Q3 2023 Takeda Pharmaceutical Co Ltd Earnings Call
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Operator: Please find the language button at the bottom of the Zoom window. If you wish to listen in Japanese, please choose Japanese. If you wish to listen in English, please choose English. If you want to listen to the original language, please turn it off.
If you wish to be seen Japanese police such as Japanese if an English visits just English if you want to listen to the original language Pisa in adult English select English and the zoom language select bottom.
Unknown Executive: 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. However, 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 our other SEC filings.
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Operator: 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. However, 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 our other SEC filings.
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Actual results may differ materially from those discussed today.
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Unknown Executive: 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 Unknown IFRS Measures and Recommendations Reconciliations with comparable asset finance measures are included in the appendix to the presentation. Without further ado, we would like to start the presentation today. We have a president and CEO. Christophe Weber, Arundhati President, Andrew Plump, and the Chief Financial Officer, Christophe Saroukos, will be presenting today, followed by a Q&A session. [inaudible] Go ahead.
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Please also refer to the important notice on page two.
Operator: 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 unknown IFRS measures, and recommendations. Reconciliations with comparable asset finance measures are included in the appendix to the presentation. Without further ado, we would like to start the presentation today. We have a president and CEO. Christopher Webber, Arundel President Andy Plum, and Chief Financial Officer Costa Zaroucos will present today, followed by a Q&A session. Now, let us begin. Go ahead.
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Reconciliations with the comparable as the spinoffs measures are included in the appendix to the presentation.
Without further Ado, we wouldn't like to start the presentation today.
We have the president and CEO Christopher.
Christophe Weber.
President Andy Plump.
And the Chief Financial Officer, Costa Circus, presenting today, followed by Q&A session.
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Christophe Weber: Thank you, Chris. And thank you, everyone, for joining our third quarter earnings call for fiscal year 23. Our vision at Takeda is to discover and deliver life-transforming treatments guided by our commitment to patients, our people, and the planet. This purpose-led approach is at the core of our strategy for sustained growth and long-term value creation for our stakeholders. Our performance in the third quarter of Fiscalia 23 further demonstrates our progress in executing on that strategy as we look ahead to a return to top line, profit, and margin growth. Our top line continues to be driven by the strong momentum of our growth and launch product, which now represents 43% of total revenue and which grew at 2.7% year-to-date at constant exchange rates. In Q3 year to date, core revenue was 3.2 trillion yen, with flat growth at a constant exchange rate compared with the same period in the previous year.
Now let us begin.
Go ahead.
Thank you Christian and thank you everyone for joining our third quarter earnings call for fiscal year 'twenty three.
Christopher Webber: Thank you, Chris, and thank you, everyone, for joining our third quarter earnings call for Fiscal Year 23. Our vision at Takeda is to discover and deliver life-transforming treatments guided by our commitment to patients, our people, and the planet. This purpose-led approach is at the core of our strategy for sustained growth and long-term value creation for our stakeholders. Our performance in the third quarter of Fiscalia 23 further demonstrates our progress in executing on that strategy as we look ahead to a return to top line, profit, and margin growth. Our top line continues to be driven by the strong momentum of our growth and launch products, which now represents 43% of total revenue and which grew at 2.7% year-to-date at constant exchange rates.
Oh, Thank you nice to just go around and deliver our life transforming treatments.
Our commitment to patients all people.
The planet.
It is proposed that approach is at the core of our strategy for sustained growth.
Term value creation for our stakeholders.
Our performance in the first quarter of fiscal year 'twenty three further demonstrating our progress in executing on that strategy. As we look ahead to a return to top line and profit and margin growth.
Our top line continued to be driven by the strong momentum of our girlfriend move product, which now represents 43% of total revenue on which grew at two 7% yesterday at constant exchange rate.
In Q3 year to date core revenue was $3 two trillion yen with flat growth at constant exchange rates compared with the same payout in the previous year.
Christopher Webber: In Q3 year-to-date, core revenue was 3.2 trillion yen with flat growth at a constant exchange rate compared with the same period in the previous year. And this is despite a significant loss of exclusivity impact, primarily from Vyvons in the U.S. and Isilva in Japan. On an actual exchange rate basis, revenue grew 4.6%. Co-operating profit was 865.6 billion yen, with a decline of 12.7% at constant exchange rates, reflecting the loss of exclusivity on high-margin products, as well as our investment in R&D and data and technology to secure long-term competitiveness. At the actual exchange rate, our core operating profit declined by 9.3%.
Unknown Executive: And this is despite significant loss of exclusivity impact, primarily from Vyvons in the U.S. and Isilva in Japan. Co-operating profit was 865.6 billion yen, with a decline of 12.7% at constant exchange rates, reflecting the loss of exclusivity on high-margin products, as well as our investment in R&D and data and technology to secure long-term competitiveness. At the actual exchange rate, our core operating profit declined by 9.3%.
And this is despite significant close up exclusivity impact primarily from vyvanse in the U S and Japan.
On the actual exchange rate basis revenue grew four 6%.
Core operating profit was $865 6 billion yen with a decline of 12, 7% at constant exchange rate, reflecting the loss of exclusivity on the high margin product.
What is our investment in R&D and technology to secure long term competitiveness.
At actual exchange rates, our operating profit declined by nine 3%.
Unknown Executive: Despite this, we remain on track to exceed 1 trillion yen in corporate profit for the full year. On a reported basis, operating profit on EPS was impacted by non-core items, including impairment of intangible assets, which were mostly booked in the second quarter. As you know, we provide full-year management guidance for core growth at a constant exchange rate, and I am pleased to report that our year-to-date core performance continues to be in line with expectations, keeping us well on track to our management guidance for the year. On the next slide, we are continuing with our R&D strategy, and we continue to advance highly innovative, life-transforming medicines for patients affected by rare or more prevalent diseases in our core therapy areas. Our pipeline delivered well in the third quarter, with two new molecules approved in the United States: Fruzacla for previously treated metastatic colorectal cancer and Azyma for an ultra-rare blood clotting disorder called congenital thrombocytopenic papilla or CTTP.
Despite this we remain on track to exceed one trillion core operating profit for the full year.
Christopher Webber: Despite this, we remain on track to exceed 1 trillion yen in corporate profit for the full year. On a reported basis, operating profit on EPS was impacted by non-core items, including impairment of intangible assets, which were mostly booked in the second quarter. As you know, we provide full-year management guidance for core growth at a constant exchange rate, and I am pleased to report that our year-to-date core performance continues to be in line with expectations, keeping us well on track to our management guidance for the year. On the next slide, we are confident in our R&D strategy, and we continue to advance highly innovative, life-transforming medicines for patients affected by rare or more prevalent diseases in our core therapy areas. Our pipeline delivered well in the third quarter with two new molecules approved in the United States, Fruzacla for previously treated metastatic colorectal cancer and Azyma for an ultra-rare blood clotting disorder called congenital thrombocytopenic papilla, or CTTP.
On a reported basis operating profit and EPS were impacted by non core items, including the impairment of intangible assets, which were mostly booked in just one quarter.
As you know we provide fully I mean, that's one guidance for core growth at constant exchange rate and I am pleased to report that our year to date core performance continued to be in line with expectation keeping us well on track to our management guidance for the year.
On the next slide where casinos.
Our R&D strategy and we continue to advance highly innovative life transforming medicines for patients affected by rare are more prevalent disease in our core therapy areas.
Our pipeline delivered well in the third quarter with two new molecules approval in the United States proves that cloud for previously treated metastatic colorectal cancer, and then Zane Marc for an intra blood clotting disorder called.
Called congenital thrombotic thrombocytopenic purpura or <unk>.
Unknown Executive: Prezenclar, which we acquired through an exclusive license agreement with UCHMED in March last year, is the first and only targeted therapy approved for metastatic colorectal cancer, regardless of biomarker status, in more than a decade. In fact, the unmet need is so significant that Frisacla was available within 24 hours following FDA approval, with the first prescription received the day after approval. I want to acknowledge the work of our oncology team in preparing for the launch and giving these patients Adzyma, this is the first and only therapy of its kind for the treatment of CTTP, an ultra-rare blood-sprutting disorder. Its approval and launch are significant milestones for this rare disease community, which we are proud to continue focusing on.
Present club, which we acquired through an exclusive license agreement with Roche made in March last year is the first and only targeted therapy approved for metastatic colorectal cancer.
Christopher Webber: Prezenclar, which we acquired through an exclusive license agreement with UCHMED in March last year, is the first and only targeted therapy approved for metastatic colorectal cancer, regardless of biomarker status, in more than a decade. In fact, the unmet need is so significant that Freezacla was available within 24 hours following FDA approval, with the first prescription received the day after approval.
Unless of biomarker status in more than a decade.
In fact, the unmet need is so significant that for exactly I was available within 24 hours. Following FDA approval with the first prescription received a day after approval.
I want to acknowledge the work of our oncology team and preparing for the launch and giving these patients hook.
Christopher Webber: I want to acknowledge the work of our oncology team in preparing for the launch and giving these patients, Regarding eczema, this is the first and only therapy of its kind for the treatment of CTTP, an ultra-rare blood protein disorder. Its approval on launch was a significant milestone for this rare disease community, which we are proud to continue focusing on. Since the second quarter since Q2, we have also made strong progress in our existing portfolio with important lifecycle management approval for our growth and launch projects. LichtenCity is now approved in China for refractory post-transplant CMV Patients in China now have access to this therapy that can enable sustained and effective treatment against post-transplant cytomegalovirus infection, which could save an organ or a life that might otherwise be lost. In November, the European Union approved Taxaro for pediatric patients with hereditary angiosema.
Regarding that Zane Marc this is the first and only therapy of at Sky for the treatment of CGP and ultra rare blood putting these other.
Its approval and launch a significant milestone for this rare disease community, which we are proud to continue focusing on.
Since the second quarter. Since Q2, we have also made strong progress in our existing portfolio with important lifecycle management approval for our growth and launch product.
Unknown Executive: Since the second quarter since Q2, we have also made strong progress in our existing portfolio with important lifecycle management approval for our growth and launch projects. The latency is now approved in China for refractory post-transplant CMV. Patients in China now have access to this therapy that can enable sustained and effective treatment against post-transplant cytomegalovirus infection, which could save an organ or a life that might otherwise be lost. In November, the European Union approved tax zero for pediatric patients with hereditary angioma.
There are some different cities in our port in China for refractory post transplant CMV patient.
Patients in China now have access to this therapy that can enable sustained and effective treatment against post transplant. She tomato virus infection, which could save in Oregon are alive that might otherwise be lost.
In November the European Union approved <unk> zero for pediatric patients with hereditary angioedema.
Unknown Executive: It is the first and only long-term prophylaxis treatment for this rare disease available in the EU for patients under the age of. And in January, we had some fantastic progress in our plasma-derived therapy portfolio, with three approvals for our immunoglobulin portfolio for chronic inflammatory demyelinating polyradical neuropathy, or CIDP, a rare disorder affecting the peripheral nervous system. IQVI, the only facilitated subcutaneous IG, was approved by both the U.S. FDA and the European Commission for Maintenance Treatment of CID, and Gamakar Liquid was approved by the FDA for the IV treatment of HIV.
She is the first and only long term prophylactic treatment for this rare disease available in the U S for patients under the age of six.
Christopher Webber: It is the first and only long-term prophylaxis treatment for this rare disease available in the EU for patients under the age of 50. And in January, we had some fantastic progress in our plasma-derived therapy portfolio, with three approvals for our immunoglobulin portfolio for chronic inflammatory demyelinating polyradical neuropathy, or CIDP, a rare disorder affecting the peripheral nervous system. IQVI, the only facilitated subcutaneous IG, was approved by both the U.S. FDA and the European Commission for maintenance treatment of CID, and Gamma-Ga liquid was approved by the FDA for the IV treatment of HIV.
And in January we had some fantastic progress in our plasma derived therapy portfolio with three approvals for immunoglobulin portfolio for chronic inflammatory demyelinating polyradiculoneuropathy RCI GP, a rare disorder affecting the peripheral nervous system.
I to be IV, only fascinated subcutaneous AG, whether approved by both the U S FDA and the European Commission for maintenance treatment of Shiite EP and Gamergate liquid was approved by the FDA for.
For IV treatment of Sergipe.
Unknown Executive: We are also expanding our late stage pipeline through targeted business development. Just a few hours ago, we announced a collaboration on a license agreement with Protagonist Therapeutics for the development and commercialization of Rucifertide, an investigational therapy in rare hematology. ReferStyle is currently in phase 3 development for polycythemia vera, a rare chronic blood disorder.
We are also expanding our late stage pipeline through targeted business development.
Christopher Webber: We are also expanding our late stage pipeline through targeted business development. Just a few hours ago, we announced a collaboration on a license agreement with Protagonist Therapeutics for the development and commercialization of Rucifertide, an investigational therapy in rare hematology. Refastyle is currently in phase 3 development for polycythemia vera, a rare chronic blood disorder.
Just a few hours ago, we announced a collaboration and license agreements with protagonist therapeutics for the development and commercialization of Rooster died in an investigational therapy in rare and metallurgy.
With a study is currently in phase III development for Polycythemia, Vera so rare chronic blood disorder.
Unknown Executive: This agreement fits well within our overall business strategy, leveraging our rare disease and hemophilia expertise. Turning to the next slide, I'd like to provide an update on two important products in our growth and launch portfolio, Antivio and Equidengi. And TVO is our number one product by revenue, and it continues to outperform the IBD market with year-to-date revenue growth of 7%, with a slight growth acceleration in Q3. It has maintained its lead in the US as the most prescribed treatment for IBD overall, as well as for IBD by naive use, and it is achieving mid-teen percentage patient growth in Europe, driven mostly by our super generous administration. In November, we also launched an antiviral pen in the U.S. for maintenance therapy in moderate to severely active ulcerative colitis. Subcontinuous therapies are estimated to represent approximately 35% to 40% of the total U.S. IBD market.
This agreement fits well within our overall business strategy, leveraging our rare disease and a mafia franchise.
Christopher Webber: This agreement fits well within our overall business strategy, leveraging our rare disease and hemophilia expertise. Turning to the next slide, I'd like to provide an update on two important products in our growth and launch portfolio, Antivio and Equidengi. And TVO is our number one product by revenue, and it continues to outperform the IBD market with year-to-date revenue growth of 7%, with a slight growth acceleration in Q3. It has maintained its lead in the U.S. as the most prescribed treatment for IBD overall, as well as for IBD by naive use, and it is achieving mid-teen percentage patient growth in Europe, driven mostly by our superdense administration.
Turning to the next slide I'd like to provide an update on two important product in our graph on launch portfolio and TV <unk> and <unk>.
And television with our number one product by revenue and it continues to outperform the IBD market with year to date revenue growth of 7% with a slight growth acceleration in Q3.
It has maintained its leading the U S is the most prescribed treatment for IBD overall as well as for IBD bio bio nave use starch and it is achieving mid teen percentage patient growth in Europe, driven mostly by our Super dangerous administration.
In November we also Andre Antigua opinion, the U S for maintenance therapy, and moderate to severely active research at <unk>.
Christopher Webber: In November, we also launched an antiviral pen in the U.S. for maintenance therapy in moderate to severely active ulcerative colitis. Subcontinuous therapies are estimated to represent approximately 35 to 40 percent of the total U.S. IBD market, so this launch is a very significant milestone in enabling us to access this segment while providing more flexibility and choice to patients. And TVO is now the only brand of therapeutics with both an IV and subcutaneous maintenance option.
So continuous therapy is estimated to represent approximately 35% to 40% of the total U S. CBD market. So these constitute a very significant milestone in enabling us to access this segment, while providing more flexibility and choice to patients.
Unknown Executive: So this launch is a very significant milestone in enabling us to access this segment while providing more flexibility and choice to patients. Antivio is now the only branded therapeutics with both IV and subcutaneous maintenance options, and we are seeing a high degree of interest among healthcare professionals. I'm happy to share some market research data with you. 98% of surveyed healthcare professionals are aware of the antidepressant, and 94% express willingness to prescribe it in the next six months. We expect an FDA decision on the antiviral pen in Crohn's disease early in fiscal year 24. Moving now to Kidanga, we are very encouraged by how our launch has been progressing globally. To date, we have launched the vaccines in 21 countries, including most recently Argentina. Kylenga is available in 17 European countries, and travel recommendations support its use to help protect travelers to dengue and endemic areas.
And TV is now the only branded therapeutics with both IV and subcutaneous maintenance option and we are seeing a high degree of interest among health care professionals.
Christopher Webber: And we are seeing a high degree of interest among healthcare professionals. I'm happy to share some market research data with you. 98% of surveyed healthcare professionals are aware of the antidote pen, and 94% express willingness to prescribe it in the next six weeks. We expect an FDA decision on the antiviral pen in Crohn's disease early in fiscal year 24. Shifting now to Kidanga, we are very encouraged by how our launch has been progressing globally. To date, we have launched the vaccines in 21 countries, including most recently Argentina. Kylenga is available in 17 European countries, and travel recommendations support its use to help protect travelers to dengue and endemic areas.
I'm happy to share some market research data with you now.
98% of surveyed care professional are aware of the antibody open and 94% expressed willingness to prescribe it in the next six months.
We expect an FDA decision on guaranteed your opinion crohn disease early in fiscal year 'twenty four.
Shifting now to Katanga, we are very encouraged by our launch has been progressing globally today.
To date, we have launched a vaccines in 21 countries.
Including most recently Argentina.
She then games available in 17 European countries and travel recommendations report, it's used to help protect travelers to dengue endemic areas.
Unknown Executive: There has been a strong initial demand in the private market where Kudenga has been launched, and now we are seeing progress towards inclusion in national immunization programs too. On December 23, Brazil's National Commission for the Incorporation of Health Technology recommended Pudenga for inclusion in a national immunization program. Subsequently, the Brazilian government has decided to initiate some focused vaccination programs in areas with high dengue incidence.
That's been a strong initial demand in private market, where crude and gas launch and now we are seeing progress towards inclusion in national immunization program too.
Christopher Webber: There has been a strong initial demand in the private market where Cudinga has been launched, and now we are seeing progress towards inclusion in national immunization programs too. On December 23, Brazil's National Commission for the Incorporation of Health Technology recommended Pudenga for inclusion in a national immunization program. The sequence of regional governments have decided to initiate some focused vaccination programs in areas with high dengue incidence.
