Takeda Pharmaceutical Company Limited

For those of you who wish to listen to this call in English, please select English in the Zoom Language Select button. In today's call, I would like to ask you to discuss the future information regarding the future of the U.S. Constitutional Reform Act of 1995. The actual results may be significantly different from the results discussed today. Regarding the potential factors that may make the actual results significantly different, the latest Form 20-F and and other SEC submission documents. In today's call, we will also discuss financial statements that do not comply with international accounting standards. Please refer to the presentation appendix for the definition and adjustment of these statements. Please also check the important information on the second page of today's presentation. Soredewa, honjitsu no presentation ni utsuritai tomoimasu. Shacho CEO no Julie Kim, Chief Financial Officer no Furuta Milano, R&D President no Andy Plump yori prezen wo sasete itadakimasu. Sono ato, shitsugiyo to no jikan wo moukete orimasu. Soredewa, hajimetai tomoimasu. Julie, please go ahead.

Thank you, Chris. Thank you for joining us for today's earnings call focused on the first quarter of fiscal year 2026. We delivered a solid start to the fiscal year and our performance this quarter demonstrates steady progress against our strategic priorities, keeping us firmly on track to achieve our full year guidance. These achievements reflect our continued execution against the two horizons strategic roadmap we shared last quarter. Thank you for joining us today. Core revenue declined slightly at 0.5% at constant exchange rate, or CER, in line with our expectations, as momentum across our core inline brands and existing new launch brands largely offset anticipated headwinds in our mature portfolio. Core operating profit declined 0.5% year-over-year at CER, reflecting the continued investment behind our upcoming launches and exciting late-stage pipelines. which we are partially offsetting by savings generated through our transformation program. And core EPS was 154 yen, a decrease of 11.8% at CER, mainly due to a favorable tax position in the prior year. Milano will walk you through the financial dynamics in more detail shortly, but the key takeaway is that we are well on track towards our full year guidance. This quarter, we had strong execution across all Horizon One priorities. We are ensuring the resilience of our existing portfolio with our core inline brands growing by 2.3% at CER. We also continue to execute against our transformation program. As an example, we have largely completed the implementation of our international business unit, which is bringing leadership and teams closer to patients and customers and supports more simplicity, speed and efficiency. We'll do all of this without sacrificing quality to help us move at pace to bring life transforming medicines to patients. Takeda's consistent and effective execution of our enterprise transformation is enabling us to fund our launches and advance our pipeline. It also represents a fundamental change in how we work today and how we will grow as a company in the future. We also made excellent progress across the pipeline this quarter. We are pleased to have received our first approval for Oveporexin in narcolepsy type 1 under the brand name Orzaful in China. And approvals in US and Japan are key milestones expected in Q2. I will speak more about the important milestones and progress towards launch for Orzaful Ruspertide, and Zazacitinib on the next slide. In oncology, we presented TAC 928 data at ASCO in first and second line non-small cell lung cancer. And we initiated a phase three study of Elriticept in first line anemia-associated MDS. Taken together, our three priorities for FY26 remain firmly on track. continue advancing preparations for the successful launch of Orzaful, Rusvertide, and Zazocitinib, progress the next wave of our pipeline, and continued execution of our transformation program to unlock new capabilities and efficiencies. We continue to build the foundation for our future growth by preparing to bring new medicines to patients. With the first Orzaful approval obtained in China, We eagerly look forward to bringing our first-in-class orexin agonist for narcolepsy type 1 to patients in the US and Japan as well, with launches expected in the second half of 2026. Orzaful has delivered transformative efficacy across a broad range of NT1 symptoms. At the SLEAP 2026 meeting, we presented additional Orzaful phase 3 data, reinforcing the potential of this medicine to establish a new standard of care by improving measures of daily function, cognition, and nighttime sleep in patients with narcolepsy type 1. Resveratide, our potential first-in-class hepcidinimetic for polycythemia vera, has demonstrated rapid, stable, and durable hematocrit control while reducing patients' reliance on phlebotomy. Resveratide has obtained US FDA priority review and we expect a U.S. launch also in the second half of 2026. Following Protagonist's opt-out from U.S. co-commercialization, we are excited to have sole responsibility for commercializing Resveratide globally and we are committed to maximizing its growth potential and impact on patients. Turning to the third of these transformative medicines, zazacitinib, is our potential best-in-class oral treatment for psoriasis delivering rapid and durable skin clearance in a convenient once daily pill with no fasting restrictions. We are on track towards launching in the US in the first half of 2027. Our confidence in its profile is stronger than ever. In our recent head-to-head phase three psoriasis study versus Ducrevacitinib, Zazacitinib demonstrated statistical superiority for all primary and key secondary endpoints with more than 35% of patients achieving PASI 100 or complete skin clearance at week 16. We also shared new data this month from the pivotal phase three psoriasis studies demonstrating that zazacitinib achieved consistent high rates of skin clearance across the body, including hard to treat and high impact sites. Andy will talk more about this in a few minutes. Importantly, we are not just generating compelling data. We are continuing to lay the groundwork for successful launches. For Orzaful, we have had medical science liaisons in the field for more than a year. We've engaged payers and KOLs, and we've set up specialty pharmacy and patient support programs to facilitate an exceptional patient experience. For Rusfortide, We are building HCP awareness of the importance of sustained hematocrit control and leveraging our established hematology commercial infrastructure to ensure we're ready for a successful launch. For zazacitinib, payer discussions and broader prelaunch preparations are already underway, supporting our ambition not only to gain market share, but also to expand the oral treatment segment. Our efforts are planful. We believe they will enable us to ensure these transformative medicines will reach patients as quickly as possible, delivering on our commitments in Horizon One and positioning Takeda for accelerated long-term growth. These milestones reinforce the depth of our late-stage pipeline and reflect the sustained, disciplined commitment we have to faster AI-enabled discovery and development, strong market access, and best-in-class scientific Medical, manufacturing, technology, and commercial capabilities. Today, we are in Horizon One and fundamentally transforming Takeda from within. This includes optimizing our operations, strengthening our competitiveness, and successfully launching new medicines that will become our future growth drivers. As I just shared, this phase is progressing well through our launch preparation, pipeline progress, to provide an additional example, we recently announced a landmark collaboration with the Indonesian government to build plasma operations in the country, starting with establishing plasma donation centers and assessing the feasibility of potential future manufacturing capabilities. Partnerships like this support the growth of our PDT business and the competitive resilience Thank you for joining us today. is working diligently to execute on our priorities and establish a strong foundation in Horizon 1. Every milestone we accomplish reinforces our path of progress towards Horizon 2 growth acceleration. Our employees' relentless dedication and discipline will continue to set the stage for sustained value creation for patients and shareholders. I will hand the call over to Milano to walk through our first quarter financial results in more detail.

