Takeda Pharmaceutical Company - Q3 2026
January 29, 2026
Transcript
Christopher O'Reilly (Head of Investor Relations)
Thank you for taking time out of a very busy schedule to join us for the earnings announcement for the third quarter, FY 2025 by Takeda. I'm the MC, O'Reilly, from IR. I would like to explain the language setting first. Please find the button for the language selection at the bottom of your window for the Zoom screen. If you wish to listen in Japanese, please select Japanese. If you wish to listen in English, please select English, and if you want to listen to the original language, please keep it off.
Andrew Plump (President of Research & Development)
Select English in the Zoom language select button.
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. Please also refer to the important notice on page 2 of the presentation regarding forward-looking statements and our non-IFRS financial measures, which will also be discussed during this call. Definitions of our non-IFRS measures and reconciliations with comparable IFRS financial measures are included in the appendix to the presentation. Now, we would like to start with today's presentation. Today, we have Christophe Weber, President and CEO; Milano Furuta, Chief Financial Officer; Andrew Plump, President, R&D; and Julie Kim, CEO-elect.
We'll present, and this will be followed by a Q&A. We'll get started right away.
Christophe Weber (CEO)
Thank you, Chris, and thank you everyone for joining us today. Our Fiscal Year 2025 third quarter results are confirming the strength of Takeda fundamentals and our ability to maintain disciplined cost management and operational efficiency while continuing to focus on innovation and long-term sustainable growth. Milano will explain our financial results in detail in his presentation shortly. Fiscal year 2025 remains truly a pivotal year for Takeda. We are in a phase of preparing for significant new product launch, making major step forward in our new growth trajectory. In particular, I would like to focus on oveporexton, rusfertide, and zasocitinib, which are key assets in our late-stage pipeline that we expect to launch over the next 18 months. Oveporexton is the first orexin agonist to be submitted to the FDA and has a considerable first-mover advantage.
Andrew Plump (President of Research & Development)
phase III results were statistically significant across all primary and secondary endpoints, demonstrating clinically meaningful improvement on daytime and nighttime symptoms. This reinforces our belief that this medicine can truly transform the life of patient with narcolepsy Type 1. Rusfertide is a hepcidin mimetic that has demonstrated durable and sustained hematocrit control in patients with polycythemia vera, or PV. Nearly half of PV patients remain untreated in the U.S. today, and those that are treated still have significant challenge in managing their disease. The phase III data underscore the potential for rusfertide to transform the standard of care for these patients. We have filed a new drug application with the FDA for oveporexton and rusfertide, and are awaiting formal acceptance. Finally, at the end of last year, we announced positive phase III psoriasis data for zasocitinib, our highly selective TYK2 inhibitor.
Full detail will be disclosed at the upcoming congress, but this once-daily oral therapy offers a compelling profile to help shift the psoriasis advanced therapy market towards oral treatment. Regulatory filing preparation are underway, and we expect to launch zasocitinib in the first half of calendar year 2027. The positive data for all three programs met or exceeded our expectation. Now we are focused on preparing for launch. We will update the peak revenue potential for these three programs in the future. Combined, we believe this product could more than offset the anticipated impact of Entyvio biosimilar entry from the early 2030s onwards. In addition to these three, our transformative late-stage pipeline includes five other innovative programs, two of which were recently added through our strategic partnership with Innovent Biologics.
Each of our eight late-stage program has the potential to transform the current standard of care, providing strong and sustainable growth drivers for Takeda well into the future. Andy will share more details about our pipeline advancement later in this call. Now, I will hand it over to Milano, who will discuss our financial result and the outlook for the rest of the fiscal year. Milano, up to you.
Milano Furuta (CFO)
Thank you, Christophe, and hello, everyone. This is Milano Furuta speaking. Slide 6 summarizes our Q3 year-to-date results. As you know, this year, we are managing the significant impact of Vyvanse generic erosion. However, if you look at the performance quarter by quarter, the headwind from Vyvanse is steadily tapering off as the year goes by, and we are maintaining strong cost discipline to limit its impact to profit. Revenue for the nine-month period was just over JPY 3.4 trillion, a decrease of 3.3% or -2.8% at constant exchange rate, or CER. Core Operating Profit, Core OP, was JPY 971.6 billion, a year-on-year decrease of 3.4% at both actual effects and CER. This is a meaningful improvement from our first half results.
Andrew Plump (President of Research & Development)
Reported operating profit was JPY 422.4 billion, an increase of 1.2%. Core EPS was JPY 428, and reported EPS was JPY 137. Cash flow has been very strong this period, with adjusted free cash flow of JPY 625.9 billion, even after the upfront payment of $1.2 billion to Innovent Biologics in December. Slide 7 shows our growth and launch products, which represent over 50% of total revenue and grew 6.7% at constant exchange rate. This is a steady improvement on the 5% growth rate we saw in Q1 and Q2. In GI, Entyvio grew 7.4% at CER. Growth in the third quarter was particularly strong, as expected, partially due to a one-time gross-to-net drop in that period, prior year.
