your very busy schedule to join Takeda's FY25 Q2 earnings announcement. I'm the MC today, Head of IR. My name's O'Reilly. Thank you for this opportunity. Allow me to explain about the language setting first. Please find the language selection button at the bottom of your Zoom window. If you wish to listen in Japanese, please select Japanese. If you wish to listen in English, please select English. Or if you prefer the original voice, please keep this choice off. Before starting, I'd like to remind everyone that we'll be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in our most recent Form 20-F and in our other SEC filings.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
There's also reference to non-IFRS measures and reconciliations with comparable IFRS financial measures included in the appendix to the presentation. Now, we'd like to start with the presentation of the day. We have Christophe Weber, President and Chief Executive Officer; Milano Furuta, Chief Financial Officer; Andrew Plump, President, Research & Development; Teresa Bitetti, President, Global Oncology Business Unit; and P.K. Morrow, Head of Oncology Therapeutic Area Unit. We'll provide you with presentations, which will be followed by a Q&A session. We will get started now.
Christophe Weber (CEO)
Thank you, Chris, and thank you, everyone, for joining us today. Our fiscal year 2025 first half results confirm our expected business dynamic for fiscal year 2025, with business fundamentals tracking as planned. This is the last year of very significant Vyvanse generic impact, which peaked in H1 and which will be much less of a headwind to our growth from now on. Growth on launch product grew 5.3% at constant exchange rate, and we expect this growth to accelerate in H2. Entyvio is growing, albeit at a slower pace, as the pen is growing 20% quarter to quarter in the U.S., but still represents only 9% of Entyvio volume in the U.S. Our PDT business is expected to grow at mid-single digit this year, with immunoglobulin and albumin growing high single digit. We will continue to maintain very tight OPEX control through efficiency improvement supporting profit.
Our decision to update fully our management guidance for operating profit and core EPS was driven by a headwind from transactional foreign exchange, mostly generated by the euro appreciation, which has most notably affected Q2. Our updated reported forecast, including our EPS forecast, reflects a non-tax deductible impairment loss booked in the first half. From fiscal year 2026 onwards, Takeda will be in a new business cycle, with Vyvanse generic impact mainly behind us, potentially three new product launches for Rusfertide, Oveporexton, and Zasocitinib, and an evolving late-stage pipeline now enriched by our strategic partnership with Innovent Biologics. Our leadership in leveraging technology on AI will further transform the company, which will be led by Julie. Milano will discuss our financial results, updates in more detail in a moment, and then Andy will present our pipeline advancement with exciting data on mezagitamab.
Later on this call, Teresa Bitetti and P.K. Morrow will discuss our partnership with Innovent Biologics and will focus on two new late-stage molecules. With that, I'll hand it over to Milano to walk us through the financials. Milano.
Milano Furuta (CFO)
Thank you, Christophe, and hello, everyone. This is Milano Furuta speaking. Slide 7 summarizes our first half financial results. Overall, our business performance is tracking as we planned. As anticipated, this period was significantly impacted by LOE, as we lost approximately JPY 100 billion of Vyvanse revenue. Meanwhile, we have been focused on driving OPEX savings, which especially offset the impact to corporate profit. We expect H1 to be the peak of Vyvanse generic impact, and we expect a better growth outlook for the full year. Revenue in H1 was just over JPY 2.2 trillion, a decrease of 6.9% or -3.9% at constant exchange rate or CR. Core operating profit, core OP, was JPY 639.2 billion, a year-on-year decrease of 11.2% at actual FX or 8.8% at CR. Reported operating profit was JPY 253.6 billion, a decline of 27.7% due to larger impairment losses this fiscal year.
Core EPS was JPY 279, and reported EPS was JPY 72. The 40% decline in the reported net profit on EPS reflects the impairment of cell therapy, which is non-deductible from taxable income. Cash flow was very strong this period, with adjusted free cash flow of JPY 525.4 billion, including improvements in working capital. Slide 8 shows our growth on launch products, which represents over 50% of revenue. In H1, this portfolio grew 5.3% at CR. This modest growth includes the impact of phasing of certain products, and we anticipate a higher growth rate in the second half. In GI, Entyvio growth was 5.1% at CR. We are encouraged to see increasing numbers of active Entyvio Pen patients in the U.S., and we are also making progress with expanding formulary access. That said, revenue growth has been slightly below expectation, and we are revising our full-year forecast for Entyvio to 6% at CR.
In rare disease, Takhzyro continues to grow steadily as a market leader in HAE prophylaxis, with 5.9% growth at CR. Our PDT portfolio growth reflects several factors which were built into our guidance and fully in line with expectation. IG growth was 3.1%. While Medicare Part D redesign is impacting several products in the U.S. this year, one of the most impacted products is Gammagard Liquid, and we expect this to normalize in Q4. Our SCIg portfolio is growing at double digits, and we expect this to continue. Albumin declined slightly in H1 due to timing of shipments to China and forcing cost containment measures. Meanwhile, we have also secured additional sustainable tender markets outside of China, and we expect albumin performance to accelerate in H2. Therefore, we confirm the growth outlook of high single digit for both IG and albumin.
In oncology, Fruzaqla continues to expand as we roll out global launches. Finally, in vaccines, we have reallocated supply of Qdenga based on market needs, which has pushed some shipments timing into later this fiscal year. However, we expect annual demand to remain in line with our original estimates. Another factor impacting the growth rate of Qdenga is transactional effects, mainly due to the strength of the euro versus the Brazilian real. On slide 9, you can see how the growth on launch products and the Vyvanse loss of exclusivity contributed to total revenue performance. FX was also a headwind this quarter due to appreciation of the Japanese yen against the major currencies. As we expect growth on launch products to deliver higher growth in H2, and Vyvanse year-on-year decline to moderate, we project more favorable year-on-year growth dynamics in H2.
Next, an update on the efficiency program that we initiated in April 2024. We continue to make progress with initiatives in H1 this year, including additional organizational changes impacting 600 positions, further optimization of real estate, and broad initiatives to capture efficiencies across the R&D value chain. Restructuring costs in H1 were JPY 27.4 billion, and we are focused on further driving additional OPEX savings. As we show on slide 11, these operational efficiencies are contributing to a reduction in R&D and SG&A expenses. In this bridge for core operating profit, you can see that LOE of high margin Vyvanse was the main reason for the year-on-year decline of 8.8% at CR. Within this decline at CR, we had a negative impact from transactional effects, which accounts for about one-third of the decline. Let me take a moment to explain how this is impacting our P&L.
