Pharmaceutical Companies Apellis and Takeda Report Growth and Market Confidence in Recent Earnings Calls

Earnings call: Apellis Pharmaceuticals reports growth and market confidence By Investing.com

Apellis Pharmaceuticals (NASDAQ:APLS), known by its ticker APLS, has announced its financial results for the second quarter of 2024, showcasing the success of its blockbuster drugs SYFOVRE and EMPAVELI. SYFOVRE, in particular, has achieved over $0.5 billion in sales since its launch, with a strong double-digit percentage growth each quarter, including $155 million in net product revenue in Q2 2024. EMPAVELI also performed well, with $24.5 million in sales, despite expectations of flat sales in the near term due to increased competition. The company is optimistic about its future, with a focus on the European market, expansion into new indications, and a robust market share in the treatment of geographic atrophy (GA). Apellis Pharmaceuticals is positioning itself for long-term success in the GA market through strategic commercial activities, including expanding the prescriber base and increasing patient awareness. The company's strong performance and strategic planning, coupled with its confidence in the value it provides to both patients and shareholders, suggest a positive outlook for its continued growth and market dominance. Apellis Pharmaceuticals (APLS) has demonstrated promising growth with its blockbuster drugs, reflecting a strong market presence. In light of this, there are several InvestingPro Tips and real-time metrics that investors should consider: InvestingPro Tips suggest that analysts are expecting sales growth in the current year for Apellis, which aligns with the company's optimistic outlook and successful sales figures reported for SYFOVRE and EMPAVELI. However, it's worth noting that analysts are not anticipating the company to be profitable this year, and earnings estimates have been revised downwards by three analysts for the upcoming period. There are 9 additional tips listed in InvestingPro that can provide further insights into Apellis's financial health and market position. From the InvestingPro Data, we can see that Apellis has a market capitalization of $4.45 billion, which is significant and speaks to the company's size and potential influence in the pharmaceutical industry. The Price/Book ratio as of the last twelve months ending Q2 2024 stands at a high 16.84, indicating that the market values the company's assets quite optimistically. This is particularly relevant as Apellis's liquid assets exceed its short-term obligations, suggesting a solid financial footing for near-term operations. Moreover, the impressive revenue growth of 240.74% in the last twelve months ending Q2 2024 further underscores the company's robust sales performance, which is crucial for investors to consider when evaluating the company's future prospects. These metrics and tips from InvestingPro provide a comprehensive view of Apellis's financial landscape, complementing the company's strategic commercial activities and market dominance aspirations. Investors can access further details and tips on InvestingPro's platform to make more informed decisions. Operator: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Apellis Pharmaceuticals Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised, today's call is being recorded. I would now like to hand the conference over to Meredith (NYSE:MDP) Kaya, Senior Vice President, Investor Relations and Strategic Finance. Please go ahead. Meredith Kaya: Good morning, and thank you for joining us to discuss Apellis second quarter 2024 financial results. With me on the call are Co-Founder and Chief Executive Officer, Dr. Cedric Francois; Chief Operating Officer, Adam Townsend; Chief Medical Officer, Dr. Caroline Baumal; and Chief Financial Officer, Tim Sullivan. Before we begin, let me point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. Now, I'll turn the call over to Cedric. Cedric Francois: Thank you, Meredith. And thank you all for joining us this morning. We are in a unique position today with one and the potential for two, blockbuster drugs in the market, SYFOVRE and EMPAVELI, both of which are making a meaningful difference for patients. Past six months have been a period of continued progress and execution by the Apellis team, but we recognize that there are questions around the competitive landscape for SYFOVRE. Given this, I wanted to share some of my thoughts. SYFOVRE is the market leader in a category with only two available drugs, 1.5 million highly motivated patients and a long runway for continued growth. That said, there has been a lot of focus on near-term dynamics. Our competitor has recently had tailwinds driven by factors such as its new J-Code. They had every incentive to drive demand in new patient starts as much as possible and yet we saw approximately half of new patients choose SYFOVRE. Following last month's successful ASRS meeting, we believe SYFOVRE clinical profile is being viewed favorably by physicians and will drive more growth in new patient starts over time. The SYFOVRE launch has been one of the best launches in recent history, generating over $0.5 billion in sales in its first six quarters and achieving double-digit percentage growth every single quarter. More than 330,000 SYFOVRE injections are estimated to have been administered to patients, and this strong growth is continuing into the second half of the year. The GA market is growing significantly and SYFOVRE has only scratched the surface of its long-term potential. Importantly, the recent ASRS meeting was a strategic turning point for us, where our focus and our discussions shifted to SYFOVRE strong and differentiated efficacy profile. We have multiple analyses supporting the efficacy of SYFOVRE, and retina doctors are enthusiastic about the totality of these data. The favorable benefit-risk profile of SYFOVRE is becoming clearer to physicians with some key takeaways. One, both monthly and every other month SYFOVRE treatment showed a better efficacy profile than the competitor among patients with non- SYFOVRE GA at both 12 months and 24 months, as detailed in the matching adjusted indirect comparison post-hoc analysis presented. Note that no head-to-head clinical trials have been performed. Two, SYFOVRE is clinically proven to offer flexible dosing from day one. Every other month, treatment with SYFOVRE provides an even safer and more cost-effective treatment, while maintaining its strong efficacy. And three, regarding safety, vasculitis is rare and appears to be a first injection phenomenon. The estimated rate has remained stable at one in 4,000 per first injection. During the podium presentation at ASRS, the rest committee confirms this estimated rate as agreed that it appears to be only on the first injection. After this meeting, we continue to believe that we are well-positioned to continue growth and further cement our market leadership in GA for many years to come. Our singular focus is to ensure that every GA patient who needs treatment has access to SYFOVRE. This is how we expect SYFOVRE to continue on its path of becoming a multibillion-dollar drug. As for the European GA opportunity, we are focused on the CHMP reexamination process and are encouraged by the progress we made throughout the initial review. This was not an unexpected outcome, given that the process was reset back to day 180 of the initial review, and therefore led by the original rapporteur. We were encouraged to learn that in this recent opinion, multiple CHMP members disagreed with the negative opinion. Additionally, the external advisory experts were aligned on Microperimetry as the best available functional measure of GA. We are humbled by the broad support shown by the European retina community, and while we remain conservative in our expectations for the reexamination, we believe we are well-positioned heading into the appeal. To new rapporteurs were recently designated, and we continue to expect the final decision to be issued in the Q4 of 2024. Moving to EMPAVELI, which continues to elevate the standard of care for patients with PNH. EMPAVELI generated $24.5 million in product sales in the Q2. We continue to believe that patients on EMPAVELI are experiencing substantial benefits as demonstrated by its 97% compliance rate. Importantly, we are exploring its potential to expand into new indications and become a best-in-class treatment option for additional high unmet need areas. The upcoming Phase 3 VALIANT top line readout in C3G and primary IC-MPGN is the next milestone in this process. And we expect to present these data later this month. If the data are positive, we plan to submit a supplemental NDA to the FDA for approval. Regarding the pipeline, we are advancing multiple earlier-stage development programs, leveraging our core expertise in complement science to fuel the next phase of value creation for Apellis. We look forward to sharing our progress at an upcoming Investor Day towards the end of this year. And finally, from a financial perspective, we are benefiting from the growing product revenue generated by SYFOVRE and EMPAVELI and have actively taken steps to strengthen our balance sheet. We now have a clear line of sight to positive cash flow, allowing us to invest in future growth without having to rely on the capital market. Before I turn it over to Adam to discuss our commercial activities, I will close by saying thank you to the patients and physicians who motivate us to develop and bring important treatments to market and to the Apellis team who have shown unbelievable commitment and perseverance in getting these important medicines to patients and to our shareholders, many of whom have stood with us through these dynamic periods and provided a wave range support to us over the years. With that, I will now turn it over to Adam. Adam Townsend: Thanks Cedric, and good morning everyone. I will begin with SYFOVRE. With revenue of about $155 million. Sales growth remains strong at more than 12% quarter over quarter. In the second year of our products launch, quarterly growth rates at these levels are a strong indicator of longer-term demand. We delivered over 79,000 commercial doses and approximately 5,000 samples of SYFOVRE in the second quarter. Demand continued to accelerate with June being our highest demand month since launch through the second quarter. We are particularly pleased to see the continued progress across the many factors driving growth, including new patient demand and a broadening prescriber base. Cedric mentioned some of the competitive dynamics, which I know is on everyone's mind, so let's start there. Our competitor had recent tailwinds driven by factors such as obtaining its new J-Code, and so it is expected that they would see their proportion of new patient share accelerate. We also saw an acceleration when SYFOVRE J-Code went into effect last October. However, we do not believe this is indicative of longer-term market dynamics. We have taken the long view on contracting. As we believe this is a large and growing market, and believe that discounting too aggressively now is unsustainable and will lead to price degradation over time. We are also executing our strategic plan in the field to reinforce SYFOVRE benefit risk profile. SYFOVRE remains the number one chosen treatment for GA with approximately 75% of the treated market as defined by the total number of patients treated. We believe SYFOVRE's position as the market leader will continue to be driven by its differentiated efficacy profile and flexible dosing. Importantly, we are also focused on maintaining market leadership whilst growing the overall GA category. We are still in the beginning stages. Our estimate based on claims data is that about 13% of GA patients who have been diagnosed and are managed by an eyecare professional are currently being treated. In addition, only a small portion of newly diagnosed and treated patients are referrals, meaning that most patients currently receiving treatment were already being seen by a retina specialist. This suggests that the majority of GA patients have not yet been diagnosed or referred to retina specialists, reinforcing that we have only scratched the surface of the large opportunity for SYFOVRE. As I mentioned on our last earnings call, we are now executing the next phase of our commercial and medical strategy. After the ASRS meeting in 2023, we developed a two-phase strategic plan with a two-year timeline. Phase 1 was focused on being transparent and educating the retina community about everything we were learning at the time around safety. This past quarter, we shifted to Phase 2 of the strategy, which is focused on strengthening our leadership in this growing market. More than 2,100 sites of care have ordered SYFOVRE. We are now on our front foot, expanding the number of new physicians using SYFOVRE, deepening our relationships with existing SYFOVRE users, establishing strong payer access and reimbursement and increasing awareness and education for patients. With physicians, we are communicating a clean and simple efficacy message, highlighting SYFOVRE increasing effects over time, which is critical given that GA is a chronic disease. We are also sharing the microperimetry data from the GALE extension study. The only data for an approved GA treatment that demonstrates a visual function benefit in a pre-specified endpoint. This allows for a productive benefit-risk discussion with the every-other-month dosing option having a dramatically positive impact for patients, doctors and payers. We had a successful ASRS meeting a few weeks ago, our first big retina meeting leading with these messages and look forward to the upcoming fall congresses. We are also continuing to broaden our reach to more retina specialists, as well as other referring eye care providers who see 10 of 1000 of GA patients. Reaching these physicians and educating them on the referral process are key to developing the GA market. With payers, we have secured unprecedented and broad coverage for patients choosing SYFOVRE. We are thrilled to share that two large national pharmacy benefit managers have recently made SYFOVRE the only preferred treatment on their commercial formularies. As the preferred product, this means that the new patients with commercial insurance will have full access to SYFOVRE as the first-line treatment and an exception process will have to be undertaken for non-preferred or disadvantaged products. While payers have several considerations in making such decisions, we believe these decisions were driven by SYFOVRE compelling value proposition, highlighting its robust efficacy with increasing effects over time and both monthly and more importantly, every other month dosing. These two PBM [ph] decisions are important milestones demonstrating payers' strong belief in SYFOVRE clinical and economic value proposition. As ensuring broad coverage and seamless reimbursement