Takeda Pharmaceutical Company Limited (TAK) Q4 2025 Earnings Report, Transcript and Summary

[Audio Gap] [Operator Instructions] [Interpreted] Before starting, I'd like to remind everyone that we will 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 actual results to differ materially are discussed in our most recent Form 20-F and in our other SEC filings. And please also refer to the important notice on Page 2. We may also refer to non-IFRS financial numbers. For the definition and reconciliations, please refer to the appendix in the presentation. Now, let's start today's presentation. President and CEO, Christophe Weber; CEO-Elect, Julie Kim; Chief Financial Officer, Milano Furuta; R&D President, Andy Plump. They will be presenting followed by Q&A session. Let's start.

Thank you, Chris, and good morning, good afternoon and good evening, everyone. Thank you for joining us today for Takeda year-end earnings call. Today will be my last earnings call as President and CEO of Takeda. It has been a real privilege to serve over the past 12 years. During that time, Takeda has transformed into a company with a global scale, with a strong portfolio of life-transforming medicines and an innovative late-stage pipeline with significant potential. I'm incredibly proud of what we have accomplished together with our colleagues around the world, building Takeda into a focused global R&D-driven biopharmaceutical leader, consistently delivering on our financial commitment, advancing our pipeline and creating value for all our stakeholders, our shareholders, while staying true to our values. Our CEO succession has been thoughtful and intentional focusing on preparing the company for its next chapter. In June, Julie Kim will formally assume the role of President and CEO following a well-planned transition that has allowed Julie to adjust our organization led by a new Takeda executive team to be involved in our Board evolution while staying focused on the business and supporting our launches and pipeline advancement. With Julie and the Takeda executive team leadership as well as the focus, commitment and dedication of our people around the world, the next era of Takeda is full of promise. As we reflect on fiscal year '25 and look ahead to the future, we are confident that our new products will propel us into a new growth era. I would also like to thank our shareholders, sell-side analysts and the broader investment community for your trust, engagement and support over the last 12 years. That support has been essential as we undertook our transformation with some bold moves along the way. And with that, I will now hand the call over to Julie, who will share today's business update and our guidance for the year ahead. Thank you.

