OSAKA, Japan--(BUSINESS WIRE)--Takeda Pharmaceutical Company Limited (TOKYO:4502)(NYSE:TAK):

Underlying Revenue declined -0.8% vs FY2018 Q1 pro-forma revenue1

• Takeda’s 14 global brands, with an aggregate revenue of 270.2 billion yen posted strong year-over-year growth of +22%. This growth mostly offset the negative impact from intensified competition, phasing, and generic erosion.
• Takeda’s 5 key business areas represent ~78% of revenues.
  • GI grew +8% spearheaded by ENTYVIO continuing to gain market share.

  • Plasma Derived Therapy (PDT) Immunology grew +2% driven by Albumin growth, with Immunoglobulin (IG) sales impacted by phasing of Intravenous Immunoglobulin (IVIG) shipments.

  • Rare Diseases declined -10% with rare hematology impacted by competition and price pressure, and strong uptake of TAKHZYRO not fully offsetting the decline of other Hereditary Angioedema (HAE) products due to the switch to TAKHZYRO and stocking in FY2018 Q1.

  • Oncology grew +8% driven by expansion of NINLARO.

  • Neuroscience grew +10% driven by the U.S. business under a new commercial structure.

Underlying Core Operating Profit Margin 32.4% for Q1

• Reported Operating Profit declined 90.0% to 9.9 billion yen, largely impacted by one-time integration costs as well as non-cash purchase accounting expenses including unwinding of inventory step-up, and increased amortization of intangibles and impairment.
• Underlying Core Operating Profit Margin for the current period was 32.4% reflecting synergy savings and continued OPEX discipline.

Achieved several important pipeline milestones in Q1

• Currently 19 New Molecular Entity assets in Phase 2 & 3.
• Advances in Cell and Gene Therapy platforms where CAR-T Cell Therapy from T-CiRA moves towards clinic and the integration of Adeno-Associated Virus-based (AAV-based) process development and manufacturing center in Austria.
• ENTYVIO subcutaneous formulation achieved primary endpoint as maintenance therapy in Crohn’s disease.
• Orexin 2 receptor agonist TAK-925 received Sakigake Designation in Japan for treatment of narcolepsy.

Disposing non-core assets to generate cash and focus the business

• Net debt / adjusted EBITDA reduced from 4.7x at end of FY2018 to 4.4x as of June 2019, which does not include the $3.4 billion upfront cash payment received July 1, 2019 for the sale of XIIDRA to Novartis.
• Sale of TACHOSIL remains on track to close in second half of calendar year.
• Negotiations ongoing for further potential divestments.

Costa Saroukos, Chief Financial Officer, commented:

“Takeda had a very strong start to the year, delivering on our strategic priorities while successfully executing the integration of Shire. The combination of solid performance across our 14 global brands, continued OPEX discipline, and realization of cost synergies resulted in strong margins and cash flow. We are also making steady progress against our divestiture plan, with the completion of the XIIDRA sale on July 1st. 
For the full year, Takeda has revised management guidance upward to reflect updated VELCADE assumptions and divestitures, and now anticipates delivering an Underlying Core Operating Profit margin in the mid-to-high twenties. 
Takeda is relentlessly executing towards our cost synergy, de-leveraging, and margin targets. We remain on track to achieve our previously raised cost synergy target of $2 billion by the end of FY 2021, we are committed to achieving our 2x net debt / adjusted EBITDA target over the next three to five years, and our strong start to fiscal 2019 gives us great confidence towards realizing top-tier margins in the medium-term.”

1. Underlying Growth compares two periods (quarters or years) of financial results under a common basis and is used by management to assess the business. These financial results are calculated on a constant currency basis and excluding the impact of divestitures and other amounts that are unusual, non-recurring items or unrelated to our ongoing operations.
2. Growth versus FY2018 Q1 pro-forma revenue. Pro forma adjustments to reflect amortization of intangible assets as if the acquisition of Shire had occurred at the beginning of FY2018, while removing non-recurring costs related to the acquisition such as transaction costs. The adjustments also include removal of impacts related to Shire's oncology business which was divested in August 2018.
3. Core Operating Profit represents net profit adjusted to exclude income tax expenses, our share of profit or loss of investments accounted for using the equity method, finance expenses and income, other operating expenses and income, amortization and impairment losses on intangible assets associated with products and other items that management believes are unrelated to our core operations, such as purchase accounting effects and transaction related costs
4. Attributable to the owners of the company.
5. Not Meaningful

FY2019 Management Guidance: Upward revision to reflect changes to assumptions

• Takeda no longer assumes any additional U.S. competitor for VELCADE within FY2019
• Reflects divestitures of XIIDRA (closed July 1, 2019) and TACHOSIL (expected close CY2019 H2)

vi. Constant Exchange Rate growth (applying FY2018 full year average foreign exchange rate). Compared to baseline of 3,300 billion JPY (rounded pro-forma April 2018 - March 2019 combined revenue of Legacy Takeda and Legacy Shire, converted at April 2018 - March 2019 average exchange rate of 111 JPY/USD; also adjusted to remove the revenue from divested assets such as Techpool, Multilab, and TACHOSIL from Legacy Takeda, and the oncology portfolio and XIIDRA from Legacy Shire)

For more details on Takeda's FY2019 1st quarter results and other financial information, please visit https://www.takeda.com/investors/reports/

