May 13th, 2026

The call balanced strong R&D momentum, significant clinical successes and robust cash generation against near-term revenue pressures from VYVANSE loss of exclusivity, pricing and supply dynamics in plasma-derived therapies, and substantial transformation and launch investments that will weigh on FY2026 profit and EPS. Management presented a clear two‑horizon strategy: near-term transformation and investment to enable a wave of launches (Horizon One) followed by accelerated growth as the new products scale (Horizon Two). The pipeline success (3 positive Phase IIIs, priority reviews, TAK-881 data), disciplined cost savings (~JPY 300 billion captured to date) and solid free cash flow provide a foundation to absorb short-term headwinds and fund launches, while execution risks (resizing, restructuring costs, biosimilar/patent challenges and market dynamics in plasma products) are material but appear managed. Overall, positives from the pipeline and balance sheet outweigh the near-term financial and operational challenges, supporting a constructive outlook conditional on successful commercialization execution.

Company Guidance

Takeda closed FY25 with core revenue of ~JPY 4.5 trillion (‑2.6% at CER), core operating profit of JPY 1.17 trillion (‑0.9% at CER), reported operating profit of JPY 408.8 billion (+19.3%), core EPS JPY 517 (+3.1% CER) and reported EPS JPY 122; operating cash flow was >JPY 1 trillion and adjusted free cash flow JPY 684.5 billion (after a $1.2 billion Innovent upfront), with approximately JPY 150 billion of VYVANSE LOE headwind this year. For FY26 management guides revenue to decline low single‑digits at CER (but to JPY 4.64 trillion on FX assumptions of JPY156/USD and JPY182/EUR, +3% actual), core operating profit to fall 5–8% at CER to ~JPY 1.16 trillion (‑1.1% on an actual FX basis), reported operating profit to rise ~2.7% to JPY 420 billion, core EPS to decline in the mid‑teens, and adjusted free cash flow to remain JPY 650–750 billion; the dividend will increase to JPY 204/share. The company expects to repay ~JPY 500 billion of debt maturing in FY26 using cash/free cash flow, has 100% fixed‑rate debt at a weighted average ~2.4%, and is targeting deleveraging toward ~2x adjusted net debt/adjusted EBITDA. Takeda highlighted efficiency gains of ~JPY 300 billion gross annualized savings to date, >JPY 150 billion of OpEx savings in FY25, and a new transformation impacting ~4,500 roles with JPY 170 billion restructuring cost in FY26 to deliver ~JPY 100 billion of savings in FY26 and >JPY 200 billion annualized by FY28, all to fund launches (oveporexton, rusfertide, zasocitinib) and pipeline investment; growth & launch products now represent >50% of revenue and grew ~4.5% CER (e.g., ENTYVIO +4.2% CER, FRUZAQLA +14.6% CER, QDENGA +10.7% CER, IG +4.1%, albumin ‑2.1% CER).