Entyvio Pen continues to be the main driver, helping us maintain leadership share in a competitive IBD market. We are also pleased to report that as of this month, Entyvio Pen is now on the formulary with all three large pharmacy benefit managers, with commercial coverage of more than 80%, in line with competing products. With this progress, we are on track to achieve our full year projection of 6% growth. In rare diseases, Takhzyro has slowed to 2.4% growth at CER. Although we continue to see strong uptake in international markets, this is being offset by the impact of new competing products in the U.S. In PDT, Q3 revenue growth marked an improvement on the first half. That said, we acknowledge some headwinds, particularly in albumin.
IG growth was 4.3% year to date, driven by subcutaneous IG products, which grew double-digit. IVIG sales have been impacted by Medicare Part D redesign in the U.S., which we expect to normalize in Q4. Albumin has returned to growth of 1.3%, but this is slower than expected due to softening demand in China, which is also putting pressure on other markets where supply is reallocated. While we anticipate additional tenders in Q4 to support an uptick in growth, there's a possibility we finish the year below our full year forecast. In oncology, FRUZAQLA continues to expand as well as we roll out global launches. Finally, in vaccines, Qdenga growth has accelerated to 22.1%, driven primarily by Brazil.
On Slide 8, you can see how incremental revenue of growth and launch products and the impact of the Vyvanse loss of exclusivity contributed to total revenue performance. With each quarter, the gap is becoming smaller as the Vyvanse decline was heavily weighted to the first half of the year, and the growth and launch products are performing better in the second half. Slide 9 shows year-on-year core OP performance. Here you can see that the LOE of high-margin Vyvanse was the main reason for the year-on-year decline of 3.4% at CER. However, we have been able to limit the Vyvanse impact through operational efficiencies with R&D and SG&A expenses, both lower than the prior year. As we explained at the Q2 earnings call, we continue to tighten the belt on expenses, building on the progress of the cost efficiency program we started in 2024.
This will be critical as we ramp up investment behind the three new product launches. We will not compromise on the necessary investment for long-term growth. We also have multiple programs in the late-stage pipeline that will require additional R&D investment in the coming years. At the same time, we will continue to pursue opportunities to offset these investments, where possible, to minimize the near-term impact on profit. Next, reported operating profit on slide 10. This was flat versus prior year, with the lower restructuring expenses more than offsetting an increase in impairment of intangible assets. The main impairment item was booked in Q2, related to the cell therapy, and there were no major new items in Q3. Slide 11 shows our updated full-year outlook.
Starting with management guidance, we are revising only revenue guidance to low single-digit decline at CER, primarily due to stronger than anticipated Vyvanse generic erosion in the U.S. However, our commitment to OpEx discipline allows us to offset the gross profit impact from Vyvanse, and we maintain full-year guidance for core OP and core EPS. For our reported and the core forecast, we have revised our FX assumptions. As a result, our revenue forecast is now JPY 4.53 trillion. Core OP forecast is JPY 1.15 trillion, and the core EPS forecast is JPY 486. We have also upgraded our adjusted free cash flow forecast. On Slide 12, we show more detail about the updated revenue and the core OP forecast. For revenue, we are reflecting latest momentum of Vyvanse and other products, which includes plasma-derived therapies and Takhzyro.
However, this is more than offset by FX upside, resulting in a net increase of our forecast of JPY 30 billion. For Core OP, continued OpEx discipline fully offset the impact of Vyvanse. We also have FX benefit for a net increase to our forecast of JPY 20 billion. Thank you, and I will now pass over to Andy.
Thank you, Milano, and hello to everyone on today's call. Takeda is entering an exciting new period of growth, powered by our late-stage pipeline. As Christophe mentioned, in 2025, we were three for three, delivering positive phase III data readouts for oveporexton, rusfertide, and zasocitinib. These exciting results are at the high end of our expectations, further strengthening our belief that these new medicines have the potential to fundamentally reshape their respective therapeutic landscapes, bringing transformative benefits to patients in the next eighteen months. Let me begin with oveporexton, our expected first-in-class orexin 2 receptor agonist, which can transform the treatment paradigm for narcolepsy Type 1. Approximately 85% of patients in the phase III oveporexton trials saw a measurable improvement, which brought them into the normative range on the Epworth Sleepiness Scale, or ESS, the gold standard measure of excessive daytime sleepiness.
That means the majority of patients have the possibility of a normal day. In both phase III studies, oveporexton achieved clinically and statistically significant improvements across all 14 primary and secondary endpoints, with most participants reaching normative ranges. This normalization across such a broad range of NT1 symptoms, including daytime sleepiness, nighttime symptoms, cataplexy, and cognitive function, is unprecedented. Oveporexton doesn't just manage symptoms, it addresses the underlying orexin deficiency in NT1, offering patients a single, well-tolerated oral therapy that could restore how a majority of NT1 patients feel and function. We have submitted a new drug application to the FDA and are working to launch oveporexton this calendar year. Next is rusfertide, our hepcidin mimetic for polycythemia vera. One key data point from the phase III study is the ability to maintain hematocrit control below 45% through 52 weeks.
