Takeda Pharmaceutical : Quarterly Securities Report for the 2nd Quarter

Table of Contents

Quarterly Securities Report

(The second quarter of 146th Business Term) for The Six-month Period and Three-month Quarter Ended September 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	16
III. Information on the Company	17
1.	Information on the Company's Shares	17
2.	Members of the Board of Directors	20
IV. Financial Information	21
1.	Condensed Interim Consolidated Financial Statements	22
2.	Others	42
B. Information on Guarantors of the Company	43

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]	November 4, 2022
[Fiscal period]	The second quarter of 146th Business Term
	(from July 1, 2022 to September 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
		Six-month period		Six-month period		For the year ended
		ended September 30,		ended September 30,		March 31,
Term		2021		2022		2022
Revenue	1,794,423	1,974,771	3,569,006
<> period ended September 30>	844,819	1,002,307
Profit before tax	284,425	220,022	302,571
Net profit for the period	183,721	166,753	230,166
Net profit attributable to owners of the Company	183,648	166,756	230,059
<> period ended September 30>	45,964	61,742
Total comprehensive income for the period	270,288	1,163,590	824,427
Total equity	5,324,361	6,713,489	5,683,523
Total assets	12,560,273	14,588,847	13,178,018
Basic earnings per share (JPY)	117.08	107.62	147.14
<> period ended September 30>	29.24	39.77
Diluted earnings per share (JPY)	116.40	106.88	145.87
Ratio of equity attributable to owners of the Company to
total assets (%)	42.4	46.0	43.1
Net cash from (used in) operating activities	400,011	305,234	1,123,105
Net cash from (used in) investing activities	(103,349)	(121,920)	(198,125)
Net cash from (used in) financing activities	(658,405)	(267,593)	(1,070,265)
Cash and cash equivalents at the end of the period	607,881	798,137	849,695

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

(Note 2) The key consolidated financial data for the six-month period ended September 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 six-month period ended September 30, 2022.

As of September 30, 2022, Takeda consisted of 220 entities comprised of 201 consolidated subsidiaries (including partnerships), 18 associates accounted for using the equity method, and Takeda Pharmaceutical Company Limited.

Change in the major group companies was as follows:

During the three-month period ended September 30, 2022 Takeda deconsolidated Baxalta GmbH due to the merger into Takeda Pharmaceuticals International AG, a consolidated subsidiary.

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Table of Contents

II. Operating and Financial Review

1. Risk Factors
   For the six-month period ended September 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 September 30, 2022)

Billion JPY or percentage

		FY2021 H1		FY2022 H1		Change versus the same period of the previous fiscal year
					Actual % Change CER % Change*1
Revenue		1,794.4		1,974.8		180.3	10.1 %	(2.3)%
Cost of sales	(517.1)	(598.3)	(81.3)	15.7	%	3.9 %
Selling, general and administrative expenses	(431.9)	(480.2)	(48.4)	11.2	%	(1.4)%
Research and development expenses	(254.1)	(297.8)	(43.7)	17.2 %	1.4 %
Amortization and impairment losses on intangible	(205.5)	(273.6)	(68.1)	33.1	%	13.2 %
assets associated with products
Other operating income	19.5	13.5	(6.1)	(31.0)%	(36.9)%
Other operating expenses	(59.4)	(83.4)	(23.9)	40.2	%	22.0 %
Operating profit		346.0		255.0		(91.0)	(26.3)%	(30.7)%
Finance income and (expenses), net	(58.0)	(33.6)	24.5	(42.2)%	(35.2)%
Share of loss of investments accounted for using	(3.5)	(1.4)	2.2	(61.3)%	(76.7)%
the equity method
Profit before tax		284.4		220.0		(64.4)	(22.6)%	(29.2)%
Income tax expenses		(100.7)	(53.3)	47.4	(47.1)%	(44.1)%
Net profit for the period		183.7		166.8		(17.0)	(9.2)%	(21.1)%

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

Revenue. Revenue for the six-month period ended September 30, 2022 was 1,974.8 billion JPY, an increase of 180.3 billion JPY, or 10.1% (CER % change: -2.3%), 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 the 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 315.6 billion JPY, or 22.0%, compared to the same period of the previous fiscal year, to 1,750.2 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 135.2 billion JPY, or 37.6%, compared to the same period of the previous fiscal year to 224.6 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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