Q1 2024 Takeda Pharmaceutical Co Ltd Earnings Call
Thank you very much for taking the time out of your busy schedule to attend the 2024 Q1 earnings presentation of Takuetsuhin Industries. I am Yuri Ora, the head of IR, and I will be your host today. Thank you for your cooperation.
Speaker Change: First, let me explain about the language settings. There is a language button at the bottom of the Zoom window. If you would like to listen in Japanese, please select Japanese. If you would like to listen in English, please select English. If you would like to listen to the original audio, please turn it off.
In today's call, we would like to inform everyone that we will be discussing forward-looking statements as defined by the U.S. Private Securities Litigation Reform Act of 1995.
Speaker Change: The actual results may differ significantly from the results discussed today. Factors that could cause the actual results to differ significantly are described in the latest Form 20-F and other filings with the SEC.
Speaker Change: Also, in today's call, we may discuss financial metrics that do not comply with International Financial Reporting Standards. For definitions and reconciliation tables of these metrics, please refer to the appendix of the presentation.
Speaker Change: Please also review the important notes on page 2 of today's presentation materials.
Speaker Change: Now, I would like to move on to today's presentation.
Speaker Change: President's
Speaker Change: President, we will have presentations from CEO Christophe Weber, Chief Financial Officer Sulta Milano, and R&D President 2 Andy Blamp. After that, we will have a Q&A session. So, let's get started. Christophe, over to you.
Christophe Weber: Thank you, Chris, and thank you everyone for joining us today. It's a pleasure to be with you all.
Speaker Change: Overall, we had a very good start to the financial year 2024. In the first three months, the consumer exchange rate increased by 2.1%.
Speaker Change: The performance has triggered a sustained strong momentum for the Globe and Launch product, increasing by 17.8% at a constant exchange rate, and will represent 46% of all profits going forward.
Speaker Change: The increase in Antiview accelerated four months after the launch of the Antiview Pen.
Speaker Change: Still early days as we are getting full access coverage, but encouraging.
Speaker Change: Additionally, we were able to see the fixed amplification of the Imedial Grouping Portfolio of Takuzaro, Kyudenga, and Furizakura.
Speaker Change: We are also managing actively the life cycle of our growth and launch portfolio. In Q1, we further expanded our main product geographic reach with approval of ListenCity in Japan and Frisaclar in Europe .
Speaker Change: In the first quarter of the fiscal year, our co-operating profit margin was at 31.6%.
Speaker Change: The decrease in R&D investment, the decrease in other OPEC countries, and the impact of the elegantization of American productivity, which is not expected to decrease in the very short term, can be avoided.
Speaker Change: Over the remainder of the fiscal year, we expect multiple pipeline programs to progress into phase 3, and we are awaiting our R&D investments towards future quarters accordingly.
Speaker Change: We hope to once again expect traditional boiling and to convey traditional boiling.
Speaker Change: We continue to be very focused on improving our co-operating profit margin through our multi-year efficiency program.
Speaker Change: This program is focused on three areas of opportunity, including organizational agility, improving procurement savings, and strengthening how we leverage data, digital and technology across Takeda.
Speaker Change: This program has incorporated specific advancements regarding R&D and American business mechanisms to promote the organization of agility for Q1.
Speaker Change: We also identified and executed new procurement-led efficiencies. For example, we have been using data technology and AI to optimize our supplier selection process.
Speaker Change: We hope that investments in data, technology, and AI will further streamline all aspects of our value chain. For example, in manufacturing and quality, our goal is to accelerate the release of drug batches. This will improve our working capital and supply potential.
Speaker Change: We also took steps to further enrich our pipeline. We signed two option agreements for mid- and late-stage programs.
Speaker Change: Additionally, it is prioritized for chronic myeloid leukemia and other cancers treated with immunotherapy, including endovelumab and batinib.
Speaker Change: Additionally, there is an active immunotherapy using ACY2460 to delay the progression of Alzheimer's disease.
Speaker Change: Such discussions will serve as the approval for inheriting our future pipeline and portfolio, and for promoting the future pipeline.
Andy: Additionally, we have incorporated significant advancements into the organic pipeline 2. Andy is scheduled to explain this point in detail.
Speaker Change: Finally, we are very satisfied with the progress made over the past month. These advancements aim to enhance our ability to achieve our mission, driving long-term business growth and profitability. I will now return to Milan to discuss our financial results. Thank you.
Milano Furuta: Thank You Christophe and then hello everyone this is Milano Furuta speaking and slide six summarizes our Q1 financial results.
Speaker Change: The price is approximately 1.2 trillion yen, increased by 14.1%, increased by 2.1%, and is called CER.
Speaker Change: The PR for Top Life Performance was carried out through the development of our project. It includes the upside from the expected Bidens and the generic version.
Speaker Change: The corporate profit is 382.3 billion yen, and depending on the CEO, it has increased by 17.1% to 4.5%.
Speaker Change: At this core, OP growth benefited from phasing of R&D investments, which we expect to be weighted more heavily in the remainder of the year.
Speaker Change: Reported profits were 16.63 billion yen, a decrease of 1.3%, including the impact of restructuring costs from the cost efficiency program, and thorough staff burdens and loads following the Phase 3 study results.
