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Tak
eda Pharmaceutical Compan

Annual Report 2015 Creating and Sustaining Corporate Value y Limited
Takeda Pharmaceutical Company Limited








2 Message from the CEO 4 Takeda's Value Creation 17 Access to Healthcare 52 Labor Integrated Annual Report Editorial Policy This report offers an integrated explanation of Takeda's strategies and performance based on its corporate philosophy, from a perspective of creating and sustaining corporate value.
the CSR Data Book. In this report, we have referred to the international framework for integrated reporting of Takeda conducts its business based on the unchanging the IIRC, the United Nations Global Compact Advanced values of Takeda-ism (Integrity: Fairness, Honesty and level criteria, and GRI's Fourth Generation of Sustainabil- Perseverance) that it has cultivated since its foundation ity Reporting Guidelines (G4) to create a comprehensive in 1781. We believe that the essence of CSR for Takeda report targeting a broad range of stakeholders, lies in its corporate activities of developing outstanding especially shareholders and other investors.
pharmaceutical products in accordance with these values. Moreover, as a corporate citizen, we aim to take Creating and Sustaining Corporate Value
the initiative to address social issues in fields where we can leverage our strengths. In this way, Takeda's Takeda is implementing strategies aimed at transforma- relationships with society are an integral part of its tion into a truly global pharmaceutical company capable of responding to diverse medical needs. Throughout all of its business activities, Takeda is committed to promoting corporate value creation by developing outstanding pharmaceutical products and Since fiscal 2006, Takeda has conducted integrated conducting corporate citizenship activities. At the same reporting, incorporating non-financial information time, we also work to sustain corporate value through about our initiatives on human rights, the environment, business processes that are grounded in integrity.
and communities, etc., in addition to financial informa- tion. Based on this, we have been publishing integrated annual reports. Since fiscal 2009, we have published Precautions Regarding Forward-Looking Statements This annual report includes forward-looking statements regarding Takeda's plans, prospects, strategies and performance, etc. These prospects are the result of assessments obtained from information currently available, and since actual performance is subject to various risks and uncertainties, it should be noted that outcomes could differ substantially from those prospects.
Factors that could affect future prospects would include, but are not limited to, economic circumstances in Takeda's business domains, competitive pressures, relevant laws and regulations, change in the status of product development, exchange rate risk and so on.
Note: The contents of this annual report are based on information for fiscal 2014 (April 1, 2014 to March 31, 2015), with some activities of significant relevance in fiscal 2015 also included.
Statements about market scales and shares in this Annual Report are based on the company's analysis of IMS data in "Long Term Country and Therapy Area Forecasts" Takeda Annual Report 2015
14 R&D Strategy 30 R&D Pipeline 12 Management Guidance36 Marketing Contents
Strategy and Overview

2 Message from the CEO 61 Corporate Governance 28 Vaccine Business Representative Director, President & CEO 29 CMC Center/Intellectual Property 65 Messages from Outside Directors 4 Takeda's Value Creation 67 Crisis Management/ Risk Factors in Business 6 Takeda's Growth Drivers 33 In-Licensing and Alliance Activities34 Manufacturing and Supply 10 Financial and Non-Financial Highlights 72 Financial Overview 35 Quality Management System 74 Financial Information 12 Management Guidance 36 Marketing: Main New Products 79 Key Social Responsibility Data 38 Performance Overview by Market 80 Independent Assurance of Environmental Message from Andrew Plump, M.D., Ph.D., and Social Performance Indicators Director and CMSO Corporate Social Responsibility (CSR)
81 Corporate Information 16 Marketing Strategy 45 Takeda's CSR Activities Further details on financial information Access to Healthcare can be found in the Consolidated Financial Statements Under IFRSs and Independent Auditor's Report Corporate Philosophy 56 Anti-Corruption/Fair Operating Practices/ 20 Global Business Operating Structure 22 Board of Directors, Auditors 58 Corporate Citizenship Activities and Corporate Officers Reference Guidelines for Disclosure of The integrated annual report contains both financial and non-financial • The International Integrated Reporting Council (IIRC) International information that we consider Framework for Integrated Reporting important for understanding Takeda. • United Nations Global Compact Advanced Level Criteria More detailed information is available • GRI's Fourth Generation of Sustainability Reporting Guidelines (G4) on our corporate website. Integrated
• Oncology: the field related to cancer • OTC products: consumer healthcare products sold • Branded generics: branded ethical products for which patents have expired [Medical Information] Standardized Wording in This Report This Annual Report contains information about products that may not be available in all countries, or may be Generic names for drugs are given omitting the base.
available under different trademarks, for different indications, in different dosages, or in different strengths. Nothing contained herein should be considered a solicitation, promotion or advertisement for any drug including the ones MLN codes for compounds in Phase II or earlier developed by under development. Any information on the products contained herein is not intended to provide medical advice legacy Millennium Pharmaceuticals, Inc. have been changed to nor should be used as a substitute for the advice provided by your physician or other healthcare provider.
TAK codes since July 2015.
Takeda Annual Report 2015
Message from the CEO
Takeda Annual Report 2015
Aiming to become an agile, best-in-class global pharmaceutical company that puts the patient at the center. Fiscal 2014 was a year of transformation for Takeda, and the treatment of type 2 diabetes, and it continues to be we are starting to see the payoff. Since I joined the available as a treatment option. However, this will not company in April 2014, our focus has been to become affect our ability to pay dividends – our annual dividend an agile, best-in-class global pharmaceutical company in per share will remain at ¥180.
every activity. Keeping the values of Takeda-ism Fiscal 2015 will be an extremely important year for (Integrity: Fairness, Honesty and Perseverance) as our delivering growth in revenue and Core Earnings based on foundation, we focused on the priorities of Patient (put the foundation we set in place in fiscal 2014. Takeda will the patient at the center), Trust (build trust with society), achieve organic growth by increasing our focus on Reputation (reinforce our reputation), and Business growth drivers, namely the core therapeutic areas of (develop the business) – in that order. By driving transfor- Gastroenterology (GI) and Oncology, and our Value mation based on these values, fiscal 2014 can be Brands (branded generics and over-the-counter (OTC) characterized as a turnaround year for Takeda. products) in Emerging Markets. This will mean growing One of the most important aspects of our transforma- sales of ENTYVIO and ensuring that we complete the tion is the redesign of our global business operating new drug application for MLN9708 and bring it to structure. We clarified the roles and responsibilities of market in the future. Meanwhile, in Emerging Markets, each organization and simplified the overall structure to we will look to expand growth in Value Brands while enable greater efficiency and competitiveness, keeping launching new products from our innovative pipeline. at the forefront the needs of patients and customers Furthermore, in R&D we will strive to create new who are hoping for a cure from Takeda products.
medicines and vaccines in the therapy areas we selected, Turning to our results in fiscal 2014, our consolidated to meet unmet medical needs. We will actively leverage revenue grew +5.1% over the previous year, mainly as a our partnerships with external institutions, such as with result of launching innovative new drugs that will be our the Center for iPS Cell Research and Application (CiRA) of growth drivers going forward, such as the ulcerative Kyoto University. We will also work to develop and train colitis and Crohn's disease treatment ENTYVIO global talent that will be able to lead our transformation (vedolizumab). Meanwhile, in R&D we progressed on a into a best-in-class global pharmaceutical company.
number of late-stage pipeline products, such as All of Takeda's business activities are guided by the MLN9708 (ixazomib) for the treatment of multiple unchanging values of Takeda-ism, which have stood the myeloma. The increase included the positive impact of test of time for more than 230 years. With this in mind, foreign exchange effects and the negative impact of we will take steps to ensure even more rigorous compli- divestments. Excluding these factors, our underlying ance, while continuing to respond to the expectations revenue growth for the year was +2.8 %, in line with our global society places on pharmaceutical companies. guidance. In terms of profitability, Underlying Core Takeda-ism is our beacon that will allow us to carry out Earnings* declined -2.1% which was also in line with our our corporate mission: "we strive towards better health guidance. Takeda recorded an operating loss for the for people worldwide through leading innovation in year, mainly reflecting the impact of the provision to cover the cost of the agreement to settle ACTOS lawsuits that had been filed in the U.S. The settlement will reduce financial uncertainties for the company, and allows us to focus fully on developing innovative medicines. We believe that ACTOS has a positive benefit/risk profile for Representative Director, President & CEO *Core Earnings is calculated by excluding temporary items from operating profit such as impacts from business combination accounting and amortization/impairment losses of intangible assets, restructuring costs and litigation costs and is a performance indicator widely used in the pharmaceutical industry. Underlying Core Earnings further excludes currency effects and the impact of one-off items such as divestments and is used to make meaningful year-to-year comparisons of the health of the business.
Takeda Annual Report 2015
Takeda's Value Creation
With Takeda-ism as the source of all our business activities, we will continue to create value and to serve the needs of patients all over the world.
P.19 Corporate Philosophy Build trust with • Patient and customer centricity • Global and agile organization fostering talent P.17 Access to Healthcare P.18 CSR Strategy P.20 Global Business Operating Structure P.52 Labor • Focused world class R&D innovation engine P.14 R&D StrategyP.30 R&D Pipeline Business
• Sustaining sales growth • Financial discipline to deliver growth P.10 Financial and Non-Financial Highlights P.12 Management Guidance P.36 Marketing • Gastroenterology (GI) • Central Nervous System (CNS) • Emerging Markets Global Specialty • Cardiovascular/ • Japan Consumer Takeda Annual Report 2015
Develop the business Number of Employees Number of long-range (as of March 31, 2015) 10-year CSR programs Takeda Annual Report 2015
Takeda's Growth Drivers
We will achieve sustainable growth by providing patients around the world with pharmaceutical products that meet their needs.
"The ulcerative colitis took away everything I loved to do. But , I am back on track. Number of ulcerative colitis and Crohn's disease patients worldwide Source: European Crohn's and Colitis Organisationhttps://www.ecco-ibd.eu/ Put the patient at the center Build trust with society Number of main products Takeda has launched in the Gastroenterology (GI) field globally Takeda Annual Report 2015
Takeda is a leader in Gastroenterology (GI) which will continue to be an important growth driver. The ulcerative colitis and Takeda continues to engage Crohn's disease treatment ENTYVIO in dialogue with all stakeholders to (vedolizumab), which was launched in the gain their deeper understanding.
U.S. and some European countries in fiscal 2014, had a strong start that should lead to peak-annual sales of over $2 billion. Takeda IR Event, "A Global Leader in Gastroenterology" P.66 Engagement with Shareholders and Investors Reinforce our reputation Develop the business Over $2bnProjected peak-annual sales for ENTYVIO in the global market Takeda Annual Report 2015
Takeda's Growth Drivers
Takeda will accelerate its growth through the global development of innovative products in the field of Oncology. In addition to maximizing the value of our core products such as VELCADE (bortezomib) for the treatment of multiple myeloma, we will also strive to make steady progress on expanding and advancing our R&D pipeline. MLN9708 builds on our leadership in proteasome inhibition that began with VELCADE. MLN9708 is currently investigated for multiple myeloma and AL amyloidosis in Japan, the U.S., and Europe.
P.30 R&D Pipeline "Ixazomib represents an exciting first-in-class oral proteasome inhibitor, which has shown promising activity when used in combination with other multiple myeloma therapies, as well as when used as a single agent in a Phase I/II clinical trial. Ixazomib could potentially be beneficial in my view as a treatment choice in older patients, and also possibly as par Professor of Medicine, Harvard Medical SchoolClinical Program Leader and Director of Clinical Research,Jerome Lipper Multiple Myeloma Center, Dana-F Paul Richardson, M.D.
arber Cancer Institute Boston, Massachusetts USA *Investigator of MLN9708 Takeda Annual Report 2015
Value Brands
Branded generics and over-the-counter (OTC) products In Emerging Markets, Takeda will drive growth through its Value Brands (branded generics and OTC products), working to maximize patient access while continuing to successfully launch with a diverse portfolio of new products including innovative products and vaccines that meet the increasing needs of each market.
Initiatives to Improve Access to Healthcare Takeda is working actively to support better access to healthcare for people around the world in emerging and developing countries through a dual approach including both business and corporate citizenship activities. P.17 Access to Healthcare Takeda has legal presence in 37 countries/areas in Emerging Markets which accounts for approximately 90% of the future growth of Emerging Markets pharmaceutical market.
Takeda Annual Report 2015
Financial and Non-Financial Highlights Five-Year Summary of Key Performance Indicators Takeda Pharmaceutical Company Limited and Subsidiaries Each Consolidated Fiscal Year Ended March 31Takeda has adopted International Financial Reporting Standards (IFRS) from fiscal 2013, ended March 31, 2014, and the disclosure information in this material is based on IFRS. According to this adoption, the previous year's information is also based on IFRS.
P.72 Financial Overview P.76 Eleven-Year Summary of Selected Financial Data P.79 Key Social Responsibility Data Results for Fiscal 2014 Net profit for the year
(attributable to owners of the Company) ¥1,777.8bn −¥129.3bn −¥145.8bn
Revenue increased by 5.1%, driven by Takeda reported an operating loss due Takeda recorded a net loss, mainly due growth of AZILVA in Japan, ENTYVIO in to booking a $2.7 billion (¥324.1 to decrease in operating income, the U.S., ADCETRIS in Europe and billion) provision for expenses related to decrease in gains on sales of financial expansion in Emerging Markets. the ACTOS litigation in the U.S., as well assets, and increase in tax expenses due Excluding factors such as the impact of as other temporary factors.
to a change in the effective tax rate in yen's depreciation, underlying revenue Japan, which is an additional one-time increased by 2.8%, in line with the Operating Profit and Operating Margin
Net Profit Attributable to Owners
of the Company/Net Income
Operating Profit Overseas (J-GAAP) R&D Expenses and Ratio to Revenue
EPS and ROE
Cash Dividends per Share
Takeda Annual Report 2015
Total input energies
CO2 emissions
¥288.3bn 8,387million
kilotons
417of CO2
Core Earnings were lower year on year, Since 1974, Takeda has systematically Takeda has set itself a target of mainly reflecting increased R&D expenses implemented energy conservation reducing CO2 emissions from energy and sales expenses related to the launch measures. With the advance of our sources by 18% from fiscal 2005 levels of new products, particularly in the U.S.
business activities, our total input energies by fiscal 2015. In fiscal 2014, Takeda expanded in fiscal 2011; however, we are reduced CO2 emissions by 19% from * Core Earnings is calculated by excluding temporary items from operating profit such as impacts from business making every effort to limit the increase.
combination accounting and amortization/impairment losses of intangible assets, etc.
Total Input Energies
Fresh Water Used
(Kilotons of CO2) Number of Employees
Proportion of Shareholders
Other corporations 5.29% Takeda Pharmaceutical Takeda Annual Report 2015
Management Guidance Underlying growth has been in line with guidance. EPS in fiscal 2014 was impacted by exceptional items, but from fiscal 2015 onward we aim to return to a highly profitable growth trajectory.
Results for Fiscal 2014
Takeda met its management guidance for fiscal Takeda believes that it is crucial to monitor the real 2014 with year-on-year underlying revenue growth performance of the business in order to enhance of 2.8% and underlying Core Earnings decline of corporate value sustainably. For that reason, the 2.1%. Reported revenue grew by 5.1% to ¥1,777.8 management views "underlying growth," which billion, with the increase mainly driven by new excludes the impact of foreign exchange and products such as ENTYVIO (vedolizumab) for exceptional items such as product divestments, as ulcerative colitis and Crohn's disease and BRINTELLIX representative of its real business performance, and (vortioxetine), for major depressive disorder in the accordingly regards the underlying growth of U.S., ENTYVIO and ADCETRIS (brentuximab vedotin) revenue, Core Earnings,*1 and Core EPS as important for malignant lymphoma in Europe, and AZILVA (azilsartan) for hypertension in Japan. Underlying Operational Guidance Met
· Revenue
+2.8% In line with guidance (2-4%)
Underlying Year-on-Year Growth*2 · Core Earnings −2.1% In line with guidance (flat to slightly declining)
· ENTYVIO for ulcerative colitis and
· CONTRAVE for chronic weight
Crohn's disease
management in adults
Strong start in the U.S. and Europe Growth Supported
Steady start in the U.S.
towards annual peak global sales · AZILVA for hypertension
of over $2 billion Strong year-on-year growth in · BRINTELLIX for major depressive disorder Japan at +80%
Outperforming two other antidepressant · TAKECAB for acid-related diseases
brands in the U.S. one year after launch Launched in Japan in February 2015 · Project Summit
Efficiency Gains
Fast execution, achieved more than half of the five-year cost savings target above Target
(¥120 billion) in two years · $2.7 billion for the ACTOS settlement and associated costs · Product/pipeline impairments and Japanese tax reform Underlying growth and impact of generics in Japan *2 Underlying revenue growth: Constant currency and without divestments *3 Products launched in or after 2009 excluding new formulations or fixed-dose combinations of existing products Takeda Annual Report 2015
Fiscal 2015 Management Guidance –
Fiscal 2015 Financial Forecasts
Operating profit Higher than revenue growth Profit before income taxes Net profit for the year (attributable to owners of the Company) Core Earnings growth Note: Foreign exchange rates are assumed at US$1=¥120; and 1euro= ¥130 revenue in Emerging Markets grew at 10% (excluding Management Guidance for Fiscal 2015
inventory adjustment), with key countries China and Takeda's outlook for fiscal 2015 appears above.
Russia both achieving strong, double-digit growth. Consolidated revenue is expected to increase from The booking of a total provision of ¥324.1 billion the previous year. The sales decrease of existing ($2.7 billion) to cover the ACTOS settlement and leading products will be absorbed by the growth of estimated costs associated with remaining cases and new products, such as ENTYVIO in the U.S. and other related litigation, along with other temporary AZILVA in Japan, sales expansion in Emerging Markets, factors, resulted in an operating loss of ¥129.3 and the positive influence of the assumed exchange billion, a net loss of ¥145.8 billion, and a basic loss per share of ¥185.
Meanwhile, a significant increase in profits is Project Summit – a company-wide strategic expected, mainly because of expenses related to the initiative to increase the effectiveness and efficiency ACTOS litigation booked in fiscal 2014 that will not of all operations – delivered aggregate savings of occur in fiscal 2015.
Fiscal 2014 savings ¥62 billion for fiscal 2013-2014. Thus, the company from Project Summit Takeda aims for low single digit underlying revenue has achieved over 50% of its target of ¥120 billion growth, with underlying growth of Core Earnings for fiscal 2013-2017 in just two years.
higher than revenue due to improved cost efficiency, *1 Core Earnings is calculated by excluding temporary items from operating and underlying growth of Core EPS exceeding Core profit such as impacts from business combination accounting and amortization/impairment losses of intangible assets, etc.
Earnings growth.
The annual dividend per share for fiscal 2014 was the same as the previous year at ¥180. In fiscal 2015, Takeda will maintain the annual dividend of ¥180 per share, and with an emphasis on shareholder returns the company will strive to maintain an annual dividend of at least ¥180 after fiscal 2015.
P.72 Financial Overview Takeda Annual Report 2015
Takeda will drive world-class innovation to provide meaningful solutions to patients with unmet medical needs.
