Takeda Delivers Strong Third-Quarter FY2024 Results; Raises Full Year Outlook, Forecasting Revenue and Core Operating Profit Margin Growth

Rhea-AI Summary

Takeda reported strong Q3 FY2024 results with revenue growth of 9.8% at actual exchange rates and 4.5% at constant exchange rate. Growth & Launch Products showed impressive momentum with 14.6% growth at CER. Core Operating Profit increased by 10.1% at CER, with margin reaching 28.5%.

The company has raised its full-year outlook, increasing its Adjusted Free Cash Flow forecast by JPY 150.0 billion to JPY550.0-650.0 billion. Takeda announced a share buyback program of up to JPY 100.0 billion, demonstrating confidence in business momentum.

The pipeline shows strong progress with three Phase 3 data readouts expected in 2025, and eight regulatory filings planned between FY2025-FY2029. Six late-stage programs have potential peak revenues of USD 10-20 billion in total.

Positive

• Revenue growth of 9.8% at AER and 4.5% at CER
• Core Operating Profit increase of 10.1% at CER with margin improvement to 28.5%
• Operating Profit surge of 86.3% at AER
• Adjusted Free Cash Flow forecast raised by JPY 150.0 billion
• Announced share buyback of up to JPY 100.0 billion
• Six late-stage programs with potential peak revenues of USD 10-20 billion

Negative

• None.

Insights

Financial Analyst

Takeda's Q3 FY2024 results reveal a compelling financial transformation, marked by exceptional execution across multiple fronts. The +9.8% revenue growth at AER, driven by a 14.6% surge in Growth & Launch Products, demonstrates the success of their portfolio strategy. The expansion of Core Operating Profit margin to 28.5% reflects impressive operational leverage and successful cost management initiatives.

The upgraded guidance is particularly noteworthy as it represents a dramatic pivot from the previous outlook. Moving from an expected mid-single-digit decline to a projected increase in Core Operating Profit signals strong business momentum and successful OPEX efficiencies. The JPY 100 billion share buyback program, combined with a +1,466% increase in adjusted free cash flow to JPY 568.3 billion, underscores robust cash generation capabilities.

The pipeline developments present substantial revenue potential, with six late-stage programs estimated to generate peak revenues of USD 10-20 billion. The anticipated three Phase 3 readouts in 2025 and eight regulatory filings planned through FY2029 create multiple catalysts for value creation. This robust pipeline, combined with improved operational efficiency and strong cash generation, positions Takeda for sustained growth trajectory beyond FY2024.

• Revenue Growth of +9.8% at Actual Exchange Rates (AER); +4.5% at Constant Exchange Rate (CER) Driven by Strong Momentum of Growth & Launch Products (+14.6% at CER)
• Core Operating Profit Increase of +10.1% at CER; Core OP Margin Climbs to 28.5%
• Reported Operating Profit +86.3% at AER Reflects Lower Impairment of Intangible Assets Compared to FY2023
• Raises Adjusted Free Cash Flow Forecast Range by JPY 150.0 billion to JPY550.0 - JPY650.0 billion
• Announces Share Buyback of up to JPY 100.0 billion

OSAKA, Japan--(BUSINESS WIRE)-- Takeda (TOKYO:4502/NYSE:TAK) today announced earnings results for the third quarter of fiscal year 2024 (nine months ended December 31, 2024) showing continued advancement of its Growth & Launch Products, which delivered double-digit growth of 14.6% at CER. The company has upgraded its full year outlook for growth, reflecting strong year-to-date product performance and OPEX efficiencies, as well as revised foreign exchange assumptions.

Takeda continues to advance multiple late-stage programs and is on track for three Phase 3 data readouts within the calendar year 2025. The company expects three regulatory filings in FY2025-FY2026 and five additional regulatory filings in FY2027-FY2029. Six of these late-stage programs are estimated to have the potential to generate peak revenues ranging from USD 10 billion to 20 billion in total and contribute to long-term growth.

Takeda also announced today its decision to buy back shares up to JPY 100.0 billion, underscoring confidence in its strong business momentum and commitment to shareholder returns. For details, see release: Takeda Announces Acquisition of Own Shares

Takeda chief financial officer, Milano Furuta, commented:
“We are raising our Management Guidance and reported & Core forecasts for the full year, pivoting to a growth outlook for revenue and operating profit on the strength of product momentum and OPEX efficiencies from our efficiency program. We are confident that we will grow our Core Operating Profit margin this fiscal year.

“As highlighted at our R&D Day in December 2024, we are on track to three Phase 3 data readouts within calendar year 2025, strengthening confidence in our long-term growth outlook.

“The announcement of our new share buyback program, approved by Takeda’s Board of Directors, demonstrates our commitment to shareholder returns.”

