Full Year 2023 Takeda Pharmaceutical Co Ltd Earnings Call

Unknown Executive: I want to remind everyone that we will be discussing four new key statements within the meaning of the Private Securities Litigation Reform Act of 1995. However, actual results may differ materially from those discussed today.

We want that to be discussing forward looking statements within the meaning of the preference Securities Litigation Reform Act of 1995 actual results may differ materially from those discussed today.

Unknown Executive: The factors that could cause our actual results to differ materially are discussed in our most recent Form 20-F and in our other SEC filings. Please also refer to the important notice on page 2 of the presentation regarding forward-looking statements and our non-IFRS financial measures, which will also be discussed during this call. Definitions of our non-IFRS measures and comparisons with comparable IFRS financial measures are included in the appendix to the presentation.

And that could cause actual results to differ materially are discussed in.

Most recent form 20-F and in our other SEC filings.

Yeah.

Please also refer to the important notice on page two of the presentation regarding forward looking statements.

Our known I first financial measures, which will also be discussed during this call definitions of Illinois for sandwiches and reconciliations with comparable ifas financial measures are included in the appendix Super dentition.

Unknown Executive: Now I would like to move on to the presentation. Christophe Weber, President and CEO, Andrew Plump, President of R&D, and Milano Furuta, Chief Financial Officer, will make a presentation. After that, we will have a question and answer session. Now, I would like to begin. Thank you, Chris.

Speaker Change: I would like to move on to the presentation.

Christophe Weber, President and CEO and.

Christophe Weber: And if I'm president of R&D.

Christophe Weber: And it made on overtime.

Speaker Change: Chief Financial Officer, he will make a presentation. After that we will have big question and answer session and I would like to begin.

Christophe Weber: Thank you all for joining our fiscal year 2023 learning call. It's really a pleasure to be with you all today. In fiscal year 2023, we continue to demonstrate our ability to discover and deliver life-transforming technologies. This vision, along with our values, is central to our strategy and daily execution. I will now review our full year performance and our priorities ahead. First, fiscal year 2020. To summarize Fiscal Year 23, it was a well-managed but tough year.

Christophe Weber: Thank you Chris Thank you all for joining our fiscal year 'twenty.

Speaker Change: 2023 earnings call.

Speaker Change: It's really a pleasure.

Earlier today.

Speaker Change: In fiscal year <unk> for Q3, we continue to demonstrate.

Our ability to discover and deliver our life transforming treatments.

Speaker Change: This vision along with our values.

Speaker Change: Core to our strategy and execution.

Speaker Change: I will now review our performance and our priorities ahead.

Speaker Change: First fiscal year Counterparties right.

Speaker Change: To summarize fiscal year 'twenty three it was a win by much but tough year.

Christophe Weber: Despite significant generic headwinds, our top-line performance exceeded management guidance with core revenue growth of plus 1.5% at constant exchange rates. The growth was driven primarily by the performance of our growth and launch products, which increased 12.8% year-over-year and now represent 43% of our total revenue. Our co-operating profit declined 13.3%, which was in line with management guidance and reflected the loss of exclusivity for high-margin products, including Vivaldi, and our continued investment in R&D and data, digital, and technology.

Speaker Change: Despite the significant generic headwinds.

Speaker Change: Top line performance exceeded management guidance with core revenue growth of plus one 5% at constant exchange rates.

Speaker Change: Ralph was driven primarily by the performance of our growth products, which increased 12, 8% year over year.

Speaker Change: Now represent 43% of our total revenues.

Speaker Change: Our corporate and profit declined 13, 3%, which was in line with management guidance and reflect the loss of exclusivity for high margin products, including <unk> and <unk>.

Speaker Change: Our continued investment in R&D and digital.

Speaker Change: Digital and technology.

Christophe Weber: Co-EPS declined 15.7%, which was above our projected low 20s percentage decline. We made significant progress in our pipeline in fiscal year 2023, with three new therapies approved in the US, for Metastatic Colorectal Cancer, Azaelma for Congenital Thrombocytopenic Papara, and Ewilia for Eosinophilic Esophagitis. We also expanded our existing portfolio with several important lifecycle management approvals.

Speaker Change: Core EPS declined 57%.

Speaker Change: Which was above our projected low twenties percentage decline.

Christophe Weber: We also received approval in the U.S. for PDG therapies, IQVIA and Gamma-Gal liquid, in Chronic Inflammatory Diminishing Polyradiculoneuropathy, or CIDR. And our dengue vaccine, Skudenga, is now approved in more than 20 countries, including where the disease is endemic. In addition, we progressed two important potential clinical therapies, TAC 279 on TAC 861, into the advanced stage of development. TAC279, now also known as Zazocitinib, has moved into phase 3 for psoriasis and phase 2 for resorative colitis and Crohn's disease.

Speaker Change: We made significant progress in our pipeline and just curious on.

Speaker Change: The Street.

Speaker Change: Three new therapy approved in the U S.

Speaker Change: For it is that cloud for metastatic colorectal cancer at landmark for congenital thrombotic thrombocytopenic purpura.

Speaker Change: So India for <unk>.

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We also expanded our existing portfolio with several important lifecycle management of pools.

Speaker Change: That could have received <unk> approval for <unk> in this.

Speaker Change: Our active collectors in September.

Speaker Change: And in last.

Last month.

We also received approval in the U S for <unk>.

Speaker Change: Liquidity.

Speaker Change: In chronic inflammatory diminishing pretty radical neuropathy or <unk>.

Speaker Change: And now our dengue vaccines <unk> is now approved in more than 20 countries, including where the disease is endemic.

Speaker Change: The addition, we progressed two important potential clinical therapies, Texas.

Speaker Change: Taxes are 900 <unk> one.

Speaker Change: Into advanced stage of development.

Speaker Change: Tak seven nine now we are still moving.

Speaker Change: <unk> has moved into phase III.

Speaker Change: The phase III for surety of colitis.

Speaker Change: <unk> disease.

Christophe Weber: We expect to initiate a phase 3 trial in Soietic arthritis soon. TAC861 is a lean molecule in our OXYGEN franchise, and it met the primary and secondary endpoints in a phase 2b trial in narcolepsy type 1, and we plan to present the trial data at a SLEEP conference in June this year. We are in discussions with the FDA to advance to Phase 3 in the first half of the fiscal year 2021, including Zadocytinib and TAK861.

We expect to initiate your phase III trial in Psoriatic arthritis.

Speaker Change: It's one of the leading with EQT now Auryxia franchise met primary and secondary endpoint in our phase II trial in narcolepsy type one and we plan to present a trend that has a sip controls in June this year.

Speaker Change: We are in discussion with the FDA to advance to phase III in the first half of fiscal year <unk>.

Christophe Weber: We expect to have up to six programs with high revenue potential in phase three development in fiscal year 2021. But amid this strong progress, we have had some setbacks, too. We made a tough decision based on the fruitful analysis of the data, and we discontinued the development of three phase two pipeline programs in oncology, Morekapis Palfa, Subasumstat, and Tag007. We also initiated the voluntary withdrawal of Exquisite globally and took the decision not to pursue regulatory filing for alofizelle in the US.

Speaker Change: Including the dose even package one.

Speaker Change: <unk> to have up to six programs with higher revenue per ton shortage in phase III development in fiscal year 'twenty four.

Speaker Change: But from.

Speaker Change: Strong progress we had some setback too we made the tough decision based on the footwear analysis of the desktop and we discontinued development of three phase II pipeline programming oncology, Bracketry Spenser <unk> debt and <unk>.

Speaker Change: We also initiated a voluntary withdrawal of activity globally.

The decision to pursue regulatory exciting for all of <unk>.

Christophe Weber: These decisions are not easy, but they are part of the journey of innovative drug discovery. They are also a reminder of the importance of financial resilience, agile, data-driven decision-making, and rigorous prioritization. Turning to the next slide, I will discuss how we return to sustainable revenue and profit growth, beginning in fiscal year 2025, and the path to delivering on our margin expansion target. We expect fiscal year 24 to be the final year of significant headwinds from buy months, and loss of exclusivity in the U.S.

Speaker Change: This decision I'll, let easy, but they are part of the joining of innovative drug discovery.

Speaker Change: Our soil reminder of the importance of financial resilience.

Speaker Change: Data driven decision, making and rigorous proceeds issue.

Speaker Change: Turning to the next slide.

Speaker Change: I will discuss how we return to sustainable revenue and profit growth.

Speaker Change: Beginning in fiscal year, 2025, and the path to delivering on our margin expansion target.

Speaker Change: We expect fiscal year 2004 to be the final year of significant headwinds from by months less opex for ZB Kinsey risks.

Christophe Weber: This is reflected in our management guidance for the year, where we expect revenue to be flat to slightly declining, core operating profit to decline approximately 10%, and core EPS to decline in the mid-10s percent at constant exchange rates. Milano will speak in more detail about our full outlook in his presentation. After the events, we expect no significant genetic exposure until the early 2030s.

Speaker Change: This is reflected in our management guidance for the year, while we expect revenue to be flat to slightly declining core operating profit to decline approximately 10% and.

Core EPS declined in the mid teens at constant exchange rates.

Speaker Change: I mean, Andrew will speak in more detail about our full year outlook in his presentation.

Andrew: I still have items, we expect no significant generic exposure until the early 2013.

Christophe Weber: In fact, the total generic exposure we expect over the coming seven years is less than the impact of Biden's decline in the two years of fiscal years 23 and 24. That is important because we also project that our growth-enhanced product will continue to deliver double-digit percent growth at a constant exchange rate in fiscal year 2021. So we are very confident that we can return to sustainable revenue growth from Peace School Year 2020. This will support stabilization and a slight improvement in our gross margin, which has been impacted by generic erosion of high-margin soil.

Andrew: In fact, the two.

Andrew: Generic exposure, we expect over the coming seven years is less and the impact from <unk> decline in the two years of fiscal year 'twenty, three and 'twenty four.

Andrew: That is important because we also project that our grew up for launch product will continue to deliver double digit percent growth at constant exchange rate in fiscal <unk>.

Andrew: So we are very confident that we can return to sustainable revenue growth.

Andrew: From fiscal year 2025.

Andrew: This would support stabilization or slight improvement in our gross margin.

Andrew: Which has been impacted by generic erosion of high margin therapies.

Christophe Weber: This is welcome progress following two very tough years of generic headwinds in fiscal year 2020. However, we have to do more to ensure that Takeda is future-ready and can deliver long-term growth. As I mentioned, in fiscal year 2024, we expect to have up to six programs in phase three development with significant revenue potential. And while we will increase our R&D budget moderately this year, rigorous prioritization will allow us to both contain our R&D budget increase while developing this late-stage program.

Andrew: This is a welcome progress following two various tiers of generic headwinds in fiscal year 'twenty three 'twenty.

Andrew: 2004.

Andrew: However, we have to do more to ensure that <unk> future ready and can deliver long term growth.

Andrew: As I mentioned in fiscal year 2020 for what we expect to have up to six program in phase III development.

Andrew: Significant revenue potential there.

Andrew: And why do we will increase our R&D budget moderately this year, a rigorous proposition will allow us to contain our R&D budgets increase.

Andrew: While developing this late stage programs.

Christophe Weber: Furthermore, we are implementing a significant multi-year efficiency program to support our target of delivering 100 to 250 basis points of margin improvement each year, beginning fiscally in 2025, to build towards our low to mid 30% co-operating profit margin target. I will provide more detail on the program on the following slide.

Hello, more we are implementing a significant multiyear efficiency program to support our target of delivering 100 to 250 basis points margin improvement each year, beginning fiscal year 2025.

Andrew: To build towards our low to mid <unk> core.

Andrew: Core operating profit margin package.

Andrew: I will provide more detail on the program on the following slide but first let me say that we have confidence in our ability to execute because we have been preparing our talent technology foundation over the past five years.

Christophe Weber: But first, I will say that we are confident in our ability to execute because we have been preparing our data and technology foundation over the past five years. As a result, our long-term outlook is bright, and our cash flow generation is strong. In line with our capital allocation policy, we are committed to growing an attractive shareholder return. For fiscal year 2024, we are proposing an increase to our annual dividend to 196 yen per share, consistent with our progressive dividend policy of increasing or maintaining the dividend each year. Moving to the next slide.

Andrew: So our long term outlook is bright and our cash flow generation is strong.

Andrew: In line with our capital allocation policy, we are committed to grow on that.

Andrew: Attractive shareholder return.

Andrew: In fiscal year 2024, we are proposing an increase to our annual dividend to 196 <unk> per share.

Andrew: Consistent with our progressive dividend policy of increasing or maintaining the dividend each year.

Andrew: Moving to the next slide.

Christophe Weber: As I previewed on the prior slide, Takeda has initiated an enterprise-wide program to drive efficiencies and deliver 100 to 250 basis points of co-operating profit margin improvement each year beginning fiscal year 2023. This program focuses on three key areas. First, organizational agility.

Andrew: As I previewed on the prior slide <unk> initiated an enterprise wide program to drive efficiencies and deliver 100 to 250 basis points core operating profit margin improvement each year, beginning fiscal year 2025.

Christophe Weber: Two, procurement savings. Three, leveraging data, digital, and technology. First, we are simplifying our business by removing layers, broadening roles, and refining operating models to improve our agility across the entire Second, we are initiating procurement-led savings to optimize our external spend and materially reduce our cost. And third, we are continuing our investment in data, digital, and technology to be better, faster, and increase productivity. I will provide more information on our progress in data, digital, and technology in the next session. For fiscal year 24, we are estimating restructuring expenses of 140 billion yen, primarily for the implementation of the efficiency program.

Andrew: This program focuses on three key areas.

Andrew: First organizational agility to procurement saving three leveraging data digital and technology.

Andrew: First we are simplifying our business by removing layers.

Andrew: What are the rules.

And the refining operating models to improve our IGT across your off price.

Secondly, we are initiating procurement led savings to she might know external spend.

Andrew: Materially reduce cost.

Andrew: And third we are continuing our investments in desktop digital and technology to be better faster and increase productivity.

Andrew: I will provide more information on our progress and that our digital and technology in the next slide.

Andrew: In fiscal year 'twenty four we're estimating restructuring expenses of 140 billion yen, primarily for the implementation of the efficiency program.

Christophe Weber: This is a significant investment, and it underscores the significance of this program for Takeda and the impact it will have on the company. We believe that efficiencies gained from the program will enable us to allocate resources towards our late-stage pipeline and new product launches and offset inflation headwinds. So we continue to integrate data, digital, and technology throughout our operation and value chain to help us develop and deliver medicines to patients more efficiently. We are taking very bold steps to seize this once-in-a-lifetime opportunity. For example,

Andrew: This is a significant investment.

And it underscores the significance of this program for a decade out.

Andrew: And the impact it will have on the company.

Andrew: We believe that the efficiencies gained from the program will enable us to allocate resources towards our late stage pipeline and new product launches and offset inflation headwinds.

Andrew: Yeah.

Andrew: So we will continue to integrate data digital and technology throughout our operation and value chain.

Andrew: First develop and deliver medicines to patients more efficiently.

We are talking we are taking very bold steps to execute this once in a lifetime opportunity for example.

Christophe Weber: We have now migrated 100% of our applications and 96% of all our data to the cloud, allowing us to leverage this data fully. We are creating innovation capability centers, which are in fact Takeda tech centers, which will develop data on technology solutions. We have three centers in Bratislava, Mexico, and Bangalore in India, each with eventually hundreds of computer engineers.