About Takeda Pharmaceutical Company Limited

Takeda Pharmaceutical Company Limited (TOKYO:4502/NYSE:TAK) is a global, values-based, R&D-driven biopharmaceutical leader headquartered in Japan, committed to bringing Better Health and a Brighter Future to patients by translating science into highly-innovative medicines. Takeda focuses its R&D efforts on four therapeutic areas: Oncology, Gastroenterology (GI), Rare Diseases and Neuroscience. We also make targeted R&D investments in Plasma-Derived Therapies and Vaccines. We are focusing on developing highly innovative medicines that contribute to making a difference in people's lives by advancing the frontier of new treatment options and leveraging our enhanced collaborative R&D engine and capabilities to create a robust, modality-diverse pipeline. Our employees are committed to improving quality of life for patients and to working with our partners in health care in approximately 80 countries and regions. 
For more information, visit https://www.takeda.com

Important Notice

For the purposes of this notice, “press release” means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed by Takeda Pharmaceutical Company Limited (“Takeda”) in connection herewith this press release. This press release (including any oral briefing and any question-and-answer in connection with it) is not intended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, exchange, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction. No shares or other securities are being offered to the public by means of this press release. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. This press release is being given (together with any further information which may be provided to the recipient) on the condition that it is for use by the recipient for information purposes only (and not for the evaluation of any investment, acquisition, disposal or any other transaction). Any failure to comply with these restrictions may constitute a violation of applicable securities laws.

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Forward-Looking Statements

This press release and any materials distributed in connection with this press release may contain forward-looking statements, beliefs or opinions regarding Takeda’s future business, future position and results of operations, including estimates, forecasts, targets and plans for Takeda. In particular, this press release contains forecasts and management estimates related to the financial and operational performance of Takeda. Without limitation, forward looking statements often include the words such as “targets”, “plans”, “believes”, “hopes”, “continues”, “expects”, “aims”, “intends”, “will”, “may”, “should”, “would”, “could” “anticipates”, “estimates”, “projects”, “forecasts” or words or terms of similar substance or the negative thereof. Any forward-looking statements in this document are based on the current assumptions and beliefs of Takeda in light of the information currently available to it. Such forward-looking statements do not represent any guarantee by Takeda or its management of future performance and involve known and unknown risks, uncertainties and other factors, including but not limited to: the economic circumstances surrounding Takeda’s business, including general economic conditions in Japan, the United States and worldwide; competitive pressures and developments; applicable laws and regulations; the success of or failure of product development programs; decisions of regulatory authorities and the timing thereof; changes in exchange rates; claims or concerns regarding the safety or efficacy of marketed products or products candidates; and post-merger integration with acquired companies, any of which may cause Takeda’s actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by such forward-looking statements. For more information on these and other factors which may affect Takeda’s results, performance, achievements, or financial position, see “Item 3. Key Information—D. Risk Factors” in Takeda’s most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission, available on Takeda’s website at: https://www.takeda.com/investors/reports/sec-filings/ or at www.sec.gov. Neither Takeda nor its management gives any assurances that the expectations expressed in these forward-looking statements will turn out to be correct, and actual results, performance or achievements could materially differ from expectations. Persons receiving this press release should not place undue reliance on forward looking statements. Takeda undertakes no obligation to update any of the forward-looking statements contained in this press release or any other forward-looking statements it may make, except as required by law or stock exchange rule. Past performance is not an indicator of future results and the results of Takeda in this press release may not be indicative of, and are not an estimate, forecast or projection of Takeda’s future results.

Certain Non-IFRS Financial Measures

This press release includes certain non-IFRS financial measures and targets. Takeda's management evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this press release. Non-IFRS results exclude certain income and cost items which are included in IFRS results. By including these non-IFRS measures, management intends to provide investors with additional information to further analyze Takeda's performance, core results and underlying trends. Non-IFRS results are not prepared in accordance with IFRS and non-IFRS information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with IFRS. Investors are encouraged to review the reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures.

Reconciliation from reported revenue to underlying revenue growth presented in accordance with IFRS are included as an appendix to this document.

Further information on certain of Takeda’s Non-IFRS measures, including reconciliations to the most comparable measures presented under IFRS, is posted on Takeda’s investor relations website at https://www.takeda.com/investors/reports/quarterly-announcements/quarterly-announcements-2019/

Medical information

This press release contains information about products that may not be available in all countries, or may be available under different trademarks, for different indications, in different dosages, or in different strengths. Nothing contained herein should be considered a solicitation, promotion or advertisement for any prescription drugs including the ones under development.

Financial information

Takeda’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). 
The Shire acquisition closed on January 8, 2019, and our consolidated results for the fiscal year ended March 31, 2019 include Shire’s results from January 8, 2019 to March 31, 2019. References to “Legacy Takeda” businesses are to our businesses held prior to our acquisition of Shire. References to “Legacy Shire” businesses are to those businesses acquired through the Shire acquisition. 
This press release includes certain pro forma information giving effect to the Shire acquisition as if it had occurred on April 1, 2018. This pro forma information has not been prepared in accordance with Article 11 of Regulation S-X. This pro forma information is presented for illustrative purposes and is based on certain assumptions and judgments based on information available to us as of the date hereof, which may not necessarily have been applicable if the Shire acquisition had actually happened as of April 1, 2018. Moreover, this pro forma information gives effect to certain transactions and other events which are not directly attributable to the Shire acquisition and/or which happened subsequently to the Shire acquisition, such as divestitures and the effects of the purchase price allocation for the Shire acquisition, and therefore may not accurately reflect the effect on our financial condition and results of operations if the Shire acquisition had actually been completed on April 1, 2018. Therefore, undue reliance should not be placed on the pro forma information included herein.

1 Growth versus FY2018 Q1 pro-forma revenue (3-month April-June 2018 combined revenue of Legacy Takeda and Legacy Shire, excluding oncology business). Please see the appendix for more details.

Contacts

Investor Relations 
Takashi Okubo, +81-(0)3-3278-2306 
takeda.ir.contact@takeda.com

Media Relations 
Kazumi Kobayashi, +81 (0)3-3278-2095 
kazumi.kobayashi@takeda.com