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    TAK
    Earnings call· Dec 2025(Q3 FY26)

    TAKEDA PHARMACEUTICAL CO LTD TAK

    Jan 29, 2026 Source

    Executive summary

    Takeda Q3 FY26 — Strong Pipeline Progress Offsets VYVANSE LOE and Market Headwinds

    Takeda delivered a quarter marked by significant pipeline advancements, with three late-stage assets showing positive Phase III data and preparing for launch, poised to drive future growth. Despite a revised full-year revenue outlook due to VYVANSE generic erosion, the company maintained profit guidance through disciplined cost management. The leadership transition to CEO-elect Julie Kim is underway, with new organizational structures implemented to enhance competitiveness and accelerate upcoming launches, while navigating market challenges like the IRA and China demand fluctuations.

    Highlights

    5

    • Growth and launch products represent over 50% of total revenue and grew 6.7% at constant exchange rate (CER).

    • Positive Phase III data readouts for oveporexton, rusfertide, and zasocitinib met or exceeded expectations, strengthening belief in their transformative potential.

    • ENTYVIO Pen achieved over 80% commercial coverage with all three large pharmacy benefit managers (PBMs) since January.

    • QDENGA growth accelerated to 22.1%, primarily driven by Brazil.

    • Adjusted free cash flow was JPY 625.9 billion for the nine-month period, with the full-year forecast upgraded.

    Concerns

    5

    • Full-year revenue guidance was revised to a low single-digit decline at CER, primarily due to stronger-than-anticipated VYVANSE generic erosion in the U.S.

    • TAKHZYRO growth slowed to 2.4% at CER, impacted by new competing products in the U.S. and Medicare Part D redesign.

    • Albumin growth was slower than expected at 1.3% due to softening demand in China, driven by government utilization guidelines.

    • IVIG sales were impacted by Medicare Part D redesign in the U.S.

    • ENTYVIO has been selected for IRA price negotiations, anticipating a substantial Medicare price cut from 2028.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year revenue
    low single-digit decline
    high materiality
    High
    Full-year core operating profit
    maintained
    high materiality
    High
    Full-year core EPS
    maintained
    high materiality
    High
    Full-year adjusted free cash flow
    upgraded
    medium materiality
    High
    ENTYVIO full-year growth
    6% growth
    medium materiality
    High
    Albumin full-year forecast
    finish below forecast
    low materiality
    Medium
    Zasocitinib launch
    first half of calendar year 2027
    high materiality
    High
    Oveporexton launch
    this calendar year
    high materiality
    High
    Rusfertide launch
    this calendar year
    high materiality
    High
    R&D expenses
    likely to go up
    medium materiality
    Medium
    Dividend policy
    progressive dividend (keep flat or increase)
    medium materiality
    High
    TAK-928 and TAK-921 go to Phase III decisions
    starting as soon as 2026 and into 2027
    medium materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Growth and Launch Products
    Represents over 50% of total revenue, showing steady improvement from Q1 and Q2 growth rates.
    		>50% of total revenue6.7% CER——
    GI (ENTYVIO)
    Growth in Q3 was particularly strong, partially due to a one-time gross-to-net true-up in the prior year. ENTYVIO Pen is a main driver, helping maintain leadership share in the IBD market.
    ENTYVIO Pen commercial coverage: >80% (since January)
    		—7.4% CER——
    Rare Diseases (TAKHZYRO)
    Growth slowed due to impact of new competing products in the U.S. and Medicare Part D redesign, offsetting strong uptake in international markets. Still considered the gold standard for HAE patients with strong real-world efficacy.
    		—2.4% CER——
    PDT (Immunoglobulin)
    Growth driven by subcutaneous IG products, which grew double digits. IVIG sales impacted by Medicare Part D redesign in the U.S., expected to normalize in Q4.
    		—4.3% YTD——
    PDT (Albumin)
    Growth slower than expected due to softening demand in China, impacted by government utilization guidelines. Supply is being reallocated to other markets, and there's a possibility of finishing the year below full-year forecast.
    		—1.3%——
    Vaccines (QDENGA)
    Growth accelerated, driven primarily by Brazil.
    		—22.1%——

    Operational metrics

    13
    Revenue
    JPY 3.4 trillion-3.3% actual FX, -2.8% CER
    9 months

    Decrease primarily due to VYVANSE generic erosion.