We have nomi created 100% of our applications are 96% of all our data to the cloud.

Andrew: So, allowing us to leverage just that's a fully.

We are creating innovation capability centers, which are taxed at a fixed centers, which will develop better technology solutions.

Andrew: We have three centers in British Slava mixed.

Andrew: Mexico, and Bangalore in India, each with eventually hundreds of computer engineers.

Christophe Weber: We are leveraging artificial intelligence, real-world evidence, and digital tools to speed clinical trial recruitment and regulatory filing. For example, the US FDA approval of GammaGar liquid for the treatment of CIDP in January 2024 was based in part on a real-world evidence study using a database licensed by Takeda. This approach, taken in place of a randomized controlled trial, amounted to considerable cost savings and several years of production and development time. In manufacturing and quality control, we are using sensors and digital cameras generating big data, which is then analyzed by artificial intelligence to improve our efficiency, for example, in predictive maintenance, road code analysis, and deviation analysis.

Andrew: We are leveraging artificial intelligence and real world evidence and digital tools to speed clinical trial recruitment in regulatory filings.

Andrew: For example, the U S FDA approval of <unk> liquid for the treatment of <unk> in January 2024.

Based in part on the real World evidence study using desktop base licensed by ticket.

Andrew: This approach taken in place of a randomized controlled trial amounted to considerable cost savings and several years of production development timeline.

Andrew: Manufacturing and quality control, we are using some Sarah on digital camera originating big desktop, which is an annualized by actually Fisher intelligence to improve our efficiency for example, and predictive maintenance Roku the analysis.

Andrew: Aviation analysis.

Christophe Weber: And I could carry on with many other examples across our value chain. Moving to slide eight on our growth and launch products, we expect revenue from this portfolio to grow at double digits at constant exchange rates and account for approximately half of total company revenue in fiscal year 2024. Some updates to highlight since we presented this slide in February are the addition of Aeolia and the removal of excavity and allophysae.

Andrew: And that could carry on with many other examples across our value chain.

Andrew: Moving to slide eight on our growth and launch products.

Andrew: We expect revenue from this portfolio to grow at double digits at constant exchange rate.

Andrew: Control approximately half of total company revenue in fiscal year 2024.

Andrew: Some updates to our hedge since we presented in February.

Andrew: Sure.

Speaker Change: And the removal of activity on the roof is it.

Christophe Weber: While we do not currently have a growth and launch product in neuroscience, we have an exciting pipeline, most notably with TAC861 and SOTIC-LISTAT in late-stage development. In Fiscal Year 24, we will present vaccines as a stand-alone business area, reflecting the strong demand for adengue vaccines and scudenga, and present PDT holistically instead of separating out PDT immunology. Turning to the next slide, I will provide an update on Antivu, our number one product by Remedy.

Speaker Change: While we do not currently have a growth product in neuroscience, we have an exciting pipeline, most notably with decades, each one and particularly in late stage development.

Speaker Change: From fiscal year 'twenty four it will be a prisoner taxis are there some that won't be necessary, all reflecting a strong demand for our dengue vaccine screening.

Speaker Change: Presents PDT leaky clean set of separating out P&G.

Speaker Change: Okay.

Speaker Change: Turning to the next slide I will provide an update on <unk>, our number one product by revenue.

Christophe Weber: Antifew continues to outperform the IBD market with strong double-digit volume growth, partially offset by price erosion, resulting in revenue growth of plus 6.6% in fiscal year 2021. Importantly, Antivio has been able to maintain the number one market position in the U.S. for IBD BioNaive New Start, with competitor launches primarily competing in later lines of treatment or impacting alternative mechanisms of, Antivirus subcontinuous or antivirus pain formulations have now launched in more than 50 markets globally, including the recent launch in the U.S., and are driving incremental growth.

Speaker Change: <unk> continues to outperform the IBD market with strong double digit volume growth, partially offset by price erosion, resulting in revenue growth of press six 6% and just curious what is history.

Speaker Change: Importantly, <unk> has been able to maintain the number one market position in the U S to IBD bio naive new stops.

Speaker Change: With competitor alone primarily competing in later lines of treatment.

Impacting at 10 achieved mechanism of actions.

Speaker Change: <unk> continues all interview opinion formulation have now launched in more than 50 markets globally.

Speaker Change: Including the recent launch in the U S are driving incremental growth.

Christophe Weber: The key point I want to highlight is that 30% of antiviral pain prescribers in the U.S. are either new to Antivio or had not prescribed Antivio for more than one year before prescribing it. This is a strong signal that this formulation is encouraging prescribers back to Antiviral and attracting new prescribers. And this is very significant because subcontinuous therapies are estimated to represent approximately 35% to 40% of the total US I Our recent USFDA approval in Crohn's provides further opportunity to reach this patient population with greater flexibility and short-term care. Turning now briefly to slide 11.

Speaker Change: The key point I want to highlight.

Speaker Change: Is that 30% of until pain prescribers.

Speaker Change: U S.

Speaker Change: Our eyes are on <unk>.

Speaker Change: <unk>, Oh had not prescribe <unk> for more than one year before prescribing is open.

Speaker Change: This is a strong signal that this formulation is encouraging prescribers back to entyvio and attracting new prescribers.

Speaker Change: And this is very significant because subcutaneous therapies are estimated to represent approximately 35% to 40% of the total U S CBD market.

Speaker Change: Our recent U S coal and coins provide further opportunity to reach this patient population with greater flexibility and choice.

Speaker Change: Turning now briefly to slide 11.

Christophe Weber: Our PDT business continues to achieve double-digit growth driven by strong global demand for immunoglobulin products and expansion of supertenuous therapies. We will focus on maintaining this growth trend through targeted incremental investment in capacity expansion across our collection and manufacturing network as well as in PDT, R&D, and DDT transformation. The PDT business has been steadily improving its co-operating profit margin since the first half of fiscal year 2023, which will continue to drive expansion of Takeda's overall co-operating profit margin as PDT accounts for a growing share of total company revenue. In closing, we are confident about the path we are on.

Speaker Change: Our beauty business continues to achieve double digit growth driven by strong global demand for immunoglobulin products.

Speaker Change: An expansion of two continuous therapy.

We will focus on maintaining this growth trend through targeted incremental investments in capacity expansion across our collection of manufacturing network.

Speaker Change: As well as in <unk> transformation.

Speaker Change: The pizza business has been improving its core operating margin since the first type of fiscal year 'twenty three.

Speaker Change: Which would continue to drive expansion of <unk> overall core operating profit margin a speedy check point for a growing share of total company revenue.

Speaker Change: In closing them.

Speaker Change: We are confident about the path we are on.

Christophe Weber: We continue to deliver on our financial commitment to progress our pipeline and to create long-term value for our stakeholders. With that, I will now turn the call over to Andy to update you on our pipeline. Thank you. Thank you very much, Christophe.

Speaker Change: We continue to deliver on our financial commitment to progress our pipeline and to create long term budget for our stakeholders.

Speaker Change: With that I will now turn the call over to Andy to update you on our pipeline. Thank you.

Andrew S. Plump: And hello to everyone on today's call. If we can go to the next slide, please. As Christophe mentioned, we've had a very successful year with significant maturation of our pipeline while delivering three new molecular entities approvals in the U.S. for Rizacla, Aginma, and Eohelia. In addition to important indication expansions of key products, the Antibiotin Pen, a convenient at-home administration option for patients, was approved in the U.S. for maintenance therapy in both ulcerative colitis and Crohn's disease, as Christophe mentioned.

Andy: Thank you very much Christophe and Hello to everyone on today's call. If we can go to the next slide please.

Andy: As Christoph mentioned, we've had a very successful year with significant maturation of our pipeline.

Andy: While delivering three new molecular and the approvals in the U S <unk>, <unk> and El Helios and.

Andy: In addition to important indication expansions of key products. The Entyvio pen a convenient at home administration option for patients was approved in the U S for maintenance therapy in both ulcerative colitis, and Crohn's disease as Chris mentioned.

Andrew S. Plump: Kudanga, our dengue vaccine, continues to receive a steady cascade of approvals across the globe. IQVIA, our facilitated subcutaneous immunoglobulin treatment, received a key approval as maintenance therapy for CIDP in both the U.S. and Europe. IQVIA offers the potential for once monthly infusion, which can positively impact patient lives and elevate the standard of care. In addition, as you heard from Christophe, a series of positive phase 2b readouts and partnering activity continue to enhance the strong momentum across our new molecular entity pipeline, fueling our growing late stage portfolio.

Andy: T. Dania are Danny vaccine continues its steady cascade of approvals across the globe.

Andy: <unk> are facilitated subcutaneous immunoglobulin treatments received a key approval as maintenance therapy with <unk> in both the U S and Europe.

Andy: <unk>.

Andy: Potential for once monthly.

Which can positively impact patient lives and elevate the standard of care.

Andy: In addition, as you've heard from Chris.

Andy: A series of positive phase <unk>, Readouts and partnering activity continues where it against the strong momentum across our new molecular entity pipeline fueling our growing late stage portfolio. Examples our potential best in class take two inhibitors as a sickness phase III attitude psoriasis trials.

Andrew S. Plump: A few examples, our potential best-in-class TIK2 inhibitors, Zazocitinibs, phase 3 latitude psoriasis trials are enrolling beyond our four, and they're doing this by leveraging novel digital approaches. Desositne's positive Phase IIb data in psoriatic arthritis were presented at the American College of Rheumatology, and the Phase III latitude psoriatic arthritis studies are expected to begin in the second half of this fiscal year.

Andy: Our enrolling beyond our forecast.

Andy: We're doing this by leveraging novel digital approaches desert fitness positive phase <unk> data in Psoriatic arthritis was presented at the American College of Rheumatology.

The phase III latitude Psoriatic arthritis studies are expected to begin in the second half of this fiscal year.

Andrew S. Plump: Our lead oral erection agonist, TAC861, read out positive phase 2B data in narcolepsy type 1 and just received FDA breakthrough therapy designation. These very exciting data will be presented at the SLEAP conference in June, and we will hold an analyst call after the presentation to review the data for those who cannot attend live. Tech 861 will begin phase three development in the first half of this fiscal year. In March, we announced positive phase 2b data for mezogitimab in median thrombocytopenia or ITP.

Our lead oral Orexin agonist Tak 861 read out positive phase <unk> data in narcolepsy pipeline and just received FDA breakthrough therapy designation.

Very exciting data will be presented at the sleep conference in June and we will hold an analyst call. After the presentation. The reviews of the data for those who cannot attend live.

Andy: It takes one will begin phase III development in the first half of this fiscal year.

Andy: In March we announced positive phase <unk> data for me to get in that it immediately thrombocytopenia neutropenia or at.

Andrew S. Plump: The phase 3 start is planned for the second half of this fiscal year. And today, we are happy to announce that mesigetamab has also demonstrated positive proof of concept in immunoglobulin A nephropathy, commonly known as IDAM. We will preview these exciting data later in this presentation. Rosferatide is a first-in-class synthetic hepcidin mimetic being developed in collaboration with Protagonist Therapeutics for the treatment of polycythemia vera, a chronic blood disorder characterized by excessive production of red blood cells, leading to an increased risk for thrombotic events.

Andy: The phase III Guard is planned for the second half of this fiscal year and today, we are happy to announce that <unk> has also demonstrated positive proof of concept in immunoglobulin a neuropathy, commonly known as IGN.

Andy: We will preview these exciting data later in this presentation.

Andy: <unk> is a first in class synthetic excited magnetic being developed in collaboration with the protagonist therapeutics for the treatment of polycythemia Vera chronic blood disorder characterized by excessive production of red blood cells, leading to an increased risk for thrombotic events in February compelling phase II.

Andrew S. Plump: In February, compelling Phase II data were published in the New England Journal of Medicine. The ongoing VERIFY Phase 3 trial has almost completed enrollment, with a potential filing in fiscal year 2025. And finally, our partner, Neuroquin, recently announced positive Phase 2b data for TAC653 in patients with an inadequate response to major depressive disorder. We are looking forward to discussions with regulatory authorities and outlining the next step. Now, building on the success of these pipeline achievements, let's now turn our attention to how these developments are shaping the future of patient care and driving value for our stakeholders. Next slide, please.

Andy: Data were published in the New England Journal of Medicine.

Andy: Ongoing verify phase III trial is almost completed enrollment with potential filings in fiscal year 2025, and finally, our partner Neurocrine recently announced positive <unk> data for tax expense by three in patients with an inadequate response to major depressive disorder, we're looking forward to discuss.

Andy: With regulatory authorities and outlining the next steps.

Andy: Now building on the success the success of these pipeline achievements, let's now turn our attention to how these developments are shaping the future of patient care.

Adding value for our stakeholders next slide please.

Andrew S. Plump: In addition to the approvals of IJINMA and FUSACLA that continue to progress through important lifecycle management activities, our late stage pipeline now has six programs that are in or about to begin phase three development. These six programs could significantly impact patient care and drive value for Takeda. We will have an R&D event later this year where we will discuss and contextualize the promising clinical data for zazositinib, fazirsiran, mezegitimab, risperatide, soticlistat, and TAC861.

Andy: In addition to the approvals of it Didnt and disaster that continued to progress through important lifecycle management activities. Our late stage pipeline now has six programs that are in or about to begin phase III development.

Andy: These six programs could significantly impact patient care and drive value for Takeda.

Andy: We will have an R&D event later this year, where we will discuss and contextualize the promising clinical data for us as a sitting at the near Saran mesic didn't add with fur tied to kick start and take tack a six one during this meeting we will also outline the significant value of these medicines can bring.

Andrew S. Plump: During this meeting, we will also outline the significant value these medicines can bring to millions of patients. Now, while our Rare Genetics and Hematology Therapeutic Area unit was discontinued last year following our decision to leave V gene therapy, we continue to maintain an operationally efficient rare disease development team within our R&D gastrointestinal inflammation therapeutic area in order to support our rare diseases business in a streamlined manner. This focus team is realizing the full potential of Adzinma by continuing development in immune-mediated thrombotic thrombocytopenic purpura or I-TTP.

Andy: Millions of patients.

Now, while our rare genetic and hematology therapy area unit was discontinued last year finally, our decision to leave <unk>.

Andy: The gene therapy.

Andy: We continue to maintain an operationally efficient rare disease development team within our R&D gastro intestinal inflammation therapeutic area in order to support our rare diseases business in a streamlined manner.

Andy: This team is realizing the full potential of again, Matt by continuing development in immune mediated thrombotic thrombocytopenic purpura.

Andy: Or I TTP at Zimmer will have proof of concept data later this fiscal year in TTP with greatly expand the number of patients who could benefit from this therapy.

Andrew S. Plump: Adzinma will have proof of concept data later this fiscal year in I-TTP, which will greatly expand the number of patients who could benefit from this therapy. This small dedicated team also coordinates Takeda's responsibility for Risferotype, where the majority of development today is managed by our partner, Protagonist. With this exciting late-stage momentum in mind, let's explore how we have significantly restructured and prioritized our pipeline over the last year through data-driven and strategic decisions to sharpen our focus on the most promising programs. Next slide, please.

Andy: This small dedicated team also coordinates Takeda has responsibility for repair tied with the majority of them today is managed by our partner protagonist.