Speaker Change: Co-EPS and reported EPS were 176 yen and 61 yen respectively.
Speaker Change: The operating cash flow is 170.3 billion yen, primarily driven by core operating improvements. The adjustment for free cash flow is 23.7 billion yen, reflecting nearly 100 billion yen in business development activities in Q1.
Speaker Change: Resigning from the protagonist, including the option agreement with AC Mune.
Speaker Change: Please note that we have introduced the term adjusted free cash flow in fiscal year 24 but the calculation is exactly the same as we used for free cash flow in our presentations last year.
Speaker Change: Now, let's look at the new trends on the seventh slide.
Speaker Change: Takeda's growth and launch products grew 17.8% at CEL in Q1, more than offsetting the loss of exclusivity impacts such as Vivense in the US and Zilver in Japan.
Speaker Change: Additionally, the net positive growth of other brands was directed towards a 2.1% revenue growth as the CEO.
Speaker Change: Compared to large currencies, the additional value of 127.2 billion yen represents an approximate 14.1% increase on the actual FX basis.
Speaker Change: Takeda is growing in all companies due to the influence of neuroscience in six important business areas.
Speaker Change: As the Christoph set, we are proud of achieving 46% total revenue from the product operated by the GOSUN development project, and we are now aiming for 17.8% growth.
Speaker Change: All of these products are meeting expectations in Q1.
Speaker Change: Tibia growth was 7.6% of the CEO.
Speaker Change: We have seen an uptick from the prior quarter, supported by the launch of NTV Japan in the US.
Speaker Change: As of July , two out of three patients have an access to AntivioPAN based on U.S. health plan adoption.
Speaker Change: We expect growth to further accelerate this year with expansion of access.
Speaker Change: Taxaero continues that strong momentum with growth of 19.8% of CER.
Speaker Change: Aiming to expand the prophylaxis market for HAE by regionalizing the area.
Speaker Change: With impunity, immunoglobulin grew 21.9% while albumin declined 14.2% due to anticipated phasing of supply to China.
Speaker Change: We hope to revive the aluminum new and expect an increase in numbers due to the new coronavirus infection.
Speaker Change: I am looking forward to the first announcements of Fuzakura and Kyudenga. Although Fuzakura is still in its early stages, its sales in the first four months have slightly increased compared to the 1.19 billion yen profit.
Speaker Change: We look forward to Japan's ratification in June, following the EU's ratification.
Speaker Change: The Kyuden Ga is currently being sold in 21 countries.
Speaker Change: Strong demand is observed in both endemic and non-endemic markets.
Speaker Change: Recently, the WHO added Q-Denga to the list of organizations for COVID-19 countermeasures. Furthermore, the Vaccine Alliance has acknowledged support for the dengue vaccine program.
Speaker Change: This technology must continue to guide knowledge and access to Kyudenga.
Speaker Change: Slide 9 shows the year-by-year bridge for the corporate profit.
Speaker Change: You will be able to understand whether LOE has a greater impact on profit than on revenue.
Speaker Change: In Q1, the burden caused by the high load of expensive products increased due to a decrease in valuable costs.
Speaker Change: Investment in Q1 decreased to 7.7% of the CEO, but we expect a gentle increase for the entire year as many programs move to phase 3 in the coming months.
Speaker Change: Compared to the year before last, there were times when we were able to receive benefits from actions including the theorization of real estate.
Speaker Change: The Cost Exponential Program announced this May is also making progress, and we are expecting payments from this program.
Speaker Change: Regarding the report on profit management, at specific values, it is often the case that the increase of core B is hindered by the high load of essential tasks and the reduction of high manufacturing costs through efficient programs.
Speaker Change: The results for Q1 were 40.9 billion yen.
Speaker Change: Let's track together with expectations throughout the year.
Speaker Change: In Q1, we also announced legal provisions through other payments. Based on our proposal, fundamentally, we addressed privacy and excellence in relation to product liability litigation in the United States.
Speaker Change: The FUJIA FY24 Outlook is unchanged from what we provided in May.
Speaker Change: Next, we will continue to monitor the remaining portfolio and the performance of SX Way to generate pollution through biovents. We will update on Q2 earnings in October.
Speaker Change: This is a brief presentation about financing activities. In June, a new 46 billion yen hybrid bond was announced.
Speaker Change: The policy is to refinance the 50 billion yen high coupon bond from 2019. This will be called in October 2024.
Speaker Change: The amount of 40 Perion yen will be re-deposited as a hybrid back loan that affects cordite.
Speaker Change: In July , we executed $3 billion U.S. dollars debt financing.
Speaker Change: In 2026, we decided to grow and prepare to lend 1.5 trillion dollars and repay 1.5 trillion dollars in loans.
Speaker Change: I would like to clearly state that these are refinancing activities, and they are primarily engaged in refinancing. And they were able to smoothly oversee our maturing debts.
Speaker Change: We maintain 100% of our debt at a fixed interest rate.
Speaker Change: and the weighted average cost is now approximately at 2%.
Speaker Change: Thank you for your attention, and I will now pass over to Andy.
