Takeda Pharmaceutical : Quarterly Securities Report for the 1st Quarter

Table of Contents

Quarterly Securities Report

(The first quarter of 146th Business Term)

for The Three-month Period Ended June 30, 2022

TAKEDA PHARMACEUTICAL COMPANY LIMITED

AND ITS SUBSIDIARIES

Table of Contents

Index

		Page
[Cover]	1
A. Company Information
I. Overview of Takeda	2
1.	Key Consolidated Financial Data	2
2.	Business Overview	2
II. Operating and Financial Review	3
1.	Risk Factors	3
2.	Analysis on Business Performance, Financial Position and Cash Flows	3
3.	Material Contracts	15
III. Information on the Company	16
1.	Information on the Company's Shares	16
2.	Members of the Board of Directors	18
IV. Financial Information	19
1.	Condensed Interim Consolidated Financial Statements	20
2.	Others	37
B. Information on Guarantors of the Company	38

Table of Contents
[Cover]
[Document Filed]	Quarterly Securities Report
[Applicable Law]	Article 24-4-7, paragraph 1 of the Financial Instruments and Exchange Act of Japan
[Filed with]	Director, Kanto Local Finance Bureau
[Filing Date]	August 4, 2022
[Fiscal period]	The first quarter of 146th Business Term
	(from April 1, 2022 to June 30, 2022)
[Company Name]	Takeda Pharmaceutical Company Limited
[Title and Name of Representative]	Christophe Weber, Representative Director, President & Chief Executive Officer
[Address of Head Office]	1-1, Doshomachi 4-chome,Chuo-ku, Osaka
	(The above address is the registered head office location and the ordinary business
	operations are conducted at the "Nearest Place of Contact")
[Telephone Number]	Not applicable
[Name of Contact Person]	Not applicable
[Nearest Place of Contact]	1-1,Nihonbashi-Honcho2-chome,Chuo-ku, Tokyo
	(Global Headquarters)
[Telephone Number]	[phone] (Main telephone number)
[Name of Contact Person]	Norimasa Takeda, Chief Accounting Officer & Corporate Controller, Global Finance
[Place for public inspection]	Takeda Pharmaceutical Company Limited (Global Headquarters)
	(1-1, Nihonbashi Honcho 2-chome,Chuo-ku, Tokyo)
	Tokyo Stock Exchange, Inc.
	(2-1, Nihonbashi Kabutocho, Chuo-ku, Tokyo)
	Nagoya Stock Exchange, Inc.
	(8-20, Sakae 3-chome,Naka-ku, Nagoya)
	Fukuoka Stock Exchange
	(14-2, Tenjin 2-chome,Chuo-ku, Fukuoka)
	Sapporo Stock Exchange
	(14-1, Minamiichijonishi 5-chome,Chuo-ku, Sapporo)

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Table of Contents

A. Company Information

I. Overview of Takeda

1. Key Consolidated Financial Data

		JPY (millions), unless otherwise indicated
		Three-month period		Three-month period		For the year ended
		ended June 30,		ended June 30,		March 31,
Term		2021		2022		2022
Revenue	949,603	972,465	3,569,006
Profit before tax	222,978	155,473	302,571
Net profit for the period	137,726	105,021	230,166
Net profit attributable to owners of the Company	137,684	105,014	230,059
Total comprehensive income for the period	197,005	784,617	824,427
Total equity	5,238,643	6,317,383	5,683,523
Total assets	12,657,234	14,065,426	13,178,018
Basic earnings per share (JPY)	87.96	67.94	147.14
Diluted earnings per share (JPY)	87.45	67.56	145.87
Ratio of equity attributable to owners of the Company to
total assets (%)	41.4	44.9	43.1
Net cash from (used in) operating activities	166,858	84,241	1,123,105
Net cash from (used in) investing activities	(70,445)	(94,714)	(198,125)
Net cash from (used in) financing activities	(411,038)	(215,717)	(1,070,265)
Cash and cash equivalents at the end of the period	654,920	645,991	849,695

(Note 1) All amounts shown are rounded to the nearest million JPY.