Thank you, Julie. And hello, everyone. Let me walk through our financial highlights for Q1 of fiscal year 2026. Overall, our Q1 results are on track towards full year guidance. Revenue was 1.22 trillion yen. An increase of 10.2% on actual FX basis or a decline of 0.5% at constant exchange rates or CR. Corporate in profit was 358.9 billion yen, up 11.5% at actual FX or minus 0.5% at CR, while reported operating profit was 201.4 billion yen. Core EPS was 154 yen, with an 11.8% decline at CR as expected, mainly reflecting tax favorability in the prior year. Reported EPS was 72 yen. Operating cash flow was lower than prior year, reflecting changes in the working capital related to our trade receivables factoring program. Adjusted free cash flow also reflects a payment of 200 million US dollar to protagonists following their decision in April to opt out of a co-promotion agreement for Rooseveltide. As Julie highlighted, this means that Takeda now holds exclusive development and commercialization rights for Rooseveltide globally. Overall, we are on track to deliver 650 to 750 billion yen pre-cash flow for the full year. Slide 10 shows a revenue bridge versus prior year. At CR, core revenue declined 0.5% as growth from core in-line brands and new launches largely offset the decline from LOE and mature products, which includes the continued generic erosion of vitamins in the US. Core in-line brands represented 58% of total revenue and grew 2.3% at CR, which is on track with our expectations for Q1. Our largest product, NTVO, remains resilient with 4% growth at CR, while iminoglobulin and alabamine were both impacted by phasing in the US, which was within our expectations. Our new launches category is still small today, only 4% of total revenue, but it is growing strongly at 22.6% at CR, supported by Frisacla, Livitensity, Azima, and Kyudenga. We are excited at the prospect of introducing new products to this category with a potential launches of Orzeful and Roosevelt Eye later this year. Finally, FX was a big positive to our top line, adding 118.2 billion yen to deliver 10.2% growth at actual exchange rates. Slide 11 shows a bridge or co-operating profit. Consistent with our priorities in Horizon 1, we have positioned fiscal year 2026 as a year of growth investments funded by savings from our transformation program. The transformation program is firmly on track, as Julie commented earlier. However, many of the initiatives were implemented at the end of the quarter meaning the savings amount captured in Q1 results is still relatively limited. All the high priority growth investments are on track, including launch readiness for Orzai Full, Rooster Tide, and Tasso City Neve, as well as progress of late stage development programs such as TAC 928 and TAC 921. We continue to demonstrate cost discipline alongside targeted investments. Finally, you can see in the chart that gross profit was positive in Q1, primarily driven by favorable FX variance in cost of goods, as well as a one-time divestiture-related milestone. Next, reported operating profit on slide 12. As you can see in this chart, the two main factors impacting year-on-year performance were lower amortization of intangible assets, mainly due to the completion of 5Ns amortization in January 2026, and higher restructuring expenses related to the transformation program. FX also provided a tailwind resulting in 9.1% growth versus prior year at actual exchange rates. Slide 13 shows our full year fiscal 2026 outlook, which is unchanged from May. And our Q1 performance was fully on track towards our targets for this year. I will close my section of the presentation by re-emphasizing our commitment to strict financial discipline through our two growth horizons. In particular, during this horizon one, our focus is on returning to revenue growth, protecting property and profits, improving reported profits and ROE, and maintaining strong adjusted free cash flow. I look forward to sharing our ongoing progress towards these goals. Thank you, and I now pass to Andy for updates on the pipeline.