Speaker Change: Thank you all for participating. Please proceed to the next slide. First, I will talk about the Shete Cluster. Recently, we have achieved two indicators in the Base 3 test: Lennox-Gastaut and Dravet symptoms.
Speaker Change: As announced earlier, Cyticlstat was unable to demonstrate clinical benefit for Lennox-Gastaut.
Speaker Change: TICULIS-DAT failed with a P-VALUE of 0.06 during the DRIVEI Syndrome Phase 3 trial, ultimately failing with a P-VALUE of 0.06 during the DRIVEI Syndrome Phase 3 trial.
Speaker Change: However, all the data from this study have a significant impact on important two-dimensional points, and the results of the large-scale Phase 2 study, which added the most important outcomes, clearly demonstrate the clinical effects in patients with nephritis.
Speaker Change: with a differentiated safety profile.
Speaker Change: Given the large unmet medical need in Dravet, we are investigating a potential regulatory path forward.
Speaker Change: This time, we presented important Phase 2B data on TAC861 and Mesigetimab. We will introduce that data later.
Speaker Change: Blizzacra and Ripensony had other ratifications besides expanding regional observation.
Speaker Change: Maralixibat was filed in Japan for allergial syndrome and progressive familial intrahepatic cholestasis.
クリストフ: Additionally, as Christoph mentioned, we are collaborating on two option deals for mid-term and late-stage programs to continue expanding the depth and breadth of our pipeline.
クリストフ: Massentage Pharma's Obirin Batinib uses a third-generation BCR-ABL Tyrosine Kinase Inhibitor to address CML and other immune substances.
Speaker Change: AC Immune ACI-24060 aims to delay Alzheimer's disease through active immunotherapy.
Speaker Change: To establish the options obtained from these two agreements, let's next focus on the overall dynamics of the pipeline. Please proceed to the next slide.
Speaker Change: The R&D pipeline has been progressing towards two important opportunities: Sazocitinib, TAK-861, and Erexin-2 receptor agonists.
Speaker Change: Both parties aim to ultimately provide Phase 3 reading.
Speaker Change: Zerocitinem may indicate that it is the most important adenocarcinoma treatment for patients.
Speaker Change: Explain the essential medical necessity for the patient to explore their light skin.
Speaker Change: The Phase III trials are enrolling rapidly, and we expect a complete enrollment in fiscal year 2024.
Speaker Change: TAC861 is conducting a global foundational study for NARCOLEPSY Type I and is making rapid progress.
Speaker Change: We will provide updates on the ZAZO-CITINIB and PAC-861 pivotal trial designs, our overall program timelines, and market potential later this year at our R&D investor event.
Speaker Change: On top of these two programs, the financial potential is significant, and in future programs, on top of these two programs,
Speaker Change: Our partner has been making significant progress together with Lisferer Time. Lisferer Time has achieved the goals expected for the financial year 2025 and continues to graduate well.
Speaker Change: As Pfizer-Selen continues to make progress, Mezagitamap will begin Phase 3 trials for Inner-Itapinia and ITP during the 2024 fiscal year, which spans two and a half years.
Speaker Change: [inaudible]
Speaker Change: There is an increase in data in our initial pipeline. We aim to continue targeted business development activities to evolve our growth pipeline. Now, please take a look at the interesting data announced last week. Please proceed to the next slide.
Speaker Change: The Phase 2B data presented at this sleep conference suggests the potential to revolutionize the treatment of narcolepsy type 1, or NT1.
Speaker Change: Unlike existing treatments, by addressing the underlying pathophysiology of the disease, TAC861 has shown the ability to significantly improve patients' quality of life, and in many cases, normalize the entirety of their symptoms.
Speaker Change: More than 80% of NH1 patients are considered to be within the normal range in maintaining sleep scales and wakefulness tests during the second mid and high doses of the day.
Speaker Change: Weekly rates of cataplexy were driven to near zero.
Speaker Change: As a result of this effect, 95% of patients transitioned to a long-term extension study after an 8-week treatment period, preventing patients from experiencing delays related to various treatments.
Speaker Change: We are observing sustained efficacy in our long-term extension study with no evidence of hepatotoxicity.
Speaker Change: Approximately 100 patients have undergone active therapy for a final period of 6 months, and about 20 patients have received treatment for over a year. This summer, we plan to announce long-term efficiency and safety data.
Speaker Change: NH1 treatment indicates a sleep time of 3-10 minutes and a sleep time of 12-15 minutes. It points out that it is not necessary for patients with narcolepsy.
Speaker Change: We are committed to bringing this exciting therapy to patients as quickly as possible.
Speaker Change: Next slide, please.
Speaker Change: Mezangitamab is an anti-CD38 resistance agent that provides the effect of resisting agents that generate plasma cells. It also has the effect of influencing infections caused by other strains.
Speaker Change: This leads to a rapid onset of response and a long-lasting immunomodulating effect.
Speaker Change: The unmet medical need in ITP is high, with relatively few approved therapies and as many as one-third of patients not well controlled on existing therapies.
Speaker Change: In this Phase 2B trial, the efficacy of mezagitamab was measured, and active ITP with many treatment experiences in patients was detected. This study showed a high concentration-response and a high concentration-response rate at high concentrations.