Thank you, Christophe, and thank you all for joining us today. Let me start by taking a moment to recognize Christophe for his amazing leadership over the last 12 years and for building Takeda into the company it is today. I'd also like to personally thank him for his guidance over the past 7 years and particularly for his mentorship during our transition. As Christophe mentioned, this organization has expanded and looks very different today in 2026 than it did when he joined the company in 2014. It was not easy, but it was made possible because of his leadership and the dedication of our teams around the world. As we reach the final stage of the CEO transition, I am honored to be entrusted with the opportunity to lead this incredible organization into its next chapter. Over the past several months, through conversations and visits with teams across our global footprint, I've been reminded again and again that Takeda is a resilient, purpose-driven organization focused on making a positive impact on patients, and we are well positioned for the future. With that context, let me turn to our performance in fiscal year '25, a year that reflects both the progress we've made and the momentum we're carrying forward. As we close fiscal year '25, we start the next chapter from a position of strength, the culmination of a decade-long strategy that has reshaped Takeda into a focused global R&D-driven biopharmaceutical company. This was an important year for Takeda, and our solid financial performance and landmark Phase III data validate the journey we've been on and position us for major launches in 2026 and 2027. The three assets we expect to launch in the next 12 months not only demonstrate the depth and rigor of our pipeline, but also demonstrate -- but also reflect our ability to deliver against demanding development and regulatory milestones. As you can see on the left-hand side of Page 5, in FY '25, core revenue was approximately JPY 4.5 trillion, partially impacted by LOE headwinds in our mature portfolio. With robust cost management, we delivered core operating profit of about JPY 1.17 trillion, a testament to our company-wide efforts to drive efficiencies and protect core operating profit. And we continue to generate strong cash flow to fund our growth and provide returns to our shareholders. Milano will walk you through the financials in more detail shortly. We have also made excellent progress in the pipeline. On the right-hand side of Page 5, you can see that during 2025, we delivered outstanding Phase III results for three leading near-term late-stage assets, oveporexton, rusfertide and zasocitinib. We have advanced toward potential regulatory approval, positioning them as future blockbuster brands for Takeda. We also recently announced positive results from a pivotal trial of TAK-881 in patients with primary immunodeficiency disease. TAK-881 is a 20% facilitated subcutaneous immunoglobulin or Ig formulation that has demonstrated comparable efficacy and tolerability to HYQVIA with only half the Ig volume. This could significantly reduce patient burden as well as solidify Takeda's position within the subcutaneous Ig market. Also in fiscal year '25, we initiated Phase III studies for elritercept in anemia-associated MDS and mezagitamab in IgA neuropathy, further strengthening the depth of our late-stage pipeline. And through disciplined partnerships, including our strategic oncology partnership with Innovent Biologics for TAK-928 & TAK-921, we continue to expand our long-term growth trajectory. Building on our pipeline progress and the financial rigor we achieved in recent years, we are entering a pivotal execution phase in fiscal year 2026. Our near-term priorities are the successful launches of oveporexton, rusfertide and zasocitinib. In parallel, we will continue to advance the next wave of our pipeline through key data readouts for programs such as TAK-360, TAK-928, TAK-921 and zasocitinib in IBD. Importantly, our focus on transforming for growth under our evolved operating model will unlock new capabilities, efficiency and speed across the organization, enabling us to deliver on both our immediate launches and fuel our long-term sustainable growth. While I mentioned that we achieved positive results for four Phase III programs, on Page 6, I'm going to focus on three assets we expect to launch in the next 12 months. With the transformational Phase III results for oveporexton, rusfertide and zasocitinib, all three programs have moved closer to potential regulatory approval and if approved, could become part of our new cohort of blockbuster brands. Over the coming quarters, our success will be defined not only by innovation, but by focused and disciplined commercial execution. Let me start with oveporexton. We are on track to bring the first and only orexin agonist to people living with narcolepsy type 1 or NT1, potentially redefining the standard of care by addressing the underlying orexin deficiency. Phase III results demonstrated groundbreaking efficacy across a broad range of NT1 symptoms, supporting the opportunity to move beyond simple symptom control. Building upon our deep commercial expertise in rare diseases and neuroscience, we are preparing for launches cross-functionally and see a multibillion-dollar potential in the NT1 market. And with FDA priority review now granted, we are preparing for the U.S. launch of oveporexton in the second half of 2026. With priority reviews from health authorities in Japan and China, we are also preparing for launches outside the U.S. and have additional filings planned throughout the year. Next, rusfertide. This is a potential first-in-class hepcidin mimetic that has the potential to shift the standard of care in polycythemia vera or PV, a rare blood cancer. Rusfertide has demonstrated rapid, stable and durable hematocrit control, either as monotherapy or when added to existing treatments, reducing symptom burden and the need for regular phlebotomies. With FDA priority review, we're now preparing to launch in the second half of 2026. Our commercial approach is very clear: building disease awareness, ensuring patients have broad access and leveraging our hematology commercial expertise and portfolio synergies to accelerate engagement with key stakeholders and drive rapid uptake. And finally, zasocitinib. This is poised to be a leading oral treatment option for psoriasis patients with the potential to significantly expand the oral segment in a growing psoriasis market. We have seen rapid and durable skin clearance delivered through a convenient once-daily oral pill with no fasting restrictions. And when you look at the market, oral treatments are already the fastest-growing segment with the number of patients on advanced oral therapy expected to triple over the next decade. As we prepare for commercialization in the first half of 2027, we are building on Takeda's experience in successfully launching in highly competitive immunology markets as we have with ENTYVIO plus the lessons learned with ENTYVIO PEN. Taken together, these three launches will reflect Takeda's ability to turn strong science into successful commercial brands. Beyond our three near-term launches, we are even more confident in our pipeline because of the depth of growth potential in the next wave. Our broader late-stage pipeline of new molecular entities continues to deliver meaningful progress, and this now represents the most robust late-stage pipeline in Takeda's history. That depth gives us a strong foundation for sustained growth and value creation well into the next decade, and it reinforces our strategy of building a resilient core business to fuel a powerful and innovative R&D engine. As Takeda enters an exciting new phase of growth, our CEO transition has continued to move forward with speed and momentum. By stepping into the role as an internal successor, I took advantage of that to move quickly, establishing the new Takeda executive team in Q4 that you see here on Page 8. Based on my leadership team, we've updated the organizational structure to transform the company for accelerated speed and growth. This has included reducing layers to bring teams closer to patients and customers, centralizing and streamlining corporate functions, driving greater efficiency through data, technology and AI. I am excited about the impact our new leadership will have in strengthening our high-performance culture, one that's essential to delivering meaningful outcomes for patients, both today and in the years ahead. In addition to our Takeda executive team, our broader governance structure, including our Board of Directors, provides a strong and stable foundation for this new era. Our Board is composed of a majority of independent directors with a strong international mix and is chaired by Mr. Masami Iijima, an independent external director, ensuring strong governance and appropriate independence. As we position the company for its next chapter of growth, we are thoughtfully evolving the composition of our Board to align with Takeda's future needs. With the upcoming retirement of six long-serving external directors who collectively played a vital role in building the Takeda we know today, we are proposing three new Board members. I will be pleased to welcome Bruce Broussard, Koichiro Kimura and Paul Stoffels to Takeda's Board of Directors pending approval at the AGM in June. Mr. Broussard brings decades of leadership experience with large global companies and international business management and deep expertise in the U.S. health care system. Kimura-san adds extensive experience in geopolitical risk and corporate governance across the Asia Pacific region and is a former Chairman of PricewaterhouseCoopers Japan. Dr. Stoffels brings an exceptional track record in pharmaceutical R&D innovation, having overseen the global launch of 25 medicines, first as Chief Science Officer at Johnson & Johnson and then as CEO of biotechnology company, Galapagos. This Board refresh ensures we have the right mix of skills, experience and forward-looking perspective to support Takeda as we work to capitalize on our historic pipeline and accelerate into our next phase of growth. Takeda is at a unique and defining inflection point, an opportunity to reinvent ourselves to thrive in the future. This moment is shaped by the convergence of key catalysts, the upcoming launches of three potentially transformed patients, the accelerating impact of AI and the start of my tenure as CEO. The convergence of these catalysts offers a timely opportunity to lay out the path forward for our next chapter of growth. This journey will be defined by two horizons, one that will require us to transform our organization while investing in our launches, pipeline and technology and a second one, accelerating our growth to expand our longer-term impact. On the left is Horizon One: Transforming for growth. A 2- to 3-year time frame. This horizon is about strengthening our competitiveness and positioning Takeda for the accelerated growth that will follow. Our business focus in this first -- in this horizon is first and foremost, to successfully launch our three new products over the next 12 months, oveporexton, rusfertide and zasocitinib and establish them as our next generation of growth drivers. In parallel, we will advance our five additional late-stage assets, including the two recently acquired oncology programs as well as the rest of our pipeline. We will also ensure the resilience of our core in-line brands like ENTYVIO, TAKHZYRO and GAMMAGARD LIQUID even as they navigate challenging market dynamics. We are also committed to transforming our organization and processes, further unlocking new capabilities and efficiencies and freeing up resources to invest in growth. In addition to reaching new patient populations, our discipline in this first horizon will allow us to return to revenue growth as launches scale, protect our core operating profit margin, increase our return on equity, drive deleveraging and support our dividend policy. On the right is Horizon Two: Growth acceleration. This is where the work we're doing today starts to fundamentally reshape Takeda's revenue profile over the mid- to long term. In the second horizon, we will unlock our potential by maximizing our new growth engine, shifting from our maturing portfolio to a new cohort of blockbuster brands. We will achieve this by scaling our first wave of launches while preparing for and executing the launch of our next wave of late-stage assets. This disciplined investment in new products and innovation, coupled with a commitment to greater operating efficiency is our strategy to not only navigate future LOE challenges, but to emerge from them as a stronger, higher-growth company, ensuring sustained expansion and a greater impact for patients. Milano will talk more about these horizons and financial proof points of success that you can expect. Across both horizons, I want to be clear that our purpose and values remain constant. We are acting with urgency, but also with discipline and thoughtfulness as we work to deliver breakthrough medicines to patients and create a clear durable path to long-term growth for Takeda and our shareholders. I will now turn the call over to Milano Furuta, our Chief Financial Officer, to discuss the financial results in greater detail.