Thank you, Milano, and hello to everyone on today's call. I want to frame this quarter simply. Takeda R&D is ready to convert pipeline progress into commercial performance that supports our two horizon growth strategy. Over the coming months, we are poised to launch three transformative medicines, Orzaphyl, Rusfratide, and Zazocitinib, each with the potential to redefine the standard of care in its field and together setting Takeda on a new growth trajectory. Let me begin with Orzaphyl, which I believe is one of the most exciting stories in neuroscience today. Narcolepsy Type 1 is a lifelong disorder caused by the loss of orexin signaling leading to disabling daytime and nighttime symptoms. At the 2025 World Sleep Congress, we presented groundbreaking results from two phase three studies that met all 14 primary and secondary endpoints demonstrating statistically significant and clinically meaningful improvements. Orzaiful delivered transformative efficacy across the broad disease spectrum, including daytime symptoms like excessive daytime sleepiness and cataplexy, as well as nighttime symptoms, cognitive symptoms, functional improvements, and quality of life. Orzaful doesn't just manage symptoms, it addresses the underlying erection deficiency in NT1, offering patients a single, well-tolerated oral therapy that could restore how a majority of NT1 patients feel and function. We are on track to bring the first and only orexin agonist to patients living with NT1. As Julie mentioned, we have received our first approval in China, and we eagerly await decisions in the US and Japan this quarter. At Sleep 2026, we presented additional Phase 3 data that I would describe as remarkable, with improvements spanning daily function, cognition, and nighttime sleep. Let me share a few of the highlights. Using the functional impacts of narcolepsy instrument, or FINI for short, we saw significant improvement across all functional domains, with p-values below 0.0001, including benefits to cognitive functioning, social activities, everyday activities, and daily responsibilities. These important benefits led to significant gains in work productivity, activity impairment, and Quality of Life. On cognition, we saw improvement versus placebo in attention, memory and executive function, each with a very significant p-value. On nighttime sleep, I want to dwell for a moment on the striking REM latency finding. REM latency is the time it takes to enter the first REM sleep stage after falling asleep. Rem sleep disturbances can manifest as sleep paralysis, sleep-related hallucinations, and sleep disruptions. At baseline, our NT1 patients had a mean REM latency of about 50 minutes against a healthy control value of roughly 130 minutes. or Zaful shifted mean REM latency into the normative range across all treatment groups in both the first light or 3001 study and the radiant light or 3002 study. This objective shift in sleep is unprecedented. To keep it simple, we are showing data from the radiant light study. Both trials produced similar results. As you can see, the objective REM shift is corroborated by the subjective assessments. We measured the subjective effects on REM-linked sleep using the NSSCT, or narcolepsy severity scale for clinical trials, a validated instrument used in narcolepsy. Orzaiful significantly reduced hallucinations and sleep paralysis in all treatment groups. And it did so with no clinically meaningful disruption to sleep architecture. In practical terms, we are significantly improving, often normalizing, a patient's day and night. Now let me turn to zazocitinib, our next generation, highly selective and potent oral TIK2 inhibitor. Here too, the data speak for themselves. In our phase three head-to-head psoriasis study, zazocitinib significantly outperformed ducravacitinib. At week 16, more than 35% of Zazocitinib-treated patients achieved complete skin clearance as measured by PASI-100. We have two key takeaway messages from these top-line results. One, this was a well-run trial with Ducravacitinib having data consistent with past Phase III trials. Two, this is the best 16-week efficacy in psoriasis that we have seen from a pill. Zazocitinib is poised to be a leading oral option with a fantastic efficacy and safety profile. Full details will be shared at a medical meeting this fall. What gives us additional confidence is the performance in the hard to