Andrew Plump, M.D., Ph.D. Director, Chief Medical & Scientific Officer (CMSO) A Patient-Centered Approach to R&D
closely with the Specialty Business Units in Oncology and Vaccine as well as with our businesses across the Takeda is putting the patient at the center of globe to ensure we are meeting their specific needs.
everything we do and continuing to transform its Over the past few years, Takeda has greatly R&D organization. To deliver innovative new accelerated its efforts to improve R&D productivity medicines to patients we are actively embracing the and launched innovative new medicines in major vast emerging translational science outside our walls. countries around the world that will meet patients' We are creating an innovation network that needs and drive new growth for Takeda. These combines our internal strengths with those of the include ENTYVIO (vedolizumab) for the treatment of external research community through collaborations ulcerative colitis and Crohn's disease, TAKECAB and partnerships with biotech, academia, consortia, (vonoprazan) for treatment of acid-related diseases, patient advocacy groups and others.
ADCETRIS (brentuximab vedotin) for malignant lymphoma, BRINTELLIX (vortioxetine) for major Transformation of the R&D Organization
depressive disorder and ZAFETAK (trelagliptin) for In September 2014, Takeda aligned its research and type 2 diabetes. Looking ahead, Takeda will continue development functions into the four Therapeutic to study the benefits that these newly launched Area Units (TAUs) of Gastroenterology (GI), Oncology, therapies offer patients by understanding the Central Nervous System (CNS), and underlying science and exploring new indications. Cardiovascular/Metabolic (CVM). The realignment is intended to enhance our effectiveness in meeting the unmet medical needs of patients by focusing our efforts and resources in core areas where we have deep expertise, an emerging pipeline of therapies and the greatest opportunity to innovate for the future. In addition, our R&D organization interacts Applying Translational Medicine to Drug Discovery
Traditional Approach to Target Selection
Translational Approach to Target Selection – Patient First
Disease Mechanism Drug & Biomarkers Takeda Annual Report 2015
Further Enhancement of External Innovation
Takeda continues to intensify its focus on external One important example is the 10-year collabora- tion agreement between Takeda and the Center for iPS Cell Research and Application (CiRA) of Kyoto University into which we entered in April 2015. The agreement is to develop clinical applications of induced pluripotent stem (iPS) cells across multiple therapeutic areas.
The "Takeda-CiRA Joint Program for iPS Cell Applications" (T-CiRA) is designed to enhance and expedite our core drug discovery efforts and provide a foundation for future efforts in regenerative This collaboration, with one of the premier CiRA is a research scientists not only in Japan but in the world, is unique institute at Kyoto University established in with regard to the cutting-edge science as well as 2010 to serve as the the structure. The T-CiRA will be located in Takeda's world's first core institute Shonan Research Center outside of Tokyo, working dedicated to pioneering iPS cell research. With alongside our own drug discovery scientists. The Nobel Prize winner, Dr. combination of academic and industry scientists in a Shinya Yamanaka, serving structure like this is unprecedented and is an as Director, various research projects are example of the forward-looking innovation network being carried out with we are building at Takeda in our efforts to bring the goal of using iPS cells innovative therapies to patients.
Christophe Weber, President & CEO (left) and Dr. Shinya Yamanaka, discovery efforts and CiRA Director (right) realize regenerative Our Recently
Pre-Proof of Concept
Takeda Annual Report 2015
Marketing Strategy / Access to Healthcare We will maximize our strengths as a global pharmaceutical company to answer wide-ranging medical needs throughout the world.
Reorganization of the Commercial Divisions
Core Management Policies in Fiscal 2015
Takeda is aiming to achieve organic growth over the Takeda will maintain its leading position in Japan by medium-term, mainly driven by innovative products maximizing the values of products including in mature markets, and Value Brands (branded TAKECAB (vonoprazan), for the treatment of generics and OTC products) in Emerging Markets. In acid-related diseases, ZAFATEK (trelagliptin) and September 2014, we reorganized our commercial NESINA (alogliptin), both for the treatment of type 2 divisions into five Business Units: Japan Pharma, US, diabetes, and AZILVA (azilsartan), for the treatment of EUCAN, Emerging Markets, and Japan Consumer Healthcare. We are promoting marketing activities in In the U.S., Takeda will actively invest in marketing line with a strategic roadmap for achieving our in order to increase its market share through new products, such as ENTYVIO (vedolizumab), for the Fiscal 2014 underlying treatment of ulcerative colitis and Crohn's disease, Initiatives for Leveraging Local Expertise
BRINTELLIX (vortioxetine), for the treatment of major *1 Excluding inventory to Contribute to Patients
depressive disorder, and CONTRAVE (naltrexone XR *2 Underlying revenue growth: Constant currency and and bupropion XR), a treatment for chronic weight As part of the transformation of its marketing without divestments management in adults.
activities, Takeda has selected "Lead Local Operating In Europe and Canada, Takeda will maintain and Companies (LOCs)" from among LOCs in each expand sales of existing products, while further country, and established a new business model for strengthening its specialty care business by focusing Revenue by Region managing products other than its global brands. on new products including ENTYVIO and the Operating companies that have been selected as malignant lymphoma treatment ADCETRIS Lead LOCs take responsibility for the products they manage, building brand strategies and preparing In Emerging Markets, Takeda will focus mainly on marketing materials, and sharing information with Russia, Brazil, and China, aiming to realize top-line other LOCs. This system widens the scope for utilizing growth of around 10% by maximizing sales of its the local expertise of these companies, which have existing portfolio of high-quality Value Brands, and by the best understanding of the therapeutic needs of continuing to successfully launch and penetrate the local patients. At the same time, it frees up resources market with a diverse portfolio of new products of Takeda Headquarters to be concentrated on including innovative products and vaccines that global brands. There are currently 12 Lead LOCs meet the increasing needs of each market.
managing 21 products. Global Pharmaceutical Market Trends
Pharmaceutical Market Size Forecast (2015-2025)
($ Billion)
The global pharmaceutical market is projected to achieve CAGR of around 4.5% between 2015 and 2025, 54% of which is expected to be provided by growth in Emerging 54% of the
growth is
In the short and medium terms, Takeda will drive its growth in Emerging Markets with branded generics and OTC products known collectively as Value Brands. Over the longer Europe-Canada 2.6% term, however, we believe there will be increasing opportu- nities for launching new medicines. Meanwhile, the forecast in mature markets is for moderate growth, but since the scale of these markets is as large as ever, we will continue to Source: IMSHealth2015, Calculated based on Long Term Country and Therapy focus primarily on innovative products in these markets.
Area Forecasts (Reprinted with permission) Takeda Annual Report 2015
Access to Healthcare
As a company committed to improving people's lives, Takeda endeavors to improve access to global healthcare.
Integrated Initiatives to Improve
Access to Healthcare
Takeda is working to support better access to Markets Business Unit to oversee business in emerg- healthcare for people around the world, including ing countries and continuing to establish a global those in emerging and developing countries, making governance system. Additional Access to Medicines reference to the Business for Social Responsibility initiatives are under discussion.
(BSR)'s Guiding Principles on Access to Healthcare (GPAH), which Takeda helped to draft.
P42 Marketing - Emerging Markets Specific initiatives are centered around the Global Health Project, which was launched in 2012 with representation from across the company. In 2014, Takeda took steps to integrate the various initiatives and further enhance its activities by establishing an Access to Medicines Committee within the Emerging Integrated Initiatives to Improve Access to Healthcare
Healthcare Access Governance
• Launched Global Health Project (2012) • Signatory to BSR Guiding Principles on Access to Healthcare (GPAH) (2013) • Global Health Project responded to the Access to Medicine Index survey (2014) • Established an Access to Medicines Committee within the Emerging Markets Business Unit (2014) R&D and collaboration with partners to address unmet medical needs
• Strengthened vaccine business (2012) • Participated in the Global Health Innovative Technology Fund (GHIT Fund) (2013) Business in Emerging Markets to address unmet medical needs
• Integrated Nycomed (2011) • Acquisition of Multilab (Brazil) (2012) Corporate citizenship activities to address social issues in emerging and developing countries
• Established the Takeda-Plan Healthcare Access Program (2009) • Established the Takeda Initiative (2010) • Commenced support for the IDEEL Program (2013) 1781 Business processes with integrity
• Research and development activities • Contract Research Organization (CRO) management to conduct global clinical studies sensitive to human rights • Three-Year Plan for Anti-Counterfeit Measures (2012) Takeda Annual Report 2015
Corporate Social Responsibility (CSR) Strategy/Corporate Philosophy We will focus on CSR activities in emerging and developing countries in line with the demands of international society.
Strengthening Our Presence
India and Malaysia for its CSR activities to date. In June in the CSR Community
2015, Takeda became a member of CSR Asia, which has the largest network of any CSR think tank in the Takeda is a LEAD company within the United Nations Asia-Pacific region, and this has strengthened its links Global Compact (GC), and collaborates with activities with the CSR community in Asia. to implement and promote the spread of the United Nations GC principles. Meanwhile, in CSR as in business, promotional organizations based in emerg- Enhancing Supply Chain Initiatives
ing countries are beginning to launch initiatives. To strengthen its CSR initiatives within the supply Takeda is strengthening its CSR activities in emerging chain, Takeda has established dedicated resources countries in coordination with organizations that have called Procurement Risk and Corporate Social operating bases in China, India, the United Arab Responsibility (CSR) within the Global Procurement Emirates, and Malaysia. In particular, Takeda has Office, which oversees company-wide global received awards from organizations promoting CSR in procurement operations. The Procurement Risk and CSR office ensures integration of CSR and diversity into supplier relationships and sourcing activities, and enables a holistic view of risks in Takeda's supplier relationships. Moreover, in May 2015, Takeda joined the Pharmaceutical Supply Chain Initiative (PSCI), an organization made up of about 20 global pharmaceu- tical companies that improve CSR activities among suppliers. In 2015, Takeda also developed a global Supplier Code of Conduct aligned with its commit- ment to the United Nations GC and the PSCI Principles. Through these and other activities, we A panel discussion at World CSR Congress (Mumbai) have been participating actively in global initiatives.
Links with the CSR Community in Emerging Countries
CSR Summit Dubai
International CSR Forum
• In May 2015, participated in CSR Summit Dubai, • In June 2015, participated in the International CSR Forum (Beijing), powered by CSR Pulse, which is based in the UAE held by the WTO Tribune, which is based in China International CSR Summit
• In June 2015, participated in the International CSR Summit (Macau), held by Enterprise Asia, which is based in Malaysia World CSR Congress
• Award winner at the Asia Responsible Entrepreneurship Awards 2015 • In February 2015, participated in World CSR Congress (Mumbai), held by the World CSR Day, which is based in India • Award winner at the Global CSR Excellence & Leadership Awards 2015 Takeda Annual Report 2015
Corporate Philosophy Mission
We strive towards better health for people worldwide through

leading innovation in medicine.
Vision 2020
Better Health, Brighter Future
For more than 230 years, we have been serving society a diverse organization committed to working with local with innovative medicines and helping patients reclaim communities to fully understand their needs and deliver valuable moments of life from illness.Now, with new industry-leading solutions with a sense of urgency, healthcare solutions from prevention to care and cure, dedication and unparalleled efficiency.
we are determined to help even more people enjoy Our passion for healthcare and commitment to their lives to the fullest.
improving lives will enable us to make the next 230 We continue to transform the future of healthcare by years healthier and brighter for people around unifying our strengths as "Global One Takeda."We are Takeda-ism and Values
Takeda-ism is the unchanging set of core values
that guides all our activities. We pledge to act with Integrity—comprising Fairness, Honesty and
Perseverance—at all times, especially when facing
difficulties or challenges. In our day-to-day work, we focus on the following values while upholding the highest ethical standards:
· Diversity
· Teamwork
· Commitment
· Passion
Takeda Annual Report 2015
Global Business Operating Structure Putting the patient at the center, we will accurately meet the needs of medical professionals through swift decision-making. Redesigning the Global
Under the new organizational structure, the R&D Business Operating Structure
organization has been realigned into four Therapeutic In April 2015, Takeda launched its new global Area Units: Gastroenterology (GI), Oncology, Central business operating structure to focus on and Nervous System (CNS), and Cardiovascular/Metabolic leverage its growth drivers and to operate more (CVM). Additionally, five regional commercial divisions efficiently and competitively as a global company. have been newly established as Regional Business The organization reflects the company's mid-term Units: Japan Pharma, US, EUCAN, Emerging Markets growth drivers, which are new global innovative and Japan Consumer Healthcare; while two global products especially in the fields of Gastroenterology Specialty Business Units equipped with unique (GI) and Oncology, as well as Value Brands (branded operational and commercial capabilities have also generics and OTC products) in Emerging Markets.
been set up: Oncology and Vaccine.
Global Business Operating Organizational Structure
Specialty Business Units Organizations directly under the President & CEO indicate main controlling functions.
Business Partners Corporate Strategy, Governance, Business Development Regional Business Units Corporate Strategy Officer Japan Pharma
Chief Financial Officer President &
Japan Consumer Healthcare
Global HR Officer Business Functions Group Internal Audit Legal, Compliance, IP Chief Medical and Scientific Officer Global General Counsel Manufacturing and Supply Communications, CSR, Public Affairs, Global Health Global Manufacturing and Supply Officer Quality Management Corporate Communications and Public Affairs Officer Global Quality Officer P.61 Corporate Governance P.63 Compliance Takeda Annual Report 2015
Takeda Executive Team
customers, while basing management on the Under the new global organizational structure, the mindset defined by the unchanging values of Takeda Executive Team (TET) comprising executives directly under Christophe Weber, President & CEO, has been established. The TET members maintain close contact and take the lead to ensure rapid dissemination of decisions and swift execution. Under the strong leadership of the TET members, Takeda is accelerating its transformation even further to become an agile, best-in-class global pharmaceuti- cal company that is entirely focused on patients and Christophe Weber, President & CEO, and the Takeda Executive Team (May 2015) (Front row, from left) Haruhiko Hirate, François-Xavier Roger, Christophe Weber, Ramona Sequeira, Christophe Bianchi, Andrew Plump (Middle row, from left) Shinji Honda, Masato Iwasaki, Giles Platford (Back row, from left) Thomas Wozniewski, Marc Princen, David Osborne, Gerard Greco, Rajeev Venkayya, Yoshihiro Nakagawa, Tadataka Yamada Takeda Annual Report 2015
Board of Directors, Auditors and Corporate Officers Board of Directors
Yasuchika Hasegawa Director, Chairman of the Board Representative Director, President & CEO 1970 Joined the Company 2008 Senior Vice President and Regional Director, 1998 Corporate Officer, Senior Vice President, Asia Pacific, GlaxoSmithKline Pharmaceutical International Division 2012 President and General Manager, GlaxoSmithKline Vaccines 2001 Senior Vice President, Corporate Planning Department 2012 CEO, GlaxoSmithKline Biologicals 2002 Senior Vice President, Corporate Strategy & 2012 Member of GlaxoSmithKline Corporate Executive Team Planning Department 2014 Chief Operating Officer of the Company 2003 President and Representative Director 2014 Corporate Officer 2011 Chairman, KEIZAI DOYUKAI 2014 President and Representative Director (to present) (Japan Association of Corporate Executives) 2015 Chief Executive Officer (to present) 2014 Chief Executive Officer2014 Chairman of the Board and Representative Director 2015 Outside Director of Tokyo Electric Power Company, Incorporated (to present) 2015 Director, Chairman of the Board (to present) Masato Iwasaki, Ph.D.
Senior Managing Director, Corporate Strategy Officer Director, President, Japan Pharma Business Unit 1981 Joined the Company 1985 Joined the Company 2008 Senior Vice President, Overseas Business Planning Department 2002 Director, Diabetes, Ethical Products Marketing 2009 President, Takeda Pharmaceuticals North America, Inc. Department, Pharmaceutical Marketing Division (currently Takeda Pharmaceuticals U.S.A., Inc.) 2008 Senior Vice President, 2011 Corporate Officer Strategic Product Planning Department 2011 Chief Integration Officer, 2010 Corporate Officer Takeda Pharmaceuticals International, Inc.
2012 Head of CMSO Office, 2012 Senior Vice President, Corporate Strategy Department Takeda Pharmaceuticals International, Inc.
2012 Senior Vice President, 2013 President, Takeda Pharmaceuticals International, Inc. Pharmaceutical Marketing Division 2012 Director (to present) 2014 Senior Managing Director (to present) 2015 President, Japan Pharma Business Unit (to present) 2015 Corporate Strategy Officer (to present) Andrew Plump, M.D., Ph.D.
Director, Chief Medical & Scientific Officer 2007 Executive Director, Cardiovascular Disease 1964 Joined Kawasaki Steel Corporation Franchise Integrator and Head, Cardiovascular (currently JFE Steel Corporation) Translational Medicine, Merck & Co.
2001 President and Representative Director, 2008 Vice President, Cardiovascular Disease Franchise Kawasaki Steel Corporation Integrator and Head, Cardiovascular Early 2005 President and Representative Director, JFE Holdings, Inc.
Development & Cardiovascular Translational 2010 Outside Director, JS Group Corporation Medicine, Merck & Co.
(currently LIXIL Group Corporation) (to present) 2008 Vice President, Cardiovascular Disease Franchise, 2011 Outside Director, Taisei Corporation (to present) Worldwide Discovery Head, Merck & Co.
2011 Outside Director of the Company (to present) 2012 Vice President and Deputy to the President, 2012 Outside Director of Tokyo Electric Power Company, Research & Translational Medicine, Sanofi S.A. Incorporated (to present) 2014 Senior Vice President and Deputy to the President 2014 Chairman of the Board, for Research & Translational Medicine, Sanofi S.A.
Tokyo Electric Power Company, Incorporated (to present) 2015 Chief Medical & Scientific Officer Designate 2014 Honorary Advisor to JFE Holdings, Inc. (to present) 2015 Corporate Officer2015 Director (to present)2015 Chief Medical & Scientific Officer (to present) 1965 Joined Mitsubishi Corporation 1963 Joined Komatsu Ltd.
2001 Member of the Board, Senior Executive Vice President, 1989 Director, Komatsu Ltd.
Mitsubishi Corporation 2001 President and Representative Director, Komatsu Ltd.
2004 Member of the Board, President & CEO, 2007 Chairman of the Board and Representative Director, Mitsubishi Corporation 2010 Chairman of the Board, Mitsubishi Corporation 2008 Outside Director, Tokyo Electron Limited (to present) 2008 Outside Director, Nomura Holdings, Inc. (to present) 2010 Outside Director, Mitsubishi Heavy Industries, Ltd.
2008 Outside Director, Nomura Securities Co., Ltd. (to present) 2010 Chairman of the Board, Komatsu Ltd.
2011 Vice Chairman, Keidanren (Japan Business Federation) 2011 Outside Director, Asahi Glass Co., Ltd. (to present) 2011 Outside Director of the Company (to present) 2013 Director and Councilor, Komatsu Ltd. 2013 Outside Director of The Shoko Chukin Bank, Ltd. 2013 Councilor, Komatsu Ltd. (to present) 2014 Outside Director of the Company (to present)2015 Outside Director, Kajima Corporation (to present) Note: Fumio Sudo, Yorihiko Kojima and Masahiro Sakane are Outside Directors as provided in Article 2, Item 15 of the Companies Act of Japan.