Speaker Change: It can be said that there is a possibility of persistent or long-term symptoms after the treatment has stopped.
Speaker Change: The treatment of emergent adverse effects were similar between treatment and placebo arms.
Speaker Change: We will be starting a Phase 3 program in ITP in the second half of the fiscal year.
Speaker Change: Lastly, we would like to invite you to our R&D day on the afternoon of December 12th, Eastern Japan Time, and on Sunday, January 13th, Japan Time.
Speaker Change: We will review data, development plans, timelines, and our assessment of the market opportunities for ZAZO-SITNIV, PAC-861, and other late-stage pipeline programs. Please save this date in your calendars.
クリス: Thank you very much. I will contact Chris.
クリス: Now, I would like to take questions from everyone.
ジュリー・キム: In addition to Christoph, Milano, and Andy, Julie Kim, the US Business Unit President, is also participating.
ジュリー・キム: If you have any questions or requests, please let us know by using the raise hand button on Zoom.
Speaker Change: For those participating via Japanese LINE, please ask your questions in Japanese. For those participating via English LINE, please ask your questions in English. For those listening to the live audio, you may ask your questions in either language. Please note that each person is limited to two questions. We will start by addressing all the questions.
Speaker Change: I would be grateful if you could. Thank you in advance.
Speaker Change: Now, we will move on to the first questioner.
Speaker Change: At first, Mr. Barker of Jeffries.
Speaker Change: Steve, please let me know what you would like to ask.
Speaker Change: It seems you have lowered your hand. We will move on to the next questioner. Next is Matsubara from Nomura Securities.
Speaker Change: Thank you for your hard work, and I look forward to working with you.
Matsubara: My name is Matsuura. Can you hear me? Yes, I can hear you. Thank you. I have two requests. The first one is about Byvas. The supply of the generic version is scheduled to resume after August , but I would like to know the current situation. Also, should we expect the revenue decrease to be more significant in the second quarter or the third quarter? Please share your company's perspective on this. The second request is about the Meiki Glove Ring facility. I believe it is currently expanding. In this context, are there any measures being taken, such as donor feeding, to improve the open margin? If there have been any changes since the last fourth quarter, please let me know.
Speaker Change: Okay, thank you for your question. So the first question on the latest status of vivance in the U.S. and the status of generic supply and when we expect that to accelerate. I'd like to ask Julie.
Speaker Change: I have a question. Next, it's a question about the changes in our plasma business. Specifically, regarding rebates, margin improvements, and questions on top of that. Christoph, please ask your question.
Speaker Change: Julie
Julie: Thank you, Chris, and thank you for the question, Matsubara-san. In terms of buy-vans, as you've noted, we have seen the supply from generics companies improve over the past quarter, and therefore our buy-vans
Julie: Demand has declined.
Speaker Change: Although it was above what we were expecting.
Speaker Change: Quarter over quarter, we do expect the supply situation
Speaker Change: for the generics to improve.
Speaker Change: However, it is very difficult for us to make accurate predictions.
Speaker Change: We are checking how each supply changes. We are closely monitoring these. There are no supply challenges for Vyvanse, and we expect the overall supply.
Speaker Change: It is considered necessary to make efforts to improve each half of the halves. When we look at it, it has decreased by about 30% compared to last year. And what we are expecting is to continue the development in the future. Thank you very much.
Speaker Change: Thank you Matsubara-san for the question regarding PDT. Strong quarter indeed in terms of growth.
Speaker Change: We expect the growth to be slightly lower for the full year, but very strong demand.
Speaker Change: Our margins have started to gradually increase a few months after the onset of the novel coronavirus. This is because we have been optimizing our supply chain.
Speaker Change: We are growing our revenue, using our manufacturing capacity fully, and the donor fee has been stable now for a couple of quarters. So we
Speaker Change: I hope to ensure how this will progress.
Speaker Change: So, overall, this is really how we are increasing our margin.
Speaker Change: We are actively managing donor fees, we are growing our revenue, our sub-Q is also growing faster, which is helping our overall margin, and then we are optimizing the utilization of our manufacturing capacity.
Speaker Change: Thank you.
Speaker Change: Thank you very much.
Speaker Change: Thank you very much
Speaker Change: Well then, it seems that Steve Barker from Jeffries has raised his hand again.
Speaker Change: Nice to meet you, Steve.
Speaker Change: Thank you for your hard work. I appreciate this opportunity and thank you for the two questions.
Speaker Change: Both are related to pipeline.
Speaker Change: Firstly...
Speaker Change: Please comment on the decision to end the partnership with JCR.
Speaker Change: Hunter Syndrome Candidate JR141
Speaker Change: This is the second question.
Speaker Change: [inaudible]
Speaker Change: Regarding the concept of Ameroid, I think many people have questions. However, this agreement is about the concept of Ameroid.
Speaker Change: TK believes that this is a very reasonable goal. I would appreciate it if you could comment on that topic and the details. Thank you.
Speaker Change: Thank you, Steve. Andy, would you like to take those two questions, please?
