Okay, good afternoon. My name is Shinichiro Muraoka, covering Japanese pharma in Morgan Stanley, in Japan, pharma team. Today, in this session, we will with Takeda. I'm extremely pleased to have Costa Saroukos, CFO of Takeda and Andrew Plump, President of R&D. Costa and Andy, thank you for joining us today. Thank you, Muraoka, for having us. Appreciate it. Thank you. Sorry, before starting this session, four important disclosures. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/research-disclosure. Okay, let's get started with Costa first. Your current earnings or outlook going forward. And your current growth drivers. First, about Entyvio. It's a quite amazing robust growth we have seen. But in the last two quarters, it looks a bit more delaying. And we understand that market is a bit slowing down. But could you elaborate the reason behind and how can we expect what can we expect going forward? Sure. Thank you, Muraokasan, for the question. Firstly, before I jump into Entyvio, let me say that we're very pleased with the start of the year. First quarter, we're seeing solid growth of top-line revenue of 3.7% at a constant exchange rate and 8.9% growth at a reported basis. What's the key driver for that growth? It's our growth and launch products. What's in that growth and launch products? PDT business. You're seeing that growing at 24% year to date. Strong performance there. Takhzyro, another solid performance in Q1, growing at 15%. And then Entyvio, growing at a slower rate at 7.1%. What are the reasons behind that? Twofold. Firstly, we're seeing in Europe, in the European markets, we've had some price cuts in January of this fiscal year, mainly in the UK with VPAS. We're also seeing price cuts in France and Germany. That's putting a significant pressure on the growth. However, by January next year, that'll wash out. We're comparing apples to apples from that standpoint. Then when I look at the U.S., you're seeing with the U.S., there's a couple of things. One, last year quarter one, we had some timing of some shipments. That sort of skewed the growth rate last year. But we are also seeing some softness in the overall IBD growth. There's some more competition pressures there, but we're continuing to keep an eye on it. What we're very excited about is the potential approval of Entyvio subcutaneous for UC, and we expect that to happen this month. That will be potentially another catalyst to drive new patients. At the end of the day, we're still very confident that we're going to deliver peak revenue for Entyvio anywhere between $7.5 billion-$9 billion. So that's something that we're very excited about. And I think the subcutaneous UC approval and potentially also the CD subcutaneous approval will be another catalyst for accelerated growth. You believe so, yeah, that two quarters are single-digit growth, but maybe you can return into. Yeah, absolutely. Absolutely. Well, we expect total revenue for Entyvio to be approximately $6 billion this fiscal year. So the $7.5-$9 billion, especially with the extended life cycle of Entyvio, where we expect the biologic biosimilars to come into the market in early next decade, we have a good runway. But of course, with the approval of subcutaneous, that will be another catalyst to accelerate the growth. Great. And in terms of, as you said, so biosimilar situation, as far as I know, so they are not so visible yet. Are there any changes? No changes to our guidance and forecasted timeline at the moment. We think it will be early, maybe 2032 to 2031. Time will tell. But we still have that sort of runway that we expect. No changes to that overall timeline of biosimilar entrance. Okay, so maybe we can expect the recovery of the momentum in the upcoming quarter. Correct. Great. Great. Thank you. Thank you. So yeah, so Entyvio, yeah, it's okay. And PDT, as you said, quite robust, quite good momentum of the sales. And so maybe in terms of the top line, I believe you can maintain such robust sales going forward, like peers as well. But so how can I say? So are there any risks for the top line of likely FcRn is cming or? So understood. We've known about FcRn. It's already factored in our guidance in the short, medium, and long term. We're very pleased with the performance of our PDT organization. Since the acquisition of Shire, we've created our own plasma-derived therapy business unit, end-to-end process. We've increased the number of collection centers. We're ramping up capacity. We're improving immensely the cost base and efficiencies, leveraging data and digital technology. We're one of the first ones from a volume standpoint compared to our peers to come back to pre-pandemic volume levels. And last year, we also reduced our donor fees by approximately 15%. So that's also improved our overall. We've done a significant improvement in our operating profit. So that's a good signal. At the same time, Q1 has been phenomenal. Growing at 24%. The full year target or full year forecast is anywhere between 10% to 