is critical for the retina specialists. And with patients, we've launched the first phase of our branded DTC campaign in the spring, which is focused on encouraging patients to talk to their physicians about GA treatment with SYFOVRE. We're excited to launch Phase 2 of our branded DTC campaign, extending our relationship with the beloved Henry Winkler in the fourth quarter. This is a very large market and we will be methodical in executing this next phase in order to set ourselves up for the long term. We will continue to execute flawlessly and be focused on getting more doctors, patients and payers to understand the efficacy and the benefits that the leading GA drug can deliver. Now, let me shift to EMPAVELI. In the second quarter, EMPAVELI generated approximately $24.5 million in U.S. net product sales. The positive trends across the key leading indicators for the PNH patient population continue into 2024. Specifically, compliance rates remain high at 97%, and we continue to have a very strong safety profile. As we previously said, with the availability of an oral treatment for PNH, we are facing a more competitive market and expect sales to be flat at least through the next 6 months to 12 months. We continue to have new patients starting in Ravelli treatment, but this has been offset by some patients switching to an oral. Finally, I will echo cedric's enthusiasm regarding the opportunity to potentially expand EMPAVELI into C3G and IC-MPGN. This market is approximately 3 times larger than the PNH market, and there are no available treatments. If EMPAVELI is approved in these indications, we are confident that we can leverage much of our existing infrastructure to rapidly reach nephrologists and deliver EMPAVELI to the thousands of patients suffering from these diseases. With that, I will now turn the call over to Caroline. Caroline? Caroline Baumal: Thanks, Adam, and good morning, everyone. We are looking forward to sharing the VALIANT data later this month. I'll talk more about this opportunity in a minute. I will first talk about SYFOVRE as our team was recently at the ASRS meeting in Stockholm where we had a significant presence with five oral presentations, including a late breaking abstract on visual function from Gail. We are particularly excited by these visual function data as this was the first time a geographic atrophy treatment had demonstrated a visual function benefit on a pre-specified analysis. Results showed that with respect to the Microperimetry endpoint, patients treated with Pegcetacoplan monthly or every other month developed fewer new Scotomatous points over 36 months compared to patients from the sham crossover group. Scotomatous points measure the areas of the retina that have lost all light sensitivity and therefore are no longer functioning. These results add to the largest body of evidence for our geographic atrophy treatment and reinforce the unprecedented effects shown by SYFOVRE to both meaningfully slow geographic atrophy lesion growth and, by doing so, preserve visual function. ASRS is one of the most important retina meetings of the year, and we had the opportunity to engage with many members of the retina community. This was a highly successful meeting for SYFOVRE and we heard repeatedly from doctors about its differentiated benefits. We look forward to continuing to engage with this community at upcoming meetings and to share the ongoing progress of SYFOVRE in patients with geographic atrophy. Moving to EMPAVELI. Later this month, we expect to share top-line results from our Phase 3 VALIANT study of Pegcetacoplan in people living with C3G and IC-MPGN, two rare and debilitating kidney diseases caused by uncontrolled complement activation and breakdown of C3. Patients are usually diagnosed in adolescence and about 50% advanced end stage kidney failure in 5 years to 10 years. Treatment options are generally a kidney transplant or lifelong dialysis, neither of which are curative. In fact, nearly 90% of transplant patients experience disease recurrence, and about half of them end up losing their transplanted organ. The phase three VALIANT study enrolled 124 patients with either C3G or primary IC-MPGN. This is the largest single trial conducted in these populations and the only Phase 3 study to enroll a broad population inclusive of adolescent and adult patients with native and post-transplant forms of disease. The primary endpoint of the VALIANT trial is a Log-transformed ratio of Urine Protein to Creatinine Ratio or UPCR, a key marker of disease progression in all patients at week 26 compared to baseline. We view success in this trial as the achievement of a statistically significant response to the primary endpoint, as well as positive effects in some of the additional secondary endpoints. Physicians have shared that this would be clinically meaningful for these patients. If VALIANT is positive, we plan to submit the supplemental NDA to the FDA for approval. Following the completion of the VALIANT study, patients were given the option to enroll into the VALIANT long-term extension study. We were highly encouraged to see that a hundred percent of the patients who have already completed VALIANT have now enrolled into depth. Beyond the VALIANT study, we are continuing to advance our earlier stage pipeline, such as our C3 siRNA, that is currently in Phase 1 development and our beam collaboration. Like Cedric said, we are excited to share more details about our pipeline programs with you at an Investor Day later this year. I will now turn the call over to Tim for a review of the financials. Tim? Tim Sullivan: Thank you, Caroline. I will now provide an overview of our financials and some comments on our debt refinancing with Sixth Street. Additional details are available in the press release that we issued earlier this morning. Total revenue for the second quarter 2024 was approximately $200 million, including $155 million SYFOVRE and $24.5 million in EMPAVELI US net product revenue. This compares with $95 million in total revenue in the second quarter of 2023. Turning to the rest of the P&L. For the second quarter, cost of sales was $23 million; R&D expenses were $78 million; SG&A expenses were $128 million; and we reported a net loss of $38 million. As I previously stated, we are realizing efficiencies this year related to our restructuring in 2023 and continue to expect our total operating expenses in 2024, inclusive of R&D and SG&A expenses to be less than our total expenses in 2023. This year, we've been focused on strengthening our balance sheet. These efforts ultimately resulted in a strategic non-dilutive refinancing collaboration with Sixth Street that we announced in May. The deal allowed us to prepay our SFJ debt at a significant discount and to free up substantial cash flow. A quick look at the terms revealed how favorable this deal was. First, this debt facility provides us with up to $475 million of which $375 million became available immediately upon closing. We can access the remaining $100 million at our option over time. Importantly, this deal was debt neutral to Apellis. We replaced $366 million in payments due to SFJ over the next few years with $375 million from Sixth Street. The principal repayment is pushed out to May, 2030 when SYFOVRE revenues are expected to be closer to peak. Our payments are interest only until then. This deal also substantially improves our liquidity and provides flexibility to access at least $200 million in incremental non-dilutive capital as we continue to invest in profitable growth. And it includes a record-low credit spread. The overall terms were some of the best in biotech seen in recent history. In aggregate, since the beginning of the year, we have unlocked over $475 million in non-dilutive capital, including $100 million from the capped call unwind announced in the first quarter. Plus, we have the flexibility to bring in $100 million within the accounts receivable line, which can be increased to $200 million upon the achievement of certain milestones and $100 million more from Sixth Street. So, a total of $775 million in non-dilutive financial flexibility. This combined with the $360 million in cash and cash equivalents that we have at the end of June 30, 2024 puts us in a strong financial position where we are on a path to becoming cashflow positive and no longer having to rely on the capital markets to fund the business. Importantly, our ability to begin generating cash is possible in both the EU and non-EU scenarios. While we believe the opportunity in Europe is significant, the ramp to peak sales is much longer. And so, the main source of profitability in the near term remains growth in the U.S. I will now hand the call back over to Cedric for closing remarks. Cedric? Cedric Francois: Thanks, Tim. We've had a very strong first half of the year. With two successful commercial products, a pipeline of innovative programs and development, and a strong financial position to support the business, I'm more confident than ever in our ability to continue creating significant value for our patients and our shareholders. And we will now open the call for questions. Operator: Thank you. [Operator Instructions]. Our first question is going to come from the line of John Miller with Evercore. Your line is open, please go ahead. Jonathan Miller: Yes, hi guys. Thanks so much for taking the questions. I would love to start with -- I'll start with this. Do you expect the share of new starts, currently around that 50% mark to grow again post a successful ASRS? And then I guess the corollary to that is, your guidance to cashflow positivity, you just mentioned doesn't assume anything more than U.S., GA launches, but does it assume more than the existing share of new starts in the U.S.? Cedric Francois: Thank you so much, John. Great to hear you. So, that is of course the most important question, right? I mean, is the new starts in the second quarter as we have discussed, there were tailwinds for [indiscernible], but as we now move forward, what really stands out and what is very encouraging to see is a very large market and the fact that SYFOVRE is leading on efficacy, flexible dosing and economic value. So, as we move forward now, we plan to recapture the lead on those first injections and take advantage of this very large market with an important unmet need. Adam, do you want to add something? Adam Townsend: Yes, thanks, Cedric. Hi, John. So, yes, we're in Phase 2 and we're already encouraged by the growth and the demand we're seeing into July. We're on the front foot. We're talking about efficacy. We're talking about every other month dosing. These are huge differentiating factors, spike drop. We can see the future and we can see that we will continue to be the number one GA drug in this market. Tim, do you have any suggestions? Tim Sullivan: Yes. So, in terms of cash flow, our revenue was $199.7 and our cash OpEx if you take out stock-based comp and depreciation is just under that. So that was $199 a little bit less than that. So really on a total OpEx basis, on a cash basis, we are net neutral. So, the differences right now are working capital and of course interest expense. So, it really doesn't take much in terms of growth for us to become cash flow positive. We're not guiding to when that will happen. But given the size of the market and the growth in this market, I don't think that's something we're worried about. Jonathan Miller: Great. Makes sense. And I guess my follow-up would be, your language on EU approval seems more positive now than it has in the past. You mentioned that you're well positioned heading into this appeal, and I think that's a little bit more positive than the previous messaging we've heard where we're all assumption all of our assumption was that this was not the base case. But how do you feel now versus how you felt the last time you had into an appeal? Do you really feel like the likelihood of an approval without further trials or without further resubmission is much higher now? Cedric Francois: Thank you, John. So, the expectation should remain the same. What is of course, the one nice takeaway from the fact that the procedure was reset was the ability for us to introduce new data and that includes pre-specified endpoints of function, which is of course, something really important and encouraging and really speaks to the appeal of this drug to patients. So again, in terms of expectations, that has not changed. The process has gone according to plan. We've been disciplined. We look forward to the 4th quarters to share what the results are. Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Anupam Rama with J.P.M. Your line is open. Please go ahead. Anupam Rama: Hey, guys. Thanks so much for taking the question. You guys noted that for SYFOVRE, June was your best month since launch. Maybe you could give us a little more color on what you were seeing on a month-by-month basis in the quarter. Was the AZERBA sort of J-Code impact more like first half of the quarter dynamic and then you saw reacceleration of SYFOVRE regrowth? Or how do we think about like what the dynamics were within the quarter? Thanks so much. Cedric Francois: Thank you so much, Anupam. I will hand it over to Adam, but I think again what stands out here and what we're super excited about is how large this market is, the fact that it's growing, the fact that AZERBA does well in a duopoly that, we'll be here for a long time and us having a drug that is meaningfully differentiated on efficacy and dosing flexibility that is really what we are focused on. But Adam, you may want to add something. Yes. Adam Townsend: Hey, Anupam. So yes, June was the highest month of the quarter and also the highest month launch today. Across multiple metrics, we saw that Q2 was a very successful quarter for us across the multiple months, right. we continue to grow accounts now can 2,0105, we saw double-digit growth for the quarter. We saw double digit growth for the quarter. We're fully into Phase 2 of our plan. And I think some of the initial steps of that happening in June is what we can witness there. Right? Talking about efficacy, talking about flexible dose and I think that's what we are really pushing hard as we now move to the next quarter. Anupam Rama: Thanks so, much for taking my question. Operator: [Operator Instructions]. And our next question comes from the line of Salveen Richter with Goldman Sachs (NYSE:GS). Your line is open. Please go ahead. Unidentified Analyst: This is [indiscernible] for Salveen. Thank you so much for taking our question. So, on the competitive dynamics, what are the factors which are driving the competitive and physician dynamics in the GA market following the permanent J-Code for is? And could you speak to the market share that you're seeing at this point and how you expect that to evolve over the near term? Cedric Francois: So, we are the market leader. We plan on continuing to be the market leader and that confidence