    Core operating profit
    JPY 971.6 billion-3.4% actual FX and CER
    9 months

    Main reason for decline was LOE of high-margin VYVANSE, but impact limited by operational efficiencies.

    Reported operating profit
    JPY 422.4 billion+1.2%
    9 months

    Increased due to lower restructuring expenses offsetting increased impairment of intangible assets.

    Core EPS
    JPY 428
    9 months

    For the nine-month period.

    Reported EPS
    JPY 137
    9 months

    For the nine-month period.

    VYVANSE generic erosion impact
    steadily tapering off
    Q3 FY26

    Heavily weighted to the first half of the year, with the gap between LOE and growth products becoming smaller.

    R&D expenses
    lowerthan prior year
    9 months

    Due to operational efficiencies and cost-saving efforts.

    SG&A expenses
    lowerthan prior year
    9 months

    Due to operational efficiencies and cost-saving efforts.

    Restructuring expenses
    lowerthan prior year
    9 months

    Lower than prior year, contributing to reported operating profit increase.

    Impairment of intangible assets
    increasedvs prior year
    9 months

    Main impairment item booked in Q2, no major new items in Q3.

    Innovent Biologics upfront payment
    USD 1.2 billion
    December

    Upfront payment made in December for strategic partnership.

    TAK-928 investment split
    60-40
    ongoing

    Shared investment with Innovent, stage-gated by go/no-go decisions.

    ENTYVIO patent expiry
    2032
    ongoing

    Patents cover various aspects of ENTYVIO, extending to 2032, influencing biosimilar entry timing.

    Industry KPIs

    3
    MetricValueDetails
    Peak sales guidance$7.5 billion to $9 billionUSD
    EPS revenue guidanceFY26 Revenue: low single-digit decline at CER; FY26 Core OP: maintained; FY26 Core EPS: maintained; FY26 Adjusted FCF: upgraded
    Geographic regional revenue growthQDENGA: accelerated growth; Albumin: slower growth%

    Deals & partnerships

    1
    Innovent BiologicsLicensed two new innovative oncology drugs, TAK-928 and TAK-921.USD 1.2 billion upfront payment

    Strategic partnership to bring two oncology assets into Takeda's late-stage pipeline. Upfront payment made in December.

    Risks & headwinds

    7
    VYVANSE generic erosionFY26

    stronger-than-anticipated

    Mitigation: Disciplined cost management and operational efficiencies to offset gross profit impact.

    TAKHZYRO competitionongoing

    impact from new competing products

    Mitigation: Defending and supporting TAKHZYRO's efficacy based on real-world data, which shows it as the gold standard.

    Medicare Part D redesignQ3 FY26, expected to normalize in Q4

    impact on IVIG sales and TAKHZYRO growth

    Mitigation: Expectation for normalization in Q4 for IVIG; managing impact on TAKHZYRO.

    Albumin demand slowdown in Chinaongoing

    slower than expected growth (1.3%)

    Mitigation: Anticipating additional tenders in Q4; reallocating supply to other markets. Expects time for growth to return in China.

    ENTYVIO IRA price negotiationfrom start of 2028

    substantial Medicare price cut

    Mitigation: Preparing for negotiation, submitting best evidence package to support ENTYVIO. Will update peak sales guidance once pricing situation is clear.

    MFN policyongoing

    not supported

    Mitigation: Assessing impact and taking necessary steps; advocating against price controls that may impact future innovation.

    Increased R&D expensesnext fiscal year (FY27)

    likely to go up

    Mitigation: Continued efforts to tighten costs wherever possible, while not compromising on necessary investments for long-term growth.