Thank you, Julie, and hello, everyone. This is Milano Furuta speaking. In fiscal year 2025, we delivered solid financial results despite a year of significant VYVANSE generic erosion. Core revenue was just over JPY 4.5 trillion with a decline of 2.6% at constant exchange rates or CER. Core operating profit core OP was JPY 1.17 trillion, a year-on-year decline of 0.9% at CER with strong OpEx discipline limiting the profit impact from VYVANSE. Reported operating profit was JPY 408.8 billion, an increase of 19.3%, reflecting lower amortization and restructuring costs. Core EPS was JPY 517, growing 3.1% at the CER and reported EPS was JPY 122. We delivered strong and stable cash flow. Operating cash flow was roughly in line with the prior year and adjusted free cash flow was JPY 684.5 billion. This is after the upfront payment of $1.2 billion to Innovent Biologics in December related to our strategic partnership in oncology. Slide 13 shows our performance versus management guidance. Core revenue decline of 2.6% at CER was in line with our latest guidance, which we updated at Q3 due to stronger generic erosion than initially expected. Core operating profit declined 0.9% at the CER, slightly better than our latest guidance, reflecting additional OpEx savings as a result of strict cost management. Core EPS growth was 3.1% at CER. This was even better than our original guidance at the start of the year, mainly due to a favorable tax position as positive pipeline progress in 2025 resulted in a reassessment of the recoverability of deferred tax assets. Slide 14 shows our Growth & Launch Products, which represent over 50% of total revenue and grew 4.5% at constant exchange rate. In GI, ENTYVIO grew 4.2% at CER, slightly behind our forecast of 6%. ENTYVIO continues to deliver growth as we enter our 13th year on the market, maintaining patient share leadership as the #1 brand in IBD in the U.S. However, we have seen continued pricing pressure as it becomes a mature brand as well as intensifying competition, especially in the later line settings. In this context, we expect growth of around 4% at CER again in FY 2026. In Rare Diseases, TAKHZYRO was roughly flat versus prior year. Although we continue to see strong uptake in the international markets, this is being offset by the impact of new competing products in the U.S. Our PDT business overall grew at 1.9% CER. This is a more moderate growth rate than seen in the past several years, reflecting ongoing health care system pressures and industry headwinds, but also Takeda's deliberate efforts to balance near-term growth and the margin improvements. IG grew 4.1% at CER, slightly behind our forecast as global supply in the industry has increased, resulting in downward price pressure. But importantly, we continue to see double-digit growth of our subcutaneous Ig products, which is a key profitability driver for PDT. While we -- while competitive pressure linked to supply dynamics has moderated near-term growth, we view this as temporary and believe the market will self-regulate, resulting in a more stabilized growth trajectory long term. In FY 2026, we expect to grow mid-single digits in line with the market. ALBUMIN declined 2.1% at CER, impacted by lower demand in China due to government cost containment measures, which was partially offset by tenders in other markets. While we expect albumin growth to be broadly flat in FY '26, we do have a positive outlook for the mid- to long term as the situation in China settles while we continue to build sustainable markets outside of China. Next, in Oncology, FRUZAQLA grew 14.6% at CER, in line with our forecast, driven by continued global expansion. Finally, in Vaccines, QDENGA growth was 10.7% at CER. While global demand remains strong, this result was behind our forecast due to the delay of a contract signing in Brazil as well as lower incidence of dengue outbreaks in certain regions compared to the prior year. From Slide 15, I will quickly walk through the moving pieces in our fiscal year 2025 results. First, revenue. Here, you can see how incremental revenue from Growth & Launch Products and the significant impact of VYVANSE loss of exclusivity contributed to core revenue decline of 2.6% at CER. In total, we lost approximately JPY 150 billion of VYVANSE revenue this year, and this headwind will be much smaller in FY '26. Slide 16 shows operating profit. You can see that loss of exclusivity had an impact on our gross profit, but importantly, this was almost completely offset by OpEx savings. The efficiency program we initiated 2 years ago, alongside further efforts to manage our expenses resulted in over JPY 150 billion cost savings in fiscal year 2025. This enabled us to protect operating profit broadly flat versus prior year, while reinvesting a substantial portion of those savings into growth opportunities. Next, reported operating profit on Slide 17. This grew 19.3%, primarily due to the end of amortization for VYVANSE in January 2026 and lower restructuring expenses, slightly offset by an increase in impairment of intangible assets. Next, free cash flow. Free cash flow was JPY 684.5 billion, in line with our forecast. This reflects strong operating cash flow of over JPY 1 trillion and approximately JPY 430 billion of CapEx and investments, including the $1.2 billion upfront payment to Innovent Biologics related to our oncology partnership. Our free cash flow comfortably covered our dividend and interest payments and contributed to ending the year with a strong cash balance. This puts us in a good position as we prepare to pay down debt maturing in FY 2026. Slide 19 shows the latest debt maturity ladder. We have approximately JPY 500 billion of debt maturing in fiscal year 2026 and our plan is to repay this mainly through cash on hand and the free cash flow we will generate through the year without refinancing by long-term debt. Our debt profile remains very manageable with 100% of our debt at fixed rate and a weighted average interest rate of approximately 2.4%. Before we switch focus to FY '26 guidance, I'd like to summarize our ongoing focus on driving efficiencies and OpEx savings. In FY 2024, we initiated an enterprise-wide program to drive efficiencies across the organization, focused on organizational agility, procurement savings and enhancing capabilities with data, digital & technology. Over the past 2 years, we have delivered significant results from this program as well as identify further opportunities to reduce costs, capturing approximately JPY 300 billion in gross annualized savings. This efficiency program enabled us to reduce OpEx over the past 2 years, limiting the impact of the VYVANSE LOE on our margins and freeing up resources to advance our pipeline, prepare for new product launches and further build our digital technology capabilities. With the cost reduction activities from this program now largely complete, we are pivoting to a new transformation program that will allow us to unlock further efficiencies aligned with a new organization established as a part of our CEO transition, which Julie just spoke about. As a part of this program, we plan to centralize and streamline corporate functions, reduce management layers to bring teams closer to patients and customers, continue driving procurement savings, simplify processes and leverage data and digital technologies and expand the scope of our existing global capability centers. We anticipate approximately 4,500 roles to be impacted by this transformation in FY '26 with a restructuring cost of JPY 170 billion expected this year. Through focused execution of this program, we expect to realize annualized gross savings of more than JPY 200 billion by FY 2028 with JPY 100 billion of savings in FY '26. These savings will be reinvested into growth opportunities, supporting the high priority launches of oveporexton, rusfertide and zasocitinib and progressing the other assets in our innovative late-stage pipeline. Next slide, please. FY 2026 will be a year of growth investment for Takeda. Management's guidance for revenue is low single-digit percentage decline at CER. This reflects our maturing in-line portfolio as we shift towards establishing future growth drivers with the launches of rusfertide and oveporexton. We expect OP to decline between 5% to 8% at the CER, reflecting this period of investment. It is critically important that we invest appropriately behind our three upcoming launches to drive growth for the future. And at the same time, we are progressing multiple other late-stage pipeline programs, which require significant R&D investment. These investments will be partially offset by savings from the transformation program. Core EPS is expected to decline in the mid-teens, steeper than core OP due to the favorable tax position that was positive to EPS in FY 2025. We have a stable outlook for free cash flow at JPY 650 billion to JPY 750 billion and consistent with our progressive dividend policy, we plan to increase the annual dividend to JPY 204 per share. The next few slides give more detail on the factors impacting our FY 2026 forecast. Slide 22 shows revenue. In this chart, we present our portfolio in three categories. Core in-line brands are products that are well established in the market, generate substantial revenue of over JPY 100 billion and are still actively promoted with sales and marketing investments. ENTYVIO, TAKHZYRO and ADCETRIS are examples in this category. New launches refers to products that are within 5 years of launch, such as QDENGA, FRUZAQLA and also includes upcoming new launches from the pipeline such as oveporexton and rusfertide. Finally, LOE and the mature portfolio on this slide represents all other products, including off-patent products and older brands that no longer generate growth. We have made this change in categories from the previous focus on growth and launch products to emphasize the importance of new launches in our two growth horizons. In FY 2026, we expect a smaller LOE impact compared to FY 2025, but at the same time, our core in-line brands will be more modest contributors to growth compared to the previous years. Meanwhile, contribution from new launches is still relatively small this year as we launch oveporexton and rusfertide later in this calendar year. We expect this category to be much more impactful on growth from next fiscal year. As a result, our management guidance for FY '26 revenue is low single-digit percentage decline at the CER, but with our FX assumptions of JPY 156 to the U.S. dollar and JPY 182 to the euro, we expect revenue on actual basis to increase by 3% to JPY 4.64 trillion. Moving to the core OP forecast on Slide 23. This will be a year of growth investment in new product launches, R&D and other prioritized investments such as data and technology. This investment will be funded by the transformation program, and we expect to deliver OpEx savings of about JPY 100 billion in FY 2026. Overall, we anticipate core OP decline of 5% to 8% at the CER, but on actual FX basis, the decline is only 1.1% with a forecast of JPY 1.16 trillion. Slide 24 shows our reported operating profit forecast. While we get the full year benefit of the end of VYVANSE amortization, this will be largely offset by restructuring costs associated with the transformation program. We expect reported operating profit to increase by 2.7% to JPY 420 billion. Following Julie's presentation of our growth road map that outlines two strategic horizons, I'd like to comment on our financial priorities during these horizons. In Horizon One, as we transform for growth, we must manage our resources and ensure we make appropriate investments in building the foundations of future growth. As we establish new growth drivers in oveporexton, rusfertide and zasocitinib and as they build scale, we should return to revenue growth. For operating profit, our focus is on protecting the margin during this period of investment in new product launches and pipeline progression through efficiency savings and focused trade-off decisions. While core operating profit growth may be limited in Horizon One due to investment, we should see an improvement in reported operating profit with restructuring costs winding down from FY '27 and ongoing scrutiny of our operating and financial expenses. It is very important to bring reported EPS above our dividend payments to the equivalent level of ROE above 5% within this Horizon One period. Meanwhile, our strong and stable adjusted free cash flow will allow us to drive further deleveraging towards our target of 2x adjusted net debt to adjusted EBITDA ratio. Looking forward to Horizon Two and this period of growth acceleration. First, as the initial three launches gain momentum and supplemented by additional launches from the late-stage pipeline, we should deliver compelling revenue growth. This top line growth will be the main driver of margin expansion with the organization we are building through the transformation, giving us a stable cost base, enabling us to expand the core operating profit margin to the low to mid-30s percentage. This core profit growth will, in turn, drive reported profits higher, allowing to realize significant improvement in capital efficiency metrics such as ROE and ROIC. And finally, with our leverage at 2x or below, we will have more flexibility in how we allocate excess capital. We will continue to pursue selected and targeted incremental investments to fuel future growth. I'm excited by this opportunity to build our growth engine in Horizon 1 and accelerate that growth in Horizon Two based on disciplined cost conscious allocation of capital. In closing, on Slide 26, I would like to show our capital allocation framework, which has been consistent since last year, supported by a strong cash flow and a commitment to maintaining solid investment-grade credit ratings, we allocate capital to growth and shareholder return. Through the investments we make in Horizon One, and the growth acceleration we expect in Horizon Two, we are committed to delivering highly competitive total shareholder returns over the coming years. Thank you. And I'll now pass to Andy for updates on the pipeline.