Real-world data shows that 78% of PV patients experience uncontrolled fluctuating hematocrit, leading to a fourfold increase in the risk of thrombotic events, including stroke, deep vein thrombosis, pulmonary embolism, and acute coronary syndrome. Rusfertide targets the biology upstream, offering more stable and durable hematocrit control and fewer variable swings in hematocrit. Durable hematocrit control, with impressive safety and tolerability, also led to clinically meaningful and statistically significant benefits to patients' quality of life, as measured by the PROMIS Fatigue Scale and Myelofibrosis Symptom Assessment Form. By reducing fatigue and other key disease-related symptoms, as well as the need for phlebotomy, rusfertide enables patients to spend less time managing their disease and more time engaging in everyday activities. We have submitted an NDA to the FDA and are working to launch rusfertide in PV this calendar year.
Finally, we have zasocitinib, our next-generation TYK2 inhibitor for immune, immune-mediated diseases. In our phase III psoriasis studies, zasocitinib worked fast, with significant improvement in PASI 75 within four weeks. Patients, of course, want clear skin. At week 16, more than half of patients on zasocitinib achieved PASI 90, or almost clear skin, and approximately 30% achieved PASI 100, or completely clear skin. PASI scores continued to improve through week 24. These results are at the very high end of reported results for all therapies in development. zasocitinib is a once-daily, well-tolerated pill that does not have any food interactions. We are looking forward to sharing the complete data at a medical conference in the near future, and expect to launch zasocitinib in psoriasis during calendar year 2027.
In addition, we remain confident in future indication expansion opportunities for zasocitinib, including psoriatic arthritis and inflammatory bowel disease. Together, oveporexton, rusfertide, and zasocitinib represent three transformative medicines we plan to bring to patients over the next 18 months. They demonstrate the strength of our R&D engine, the speed and quality of our clinical execution, and our commitment to delivering therapies that meaningfully change how patients live. Next slide, please. These first three approvals are just the beginning. I wanna highlight some additional bright spots within our late-stage pipeline. Building on our success, a head-to-head study of zasocitinib versus deucravacitinib is fully enrolled and on track to read out in 2026. These data are not required for filing, but will be insightful to further differentiate zasocitinib from other oral psoriasis medicines.
Last November, at the American Society of Nephrology Kidney Week, we presented new IgA nephropathy data from a proof-of-concept study for mezagitamab, our anti-CD38 monoclonal antibody. IgAN is a progressive autoimmune disease that causes irreversible damage to kidney function. Patients receiving mezagitamab demonstrated durable kidney function for about two years. This is an incredible 18 months after the initial five-month treatment period, suggesting a disease-modifying effect sustained long after dosing that could allow for extended treatment holidays. Very important for patients with this lifelong disease, where many progress to kidney failure within 10 years. In addition to oveporexton, we are excited about the potential of our second orexin 2 receptor agonist, TAK-360, which is initially focused on patients with normal orexin levels, like those with narcolepsy Type 2 and idiopathic hypersomnia.
phase II studies in NT2 and IH are enrolling well, and we expect to have data this year to inform phase III development. Next slide, please. Turning our attention to oncology, late-stage highlights include elritercept, our activin A/B ligand trap that showed compelling data in myelofibrosis, as presented at this past ASH meeting. phase II myelofibrosis data showed clinically meaningful improvements in anemia and thrombocytopenia, alongside favorable trends in spleen volume and symptoms when added to ruxolitinib. Elritercept remains a late-stage, potentially best-in-class approach across MDS and myelofibrosis. And lastly, we recently licensed two new innovative oncology drugs from Innovent Biologics, now called TAK-928 and TAK-921. TAK-928 is a potential first-in-class alpha-biased IL-2/PD-1 bispecific antibody designed to selectively activate tumor-specific cytotoxic T cells through activation of the IL-2 alpha CD25 receptor, while reducing the risk of exhaustion through immune checkpoint inhibition.
In early-stage clinical studies, TAK-928 has demonstrated encouraging activity in heavily pretreated immunotherapy and chemotherapy-refractory lung cancer, as well as in immunologically cold tumors, such as microsatellite stable colorectal cancer. We have seen compelling, high-quality data in well over 1,200 Chinese patients and consistent early signals from ex-China populations. We have completed the rapid transfer of data and materials and are now executing with speed to generate global data sets that will supplement the China data shared last year at ASCO. This will allow us to advance TAK-928 to treat a broad range of solid tumors, including non-small cell lung cancer and microsatellite stable colorectal cancer. These go to phase III decisions will start as soon as 2026 and into 2027. The shared investment in TAK-928 has a 60/40 split with Innovent and is stage-gated by these go decisions.
TAK-921 is a claudin 18.2-targeted antibody drug conjugate that couples a selective antibody with a silenced Fc region to a topoisomerase payload. This approach is designed for potent, tumor-specific delivery of this preferred payload to patients with pancreatic and gastric cancers, where unmet need remains high. The engineered FC silencing reduces off-target toxicity in the GI tract and lung, potentially allowing for more robust dosing and the ability to combine with first-line regimens. Clinical data shows lower rates of GI adverse events relative to other claudin 18.2-targeted antibodies in development. We plan to develop TAK-921 in first-line gastric cancer and first-line pancreatic cancer. Now I'd like to turn it back to Christophe and Julie for a few closing remarks.