20%. So I'm very confident that we're going to deliver that and also believe on the future state to grow at or faster than the market in 2024 and beyond. Great. Great. So the top line, so quite robust. How about the bottom line or margin? So, margin, we don't disclose the actual margin, but I can tell you with the actions that the team has done in the last couple of years, in particular the ramp-up of capacity, the end-to-end process efficiencies, leveraging data and digital technology throughout the value chain from the donor experience, from the time the donor comes into the site until the operational efficiencies overall, and also the donor fee reduction since last year, that's starting to filter through to the P&L and improve the bottom line. I believe that overall today, the PDT business is diluted to the overall Takeda corporate profit margin. All the signs are very positive, and we're seeing it already in Q1. I believe that this business will be no longer diluted in the next, say, three to five years. Great. Great. Great. So in terms of the collection, so it's also going quite well. So are there any concerns over the collections as well? I mean, the collections are doing well. We've ramped up the number of collection centers as well. So we're over 230 collection centers globally. And then this year, we're expecting to increase the number of collection centers by approximately 20. So the team's doing a remarkable job on the collections and ramping up capacity as well to deliver that 65% capacity volume base as well. Great. And so the other side of the current business, LOE is now coming. So in terms of Vyvanse. So in the end of August, U.S. LOE has come. Could you update what's ongoing? You can imagine it's very fresh and dynamic, but we have already seen some generics come into the market in the U.S. We had loss of exclusivity end of August, as you highlight. It's been 10 days since the loss of exclusivity, and we're monitoring the situation, and we have seen that there has been some generics. We still don't know how many yet. But we have also given our forecast assumes an erosion rate of anywhere between around 35%-38% erosion. We're continuing to monitor the erosion curve. At this stage, no further information I can share with you. Perhaps we'll have more information in Q2 once we have some more data points, and that's where we are. But roughly mostly on track. On track to our guidance at the moment, which means that we'll take a hit this year on the loss of exclusivity impact. And that means if we deliver, well, if the loss of exclusivity erosion curve is aligned to our forecast, that means that we expect 2024 to be a return to growth. We've given our guidance and top line of low single digit negative growth this year due to Vyvanse and Azilva. Azilva in Japan’s already had its impact from June, loss of exclusivity. So that's happened. Yeah. Great. But just to confirm in terms of Vyvanse so as of before the LOE, so sales momentum was amazingly strong. So in the past, so one, two, three, four, five months of this fiscal year, you are recording maybe a bit better, higher than you had initially expected. That's correct? Yeah. But again, it's so volatile. It's so dynamic. We continue to monitor how many generics will come into the market. We've got our own assumptions, and then we'll see whether that plays out. If less generics, less erosion curve, that means we have better performance this year, which means that the growth will probably be not in 2024 but 2025. But at this stage, we think that the erosion curve will be quite aligned to our guidance, and hence the reason we believe 2024 will be the return to growth story for Takeda. Yeah. Yeah. Thank you. So you already have answered to my next question. So what's the total earnings on this fiscal year ending in March, fiscal March 2024, and what we can expect in fiscal March 2025? So my question is, so yeah, better than so including currency benefits. So your current fiscal year, initially, we had expected negative growth in core operating profit. But the negative growth, negativity is moderated more. So when we give guidance, we give it on a constant exchange rate. So you said all the constant exchange rates captured there. So we don't benefit from the fluctuations. But on an actual basis, you're right. We are seeing the weakening of the yen versus the U.S. dollar allows us to have greater revenue on an actual basis. Having said that, the weaker yen to the euro puts pressure on our cost of goods because many of our manufacturing plants are in Europe. So yes, we may get the upside on an actual basis on revenue, but we're being impacted relatively consistently on the cost of goods. So net on the operating profit, it might be neutralized. But time will tell. Yeah. Yeah. Got it. And in terms of the next fiscal year, it's up to the velocity of the erosion. Correct. Correct. The good news is that after Vyvanse, we don't have any major loss of exclusivity for Takeda until Entyvio biosimilar