Thank you, Milano, and hello to everyone on today's call. Takeda R&D delivered an incredibly strong performance in 2025. We were 3-for-3 delivering positive Phase III data readouts for oveporexton, rusfertide and zasocitinib. Today, I'd like to highlight how Takeda's R&D is delivering on the promise of our late-stage pipeline by converting assets into successful launches while simultaneously building the foundation to support this next wave of growth. As Julie mentioned, oveporexton is a potential first-in-class orexin agonist designed to address the underlying orexin deficiency that causes narcolepsy type 1. Oveporexton has the potential to redefine the standard of care and how people with NT1 feel and function with treatment. It was granted priority review by the FDA, and we look forward to bringing this transformative medicine to patients later this year. Next is rusfertide, a potential first-in-class hepcidin mimetic. Elevated hematocrit due to excessive red blood cell production is a hallmark of PV and failure to control it in PV patients has been shown to result in a 4x higher risk of death due to cardiovascular and thrombotic events such as heart attack and stroke. Rusfertide demonstrated rapid, stable and durable hematocrit control as well as improvement in fatigue, the most common constitutional symptom in PV. It was also granted priority review by the FDA, and we are poised for a launch in the second half of FY 2026. Now I'd like to spend a few minutes on zasocitinib, including highlights from the data we presented at the American Academy of Dermatology in March. The key takeaway is simple. Zasocitinib delivers rapid and durable skin clearance in a convenient once-daily pill with no fasting restrictions. Psoriasis is a chronic immune-mediated disease characterized by itchy, painful, disfiguring and disabling skin lesions that affect patients' physical, emotional and psychological well-being. We believe zasocitinib is a potential best-in-class oral treatment for psoriasis that not only competes within the existing oral segment, but can also expand it. Zasocitinib addresses a clear unmet need for patients who today might move from a topical treatment directly to an injectable in order to reach higher levels of clearance. The AAD data set reinforces this in two ways. First, how quickly patients begin to see improvement in skin clearance compared to the most prescribed oral therapies today. And second, how those early gains translate to sustained high levels of skin clearance and quality of life improvements. The data show early separation in skin clearance compared to apremilast. By week 4, a greater proportion of patients on zasocitinib had already reached PASI 90 compared to apremilast and placebo. Now this matters because speed isn't just a nice to have in psoriasis. Patients can see and feel the difference quickly, and that can influence persistence and satisfaction with therapy. Now importantly, the early improvements in PASI are supported by the overall clinical profile. 7 out of 10 patients taking a convenient once-daily pill get great results with clear or almost clear skin as shown with PASI 90 scores, with a tolerability profile appropriate for long-term use. You can see the powerful results in the full body image on the right. This patient had over 95% of the plaques cleared from his back, arms and legs with 16 weeks of therapy. The broad clearance across the entire body is the kind of profile that can shift prescribing patterns and expand the oral psoriasis category. Again, you can see the rapid onset of effect with zasocitinib. We start to see meaningful clearance very early with a distinct trajectory of improvement over the first month. For patients, that speed can be the difference between staying on an oral therapy and deciding that they need to escalate to an injectable. As we showed with the PASI 90 graph, the response is broad-based, and a majority of the patients achieved clear or almost clear skin. And of course, in psoriasis, it's not just about clearing plaques. It's also about addressing the emotional and psychological impact on patients' lives. The DLQI is a patient-reported measure of how psoriasis affects day-to-day life, things like symptoms, social interactions, work and confidence. Consistent with what we see with skin clearance, patients on zasocitinib showed superior improvement versus apremilast and placebo as early as week 4. For prescribers, that quality of life signal showing up early and aligning with efficacy helps reinforce the overall value proposition. It supports our view that zasocitinib can be a very compelling oral option for patients who want both rapid results and meaningful quality of life improvements. Beyond early response, we also want to know, are these results durable. Durability is critical in chronic diseases like psoriasis. In patients who remained on zasocitinib at week 40 and had a response, more than 90% maintained key efficacy thresholds on the physician global assessment as well as PASI 75 and PASI 90 through week 60. This is outstanding and the best durability seen among oral psoriasis drugs. Now let's take a moment to double-click on the graph in the lower right-hand corner for PASI 90. When we look at the few patients who lost response and completed the trial, all patients maintain at least a PASI 75 and on average, had a PASI score of 84. That level of maintenance supports confidence that the early responses we see translate to durable control for patients. So taken together, rapid onset, improvements in quality of life and durable maintenance, we believe zasocitinib will be an excellent option for psoriasis patients as we advance towards launch. Our pivotal studies show zasocitinib delivers rapid and durable clearance with no new safety signals. Up to half of the patients achieved completely clear skin as measured by the physician's general assessment. In real-world use, once-daily dosing, no fasting restrictions and a well-tolerated oral regimen that can fit into patients' lives will matter. The excellent long-term durability data suggests that compliance can be high as and part of our new cohort of blockbuster brands. I'd like to close my remarks today by covering some important upcoming milestones that further reinforce our R&D momentum and the strength of our late-stage pipeline well beyond the three near-term launches. So, with three successful Phase III readouts of FY 2025, what's next? Takeda's strong development engine is operating at scale across all of our therapeutic areas. We expect a steady cadence of major catalysts across the portfolio through FY '26 and '27. Let me highlight a few. In GI, we'll continue maximizing the value of zasocitinib with additional indication expansions. This fiscal year, we're anticipating filing an NDA for approval in psoriasis and reading out the results of the head-to-head study versus deucravacitinib in psoriasis to support the launch. In FY 2027, we expect to file zasocitinib for approval in our second indication, psoriatic arthritis. Over this 2-year period, we will also learn about the next indication expansion opportunities for zasocitinib from the 4 proof-of-concept studies, which include readouts in Crohn's disease and ulcerative colitis. Mezagitamab. Mezagitamab is a fully human anti-CD38 monoclonal antibody with the potential to be best-in-class in the treatment of autoimmune conditions. Its unique, sustained and selective depletion of disease-causing target cells supports a pipeline and a product opportunity across multiple indications. In addition to two ongoing pivotal Phase III studies in IgA nephropathy and immune thrombocytopenia, we will be initiating a Phase II study in late antibody-mediated rejection of kidney transplants or AMR this year. In IgA nephropathy, mezagitamab demonstrated compelling efficacy, including stabilization of eGFR and durable kidney protection for up to 18 months off of treatment. These results, combined with a favorable safety profile support the potential for meaningful treatment holidays and improved patient convenience. We believe mezagitamab is well positioned to become a leading treatment option in IgA nephropathy with regulatory filings anticipated as early as FY 2027. In neuroscience, we will continue to expand our groundbreaking orexin franchise. The oveporexton filing in narcolepsy type 1 is proceeding well, and we expect an approval decision on or before our August PDUFA date. We anticipate filing in the EU based on the recently initiated 3003 randomized-withdrawal study. Looking beyond oveporexton and NT1, we'll have the Phase II readout for TAK-360, our next orexin 2 receptor agonist in NT2 and IH. The data from these studies will inform our late-stage programs in patients with sleep wake disorders and normal orexin levels. In oncology, the rusfertide review is on track, and we eagerly await the FDA decision by the end of August. For elritercept, the next indication expansion opportunities will begin shortly in anemia associated with first-line myelodysplastic syndrome and myelofibrosis. Over the next 2 years, we will have multiple proof-of-concept readouts for TAK-928, our PD-1/IL-2 alpha biased bispecific fusion protein and TAK-921, our Claudin 18.2 targeted antibody drug conjugate. The totality of these rich data sets will provide a clear picture on the initial expansion opportunities for our oncology pipeline, where we continue to advance programs with clear biological rationale and the potential to address high unmet needs while generating the data required to support the next stages of investment. Our outlook summarizes the key assets and milestones to follow in FY '26 and '27. As we have highlighted throughout this call, we are on track to deliver FDA approvals for oveporexton in NT1 and rusfertide in PV in fiscal year 2026 and zasocitinib in psoriasis in fiscal 2027. Fiscal 2026 is off to a good start with a positive registration-enabling Phase II/III readout for TAK-881 in primary immunodeficiencies. TAK-881 is a next-generation facilitated subcutaneous immunoglobulin, which is twice as concentrated as HYQVIA and has the potential to deliver the required immunoglobulin dose in half the infusion volume with significantly reduced infusion times and fewer injection sites. These results support TAK-881's potential to strengthen our leadership in subcutaneous immunoglobulins, a key growth driver for plasma-derived therapies. We're now preparing for regulatory submissions planned for this year. If there's one message I'd leave you with about our outlook, it's this. Our patient-driven science-first approach to R&D has established a late-stage pipeline that can sustain Takeda's growth for the foreseeable future. Going forward, we anticipate an average of 2 to 3 NME filings and/or important U.S. indication expansions each year through 2030. Momentum across our late-stage pipeline is strong and growing. It will provide a steady stream of NMEs and important indication expansions, establishing a new growth engine, shifting from our maturing portfolio and enabling a stronger, higher growth company that has a greater impact for patients globally. And with that, I'll turn it back to Julie for closing remarks.