Christophe Weber (CEO)
Thank you, Andy and Milano. Before we start the Q&A, I would like to share that this is my last earnings call as a main presenter. I will be on the full year earnings call, but in a supportive role as Julie Kim, our CEO-elect, takes the lead and sets guidance for fiscal year 2026, ahead of our formal handover in June. This is part of our intentional and coordinated transition. Starting this month, Julie began taking on more operational responsibilities to ensure that we remain focused on our upcoming launches without interruption. I would like to thank all of you for the important dialogue we had over the years about our business. I am proud of the work we have done to position Takeda among the global R&D-driven pharma leaders, and poised for growth in the years ahead.
Andrew Plump (President of Research & Development)
It has been a wonderful journey, and I am excited about Takeda's future and confident in Julie's leadership in its next era. Julie, over to you.
Julie Kim (CEO-elect)
Thank you, Christophe, and thank you for your leadership and guidance over the last 12 years. Hello, everyone, and thank you for your trust that you're putting in me to lead Takeda's next era of growth. As Christophe shared, our transition has been incredibly collaborative, and one of the benefits of being an internal successor is that we don't have to slow down. We can keep the momentum going and continue to move the organization forward. To that end, you may have seen our post today about changes to our organizational structure and executive leadership we are making, effective April 1. These changes are designed to position us for competitiveness, growth, and speed in the years ahead, particularly as we plan for multiple launches.
Andrew Plump (President of Research & Development)
As we implement these changes, we expect that teams will identify opportunities to simplify their work further as we continue to redesign our processes to adopt AI and other advanced technologies. Next quarter, I look forward to taking the lead on the earnings announcement and providing guidance for fiscal year 2026. I value our ongoing dialogue and will stay closely engaged with all of you in the months and years ahead. Thank you. With that, I will turn it back to Chris for Q&A.
Christopher O'Reilly (Head of Investor Relations)
Now I'd like to open the floor for questions. If you have a question, please, press the Raise a Hand button on your Zoom screen. If you're using Japanese channel, please, ask the question in Japanese, and if you're using the English channel, please, ask in English. If you're listening to the original language, either language will do, and we would like to limit the number of questions to two per person. Now we welcome your questions. Morgan Stanley, Muraoka [Foreign language], please unmute yourself and ask your question.
Shinichiro Muraoka (Analyst)
Thank you very much.
Andrew Plump (President of Research & Development)
This is Muraoka, Morgan Stanley. I hope you can hear me.
Christopher O'Reilly (Head of Investor Relations)
Yes, we can hear you.
Shinichiro Muraoka (Analyst)
Thank you. Maybe it's too early to ask, but Milano [Foreign language], what are your thoughts about the next fiscal year? Contribution from the new product is probably small, and you'll be spending a lot of marketing expenses for those new launches. I understand that, but Vyvanse situation is coming down. It's getting better, and profit will be maybe flat or slight decrease. I'm thinking that you can continue to increase dividend, but can you give us some suggestions about what will happen in the next fiscal year? Thank you.
Christopher O'Reilly (Head of Investor Relations)
Milano please go ahead.
Milano Furuta (CFO)
Thank you, Muraoka [Foreign language]. Yes, it's a little bit too early, you're right. Our guidance will be provided as usual in May. The next fiscal year's budget is being finalized as we speak, so please give us some more time.
Andrew Plump (President of Research & Development)
With regard to the current momentum, I believe that we can give you some more information. Top line, growth of growth and launch products versus the LOE impact, I think it's a balance between the two. We expect the growth products and launch products to continue to grow, but as you saw in the numbers in this fiscal year, they are beginning to mature. This cannot be denied. But the gap between LOE and the growth and launch products is shrinking every quarter. So we need to see how this balance will work out for the next fiscal year. We are trying to figure that out now, so please give us some more time. As far as expenses are concerned, this fiscal year, the whole company endeavored on saving the costs, and we will continue to make this effort.
But Muraoka [Foreign language], like you said, launch costs, three products to be launched within one year. This means that there will be some load, burden, but this uptick is very important for the future growth as well. This is a very important timing for us, so we will be discerning in terms of which investments are necessary, and we will not compromise in investing these launches. As far as R&D is concerned, this fiscal year we have been trying to save the costs, and also at the same time continue to drive various product projects. Through the Innovent partnership, we have introduced new assets for Japan, and the full-scale development is expected to start. Considering that impact, R&D expenses are likely to go up. I think that would be the correct way of reading it.
But again, I would like to emphasize that we will continue to tighten the cost wherever we can. And I hope that you can evaluate that as well. Do you have any comment about shareholder return? Well, dividend, yes. Progressive dividend is something that we have been talking about for a long time, so this is a basic policy. So either keep it flat or try to increase the dividend. This is the basis. Whether or not the dividend will increase and by how much, well, in order to decide that, we have to look at the core EPS and also reported EPS, as well as cash flow generating power, and speed of a reduction of debt-bearing debt, interest-bearing debts. So we'll pay attention to those and decide. Understand. Thank you very much. I have great expectations.