In December 'twenty, three whereas International Commission for the incorporation of health technology recommended to Danielle for infusion internationally musician program.
Subsequently the Virginian government has decided to initiate some focused vaccination program in areas with high dengue incidence rates.
Unknown Executive: We are also in productive discussions with governments in other endemic countries, and we are pursuing private and public partnership with government, institutional businesses, NGOs, and manufacturers to extend access. We are committed to our goal of reaching a total manufacturing capacity of 100 million doses per year to comprehensively address the growing burden of dengue infection. Turning to our high-level outlook for the near, medium, and long term, as we enter the final quarter of this fiscal year, we are confident in our business strategy and are committed to growth and shareholder returns. Based on our current assumption, we still expect to return to revenue profit on margin growth in the near term, driven largely by the continued expansion of our growth and launch project. We achieved significant regulatory milestones in Q2, in the form of new product approval and important indication expansion for the existing portfolio, and we continue to see significant potential in our late-stage pipeline. Generic competition for variables and asylums will continue to impact revenue and profit growth this fiscal year.
We also and productive discussion with government in order on the mid countries and we are pushing private public partnership with government institutional business is engineers and manufacturers to expand access.
Christopher Webber: We are also in productive discussions with governments in other endemic countries, and we are pursuing private and public partnership with government, institutional businesses, NGOs, and manufacturers to extend access. We are committed to our goal of reaching a total manufacturing capacity of 100 million doses per year to comprehensively address the growing burden of dengue infection. Turning to our high-level outlook for the near, medium, and long term, as we have entered the final quarter of this fiscal year, we are confident in our business strategy and are committed to growth and shareholder returns. Based on our current assumption, we still expect to return to revenue, profit, and margin growth in the near term, driven largely by the continued expansion of our growth-on-launch project. We achieved significant regulatory milestones in Q2 in the form of new product approval, an important indication expansion for the existing portfolio, and we continue to see significant potential in our late-stage pipeline. Generic competition for variables and asylums will continue to impact revenue and profit growth this fiscal year.
We are committed to our goal of reaching a total manufacturing capacity of 100 million dose per year to comprehensively address the growing burden of dengue infection.
Turning to our our high level outlook for the near medium and long term.
As we have until the final quarter of this fiscal year.
We are confident in our business strategy and are committed to growth and shareholder return.
Based on our current assumption, we still expect to return to revenue profit and margin growth in the near term.
Or even largely by the continued expansion of our graph on launch product.
We have achieved significant regulatory milestones since Q2 in the form of new product approval and important indication expansion for the existing portfolio and we continue to see significant potential in our late stage pipeline.
Generic competition for Vyvanse and <unk>.
Continue to impact revenue and profit growth this fiscal year. However.
Unknown Executive: However, Once that impact has washed out, we'll have limited loss of exclusivity exposure until the launch of Antivir Biosimilar, which could occur as late as 2032 in the US. Momentum for our growth and launch product, combined with our continued investment in R&D, will drive progress in the medium and long term. Looking ahead, we are committed to returning to a co-operating profit margin in the low to mid-30s, supported by our growth and launch product, cost control, and value creation enabled by data and technology, including AI. We believe AI has the potential to create significant, scalable, and sustainable value attachments.
Once that impact is washed out will have limited loss of exclusivity exposure and since the launch of antigen Biosimilar, which could Akira as late as 2032 in the U S.
Christopher Webber: However... Once that impact has washed out, we'll have limited loss of exclusivity exposure until the launch of Antivir Biosimilar, which could occur as late as 2032 in the US. Momentum for our growth and launch product, combined with our continued investment in R&D, will drive progress in the medium and long term. Looking ahead, we are committed to returning to a cooperative profit margin in the low to mid-30s, supported by our growth and launch product, cost control, and value creation enabled by data and technology, including AI. We believe AI has the potential to create significant, scalable, and sustainable value for our customers.
Momentum for our growth and launch products combined with our continued investment in R&D will drive progress in the medium and long term.
Looking ahead, we are committed to returning to core operating profit margin in the low to mid thirties supported by our growth and launch product cost control and value creation enabled by data and technology, including AI.
We believe AI.
Has the potential to create significant scalable and sustainable value a decade now.
Unknown Executive: It will enable us to improve efficiency across our entire value chain, including in R&D, manufacturing, patient engagement, and business operations. We believe that data, technology, and AI will completely change how we operate as a company. And we are moving at full speed across the value chain to implement digital and AI tools and applications. We will share more detail on this topic in our future presentations.
It will enable us to improve efficiency across our entire value chain, including in R&D manufacturing patient engagement and business operation.
Christopher Webber: It will enable us to improve efficiency across our entire value chain, including in R&D, manufacturing, patient engagement, and business operations. We believe that data, technology, and AI will completely change how we operate as a company, and we are moving at full speed across the value chain to implement digital and AI tools and applications. We will share more detail on this topic in our future presentations. Looking ahead, we'll continue to evaluate asset-specific business development opportunities to further enhance our pipeline and reinforce our growth profile. Our bidding strategy has been proving successful, with the approval and launch of Frisa Kla and the positive progress of TAC 279 through this pipeline this fiscal year. This approach to innovation, combined with a robust clinical pipeline of potential best-in-class or first-in-class assets, will position Takeda well for long-term growth. Finally, our progressive dividend policy of increasing or maintaining the dividend each year will allow us to continue to return value to shareholders. In closing, we are confident about the path we are on.
We believe that that that technology and AI will completely change how we operate as a company and we are moving at full speed across the value chain to implement digital on AI tools and application.
We'll share more detail on this topic in a future presentation.
Unknown Executive: Looking ahead, we'll continue to evaluate asset-specific business development opportunities to further enhance our pipeline and reinforce our growth profile. Our BD strategy has been proving successful with the approval and launch of FrusaCla and the positive progress of TAC279 through this pipeline this fiscal year. This approach to innovation, combined with a robust clinical pipeline of potential best-in-class or first-in-class assets, will position Takeda well for long-term growth. Finally, our progressive dividend policy of increasing or maintaining the dividend each year will allow us to continue to return value to shareholders.
Looking ahead, we'll continue to evaluate asset specific business development opportunities to further enhance our pipeline and reinforce our growth profile.
Our BD strategy has been proving successful with the approval Alondra freezer cooler and the positive progress of tact 279 through the this pipeline this fiscal year.
This approach to innovation combined with our robust clinical pipeline of potential best in class or first in class asset will position <unk> well for the long term growth.
Finally, our progressive dividend policy of increasing or maintaining that dividend each year will allow us to continue to return value to shareholders.
Unknown Executive: In closing, we are confident about the path we are on; our year-to-date performance demonstrates strong momentum in our growth and launch product, the potential in our pipeline, and solid execution against our business strategy. With the approval and launch of two new therapies this quarter in the U.S., and multiple life cycle management approvals around the world. We are very confident that the strength of our commercial execution combined with the potential of our pipeline will help to fuel our long-term growth. And this brings us back to the vision that drives us to discover and deliver life-transforming treatments guided by our commitment to patients, our people, and the planet. With that, I will now turn the call over to Andy to update you on our pipeline. Thank you.
In closing we are confident about the path. We are on our year to date performance demonstrates the strong momentum in our growth hormone product the potential in our pipeline and solid execution against our business strategy.
Andy Plum: Our year-to-date performance demonstrates strong momentum in our growth and launch product, the potential in our pipeline, and solid execution against our business strategy, with the approval and launch of two new therapies this quarter in the U.S. and multiple life cycle management approvals around the world. We are very confident that the strength of our commercial execution combined with the potential of our pipeline will help to fuel our long-term growth. And this brings us back to the vision that drives us, to discover and deliver life-transforming treatments guided by our commitment to patients, our people on the planet. With that, I will now turn the call over to Andy to update you on our pipeline. Thank you.
With the approval and launch of two new therapy this quarter in the U S and multiple lifecycle management approval around the world.
We are very much confident that the strength of our commercial execution combined with the potential of our pipeline will help to fuel our long term growth.
And this bring us back to the vision that drivers to discover and deliver life transforming treatment guided by our commitment to patients our people on the planet.
With that I will now turn the call over to Andy to update you on our pipeline. Thank you.
Unknown Executive: We've had a very successful quarter, delivering some major milestones while continuing to build momentum across our pipeline. Here are a few examples of the significant pipeline achievements from the third quarter. As Christophe mentioned, at Zinma and Prusatla, two new molecular entities received approval in the United States. Zinma is a recombinant ADAMTS-13 protein designed to replace the missing enzyme that causes patients living with congenital TTP to face serious life-threatening health challenges.
Thank you very much Christophe and Hello to everyone on today's call to go to the next slide please.
Andy Plum: Thank you very much, Christophe, and hello to everyone on today's call. If we can go to the next slide, please. We've had a very successful quarter, delivering some major milestones while continuing to build momentum across our pipeline. Here are a few examples of the significant pipeline achievements from the third quarter. As Christoph mentioned, Zinma and Prusakla are two new molecular entities that have received approval in the United States. Zinma is a recombinant ADAMTS-13 protein designed to replace the missing enzyme that causes patients living with congenital TTP to face serious life-threatening health challenges.
We've had a very successful quarter delivering some major milestones, while continuing to build momentum across our pipeline here.
Here are a few examples of the significant pipeline achievements from the third quarter as Christophe mentioned at Zimmer and <unk> two new molecular entities have received approval in the United States.
Denver is a recombinant atom T. S 13 protein designed to replace the missing enzyme which causes patients living with congenital TTP to take serious life threatening health challenges.
Andrew S. Plump: This approval is based on Edzinma's favorable efficacy profile, notably a 60% reduction in the incidence of thrombocytopenic events versus plasma-based therapies. In fact, Takeda was awarded a priority review voucher for this approval as it addresses a major unmet need in patients with this rare pediatric disease. We are also evaluating edema in a phase 2b study in immune thrombotic thrombocytopenic purpura, or ITTP, which is a significantly more prevalent disease. Pruzacla, an oral VEGF inhibitor, was approved in the U.S. for certain patients with previously treated metastatic colorectal cancer.
This approval is based on ads in most favorable efficacy profile, notably a 60% reduction in the incidence of thrombocytopenic events versus plasma based therapies. In fact, Takeda was awarded a priority review voucher for this approval as it addresses a major unmet need in patients with this rare pediatric disease.
Andy Plum: This approval is based on Edzinma's favorable efficacy profile, notably a 60% reduction in the incidence of thrombocytopenic events versus plasma-based therapies. In fact, Takeda was awarded a priority review voucher for this approval as it addresses a major unmet need in patients with this rare pediatric disease. We were also evaluating eczema in a phase 2b study of immune thrombotic thrombocytopenic purpura, or ITTP, which is a significantly more prevalent disease.
We are also evaluating a denver in a phase <unk> study in immune thrombotic, thrombocytopenic, purpura or ITT P, which is significantly more prevalent disease.
<unk>, an oral VEGF inhibitor was approved in the U S for certain patients with previously treated metastatic colorectal cancer demonstrated a significant improvement in overall survival with a manageable safety profile and not surprisingly initial commercial uptake has been quite strong.
Andy Plum: Cruzacla, an oral VEGF inhibitor, was approved in the U.S. for certain patients with previously treated metastatic colorectal cancer. It demonstrated a significant improvement in overall survival with a manageable safety profile, and not surprisingly, initial commercial uptake has been quite strong. In addition, we continue to rapidly advance the development of our allosteric TIK2 inhibitor, TAC279, initiating the Latitude Clinical Trial Program with two Phase III psoriasis trials that are progressing well. Following the presentation of positive and very exciting psoriatic arthritis phase 2b data at the American College of Rheumatology, we plan to initiate enrollment in the Latitude Psoriatic Arthritis Phase To support the development of PAC-279 in inflammatory bowel disease, we aligned with the FDA on the clinical trial design for phase 2B studies in Crohn's disease and ulcerative colitis, utilizing much higher doses than studied in psoriasis or psoriatic arthritis.
Unknown Executive: It demonstrated a significant improvement in overall survival with a manageable safety profile, and not surprisingly, initial commercial uptake has been quite strong. In addition, we continue to rapidly advance the development of our allosteric TIK2 inhibitor TAC279, initiating the LATITUDE clinical trial program with two phase three psoriasis trials that are progressing well. Following the presentation of positive and very exciting psoriatic arthritis phase 2B data at the American College of Rheumatology, we plan to initiate enrollment in the Latitude Psoriatic Arthritis Phase 3 program in fiscal year 2024. To support the development of PAC-279 in inflammatory bowel disease, we aligned with the FDA on the clinical trial design for phase 2B studies in Crohn's disease and ulcerative colitis, utilizing much higher doses than studied in psoriasis or psoriatic arthritis.
In addition, we continue to rapidly advance the development of our allosteric <unk> inhibitor <unk> hundred seven nine initiating the latitude clinical trial program with two phase III psoriasis psoriasis trials that are enrolling well.
Following the presentation of positive and very exciting psoriatic arthritis phase <unk> data at the American College of Rheumatology, we plan to initiate enrollment in the latitude psoriatic arthritis phase III program in fiscal year 2024.
To support the development of tap to seven nine in inflammatory bowel disease, we align with the FDA on the clinical trial design for Phase <unk> studies in Crohn's disease, and ulcerative colitis utilizing much higher doses than studies in psoriasis or psoriatic arthritis to seven nine is our leading pipeline priority.
Unknown Executive: 279 is our leading pipeline priority, and we continue to make steady progress as we work to bring this potentially best-in-class treatment to patients. In the third quarter, we also delivered important indication and geographic expansions for our growth and launch products. As Christophe just mentioned, in the U.S., GammaGuard Liquid and HiQVIA received their first approvals for induction and maintenance of CIDP, respectively.
And we continue to make steady progress as we work to bring this potentially best in class treatment to patients in.
Andy Plum: 279 is our leading pipeline priority, and we continue to make steady progress as we work to bring this potentially best-in-class treatment to patients. In the third quarter, we also delivered important indication and geographic expansions for our growth and launch products. As Christophe just mentioned, in the U.S., GammaGuard Liquid and IQVIA received their first approvals for induction and maintenance of CIDP, respectively.
In the third quarter, we also delivered important indications and geographic expansions for our growth and launch products as Christophe just mentioned in the U S. Gamma guard liquid and Ikea received their first approvals for induction and maintenance of key IDP, respectively. With these approvals we can now offer treatment for patients with this rare acquire.
Unknown Executive: With these approvals, we can now offer treatment for patients with this rare acquired immune-mediated neuromuscular disorder throughout their journey. HiQVIA was also just approved for CIDP maintenance in the EU. We also continue to expand our pipeline with targeted late stage deals. A few hours ago, we announced a worldwide license and collaboration agreement with Protagonist Therapeutics for risferatide. Now, risferatide is a first-in-class hepcidin mimetic in a pivotal phase three trial for the treatment of polycythemia vera, a rare chronic blood disorder that affects as many as one hundred and sixty thousand patients in the United States.
Third immune mediate neuromuscular disorder throughout their journey.
<unk> was also just approved for CIB be maintenance in the EU.
We also continue to expand our pipeline with targeted late stage deals.
Andy Plum: With these approvals, we can now offer treatment for patients with this rare acquired immune-mediated neuromuscular disorder throughout their journey. IQVIA was also just approved for CIDP maintenance in the EU. We also continue to expand our pipeline with targeted late-stage deals. A few hours ago, we announced a worldwide license and collaboration agreement with Protagonist Therapeutics for risferatide. Now, risferatide is a first-in-class hepcidin mimetic in a pivotal phase three trial for the treatment of polycythemia vera, a rare chronic blood disorder that affects as many as 160,000 patients in the United States.
Few hours ago, we announced a worldwide licensing collaboration agreement with protagonist Therapeutics for <unk> <unk> is a first in class up sided in magnetic and a pivotal paid phase III trial for the treatment of polycythemia Vera a rare chronic blood disorder that affects as many as 160000 patients in the United.
Unknown Executive: The risferatide phase 3 trial is expected to complete enrollment soon and will add to our growing late stage pipeline. If we can get to the next slide, please. Our late-stage pipeline reflects Takeda's commitment to developing life-transforming medicines for rare and more prevalent diseases. As I mentioned, TAC279 is enrolling patients in two phase 3 psoriasis trials. [inaudible] PAC-279 is a potential best-in-class oral therapy for psoriasis and will start a phase 3 head-to-head trial against dracavacitinib in 2024.
States the.
They're a stereotype basic trial is expected to complete enrollment soon and will add to our growing late stage pipeline. If we can get to the next slide. Please our late stage pipeline reflects the cadence commitment to develop life transforming medicines for rare and more prevalent diseases as I mentioned at $2 79 is enrolling patients in two phase III psoriasis.
This trials.
Psoriasis trials have historically lacked representation from patients of color. We are proactively taking steps for the tact 279 latitudes psoriasis program to reflect unprecedented patient diversity.
Andy Plum: The Risferatide Phase III trial is expected to complete enrollment soon and will add to our growing late-stage pipeline. If we can get to the next slide, please. Our late-stage pipeline reflects Decatur's commitment to developing life-transforming medicines for rare and more prevalent diseases. As I mentioned, TAC279 is enrolling patients in two Phase III psoriasis trials. Because psoriasis trials have historically lacked representations from patients of color, we are proactively taking steps for the TAC 279 Latitude Psoriasis Program to reflect unprecedented patient diversity.
At 279, as a potential best in class oral therapy for psoriasis, and we'll start a phase III head to head trial against <unk> in 2024 now let.
Unknown Executive: Let me take a step back to remind everyone that Takeda is an industry leader with more than 70 years of experience working in rare diseases and hematology. We remain deeply committed to researching and developing life-transforming medicines, many of which will treat patients with rare diseases in our core therapeutic areas of neuroscience, GI, and inflammation. Moreover, our Plasma Derived Therapies organization continues to pursue transformational therapies in rare diseases, while our oncology team remains focused on cancers with high unmet medical needs across a range of patient populations.
Let me take a step back and remind everyone that Takeda is an industry leader with more than 70 years of experience working in rare diseases and hematology.
We remain deeply committed to researching and developing life transforming medicines, many of which will treat patients with rare diseases in our core therapeutic areas of neuroscience Gi and inflammation. Moreover.
Moreover, our plasma derived therapies organization continues to pursue transform transformational therapies in rare diseases, while our oncology team remains focus on cancers with high unmet medical needs across a range of patient populations.