Andy: With this exciting late stage momentum in mind, let's explore how we have significantly restructured and prioritize our pipeline over the last year through data driven and strategic decisions to sharpen our focus on the most promising programs next slide please.

Andrew S. Plump: To fund our maturing and exciting Phase 3 pipeline, 25 data-driven and strategic decisions were made across the portfolio this past year to refocus efforts on the expanding late-stage portfolio. We had two key negative phase 3 data sets this year, as Christophe has mentioned, a low placebo in the U.S. and the confirmatory frontline data for excivity. As I have highlighted, though, our overall pipeline momentum was positive, especially for our highest value program. Can we click for the bill, please?

Andy: To fund, our maturing and exciting phase III pipeline 25 data driven and strategic decisions were made across the portfolio. This past year to refocus efforts on the Anthony late stage portfolio.

Andy: We had Q key we acute key negative phase III datasets in the year as Christophe has mentioned a low PCL in the U S and the confirmatory frontline data <unk>.

As I've highlighted though our overall pipeline momentum was positive, especially for our highest value programs.

Andy: They can click for the bill please.

Andrew S. Plump: I would like to now take a moment to review our efforts in oncology. Well, of course, we're disappointed by recent setbacks. Let me assure you that Takeda is fully committed to oncology as a key component of our strategy and long-term growth and remains a core therapeutic area of our business. We have a long history of institutional knowledge, development expertise, and strong relationships in the oncology ecosystem. We fully intend to leverage our internal capabilities to accelerate and augment our oncology pipeline.

I would like to now take a moment to review our efforts in oncology.

Andy: Of course, we're disappointed by recent setbacks red meat.

Andy: Sure.

<unk> is fully committed to oncology is a key component of our strategy and long term growth.

Andy: And remains a core therapeutic area of our business.

Andy: We have a long history of institutional knowledge development expertise and strong relationships in the oncology ecosystem, we fully intend to leverage our internal capabilities to accelerate and augment our oncology pipeline going forward, we will explore a broad range of modalities and mechanisms as we seek.

Andrew S. Plump: Going forward, we will explore a broad range of modalities and mechanisms as we seek to advance the most promising science and ultimately address the highest areas of patient need. We have a new R&D head of oncology, P.K. Morrow, who is a practicing oncologist at MD Anderson Cancer Center before taking on leadership roles at two large biotechnology companies.

To advance the most promising science and ultimately address the highest areas of patient need.

Andy: We have a new R&D head of oncology PK Morrow, who was a practicing oncologist at MD Anderson cancer Center before taking on leadership roles at two large biotechnology companies. She brings strong development capability and will guide the building and replenishment of our oncology pipeline through internal.

Andrew S. Plump: She brings strong development capability and will guide the building and replenishment of our oncology pipeline through internal and external innovation. Now early green shoots of progress include the successful approval and launch of Fusacla, early stage ups of internal programs like Dazostinag, TAC-676, our first sting agonist to enter the clinic, and TAC-012, our first gamma-delta T cell therapy, as well as our recent licensing agreement with Kumquat Therapeutics, which brought a promising immuno-oncology asset into our preclinical pipeline.

Andy: And external innovation now early green shoots of progress include the successful approval and launch of <unk>.

Andy: Early stage ups of internal programs like dazzle skin that taxi cab and set our first Sting agonist entered the clinic and tack on to our first gamma Delta T cell therapy as well as our recent licensure from <unk> therapeutics, which brought a promising immuno oncology asset into our preclinical.

Andy: Pipeline, we look forward to sharing our progress in the months ahead next slide. Please now here I'd like to highlight the strength and potential of our early to mid stage pipeline, which is poised to address unmet patient need and contribute in the near term to our growing late stage portfolio in our emerging.

Andrew S. Plump: We look forward to sharing our progress in the months ahead. Next slide, please. Now, I'd like to highlight the strength and potential of our early to mid-stage pipeline, which is poised to address unmet patient needs and contribute in the near term to our growing late-stage portfolio. In our emerging celiac disease franchise, we will have an important readout for TAC227 over the next 12 months. Pac-227, a transglutaminase 2 inhibitor, has already demonstrated reductions in gluten-induced intestinal pathology, as published in the June 2021 New England Journal of Medicine.

Andy: Celiac disease franchise, we will have an important readout for tap to two seven over the next 12 months <unk> two inhibitor has already demonstrated reductions in Luton induced intestinal apology as published in the June 2021, New England Journal of Medicine.

Andrew S. Plump: As Christophe mentioned, we are pivoting development of TAC-007, our CD19 CAR-NK cell therapy from oncology to autoimmune diseases, where there is exciting autologous cell therapy data emerging with long-lasting effects in refractory autoimmune diseases. Relative to CAR-T therapy, our CAR-NK platform has a favorable safety profile and an off-the-shelf manufacturing process that will deliver therapy on demand at And while this is a very competitive area for autologous cell therapies, there are few allogeneic programs in the mix.

Andy: As Chris mentioned, we are pivoting development of <unk> seven our CD 19 car NK cell therapy.

Andy: Oncology too.

Andy: Autoimmune diseases, where there is exciting autologous cell therapy data emerging with long lasting effects in refractory autoimmune diseases relative to car T therapy or car NK.

Andy: At <unk> safety profile.

Andy: And in an off the shelf manufacturing process that will deliver therapy on demand at a significantly lower cost of goods and a very competitive area for autologous cell therapies. There are few allogeneic programs in the mix.

Andrew S. Plump: In addition, our expanded Erexin franchise continues to progress well, and we expect a proof of concept readout for Danivorexatom in post-anesthesia recovery later this year. TAC360, our next generation oral Erexin agonist, has started recruiting in phase one. We will advance TAC360 quickly using our deep understanding of Erexin biology and industry leading expertise with Erexin agonists to accelerate development for narcolepsy type 2 and idiopathic hypersomnia.

Andy: In addition, our expanded Orexin franchise continues to progress well, we expect to proof of concept readout for Danaher Exxon and post anesthesia recovery later this year at 360, our next generation oral Orexin agonist has started recruiting in phase one.

Andy: We will advance tax 360 quickly using our deep understanding of Orexin biology, and industry, leading expertise that the orexin agonist.

Andy: To accelerate development in narcolepsy type two and idiopathic hypersomnia.

Andrew S. Plump: TACC 360 has already been awarded a fast track designation by FDA. Next slide, please. Let us now focus on upcoming milestones that are expected to make a significant impact in the near future. We eagerly await the ceticlistat phase 3 readout in Dravet syndrome and Lennox-Gastaut syndrome, or LGS, both due in the first half of this fiscal year. Ceticlostad has a novel mechanism of action and has been well tolerated in clinical studies.

Andy: 360 has already been awarded fast track designation by FDA next slide please let us now focus on upcoming milestones that are expected to make a significant impact in the near future we.

Andy: We eagerly eagerly await the <unk> phase III readout in Roubaix syndrome in Lennox <unk> syndrome, or lgs, both you and the first half of this fiscal year.

Andy: So that has a novel mechanism of action and has been well tolerated.

Andrew S. Plump: We believe approval of ceticlostad could lead to a reimagining of care for patients with these pediatric epilepsy. Other upcoming milestones include the start of phase 3 development for TACC861 and narcolepsy type 1 and the completion of enrollment for Zazositinib's phase 3 latitude psoriasis trials in the second half of fiscal year 2024. Given the strong momentum of our mid- to late-stage pipeline, we plan to host an R&D event later this year to provide an update on our strategy, present deep dives into our potentially transformative late-stage programs, and share more about our data, digital, and technology efforts.

Andy: Studies, we believe approval of <unk> that could lead to a re imagining of care for patients with these pediatric epilepsies.

Andy: Other upcoming milestones include at the start of Phase three development for Tak 861 in narcolepsy timeline and the completion of enrolment because as a sickness phase III latitudes psoriasis trials in the second half of fiscal year 2024.

Andy: Given the strong momentum of our mid to late stage pipeline, we plan to host an R&D event. Later this year to provide an update on our strategy presented deep dives into our potentially transformative late stage programs and share more about our data digital and technology efforts specific details of the event will be shared.

Andrew S. Plump: Specific details of the event will be shared soon. With these milestones on the horizon, I'm particularly excited to share more about mesigetimab. Let's dive into the details of this promising therapy and its potential for use across a range of immune-mediated disorders. Next slide, please. Mezegitimab is an anti-CD38 antibody that has a lower affinity for platelets and red blood cells than the leading market for CD38 antibodies.

Andy: <unk>.

Andy: With these milestones on the horizon, I'm, particularly excited to share more about and as they get them now let's dive into the details of this promising therapy and its potential for use across a range of immune mediated disorders next slide please.

Andy: <unk> is an anti <unk> antibody that has a lower affinity for platelets and red blood cells, and the leading marketed CD <unk> antibody.

Andrew S. Plump: Our data on file shows robust immunoglobulin reductions across multiple antibody subtypes. Furthermore, in addition to depleting antibody-producing plasma cells, mezuginimab has shown an ability to substantially reduce a range of other cells involved in inflammatory processes, leading to a rapid onset of response and a long-lasting and mutomodulating effect. The lowering of immunoglobulin G is on par or less than that seen with anti-SCRN. And yet, and yet, we have seen more robust, rapid, and sustained platelet responses in ITP relative to these agents.

Andy: Our data on file showed robust immunoglobulin reductions across multiple antibody subtext in.

Andy: In addition to depleting antibody.

Andy: <unk> <unk> has shown an ability to substantially reduce a range of other cells involved in inflammatory processes.

Andy: Leading to a rapid onset of response and a long lasting and needle modulating effect.

Andy: The lowering of immunoglobulin as a bar or less than that seen with anti <unk> and.

And yet and yet we have seen more robust rapid and sustained platelet responses in ITT relative to these agents.

Andrew S. Plump: This suggests that mesigetamase's mechanism of action goes beyond the effects of lowering immunoglobulin. We look forward to sharing our ITP data at an upcoming major hematology conference later this year. In IgAN, mezuginumab's host of immunomodulating effects, including reductions in galactose deficient IgA by 62%, leads to robust benefits on proteinuria.

Andy: This suggests that navigator <unk> mechanism of action, but beyond the effects of lowering immunoglobulin.

Andy: We look forward to sharing our ITT data at an upcoming major Hematology conference later this year.

Andy: And I again, Michigan, <unk> hosted a immuno modulating effects, including reductions in galactose deficient Iga by 62% leads to robust benefits on proteinuria.

Andrew S. Plump: Mezuginimab thus has the potential to modify the disease path for these patients. Our proof of concept data suggests a very competitive profile for IgAN despite a crowded development landscape. We look forward to discussions with health authorities on our Phase 3 program. We will share the IgAN data at a medical conference later this year. Thank you.

Andy: <unk> has the potential to modify the disease path for these patients are proof of concept data suggests a very competitive profile and I again, despite a crowded development landscape. We look forward to discussions with health authorities about our phase III program, we will share the IGN data at a medical.

Later this year thank.

Speaker Change: Thank you at this point I will turn it over to millennium.

Milano Furuta: It's my pleasure to present FY23 results and the financial outlook for FY24 and awards. FY23 revenue was over 4.2 trillion yen, an increase of 5.9% on an actual FX basis, or 1.5% at constant exchange rates, or CER. This result exceeded our management guidance of a low single-digit decline at CER, mainly due to milder generic penetration of violence on top of continued momentum of our growth and launch product. Cooperative Profit, Co-OP was 1054.9 billion yen, a year-on-year decline of 13.3% of CER, in line with management guidance for a low percentage decline.

Millennium: Thank you, Andy and Hello, everyone. It's my pleasure to upset the FY2023 results.

Millennium: The financial outlook for FY 'twenty for <unk>.

Millennium: FY2023 revenue was $4 two trillion an increase of five 9% on an ex FX basis.

Millennium: One 5% at constant exchange rates.

Millennium: Or CER.

Speaker Change: This result exceeded our management guidance.

Speaker Change: Low single digit decline at CER, mainly due to <unk>.

Speaker Change: Rick titration of violence.

Speaker Change: On top of continued momentum of our growth and launch products.

Core operating profit call Pete.

Speaker Change: <unk> thousand $54 9 billion yen.

Speaker Change: Year on year decline by 13, 3% at CER.

Speaker Change: And with management guidance for low percentage decline.

Milano Furuta: This decline mainly reflects the LOE of high cross-margin products, Transactional FX Impacting Cog, and increased investment in R&D and data digital technology. Let me call it D&D. reported operating profit was 214.1 billion yen, a decline of 56.4%, including higher impairment losses based on study readouts of alopecia and activity, as well as higher research and litigation related expenses. Core EPS was 4

Speaker Change: This decline mainly reflects the loss of high gross margin product.

Speaker Change: <unk> FX impacting Cogs and.

Speaker Change: <unk> increased investment in R&D and data digital technology, let me call it didn't team.

Reported operating profit was.

Speaker Change: $214 1 billion, a decline of 56, 4%, including.

Speaker Change: Higher impairment losses based on study readouts of allergy cell and exclusivity.

Speaker Change: As well as higher sourcing and litigation related expenses.

Speaker Change: Core EPS was a 480 <unk> okay.

Milano Furuta: 50.7% decline at CR. It landed better than our management guidance, below a 20% decline due to more favourable tax rates. Reported EPS was 92 yen, a 54.9% decline with a lower financial income than the prior year offset by a reduction in tax expense.

Speaker Change: <unk>, 7% decline at CER.

Speaker Change: It landed better that our management guidance below 20% decline due to more favorable tax rate.

Reported EPS was <unk> 92 yen.

Speaker Change: 54, 9% decline.

Speaker Change: With a lower financial income than prior year offset by a reduction in tax expense.

Milano Furuta: Operating cash flow and free cash flow were 716.3 billion yen and 283.4 billion yen, respectively, which I will explain later. Now, let's look at the Yahoo! revenue dynamics on slide 21. Our growth and launch products grew by 12.8% at CER, representing now 43% of total revenue in FY23, which was almost entirely upset by the impact of Elohim. However, growth of other products more than compensated for lower COVID-19 vaccine sales, and total revenue landed with 1.5% growth at CER. The depreciation of the yen versus major currencies increased revenue, resulting in total growth of 5.9% on an actual FX basis.

Speaker Change: Operating cash flow at a free cash flow was $716 3 billion yen and.

Speaker Change: At $283 4 billion yen, respectively, which I will explain later.

Let's look at the year on year revenue dynamics in slide 21.

Speaker Change: Our growth and launch products grew by 12, 8% at CER.

Speaker Change: Sure.

Speaker Change: Representing now 43% of total revenue in FY2023.

Speaker Change: Which was almost entirely offset by the impact of <unk>.

Growth of other products more than compensated for lower COVID-19 vaccine sales.

Speaker Change: And total revenue landed with one 5% growth at CER.

Speaker Change: The depreciation of the yen versus major currencies increased in revenue, resulting in total growth of five 9% on actual FX basis.

Milano Furuta: Slide 22 shows Iao-Niena Cooperative Profit Dynamics. You can see how LOEs and lower COVID-19 vaccine revenue are having a larger impact on profit due to their higher gross margin. On the investment side, we continue to allocate resources to TD&T and R&D. On a CER basis, R&D spending increased by over 8%, slightly ahead of our forecast due to wind-down costs associated with program terminations. I want to spend a moment to elaborate on the major factors behind the 4.8 percentage point. Co-Operating Profit Margin Drop: The biggest factor was gross margin decline. This was caused by a combination of two elements.