Shinichiro Muraoka (Analyst)
I have another question about zasocitinib. UC/CD phase II outcome, when can we expect it? And also, what about dosing? phase II for UC was 50 milligram or 30 milligram? And, what about the psoriasis safety data? Based on that safety data, can you perhaps comment on this?
Christopher O'Reilly (Head of Investor Relations)
The question on timing for the UC and CD readouts for zasocitinib and which doses we are using, Andy, if you could comment on that, please.
Andrew Plump (President of Research & Development)
Thanks, Chris, and thanks, Muraoka [Foreign language]. So, we'll have data from both the UC and Crohn's disease phase II-B studies this year. Both are dose-ranging studies. As we've mentioned, we haven't disclosed the precise doses, but as we've mentioned, the 30-milligram dose that we've studied in psoriasis and that we'll be registering for psoriasis is the low end of the dose range in IBD. We have reason to believe that higher exposures will be necessary for efficacy in UC and Crohn's disease, and we have significant upwards headroom in dose to study. So those studies are ongoing. And then your last question was with respect to safety profile for psoriasis. So we've just commented at the top line in December when the phase III studies were read out.
We'll be presenting at a medical conference in the near future. You could probably guess which conference we're targeting. Overall, the safety profile that we've seen in both phase III studies is very consistent with the profile that we had seen previously in our phase II study.
Shinichiro Muraoka (Analyst)
Understand. Thank you very much.
Christopher O'Reilly (Head of Investor Relations)
Thank you very much. Next question is, Yamaguchi [Foreign language], Citi, please.
Hidemaru Yamaguchi (Analyst)
Can you hear me?
Christopher O'Reilly (Head of Investor Relations)
Yes, we can. Thank you.
Hidemaru Yamaguchi (Analyst)
So thank you very much. So this is Yamaguchi from Citi. I have two questions. First of all, the first one is more of a broad question because the MFN situation or medical policy in the United States seem to be coming down because the major companies are now settled with the U.S. government on MFN. But Japanese company, including your company, are still excluded from this discussion. But what do you think about this sort of activity which you need to do regarding MFN or U.S. policy in the near future? That's the first question. The second question is that regarding the organization change which you announced today, especially on the strategic portfolio development, which it sounds like you're trying to speed up on some of marketing activity in those areas, especially in the U.S.
Andrew Plump (President of Research & Development)
U.S. marketing is a key for next few years, and it depends on the product, but your marketing activity in the past are not necessarily executing better than expected, to be honest. But how are you going to change, especially on the U.S. marketing organizations or activities in the near future through the Kim [Foreign language]'s roles or CEO roles in the near future? Thank you. Two questions.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Yamaguchi [Foreign language]. So the first question on MFN and latest U.S. policy updates. The second question regarding the organizational updates that we announced today. So I'd like to call on Julie to address both of those questions, please. Julie?
Julie Kim (CEO-elect)
Yes. Thank you, Yamaguchi [Foreign language], for the questions. First, in regard to MFN, as you've noted, the number of companies, 17 companies that had originally received the letters from the White House, they have all gone in for negotiated agreements in regards to how they will approach MFN, how they're going to be managing tariffs with the relief that they received, and the further investments in the U.S. Since those agreements have been made, there were also releases from the government in terms of the generous model, which details how these agreements can be actually implemented through Medicaid. And there have been a release of the both GLOBE and GUARD CMMI demonstration projects for commentary by the public.
Andrew Plump (President of Research & Development)
So at this point, we have assessed both the impact of the IRA's and looking at the potential design of the two CMMI products on Takeda and Takeda portfolio. So we are evaluating those impacts and taking necessary steps to address that within our approach to MFN. But let me end by saying that in general, MFN is not an approach that we support. Having price controls and importing one component of healthcare systems that have very, very different structures does not make sense for the U.S. and can impact future innovation. So we are not in favor of MFN, but we will continue to address the challenges that may face Takeda going forward.
In regard to the organization changes that were announced today, you will see that from a commercial standpoint, there are basically two key structures that we are trying to focus on. One is a therapeutic one, and so you will see that the oncology business unit is still a separate business unit. Both Andy and Christophe have talked about the assets that we have brought in, and particularly the Innovent ones will be the key part of our oncology portfolio, and we are very much looking forward to launching rusfertide later this year. So maintaining a focus on oncology to drive that growth and potential that we have in our pipeline now is absolutely critical.
And then for the upcoming launches, creating two primarily geographic focus, one in the U.S., maintaining the U.S. focus, given the size of the market and the dynamics that exist, that we have to to manage, that is part of being able to set ourselves up for success going forward in terms of the commercial approach to the U.S. as well as the international markets. So what may not be as visible through the org changes that are announced is the work that we're doing in terms of our marketing excellence and sales excellence and commercial operations. So we are working on all those aspects, again, to ensure that we are ready and can deliver successful launches going forward. Thank you. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you very much. For the next question, I would like to call on Stephen Barker from Jefferies. Steve, please unmute and ask your question.