Revenue can be impacted when there is an FX fluctuation between the currency paid for product and the currency of the entity where revenue is booked. This is exactly what is impacting Qdenga sales today, for example, because our European entity books revenue in Europe for its sales to Brazil in Brazilian real. Cost of goods can be impacted too when products are imported from other countries. For example, when the euro appreciates, commercial entities outside Europe have to recognize higher costs when importing products to sell locally. As you know, Takeda has a large manufacturing footprint in Europe, so we are particularly sensitive to euro currency volatility. Next, reported operating profit on slide 12. This decreased by 27.7% versus prior year, mainly due to the decline in core operating profit and higher impairments of intangible assets.
The main item was a JPY 58.2 billion expense related to our recent decision to discontinue cell therapy efforts. Next, our updated full-year outlook on slide 13. Starting with management guidance, although we have reduced our forecast for Entyvio and Vyvanse, we expect total revenue to stay in the range of the broadly flat versus prior year. For profit guidance, we expect higher OPEX savings to fully mitigate the impact from unfavorable change in product mix. However, the transactional effects dynamic that I just described is having a larger impact on profits. Therefore, we are slightly lowering our guidance for operating profit and core EPS from broadly flat to low single digit percentage decline. The bottom part of the slide shows our reported and core forecast. These reflect our latest FX assumptions, including translational effects and items booked in H1 that will impact the full-year results.
We have also revised our adjusted free cash flow forecast to include a JPY 1.2 billion payment to Innovent Biologics for our recently announced in-licensing deal. This payment will be funded by cash on hand. Our dividend outlook remains JPY 200 per share for the full year. On slide 14, we show more details about the updated core operating profit forecast. You can see the relative magnitude of translation effects impact while OPEX savings compensate for unfavorable product mix. The net impact of all these moving parts, including translation effects, is a JPY 10 billion reduction in our core operating profit forecast to JPY 1.13 trillion. In summary, our business fundamentals are tracking as planned. While H1 growth was largely impacted by LOE, we expect better growth rates for the full fiscal year. Meanwhile, we remain focused on cost discipline to deliver our guidance while investing for future growth. Thank you for your attention.
I will now hand over to Andy for more details on the pipeline updates.
Andrew Plump (President of Research and Development)
Thank you very much, Milano, and hello to everyone on today's call. Next slide, please. Fiscal year 2025, as you just heard from Christophe, is a pivotal year as we advance and accelerate our exciting high-value late-stage pipeline to launch. Today, I am pleased to provide pipeline updates reflecting our growing late-stage portfolio of promising programs powered by our increasingly productive and efficient development engine. We are two for two with positive phase III studies for both Rusfertide and Oveporexton, with Zasocitinib in phase III data in psoriasis expected by the end of this calendar year. In a few minutes, Teresa Bitetti and P.K. Morrow will walk you through the details of our recently announced partnership with Innovent Biologics, which, upon closing, will expand our oncology pipeline.
With two highly differentiated late-stage oncology assets in development for multiple solid tumors, this deal has the potential to transform our oncology pipeline. But first, I'm going to highlight some recently presented phase III data for Oveporexton and long-term IgA nephropathy data for mezagitamab that we are particularly excited about. The results of these studies truly represent Takeda's high bar for innovation and the breakthrough benefits we seek to provide patients. Let's start with Oveporexton on the next slide. Oveporexton is on track to be the first in class and potentially best in class orexin-2 receptor agonist that treats the underlying orexin deficiency in patients with narcolepsy type 1. We believe that the data presented at the World Sleep Congress last month establishes a new standard of care for NT1.
In one of the largest, most comprehensive phase III development programs for NT1 to date, we demonstrated statistically significant and clinically meaningful improvement across all 14 primary and secondary endpoints, with most participants within normative ranges. It is clear that Oveporexton has a profound effect on daytime symptoms like excessive daytime sleepiness and cataplexy, nighttime symptoms, and cognitive symptoms. In addition, it significantly impacts how patients with NT1 feel and function. We believe we have created a new standard of care to treat NT1 by treating the entire range of symptoms with a safe, well-tolerated pill. Oveporexton sets a high bar with a new standard of care, which will be hard to beat. Feel and function were assessed using multiple objective and subjective measures.
Based on these strong phase III data, we plan to file for U.S. approval in NT1 as quickly as possible later this year, with regional filings to occur simultaneously or shortly thereafter. Our orexin franchise is making rapid progress beyond Oveporexton. The next generation orexin-2 receptor agonist, TAK-360, is rapidly enrolling phase II studies for narcolepsy type 2 and idiopathic hypersomnia. Results for these trials are expected to be read out by early fiscal year 2026. Next slide, please. We previously presented compelling 48-week proof of concept data for our anti-CD38 antibody, mezagitamab, in IgA nephropathy. This includes consistent and supportive trends in decreased IgA, IgG, and galactose-deficient IgA1 levels, reflecting the selective targeting of CD38 on plasma cells, which produce pathological antibodies. I'll now preview the exceptional 96-week results from the proof of concept trial that continue to support this promising approach to modifying this disease.
Mezagitamab-treated patients show persistent reductions in proteinuria, or UPCR, nearly 18 months after the last dose, suggesting sustained efficacy beyond the treatment period. Importantly, the estimated glomerular filtration rate, or eGFR, that is the regulatory gold standard for measuring renal function, remains stable at 96 weeks. Mezagitamab is the first IgA nephropathy therapy to demonstrate stable renal function 18 months after dosing. We look forward to presenting the full data at ASN Kidney Week next month. Our phase III IgA nephropathy study is open and enrolling well. Next slide, please. The phase III verify study of Rusfertide, a potential first-in-class synthetic hepcidin mimetic in development to treat polycythemia vera, was presented at the American Society of Clinical Oncology in a plenary session in June. Updated 52-week data will be available at an upcoming medical congress.
This quarter, we received breakthrough therapy designation, which speaks to the exceptional practice-changing data presented at ASCO 2025 and increases the probability of priority review for Rusfertide, which we intend to file this fiscal year. Looking ahead to our next major pipeline milestone, we expect Zasocitinib in phase III psoriasis data later this calendar year. Based on the data seen in phase II, we believe Zasocitinib will provide an important and very attractive oral option for patients. I'm also excited to report that the head-to-head study of Zasocitinib versus deucravacitinib in psoriasis is expected to complete enrollment in the next few weeks. As you can see here, psoriasis is the first of many diseases where Zasocitinib can benefit patients.
