Takeda Pharmaceutical Company (4502) investor relations material

Executive summary

• H1 FY25 results aligned with expectations, with growth on launch products up 5.3% at CER, offsetting declines from Vyvanse generics and FX headwinds; business fundamentals remain on track.

• Strategic partnership with Innovent Biologics adds three late-stage oncology assets, expected to be significant growth drivers post-2030.

• Pipeline progress includes upcoming filings for Rusfertide and Oveporexton, and restructuring initiatives affecting 600 positions for further OpEx savings.

• Revenue for H1 FY25 was JPY 2,219.5 billion, down 6.9% year-over-year, mainly due to Neuroscience declines and adverse FX, partially offset by growth in GI, Rare Diseases, PDT, and Oncology.

• Core operating profit was JPY 639.2 billion, down 11.2% YoY, and net profit attributable to owners was JPY 112.4 billion, down 40.0%.

Financial highlights

• H1 revenue was just over JPY 2.2 trillion, down 6.9% YoY (−3.9% at CER); core operating profit was JPY 639.2 billion, down 11.2% (−8.8% at CER).

• Adjusted free cash flow more than doubled YoY to JPY 525.4 billion, aided by working capital improvements and lower investing outflows.

• Gross margin decreased to 65.5% from 67.2% YoY, with about half the decline from FX and half from product mix changes.

• Reported operating profit fell 27.7% due to higher impairment losses, including a JPY 58.2 billion expense from discontinuing cell therapy efforts.

• Core EPS was JPY 279; reported EPS was JPY 72, reflecting a 40% decline in net profit due to non-tax-deductible impairments.

Outlook and guidance

• Full-year revenue expected to be broadly flat at CER; core operating profit and core EPS guidance lowered to a low single-digit percentage decline due to FX headwinds and product mix.

• FY2025 revenue forecast revised down to JPY 4,500.0 billion, operating profit to JPY 400.0 billion, and net profit to JPY 153.0 billion, reflecting impairment charges and product mix.

• Adjusted free cash flow forecast updated to JPY 600–700 billion, reflecting a $1.2 billion payment for the Innovent deal, funded by cash on hand.

• Dividend outlook maintained at JPY 200 per share.