Steve Barker (Analyst)
Yes. Steve Barker from Jefferies. Thanks for taking my questions. I have two questions, both about Entyvio. The third quarter sales were very robust. The global third quarter sales expanded 17% year-on-year on a reported basis, much better than the 3% growth reported in the second quarter. You said that you are now confident that you can achieve your 6% guidance for the full year, but that would imply a 2% decline year-on-year in fourth quarter sales. So would you agree that there's a decent chance at least that you could beat the current guidance for full year 6% growth? And if you could just talk a little bit more about what's driving the good performance in the third quarter, and if it is something that can be sustained into next year.
Andrew Plump (President of Research & Development)
That's the first question. Then second question, a couple of days ago, CMS announced that Entyvio has been chosen as one of the drugs for the third cycle of IRA price negotiations, meaning that, it's likely to get a substantial Medicare price cut from the start of 2028. Any comments on how big that price cut might be, and if you can still achieve your peak sales guidance of $7.5 billion-$9 billion even with the price cut? Thank you.
Christopher O'Reilly (Head of Investor Relations)
Okay. Thank you, Steve. So the question on Entyvio sales trend, impact of IRA inclusion and the implications on peak sales. So I'd like to ask Christophe to start with this one, and perhaps Julie can add some comments as well. Christophe? Sorry, Christophe, I think you might be muted.
Christophe Weber (CEO)
Thank you. Thank you, Steve. Obviously, Entyvio is operating now in a very competitive market. We know that, but we are pleased by the Q3 performance. One important point is that we have improved our coverage situation in the U.S. All the big three now, PBMs, are reimbursing and covering Entyvio Pen. Took a while, but we have now a coverage at the level of our competitors, around 80% since January, so it's quite recent. So we are hopeful that the pen will continue to progress in the U.S. as it has progressed in other countries. Long term, we still aim to have a 50/50 split between the IV and the pen. So overall, you know, a good performance in Q3. Long term-
Andrew Plump (President of Research & Development)
We project on Entyvio not to gain market share, but to remain stable and to grow at market pace, basically. While the pen is developing, that's our current estimation, but you know, the market is changing quite a bit, but good performance for sure in Q3.
Julie Kim (CEO-elect)
And then, Steve, in regards to the IRA selection of Entyvio, as we've shared in the past, this was anticipated, and so we've been preparing for this eventuality. As you know, from a timing perspective, we have a period of time in which we have to confirm engagement in the negotiation. And then towards the end of the year, we will actually find out what price will be set. As I think you are also aware, it's not really a negotiation, but we will be submitting our best evidence package to support Entyvio. If you look at what's been happening over the previous two cohorts, the second cohort had higher price cuts than the first cohort.
Andrew Plump (President of Research & Development)
So it is too early to say whether that trend will continue into the third cohort or whether it will be similar to the second cohort. So it really depends on where we land with the final pricing on Entyvio in terms of when that peak revenue could be, and also if we end up in the $7.5-$9 or not. So we will update later once we understand what our pricing situation will be for Entyvio. Thank you.
Steve Barker (Analyst)
Understood. Thank you very much.
Christopher O'Reilly (Head of Investor Relations)
Thank you. Next question is from Matsubara [Foreign language], Nomura Securities. Please unmute and ask a question.
Hiroyuki Matsubara (Analyst)
This is Matsubara, Nomura Securities. Thank you. First question is about Takhzyro. On a CER basis from the second quarter, the growth rate seems to be slowing down. And, is it affected by the competitor, Dawnzera, and, the transition from Takhzyro to Dawnzera, and HAE attack rate, showing some 65% decrease? So what about the prescription rate in existing patients or new patients? Could you comment on those? Second is, as Milano Furuta mentioned, Obinutron and, zasocitinib will be launched, and also R&D spending, more spending will be necessary. And, in the midterm viewpoint, as you try to increase the operating profit, how are you going to take measures?
Christopher O'Reilly (Head of Investor Relations)
Thank you, Matsubara [Foreign language], for your questions. So the first around recent Takhzyro trends, prescription trends in the U.S., I'd like to ask Julie to comment on that. And then the second question, looking at outlook for profit over the medium term, I'd like to ask Milano to comment on that, please. First, Julie?
Julie Kim (CEO-elect)
Yes. Thank you for the question, Matsubara [Foreign language]. When it comes to Takhzyro, I, I will share a few comments. First, in terms of the overall market, this is a market that has been maturing. The diagnosis rate is high, and the penetration of prophylaxis treatment, it has been high as well. So Takhzyro continues to be the gold standard for HAE patients. And you, you are correct that we have seen an impact of the launches of the two competitive, recent competitive entrants. And so we are seeing an impact in terms of new starts, from these new competitive entrants. But I also want to point out that part of the lower growth is also due from the impact of Medicare Part D redesign, that we are experiencing, a bit higher, impact from that in the U.S. than anticipated.