Takeda Annual Report 2015
Yasuhiko Yamanaka Corporate Auditor Corporate Auditor 1972 Joined the Company 1979 Joined the Company 2000 General Manager, Department of Europe, 2003 Senior Vice President, Corporate Strategy & Pharmaceutical International Division Planning Department 2003 General Manager, 2004 Corporate Officer Department of Europe and Asia 2007 Senior Vice President, Pharmaceutical 2005 Corporate Officer Marketing Division 2007 General Manager, Overseas Business Planning Department 2011 Managing Director 2008 Corporate Auditor (to present) 2012 Assistant to CEO, Globalization2013 Special Missions assigned by President2014 Special Missions2015 Corporate Auditor (to present) Tsuguoki Fujinuma Corporate Auditor Corporate Auditor 1974 Registered as a certified public accountant (to present) 1982 Registered as an attorney-at-law (Osaka Bar Association) 1991 Representative Partner of Asahi Shinwa & Co.
1982 Joined Oh-Ebashi Law Offices 1993 Representative Partner, Showa Ota & Co. 1987 Registered as an attorney-at-law at (currently Ernst & Young ShinNihon) New York Bar Association 2004 Chairman and President of the Japanese 1997 Outside Corporate Auditor, Sunstar Inc.
Institute of Certified Public Accountants 2002 Managing Partner, Oh-Ebashi LPC & Partners (to present) 2008 Outside Corporate Auditor of the Company (to present) 2006 Outside Corporate Auditor, NIDEC CORPORATION 2008 Outside Corporate Auditor of Sumitomo Corporation 2011 President, Inter-Pacific Bar Association 2012 Outside Director, NEXON Co., Ltd. (to present) 2008 Outside Director of Nomura Holdings, Inc. (to present) 2012 Outside Director, EBARA CORPORATION (to present) 2008 Outside Director of Nomura Securities Co., Ltd. (to present) 2013 Outside Corporate Auditor of the Company (to present) 2008 Outside Director of 2013 Outside Director, Sony Financial Holdings Inc. (to present) Sumitomo Life Insurance Company (to present) 2010 Outside Corporate Auditor of Seven & i Holdings Co., Ltd. (to present) 2010 Vice-Chairman, IFRS Foundation Trustees Note: Corporate auditors Tsuguoki Fujinuma and Shiro Kuniya are Outside Corporate Auditors as provided in Article 2, Item 16 of the Companies Act of Japan.
Tetsuyuki Maruyama, Ph.D.
Corporate Communications and Head of Sales, East Japan, Global HR Officer General Manager, Public Affairs Officer Japan Pharma Business Unit Pharmaceutical Research Division Yoshihiro Nakagawa Christophe Bianchi, M.D.
Rajeev Venkayya, M.D.
Global General Counsel President, Global Oncology Business Unit President, Global Vaccine Business Unit President, Emerging Markets Business Unit Thomas Wozniewski, Ph.D.
Gerard Greco, Ph.D.
Global Manufacturing and Supply Officer Global Quality Officer Global Compliance Officer President, EUCAN Business Unit Ramona SequeiraPresident, US Business Unit P.62 Takeda Global Advisory Board as of June 26, 2015 Takeda Annual Report 2015
Taking on the challenge of developing innovative pharmaceutical products – that is the role Takeda is committed to for people all over the world. We will continue to diligently create pharmaceutical products guided by the philosophy of Takeda-ism.
28 Vaccine Business 29 CMC Center/Intellectual Property 33 In-Licensing and Alliance Activities 34 Manufacturing and Supply 35 Quality Management System 36 Marketing: Main New Products 38 Performance Overview by Market Takeda Annual Report 2015
We will focus on activities to obtain new drug approvals quickly for our rich late-stage pipeline, as we focus on a patient-centered approach to R&D.
Achievements in Fiscal 2014
Takeda is accelerating its activities as a focused, world-class R&D engine.
In fiscal 2014, Takeda launched new products to meet patients' unmet medical needs in major countries around the world. These products have delivered outstanding performance that assures Takeda's route to sustainable growth. The main achievements by core therapeutic area are as follows.
I've always been around music. My career and life In Gastroenterology (GI), Takeda was granted on stage were interrupted with frequent coughs marketing authorization for ENTYVIO (vedolizumab) in and colds and the discovery of a lump in my neck. the U.S. and Europe in May 2014. ENTYVIO is a I was diagnosed with Hodgkin lymphoma. I didn't biologic therapy planned and developed for moder- know what to expect. I couldn't look ahead. Now, ate to severe active ulcerative colitis concomitantly new treatments have given me a reason to be hopeful. It's all very exciting! with Crohn's disease. The drug had a development period of 15 years and Takeda conducted simultane- ous clinical trials evaluating both ulcerative colitis and Carol Jarvis
Crohn's disease patient populations involving 2,700 patients in nearly 40 countries around the world.
Takeda Annual Report 2015
In December 2014, Takeda received manufactur- six months following completion of prior VELCADE ing and marketing approval for TAKECAB treatment. In addition, in October 2014, Takeda (vonoprazan) for the treatment of acid-related received approval from the FDA for an additional diseases in Japan. TAKECAB inhibits the proton indication of VELCADE for use in previously untreated pump*1 with a novel mechanism, and provides a patients with mantle cell lymphoma. As a promising strong and sustained acid secretion inhibitory effect.
successor proteasome inhibitor to VELCADE, In Oncology, in August 2014, Takeda received MLN9708 (ixazomib) is now in five Phase III clinical approval from the U.S. Food and Drug Administration trials for patients with multiple myeloma and (FDA) for an additional indication of VELCADE relapsed or refractory primary (AL) amyloidosis in (bortezomib) for the retreatment of adult patients Japan, the U.S., and Europe. In November 2014, with multiple myeloma who had previously Takeda was granted Breakthrough Therapy*2 status responded to VELCADE therapy and relapsed at least from the FDA for MLN9708 for the treatment of relapsed or refractory systemic light-chain (AL) R&D Expenses/Ratio to Revenue
In the Cardiovascular/Metabolic area, in March 2015, Takeda received manufacturing and sales R&D expenses/ratio to approval in Japan for ZAFATEK (trelagliptin), a drug for revenue (fiscal 2014) treating type 2 diabetes, and ZAFATEK was launched in May 2015. Takeda expects that ZAFATEK can provide enhanced convenience with it being the world's first once-weekly DPP-4 inhibitor.
*1 Proton pump: An enzyme that functions in the final stages of acid secretion in gastric parietal cells.
*2 Breakthrough Therapy designation is intended to expedite the development and review of new medicines to treat serious or life-threatening conditions.
ENTYVIO mechanism of action
MAdCAM-1 binds in a specific groove of the 47 integrin* ENTYVIO prevents is thought to be binding to the 47 inflammation process in ulcerative colitis and Crohn's disease.
*4 4 7 integrin is a protein present on the surface of lymphocytes and is involved in immunological reaction in the intestinal tract.
Takeda Annual Report 2015
Global R&D Sites
Tokyo, Osaka, Shonan, Hikari (Japan) Guangzhou (China) Fort Collins (U.S.) Zurich (Switzerland) Rio de Janeiro (Brazil) as of March 31, 2015 Promotion of In-Licensing and Alliances
In March 2015, Takeda won the 2015 Association Takeda uses in-licensing and R&D alliances to of Strategic Alliance Professionals Alliance Excellence reinforce the pipeline as an important strategy for Award*3 in recognition of its successful in-licensing complementing in-house R&D activities. We have a and alliance activities. The award is not just for dedicated Alliance Management team to ensure pharmaceutical companies but all industries.
partnerships work smoothly.
In fiscal 2014, Takeda launched three new *3 Alliance Excellence Award: An award held by the Association of Strategic Alliance Professionals (ASAP) of the U.S. products, including ADCETRIS (brentuximab vedotin), a treatment for malignant lymphoma that was P.33 In-Licensing and Alliance Activities in-licensed from Seattle Genetics, Inc. We also obtained two successful approvals, and completed one new drug application. In fiscal 2015 more than 50% of our revenues will come from partnerships and Initiatives to Improve Productivity
High-Throughput Screening Process
In the process of developing new drugs, it is necessary to select "seed" compounds for development through a screening process. However, since the probability of being able to determine new drug candidates is incredibly low, countless repeated tests are carried out. Takeda's high-throughput screening process uses high-precision robots operating around the clock to search for "seeds," greatly improving the speed and accuracy of the process. High-precision robots search for "seeds" Takeda Annual Report 2015
Aiming to develop innovative vaccines that can address public health needs in the world, we are promoting the global vaccine business. We are aggressively pursuing technologies to develop new products.
We are aggressively addressing global public health designed to cover a broad range of genetic strains of and prevention of disease to ensure "Better Health, norovirus. Currently, Phase II trials are in progress. Brighter Future" for people around the world Trial results announced in October 2013 demon- through the development of vaccines for infectious strated for the first time that the norovirus vaccine diseases that threaten the lives of millions of people was able to reduce symptoms in people who had each year, and for which vaccines do not exist.
been administered the norovirus.
Building a Global Vaccine Business
Takeda has established a Specialty Business Unit for Dengue is the most important mosquito-borne viral vaccines which is applying innovation to tackle the illness in the world, and is one of four World Health world's most challenging health problems for which Organization future vaccine priorities. TAK-003 is a vaccines do not yet exist. The unit has assembled a recombinant vaccine that targets all four strains of world-class vaccine team, with talent from top the virus. It is built on the genetic backbone of the companies, public institutions and private foundations, dengue type 2 virus, which is an important dengue to build upon its long history of improving public strain in many parts of the world. TAK-003 is currently health in Japan. It is currently operating in locations being evaluated in Phase II studies.
around the globe, including the U.S., Switzerland, Singapore, Brazil and Japan, with functions spanning basic research, clinical development, Chemistry, The Japanese government is promoting measures to Manufacturing and Controls (CMC), manufacturing, prepare for pandemic influenza. Takeda has been policy & scientific affairs, and commercial strategy.
selected as the government's main partner in this The unit is developing promising vaccine candidates endeavor. In the event of a pandemic, a cell-cultured Number of people who against norovirus and dengue, which hold the influenza vaccine H5N1 and prototype*1 developed die from norovirus each potential to ease the burden of disease around the jointly with Baxter International Inc. will be produced year around the world world. Takeda will continue to work through the Source: Patel MM, et al. in a state-of-the-art facility built with joint funding vaccine business to contribute to better global public Systematic literature review of from the Japanese government. role of noroviruses in sporadic health, disease prevention, and improved access to gastroenteritis. Emerg Infect Dis. We are also continuing with the development of TAK-850, a cell-culture based seasonal influenza vaccine. It is currently in Phase I and II clinical trials. *1 To facilitate rapid manufacture and supply of a vaccine for use in the event of TAK-214 is the only norovirus vaccine in the world a pandemic caused by an influenza strain other than H5N1 currently in the clinical development stage, and is P.17 Access to HealthcareP.30 R&D Pipeline Basic Information on the Main Viruses Targeted in Development
Number of people Dengue Virus
worldwide infected with Norovirus exists throughout the world. It causes severe, The dengue virus causes dengue fever, with symptoms dengue virus each year acute gastrointestinal inflammation accompanied by fever, including fever, headache, muscle pain, and rashes. About Source: Centers for Disease Control and Prevention abdominal pain, diarrhea, and vomiting. It is the leading half of the global population cause of gastroenteritis and food poising in advanced is at risk of infection. Dengue countries, infecting 21 million*2 people in the U.S. each affects all people regardless year. It is possible to be infected multiple times throughout of region, socioeconomic life, and a cure has yet to be found. *2 Source: Centers for Disease Control and Prevention Yellow fever mosquito Takeda Annual Report 2015
CMC Center
Maximize Product Value to Patients
to effectively manage all of these patent portfolios.
Takeda's IP operations must also address the The Chemistry, Manufacturing and Controls (CMC) important issue of how to construct patent portfolios Center's mission is to maximize product value to to protect new businesses based on new state-of-the- patients through our innovative CMC technologies Manufacturing and art technologies developed in recent years, including Controls) research is a and operational excellence. The CMC Center seeks to comprehensive approach regenerative medicine, cell-based therapies and gene establish platform technologies that add value to to supporting compound therapy. In addition, there has been an increase in the Takeda products, and to develop new technologies characterization, process importance of companion diagnostics using biomark- development, pharmaceu- in-house or through partnerships to ensure that the tical manufacturing, and ers, and addressing this topic has become an impor- CMC Center continues to provide value in the future.
analytical testing, all in tant new issue for IP in the pharmaceutical industry.
CMC Center headquarters are in Osaka, Japan with alignment and coordina-tion with the quality offices in Boston, Deerfield, San Diego (U.S.), Singen Helping to Realize Sustainable Growth
(Germany), London (U.K.), and Hikari, Shonan (Japan). Under the new vision of "One CMC Center for The IP aims to help Takeda's growth by supporting its Superior Medicines," all sites are well integrated on a increasingly global business activities, specifically by function basis and functions closely communicate ensuring appropriate protection of Takeda's scientific with each other to continuously maintain our ideas and inventions, and the goodwill of its products. At present, the IP has offices in Tokyo, Shonan (Japan), We have five main laboratory functions all Deerfield, San Diego, Boston (U.S.), Cambridge (U.K.) engaged in activities for Investigational Medicinal and Zurich (Switzerland). Each member of these Products (IMP) to support preclinical and clinical teams supports Takeda's business in their respective studies and product registration.
regions, and we are also constructing an organization capable of operating on a global scale under a shared management policy and strategy of "Global One IP." In terms of external activities, we are actively conveying our opinions regarding revisions to legal Intellectual Property Protecting
systems through a range of external organizations, so as to quickly respond to increasingly borderless IP Takeda has been strengthening functions that will help regulatory systems worldwide surrounding the its transformation into a best-in-class pharmaceutical company's business. Global IP activities organized in company by establishing the Global General Counsel, this way support Takeda's entire business from R&D to who is accountable for oversight of the Intellectual sales and marketing by focusing on the three key tasks Property (IP) function, as well as legal and compliance defined below.
The IP supports the business by protecting scientific ideas and inventions using patents, goodwill capital- [1] Maximization of value of the product and pipeline and protection of related rights aligned to Therapeutic ized in product brands using trademark rights, and Area Units' strategies also by promoting the proper usage of such IP rights. [2] Facilitation of more dynamic harnessing of external In particular, the protection of scientific ideas and innovation through partner alliance support inventions is conducted in close and mutual coopera- [3] Securing and protection of IP rights around the world tion with R&D functions.
including emerging countries It is generally assumed that patent protection of pharmaceutical products is achieved solely by a basic For further details about Takeda's IP, refer to the CSR Data Book: substance patent covering the original new active ingredient. In fact, a medicine relies on a patent portfolio that protects not only the ingredient, but also its use, manufacturing process, formulation, production intermediates, any related derivatives, and the methods for evaluating biomarkers. The IP strives Takeda Annual Report 2015
Pipeline Drugs (Phase II and above: Overview) The indications are primarily those for which Takeda will actively pursue approval.
Stage of Development Ulcerative colitis Acid-related diseases Pediatric functional constipation Ulcerative colitis Retreatment of multiple myeloma Front line mantle cell lymphoma brentuximab vedotin Post-ASCT Hodgkin lymphoma Relapsed cutaneous T-cell lymphoma Front line Hodgkin lymphoma Front line mature T-cell lymphoma LEUPLIN®, etc. Prostate cancer and premenopausal breast cancer (6-month formulation) Previously untreated multiple myeloma Relapsed or refractory multiple myeloma Maintenance therapy in patients with newly diagnosed multiple myeloma following autologous stem cell transplant Maintenance therapy in patients with newly diagnosed multiple myeloma not treated with stem cell transplant Relapsed or refractory primary (AL) amyloidosis Small cell lung cancer Pancreatic cancer Central Nervous System (CNS) Relapse prevention of multiple sclerosis Lu AA21004
Major depressive disorder Generalized anxiety disorder Attention Deficit Hyperactivity Disorder in adult patients Delay of onset of mild cognitive impairment due to Alzheimer's disease Parkinson's disease Type 2 diabetes mellitus (fixed-dose combination with metformin) Hypertension (fixed-dose combination with amlodipine and Early stage diabetic nephropathy Prevention of infectious disease caused by Hib Prevention of dengue fever caused by dengue virus Prevention of acute gastroenteritis (AGE) caused by norovirus Prevention of influenza disease caused by influenza virus subtype A and B contained in the vaccine Other Therapeutic Areas Ethylene glycol and methanol poisonings Hyperuricemia and gout (extended-release formulation) Osteoporosis (additional formulation; change of the dosage and administration) Rheumatoid arthritis *1 Formerly known as MLN0128 *2 Formerly known as MLN0264 For further details on the status of the development pipeline, refer to Takeda's website: Note: • J: Japan, U: U.S., E: Europe • Progress in stage from May 8, 2014 (release of fiscal 2013 results) until June 30, 2015 Takeda Annual Report 2015
Current Status of Major Pipeline Drugs
Treatment for Multiple Myeloma: MLN9708
(ixazomib) (U.S./Europe/Japan: Phase III)
MLN9708 builds on our leadership in proteasome Treatment for Ulcerative Colitis and
inhibition that began with VELCADE. MLN9708 is the Crohn's Disease: MLN0002 (vedolizumab)
oral proteasome inhibitor in the most advanced (U.S./ Europe: Approved, Japan: Phase III )
stage of development, and it is currently being investigated in five Phase III clinical trials for multiple MLN0002 is a monoclonal antibody against 4 myeloma and relapsed/refractory primary (AL) integrin.* In May 2014, Takeda obtained regulatory amyloidosis in Japan, the U.S., and Europe. In approval in the U.S. and Europe for MLN0002 for the February 2015, Takeda announced positive results treatment of ulcerative colitis and Crohn's disease from an interim analysis of the Phase III pivotal trial and it is now being marketed as ENTYVIO. It is for MLN9708. Takeda is also investigating MLN9708 currently undergoing Phase III clinical trials in Japan, in a broad range of other cancers.
and Takeda plans an ambitious life-cycle manage- ment program including a subcutaneous formulation and additional indications. R&D Pipeline
* 47 integrin is a protein present on the surface of lymphocytes and is involved in an immunological reaction in the intestinal tract.
The R&D pipeline means drugs under develop-ment, from the start of research through Treatment for Acid-Related Diseases:
approval and launch. Clinical trials are TAK-438 (vonoprazan) (Japan: Approved)
conducted in humans for drugs for which basic research and preclinical trials have been TAK-438 is a potassium-competitive acid blocker completed. Medicines that have undergone (P-CAB) that suppresses gastric acid secretion by safety and efficacy evaluation via three phases binding to the proton pump* in gastric parietal cells, of clinical trials are launched onto the market as new drugs after approval by regulatory strongly and sustainably inhibiting the action of the proton pump. In December 2014, Takeda received approval for the drug in Japan, where it is now being Basic Research/Preclinical Trials
marketed as TAKECAB.
* Proton pump: An enzyme that functions in the final stages of acid secretion in gastric parietal cells.
Conducted involving a small group of healthy volunteers in order to evaluate safety and ADME Treatment for Malignant Lymphoma:
(Absorption, Distribution, Metabolism, and Excretion) of the drug.
SGN-35 (brentuximab vedotin)
Conducted involving a small group of patient In-licensed from Seattle Genetics, Inc. of the U.S., the volunteers in order to evaluate safety, efficacy, anti-cancer agent SGN-35 is an antibody-drug dosage, and administration regimen.
conjugate that targets the CD30 antigen expressed by some tumor cells. Takeda obtained regulatory Conducted involving a large number of patient approval for SGN-35 in Europe in October 2012 and volunteers in order to evaluate safety and Japan in January 2014 for relapsed/refractory efficacy in comparison to active (or inactive) comparators.