(Note 2) The key consolidated financial data for the three-month period ended June 30, 2021 and 2022 are based on the condensed interim consolidated financial statements prepared in accordance with IAS 34.

2. Business Overview

There has been no significant change in our business and our group companies for the three-month period ended June 30, 2022. As of June 30, 2022, Takeda consisted of 223 entities comprised of 206 consolidated subsidiaries (including partnerships), 16 associates accounted for using the equity method, and Takeda Pharmaceutical Company Limited. There has been no significant change in our group companies for the three-month period ended June 30, 2022.

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Table of Contents

II. Operating and Financial Review

1. Risk Factors
   For the three-month period ended June 30, 2022, there were no unusual changes in our business performance, financial position, and cash flows, as well as no significant changes in the risk factors compared to what we reported in our Annual Securities Report for the year ended March 31, 2022 which was filed in Japan.
2. Analysis on Business Performance, Financial Position and Cash Flows

(1) Consolidated Financial Results (April 1 to June 30, 2022)

Billion JPY or percentage

		FY2021 Q1		FY2022 Q1		Change versus the same period of the previous fiscal year
					Actual % Change	CER % Change*1
Revenue		949.6		972.5		22.9	2.4 %	(6.8)%
Cost of sales	(241.3)	(292.9)	(51.6)	21.4	%	11.3 %
Selling, general and administrative expenses	(219.8)	(231.5)	(11.6)	5.3	%	(4.4)%
Research and development expenses	(122.5)	(143.6)	(21.1)	17.2 %	4.4 %
Amortization and impairment losses on intangible	(102.8)	(131.3)	(28.5)	27.7	%	12.5 %
assets associated with products
Other operating income	11.1	5.5	(5.6)	(50.7)%	(52.5)%
Other operating expenses	(25.8)	(28.2)	(2.4)	9.4	%	(6.2)%
Operating profit		248.6		150.5		(98.0)	(39.4)%	(42.2)%
Finance income and (expenses), net	(25.2)	5.5	30.7		―	―
Share of loss of investments accounted for using	(0.4)	(0.5)	(0.1)	39.3	%	(2.0)%
the equity method
Profit before tax		223.0		155.5		(67.5)	(30.3)%	(33.7)%
Income tax expenses		(85.3)	(50.5)	34.8	(40.8)%	(41.7)%
Net profit for the period		137.7		105.0		(32.7)	(23.7)%	(28.7)%

*1 Please refer to Core Results (April 1 to June 30, 2022), Definition of Core financial measures and Constant Exchange Rate change, for the definition.

Revenue. Revenue for the three-month period ended June 30, 2022 was 972.5 billion JPY, an increase of 22.9 billion JPY, or 2.4% (CER % change: -6.8%), compared to the same period of the previous fiscal year. The increase is primarily attributable to growth from business momentum and favorable foreign exchange rates, offsetting the decrease of revenue in the current period due to sale of a portfolio of diabetes products in Japan to Teijin Pharma Limited for 133.0 billion JPY, which was recorded as revenue in the same period of the previous fiscal year.

Revenue of our core therapeutic areas (i.e. Gastroenterology ("GI"), Rare Diseases, Plasma-Derived Therapies ("PDT") Immunology, Oncology, and Neuroscience) increased by 145.8 billion JPY, or 20.6%, compared to the same period of the previous fiscal year, to 853.8 billion JPY. Each of our core therapeutic areas, except Oncology, contributed to positive revenue growth due to growth from business momentum and favorable foreign exchange rates. Generic erosion and intensified competition impacted certain Oncology products in the current period.

Revenue outside of our core therapeutic areas significantly decreased by 123.0 billion JPY, or 50.9%, compared to the same period of the previous fiscal year to 118.7 billion JPY, largely due to the aforementioned non-recurring 133.0 billion JPY selling price of the diabetes portfolio in Japan recorded as revenue in the same period of the previous fiscal year.

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