treat high impact areas like psoriasis of the scalp, palms, and soles, as demonstrated here by the high rates of skin clearance in the phase three latitude programs, as well as statistically significant benefits to nails. These are the places where psoriasis can have greatest day-to-day impact for patients who are among the hardest to treat. The new psoriasis data continues to add to our library of outstanding phase three results. I'd like to take a moment to remind you that zazocitinib is far more than just a psoriasis story. As you can see here at the top, zazocitinib has studies underway across a broad range of immune mediated diseases like psoriatic arthritis, Crohn's disease, ulcerative colitis, vitiligo, and hydradenitis superativa. Zazocitinib is a molecule we believe could redefine what is possible with a convenient once daily oral therapy. We anticipate a phase two Thank you for joining us today. In addition, for the small number of patients who may benefit from dose escalation, the trial will include a higher dose option. Beyond Orzaful, we are advancing TAC360 in narcolepsy type two and idiopathic hypersomnia and anticipate phase two data later this calendar year. The third of our imminent launches is Rusvertide, a first-in-class hepcidin mimetic for polycythemia vera. Rusvertide delivers rapid, stable, and durable hematocrit control, addressing a major unmet medical need in PV. It is filed in the U.S., with an EU filing targeted later this fiscal year. We have an August PDUFA date and anticipate launch immediately thereafter. Now, I want to be clear that our story does not end with these three assets. They are the starting acts of the most robust late stage pipeline in Takeda's history. And as we continue through Horizon One, we will advance the next wave of pipeline progress with key readouts and milestones. As Julie shared earlier in oncology, L-Ritercept has started two phase three trials in first and second line myelodysplastic syndrome and will soon start a pivotal trial in myelofibrosis. We presented important updates at ASCO in June for TAC928, our PD-1 IL-2 alpha biased bispecific fusion protein. First, in patients with second line plus IO resistant, non-squamous, non-small cell lung cancer, an area of great unmet need, we showed a 42% overall survival rate at two years. We are planning for a pivotal phase three in this refractory population later this fiscal year. In first line non-small cell lung cancer patients with less than 50% PD-L1 expression, we were excited to see outstanding early data for TAC928 in combination with chemotherapy with favorable safety data. We are looking forward to additional data cuts in the coming months as the trial matures. TAC921, also known as Arco Tabatican, is an oncology program that has received less attention but remains highly promising. Strong progression-free survival data was announced from our partners at InnoVent in June from a regional Phase III trial in third-line gastric cancer. We plan on filing in Japan in fiscal year 2027 using mature overall survival data from this trial. In PDT, TAC 881, our 20% next generation facilitated sub-QIG is advancing towards a US filing in primary immunodeficiency and filings in multiple indications in Europe and Japan. Let me close where I began. What you're seeing from Takeda R&D is the result of our sustained focus on pursuing science, but we have the depth to lead. and commitment to discipline choices that allow us to advance programs with the most meaningful patient potential. Orzaful, Rust for Tide and Zazocitinib are the leading edge of that strategy. And behind them is a pipeline with the depth to sustain this momentum well into the future. If we take a step back, we anticipate U.S. launch of Orzaful in the second half of 2026, Rusvertide launch in the second half of 2026 and Zazocitinib launch in the first half of 2027. Three potential new standards of care launching in close succession, two of which carry breakthrough and fast track designations. This is the launch cadence that underpins our confidence in Takeda's growth trajectory. I have never been more confident in the science, and the team behind it, and in our ability to improve patients' lives and build a healthier world for generations. I look forward to sharing our continued progress with you. Thank you. And with that, I'll turn it back to Julie to wrap up the presentation. Julie.