Andrew Plump (President of Research & Development)
Now, when it comes to long-term efficacy, if you look at the real world evidence that we have for Takhzyro, no other product is able to demonstrate the level of efficacy that we have, when you look at the data from an attack perspective. We have patients that are attack-free for over a year, at any given point in time. And so from an efficacy standpoint, our real world data for Takhzyro, it can't be beat. So that is something that I would like to highlight, and it's something that we continue to defend and support from a Takhzyro standpoint.
Milano Furuta (CFO)
Matsubara [Foreign language], thank you very much, Matsubara [Foreign language], and I'd like to answer to your second question. At the beginning, as Muraoka [Foreign language] also asked, and I mentioned about the pressure of overall expenditure increase. Therefore, I'd like to touch upon the potential contribution of new products to the profit. And this is a general comment, that whenever new products come out, then in the second year or the third year since its launch, we will see a contribution to the profit. It depends on the timing of the launches. Therefore, it is difficult for us to say anything concrete, whether it's gonna be next year or the year after the next, and how much? But amongst the three products, oveporexton uptake after the launch is expected to be fast.
Andrew Plump (President of Research & Development)
Whereas, zasocitinib, will have to play in the very, highly competitive market. Therefore, I think for zasocitinib, I think we need to take time to monitor. And, rusfertide is in between. It is a highly innovative product, but at the same time, the market access may not necessarily be so easy. Therefore, how that will demonstrate the uptake, we would like to monitor. But the speed of uptake, will be impacting on to the timing that we start to see, the product's contribution to the profit. And, also, not just, these, three products, but, five new pipeline assets, readouts are coming, and, in, forthcoming five or six years, they will, continue to be launched. And as a result, overall, I think that the overall profit level should be able to be enhanced.
At the same time, not just the Core OP, but the reported operating profit is also monitored. For instance, Vyvanse, the intangible asset, the amortization will be complete. And, as a result, there will be also a positive contribution in that sense. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you very much for the question. Moving on to the next question, I would like to call on, from TD Cowen, Mike Nedelcovych. Mike, please unmute and ask your question.
Mike Nedelcovych (Analyst)
Great. Thank you so much for the questions. I have two. My first is also related to the IRA impact on Entyvio. I believe it is Takeda's base case that Entyvio Pen will be included in the IRA price negotiation, but I'm curious if that is a completely settled matter or not. Is there any chance that Entyvio Pen is ultimately excluded from the IRA price negotiation? That's my first question. And then my second question relates to the partnered AC Immune asset in Alzheimer's. It looks like data may be anticipated mid this year. Should we expect that to be the time when Takeda decides if it wants to opt in or not? And Andy, I'm curious to hear your thoughts more broadly on prospects for Alzheimer's disease prevention or delay based on early amyloid plaque clearance. What are your general thoughts on this approach? Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Mike. So I think the first question, Julie can comment on IRA Entyvio and impact on potential impact on pen, and then the second question to Andy on the AC Immune partnership and AD in general. Julie?
Julie Kim (CEO-elect)
Hi, thanks for the question, Mike. In terms of the negotiation with the IRA, we do expect that pen will be included.
Andrew Plump (President of Research & Development)
Mike, on the AC Immune program. So we won't have data this year to drive a decision. That will come in subsequent years. And thanks for asking more generally. Of course, I've been working in this industry for almost three decades now, and the first project I worked on was a project in, like, of a gamma-secretase inhibitor designed to reduce A beta production. It's been one of... to me, one of the most exciting and promising, but also one of the most challenging areas in our industry.
I'm a big believer that if we could clear A beta plaque early, in the longitudinal course of Alzheimer's disease, that we could drive even greater benefits than what we see from the passive antibodies that have been used and demonstrated efficacy. So we're quite excited about the vaccine program. Of course, the challenge with the, historically with the vaccines, has been threading the needle of safety and efficacy. We think we have a shot with the AC Immune partners, and still working towards that.
Mike Nedelcovych (Analyst)
Thanks so much.
Christopher O'Reilly (Head of Investor Relations)
Thank you very much. Next question is, Wakao [Foreign language], J.P. Morgan. Please unmute and ask a question.
Seiji Wakao (Analyst)
This is Wakao, J.P. Morgan. Thank you for this opportunity.
Andrew Plump (President of Research & Development)
I have two questions. Firstly, regarding PDT, how do you assess the clinical progress on PDT? Compared with your guidance, PDT progress seems to have been somewhat slower. And, could you share your outlook for PDT in fourth quarter and next fiscal year? This is the first question, and then second question is about zasocitinib. Should we expect the zasocitinib phase III data to be presented at the AAD in March? If so, what key aspects should we focus on? As icotrokinra and orismilast programs have shown favorable data also, where do you see the zasocitinib's key point of differentiation?
Christopher O'Reilly (Head of Investor Relations)
Thank you, Wakao [Foreign language]. So the first question on the PDT business performance and outlook, I'd like to ask Julie to comment on that. And the second question on Zaso data, where will it be presented, and what we should focus on in that data? I'd like to ask Andy to comment on that, please.
