Takeda Pharmaceutical Company Limited

Before starting, I'd like to remind everyone that we'll be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in the most recent Form 20F and in our other SEC findings. Please also refer to the important notice on page 2 of the presentation. Well, from our side, as the presenters and also the panel, We have President and CEO, Christopher Weber, and Andy Prample, President, Research and Development, Kost Sarukos, Chief Financial Officer, and Masato Iwasaki, Japan General Affairs, and Ramona Sequeira, President, U.S. Business Unit and Global Portfolio Commercialization, and Julie Kim, President, Plasma GIF, the SIP's Business Unit. And now from Christophe, Andy and Osta, we will give you presentations. And after that, we'd like to take questions. Now we'd like to start.

Thank you, Christ, and thank you everyone on the phone to join us today. It's a great pleasure to be with you. So we'll take you through the progress we are making in the transformation of of Takeda as we discussed our performance in the first half of our fiscal year. So how are we progressing towards our vision? And this is, please go to slide number four. Our vision at Takeda is to discover and deliver life transforming treatments, guided by our commitment to patients, our people, and the planet. And first, despite the pressure of the pandemic, Our employees have come together with a very strong commitment to make a difference for patients. So I feel really inspired and energized by the spirit and determination that the entire organization has shown during this pandemic. Our journey in the transformation of our company has been producing very strong results. And I think our first half results are evidence of our progress. Specifically, we have consistently delivered on the fundamentals. Our underlying revenue growth for the first half has accelerated to plus 6.8% with a reported revenue growth at 12.8% compared to prior year. This growth continues to be driven by Takeda's 14 global brands with underlying growth of these 14 global brands of 11.4% in the first half. And more importantly, for the future, our diverse portfolio of 14 global brands now represents 42%, an impressive 42% of our total revenue. I mean, when you look back, what a transformation considering that Akeda launched its first ever global product back in 2014. Before 2014, we didn't have a single global brand in our portfolio. Today we have 14, which represents 42% of our total global revenue. And we are expecting an acceleration in the second half of the year and significant revenue growth for our global brand over the near to medium term, particularly as we expand into new markets. So today we remain on track to meet our full year 2021 guidance of mid-single-digit underlying revenue and underlying cooperating profit growth thanks to the continued performance of our 14 global brands. And as we are confident in our financial performance with very strong cash flow generation, as we are confident in our strategy and our growth potential driven by our 14 global brands and broad pipeline, And this strategy, this growth dynamic, we think is not reflected in our current share price. We are initiating a share buyback of up to 100 billion yen. Also a reflection to our commitment to delivering value to our shareholders. So what is Takeda growth strategy? Well, we think it's a very clear growth strategy. We have a razor sharp focus on bringing life transforming treatment to patients. So we will drive the growth in our 14 global brands through new indication, label extension, our expansion to geographies previously answered. It is very clear that these 14 global brands will continue to grow significantly in the coming years, at least until Ontario faced by a similar competition in the US. We will also continue to invest in the approximately 40 clinical stage pipeline assets that all bring the potential to transform the life of patients. Our strong pipeline and portfolio are not built around a single flagship product or compound, but instead are highly diversified and focused in area of high unmet patient need. In fact, more than one third of our wave one pipeline has received breakthrough therapy designation a true testament to our innovation and focus on targeting entirely new categories and modalities. By this standard, and even considering some setback, and I will come back to that, we are experiencing a remarkable year. Our pipeline is beginning to deliver on our ambitious aspiration. I'll go into a bit more detail later, but in this quarter alone, we received FDA approval for XCVT in the US, and an anonymous recommendation by an FDA advisory committee for Marie Bavir, with a decision on an FDA approval schedule sometime in the coming weeks. At the same time, we will continue to evaluate opportunities for strategic partnership and collaboration that complement our therapeutic area of focus to expand patient access to the treatment they need and to help accelerate our pipeline strategy. One example of that is a collaboration with Arrowhead Pharmaceuticals to develop PAK999, a first-in-class RNA therapy designed to treat the underlying cause of alpha-1-antitrypsin-associated liver disease. It is a