With that, I will now turn it over to Teresa and P.K. Morrow to provide more details on the Innovent partnership, which has the potential to catapult Takeda into an industry-leading oncology company. Thank you.
Teresa Bitetti (President of Global Oncology Business Unit)
Thank you, Andy. Good morning, good afternoon, and good evening. We're pleased to be here today to share more detail about our recently announced partnership with Innovent Biologics and why it's critically important for patients and for Takeda. Next slide. Our collaboration with Innovent involves three differentiated assets, each with unique mechanisms. IBI363 is a potentially first-in-class PD-1/IL-2 alpha-bias bispecific. IBI343 is a next-generation Claudin 18.2 ADC. And we're also receiving the exclusive option to license IBI3001, which is another ADC targeting EGFR and B7-H3. This deal is strategically important because it adds cutting-edge anchor assets to our pipeline. First, a bispecific with the potential to be an IO backbone therapy across a broad range of indications, lung included. Second, a next-generation ADC with potential to address difficult-to-treat cancers, including gastric and pancreatic. And finally, an option to license a potential best-in-class bispecific ADC.
These unique programs, each with differentiated mechanisms, further demonstrate our commitment to science, our commitment to patients, and have the potential to be significant growth drivers for the Takeda enterprise post 2030. So next slide. Let me spend a little time sharing how we've structured this deal and what it brings to the Takeda portfolio. So for IBI363, which is the PD-1 IL-2 alpha-bias bispecific, Takeda will lead the co-development of this asset globally using a 60/40 Takeda Innovent cost split. Takeda will also lead U.S. co-commercialization of IBI363 with a 60/40 Takeda Innovent profit or loss split. And Takeda will have the exclusive right to commercialize and manufacture outside of Greater China. For IBI343, the Claudin 18.2 ADC, Takeda will have the right to develop, manufacture, and commercialize worldwide outside of Greater China.
Finally, we will have the option for IBI3001, which is the EGFR B7-H3 ADC currently in phase I. If we choose to exercise the option, we will have global rights to develop, manufacture, and commercialize outside of Greater China. Next slide. This collaboration further enhances and augments our oncology portfolio and is consistent with our clearly articulated oncology strategy. As a reminder, you can see here on this slide, our strategy is focused on three disease areas and three modalities. As we have highlighted here in the red box, the programs included in this partnership fit squarely within our strategy. Now I'm going to turn it over to P.K. Morrow to explain more about the science behind these programs.
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Thank you, Teresa. I'm now going to share more about the three programs in this collaboration and why we are so excited to bring them into our pipeline at Takeda. I will start with IBI363. IBI363, as you can see here, is a bispecific with a unique mechanism that has the potential to become an immuno-oncology or IO backbone. Specifically, IBI363 is what I would call an IO-IO molecule, meaning that it is designed to block the PD-1/PD-L1 pathway and selectively activate IL-2 alpha signaling while attenuating IL-2 beta-gamma signaling. As you can see on the left-hand side of this slide, this differentiated IL-2 alpha-biased approach has been shown to activate tumor-specific T cells that express both PD-1 and IL-2 alpha receptor within the tumor microenvironment, thereby unleashing a more effective anti-tumor immune response.
IBI363 thereby supercharges tumor-specific T cells, resulting in apoptosis of the cancer cell, and by blocking the PD-1 pathway, IBI363 ensures that these T cells continue to stay activated, and it reduces the risk of T cell exhaustion. IBI363 has now dosed more than 1,200 patients and has demonstrated very encouraging results. Next slide. We have seen clinically impactful results in trials involving patients with IO refractory squamous and non-squamous non-small cell lung cancer, as well as in third-line microsatellite stable colorectal cancer, and while median overall survival is immature at the higher doses, it already shows a positive trend even at these lower doses. The results you see on the screen were just shared as oral presentations at this year's ASCO. They are encouraging data, especially when indirectly compared to results from standard of care chemotherapy on the right.
The safety profile of IBI363 is considered tolerable, with the most common adverse events related to IBI363 being rash and arthralgia. Discontinuations due to these events have occurred in a small percentage of patients, and a priming dose has been added to the dosing schedule to reduce the risk of immune-related events that may occur with bispecific dosing. The high caliber of these data is reinforced by the FDA's granting of a fast-track designation in non-small cell lung cancer. Thus, while this is a competitive environment, we are very encouraged by the data we have seen to date and the potential of this differentiated mechanism. Next slide. To maximize the potential of IBI363, we have three very clear objectives, which are built on the efficacy that we've seen thus far. First is to establish foundational efficacy in tumors that have progressed as IO therapies.
Second is to penetrate into earlier lines as either monotherapy or in combination, and third is to build on our known data to establish efficacy in immune desert tumors such as microsatellite stable colorectal cancer, in which other IO therapies have not worked, so that's why, as shown on this slide, we're initially establishing the five phase III trials, including two trials in IO refractory squamous and non-squamous non-small cell lung cancer, two in front-line non-small cell lung cancer, and one in microsatellite stable colorectal cancer. We also have a series of life cycle management trials that we're discussing with Innovent, which will help to build upon proof of concept data as it evolves. Next slide. Now I'll walk you through IBI343. This Claudin 18.2 targeted ADC is seamlessly harmonized with our oncology strategy due to, first, its novel ADC platform, and second, its demonstrated efficacy in GI cancers.
When examining the image on the left, I will walk you through the platform from left to right. First, on the very left, IBI343 has a humanized IgG1 with Fc silencing. This Fc silencing is important because it reduces the risk of off-target toxicity and increases the tolerability of this claudin targeting molecule. This differentiates 343 from other claudin targeting agents, which are known to have increased gastrointestinal adverse events. In addition to that, in the middle, the glycan-specific conjugation and sulfamide spacer increases the stability, solubility, and potential bystander effect, allowing the ADC to result in a more efficient apoptosis of the cancer cell. And it also supports a homogeneous drug-to-antibody ratio of approximately four, which many of us believe is a favorable ratio for ADCs. And finally, this potent exatecan payload inhibits topoisomerase I, so it fits seamlessly into many standard of care regimens. Next slide.