Julie Kim (CEO-elect)
... Thank you for the question, Wakao [Foreign language]. In regards to PDT, as Milano was sharing in his part of the presentation earlier, we do see some slowdown in demand, particularly in regards to albumin in China. As you may be aware, the Chinese government has put in place utilization guidelines that are impacting demand for albumin in China, and it has slowed down the growth, and it will take time for growth to return in China. When you look at the overall outlook for PDT overall, there we still believe we will have mid-single-digit growth for this year, as previously shared, and longer-term outlook is still strong.
Andrew Plump (President of Research & Development)
The quarter to quarter, as you know, because there are lots of variabilities in regard to tender timing, et cetera, as Milano mentioned, we do believe that there is a possibility we will have a shortfall, particularly in regards to albumin. But overall, we will be meeting the forecast for PDT.
Seiji Wakao (Analyst)
Yeah, about-
Andrew Plump (President of Research & Development)
I'm sorry, please.
Seiji Wakao (Analyst)
So, could you also comment on the immunoglobulin?
Julie Kim (CEO-elect)
Oh, sure. Yes, from an immunoglobulin perspective, again, long-term growth, we believe will remain steady. And from a short-term perspective, we are expecting to be on forecast for immunoglobulin.
Seiji Wakao (Analyst)
Okay.
Andrew Plump (President of Research & Development)
And Wakao, this is Andy. So thank you for your question on zasocitinib. So we haven't disclosed yet the conference that we'll be presenting at, but AAD certainly is a possibility. Just suggest that you watch out for the abstract when they're released in mid-February for AAD. And then in terms of what to look for, it's, you know, pretty straightforward. It's fast onset of action, it's clear skin, and it's ease of administration. We have a once-daily oral pill that's well-tolerated with a strong safety profile. And then when you double-click, you'll see that in the two phase III studies, we hit on every single primary and secondary endpoint, and that's 44 total endpoints. So there'll be a lot of data that will be shared, and we're quite excited to get it out there.
Seiji Wakao (Analyst)
All right, so what, what is our competitive advantage?
Andrew Plump (President of Research & Development)
Well, as we mentioned over the last hour, it has an efficacy profile that at 16 weeks is at the very high end of what's been seen for oral agents. It's ease of administration without having any food effects. And it's the overall profile, and it's the rapidity with which we generate clear skin in an oral agent. You know, we believe and we think the data will demonstrate that it's as good or better than any other oral option in the moderate to severe plaque psoriasis space.
Seiji Wakao (Analyst)
Yeah, I'm looking forward to see the data. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Okay. Thank you very much, Wakao [Foreign language]. I think we have just time for one final questioner, so I'd like to call on Tony Ren from Macquarie. Tony, please unmute and ask your question, please.
Tony Ren (Analyst)
Yeah. Thanks for the chance to ask my the last questions. My first one, and I'll go back to the again, for Andy, the zasocitinib regulatory pathway. So assuming that you will present the data at AAD in March, the standard FDA review takes about 10 months. So do you think you can actually launch it earlier than the 18 months of a timeline guided? Are you being a little bit too conservative in estimating the timeline? So that's my first question. The second one is probably to Julie about the Entyvio biosimilar. Have you-- has your thinking about the biosimilar entry changed because of the subcutaneous pen? I noticed at a recent conference in San Francisco, you guys are now saying 2030 and beyond.
Andrew Plump (President of Research & Development)
So, just wanna confirm whether the launch of the pen and the wide adoption of the pen has anything to do with the, biosimilar entry. Yeah, so that's my second question. Thank you very much.
Christopher O'Reilly (Head of Investor Relations)
Okay. Thank you, Tony, for your question. So the first on zasocitinib regulatory pathway and potential launch timing, Andy can comment on that. And then the second question on Entyvio biosimilar entry timing, I think Julie can comment on that, please. Andy?
Andrew Plump (President of Research & Development)
Yeah. Thanks, Chris, and thanks, Tony. So just to put perspective on the filing timeline, so there are three elements that define the timeline for filing. There's the phase III studies, which we've completed. Those are ready to go. There's the overall patient safety database, so we have to accrue safety in about 1,000 patients on active drug for a full year. And then the third is the CMC package. So when you put all three of those together, Tony, we're looking at a submission that's likely to occur sometime in this summer. And then, of course, the timeline for the review will be something that will be in dialogue with the FDA, and once we've made that submission.
Tony Ren (Analyst)
Yeah, great. Thanks.
Julie Kim (CEO-elect)
Thanks, Tony, for the question on, on the Entyvio biosimilar timing. So we have not really changed our, timing expectations here. As we've shared previously, we do have patents that cover various different aspects of Entyvio that go out to 2032. But as you are also well aware, there are biosimilars in development, and they could file with legal challenges. I'm sorry. They could file, and we would then pursue legal challenges, so that's why the timing could be 2030-2032, and that's why you hear us saying that. Also, from a, an overall market attractiveness perspective for Entyvio, as now that Entyvio has been selected for IRA negotiation, the, the pricing expectations for biosimilars will also be impacted by that. Thank you.
Tony Ren (Analyst)
All right. Thank you.
Christopher O'Reilly (Head of Investor Relations)
Thank you, Tony, for your questions. With that, we'd like to bring this call to a close. Thank you all very much for participating in the call today. This concludes our Q3 earnings call. Thank you. Good night.