Thank you, Andy. As you have heard, the momentum across our R&D organization is translating directly into tangible milestones with the goal of bridging us from transformation to growth acceleration. We are also dedicated to operational discipline and our enterprise transformation is already starting to unlock capital to reinvest in our pipeline and launches. In summary, we are delivering on our priorities in Horizon One towards a clear set of operational and financial goals. These milestones will enable us to secure a strong foundation that will advance us to Horizon 2, an era that will be defined by accelerated revenue growth, structural margin expansion, and sustained value creation. We know our shareholders are eager to discuss more details of this path forward, and I am pleased to announce that we will host a Capital Markets Day in Tokyo on December 11, 2026. At that event, the executive team and I will provide a deep dive into our pipeline progress and mid to long-term financial ambitions in line with our Two Horizons strategic roadmap that will guide our growth through the end of the decade and beyond. We have the right strategy, a highly competitive portfolio, and a united, deeply committed global team. I am proud of the progress we made this quarter, and I am incredibly energized by the trajectory we are on. With that, I'll now turn the call over to Chris for Q&A.

Thank you very much.

Thank you. My question is Yamaguchi from Citi. I have two questions. The first question is the overall earnings. And Milano-san mentioned gross margin on the Q1 seemed to be relatively high compared to full year guidance. And you talk about some mix, product mix, but also you talk about some divestiture related things. So how much is contributing this divestiture thing and is it just one-off or not? So can you give me comment on those gross margin prospects, Q1 and full year? The second question is that you may not have answer yet, but all therefore is now approved in China and also will be approved in the US and Japan. Can you give me the overall strategy, how you're going to position this drug compared to the current therapy? Are you going to add on or are you going to replace? Are you going to take the new patient or are you going to take the share from the existing patients? How about the pricing strategy? So if you have any kind of general strategy on a global basis on the OZ4, please let me know. Thank you. Those are two questions.

Thank you, Yamaguchi-san. So the first question on breakdown of gross margin performance, so Milano can take that. And then the second question on Orzaiful as we prepare for global launch, any additional commentary on positioning, where we'll get the patients, pricing, etc. Julie can comment on that one. Milano?

Thank you for your question, Mr. Yamaguchi. I would like to explain some of the points that Mr. Yamaguchi mentioned. As Mr. Yamaguchi said, the gross margin has improved by 1.4 points compared to the same period last year. In fact, the impact of the product mix It was almost neutral. The one-time contribution that was mentioned earlier was also relatively small. This is a temporary milestone income with the completion of the technical evaluation of the technical evaluation, which leads to the reduction effect of the cost. It's relatively small in Q1, and it's even smaller in Q2, so I think it's almost negligible when you look at it in Q2. In Q1, the one that actually contributed to the improvement of the rough rate was the PDT product. Thank you for watching. are the biggest factors that led to a significant improvement in the P&D value of the U.S. dollar. As for the second quarter of the question, the first quarter has only just ended, and we expect a 65% drop in May. Thank you, Yamaguchi-san, for the question about Orzeful positioning. So let me share a few thoughts with everyone on this.