Andy Plum: PAC-279 is a potential best-in-class oral therapy for psoriasis and will start a Phase III head-to-head trial against dracavacitinib in 2024. But let me take a step back to remind everyone that Takeda is an industry leader with more than 70 years of experience working in rare diseases and hematology. We remain deeply committed to researching and developing life-transforming medicines, many of which will treat patients with rare diseases in our core therapeutic areas of neuroscience, GI, and inflammation. Moreover, our plasma derived therapies organization continues to pursue transformational therapies in rare diseases, while our oncology team remains focused on cancers with high unmet medical needs across a range of patient populations.
Unknown Executive: Now, in keeping with our emphasis on collaboration, we will continue to partner with the health care providers and communities who support these patients, while also exploring late-stage business development opportunities like the protagonist partnership announced just recently, leveraging our deep commercial expertise to bring transformative therapies to patients with rare diseases. And finally, Takeda continuously prioritizes our portfolio to direct resources to our most promising therapies. For example, we have decided to discontinue the development of modactin modactin plus Balfour.
Keeping with our emphasis on collaboration we will continue to partner with with the health care providers and communities who support these patients. While also exploring late stage business development opportunities like the protagonist partnership announced just recently leveraging our deep commercial expertise to bring transformative therapies to.
Patients with rare diseases.
And finally, Takeda continuously prioritizes our portfolio to direct resources to our most promising therapies. For example, we have decided to discontinue development of Madame medallion Alpha.
Unknown Executive: This is a strategic decision based on a number of factors, including the existing data set, the rapidly evolving multiple myeloma treatment landscape, and the long development timelines. Takeda remains committed to oncology and will continue to develop therapies across hematologic and solid tumors. Next slide, please. We're rapidly advancing our exciting mid-stage pipeline and anticipate that a number of these programs will progress to phase three pivotal development in the coming year. Erection agonists have the potential to be the first agents to address the underlying cause of narcolepsy type 1, offering the potential for functional cures.
This is a strategic decision based on a number of factors, including the existing dataset that rapidly evolving multiple myeloma treatment landscape and along development timelines.
Andy Plum: In keeping with our emphasis on collaboration, we will continue to partner with the healthcare providers and communities who support these patients while also exploring late-stage business development opportunities, like the Protagonist Partnership announced just recently, leveraging our deep commercial expertise to bring transformative therapies to patients with rare diseases. And finally, Takeda continuously prioritizes our portfolio to direct resources to our most promising therapies. For example, we have decided to discontinue the development of modactypus balsam.
<unk> remains committed to oncology and will continue to develop therapies across hematologic and solid tumors next slide please we.
We are rapidly advancing our exciting mid stage pipeline and anticipate that a number of these programs will progress to phase III pivotal development in the coming year.
Orexin agonist have the potential to be the first agents to address the underlying cause of narcolepsy type one offering the potential for functional cures.
Unknown Executive: TAC861, our lead erection agonist, completed enrollment well ahead of schedule in two phase 2b trials that began in January 2023. Combined, the TAC861 narcolepsy type 1 and type 2 trials have enrolled approximately 180 patients, and nearly all who completed the trial enrolled in the long-term extension studies.
It takes one our lead Orexin agonist completed enrollment well ahead of schedule in Q phase II B trials that began in January 2023, combined the TAC 861, narcolepsy type one and type two trials have enrolled approximately 180 patients nearly all who completed the trial.
Andy Plum: This is a strategic decision based on a number of factors, including the existing data set, the rapidly evolving multiple myeloma treatment landscape, and the long development timeline. Decatur remains committed to oncology and will continue to develop therapies across hematologic and solid tumors. Next slide, please. We're rapidly advancing our exciting mid-stage pipeline and anticipate that a number of these programs will progress to phase three pivotal development in the coming year. Erection agonists have the potential to be the first agents to address the underlying cause of narcolepsy type 1, offering the potential for functional cures.
Enrolled in the long term extension study.
Unknown Executive: These phase two studies and the long-term extension study will help inform the TAC 861 phase three program. As a reminder, TAC 861 is a more potent agent that may provide efficacy at a much lower dose than our previously tested oral orexin agonist, significantly reducing the potential for adverse effects, including liver toxicity, which tends to be dose-related. Multiple external reviews by the Data Safety Monitoring Committee confirmed that no liver toxicity signals appeared in the TAC861 Phase 2 trials. We are on track to make a final go-no-go decision to advance TAC 861 to phase three in narcolepsy this fiscal year, and we are planning the phase three program at risk to maintain momentum. Mizogitimab, our fully humanized anti-CD38 monoclonal antibody, is being studied across several rare autoimmune inflammatory diseases. It works by depleting plasma cells and plasma blasts, resulting in a number of beneficial immunomodulatory effects.
These phase II studies and the long term extension study will help inform the TAC 861 Phase III program. As a reminder package. This one is a more potent agent the neighbor fight efficacy at a much lower dose than our previously tested oral orexin agonist significantly reducing the potential for adverse effects, including liver tox.
The city, which tends to be dose related.
Multiple external reviews by the data safety monitoring committee confirm that no liver toxicity signals have appeared in the packet six one phase II trials. We are on track to make a final go no go decision to advanced Hacker. It takes one to phase III in narcolepsy. This fiscal year and we are planning the phase III program at risk.
Andy Plum: TAC861, our lead erection agonist, completed enrollment well ahead of schedule in two Phase IIb trials that began in January 2023. Combined, the TAC861 narcolepsy type 1 and type 2 trials have enrolled approximately 180 patients, and nearly all who completed the trial enrolled in the long-term extension studies.
To maintain momentum.
Does it get a mab or fully humanized anti CD 38, monoclonal antibody that is being studied across several rare autoimmune inflammatory diseases.
It works by depleting plasma cells and plasma blasts, resulting in a number of beneficial immuno modular Tory effects. We are excited by the <unk> mechanism of action and we look forward to presenting data in I T P and Iga nephropathy at medical conferences later this year next slide please.
Andy Plum: These phase two studies and the long-term extension study will help inform the TAC861 phase three program. As a reminder, TAC861 is a more potent agent that may provide efficacy at a much lower dose than our previously tested oral orexin agonist, significantly reducing the potential for adverse effects, including liver toxicity, which tends to be dose-related. Multiple external reviews by the Data Safety Monitoring Committee confirmed that no liver toxicity signals appeared in the TAC861 Phase 2 trials. We are on track to make a final go-no-go decision to advance TAC 861 to phase three in narcolepsy this fiscal year, and we are planning the phase three program at risk to maintain momentum. Mizogitimab, our fully humanized anti-CD38 monoclonal antibody, is being studied across several rare autoimmune inflammatory diseases. It works by depleting plasma cells and plasma blasts, resulting in a number of beneficial immunomodulatory effects.
Unknown Executive: We are excited by MEZU-GITIMAB's mechanism of action, and we look forward to presenting data in ITP and IgA nephropathy at medical conferences later this year. Next slide, please. As you can see, the third quarter was a productive quarter with two NME approvals for Ajinima and Fruzacla, important indication expansions for Taxiro, Hycubia, and GammaGuard, and positive phase three data for Maralixibat in Japan, for which we will seek approval later this year. Takeda generated considerable pipeline momentum in fiscal year 2023. And as you'll see next, there's much more to come in fiscal year 2024. Next slide, please.
As you can see the third quarter was a protected productive quarter with Q NME approvals for Denmark for exactly important indication expansions for tax Iroh had Cuba, and Gamma guard and positive phase III data for <unk> in Japan for which we will seek approval later this year.
Data has generated considerable pipeline momentum in fiscal year 2023, and as you'll see next theres much more to come in fiscal year 2024 next slide. Please in the coming months, we anticipate several meaningful potential approvals and phase III readouts.
These include lifecycle expansion opportunities for Entyvio sub Q for Crohn's disease potential Iclusig approval for first line Philadelphia positive acute lymphoblastic leukemia in the United States and the potential approval for <unk> 71 in the U S. For eosinophilic Esophagitis. In addition, there will be two phase III readouts for <unk>.
Unknown Executive: In the coming months, we anticipate several meaningful potential approvals and phase three readouts. These include life cycle expansion opportunities for antibiotic sub-Q for Crohn's disease, potential inclusive approval for first line Philadelphia positive acute lymphoblastic leukemia in the United States, and potential approval for TAC721 in the US for eosinophilic esophagitis. In addition, there will be two phase three readouts for saticulostat and Dravet syndrome and Lennox-Gastaut syndrome, two rare pediatric epilepsies, which may allow for filing in 2024.
And drove a syndrome and <unk> syndrome, two rare pediatric epilepsy, epilepsy, which may allow for filing in 2024.
Andy Plum: We are excited by Mezigetimab's mechanism of action, and we look forward to presenting data in ITP and IgA nephropathy at medical conferences later this year. Next slide, please. As you can see, the third quarter was a productive quarter with two NME approvals for Adzima and Fruzacla, important indication expansions for Taxiro, Hycubia, and GammaGuard, and positive phase three data for Maralixibat in Japan, for which we will seek approval later this year. Decatur has generated considerable pipeline momentum for fiscal year 2023.
As I mentioned earlier, our teams remain laser focused on developing Tak seven nine in the first four major indications, while exploring development and others.
Our pipeline is maturing.
Five new molecular entities in phase III development of waiting first approvals. In addition to these five global phase III NME programs, we have prioritized a group of registration, enabling regional development programs outside of the United States.
Unknown Executive: As I mentioned earlier, our teams remain laser focused on developing TAC279 in the first four major indications while exploring development in others. Our pipeline is maturing, with five new molecular entities in Phase 3 development awaiting first approvals. In addition to these five global Phase 3 NME programs, we have prioritized a group of registration-enabling regional development programs outside of the United States.
Key data Readouts and our exciting.
Exciting mid stage pipeline and targeted targeted business development opportunities will continue to add to our maturing late stage portfolio.
We look we look forward to important mid stage milestones in the development of our Orexin franchise like the phase <unk> study Readouts attack 861, and the phase one start for our next generation oral Orexin agonist Tak III 60 and.
Andy Plum: And as you'll see next, there's much more to come in fiscal year 2024. Next slide, please. In the coming months, we anticipate several meaningful potential approvals and phase three reductions. These include life cycle expansion opportunities for antibiotic sub-Q for Crohn's disease, potential inclusive approval for first-line Philadelphia positive acute lymphoblastic leukemia in the United States, and potential approval for TAC721 in the U.S. for eosinophilic esophagitis. In addition, there will be two phase three readouts for saticulostat and Dravet syndrome and Lennis-Gastaut syndrome, two rare pediatric epilepsies, which may allow for filing in 2024.
Unknown Executive: Key data readouts in our exciting mid-stage pipeline and targeted business development opportunities will continue to add to our maturing late-stage portfolio. We look forward to important mid-stage milestones in the development of our erection franchise, like the Phase 2B study readouts for TAC 861 and the Phase 1 start for our next generation oral erection agonist, TAP 36. And as mentioned, Mezegitimab's coming ITP and IgA nephropathy data will allow us to make a data-driven go-no-go decision for phase three. Across our pipeline, we will continue leveraging data, digital, and technology to develop programs faster and increase our probability of success. Now, for example, we started phase 2B trials at PAC 861 within two weeks of completing phase 1B by planning at risk. We also leverage site selection tools trained with our deep site and investigator experience from previous ERECSIN trials.
And as mentioned mitigate them adds coming in <unk> and Iga nephropathy data will allow us to make a data driven go no go decision to phase III.
Across our pipeline, we will continue leveraging data digital and technology to develop programs faster and increase our probability of success. Now for example, we started phase III trials of packet takes one within two weeks of completing phase one b by planning at risk.
We also leveraged site selection tools trained with our deep site and investigator experience from previous Orexin class, but.
But attack 861 phase II studies, we used our proprietary in house digital tool that provides real time site performance data to analyze and manage enrollment.
Andy Plum: As I mentioned earlier, our teams remain laser-focused on developing TAC279 in the first four major indications while exploring development in others. Our pipeline is maturing, with five new molecular entities in Phase III development awaiting first approvals. In addition to these five global Phase III NME programs, we have prioritized a group of registration-enabling regional development programs outside of the United States, key data readouts in our exciting mid-stage pipeline, and targeted business development opportunities will continue to add to our maturing late-stage portfolio. We look forward to important mid-stage milestones in the development of our Erexin franchise, like the Phase IIb study readouts of TAC861 and the Phase And as mentioned, mezigetamab's coming ITP and IgA nephropathy data will allow us to make a data-driven go-no-go decision for phase three. Across our pipeline, we will continue leveraging data, digital, and technology to develop programs faster and increase our probability of success. Now, for example, we started phase 2B trials of PAC 861 within two weeks of completing phase 1B by planning at risk. We also leverage site selection tools trained with our deep site and investigator experience from previous ERECSIN trials.
<unk> is to complete the study <unk> five months ahead of plan. This.
This tool specifically designed for clinical trial execution also helped us to improve site selection screen patients and to provide real time data review data monitoring and data cleanup. We will continue utilizing digital tools and proprietary data to help us make critical decisions to advance and deliver our pipeline to patients.
Given the strong momentum of our mid to late stage pipeline Takeda plans to host an R&D R&D event in fiscal year 2024 to provide an update on our strategy present deep dives into our flagship programs and share more about our data digital and technology efforts. Thank you very much and now I will turn it over.
Unknown Executive: For the TAC 861 Phase 2B studies, we used a proprietary in-house digital tool that provided real-time site performance data to analyze and manage enrollment, allowing us to complete the study five months ahead of schedule. This tool, specifically designed for clinical trial execution, also helps us to improve site selection, screen patients, and to provide real-time data review, data monitoring, and data cleanup. We will continue utilizing digital tools and proprietary data to help us make critical decisions to advance and deliver our pipeline to patients. Given the strong momentum of our mid to late stage pipeline, Takeda plans to host an R&D event in fiscal year 2024 to provide an update on our strategy, present deep dives into our flagship programs, and share more about our data, digital, and technology efforts. Thank you very much.
Costa.
Thank you Andy and Hello, everyone. This is Costa Rica speaking today I will walk you through the financial highlights of our fiscal 2023 Q3 year to date results.
Starting with the top line revenue was 3.2 trillion yen or 22 8 billion U S dollars, which is flat versus prior year at constant exchange rate or four 6% on an actual basis, including FX upside from the depreciation of the yen.
We have started to see significant erosion of God entrance generics entered into the U S market in August 2023, but offsetting the <unk> decline was continued growth of our growth and launch products.
These now represent 43% of total revenue and grew 12, 7% at constant exchange rate.
Constantine Saroukos: And now, I will turn it over to Kasa. Thank you, Andrew. And hello, everyone.
Andy Plum: For the TAC 861 Phase 2B studies, we used a proprietary in-house digital tool that provided real-time site performance data to analyze and manage enrollment, allowing us to complete the study five months ahead of schedule. This tool, specifically designed for clinical trial execution, also helps us to improve site selection, screen patients, and to provide real-time data review, data monitoring, and data cleanup. We will continue utilizing digital tools and proprietary data to help us make critical decisions to advance and deliver our pipeline to patients. Given the strong momentum of our mid- to late-stage pipeline, Takeda plans to host an R&D event in fiscal year 2024 to provide an update on our strategy, present deep dives into our flagship programs, and share more about our data, digital, and technology efforts. Thank you very much, and now I will turn it over to Kasi. Thank you, Andy, and hello, everyone. This is Costas Aroukos speaking.
Core operating profit was $865 6 billion yen or $6 1 billion U S dollars with core operating profit margin of approximately 27%.
Constantine Saroukos: This is Constance Saroukos speaking. Today, I'll walk you through the financial highlights of our fiscal 2023 Q3 year-to-date results. Starting with the top line, revenue was 3.2 trillion yen or 22.8 billion US dollars, which is flat versus the prior year at a constant exchange rate, or 4.6% on an actual basis including FX upside from the depreciation of the yen. We have started to see significant erosion of Biobank since generics entered the U.S. market in August of 2023. But offsetting the Biobank's decline was continued growth of our growth and launch products, which now represent 43% of total revenue and grew 12.7% at constant exchange rates. Core operating profit was 865.6 billion yen, or 6.1 billion US dollars, with a core operating profit margin of approximately 27%. Reporting operating profit was 224.1 billion yen, reflecting the significant impact of non-cash impairment losses and other non-core items that were primarily booked in Q2.
Reporting operating profit was $224 1 billion yen, reflecting the significant impact of noncash impairment losses and other noncore items that were primarily booked in Q2.
Core EPS was 412 again and reported EPS was <unk> 94, yet.
Going to cash flow, we continue to see strong cash generation from the business with operating cash flows of $437 8 billion yen or $3 $1 billion year to date.
Free cash flow was $36 3 billion gain which reflects almost 300 billion yen of cash out for acquisitions and in licensing so far this fiscal year, including the bills for Tech Tuesday, Benoit and exactly.
We maintain a resilient financial base with 100% of outstanding debt at fixed interest rates and I'm pleased to share that our weighted average fixed interest rate has improved from approximately 2% to one 6% driven by debt pay down.
Costa Zaroucos: Today, I'll walk you through the financial highlights of our fiscal 2023 Q3 year-to-date results. Starting with the top line, revenue was 3.2 trillion yen or 22.8 billion US dollars, which is flat versus the prior year at a constant exchange rate or 4.6% on an actual basis including FX upside from the depreciation of the yen. We have started to see significant erosion of Biobank since generics entered the U.S. market in August of 2023. But offsetting Biobank's decline was continued growth of our growth and launch product. These now represent 43% of total revenue and grew 12.7% at constant exchange rates. Core operating profit was 865.6 billion yen, or 6.1 billion US dollars, with a core operating profit margin of approximately 27%. The reporting operating profit was 224.1 billion yen, reflecting the significant impact of non-cash impairment losses and other non-core items that were primarily booked in Q2.
$1 5 billion U S dollars year to date.
With regards to the outlook for full year fiscal 2023, we continue to track well towards our management guidance for performance at a constant exchange rate. There is no change to our full year management gardens, and no change to our full year P&L forecast.