is based on stability around the safety, which was really important and where SRS was a real turning point for us. -- those that were there, it was a quiet meeting on that front and the discussion very much shifted towards the efficacy profile. And there the majority of doctors clearly see the differentiation of SYFOVRE versus the competition. So, as we now move forward, the focal point will more and more become efficacy, the differentiation, the long-term data, the mass amount of data that we have with SYFOVRE, and then the real and important benefit of every other month dosing. So, the convenience that that offers to patients. Also, the fact that health the number of intravitreal injections is twice as safe as monthly injections. All of these things are going to come more into focus. I know Adam, if you want to add something? Adam Townsend: Sure. So obviously, if you go back to our J-Code, we also noticed tailwinds when we had our J-Code, it unlocked certain new accounts. So, the competitor had some tailwinds. And even with those tailwinds we maintained approximately 50% of new starts and market leadership, 75% of the total market. That is down at Cedric said to a real successful execution of Phase 2 of our strategic plan, plus some positive comments moving forward from ASRS. Now, you also asked about market share. So, we track market share based on vials going into physicians and then being injected into patients. And so, we think that's the most robust way of measuring market share. And we had a 75% market share. Now, as this market grows, we will continue to push incredibly hard on our efficacy message, our dosing convenience, and the economic value. And we think that that will maintain our leadership moving forward. Operator: And our next question comes from the line of Yigal Nochomovitz with Citigroup. Your line is open. Please go ahead. Yigal Nochomovitz: Thank you, very much for taking my question. Shifting over to C3G and IC-MPGN -- I just wanted to get your thoughts on how you expect the position type for the Copeland in this market, assuming VALIANT is positive? And what do you think you need to show on proteinuria as well as some of the other secondary endpoints that Caroline mentioned to be competitive with the emerging oral options? Cedric Francois: Sorry, Yigal, we had a hard time hearing it here. Tim, who has hearing translate for me. So, look, we are very excited about the opportunity in C3G and IC-MPGN. This is something that has been a little bit below the radar screen of most, but a really large and important opportunity for us. We have seen the results from the NOBLE study, where we have the histopath data, which is really best in class, ever seen within this disease. We also have already, while this drug is not on the market, yet seen the excitement around science for this drug. And we have seen in the NOBLE study, approximately 50% reductions in the protein area. So that is, of course, the goal for us is to meet statistical significance on the primary endpoint, and then to really pay attention to the transplanted population. So, I hope that answers your question. Yigal Nochomovitz: No. That's helpful. And then, just another question. From people's design and VALIANT, we are combining C3G and IC-MPGN into one study. Obviously, the competitor is doing separate studies for both indications. Do you see that as being a significant difference in terms of how physicians will interpret and implement the data when both those are approved? Cedric Francois: Yes, that will depend on the data, right? So, I think you bring up a very important point, which is that the way in which the study reads out should be viewed in the context of, of course, what we have seen with abate. We decided to include in one study both C3G and IC-MPGN, with the hope that the data would be good enough for both to find their way into our label. So, we're going to see if that's the case or not. And we're going to see how the data stacks up against what has already been disclosed by Novartis (LON:0QLR) (SIX:NOVN) in the past months. Operator: Thank you. In one moment as we move on to our next question. And our next question is going to come from the line of Steven Seedhouse with Raymond James. Your line is open. Please go ahead. Steven Seedhouse: Thank you. Good morning. Thanks for the update. First question, I just -- regarding a new line item on the balance sheet for long-term inventory, a $23 million entry. Has there been any change to the expected sales trajectory in the next 12 months versus prior? Are you anticipating that entry will be gone in subsequent quarters or is it going to grow? And then also what is the shelf life of the raw materials, I guess, that comprise that entry? Cedric Francois: Yes, thanks, Steve. So that entry was put in place because we have to do our ordering for our inventory long and advanced. And we had planned for the potential success of ALS. There's also a couple of other factors, which include the delay in the EU for SYFOVRE and also our expected ordering from [indiscernible]. So, we had to plan for all that well in advance. And so much of that, in fact, most of it has to do with inventory. So, we don't know exactly how long that line item will last there, but most of that inventory has a shelf life of three years or more. So, we just put that in place because of the dynamics we talked about, but it's primarily in the value. Steven Seedhouse: Okay. Good to know. And then just on the dynamic of patients, maybe switching between Izervay and SYFOVRE, do you have good visibility into both directions of switching there? And has it been -- if so, has it been sort of a net positive, net negative, or net neutral in terms of unique patients on either drug? Thanks. Adam Townsend: Hi, Steve, it's Adam. So yes, we have some visibility to that now. Obviously, with all analysis that we can do. It's only a subset of the total market. So obviously, last year, we did see some switching from SYFOVRE to Izervay. We saw 1 or 2 accounts switch the majority of the patients. And what we have seen moving forward is we've actually seen some switching from Izervay come back to SYFOVRE. And our assumption there is that's based on the efficacy and the flexible dosing of this drug. Switching tends to be a very small piece of the market, and it goes both ways based on our data set. As we look forward into Q3 and beyond, right, we're really, really encouraged by all of the metrics we're seeing about strong demand across multiple metrics. That includes switching as a piece of it, a small piece of it. That includes new starts and our plan to execute everything to push new starts. It includes more physicians writing SYFOVRE for the first time and increasing the number of accounts that are using SYFOVRE. We're really, really positive on what we're seeing so far, and we think a lot of that's down to the strong efficacy, the leading efficacy, flexible dose and economic value. Hopefully, I see if that answers your question. Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Colleen Kusy with Baird. Your line is open. Please go ahead. Colleen Kusy: Great. Thanks. Good morning and thanks for taking our questions. Can you provide any thoughts on when you might provide revenue guidance for SYFOVRE? Cedric Francois: Sure. Thank you. So obviously, we're not providing it for the remainder of this year and it's something we'll reconsider for next year, but we're not guiding on the guide yet. Colleen Kusy: Thank you. And then for the EU review, I think you said the repertoires have been selected. Can you provide any commentary on the background of the new repertoires and if either of them were a dissenting vote from the most recent review? Cedric Francois: Thank you so much, Colleen. So, we don't provide details on that. As mentioned, we consider the ARPSO success to have remained stable, the process to have gone very much in line with what we had expected. And hopefully, in the Q4, we'll be able to come back with positive news. Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Phil Nadeau with TD Cowen. Your line is open. Please go ahead. Phil Nadeau: Good morning. Thanks for taking our questions. On the competitive environment, first, [Technical Difficulty] and then second, the dynamics of competition, what do you think the position in center level overall? Are students becoming Izervay versus a focused position using both and setting centers one versus the other or are they using both? [Technical Difficulty] Cedric Francois: Hey, Phil, I don't know if it's Arlen or yours, but we have a very hard time hearing your question. Phil Nadeau: Sorry, Yes. So first on discounting, what are you seeing in the marketplace on discounting and what is the pelos Ozone strategy on discounting? And then 2nd on competition, can you talk about on the patient sorry, on the physician center level, are centers choosing one or the other or are they going patient by patient using either way versus --? Thanks. Cedric Francois: Thank you so much. Adam, do you want to take that? Adam Townsend: Yes. Hey, Phil. Thanks for repeating the question. Contracting's obviously a standard process in this market and we are taking a really strategic and thoughtful view on how we contract in this market? This is a large and growing market and we've only just scratched the surface of moving patients into the market. So, if you look forward to how big this market could possibly be, we want to maintain as much value as is possible. So, we've been incredibly thoughtful on contracting. Then to your second part of your question so at an account level, we have seen that there are many SYFOVRE advocates and fans and these physicians are choosing SYFOVRE for its leading efficacy, flexible dosing. It is now well documented safety profile and the robust real-world evidence and that comes consistently when we interact with physicians at conferences and various other interactions too. Now, no surprise, there are always some competitor physicians also, who tend to be choosing the competitor for its safety profile. One thing we have noticed, and I don't know if Caroline wants to comment afterwards is, a lot of physicians will have a discussion about SYFOVRE, for example, with their patient and explain the efficacy profile and the flexible medicine. And some physicians will have the same conversation on eyes. So, the patient voice is also important in this discussion, and we truly believe that efficacy will drive patients to want to choose SYFOVRE. Caroline, anything you want to add? Caroline Baumal: I think when it comes to physician [indiscernible], just had an ad board yesterday and speaking with my colleagues at ASRS, they're very driven to have less than monthly dosing, which is consistent with the high efficacy. And they're really also driven by our data that goes into the third year of use that patients have completed the Gale study. Some patients with over five years of continuous use of SYFOVRE. So, to them, the most important thing is to give the maximum efficacy with the least burden for patients. Operator: Our next question comes from the line of Akash Tiwari with Jefferies. Your line is open. Please go ahead. Ivy Wang: This is Ivy on for Akash. Thanks so much for taking our question. So, you've alluded to a safety update second half of this year. Just wanted to get a sense of what that could entail? Also, given Ivey has half the amount of PEG in a shorter half-life compared to SYFOVRE, are you working with ASRS other doctors to run studies looking at dose titration or spaced out dosing regimens, foresight, SYFOVRE? And when can we get an update on that? Cedric Francois: So, first of all, the safety is now very clear and well established. And what was really important for us was that SRS -- the SRS REST committee agreed with aped on the rarity of these events, one in 4,000 on the first injection, and the fact that this is primarily a first injection phenomenon. So those are important facts and of course then you place it in the broader context of the safety where SYFOVRE stacks up very well against Izervay specifically, also because of that every other month of dosing that is available. So, based on an enormous denominator of 330,000 injections, we know very well what the safety profile is. I don't think there's going to be much more discussion around that. What we will talk a lot about now is what the efficacy really looks like. And I think that is where the discussion is going to go. What was really gratifying to see coming out of ASRS is that everything is becoming more quiet and more reasoned within this field. So only 13% of patients with GA right now have been treated. These patients are desperate for treatment. They are going blind. Understanding the safety profile and the efficacy that they get in return is really important and is going to drive the growth of this market for many years to come. So that is something that really stood out. In terms of mitigations, for something as rare as this event, it is a question, what can you do? What should you do? It's of course, when it happened, it's not good, but, intravitreal injections carry a risk. Every time you do an intravitreal injection, there's a chance of one in 3,000 to 5,000 of getting infection and of endophthalmitis as well. That is normal with any type of drug. So, this is really something that we're looking forward to. I don't know if Caroline wants to add something. Caroline Baumal: I think the retina community has really appreciated our transparency with this and our partnership. I mean, we are driven by science and we're driven by the best for patient care. And that is the continual feedback. And I will tell you that the community would have no problem giving different sort of feedback if that was indicated. So, they're really pleased with this and they're really excited to continue to work with us and develop more data for our patients to give them the best care. Cedric Francois: Yes, and we're really feeling that momentum this quarter. I mean, it's really, I think SRS was a real training. Ivy Wang: Great. Thank you so much. Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Eliana Merle with UBS. Your line is open, please go ahead. Eliana Merle: Hi guys, thanks for taking my question. Just a quick one on SYFOVRE and then a question on VALIANT. Sorry if I missed this before, but can you confirm if volumes were up in July versus June for SYFOVRE? And then for VALIANT, just how are you thinking about what's clinically meaningful in the pre-versus post-transplant setting? And then any difference in efficacy expected between these two settings and just commercially how you're thinking about the relative size of the population opportunity for pegcetacoplan in the pre versus post-transplant patients? Thanks. Cedric Francois: Thank you so much. Adam, do you want to take this first? Adam Townsend: Sure. Yes, so we're really thrilled with the strong growth because it's continuing into July and we expect it to continue for the rest of the quarter and onwards. We're seeing it across multiple metrics and I think it's down a lot to flawless execution of Phase 2 of our plan. We are now on the front foot and we're pushing hard. So, we're thrilled with what we're seeing into July. We expect that to continue. We're going to work hard to make sure. And then as it relates to VALIANT, so pre versus post-transplant. So, as you may recall, Eli, for us, the post-transplant segment is a very intriguing one because it's easy to take biopsies and to track on histopathology what your drug does in that population. It is also a population that was kind of deprioritized by our competitors and it's one that we happily embrace because what is best for a transplanted kidney is best for kidneys with this disease, period. So, this is really something that has many advantages for us to focus on. But on the other hand, should our data be really good in VALIANT, there is a real opportunity to differentiate from [indiscernible] and to know in a disease as serious as C3G or IC-MPGN, efficacy is what will really, really matter. More than convenient straight, whether you take a pill or subcutaneous. If you have a real differentiation on efficacy, that is what we'll stand out. I also want to point out, of course, we've always talked about the remarkable safety profile that we've seen in PNH and the other indications where SYFOVRE has been used and is on the market, combined with this extraordinary compliance rate of 97%. SYFOVRE, which has the same active ingredient as SYFOVRE is an amazing drug and hopefully in Valeant, we will see a new indication emerge for that drug. Operator: Thank you. And one moment as we move on to our next question. And our next question comes from the line of Annabel Samimy with Stifel. Your line is open. Please go ahead. Annabel Samimy: Hi, all. Thanks for taking my call. So, I guess in our channel checks, we're happy to find that consensus among these physicians we spoke to is generally in line with your comments that physicians give SYFOVRE that edge on efficacy. I guess my question is, how are they responding to the micropurgatory data? Because it's not something that they typically do in their offices. So how can they use that with their patients practically so they can show patients benefit over time and keep them motivated? And I ask that, I guess for retention beyond that, say, 18 months to 2-year timeframe where patients may start dropping off? Do they have the tools right now? And are they starting to adopt some of these tools so they can demonstrate to their patients that this is working? Thanks. Cedric Francois: Thank you, Annabel. Adam is going to first answer the first question. Adam Townsend: Yes. Thanks Annabel. So, I appreciate your comments on efficacy. We also did a recent piece of market research, and we noticed in our sentiment to our market research that our efficacy perception is increasing and there's a gap between us and the competitor in our market research. So, it seems to confirm what you said. I'll hand over to Caroline on microcurrent. Caroline Baumal: Thank you, Adam. Physicians are really excited about the micropurgatory data. And in showing them, they see the trend in the micropurgatory data that's followed over time and that it reaches this pre-specified endpoint. I think that most physicians, realize that micropurgatory in many ways is analogous to a visual field testing, and they appreciate that it shows benefit in a clinical trial. But in the real world, they like to use OCT, which also, has shown benefits using our AI algorithms combined with the University of Vienna. So, I think the fact that we have this prespecified endpoint though is very highly meaningful, and it will mostly be used today in clinical studies, although some people are using micropurgatory in the real world. In the real world, we can use imaging to show this to patients, and we have cases that we've shown to physicians. In fact, we showed one at ASRS where, a patient in the observed fellow eye, the geographic atrophy grew 3 times as much compared to the treated eye. So, cases like this are highly meaningful, and that was in Matt McCumber's video talk at ASMS. Operator: Thank you. And one moment as we move on to our next question. Our next question is going to come from the line of Francois Brisebois with Oppenheimer. Your line is open. Please go ahead. Francois Brisebois: Hi. Thanks for the question here. So, I was just wondering, so in terms of function we've discussed, but on convenience and the importance of that and the economic value, can you help us understand a little bit from the convenience. Is that as advantages to the physician as it is to the patient? I'm just trying to understand if convenience and economic value here have a correlation or not. Cedric Francois: There's three pieces to that question. There's the convenience to the patient, convenience to the physician, and then the convenience, quite frankly to the payer. So, when we start with the convenience to the patient, having every other month dosing available is really, really important. Our competitor, sure there is some off-label use with every other month, but our competitor has only monthly. We're going to find out at the end of this year if they actually ever get every other month in their label. This is a huge point of differentiation that we will benefit meaningfully from should end up the way we think. The advantage to physicians of every other month is, again, the flexibility. And I'm going to let Caroline answer like her view on that and then have Adam dive into the payer aspect of the cost -- the value. Caroline Baumal: Certainly, to realize the anatomic benefits of SYFOVRE, we've seen that every other month dosing is meaningful. And I think that with our flexible every 25 days to 60 days in our label, patients can come every six to eight weeks and still realize these meaningful effects. And certainly, in the US, physicians love to have that plus minus one to two weeks with their dosing. And it's more likely for patients to come in and complete this. We know that with monthly dosing from our anti-VEGF experience, it's really very, very difficult to complete that and patients will often drop out because they cannot maintain that. Adam? Adam Townsend: So obviously, we were we're thrilled that some payers are starting to look at this category and selecting SYFOVRE referred choice. So, this decision was basically made on its robust efficacy profile and particularly the increasing effects over time. And I think it's really basically simple. SYFOVRE is efficacious with monthly and every other month doses, and this is good for patients and is economically supportive for the health plan. And I think that's going to be important for us as this market continues to grow and become bigger. Cedric Francois: And context there is that the flexibility is everything. Some patients with aggressive lesions want to be dosed monthly. We have seen very clearly in GALE as well that there are advantages to treating monthly. I mean, it is more intense from a dosing perspective of course, but in terms of reducing the lesion growth, there is an advantage to monthly. So that flexibility, the huge amount of data that we have both in its absolute but also longitudinally over time. We have three years now, we will have more data coming. All of that's incredibly valuable. Francois Brisebois: And just lastly on the VALIANT data, just because it's coming up very shortly here. You guys discussed in terms of success and expectations stats on the primary, but on the secondary in terms of -- is this the positive trend on some secondary endpoints or all? And is this what the regulators need to see from conversations? They're just trying to understand more on the secondary endpoints and points here. Cedric Francois: The secondary endpoints need to trend supportive of the primary. We have seen this with [indiscernible], where none of the secondary endpoints were met. But where we believe there is still a path forward for [indiscernible]. They were specifically asked to submit the data at one year as you may recall after having the six-month primary endpoint. Those are all things, secondary endpoints are more contextual, but very important to provide support to what we measure with the primary endpoint and the protein area reductions. Operator: Thank you. And one moment as we move on to our next question. Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Your line is open. Please go ahead. Douglas Tsao: Hi. Good morning. Thanks for taking the questions. I'm just curious, Adam, in terms of the patients that are now being treated, I think in the past you indicated that like 90% of them were already on the books of retina specialists. I'm just curious if that continues to be the case. And then in terms of the DTC work that you have done, for the most part, I think the Henry Winkler campaign has sort of been an unbranded campaign. Does there come a point where you might consider, now that you're quote on sort of in Phase 2, switch to a branded DTC effort to sort of focus on the competitive dynamics and the attributes of SYFOVRE versus Izervay? Adam Townsend: Yes. Thanks, Doug. So yes, this is obviously a large and growing market with 13% market penetration for the current approved therapies. And most of those patients, in fact, the vast majority of those patients were already on the books of retina specialists. So, they're tapping into the patients that have GA that they were perhaps seeing that had other complications, for example. One thing, Phase 2 of our plan is super critical and DTC is also a part of it, is that we are going to educate ophthalmologists and optometrists on geographic atrophy as a disease. And once you start to educate those physicians, they will be able to potentially refer viable patients to retina specialists for treatment. We see this as a really big market, and actually facilitating that education is only going to help us. So, DTC, Doug, yes, Henry Winkler was disease education. It was incredibly well received by patients, but also by physicians. We did transition as part of Phase 2 to branded DTC. So, Henry was educating the world about go and get your eyes checked. And branded DTC is talking about SYFOVRE and the benefits of the efficacy that SYFOVRE does. So that patients are educated on the disease and then they can go and ask a physician to have a conversation about something. As we progress, moving forward, we're going to push DTC with a real strong approach on actual SYFOVRE and there's some exciting things happening with Henry moving forward. Douglas Tsao: Great. Thank you so much. Operator: Thank you. And one moment as we move on to our next question. Our next question comes from the line of Biren Amin with Piper Sandler. Your line is open. Please go ahead. Biren Amin: Yes. Hi, guys. Thanks for taking my question. Maybe, if I could start with the competitive dynamic. Astellas earlier today on their call stated that they're seeing eye survey capturing a majority of new patients starts. Are you seeing similar trends from your treatment use and market research data? Cedric Francois: Thank you. Go ahead. Adam Townsend: Yes. So, we are seeing through our dataset, which is not market research. We use a dataset that actually tracks vials into a physician site and then into a patient. So, we believe in the robustness of this, but we could do market research. And I think you get some bias when you do market research. And with the headwinds the competitors have, we were still maintaining approximately 50% share of new starts. And I think that's really, really strong considering it was the quarter of their J-Code. So that's how we look at the data set. We believe 75% market share of total market is a very robust number, and we look to the future of how big this market can be and being the number one GA product in it. Biren Amin: Great. That's helpful in terms of data point. And then maybe if I could have a follow-up. So, on the quarter, it seems commercial units grew about 10% quarter-over-quarter if you take out samples, but sales grew about 12% quarter-over-quarter. So, is the remainder from lower gross to net in the quarter? And what should we expect for gross to net for the 3rd quarter? Cedric Francois: Sure. Thanks, Biren. So gross to net, obviously, we don't say exactly what gross to net is. It did go up slightly this quarter, but was really well within the range of where it was last quarter. And in terms of the files out, that those are the accurate numbers, and we don't tag on four numbers. Operator: Thank you. And one moment. And our last question is going to come from the line of Graig Suvannavejh with Mizuho Securities. Your line is open. Please go ahead. Graig Suvannavejh: Thanks. Thank you for taking my question. I just wanted to follow-up on earlier in the year comments around seasonality and how that impacted the Q1 in particular. I'm just wondering as you've got Q2 now behind you, if you can provide us any commentary on what you're expecting, if anything, around seasonality impacts in the third quarter and fourth quarter just as we think about modeling, SYFOVRE revenue on a go forward basis? Thanks. Cedric Francois: Yes. Thanks for the question. So obviously seasonality is an important metric to measure here. Every time we go to a big retina conference like ASRS a couple of weeks ago, right, a large proportion of physicians are there. So, there are multiple meetings moving forward, where physicians will be attending those conferences and learning about our efficacy data. Caroline, anything you want to add from your retina physician perspective? Caroline Baumal: That, the retina physicians are really looking forward. We have some upcoming exciting presentations, and they want to offer patients a product that's going to be effective with increasing effects over time. So, they are very motivated and, looking forward to working with us on analyzing the data. Graig Suvannavejh: And just as a follow-up, is there anything on like purchasing patterns, seasonally, third quarter versus fourth quarter, bigger picture? Cedric Francois: I don't think we've had enough experience yet to really say that, at least in our in terms of this market. Anti-VEGF, there isn't anything that stands out particularly. I mean obviously you have August and that can be a full month just because vacation is booked. There's nothing really dramatic. Operator: Thank you. And I'm showing as I said, there is no further questions, and I would like to turn the conference back over to Cedric Francois for any further remarks. Cedric Francois: Thank you, operator. Thank you everyone for joining us this morning. If you have any follow-up questions, please feel free to reach out to Meredith and we look forward to hearing and speaking with many of you today. Thank you. Operator: This concludes today's conference call. Thank you for participating and you may now disconnect.