Danny Plamp: Hello, this is Steve. This is Danny Plump. As you can see, we achieved very important priorities last year through the pipeline, and we have been increasing the potential to support the latest pipeline. The decision on JCR1-2-1 is part of those priorities, and we are very excited about the program, expecting it to be a successful program for both patients and JCR. In the ACI-24-060 program, we are taking a slightly different approach, and we hope to see the effects of AMOE-? cleaning.
Speaker Change: unequivocal, you know, this is clear clinical benefit, the benefits are, are my modest.
Speaker Change: What many people believe is considered to be the timing of the intervention. It is believed that active antibiotic treatment may initially create a safe profile. With the increase in antibiotics,
Speaker Change: and secondly if and of course we need to wait to see the phase two data we still haven't seen phase two data this is a very early program but if we're seeing the kind of
Speaker Change: Due to the occurrence of antibitis, it is considered that this patient may need to be hospitalized sooner. This is a very convenient management policy, and by hospitalizing many patients and us sooner, it is considered that the efficiency can be greatly increased. It is clear that the occurrence of this antibitis is delayed, but the profile of the vaccine is considered to be very different.
Speaker Change: I think that we might be able to change the treatment of this disease.
Andy: Thanks, Andy. Just to follow up on the first topic, Takeda already has the best-selling treatment for Hunter's disease, Alloprase, and
Speaker Change: Don't you think they are developing a new item for JCR? Is there a possibility to move it? Have you seen it in market performance?
Speaker Change: Did the cargo in Japan remind you of that perspective? Does Araplay plan to continue being the most well-known treatment for disabilities in the future?
Speaker Change: I would like to ask Julie a question, but could you raise the level a bit?
Speaker Change: JCR has the characteristics of 1,4,1 and has a structural mechanism that can prevent the destruction of blood circulation.
Speaker Change: Our hope and our continued hope for JCR and for patients with this asset was the ability to expand the treatment potential of this replacement enzyme to treat you know children that have neurological manifestations as well. But Julie maybe you want to comment as well.
Speaker Change: About Ella Plays,
Speaker Change: [inaudible]
Speaker Change: Presence of Allopraise on the market and there are a couple of small competitors as you are aware in some of our markets for the hunter patient and We also had as you know Another program that we were studying
Speaker Change: Regarding Hunter, it indicates that we have not yet reached the endpoint of Phase 3. We confirm that we are still interested in further developing Hunter.
Speaker Change: As for the treatment for patients with Hunter syndrome, Elelyso is currently maintaining the needs of those patients. Thank you.
Speaker Change: Thanks very much.
Speaker Change: Thank you very much. Now, I would like to move on to the next questioner.
Speaker Change: Next, Mr. Muraoka from Morgan Stanley , please.
Speaker Change: Hello, good evening, this is Morgan Stanley Muraoka. Nice to meet you.
Speaker Change: First, regarding NTVO, I think the story about the pen is wonderful.
Speaker Change: In terms of the deviation from the full-year CER plus 16% target for this period, it is quite significant from the second quarter onwards.
Speaker Change: If we don't keep up the pace, we won't reach the annual target on a constant currency basis.
Speaker Change: I think so, but do you believe we can catch up here? If you think we can, could you please provide some evidence as well?
Speaker Change: Ah, sorry for the wait, here's the first one, yes, and the second one, yes, please.
Speaker Change: Is it correct to assume that the data for the POC of IGAN for the 079 MESA guitar mag will be available at the R&D stage?
Speaker Change: That's the second one.
Speaker Change: Thank you for your hard work. The first question is about NTVO's confidence in aiming for a 16% increase over the entire year. Regarding the importance of the release of PEN in the United States,
Speaker Change: I would also like to hear your comments on the expectations for Antivio and Pen Uptake. Next, I would like to ask about the data on Tykuze 079 Mezagitamaigan.
Speaker Change: Yes, thank you for the question, Muraoka-san. And in terms of Antivio in the U.S., as you've noted, the pen launch
Speaker Change: has gone well thus far and we are continuing to increase our access for patients.
Speaker Change: We've seen 6.5% growth in Q1 in the U.S., and we do expect, since the Crohn's indication was also just approved a couple of months ago, that we will see further acceleration as we continue to pull through. Not just...
Speaker Change: The impression of UC in Penn and the impression of clones in Penn. As Christoph said in the presentation.
Speaker Change: We also want to increase access to Milan.
Speaker Change: By combining four American patients and two additional indicators with an evolved access method, we expect to see the acceleration of the second half of the year in America.
Speaker Change: I would also note that last year we had, across the globe, 12% growth in volume.
Speaker Change: And we do expect to see lower EU callbacks this year, so that will also contribute to our ability to achieve the 16%.
Speaker Change: We recognize that the number of years in Antibia is increasing year by year, but we have positive indications about the possibility of achieving it. And we will continue in America, and the amplification in Europe will of course continue strongly.
Speaker Change: Thank you.
Speaker Change: Thank you, Mr. Mario Kosan and TND, for sharing your stories with us. We are looking to delve deeper into the Magic Map program.
Speaker Change: as one of the key areas of focus at the R&D day in December . It's
Speaker Change: including ITP, IGAN, and other indications that we're considering this the mechanism of action for this molecule
Speaker Change: Suggests.