Constantine Saroukos: Core EPS was 412 and reported EPS was 94. Moving to cash flow, we continue to see strong cash generation from the business with operating cash flow of 437.8 billion, or $3.1 billion year-to-date. Free cash flow was 36.3 billion yen, which reflects almost 300 billion yen of cash out for acquisitions and in licensing so far this fiscal year, including the bills for TAC 279 and for ZACLA. We maintain a resilient financial base with 100% of outstanding debt at fixed interest rates.
However, it's important to note that there is potential upside to revenue and core operating profit if current FX rates continue.
Also I want to emphasize that we are not changing our full year free cash flow forecast of 400 to 5 billion yen with some working capital phasing that has impacted us year to date expected to unwind in Q4.
Constantine Saroukos: And I'm pleased to share that our weighted average fixed interest rate has improved from approximately 2% to 1.6%, driven by debt paydown of US$1.5 billion year-to-date. With regard to the outlook for full year fiscal 2023, we continue to track the world towards our management guidance for performance at a constant exchange rate. There is no change to our full-year management guidance and no change to our full-year P&L forecast. However, it's important to note that there is potential upside to revenue and core operating profit if current FX rates continue. Also, I want to emphasize that we are not changing our full year free cash flow forecast of 400 to 500 billion yen with some working capital phasing that has impacted us year to date, but we expect to unwind in Q4.
Yeah.
On Slide 16, let me run through our Q3 year to date financial performance in more detail starting with our core result on the right hand side you can see that revenue were three two trillion yen with growth of four 6% or flat at constant exchange rates, we felt growth and launch products.
Offsetting the significant loss of exclusivity impact core operating profit was $865 6 billion a decline of nine 3% on an actual basis or 12, 7% on a constant exchange rate.
Costa Zaroucos: Core EPS was 412 yen, and reported EPS was 94 yen. Moving to cash flow, we continue to see strong cash generation from the business with operating cash flow of 437.8 billion yen, or 3.1 billion dollars, year-to-date. Free cash flow was $36.3 billion, which reflects almost $300 billion of cash out for acquisitions and in licensing so far this fiscal year, including the bills for TAC 279 and for Zaglar. We maintain a resilient financial base with 100% of outstanding debt at fixed interest rates.
This reflects the impact of generic competition for high margin products, such as by that as well.
Okay excellent.
Excellent Amazon as well as lower COVID-19 vaccine revenue.
Meanwhile, we have continued to make the necessary investments in R&D and data and technology to secure the long term success of the business.
Constantine Saroukos: On slide 16, let me run through our Q3 year-to-date financial performance in more detail. Starting with our core results, on the right-hand side, you can see that revenue was 3.2 trillion yen with growth of 4.6%, all flat at constant exchange rates, with our growth and launch products offsetting the significant loss of exclusivity impact. Co-operating profit was 865.6 billion yen, a decline of 9.3% on an actual basis or 12.7% on a constant exchange rate.
Core net profit declined by 12, 2% at constant exchange rate and core EPS was 412 yen.
On the left hand side of the slide you can see our reported results reported revenue is the same as core revenues reported operating profit was significantly impacted by large non core items that we booked in Q2.
Costa Zaroucos: And I'm pleased to share that our weighted average fixed interest rate has improved from approximately 2% to 1.6%, driven by debt paydown of US$1.5 billion year-to-date. With regard to the outlook for full year fiscal 2023, we continue to track well towards our management guidance for performance at a constant exchange rate. There is no change to our full-year management guidance and no change to our full-year P&L forecast. However, it's important to note that there is potential upside to revenue and core operating profit if current FX rates continue. Also, I want to emphasize that we are not changing our full year free cash flow forecast of 400 to 500 billion yen with some working capital phasing that has impacted us year to date, but we expect to unwind in Q4.
These are reflected in our reported operating profit results of $224 1 billion yen or a year on year decline of 44, 2%.
Reported net profit and reported EPS declined approximately 49%, reflecting the decline in reported operating profit.
Constantine Saroukos: This reflects the impact of generic competition for high-margin products such as Vyvair, Velcade, Dexcellent, and Azuba as well as lower COVID-19 vaccine revenue. Meanwhile, we have continued to make the necessary investments in R&D and data and technology to secure the long-term success of the business. Core net profit declined by 12.2% at the cost of exchange rate, and core EPS was 412 yen.
Operating cash flow was $437 8 billion yen lower than prior year due to working capital phasing as well as the bar bench generic impact free cash flow reflected our cash payments for Tak seven nine and for exactly but there is no change to our full year forecast of 400.
To 500 billion yen.
On slide 17.
I'd like to highlight the performance of our growth and launch products, which are the key drivers of top line performance.
Constantine Saroukos: On the left-hand side of the slide, you can see our reported results. Reported revenue is the same as core revenue. Reported operating profit was significantly impacted by large non-core items that we booked in Q2. These are reflected in our reported operating profit results of 224.1 billion yen, or a year-on-year decline of 44.2. Reported net profit and reported EPS declined approximately 49%, reflecting the decline in reported operating profit.
These products generated 43% of total revenue Q3 year to date with 12, 7% growth at constant exchange rate.
Costa Zaroucos: On slide 16, let me run through our Q3 year-to-date financial performance in more detail, starting with our core results. On the right-hand side, you can see that revenue was 3.2 trillion yen with growth of 4.6%, all flat at constant exchange rates, with our growth and launch products offsetting the significant loss of exclusivity impact. Co-operating profit was 865.6 billion yen, a decline of 9.3% on an actual basis or 12.7% on a constant exchange rate.
Within our five key business areas Gi grew at 4% at a constant exchange rate.
Slow down versus last year impacted by generic entry of excellent in the U S. In January 2023.
Our largest product entyvio continues to perform well with growth of 7% outperforming the overall IBD market and initial feedback on the Tbi paid in subcutaneous launch has been positive.
Constantine Saroukos: Operating cash flow was 437.8 billion yen, lower than prior years due to working capital phasing as well as the Vyvanse generic impact. Free cash flow reflected our cash payments for TAC279 and Frisacla, but there was no change to our four-year forecast of 400 to 500 billion yen. On slide 17, I would like to highlight the performance of our growth and launch products, which are the key drivers of top-line performance. These products generated 43% of total revenue in Q3 year-to-date, with 12.7% growth at constant exchange rates.
In rare diseases Tac Zara continues its strong momentum with growth of 12% having successfully launched in over 50 countries and we sustained demand in the U S.
Uptake of liquidity continues to be strong and I'm also happy to highlight the new launch of a Denmark, the first and only enzyme replacement therapy for <unk>, although the St. TTP indication is a niche commercial opportunity. This new approval is extremely meaningful for patients suffering from this.
Costa Zaroucos: This reflects the impact of generic competition for high-margin products such as Vyvair, Velcade, Dexcellent, and Azuba as well as lower COVID-19 vaccine revenue. Meanwhile, we have continued to make the necessary investments in R&D and data and technology to secure the long-term success of the business. Core Net Profit declined by 12.2% at cost of exchange rates, and Core EPS was 412 Yen.
Unknown Executive: Within our five key business areas, GI grew at 4% at a constant exchange rate, a slowdown versus last year, impacted by the generic entry of Dexelen in the US in January 2023. Our largest product, Intivio, continues to perform well with growth of 7%, outperforming the overall IBD market, and initial feedback on the Intivio paired and subcutaneous launch has been positive. In rare diseases, tax IRA continues its strong momentum with growth of 12%, having successfully launched in over 50 countries and with sustained demand in the U.S., uptake of Liftensity continues to be strong, and I'm also happy to highlight the new launch of Adzinma, the first and only enzyme replacement therapy for CTTP. Although the CTTP indication is a niche commercial opportunity, this new approval is extremely meaningful for patients suffering from this disease. PDT Immunology continues to deliver outstanding growth of 16%, including 18% growth of immunoglobulin and 7% growth of albulin. Both our IG and albumen products continue to see strong demand. We have continued to expand our Plasma Donation Center footprint, with our global network now exceeding 250 centers.
<unk> disease.
PDT immunology continues to deliver outstanding growth of 16%, including 18% growth of immune globulin and 7% growth of albumin.
Both our <unk> and albumin products continue to see strong demand. We have continued to expand our plasma donation center footprint with our global network now exceeding 250 centers.
Costa Zaroucos: On the left-hand side of the slide, you can see our reported results. Reported revenue is the same as core revenue, but reported operating profit was significantly impacted by large non-core items that we booked in Q2.
And we have seen donor compensation continue on a downward trend since fiscal year 2022 after significant increases during the pandemic we.
Costa Zaroucos: These are reflected in our reported operating profit results of 224.1 billion yen, or a year-on-year decline of 44.2%. Reported net profit and reported EPS declined approximately 49 percent, reflecting the decline in reported operating profit. Operating cash flow was 437.8 billion yen, lower than prior years due to working capital phasing as well as the Vyvanse generic impact. Free cash flow reflected our cash payments for TAC279 and Frisacla, but there was no change to our four-year forecast of 400 to 500 billion yen on slide 17. I would like to highlight the performance of our growth and launch products, which are the key drivers of top-line performance. These products generated 43% of total revenue in Q3 year-to-date, with 12.7% growth at a constant exchange rate.
We know modulate compensation in a highly segmented way, while achieving the volumes to deliver our commitments to our patients together with initiatives to improve efficiency across the PDP value chain. This has enabled us to improve ADT margins year on year in fiscal year 'twenty three for the first time.
Since the pandemic.
Mixed is oncology, which continues to decline as a result of brocade generics. However, the timing of loss of exclusivity in May 2022 means that the impact should wash out by the end of this fiscal year.
Also I would like to highlight another new product for exactly which launched in November 2023 in the U S for the treatment of patients with metastatic colorectal cancer.
The launch is off to a strong start having treated the first patient just 24 hours after the approval.
Costa Zaroucos: Within our five key business areas, GI grew at 4% at a constant exchange rate, a slowdown versus last year, impacted by the generic entry of Dexelen in the US in January 2023. Our largest product, Intivio, continues to perform well, with growth of 7%, outperforming the overall IBD market, and initial feedback on the Intivio paired and subcutaneous launch has been positive. In rare diseases, Taxiri continues its strong momentum with growth of 12%, having successfully launched in over 50 countries and with sustained demand in the US. Uptake of Liftensity continues to be strong, and I'm also happy to highlight the new launch of Adzinma, the first and only enzyme replacement therapy for CTTP. Although the CTTP indication is a niche commercial opportunity, this new approval is extremely meaningful for patients suffering from this disease.
Unknown Executive: And we have seen donor compensation continue on a downward trend since fiscal year 2022 after significant increases during the pandemic. We now modulate compensation in a highly segmented way while achieving the volumes to deliver our commitments to our patients. Together with initiatives to improve efficiency across the PDT value chain, this has enabled us to improve PDT margins year-on-year in fiscal year 23 for the first time since the pandemic. Next is oncology, which continues to decline as a result of Velcade generics. However, the timing of the loss of exclusivity in May 2022 means that the impact should wash out by the end of this fiscal year.
Neuroscience declined minus 6% as a result of BARDA generics launching in the U S. After paint expiring in August to date brand share erosion of Barton's has been slightly more than initially anticipated due to constraints of generic supply.
We expect this situation to ease towards the end of this fiscal year, but it does mean, we have slightly increased our full year assumption for vyvanse revenue.
The other segment is declining due to lower revenue from COVID-19, vaccines and generic competition to <unk> in Japan.
This other segment also includes our dengue vaccine Katanga, which is seeing strong initial demand in both endemic and travel markets.
Unknown Executive: Also, I would like to highlight another new product for ZAKLA, which launched in November 2023 in the US for the treatment of patients with metastatic colorectal cancer. The launch is off to a strong start, having treated the first patient just 24 hours after the approval. Neuroscience declined minus 6% as a result of Vyvanse generics launching in the US after patent expiry in August.
Over the next three slides I'll walk you through some waterfalls to better explain the moving pieces in our Q3 year to date performance versus prior year.
Costa Zaroucos: PDT Immunology continues to deliver outstanding growth of 16%, including 18% growth of immunoglobulin and 7% growth of albulin; both our IG and albumin products continue to see strong demand. We have continued to expand our Plasma Donation Center footprint, with our global network now exceeding 250 centers, and we have seen donor compensation continue on a downward trend since fiscal year 2022 after significant increases during the pandemic. We now modulate compensation in a highly segmented way while achieving the volumes to deliver our commitments to our patients. Together with initiatives to improve efficiency across the PDT value chain, this has enabled us to improve PDT margins year-on-year in fiscal year 23 for the first time since the pandemic. Next is oncology, which continues to decline as a result of Velcade generics. However, the timing of loss of exclusivity in May 2022 means that the impact should wash out by the end of this fiscal year.
Starting with revenue on slide 18, you can see that versus prior year outgrowth and launch products with the main reason, we were able to maintain flat growth at constant exchange rates. Despite $133 3 billion yen of loss of exclusivity headwinds as well as lower Corona virus.
Unknown Executive: To date, brand share erosion of Vyvanse has been slightly milder than initially anticipated due to constraints of generic supply. We expect this situation to ease towards the end of this fiscal year, but it does mean we have slightly increased our four-year assumption for Vyvanse revenue. Finally, the other segment is declining due to lower revenue from COVID-19 vaccines and generic competition from Azuba in Japan. However, this other segment also includes our dengue vaccine, Kudenga, which is seeing strong initial demand in both endemic and travel markets.
<unk> vaccine revenue compared to prior year.
Top of this we had an FX tailwind due to the depreciation of the yen, taking our top line growth on an actual basis to four 6%.
Moving to the year on year cooperating profit bridge on Slide 19, you can see how loss of exclusivity and the Corona virus vaccine decline or having a larger impact on profit compared to revenues due to the higher margins.
The investment side, we continue to allocate resources to R&D to support high potential programs, such as TAC 279, and our Orexin franchise.
Unknown Executive: Over the next three slides, I'll walk you through some waterfalls to better explain the moving pieces in our Q3 year-to-date performance versus the prior year. Starting with revenue on slide 18, you can see that versus the prior year, our growth and launch products were the main reasons we were able to maintain flat growth at constant exchange rates despite 133.3 billion yen of loss of exclusivity headwinds, as well as lower coronavirus vaccine revenue compared to the prior year. On top of this, we had an FX tailwind due to the depreciation of the yen, taking our top line growth on an actual basis to 4.6%.
R&D spending increased seven 3% year to date on a constant exchange rate basis, but this does reflect some phasing and we still aim to land the full year with a mid single digit increase.
Costa Zaroucos: Also, I would like to highlight another new product for ZAKLA, which launched in November 2023 in the US for the treatment of patients with metastatic colorectal cancer. The launch is off to a strong start, having treated the first patient just 24 hours after the approval. Neuroscience declined by minus six percent as a result of Vyvanse generics launching in the US after patent expiry in August.
We also continued to make substantial investments in data and technology, including AI across the value chain.
We believe these investments will have a transformational impact on ticket as long term competitiveness and play an important role in our return to growth and therefore, we continue to allocate capital in these areas.
Unknown Executive: Moving to the year-on-year cooperating profit breach on slide 19, here you can see how loss of exclusivity and the coronavirus vaccine decline are having a larger impact on profit compared to revenue due to their higher margin. On the investment side, we continue to allocate resources to R&D to support high-potential programs such as TAC 279 and our Erexon franchise. R&D spend increased 7.3% year-to-date on a constant exchange rate basis. However, this does reflect some phasing, and we still aim to land the full year with a mid single-digit increase. We also continue to make substantial investments in data and technology, including AI, across the We believe these investments will have a transformational impact on Takeda's long-term competitiveness and play an important role in our return to growth, and therefore, we continue to allocate capital to these areas. All these factors combined result in our first half co-operating profit decline of 12.7% on a constant exchange rate basis or 9.3% decline when factoring in the benefit of FX.
All these factors combined resulted in a first half core operating profit decline of 12, 7% on a constant exchange rate basis, or nine 3% decline when factoring in the benefit of FX.
Costa Zaroucos: To date, brand share erosion of Vyvanse has been slightly milder than initially anticipated due to constraints of generic supply. We expect this situation to ease towards the end of this fiscal year, but it does mean we have slightly increased our four-year assumption for Vyvanse revenue. Finally, the other segment is declining due to lower revenue from COVID-19 vaccines and generic competition from Azuba in Japan. However, this other segment also includes our dengue vaccine, Kudenga, which is seeing strong initial demand in both endemic and travel markets.
I would also highlight that although the depreciation will begin had a significant impact upside impact on a revenue benefit to profit is less pronounced this is because of our substantial overseas expenses and in fact, the appreciation of the yen versus the euro is actually negative.
Profits due to a higher proportion of cost of goods in euro.
Next to slide 20, which explains the major items impacting our reported operating profit versus prior year.
Costa Zaroucos: Over the next three slides, I'll walk you through some waterfalls to better explain the moving pieces in our Q3 year-to-date performance versus the prior year, starting with revenue on slide 18. You can see that versus the prior year, our growth and launch products were the main reasons we were able to maintain flat growth at constant exchange rates despite 133.3 billion yen of loss of exclusivity headwinds, as well as lower coronavirus vaccine revenue compared to the prior year. On top of this, we had an FX tailwind due to the depreciation of the yen, taking our top line growth on an actual basis to 4.6%.
In addition to the declining cooperating profit we had a sizable increase in impairment of intangible assets, which year to date totaled $119 3 billion yen. Most of this was already booked in Q2, when we recognized impairments related to the negative phase III study readout of our peso.
And the voluntary global withdrawal of excuse me in.
In addition, we have higher restructuring costs this year related to exiting AAV gene therapy, and consolidating our office footprint. All of these items combined led to the reported operating profit decline of minus 44, 2%.
Unknown Executive: I would also highlight that although the depreciation of the yen had a significant, upside impact on our revenue, the benefit to profit is less pronounced. This is because of our substantial overseas expenses, and, in fact, depreciation of the yen versus the euro is actually negative to profits due to our higher proportion of cost of goods in euros. Next is slide 20, which explains the major items impacting our reported operating profit versus the prior year. In addition to the decline in cooperative profit, we had a sizable increase in impairment of intangible assets, which year-to-date totaled 119.3 billion yen.
Moving to slide 21, and our outlook for full year fiscal 2023.
Based on our year to date performance, we do not see the need to make any changes to our management guidance. At this time, we still anticipate low single digit before a percentage decline in revenue.
