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    TAK
    Earnings call· Sep 2025(Q2 FY25)

    TAKEDA PHARMACEUTICAL CO LTD TAK

    Oct 30, 2025 Source

    Executive summary

    Takeda Q2 FY25 — VYVANSE LOE Peaks, Pipeline Advances, and Innovent Partnership Bolsters Oncology

    Takeda's Q2 FY25 results confirm business fundamentals are tracking as planned, despite the peak impact of VYVANSE generic erosion. The company is poised for a new business cycle from FY26, driven by an accelerating late-stage pipeline, including positive Phase III data for oveporexton and rusfertide, and a transformative oncology partnership with Innovent Biologics. While transactional FX headwinds impacted profit guidance, Takeda maintains tight OpEx control and a progressive dividend policy, positioning for long-term growth and margin improvement.

    Highlights

    5

    • Growth and launch products grew 5.3% at constant exchange rate in H1 FY25, with expected acceleration in H2.

    • Oveporexton Phase III data established a new standard of care for narcolepsy type 1, with U.S. filing planned for later this year.

    • Mezagitamab showed stable renal function at 96 weeks in IgA nephropathy, 18 months after last dose.

    • Innovent Biologics partnership adds two late-stage oncology assets (IBI363, IBI343) and an option for a third (IBI3001), with a $1.2 billion upfront payment.

    • Adjusted free cash flow was very strong at JPY 525.4 billion in H1 FY25, including working capital improvements.

    Concerns

    5

    • VYVANSE generic impact led to approximately JPY 100 billion revenue loss in H1 FY25, peaking in this period.

    • Core operating profit decreased 11.2% year-on-year at actual FX (8.8% at CER) in H1 FY25.

    • Reported operating profit declined 27.7% due to higher impairment losses, including JPY 58.2 billion for discontinued cell therapy efforts.

    • Full-year core operating profit and core EPS guidance lowered from broadly flat to low single-digit percentage decline due to transactional FX headwinds.

    • ENTYVIO revenue growth was slightly below expectation, with full-year forecast revised to 6% at CER from 9%.

    Guidance & targets

    17
    CategoryTargetConfidence
    Growth and launch products growth rate
    accelerate in H2
    medium materiality
    High
    PDT business growth
    mid-single digit
    medium materiality
    High
    Immunoglobulin (IG) growth
    high single digit
    medium materiality
    High
    Albumin growth
    high single digit
    medium materiality
    High
    ENTYVIO full year forecast
    6% at CER
    high materiality
    Medium
    QDENGA annual demand
    remain in line with our original estimate
    medium materiality
    High
    Total revenue
    stay in the range of the broadly flat versus prior year
    high materiality
    High
    Core operating profit
    low single-digit percentage decline
    high materiality
    Medium
    Core EPS
    low single-digit percentage decline
    high materiality
    Medium
    Dividend outlook
    JPY 200 per share
    medium materiality
    High
    Operating profit forecast reduction
    JPY 10 billion reduction
    high materiality
    High
    Zasocitinib Phase III psoriasis data
    expected later this calendar year
    high materiality
    High
    Oveporexton U.S. approval filing for NT1
    as quickly as possible later this year
    high materiality
    High
    TAK-360 Phase II results for narcolepsy type 2 and idiopathic hypersomnia
    expected to be read out by early fiscal year 2026
    medium materiality
    High
    Rusfertide filing
    intend to file this fiscal year
    high materiality
    High
    Zasocitinib head-to-head study enrollment completion
    expected to complete enrollment in the next few weeks
    medium materiality
    High
    IBI363 Phase III study in second-line squamous non-small cell lung cancer
    expected to begin in the coming months
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Growth and Launch Products
    Grew at constant exchange rate in H1 FY25, expected to accelerate in H2. Represents over 50% of total revenue.
    		—5.3%——
    GI (Gastrointestinal)
    ENTYVIO growth was slightly below expectations, leading to a revised full-year forecast. Pen penetration is advancing, but overall growth is impacted by competitive activity and channel mix.
    ENTYVIO growth at CER: 5.1%ENTYVIO Pen growth in U.S. (QoQ): 20%ENTYVIO Pen volume in U.S.: 9% of total ENTYVIO volume
    		—5.1%——
    Rare Disease
    TAKHZYRO continues steady growth as a market leader in HAE prophylaxis.
    TAKHZYRO growth at CER: 5.9%
    		—5.9%——
    PDT (Plasma-Derived Therapies)
    Overall PDT business expected to grow mid-single digit for the year. IG growth impacted by Medicare Part D redesign, but SCIG portfolio growing double digits. Albumin decline in H1 due to China shipment timing and cost containment, expected to accelerate in H2 with new tender markets. Margin recovery expected year after year.
    Immunoglobulin (IG) growth: 3.1%SCIG portfolio growth: double digitsAlbumin decline in H1: slightBioLife volume collection improvement per donation: 10% to 11%
    		————

    Operational metrics

    13
    VYVANSE revenue loss
    JPY 100 billion
    H1 FY25

    Approximate loss due to loss of exclusivity, representing the peak impact.