Speaker Change: To demonstrate the potential to exceed the item's value, we are clearly contributing to the ITP. We are
Speaker Change: Very robust Phase 1B data in IGAN. IGAN is an extraordinarily competitive field. We think our profile is equal to or better than anything that's been reported, but we're being thoughtful in terms of how we proceed.
Speaker Change: Our intent right now is to disclose data at a medical conference in the fall and to have that data available to share with you at the R&D day, but we're also thoughtful of the competitive landscape. And so, so more to come. Thanks.
Speaker Change: Okay, thank you very much. I'd like to call on the next question, Mike Nedelkovych from Cowan. Please go ahead, Mike.
Michael Thomas Nedelcovych: Thank you for the Q&A. I have two Q&As. The first Q&A is about TAC-279. As you know, the new competitor's TIC-2 inhibitor failed in the interim IBD trial.
Speaker Change: Relative to Ducravacitinib, you have noted in the past that TAC279 is being tested at higher equivalent doses, and that could make the difference in IBD. Should we apply the same logic when comparing to the Ventix molecule, or are there additional factors to consider?
Speaker Change: The next question is about guidance.
Speaker Change: Vyvanse again performed better than expected this quarter and at least by our estimation all of your key products beat as well. So I'm curious if your reiteration of full year guidance is meant to lead cautious or if there may be headwinds in the rest of the fiscal year that we're not considering.
アンディ: Let's start with Andy's question. Next, a question about guidance. Please ask Mr. Milano.
Speaker Change: Hi, Mike. Thanks for the question. So we saw, of course, we've seen essentially what you've seen with respect to the Ventex disclosure, which is just a press release. So we don't have all the data in front of us.
Speaker Change: What we know from that past release is that it was a relatively small study that was running Crohn's disease.
Speaker Change: at doses that were equivalent
Speaker Change: to the doses that were used in their psoriasis.
Speaker Change: Phase 2 program. We know from the psoriasis program that the data were sub clinical data were suboptimal relative to our 30 milligram dose in 279. Directionally slightly better than Ducravacid and the
Speaker Change #100: slightly worse than 279. Those are the same doses that were used in IBD. The disclosure for the IBD trial was that they failed in their primary endpoint, which is a very
Speaker Change #101: subjective endpoint, very unusual to use this this endpoint, which is called the CDAI in a phase two study.
Speaker Change #100: and that they showed dose-dependent positive effects in the much more robust.
Speaker Change #100: Objective endpoint which is endoscopy.
Speaker Change #100: So of course we're going to have to wait to see these data but you know our our internal sense is it's actually encouraging um for for 279. You know we continue to have you know a strong belief in the potential in IBD and in both the Crohn's and ulcerative colitis studies are enrolling and we expect to see them read out in 2026.
Speaker Change #102: Thank you very much. I have a question about the next topic.
Speaker Change #103: So we don't change the guidance, it's not about the headwinds.
Speaker Change #103: Dr. Rather
Speaker Change #104: There are two components: the top line and the expense line. I talked about the top line, and at the beginning of last week, there was an upside for Byvens, but now Byvens' Erojoin is...
Speaker Change #104: In response to that expectation, we anticipate that pollution will accelerate over the next four months.
Speaker Change #104: Even on the extension side, R&D investment is expected by the end of this fiscal year.
Speaker Change #105: Looking at the overall situation, there are no major factors at this point in time. I believe that the current guidance should be changed. However, I would like to return to the Q2 announcement in September and continue the investigation.
Speaker Change #106: Thank you so much.
Speaker Change #105: Thank you very much
若狼様: Now, let's move on to the next question. Next is the young wolf from J.P. Morgan. Young wolf, please unmute yourself and ask your question.
若狼様: Two young uncles of Jeppin Morgan, please.
若狼様: One is about Interio, but I think Stiligee recently obtained approval for the marine land pollution adaptation.
Speaker Change #108: Please let me know if there is any possibility that this could have a negative impact on the share sales of Myntibio. How do you think about it? Another point is regarding the gross profit margin.
Speaker Change #109: I believe the full-term facility plan is at 65.5%. On the other hand, the first quarter is at 68%. Could you please let me know if there are any factors that might put pressure on the second quarter and beyond? Thank you.
Speaker Change #109: Thank you Wakao-san for the question. So the first question on in TVO
Julie: Impact from the approval of Skyrizi in UC? Any impact on market share? I'd like to call on Julie to comment on that. And then second question, for Milano on gross margin, 68% in Q1 with an outlook for 65% for the full year. What are the reasons why it will decline in the coming quarters?
Speaker Change #110: Thank you for your question regarding the indication of UC.
Speaker Change #111: We continue to maintain our strong position as a market leader on the front line.
Speaker Change #112: The change regarding the patient is on the second line.
Speaker Change #112: This is the place where Skylegy was first influenced by CD, and also the place where U.C. was first influenced.
Speaker Change #112: So, again, from a mechanism of action perspective, Antivio remains the only gut selective.
Speaker Change #112: therapy that's out there for IBD patients both in UC and CD and the new entrants seem to be impacting more within the other classes the other MOAs
Speaker Change #112: Thank you.