Costa Zaroucos: Moving to the year-on-year cooperating profit breach on slide 19, here you can see how loss of exclusivity and the coronavirus vaccine decline are having a larger impact on profit compared to revenue due to their higher margin. On the investment side, we continue to allocate resources to R&D to support high-potential programs such as TAC 279 and our Erexon franchise. R&D spend increased 7.3% year-to-date on a constant exchange rate basis. However, this does reflect some phasing, and we still aim to land the full year with a mid single-digit increase. We also continue to make substantial investments in data and technology, including AI, across the We believe these investments will have a transformational impact on Takeda's long-term competitiveness and play an important role in our return to growth, and therefore, we continue to allocate capital to these areas. All these factors combined result in our first half co-operating profit decline of 12.7% on a constant exchange rate basis or 9.3% decline when factoring in the benefit of FX.
Low tens percentage decline in core operating profit.
Twenties percentage decline in core EPS on a constant exchange rate basis. We are also keeping a reported and core forecast on an actual FX basis unchanged.
There is some potential upside to revenue and cooperating profit if current FX rates continue and we've included a currency sensitivity chart on slide 19 in the appendix for your reference.
Unknown Executive: Most of this was already booked in Q2, when we recognized impairments related to the negative Phase 3 study readout of Alafisil and the voluntary global withdrawal of Excivity. In addition, we have higher restructuring costs this year related to exiting AAV gene therapy and consolidating our office. All these items combined led to the reported operating profit decline of minus 44.2%.
Our free cash flow forecast is unchanged at $400 billion to $500 billion with some of the working capital phasing I mentioned earlier expected to unwind in Q4, and we remain committed to paying to fiscal year 'twenty three dividend of 188 yet.
On slide 22, we show our updated debt maturity ladder.
By the end of December we had prepaid all of the $1 5 billion U S dollars of bonds maturing this fiscal year, which brought our weighted average interest rate down to one 6% as a reminder, 100% of our debt is at fixed rates with an average maturity.
Constantine Saroukos: Moving to slide 21 and our outlook for full year fiscal 2023. Based on our year-to-date performance, we do not see the need to make any changes to our management guidance at this time. We still anticipate a low single-digit percentage decline in revenue, a low 10s percentage decline in core operating profit, and a low 20s percentage decline in core EPS, all on a constant exchange rate basis. We are also keeping our reported and core forecasts on an actual FX basis unchanged.
<unk> of approximately eight years.
I would also highlight that our repayment obligations in fiscal year, 'twenty, four and fiscal year 'twenty are minimal, which means we have flexibility in how we allocate cash over the next couple of years, including potentially prepaying some of the fiscal year 26 maturities.
Costa Zaroucos: I would also highlight that although the depreciation of the yen had a significant impact, an upside impact, on our revenue, the benefit to profit is less pronounced. This is because of our substantial overseas expenses, and in fact, depreciation of the yen versus the euro is actually negative for profits due to our higher proportion of cost of goods in euros. Next is slide 20, which explains the major items impacting our reported operating profit versus the prior year. In addition to the declining cooperative profit, we had a sizable increase in impairment of intangible assets, which year-to-date totaled 119.3 billion yen.
Constantine Saroukos: There is some potential upside to revenue and co-operating profit if current FX rates continue, and we've included a currency sensitivity chart on slide A19 in the appendix for your reference. Our free cash flow forecast is unchanged at 400 to 500 billion yen, with some of the working capital phasing I mentioned earlier expected to unwind in Q4, and we remain committed to paying the fiscal year 23 dividend of 188 yen. On slide 22, we show our updated debt maturity ladder. By the end of December, we had prepaid all of the US$1.5 billion of bonds maturing this fiscal year, which brought our weighted average interest rate down to 1.6%.
To close out on the presentation on slide 23, I'd like to reemphasize that we are well on track towards our full year management guidance.
We have been preparing for the loss of exclusivity headwinds we faced in fiscal year 2023 for many years, we have confidence in our portfolio and pipeline to deliver a return to growth in the near term and we will continue to allocate capital with discipline as we focus on delivering sustainable growth and competitive shareholder returns.
Constantine Saroukos: As a reminder, 100% of our debt is at fixed rates, with an average maturity of approximately 8 years. I would also highlight that our repayment obligations in FY24 and FY25 are minimal, which means we have flexibility in how we allocate cash over the next couple of years, including potentially pre-paying some of the FY26 maturity. To close out the presentation on slide 23, I'd like to re-emphasize that we are well on track towards our four-year management guidance. We have been preparing for the loss of exclusivity headwinds we face in fiscal year 2023 for many years. We have confidence in our portfolio and pipeline to deliver a return to growth in the near term, and we will continue to allocate capital with discipline as we focus on delivering sustainable growth and competitive shareholder returns. I'd like to now hand it back to Christophe.
I'd like to now hand, it back to Christoph Thank you.
Costa Zaroucos: Most of this was already booked in Q2 when we recognized impairments related to the negative Phase 3 study readout of Alafisil and the voluntary global withdrawal of Excivity. In addition, we have higher restructuring costs this year related to exiting AAV gene therapy and consolidating our office book. All these items combined led to the reported operating profit decline of minus 44.2%.
Thank you Christa.
As you might have seen earlier today, we announced that after 20 years working abroad. Christa has decided to return home to Australia to be closer to his family.
He will step down as the Chief Financial Officer on April 1st.
And remain with the company as a board director until June 28, 2024.
Costa Zaroucos: Moving to slide 21 and our outlook for full year fiscal 2023. Based on our year-to-date performance, we do not see the need to make any changes to our management guidance at this time. We still anticipate a low single-digit percentage decline in revenue, a low 10s percentage decline in core operating profit, and a low 20s percentage decline in core EPS, all on a constant exchange rate basis. We are also keeping our reported and core forecasts on an actual FX basis unchanged.
Milanov Rota with currently President of Takeda, Japan Pharma business unit will succeed Christophe CFO effective April one 2024.
Costar joined <unk> in 2015, as the CFO of the U can business unit.
He was appointed global CFO in April 2018.
At the time of <unk> proposed acquisition of Shire.
Since then he has been instrumental in <unk> transformation into a global biopharmaceutical company and the lending over an exceptional finance organization.
Chris has been a trusted colleague to me the TT and their board and I wish him all the best as he returns to his home country.
Christophe Weber: Thank you. Thank you, Costa. As you might have seen earlier today, we announced that after 20 years of working abroad, Costa has decided to return home to Australia to be closer to his family.
Costa Zaroucos: There is some potential upside to revenue and co-operating profit if current FX rates continue, and we've included a currency sensitivity chart on slide A19 in the appendix for your reference. Our free cash flow forecast is unchanged at 400 to 500 billion yen, with some of the working capital phasing I mentioned earlier expected to unwind in Q4, and we remain committed to paying the fiscal year 23 dividend of 188 yen. On slide 22, we show our updated debt maturity ladder. By the end of December, we had prepaid all of the US$1.5 billion of bonds maturing this fiscal year, which brought our weighted average interest rate down to 1.6%.
I am very pleased that millennial fruit that will succeed Christa as global CFO to continue to drive our strategy forward and deliver growth and shareholder return.
Christophe Weber: He will step down as Chief Financial Officer on April 1st and remain with the company as a board director until June 28, 2024. Milano Furuta, who is currently president of Takeda Japan Pharma business unit, will succeed Costa as CFO effective April 1, 2021. Costa joined Takeda in 2015 as the CFO of the UCAN business unit, and he was appointed global CFO in April 2018, at the time of Takeda's proposed acquisition of China. Since then, he has been instrumental in Takeda's transformation into a global biopharmaceutical company, and he is handing over an exceptional finance organization. Costa has been a trusted colleague to me, the T.T.
Many enemies of longtime texture that colleague with a deep understanding of technology business and culture.
We had a number of leadership Cola Takeda around the world.
Prior to joining <unk> in 2010 minute Norwalk has in.
And equity research analyst at an investment management firm at this stage.
He began his carrier in 2000 and banking and private equity investment in Japan.
Where I was involved with several type of financial transaction, including leveraged buyout and debt restructuring.
Prior to becoming president of the Japan Pharma business unit <unk> for two years as corporate strategy officer and chief of SaaS.
Costa Zaroucos: As a reminder, 100% of our debt is at fixed rates, with an average maturity of approximately 8 years. I would also highlight that our repayment obligations in FY24 and FY25 are minimal, which means we have flexibility in how we allocate cash over the next couple of years, including potentially pre-paying some of the FY26 maturity. To close out the presentation on slide 23, I'd like to re-emphasize that we are well on track towards our four-year management guidance. We have been preparing for the loss of exclusivity headwinds we face in fiscal year 2023 for many years. We have confidence in our portfolio and pipeline to deliver a return to growth in the near term, and we will continue to allocate capital with discipline as we focus on delivering sustainable growth and competitive shareholder returns. Now, I'd like to hand it back to Christoph.
He has been a member of the executive team for the last five years.
I would like to invite firsthand Milano to say a few words costar would like to go first.
Christophe Weber: and the board, and I wish him all the best as he returns to his home country. I'm very pleased that Milano Furuta will succeed Costa as Global CFO to continue to drive our strategy forward and deliver growth and shareholder return. Milano is a longtime Takeda colleague with a deep understanding of Takeda's business and culture. He has held a number of leadership roles at Takeda companies around the world. Prior to joining Takeda in 2010, Milano worked as an equity research analyst at an investment management firm in the United States. He began his career in 2000 in banking and private equity investment in Japan, where he was involved with several types of financial transactions, including leverage buyouts and debt restructuring.
Thank you Christophe for the Con words.
It's been an incredible journey and a true privilege to work at Takeda for the best part of a decade in particular, the past six years as the global CFO.
It's been a point of pride to come to work every day at a company with a deeply rooted values based culture and with colleagues, who really put patients at the center of everything we do.
I'm immensely proud I'm immensely proud of what we've accomplished through a period of unprecedented transformation and growth for Takeda.
But as Christopher said after 20 years working abroad, I'm ready to move back to Australia to be closer to my family until the end of March.
Christophe Weber: Prior to becoming President of the Japan Pharma Business Unit, Milano served for two years as Corporate Strategy Officer and Chief. He has been a member of the Takeda executive team for the last five years. Costa, would you like to go first?
Our focus will be on delivering our management guidance for fiscal year 2023.
And ensuring we are set up for success in fiscal year 2024.
I will also be working closely with <unk> on the transition.
Christopher Webber: Thank you. Thank you, Costa. As you might have seen earlier today, we announced that after 20 years of working abroad, Costa has decided to return home to Australia to be closer to his family.
I would really like to thank you all for your support and friendship and I wish Takeda and you all the best I'll pass it now over to <unk> for a few words. Thank you all.
Constantine Saroukos: Thank you, Christophe, for the kind words. It's been an incredible journey and a true privilege to work at Takeda for the best part of a decade, in particular, the past six years as the global CFO. It's been a point of pride to come to work every day at a company with a deeply rooted values-based culture and with colleagues who really put patience at the center of everything we do. I'm immensely proud of what we've accomplished during a period of unprecedented transformation and growth for Takeda. But, as Christophe said, after 20 years of working abroad, I'm ready to move back to Australia to be closer to my family.
Thank you Christophe Thank you hi, everyone.
My Name's Milano and I have a I have been the festival electric on that statement Costa <unk>.
Christopher Webber: He will step down as Chief Financial Officer on April 1st and remain with the company as a board director until June 28th, 2024. Milano Furuta, who is currently president of Takeda Japan's pharma business unit, will succeed Costa as CFO effective April 1st, 2021. Costa joined Takeda in 2015 as the CFO of the UCAN business unit, and he was appointed global CFO in April 2018, at the time of Takeda's proposed acquisition of Shire. Since then, he has been instrumental in Takeda's transformation into a global biopharmaceutical company, and he is handing over an exceptional finance organization. Costa has been a trusted colleague to me, the T.T.
Oh, the great achievements. He has been delivered in the past six years and I'm really ordered to be the part of the organization financial organization and in the future leading the finance organization and then that.
Looking forward to meeting you to many of the year after April and I have been as Christoph said I'll have him as a member of the Tucker executive team members.
For the past five years, and I'm fully aligned with our strategy, especially for the investments with our growth and shareholder returns, but not the after April 1st I'm very much looking forward to meeting you all and listen and then it's got a new chapter. Thank you.
Constantine Saroukos: Until the end of March, my focus will be on delivering our management guidance for fiscal year 2023 and ensuring we are set up for success in fiscal year 2024. I will also be working closely with Milano on the transition. I would truly like to thank you all for your support and friendship and I wish Takeda and you all the best. Now, I'll pass it now over to Milano for a few words.
So does that mean.
Oh, My God I'm, almost mono now that I would like to entertain questions from participants Christophe Wendy and cluster.
Christopher Webber: and the board, and I wish him all the best as he returns to his home country. I'm very pleased that Milano-Ferruta will succeed Costa as Global CFO to continue to drive our strategy forward and deliver growth and shareholder return. Milano is a longtime Takeda colleague with a deep understanding of Takeda's business and culture. He has held a number of leadership roles at Takeda companies around the world. Prior to joining Takeda in 2010, Milano worked as an equity research analyst at an investment management firm in the United States. He began his career in 2000 in banking and private equity investment in Japan, where he was involved with several types of financial transactions including leveraged buyouts and debt restructuring.
In addition patient acuity.
We'll be participating.
If you just want to ask.
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Thanks, Ken Burton if you <unk>.
Milano Furuta: Thank you all. Thank you, Christophe. Thank you, Kosta. Hi, everyone. My name is Milano.
He's asking this Japanese children.
He's asking Japanese.
No that's fair.
I mean, China, China you can.
Oh, great. Okay. That's good.
Two questions upfront.
Okay.
Hi, Thanks question.
I'm thinking you know pretty soon.
Please go ahead.
Yeah.
Can you hear me.
Thanks, guys. Thanks. Thank you so the CMO microscopy.
Milano Furuta: And I have a, I have been, first of all, I'd like to congratulate Kosta on all the great achievements he has delivered in the past six years. And I'm really honored to be part of the organization, the financial organization, and, in the future, leading the finance organization. And then, looking forward to meeting you, many of you, after April.
Just to make a brief with two questions. The first question is regarding type deal.
Is it true that the entirety of Q3 sales in the telecom is growing a bit compared to Q O Q.
But at the same time still.
Still sort of a high single digit growth.
So can you give us some current situation how the new patient. She attrition is I'd also talk about the issue, but can you give us some penetration ratio of execution.
Milano Furuta: And I have been, as Christophe said, a member of the Takeda executive team for the past five years. And I'm fully aligned with Takeda's strategy, especially for the investment, for the growth, and then I will show for the returns. But now, after April 1st, I'm very much looking forward to meeting you all, and then listening, and then discovering the new chapter. Thank you.
U S C. Sorry, I should have also phosphide side, you've got the entire deal.
The second one is a direction are purely timing.
Christopher Webber: Prior to becoming president of the Japan Pharma Business Unit, Milano served for two years as Corporate Strategy Officer and Chief. He has been a member of the Takeda executive team for the last five years. I would like to invite Kristin Milano to say a few words. Kristin, would you like to go first? Thank you, Christophe, for the kind words. It's been an incredible journey and a true privilege to work at Takeda for the best part of a decade, in particular, the past six years as the global CFO. It's been a point of pride to come to work every day at a company with a deeply rooted values-based culture and with colleagues who really put patience at the center of everything we do. I'm immensely proud of what we've accomplished through a period of unprecedented transformation and growth for Takeda. But, as Christophe said, after 20 years of working abroad, I'm ready to move back to Australia to be closer to my family.
Talk about this discovery, meaning by the end of March.
I saw.
Unknown Executive: Now we would like to take questions from the participants. Christophe, Andy, and Costa Milano will be answering. In addition, U.S. President Julie Kim will be participating. If you want to ask a question, please raise your hand. Please press the raise hand button.
It looks a little bit to expedite it but I thought its much like April to June.
So is it fair to say that you are going to decide to buy a much then oh are you going to share some data with us after this decision.
Unknown Executive: If you're in English. Please ask in English, in Japanese, if you are in the original journal, then you can use the English language, you can ask up to two questions up front. First question, from the city with Yamaguchi-san. Please go ahead. Thank you, thank you. So this is Yamaguchi from Citi.
This decision will be.
Public allowance, because it's going to be interesting.
Data and that's the same kind of questions, so timing and why.
While it is expedited.
Unknown Executive: I'd like to make two brief questions. The first question is regarding Entaibyo. It is true that the entire view of Q3 sales in the dollar term is growing a bit compared to Q1Q. But at the same time, at the moment, it's still sort of a high single-digit growth. So can you give us some current situation, how the new patient situation is, and also you talk about SC, but can you give us some penetration ratio of SQ, SQ, and SC, sorry, if you have one. So first of all, regarding the entire view. The second one is that direction, the POC timing, you talk about this fiscal year meaning by the end of March. It looks a little bit expedited, but I thought it was like April or June.
Nucleus is expedite sector and that's two questions. Thank you very much Greg.
Thank you Yamaguchi San so the first question on Entyvio in terms of the market evolution and uptake of the Entyvio Pam I would like to ask Julie to comment on that and then the second question on Orexin.
Timing and the communications around that I'd like to ask Andy to comment on that one.
Costa Zaroucos: Until the end of March, my focus will be on delivering our management guidance for fiscal year 2023 and ensuring we are set up for success in fiscal year 2024. I will also be working closely with Milano on the transition. I would truly like to thank you all for your support and friendship, and I wish Takeda and you all the best. I'll pass this now over to Milana for a few words. Thank you all. Thank you, Christophe. Thank you, Costa. Hi everyone. My name is Milano.
Thank you Yamaguchi San for the question in regards to Entyvio, Let me talk a little bit about overall, our position as well as acute.
So from an overall perspective in terms of new patient starts as Christophe mentioned, we still remain the market leader in terms of IBD bio naive new patient starts and in particularly in UC and cc share that orange our share grew by one 1% in U C over the last 12 months and.
Unknown Executive: So, is it fair to say that you are going to decide by March, then how are you going to share some data with us after this decision, and this decision will be publicly announced because it's going to be interesting, the data, and that's the second question, so thank you very much. Great, thank you Yamaguchi-san. So the first question on Antivio in terms of the market evolution and uptake of the Antivio pen, I'd like to ask Julie to comment on that, and then the second question on Orexin timing and the communications around that, I'd like to ask Andy to comment on that. Thank you Yamaguchi-san for the question. In regards to Antivio, let me talk a little bit about our overall position as well as SubQ.