IBI343 has been dosed in more than 340 patients. As shown during oral presentations at this year's ASCO, IBI343 has demonstrated encouraging activity in pancreatic and gastric cancers. Compared to the standard of care, IBI343 has more than doubled the response rate and more than doubled the overall survival as compared to standard of care chemotherapy thus far. This, coupled with a favorable and consistent safety profile with manageable GI and hematologic adverse events, supports its ability to fit seamlessly into the standard of care. All of this makes us very excited to continue advancing this asset in GI cancers with critical unmet need. As with IBI363, these results were also reinforced by a fast-track designation by the FDA for pancreatic ductal adenocarcinoma. Next slide.
We also have an ambitious development plan for IBI343 in Claudin 18.2 expressing GI cancers as its topoisomerase inhibition enables us to fit seamlessly into the front-line treatment of pancreatic cancer. In the second line of the chart, you can see that Innovent has an ongoing study which is well underway in China and Japan in the third-line setting in gastric cancer. We will leverage this data from this study and add a single-arm study in the U.S. and the EU to move forward towards global registration in the third-line setting. And in the bottom row, you can see that the plans are underway for a front-line study in gastric cancer to address the needs of more gastric cancer patients across lines of therapy. Next slide. And finally, I will review with you IBI3001, for which we have the exclusive option to license at a potential future date.
IBI3001 is truly a novel molecule, which is both a bispecific and an ADC. It targets EGFR and B7-H3, two targets that are highly expressed in many solid tumors, including lung cancer, colorectal cancer, and head and neck cancer. And it is linked to the same potent exatecan payload as IBI343. Innovent has rapidly progressed this asset into the clinic, already producing data, as you can see on the right-hand side, that shows encouraging efficacy even in highly refractory solid tumors. We look forward to following the progress of this trial, which is moving at speed. And with that, I'm delighted to turn it back to Teresa to talk about the immense promise of this collaboration for patients.
Teresa Bitetti (President of Global Oncology Business Unit)
Thank you, P.K. Morrow. So looking at this from a patient perspective against the backdrop of the top tumor types by overall prevalence worldwide, we have the opportunity to make a difference in areas of extremely high unmet need. So as you can see highlighted in red, the tumors in our initial development plan are not only prevalent but difficult to treat. In our initial plans, we can address four of these cancers and make a meaningful difference for patients. Next slide. As I mentioned at the start, this partnership will serve as a significant potential growth driver for Takeda. When we look at the market opportunity for our initial development plans for IBI363, we're looking at lung and CRC.
In lung, we will be focusing on the IO refractory second-line setting, where the majority of patients will have already been treated with a PD1 or PDL1, and then move rapidly into the front-line setting as a monotherapy or part of a combination regimen. In colorectal cancer, we'll focus on the front-line patients with MSS-CRC. In aggregate, the initial plan focuses on a potential combined addressable market of over JPY 40 billion. Next slide. Now let's look at the market potential for IBI343. Globally, gastric cancer affects around a million people, with 35%-55% expressing the Claudin 18 biomarker. In pancreatic, the global incidence is approximately 500,000, with 30%-60% of patients expressing Claudin 18. The current standard of care in these tumor types centers on chemotherapy, and the five-year survival rates are very low, highlighting the urgent need for innovative treatments.
Altogether, IBI343 offers a potential combined addressable market of approximately 8 billion, although we expect this market to grow as we and other novel agents enter. So as you can see, across both assets, there's an enormous potential to make a significant impact for patients. So next slide. So in closing, we are incredibly energized by this extraordinary strategic partnership that brings great value for both patients and for Takeda. This agreement with Innovent will enable us to address critical treatment gaps in some of the most prevalent and difficult-to-treat cancers. It brings forward unique and truly differentiated programs that will overcome many of the challenges of currently available therapies, and it adds anchor assets to our solid tumor pipeline with the potential to be future growth drivers for Takeda. So in short, this collaboration is incredibly meaningful both for us and for patients. So thank you for your attention.
I'm going to hand back to Chris to open the Q&A.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
We have Christophe, Milano Furuta, Teresa, P.K., and Julie Kim, CEO-elect. Interim Head Global Portfolio Division and Giles Platford, President. The Plasma-Derived Therapies Business Unit are joining in the Q&A. If you have any questions, please raise your hand using the Zoom feature. If you are on the Japanese line, please ask your questions in Japanese, and if you are on English line, please ask your questions in English. If you are listening to the live audio, you may be able to use either of those two languages. Please limit your questions up to two questions per person. The first question is from Yamaguchi-san. Please unmute.
Yes, we can hear you. Please.
Hidemaru Yamaguchi (Managing Director)
Thank you very much for taking my question. This is Yamaguchi from Citi. The first question regarding to Innovent deal. I understand the potential of this product is pretty big, but at the same time, Takeda itself has not really involved in a solid tumor for a while after Alunbrig. And the investors have a lot of questions on this one, how much you need to spend on R&D for the next few years where you have to balance the operating margin. R&D investment, even though you're going to split, but solid tumor first-line seems to be very costly. Can you give me some elaboration on how you are going to run this clinical trial to compete with the global guys on the R&D and trying to, how to say, finance your R&D and the potential impact to the margins? That's the first question.
The second question regarding to the earnings change, even though there's only a slight change on the CL basis on the Entyvio and the Vyvanse, but seem to have a big change on the currency things, and this year might be a unique year, but is there any way in the future trying to avoid those changes or through some other transaction trying to prevent, or this year it's hard to escape from this currency related to earnings divisions? Thank you. That's the second question. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Yamaguchi-san. So the first question was around how we're going to run the trials for the Innovent assets and what that means for our R&D expenses. So perhaps P.K. can just comment briefly again on the development plans we have in place for these programs, and then Milano can add a comment on how that will fit within our R&D budget. And then for the second question on this transactional effects impact, I'd also like to ask Milano to comment on that, please.
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Yes, thank you. So we are very committed to investment both within our oncology portfolio as well as overall in order to support our long-term growth while continuing to support profitability. In terms of the financial implications of this deal, these have actually been reflected in our revised forecast and guidance. It's a little premature for us right now to comment on outlook for R&D spend and margins for fiscal year 2026, but I can tell you we are very committed to achieving the margins in the mid to long term, which are driven by top-line growth and optimizing our cost structure.