Earnings call: Takeda reports steady growth and pipeline progress By Investing.com

Takeda Pharmaceutical Company (NYSE:TAK) Limited (TSE: 4502), a global biopharmaceutical leader, reported a 2.1% revenue growth at constant exchange rates during its first quarter earnings call for the fiscal year 2024. The growth was primarily driven by the strong performance of Growth & Launch Products, which now represent 46% of total revenue. Takeda's core operating profit margin reached 31.6%, benefiting from reduced operating expenses and lower-than-expected generic erosion of VYVANSE in the United States. The company also highlighted the successful launch of ENTYVIO Pen in the US and robust growth in its immunoglobulin portfolio. In conclusion, Takeda Pharmaceutical remains focused on driving growth through its key products and advancing its pipeline, despite facing challenges such as generic competition and R&D investment needs. The company's financial performance and strategic initiatives suggest a proactive approach to sustaining its market position and delivering innovative treatments to patients globally. Takeda Pharmaceutical Company Limited (TSE: 4502) has demonstrated resilience in its financial performance despite the challenges posed by generic competition and the need for increased R&D investments. As per the latest data from InvestingPro, Takeda is trading at a high earnings multiple with a P/E Ratio of 44.32, indicating investor confidence in its future earnings potential. However, when adjusted for the last twelve months as of Q1 2025, the P/E Ratio stands at a more moderate 16.49, reflecting a nuanced valuation landscape for the company. InvestingPro Tips suggest that Takeda's valuation implies a strong free cash flow yield, which is a positive sign for investors looking for companies with the ability to generate cash and potentially return it to shareholders. Additionally, with a Gross Profit Margin of 66.07% in the last twelve months as of Q1 2025, Takeda maintains a robust profitability in its operations, underscoring its efficiency in managing costs relative to revenue. It's worth noting that Takeda has maintained dividend payments for 33 consecutive years, showcasing its commitment to providing shareholder returns. The dividend yield as of 2024 was 3.39%, which may attract income-focused investors, especially when considering the stock is trading near its 52-week low, as indicated by the price being 85.91% of its 52-week high. For investors interested in exploring more about Takeda's investment potential, there are additional InvestingPro Tips available at https://www.investing.com/pro/TAK, offering deeper insights into the company's financial health and market position. In conclusion, Takeda's recent financial data and the InvestingPro Tips reinforce the company's position as a prominent player in the Pharmaceuticals industry, with a solid track record and a strategy aimed at sustaining growth and shareholder value. Christopher O'Reilly: Thank you very much for taking time out of your very busy schedule to join us for this first quarter earnings call by Takeda for FY '24. I'm the master of ceremony today. My name is O'Reilly from IR, I'm the Head of IR. I would like to explain the language setting first. Please find the language button at the bottom on the Zoom (NASDAQ:ZM) window. If you wish to listen in Japanese, please select the Japanese; if English, please select the English. If you want to listen to the original, please turn them off. Before starting, I would like to remind everyone that we'll be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in the most recent Form 20-F and in our other SEC filings. Please also refer to the important notice on Page 2 of the presentation regarding forward-looking statements and our non-IFRS final measures, which will be also discussed during this call. Definitions of our non-IFRS measures and their reconciliations with the comparable IFRS financial measures are included in the appendix of the presentation. Now without further ado, we would like to move on to the presentation of the day, which will be given by Christophe Weber, President and CEO; Milano Furuta, Chief Financial Officer; and Andy Plump, R&D President. Following the presentations, we have the time for Q&A. Now let us begin. Christophe, over to you. Christophe Weber: Thank you, Chris, and thank you, everyone, for joining us today. It's a pleasure to be with you all. Overall, we had a very positive start to fiscal year 2024. In the first 3 months, revenue grew 2.1% at constant exchange rate. Performance was driven by the continued strong momentum of our Growth & Launch Products, which grew 17.8% at constant exchange rate, and they now represent 46% of our total revenue. ENTYVIO growth has started to accelerate since last quarter with the launch of ENTYVIO Pen in the U.S. Still early days as we are getting full access coverage, but encouraging. We also saw robust growth of our immunoglobulin portfolio, TAKHZYRO, QDENGA and FRUZAQLA. We are also managing actively the life cycle of our Growth & Launch portfolio. In Q1, we further expanded our main product geographic reach with approval of LIVTENCITY in Japan and FRUZAQLA in Europe. In the first quarter of the fiscal year, our core operating profit margin was at 31.6%, benefiting from phasing of R&D investment, reduction in other OpEx and temporarily lower-than-anticipated generic erosion of VYVANSE in the U.S. Over the remainder of the fiscal year, we expect multiple pipeline programs to progress into Phase III, and we are awaiting our R&D investment towards future quarter accordingly. We also expect VYVANSE generic erosion to come back in line with projection. We continue to be very focused on improving our core operating profit margin through our multiyear efficiency program. This program is focused on 3 areas of opportunity: increasing organizational agility, improving procurement savings and strengthening how we leverage data, digital and technology across Takeda. Our progress on this program is on track. In Q1, we took concrete steps to improve organizational agility, for example, in R&D and in our U.S. commercial organization. We also identified and executed new procurement-led efficiencies. For example, we have been using data, technology and AI to optimize our supplier selection process. We believe that our investment in data, technology and AI will yield productivity and efficiency gain across our value chain. For example, in manufacturing and quality, our goal is to accelerate the release of drug batch, which will improve our working capital and our ability to supply it. We also took steps to further enrich our pipeline. We signed 2 option agreements for mid- and late-stage programs: one with Ascentage for olverembatinib for chronic myeloid leukemia and other hematological concerns; the other with AC Immune for ACI-24.060, an active immunotherapy designed to delay or slow Alzheimer's disease progression. Agreements such as these complement our existing pipeline and portfolio and all promise for enriching our pipeline in the future. We also made notable advancements in our organic pipeline, too, and Andy will discuss this in more depth in his presentation. In closing, we are very pleased with the progress we made in this first quarter, which reinforced our ability to deliver on our mission to transform the life of patients while driving long-term business growth and profitability. I will now hand over to Milano to discuss our financial results. Thank you. Milano Furuta: Thank you, Christophe, and hello, everyone. This is Milano Furuta speaking. And Slide 6 summarizes our Q1 financial results. Revenue was just over JPY 1.2 trillion, an increase of 14.1% or 2.1% at constant exchange rate, we call it CER. Top line performance of CER was driven by our Growth & Launch Products with some upside from milder-than-anticipated VYVANSE generic erosion. Core operating profit, or core OP, was at JPY 382.3 billion, a year-on-year increase of 17.1% or 4.5% at CER. This core OP growth benefited from phasing of R&D investments, which we expect to be weighted more heavily in the remainder of the year. Reported operating profit was JPY 166.3 billion, a decline of 1.3%, including the impact of restructuring expenses for the cost efficiency program and the impairment of soticlestat after the Phase III study readouts. Core EPS and reported EPS were JPY 176 and JPY 61, respectively. Operating cash flow was JPY 170.3 billion, primarily driven by core OP improvements. And adjusted free cash flow was JPY 23.7 billion, reflecting almost JPY 100 billion of business development activity in Q1 and including the in-licensing of rusfertide from Protagonist and our option agreement with AC Immune. Please note that we have introduced the term adjusted free cash flow in fiscal year '24, but the calculation is exactly the same as we used for free cash flow in our presentations last year. Let's look at the year-on-year revenue dynamics on Slide 7. Takeda's Growth & Launch Products grew 17.8% at CER in Q1, more than offsetting the loss of exclusivity impact such as VYVANSE in the U.S. and AZILVA in Japan. Additionally, net positive growth in other brands contributed to 2.1% revenue growth at CER. The depreciation of the yen versus major currencies was an additional revenue tailwind of JPY 127.2 billion, resulting in a 14.1% growth on actual FX basis. Takeda has a balanced portfolio across 6 key business areas, which are all growing, except neuroscience due to VYVANSE LOE. These are driven by Growth & Launch Products, as Christophe said, which now represent 46% of total revenue and is now growing at 17.8% at CER. All of these products performed broadly line with expectations in Q1. ENTYVIO growth was 7.6% at CER. We have seen an uptick from the prior quarter supported by the launch of ENTYVIO Pen in the U.S. As of July, 2 out of 3 patients have an access to ENTYVIO Pen based on U.S. health plan adoption. We expect growth to further accelerate this year with expansion of access. TAKHZYRO continues to have a strong momentum with growth of 19.8% of CER. It is capitalizing its leading position in the expanding prophylaxis market in HAE. Within PDT, immunoglobulin grew 21.9%, while albumin declined 14.2% due to anticipated phasing of supply to China. We expect albumin revenue to recover and reaffirm the full year forecast to single-digit growth at CER. We are happy to see the first launch uptake of FRUZAQLA and QDENGA. For FRUZAQLA, it is still early days, but the first quarter sales are slightly better than we expected with revenue of JPY 11.9 million. We expect momentum to continue with EU approval in June and approval in Japan anticipated soon. QDENGA, our dengue vaccine, is now available in 21 countries. We see strong demand in both endemic and non-endemic markets. Recently, the WHO added QDENGA to their list of pre-qualified vaccines; and Gavi, the Vaccine Alliance, approved its support for our dengue vaccine program. These acknowledgments should drive further awareness and access for QDENGA going forward. Slide 9 shows the year-on-year bridge for core operating profit. You can see how LOE had a proportionally larger impact on profit than revenue due to the high gross margin of products like VYVANSE and AZILVA. In Q1, this was offset by phasing of expenses, particularly in R&D. R&D investment in Q1 decreased by 7.7% at CER, but we still expect a modest increase for the full year as multiple programs move into Phase III in the coming months. In other OpEx, we saw a decline versus prior year benefiting from initiatives, including the rationalization of real estate we executed last year. The cost efficiency program that we announced in May is also progressing on track. We expect savings from this program will ramp up in coming quarters. When it comes to reported operating profit, higher impairment of intangibles, mostly for soticlestat, and higher restructuring costs associated with efficiency program more than offset the core OP growth. Restructuring costs in Q1 totaled JPY 40.9 billion, tracking in line with our expectations for the full year. Also in Q1, we booked a legal provision in other