Thank you, Andy. This is an exciting time for Takeda. Over the last 12 years under Christophe's leadership, anchored in our Japanese heritage and with the steadfast commitment of our employees, we have grown, evolved and strengthened the organization to a truly global company with scale and a remarkably innovative pipeline. I want to express my deep gratitude to Christophe for his remarkable leadership and lasting contributions to our company. He has been a role model for me and many others in the company, and I wish him well in the next phase of his journey. I also want to express my appreciation to the Board for the trust they have placed in me and in our executive team to lead Takeda and shape its future. As we embark on our next era, we are fueled by our people within a new operating model. powered by innovative technology and AI, fortified by our financial strategy and guided by our purpose of better health for people and a brighter future for the world. With a strong foundation of enduring values and forward-looking capabilities, we are reinventing ourselves for sustainable innovation-driven growth. We approach the path forward with a steadfast commitment to execute against our two horizons. In the near term, we are focused on the launches of three transformative medicines in the next 12 months, putting us on a new growth trajectory. Our ability to do so means that we will have built the necessary capabilities to create an engine for growth through our future launches. The innovative programs that follow in our late-stage pipeline will enable us to accelerate growth, delivering sustained value to patients, communities and our shareholders. We are united by the opportunity ahead of us and excited for Takeda's next era. Later this fiscal year at a Capital Markets Day, I look forward to outlining our longer-term ambition and the strategic road map that will guide our growth through the end of the decade and beyond. Thank you, and I'll now hand back to Chris to open the Q&A session.