Hodgkin lymphoma and relapsed/refractory anaplastic large cell lymphoma,* and it was launched under the brand name ADCETRIS. Currently, it is approved in over 55 countries worldwide and Takeda is conducting several additional trials to expand the P.50 Human Rights * In Europe, relapsed/refractory systemic anaplastic large cell lymphoma Takeda Annual Report 2015
Central Nervous System (CNS)
Treatment for Major Depressive Disorder:
Norovirus Vaccine TAK-214 (Phase II)
Lu AA21004 (vortioxetine)
The norovirus vaccine developed by LigoCyte (U.S.: Approved, Japan: Phase III)
Deaths worldwide due (currently Takeda Vaccines, Inc.) is designed to cover In-licensed from H. Lundbeck A/S of Denmark, a broad range of genetic strains of norovirus, a Source: World Cancer Report Lu AA21004 is considered to be a compound with leading cause of acute gastroenteritis in adults and 2014 (International Agency for Research on Cancer) the combination of pharmacodynamic activity. children around the globe. A vaccine for norovirus Lu AA21004 obtained regulatory approval in the U.S. does not currently exist. Phase II clinical trials of an in September 2013 and was launched under the intramuscular formulation are in progress.
brand name BRINTELLIX. Lu AA21004 is currently in Phase III in Japan.
Dengue Vaccine TAK-003 (Phase II)
The dengue vaccine is a tetravalent dengue fever vaccine that includes all four strains of the dengue virus. It is currently in Phase II clinical trials. Phase I clinical trials in the U.S. and Colombia and Phase II Treatment for Type 2 Diabetes: SYR-322
trials in dengue-ridden countries throughout Asia and South America showed that children, youth, and SYR-322 treats type 2 diabetes by inhibiting the adults who received two vaccinations demonstrated action of the DPP-4* enzyme. SYR-322 has obtained an immune reaction against all four dengue strains, regulatory approval in Japan in April 2010, the U.S. in and showed no issues for concern regarding safety. January 2013, and Europe in September 2013, and was launched under the brand names NESINA in the U.S. and VIPIDIA in Europe. Takeda is continuing Influenza Vaccine TAK-850 (Japan: Phase I/II)
development and submission activities toward TAK-850 is an inactivated seasonal influenza vaccine regulatory approvals in Emerging Markets such as developed using cell culture technology licensed Brazil and Russia, and is currently conducting Phase from Baxter International Inc. of the U.S. Since the III clinical trials of a fixed-dose combination of vaccine uses neither eggs, preservatives, adjuvant, NESINA with metformin in Japan. nor antibiotic, it holds promise for use with people who are allergic to these. * DPP-4 breaks down glucagon-like peptide-1 (GLP-1), a hormone that stimulates the secretion of insulin.
Treatment for Type 2 Diabetes: SYR-472
(trelagliptin) (Japan: Approved)
SYR-472 is a once-weekly DPP-4 inhibitor that is anticipated to be a new treatment option for patients who require effective control of their blood glucose levels. In March 2015, Takeda received approval for the drug in Japan, where it is now being marketed as ZAFATEK.
Takeda Annual Report 2015
In-Licensing and Alliance Ac
Advances in In-Licensing and Alliance Activities from April 2014 Onward
Teva Pharmaceutical Industries Ltd. (Israel)
Keio University School of Medicine and Niigata University (Japan)
• In April 2014, Takeda announced that it has entered into an agreement • In April 2015, Takeda announced that it has signed an agreement with with Teva to commercialize Teva's Parkinson's disease treatment Keio University School of Medicine and Niigata University to undertake rasagiline in Japan. In January 2015, Takeda started Phase II/III and Phase collaborative research at Takeda's Shonan Research Center focusing on III clinical trials of rasagiline in Japan.
the search and functional analysis of disease-related RNA-binding proteins.
• In December 2014, Takeda submitted an NDA in Japan for glatiramer, a drug indicated for the relapse prevention of multiple sclerosis in-licensed The National Cancer Center (NCC) (Japan)
• In May 2015, Takeda announced that it has signed a partnership agreement with the National Cancer Center (NCC) of Japan to discover and develop anti-cancer agents. Through the partnership, Takeda and the • In May 2014, Takeda announced that it has entered into an option NCC will share information and hold regular discussions in order to agreement with MacroGenics to develop and commercialize MGD010, a collaborate across areas from basic research to clinical research and product candidate currently in preclinical development for the treatment of autoimmune diseases.
• In September 2014, Takeda announced that it has entered into an as of June 30, 2015 agreement with MacroGenics to develop and market four additional For further details on in-licensing and alliance activities, refer to Takeda's website: product candidates. Paladin Labs Inc. (Canada)
• In January 2015, Takeda launched "Fomepizole Intravenous Infusion 1.5g Takeda" (fomepizole) in Japan, which Takeda in-licensed from Paladin Labs for the treatment of ethylene glycol and methanol GE Healthcare (U.K.)
Research using iPS cell • In November 2014, Takeda announced that it has entered into an technology is now alliance agreement with GE Healthcare related to GE Healthcare's moving into the stage of diagnostic technologies for hepatic fibrosis. The collaborative effort aims clinical trials. Our 10-year to accelerate development of therapeutic drugs as well as new joint research agreement diagnostic technologies for liver diseases.
with Japan's leading pharmaceutical company, Monash University (Australia)
Takeda, has given us tremendous momentum • In December 2014, Takeda announced that it has entered a strategic towards achieving research alliance agreement with Monash University to develop new medicines to address significant unmet medical needs in gastroenterology.
therapeutic applications for iPS cell technology. Queen Mary University of London (U.K.)
This kind of comprehen-sive joint research on • In February 2015, Takeda announced that it has entered a research such a large scale over alliance agreement with Queen Mary University that aims to define new such a long term was insights and develop novel therapies in gastroenterology.
without precedent, and we expect it to yield many results in terms of the potential for drug discovery using iPS cell Center for iPS Cell Research and Application (CiRA)
of Kyoto University (Japan)
Our vision and that of Takeda are in perfect agreement in seeking to create novel treatments using iPS cells, and to • In April 2015, Takeda and the Center for iPS Cell Research and Applica- contribute patients. Through our partnership, we aim to tion (CiRA) of Kyoto University entered a 10-year collaboration contribute to the development of treatments for all kinds of agreement on iPS cell research. Takeda and CiRA will work together to patients, suffering from both common and rare illnesses.
develop clinical applications of induced pluripotent stem (iPS) cells in areas such as heart failure, diabetes mellitus, and neurological disorders. The collaboration is called the "Takeda-CiRA Joint Program for iPS Cell Shinya Yamanaka, M.D., Ph.D.
Director, Center for iPS Cell Research and Application (CiRA),
Applications" (T-CiRA), and is designed to expedite multiple research Kyoto University (Japan) projects for drug discovery and cell therapy using iPS cell technologies.
Takeda Annual Report 2015
Manufacturing and Supply/Quality Management System Manufacturing and Supply
We are accelerating measures to strengthen our global manufacturing and supply functions as part of our effort to build a robust and efficient operating model.
Strengthening the Global Manufacturing
and Supply Chain Network
In order to respond to the rapid geographical expansion of its sales activities, Takeda is taking steps to strengthen its global manufacturing and supply chain network and quality system. We are accelerat- ing our integration of manufacturing and supply chain divisions under the supervision of Dr. Thomas Wozniewski, the Global Manufacturing and Supply Officer (GMSO), who works closely with the division leadership teams to drive forward Takeda's global manufacturing and supply strategy. Takeda currently has 25 production sites in 18 countries, and is promoting various initiatives towards optimizing its global manufacturing and Number of countries where Takeda has supply system. In November 2014, we decided to transfer the solid formulation manufacturing operations of the Osaka plant to the Hikari plant and the Oranienburg plant in Germany. Looking ahead, we will continue our efforts to maximize the capability of our global manufacturing network, further reduce costs through global procurement of raw materials, and more effectively integrate and increase the efficiency of our global supply chain.
P.56 Global Procurement Incorporating CSR Hikari plant in Japan rod tion Sites
uction Sites
as of June 30, 2015 Takeda Annual Report 2015
Quality Management System
To ensure the quality of Takeda products for patients in every country around the world, we have been transforming our Global Quality organization.
Transforming the Global Quality
Reinforcing Global Quality Auditing
Global Quality will focus on both internal audits of Takeda continues to drive rapid globalization of its Takeda and external audits of suppliers. The number business, and to establish a Global Quality organiza- of externally audited sites reached 2,500.
tion capable of supporting this growth, Gerard Greco, Ph.D., joined the company as Global Quality Officer (GQO) reporting to the President & CEO. GQO is leading the transformation of Global Quality The new Global Quality organization is designed to by establishing a new vision built upon three pillars: fully support Takeda in its objective of being a Science, Systems and People. In addition, Global best-in-class pharmaceutical company. The most Quality has been restructured to fully align with immediate focus is to fully implement the new related departments, such as R&D, Global Manufac- organization, global systems and programs, Global turing and Supply (GMS), Commercial, and the Quality Auditing and global projects that support, Vaccine and Oncology Business Units. Our new enhance, and improve the business in the most approach to Quality reflects our commitment to cost-effective manner possible. As part of this putting the patient at the center of all we do, transformation, Takeda is implementing a robust, building trust with society, reinforcing our reputa- global quality management system and governance tion, and developing our business.
model to meet the requirements and expectations of a global pharmaceutical company, reflecting that product safety and efficacy remain its top priorities. 1. Science
Operating as a fully integrated function within the · Product and process knowledge business, Global Quality will establish and promote a · New technologies· Robust analytical development quality culture that ensures consistent product safety 2. Systems
· Integrated quality 3. People
P.56 Global Anti-Counterfeit Measures · Knowledge and skills development · Supplier quality · Performance management For further details about Takeda's quality management system, · Talent pipeline construction to nurture next generation of leaders refer to the CSR Data Book:http://www.takeda.com/csr/reports/ The restructuring of Global Quality redefines the scope and responsibilities in the organization. This approach will standardize practices across the companies that have joined Takeda through recent acquisitions, thus eliminating redundant and inefficient ways of working. In addition, there is a concerted effort to drive change through the business by incorporating innovation, continuous improvement, knowledge and best-practice sharing into the organizational concept. We have also established a Regional Oversight structure for sites, Local Operating Companies (LOC) and functional Quality teams. A key feature includes implementing a standard site structure model for the Quality organizations in our manufacturing sites in order to establish consistent functions, roles and responsibili- ties across the network.
Takeda Annual Report 2015
We aim to provide innovative high-quality products to patients worldwide.
Takeda's Main New Products GI
For Ulcerative Colitis and Crohn's Disease
For Acid-Related Diseases Main in-house sales regions: Main in-house sales regions: ENTYVIO (U.S. and Europe) TAKECAB (Japan) Central Nervous System
For Major Depressive Disorders For Type 2 Diabetes Main in-house sales regions: Main in-house sales regions: Japan, U.S. and Europe BRINTELLIX (U.S.) NESINA (Japan and U.S.) VIPIDIA (Europe) For Hyperlipidemia Omega-3-Acid Ethyl Esters 90
Naltrexone XR/Bupropion XR
Main in-house sales regions: Main in-house sales regions: LOTRIGA (Japan) CONTRAVE (U.S.) Note: New Products: Represent products launched in or after 2009 Takeda Annual Report 2015
For Acid Reflux Disease For Malignant Lymphoma Main in-house sales regions: Main in-house sales regions: DEXILANT (U.S. and Asia) ADCETRIS (Japan and Europe) For Type 2 Diabetes Launched in May 2015 Main in-house sales regions: Main in-house sales regions: ZAFATEK (Japan) AZILVA (Japan) For Hyperuricemia and Gout Main in-house sales regions: Main in-house sales regions: ULORIC (U.S.) COLCRYS (U.S.) Takeda Annual Report 2015
Takeda Key Figures
Takeda's revenue from ethical drugs in Japan in fiscal 2014 fell by 4.6% year on year to ¥553.2 billion, mainly due to the impacts of an expansion of generics and a reduction in drug prices under the National Health Insurance (NHI) scheme. However, sales contributions from new products such as the type 2 diabetes treatment NESINA (alogliptin) family and the antihypertension treatment AZILVA Projected share of new product*1 on in-house product revenue in fiscal 2015 (azilsartan) helped to offset the decline.
*1 In-house products that have been on the market for 5 years or less after launch (6 years including the year of launch) Note: Excluding royalty and service income The adverse business environment is expected to continue, with the government's policy of promoting use of generics and the impact of further NHI drug price revisions slated for 2016 and 2017. Overall market growth is expected to remain almost flat until Fiscal 2014 Sales of
Sales (¥ Billion) BLOPRESS hypertension treatment 94.6 24.8%
LEUPLIN prostate and breast cancer treatment 57.6 10.7%
TAKEPRON peptic ulcer treatment
52.5 22.3%
AZILVA hypertension treatment 45.4 79.4%
NESINA type 2 diabetes treatment 38.4 1.0%
VECTIBIX colorectal cancer treatment 18.3 5.3%
Japan Consumer Healthcare
The consumer healthcare business generated revenue of ¥73.6 billion (up 1.0% year on year) in fiscal 2014, reflecting higher sales of products such as ALINAMIN tablets.
Fiscal 2014 Sales of Core Brands Sales (¥ Billion) (YoY)
ALINAMIN tablets ALINAMIN drinks Consumer Healthcare Business Core Brand Products and The BENZA range Midori no Shukan, a health food containing euglena Takeda Annual Report 2015
Takeda plans to maintain the top share in the medicine that fulfills previously unmet medical Japanese market by concentrating its resources on needs. By promoting activities to provide information new products to drive future growth and continuing to meet the needs of customers and patients, we Questions to doctors: to transform itself in response to the environmental have contributed to the treatment of many patients Which company do changes in the pharmaceutical industry. who had been waiting for ADCETRIS. In April 2015, you view as having excellent sales In the Cardiovascular/Metabolic (CVM) area, the Takeda established two Specialty Business Units to representatives in new product AZILVA has grown significantly. Takeda create independent sales and marketing functions for will further enhance its portfolio centered on the areas of Oncology and Vaccine, as a measure to Takeda was ranked No.1 Takeda's DPP-4*2 inhibitor family with the addition to further strengthen the specialty care business.
in 2014 and 2015 for the product lineup of the type 2 diabetes treatment Previously, Takeda has promoted activities to quality of sales ZAFATEK (trelagliptin), which is the world's first provide high quality drug information through its representatives in the opinion of doctors.
once-weekly oral treatment option, in order to meet medical representatives (MRs), which earned respect Source: Monthly Mix February, an even wider range of therapeutic needs. In the from medical professionals. Now, Takeda is working 2014, February, 2015(Elsevier Japan) Gastrointestinal, CNS, Urological and to cement these trust relationships even further by Bone/Rheumatic Diseases areas, the new product redefining the image of MRs in line with the demands TAKECAB (vonoprazan), for treatment of acid-related of the future. Takeda has also established the Medical diseases, has achieved rapid market penetration Affairs Department in Japan independently from the since its launch in February 2015.
commercial divisions, and will work to further In the Oncology area, ADCETRIS (brentuximab enhance its medical science information provision vedotin), a treatment for malignant lymphoma, was launched in April 2014 as an innovative new *2 DPP-4 breaks down glucagon-like peptide-1 (GLP-1), a hormone that stimulates the secretion of insulin.
Main products launched recently Business Environment and Takeda's Strategy
With the promotion of self-medication being sive alliance agreement with euglena Co., Ltd. positioned as one of the important objectives of concerning products containing Euglena,* and Japan's health insurance program reform initiative, commenced sales of Midori no Shukan, a health food OTC products are expected to play an increasingly containing euglena, as a product for mail-order sale important role in Japanese society. Takeda is only. Takeda will continue working to create new promoting the growth of the OTC product business products designed primarily to support customers' centered on core brands such as ALINAMIN and BENZA as well as nurturing new in-licensed products * A kind of algae containing a balanced compliment of 59 nutrients and offering and strengthening mail-order sales and exports. In October 2014, Takeda entered a comprehen- Takeda Annual Report 2015
Takeda Key Figures
such as ENTYVIO (vedolizumab), for the treatment of ¥394.9 (¥ Billion)
ulcerative colitis and Crohn's disease, growth in diverse core products such as VELCADE (bortezomib), for the treatment of multiple myeloma, and the impact of the yen's depreciation. Fiscal 2014 revenue The U.S. market remains the largest pharmaceutical market in the world, and is a key market in terms of Fiscal 2014 underlying revenue growth* Takeda's growth going forward. The evolving * Underlying revenue growth: Constant currency and without divestments landscape of integrated delivery networks (IDNs) has many companies experimenting with their business Note: Excluding royalty and service income model to improve payer access (risk-sharing; real-world data) and differentiate versus competitors.
In the U.S., we will achieve market penetration by concentrating resources on the three new products: the new growth driver ENTYVIO, the major depres- sive disorder treatment BRINTELLIX (vortioxetine), and the chronic weight management treatment CONTRAVE (naltrexone XR/bupropion XR). ENTYVIO is Takeda's fastest ever drug to achieve sales of $100 million in the U.S., and is expected to become the largest contributor to Takeda's global growth.
We will propose and execute optimal sales strategies for each core therapeutic area to maximize the value of our diverse core products, including VELCADE, COLCRYS (colchicine) for the treatment of acute gout flares and ULORIC (febuxostat) for hyperuricemia in adult gout patients, DEXILANT (dexlansoprazole) for the treatment of gastroesopha- geal reflux disease, and the NESINA (alogliptin) family Revenue in the U.S. in fiscal 2014 increased to of treatments for type 2 diabetes. ¥394.9 billion, a year-on-year increase of 23.8%. The In addition, we will invest in Medical Affairs to help increase reflects the contributions of new products New cases diagnosed in the building of systems for medical research, as ulcerative colitis Fiscal 2014 Net Sales of
medical education and communication of medical and Crohn's disease in Net Sales (¥ Billion) science information needed to advance medical the U.S. every year Source: Crohn's & Colitis VELCADE multiple myeloma treatment 111.2 16.9%
Foundation of Americahttp://www.ccfa.org/ COLCRYS gout treatment 58.8 13.3%
DEXILANT acid reflux disease treatment 53.5 19.3%
ULORIC hyperuricemia and gout treatment 32.6 22.9%
ulcerative colitis and Crohn's disease treatment Takeda Annual Report 2015
Takeda Key Figures
disease, as well as strong performances from existing products and the impact of the yen's depreciation. Fiscal 2014 revenue Governments across Europe are showing a tendency to prioritize highly innovative products when approving new drugs. Given this situation, Takeda is projecting strong growth in the specialty care area, with a compound annual growth rate (CAGR) of Fiscal 2014 underlying revenue growth* approximately 8%. Specialty care will be key driver of * Underlying revenue growth: Constant currency and without divestments growth in the region (94% of absolute growth up to Note: Excluding royalty and service income In Europe-Canada, Takeda is evolving into an agile specialty care provider, delivering better health for patients through leading innovations in Gastroenter- ology (GI) and Oncology. Looking ahead, we will take steps to enhance digital engagement and key account management, while also strengthening Medical Affairs and market access capabilities to provide greater patient and customer-centricity. In Gastroenterology (GI), we launched ENTYVIO in 12 countries throughout fiscal 2014, and achieved early market penetration. In fiscal 2015, we plan to launch it in a further 13 countries, giving Takeda an 80% coverage rate of the Europe-Canada markets. In Oncology, our new product ADCETRIS continued to deliver further growth, and we will continue aggressively expanding our new product lineup in In the primary care business, we will focus on growth of the VIPIDIA* (alogliptin) family of new type Revenue in Europe and Canada in fiscal 2014 rose 2 diabetes treatments. We will also maintain sales of 8.1% year-on-year to ¥287.1 billion. The growth our core products, such as the peptic ulcer treatment reflects sales contributions from new products Number of patients in ADCETRIS (brentuximab vedotin), for the treatment Europe affected by of malignant lymphoma, and ENTYVIO (vedolizumab), * Japan and U.S. product name: NESINA ulcerative colitis and Crohn's disease for the treatment of ulcerative colitis and Crohn's Source: European Crohn's and Colitis Organisation Fiscal 2014 Net Sales of
Net Sales (¥ Billion) Pantoprazole peptic ulcer treatment ADCETRIS malignant lymphoma treatment 16.8 51.7%
ulcerative colitis and Crohn's disease treatment Takeda Annual Report 2015
Takeda Key Figures
¥292.3 (¥ Billion)400
Fiscal 2014 revenue Fiscal 2014 underlying revenue growth*(excluding inventory adjustment) * Underlying revenue growth: Constant currency and without divestments Note: Excluding royalty and service income Singapore Headquarters In February 2015, Takeda established a new regional hub in Biopolis, Singapore. Basing the new Emerging Markets Business Unit headquarters here will give Takeda quick and easy access to important market information on the region, enabling a faster, agile response to changes in patient needs or markets. The Singapore office also includes Asia Pacific commercial operations, the Vaccine Business Unit, and the Takeda Development Center Asia.