expenses according to our agreement in principle to resolve U.S. product liability litigation related to Prevacid and Dexilant. The full year FY '24 outlook is unchanged from what we provided in May. We will continue to monitor the VYVANSE generic erosion alongside performance of the rest of our portfolio and FX rates. We will provide an update at the Q2 earnings in October. A brief update on the financing activities. In June, we issued a new hybrid bond of JPY 460 billion. All the proceeds will go towards refinancing the JPY 500 billion of hybrid bonds from 2019 that we'll call in -- we will call in October 2024. The balance of JPY 40 billion will be refinanced with hybrid-backed loans, which will come into effect on the call date. In July, we executed USD 3 billion of debt financing. We used this to prepay USD 1.5 billion of bonds maturing in 2026 and to pay down another USD 1.5 billion of outstanding commercial paper. I just want to clarify, as all these are refinancing activities, they are leverage neutral, and they have smoothed out our debt maturity ladder, as you can see. We maintained 100% of our debt at a fixed interest rate, and the weighted average cost is now approximately at 2%. Thank you for your attention, and I'll now pass over to Andy. Andy Plump: Thank you very much, Milano. Hello to everybody on today's call. So if we go to the next slide, please, Chris. Thank you. We start with soticlestat, which recently completed Phase III trials in 2 indications: Lennox-Gastaut and Dravet syndrome. As previously communicated, soticlestat failed to demonstrate clinical benefit in Lennox-Gastaut. Soticlestat also failed to meet its primary endpoint in the Dravet syndrome Phase III trial, narrowly missing with a p-value of 0.06. However, the totality of data from this study with meaningful effects on key secondary endpoints, combined with the highly significant results from the large Phase II study, suggest clear clinical benefits for soticlestat in Dravet patients with a differentiated safety profile. Given the large unmet medical need in Dravet, we are investigating a potential regulatory path forward. This quarter, we had important Phase IIb data presented for TAK-861 and mezagitamab that we will describe later in the presentation. FRUZAQLA and LIVTENCITY had additional approvals that expand their geographic reach. Maralixibat was filed in Japan for Alagille syndrome and progressive familial intrahepatic cholestasis. In addition, we continue to expand the depth and breadth of our pipeline by signing 2 option deals, as Christophe mentioned, for mid- and late-stage programs. From percentage Ascentage Pharma, olverembatinib is a third-generation PCR-able tyrosine kinase inhibitor to treat CML and other hematological malignancies. From AC Immune, ACI-24.060 is an active immunotherapy aimed at slowing Alzheimer's disease by targeting toxic amyloid beta. Building on the optionality we have gained with these 2 deals, let's now turn our attention to the overall momentum we are generating in our pipeline. Next slide, please. Our rich R&D pipeline continues to advance with 2 significant opportunities: zasocitinib, our selective TYK2 inhibitor; and TAK-861, our orexin 2 receptor agonist, both poised to deliver near-term Phase III readouts. Zasocitinib has the potential to be the leading oral treatment for patients with moderate to severe plaque psoriasis, addressing a significant unmet medical need for patients seeking clear skin. The Phase III trials are enrolling rapidly, and we expect to complete enrollment in fiscal year 2024. TAK-861 is also advancing rapidly as we have initiated global Phase III trials in narcolepsy type 1. We will provide updates on the zasocitinib and TAK-861 pivotal trial designs, our overall program time lines and market potential later this year at our R&D Investor event. Beyond these 2 programs with significant revenue potential, we have significant depth and breadth in our late-stage program -- pipeline that will further contribute to Takeda's long-term growth. Our partners at Protagonist have been making strong progress with rusfertide, which continues to enroll well with a target filing expected in fiscal year 2025. Fazirsiran continues to advance, and mezagitamab will begin Phase III trials for immune thrombocytopenia or ITP in the second half of fiscal year 2024. Near-term Phase II readouts that can expand our growing late-stage pipeline include ADZYNMA in immune thrombotic thrombocytopenic purpura or ITTP and TAK-227 in celiac disease. We have additional data inflections within our early-stage pipeline and intend to continue targeted business development activities to further enhance our maturing pipeline. Now let's review some of the exciting data that was presented this past quarter. Next slide, please. These transformative Phase IIb data presented at the SLEEP conference demonstrate the potential to revolutionize the treatment of narcolepsy type 1 or NT1. Unlike existing treatments, by addressing the underlying pathophysiology of the disease, TAK-861 has shown the ability to significantly improve patients' quality of life and, in many cases, normalize the entirety of their symptoms. Greater than 80% of the NT1 patients on the mid to high twice-daily doses were within the normal ranges for the Epworth Sleepiness Scale and the Maintenance of Wakefulness Test. Weekly rates of cataplexy were driven to near 0. This efficacy was stained over an 8-week treatment period, and 95% of patients rolled over into a long-term extension study with no patients discontinuing due to treatment-related adverse events. We are observing sustained efficacy in our long-term extension study with no evidence of hepatotoxicity. Over 100 patients have now been treated for at least 6 months on active therapy and approximately 20 patients for greater than 1 year. We intend to present long-term efficacy and safety data at a medical conference this fall. It's worth noting that current NT1 therapies have shown maintenance of wakefulness times ranging from 3 to 10 minutes and Epworth sleepiness scores around 12 to 15, underscoring the unmet need for patients with narcolepsy. We are committed to bringing this exciting therapy to patients as quickly as possible. Let's now focus on the mezagitamab immune thrombocytopenia or ITP data. Next slide, please. Mezagitamab is an anti-CD38 antibody which depletes antibody-producing plasma cells as well as impacting a range of other cells involved in inflammatory processes. This leads to a rapid onset of response and a long-lasting immunomodulating effect. The unmet medical need in ITP is high with relatively few approved therapies and as many as 1/3 of patients not well controlled on existing therapies. In this Phase IIb trial, we assess the efficacy of mezagitamab in a deeply treatment-experienced population of patients with persistent or chronic ITP. The study demonstrated consistent dose response and high response rates at the high doses. There also appears to be the potential for durable and long-term remission after therapy is stopped. The treatment of emergent adverse effects were similar between treatment and placebo arms. We will be starting a Phase III program in ITP in the second half of the fiscal year. Finally, I would like to take this opportunity to invite you to our R&D Day to be held December 12 in the evening, Eastern Standard Time, and the morning of December 13 in Japan. We will review data, development plans, time lines and our assessment of the market opportunities for zasocitinib, TAK-861 and other late-stage pipeline programs. Please save this date in your calendars. Thank you very much, and I will now turn it over to Chris to open the Q&A session. Christopher O'Reilly: We would like to invite questions. In addition to Christophe, Milano and Andy; Julie Kim, President of U.S. Business Unit, will also join the Q&A. [Operator Instructions] A - Christopher O'Reilly: The first question, from Jefferies, we have Barker-san. Steve, please unmute your microphone and ask your question. It looks like he put his hand down. So let's move on to the next question, Matsubara-san from Nomura Security. Hiroyuki Matsubara: Yes, this is Matsubara from Nomura Securities. Can you hear me okay? Christopher O'Reilly: Yes. Hiroyuki Matsubara: I have two questions. First question is about VYVANSE. The generic supply will start again in August. So what is the current situation? And in the second quarter, do we see a decline in revenue? Or do we see that in the third quarter? What is your view? And the second question is about immunoglobulin. I understand that it's growing right now. But donor fee or other measures, maybe you can implement measures to improve OP margin? Are you doing that right now? And have those measures changed since the last quarterly call? Christopher O'Reilly: Okay. Thank you for your question. So the first question on the latest status of VYVANSE in the U.S. and the [soticlestat] generic supply and when we expect that to accelerate, I'd like to ask Julie to comment on that question. And then the second question about any changes in our plasma business, particularly around donor fees, margin improvements, any commentary on that? I'd like to ask perhaps Christophe to take that question. Julie? Julie Kim: Thank you, Chris, and thank you for the question, Matsubara-san. In terms of VYVANSE, as you've noted, we have seen the supply from generics companies improve over the past quarter and, therefore, our VYVANSE demand has declined, although it was above what we were expecting. Quarter-over-quarter, we do expect the supply situation for the generics to improve, but it is very difficult for us to accurately predict exactly what their supply might be. So we are monitoring this closely for VYVANSE. We do not have any supply challenges. And as I said, we do expect the overall supply for the generics to improve quarter-over-quarter. And so we saw, from a VYVANSE perspective, roughly just over 30% decline versus last year, and we expect our continued erosion of VYVANSE to proceed as planned. Thank you. Christophe Weber: Thank you, Matsubara-san, for the question regarding PDT. A strong quarter indeed in terms of growth. We expect the growth to be slightly lower for the full year, but very strong demand. Our margin has been improving now for a few quarters, starting just after COVID, in fact. This is due to the fact that we are optimizing our supply chain. We are growing our revenue using our manufacturing capacity fully. And the donor fee has been stable now for a couple of quarters. So -- and we expect them to remain stable, but we will see how this is evolving. So overall, this is really how we are increasing our margin. We are actively managing donor fee. We are growing our revenue. Our subcu also is growing faster, which is helping our overall margin. And then we are optimizing the utilization of our manufacturing capacity. Thank you. Christopher O'Reilly: Now Jefferies, Mr. Steve Barker, it seems you raised your hand. Please go ahead, Steve. Steve Barker: Thank you for giving me this opportunity to ask two questions, both are related to pipeline. Firstly, I was wondering if you could comment on your decision to end your partnership with JCR for Hunter syndrome candidate JR-141. And then second question is regarding your deal with AC Immune for Alzheimer's. And given the regulatory challenges that Eisai's LEQEMBI continues to suffer, I think there are questions in people's minds about the amyloid thesis in general, but this deal seems to indicate that Takeda believes that this is a very legitimate target. And I was wondering if you could comment on that topic generally and on this program more specifically. Christopher O'Reilly: Thank you, Steve. Andy, would you like to take those 2 questions, please? Andy Plump: Sure. Steve, it's Andy Plump. So firstly, as you know, we've undergone a very significant prioritization of our pipeline over the last year to increase capacity to support our emerging late-stage pipeline, and the JCR-121 decision was really just a part of that prioritization. So we're quite enthusiastic about the program. We hope for patients and for JCR that that's