First, just a quick reminder why we're so excited about Orzaful. It is the first in class and potentially best in class orexin agonist designed to treat the underlying orexin deficiency that causes NT1. And as you saw from the information that we shared previously and Andy shared on the call today, the efficacy across broad disease spectrum is really impressive. And so We do anticipate that Orzaful will redefine the standard of care in NT1. So in terms of how we expect Orzaful to be used, we studied it as a monotherapy. So that is our anticipation that Orzaful is an effective monotherapy treatment. In terms of where the patients will come from, I would say there's two sources. First and foremost, we will be addressing the patient need for individuals who are already diagnosed with NT1 and already on therapy. That will be the initial source of growth for orzaful. The second source of growth will come from improved diagnosis. This will take a bit longer time. in order to drive better diagnosis, but that would be the second source of growth. And I think your third question was on pricing for Orzaful. So obviously we don't share pricing at this point ahead of launch, but in general, our approach to pricing is to ensure appropriate value recognition for the transformative nature of the medicine, but at the same time, Thank you. Thank you. The next question is from Mr. Muraoka of Morgan Stanley. Thank you.

Well, the first question is about 360. Is it better to think about the announcement of 360 data before the capital market day or at that time? Also, the phase 2 of NT1 is being started at 360. この背景ですね、価格戦略を柔軟にしたいのか、1日1回をやはり必要になっていると考えているのか、このあたり背景を教えてください。それが一つ目の質問。 One more thing, how to announce the UCCD of ZASO. I heard you said it was at the end of the year, but is this UCCD announced together, and is it a press release, or will it be announced in the third quarter? Please tell me what kind of style it will be. That's all.

Thank you, Murawaka-san, for the questions. So the first on TAC360 data disclosure timing, would that be ahead of the Capital Markets Day in December? And then What is the positioning or the background behind studying TAC360 in narcolepsy type 1? And then the second question on timing of zazacitinib UC and CD data and also how that data would be presented. Will you announce the results of both studies simultaneously? So both of these questions, I'd like to call on Andy to comment on those, please.

Great. Thanks, Chris. And thank you very much, Maroka-san. This is Andy Plump. So firstly, with respect to TAC360, so I'll just remind everybody that TAC360 is in the midst of three ongoing phase two studies, one in idiopathic hypersomnia, one in type two narcolepsy, and then recently started one in type one narcolepsy. In terms of timing for the former two, IH and NT2, the study design is built around an adaptive design that allows us to rapidly pivot and explore both dose and dose regimen. We're testing both once a day and twice a day doses. So in such a design, we don't have a clear end date. Thank you very much. With that said, we are at the very front end of understanding what araxin agonists can do across a broad range of diseases. And so our interest is to continue to learn more and to continue to explore. With respect to Zazocitinib and IBD, both the UC and Crohn's disease trials are going well. We expect to have data by the end of this fiscal year. In terms of how and where we present those data, that's still something that we're sorting through. Thank you.

Thank you very much.

Thank you very much. Next, we have Matsubara from Nomura Shoken. Thank you for your time.

The second is about Lusperatide. This is also coming to PDFA in August, but can you tell us whether the price is more acceptable than the psychological burden in the discussion of the strategy in the field of science in comparison to the blood?

Thank you for the question. So the first on Entivio growing at 3.8%, a constant exchange rate in the first quarter. So any comments on sort of prescription trends, how the performance is going for Entivio? And then the second question on Rusfotide, in particular, how you go positioning versus phlebotomy in terms of pricing strategy. So I think both of those questions, Julie, I'd like to ask you to comment on those, please.

Thanks for the questions, Matsubara-san. Let me tackle Intivio first. So when we look at Intivio, as you know, it's been on the market for over a decade now, and we're pleased that we continue to be able to grow Intivio. It's still the number one prescribed brand in IBD overall, particularly with the first line leadership in UC. And when you look at the performance in the US, I would say a couple of things. Although sales We're down in Q1 year over year at constant exchange rate. We do see overall demand growth. The decline is due to pricing mix and lower days on hand. When we look at the growth of Penn, we continue to see very strong growth of Intivio Penn in the US. And so we're pleased with that continued progression. For our markets outside of the US, here we continue to see strong growth with 6.7% growth in Europe, 10% in Japan, and the rest of our intercontinental markets at just about 36% growth. So again, very strong performance for Intivio, driven by Intivio SubQ or the PEN, across all of our markets. So for the full year, we do expect to be able to hit our guidance. Your second question in terms of Russ for Tide pricing. So again, we won't share details of pricing at this point, and I'll just reiterate that our approach to pricing is to make sure that we can receive appropriate value recognition for Russ for Tide, but also allowing Thank you very much.