    What to watch in Q4 FY26

    5

    Next fiscal year's budget and guidance

    May
    CurrentBeing finalized
    TargetFormal guidance provided

    Why it matters

    This will provide the first comprehensive outlook for FY27, detailing the balance between new product launch investments, VYVANSE LOE impact, and overall profitability.

    Our guidance will be provided as usual in May. And the next fiscal year's budget is being finalized as we speak. So please give us some more time.

    Q&A highlights

    6

    What are Takeda's thoughts on the next fiscal year's financial performance, considering new product launches, VYVANSE impact, and R&D expenses? Also, what is the outlook for shareholder return, specifically dividends?

    Milano Furuta stated it's too early for precise guidance (to be provided in May). He noted that growth and launch products continue to grow but are maturing, while VYVANSE LOE impact is shrinking. Launch costs for three new products will increase expenses, and R&D expenses are likely to rise due to new asset development. The company maintains a progressive dividend policy (flat or increasing), with the decision based on core EPS, reported EPS, cash flow, and debt reduction speed.

    “Progressive dividend is something that we have been talking about for a long time. So this is the basic policy. So either keep it flat or try to increase the dividend. This is the basis.”

    asked by Shinichiro Muraoka · answered by Milano Furuta

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Pipeline Progress and Upcoming Launches

    Takeda reported positive Phase III data for three key late-stage assets: oveporexton (narcolepsy type 1), rusfertide (polycythemia vera), and zasocitinib (psoriasis). Oveporexton and rusfertide NDAs have been submitted to the FDA with launches expected in calendar year 2026. Zasocitinib regulatory filing preparations are underway for a launch in the first half of calendar year 2027. These programs are expected to more than offset the anticipated impact of ENTYVIO biosimilar entry from the early 2030s.

    02

    Financial Performance and Outlook

    For the nine months, revenue decreased 3.3% (2.8% at CER) to JPY 3.4 trillion, primarily due to VYVANSE generic erosion. However, core operating profit decreased only 3.4% at CER to JPY 971.6 billion, reflecting strong cost discipline. Full-year revenue guidance was revised to a low single-digit decline at CER, but core operating profit and core EPS guidance were maintained, and adjusted free cash flow forecast was upgraded to JPY 625.9 billion.

    03

    Key Product Performance and Market Dynamics

    Growth and launch products, representing over 50% of total revenue, grew 6.7% at CER. ENTYVIO grew 7.4% at CER, with strong Q3 performance partially due to a gross-to-net true-up📎 and improved U.S. commercial coverage for ENTYVIO Pen (>80%). TAKHZYRO growth slowed to 2.4% at CER due to new U.S. competitors and Medicare Part D redesign. Plasma-derived therapies (PDT) saw IG growth of 4.3% YTD, but Albumin growth was slower at 1.3% due to softening China demand.

    04

    Strategic Partnerships and Broader Pipeline

    Takeda highlighted its broader late-stage pipeline, including five other innovative programs. Notably, the company recently licensed two oncology drugs, TAK-928 and TAK-921, from Innovent Biologics, with go/no-go Phase III decisions for TAK-928 expected from 2026 into 2027. Other assets like mezagitamab (IgA nephropathy) and TAK-360 (narcolepsy type 2/idiopathic hypersomnia) are also progressing, demonstrating the strength of Takeda's R&D engine.

    05

    Leadership Transition and Organizational Changes

    Christophe Weber announced this as his last earnings call as main presenter, with CEO-elect Julie Kim taking the lead for the next fiscal year's guidance. Effective April 1, organizational changes are being implemented to position Takeda for competitiveness, growth, and speed, particularly in preparation for multiple launches. These changes include a continued focus on oncology and a primarily geographic commercial structure with a strong U.S. focus.

    06

    Impact of U.S. Policy (IRA and MFN)

    ENTYVIO has been selected for the third cycle of IRA price negotiations, anticipating a substantial Medicare price cut from 2028. Takeda expects ENTYVIO Pen to be included in these negotiations. The company also expressed its general opposition to the Most Favored Nation (MFN) policy, arguing that price controls can negatively impact future innovation in the U.S. and that importing components of other healthcare systems does not make sense.

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