Speaker Change: Slide 22 shows that year on year operating profit dynamics.

Speaker Change: Can see how NOI and lower COVID-19, vaccines revenue, having a larger impact on profit.

Speaker Change: Due to their higher gross margins.

Speaker Change: On the investment side, we continue to allocate resources to TMT and R&D.

Speaker Change: On the CER basis, R&D spend increased by over 8%.

Speaker Change: Slightly ahead of our forecast due to wind down costs associated with program terminations.

Speaker Change: I want to spend a moment to elaborate major factors behind our four eight percentage points.

Speaker Change: Core operating profit margin dropped.

Speaker Change: The biggest factor was the gross margin decline.

Speaker Change: This was caused by a combination of two elements.

Milano Furuta: One, product mix between growth and launch products and LOE impacted products. And second, transactional effects impacted cost. These two components almost equally affected the cross-margin decline.

Speaker Change: One product mix between growth and launch products and low.

Speaker Change: Impacted products and second transactional FX impact on Cogs.

Speaker Change: These two components almost equally affected the gross margin decline.

Milano Furuta: Then the next factor is the extra spend on R&D and DDT, as I have already mentioned. The last factor is translational effects. The depreciation of Yen increased revenue and the core OP by 176.9 billion Yen and 24.0 billion Yen, respectively, which pushed further down our core OP margin. Next slide, 23, chose Reported Operating Profit Breach versus Pryea. In addition to the core OP decline, we booked impairments of intangible assets in FY23, totaling 130.6 billion yen, mainly around the LLC sale and executive. An impairment reversal in Q4 for ear helia was offset by several additional impairments related to the discontinuations of the modicum alpha, TAC007, and others.

Speaker Change: Dan Thanks factor is that extra spend in R&D and DDT as I already mentioned.

Speaker Change: The last factor is translational FX impact.

The depreciation of yen increase the revenue and the co op.

Speaker Change: By 176, 9 billion yen and 24.1 billion yen respectively.

Speaker Change: Which pushed farther down our core op margin.

Speaker Change: Next slide 23.

Speaker Change: Reported operating profit bridge versus prior year.

Speaker Change: In addition to the core op decline, we booked impairments of intangible assets in FY 'twenty, three totaling $130 6 billion yen.

Speaker Change: Really around LSE and <unk>.

The impairment reversal in Q4 for you Sheila was offset by several additional impairments related to the discontinuation of the <unk> Alpha <unk> seven and other.

Milano Furuta: Other operating expenses increased due to litigation provisions, restructuring costs, and the revaluation of contingent considerations. Translation FX was a further headwind to reported operating profit because many of our non-core expenses, such as amortization, impairments, and legal provisions, are booked in a foreign currency. All these items combined led to a reported operating profit decline of 56.4%.

Speaker Change: Other operating expenses increased due to litigation provisions and the restructuring costs and the revaluation of contingent considerations.

Speaker Change: Yeah.

Speaker Change: Charleston, and FX was further had that headwind.

Speaker Change: To a reported operating profit because many of our noncore expenses.

Speaker Change: Expenses, such as amortization impairment and legal provisions are booked in foreign currency.

Speaker Change: All of these items combined led to the reported operating profit climbed 56, 4%.

Milano Furuta: Next is our cash flow analysis on slide 24. Operating cash flow for FY23 was 716.3 billion yen, lower than the prior year, mainly due to the decline in cooperative profit and a one-time cash payment related to litigation. Pre-cash flow was 283.4 billion yen, reflecting total capex of 480 billion yen. This was below our full year forecast of 400 to 500 billion yen, mainly because of litigation-related payments and higher working capital. Moving on, to our outlook for FY24.

Next is our cash flow analysis on slide 24.

Speaker Change: Operating cash flow for FY 'twenty, three was $716 3 billion yen.

Speaker Change: Lower than prior year.

Speaker Change: Due to the decline in cooperative profit.

Speaker Change: And at one time cash payments related to irrigation.

Speaker Change: Free cash flow was strong at $83 4 billion yen.

Speaker Change: Reflecting total capex of 480 billion yen.

Speaker Change: This is below our full year forecast of 400 to 500 billion, mainly because obligation related payments.

Speaker Change: Higher working capital.

Speaker Change: Moving to our outlook for FY 'twenty four.

Milano Furuta: Let me start with our management guidance on the right-hand side of the slide. As explained earlier, the impact of generics on violence is shifting to FY24. However, we still anticipate strong momentum of our growth and launch products, in particular, NTVO and immunoglobulin, which will largely alleviate this headwind to result in a flat to slightly declining revenue on a CER basis. Co-OP is expected to decline by approximately 10% at CER because of the high profitability of Biden's and a modest increase in R&D and D&T. Core EPS is expected to decline by mid-tenth presentation, with a normalization of our core tax rate to around 20%.

Speaker Change: Let me start with our management guidance on the right hand side of the slide.

Speaker Change: As explained earlier the impact of generics on biomass is shifting to FY 'twenty four.

Speaker Change: However, we still anticipate strong momentum of our growth and launch products.

Speaker Change: In particular, Entyvio and globally, which will largely alleviate is headwind to result in a flat fee.

The declining revenue or CER basis.

Speaker Change: Co op is expected to decline by a person.

Speaker Change: At least 10% at CER because of the high profitability of guidance.

Speaker Change: And a modest increase in R&D and <unk>.

Speaker Change: Core EPS is expected to decline by mid 10th presentation.

Speaker Change: With a normalization.

Speaker Change: Our tax rate to around 20%.

Milano Furuta: Our forecast on an actual FX basis assumes 150 yen to the US dollar and 160 yen to the euro. We expect revenue to be 4.35 trillion yen, which is a 2% increase versus the prior year on an actual basis. Co-OP's forecast is 1 trillion Yen. Reported operating profit forecast is 225 billion yen, including 140 billion yen of restructuring costs. Qua EPS and Report D EPS are expected to be 431 yen and 37 yen, respectively.

Speaker Change: Our forecast on the actual FX basis assumes 150 yen to the U S. Dollar at 160 yen to the euro.

Speaker Change: We expect revenue to be 435 to three OEM.

Speaker Change: Which is a 2% increase.

Speaker Change: Prior year at actual FX.

Speaker Change: Co op forecast on.

Speaker Change: Billion yen.

Speaker Change: Reported operating profit forecast 225 billion yen, including 140 billion yen of restructuring costs.

Speaker Change: Core EPS, our reported EPS is expected to be 431, yet and.

Speaker Change: And 37 yen respectively.

Milano Furuta: Our adjusted free cash flow forecast is 350 to 450 billion yen. This reflects the reduction in cash flow from finance, higher cash restructuring expenses, as well as a continued envelope for targeted e-licensing opportunities. Finally, according to the capital allocation policy we updated last year, we are announcing a dividend increase for the second successive year by a further 18 to 196 yen per share.

Speaker Change: Our adjusted free cash flow forecast is 352 450 billion yen.

Speaker Change: This reflects a reduction in cash flow from <unk>.

Speaker Change: Higher cash restructuring expenses as well as a continued envelope for targeted in licensing opportunities.

Speaker Change: Finally, according to the capital allocation policy, we updated last year.

Speaker Change: We are announcing a dividend increase for the second successive year by a further 200.

Speaker Change: <unk> 96 per share.

Milano Furuta: Slide 26 features the dynamics impacting our revenue outlook for FY24, which I actually have explained mostly. Slide 27 shows a similar waterfall for FR24 Cooperative Profit. The dynamics look similar to FR2-D3, but there are two differences I want to point out.

Speaker Change: Slide 26, <unk> the dynamics impacting our revenue outlook for FY, 'twenty, four which actually I explained mostly.

Slide 27 shows a similar waterfall.

For FY 'twenty for operating profit.

The dynamics looks similar to FY <unk>, but there are two differences I want to point out.

Milano Furuta: First, cross-margin deterioration is expected to be less in FR2D4. Second, we expect savings in other OPECs to start offsetting our incremental strategic investments in R&D and D&T. The net impact is a co-op decline of about 10% at CER. Although we are guiding for FY24 to be another year of profit decline, we expect to bottom out this year.

Speaker Change: First gross margin deterioration is expected to be less in FY 'twenty for second.

Speaker Change: Second we expect fittings in other opex to start offsetting our incremental strategic investments in R&D and DMT.

Speaker Change: The net impact is a co op decline of about 10% at CER.

Speaker Change: Although we are guiding for FY 'twenty four to be another year of profit decline, we expect to bottom out this year.

Milano Furuta: We implement enterprise-wide programs to drive efficiencies across the value chain with 140 billion yen of restructuring costs in FY24, as well as some additional lower costs in the next couple of years. Through this program, we generate significant gross cost savings, and while much of this will be reinvested for growth.

Speaker Change: We implement to enterprise wide program to drive efficiencies across the value chain with $140 billion of restructuring costs in FY 'twenty four as well as some additional lower cost in the next couple of years.

Speaker Change: Through this program, we generated significant gross cost savings.

Speaker Change: While much of this will be invested for growth.

Milano Furuta: We are committed to making concrete steps to improve QoP margin toward the low to mid-30s. On this slide, I would like to give a bit more color on how we see the P&L evolving from FY25 onwards. Firstly, it is very important to emphasize our return to sustainable revenue growth after the bionic LOE is behind us. This will be enabled by the current growth and launch products. New launches from our pipeline, and with limited further generic exposure, is the case.

Speaker Change: We are committed to make a concrete steps on improving core op margin.

Speaker Change: The low to mid 30.

On this slide I would like to give a bit more color on how we see the P&L evolving from FY 'twenty five onwards.

Speaker Change: Firstly it is very important to emphasize our return to sustainable revenue growth. After the virus is behind us.

Speaker Change: This will be enabled by the current growth and launch products.

Speaker Change: New launches from our pipeline.

Speaker Change: And with limited further generic exposure.

Milano Furuta: We expect our gross margins to bottom out with the Vyvanse LOE, with a gradual improvement due to the expansion of NTDO and other high-margin products, as well as efficiencies in manufacturing and supply chain and continued margin improvements in PDG. For SG&A, we plan to hold expenses flat to slightly declining on an absolute basis offsetting investments and inflation; by managing the decisions they spend, we should see the ratio of SG&A as a percentage of revenue decline as the top line grows, resulting in a majority of quality margin improvement. In R&D, we are rigorously prioritizing our pipeline to fund late-stage programs.

Speaker Change: Good.

Speaker Change: We expect our gross margins for the mouse with a biobank salary.

Speaker Change: With a gradual improvement due to expansion of Entyvio.

Speaker Change: Other high margin products.

As well as <unk> manufacturing or supply chain.

Speaker Change: And continued margin improvement in PDT.

For SG&A, we bounded core expenses flat to slightly declining, but absolute basis offsetting investments and inflation.

Speaker Change: By managing SG&A spend.

Speaker Change: We should see the ratio of SG&A as a percentage of revenue decline as the top line growth.

Speaker Change: Resulting majority of co op margin improvements.

Speaker Change: In R&D.

Speaker Change: We are rigorously prioritizing our pipeline to fund late stage program.

Milano Furuta: To discipline cost management, we intend to progress a pipeline with a broadly neutral impact on margins. In other words, we will manage R&D incremental investments broadly in line with revenue growth from FY25. As a result of all these dynamics, we plan to deliver 100 to 250 basis points of copy margin improvement each year. We are very confident in our execution of the emergency program and cost management. But to be transparent, there are also some important assumptions behind this outlook, such as bimance erosion timing and FX rate. For example, slower erosion would set a higher starting point in FY24.

Speaker Change: Through disciplined cost management, we intend to progress our pipeline with broadly neutral impact on margin.

Speaker Change: Of the world.

Speaker Change: We will diminish R&D incremental investments broadly in line with revenue growth from FY 'twenty five.

Speaker Change: As a result of all of these dynamics, we plan to deliver 100 to 250 basis points coffee margin improvement each year.

Speaker Change: We are very confident in our execution.

Speaker Change: The extensive program and cost management.

Speaker Change: <unk> transparent there are also some important assumptions behind this outlook, such as biomass erosion timing and FX rate.

Milano Furuta: Or, as we experienced in FY23, significant currency volatility might cause a headwind to margin improvement. Before handing back to Christophe for closing remarks, I just want to reiterate our capital allocation policy that we updated last year. We continue to prioritize investment for growth in our pipeline, new product launches, and expanding our PDT business while delivering attractive returns to our shareholders. I also emphasize that we remain committed to maintaining solid investment grade ratings.

For example, slower erosion, we've set the higher starting point FY 'twenty four.

Speaker Change: As we experienced in excess of industry significant currency volatility might coast, a headwind to our margin improvement.

Speaker Change: Before handing back to Christoph for closing remarks, I, just want to reiterate our capital allocation policy that we updated last year.

We continue to prioritize investments for growth in our pipeline, new product launches and expanding our PBS.

Speaker Change: While delivering attractive returns to our shareholders.

Speaker Change: I also emphasize that we remain committed to maintaining solid investment grade ratings.

Milano Furuta: With this year's ADN increase, we believe our dividend payout ratio in core EPS becomes more in line with our industry peers. Going forward, and with our progressive dividend policy, we will decide on the dividends according to our long-term profit growth outlook and financial capacity in cash flow and balance sheet.

Christoph: With this year's ADN increase we believe our dividend payout ratio in quite yet.

Christoph: Perhaps more in line with our industry peers.

Christoph: Going forth.

And our progressive dividend policy.

We will decide the dividend according to long term profit growth outlook, and our financial capacity and cash flow and balance sheet.

Milano Furuta: Thank you for your attention. And I'll hand back to Christophe to close the presentation. Thank you, Andy, and thank you, Milano. As I said at the beginning, I would describe fiscal year 23 as a well-managed, tough year.

Christoph: Thank you for your attention and I hand back to Christophe to close the presentation.

Thank you Andy and thank you Emmanuel.

Christophe Weber: And at the beginning.

Christophe Weber: We'll describe fiscal year 'twenty three is a wind manicured turf here.

Christophe Weber: In a very challenging environment, we met or exceeded our management guidelines and made significant progress in our pipeline for marketed therapies. Looking ahead, we believe that we have one final year in 2020. We are committed to the rigorous prioritization needed to maximize their potential for success. I'll return to revenue growth, combined with a significant efficiency program we introduced today, giving us a clear path to delivering 100 to 250 basis points of co-operating profit margin improvement each year from fiscal year 25 towards our low to mid-30s percentage target.

Christophe Weber: In a very challenging environment, we met or exceeded our management guidance and made significant progress in our pipeline on market therapies.

Christophe Weber: Looking ahead.

Christophe Weber: We believe that we have won another year in 2020.

Speaker Change: Sure and we are committed to a rigorous part position needed to maximize their potential for success.

Speaker Change: Our return to revenue growth combined.

Combined with a significant deficiency program, we introduced today give us a clear path to delivering 100 to <unk> hundred 50 basis points core operating margin improvement each year from fiscal year 'twenty five towards our low to mid <unk> percentage target.

Christophe Weber: Finally, we remain committed to delivering an attractive return to our shareholders and feel confident in proposing an increase to our annual dividend again this year. We look forward to the opportunities that lie ahead. Thank you for your continued support and confidence in Takeda.

Speaker Change: Finally, we remain committed to delivering attractive returns to our shareholders and feel confident operating an increase to our annual dividend again.

We look forward to the opportunity that Louise thank.