Singapore is an important business hub in Asia. Around 4,000 multinational corporations have set up regional headquarters there, including around 30 pharmaceutical companies. Singapore's Biopolis district is a dynamic concentration of offices and R&D facilities of biomedical companies, and provides the perfect business environment for pursuing further development and partnership opportunities. Takeda Established a New Regional Hub
in Singapore to Accelerate Growth in the
Revenue in the Russia Market
Takeda has a legal presence in 37 countries/areas spread across five areas - Asia Pacific, Greater China, Latin America, Near East, Middle East & Africa (NEMEA) and the Commonwealth of Independent States (CIS). These markets already account for 90% of pharmaceutical market growth in Emerging Markets. Placing patients at the center of the business, the Emerging Markets Business Unit aims to achieve sustainable growth by launching new products in line with a clear portfolio strategy.
Note: Excluding royalty and service income Takeda Annual Report 2015
Going forward, Takeda will work from its base in Singapore to create a structure that strongly links its Takeda aims to become a top 10 player in Emerging main R&D and sales and marketing functions in Markets by 2020, with a three-pillar strategy for Emerging Markets, and to accelerate business growth by deepening its understanding of patients and 1) Geographic focus: efforts will be concentrated on customers to meet their needs. building and reinforcing scale in markets where Takeda already has a commercial presence – enormous opportunities remain in countries such Revenue in Emerging Markets for fiscal 2014 was as China, India and Vietnam.
¥292.3 billion, representing year-on-year underlying 2) Resources will be deployed behind four key growth (excluding inventory adjustment) of 10%. segments identified as having increased disease While some countries and regions were temporarily prevalence and market growth (diabetes), strong affected by the economic environment, key countries in-house capabilities and brands that can be China and Russia both achieved strong, double-digit leveraged (Gastroenterology (GI), OTC), or where Takeda has a robust and innovative pipeline that addresses unmet medical needs (Oncology). 3) Explore inorganic growth opportunities in selected markets, particularly through M&A.
The Emerging Markets business is expected to contribute over 54% of total global pharmaceutical Takeda has also established a global Access to market growth between 2015 and 2025. Medicines Committee and Governance Model. The Already accounting for more than 80% of the model helps connect and promote Takeda's 96.29m global population, with an ever expanding affluent company-wide activities and initiatives to improve middle class, Emerging Markets are stepping up healthcare offerings and address unmet medical China ranks first in the world for the number investments in infrastructure, education and of adults suffering healthcare. On the other hand, public healthcare from diabetes (2014) systems in some countries are still inadequate, P.17 Access to Healthcare Source: IDF Diabetes Atlas Sixth leaving many people without access to basic Edition, International Diabetes Federation Revenue in the Brazil Market
Revenue in the Chinese Market
Note: Excluding royalty and service income Note: Excluding royalty and service income Takeda Annual Report 2015
Corporate
As a company committed to improving people's lives, Takeda considers the various impacts of its business operations on society and strives to create and sustain value throughout every part of its business processes. At the same time we also focus on being an active corporate citizen.
45 Takeda's CSR Activities 56 Anti-Corruption/Fair Operating Practices/ 58 Corporate Citizenship Activities Takeda Annual Report 2015
Takeda's CSR Activities
Recognizing companies are part of society, Takeda conducts activities with a holistic approach to not only create but also sustain corporate value.
Basic Policy on CSR
For Takeda, CSR is rooted in putting the patient in the center and operating a pharmaceutical business that creates outstanding products. In addition, we strive to maintain and improve sound business processes, SDGsA set of international and to engage in activities to promote a sustainable targets for sustainable society as a good corporate citizen. In doing so, we development being are implementing a model of value creation and considered in connection with the drafting of the preservation through CSR. This will help us to build post-2015 development trust with society, reinforce our reputation, and agenda, to continue on further develop the pharmaceutical business. In from the Millennium Development Goals conducting our activities, we refer to internationally (MDGs), which will finish recognized guidelines, such as the United Nations Patients queue at an outpatient clinic (Tanzania) Global Compact's 10 principles, and long-term From the Takeda Initiative* project website international targets, such as the Sustainable Development Goals (SDGs) that are scheduled to be * A 10-year endowment program launched in 2010 to support the Global Fund to Fight AIDS, Tuberculosis and Malaria (the Global Fund), by developing the P.18 CSR Strategy announced in September 2015. We also apply the capacity of healthcare providers in Africa.
P.58 Corporate Citizenship Activities Creating and Sustaining Value through CSR
Build trust with Social value
Activities as a corporation
Business
· Develop outstanding pharmaceutical products (the basis of CSR) management
Takeda-ism
Activities as a corporate citizen
· Initiatives for stakeholders · Build a framework to promote progress of medical and pharmaceutical research (mission implementation) Takeda Annual Report 2015
Takeda's CSR Activities CSR Governance and Strategic Engagement
Takeda has participated in the United Nations Global Compact LEAD program since its inception, as well as research conferences Decision making: Just as with business matters,
related to SDGs and setting long-term goals. In 2015, Takeda important CSR-related matters are handled by the joined the Business for Social Responsibility (BSR)'s Business Review Committee or the Board of HERhealth* and CSR Asia. Moreover, Takeda is increasing its engagement with CSR promotion Due diligence: We identify any impacts business
organizations in emerging countries with activities have on society and the environment, different cultural and religious including potential impacts, and take appropriate backgrounds, with the goal of measures to handle them, with the aim of facilitating smooth business sustaining corporate value.
development in Emerging Implementation: Material issues identified
through engagement activities are categorized into quality, human rights, labor, environment, * A project for improving female workers' health in procurement, supply chain management, developing countries compliance and community, making reference to standards such as ISO 26000. Then they are dealt with as projects by the relevant departments.
Disclosure: A dedicated CSR organization within
Corporate Communications and Public Affairs
(CCPA) promotes disclosure of CSR-related information, making reference to the United Nations Global Compact Advanced Level criteria, GRI's fourth generation of Sustainability Reporting Guidelines (G4), and the International Integrated Reporting Council (IIRC) International Integrated Global Health Community
Reporting Framework, and other guidelines. United Nations Global Compact The Access to Medicine (ATM) Global Health Community
The UNGC is a worldwide Index was developed by the framework for promoting Access to Medicine Foundation to In April 2015, Takeda established voluntary actions by corporations independently rank pharmaceuti- functions within CCPA that are dedicated as responsible corporate citizens. cal companies' efforts to improve to engagement with global health-related Participating businesses and access to medicine.
organizations are asked to support stakeholders. Takeda tightens the links with and implement its 10 principles.
international institutions such as the WHO, and works In the context of social to enhance Takeda's industry involvement through the responsibility, due diligence is the IFPMA and pharmaceutical industry associations in each Business for Social Responsibility process of identifying and A global association of member avoiding or reducing the negative country and to increase patient advocacy activities in companies for CSR.
impacts of an organization's various countries.
decisions and activities.
CCPA Organizational
A CSR think tank with one of the Corporate Communications largest networks in the Global Public Affairs For Takeda, stakeholder engagement means understand- Corporate Communications ing the position and concerns of and Public Affairs International Federation of stakeholders and then reflecting Pharmaceutical Manufacturers & these in corporate activities and decision making.
Crisis Management Takeda Annual Report 2015
Evaluation Agencies for Environmental, Social, and
Governance (ESG), etc.
We monitor the status of CSR trends and the expectations of investors and Takeda works to grasp long-term CSR NGOs of pharmaceutical companies through surveys from socially trends and expectations of the responsible investment (SRI) indices such as the Dow Jones Sustainabil- company both now and in the future ity Index and FTSE4Good Global Index. With respect to our through dialogue with a diverse range Evaluation agencies f
response to the issue of access to healthcare, we have of communities and stakeholders. In established a dedicated department with the marketing this way, we obtain an overall picture division for Emerging Markets, which is in Singapore. of the current situation before The department responds to surveys from institu- implementing CSR activities. tions that evaluate healthcare access, such as the Access to Medicine Foundation. or ESG, etc. Inclusion Status in SRI (Socially Responsible Investment) Indices
(as of June 30, 2015)
• Dow Jones Sustainability Asia Pacific Index (S&P Dow Jones Indices LLC of the U.S.) • FTSE4Good Global Index (FTSE International Limited of the U.K.) • Morningstar Socially Responsible Investment Index (MS-SRI) (Morningstar Japan, Inc.) Strategic
Dialogue with Stakeholders
Takeda enhances the quality of dialogue with stakeholders using the AA1000 standards, based on appropriate information disclosures and dissemination. We have also established a contact point for consultations and complaints, which we respond to appropriately in our drive to improve our corporate activities.
Dialogue with Stakeholders Method of Dialogue Organizational Body • Participate in international conferences • Pharmaceutical information providing activities Patients and Medical • Provide information through customer relations and through our website, etc. Relations Contact • Hold seminars on healthcare, etc. • Provide information through advertising Center, etc.
Shareholders and • Provide information through our Annual Report, website, and other media • Shareholders' meetings and investors' briefings • IR activities IR, CCPA, etc.
• Respond to CSR surveys by socially responsible investors • Implement programs in cooperation with NGOs and NPOs • Activities through involvement in economic and industry groups • Hold CSR lectures for adults and students • Exchange of views (dialogue) • Volunteer activities • Dialogue with local residents living near manufacturing and research facilities • Disclosure of information through Annual Report and website, etc.
manufacturing and research facility • Honest procurement activities based on the Takeda Global Code of Conduct and the Takeda Business Partners Supplier Code of Conduct • Surveys of business partners bodies handling procurement, etc.
• Exchange of views, explanations, study sessions • Inquiries desk Issued by British firm AccountAbility, these are • Global employee survey • The Takeda Global Code of Conduct • Voice of Takeda System (VTS) resources-related • Labor-management dialogue • Counseling • Hold "Worldwide Takeda-ism Months" guidelines relating to departments, Legal • A range of capability development training department, etc.
Stakeholders comprise all parties that are influenced by, and/or have an influence on, corporate activities.
Takeda Annual Report 2015
Takeda's CSR Activities Takeda uses the framework of the core subjects in the ISO 26000 standard to promote its activities. This section explains Takeda's activities in accordance with the disclosure standards of the United Nations Global Compact.
CSR Activity Targets and Results
The United Nations Targets for Fiscal 2014 Advanced Level Criteria Core Subjects Results for Fiscal 2014 Continue to increase knowledge and awareness of CSR Published pages to explain about CSR in the in-house magazine four times in the year, and posted 16 CSR articles on the global intranet Held dialogues regarding the Takeda-Plan Healthcare Access Program with Continue to engage with stakeholders cooperating NGO Plan Japan and CSR consultant CSR Asia, and summarized them in a pamphlet Continue to ensure strict adherence to company rules on Invited BSR to conduct seminars on human rights at relevant in-house human rights in all operational processes, including research, development, procurement, and marketing Conducted status surveys of each country on a global basis, continued female employee development programs and diversity awareness raising Continue to strengthen the promotion of diversity activities, and provided support for networking meetings of female company executives (Japan) Identified a group of individuals who are expected to become global Continue to promote accelerated development of global leaders, applying the company's Global Core Competency Model and Talent Review Process, and launched a training program to develop them Achieved 1,800 annual total working hour level through initiatives to reduce Continue to promote work-life balance overtime work hours and improve acquisition rate of annual paid leave (Japan) Continue to promote the Takeda Group Environmental Each subsidiary and division set targets based on the plan and worked to Conduct internal audit based on the Global EHS Guideline Conducted internal audits systematically at every division worldwide based and the checklist Continue to strengthen and improve environmental Each subsidiary and division set targets based on the plan and worked to protection and accident prevention management systems Continue to promote full employee participation in energy Each division achieved its established energy conservation targets Continue to improve awareness raising, education, and training Held environmental protection and accident prevention training according for environmental protection and accident prevention to plan and engaged in educational activities via the intranet Continued to cultivate over 100 species of endangered herbal plants at Continue to promote initiatives for biodiversity conservation Takeda Garden for Medicinal Plant Conservation (Kyoto) to ensure their ongoing preservation Conducted activities to enhance employee understanding of the principles Continue to instill the Takeda Global Code of Conduct and in the Takeda Global Code of Conduct and reinforced our Takeda the Takeda Anti-Corruption Global Policy in employees Anti-Corruption program through the implementation of the Global Policy on Anti-Corruption Due Diligence on Third Parties Completed a CSR risk assessment on our global supply base Plan to conduct the CSR survey for new suppliers (over 15,000 suppliers) Continue to promote green procurement Continued steady promotion of green procurement Anti-Corruption Consumer Assess the effectiveness of the Three-Year Plan by Enabled 9,933 illegal online pharmacies to be shut down. Overall, employing numerical indicators outcome of the Three-Year Plan exceeded expectation Revised our internal review system for promotional materials for healthcare Continue to raise disease awareness through Takeda professionals to ensure that the information we provide complies with website and advertising current regulations Continue to provide information spanning treatments and Provided information on treatments and preventative therapies through preventative measures website, seminars, and various other media Continue to provide ongoing support for areas affected by Provided steady support under a long-term scheme running through to the Great East Japan Earthquake Continue to promote corporate citizenship activities in the Steadily implemented healthcare-related programs such as the Takeda Initiative and IDEEL Program Continued to provide funds for the Global Health Innovative Technology Continue to provide research grants in a wide range of Fund (GHIT Fund), which aims to promote the discovery of new drugs to fields that contribute to healthcare progress fight communicable diseases in developing countries Participated in international conferences such as World CSR Congress Continue partnerships with NGOs and NPOs (India), and strengthened relationships with NPOs in Asia Created a photobook summarizing employees' corporate citizenship Continue to raise awareness throughout the company activities around the world for patients, and shared the information with all about the Basic Policies on Corporate Citizenship Activities Continue to implement activities to publicize the Global Updated guidelines related to donations based on changes in the Donation Guidelines throughout the company corporate governance system Continue to provide opportunities for volunteer activities Conducted a complete renewal of the volunteer information page on the to employees in Japan Evaluations: :Target achieved :Target not completely achieved :Target not achieved Takeda Annual Report 2015
Targets for Fiscal 2015 Page in Annual Report Continue to increase knowledge and awareness of CSR among employees P.18 CSR Strategy P.45Takeda's CSR Activities P.61 Corporate Governance Continue to engage with stakeholders Continue to ensure strict adherence to company rules on human rights in all operational processes, including research, development, procurement, and Continue to strengthen the promotion of diversity Global Talent ManagementPromotion of DiversityGlobal Survey on Best-in-Class Continue to promote accelerated development of global leaders Continue to promote work-life balance Continue to promote the Takeda Group Environmental Action Plan Conduct internal audit based on the Global EHS Guideline and the checklist Environmental PerformanceAction Plan through to Fiscal 2020 Established Continue to strengthen and improve environmental protection and accident prevention management systems Continue to promote full employee participation in energy conservation Continue to improve awareness raising, education, and training for environmental protection and accident prevention Continue to promote initiatives for biodiversity conservation P.29 Intellectual Improve compliance monitoring activities The Takeda Global Code of Conduct Global Procurement Incorporating CSR Publish a new Supplier Code of Conduct Fair Promotion Activities Implement new global process for supplier risk and CSR evaluation and improvement Monitor and pursue legal action on rogue online pharmacies P.34 Manufacturing Engage relevant law enforcements and regulatory agencies around the globe to combat the sale and trade of illicit products Global Anti-Counterfeit Measures Secure the legitimate supply chain Improve the process for preparing promotional materials for healthcare professionals and rigorous application throughout the company Provide appropriate information to patients using Takeda's products through the company website Continue to provide information spanning treatments and preventative measures Continue to provide ongoing support for areas affected by the Great East Japan Global Healthcare Issues Continue to promote corporate citizenship activities in the healthcare field P.28 Vaccine Business Healthcare Issues in Each Business Area Continue to provide research grants in a wide range of fields that contribute to Support for Areas Affected by the healthcare progress Great East Japan EarthquakeHERhealth Continue partnerships with NGOs and NPOs Continue to raise awareness throughout the company about the Basic Policies on Corporate Citizenship Activities Continue to implement activities to publicize the Global Donation Guidelines throughout the company Continue to provide opportunities for volunteer activities to employees in Japan For further details about our activities, refer to the CSR Data Book: http://www.takeda.com/csr/reports/ Takeda Annual Report 2015
Taking a global perspective, Takeda is doing its utmost to protect human rights through every link of the value chain.
Takeda has prepared internal standards in the form of policies and guidelines based on international human rights standards, and strives to be socially responsible at every stage of the value chain from research and development to procurement, production, distribution, and sales and marketing as it conducts its activities.