very devastating condition for which currently there is no approved therapy. Another great example of this strategy is a recent collaboration and license agreement with GCR Pharmaceuticals to commercialize GR141 for the treatment of Hunter syndrome. GR141 introduced a new way to treat Hunter syndrome and help maintain or improve cognitive function in patients living with this rare disease. What is also very notable here is that it is the first time Takeda has entered an agreement with a Japanese company to commercialize a program outside of Japan. I think it's indicative of how we are perceived now as a global partner of choice among Japanese companies too. And you might have seen, just this week, we announced the acquisition of Gamma Delta Therapeutics to further strengthen our immuno-oncology and cell therapy pipeline with a novel platform leveraging Gamma Delta T-cells. This was a built-to-buy collaboration which we started in 2017, which brings to Takeda a novel cell therapy approach to target solid tumor and hematologic malignancies. So our plan is very clear and consistent. Our strategic vision is to focus on leveraging the strength of Takeda's 14 global brands, which will remain a growth driver over the coming years. providing us with the momentum to support the growth potential of our exciting pipeline. Having said that, allow me to address our recent clinical development setback that you know already, but I want to come back on that. It goes without saying that when one develops truly innovative R&D compounds, as an R&D organization, you do experience setbacks and challenges. as at the same time important progress are made. This is what being on the leading edge of science is all about. Andy will address that in greater detail shortly, but I can tell you that we recently announced that a safety signal has emerged in a phase 2 study of TAC994, which is an investigational oral aroxin agonist for the treatment of sarcolysis type 1. We will continue to analyze the data, and I want to reinforce that we are committed to advancing our multi-asset orexin franchise, including the oral orexin agonistat 861, which is currently in phase 1 development. We also announced that the pevonodistat phase 3 PAN-TAS2D did not achieve statistical significance for the primary endpoint of event-free survival compared to azacitidine. But this is why I shared with you that the diversity in our clinical programs and approximately 40 clinical stage NMEs give our pipeline strength and resilience. Strength and resilience. We are excited about the potential to deliver dozens of new therapies to patients in the next decade. And I think we should not lose sight of that. So in our mind, these setbacks are not derailers of our strategy. They are setbacks, but we have enough breath in our pipeline to continue to look towards the future with serenity, with a sense of urgency also to develop other molecules. Another point that I want to mention today is that I'm very pleased to report that earlier this month, we received confirmation that we successfully addressed and FDA warning letter for manufacturing sites in Ikari. The FDA has now issued a revised voluntary action indicated status to the Ikari manufacturing site with an agreement to maintain a dialogue regarding ongoing commitment. So the closing of the warning letter on the site status change is a positive development in the ongoing effort to address the FDA observation in the official action indicated in March 2020. So I think it does speak to our strong track record of upholding quality standards and our close collaboration with the FDA throughout this process. On the next slide, I just want to update you on our contribution against COVID-19. Takeda is really keen and is really committed to play a key role in the head to fight the COVID-19 pandemic in Japan. As you know, as a marketing authorization holder for the Moderna COVID-19 vaccines in Japan, we have distributed 50 million doses in Japan and expect to begin importing and distributing an additional 50 million doses as early as the beginning of 2022. We are also partnering with Novavax in Japan to develop and manufacture up to 250 million dose per year and commercialize F-COVID-19 vaccines candidate from our Hikari facility in Japan where it will be manufactured. So we aim to begin the distribution of these vaccines in the early part of 2022 under the government vaccines program. Of course, pending the number of factors including regulatory approval. One thing I would like you to notice is that Novavax pricing in Japan will reflect the government subsidy we received to build the manufacturing capacity in Italy. So there is no doubt that we have a very important role to play to continue combating the COVID-19 pandemic. And, you know, we are very committed to it. But it's also something that provides us valuable insight as we are applying to all our vaccines development programs. On the next slide, I just want to zoom in on, you know, our pipeline wins for this quarter. And Andy will provide you much more greater detail right after. But I can tell you that we are very excited by the promise of and potential of our pipeline as demonstrated with the approval of XQVT in the U.S. and