[Interpreted] Now we would like to entertain questions from you. Christophe, Julie, Furuta, Andy will answer. Additionally, U.S. Business Unit President, Rhonda Pacheco, Global Oncology Business Unit President, Teresa Betetti will be joining. [Operator Instructions] First question from Morgan Stanley. Mr. Muraoka, please unmute and ask your question.

[Interpreted] First question is to Milano-san, Horizon One. In core, you mentioned 2 to 3 years of Horizon One and the operating profit will be limited and that means 2027 and beyond, there will be growth, but the growth is not big or does that mean it's flat? Can you give a bit more color, please? Second question narcolepsy TAK-360 Phase II results may be available on your site possibly regarding dose setting, I heard that you are working on that. And can you give update on this? And details will be mentioned at World Sleep in September. Those are questions. So the first question on core operating profit, what's the outlook within Horizon One? And any thoughts on fiscal 2027. So I'd like to ask Milano to comment on that. And then the second question, what is the latest status of the TAK-360 study? Do we expect the Phase II result anytime soon and perhaps a data presentation in September? I'd like to ask Andy to comment on that, please.

[Interpreted] Muraoka-san, thank you very much for your question. 2027 and beyond for that period, we want to be back to growth. That's the basic idea. core operating profit level, we should be back to growth. That's our projection. But how much growth rate, what would be the growth rate? It depends on the uptake of new products, new launches.

Muraoka-san, thank you very much for your question. This is Andy Plump. So, let me first reinforce we are 100% committed to our orexin franchise. And as we've discussed over the last hour, we are very excited to bring -- to have oveporexton approved this summer and very much looking forward to the launch in NT1 later this year. We have two molecules that follow oveporexton, TAK-360, as you mentioned, and TAK-495. These are next-generation orexin 2 receptor agonist. TAK-360 is being developed in NT2 and IH. We have ongoing Phase IIb studies. The design of these Phase IIb studies are quite creative. They're an adaptive design that allow us to rapidly work through the appropriate dose and administration schedule. As I think we all are aware, for the orexin agonist threading the needle between efficacy and safety is really the key. And so we're being very thoughtful in how we work through our dosing regimen. We haven't disclosed plans for when we would disclose data from each of these studies. But I'll say that our two studies are progressing rapidly. There's a lot of excitement for both molecules, and we'll have data later this year to share.

[Interpreted] Next question is from Mr. Yamaguchi, Citigroup.

So this is Yamaguchi from Citi. I have two questions first. The first question is the kind of same question that Muraoka-san asked regarding Horizon One and Two. I wasn't quite sure what year you are referring to, Horizon One and Two. If you have a clear answer, please let me know what is the year for 2027 or '28 for Horizon One or Two? And the question regarding to this one is that if you're getting into the Horizon Two period, what is the kind of level which you are referring to in your head, what is the CAGR on the top line? That's the first question. Second question is the plasma question. You asked about the oversupply and price competition. Not only for you, the all industry are suffering exactly same issue at the moment. And people are a bit worried about from the investment committee about the potential downside of this business, which you're putting some numbers for next fiscal year, but is there any downside risk? Or how long does it take to back to the normal business? And if you have something you can do for this?

[Interpreted] Thank you, Yamaguchi-san, for the questions. So the first on sort of more specific time lines for the Horizon One, Horizon Two and any more detail on the growth outlook in those horizons. And then the second question on the plasma business, current status and whether there's any downside risk. So, I'd like to ask Julie to take those questions, please.

Thank you, Chris, and thank you for the questions, Yamaguchi-san. In regard to the first one about Horizon One and Horizon Two, Horizon One is a 2- to 3-year time frame. So, we have not been specific about whether it is '27 or FY '28. It depends on the trajectory of our launches. So, there are some aspects that you see listed in Horizon One, we believe we can achieve within 2 years and some might take 3 years. So, that is the timing. In terms of growth, we are not providing growth projections beyond FY '26 at this point. But later in the year, when we have our Capital Markets Day, we'll provide a bit more detail in terms of what you can expect in the two different horizons. But safe to say that Horizon Two, we are anticipating or targeting to have a much higher growth rate to propel our future growth beyond the LOE for brands like ENTYVIO. Your second question is in regard to PDT. And so I'll break that down into albumin versus immunoglobulin. So, for albumin, as we shared, the current performance that you saw for albumin has to do primarily with the utilization control in China implemented by the Chinese government. We do expect that underlying demand will rebound over time. How quickly that will happen is difficult to say, but we do expect it to rebound. When it comes to immunoglobulin, what you are seeing now is a return to a more normalized market. So, for the past number of years, we have had a supply-constrained market. But when you look over a longer-term time horizon, we often move between periods of lower supply and higher supply. And in the higher supply markets as we are in today, the focus becomes demand generation like you have in any other normal market. The impact of alternative medicines like the anti-FcRns, as we've shared in the past, is already included in our demand projections going forward. So, we are confident that there will be continued growth in the mid-single digits for Igs and return to growth for albumin in the coming years. Thank you.