Speaker Change #113: Thank you for watching.
フルタ: Ah, thank you, Kawao-san. Um, ah, this is Furuta speaking.
Speaker Change #115: Regarding the outlook for the gross profit margin, after the end of Q1, we expect that products with relatively high gross profit margins, such as Vyvanse and Zilber, will decrease significantly, especially Vyvanse. This impact, along with the increased demand or sales of products with slightly lower gross profit margins, such as albumin, leads us to believe that the gross profit margin will decline. As of now, the gross profit margin for Q1 is in line with expectations, so at this point, the current level is maintained.
Speaker Change #115: I am thinking that I want to maintain it.
Speaker Change #115: Yes, thank you.
トニー: Thank you Wakao-san. Okay moving to the next question I'd like to call upon Tony Ren from Macquarie. Tony please unmute and ask your question.
Tony Ren: Yeah, sure. Thank you for the opportunity to ask my questions. So I want to ask about your IVIG, your immunoglobulin in CIDP.
Speaker Change #118: The data and results of Argenx's VIVGARD have been announced. CIDP was approved in June.
Speaker Change #118: and they said the uptake in CIDP is exceptionally strong. I think that's their wording.
Speaker Change #118: in their transcript. So I just want to see what type of we've been. So we've had competition from them for about a month now. I just want to see what are you seeing in a market.
Speaker Change #118: And then I also want to go back to the market share for Antivio as my second question. If you know if you look.
Speaker Change #118: Please watch Abby's video.
Speaker Change #118: [inaudible]
Speaker Change #119: And, you know, I just want to see your view on that. And also, I believe you guys used to show...
Speaker Change #120: I will show the long-term market sales chart of the interior seller to the interior invader. I cannot see it as an interior seller.
Speaker Change #121: In this presentation for the first quarter, I just wanted to see if I'm missing anything here. So that's my second question. Yeah. Thank you. Thank you, Tony. I think we can call on Julie to answer both of these questions. Julie.
Speaker Change #122: Thank you for your question. First, I will ask about your question regarding CIDP.
Speaker Change #122: So in terms of CIDP, our expectations have not changed in terms of the long-term position for
Speaker Change #123: IG IV or IGs in general, not just IV, both are gamma-gar liquid and IQVIA in the IDP. And so, of course, for patients, it is always a positive.
Speaker Change #123: positive situation when they have more choice, especially
Speaker Change #124: For patients like those with CADP, we know that many patients respond to Ig therapy, and Ig therapy remains the gold standard.
Speaker Change #124: Pleased with our launch of CIDP and HYCUVIA over the past several months.
Speaker Change #125: Next, there was a question about Antivio. Regarding the question about Antivio, first, there is a question about the share of Antivio. First, there is a question about the share of Antivio.
Speaker Change #125: both in overall.
Speaker Change #125: And then when we talk about the market share graph, which I think.
Speaker Change #126: is your second question. So as you are aware, I'm sure everyone is aware, there was a cyber situation earlier this calendar year that impacted claims and claims processing. And because of that,
Speaker Change #126: At this point, we're not able to show the current.
Speaker Change #127: share data. As soon as that has been sorted and worked through in terms of the claims data in the US, we will be able to revert and show the shared data again. But in terms of first line, BioNaive, Antivio is still the market share leader.
Speaker Change #128: I hope I can answer your question. If there is anything wrong, please contact me again.
Speaker Change #128: [inaudible]
Speaker Change #129: Thank you very much. Now, the next question is from Mr. Haruta of UBS Securities. Please go ahead with your question.
Haruta: Ah, this is Haruta from Yumei Securities. Nice to meet you.
Haruta: Regarding the first question, as part of the margin improvement program, Andy mentioned in the media that the changes to the R&D personnel and organization would be completed within the 2024 fiscal year.
Speaker Change #131: I believe that there are parts that can be made more efficient by consolidating research functions, but with a reduced workforce, how do you plan to increase productivity? How will you manage the new organization moving forward? Please tell us about that.
Speaker Change #132: As for the second point, I think there are companies that are developing biosimilars for Entyvio. Although not for all indications, I believe there are some that will complete Phase 3 trials around 2025 or 2026.
Speaker Change #133: Considering the current development status of biosimilars, how do you view the assumption that biosimilars will not enter the market until around 2030 or 2032? Is there likely to be an update on this point in the future? Please provide information on this matter.
Speaker Change #134: Thank you for your question. First, regarding the question about the organization of the R&D department. This question is about the organization for this fiscal year. Can we improve our productivity through this period of change?
アンディ: The following question is about the NTVO's biosimulation timing. It's regarding Andy's question and Christoph's question. Could you please provide the latest information on the NTVO's biosimulation timing?
Speaker Change #135: Thanks, Chris, and thanks, Haruta-san. So we're continually looking at our pipeline. We're continually making data and strategic-driven decisions to prioritize our pipeline. And we're continually looking at how we operate to ensure that we're operating in the most effective and efficient way possible.