Louise: Thank you for your continued support and confidence in decades.

Louise: I will now hand, it back to Chris Thank you.

Unknown Executive: In addition to Christophe, Andy, and Furuta, we have Ramona Sequeira, President of the Global Portfolio Division, Julie Kim, President of the US Business Unit, Charles Plattford, President of the PDT Business Unit, and Teresa Bittetti, President of the Global Oncology Business Unit, joining the Q&A. If you want to ask a question, please raise your hand using the button on the Zoom platform. If you are listening in the Japanese language, please ask a question in Japanese. If you are listening in the English language, please ask a question in English. And if you are listening to live audio, you may be able to ask a question in either one of the languages.

Chris: So does it mean, a pharmacological should small orca stifle would like to entertain questions from year Mustang stimulation to Crystal Cove and put attack.

Chris: We have the Vermont seeking out Chris.

Chris: Chris Dan with a global portfolio Division, Julie Kim President of the U S business unit.

Speaker Change: Pet food Preston PTT business unit, Tennessee, <unk> President of global oncology business unit joining <unk>.

If you want to ask a question please.

Sam you can temper the gem platform. If you are listening in Japanese line. Please ask a question each please.

Speaker Change: In the Cheyenne. Please ask a question in English <unk>.

Speaker Change: Tonight's O'neill, you may be able to.

Speaker Change: Ask a question you know none of the downgrades.

I'll do it because it to ask a question up to to understate own questions at once.

Speaker Change: Okay.

Speaker Change: Hi.

Unknown Executive: And you are kindly requested to ask questions up to two and state all the questions at once. So we'd like to move on to the first question. Jeffreys, Steve Barker. Yes, yes, it's Steve Barker.

Tony: Tony its recycled.

Tony: Recycle some of that can move on to the first question. Please.

Stephen Barker: Steve Barker without you.

Steve Barker: Alignment.

Yeah.

Steve Barker: Yes.

Steve Barker: Okay.

Steve Barker: Yeah.

Stephen Barker: Thanks, thanks for taking my questions. So my first question is about your restructuring. You plan to book a charge of 140 billion yen this year.

Steve Barker: Yes, yes, it's Steve.

Steve Barker: The group's thanks, thanks for taking my questions.

Steve Barker: So my first question is about your restructuring.

Steve Barker: Planning to book, a charge of 140 billion yen this year.

Unknown Executive: I'd be interested if you could share any details about what this is going to entail and the scope of any planned redundancies and which divisions that it's going to focus on. Now my second question regarding the vaccine business, Christophe's comments. I think they seem to indicate a more enthusiastic commitment to the vaccine business based on the success of Cudinga, but you only have one global product. Should we understand that your new plan could involve adding vaccines to your portfolio, potentially through acquisitions? Thanks very much.

Steve Barker: I'd be interested if you could share any details about the.

Steve Barker: What this is going to entail and the scope of any planned redundancies and which divisions.

Steve Barker: Can focus on the my second question regarding the vaccine business.

Christoph comments.

Steve Barker: I think it seems to indicate a more enthusiastic commitment to the vaccines business now based upon the success of two dengue.

But you only have one global product should we understand that your.

Steve Barker: And.

Could enroll.

Speaker Change: Adding vaccines to a portfolio of potentially through acquisitions. Thanks, so much.

Unknown Executive: Thank you, Steve. So the first question on restructuring and more details on the program, and then the second question on our strategy in the vaccines business. I'd like to ask Christophe to answer both of those questions.

Speaker Change: Thank you Steve So the first question on restructuring and more details on the program and then the second question on our strategy in the vaccines business I'd like to ask Christophe to answer both of those questions.

Christophe Weber: Thank you, Steve. So the first question, the efficiency of programs does include some redundancy in many different areas of the company. It will impact differently different departments, but we are looking at a more agile organization, streamlining the organization, gaining more efficiency with data technology and AI. The pipeline prioritization also will create some reorganization, so there is an element of redundancy in this provision. It's not 100% of that, but it's

Christophe Weber: Thank you Steve.

Christophe Weber: So the first question on the efficiency of our programs.

Christophe Weber: <unk>.

Christophe Weber: Include those summer road LLC.

Speaker Change: And there are many different areas of the company.

Speaker Change: It's it will impact differently from the department, but we are looking at.

Speaker Change: More giant organization.

Learning organization in more efficiency desktop without technology.

Speaker Change: AI.

Speaker Change: The pipeline participation also.

We'll create some reorganizations whose arena.

Speaker Change: The amount of relevancy.

Speaker Change: In this in.

Speaker Change: And this provision.

It's not 100% that but it's a significant.

Christophe Weber: Regarding vaccine development, we are very excited about Cure Dengue, for sure. I mean, first, it's a great vaccine, very efficacious. And unfortunately, dengue prevalence is increasing very significantly in endemic countries.

Speaker Change: And if you can.

Regarding the vaccines.

Speaker Change: Vaccines they have a mantra we are very excited about treating Jeff Shaw.

Speaker Change: Firstly to great vaccine efficacy.

Speaker Change: The key issues.

Speaker Change: Unfortunately dengue.

Speaker Change: Prevalences.

Speaker Change: Increasing very significantly in endemic countries.

Christophe Weber: On the other hand, for future vaccine development, we are looking for a strategic partner. We don't want to do it alone by ourselves. We are missing many strategic components of vaccines. So we want to, ideally, we would like to find a vaccine strategic partner to potentially develop more other vaccines, if you like, after Cure Dengue. How would that sort of strategic partnership work? What role would Takeda play in such a partnership?

Speaker Change: The other end for secure all vaccines developed Ponta, we are looking for strategic partner.

Speaker Change: We don't want to do it alone.

Speaker Change: The loan by ourselves we are missing many strategic component in vaccines.

Speaker Change: We want to I believe we would like to find.

Speaker Change: <unk> strategic partner.

Speaker Change: To potentially develop.

Speaker Change: More vaccines, if you like us to ask you if you didn't get.

Speaker Change: How would that sort of.

Speaker Change: T J partnership work what role with Takeda.

Speaker Change: Takeda playing such a partnership.

Christophe Weber: I will not give you details at this stage because I cannot disclose the type of discussion that we are having. There are many different types of potential strategic partnership models. But basically, we think that if we could find a good partner, it will strengthen our capability in vaccine development and will also reduce our financial exposure. Developing new vaccines is very expensive, very, very long, which is fine. But we are also missing some core capabilities.

Speaker Change: Although I will not give you detail just Asia.

Speaker Change: Those are.

Speaker Change: I cannot disclose the type of discussion that we're having with them.

Speaker Change: Davidson.

Speaker Change: Many different type of potential modelo strategic partnership, but basically we are seeing that.

Speaker Change: If we could find a good partner off it will strengthen our our captain Jean vaccines development.

Speaker Change: It will resort.

Speaker Change: Reduce our financial exposure are developing election season is very expensive very very long, which is fine, but you're also missing some some core capabilities. So so we have many different models.

Christophe Weber: So there are many different models. If, of course, at one stage, we are able to do a strategic partnership like that, we will share with you the details. Understood. Thanks so much. Next question from Yamaguchi-san's city, please. Yes, we can hear you.

Speaker Change: If we of course.

Speaker Change: At one stage, we are able to do a strategic partnership divestments.

Speaker Change: Yes.

Speaker Change: Understood Thanks very much.

Speaker Change: Hi, signal, which smaller shipping Yamaguchi from question from Yamaguchi from Citi. Please.

Unknown Executive: Great, thank you. Thank you. So, this is Yamaguchi from Citi.

Yamaguchi: Hi, Jamie Yes, we can hear you great. Thank you. Thank you so the CFO for city that could two questions. The first one regarding about the business.

Hidemaru Yamaguchi: Two questions. The first one is regarding a PDT business, and the PDT business is growing faster than the industry, and you seem to have a good condition, of course, as well, and the operating margin is now improving. Can you give us some guidance on what kind of gross margin you're looking for for this fiscal year compared to last fiscal year? That's the first question. The second question is regarding a project on the abstract of sleep at the TAC I-61 and the congratulations for the PDT, but the placebo adjusted time is around 26 minutes. I think it's between three to five milligrams if I remember correctly, which is great, but it's a little bit weaker than 994 and also this is only for NT1.

Jamie: The PDP business is growing faster than the industry.

Speaker Change: You seem to have a good condition of course as well.

Speaker Change: Operating margin is now improving.

Jamie: You gave us the guidance with what kind of gross margin you're looking for this fiscal year compared to last week's Korea. That's the first question.

Jamie: Second question is regarding correctly a project on.

Jamie: On the <unk> abstract.

Jamie: Asleep tuck <unk> 61.

Congress asset congratulation with the B T D. But are the principal adjustments at a time is around between six minutes I think it's between a three to five milligrams, if I remember correctly, which is great, but like I said it would be.

Jamie: We got the 99, Paul I'd also this is the only if a N T. One so can you give us any any impressions or why it has either been S cases compared to 94 because of the voltage thinks also why did you do only for the N T one and again.

Jamie: Charles to comment and then the second question.

Jamie: Steve to answer that one thank you.

Unknown Executive: So can you give us any impressions of why it is a little bit less efficacious compared to 994 because of those things? And also, why did you only do it for the NT1 and give... Giles to comment and then the second question, to answer that one. Thank you. Thank you Chris and Yamaguchi-san. Thank you for the question. We do expect the PDT business to continue growing high single digits in fiscal 24, with the EMI Global portfolio growing five, 15% and single digit growth for my album and portfolio. We don't give guidance around gross margin or COP by division.

Speaker Change: Thank you Chris I'm Yamaguchi, San Thank you for the question, we do expect our P&C business to continue growing high single digits in fiscal 'twenty four with the Goldman portfolio growing five.

Yamaguchi: To 15% in single digit gross my augment portfolio, we don't.

Stephen Barker: Give guidance around gross margin all CRP.

Unknown Executive: But what I can assure you is that we continue to see positive momentum in margin expansion for the PDT business driven by better value recognition, a better portfolio mix, particularly uptake of our innovative subcutaneous IG, portfolio supported also by the recent approval in the US and Europe for treatment of CID patients, but also supported by continued investment in DD&T transformation across the value chain, which is helping to drive efficiency and productivity. Thank you. Yamaguchi-san, this is Andy.

Stephen Barker: By Division.

Speaker Change: But what I can assure you is that we continue to see positive momentum.

Speaker Change: <unk> expansion for the beauty business, driven by better value recognition better portfolio mix, particularly uptake of our innovative subcutaneous RG <unk>.

Speaker Change: Portfolio supported also by the recent approval.

Speaker Change: For <unk> in the U S Europe for treatment of CIB patients a therapy patients but also.

Speaker Change: Supported by continued investment in Didi and T transformation across the value chain, which is helping to drive efficiency and productivity.

Speaker Change: Thank you.

Andrew S. Plump: Firstly, with respect to ATIP1 and type 1 narcolepsy, the good news is that in three weeks, you'll have an opportunity to see the full data set as it's presented at SLEAP. And as I mentioned, we'll host an IR, go deeper into your questions, and share more of the data. Just so, at this point, just a few brief comments. But just a general comment, which is that I think it will be hard to create a profile that will be more effective than TAC861 in type 1 narcolepsy. It will be hard to create a profile that's gonna be better.

Hidemaru Yamaguchi: Yamaguchi San.

Andy: Andy Good evening.

Berkeley with respected ATR, Glenn and technical let's see the good news is that in three weeks, you'll have an opportunity to see the copel dataset has its presented at sleep and as I mentioned, we will host an IR.

Andy: Go deeper into the into your questions in and share more of the data just so so at this point just a few brief comments.

Speaker Change: Just a general comment which is I think it will be hard to.

Speaker Change: To create a profile that will be more there'll be better than Tac 861 in type one narcolepsy it will be hard to create a profile, it's going to be better and I wouldn't look at small number numeric differences in a highly artificial endpoint like MW T as relevant what will be very important for <unk>.

Andrew S. Plump: And I wouldn't look at small number, numeric differences in a highly artificial endpoint like MWT as relevant. What will be very important for you to see is the efficacy across the multiple different aspects of type 1 narcolepsy, excessive daytime sleepiness, cataplexy, nighttime sleep architecture, and then measures of patient functional quality of life. We've looked extensively across all of these, and I can tell you that the profile for 861 is quite transformative.

You to see the efficacy of course.

Speaker Change: The multiple different aspects of them.

Type one narcolepsy excessive daytime sleepiness cataplexy nighttime sleep architecture, and then measures of patient function and quality of life. We look extensively across all of these in.

Speaker Change: And I can tell you that the profile for a six one is is quite is quite transformative and for many of these patients were functionally curing there were type one narcolepsy and in addition, there's a there's a therapeutic index, it's important to thread the needle so dose becomes quite important in managing efficacy.

Andrew S. Plump: And for many of these patients, we're functionally curing their type 1 narcolepsy. In addition, there's a therapeutic index that's important to thread the needle on. So dose becomes quite important in managing efficacy and therapeutic index, and we think that we have threaded that needle with TAC861, and you'll see the data in a few weeks. With respect to type 2 narcolepsy and idiopathic hypersomnia, there's clearly a dose response element.

Speaker Change: With therapeutic index, and we think that we have been shredded that needle with package is fine and Youll see that youll see the data in a few weeks with respect to Titan to narcolepsy and idiopathic hypersomnia, there's clearly a dose response element and we made the calculated decision that we wanted to focus type one narcolepsy with 861 and.

Andrew S. Plump: And we made the calculated decision that we wanted to focus on type 1 narcolepsy with 861, and part of that decision was the data that we had seen in our phase 2B studies. Part of that decision was, as you know, our intent to really go forward with the lowest efficacious dose possible for 861, given the history with TAC994. And then, most importantly, was the momentum that we were generating with TAC360, which is now in the clinic. Our intent for TAC360 is to move forward very rapidly with type 2 narcolepsy and other late-cycle disorders.

Speaker Change: That decision was the data that we had seen in our phase <unk> studies are to that decision was as you know our intent to really go forward with the lowest efficacious dose possible for Asics, one given the history with Acme renamed core and then perhaps most importantly was the momentum that we were generating with tax III.

Speaker Change: <unk>, which is now in the clinic, our intent for tax free 60 years to move forward very rapidly in type two narcolepsy and wake.

Speaker Change: Wake cycle disorders.

Speaker Change: Thank you.

Okay.

Unknown Executive: Thank you. Thank you, Yamaguchi-san. So for the next question, I'd like to call on Cowan. Mike Nedelcovych, please unmute and ask your question. Hi, thank you for the questions. I have two.

Speaker Change: Thank you Yamaguchi San.

Speaker Change: So for the next question I would like to call on Cowen Microgrid Michael.

Please ask your questions.

Michael Thomas Nedelcovych: The first is on Antivio. You note that newly launched Antivio competitors appear to be gaining share from other drug classes. But AbbVie's IL-23 is approved in Crohn's while only being filed for UC, and Lily's IL-23 was approved in UC only six months ago, with Crohn's approval pending. So I'm curious, how confident are you that this dynamic will persist in Antivio's favor? And then my second question is about TAC-007. You kindly outlined the differentiated features of TAC-007 relative to competitors pursuing cell therapy for autoimmune disease. But why is this approach superior to, for example, CD19 or CD20 directed T cell engaging antibodies? And where might TAC-007 have limitations relative to other modalities?