Thank you, Matsubara-san. For the next question, I'd like to call on Mike Nedeljkovic from TD Cowen. Please go ahead and ask your question.

Hi, thank you so much for the questions. I have two. My first is actually on mezogidamab. Back in December 2024, you laid out a peak sales ambition in ITP and IGAN of 1 to 3 billion US dollars. Have there been any developments in either mezogidamab's development or in the competitive landscape that make you more confident in one or the other end of that range? And are there any indications being explored that could be added to this target in the near future? So that's my first question. And then my second question is on the risk of Intivio biosimilars in the U.S. What's the roadmap from here to your estimated 2032 timeline? What is the next step that we should be monitoring? And is there any Intivio PIN IP that could extend exclusivity further than 2032? Thank you.

Great. Thank you, Mike. So the first question on how we're progressing with mezoginamab and thoughts on recent developments in these markets. I think Andy can take that question. And then the second on biosimilars for Entibio and sort of route from here to 2032 in terms of biosimilar entry and whether the pen gives us any extended IP. Julie can answer that question, please.

Mike, thank you. Thank you very much. This is Andy. So as you know, we have two ongoing phase three studies for mezoginamab. One is in third line ITP and the other is in IGAN. We just recently started a phase two program in antibody mediated rejection. So we have three indications that are going rapidly with mezoginamab. We do continue to look at additional indications. Thank you so much for joining us. Thank you so much for joining us. Thank you so much for joining us. So we believe we have a product that not only is going to be differentiated in terms of its safety and efficacy, but also in terms of its administration schedule.

Thanks, Mike, for your questions. And let me just add a quick comment because I think you did also inquire about peak sales estimates for Meza. So we're not changing any peak sales at this point, but when we get to the capital markets day in December, we will provide Thank you. Thank you. Thank you. We expect it to still be roughly three to five years in litigation. We will defend our IP positions. We feel very good about our IP position. And so this is something that we will continue to provide updates on, but no change in overall timeline.

Thank you so much.

Thank you, Mike. And so for the next question, I'd like to call on Miki Sogi from Bernstein. Miki, please go ahead and ask your question.

Thank you. I have two questions. The first one is to Andy about IVI-363. So, you know, on the page 23, I see that you have achieved the proof of concept of this product for second line non-squamous, non-small cell lung cancer and first line non-squamous. So are these the data that we have not seen? And then we are also, we should be expecting to see the data at ESMO this year. That's the first question. Second question is about, you know, the new product launches of Oveparexone and Rasprotide. To be honest with you, I'm a little bit surprised that you didn't really mention any commercial products Launch preparation during this presentation despite the fact that launch or approval is imminent. And I'd like to see what are the key operational KPI that you are currently thinking of for these product launches and hopefully we will get the update on that later on.

Thank you, Miki. So the first question on TAC 928 POC achievements, as we've marked on this slide, so Andy can provide some color on that. And then the second question, Orzaful, Russ for Tide, launch preparation, what the operational KPIs will be, etc. Julie can comment on that one, please.

Great, thank you, Mickey. So just to remind everybody, IBI-363, or what we now call TAC-928, is our PD-1 IL-2 alpha-biased bispecific protein that we've partnered with InnoVent on. We're pursuing multiple indications in parallel. We've already started a Phase III global program in IL refractory second-line squamous non-small-cell lung cancer. And to your question, Mickey, we now have very encouraging results Thank you for having me. Thank you for joining us. We have maturing data that was presented at ASCO by our partners at an event that suggests response rates of upwards of 80%. So we'll continue to track maturing data, but we're preparing to start that phase three study later in this fiscal year.

Oh, Andy, I have a follow-up question on the first line. I believe that, you know, the data that was presented at ASCO was, you know, dose escalation or dose selection phase, and you are running or Innovant is running the dose experimentally. So-Young Kim, Norimasa Takeda, Michael Fox, Haruhiko Hirate, Iwaaki Taniguchi, Christophe Weber, Andrew Plump,

Thank you very much. Of course, the phase three study will be done depending on the mutation burden. It will be done either against a PD-1 PEMBRO with chemo or versus a PD-1 alone. In terms of the maturing data, Mickey, we don't have specific plans to share today as to when those data will be available, but we assure you that as those data mature, we will present them in rapid fashion.