FINANCIAL HIGHLIGHTS for FY2024 Q3 YTD Ended December 31, 2024

(Billion yen, except percentages and per share amounts)
	FY2024 Q3 YTD	FY2023 Q3 YTD	vs. PRIOR YEAR (Actual % change)
Revenue	3,528.2	3,212.9	+9.8%
Operating Profit	417.5	224.1	+86.3%
Net Profit	211.1	147.1	+43.5%
EPS (Yen)	134	94	+42.1%
Operating Cash Flow	835.0	437.8	+90.8%
Adjusted Free Cash Flow (Non-IFRS)	568.3	36.3	+1,466%

Core (Non-IFRS)
(Billion yen, except percentages and per share amounts)
	FY2024 Q3 YTD	FY2023 Q3 YTD	vs. PRIOR YEAR (Actual % change)	vs. PRIOR YEAR (CER % change)
Revenue	3,528.2	3,212.9	+9.8%	+4.5%
Operating Profit	1,006.3	865.6	+16.3%	+10.1%
Margin	28.5%	26.9%	+1.6pp	―
Net Profit	698.9	643.6	+8.6%	+1.9%
EPS (Yen)	443	412	+7.5%	+0.9%

FY2024 Outlook
Updating Full Year Management Guidance and Reported and Core Forecasts

Takeda has upgraded its FY2024 Management Guidance, primarily driven by product momentum and OPEX savings. In addition, and also reflecting revised foreign exchange assumptions for the year, Takeda has raised its FY2024 reported and Core forecasts from the previous forecast. For more details, see release: Notice of the Revised Forecast of Consolidated Financials for FY2024 (IFRS)

FY2024 Management Guidance Core Change at CER (Non-IFRS)
	FY2024 PREVIOUS MANAGEMENT GUIDANCE (October 2024)	FY2024 REVISED MANAGEMENT GUIDANCE (January 2025)
Core Revenue	Flat to slightly increasing	Low-single-digit % increase
Core Operating Profit	Mid-single-digit % decline	Low-single-digit % increase
Core EPS (Yen)	Approx 10% decline	Flat to slightly declining

FY2024 Reported and Core Forecasts
(Billion yen, except percentages and per share amounts)
	FY2024 PREVIOUS FORECAST (October 2024)	FY2024 REVISED FORECAST (January 2025)
Revenue	4,480.0	4,590.0
Core Revenue (Non-IFRS)	4,480.0	4,590.0
Operating Profit	265.0	344.0
Core Operating Profit (Non-IFRS)	1,050.0	1,150.0
Net Profit	68.0	118.0
EPS (Yen)	43	75
Core EPS (Yen) (Non-IFRS)	456	507
Adjusted Free Cash Flow (Non-IFRS)	400.0-500.0	550.0-650.0
Annual Dividend per Share (Yen)	196	196

Positive Momentum in High-Value, Late-Stage Pipeline
The company is building strong momentum with its high-value, late-stage programs. The transformative value these programs can deliver to patients, as well as the significant revenue potential through 2030 and beyond, were presented at the R&D Day event held in December 2024.

Among the multiple late-stage programs presented, the company expects three Phase 3 data readouts in the calendar year 2025 with filings anticipated in FY2025-FY2026 for the following programs and indications:

• oveporexton (TAK-861) for the treatment of narcolepsy type 1,
• zasocitinib for the treatment of psoriasis, and
• rusfertide for the treatment of polycythemia vera, a rare chronic blood disorder

Moreover, five additional indication filings for late-stage programs are on pace for FY2027-FY2029.

• zasocitinib for the treatment of psoriatic arthritis,
• mezagitamab for treatments of immune thrombocytopenia (ITP), a rare immune-mediated bleeding disorder, and immunoglobulin A nephropathy (IgAN), a chronic progressive autoimmune mediated kidney disease,
• fazirsiran for the treatment of alpha-1 antitrypsin deficiency-associated liver disease, and
• elritercept for the treatment of anemia associated with myelodysplastic syndrome

Beyond its high-value, late-stage pipeline, Takeda will continue advancing its early-stage pipeline and focusing on strategic business development opportunities, to deliver treatments that have the potential to change patients’ lives.

Additional Information About Takeda’s FY2024 Q3 YTD Results
For more details about Takeda’s FY2024 Q3 YTD results, commercial progress, pipeline updates and other financial information, including key assumptions in the FY2024 forecast and management guidance as well as definitions of non-IFRS measures, please refer to Takeda’s FY2024 Q3 investor presentation (available at https://www.takeda.com/investors/financial-results/quarterly-results/)

About Takeda
Takeda is focused on creating better health for people and a brighter future for the world. We aim to discover and deliver life-transforming treatments in our core therapeutic and business areas, including gastrointestinal and inflammation, rare diseases, plasma-derived therapies, oncology, neuroscience and vaccines. Together with our partners, we aim to improve the patient experience and advance a new frontier of treatment options through our dynamic and diverse pipeline. As a leading values-based, R&D-driven biopharmaceutical company headquartered in Japan, we are guided by our commitment to patients, our people and the planet. Our employees in approximately 80 countries and regions are driven by our purpose and are grounded in the values that have defined us for more than two centuries. For more information, visit 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”) regarding 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.

The companies in which Takeda directly and indirectly owns investments are separate entities. In this press release, “Takeda” is sometimes used for convenience where references are made to Takeda and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

The product names appearing in this document are trademarks or registered trademarks owned by Takeda, or their respective owners.