Milano Furuta (CFO)
Thank you, P.K. And then hello, Yamaguchi-san. Not much things to add to what P.K. said already, but I think you can see that we have been managing quite effectively, or in some areas, we are even reducing our expenses beyond our initial expectations by the extensive program, also with continuous cost discipline. That's one. And then the second one is we are very mindful about the incremental R&D investment as well. So that's why you see this cost split of the 60/40 for this IBI363 compound. At the same time, as you might be aware, we have been arranging some cost-sharing program, the partnership with Blackstone for mezagitamab. So that's kind of through those kind of arrangements, we are very consciously managing incremental investments. But in the end, we want to invest for growth while optimizing OpEx.
Eventually, that's going to be top-line growth should be the main driver toward the long-term corporate margin improvements. Second question about transaction effects. This is very hard to answer as it's very difficult to predict the currency fluctuation. But this transaction effect in Takeda's case, as I commented during the presentation, the euro volatilities have a big impact in this year. This is because relatively we have a large footprint in the manufacturing operation in Europe. So we have to see how currencies go. But in the long term, if we want to mitigate, then we have to maybe in the long run, somehow we have to rebalance the manufacturing footprint. But that's a kind of, of course, long-term strategic plan. It's not that we're taking actions depending on the one-year currency volatility. We have to take a bit of long-term stance on that. Thank you.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
Thank you very much. Next question from Mr. Matsubara from Nomura. Hello, Matsubara from Nomura. Do you hear me okay? Yes. Thank you for the explanation. I have two questions. First is about Entyvio. As you explained, Entyvio Pen penetration is advancing, but the insurance coverage as of now and to enhance penetration of Pen, furthermore, what actions are you taking now? The second question is Nabla Bio that you have partnership with now, and this is non-clinical as of now, and it's not fully disclosed, but by utilizing this R&D acceleration, how does it go? And for mid to long-term pipeline enhancement and acceleration, how do you see that? Thank you.
Okay, so thank you for your questions, Matsubara-san. So the first on Entyvio, what is the state of insurance coverage? What are we doing to expand access to Pen? I'd like to ask Julie to comment on that. And then the second question was on our recently announced collaboration with Nabla Bio. Perhaps Andy can add some comments on what we're doing in terms of utilizing AI in drug discovery. Julie?
Julie Kim (CEO-elect, Interim Head Global Portfolio Division)
Yes, thank you for the question. In regards to Entyvio Pen access, as you heard from Christophe in his opening comments, we are continuing to improve our overall position along the access continuum, and we're encouraged by the 20% growth that we're seeing quarter-over-quarter in terms of Entyvio Pen. Now, that being said, we continue to work on access at various different levels. One, in terms of the, I would say, the highest level coverage, I think you are all aware that we have two out of the three big contracts signed for quite some time now, and we continue to work on the CVS piece. For the other levels of access, when you look at the way that the U.S. market is structured, it's actually there's a lot of localization, even with the way that we have the big three PBMs.
So while we continue to improve at the local level as well, we are putting in place very specific tactical actions to address the localized challenges in addition to what we're doing at the overall coverage level. So hopefully that gives you a sense that we're working across multiple different levels on the access continuum in the U.S.
Andrew Plump (President of Research and Development)
And thank you. Thank you, Julie and Matsubara-san. Thanks for the question. We're quite excited by the partnership with Nabla Bio, but maybe I can just dial up for a second and give you some sense of the work that we've been managing in our research laboratories for the last couple of years. We see discovery in the biopharmaceutical industry changing quite rapidly, and we're positioning Takeda to be at the leading edge of application of advanced technologies in research. And in fact, we're in the process of completing a new laboratory in Cambridge, Massachusetts, in Kendall Square that we call the Lab of the Future. And the intent of this lab is to enable a workflow in discovery that can both improve our probabilities of success and also greatly accelerate the time that it takes to move molecules through discovery.
Today, one in five, one in four of our research programs are enabled by In Silico technology. By next year, we expect that over 90% of our programs will be enabled by In Silico technology. The partnership with Nabla Bioscience is one example of how we're embracing AI in drug discovery. This is a company that was started by George Church that uses algorithms to optimize sequences of large molecules. We've worked with them for over two years now, and we had three pilot experiments that each were successful, two accelerated programs, and a third one actually took us to a novel space that we wouldn't have gotten to with traditional approaches. So we were quite excited about that, and that's what led to then the collaboration that you see at hand.
Christopher O'Reilly (Head of Investor Relations)
Wakao-san.
Thank you. JP Morgan, Wakao-san. Please unmute and ask your question.
Seiji Wakao (Senior Analyst)
Hi. Arigatou gozaimasu.
Yes. Thank you.
Thank you for my question. This is Wakao from JPMorgan. I have two questions. Firstly, regarding gross margin trend and revised guidance. When comparing the initial guidance plan with the revised three-year guidance, the gross margin has deteriorated 66% to 64.7%. Should we understand this is primarily an FX impact from the euro? If there are other contributing factors, could you elaborate on this point? And also, if FX is indeed affecting the gross margin, the second quarter gross margin looks relatively solid compared to the FX levels. I'd like to know this point. And why do you expect it to deteriorate in the second half? And a second question about Innovent partnerships. When is the next data update for IBI363 expected? So page 27. Regarding ongoing first line and second line NSCLC studies, will we be able to see data in 2026?
In addition, when is the global phase trial expected to start? That's it.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Wakao-san, so the first question on gross margin trend and the revised gross margin outlook for the full fiscal year. I'd like to ask Milano to comment on that, and the second question on the next data point to come for IBI363 and whether we can give any indication of starting phase III studies. I'd like to ask P.K. to comment on that, please.
Milano Furuta (CFO)
Wakao-san, thank you. Thank you for the question. You asked about the bridge from initial forecast, updated forecast. At the same time, how the H2 second half gross margin will be lower. Actually, the answer would be basically the same. If we compare the May forecast and the revised forecast, as you said, gross margin is expected to be lower by about 1.4 percentage points. About half is coming from the transaction effects, and the other half is also coming from kind of product mix change. So we are reducing the Vyvanse revenue, and the Entyvio revenue, and then these two revisions have a negative impact on the gross margin. So that's contributing this gross margin updates in the two forecasts. And actually, this dynamics explains in the second half because this is more about the second half sales. Also, we are updating the currency forecast for H2.
So those two impacts will be contributing to lower gross margin in H2.