    Revenue
    JPY 2.2 trilliondecreased 6.9% (3.9% at CER)
    H1 FY25

    Total revenue for the first half of the fiscal year.

    Core operating profit
    JPY 639.2 billiondecreased 11.2% (8.8% at CER)
    H1 FY25

    Year-on-year decrease, with transactional FX accounting for about 1/3 of the CER decline.

    Reported operating profit
    JPY 253.6 billiondeclined 27.7%
    H1 FY25

    Mainly due to decline in core operating profit and higher impairment of intangible assets.

    Core EPS
    JPY 279
    H1 FY25

    Earnings per share on a core basis.

    Reported EPS
    JPY 7240% decline
    H1 FY25

    Reflects impairment of cell therapy, which is non-tax deductible.

    Restructuring costs
    JPY 27.4 billion
    H1 FY25

    Costs associated with efficiency programs, including organizational changes.

    Impairment loss (cell therapy)
    JPY 58.2 billion
    H1 FY25

    Expense related to the decision to discontinue cell therapy efforts, non-tax deductible.

    Innovent Biologics payment
    USD 1.2 billion
    FY25

    Upfront payment for the in-licensing deal, funded by cash on hand.

    Operating profit forecast
    JPY 1.13 trillionJPY 10 billion reduction
    FY25

    Revised full-year forecast, reflecting the net impact of transactional FX and OpEx savings.

    Organizational changes
    600 positions
    H1 FY25

    Impacted by efficiency initiatives.

    Gross margin
    64.7%deteriorated from 66%
    FY25

    Expected full-year gross margin, revised downwards.

    Research programs enabled by in silico technology
    90%from 25% today
    Next year

    Target for the proportion of research programs utilizing advanced computational methods.

    Industry KPIs

    8
    MetricValueDetails
    Peak sales guidancenot changing
    EPS revenue guidancelow single-digit percentage decline%
    Pricing policy impactimpacting several products
    Pipeline clinical milestones2 for 2
    Regulatory approvals filingsBreakthrough Therapy Designation
    Therapeutic drug market sharemarket share leader
    Clinical trial efficacy safety datastable renal function
    Business development capacity deal appetiteUSD 1.2 billionUSD

    Deals & partnerships

    3
    Innovent BiologicsStrategic partnership to expand oncology pipeline with three differentiated assets: IBI363 (PD-1/IL-2 alpha bias bispecific), IBI343 (Claudin 18.2 ADC), and an exclusive option for IBI3001 (EGFR/B7H3 ADC). Takeda will lead co-development and co-commercialization for IBI363 globally (outside Greater China) with a 60-40 split, and worldwide rights for IBI343 (outside Greater China).USD 1.2 billion

    The deal adds cutting-edge anchor assets to Takeda's pipeline, fitting squarely within its oncology strategy. Takeda will manufacture these molecules in the U.S. to mitigate geopolitical risk.

    BlackstoneCost-sharing program for mezagitamab development.

    An example of arrangements Takeda uses to consciously manage incremental investment while optimizing OpEx.

    Nabla BiosciencesCollaboration to utilize AI in drug discovery, specifically using algorithms to optimize sequences of large molecules.

    Follows three successful pilot experiments, two of which accelerated programs and a third led to a novel discovery. Positions Takeda at the leading edge of applying advanced technologies in research.

    Risks & headwinds

    6
    VYVANSE generic impactH1 FY25 (peak impact)

    approximately JPY 100 billion revenue loss in H1 FY25

    Mitigation: Expected to be much less of a headwind from now on; focus on growth from launch products and pipeline.

    Transactional foreign exchange (FX)FY25

    accounted for about 1/3 of the 8.8% CER core operating profit decline in H1; JPY 10 billion reduction in operating profit forecast for FY25

    Mitigation: Long-term strategic plan may involve rebalancing manufacturing footprint; not taking actions based on 1-year currency volatility. OpEx savings partially mitigate impact.

    ENTYVIO competitive pressures and channel mixFY25

    full year forecast revised from 9% to 6% at CER

    Mitigation: Working on improving overall access continuum, resolving localized access hurdles for ENTYVIO Pen, expecting acceleration of growth as hurdles are resolved. Holding market share due to gut-selective mechanism.

    Impairment lossesH1 FY25

    JPY 58.2 billion expense related to discontinued cell therapy efforts

    Mitigation: Reflected in reported forecast; focus on investing for future growth in other areas.