the unanimous recommendation by FDA Advisory Committee for Marie-Pavir. EXTIVITY is a very important new treatment for adult patients with locally advanced or metastatic non-small cell lung cancer with epidermal growth factor receptor exon 20 insertion mutation. It is the first and only approved oral therapy specifically designed to target EGFR exon 20 insertion mutation for patients with disease that's progressed on or after platinum-based chemotherapy. This disease has historically been under-diagnosed, and patients have, until recently, very limited effective treatment options. So the approval of Xtivity advanced the treatment landscape, and for the first time, patients will have access to effective oral therapy. We are also very excited about the potential for Maribavir to transform the way cytomegalovirus CMV infection is treated. If approved by the FDA, Marie-Bavir will be the first and only treatment indicated for adult transplant recipients with refractory CMV infection and disease without or with resistance. CMV is a very challenging infection in transplant patients with an estimated incidence rate greater than 25% in solid organ transplant and stem cell transplant recipients. We are proud to advance science in this critical area of need. So Eschiviti and Maritavir are just two examples of how Takeda approach scientific development. We focus on areas for patients who have serious need and they have very limited or even yet to be discovered treatment options. So we are very encouraged by these recent developments and we are continuing to look forward to upcoming milestones in our innovative and diversified pipeline. So we talk about our recent milestone, let me also talk about how we are building our long-term pipeline. We have a very aggressive plan to continue building a pipeline that has the potential to transform lives, and in the process, transform our business. Our R&D strategy, as you now I'm sure know, is to focus on a few disease areas in order to have exquisite scientific know-how. to focus only on programs with a life-transforming potential for patients, and also to be the preferred partner for research entities needing a pharmaceutical partner. We have made big investments in areas that will transform patient treatments for many diseases in four areas of oncology, rare genetic, and hematology disease, neuroscience, and gastroenterology. And these are areas where there is a lot of need for innovation and new treatment option. So look at our oncology pipeline, for example. We are advancing multiple first-in-class immunotherapy candidates that have the potential to be transformative for people with blood cancer and solid tumors. We are also seeing great promise with our pipeline compounds in rare disease, where there is often an incredibly small patient population, but with desperate need for effective treatment option. In the US, Approximately 50% of Takeda's pipeline is being developed in rare or often diseased areas and addressed areas of very high unmet need. I also want to mention that we also built a dedicated PDT R&D capability as we focused on improving our existing product, as well as researching new plasma therapies, as well as an R&D vaccine investment focused essentially on our daily vaccines. We are very committed to science, to our pipeline. We think that the potential of this pipeline is very significant, and this is why we have increased our R&D investments to 522 billion yen in fiscal year 21, which is representing a growth of 14.5% compared to last year. And this is an effort to ensure that we are in position to deliver the next generation of potentially transformative therapies. To conclude, and before Andy will give you more details on our R&D pipeline progression, our transformation continues to bring Takeda's future into focus. In 2014, we set out on a journey to accelerate our globalization, to reinvent Takeda into a truly values-based, R&D-driven global company positioned for long-term business growth. I think we have made very significant progress. We have gained a leadership position in our core business areas, oncology, radiology, pneumatology, neuroscience, gastroenterology, and plasma-derived therapy. We have completed the largest foreign acquisition in Japanese history that gave us competitive scale, that helped grow our margin, and that allowed us to establish a portfolio of 14 global brands that are generating today steady organic growth. Prior to 2014, Takeda did not have any single global branch. So the success of this acquisition has provided us with the scale, momentum and resources to build a dynamic new future. And with the near-term and robust growth of our 14 global brands as our foundation, our reborn pipeline and approximately 40 clinical stage assets which will provide the potential for an unprecedented number of regulatory approval over the next several years. So that brings us back to our vision to discover and deliver life-transforming treatments guided by our commitment to patients, our people, and the planet. And I think Paqueda's growth strategy is a reflection of that vision. With that, I would like to provide Andy with an opportunity to focus on our R&D strategy and our pipeline progress.