Significant growth.
Within that indication.
So when you look at the.
Art of Imperial pen in the U S and.
Please remember that new patients have to be and have an induction period on IV first so at this point, it's very early to say what the patient uptake has been unimpeded pen that as Christophe mentioned blueberry.
Milano Furuta: And I have been, first of all, I'd like to congratulate Costa on all the great achievements he has delivered in the past six years. And I'm really honored to be part of the financial organization and, in the future, to lead the financial organization. And then I am looking forward to meeting many of you after April. And I have been, as Christophe said, a member of the Takeda executive team for the past five years. And I'm fully aligned with Takeda's strategy, especially for the investment, for the growth, and then I'm sure of the returns. But now, after April 1st, I'm very much looking forward to meeting you all and then listening and discovering the new chapter.
We're very pleased with the information to date in terms of the awareness of Penn amongst our HCP as our target HCP and I'm also happy to share that we recently signed.
An agreement with one of the big three national Pbms as well as signing agreements with five regional.
Julie Kim: So from an overall perspective, in terms of new patient starts, as Christophe mentioned, we still remain the market leader in terms of IBD, BioNaive, new patient starts. And particularly in UC, I'm pleased to share that our share grew by 1.1% in UC over the last 12 months, and that's a significant growth within that indication. So when you look at the start of AntivioPEN in the US, please remember that new patients have to have an induction period on IV first.
Regional plans as well so very pleased with the direction of progress and we hope to share more detailed information on patient uptake with the pen at a future call.
Operator: Thank you. Now we would like to take questions from the participants. Christoph, Andy, and Costa Milano will be answering. In addition, U.S. President Julie R. Kim will be participating. If you want to ask a question, please raise your hand. Please press the raise hand button if you are in English.
Thank you.
Now Yamaguchi, San it's Andy who could be good.
Good evening corrected.
And programs has accelerated so youll remember we started the two phase <unk> studies for Tak 861 in type one narcolepsy in type two narcolepsy in January of last year on.
On the heels of that.
Our finishing our phase one program and just December so we had accelerated the start of that study our expectation was that that study would take about 18 months to fully enrolling complete and we ended up completely in <unk>.
Operator: Please ask in English, in Japanese, if you are in the original journal, then you can use the language. You can ask up to two questions up front. First question from the CT group, Yamaguchi-san. Please go ahead. Thank you, thank you. So this is Yamaguchi from Citibank. I'd like to make two brief questions. The first question is regarding In Tai Pio.
Julie Kim: So at this point, it's very early to say what the patient uptake has been for AntivioPEN. But as Christophe mentioned, we're very pleased with the information to date in terms of the awareness of PEN amongst our HCPs, our target HCPs. And I'm also happy to share that we recently signed an agreement with one of the big three national PBMs as well as agreements with five regional plans as well. So, very pleased with the direction of progress, and we hope to share more detailed information on patient uptake with the PEN at a future call. Thank you. Yamaguchi-san, it's Andy.
Under 12 months, so that study both studies this.
Type one and type two narcolepsy studies have completed enrollment and we are waiting to see data and correct. We will be making a decision. This fiscal year before March to move forward with the phase III program.
Operator: It is true that the entire view of Q3 sales in the dollar term is growing a bit compared to Q1Q, but at the same time, it's still sort of high single-digit growth. So can you give us some current situation, how the new patient situation is, and also you talk about SC, but can you give us some penetration ratio of SQ, SQ, SC, sorry, if you have one. So first of all, regarding the tibia. The second one is that direction, the POC timing, you talk about this fiscal year, meaning by the end of March. I thought it looked a little bit expedited, but I thought it was like April to June.
We're planning the phase III program that risk because.
Yes.
The.
The excitement the ability to enroll the <unk>.
Julie Kim: So, good evening. You're correct; the erection program has accelerated. So you'll remember we started the two Phase 2B studies for TAC861 and Type 1 narcolepsy and Type 2 narcolepsy in January of last year, on the heels of our finishing our Phase 1 program in just December. So we had accelerated the start of that study. Our expectation was that that study would take about 18 months to fully enroll and complete, but we ended up completing it in under 12 months.
The study quickly stems from probably a number of different factors. One is the excitement nerd patients and investigators have over this mechanism. The second is our experience now in narcolepsy and the third as I mentioned, our new tools that we're leveraging to accelerate our clinical trials. So we're.
Very excited to move that forward in terms of when and how data will be presented with we're still working through that internally.
Operator: So is it fair to say that you are going to decide by March, then how are you going to share some data with us after this decision? And this decision will be publicly announced because it's going to be interesting, the data. And that's the second question. Timing and why is this expedited? I say, if it's expedited, thank you. And that's two questions. Thank you very much.
Thank you.
Thank you Yamaguchi San for the question.
So the next question will be from <unk> from J P. Morgan.
Andrew S. Plump: So that study, both studies, the Type 1 and Type 2 narcolepsy studies have completed enrollment, and we're waiting to see data. And correct, we'll be making a decision this fiscal year before March to move forward with the Phase 3 program. We're planning the Phase 3 program at rest because of our enthusiasm. The excitement, and the ability to roll out the study quickly, probably stem from a number of different factors. One is the excitement that patients and investigators have over this mechanism. The second is our experience now in narcolepsy.
While Carlson. Please go ahead.
<unk>.
Yeah.
Can you hear me, yes, yes, we hear you.
I have two questions.
First about safety profile 886 foot.
Julie R. Kim: Great, thank you, Yamaguchi-san. So the first question on Antivio, in terms of the market evolution and uptake of the Antivio pen, I'd like to ask Julie to comment on that. And then the second question on Orexin timing and the communications around that, I'd like to ask Andy to comment on that. Thank you, Yamaguchi-san, for the question. In regards to Antivio, let me talk a little bit about our overall position as well as SubQ.
No I understand that there has been no no hepatopathy or beyond progress.
A six one <unk> you have commended our Congress.
I'll find that <unk> need to be checked or achieve the ask.
To understand them more and more on this point.
Should we be cautious about the <unk> <unk> is not about big issue.
This is robust and its economy their gross margins on.
Cmos note the solid quarter.
Andrew S. Plump: And the third, as I mentioned, are new tools that we're leveraging to accelerate our clinical trials. So we're very excited to move that forward. In terms of when and how data will be presented, we're still working through that internally. Thank you.
Julie R. Kim: So from an overall perspective in terms of new patient starts, as Christophe mentioned, we still remain the market leader in terms of IBD, BioNaive, new patient starts. And particularly in UC, I'm pleased to share that our share grew by 1.1% in UC over the last 12 months. And that was significant growth within that indication. So when you look at the start of AntivioPEN in the US, please remember that new patients have to be, have an induction period on IV first.
Third quarter gross margin it seems to be declined compared to second quarter could you. Please explain this and is this as brand and how should we when she got the gross margin in the fourth quarter.
Unknown Executive: Thank you, Yamaguchi-san, for the questions. So the next question will be from Seiji Wakao from J.P. Morgan. Wakao-san, please go ahead. Hi, can you hear me?
This is Scott Scott question.
Great. Thank you I'll pass on so the first question on packaged six one safety on the hepatitis hepatic toxicity, the visual side effects, but also specifically on CV risk I'd like to ask Andy to comment on that and then the second question on gross margin in Q3, the reasons for the gross gross margin decline and also the outlook for Q4, I would like to ask Costa.
Unknown Executive: Yes, yes, we hear you. I had, I have two questions. First, about safety profile 861. So I understand that there have been no, no HEPA toxicity or vision problems with 861. On the other hand, you commented at our conference that 861 needs to be checked for CVDX. I would like to understand more on this point. Should we be cautious about the civil risk of H61, or is it not a big issue? This is the first, and the second is the growth margin for the three months of the third quarter. The third quarter growth margin seems to be declining compared to the second quarter. Could you please explain this, and is this as planned, and how should we consider the growth margin in the fourth quarter? This is kind of a question.
Julie R. Kim: So at this point, it's very early to say what the patient uptake has been for AntivioPEN. But as Christophe mentioned, we're very pleased with the information to date in terms of the awareness of PEN amongst our HCPs, our target HCPs. And I'm also happy to share that we recently signed an agreement with one of the big three national PBMs as well as agreements with five regional plans as well. So, very pleased with the direction of progress, and we hope to share more detailed information on patient uptake with the PEN at a future call. Thank you. Yamaguchi-san, it's Andy.
Comment on that.
Thanks, Chris and thanks Mckesson.
So in order to fully understand the safety profile of <unk> six one we need to look at the full at the full dataset.
What I can say is that <unk>.
Just on the blinded data, we don't see any evidence of visual disturbances.
Just on the blinded data and the data safety monitoring board looking at Unblinded data, we don't see any evidence of liver toxicity and in terms of cardiovascular risk is something that we have a deep understanding of and.
Andy Plum: So, good evening. You're correct. The erection program has accelerated. So you'll remember we started the two Phase IIb studies for TAC861 and Type I narcolepsy and Type II narcolepsy in January of last year, on the heels of finishing our Phase I program in just December. So we had accelerated the start of that study. Our expectation was that it would take about 18 months to fully enroll and complete, and we ended up completing it in under 12 months.
Andrew S. Plump: Great. Thank you, Wakao-san. So the first question on TAC-861 safety concerns hepatotoxicity, visual side effects, but also specifically on CV risk.
At this point don't have concerns that that's going to be a significant issue for this program.
Okay.
Alright. Thank you <unk> for your question typically we prefer to look at year to date because of fluctuations and phasing on a quarter by quarter quarter basis year to date gross profit.
Unknown Executive: I'd like to ask Andy to comment on that. And then, on gross margin in Q3, the reasons for the gross margin decline, and also the outlook for Q4, I'd like to ask Costa to comment on that.
Margin has declined from a reported basis by two 1% it's on target too.
Andrew S. Plump: Thanks, Crescent. Thanks, Wakao-san. So, in order to fully understand the safety profile of TAC861, we need to look at the full data set. What I can say is that, based on the blinded data, we don't see any evidence of visual disturbances. And based on the blinded data and the data safety monitoring board looking at unblinded data, we don't see any evidence of liver toxicity
Andy Plum: So both studies, the Type I and Type II narcolepsy studies, have completed enrollment, and we're waiting to see data. And correct, we'll be making a decision this fiscal year before March to move forward with the Phase III program. We're planning the Phase III program at risk because of our enthusiasm. The excitement, and the ability to roll out the study quickly, probably stem from a number of different factors. One is the excitement that patients and investigators have over this mechanism. The second is our experience now in narcolepsy.
Our internal forecast is predominantly driven by the loss of exclusivity headwinds you know we have a higher loss of exclusivity margins for products like Vyvanse Brocade Zorba.
And less revenue for Covid vaccines.
And launch products, although they are growing quite considerably at 12, 7%.
Andrew S. Plump: And in terms of cardiovascular risk, it's something that we have a deep understanding of and, at this point, don't have concerns that that's going to be a significant issue for this program. Hi, thank you Wakao-san for your question. Typically, we prefer to look at year-to-date because of fluctuations and phasing on a quarter-by-quarter basis. So, year-to-date, the gross profit margin has declined from a reported basis by 2.1%.
They're still not at the level to offset the loss of exclusivity headwinds, but overall the three 1% decline versus prior year is on track to our four.
Andy Plum: And the third, as I mentioned, are new tools that we're leveraging to accelerate our clinical trials. So we're very excited to move that forward. In terms of when and how data will be presented, we're still working through that internally. Thank you.
In total forecast and externally thank you.
Thank you.
Okay. The next question, we'd like to take from Mike Labelle Kovich from Cowen. Please on mute and ask your question.
Operator: Thank you, Yamaguchi-san, for the question. So the next question will be from Seiji Wakao from J.P. Morgan. Wachowski, please go ahead. Hi, can you hear me?
Great. Thank you for the questions I have two the first is <unk>.
Broadly on the oncology segment.
<unk> had some wins and some setbacks in this area, but I think it's fair to say the segment lacks what could be considered a flagship product or pipeline candidate would you disagree with that statement and what oncology asset do you think deserves more attention than it perhaps receives.
Constantine Saroukos: It's on target with our internal forecast. It's predominantly driven by the loss of exclusivity. Headwinds, you know; we have higher loss of exclusivity margins for products like Vyvanse, Velcade, and Azilba, and less revenue for COVID vaccines. The growth and launch products, although they're growing quite considerably at 12.7%, they're still not at the level to offset the loss of exclusivity headwinds. But overall, the 2.1% decline versus prior years is on track with our internal forecast.
Operator: Yes, yes, we hear you. I have two questions. First, about safety profile 861. I understand that there have been no HEPA toxicity or vision problems with 861. On the other hand, you have commented at our conference that 861 needs to be checked for CVDX. I would like to understand more on this point. Should we be cautious about the civil risk of H61, or is it not a big issue?
And then my second question is on <unk>, you have made impressive progress so far how should we think about the path from here to potential 2 billion USD and peak sales will growth come in big bonuses as government contracts are signed or will it be more linear and gradual.
Thank you great.
Unknown Executive: Thank you. Okay, the next question we'd like to take from Mike Nedelkovych from Cowen. Please unmute and ask your question. Great, thank you for the questions. I have two.
Great. Thank you Mike So the question on Q Tango I'd like to ask Christophe to take that one and on the oncology portfolio in the pipeline, perhaps Christophe can comment on that and then Andy can follow up with some pipeline comments.
Andy Plum: This is the first. And the second is the growth margin for the three months of the third quarter. The third quarter growth margin seems to be declining compared to the second quarter. Could you please explain this, and is this a bug?
Unknown Executive: The first is pretty broadly on the oncology segment. You've had some wins and some setbacks in this area, but I think it's fair to say that this segment lacks what could be considered a flagship product or pipeline candidate. Would you disagree with that statement?
And I think to mitral I think.
The two then it's a combination.
Nation actually because it was a private market. So when you introduced the vaccines in the private market.
Costa Zaroucos: And how should we consider the growth margin in the fourth quarter? This is the second question. Great. Thank you, Wakao-san.
That's a bit more and you also answered.
Can mobilize a takeoff.
Unknown Executive: And what oncology asset do you think deserves more attention than it perhaps receives? And then my second question is about Kudenga. You've made impressive progress so far. How should we think about the path from here to potential $2 billion USD in PEEP sales? Will growth come in big bolus as government contracts are signed?
Andy Plum: So the first question on TAC861 safety, on hepatotoxicity, the visual side effects, but also specifically on CV risk. I'd like to ask Andy to comment on that. And then the second question on gross margin in Q3, the reasons for the gross margin decline, and also the outlook for Q4. I'd like to ask Costa to comment on that. Thanks, Crescent. Thanks, McAllister.
The big volume is more of a national immunization program.
That's more like because secondly, if a country like Brazil for example want to introduce a very vast.
<unk>.
In addition programming of you see you have.
We'd have a sort of big jump when that happens. So that's why it's notoriously quite.
Unknown Executive: Or will it be more linear and gradual? Great, thank you, Mike. So the question on Kudengo, I'd like to ask Christophe to take that one. And on oncology, the portfolio in the pipeline, perhaps Christophe can comment on that, and then Andy can follow up with some pipeline comments. And thank you, Michael. I think Kudenga is actually a combination, actually, because of the private market.
Difficult to actually forecast long term this type of offer vaccines.
No.
There is a one to $1 62 billion PK is really correlated to now to our ability to to reach the one.
Andy Plum: So in order to fully understand the safety profile of TAC861, we need to look at the full data set. What I can say is that, based on the blinded data, we don't see any evidence of visual disturbances. And based on the blinded data and the data safety monitoring board looking at unblinded data, we don't see any evidence of liver toxicity.
$100 million.
And enrollment prediction capability, we are not there yet, but we are very very actively looking at expanding our own manufacturing capacity on our side and the silicon in Germany, we have a current share more and we are in discussion with potential.
Christophe Weber: So when you introduce the vaccines in the private market, that's, that's a bit more linear. So it's, we can modelize a takeoff. But the big volume is more national immunization programs. And that's, that's more nonlinear, if you like, because suddenly, if a country like Brazil, for example, wants to introduce a very vast immunization program, obviously, you have, you will have a sort of big jump when that happens. So that's why it's notoriously quite difficult to actually forecast long term this type of vaccine. Now, the 1.6 to 2 billion peak is really correlated now to our ability to reach the 100 million dose per annum production capability. We are not there yet, but we are very, very actively looking at expanding our own manufacturing capacity at our site in Simken in Germany.
Andy Plum: And in terms of cardiovascular risk, it's something that we have a deep understanding of and, at this point, don't have concerns that that's going to be a significant issue for this program. Hi, thank you Waqar for your question. Typically, we prefer to look at year-to-date because of fluctuations and phasing on a quarter-by-quarter basis. So, year-to-date, the gross profit margin has declined from a reported basis by 2.1 percent.
Potential partner to go to this 100 million as quickly as possible.
As you know others are with that Guy has been even stronger than what we expected the approval the label of onshore and so.
Frankly today the demand is greater than the supply of these vaccines. So we are very actively looking at expanding our manufacturing capacity.
Costa Zaroucos: It's on target with our internal forecast. It's predominantly driven by the loss of exclusivity. Headwinds, you know; we have higher loss of exclusivity margins for products like Vyvanse, Velcade, and Azilba and less revenue for COVID vaccines. The growth and launch products, although they're growing quite considerably at 12.7 percent, they're still not at the level to offset the loss of exclusivity headwinds. But overall, the 2.1 percent decline versus prior years is on track with our internal forecast.
Oncology, we had some we knew we had some setbacks.
We want to be a leader in oncology, we are not there yet so we are very much active on that yet.
Actually in our pipelines are less.
Advance.
Christophe Weber: We have a current CMO, and we are in discussions with other potential partners to go to this 100 million doses as quickly as possible. As you know, the data has been even stronger than we expected. The approval, and the label, also.
Some other offsets like Asics, one and 279 phase III I'm not there yet we have a couple of.
By apply effect in our pipeline, which are very promising.
<unk> can say a few words about this assets.
Costa Zaroucos: Thank you. Okay, the next question we'd like to take from Mike Nedeljkovic from Cowen. Please unmute and ask your question.
Yeah. Thanks, Thanks, Christophe and thanks, Mike and I'll mention that.