So thank you for the question, Sogi-san. Maybe I wasn't excited enough in my voice. I did talk about the launch preparation during the presentation, but let me share in more detail so that you get a sense of what we've been doing. So first I will tackle Orzaiful. When you look at the, and I'm assuming you're asking specifically about the US, although both China and Japan are also We now have the approval, as you heard. One thing I do want to say about China is that the submission for NRDL approval, the window is only once per year. And so the approval came after that window. So we won't be able to submit for NRDL until next year, meaning NRDL listing wouldn't be available until January of 2018. So between now and then, we will focus on private market, and then the full launch will be after we receive, hopefully we receive NRDL listing. So in the US, as I mentioned during the presentation, we've had our MSLs in the field now for over a year. focused on awareness and education around orexin and the mechanism of action. We've had our sales in the field, mapping accounts, getting introduced to the sleep centers in particular. We've been running disease state education campaigns. We've been having payer meetings. Our specialty is Pharmacy Network and patient support programs are ready to go. So at this point, we are waiting for the FDA approval and then the subsequent DEA scheduling, and we'll be ready to go. For Ruspertide, some very similar activities, again, in the field doing education and awareness. As I mentioned in previous calls, there is a sense of inertia in terms of the Thank you very much. and of course the payer engagements. So all of that is in play. In terms of the things that we, metrics that we'll be looking at, it'll be things like patient numbers, payer coverage and source of patients. So hopefully that addresses your question.

Sure, Julie, I have one additional questions. What is your, the target of payer coverage after 12 months of launch? Commercial coverage.

Yeah, so we are trying to secure commercial coverage as quickly as possible. So at this point, I'm not going to share a target with you, but we want to make sure we have broad coverage.

Thank you.

Thank you, Miki. I think we'll take one final question. So we'll end with Stephen Barker from Jefferies. Steve, please go ahead and ask your questions.

Thanks, Steve Barker from Jefferies. So congratulations on the China approval of Orzaful. Could you clarify whether the approved label includes both the one milligram and two milligram tablet strengths? That is, do the physicians in China have the flexibility to prescribe either dose or is the label focused on the two milligram BID regimen that was tested in radiant light? and follow-up question, is the same strength profile reflected in the US and Japan applications, please? Thank you.

Thank you, Steve. So Andy, would you like to answer those questions, please?

So Steve, the label hasn't been released yet in China. And of course, we're still in the process of discussing the label in the U.S. and Japan. So we can't comment specifically what's on the label, but we can say that the expectation in China and the U.S. at least, we've not gotten to this point of discussions with Japan, is that physicians will have access to multiple doses for patients.

Okay, great. And if I can just follow up with a question about Tax360. There's two aspects of what you presented today that caught my attention. So you are testing it in NT1, which suggests that it has the potential to expand the market opportunity beyond orzaiful. I was wondering if you could explain that. And then also the fact that you're evaluating both once daily and twice daily dosing. If you could explain that development choice as well, please.

So just quickly in the interest of time, Steve, so again, we're fully confident in Orzaful and in the profile that we've seen for Orzaful, and we think it's going to be a best-in-class agent for type 1 narcolepsy. We also recognize that we're really at the front end of understanding what orexin biology can do across a range of diseases. understanding dose exposure and clinical response. And so with TAC360, given that it's relatively early in development, our goal is to be as thoughtful as possible within a disease, testing as broad a range of doses and dose regimens, as well as across diseases to understand what the potential of that molecule is. And once we have all those data, then we'll make decisions as to what doses we bring forward and what indications.

Fantastic. Thank you very much.

Thank you, Steve, for your questions. That brings our Q&A session to a close, and I'd like to now hand it over to Julie for some closing remarks.

So thank you, everyone, for joining us today and for your very thoughtful questions. I hope you are equally excited about our expected launches as we are. and I hope that many of you will join us later this year for our Capital Markets Day on December 11th here in Tokyo. I look forward to sharing our longer term ambition with you and spending a bit more time on our strategic roadmap that will guide our growth through the end of the decade and beyond. So thank you again for your time and have a wonderful rest of your day or evening.