Thank you. Thank you very much, Christoph, and hello, everybody. This new year 21 continues to be an inflection year that we firmly believe will kick off a decade of innovation from our pipeline. Our pipeline is diverse and dynamic. As anyone would expect in pursuit of novel, life-changing, or transformative medicines, one will experience headwinds and tailwinds from time to time. I would like to provide some color and additional context on these recent events. So first, let's start with the tailwinds or the positive events. As you just heard from Christoph, Xtivity was approved in the United States. This approval comes just five years after this molecule entered the clinic. And importantly, Xtivity is the first of our wave one new molecular entities to be approved. And it's certainly a moment worth celebrating. As Christophe mentioned, we also had a unanimous FDA advisory panel recommending approval for our anti-CMV drug, Merigavir, and we anticipate a final decision next month. So let's talk a little bit about our R&D lifecycle management efforts for our global and regional brands, which continue to progress and do well. For Intivio subcutaneous, we recently received written feedback from FDA, which provides much greater clarity on the regulatory package and data elements needed for resubmission. We thus have more confidence for a potential approval now in fiscal year 2023. We also received an additional six months of pediatric exclusivity for Vyvanse from FDA. We now have market exclusivity in the United States until August of 2023. In addition, we had approval for Alopecia in Japan, as well as label expansions for Tabomedics and Vocinti in Japan and China, respectively. These R&D lifecycle management efforts are important to our future and will continue to drive revenues for Takeda in the short and medium term. We continue to invest in novel mechanisms and capabilities and aim to unlock innovation wherever it originates. Our strong emphasis on partnerships, continues to bolster our exciting pipeline with potential therapies that may provide step function improvements or cures for patients in the future. We just completed in-licensing, as Christoph went through, of JR141, a potential next-generation recombinant fusion protein that pairs iduronorate 2-sulfatase to an antibody to the human transferrin receptor, allowing shoveling through the blood-brain barrier. This innovative new treatment for Hunter's syndrome patients was recently granted prime designation by the EU and could potentially address both central neurologic symptoms as well as peripheral symptoms in Hunter's patients. We also continue to build on our platform technologies. And again, as Christoph mentioned, we announced this week the acquisition of Damodelta Therapeutics. This was a build-to-buy collaboration that we initiated in 2017. We really know this company well. We really like the technology and the progress that has been made. And just yesterday, we exercised our rights to purchase this company and add to our cell therapy ambition. And then finally, we announced three next-generation gene therapy collaborations that will provide tools to potentially help us address some of the issues with first-generation gene therapy constructs. And these partnerships include Selecta, Poseida, and Immunosoft. So, if we can please go to the next slide. Actually, before I start to mention the next slide, I'll also mention that, of course, we've had some headwinds that you're very aware of over the past quarter. These are events that stall or oppose some of our forward momentum. As Christoph mentioned, pevinitistat did not achieve statistical significance for the primary endpoint of event-free survival in the Phase III panther study for patients with high-risk myelodysplastic syndrome, and we expect to present information at an upcoming medical conference. And in addition, importantly, TAP994 had a safety signal. This was a liver safety signal, which we will discuss in much greater detail later in this call. So our pipeline, despite these events, despite these headwinds, is strong and is starting to deliver value. This is our pipeline. We have approximately 40 new molecular entities in development. And over the past quarter, we've added new molecules like TAC-105, a peptide used to treat conditions that result from nausea and vomiting. This is a peptide that was discovered in the Tejeda Laboratories. And also JR-141, where we continue to invest in cutting-edge technologies for rare diseases like Hunter syndrome, as I just went through. So if we can please go to the next slide, 10. I wanted to spend some time walking you through our reps and franchise. And I'd like to first reiterate why many experts and regulatory authorities remain excited and optimistic. Importantly, we have seen transformative efficacy in multiple patient populations, including type 1 narcoleptics, where we see responses in the maintenance of wakefulness tests of greater than 30 minutes above placebo response, a result pushing up against the upper limit of this 40-minute test. And just by reference, the standard of care today shows less than eight minutes above placebo. In addition, we've received positive feedback from health authorities securing prime designation in the EU and breakthrough designation in both US and China all over the past four months. These regulatory designations speak to the strength of the data and the excitement in the field of erection tube receptor agonists. But unfortunately, over the last few weeks, we've faced a significant setback, a liver safety signal PROTAC 994 in our eight-week 1501 Phase 2B study and our 1504 long-term extension trial. As a result of this safety signal, we discontinued the trial early to protect patient safety. Ending the studies will allow us to holistically assess the risk benefit prior to making a decision on possible next steps. of course, in conjunction with regulators. So let me just spend a moment explaining exactly what we saw. We saw a single patient in a long-term extension trial who had significantly raised liver enzymes. This was, in fact, a serious adverse event. Treatment was discontinued. The