a successful program. For the ACI-24.060 program, actually, I have a different -- slightly different take than the one that you just described. I think that the benefits that we've seen with the amyloid beta clearing passively administered antibodies are unequivocal. There's clear clinical benefit. The benefits are modest, which many people believe reflects the timing of intervention. We think that with the active immunotherapy, the vaccine, firstly, we have the potential to generate a safer profile based on the kinetics of raising these antibodies. And secondly, if -- and of course, we need to wait and see the Phase II data. We still haven't seen the Phase II data. This is a very early program. But if we're seeing the kind of amyloid beta clearing that the passively administered antibodies have seen, we think we have the potential to go in even earlier in these patients with a very convenient administration. And we and many believe that by going in earlier, you have the potential to significantly increase the level of efficacy. It's clear that the uptake of these antibodies has been slow. But we think that the vaccine has a very different profile that could really potentially transform the treatment of this disease. Steve Barker: Just to follow up on the first topic. Takeda already has the best-selling treatment for Hunter disease, ELAPRASE. And presumably, you thought that the new asset you were developing with JCR had the potential to displace that. Is there something that you've seen in the market performance of -- is cargo in Japan, for example, that made you rethink that view? Do you think that ELAPRASE can continue to be the most popular treatment for Hunter syndrome going forward? Andy Plump: Well, maybe I'm going to ask Julie to step in here, but maybe just to level set, so there was -- the JCR, the 141 asset actually was unique relative to ELAPRASE that it had a shuttle mechanism that allowed it to traverse the blood-brain barrier. And so our hope and our continued hope for JCR and for patients with this asset was the ability to expand the treatment potential of this replacement enzyme to treat children that have neurological manifestations as well. But Julie, maybe you want to comment as well? Julie Kim: Sorry, just trying to get myself off mute. So yes, in terms of ELAPRASE, we continue to be pleased with the presence of ELAPRASE on the market. And there are a couple of small competitors, as you are aware, in some of our markets for the Hunter patients. And we also had, as you know, another program that we were studying in terms of Hunter that did not meet its endpoints in the Phase III. So we continue to see that there is interest in developing further treatments for Hunter patients. But at least for now, ELAPRASE continues to serve the needs of those patients. Thank you. Christopher O'Reilly: Moving on to the next question, Morgan Stanley (NYSE:MS), Mr. Muraoka. Shinichiro Muraoka: This is Muraoka from Morgan Stanley. My first question is about ENTYVIO. I think ENTYVIO Pen is a wonderful story. And the CER for full year is 16%, that's the target. And if you think about the gap against the target, you have to really accelerate the growth in the second quarter. Otherwise, you cannot really achieve the full year target on a constant currency basis. Do you believe that you can catch up before the end of the year? And if so, do you have any evidence? Why do you think that? Sorry, that was the first question. And the second question is at the time of our R&D Day, 079, mezagitamab IgAN POC data, can we expect to see that on the R&D Day? That's the second question. Christopher O'Reilly: Okay. Thank you for your question. So the first question on ENTYVIO and the confidence in the full year target of 16% growth. Considering the importance of the Pen launch in the U.S., I'd like to ask Julie to comment on our expectations for the rest of the year for ENTYVIO and the Pen uptake. And then the second question on whether we will see TAK-079, mezagitamab IgAN data at the R&D Day later in the year, I'd like to ask Andy to comment on that. Julie Kim: Yes. Thank you for the question, Muraoka-san. And in terms of ENTYVIO in the U.S., as you've noted, the Pen launch has gone well thus far, and we are continuing to increase our access for patients. We've seen 6.5% growth in Q1 in the U.S. And we do expect, since the Crohn's indication was also just approved a couple of months ago, that we will see further acceleration as we continue to pull through not just the UC indication on Pen, but also the Crohn's indication on Pen. As Christophe mentioned in the presentation and Milano as well, we are continuing to increase the access for patients in the U.S. And with the combination of the 2 indications, plus improved access, we do expect to see an acceleration in the second half of the year for Pen in the U.S. I would also note that last year, we had, across the globe, 12% growth in volume, and we do expect to see lower EU clawbacks this year, so that will also contribute to our ability to achieve the 16% growth year-on-year for ENTYVIO, which we acknowledge is ambitious. But we do have positive indications in terms of our ability to achieve that. And as I said, we continue to push in the U.S. and growth in Europe continues to be strong as well. Thank you. Andy Plump: Yes. Muraoka-san, thank you. It's Andy. So obviously, we'll take a deep dive into the mezagitamab program as one of the key areas of focus at the R&D Day in December. It's including ITP, IgAN and other indications that we're considering this, the mechanism of action for this molecule suggests the potential for benefits across a range of indications. We're clearly committed to ITP. We have very robust Phase Ib data in IgAN. IgAN is an extraordinarily competitive field. We think our profile is equal to or better than anything that's been reported, but we're being thoughtful in terms of how we proceed. Our intent right now is to disclose data at a medical conference in the fall and to have that data available to share with you at the R&D Day, but we're also thoughtful of the competitive landscape. And so more to come. Thanks. Christopher O'Reilly: Okay. Thank you very much. I'd like to call on the next question, Mike Nedelcovych from Cowen. Mike Nedelcovych: I have two. My first is on TAK-279. So as I'm sure you're aware, another competitor TYK2 inhibitor failed in a mid-stage IBD trial. Relative to deucravacitinib, you have noted in the past that TAK-279 is being tested at higher equivalent doses, and that could make the difference in IBD. Should we apply the same logic when comparing to the Ventyx molecule? Or are there additional factors to consider? And my second question relates to guidance. VYVANSE again performed better than expected this quarter and, at least by our estimation, all of your key products as well. So I'm curious if your reiteration of full year guidance is meant to lean cautious or if there may be headwinds in the rest of the fiscal year that we're not considering? Christopher O'Reilly: Thanks, Mike. So I think the first question for Andy. And then the second question on guidance, I'd like to ask Milano to comment on that, please. Andy Plump: Mike, thanks for the question. So of course, we've seen essentially what you've seen with respect to the Ventyx disclosure, which is just a press release. So we don't have all the data in front of us. What we know from that press release is that it was a relatively small study that was running Crohn's disease at doses that were equivalent to the doses that were used in their psoriasis Phase II program. We know from the psoriasis program that the data were -- subclinical data were suboptimal relative to our 30-milligram dose in 279, directionally slightly better than deucravacitinib, slightly worse than 279. Those are the same doses that were used in IBD. The disclosure for the IBD trial was that they failed in their primary endpoint, which is a very subjective endpoint, very unusual to use this endpoint, which is called the CDAI in a Phase II study and that they showed dose-dependent positive effects and a much more robust objective endpoint, which is endoscopy. So of course, we're going to have to wait to see these data. But our internal sense is it's actually encouraging for 279. We continue to have strong belief in the potential in IBD, and both the Crohn's and ulcerative colitis studies are enrolling, and we expect to see them read out in 2026. Milano Furuta: Thank you, Mike, and then I'm going to answer to the second question, so the -- about the guidance. So we don't change the guidance. It's not about the headwinds, but rather maybe 2 components for the both the top line and the expense side as well. So top line, you commented about VYVANSE, but yes, we did have some upside in VYVANSE at the beginning of this quarter. But we do see now VYVANSE generic erosion is coming back to our sort of expectation. And then we do expect that generic erosion is going to be accelerated the coming quarters. And for expense side as well, the R&D investments are weighted toward the rest of the year. So all in all, if you look at the full year, there is not much the big, big component at this moment we think we should change the guidance as of now. But we will monitor the situation, and we will come back at the Q2 announcement in October. Christopher O'Reilly: Moving on to the next question, JPMorgan (NYSE:JPM), Mr. Wakao, please. Seiji Wakao: Yes, this is Wakao, JPMorgan. I have two questions. My first question is about ENTYVIO. SKYRIZI was approved for the indication of UC recently. And does it impact ENTYVIO's share or revenue in a negative way? That is my question. What is your view on this? And the second question is about the gross profit margin -- gross margin. 65.5%, I think, is the target for the full year, and the first quarter was at 68%. So what are the factors that would lower this number from the second quarter and beyond? That's all. Christopher O'Reilly: Thank you, Wakao-san, for the question. So the first question on ENTYVIO impact from the approval of SKYRIZI in UC, any impact on market share? I'd like to call on Julie to comment on that. And then second question for Milano on gross margin, 68% in Q1 with an outlook for 65% for the full year. What are the reasons why it will decline in the coming quarters? Julie Kim: Thank you for the question, Wakao-san. In terms of the UC indication, ENTYVIO continues to hold our strong position as market share leader in first line. Where we do see churn in terms of patients is in second line and beyond, and this is where SKYRIZI had their initial impact with CD and that's where we are seeing their initial impact for UC as well. So again, from a mechanism of action perspective, ENTYVIO remains the only gut-selective therapy that's out there for IBD patients, both in UC and CD, and the new entrants seem to be impacting more within the other classes, the other MOAs. Thank you. Milano Furuta: Thank you, Mr. Wakao. This is Furuta speaking. In terms of outlook of gross margin, after the first quarter, for the remainder of the year, VYVANSE and AZILVA, high gross margin products will be shrinking, especially VYVANSE. So that's the impact. And also albumin, lower-margin products, we will see recovery in terms of demand as well as revenue, and this is why we expect the gross margin to lower somewhat. Q1 gross margin is in line of our expectation. So currently, we want to maintain the existing guidance. Christopher O'Reilly: Moving to the next question, I'd like to call upon Tony Ren from Macquarie. Tony Ren: So I want to ask about your IVIG, your immunoglobulin in CIDP. So we saw some data, some results coming out of argenx. Their VYVGART was approved in CIDP, I believe, quite late in June. And they said the uptake in CIDP is exceptionally strong. I think that's their wording in their transcript. So I just want to see what type of -- are we being -- so we've had competition from them for about a month now. I just want to see, what are you seeing in the market? And then I also want to go back to the market share for ENTYVIO as my second question. If you look at AbbVie's pronouncements