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Thank you, Milano. And perhaps to address the other two questions that were asked related to the Innovent collaboration, the first is to say that we, like you, are very enthusiastically monitoring the data with both IBI363 and IBI343. We are not yet releasing when we will disclose further data in the coming year, but we will be following this closely as we determine when the appropriate data inflection will be in order to release more data at a public forum. The second question you had was related to the start of the phase III studies, and we have noted that the phase III study in second-line squamous non-small cell lung cancer we expect to begin in the coming months. And as you saw from the slides, we will also be looking towards moving and initiating additional studies at speed. Thank you.
Seiji Wakao (Senior Analyst)
Okay. Thank you.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
Next question.
Steve Barker-san.
Steve Barker, Jefferies.
Steve Barker (Managing Director)
Yeah. Steve Barker from Jefferies. Thanks for taking my questions. The first question is about Entyvio, and the second question is about your collaboration with Innovent. Starting with Entyvio, so you've cut your estimated current growth rate at constant exchange rates from 9% to 6% due to competitive pressures. I was wondering if you could give us more details of those competitive pressures and the implications for growth going forward, as in next year and beyond. And secondly, regarding your deal with Innovent, certainly the China data published to date on IBI363 is impressive, but there have been several cases where impressive data in China has not been replicated in international studies.
So I was wondering if you could share your view on if that apparent trend or phenomenon is real or not, and more specifically, how confident are you that you can replicate the impressive China data in international trials? Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Steve, so I think the first question on Entyvio and the reasons for the reduction in the full-year forecast, I'd like to call on Julie to answer that, and the second question on data replicability of the China studies in a more global population, I'd like to ask P.K. to comment on that, please.
Julie Kim (CEO-elect, Interim Head Global Portfolio Division)
Thanks for the question, Steven, on Entyvio. So let me start by saying that Entyvio has been on the market for 12 years now, and it is still the overall market share leader in IBD when you look at it from a patient demand perspective, and we are holding market share. But as you've noted, there are a few things that are impacting our top line. One is in terms of the intensified competitive activity, and we're seeing that particularly on the CD side, but it is also starting to impact UC. But as I said, overall, because Entyvio is still the only gut-selective medicine out there for IBD, we've been able to hold share. The other things that are impacting the top line, there are a few things. One, as Milano mentioned in his talks, it is about the channel mix.
We've particularly had an increase in 340B population as well as an increase in Medicare Part D redesign impact. Beyond that, the pen conversion, as we've mentioned, is moving a bit slower than we anticipated. And while we are resolving those access hurdles, it has impacted the top line thus far. But we do expect, as those hurdles are resolved, we will see an acceleration of growth, which is why we do expect to end the year higher than where we are year to date.
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Thank you, Julie. And to answer the second question, I'll say two points. One is, as you alluded to, initially, Innovent has accrued more patients in China, but over the past few months has now begun to increase the enrollment ex-China, including in the U.S. and Australia, and we are continuing to monitor that data as well as its applicability. The second element is the fact that we actually endeavored on very significant due diligence during the evaluation for this collaboration. And that included bringing our own Takeda radiologists in order to evaluate many of the images that were seen of the patients as well as determining the correlation with our response criteria, i.e., RECIST. And we saw a very strong correlation there. Thank you.
Steve Barker (Managing Director)
Understood. Thank you very much.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
Next question. SMBC Nikko Securities. Wada, please unmute yourself and address your questions. Thank you very much. Wada from SMBC Nikko Securities. About Innovent pipeline, I have questions.
IBI363.
[Foreign language]
Regarding mechanism of action, I want to know IL-2 alpha bias. What's the significance of this?
Roche has, well, IL-2 itself is approved for the melanoma and other cancers not expanded very much to other cancers. If you activate alpha Treg may be activated as well and because of that immunoresponse is suppressed. I think that was what was the average IL-2 alpha activated mechanism for IBI363. What's the meaning of that, including the clinical data you have obtained so far? Can you explain that, please?
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Thank you.
Christopher O'Reilly (Head of Investor Relations)
Yeah. P.K., would you like to take that question?
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Yes, absolutely. So it's a great question, and we also asked the same question and interrogated that data with Innovent and discussed this in depth. And I can tell you that what is actually unique about this particular pathway is the fact that first, we did learn from the experiences of others within the industry as it relates to IL-2, and that's why our focus has been on this IL-2 alpha bias with attenuation of the beta-gamma pathway. And with that in mind, we have seen that the IL-2 alpha bias approach has been able to target specifically tumor-specific T cells that are expressed both PD-1 and IL-2 alpha. So it's been a very precise and effective activation within the tumor microenvironment. The other question that you had was related to whether this would actually cause and trigger activation of Tregs, which we also had that question related to.
And we have not actually seen activation of Treg cells, which would have resulted, of course, in a decrease in the immune response. Thirdly, I would say that because of this, we think that the clinical data are very consistent with the mechanism of action, with findings of very encouraging data in both IO refractory as well as in earlier lines. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you.
Hiroshi Wada (Research Analyst)
[Foreign language]
Thank you. So yes.
May I continue? Yes, go ahead. For development policy, so refractory cold tumor is the strategy that you want to take. I understand that additional and IL-2 were NSCLC first line and head-to-head with PD-1 for phase III. Is that the plan going forward?
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Yes. Chris, would you like me to take this?
Christopher O'Reilly (Head of Investor Relations)
Oh, yes, please.
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Okay. Yes, of course, so I think your question was around the development plan related to IBI363 and where we see the experience with this and the promise of this, and I agree with you that we actually want to leverage the strong clinical data, so beyond the two second-line studies in IO-refractory squamous and non-squamous non-small cell lung cancer, we will plan to go head-to-head against IO therapy, both likely in an all-comers population as well as in a TPS high population.
Christopher O'Reilly (Head of Investor Relations)
Thank you very much for your question. Next question, I'd like to call upon Tony Ren from Macquarie. Tony, please unmute and ask your question.
Tony Ren (Head of Asia Healthcare Research)
Hello. Tony Ren from Macquarie. Can you guys hear me?
Christopher O'Reilly (Head of Investor Relations)
Yes, we hear you.
Tony Ren (Head of Asia Healthcare Research)
Okay. Perfect. Yeah. Thank you for taking my questions. Yeah. A couple of questions again on the Innovent transaction. For the IL-2 PD-1 bispecific IBI363, I understand I actually cover Innovent myself. I understand they have a global phase II study. The estimated primary completion of this study is March 2026, so really only four months away. Did you guys get a chance to look at the data from that phase II study, which I believe primarily is conducted in the U.S. and looking to recruit about 178 patients? And if so, were the data better or worse than what you've seen in China? So that's my first question.