patient is being closely monitored and remains asymptomatic and clinically stable. The decision to stop the Phase II study, as well as its extension, was based on the degree of liver function test elevations in this patient, as well as the recent identification of additional patients who were discontinued from the trial for smaller increases in liver function tests. We are in close contact with clinical sites and principal investigators to ensure appropriate follow-up and to gather all necessary information to fully fully understand these cases. We are now working to analyze the data and further understand the mechanism underlying these liver findings. This full risk-benefit assessment will be made, and we are committed to publishing the results at a medical meeting in 2022. So, if we can go to the next slide, 11, please. I want to spend a minute talking about our leadership position in Erepsin and our future plans. And I'll underscore. This step back in no way deters our ambition to develop and deliver a transformative therapy for patients with type 1 narcolepsy and other hypersomnolence disorders. If anything, if anything, we are more determined than ever to achieve this goal. We have a number of differentiated molecules in our pipeline that are part of our Ericsson franchise, and we are now exploring the best paths for acceleration. So these include two molecules you have heard of before, as well as multiple additional molecules in preclinical stages. First, there's PAP861, a differentiated, longer-acting oral agonist compared to PAP994. It's currently in a Phase I single and multiple ascending dose study. This study will provide initial safety and PK data, as well as information on initial efficacy in both sleep-deprived healthy volunteers, and type 1 narcolepsy patients. This will provide us data in narcolepsy as well as its effects in people with normal orexin levels. Together, these results will inform our future development plans. And then there's PAP925, the IV formulation that provided us initial proof of concept of the mechanism for in type 1 narcolepsy, as well as type 2 narcolepsy and idiopathic hypersomnia, in excessive daytime sleepiness with obstructive sleep apnea, and is currently being explored in the post-anesthesia setting in patients with obstructive sleep apnea. Obstructive sleep apnea patients are at high risk for respiratory issues when recovering from anesthesia. We believe our short-acting IV infusion can help in this setting. important to note that we are additionally developing multiple molecules with differentiated profiles in our research labs. We have an army of scientists working on orexin and now have a deep understanding of the orexin 2 receptor agonist pathway and have gathered incredibly valuable clinical data. We know we have an efficacious mechanism with transformative potential equipped to With this knowledge, we will accelerate development of our current molecules, and our chemists will design new molecules for the future. We will be in a position to make a data-driven decision on next steps for these programs in 2022. This has and will continue to be a top priority for Takeda and our R&D organization. We are now working harder than ever and equipped with knowledge to build this franchise. We will continue our leadership in the erection agonist field and build on our foundation. We are dedicated, fully dedicated to bringing transformative erection agonist medicines to patients suffering from narcolepsy and other related sleep disorders. We want to thank all the patients and their physicians for participating in our clinical trials. So, we can go to the next slide, please. As you heard earlier from Christoph, and as you're aware, we received unanimous support at the October 7th FDA Advisory Committee panel for Meribavir, and we expect a decision in the next month. CMV is the most common viral infection after transplantation, and we have seen robust efficacy, in fact, greater than two-fold greater than standard of care, with a significantly better safety profile, ten-fold lower toxicity, specifically related to neutropenia and kidney injury, We are very excited about bringing this novel therapy to transplant patients. You can see some of the timelines on the left side of this slide, including the potential approval in the EU early next year. You also see timelines for our frontline trial and post-hematopoietic stem cell transplant, which is on track to read out in the first half of fiscal year 22, filing shortly thereafter. So, if we move to the next slide, please. Finally, I want to highlight gamma-delta therapeutics. This recently announced acquisition is scheduled to close in the first quarter of fiscal year 2022. Now, as you can see in this slide, we positioned gamma-delta in our overall oncology strategy and our pipeline. So, what is this? Gamma-delta T cells have shown potent anti-tumor activity that is not antigen-specific. So, we should anticipate the potential for advantages across a wide range of tumors, including solid tumors. This acquisition continues to build our rich pipeline of oncology therapies and help fulfill our self-therapy ambition. Could we move to the next slide, please? Before handing it over to Costa, let me just say that we have an exciting and dynamic pipeline, and it continues to advance. Beyond what we have mentioned earlier, we want to highlight one of our earlier stage programs. something that we'll be doing more and more of. We have seen exciting clinical proof of concept data with CAC573 in patients with relapsing and refractory multiple myeloma, and we will be sharing these data at a medical conference this calendar year. We remain highly optimistic on our prospects, and we believe we have the right R&D model that is focused on treatments with the potential for step function benefits or cures for patients. We continue to drive growth in our 14 global brands through new indications and global expansions. We will continue to invest and drive our innovative pipeline of now 40 new molecular entities that have the potential to transform the lives of patients. With that, I will hand it over to Kostas Saroukas.