Christophe Weber: And so, frankly, today the demand is greater than the supply of these vaccines, so we are very actively looking at expanding our manufacturing capacity. On oncology, we had some wins, we had some setbacks. We want to be a leader in oncology. We are not there yet.
Having having worked in R&D for 25 years.
Operator: Great. Thank you for the questions. I have two.
The most exciting <unk>.
Operator: The first is, broadly speaking, on the oncology segment. You've had some wins and some setbacks in this area, but I think it's fair to say that this segment lacks what could be considered a flagship product or pipeline candidate. Would you disagree with that statement, and what oncology asset do you think deserves more attention than it perhaps receives? And then my second question is about Kudenga.
Reputed area, but also the most challenging that I've been involved in has been has been oncology.
And we know that the if we look at the investment in oncology in the in.
Christophe Weber: So we are very active in that. They are actually in our pipeline, they are less advanced than some other assets like 861 and 279 phase three, they're not there yet. We have a couple of pipelines in our pipeline, which are very promising. Perhaps Andy can say a few words about that. Thanks, Christophe.
In the venture World. If we look at the amount of NIH and academic research its focus on oncology there isn't an area, where we spend more and where we understand more and it also is an area where we are.
Faces many challenges that failure rates in oncology continues to be amongst the highest in the industry. So.
Christopher Webber: You've made impressive progress so far. How should we think about the path from here to potential $2 billion USD in PEEP sales? Will growth come in big bolus as government contracts are signed, or will it be more linear and gradual? Great, thank you, Mike. So the question on QDengo, I'd like to ask Christophe to take that one, and on the oncology portfolio in the pipeline, perhaps Christophe can comment on that, and then Andy can follow up with some pipeline comments. And thank you, Michael.
I don't think its just us I think this is this is the field on the flip side the the opportunity to change patients' lives and the revenue potential is just demand and so we're really committed to oncology. We're really excited about our pipeline. We still haven't had that breakthrough right, but I think as you know it can happen very quickly.
Andrew S. Plump: And thanks, Mike. And I'll mention that, you know, having worked in R&D for 25 years, in some ways, the most exciting therapeutic area, but also the most challenging that I've been involved in, has been oncology. And, you know, we know that if we look at the investment in oncology in the venture world, if we look at the amount of NIH and academic research that's focused on oncology, there isn't an area where we spend more and where we understand more. And it also isn't an area where we face as many challenges.
We have a handful of programs in mid stage development right now Super some stat is lead.
We have two sting agonist, we have to.
Two T.
T cell engages that they came in through a company.
Andy Plum: I think the one thing it's a combination, actually, because of the private market. So when you introduce the vaccines into the private market, that's, that's a bit more linear. So it's a We can modelize a takeoff, but the big volume is more a national immunization program, and that's more nonlinear, if you like, because suddenly, if a country like Brazil, for example, wants to introduce a very vast immunization program, obviously, you will have a sort of big jump when that happens. So that's why it's notoriously quite difficult to actually We are not there yet, but we are very, very actively looking at expanding our own manufacturing capacity at our site in Simcon in Germany.
A company that we bought a few years ago that we had to help to create club Maverick Therapeutics and then we have a number of programs in early development and we have our cell therapy engines. So we feel that we're making the right investments in oncology and the key now is to leverage the excellence that we're building and development in order to bring these programs to decisions.
Andrew S. Plump: The failure rates in oncology continue to be amongst the highest in the industry, so I don't think it's just us. I think this is the field. On the flip side, the opportunity to change patients' lives and the revenue potential are just immense. And so we're really committed to oncology. We're really excited about our pipeline. We still haven't had that breakthrough product, but I think, as you know, it can happen very quickly. We have a handful of programs in mid-stage development right now, and Subhasamstat is the lead. We have two Sting agonists.
I mentioned that just Monday, we actually brought in a new.
Oncology R&D had PK Mauro.
Real Deepak certain highly experienced across oncology and multiple modalities. So we're really looking forward to PK, taking the reins in carrying carrying oncology efforts forward Mike.
Okay. Thank you.
Thank you Mike.
So the next question, we're going to take from Shinichi Muramoto <unk> from Morgan Stanley Muraoka, San Please go ahead and ask your question.
We will advance funding some railcar Morgan Stanley.
Andy Plum: We have a current CMO, and we are in discussions with other potential partners to go to this 100 million doses as quickly as possible. As you know, the data has been even stronger than what we expected, the approval, and the label, also, and so frankly, today the demand is greater than the supply of these vaccines, so we are, you know, very actively looking at expanding our manufacturing capacity. Oncology We had some wins; we had some setbacks. We want to be a leader in oncology. We are not there yet, so we are very active in that. Actually, in our pipeline, they are less advanced than some other assets like 861 and 279, phase 3. They are not there yet.
Thank you for this opportunity.
Okay.
Andrew S. Plump: We have two T-cell engagers that came in through a company that we bought a few years ago that we had to help to create called Maverick Therapeutics, and then we have a number of programs in early development. And we have our cell therapy engine, so we feel that we're making the right investments in oncology. And the key now is to leverage the excellence that we're building in development and just bring these programs to decisions. I'll mention that just on Monday, we actually brought in a new oncology R&D head, P.K. Morrow, who's a real deep expert, highly experienced across oncology in multiple modalities.
My first question is to Christoph.
Next fiscal year.
And I'll come back with them.
And how do we look at this.
Well I think.
This is positive right now, but it's not declining as fast.
And inflation, how do you look at the next three months ago, you set them next fiscal year, that's going to be tough.
Three months.
Since then have you changed your mind about that what would happen in the next fiscal year or not.
That's my first question.
And then my second question is about a 279 pipeline you see and C D high dose <unk>.
Andrew S. Plump: So we're really looking forward to P.K. taking the reins and carrying our oncology efforts forward. Thank you, Mike.
Andy Plum: We have a couple of assets in our pipeline which are very promising. Perhaps Andy can say a few words about one of them. Thanks, Christoph, and thanks, Mike. And I'll mention that, having worked in R&D for 25 years, in some ways, the most exciting therapeutic area, but also the most challenging, that I've been involved in has been oncology. And we know that if we look at the investment in oncology in the venture world, if we look at the amount of NIH and academic research that's focused on oncology, there isn't an area where we spend more and where we understand more. And it also isn't an area where we face as many challenges. The failure rates in oncology continue to be amongst the highest in the industry, so I don't think it's just us.
Unknown Executive: Okay, so the next question we're going to take from Shinichiro Muraoka from Morgan Stanley. Muraoka-san, please go ahead and ask your question. Konnichiwa.
It's going to start.
And.
I want to know the possibly until filing or approval of the phase <unk>.
Unknown Executive: This is Muraoka from Morgan Stanley. Thank you for this opportunity. My first question is to Christophe. Next is clear. Um, how do we look at this? Well, FX is positive right now; Vyvanse is not declining as fast.
Phase III will be conducted first and then Paul you see in C. D. You separately.
<unk> is.
Is there a pathway that would accelerate this process.
That's all my questions. Thank you okay. Thank you for.
So the first question to Christoph on thoughts for next fiscal year fiscal year 2020 for Q2, you said it would be a tight year has anything changed over the past three months since your previous comments on FY 2020 for outlook.
Unknown Executive: And based on that situation, how do we look at the next year? Three months ago, you said the next fiscal year was going to be tough. Three months have passed since then.
Unknown Executive: Have you changed your mind about what will happen in the next fiscal year or not? That's my first question. And my second question is about the 279 pipeline, UC and CD, high-dose, phase 2B, is going to start. I want to know the pathway until filing or approval after phase 2B. Phase 3 will be conducted first, and then, for UC and CD, you will file separately. Or, is there a pathway that would accelerate this process? Those are my questions.
And then the second question on TAC 279 on the path to submission in ulcerative colitis and Crohn's disease.
We need to do a phase III study in both of those indications after the phase II B. So what is the path to submission in those indications I'd like to ask Andy to take that question.
Andy Plum: I think this is the field. On the flip side, the opportunity to change patients' lives and the revenue potential are just immense. And so we're really committed to oncology. We're really excited about our pipeline. We still haven't had that breakthrough product, but I think, as you know, it can happen very quickly. We have a handful of programs in mid-stage development right now. Subasamstat is the lead drug. We have two Sting agonists.
Thank you Chris Thank you Marcus.
Obviously, we'll give a precise.
Christophe Weber: Thank you. The first question is to Christophe on thoughts for the next fiscal year, fiscal year 2024. In Q2, you said it would be a tight year.
Precise guidance on next year on the fiscal year 2004 in May but what we described earlier remain valid it will be a <unk>.
Unknown Executive: Has anything changed over the past three months since your previous comments on FY 2024 outlook? And then the second question on TAC 279 on the path to submission for ulcerative colitis and Crohn's disease. Will we need to do a phase three study in both of those indications after phase 2b? So what is the path to submission for those indications? I'd like to ask Andy to take that question. Thank you, Chris.
Yeah. It would be we can describe it as flattish year flat.
Andy Plum: We have two T-cell engagers that came in through a company that we bought a few years ago that we had to help to create called Maverick Therapeutics. And then we have a number of programs in early development, and we have our cell therapy engine. So we feel that we're making the right investments in oncology, and the key now is to leverage the excellence that we're building in development and just bring these programs to decisions. I'll mention that just on Monday, we actually brought in a new oncology R&D head, P.K. Morrow, who's a real deep expert, highly experienced across oncology in multiple modalities.
Flattish.
Perhaps slightly positive or slightly negative we need to see how vyvanse is evolving in the next three months, but it would be flattish.
Such a shift certainly in both revenue and cost and profit margin because the way to see it is that the first semester, all will still be a declining semester because of the <unk>.
Christophe Weber: Thank you, Muraoka-san. You know, obviously, we'll give precise guidance for next year at fiscal year 24 in May. But what we described earlier will remain valid; it will be a tight year; it will be, we can describe it as a flattish year, flattish, perhaps slightly positive or slightly negative. We need to see how Vyvons is evolving still in the next three months.
Generic introduction of violence in August 2003, So your seats will impact the first semester on the other end of the second semester off.
Andy Plum: So we're really looking forward to P.K. taking the reins and carrying our oncology efforts forward. Thank you, Mike.
It will be on a like for like an issue like it. So it will be much lesser generic impact on headwinds in this one semester. That's why overall the year, we'd be flattish with will provide a precise guidance in may. Thank you.
Operator: Okay, so the next question we're going to take from Shinichiro Muraoka from Morgan Stanley. Muraoka-san, please go ahead and ask your question. Konnichiwa, this is Shinichiro Muraoka from Morgan Stanley.
Christophe Weber: But it will be a fattish year, certainly in terms of both revenue and co-opting profit margin because the way to see it is that the first semester will still be a declining semester because of the generic introduction of Vyvons on August 23. So you see, it will impact the first semester. On the other hand, in the second semester, it will be like for like, if you like. So there will be much less generic impact on headwinds in the second semester.
And then <unk>, maybe I can dial up and walk you just briefly through the strategy for Tak seven nine to first and foremost is to push forward in this continuum of psoriasis and Psoriatic arthritis, where we have strong proof of concept.
Operator: Thank you for this opportunity. My first question is to Christophe. Next to the square, um, how do we look at this?
Operator: Well, FX is positive right now, and Vyvanse is not declining as fast. And based on this situation, how do we look at the next year? Three months ago, you said the next fiscal year was going to be tough, but three months... have passed since then. Have you changed your mind about what will happen in the next fiscal year, or not?
Our hope is that the.
<unk> phase III program, which is enrolling quite well, we can accelerate bring that to market in the 25 to 27 range. Shortly thereafter, we will startup we're starting our phase III studies in Psoriatic arthritis. The latitude program. Shortly after approval in psoriasis, we're looking forward to approval in Psoriatic arthritis, and as we've discussed this is a.
Christophe Weber: That's why, overall, the year will be fattish but will provide precise guidance in May. Thank you. And Muraoka-san, maybe I can dial up and walk you just briefly through the strategy for TAC 279. So, first and foremost, it is to push forward in this continuum of psoriasis and psoriatic arthritis where we have strong proof of concept. Our hope is that the psoriasis phase 3 program, which is enrolling quite well, we can accelerate, bring that to market in the 25 to 27 range. Shortly thereafter, we're starting our phase 3 studies in psoriatic arthritis, the Latitude Program. Shortly after approval in psoriasis, we're looking forward to approval in psoriatic arthritis. And as we've discussed, this is a continuum of disease, and we strongly believe that TAC279 will be best-in-class. This year, we'll start a head-to-head trial in psoriasis against Ducravacitinib to demonstrate that experimentally.
Operator: That's my first question. And my second question is about the 279 pipeline. UC and CD, high-dose, phase 2B, is going to start, and uh... I want to know the pathway until filing or approval after phase 2B. Is phase 3 going to be conducted first, and then for UC and CD, you will file separately or not? Is there a pathway that would accelerate this process?
<unk> disease, and we strongly believe that tap to 79 will be a best in class. This year, we will start a head to head in psoriasis against to grab a citizen to demonstrate that experimentally. So we're very excited about pushing that sorry, psoriasis psoriatic arthritis spectrum forward as rapidly as possible for IBD.
Operator: Those are my questions. Thank you. The first question is for Christophe on thoughts for the next fiscal year, fiscal year 2024. In Q2, you said it would be a tight year.
No.
Maybe getting a little bit ahead of ourselves to start to predict approval timelines I think the first diverse impaction for us is really demonstrating that it took two inhibitor can be effective in crohn's disease and ulcerative colitis. We believe strongly based on the genetic data that exists based on the role that <unk> plays in cider.
Christopher Webber: Has anything changed over the past three months since your previous comments on FY 2024 outlook? And then the second question on TAC 279 on the path to submission for ulcerative colitis and Crohn's disease. Will we need to do a phase three study in both of those indications after phase 2b? So what is the path to submission for those indications? I'd like to ask Andy to take that question.
Andrew S. Plump: So we're very excited about pushing that psoriasis, psoriatic arthritis spectrum forward as rapidly as possible. For IBD, though, it may be getting a little bit ahead of ourselves to start to predict approval timelines. I think the first inflection point for us is really demonstrating that a TIC2 inhibitor can be effective in Crohn's disease and ulcerative colitis. We believe strongly, based on the genetic data that exists, based on the role that TIC2 plays in cytokine signaling, based on robust animal model data, we really believe that with a higher dose, we can be efficacious, but it's incumbent on us to So first and foremost is getting the phase 2b studies off the ground. The Crohn's study should start in the next couple of months.
<unk> signaling based on robust animal model data, we really believe that with a higher dose we can be efficacious, but it's it's incumbent on us to demonstrate that in clinical trials. So first and foremost is getting the phase <unk> studies off the ground. The Crohn's study should start in the next couple of months UC study shortly thereafter.
Andy Plum: Thank you Chris, thank you Morakos, and you know obviously we'll give precise guidance for next year, fiscal year 24, in May, but what we described earlier will remain valid; it will be tight here; we can describe it as a flattish year, flattish, perhaps slightly positive or slightly negative. We need to see how Vivance is evolving in the next three months. But it would be a fattish year, certainly in both revenue and corrected profit margin.
And then if those studies are successful.
That's our plan.
The acceleration path. Unfortunately, IBD is a somewhat of a lung development track the acceleration path is through excellence in in clinical trial execution, and that's something as I mentioned with 861, we feel we're really getting a handle on with with the with the model that we have in place and with the digital and technology tools that were.
Starting to implement in our in our development programs. If everything goes well I think we'd be looking at approvals in IBD by by the end of this decade.
Christopher Webber: Because the way to see it is that the first semester will still be a declining semester because of the generic introduction of Vivance on August 23. So you see, it will impact the first semester. On the other end, the second semester, it will be like for like, if you like. So there will be much less generic impact on headwinds in the second semester. That's why, overall, the year will be fattish.
Andrew S. Plump: UC study shortly thereafter. And then if those studies are successful, that's our plan. The acceleration path, unfortunately, IBD is somewhat of a long development track. The acceleration path is through excellence in clinical trial execution, and that's something, as I mentioned, with HX1, we feel we're really getting a handle on with the model that we have in place and with the digital and technology tools that we're starting to implement in our development programs. If everything goes well, I think we'll be looking at approvals in IBD by the end of this decade. Thank you, Muraoka-san, for the question. So next question, moving on, I'd like to call on Hiroyuki Matsubara from Nomura. Matsubara-san, please unmute and ask your question. [inaudible] all around and switch back, and I've already finished developing it in Europe. Nucleic Acid, and the efficacy seems better than Takeda. What do you think of this? Do you agree?
Okay.
Thank you Roxanne for the question.
So next question moving on I'd like to call on.
<unk> from Nomura.
Matsubara Sam please on mute and ask your question is not what I'm talking about what's going to happen.
Where do you think you can keep thinking yes.
Andy Plum: But we'll provide precise guidance in May. Thank you. And Mariacosan, maybe I can dial you and walk you just briefly through the strategy for TAC 279.
So somebody asked a question about China bus.
Okay.
Oh yeah.
And snitch patent cases.
And I'm glad to see that.
I already see stability.
Okay.
Nuclear patent.
It seems that kind of impact that at all what you're seeing countries.
Generation.
The potential of the next generation.
Andy Plum: So first and foremost, it is to push forward in this continuum of psoriasis and psoriatic arthritis where we have strong proof of concept. Our hope is that the psoriasis phase three program, which is enrolling quite well, we can accelerate, bring that to market in the 25 to 27 range. Shortly thereafter, we're starting our phase three studies in psoriatic arthritis, the Latitude Program. Shortly after approval in psoriasis, we're looking forward to approval in psoriatic arthritis. And as we've discussed, this is a continuum of disease, and we strongly believe that PAC 279 will be the best in class. This year, we'll start a head-to-head in psoriasis against Ducravacitinib to demonstrate that experimentally.
Well, that's a difference between next generation compound and eight six months.
We're seeing the competitive landscape evolving including both switch back from all the data, but also next line of therapy is coming through I'd like to ask Julie perhaps to comment on that and then the next question on the next generation Orexin agonist. How are we positioning that vis vis Tak 861, like Andy to comment on that.
Unknown Executive: And the next generation, the reaction and the potential of the next generation? And what's the difference between the next generation compound and H61? I'd like to ask Julie to comment on that. And then the next question on the next generation Erexian agonist, how are we positioning that vis-à-vis Tac861? I'd like Andy to comment on that.