Moving to the next caller. Next, I'd like to call on Mike Nedelcovych from TD Cowen.

I have two. My first question is on your Horizon Two vision. During this phase, can Takeda achieve the levels of growth and innovation to which it aspires while still participating as one of the major players in the plasma-derived therapies market? That's my first question. And then my second question is on zasocitinib in psoriasis. You've emphasized that your competitors' product requires fasting, which could be a convenience hurdle. Are you also expecting compliance issues when it comes to that fasting requirement to possibly undercut the real-world efficacy of icotyde? Are there any, for example, precedents in your market research that suggests that's possible?

Thank you, Mike, for your questions. So the first on Horizon Two and where PDT may fit within that growth outlook, I'd like to ask Julie to comment on that. And then the second question around zasocitinib in psoriasis and particularly around the fasting requirements of a competitor. I'd like to ask Rhonda from our U.S. business unit to comment on that one, please.

Thanks for the questions, Michael. In regard to your first one, with our growth projections for Horizon Two, yes, we do expect PDT to contribute to that. So, as you saw both in my section as well as Andy's section, we have a number of late-stage assets that will contribute to the accelerated growth in Horizon Two, including TAK-881, which we shared a little bit about today. So, that combination of late-stage assets plus the continued progression we expect to have in our pipeline will fuel sustained growth in Horizon Two.

And I'll start here. Hi, everybody. This is Rhonda. Thank you for your question around zaso. I won't comment on exactly the data that you'll see with ICO, but we do believe that when you look at zaso's profile, the simple once-daily pill with no fasting restrictions is definitely one area we will differentiate. The other two exciting areas is going back to our efficacy and how fast zaso works as you saw rapid response at week 4 in that early response just keeps getting better with that out to week 16 and remains durable out to week 60. When we talk to both HCPs and patients, we hear that it's important to see that rapid 4-week result and also that durability and that convenience matters, eliminating a real-world barrier that can affect adherence and potentially a food effect. So, we're excited about zaso's profile. Again, it's rapid, it's durable and it's convenient with no fasting restrictions.

[Interpreted] Next question from Nomura Securities, Matsubara-san.

[Interpreted] Matsubara from Nomura Securities. My first question is Page 20, transformation program for FY '26, about JPY 100 billion. And the sales and R&D numbers, do you have breakdowns? And for the next year, JPY 200 billion, so that SG&A would be flat or it could be lower? And second question about that in the past, you had mentioned there are no TB concerns, PACIFIC-2 requires TB testing. I wonder if your product requires TB testing, what is your opinion on this?

First on the breakdown of the savings as part of our previous efficiency program and forward-looking transformation program by SG&A and R&D. So, I'd like to ask Milano to comment on that. And then the second question was around thoughts around potential for tuberculosis testing for zasocitinib. I'd like to ask Rhonda to comment on that, please.

[Interpreted] Thank you very much, Matsubara-san. For FY '26 or beyond '26 cost items, details will not be mentioned this time, but this transformation program that is ongoing, and we expect much of that is coming from SG&A to reduce costs -- and there are -- you can compare some financial numbers. R&D versus '25, '26 is higher. Well, of course, FX is impacting, but there are elritercept, TAK-928 and others, there are various programs that we need to make investment. So, we would have a bit more increase. But up to FY '25, R&D had efficiency, thanks to efficiency program, the expenses have been tightly controlled. But for FY '26, we need to have good investment and transformation programs contribution will be mainly coming from SG&A. To have successful launches, we need to make investment and FY '26 reflects that very much. You can compare SG&A for the last year and this year, you would know when you consider FX rate is more or less flat. So, excluding FX at CER basis, SG&A expenses considering launch preparation, it is actually a bit lower. So, transformation programs is coming mainly from SG&A. That's the plan. For the next year, what is the outlook? and beyond ending March 2028? Yes. So FY '27 and beyond, well, transformation programs after JPY 100 billion towards JPY 200 billion, we will be wrapping up. On the other hand, there will be ups and downs in investment. Therefore, as of now, we can't give you more details beyond that.

Rhonda, would you like to take the TB question?

Yes. Thank you for the TB question. When you look at our clinical trials, we haven't seen any reactivation of TB in our studies. And from a pure commercial perspective, this is less of a hurdle since this is commonly managed among HCPs who treat patients in this disease state. But again, we haven't seen that in our studies. Thank you for the question.

Moving to the next question. I'd like to call on Stephen Barker from Jefferies.

Steve Barker from Jefferies. So, my first one is regarding estimates for oveporexton and rusfertide in the current year. I understand that you have PDUFAs for both drugs in August. And do you have any revenues baked into your current year estimates? That's my first question. And my second question is regarding leverage. I understand from today's presentation that you plan to pay back JPY 500 billion of debt in this current year. And I think you finished last year with net debt to EV/EBITDA of 2.6x. Where does the net debt to EV/EBITDA land in the current year? And is -- are we getting close to that to your target of 2.0x target? And if you get there, what does that mean? What sort of extra flexibility will you have? And what might you do with that?

Thank you, Steve. So, the first question on whether oveporexton and rusfertide are included in our forecast numbers for 2026. I'd like to ask Julie to comment on that, please. And then the second question on the outlook for leverage at the end of this fiscal year, will we be close to that 2x target? And what does that mean for future capital allocation? I'd like to ask Milano to comment on that, please.

Thanks for the question, Stephen. So, when we look at our launches, yes, we do have revenues for both oveporexton and rusfertide included within our FY '26 forecast, but we don't provide individual forecasts for launch brands in their first year. It's due to a number of different factors. but let me just reiterate that we are very, very excited about these three launches, and we're laser-focused on the execution. And as I shared earlier, it's a top priority for us in Horizon One, and we look forward to updating you on our progress in future calls.