Guidelines for Reference International Human Rights Standards Takeda's Internal Standards Universal Declaration of Human Rights
A declaration adopted by the United Nations General Assembly in Basic Rules of Compliance 1948, as a common standard of achievement for all peoples and The Takeda Global Code of Conduct
Crisis Management The Declaration of Helsinki
The Takeda Group Global Crisis Management Policy
A statement of ethical principles for research and clinical trials involving human-derived specimens, adopted by the World Quality Assurance Medical Association (WMA) in 1964 Takeda Corporate Quality Policy
10 Principles of the United Nations Global Compact
Environment, Health, and Safety Global EHS policy
A voluntary set of principles for corporations to realize sustainable development of society, advocated by the Secretary-General of the United Nations in 1999 Human Rights-Related Rules for Research and
The BSR "Guiding Principles on Access to Healthcare"
A set of principles for improving access to healthcare globally, set out in 2013 by the BSR, an global association of member Takeda Supplier Code of Conduct and
companies for CSR Global Procurement Policy
Major Human Rights Issues and Initiatives throughout the Value Chain Development (Clinical Trials)
• Obtaining the voluntary agreement (informed • Obtaining the voluntary agreement (informed • Human rights problems for workers at consent) of all individuals who provide consent) of all individuals who participate in suppliers primarily in emerging and human-derived specimens beforehand clinical trials beforehand developing countries • Conduct research activities based on a • Follow the International Conference on Harmonisa- • Assess potential human rights risks in Takeda's framework of policies and rules that respect the tion - Good Clinical Practice (ICH-GCP) guidelines, supplier base and work with selected dignity of life and human rights which are international standards consistent with suppliers to manage human rights risks the spirit of the Declaration of Helsinki • Promote supplier diversity in accordance with the Global Procurement Policy P.54 Environment P.56 Anti-Corruption/Fair Operating Practices/Consumer Issues P.63 Compliance Takeda Annual Report 2015
KEY FIGURES
Number of departments that participated in an internalHuman Rights seminar by Business for Social Responsibility (BSR) 3 (fiscal 2014)
Clinical Trial Process Management Emphasizing the
Number of global CROs Human Rights of Trial Participants
contracted after conducting pre-contractual quality Takeda conducts clinical trials globally while giving the utmost consideration to the human rights of trial participants. Accordingly, when selecting contract research organizations (CROs) to perform various operations in our global clinical trials, we take particular care to conduct rigorous pre-contractual quality assurance audits. After contracting with CROs, we take responsibility for oversight of all CRO activities and evaluate CROs on an ongoing basis in line with our policies and standards. Global pharmaceutical companies that conduct business in Emerging Markets and developing countries must give consideration and care to human rights issues in various processes in the course of providing medicines. Takeda will continue to fulfill its Issues and Initiatives responsibilities as a company involved in improving people's lives by bolstering its initiatives across Takeda, drawing on a variety of insights gained through proactive participation in international community forums.
For further details about our activities, refer to the CSR Data Book: http://www.takeda.com/csr/reports/ Sales and Marketing
• Concerns for the safety and health of people • Prevention of health problems to patients due • Appropriate provision, collection and who live near our facilities to counterfeit drugs communication of information related to pharmaceutical products • Strengthen response based on the "Global EHS • Safeguarding our products and securing the • Compliance with the JPMA Code of Practice Policy" and "Global EHS Guideline" supply chain by engaging in risk-based and and the Fair Competition Code for Ethical holistic product protection activities Drug Production and Sales Takeda Annual Report 2015
Under Global One Takeda, we are creating an organization that can fully leverage diversity to promote business activities that will help patients around the world. Takeda is endeavoring to attract and develop diverse global talent and provide a working environment where employees can work comfortably as part of our transformation into a best-in-class global pharmaceutical company. Global Talent Management
Under a new organization supervised by the continuous stream of leadership talent capable Global HR Officer (GHRO), Takeda is taking of driving our global business. Meanwhile, the The name of the program proactive measures to attract and develop Schola Cogito program that we launched in is from the Latin words talent globally and to achieve optimal deploy- Japan is a unique voluntary training program Schola ("school") and Cogito ("to think"). A ment. We have introduced a Global Core that utilizes IT to make it easy for employees to business site where Competency Model and Talent Review Process, participate from distant locations. By actively lectures are held serves which we use to achieve fair and objective providing educational opportunities for as a hub connecting a network of major human resource evaluation and development. ambitious employees, we are fostering a culture business sites and mobile We have also set up a common global stepped of learning.
PCs, enabling participants development program aimed at producing a to work on acquiring business skills without restrictions due to working location.
Promotion of Diversity
Status of Women's Empowerment Initiatives
In 2012, Takeda announced its support for the Women's Empowerment Principles Employee composition (WEPs), which are the joint creation of the United Nations Global Compact and the Empowerment refers to the ability of women to United Nations Entity for Gender Equality leadership develop- participate in various and the Empowerment of Women (UN Ratio of women in managerial Women). Takeda follows the seven principles processes with the ability to choose and make to enhance its initiatives for promoting the decisions for themselves, active participation of women in corporate Child care leave users both as individuals and activities. In Japan, Takeda is taking steps to within the context of Ratio of women receiving social groups such as develop and produce female management health examination for corporations and talent and has set specific numerical targets gender-related health issues to help achieve this aim. In fiscal 2014, the Number of users of on-site child care facilities percentage of women in managerial Data collection sites: Takeda Pharmaceutical Company Limited positions was 3.9%.
* To get a more accurate understanding of the effects of diversity promotion initiatives, in fiscal 2014 the calculation method was changed to include women posted overseas and full-time contract employees. A networking meeting for female company executives The President & CEO exchanges opinions with female company executives Data assured by a third party Takeda Annual Report 2015
KEY FIGURES
Ratio of overseas employees Number of employees(as of March 31, 2015) Target percentage of women in managerial positions in Japan by Global Survey on Best-in-Class
Number of different In June 2015, Takeda conducted a global survey of all employees on the language and dialect theme of becoming a best-in-class employer in the eyes of all its employees. versions of the survey The survey was provided in 33 different languages and dialects, and the system allowed employees to complete it either online, on a mobile device, or on paper. Takeda will use the results of the survey to develop its initiatives for becoming a best-in-class pharmaceutical company with world-class R&D capabilities that is entirely focused on patients and customers all around the world. Takeda will build a common global HR platform to unite it under Global One Takeda as an organization where diversity can thrive. We will also pursue an optimal combination of global and local talent. Looking ahead, we will make further upgrades to our HR Issues and Initiatives systems and functions to enable various talent with a shared commitment to Takeda- ism make fullest use of their capabilities and passion in their respective roles and regions for the sake of the health of people all over the world.
P.80 Independent Assurance of Environmental and Social Performance Indicators For further details about our activities, refer to the CSR Data Book:http://www.takeda.com/csr/reports/ Takeda Annual Report 2015
We are progressing in areas of environment, health, and safety (EHS) with a long-term perspective to fulfill our responsibilities as a global enterprise. Takeda has been engaged in environmental protection with a long-term perspective. We are establishing the environmental management system suitable for a global pharmaceutical company and working together to advance globally harmonized EHS activities.
Takeda is strengthening its environmental protection structure following the direction set out by the Global EHS Policy. In 2015, we Protection Committee reorganized the corporate EHS system to enable agile and efficient management at the global level. Having the system at the center, we will further progress environmental protection measures both from global and local perspectives in a layer by layer fashion.
Second Global EHS Meeting (Dec. 16-17, 2014) CO2 Emissions Due to Activities of Takeda
Pharmaceutical Company Limited, Suppliers,
Customers and Others (Scope 3)
(Kilotons of CO2) Ratio of Scope* 3 CO2 emissions across the Purchased goods '13 and services '14 entire value chain CO2 Emissions of Takeda
relating to Takeda (Kilotons of CO2) Fuel and energy related '13 activities not included Company's business activities (fiscal 2014) Processing of '13 sold products '14 * Refers to the scope for calculation and reporting on Business travel, other emissions as stipulated by GHG Protocol, an international standard for Data collection sites: Takeda Pharmaceutical Company Limited calculating GHG emissions.
Direct emissions at the company (Scope 1), Indirect emissions from energy sources (Scope 2), Other indirect emissions (Scope 3) Volume of Fresh Water Used and Discharged
of Takeda
Data collection sites: Takeda's production and research sites (Takeda Pharmaceutical Company Limited includes its headquarters and sales offices.) Number of people Due to a divestment, past data has been restated. worldwide who do not have access to clean Calculation Method · Emissions included in the calculation CO2 emissions refer to direct emissions generated by combustion of Source: United Nations "World fossil fuels and indirect emissions from energy sources.
Water Development Report" (2015) · CO2 emission factorEmissions of Takeda in Japan are calculated based on the "Law Concerning the Rational Use of Energy," and the CO2 emission factor for purchased electricity is the adjusted emission factor for each electric power provider in each fiscal year (figures for fiscal 2014 are the actual figures from fiscal 2013). The CO Volume of Fresh Water Used Volume Discharged 2 emission factors for electricity purchased outside Japan are based on country-specific factors stipulated Data collection sites: Takeda's production and research sites in the GHG Protocol. Due to changes in factors, past data has been Due to a divestment, past data has been restated.
The calculation method of discharged water was changed.
Data assured by a third party Takeda Annual Report 2015
KEY FIGURES
Reduction in Takeda's CO2 emissions in Japan and Reduction in Takeda's reported atmospheric release of PRTR overseas from fiscal 2005 level (fiscal 2014) substances in Japan from fiscal 2010 level (fiscal 2014) Reduction in the volume of Takeda's final waste disposal Number of endangered plant species preserved in the in Japan from fiscal 2010 level (fiscal 2014) Takeda Garden for Medicinal Plant Conservation (Kyoto) as of March 31, 2015 Action Plan through to Fiscal 2020 Established
Target reduction in Takeda's CO2 emissions from fiscal 2005 level Takeda continues to undertake environmental protection activities with a medium- to long-term perspective, and has established an action plan with targets for fiscal 2020. The plan sets out numerical targets for CO2, NOx, and SOx emissions, volumes of waste for final disposal, and fresh water usage. It calls for a 25% reduction in CO2 emissions from fiscal 2005 levels.
Fiscal 2020 Medium-Term Global Targets (from fiscal 2005 level) The volume of final waste disposal (Japan) Takeda has been responding to various concerns of the global community such as water resource management and climate change. Through Scope 3 and independent assurance, we will continue to measure our environmental impact and disclose highly Issues and Initiatives transparent and reliable information. Moreover, we will engage in EHS management with a longer-term perspective based on global targets for the year 2020 with regard to key themes.
P.80 Independent Assurance of Environmental and Social Performance Indicators For further details about our activities, refer to the CSR Data Book: http://www.takeda.com/csr/reports/ Takeda Annual Report 2015
Anti-Corruption/Fair Operating Practices/Consumer Issues We will promote fair operating practices across Takeda while promoting strong anti-counterfeit measures to protect the health and peace of mind of patients.
Takeda is committed to observing the laws of each country, as well as applying high ethical and moral standards based on Takeda-ism as it promotes business activities with a priority on ensuring the health and safety of people all over the world. The Takeda Global Code of Conduct
Global Anti-Counterfeit Measures
The Takeda Global Code of Conduct is a set of In fulfilling a part of Takeda's mission to strive towards principles governing employee conduct. All better health for people worldwide, Global Product Group executives and employees are expected to Protection, which is a team consisting of diverse understand, comply with, and implement the subject matter experts, is safeguarding our products Code in their daily business activities.
and securing the supply chain by engaging in risk-based and holistic product protection activities throughout Takeda.
Global Procurement Incorporating CSR
Takeda is increasing its focus on managing risks and corporate social responsibil-     
 
ity (CSR) in its supply chain. This year Takeda has introduced a new Supplier Code of Conduct to encourage suppliers to make their own efforts towards CSR. Takeda plans to evaluate supplier performance on the Supplier Code as part of a new global process and will target improvements with suppliers on select areas. In 2015, Takeda became a member of the Pharmaceutical Supply Chain Initiative, a group of some 20 global pharmaceutical companies, which assess and promote the CSR activities of pharmaceutical suppliers. Takeda has extended its commitment to diversity to the marketplace, with its A Supplier Diversity Supplier Diversity Program, which enables socially and economically diverse companies to have an appropriate opportunity to compete with other suppliers, which serve Takeda. • Specific Conduct Guidelines for Anti-Corruption • Basic Rules of Compliance The Takeda Anti-Corruption Global Policy
The Takeda Global Code of Conduct
The Global Policy for Anti-Corruption
Due Diligence on Third Parties
Policy Framework for Respecting the Dignity of Life Guidelines for Implementing CSR Guidelines for Reducing throughout the Value Chain Environmental Risks Rules for the Research Ethics
Global Procurement Policy
Global EHS Policy
Investigation Committee, etc.
Takeda Supplier Code of Conduct
Global EHS Guideline
Research and Development
Main Policies/Guidelines/Action Plans on Anti-Corruption/Fair Operating Practices/Consumer Issues Takeda Annual Report 2015
KEY FIGURES
Number of illicit online pharmacies identified and shut down as a result of Takeda's investigations (fiscal 2014) Number of languages into which the Takeda Global Code of With the creation of the new Global Compliance organization, which is Conduct has been translated overseen by the Global General Counsel (GGC), Takeda is taking steps to ensure consistent application of its policies throughout the Group. The Takeda Global Code of Conduct is translated into local languages to promote employee understanding.
Takeda has established a policy framework that includes the Takeda Global Code of Conduct and the Takeda Anti-Corruption Global Policy. To provide guidance to ensure the policies are followed and to implement them effectively in line with the situation in Issues and Initiatives each country, we are continually developing individual standard operating procedures for each country and region which provide detailed guidance on acceptable conduct of specific business activities. Going forward, we will take even further measures to ensure rigorous compliance, enhancing our compliance programs to cover additional activities and implementing a comprehensive compliance monitoring program to ensure we continue to build a best-in-class sustainable company that puts the patient at the center.
For further details about our activities, refer to the CSR Data Book:http://www.takeda.com/csr/reports/ Fair Promotion Activities
• Guidelines on Fair Market Value for the Compensation of Healthcare Professionals Global Policy regarding Fair Market Value
Takeda's activities are governed by the Takeda Global Code of Conduct, which includes guidelines on fair promotion activities and ensures strict adherence to laws relating to the pharmaceutical business in each Policy on Takeda's overall Philosophy and Code for Promoting Drugs Commitment to Quality The Policy on Promotion
country and to the Code of Practice of Takeda Corporate Quality Policy
of the JPMA Code of Practice
the International Federation of Pharmaceutical Manufacturers & Sales and Marketing
Associations (IFPMA) and its member Takeda Annual Report 2015
Corporate Citizenship Activities We will cooperate with international organizations, NGOs, and others to carry out activities focused on the healthcare field.
As a company committed to improving people's lives, Takeda undertakes corporate citizenship activities intended to solve or alleviate social issues facing patients and people who have suffered from disasters. Joint R&D with MMV Global Healthcare Issues
Joint R&D on anti-malaria We are engaged in various programs that reflect the calls of international society, compounds with the Medicines for Malaria such as the United Nations Millennium Development Goals and WHO appeals.
Venture (MMV), a project supported by the Global Researchers and academia Healthcare professionals General public and patients Health Innovative Technology Fund (GHIT Fund) Takeda Initiative Joint R&D
Ebola crisis
with MMV, etc.
A program to develop the Japanese Red Cross capacity of healthcare Society, etc.
providers in three African countries, promoted in partnership with the Global Fund to Fight AIDS, Tuberculosis and Malaria (the Global Fund) An e-learning program on diabetes for healthcare professionals in developing countries, promoted in partnership with the international NGO Project Hope * The International Diabetes Educator E-Learning Healthcare Issues in Each Business Area
Based on the concept of "putting the patient at the center," Takeda's business sites in countries all over
the world are playing their part as members of the local community by donating to local organizations,
supporting volunteer activities by employees, and engaging in corporate citizenship activities in line with
local needs, such as initiatives to raise awareness of disease.
Corporate Citizenship Activities by Business Sites
around the World (Partial)
· Participate in events to support · Charity support for children's · Plan and perform plays with · Support nutritional improve- health awareness-raising themes · Volunteer painting activities at · Study meetings with guest Initiatives that
children's hospitals speakers from NGOs Learn "put the patient Work
· Clean up events at accommo- · Exchange events with patients dation facilities for patients at the center"
and their families · Support photography exhibitions · Support scholarship programs in support of patients for medical students · Make picture books to promote · Donate to healthcare related better lifestyle habits Details of activities can be found in the Takeda Corporate Citizenship Activities Photobook http://www.takeda.com/company/channel/ Takeda Annual Report 2015
KEY FIGURES
3
Number of long-range 10-year CSR programs
Number of countries Working women in developing and emerging countries suffer from where HERhealth is operating inadequate health knowledge and access to healthcare. Business for Social Responsibility (BSR), a global association of member companies for CSR, established HERhealth to address these issues in global supply chains. Takeda supports HERhealth in 2015, and is particularly involved in enhancing factory health clinics to better support women's health in the workplace. We are currently piloting a program in Bangladesh.
Takeda began supporting the HERhealth program in 2015. After the completion of pilot projects in Bangladesh, the program aims to expand its activities into Vietnam, Indonesia, Cambodia, and Kenya. Looking ahead, we will continue to Issues and Initiatives promote healthcare-related programs that respond to the demands of global society, and that contribute in particular to the Sustainable Development Goals, in collaboration with international organizations and NGOs. For further details about our activities, refer to the CSR Data Book:http://www.takeda.com/csr/reports/ Support for Areas Affected by the Great East Japan Earthquake
Since immediately after the Great East Japan Earthquake, Takeda has been conducting long-term activities to support the recovery of Donation amount for areas affected by the disaster. Examples include Great East Japan the contribution of pharmaceuticals and Earthquake assistance donations. We have made a commitment to Period for operating recovery continue support for 10 years through to 2020. support programs by NPOs through Takeda's Through projects such as contributing part of contributions: 2011-2020 the profits from ALINAMIN, we have donated A support activity introduction video approximately ¥3.9 billion in total. "We will never forget 3.11 2015 " For further details about Takeda's activities to support the recovery from the Great East Japan Earthquake, refer to its website: Takeda Annual Report 2015
Takeda will work to establish a management framework befitting a world-class pharmaceutical company that operates on a global scale.
61 Corporate Governance 65 Messages from Outside Directors 67 Crisis Management/Risk Factors in Business Takeda Annual Report 2015
Fundamental Policy and Structure
conducted by corporate auditors. At the same time, Takeda also has outside directors who bring perspec- Policy toward Corporate Governance
tives from other industries to help ensure the Takeda's management mission is to "strive towards appropriate execution of business operations. better health for people worldwide through leading Moreover, as management tasks continue to diversify, innovation in medicine." In line with this mission, Takeda has established the Takeda Executive Team to Takeda is working to establish a management manage and supervise each function under President framework befitting a world-class pharmaceutical & Chief Executive Officer (CEO), and also established company that operates on a global scale. We are the Business Review Committee (which is responsible strengthening internal controls, including rigorous for general management matters), the Product compliance and risk management, and establishing a Review Committee (which is responsible for R&D and structure to facilitate rapid decision-making that is product-related matters), and the Audit, Risk and sound and transparent. Through these initiatives, we Compliance Committee (which is responsible for will further enhance our corporate governance, internal audit, risk management and compliance thereby maximizing corporate value.
matters) to review important matters, thereby ensuring a system that enables faster and more flexible work execution and deeper cooperation among the various functions. Under the Audit, Risk At Takeda, the Board of Directors determines the and Compliance Committee, we have a Risk Manage- fundamental policies for Takeda, and management ment Committee which aims at promoting and and business operations are then conducted in enhancing the risk management culture to support accordance with their decisions. Transparency of the business decision making.