Michael: Hi, Thank you for the questions I have two the first is on studio in the newly launched Entyvio competitors appear to be gaining share from other drug classes, but add these IL 23 is approved in crohn's, while only filed for UC.

And Lilly's IL 23 was approved and you see only six months ago with Crohn's approval pending so I'm curious how confident are you that this dynamic will persist in entyvio is favor.

And then my second question is on TAC 007, you kindly outlined differentiate and features of Taco O seven relative to competitors pursuing self therapy for autoimmune disease, but why is this approach superior to for example, CD 19, or CD 20, directed T cell engaging antibodies and where might tack.

Michael: Oh, seven have limitations relative to other modalities.

Unknown Executive: Thank you. Thank you, Mike. So the first question on NTVO market share performance, particularly in later lines of therapy. I'd like to ask Julie to comment on that.

Speaker Change: Thank you.

Speaker Change: Thank you Mike So the first question on <unk>, our market share performance, particularly our lines of therapy I'd like to ask Julie to comment on that and then on tax double of seven in <unk>.

Julie Kim: And then on TAC007 in immune disorders, Andy can comment on that. Thanks, Chris, and thanks for the question, Mike. When it comes to Antivio's performance in the U.S., I think being 10 years on the market and able to grow demand faster than the market and maintain our market share leader position in first line, both in IBD overall and in BioNaive starts, demonstrates the strong track record that Antivio has, being a gut selective option for HCPs to use with their patients in both UC and CD.

Speaker Change: Disorders, Andy can comment on that.

Julie Kim: Thanks, Kristen for the question, Mike when it comes to Entyvio <unk> performance in the U S.

Julie Kim: Being 10 years on the market and able to grow.

Julie Kim: Demand faster than the market and maintain our market share leader.

Speaker Change: <unk> interests lie in both in IBD overall and bio naive.

Speaker Change: Constraints and strong track record that Entyvio has being a gut selective option for HCP as T is that their patient from both UC and CD. So we do believe that in first line will be able to hold our market share position given the track record that Jeff mentioned and where we see the new entrants.

Julie Kim: So we do believe that, in first line, we'll be able to hold our market share position, given the track record that I just mentioned, and where we see the new entrants gaining share is in second line and beyond. So we expect that, as new products continue to gain the different indications, whether it's CD or UC, that's where we will see them take hold when they want. Mike, it's Andy.

Speaker Change: Hum.

Speaker Change: Gaining share in second line and beyond so we expect that the as new.

Speaker Change: <unk> products continue to gain.

Indications are that C D or you see that that's where we will see them take hold.

Speaker Change: Yeah.

Speaker Change: When they launch.

Andrew S. Plump: With respect to TACO7, we, of course, don't want to get out ahead of ourselves here. This is just an extraordinarily exciting and competitive landscape right now, and we're really learning as we're moving forward. The profile for TACO7 fits very well with autoimmune diseases. It's an off-the-shelf agent, and manufacturing is quite simple.

Mike Danny: Mike Danny for with respect to <unk>, we of course don't want to get ahead of ourselves here. This this is just an extraordinarily exciting and competitive landscape right now and we're really learning as we're moving forward the.

Mike Danny: The profile for <unk>, seven and fits very well with autoimmune diseases. It's an off the shelf agent manufacturing is quite simple we have a cryopreserved formulation of <unk> and ship anywhere in the world. The cost of goods are a fraction of what it cost to make an autologous cell therapy, our experience in oncology is dead.

Andrew S. Plump: We have a cryopreserved formulation that we can ship anywhere in the world. The cost of goods is a fraction of what it costs to make an autologous cell therapy. Our experience in oncology is that the safety profile is better than what we've seen with autologous therapies, and it's quite potent.

Mike Danny: The safety profile is is better than what we've seen with <unk>.

Mike Danny: All of these other therapies and and it's quite potent.

Andrew S. Plump: So it lends itself very nicely, as you can imagine, to patients with autoimmune diseases relative to patients with cancer. Of course, there's a lot for us to understand. We feel quite confident, based on the activity of TACO7, that we'll see efficacy similar to what's been seen with the other cell therapy agents in these diseases. But that's something that we still need to sort through.

Mike Danny: So it lends itself very nicely as you can imagine to patients with with autoimmune diseases relative to patients with cancer of course, Theres a lot for us to understand.

Mike Danny: We feel quite confident based on the activity of <unk> seven that will see efficacy similar to what's been seen with the other cell therapy agents. These diseases, but that's something that we still need to sort through we also need to sort of the way. We're conditioning regimens will look like with dose will look like so there's still a lot to learn your question.

Andrew S. Plump: We also need to sort through what conditioning regimens will look like, and what doses will look like. So there's still a lot to learn. Your question, though, around how it compares to non-cell therapies, I think the answer to that question is we just don't have proof of principle for any other type of agent having the kind of truly remarkable transformative efficacy, perhaps curing these diseases.

Mike Danny: Though around how it compares to.

Mike Danny: Non cell therapies, I think they'd be answer that question is we just don't have proof of principle for any other type of agent having.

Mike Danny: Having the kind of.

Mike Danny: Truly remarkable transformative efficacy, perhaps securing these diseases and Natalie the experience to date with depleting antibodies like CD 19 naked antibodies you see 'twenty naked antibodies suggests that you can use.

Andrew S. Plump: And actually, the experience to date with depleting antibodies like CD19-naked antibodies or CD20-naked antibodies suggests that you can significantly eradicate circulating B-cell populations, see modest to significant benefits over the short term, but then rebound of disease. And for reasons that I don't think the field fully understands, the cell therapies have been much more active in not having significant initial responses but sustained responses over years. So I think the jury's still out as to whether other agents are going to be as effective, let's say, as cell therapies.

Mike Danny: Efficient with eradicate circulating b cell populations.

Mike Danny: Mott is modest to significant benefits over short term, but then rebound of disease and for reasons that I don't think the field fully understands the cell therapies have been much more active in that.

Mike Danny: Significant initial responses, but sustained responses over the years. So I think the jury's still out as to whether other agents that are going to be asking that has effective let's say of the cell therapies and then lastly, you are asking about the liabilities of <unk> seven.

Andrew S. Plump: And then lastly, you're asking about the liabilities of TACO7. It looks quite good. I guess the one kind of challenge a bit right now is that you still require conditioning. We don't know if you can just purely give cell therapy without actually conditioning the bone marrow to allow for reconstitution with the cell therapy, but it's certainly something we'll be exploring, which will be less severe conditioning regimens.

Mike Danny: It looks quite good I guess the one the one.

Mike Danny: The challenge right now is that he's total air conditioning. We don't know if you can just purely give the shelf therapy without actually conditioning, the bone marrow to allow for reconstitution with the therapy, but it certainly that's something an area that we'll be exploring which will be less less less severe.

Mike Danny: Additional measures.

Unknown Executive: Okay, thank you. So moving on to the next question, I'd like to call on Muraoka-san from Morgan Stanley. Please unmute and ask your question. Konnichiwa, Morgan Stanley, Muraoka desu.

Mike Danny: Okay.

Speaker Change: Okay. Thank you so move onto the next question I'd like to call on Moodle.

Speaker Change: Morgan Stanley.

Speaker Change: Please on mute.

Speaker Change: Question.

Shinichiro Muraoka: This is Muraoka from Morgan Stanley. My first question is about the core, will be merging. Recovery, You mentioned 100 to 250 basis points. Improvement, IEA, is expected. And if it is actually following the plan, then I think probably in 2030, if the target will be attained from the current 29.7%, and then, I think that it may be, sort of, high-level ones, but it may be declining after that.

Speaker Change: <unk> founded Alberto Cortes and this is from an outcome on Sunday.

Speaker Change: Ultimately.

Speaker Change: My first question is.

Speaker Change: It's about the core <unk>.

Speaker Change: Recovery.

Speaker Change: Tor.

Speaker Change: Then current.

Speaker Change: Current Yakubov basis, you mentioned 100 to 250 basis point.

Speaker Change: Cost improvement a year.

Speaker Change: Obviously.

Speaker Change: It is expected that it's it is.

Speaker Change: Actually he put into plan, then I think I probably in 2035.

Speaker Change: Tiger WB.

Speaker Change: Data from the kind of 29, 7% and advent.

Speaker Change: I think that it may be.

Speaker Change: <unk> two.

Speaker Change: Okay.

Speaker Change: So divide up advanced but they may be declining that.

Unknown Executive: Is that the right understanding? And also, this improvement will come from the improvement of The Gross Margin. That's my first question. The second question is about BDT. There are other competitors' compounds, and they seem to be in trouble now. Takeda, In terms of [inaudible] Are there any chances that you will have more business opportunities, for instance, to get a collection center relatively easily? Thank you. So, again, thank you. Thank you. Excuse me, Mr. Muraoka.

Speaker Change: He said that Davita understanding and also.

Speaker Change: This improvement.

Speaker Change: Will come from the improvement.

Speaker Change: The gross margin.

Speaker Change: That's my first question second question is about the PDT.

Speaker Change: Okay.

Speaker Change: You might go to market.

Speaker Change: There are competitors.

Speaker Change: Paul.

Speaker Change: There seems to be in trouble now.

Speaker Change: And.

Speaker Change: Check it out.

Speaker Change: For example.

Speaker Change: <unk>.

Speaker Change: Please ask your question Santos.

Speaker Change: Yep.

Speaker Change: This opportunity.

Speaker Change: The signal.

Santos: Any chances that thank you.

Santos: We have the more business opportunities for <unk>.

Santos: Two more data to be easily get a collection center.

Speaker Change: I'd like to ask a question on PTC to be answered.

By Giles Brown or whether there are any opportunities to acquire more centers and then the first question on margin I'd like to ask Melano to comment and then Christophe has anything to add.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: So if I take out.

Unknown Executive: Hello. Hello. Hello, Mr. Muraoka-san.

Speaker Change: Okay.

Speaker Change: Chemotherapy.

Speaker Change: Eric when you draw.

Unknown Executive: Thank you very much for your question. I just said that the starting point is about 23%, and then, annually, 100% 100 to 250 basis point improvement is expected, and then in order to reach 30%, it takes time, and that time period that you mentioned is more or less correct. And that may be overlapping with the interview timing. Have a good one.

Speaker Change: Utah.

Thank you very much for your question.

Speaker Change: <unk>.

Speaker Change: And also.

Speaker Change: As I said.

Speaker Change: Does that imply <unk> to.

Speaker Change: 23% and then Eddie.

Speaker Change: Eight basis points and.

Speaker Change: 100% of 100 to 250 basis point improvement.

Speaker Change: As expected and then.

Speaker Change: In order to reach is 30% it takes time and that type.

Speaker Change: You mentioned Mesa.

Speaker Change: More or less correct.

Speaker Change:

Speaker Change: May be over a penis entyvio timing.

Uh-huh normalcy.

Unknown Executive: But there will be a new pipeline. Thank you for coming out and making contributions to the profit. I think they prove it; their profile will be different. So after the interview with LOE, what will our profit rate be?

Speaker Change: I don't know that there will be new pipeline with Amazon.

Speaker Change: And coming out and they are making contributions to the profit and therefore.

I think our D N a profit.

Speaker Change: No profile VP different.

Speaker Change: After anti deal in Italy.

Speaker Change: That will be all about profit debate 80 difficult.

Unknown Executive: It is difficult at this stage to estimate, but we also have to expect the contribution from new products as well. Thank you. Muraoka-san, thank you very much for the question on PDT. We are always looking at both organic and inorganic opportunities to continue to expand our [inaudible] Up to fiscal 28, we have opened over 100 new collection centers over the past four years. Thank you so much for that, Collections Network.

At this stage.

Speaker Change: But we also have to expect get contribution from new products as well.

Thank you.

Speaker Change: Okay.

Speaker Change: Jonathan.

Speaker Change: Morocco side. Thank you very much for the question on.

Speaker Change: <unk>.

Speaker Change: We are always looking at both.

Organic and inorganic opportunities to continue to expand.

Speaker Change: Capacity, both in our collections network that you referred to as well across our.

Speaker Change: Manufacturing network, we are committed to expand our capacity.

Speaker Change: By 50% over the next five years.

Speaker Change: Up to <unk>.

Speaker Change: Fiscal 2008, we have opened.

Speaker Change: Over 100, new collection centers over the past four years.

Unknown Executive: We're very excited about the ramp-up that we're now seeing over the coming years that will help to gain efficiency and productivity, particularly with data and digital. We've made reference in the slide deck to the commencement of the rollout of our personalized nomogram program, which will be effective in 35 centers across the U.S. by the end of fiscal 2024, and we will continue rolling it out across our entire network in fiscal 25, along with other data, digital, and technology investments, which will support further capacity expansion. Thank you. Thank you very much. Okay, thank you. I'd like to call upon Wakao-san from J.P. Morgan. Wakao-san, please unmute and ask your question. Wakao from J.P. Morgan.

Speaker Change: And the size of our flex.

Collections network, we're very excited about the ramp up that we're now seeing of the coming years that will help to gain in efficiency and productivity, particularly with data and digital.

Speaker Change: We've made reference in the slide deck too.

Speaker Change: Commencement the rollouts of our personalized nomogram program, which flow.

Speaker Change: The effective in 35 centers across the U S. By the end of fiscal 'twenty, four and we will continue rollout across our entire network.

Speaker Change: Cool.

Speaker Change: <unk> along with other.

Speaker Change: Data digital and technology investments, which will support further capacity expansion. Thank.

Speaker Change: Thank you.

Speaker Change: Many of those end markets.

Speaker Change: Thank you very much.

Speaker Change: Thank you the next.

Speaker Change: The question I would like to call upon.

Speaker Change: Carlson from J P. Morgan.

Seiji Wakao: Two questions. One, Antibio, FY24. 964 billion yen.

Carlson: San please on mute and ask your question.

Carlson: By integrating all about novartis outside of Moscow from Jpmorgan two questions. One N T P O <unk> turnkey full huh.

Carlson: 964 billion yen can you elaborate on that.

Unknown Executive: Can you elaborate on that? FY23 CEO Days was 6.6% growth, but you now expect 16% for FY24. That's a big growth. Do you see any trends in the first year to say that you're going to have that improvement? And then the IGAM POC data, can you explain and add some color? As you mentioned, development is rather competitive. 79 POC compared to other competitor products; you have competitive data available already, can you explain that, please?

Carlson: Yes.

Speaker Change: If I take T T Cerp's plus.

Six 6%.

Speaker Change: Now expect steam percent for FY 'twenty for granted because.

Speaker Change: You see some turn in that sense, you can say that you can enhance that improvement.

And then I N P M C D cash.

Speaker Change: Can you explain it add some color.

Speaker Change: Okay.

Speaker Change: As Ian mentioned.

Speaker Change: <unk> is a rather competitive.

Speaker Change: Yeah.

Speaker Change: Seven nine plc compared to other competitors product you can think he could the data available already.

Unknown Executive: So the first question on Antivio performance and outlook for 2024, I'd like to ask Julie to answer that. And then the second question on Mesogitimab and the data that we have in IGAM, anything that Andy can comment on its competitiveness at this stage. So thank you for the question, Wakao-san. In terms of the antivio outlook of 16% growth year over year, we appreciate that this is an ambitious target, but we do believe that it is achievable. A number of things contribute to the thinking behind this.

Speaker Change: Explain that please thank you.