entry comes in, which could be 2032. So it's all about, okay, we understand we've been very transparent on the headwinds on loss of exclusivity with Azilva, Vyvanse. The Vyvanse whether it happens completely this year or next year. But beyond that, we have a small amount of loss of exclusivity impact until Entyvio biosimilars. We have so much exciting new product launches that we expect in the next six years. That's where Andy can also play a big role on executing on the pipeline as well to help with the launches. Yeah. Great. We're very excited with the future growth. Yeah, I would like to move to Andy's part, so pipeline. First of all, sorry, before I'm done, in terms of Q2, you already have, say, the $1.6-$2 billion big potential. But after that, you withdrew in the U.S. market for filing, approval filing. But does that affect your big sales estimate? Sure. So of course, it's disappointing that we have to withdraw in the U.S. But overall, the size of the U.S. market for Q2 was very small. So no impact to the peak revenue of $1.6 billion-$2 billion guidance. Okay. Great. Thank you. Then I would like to ask about the pipeline to Andy. First, today, this morning, sorry, you may have made a press release of TAK-279, oral TYK2, the good safety profile to be observed for psoriatic arthritis. Could you elaborate briefly about the result first, please? It's great to see you. And of course, it was coincidental that we put out the press release on the day of the. Yeah. Thank you. But so it's just a directional press release. We'll be presenting the data at an academic conference later this time of year. So we'll have a chance to see those data. This is psoriatic arthritis. We felt there was a very good chance we'd be successful, and we were quite excited about the data set. This is now the second proof of concept that we have for TAK-279. The first is in psoriasis. And we presented those phase 2b data earlier in the year at the American Academy of Dermatology. And based on those data, we feel very confident that we have a best-in-class drug. We're in the process of kicking off our phase 3 program. We expect to have our first patient enrolled at a 30-mg dose sometime later this calendar year. So that's going full speed. We're in the process of planning a head-to-head study against Sotyktu. We think that based on the phase 2b data, based on the consistency of the PASI endpoint, the PASI 100 endpoint in particular, it's a very specific measure. There's not a lot of noise around that. We think that we have a very good chance and a reasonably stellar study to demonstrate superiority. And our hope is that by the time we launch, we'll have our two phase 3 studies, which will start this year, plus the head-to-head to really drive market access and penetration. So those two are off and moving. And then we've got three other indications that we're pushing forward in parallel very aggressively: lupus, ulcerative colitis, and Crohn's disease. And for ulcerative colitis and Crohn's disease, there's substantive data that suggests that we'll need more TYK2 inhibition than what you would need to see efficacy in any of the first three indications. That gets to where we really think the differentiation is for this highly selective TYK2 inhibitor, TAK-279. That's that we've hit TYK2 and we have no activity on JAK. We can dose that significantly above that 30-milligram dose. We've actually decided that we think that dose will need to be and we've had very positive interactions with the agency. We'll be moving forward with UC and Crohn's. Those are the five core indications. If you know the biology of TYK2, I've said there are plenty of expanded potential indications. We're going through a process where we're looking at biological rationale. We're looking at the competition and unmet medical need across these diseases. Of course, we're looking at the commercial opportunity. Then we'll winnow those down. We'll probably end up pursuing an additional four to six indications. Of course, with now IRA front and center for everybody, ourselves included, we can't do this sequentially. So we'll be bringing forward these indications in parallel. The way we think about it, it lines up this way that by the time biosimilar entry comes in from Teva, our expectation is we will have approvals and hopefully launches for that entire array of potential indications. Great. Great. Yeah. In terms of the competition, so in June, July, sorry, I forgot to detail that. So all our IL-23 data was available. What's your takeaway? So I mean, of course, the other new parameter is the space, IBD, in particular. It's incredibly competitive both with respect to biologics and with respect to oral agents. There are very few in some of these diseases, IBD included, psoriasis, there are very few oral agents that really have an efficacy profile that patients with more moderate to severe disease need. So we think that there's room for multiple entrants. Certainly, within the TYK2 class, we have, including the front-runner and what's behind us, we believe we have the best-in-class molecule in terms of potency, selectivity, the behavior of the molecule, the decay of the molecule, and the clinical data now support that. So we're actually focused executing on this mechanism. What will happen with the other mechanism? There's still a lot of potential, but also a lot of unknowns. We're just focused on ensuring that we can do this development program well and fast. Yeah. Great. So in terms of that, so you have guidance over the timing of filing 2025 to 2026. To be honest, quite broad. But is that possible? To file the first indication for oral TYK2 in 2025. Is that doable? 