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.