Speaker Change: So the first question on Entyvio performance and outlook of 2024, I'd like to ask Julie to answer. This and then the second question on Mexico to map and the data that we have in ICANN anything that I can comment on it competitiveness at this stage.

Yeah.

Speaker Change: Yeah.

So thank you for the question Mark how Sean in terms of the activity outlook of 16% growth year over year, we appreciate that.

Julie Kim: Is an ambitious target, but we do believe that it is achievable.

Julie Kim: First, when you look at the growth of AntivioPEN, the subcutaneous formulation for Antivio, we continue to see good signs from the launch in the U.S. You heard Christophe mention some of the statistics in terms of access to new HCPs, new patients, as well as the uptake that we've seen in general in UC. And we're very excited about the CD approval that we received last month. In addition, when you look at what's happening from a revenue perspective, we did experience significant callbacks and rebates in Europe last year in FY23 that we don't anticipate will be as strong in FY24.

Julie Kim: A number of things contribute to that.

The thinking behind this first when you look at the growth of MTV append, the subcutaneous formulation or Entyvio, we continue to see good signs for launch in the U S. E. Christophe mentioned some of the statistics in terms of access to new HCP and patient as well as the.

Julie Kim: Take that we've seen in general.

And we're very excited about the CD approval that we see last month.

Julie Kim: In addition, when you look at the advanced therapy markets and the number of patients that still remain on conventional therapy, there is still an opportunity for us to gain additional patients, particularly with our first line positions in the US. So all of these combined give us reason to believe that we can achieve 16% growth in FY24. And Wakao-san, on meziginimab or TACO7-9, there's something quite unique about the depleting activity of this agent that goes far beyond the reductions that we're seeing in immunoglobulin.

Julie Kim: And again when.

When you look at what's happening from a.

Julie Kim: Revenue perspective, we did experience.

Second callbacks and rebate.

In Europe last year in FY2023 that we don't anticipate will be as strong in FY 'twenty four and.

Julie Kim: In addition, when you look at the advanced therapy market.

Julie Kim: A number of patients that still.

Julie Kim: Remain.

Julie Kim: <unk>.

Julie Kim: Conventional therapy that there is still an opportunity for us.

Julie Kim: Gain additional patients, particularly with our checkpoint position in the U S.

Julie Kim: So all of these combined.

Julie Kim: Give us reason to believe that we can achieve.

Julie Kim: Percent growth in FY 'twenty four.

Julie Kim: And what we're counting on <unk> 79.

Julie Kim: There is there is something quite unique about the depleting activity of this agent that goes far beyond the reductions that we're seeing in immunoglobulin and the best.

Julie Kim: And the best demonstration of that has been in ITP, where, as I mentioned, we do see reductions in immunoglobulins, but those are actually less than what's seen with the anti-FCRNs. And yet, in ITP, our dataset, which we'll present this year, and you'll have a chance to see, is quite different from what's been seen with FCRNs, both in terms of the magnitude of response in refractory patients, as well as the rapidity of response. So there's no way to explain the rapid rebound in patients' platelet counts based solely on reductions in circulating pathological immunoglobulins.

Julie Kim: Demonstration of that has been in ITT.

Julie Kim: As I mentioned, we see we do see reductions in immunoglobulins and and.

Julie Kim: And those are in.

Julie Kim: Actually less than what's seen with the anti F <unk> and yet in ITT or a dataset, which will present this year, you'll have against to see that is quite different than what's been seen with <unk>. Both in terms of the magnitude of response in refractory patients as well as the rapidity of response, so there's no way to explain the rapid.

Julie Kim: Rebounding in patients' platelet counts based solely on reductions of circulating pathological immunoglobulins and I'm not sure that we fully understand what's driving that rapid and profound benefit.

Andrew S. Plump: And I'm not sure that we fully understand what's driving that rapid and profound benefit, something that we're investigating. And in refractory ITP, third-line, and some second-line patients, there really isn't a competitive agent. I think this is a real chance for us to offer significant benefits in a market that's much less competitive. The whole file for mesigetimab is further supported by what we've seen in IGAN, and there's not much I can share at this point other than what we've said, based on the 1B data that we've shown. I can say that...

Julie Kim: Something that we're investigating and in refractory.

Julie Kim: D Irvine and some second line patients there really isn't a competitive agent I think this is a real chance for us to offer significant benefits in a market that's much less competitive.

Julie Kim: The profile of mitigating mabus is further supported by what we've seen and again, there's not much I can share because more than what he said.

Andrew S. Plump: It is a very competitive landscape, and the data that we've seen with MESA is on par or better than essentially anything that's been presented. However, we're all still looking at relatively early data sets that are focused predominantly on a proxy measure of benefit in IgAM, which is proteinuria. I don't think we fully understand whether proteinuria will translate to preservation of renal function, which is going to be the key clinical endpoint that will be most relevant in this patient population.

Julie Kim: Based on the the one the one the data that we've shown and I can say that.

Julie Kim: It is a very competitive landscape and the data that we've seen with NASA is on par or better than essentially anything thats been presented but we're also looking at relatively early datasets that are focused predominantly on a proxy injure of benefit in <unk>, which is proteinuria I don't think we.

Julie Kim: We fully understand why the proteinuria will translate to preservation of renal function, which is going to be the E. Clinical endpoint that will be most relevant in this patient population and there are many different mechanisms of action and we're the only <unk> 38, an antibody. That's that's progressing right now and again, so I think that we have a chance.

Unknown Executive: And there are many different mechanisms of action, and we're the only CD38-depleting antibody that's progressing right now in IgAM. So I think that we have a chance to be quite competitive in this space, despite the large number of different agents being tested. It's also a relatively large market with very high medical needs, so there's the potential for multiple different agents. Thank you. Moving to the next question, I'd like to call on Tony Ren from Macquarie. Please unmute and ask your question. Okay, that's yummy. Hi Tony. Yes, we can hear you.

Julie Kim: To be quite competitive in this in this space and despite the numbers.

Julie Kim: A different agent retention and also a relatively large market with no matter who need so there's the potential for multiple different.

Different agents.

Julie Kim: Okay.

Julie Kim: Okay.

Speaker Change: Thank you.

Speaker Change: Moving to the next question I'd like to call upon Tony ran from Macquarie. Please on mute and ask your question.

Unknown Executive: Okay, perfect. Yeah. So a couple of questions. The first one on your pipeline, TAC-279, looks like the head-to-head survives this trial against 42 is now delayed by about two to four quarters. I wanted to get some understanding of what's the thinking behind that.

Tony: Okay Gotcha.

Tony: Hi, Tony Yes, we can hear you.

Tony: Perfect.

Tony: So a couple of thoughts.

Question. So first of all on your pipeline chart two.

Tony: 279.

Tony: Isn't it.

Tony: It looks like the <unk>.

Head to head psoriasis trial against <unk> for Q2 is now delayed by about two more quarters I wanted to get some understanding.

Unknown Executive: In addition, this is a question about Antivio, the effort to extend its loss of site exclusivity. We've seen, in the U.S., that they've been getting increasingly tough on drug pricing and patent evergreening. We see FTC taking some pretty tough actions.

Tony: What so what's the thinking behind that.

Speaker Change: In addition.

Speaker Change: This is a question I'll, let <unk> to expand its lifestyle sites with Liberty.

Speaker Change: We have seen.

Unknown Executive: So how confident are you guys about extending the interview loss of exclusivity into the 2030s? So that's the two following. Okay, thank you. Thank you, Tony.

Speaker Change: In the U S. What are you seeing that.

Speaker Change: They've been pretty getting increasingly tough on drug pricing and patent.

Speaker Change: <unk>.

Speaker Change: We see FTC, taking some pretty tough actions so how.

Speaker Change: Confidence how you guys are above that withstanding the energy deal.

Loss outside exclusivity into 2030.

Unknown Executive: So the question on Zazu Citimap and Zazu Citinab, I'd like to ask Andy to comment on that, and then perhaps Ramona could add some color on the market opportunity for this program as well. And then the next question on NTVO and lots of exclusivity assumptions, particularly in the US, I'd like to ask Julie to comment on that. So first, Andy, please.

Speaker Change: So that's the truth.

Speaker Change: Okay.

Speaker Change: Okay. Thank you.

Tony: Thank you Tony.

Tony: So the question on <unk>.

Tony: <unk> I'd like to ask Andy to comment on that and then perhaps Ramona add some color on the market opportunity for this program as well and then the next question on Entyvio and <unk> loss of exclusivity assumptions, particularly in the U S. I'd like to ask Julie to comment on that so first Andy please.

Unknown Executive: Thanks, Chris. Thanks, Tony. So we're not, it's the head-to-head study; the timing of the head-to-head study is not delayed per se, where the head-to-head study will not be necessary for filing. The filing for psoriasis will be based on the two latitude phase three studies. And what we're doing is we're still working out the design of the head-to-head study to make it most relevant to physicians and patients to understand the differences between Zazo and Ducre, and we're just timing that study to have the data at the appropriate time point to support the launch of Zazo. And then I'll hand it over to Ramona or Julie to comment on the competitiveness.

Andy: Alright, Thanks, Chris Thanks, Toni So we're not it's the the head to head study the timing of the head to head studies not delayed per se, where the head to head study will not be necessary for filing the filing in psoriasis will be based on the two attitude.

Andy: Phase III studies in <unk>.

What we're doing is we're.

Andy: We're still working to design at the head to head study to make it most relevant to <unk>.

Andy: Physicians and patients to understand the differences between <unk> and Duke <unk> and were just timing that study to have the data at the appropriate.

Andy: The time point to support the launches of <unk>.

Andrew S. Plump: Yeah, I can make some quick comments, Tony, on 279 and the plans that we have. And first of all, let me say that the head-to-head trial remains an important part of our evidence package. So it's not registration-enabling.

Speaker Change: And then I'll hand, it over to Ramona or Julia did comment on that.

Speaker Change: Competitiveness.

Ramona: Yeah, I can do I can make some quick comments Tony online 279.

Ramona Sequeira: So, you know, there's no compromising on our timelines. But at the same time, we know we have a very, very strong product. We know the profile of 279 is one point three million times greater binding for tick two versus Jack.

Speaker Change: Plants that we have in and first of all let me say that that head to head trial remains an important part of our evidence package, so and it's not registration, enabling so weird.

Theres no compromising to our timelines, but at the same time, we know we have a very good product we know the profile of <unk>.

Ramona Sequeira: And so we know that we can dose for efficacy, achieving favorable side effects while decreasing the risk of non-selective Jack inhibition. You know, we saw from our phase three trials that a third of the patients had clear skin in our phase two B. So we're pretty excited about moving ahead with our full package. Psoriasis, psoriatic arthritis, doing our work in UC and CD, and the head-to-head versus Ducre in psoriasis is a big part of that evidence package. So our timelines are not compromised.

Speaker Change: One 3 million fold greater binding protect two versus Jack and so we know that we can dose for efficacy achieving favorable side effects, while decreasing the risk of non selective JAK inhibition.

And we saw from our phase III trials with patients.

Patients had clear skin in our faces today. So we're pretty excited about moving ahead with our full package psoriasis psoriatic arthritis, and doing our work and you see in C D and the head to head versus <unk> in psoriasis is a big part of that evidence package. So.

Ramona Sequeira: We're staging the trials to complete them quickly, and we're moving ahead with that. Thank you. Hi Tony, in terms of the question on Antivio LOE, our assumptions here have not changed in terms of when we expect that to occur, and part of this is driven by the patent that we have on Antivio, but part of it is also driven by the timing of the clinical trials needed by other companies in order to challenge Ampivio with the generic. And so, given those combined data points.

Speaker Change: Our timelines are not compromised restaging of trials to complete them quickly.

Julie Kim: We believe that the LOE or the challenge from a generic would not occur until 2030. It's the earliest in 2032, is what we've been communicating. Okay, very good. Yeah, thank you very much. Thank you, Tony.

Speaker Change: And we're moving ahead with that thank you.

Speaker Change: Hi, Tony in terms of the question on the Entyvio L O E.

Tony: Our assumptions here have not changed in terms of when we expect that to occur and part of this is driven by the pattern that we have.

Tony: On Entyvio, but part of it is also driven by timing.

Tony:

Tony: No.

Tony: Nickel trials needed by other company in order to challenge and video with the generic and so given those.

Tony: Combined data points.

Tony: We believe that the low or.

Tony: Or the <unk>.

Tony: Talent from a generic would not occur until 2030.

Tony: Early in 2032.

Unknown Executive: Okay, moving to the next question. I'd like to call on Nomura Securities. I see a hand raised by Maeda-san or Matsubara-san.

Tony: Communicating.

Speaker Change: Okay very good thank you very much.

Speaker Change: Yeah.

Speaker Change: Thank you Tony Okay, moving to the next question I would like to pull upon Nomura Securities I see a hand raised by my Edison or Matsubara phone. Please on mute and ask your question.

Unknown Executive: Please unmute and ask your question. I'm Matsubara from Nomura Securities. Can you hear me okay?

Unknown Executive: Yes, thank you. The first question is about NTVO. In your previous answer, we understand that NTVO will grow. However, so far, during the COVID-19 pandemic or even after the pandemic, patients are not coming back. And what is the current situation?

Speaker Change: Okay.

No what I spoke about is one of the most squamous this to better.

Edison: And I'm not talking about this can you hear me okay. Yes. Thank you negotiate the first question is MTBE.

Speaker Change: In your previous answer we understand that the <unk> growth.

Unknown Executive: Second question is about the virus. Genetics supply shortage, I think is still going on and looking at the FDA list in April, May or maybe up to August. Some items may be shipped out, but still others are in shortage. So this genetics, impact, how much do you think that it is expected in this new year? First question on Antivio and whether patients are returning after coronavirus.

Speaker Change: I have a sofa.

During the COVID-19 pandemic will even after the pandemic the patients.

Speaker Change: And are you back and what is the current situation. The second question is about the buybacks.

Speaker Change: Thanks, that's helpful.

Speaker Change: So going gone and he'll conduct FDA list.

To me well maybe up to August.

Speaker Change: Some may be shipped out.

Julie Kim: And then the second question on ViaVance generics and what our expectations are for generic supply in 2024. So I'd like to ask Julie to answer both these questions. Thank you Matsubara-san for the question. First, in terms of Antivio, let me distinguish between Antivio's performance versus what the market performance has been. I think that is at the heart of your question. And so, as we've shared before, when you look at certain factors like diagnosis rates, we do see that diagnosis rates, whether it's for UC, but particularly for CD, are much lower than what they were pre-pandemic. So market growth overall has been slower than pre-pandemic. We estimate that the market growth for this past fiscal year was roughly just over 4% in terms of demand growth.

Speaker Change: Our guys are utilities.

Speaker Change: Dysgenics huh.

Speaker Change: Okay.

Speaker Change: The impact of how much do you think it is expected into EMEA.

Speaker Change: So first question on Entyvio and whether patients are returning after Corona virus and then the second question on firearms generics and what our expectations are for generic supply.

Julie Kim: And so we do expect that the market will continue to grow, albeit at a slower rate than it has historically. In terms of Antivia's position within that, as mentioned before, we are holding on to our first, sorry, our position on the first line in IBD overall as the market cheerleader, as well as BioNaive Start. In terms of your second question around Vyvanse generic supply, let me start by saying we now have 10 generics that are on the market in the U.S.

Speaker Change: In 2024, so I'd like to ask Julie to answer both of these questions.