2025-2027. So 2025 would be the fastest. 2027 would be the slowest. I think the bottom line is that we need to. This will be the largest program that we've ever run in terms of number of sites, number of countries that are involved. We actually have implemented a new development model we call G-CHIPS. And it involves really bringing in digital data and patient analytics so we can. This is the first time we're doing this, understand better where these patients are and how we can more rapidly access these patients through campaigns. So this is a bit of a new space for us. So once we start enrolling that trial and we start to see what the trends are, we'll start to be able to tell you with more precision what exactly that filing timeline would look like. Great. Thank you. And moving to the orexin program, TAK-861. So maybe this week, next week, you will be presenting the first initial clinical data at the medical conference. And I assume the abstract. But yeah, efficacy-wise, it's quite robust. But safety-wise, sorry, I forgot the word. Micturition risk is also highlighted. So could you read over so let me understand what's the pros and cons of TAK-861? Sure. So, just dialing up for a second. So we've been working in orexin biology now for 10 or 12 years. And together with TAK-279, this is our largest investment both clinically and for orexin preclinically. And we think this orexin pathway. There's immense enthusiasm about this pathway. The potential to functionally cure patients with type 1 narcolepsy, not just the excessive daytime sleepiness, but the cataplexy and the many other associated symptoms with this disease, we think that that's in reach. But when you start to look at the biology of this neural circuit, you start to uncover, not unlike what we have with TAK-279, perhaps eight or 10 or 16 different potential indications. And we believe that that will likely require a number of different molecules with different characteristics and biophysical features. One example is TAK-925, which is our IV molecule that we're now in the process of developing in hospital settings. We're looking at it in the postoperative recovery setting. We're very excited about not just the ability of this molecule to wake these patients up, but to change their physiology. Really interesting elements that we'll be playing out over time. TAK-861, the opportunity with TAK-861 is quite significant. We think we have the potential to have efficacy like the best-in-class orexin receptor 2 agonist, like TAK-994. We've shared the TAK-994 data. People have seen that in the New England Journal paper that came out earlier this year. The issue with TAK-861 is that we're quite cautious in terms of the maximal dose. We're conservative. We've said this many times, but empirically, we don't want to do much above 10 milligrams in terms of our aggregate daily dose. There's a lot of history around drug-induced liver injury that suggests that you can keep your exposure below 10 milligrams. You just don't see this liver injury. The reason for that is these natural scavenger systems that exist in the liver that can clear what we think of as the toxic metabolites that are driving this liver injury. You're referring to, though, orexin on target mechanism-based tolerability issues. I would say there are two that we focused on. One is obvious. It's insomnia. We've learned, we think, how to mitigate insomnia. The second, for reasons that we're beginning to understand better and better, and perhaps how to mitigate with next-generation compounds, are urinary urgency. Now, we're not worried about this as a showstopper. With the exception of one patient that we studied in the entirety of the TAK-861 phase 2b program, it's mild in severity. One patient had a moderately severe incident, and no patient has dropped out of the study because of it. Furthermore, we actually have the eight-week phase 2b study that's ongoing, and these patients can opt into an open label extension, which is a one-year study, and then continue. We see 100% conversion of patients from the 2b study into the open label extension. I think that really tells you something about the experience of these patients on these orexin agonists and the fact that these urinary tolerability issues are really not dose-limiting. Simply speaking, it's manageable one. That's