Takeda Pharmaceutical Earnings: Results in Line, Pipeline on Track, FVE Increased

Narrow-moat Takeda’s fiscal second-quarter earnings were in line with expectations on a constant currency basis. Revenue was JPY 1.04 trillion, which is 4% year-on-year growth and negative 0.8% on a constant currency basis. Core operating profit was JPY 262 million, or 25.2% of revenue, which is 5.3 percentage points worse than the same period last year. We think this is mostly attributable to loss of revenue from high-margin coronavirus products and also elevated research and development expense. The company revised its guidance for reported figures to account for JPY weakness and asset impairments but did not change its constant currency guidance for core figures.