Thank you much marathon for the question in regards to tax IRA when you look at the.
Patient switching from all the data we have seen patients switched back to tech zero again textile has very strong efficacy and safety data for the number.
Multiple years, and so that that has.
Andrew S. Plump: Thank you Matsubara san for the question. In regards to TxIRO, when you look at patients switching from Orlodea, we have seen patients switch back to TxIRO. Again, TxIRO has very strong efficacy and safety data proven over multiple years, and so that has been the reason why patients switch back to Taxiro from Orladeo. The convenience of the oral does not trump the stronger efficacy that Taxiro presents.
Andy Plum: So we're very excited about pushing that psoriasis, psoriatic arthritis spectrum forward as rapidly as possible. For IBD, though, it may be getting a little bit ahead of ourselves to start to predict approval timelines. I think the first inflection point for us is really demonstrating that a TIK2 inhibitor can be effective in Crohn's disease and ulcerative colitis. We believe strongly, based on the genetic data that exists, based on the role that TIK2 plays in cytokine signaling, based on robust animal model data, we really believe that with a higher dose, we can be efficacious, but it's incumbent on So first and foremost is getting the phase two B studies off the ground. The Crohn's study should start in the next couple of months. UC study shortly thereafter.
And the reason why patients switched back to tax IRA from or the day of the convenience of the oral does not Trump a stronger efficacy that textile present in regards to new entrants you were mentioning in particular, Gary This is Matt.
What we've seen from the data that's been shared thus far it does seem to have efficacy that is similar to tech zero.
But again, we believe that the techs iras.
Julie Kim: In regards to new entrants, you were mentioning in particular Garudisumab. What we've seen from the data that's been shared thus far, it does seem to have efficacy that is similar to Taxiro. But again, we believe that Taxiro's [inaudible] performance in terms of efficacy and safety is a benefit for TxIRO. And Matsubara-san, on the next-generation oral orexin agonist, TAC360, which is going to have its IND filed in the next several weeks, it's an entirely novel structure relative to TAC861, novel properties, potency, PK, e How we position that, to a large extent, will depend on the data sets that we'll see in the near future on TAC861. But there are lots of possibilities, and it's something that we hope we'll be able to share during an extended discussion at an R&D event that we're planning for later in 2024. Arigatou gozaimasu.
Strong position in the marketplace we have.
Market share leadership, particularly in the prophylaxis.
Segment.
E and that that long.
Performance in terms of efficacy and safety is a benefit for tech zero.
Andy Plum: And then if those studies are successful, that's our plan. The acceleration path. Unfortunately, IBD is somewhat of a long development track. The acceleration path is through excellence in clinical trial execution, and that's something, as I mentioned with 861, we feel we're really getting a handle on with the model that we have in place and with the digital and technology tools that we're starting to implement in our development programs. If everything goes well, I think we'll be looking at approvals in IBD by the end of this decade. Thank you, Murata san, for the question. So next question, moving on, I'd like to call on Hiroyuki Matsubara from Nomura. Matsubara-san, please unmute and ask your question. What's your first question about drugs? all around and switch back, and I already see stickers up here, nuclear asset, and the efficacy seems better than tactile. What do you think of this?
And <unk>.
<unk> on the next generation Orexin oral Orexin agonist tax $3 60, which is gonna habitat IND filed in the next several weeks.
It's an entirely novel structure relative to <unk> six one.
Novel novel properties potency PK.
Et cetera, how we position that to a large extent will depend on the data sets that we'll see in the near future on Tac 861.
But there are lots of possibilities and it's something that we hope that we'll be able to share during an extended discussion at an R&D event that we're planning for later in 2024.
Yes.
That was it.
I think that those I Mustang.
Andrew S. Plump: Okay, let's move on to the next question. I'd like to call upon Yamakita-san from Jeffreys. Please unmute and ask your question. Oh, it looks like the hand has been lowered.
Let's move on to the next question.
Like to call upon me I'll be Yamaki Dasani Yamaki talk.
From Jefferies. Please on mute and ask your question.
Yeah.
It looks like the hand, theres been lowered so I'd like to move onto the next question from Macquarie. So if a friend or from Macquarie is still on the line. Please go ahead on mute and ask your question.
Unknown Executive: So I'd like to move on to the next question from Macquarie. So if Franda from Macquarie is still on the line, please go ahead, unmute, and ask your question. Okay. Hello, is that you, Tony? We're unable to hear you.
Julie R. Kim: And the next generation, the reaction and the potential of the next generation? And what's the difference between the next generation compound and H61? we've got to tackle solving including both switch back from but also the next line of therapy is coming through. I'd like to ask Julie perhaps to comment on that and Sue Liperman. The next question on the next generation resonates, how are we positioning that vis-a-vis searching the world, and I'd like Andy to comment on that. Thank you, Matsubara san, for the question. In regards to TexIRO, when you look at patients switching from Orlodea, we have seen patients switch back to TexIRO. Again, TexIRO has very strong efficacy and safety data proven over multiple years, and so that has been the reason why patients switch back to Taxiro from Orladeo. The convenience of the oral does not trump the stronger efficacy that Taxiro presents.
Right Okay.
Hello, Thank you Tony.
Yeah.
We're unable to hear you hi, this is <unk> 20 around from Macquarie, Oh, Hi, Yes, Tony Yes, we can hear you okay perfect yeah, Okay, I'm sorry, yes.
Unknown Executive: Hi, this is Tony Ren from Macquarie. Oh, hi. Yes, Tony. Yes, we can hear you.
Unknown Executive: Okay, perfect. Yeah. Okay. Yeah. Sorry.
Unknown Executive: Yeah. So, a couple of questions. First of all, about the licensing of Protagonist Therapeutics' Rosfertide, I just want to get a sense from you about your expectation for this asset. When do you think it's going to launch? What's the peak sales estimate? So, that's online Rossford Tide.
So a couple of a couple of questions. So our self so first of all about the licensing of <unk>.
Protagonist Therapeutics Ross for a tide.
Just wanted to get a sense from you.
About your expectation at this asset.
When do you think it's going to launch a what's the peak sales estimates.
So so that's how I rasp are tied are the.
Unknown Executive: The other one is that I want to go back to Intivio again. So, basically, I always think about Intivio as the market size in terms of the size of the pie, which is determined by the number of colonoscopy procedures being performed. I want to see how that's trending after COVID. And then the other one is that I did notice, I think on slide number 27, there was a bit of a market share decline compared to the second quarter slides, so I just want to get some clarity on that. Okay, Julie, would you like to take both of those questions, perhaps?
The other one is that I want to go back to.
I wanted to go back to I N T V or again, so basically I always think about entyvio as a market sizing up the size of the pie.
As determined by the number of colonoscopy colonoscopy procedures being performed on a see how that's trending after COVID-19.
Andy Plum: In regards to new entrants, you were mentioning, in particular, Garudisumab. What we've seen from the data that's been shared thus far, it does seem to have efficacy that is similar to Taxiro. But again, we believe that with Taxiro, in the marketplace; we have market share leadership, particularly in the prophylaxis segment of HAE, that that long performance in terms of efficacy and safety is a benefit for TxIRO. And Metsuburisun, on the next generation oral orexin agonist, TAC360, which is going to have its IND filed in the next several weeks; it's an entirely novel structure relative to TAC861, novel properties, potency, PK, et cetera.
And then the other one is that I did notice I think on last slide number 27.
As a bit of a market share decline.
Impaired to the second quarter slides, so I just wanted to get some clarity on that.
Okay, Julian would you like to take both of those questions perhaps.
Julie Kim: Sure. Thanks, Tony, for the questions. In terms of Risveratai, we've not provided peak market share data yet. We will do that in the future. In terms of when we expect launch, as Andy mentioned, currently, the product is in phase three clinical trials. We do understand that the trial is enrolling quite well.
Sure. Thanks, Tony for the questions in terms of a fair time, we've not provided.
Market share data, yet we will do that in the future in terms of when we expect launch.
Andy mentioned currently the product is in phase III clinical trials.
We do understand that the trial is enrolling quite well.
Julie Kim: So it'll still be a few years before we see launch, but again, we will provide more details later on in terms of the spherotype. For the questions in regards to Antivio, as I mentioned earlier, in terms of first line treatment where Antivio is strong, we still maintain our market share leadership position; where we have seen some market share loss is in second line and further. This is where new competitive entrants have come in, and that's typically where they come in, second line and beyond. And so you are correct in that, overall, it has led to a slight market share decline, but we remain quite strong in first line. Okay, thank you very much. Thank you, Tony, and I think Yamakita-san from Jeffreys is back. Yamakita-san, or if that's Steve Barker, perhaps if you'd like to unmute and ask a question, please.
Andy Plum: How we position that, to a large extent, will depend on the data sets that we'll see in the near future on TAC861. But there are lots of possibilities, and it's something that we hope we'll be able to share during an extended discussion at an R&D event that we're planning for later in 2024. Thank you very much.
So it will still be a few years before we see launch but.
Again, we will provide more detail.
Later on in terms of its fair to say.
For the questions in regards to Entyvio as I mentioned earlier.
In terms of first line treatment, where entyvio is strong we still maintain our market share leadership position, where we have seen some market share loss is in second line and further this is where the new competitive entrants have come in and Thats typically where they come in.
Operator: It looks like the hand has been lowered, so I'd like to move on to the next question from Macquarie. So, if Franda from Macquarie is still on the line, please go ahead, unmute, and ask your question. Okay. Hello, is that you, Tony? We're unable to hear you.
Second line and beyond and so you are correct in that overall it has led to a slight market share decline, but we remain quite strong in first line.
Operator: Hi, this is Tony Ren from Macquarie. Oh, hi, yes, Tony. Yes, we can hear you.
Okay. Thank you very much.
Thank you Tony.
Thank you.
Operator: Okay, perfect. Yeah, okay, yeah, sorry, yeah. So a couple of questions. First of all, about the licensing of Protagonist Therapeutics' Raspertide. I just wanna get a sense from you about your expectation for this asset. When do you think it's gonna launch? What's the peak sales estimate? So, that's on my Rossford Tide.
Kicked us on from Jefferies is back Emricasan or thoughts, Steve Barker, perhaps if you'd like to on mute and ask a question. Please yes, Steve Barker from Jefferies. Thanks, very much for taking my questions. My first question's related to Q Deng I'm looking at the geographic split of the sales to date and it look.
Julie Kim: Yes, it's Steve Barker from Jeffreys. Thanks very much for taking my questions. My first question is related to Kudenga. I'm looking at the geographic split of the sales to date, and it looks like it's about 70% weighted towards emerging markets. I was wondering if you expected that to continue or whether the weight in emerging markets would be higher in the future. And then also the potential $2 billion peak sales related to 100 million doses. Should we assume that you're aiming for an average sales price of about $20 per dose? And then my second question is related to margins; you are aiming to get your core OPM back up well back up to the low to mid-30s, ultimately. I was hoping you could help us understand the path to that high level of profitability, in terms of improvements in cost ratios and GPM. Where is the improvement likely to come from? Thank you. Great. Thank you, Steve, for those questions. So a question on Kudenga and the revenue split and also average cost of those, and then also the return to the low to mid-30s. I'd like to ask Christophe to comment on both of those questions.
Like it's about 70% weighted towards emerging markets.
Julie R. Kim: The other one is that I want to go back to Intivio again. So, basically, I always think about Intivio as the market size in terms of the size of the pie, which is determined by the number of colonoscopy procedures being performed. I want to see how that's trending after COVID. And then the other one is that I did notice, I think on slide number 27, there was a bit of a market share decline compared to the second quarter slides. So, I just want to get some clarification on that.
Wondering if you expected that to continue or whether the weight.
Emerging markets would would be.
Higher in future and then also a potential $2 billion peak sales.
Related to a 100 million.
Doses should we assume that you're aiming for an average sales price of about $20 per dose.
And then my second question's related to margins.
You are aiming to get your core OPM backup well back up to low to mid Thirty's ultimately.
Julie R. Kim: Okay, Julie, would you like to take both of those questions perhaps? Sure. Thanks, Tony, for the questions. In terms of Risveratai, we've not provided peak market share data yet. We will do that in the future. In terms of when we expect launch, as Andy mentioned, currently, the product is in phase three clinical trials. We do understand that the trial is enrolling quite well.
I was hoping you could help us understand the pox two that high level of profitability.
In terms of improvements for our cost ratios G. P M, whereas the improvement by could've come from thank you great. Thank you Steve for those questions. So a question on <unk> on the revenue split and also average cost of dose and then also the return to low to mid thirties, I'd like to ask Christophe to comment on both of them.
Julie R. Kim: So it'll still be a few years before we see launch, but again, we will provide more details later on in terms of the spherotype. For the questions in regards to Antivio, as I mentioned earlier, in terms of first line treatment where Antivio is strong, we still maintain our market share leadership position; where we have seen some market share loss is in second line and further. This is where new competitive entrants have come in, and that's typically where they come in, second line and beyond. And so you are correct in that, overall, it has led to a slight market share decline, but we remain quite strong in first line. Okay, thank you very much. Thank you, Tony, and I think. Yamakita-san from Jefferies is back. Yamakita-san, or if that's Steve Barker, perhaps if you'd like to unmute and ask a question, please.
Christophe Weber: Thank you, Steve. I think in Kudenga, as we progress, most of the revenue will come from emerging countries. So, in fact, it will come from endemic countries and countries which are initiating a national immigration program. Right now, we are more in the private market and the travel market. And so I think the large volume and type of demand will come later from endemic countries. And I think, obviously, you can do the ratio between, you know, the 100 million doses and the 2 billion. So yeah, I mean, on average, we'll be around that type of price per dose. I mean, today, in the price market in Indonesia, we launched at 26 US dollars per dose in Indonesia, and typically, the national immunization program at a lower price when we contract with the government.
Those questions.
Thank you Steve.
I think beyond to dengue.
Well as we progress.
Most of the revenue will come from emerging countries. So in fact, it will come from <unk> countries and the countries, which are initiating a national immunization program right. Now we are more in the private market and the travel market.
Sure.
Things are large volume.
Type of demand will come later on from on the mid countries.
<unk>.
I think obviously you can do the ratio between.
The 100 million daus in the 2 billion. So yeah, I mean on average would be around that type of price that those I mean today were enterprise market in Indonesia, We launched at 26 years that Ive got noise in Indonesia, and typically international ammunition program.
Operator: Yes, it's Steve Barker from Jefferies. Thanks very much for taking my questions. My first question is related to Kudenga.
To allow lower price when we contract with Google element. So that's why our intent our intent was to.
Christopher Webber: I'm looking at the geographic split of the sales to date, and it looks like it's about 70% weighted towards emerging markets. I was wondering if you expected that to continue, or whether the weight of emerging markets would be higher in the future. And then also potential $2 billion peak sales related to 100 million doses. Should we assume that you're aiming for an average sales price of about $20 per dose? And then my second question is related to margins; you are aiming to get your core OPM back up, well back up to the low to mid-30s, ultimately. I was hoping you could help us understand the path to that high level of profitability, in terms of improvements in cost ratios and GPM. Where is the improvement likely to come from? Thank you. Great
Christophe Weber: So, and that was our intent. Our intent was to make these vaccines to create access to very innovative vaccines, but we want these vaccines to be brought into immunization programs rapidly.
Make this vaccine.
To create access to.
And she was very innovative vaccines, but we want these vaccines to be bring it to be brought into ammunition program rapidly and so that's that's our strategy regarding.
Christophe Weber: And so that's, that's our strategy. Regarding the return to the low to mid-30s corporate profit margin, we'll give more detail in May about the path to get there. It will be a combination of revenue return to growth and our growth on the launch product; gross margin is high because it is a highly innovative medicine. So that will help. It will be about leveraging technology, AI, and gaining productivity. And it will also be about cost control. So it will be a combination of all three.
A return to low to mid <unk> core operating profit margin will give more detail in may of Ards, a path to get there, which will compete to be a combination of <unk>.
Revenue returned to growth and our growth hormone product gross margin is.
Christopher Webber: Thank you, Steve, for those questions. So a question on Cudinga and the revenue split and also average cost of those, and then also the return to the low to mid-30s. I'd like to ask Christoph to comment on both of those questions.
Hi.
Highly innovative medicine, so that will help but it will be about leveraging <unk>.
Technology AI on gain productivity and it would be sort of a cost control, which would be a combination of all three but in may we'll give more will be more indication about how how and how quickly will it will go back to low to mid thirties.
Christopher Webber: Thank you, Steve. I think in Kudenga, as we progress, most of the revenue will come from emerging countries. So, in fact, it will come from endemic countries and countries which are initiating a national immunization program. Right now, we are more in the private market and the travel market. And so I think the large volume and type of demand will come later from endemic countries. And I think, obviously, you can do the ratio between, you know, the 100 million doses and the 2 billion. So, yeah, I mean, on average, we will be around that type of price per dose. I mean, today, in the private market in Indonesia, we launched it at 26 US dollars per dose in Indonesia, and typically, the national immunization program at a lower price when we contract with the government.
Christophe Weber: But in May, we'll give more indication about how, how, and how quickly we will go back to low to mid. Thank you. Thanks very much. Arigatou gozaimashita. Since time's up, we would like to close the Q&A session at this point. Again, thank you for joining us this part of your busy schedule, and thank you for your continued support.
Thanks very much.
Do you have those I must stop.
But I am on Oh, gosh, it's one day, you'll pay in order to come from Sundance, Utah.
Uh huh.
We don't have to close the Q&A session at this point I can't Thank you for joining us despite your busy schedule.
And thank you for your continued support.
Yeah.
So, and that was our intent. Our intent was to make these vaccines to create access. And this is a very innovative vaccines, but we want these vaccines to be brought into immunization program rapidly. And so that's our strategy. Regarding return to low to mid 30s co-operating profit margin, we'll give more detail in May about the path to get there. It will be a combination of revenue return to growth and our growth on launch product growth margin is high because highly innovative medicine so that will help. It will be about leveraging technology, AI and gain productivity and it will be also cost control so it will be a combination of all three but in May we'll give more will be more indication about how how and how quickly we'll we'll go back to load to meet. Thank you. Thanks very much. Arigato gozaimashita, your, Since time's up, we would like to close the Q&A session at this point. Again, thank you for joining us this part of your busy schedule, and thank you for your continued support.