    China albumin cost containment measuresH1 FY25

    slight decline in albumin in H1 FY25

    Mitigation: Actively building sustainable market opportunities for albumin outside of China, securing new tenders for H2 delivery to accelerate growth.

    US Biosecure Act / geopolitical risk for Innovent partnershipOngoing

    Potential political consequences of having China Biotech as a partner

    Mitigation: Takeda will drive global development to meet regulatory criteria worldwide and plans to manufacture these molecules in the U.S. via full tech transfer.

    What to watch in Q3 FY25

    5

    Growth and launch products growth rate

    H2 FY25
    Current5.3% at CER in H1 FY25
    Targetaccelerated growth

    Why it matters

    This is a key driver for Takeda's future growth as VYVANSE LOE impact diminishes.

    Growth on launch product grew 5.3% at constant exchange rate, and we expect this growth to accelerate in H2.

    Q&A highlights

    6

    How will Takeda manage the R&D costs for the Innovent solid tumor pipeline, given the need to balance operating margins? Can transactional FX impacts be avoided in the future?

    Takeda is committed to oncology investment while supporting profitability, with the Innovent deal's financial implications already reflected in revised forecasts. They manage incremental R&D through cost-sharing (e.g., 60-40 split for IBI363, Blackstone partnership for mezagitamab) and continuous cost discipline. Transactional FX is hard to predict; long-term mitigation might involve rebalancing manufacturing footprint, but not based on short-term volatility.

    “But in the long -- 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 kind of, of course, a long-term strategic plan. It's not -- we've taken actions depending on a 1-year currency volatility. We have to take a bit to long-term stance on that.”

    asked by Hidemaru Yamaguchi · answered by Milano Furuta

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Pivot Post-VYVANSE LOE

    Takeda is entering a new business cycle from fiscal year 2026, with the significant impact of VYVANSE generic erosion largely behind it. The company anticipates potential launches of three new products: rusfertide, oveporexton, and zasocitinib, alongside an enriched late-stage pipeline from the Innovent Biologics partnership. This transition marks a strategic shift towards accelerating growth from new launches and pipeline assets, supported by continued operational efficiency and cost control.

    02

    Innovent Biologics Partnership: Oncology Pipeline Transformation

    The recently announced partnership with Innovent Biologics is expected to transform Takeda's oncology pipeline, adding two highly differentiated late-stage assets, IBI363 (PD-1/IL-2 alpha bias bispecific) and IBI343 (Claudin 18.2 ADC), plus an option for IBI3001 (EGFR/B7H3 ADC). This collaboration aligns with Takeda's oncology strategy focusing on specific disease areas and modalities, with an initial addressable market of over $40 billion for IBI363 in lung and CRC, and $8 billion for IBI343 in gastric and pancreatic cancers. Takeda will lead global development and commercialization outside Greater China for key assets, with a 60-40 cost/profit split for IBI363.

    03

    Pipeline Advancements and Key Data Readouts

    Takeda reported positive Phase III studies for rusfertide (polycythemia vera) and oveporexton (narcolepsy type 1), with oveporexton data establishing a new standard of care and U.S. filing planned for later this year. Mezagitamab (IgA nephropathy) showed exceptional 96-week results with stable renal function 18 months post-dosing. The company also expects zasocitinib Phase III psoriasis data by year-end and is rapidly enrolling Phase II studies for TAK-360, a next-generation orexin 2 receptor agonist.

    04

    Operational Efficiency and FX Headwinds

    Takeda continues to maintain tight OpEx control through efficiency improvements, including organizational changes impacting 600 positions and optimization of real estate. These savings are partially offsetting the impact of VYVANSE LOE and unfavorable product mix. However, transactional foreign exchange, primarily due to euro appreciation against the Brazilian real, has created a headwind, notably affecting QDENGA sales and leading to a slight lowering of full-year core operating profit and core EPS guidance.

    05

    Plasma-Derived Therapies (PDT) Business Dynamics

    The PDT business is expected to grow at mid-single digits for the year, with immunoglobulin and albumin projected for high single-digit growth. While H1 saw slight declines in albumin due to shipment timing to China and cost containment measures, Takeda has secured additional sustainable tender markets outside China to accelerate H2 performance. The company is also investing in BioLife collections network efficiency, improving volume collection by 10-11% per donation through personalized nomograms, and continuously evaluating new countries for plasma supply.

    06

    AI and Technology in Drug Discovery

    Takeda is positioning itself at the forefront of applying advanced technologies in research, with a new 'lab of the future' in Cambridge, Massachusetts. By next year, over 90% of its research programs are expected to be enabled by in silico technology. The partnership with Nabla Biosciences exemplifies this, using AI algorithms to optimize large molecule sequences, which has already accelerated programs and led to novel discoveries not achievable with traditional approaches.

    AI-generated summary of the company’s earnings call. Not investment advice.