Christophe Weber (CEO)
P.K., would you like to answer that one as well, please?
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Yeah, absolutely. So yes. First, I would like to say that, yes, we have been in constant communication with Innovent related to the evolving data. And as you allude to, that data in the global phase II is progressing, or the trial itself is progressing very nicely and at speed. I can't disclose what obviously the data shows thus far, but we can see that I would like to just say that the data thus far is fairly encouraging, but I think too early to comment further.
Tony Ren (Head of Asia Healthcare Research)
Okay. Thank you for addressing that. Also, Innovent is starting the phase III global study. I think it's called MarsLight-11 trial in immunotherapy-resistant non-squamous non-small cell lung cancer, right? So that trial, according to ClinicalTrials.gov, is literally starting today. But also, Dr. Morrow, you said that you're looking to start in the next few months. So as Takeda is leading the clinical development, right, are you looking to change the trial design and the conduct of this MarsLight-11 study?
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
So what I will say is that, as I noted, we have had great conversations and discussions with Innovent weekly, if not every few days. And related to the MarsLight study as well as these beginning studies, we've also had discussions about whether we would desire to change or tweak any of the elements of the protocol itself. I would say right now, we have not required any or asked for any significant changes as of today, but we are continuing to have those discussions.
Tony Ren (Head of Asia Healthcare Research)
If you do decide to change the trial design or protocol or conduct, would that require a new FDA clearance?
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
I don't think so.
Tony Ren (Head of Asia Healthcare Research)
Okay. Perfect. Great. Thank you very much.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
Thank you. Next question.
Mr. Ueda, Goldman Sachs, please. Go ahead.
Eiji Ueda (Research Analyst)
Goldman Sachs [Foreign language]
Thank you. I am Ueda, Goldman Sachs.
Plasma-derived therapies business. In the United States, now CSL has been closing some of its plasma collection centers recently. So it also appears that Takeda is currently focusing on improving efficiency, such as optimizing utilization rates and implementing the digital transformation initiatives rather than expanding the number of centers. So are there any changes in the business environment in the U.S., such as demand outlook or cost structure that are driving these shifts? And furthermore, I think some other companies seem to be actively investing in the collection centers outside the U.S. So could you also let us know whether you are also considering similar types of investments? [Foreign language]
I would like to ask a second question to Milano regarding your dividend increase. Given the downward revision of the guidance, I believe that EPS is going to be also lowered, and you also are able to transfer from the accumulated fund to your hand. However, what about the potential risk of the impairment loss and how you are confident to continue increasing the dividend payment? I'd like to ask the second question to Milano's answer.
Christopher O'Reilly (Head of Investor Relations)
So the first on the PDT business and specifically on our collection initiatives in the U.S., I think I'd like to ask Giles to comment on that. And then the second question on the sustainability of the dividend. Milano, if you could kindly answer on that one, please.
Giles Platford (President of the Plasma-Derived Therapies Business Unit)
Yeah. Thank you, Chris, and thank you, Ueda-san, for the question. We have been investing extensively to improve efficiency and productivity across our BioLife collections network, and that has positioned us very strongly to be able to meet the growing demand for plasma-derived therapies and to continue to grow our collection volumes without opening to the same extent new centers. In particular, we have benefited this year from the accelerated rollout of the personalized nomogram for both our FK and Haemonetics devices, and that has enabled us to improve volume collection by approximately 10%-11% on a per-donation basis. And as a result, we won't be opening as many new centers, and we are also benefiting from the ramp-up of the centers that we have opened in the past years.
To the second part of your question, we do continuously evaluate opportunities to open up new countries to contribute to global supply of plasma. We don't have anything to communicate at this point in time, but it is a big part of our advocacy work worldwide to ensure that we are having more countries contributing to sustainable supply of plasma. Thank you.
Milano Furuta (CFO)
Ueda-san, [Foreign language]
Thank you very much. Ueda, hello. Thank you very much for your question. Basically, regarding our dividend policy, as we explained in the past, it is a progressive policy, meaning we will sustain or increase the dividend. And in order for us to make a decision, we will look at core EPS and reported EPS and meet a long-term reduction of interest-bearing liabilities or borrowings. And looking at these three parameters, we make a proposal of what to do with the dividend in the next year and going forward. Therefore, at this point in time, I cannot say anything definitely, but these are the three points we will base our decisions. And for the next fiscal year, around May timeframe, we would like to announce what is the policy of dividend. Understood. Thank you very much. That's all from me.
Thank you very much. Next question from UBS Sakai-san, please. Hello. Thank you very much.
Kiye Sakai (Managing Director and Counsel)
Two questions. One is the same plasma business. Now, CSL issued a profit warning. The reason is very vague, but one of the factors they mentioned is weakening demand of China out of moving sales or revenues. And your slide 40, you have slide defined China. However, you haven't really changed the guidance for FY25. Do you still think that this guidance is achievable? If it's so, can you just give us what's really going on in China market right now? So that's the first question. The second question is U.S. BIOSECURE Act, when you make a deal with Innovent. Anything going on in the U.S. these days is a mystery, but this act is still pending. And have you considered what are the political consequences having China Biotech as a partner?
Probably not, but if you could update with this BIOSECURE Act and your business tie-up, I would really appreciate that. So that's the second question.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Sakai-san. So the first question on albumin demand in China and our confidence in the full year outlook, I'd like to ask Giles to comment on that. And then the second question on U.S. BIOSECURE Act vis-à-vis the Innovent deal, I'd like to ask Christophe to answer that question, please.
Giles Platford (President of the Plasma-Derived Therapies Business Unit)
Sure, Chris, and thank you, Sakai-san, for your question. It's true. Our albumin portfolio did decline marginally by 2% for the first half. This was a result of the impact of shipment phasing to China, but also related to the continued government-imposed cost controls in the country, both of which were anticipated, as well as some effect of tender timing globally, and I'd like to point out that with a somewhat slower near-term growth outlook for China linked to those government-imposed cost controls, we have been actively working to build sustainable market opportunities for albumin outside of China, and we do see continued growing demand for albumin worldwide, and we have successfully secured a number of tenders in markets ex-China, which will be delivered in the second half, hence accelerating our growth for the balance of the year.
So yes, we remain confident to deliver on our guidance of high single-digit growth for the year for albumin and for our IG portfolio. Thank you.