Steve, thank you for the question about the leverage. We expect a good pace of the managing this leverage ratio toward 2.0. We don't specify the exact timing. It might not be just a straight line, but we are pretty confident on our cash flow generation. And I expect -- we expect a pretty good direction toward the 2.0. But in the meantime, regarding your question on, okay, what does it mean more flexibility as we reach the 2.0. Well, it's basically the -- we continue to pursue good growth opportunities. We will be selectively choose attractive investment opportunities. And then that's always we do. But once or like we -- our leverage is become lighter, and then, of course, we have more flexibility. But, I would say we keep discipline on investments. We pursue the growth opportunities, but we maintain a discipline on how we invest.

Thank you, Steve, for the questions. Moving to the next question. I'd like to call on Tony Ren from Macquarie.

This is Tony Ren from Macquarie. I have two questions as well. The first question is about the clinical development program for your thinking about zasocitinib in the IBD. Recently, one of your competitor conducted a couple of Phase II trials testing a combination of interleukin-23 and TNF alpha agents together in in both Crohn's and colitis did not work out very well. I wanted to ask, Andy, whether that affects any of your thinking of zasocitinib's Phase III studies in these indications. And also I would like to ask whether you are thinking about any combinatorial approaches in immunology and inflammation. Yes.

Tony, if you could give us both of your questions upfront, and then we can.

Sure, yes. Okay. Yes. My second question is on ENTYVIO. So, as Milano said, the growth last year was slightly below expectation on a CER basis. I would like to just ask what's the causes for that? And looking forward, we see that one of your competitor -- one of your biosimilar competitors, Alvotech, recently launched -- recently filed in Europe. Anyone would like to ask about when do you think that will start to impact your European business and how you are preparing for that?

Okay. Great. Thank you, Tony, for the question. So the first on zasocitinib in IBD, in particular, thoughts on potential combinations. So, I'd like to call on Andy to answer that question. And then the second question on ENTYVIO performance and also thoughts on biosimilars. So, I'd like to ask Julie to begin that question and then perhaps Rhonda can add more detail as necessary.

Thanks, Chris. Thanks, Tony. for your question. So, let me just emphasize again how excited we are about the overall profile of zasocitinib. We're looking forward to filing in psoriasis later this year. We're looking forward to seeing the head-to-head data in the superiority study design against deucravacitinib, and we're looking forward to launching zazo in psoriasis early next year, followed rapidly by a launch in psoriatic arthritis. To your question around IBD, first things first before we start to think about combination therapies, we'll have to see the results of the two Phase IIb studies in ulcerative colitis and Crohn's disease. We're obviously quite excited to see the data from these studies roll out. The the supporting rationale for efficacy in IBD is quite strong. But of course, we're going to need to see what those data look like. I think dialing up to your question around combinations, it's clear that the -- in order to pass the efficacy ceiling in IBD, combinations are going to be an important part of the treatment regimen. Still with that said, there's a dearth of oral options. And so, we see zasocitinib potentially is playing a very important role in that oral segment.

Thanks for the question, Tony, about ENTYVIO. So, let me address the biosimilar question first, and then we'll talk a little bit about the U.S. I will hand it over to Rhonda to give you some specifics on that. So as you noted, Alvotech has filed. They announced earlier in their earnings call that they had filed for marketing authorization in Europe. And as we have previously communicated, we have granted patents that cover various different aspects of ENTYVIO that expire in 2032. We are also aware that litigations have been filed to challenge certain patents in the U.K. and Netherlands, and we intend to vigorously defend these patents. So, that's where we stand on the biosimilar situation in Europe, where there has been some movement in recent days. But again, we will defend our patent position there. Overall, as you heard from Milano earlier during his presentation, ENTYVIO is part of our core in-line brands, and we are going to be focusing on the resiliency of our products in that category. And so we will continue to focus on defending ENTYVIO as still the only gut-selective medicine for IBD and defend its share in particularly UC bio-naive patients. Overall, we did have lower growth for ENTYVIO, largely driven by dynamics in the U.S. So at this point, I'll hand it over to Rhonda to share with you some of the specifics around ENTYVIO in the U.S. Rhonda?

Thank you, Julie. ENTYVIO continues to deliver its sustained growth in its 13th year on the market. we're growing with the market in first-line where the vast majority of revenue is from that first-line treatment. When we look at the full year '25 versus '24, specifically in the U.S., we see that growth driven by demand and by mostly PEN demand. We also took a price increase, but that was completely offset by the gross to net pressure that you would expect to see in the 13th year on the market. resulting in, again, this is a U.S.-specific number, 2.2% revenue of '25 over '24. Moving forward, our confidence is in that first-line strategy with ENTYVIO, and we're focused on executing and clearly differentiating ENTYVIO in the market. Thank you.

Okay. I think we have time for one final caller. So next, I would like to call on Miki Sogi from Bernstein.

So, my first question is about zasocitinib. What is the likelihood you think of not zasocitinib as a label not having a requirement of TB because we have been hearing from multiple doctors that there's -- the TB test requirement is quite critical for dermatologists adoption of the drug. So, this is the first question. And the second question is about your ambitions to reach core OP margin to the low to mid-30%. So, we understand that it's going to be a little bit far out. However, we'd like to understand what is the key thing that needs to happen for you to achieve that OPM ambition.

Okay. Thank you, Miki. So first, another question on TB with zasocitinib. So perhaps, Rhonda, if you could again just restate our thoughts on that. And then the second question on the key levers to get to the low to mid-30s margin. Milano can take that question, please.

Great. Thank you for the question. Going back to our clinical trials, we haven't seen any reactivation of TB in our studies. And also from a pure commercial perspective, we see this as less of a hurdle since this is commonly managed among HCPs who treat patients in this disease state. It's too early at this point to really make any thoughts on the label. But again, we haven't seen any reactivation of TB in the study.

Thank you, Miki, for the question. So, I would say that basically, the main driver to get the corporate operating profit margin low to mid-30s is really successful, a series of successful new launches. So, we're going to embark on this era with the first -- sorry, the oveporexton and rusfertide this year and then zasocitinib. But we have five more assets in the late stage and the pipeline. And then we are aiming to launch these assets after those three. And then that's a driver to get the low to mid-30s. And then it's not necessarily kind of the profit accretive. It's become profit accretive from year 1 for each asset. normally it takes like year 2, year 3. And then we are making those launches, a series of launches in the coming next -- until the decades. So, as each launches we become successful and then that's going to accumulate, then we -- that's going to bring us to get the low to mid-30s. That's how we envision.

Thank you very much. Okay. With that, we've reached the end of time, so I'd like to bring this conference call to a close. Thank you very much for joining. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]