Julie Kim: Thank you Matt for the question first in terms of Entyvio, Let me distinguish between Entyvio performance versus what the market performance and I think that is at the heart of your question. So as we've shared before and you look at searching factor like diagnosed.

Julie Kim: That's right, we do see that diagnosis rate, whether it's where you see that particularly for E. D are much lower than what they were pre pandemic to the market growth overall has been slower than pre pandemic, we estimate that the market growth for this past fiscal year.

Julie Kim: Lastly, just over 4% in terms of the demand growth.

Julie Kim: And so we do expect that the market will continue to grow, albeit at a slower rate than it has historically in terms of the entity is positioned within that as mentioned before we are holding on to our first.

Julie Kim: Our sorry, our position in first line.

Julie Kim: In IBD overall as market shoulder as well as bio naive start.

Julie Kim: Initially, it started with seven, but now we have 10 generics on the market. The generic companies have experienced some supply challenges, as noted on the FDA shortage website. But we do anticipate that going forward, generic companies should be able to better supply the market. So from a Vyvanse, branded Vyvanse perspective, we are. We are not experiencing any supply challenges, and we are able to provide Vyvanse and branded Vyvanse to meet the demand that still exists in this market.

Julie Kim: In terms of your second question around by Vance generic supply, let me start by saying right now.

And now have 10 generics that are on the market in the U S. Initially it started with seven but now we have 10 generics on the market.

Julie Kim: The generic companies have experienced some supply challenges as noted on the FDA shortage website, but we do anticipate that going forward. The generic company should be able to better supply the market. So from a <unk> branded by then protected.

We are we.

Julie Kim: We are not experiencing any supply challenges and we are able to provide by then.

Julie Kim: Branded by then to meet the demand that still exist.

Julie Kim: Thank you very much. Okay, moving to the next question from UBS, Haruta-san. Please unmute and ask your question. Hi, this is Kasumi Haruta from UBS. Can you hear me?

Julie Kim: Okay.

Unknown Executive: Yes, we can hear you. Please go ahead. Yes, I have two questions. The first one is about the Margin Improvement Program. I guess this program will start on March 26.

Unknown Executive: How should we think about the improvement progress? Earlier timing could be a drastic change, or later timing could be a better margin improvement. How should we think about the improvement progress going forward? And second one is on TACH H6-1.

Speaker Change: Thank you so much.

Speaker Change: Okay moving to the next question from UBS.

Please ask your question.

UBS: Hi, This is causing me hooked off UBS can you hear me, yes. We can you. Please go ahead, yes.

Yes, I have two questions first one is about the margin prevent program I guess this program going to start for March 26.

UBS: Should we think about the improvement progress.

Speaker Change: Are you timing I'll take a start that timing could be Jessica change or that's our timing could be better margin improve and how we should think about the improvement progress going forward and the second one.

Unknown Executive: If I'm correct, I think Andy mentioned that those will be the lowest doses for phase 3. So is that correct? And I assume from the abstract, from the sleep, there was no dose dependency result from the MWT endpoint. And I would like to know the reason or background for this dose dependency result.

Speaker Change: It's on cap Asics, one if I'm correct I think Andy Foundation.

Speaker Change: Those will be double slowly astellas for phase three so is that correct and I assume from the abstract from the sleep there was no.

Dose dependency.

Unknown Executive: Thank you. Thank you, Haruta-san. So the first question about the margin improvement, I'd like to ask Milano to comment on that and then Andy about 86.1 dosing. Milano?

Speaker Change: From the M. W T point.

Speaker Change: And I would like to know the reason or background of of this dose dependency.

Milano Furuta: Thank you, Haruta-san. So the, let me clarify again, the baseline or starting point for the margin improvement will be FY24. And then from there, and 25 onwards, we tend to improve 100 to 250 basis points each year. So the it's gonna be 25, a copy margin will be better than 24. And then onwards. So you can count like that.

Speaker Change: <unk>.

Speaker Change: Thank you.

Speaker Change: So the question around the margin improvement I'd like to ask mulatto to comment on that and then Andy on apex, one dosing.

Speaker Change: No no.

Speaker Change: Thank you hurt the fan so let me clarify again.

Mulatto: So the baseline or starting point for the margin improvement will be FY 'twenty four.

Mulatto: And then from there.

Mulatto: And 'twenty five onwards.

Mulatto: We are in we can to improve 100 to 250 basis points each year.

Milano Furuta: It's not It's not starting from 26 and onwards from baseline from 3 to 4 and improving from 25. Is that clear? Yes. It has a range of 100 to 25, and 250 bits.

Mulatto: So it's going to add eight to five.

Mulatto: A copy margin will be better done 24.

Mulatto: And then onward, so you can count.

Speaker Change: That is.

Speaker Change: It is not sloppy starting from 2600 <unk> from.

Speaker Change: Based on iPhone before and improving from FY 'twenty five.

Milano Furuta: So I wanted to know more about how skewed that margin improvement is, progress or drastic change from the beginning or at the time when there would be more uptick for the improvement. Ah, thank you. So, the restart program from this fiscal year, and we expect the sort of benefit of this program will gradually increase towards 2025-2026. So the reason why we gave a bit of a range from 100 basis points to 250 basis points is that we expect, at this moment, the margin improvement will be bigger in FY26 than FY25. Okay, great.

Speaker Change: Yeah.

Speaker Change: Is that clear.

Speaker Change: Yes, I have a right range 400 to 25, Oh My God.

Speaker Change: 250 bps, so I what I.

I wanted to give more I know about house keywords that are marching our implementation progress.

Drastically changed from the beginning or that the timing would be more uptake for that improvement.

Speaker Change: Oh, Thank you so <unk>.

We start the program from this fiscal year.

Speaker Change: And we expect the sort of benefit.

Speaker Change: Graham will gradually increase towards 'twenty five 'twenty six.

Speaker Change: So the reason why we gave a bit the range from 100 basis points to 50 basis points as we expect at this moment. It is margin improvement will be a bigger in FY 'twenty six.

Andrew S. Plump: Thank you. And Arata-san, on 861, I didn't mean to suggest that there isn't dose responsiveness in our 861 data, but the good news is that in three weeks, you'll have a chance to dive deep into all of the data. So I'm not going to really try to unpack that here today.

Speaker Change: Then FY 'twenty five.

Speaker Change: Okay, great. Thank you.

Speaker Change: And our rapid sign on aegis, when I didn't I didn't mean to say.

Speaker Change: There isn't dose responsiveness in and our 861 data.

Speaker Change: And but.

The good news is that in three weeks on the chance to dive deep into into all of data.

Andrew S. Plump: But I will say that, and I'm not going to comment on, I can't comment on our phase three dose. At this point, we're still working through the design and having discussions with regulatory authorities. And it's also, some people look at it as quite competitive.

Speaker Change: So not really.

Speaker Change: The impact that you're here today.

Speaker Change: But I will say that and I'm not going to comment on that I can't comment on what a phase III dose at this point, we're still working through the design and having discussions with regulatory authorities.

Speaker Change: Got it.

Speaker Change: Quite competitive.

I will say that our phase <unk> study was designed.

Speaker Change: And we never use the word perfect, but almost perfectly to really help us understand how that.

Speaker Change: Move forward into phase III with the dose that we think will both thread the needle in terms of maximal efficacy in type one narcolepsy and the best safety and Tolerability.

Andrew S. Plump: But I will say that our phase 2B study was designed, and we never use the word perfect, but almost perfectly, to really help us understand how to move forward into phase three with the dose that we think will thread the needle in terms of maximal efficacy in type 1 narcolepsy and the best safety and tolerability. Okay, thank you. Okay, I think we have time for one final question. So I'd like to ask FNBC's Nico Wada-san, please unmute and ask your question. Wada from SMBC Neko Securities. Can you hear me?

Speaker Change: Okay.

Speaker Change: Okay. Thank you.

Speaker Change: Okay.

Speaker Change: Okay. I think we have time for one final question. So I'd like to ask F. N B cynical Watson. Please on mute and ask your question.

Unknown Executive: Yes. Well, there are two questions I'd like to ask. As for the Research and Development Pipeline, you have been selective in prioritization, so impairment losses will be completed in fiscal 2023. Is that correct? And how would you plan to have R&D? grayed out for the next five years? Are you going to? I expect this to be flat.

Speaker Change: Okay.

Speaker Change: Assumption of course Ocado there.

Speaker Change: SMT Seneca Securities can you hear me yes.

Speaker Change: Well there are two questions I like to ask you.

Speaker Change: As for our research and development pipeline.

Speaker Change: And you have us being selective and prioritization St and losses.

Speaker Change #100: Stinker completed in fiscal 2023 is that correct.

Unknown Executive: That's my first question. The second question... 861 Successor 360 Positioning, and you're aiming for MT2. 861 is for NT1, so there is a differentiation, and you are aiming for MT2, for 360 zero. But in terms of the advantage of the agent, is there any evidence that you see that this will be effective in NT2? But NT2, orexin, it's not that much of a label at all. So an orexin agonist, is that really effective in addressing NT2? That's my question, too.

Speaker Change #100: How would you plan to have the RMT.

Speaker Change #100: Played out for the next five years are you going to.

Speaker Change #100: We expect this to be flat.

Speaker Change #101: That's my first question.

Speaker Change #102: Second question, Jason 861, a successor.

Speaker Change #102: Six and their positioning.

Speaker Change #102: And are you aiming for MTT.

Speaker Change #102: 86, one is for empty long.

Speaker Change #102: There is a differentiation and are you aiming for empty tubes for 306 zero.

Speaker Change #102: But the interest of our advantages advantage of.

Speaker Change #102: The agent is there any evidence that you see that this will be effective in LTE.

Unknown Executive: And our R&D expense outlook going forward, I'd like Milano to answer that question. And then the second question on the positioning of TAC360, I'd like to ask Andy to comment. What have we seen that suggests that it could work in NT2? And what is the hypothesis behind orexin agonists working in NT2 when these patients already have orexin circulating in their brains? So I'd like Milano's first question, and Andy's second.

Speaker Change #102: But indeed to a vaccine.

Speaker Change #103: Not that.

Speaker Change #103: Let's play the garage. So exing agonist is that really effective in addressing and tier twos. That's my question.

Speaker Change #103: Costs related to Ocwen.

Speaker Change #103: Amortization and our R&D expense outlook going forward I would like to cross mill, Iowa to answer that question and then the second question on positioning tax III 60, I'd like to ask Andy to comment.

Milano Furuta: Thank you very much for your question, Mr. Wada, for the first question. We have implemented a program to prioritize the programs, and impairment losses were booked, and winding down costs were booked, in FY23; almost all were booked in FY23. And going forward, for the budget for R&D, in terms of prospect, gradually, there will be an increasing trend, in line with the increase in revenue. So we are mostly in line with the increase in revenue.

Speaker Change #104: We've seen that suggests that it could work in N T. Two and what is the hypothesis behind Orexin agonist working in NTT. When these patients already have or exit circulating in that in that range stuff like Madonna first question and the second question. Please.

Speaker Change #105: Auto was our third largest supplemental on our small desk damage for your question Mr Rider.

Speaker Change #106: First question.

Speaker Change #107: We have done that.

Speaker Change #108: We waited for them to prioritize C programs and impairment losses are booked and winding down costs are booked.

Speaker Change #109: In FY2023.

Speaker Change #109: Almost all were booked in FY2023.

Speaker Change #109: And going forward so the budget of the R&D in terms of.

Milano Furuta: That's how we are going to manage R&D investments. So in terms of percentage of revenue or ROP margin, it is going to be neutral. So does that mean that? Going forward, you are going to see improvement in margin, open margin. So that means that you're going to reduce costs and SG&A.

Speaker Change #109: Gradually.

It will be increasing trend.

Speaker Change #109: In line with the increase in revenue.

So we are mostly in line with that.

Speaker Change #109: Increasing revenue, that's how Atlantic Cocainize R&D investments so in terms of percentage of our revenue.

Speaker Change #109: Oh P. My team and it is currently.

Milano Furuta: Yes, that's correct. Thank you. This is Andy.

Speaker Change #110: Good morning.

Speaker Change #110: So it doesn't mean that.

Andrew S. Plump: Over the past several years, with multiple molecules, we've demonstrated that orexin agonism can be effective in NT1 as well as a range of sleep-wake cycle disorders that are characterized by normal orexin levels. So you know NT1 is orexin deficient, and all of the other indications that we talked about, including type 2 narcolepsy and idiopathic hypersomnia, have normal orex So there's a very different disease etiology, and the pharmacology is quite different.

Speaker Change #111: Going forward, you're going to see improvement in margin.

Speaker Change #112: And so that's that means that they were going to reduce costs in the SG&A, yes. That's correct. Thank you.

Rather this is Andy we've over the past several years with multiple molecules. We've demonstrated the orexin agonist be affected in Q1 as well as a range of sleep wake cycle disorders that are that are characterized by normal orexin levels. So <unk> widened.

Andrew S. Plump: We have the most experience with type 1 narcolepsy, and I'll add something I haven't mentioned, which is that we now have an ongoing open-label extension study with 861 and type 1 narcolepsy, and we've now seen data for most patients up to six months and now some patients up to a year, and you know those data will be presented later in the year, but we continue to see sustained, durable There's still a lot for us to learn about type 2 narcolepsy and idiopathic hypersomnia.

Andy: His orexin deficient.

Andy: All of the other indications that provide including type two narcolepsy and idiopathic hypersomnia abnormal orexin level. So there is a very different disease etiology in oncology is quite different.

Andy: The most experience with type one narcolepsy and I'll add.

Andy: Something I haven't mentioned, which is that we have now an open.

Andy: Ongoing open label extension study with 861 in type one narcolepsy and we've now seen data for most patients up to six months in some patients up to a year.

Andrew S. Plump: We've seen benefits in short-term therapy, but the sustainability of those benefits over time is something that we'll have to demonstrate in our clinical trials, and so we've made the decision for 861 to really focus on type 1 narcolepsy. 360 was developed purposefully and is differentiated from 861, and we believe, based on our understanding of its profile pre-clinically and our translational understanding of this mechanism, that it will be effective in type 2 narcolepsy and idiopathic hypersomnia, and that's what we're focused on moving as fast as possible to get that data and accelerate it to patients.

Andy: And those data will be presented later in the year, but we continue to see sustained durable robust efficacy.

Andy: There's still a lot for us to learn and Ted critical Attunity Pathic hypersomnia, we've seen benefits and into a true therapy. The sustainability of those benefits over time is something that we'll have to demonstrate in our clinical trials.

Andy: <unk> made the decision right just want to really focus on type one narcolepsy $3 60 was developed purposely and is differentiated from <unk>, London, We believe based on our understanding of its profile pre clinically in our translational understanding of this mechanism that it will be effective in type two narcolepsy.

Andrew S. Plump: Arigatou gozaimasu. Thank you. With that, we've now reached the end of the conference call. Thank you, everyone, for attending, and if you have any follow-up questions, please reach out to the Investor Relations team. Thank you very much, and good night, good day.

Andy: And idiopathic hypersomnia and that's what we're focused on is moving as fast as possible to get those data and through accelerated patients.

Andy: Okay.

Andy: Okay.

Andy: Until then.

Speaker Change #113: Thank you with that we've now reached a very much conference call. Thank you everyone for attending and if you have any follow up questions. Please reach out to the Investor Relations team. Thank you very much and good day.

Speaker Change #113: Yeah.

Speaker Change #113: Yeah.