and what they say during their earnings about IBD, they are obviously very aggressively targeting the frontline bio-naive IBD setting. And I just want to see your view on that. And also, I believe you guys used to show a longitudinal market share graph of ENTYVIO and its competitors in IBD. I don't believe I see it in this presentation for the first quarter. I just wanted to see if I'm not missing anything here. So that's my second question. Christopher O'Reilly: Thank you, Tony. I think we can call on Julie to answer both of these questions. Julie? Julie Kim: Yes. Thank you, Tony, for the questions. So let me start with your first one in regards to CIDP. So in terms of CIDP, our expectations have not changed in terms of the long-term position for IGIV or IGs in general, not just IV, both our GAMMAGARD LIQUID and HYQVIA in CIDP. And so, of course, for patients, it is always a positive situation when they have more choice, especially with the disease area like CIDP where the patients are heterogeneous and we know that not all patients respond to IG therapy. But IG does remain the gold standard. And we are pleased with our launch of CIDP and HYQVIA over the past several months. Moving to ENTYVIO. So you had a couple of questions on ENTYVIO. So let me see if I remember them correctly. So the first, in terms of ENTYVIO share in first-line vis-à-vis AbbVie (NYSE:ABBV). So as I mentioned for first-line bio-naive share, we are still the market share leader both in overall. And then when we talk about the market share graph, which I think is your second question, so as you are aware, I'm sure everyone is aware, there was a cyber-situation earlier this calendar year that impacted claims and claims processing. And because of that, at this point, we're not able to show the current share data. As soon as that has been sorted and worked through in terms of the claims data in the U.S., we will be able to revert and show the share data again. But in terms of first-line bio-naive, ENTYVIO is still the market share leader. I hope that addresses your questions. And if I missed something, please ask again. Christopher O'Reilly: Moving on to the next question, UBS Securities, Haruta-san. Kasumi Haruta: Yes, this is Haruta, UBS Securities. My first question is about R&D organization. Margin improvement program is in place. And within FY '24, in terms of headcount, organizational structure, I understand that you'll finish reorganizing, and you mentioned that. I think some of the functions will be centralized and the efficiency will be improved. But with a fewer headcount, how can you improve productivity? And how do you intend to run, operate the new organization? So that's my first question. My second question is about the ENTYVIO biosimilar. I think some companies are advancing in the development, not necessarily in all indications, but in '25 or '26, some of the Phase III studies will be completed according to my estimation. Now status of biosimilar development, considering this status, do you think ENTYVIO can protect itself against the biosimilar until 2030, 2032? Do you maintain this assumption? Or do you have any updates on how long you can protect yourself against biosimilars? Christopher O'Reilly: Thank you, Haruta-san, for your questions. So the first question on R&D organization, with the restructuring of the organization that's taking place this year, how can we make sure that we are improving productivity through this period of change? And then the second question was on ENTYVIO biosimilar timing. So I think the first question, for Andy; and then second question, I think perhaps, Christophe, if you could comment on our latest biosimilar entry timing assumptions for ENTYVIO. Andy Plump: Thanks, Chris, and thanks, Haruta-san. So we're continually looking at our pipeline. We're continually making data and strategic-driven decisions to prioritize our pipeline, and we're continually looking at how we operate to ensure that we're operating in the most effective and efficient way possible. We, over the course of the last year, as I mentioned earlier, we went through quite a significant pipeline prioritization to ensure that we were concentrating our resources as much as necessary to support our growing late-stage pipeline, which now has 6 programs in it and the potential for more programs to come. As Christophe has mentioned, previously, we've also year-on-year been increasing our R&D budget to ensure that we can support that pipeline. So the efficiency program that we've undertaken over the past year, and that's in full swing right now, is really designed to ensure that we have an organization that can drive fully that pipeline forward. Given the prioritization, we feel that we're rightsized to deliver on that pipeline. We're also, as we've mentioned in many different settings, we're also looking to leverage more and more efficiencies in automation from data, digital and technology. And we're starting now to realize some of the benefits of that strategy. Thank you. Christophe Weber: Thank you for the question regarding ENTYVIO biosimilars. Look, based on what we know and we look at, of course, development stage of biosimilars, but also we look at the defense of our patent set, we don't see any reason to change our current assumption is that the earliest biosimilar could enter the market in the U.S. will be 2030 to 2032. So no change to our assumptions so far based on what we know. I will also mention, because we get the question very often, that the ENTYVIO Pen, which is very important right now, as Julie mentioned, it does allow us to keep our leadership in bio-naive patients. We have not seen a market share decline because of the ENTYVIO characteristic. But the ENTYVIO Pen is not allowing us to have a longer protection. So this is why we have no change to our assumptions when it comes to biosimilar entry. Thank you. Christopher O'Reilly: Next question, from Citi, Yamaguchi-san. Hidemaru Yamaguchi: This is Yamaguchi from Citi. I have two questions. The first question that might be in the presentation, but I may have missed it, but the QDENGA, Q1 looks very strong. And is there any kind of onetime factor why this is the kind of basic number for this quarter, which I can think over the 4x more than this one? So that's the first question, QDENGA situation. The second question is kind of a repeated question, but the progress rate in the Q1 as far as earnings is concerned, except currency, except VYVANSE, is it in line or is it still pretty looks good as far as the earnings progress is concerned, except currency and then VYVANSE? Christopher O'Reilly: Thank you, Yamaguchi-san. So the first question on QDENGA performance, I'd like to ask Christophe to comment on that. And then the second question on Q1 progress rate versus the full year, excluding FX, I'd like to ask Milano to comment on that, please. Christophe Weber: Thank you, Yamaguchi-san. Look, I think QDENGA is off to a strong start. We see a very significant demand where it is -- I mean, in endemic countries as well as countries where there is a travel market. We are ramping up our manufacturing capacity. This is a limiting factor right now. The demand is way greater than our supply capacity. We are expanding this supply capacity. So yes, we are very pleased with the takeoff. I don't think there is any special case in here. There is -- there will be in the future, by the way, because there is a private market that is quite predictable and linear, if you like, but more and more because we are going into public immunization programs. They are not obviously phased, if you like, depending on the order, on the supply that we can provide to a government. But really, product is off to a fantastic start. And as we all know, dengue is a major issue in many countries. Thank you. Milano Furuta: Thank you, Yamaguchi-san, for the question. So the -- overall, I think on the top line side, we are -- we think it's on track. It's according to our expectation. And VYVANSE indeed have some upside at the beginning -- especially beginning of the quarter. But we do expect it's coming, by that generic erosion, will come back to our expectation level going forward. For the expense side, the -- there was some phasing in R&D. So we spent less in R&D for the first quarter. And then those development costs are weighted toward the rest of the year. So it's going to ramping up. So the -- yes, we did have less expense in Q1, but it will catch up. So all in all, according to our expectation, and then that's why we don't change the guidance at this moment. Thank you. Christopher O'Reilly: I think we have time for just one final question, so I'd like to call on Miki Sogi from Bernstein. Miki Sogi: So first question is the TAKHZYRO and immunoglobulin. It seems like these 2 products had a really strong growth in first quarter. Is there any market dynamics that -- can you explain this -- the growth? And also, is this something you are expecting to sustain over the year? Miki Sogi: Yes, exactly. Yes. And so for the second question is the -- so TYK2 from the BMS. We have been hearing that these products, TYK2 inhibitor, the first in class has been -- its launch has been quite underwhelming. And this is due to the fact that the payer coverage has been quite slow. I just wanted to see, is it the kind of pace that your TYK2 inhibitor would also have? Or if not, what would you do differently? Christopher O'Reilly: Great. Thank you, Miki. So Julie, would you like to comment on both of those questions? Julie Kim: Okay. So the first one, in terms of TAKHZYRO and the immunoglobulin growth, I'll speak primarily to the growth in the U.S. versus rest of world. I'd make a couple of comments on that. But in terms of U.S., what we continue to see for TAKHZYRO is a very strong growth in terms of patients year-over-year. And so even though the product has been on the market for quite a number of years and we've had new entrants like orals come on, we continue to see a strong growth in patients. So for example, in Q1 of this year, we had roughly 25% of our start forms come from prescribers who are writing TAKHZYRO for the first time. So we're quite pleased with the continued growth of TAKHZYRO in the U.S. And outside of the U.S., we continue to see further patient growth as well as launches in our markets outside of the U.S. So that's what's driving the strong growth for TAKHZYRO. In terms of the immunoglobulins in the U.S., we've had, as I mentioned in an earlier answer, the approval of our CIDP indication for HYQVIA and GAMMAGARD LIQUID. And we've had very strong growth overall for our IGs in general because of the continued ramp that there is in terms of diagnosis and optimization of treatment in primary immune deficiency and now with the addition of the CIDP indication, strong growth in the U.S. Outside of the U.S., there continues to be more demand than supply, which is contributing to growth outside of the U.S. And Chris, remind me of the second question? Apologies, I've -- it slipped my mind. Christopher O'Reilly: Thoughts on the TYK2 uptake in the U.S. and implications for TAK-279. Julie Kim: Sure. Sure. On the TYK2 uptake, so look, it's not our place to comment on our competitors' performance. But as you heard from Andy, in terms of TAK-279, we believe in the differentiated profile that we've seen thus far for TAK-279. And from a commercial perspective, if that data bears out in Phase III, that will give us a very strong position from a commercial standpoint to launch successfully against the existing products in the space in psoriasis as well as vis-à-vis the existing TYK2 product as well. Thank you. Christophe Weber: Sogi-san, sorry, maybe let me add some comments around IG. So yes, the IG's growth in Q1 was pretty strong comparing to our annual guidance, but the growth rate in a quarter-by-quarter growth rate of PDT can fluctuate a bit. So the -- we expect to stay the full year growth would be within the guidance, which is in the 5% to 15%. Christopher O'Reilly: Great. Thank you, Sogi-san. With this, we've reached the end of the call. So thank you, everyone, for joining us today, and we wish you all the best. Thank you very much.