Christophe Weber (CEO)
Thank you, Sakai-san. This is Christophe here. Obviously, we take into consideration the geopolitical environment when we discuss a deal like our partnership with Innovent Biologics. So I will mention two points. One is that we will drive the global development of this asset, guaranteeing that it is meeting all the criteria required by regulatory agencies across the world. So that's very important. And the second point I will mention is that we will manufacture these molecules in the U.S. So we will do a full tech transfer and we'll organize the manufacturing of this molecule in the U.S. And therefore, we think that this is also a way to mitigate the potential geopolitical risk. Thank you.
Kiye Sakai (Managing Director and Counsel)
Thank you. Can you just, Giles-san, can you just give me a margin?
Can you give a margin update in PDT business?
Giles Platford (President of the Plasma-Derived Therapies Business Unit)
Yeah, absolutely. I can do that, so we continue to see our margin recovery year after year, and we expect to deliver continued margin improvement in fiscal 2025. That's part of the reason why we gave a slightly more modest guidance in terms of growth for this year. We are seeing more supply on the market. If you remember, Takeda was the first to recover post-pandemic, so we benefited from strong growth the past couple of years in meeting unmet demand globally. We see that situation now normalizing, so we're being a little more selective in terms of tender participation ex-U.S., very much expected, anticipated, and consistent with the guidance that we gave, and that's partly because we're trying to calibrate both the need to grow, but also the need to grow profitably and to ensure we're getting value recognition in the process.
We see continued improvement in product mix. So our innovative subcutaneous IG portfolio has delivered 15% growth for the first half. So that product mix helps in improving margins. The BioLife productivity and efficiency efforts driven by data digital and technology transformation that I referenced earlier are also helping us to improve margin. And we have seen gradual improvement in yield, in fractionation, and process improvement across our manufacturing network. So all of that is contributing to an improvement in margin over time. Thank you, Sakai-san.
Kiye Sakai (Managing Director and Counsel)
Okay. Thank you very much.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Sakai-san. For the next question, I'd like to call on Mike Nedelkovych from TD Cowen. Please unmute and ask your question.
Mike Nedelcovych (Analyst)
Thanks for the questions. My first is just a broad question on your celiac disease programs. I'm just curious what the breadth of your ambitions are here. How important could those programs become ultimately should they make it to the marketplace, and then my second question is on mezagitamab for IgAN. When we think about the target product profile for that agent, is it sufficient to have efficacy similar to competitor agents across mechanisms, but with potential treatment holidays, or should we be looking for better efficacy? Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Mike. I think both of those questions on our celiac ambitions and aspirations for mezagitamab. Andy can answer those.
Andrew Plump (President of Research and Development)
Thanks, Chris. Good morning, Mike. It's Andy. So firstly, on the celiac programs, we had three programs that were in proof of concept studies. One that we've discontinued, which was TAK-062, which was an orally administered glutenase which failed to show benefits. And two, TAK-227, which is a transglutaminase 2 inhibitor that's got restricted. And then TAK-101, which is a tolerizing vaccine. Both of those are still in phase II studies right now. Of course, this is a huge unmet medical need with no established standards of care. The bar is quite high for moving forward, and the science is quite tough, but we're excited to see data in the coming months and over the next year for both of those programs. So I think we can talk more about what the potential long-term could look like after we've seen those data.
In terms of mezagitamab, obviously, and you're referencing this, it's an incredibly competitive landscape. With mezagitamab, though, we've got a fairly unique opportunity here. I would say that in terms of efficacy, based on the data that we've seen, especially from the APRIL/BAFF agents, I don't think that we expect to see more efficacy. I think the real opportunity with mezagitamab is at least similar efficacy. The 96-week data that I referenced that you'll see in the coming weeks at the upcoming ASN week meeting is quite extraordinary. I think the real opportunity here is the potential for sustained benefit after relatively short-term dosing. And then secondly, the potential benefits on safety.
Mike Nedelcovych (Analyst)
Thank you.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
In the interest of time, I'd like to make the next question as final.
Sogi-san, Bernstein, please unmute yourself.
Miki Sogi (Biopharma Equity Research Analyst)
First question is about Entyvio. So this is to Julie. So you have mentioned that the evolving competition in the U.S., as well as the increasing change in channel mix. I can imagine that those dynamics are not really easily reversible. So should we assume that the slowing down, the growth rate, as you have included in the revision from 9% to 6%, is this the kind of trend we should expect for 2026 and beyond? And if that's the case, will you be revisiting the peak yourself of Entyvio at some point? That's the first question. The second question is about the Innovent deal. I have a question about this IBI3001, very interesting product, the bispecific ADC.
For this molecule, should we think that this is kind of going to work as two ADCs in one molecule, meaning that it's just kind of working as an eGFR ADC and the B7-H3 ADC, or if there's any synergy by putting the functions in one molecule? Those are two questions. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Okay. Thank you, Miki. So the first question on Entyvio to Julie, and the second on IBI3001 to P.K., please.
Julie Kim (CEO-elect, Interim Head Global Portfolio Division)
Thanks for the questions, Miki. In terms of the growth, what I would say is this. As I mentioned earlier, Entyvio has been able to hold share, patient demand share in overall IBD. And what I would expect, without giving any predictions about growth and whatnot that will provide for FY26 in May, I would say that our growth is in line with market at this point in terms of patient demand. And we expect to be able to hold our share, given the fact that we're still the only gut-selective molecule in IBD and the strong track record that we have, particularly in UC. As I mentioned, where we see the significant competitive challenges is in CD thus far. In terms of the peak at this point, we are not changing our overall peak revenue guidance.
P.K. Morrow (Head of Oncology Therapeutic Area Unit)
Thank you. To add on related to IBI3001, happy to bring this forward. We agreed when discussing the data and the potential for this molecule with Innovent. It was based upon a few elements. The first is the fact that these targets are very well harmonized with our current disease area strategy in solid tumors, particularly in GI and thoracic cancers, these two targets specifically. The second element is that we believe that as they actually target two elements and then use the same novel exatecan payload as well as platform, that they would be able to very specifically harness a payload and result in more encouraging efficacy. We've seen some elements of that thus far in the earlier doses, as I noted, and we will continue to monitor as we progress up the dose levels.
Thank you.
Christopher O'Reilly (Head of Investor Relations)
[Foreign language]
Thank you very much. For your participation today, we would like to ask for your kind continued support. Thank you.