right. Great. Thank you. And so I'd like to also ask about, yeah, in terms of orexin, so complex landscape. So Jazz Pharma and Sumitomo Pharma as their lead product is, I understand, one year or one and a half year behind your TAK-861 program. So of course, information is quite limited. But what's your current understanding of the complex landscape? We're absolutely aware of the competitive landscape and something that we think a lot about because we own this mechanism. We own this chemistry space, and we own this translatability. We have to make sure that we win ultimately in the end. We think that TAK-861 has the potential to be a winner, and it's minimally a year ahead. I think it's not rocket science to develop in this space, but actually, we've learned from our TAK-994 to TAK-861 experience, especially not a simple severe disease. It's not a simple population to enroll. We think we have some advantages that can help to accelerate our program versus competitors. It's another reason why we have beyond TAK-861 and TAK-925 a set of next-generation molecules that over the course of the next six months will be coming into the clinic. We take these competitors very seriously. We think we have an understanding of what those molecules are and what their pros and cons are. And so we're watching it very carefully. And in the end, the clinical experience with these molecules will tell us how competitive they actually are. Great. Great. Thank you. So yeah. Now, I'd like to have only three minutes left. But if you from the audience have any questions, please raise your hand. But if not, maybe no. It's okay. So I will continue again. So I'd like to move to this question to Costa. So Costa allocation. So in your oral TYK2 acquisition in the end of last year, so it was $4 billion that acquisition. But I understand now you are not so much focused on the large-sized acquisition, but the tuck-in-like acquisitions are more realistic, I think. But could you, yeah, let us know again your current strategy of the acquisitions? Sure. Let me update you on our capital allocation policy. So in May, we updated our capital allocation policy to focus on two areas. First one being investing in growth drivers, and that means continue to invest in our R&D, invest in new product launches, and also tuck-in deals, bump-on deals, not major M&As. Now, I don't think we need to do an M&A acquisition the size of a Nimbus. I mean, that was a $4 billion acquisition. Very excited about that asset, but in the future, they'll be more smaller in magnitude. Having said that, we were able to afford that $4 billion. $3 billion we paid out of cash on hand because of the great work we've done deleveraging, delivering our synergies, and improving our operating profit margin. At the same time, I did want to highlight that our total debt level as a company, we had the foresight three or four years ago to fix our interest rates. And so the total debt profile that we have, our interest rates are fixed at 2%. Yeah. So we're in a strong position from a cash flow, free cash flow standpoint. So we'll continue to invest in R&D, new product launches, and small bolt-ons that are aligned to our therapeutic area of focus and aligned to our R&D strategy, number one. Number two is enhancing our shareholder returns. What does that mean? We added a new focus area where we're saying it's a progressive dividend policy where we say we will either increase or maintain the dividend. So in May, it was the first time we increased our dividend from JPY 180 to JPY 188. It's our first time we've increased the dividend in 15 years. This is something. Why are we doing that? Because we're very confident in our future growth, very confident in our debt profile and management of our deleveraging profile, and at the same time, we have the ability to and we've captured share buybacks when appropriate, so we have two levers to pull from a shareholder return policy: increase or maintain the dividend or share buybacks when appropriate. Yeah. Thank you. Yeah. So the dividend increase for the first time in the last 15 years, yeah, the market appreciated a lot in a half a year ago. But it's a tricky question, but I know that. But next year, of course, it's up to the buybacks and losses. But if we assume that YoY earnings, in this case, you maintain the dividend, not the increase of the dividend. Is that right? Look, it's too early to communicate that. And we'll come back to you in the market in May of next year. But we're very confident with our free cash flow projection. We're confident in our return to growth. And the debt profile is well maintained and well managed. So again, we don't envisage ourselves not to continue to focus on our shareholder return policy. So that's something that will provide more color towards the end of the fiscal year. Great. Great. Thank you. Thank you very much. So now time has come. Thank you very much, Costa and Andy, for joining today's session. Thank you very much. Thank you very much.