Board of Directors is achieved through audits Schematic Diagram of Takeda's Corporate Governance System, Including the Internal Control System
General Meeting of Shareholders
Removal of members Non-reappointment Board of Directors
Board of Auditors
Removal of members Chairman of the Board
The Group Internal
Removal and Supervision of members President & Chief Executive Officer (CEO)
Takeda Executive Team (TET)
Business Review Committee
Product Review Committee
Audit, Risk and Compliance Committee
(Deliberation and decision making on (Deliberation and decision making on (Deliberation and decision making on important issues relating to strategy, important issues relating to R&D and important issues relating to Internal Audit, management and business execution) pipelines/ on-market products) Risk Management and Compliance) Internal Audit Committee
Execution-related Risk Management Committee
Global Compliance Committee
Internal auditing Heads of Each Unit and Presidents of the Group Companies
Takeda Annual Report 2015
Corporate Governance Takeda has given its Board of Directors the primary Committee Concerned with Business Execution
functions of observing and overseeing business execution as well as decision-making for company The Takeda Executive Team consists of management. The Board of Directors consists of members who report to the President eight directors (all male), six Japanese and two & Chief Executive Officer (CEO). Each non-Japanese, including three outside directors, and member manages one of the meets in principle once per month to make resolu- following Takeda's functions: corporate strategy, finance and tions and receive reports on important matters accounting, human resources, legal, corporate communication, R&D, Furthermore, a Nomination Committee and a manufacturing, quality control, each Compensation Committee were established as regional business unit of Japan, US, advisory bodies to the Board of Directors. Nomina- Europe & Canada and emerging tion Committee consists of one outside director as a markets and each specialty business Chairman, one outside director and one internal unit of oncology and vaccine.
director. Compensation Committee consists of one outside director as a Chairman, one outside auditor and one internal director. Together, the committees reappointment, and having and administering serve to ensure transparency and objectivity in appropriate succession plans) and to the compensa- decision-making processes and results relating to tion system (appropriate levels of compensation for personnel matters for internal directors (appropriate the directors, appropriate performance targets within standards and procedures for appointment and the director bonus system, and appropriate bonuses Compensation of Directors and Corporate Auditors
Amount and Type of Compensation for Each Class of Director and Corporate Auditor, and Number of Recipients
Total amount of Total amount of compensation by type (millions of yen) Class of director/auditor (millions of yen) Basic compensation Long-term incentive Directors (excl. outside directors) Corporate auditors (excl. outside corporate auditors) Outside directors and outside corporate auditors Note: The figures above include one Director who retired as of the conclusion of the 138th Ordinary General Meeting of Shareholders held on June 27, 2014, and three Directors and one Auditor who retired as of the conclusion of the 139th Ordinary General Meeting of Shareholders held on June 26, 2015.
Takeda's Corporate Governance Report can be viewed on the corporate website.
http://www.takeda.com/investor-information/governance/ Up-to-date information on major subsidiaries and affiliates can be viewed on the corporate website.
http://www.takeda.com/company/worldwide/ Takeda Global Advisory Board (TGAB)
The Takeda Global Advisory Board (TGAB) is a body comprised of four external advisors with executive-level experience at global pharmaceutical companies. The TGAB conducts vigorous exchanges of opinion with management about various management issues.
Former Vice Chairman of Pfizer Inc. and currently Senior Advisor Former Executive Vice President, International, AstraZeneca plc and for Essex Woodlands Health Ventures currently Chairman of Vectura Group plc William W. Chin, M.D.
Former Chairman and CEO of Eli Lilly and Company and Former Executive Dean of Harvard Medical School, and currently currently Chairman Emeritus of Eli Lilly and Company Executive Vice President of Science and Regulatory Affairs, PhRMA Takeda Annual Report 2015
based on business results).
Any risks we may face in the course of global business operations are managed by the personnel The Takeda Global Code of Conduct and
responsible for risk management in each function Promotion of the Global Compliance Program
within the relevant domain. We therefore have set a In order to fulfill social expectations, gain trust and system in place to prevent or mitigate risks, accord- bring value to society, Takeda believes that, in ing to their degree and nature.
addition to complying with laws and regulations, it is Furthermore, based on the "Takeda Group's essential for all employees and executives to maintain Management Policy," we work to clarify the roles and a high ethical and moral standard through the responsibilities of each function. We ensure compli- practical implementation of the corporate philosophy, ance and appropriate business operations through Takeda-ism as we focus on the priorities of Patient (put implementation of periodic internal audits and the the patient at the center), Trust (build trust with Control Self Assessment (CSA) program* to each society), Reputation (reinforce our reputation), and company and each function in Takeda.
Business (develop the business) – in that order. In line * Under the CSA program, personnel responsible for internal control assess the with this perspective, Takeda has a Global Code of status of internal control in their particular company or division and pledge to Conduct which establishes a common set of principles implement a program of improvement. They then take an oath to confirm that the proposed program of improvement is appropriate. The CSA program forms governing employee conduct globally. In fiscal 2011, the basis for evaluation and confirmation of financial reporting by management.
Takeda formulated the Takeda Anti-Corruption Global Policy to deal with tightening regulations of anti-bribery globally and in fiscal 2013, Takeda Takeda is a "Company with Auditors" as defined in implemented the Global Policy for Anti-Corruption Japan's Companies Act. Takeda has established a Due Diligence on Third Parties.
system to ensure the effective implementation of To promote compliance throughout the company, audits, under the "Audit Rules by Corporate Auditors" Takeda has appointed a Global Compliance Officer which prescribe the activities of auditors, including and established the Global Compliance Committee.
attendance at important meetings and authority to The Takeda Global Code of Conduct and the Takeda Global Code of review important documents. Takeda also ensures Conduct (Japan edition) can be viewed on Takeda's corporate website.
the soundness and transparency of business manage- ment by means of an audit by the Board of Corporate Auditors and by the internal and outside Corporate Auditors. In addition, KPMG AZSA LLC serves as the accounting auditor.
Global Compliance Organization
Compliance US Business Unit Compliance
Compliance Oncology Business Unit Compliance Vaccine Business Unit Global Compliance Operations Global Compliance Governance & Investigations Takeda Annual Report 2015
Corporate Governance Promotion of Compliance at
targeting healthcare professionals for the hyperten- sion medicine BLOPRESS (candesartan), which were developed in 2006 and 2010 based on results from Under the global compliance organizational the investigator-led CASE-J clinical research, etc., are structure, each Takeda company continues to applicable as misleading advertisements prohibited reinforce their compliance programs in line with the under Article 66, Paragraph 1 in the PMD Act of Takeda Global Code of Conduct.
Regardless of where it originates, the global, The order does not raise any questions on regional and local Compliance teams work together BLOPRESS' proven safety and efficacy in lowering in a coordinated manner to ensure consistent blood pressure. However, Takeda sincerely regrets implementation of each initiative.
receiving this order to improve business operation due to misleading advertisements, and sincerely Promotion of Compliance in Research
apologizes to patients, healthcare professionals, and In pursuing its research activities, Takeda complies all concerned parties for the concern caused by this with relevant laws, such as the Pharmaceutical and Medical Device Act (PMD Act), as well as in-house This order is based on the judgment by the MHLW regulations in order to develop outstanding pharma- that Takeda inappropriately emphasized expressions ceutical products.
in promotional materials for healthcare professionals To conduct experiments with animals which are regarding secondary effects of medicine to control essential to the research and development of new cardiovascular events and diabetes. Accordingly, drugs, we have set rules and established committees MHLW requests Takeda to strengthen the review within our research facilities that included external system for materials, including advertisements, and members (such as the Institutional Animal Care and to enhance the training program for employees and Use Committee, etc.) which examines and approves senior managers responsible for the process of experiment plans. The committees comply with the developing and reviewing materials in Japan.
Act on Welfare and Management of Animals and Takeda has already introduced enhanced review other laws and regulations, as we make every effort and management structures for controlling promo- to practice the 3Rs,*1 the fundamental ethical and tional materials to prevent similar incidents, in scientific principles for respecting life and caring for response to the changing social environment and animals. Shonan Research Center and Takeda regulations in Japan. Takeda takes this order to California, Inc. received Full Accreditation by the improve business operation by the MHLW very Association for Assessment and Accreditation of seriously, and will continuously enforce necessary Laboratory Animal Care International (AAALAC In addition, when dealing with biohazards and chemical hazards we take all possible measures to protect people and the environment.
*1 The 3Rs are Reduction (of the number of animals in experiments), Replacement (of animal-based experiments with non-animal-based ones) and Refinement (of methods to reduce animal suffering).
*2 AAALAC International is a private, non-profit organization that promotes the humane treatment of animals in science through voluntary accreditation and assessment programs.
Issues Surrounding the Candesartan
Antihypertensive Survival Evaluation
in Japan (CASE-J Study)
In June 2015, Takeda received an order to improve business operation from the Japanese Ministry of Health Labour and Welfare ("MHLW"). The order was based on the decision that two promotional materials Takeda Annual Report 2015
Messages from the Outside Directors
For the continuation and development of a company, there is constant pressure in terms of how it is evaluated by shareholders and by society. It is here that the outside directors and indepen-dent corporate officers have an important role and responsibility. The reality of this is steadily becoming apparent. It goes without saying. I am prepared to do my duty, and this shall be accomplished even before the corporate governance code which was announced this year. The code calls on outside directors and others to supervise business execution under the CEO even more rigorously. To ensure that this supervision is sound, the code has detailed require-ments based on five core principles. These include early provision of materials for Board of Directors meetings and receiving sufficient explanation to ensure proper understanding, having a stronger sense of responsibility in the appointment of the management team and devising systems to obtain information for that purpose, and constructing systems to comprehend the actual state of management in close coordination with frontline operations. Under our President & CEO, Christophe Weber, we must coordinate our movements with the executive side. It sounds simple, but it is no easy task. I am committed to making my best, sincere effort. Fumio Sudo, Outside Director
Amid a rapidly changing business environment and mounting demands on corporate governance, Takeda has taken swift, bold action to make important upgrades to its management foundation, including diversification of its management team and reorganization of its global operating structure. As a leading company in the pharmaceutical industry, Takeda is constantly taking on new challenges, driven by a strong sense of mission and a desire to grow. As an outside director, I am impressed by the company's commitment, and I take my role in Takeda's "proactive governance" very seriously. Looking ahead, Takeda must continue enhancing its foundations, while increasing its management efficiency and speed. The company needs to strengthen its presence in local communities, its understanding of increasingly diverse risks and needs, and its ability to adapt to change. As the former head of a major global integrated business enterprise, I can offer experience in globalization and business model transformation, and I look forward to advising Takeda however I can. By overseeing the company's compliance and performing other supervisory duties, I hope to contribute to Takeda's continued growth going forward.
Yorihiko Kojima, Outside Director
What is the most important thing for a company to achieve sustainable growth? I have always considered it is to be an organization that continues to evolve through generations, even when the top management changes. The foundation of such an organization is corporate governance, and a key factor is the degree to which it can be broken down and explained clearly, and become a shared understanding developed within the company. For example, good news about something such as the development status of a new drug will be conveyed to the management team, even without really making any effort. However, bad news related to safety, compliance, or product quality needs to be related quickly to management, more so if the news is very bad, and dealt with promptly. This is a basic part of increasing corporate value. We need to aim to have corporate governance penetrate deeply and widely into the awareness not only of the management team, but all employees. Going forward, I will actively strive to do what I can to make the Board of Directors meetings even more effective by contributing perspectives based on my experience. Masahiro Sakane, Outside Director
Takeda Annual Report 2015
Corporate Governance Engagement with Shareholders and Investors
Through constructive dialogue and appropriate collaboration
with shareholders and investors, we will secure a stable foundation
in the capital markets over the mid- to long-term.
marketing in the therapeutic area of Gastroenterology (GI) delivered presentations about initiatives in GI. Takeda is a global leader Takeda's management is engaging in constructive in GI, with a strong franchise of products and pipeline dialogue with shareholders and investors regarding assets in this area. At the meeting, we announced our management policies and strategies towards achieving future growth strategy for the GI area, focusing on our sustainable growth.
R&D initiatives, and on new products ENTYVIO For institutional investors both in Japan and around (vedolizumab) for ulcerative colitis and Crohn's disease, the world, Takeda hosts earnings release meetings and which was launched in Europe and the U.S. during fiscal conference calls. In these meetings and conference calls, 2014, and TAKECAB (vonoprazan) for acid-related in addition to reporting our operating results, the diseases, which had just been launched in Japan.
management takes time to answer participants' questions directly. The management also participates as much as possible in one-on-one meetings with Japan and overseas investors to provide updates on the company's We are also active in providing information to retail investors, with the Investor Relations team delivering presentations to retail investors throughout Japan.
In March 2015, Takeda held an event for institutional investors and analysts in New York, where Christophe Weber, President & CEO, and leaders in R&D and Takeda IR Event, "A Global Leader in Gastroenterology" (New York) Takeda Annual Report 2015
their own crisis management systems, implementing preventive measures, and taking appropriate action if Takeda's Approach to Crisis Management
a crisis occurs. In the case of a crisis that has a major The prevention of emergency situations that could impact on Takeda and requires company-wide result in a considerable impact on our management, action, a "Global Crisis Management Committee" or responding immediately when such a situation chaired by the President & CEO of Takeda coordi- occurs, is an important aspect of Takeda's corporate nates a common understanding of the situation and governance. Takeda has therefore been working to any relevant information. The Committee directs further strengthen its crisis management function, in each company to take countermeasures, later addition to ensuring adequate audits and other following up on the implementation of the counter- internal controls and promoting compliance on a company-wide basis.
When implementing crisis management initiatives, it is important to act with fairness and integrity to Risk Factors in Business
ensure Takeda's employees and finances are Takeda's business performance is subject to various safeguarded. This is also a responsibility that Takeda present and future risks, and may experience must fulfill toward its stakeholders, who include unexpected fluctuations due to the occurrence of shareholders, customers, suppliers, employees, risk events. Below is a discussion of the main communities, and society at large. Takeda has assumed risks that Takeda faces in its business therefore formulated the "Takeda Group Global activities. Takeda works to fully identify potential risks Business Continuity Plan (BCP) Policy" as part of its and takes all possible steps to prevent them from response to prevent the interruption of business materializing. Moreover, Takeda will ensure a precise activities in the event of any accident or disaster or, response if risk events occur.
where interruption is unavoidable, to resume The future events contained in these items are business at the earliest opportunity, in addition to envisioned as of the end of fiscal 2014.
the existing "Takeda Group Global Crisis Manage- 1) Risk in R&D
Through these initiatives, Takeda will continue to fulfill its mission of maintaining a reliable supply of While Takeda strives for efficient R&D activities aimed at launching new products in each market of Japan, the U.S., Europe and Asia as early as possible, Global Crisis Management Policy
marketing of ethical drugs, whether in-house developed or licensed compounds, is allowed only Takeda strives to ensure that all possible preventive when they have been approved through rigorous measures are taken to avoid potential crises in investigations of efficacy and safety as stipulated by accordance with the "Takeda Group Global Crisis the competent authorities.
Management Policy," which comprises basic policies, If the efficacy and safety of compounds Takeda is rules and standards for crisis management. The policy preparing to bring to market do not meet the also underpins systems and operations we have put required level for approval, or if the reviewing in place to respond to each type of crisis swiftly and authorities express concern regarding the conformity appropriately. In this way, we aim to minimize any of such compounds, Takeda will have to give up R&D potential harm to employees, any impact on Takeda's activities for such compounds at that point, or finances, and any effect on society at large in the conduct additional clinical or non-clinical testing. As event of a crisis.
a result, Takeda risks the inability to recoup the costs incurred, a delay in launching new products, or being obliged to revise its R&D strategy.
Crisis Management Structure
Takeda Pharmaceutical Company Limited and its Group companies are responsible for establishing Takeda Annual Report 2015
Corporate Governance 2) Risk in intellectual property rights
prices is increasing as a result of strong demand from Each of Takeda's products is protected for a certain the federal and state governments and Managed period by various patents covering substance, Care programs. In Japan, the authorities currently processes, formulations and uses. While Takeda reduce the National Health Insurance (NHI) prices for strictly manages intellectual property rights, drugs every other year, but moving forward there is a including patents, and always keeps careful watch for risk of this becoming an annual revision. In addition, potential infringement by a third party, expected the amount of price reduction of long-listed drugs is earnings may be lost if the intellectual property increasing. In the European market, drug prices have rights held by Takeda are infringed by a third party. been reduced in a similar fashion, due to measures Moreover, if Takeda's in-house product is proven to implemented in each country to control drug costs have infringed a third party's intellectual property and the expansion of parallel imports. Price reduc- rights, Takeda may be required to pay compensations.
tion as a result of efforts to curtail drug costs in each country can significantly influence Takeda's business 3) Risk of sales decrease following patent
performance and financial standing.
While Takeda takes active measures to extend 6) Influence of exchange fluctuations
product life cycles, including the addition of new Takeda's overseas revenue in fiscal 2014 amounted indications and formulations, generic drugs inevitably to ¥1,065.0 billion, which accounted for 59.9% of penetrate the market following patent expirations of total consolidated revenue. Revenue in the U.S. was most branded products. In Japan, the authorities are ¥426.1 billion, which accounted for 24.0% of total actively promoting the further use of generics, consolidated revenue. For this reason, the deprecia- which, in addition to price cuts for long-listed tion of the yen has a positive impact on our revenue; products, is putting further pressure on our revenue. however, the depreciation of the yen also causes an In addition, the increasing use of generic drugs and increase in overseas costs including R&D expenses, prescription-to-OTC switches also intensifies competi- meaning that the impact on profit is both positive tion, both in Japan and overseas markets, especially and negative. Takeda's business performance and in the U.S. market. Takeda's sales of ethical drugs financial standing are considerably affected by may drop sharply as a result of these trends.
fluctuations in foreign exchange rates. Most of such risks are pure translation risks and as such cannot be 4) Risk of side effects
Although ethical drugs are only allowed to be
marketed after approval for production and market- 7) Risk related to corporate acquisitions
ing following rigorous investigation by the compe- As part of its global business development in order to tent authorities around the world, accumulated data realize sustainable growth, Takeda engages in during the post-marketing period may reveal side corporate acquisitions. However, there is a possibility effects that were not known at the time of launch. If that the intended result or profit expected from such new side effects are identified for a product, Takeda acquisitions may not be realized, as business will be required to describe the side effects in a activities in countries around the world are "precaution" section of the package insert, or confronted by many risks including, but not limited restrict usage of the product. Takeda may also be to, changes in law and regulations, political unrest, obliged to either discontinue sale of the product or economic uncertainty, and differences in business recall it. Takeda can potentially be liable for damages practices. In addition, there may be an impact on the and liabilities if such events occur.
financial results and financial condition of Takeda if write-downs, etc., occur due to a decrease in the value of acquired assets resulting from investment 5) Risk of price-reduction due to movements to
activities such as corporate acquisitions.
curtail drug costs
In the U.S. market, which is the world's largest, authorities are promoting the use of low-price generic drugs, and pressure to reduce brand drug Takeda Annual Report 2015
8) Country risk in the countries and regions in
Litigation and Other Legal Matters
1) U.S. AWP litigation
With the global development of its business, Takeda In the U.S., civil lawsuits have been filed by patients, establishes its risk management structure to reduce insurance companies and state governments against the damage from and cope with the risks, including numerous pharmaceutical companies, including governmental, social, and economic risks, in the major enterprises, over the sale of certain pharma- countries and regions it operates in. However, Takeda ceutical products. The complaints seek, among other may face unexpected situations. As a result, there things, damages resulting from price discrepancies may be an impact on the financial results and between the average wholesale price (AWP) as financial condition of Takeda.
published and the actual selling prices. Thus, these types of lawsuits are sometimes called "AWP 9) Risk related to stable supply
litigation". Actions are pending against TAP Pharma- In parallel with rapid international expansion of its ceutical Products Inc.* in three state courts over sales network, Takeda is strengthening its global lansoprazole (U.S. product name: Prevacid). In one supply chain. However, in the event of technical or case, Takeda is also named as a defendant.
legal / regulatory problems in Takeda's production or Takeda is diligently defending itself in each of the distribution facilities, or other disruption due to remaining aforementioned lawsuits.
natural disasters or accidental reasons, Takeda may * TAP was merged into Takeda Pharmaceuticals North America, Inc. (hereinafter have a suspension of or substantial delay in the "TPNA") in June 2008 and TPNA changed its name to Takeda Pharmaceuticals U.S.A., Inc. ("TPUSA") in January 2012. TAP marketed Prevacid before its merger supply of products. As a result, there may be an impact on the financial results and financial condi- tion of Takeda.
