Takeda's FY2025 Q1: Discrepancies Unveiled in R&D Spending, U.S. Business Impact, and Growth Strategies

R&D expense progression, U.S. business performance, R&D expense projections, Entyvio's growth strategy, and US market performance and strategic investments are the key contradictions discussed in Takeda's latest FY2025Q1 earnings call.



Revenue and Profit Impact of VYVANSE Generic Erosion:
- Takeda Pharmaceutical's revenue for Q1 FY2025 was just over JPY1.1 trillion, a decrease of 8.4% or 3.7% at constant exchange rates (CR).
- The reported operating profit was JPY184.6 billion, growing 11%.
- The decline in revenue was primarily due to the significant impact of VYVANSE generic erosion, which was expected to moderate in future quarters.

Growth in Launched Products:
- Takeda's launched products, representing 50% of revenue, grew 5% at CR in Q1.
- Growth was driven by products like Entyvio and TAKHZYRO, although there was a slow start for some products.

R&D and Pipeline Progress:
- The company's pipeline achieved significant results, with positive pivotal Phase III studies for oveporexton for narcolepsy type 1.
- This progress is expected to enhance Takeda's long-term growth and establish new standards of care in related disorders.

Currency and FX Impact:
- Takeda's financials were impacted by the appreciation of the Japanese yen against major currencies, serving as a headwind in Q1.
- This appreciation affected the company's revenue and profit outlook, adding to the challenges of managing exchange rate fluctuations.

Preparedness for Potential Tariff Impacts:
- Takeda's FY2025 outlook does not reflect potential impacts from tariffs, as the company has positioned itself to manage any effective tariffs.
- The company is well-poised due to a relatively low exposure of US revenue to tariffs, with approximately 8% to 10% of US revenue subject to tariffs.