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. Without limitation, forward-looking statements often include words such as “targets”, “plans”, “believes”, “hopes”, “continues”, “expects”, “aims”, “intends”, “ensures”, “will”, “may”, “should”, “would”, “could”, “anticipates”, “estimates”, “projects”, “forecasts”, “outlook” or similar expressions or the negative thereof. These forward-looking statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those expressed or implied by the forward-looking statements: the economic circumstances surrounding Takeda’s global business, including general economic conditions in Japan and the United States; competitive pressures and developments; changes to applicable laws and regulations; challenges inherent in new product development, including uncertainty of clinical success and decisions of regulatory authorities and the timing thereof; uncertainty of commercial success for new and existing products; manufacturing difficulties or delays; fluctuations in interest and currency exchange rates; claims or concerns regarding the safety or efficacy of marketed products or product candidates; the impact of health crises, like the novel coronavirus pandemic; the success of our environmental sustainability efforts, in enabling us to reduce our greenhouse gas emissions or meet our other environmental goals; the extent to which our efforts to increase efficiency, productivity or cost-savings, such as the integration of digital technologies, including artificial intelligence, in our business or other initiatives to restructure our operations will lead to the expected benefits; and other factors identified in Takeda’s most recent Annual Report on Form 20-F and Takeda’s other reports filed with the U.S. Securities and Exchange Commission, available on Takeda’s website at: https://www.takeda.com/investors/sec-filings-and-security-reports/ or at www.sec.gov. Takeda does not undertake 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 or statements of Takeda in this press release may not be indicative of, and are not an estimate, forecast, guarantee or projection of Takeda’s future results.

Financial information and Non-IFRS Measures
Takeda’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

This press release and materials distributed in connection with this press release include certain financial measures not presented in accordance with IFRS, such as Core Revenue, Core Operating Profit, Core Net Profit for the year attributable to owners of the Company, Core EPS, Constant Exchange Rate (“CER”) change, Net Debt, Adjusted Net Debt, EBITDA, Adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow. Takeda’s management evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this press release. These non-IFRS measures exclude certain income, cost and cash flow items which are included in, or are calculated differently from, the most closely comparable measures presented in accordance with IFRS. Takeda’s non-IFRS measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared in accordance with IFRS (which we sometimes refer to as “reported” measures). Investors are encouraged to review the definitions and reconciliations of non-IFRS measures to their most directly comparable IFRS measures, which are in the Financial Appendix appearing at the end of our FY2024 Q3 investor presentation (available at www.takeda.com/investors). Beginning in the quarter ended June 30, 2024, Takeda (i) changed its methodology for CER adjustments to results of subsidiaries in hyperinflation countries to present those results in a manner consistent with IAS 29, Financial Reporting in Hyperinflation Economies, (ii) re-named Free Cash Flow as previously calculated as “Adjusted Free Cash Flow” (with “Free Cash Flow” to be reported as Operating Cash Flow less Property, Plant and Equipment), and (iii) re-named Net Debt as previously calculated as “Adjusted Net Debt” (with “Net Debt” to be reported as the book value of bonds and loans less cash and cash equivalents).

Peak Sales and PTRS Estimates
References in this press release to peak revenue potential ranges are estimates that have not been adjusted for probability of technical and regulatory success (PTRS) and should not be considered a forecast or target. These peak revenue potential ranges represent Takeda’s assessments of various possible future commercial scenarios that may or may not occur.

References in this press release to PTRS are to internal estimates of Takeda regarding the likelihood of obtaining regulatory approval for a particular product in a particular indication. These estimates reflect the subjective judgment of responsible Takeda personnel and have been approved by Takeda’s Portfolio Review Committee for use in internal planning.

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.

Please refer to slide 5 of Takeda’s FY2024 Q3 investor presentation (available at https://www.takeda.com/investors/financial-results/quarterly-results/) for the definition of Growth & Launch Products.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250127274764/en/

Investor Relations

Christopher O’Reilly

Christopher.oreilly@takeda.com

+81 (0) 90-6481-3412

Media Relations

Brendan Jennings

Brendan.jennings@takeda.com

+81 (0) 80-2705-8259

(Outside Japan business hours)

Media_relations@takeda.com

Source: Takeda Pharmaceutical Company Limited

FAQ

What is Takeda's (TAK) revenue growth for Q3 FY2024?

Takeda reported revenue growth of 9.8% at actual exchange rates (AER) and 4.5% at constant exchange rate (CER) for Q3 FY2024.

How much is TAK's share buyback program worth?

Takeda announced a share buyback program of up to JPY 100.0 billion.

What is Takeda's (TAK) core operating profit margin in Q3 FY2024?

Takeda's core operating profit margin reached 28.5%, showing an increase of 1.6 percentage points.

How many Phase 3 data readouts does TAK expect in 2025?

Takeda expects three Phase 3 data readouts within calendar year 2025.

What is TAK's revised free cash flow forecast for FY2024?

Takeda raised its Adjusted Free Cash Flow forecast range to JPY550.0-650.0 billion, an increase of JPY 150.0 billion.