Haruta-san: As I mentioned earlier, over the past year, we have prioritized very important pipelines. To ensure that we maximize our resource concentration, we now have six programs that need support in the late-stage pipeline. We will need to support even more programs going forward. As Mr. Christophe mentioned earlier, we have ensured that we increase the R&D budget year after year to support that pipeline. The priority programs from the past year are now fully progressing. Our organization is designed to advance that pipeline with full force through the priority programs.
Speaker Change #137: We feel that we need to find the right size to correspond to those pipelines. As we have mentioned in many places, we aim to seek more efforts towards automation and efficiency from data, digital, and technology. We are starting to realize those benefits.
Speaker Change #138: that strategy. Thank you.
Speaker Change #138: Thank you for the question regarding the biosimilar slow look.
Speaker Change #138: Based on what we know, we are, of course, looking at the development stage of biosimilar art, but we are also considering the defense of our set of attempts.
Speaker Change #139: We don't see any reason to change our current assumption that the earliest a biosimilar could enter the market in the US would be
Speaker Change #139: I am here
Speaker Change #140: 2032-2032. So no change to our assumptions so far based on what we know. I will also mention, because we get the question very often,
Speaker Change #140: The anti-view pen is very important. As Julie said, the anti-view pen is for us...
Speaker Change #141: We must maintain our leadership. We have never seen a decline in market share. Due to the characteristics of Antibio, the Antibio pen is for us.
Speaker Change #141: longer protection. So this is why we have no chance to our assumptions when it comes to biosimilar entry. Thank you.
Speaker Change #141: Thank you very much
Speaker Change #141: Thank you very much
Yamaguchi: Now, we would like to move on to the next question. Next is Mr. Yamaguchi from CT. Please unmute yourself and ask your question.
Hidemaru Yamaguchi: Can you hear me? Yes, I can hear you.
Hidemaru Yamaguchi: Thank you very much
Hidemaru Yamaguchi: The first question might be in the presentation, but it's question 10. Question 1 is very intense.
Speaker Change #144: Could this be the basic one-time factor of numbers? I can think about it 4 more times than this.
Speaker Change #144: [inaudible]
Speaker Change #144: [inaudible]
Yamaguchi: Thank you Yamaguchi-san. So the first question on Kudenga performance, I'd like to ask Christophe to comment on that. And the second question on Q1 progress rate versus the full year excluding FX, I'd like to ask Milano to comment on that please.
Speaker Change #145: Thank you for watching.
山口さん: Yamaguchi-san, I think Kyodan-ga is off to a strong start. We see a very significant demand in endemic countries as well as countries where there is a travel market.
Speaker Change #147: We are ramping up our manufacturing capacity. This is a limiting factor right now. The demand is way greater than our supply capacity. We are expanding the supply capacity.
Speaker Change #148: We are very satisfied with the handling. There is no specific theme here. These will be released in the future.
Speaker Change #148: predictable and linear, if you like, but more and more because we are going into
Speaker Change #148: public immunization programs
Speaker Change #148: They are notoriously
Speaker Change #148: phase, if you like, depending on the order or the supply that we can provide to the government. But really, the product is off to a fantastic start. And as we all know, dengue is a major issue in many countries. Thank you.
Speaker Change #148: Well then, thank you for watching.
Speaker Change #148: Thank you very much, San, for the question.
Speaker Change #148: Overall, I think the top line side is on track.
Speaker Change #149: It's according to our expectation and Biden's did have some upside at the beginning, especially beginning of the quarter, but we do expect it's coming back that generic erosion.
Speaker Change #149: we'll get back to our expectation level going forward.
Speaker Change #149: For the expense side.
Speaker Change #149: There was some phasing in R&D.
Speaker Change #149: So we spend less in R&D for the first quarter, and then those development costs are weighted toward the rest of the year.
Speaker Change #150: So it's it's gonna ramping up. So the yes, we did have less expense in Q1, but it will catch up. So only null, according to expectation. And then that's why we don't change the guidance at this moment. Thank you. Thank you. Thank you very much.
Miki Sogi: Thank you, Mr. Yamaguchi. Regarding the last question, we will hear from Mr. Mikisogi. Mr. Miki, we are waiting for your question.
Miki Sogi: [inaudible]
Speaker Change #152: My question is the Tuxxairo and immunoglobulin, it seems that you know these two products had a really strong growth in the first quarter, is there any market dynamics that can you explain you know this the growth and also is this something you know you are expecting to sustain over the year?
Speaker Change #152: The second question is a question about SATIC-2 from BMS.
Speaker Change #152: I hear that the release of this product made by Inhibitor is quite tense.
Speaker Change #153: As a result, the pair coverage has become quite slow, and it might also affect the Take 2 inhibitor, but what should we do if it doesn't?
Speaker Change #154: Great. Thank you, Miki. So, Julie, would you like to comment on both of those questions?
Speaker Change #154: Okay.
<unk> growth in Q1 was pretty strong comparing to our annual guidance, but the that growth rate quarter by quarter growth rate of PDT can fluctuate a bit.
So the.
We expect to stay for the year, our growth would be within the guidance, which is 5% to 15%.
Thank you very much for your explanation that's great. Thank you.
Great. Thank you Sylvia.
With this.
End of the call. So thank you everyone for joining us today and we wish you all the best Thank you very much.