2) Product liability litigation regarding
10) Risk related to litigation and other legal
Takeda Pharmaceutical Company Limited, Takeda Pharmaceuticals U.S.A., Inc. ("TPUSA"), and certain In addition to existing litigation, there is a possibility Company Affiliates located in the U.S. have been that a suit may be brought to court related to named as defendants in lawsuits pending in U.S. Takeda's operational activities, in terms of an adverse federal and state courts in which plaintiffs allege to effect of a pharmaceutical product, product liability, have developed bladder cancer or other injuries as a labor issues, fair trade, etc. As a result, there may be result of taking products containing type 2 diabetes an impact on the financial results and financial treatment pioglitazone (U.S. brand name: ACTOS) condition of Takeda.
(hereafter, "ACTOS" is used to refer generally to Takeda products containing pioglitazone). Eli Lilly & Co. ("Eli Lilly") is a defendant in many of these lawsuits. Also, proposed personal injury class action lawsuits have been filed in Canada, a claim seeking compensation for bladder cancer has been filed in Germany. A claim seeking compensation for bladder cancer in France was resolved.
Takeda Annual Report 2015
Corporate Governance Of the nine lawsuits tried to-date in the U.S. or In April 2015, Takeda Pharmaceutical Company state courts, five cases have resulted in judgments in Limited and TPUSA reached agreement that is favor of Takeda. Plaintiffs in those cases are challeng- expected to resolve the vast majority of ACTOS ing the judgments in post-trial motions or appeals.
product liability lawsuits pending against Takeda in In 2014, the first trial was conducted in the federal the U.S., and this agreement was announced on April multi-district litigation ("MDL")*, in the case of 29 (U.S. time April 28). The settlement would cover Terrence Allen, et al. v. TPNA, et al. On April 7, 2014, all bladder cancer claims pending in any U.S. court as the jury reached a verdict in favor of plaintiffs and of the date of settlement, and claimants with unfiled awarded $1.475 million in compensatory damages claims represented by counsel as of the date of against Takeda defendants and Eli Lilly, allocating settlement and within three days thereafter are also liability 75% to Takeda defendants and 25% to Eli eligible to participate. The settlement will become Lilly. The jury also assessed $6 billion in punitive effective if 95% of current litigants and claimants opt damages against Takeda defendants and $3 billion in in, and once that threshold is achieved, Takeda punitive damages against Eli Lilly. In June, Takeda and agrees to pay $2.37 billion into a settlement fund. Eli Lilly filed post-trial motions challenging the That figure will rise to $2.4 billion if more than 97% verdict. In August, the court denied the post-trial of the current litigants and claimants opt to partici- motion for judgment in favor of Takeda and Eli Lilly pate in the settlement. Under the settlement, current and in September, entered a judgment on the jury litigants and claimants who meet prescribed criteria verdict mentioned above. The compensatory would receive payouts from the fund. In light of the damages award was reduced from $1.475 million to settlement, the Fifth Circuit Court of Appeals entered $1.27 million under New York law as the result of an order dismissing the appeal in the Allen case this judgment. On October 27, 2014, the court without prejudice to reinstate the appeal within 180 ruled on the post-trial motion to reduce the punitive damage award, entering an amended judgment to Takeda believes that the claims made in this reduce the punitive damage award against Takeda litigation are without merit, and does not admit defendants to $27.65 million and against Eli Lilly to liability. Takeda believes that the company acted $9.22 million. Takeda and Eli Lilly appealed this responsibly with regard to ACTOS. Takeda will judgment to the Fifth Circuit Court of Appeals.
continue to vigorously defend through all available In October 2014, the jury in a state court located legal means any cases that continue or are newly in Philadelphia County, Pennsylvania, found in favor filed after the settlement.
of the plaintiff and awarded $2.05 million in Upon reaching agreement towards settlement, compensatory damages, and the trial court thereaf- Takeda booked a $2.7 billion (324.1 billion yen) ter entered judgment on this award. Takeda has provision in the fourth quarter of fiscal year 2014 to appealed this judgment. In a separate trial in the cover the settlement, costs associated with defend- same court in February 2015, the jury found in favor ing the remaining cases and for other related of the plaintiff and awarded $2.318 million in compensatory damages and $1.334 million in Takeda stands behind the substantial data that punitive damages. Takeda's post-trial motions confirm a positive benefit/risk profile for ACTOS, challenging the verdict are pending. In November which includes more than 14 years of clinical and 2014, the jury in a state court located in Berkeley patient experience with the product. Takeda's County, West Virginia found in favor of Takeda on decision to settle does not change the company's plaintiffs' claims that Takeda failed to warn about the continued commitment to ACTOS. ACTOS has been risks of bladder cancer or that ACTOS caused approved for use in 95 countries, including the U.S., plaintiffs' bladder cancer. However, the jury found in Japan, several in Europe, Australia, Brazil, Canada and favor of plaintiffs on their claim for spoliation of Russia, and continues to be available as a treatment evidence and awarded $155,000 in compensatory option in the U.S. and other countries.
damages. The trial court thereafter entered * An MDL consolidates similar cases filed in federal courts under one federal judgment on this award. Takeda has appealed this jurisdiction primarily for pre-trial and discovery purposes.
Takeda Annual Report 2015
3) Patent infringement litigation and administrative
litigation regarding colchicine product
On September 30, 2014, the U.S. Food and Drug Administration ("FDA") granted approval to Hikma Pharmaceuticals PLC ("Hikma") for colchicine capsules, to be marketed under the name Mitigare. In response Takeda filed a patent infringement lawsuit against Hikma and Hikma subsidiaries in the District Court for the District of Delaware asserting that their colchicine product infringes several Takeda patents applicable to Colcrys, the first single- ingredient oral colchicine product approved by the FDA. Takeda also filed a request for a temporary restraining order ("TRO") and a preliminary injunc- tion prohibiting the launch of Mitigare. On October 9, the court granted a TRO pending its decision on Takeda's motion for a preliminary injunction. On November 4, the court denied Takeda's motion for a preliminary injunction. The court further ruled, however, that the TRO would remain in place, provided Takeda filed an immediate, expedited appeal. In response, Takeda filed a notice of appeal in the Federal Circuit Court of Appeals. On January 9, 2015, the Federal Circuit Court of Appeals affirmed the denial of the preliminary injunction, allowing Hikma to launch its product. Takeda intends to proceed with its patent infringement claims against Hikma in the trial court, where Takeda will seek a permanent injunction and damages, including lost profits caused by the launch of Hikma's product.
In parallel, shortly after filing the patent infringe- ment lawsuit in October 2014, Takeda filed a lawsuit against the FDA in the District Court for the District of Columbia seeking an order rescinding or staying approval of Mitigare. The lawsuit claims that the FDA violated the Administrative Procedure Act in approving Hikma's Mitigare. On January 9, 2015, the court denied Takeda's claims. Takeda has appealed the court's ruling.
Takeda Annual Report 2015
Financial Overview Results of Operations
year to a net loss of ¥145.8 billion. Net profit deteriorated dramatically due to a significant decrease in operating profit. In addition, net financial Consolidated revenue in fiscal 2014 grew 5.1% income and expenses deteriorated, mainly due to a year on year to ¥1,777.8 billion.
decrease in gains on sales of financial assets In Japan, sales of antihypertensive agent AZILVA compared to the previous year. Furthermore, tax (azilsartan) and the hyperlipidemia treatment expenses increased due to a revaluation of the LOTRIGA (omega-3-acid ethyl esters 90) increased recoverability of deferred tax assets and a reduction significantly over the previous year. of the effective tax rate in Japan.
In the U.S., in addition to an increase in sales of Basic earnings per share deteriorated to a loss per VELCADE (bortezomib) for patients with multiple share of ¥185.37, a decrease of 237.2% compared myeloma, ENTYVIO (vedolizumab) for ulcerative to the previous year. colitis and Crohn's disease has experienced outstand- ing sales uptake since its launch in 2014. Further- more, in Europe, the sales of ADCETRIS (brentuximab Core Earnings*2 was ¥288.3 billion, a decrease of vedotin) for treatment of malignant lymphoma have 8.2% compared to the previous year. Fiscal 2014 was continued to expand. positioned as a year of investment, with higher The depreciation of the yen also had a positive expenses to support the launch of new products and impact on revenue. On the other hand, there were the development of our late-stage pipeline.
also negative factors, including the penetration of Core Net Profit*3 was ¥176.7 billion, a decrease of generic products after the patent expiry of 15.9% compared to the previous year.
blockbuster products such as candesartan (Japanese Core EPS*4 was ¥224.73, a decrease of 15.6% product name: BLOPRESS), a drug for hypertension, compared to the previous year.
and lansoprazole (Japanese product name: TAKEPRON), a drug for peptic ulcers, as well as the *2 Core Earnings is calculated by excluding temporary items from operating profit such as impacts from business combination accounting and impact of a National Health Insurance price reduc- amortization/impairment losses of intangible assets, etc.
tion in Japan. In total, consolidated revenue *3 Core Net Profit is calculated by deducting items of the same type as deducted in the calculation of Core Earnings as well as any tax effects increased by ¥86.1 billion. Underlying revenue associated with them from net profit.
*4 Earnings per share calculated based on Core Net Profit.
growth*1 increased by 2.8% compared to the previous year.
Main Operating Results
*1 Underlying revenue growth: Constant currency and without divestments Consolidated operating profit declined by 192.8% from the previous fiscal year to an operating loss of Operating profit ¥129.3 billion.
The significant decline in profits reflects the company's recognition of a provision of $2.7 billion (attributable to owners of the Company) (¥324.1 billion) to cover the ACTOS settlement and estimated costs associated with remaining cases and other related litigation, as well as other temporary factors such as recognition of impairment losses of ¥53.2 billion on intangible assets associated with Consolidated Net Profit for the Year
(Attributable to Owners of the Company)
Consolidated net profit for the year (attributable to owners of the Company) declined by 236.7% year on Takeda Annual Report 2015
ativities was ¥91.3 billion, and net cash used in financing activities was ¥301.0 billion, the latter mainly for redemption of bonds.
Total assets as of March 31, 2015 were ¥4,296.2 billion, a decrease of ¥273.0 billion compared to the previous fiscal year end. Basic Policy for Profit
Financial assets (current) decreased, mainly due to Distribution and Dividends
the decrease in intangible assets resulting from the Basic Policy for Profit Distribution
recognition of depreciation and impairment loss and the redemption of bonds. On the other hand, the In order to maximize the enterprise value of Takeda, company and its subsidiaries in U.S. are most likely to we strive towards a sustainable improvement in reach agreement to resolve the vast majority of earning capacity through essential investment in R&D ACTOS product liability lawsuits pending against and the steady implementation of our growth Takeda. Accordingly, other financial assets (current) strategies. In addition, we are maintaining and increased due to recording an amount for insurance strengthening our sound financial base under a income which has largely been confirmed to be paid flexible financial strategy, improving the efficiency of out by product liability insurance.
working capital by optimizing the balance sheet and allocating generated free cash flow into investments for sustainable growth and repayment of debt. Regarding the distribution of profits resulting from Total liabilities as of March 31, 2015, were ¥2,090.0 our sustainable increase in profitability, in fiscal 2015 we will maintain an annual dividend of ¥180 per Total liabilities increased by ¥61.5 billion from the share. Moving forward we will continue to emphasize previous fiscal year end due to the provision of returns to shareholders, striving at minimum to ¥324.1 billion made for the ACTOS litigation, which maintain the ¥180 annual dividend per share after includes settlement costs, legal fees and other fiscal 2015.
associated costs. The increase was partially offset by the redemption of bonds. Dividend for Fiscal 2014
The annual dividend per share for fiscal 2014 was the same as the previous year at ¥180.
Total equity decreased by ¥334.5 billion from the previous fiscal year end to ¥2,206.2 billion as of Dividend for Fiscal 2015
March 31, 2015, due to the significant net loss recorded for the year, in addition to dividend For fiscal 2015, Takeda plans to pay an annual dividend of ¥180 per share, the same amount as The ratio of equity attributable to owners of the fiscal 2014.
Company to total assets decreased by 4.3 percent- age points to 49.7% from the previous fiscal year Cash Flows
Cash flow for the current fiscal year resulted in a net cash outflow of ¥10.8 billion.
Net cash provided by operating activities was ¥182.5 billion, net cash provided by investing Refer to the "Consolidated Financial Statements Under IFRSs and Independent Auditor's Report" for more details: Takeda Annual Report 2015
Financial Information Consolidated Statement of Operations
Takeda Pharmaceutical Company Limited and SubsidiariesYears ended March 31, 2015 and 2014 Thousands of U.S. dollars Selling, general and administrative expenses Research and development expenses Amortization and impairment losses on intangible assets associated with products Other operating income Other operating expenses Operating profit (loss) Share of profit of associates accounted for using the equity method Profit (loss) before tax Income tax benefit (expenses) Net profit (loss) for the year Attributable to: Owners of the Company Non-controlling Net profit (loss) for the year Earnings per share Basic earnings (loss) per share Diluted earnings (loss) per share Note: •The U.S. dollar amounts in this report represent translations of Japanese yen, solely for the reader's convenience, at the rate of ¥120=US$1, the approximate exchange rate on March 31, 2015. •Takeda has adopted International Financial Reporting Standards (IFRS) from Fiscal 2013 ended March 31, 2014 and the disclosure information in this material is For consolidated financial statements and notes to consolidated financial statements, refer to the "Consolidated Financial Statements Under IFRSs and Independent Auditor's Report": http://www.takeda.com/investor-information/ Takeda Annual Report 2015
Consolidated Statement of Financial Position
Takeda Pharmaceutical Company Limited and SubsidiariesYears ended March 31, 2015 and 2014 ASSETS NON-CURRENT ASSETS Property, plant and equipment Investments accounted for using the equity method Other financial assets Other non-current assets Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade and other receivables Other financial assets Income taxes recoverable Other current assets Cash and cash equivalents Assets held for sale Total current assets LIABILITIES AND EQUITY LIABILITIES NON-CURRENT LIABILITIES Bonds and loans Other financial liabilities Net defined benefit liabilities Other non-current liabilities Deferred tax liabilities Total non-current liabilities CURRENT LIABILITIES Bonds and loans Trade and other payables Other financial liabilities Income taxes payable Other current liabilities Liabilities held for sale Total current liabilities Other components of equity Equity attributable to owners of the Company Non-controlling
Total liabilities and equity

For consolidated financial statements and notes to consolidated financial statements, refer to the "Consolidated Financial Statements Under IFRSs and Independent Auditor's Report": http://www.takeda.com/investor-information/ Takeda Annual Report 2015
Financial Information Eleven-Year Summary of Selected Financial Data
Takeda Pharmaceutical Company Limited and Subsidiaries Research and development expenses Operating profit (loss) Profit (loss) before tax Net profit (loss) attributable to owners of the Company Per share amounts (Yen and U.S. dollars) Basic earnings (loss) Diluted earnings (loss) Non-current assets Non-current liabilities Current liabilities Number of shareholders Number of employees Note: •The U.S. dollar amounts in this report represent translations of Japanese yen, solely for the reader's convenience, at the rate of ¥120=US$1, the approximate exchange rate on March 31, 2015.
•Employees working in Takeda Pharmaceutical Company Limited and its consolidated subsidiaries. From fiscal 2010, ended March 31, 2011, the numbers are indicated on a full time equivalent basis. •Takeda has adopted International Financial Reporting Standards (IFRS) from fiscal 2013 ended March 31, 2014 and the disclosure information in this material is based on IFRS. According to this adoption, the previous year's information is also based on IFRS.
•Account names under IFRS. Names in J-GAAP correspond to names in IFRS as follows: •Net sales/Revenue •Operating Income/Operating profit •Income before income taxes and minority interests/Profit before tax •Net income/Net profit attributable to owners of the Company •Earnings per share/Basic earnings per share •Diluted net income per share/Diluted earnings per share •Net assets/Equity Takeda Annual Report 2015
Takeda Annual Report 2015
Financial Information Ethical Drugs: Revenue by Region
Takeda Pharmaceutical Company Limited and SubsidiariesYears ended March 31, 2015 and 2014 (Billions of Yen) Europe and Canada Royalty income and service income Total ethical drugs revenue Ratio of overseas ethical drugs revenue * Revenue amount is classified into countries or regions based on the customer location.
** Effective from fiscal 2014, the company changed the regional classification to ensure consistency with its global organizational structure (previous "North America" was divided into "United States" and "Canada," and "Canada" and previous "Europe" were integrated into "Europe and Canada"). For fair comparison purpose, the amounts reported in the periods of fiscal 2013 were modified according to the new classification.
*** Other region includes Middle East, Oceania and Africa.
Ethical Drugs: Global Major Products' Sales
Takeda Pharmaceutical Company Limited and SubsidiariesYears ended March 31, 2015 and 2014 (Billions of Yen) * Royalty income and service income are included in 2014 and 2015.
Takeda Annual Report 2015
Key Social Responsibility Data
Takeda Pharmaceutical Company Limited and Subsidiaries Consumer healthcare Note: Employees working in Takeda Pharmaceutical Company Limited and its consolidated subsidiaries on a full time equivalent basis Total input energies 6,161 thousand m3 6,673 thousand m3 7,029 thousand m3 417 kilotons of CO2 418 kilotons of CO2 404 kilotons of CO2 SOx (sulfur oxides) emissions NOx (nitrogen oxides) emissions Amount of waste generated PRTR-designated substances released into the atmosphere (Japan) Note: Due to a divestment, 2013 and 2014 data has been restated. Corporate Citizenship Activities
Takeda Science Foundation research grants Shoshisha Foundation scholarships Institute for Fermentation, Osaka, research grants Takeda Annual Report 2015
Independent Assurance of Environmental and Social Performance Indicators/Corporate Information Independent Assurance of Environmental and Social Performance Indicators
Takeda Annual Report 2015
Corporate Information as of March 31, 2015
Takeda Pharmaceutical Company Limited
American Depositary Receipts (ADR) : Ratio (ADR:ORD): 2:1 Date of Incorporation Exchange: OTC (Over-the-Counter) Number of Shareholders Common Shares Issued Independent Certified The Bank of New York Mellon Public Accountants Ginsen Bingomachi Bldg. 3-6-5, Kawara-machi, Chuo-ku, 101 Barclay Street, New York, Osaka-shi, Osaka 541-0048, Japan Stock Exchange Listings (#4502) Tokyo, Nagoya, Fukuoka, Sapporo DR Shareowner Contact: Administrator of the Mitsubishi UFJ Trust and Banking Corporation Non-U.S. Callers: 201-680-6825 Shareholders' Register 4-5 Marunouchi 1-chome Chiyoda-ku, Tokyo 100-8212, Japan U.S. Callers: (888) 269-2377URL: http://www.adrbnymellon.com Principal Shareholders (10 largest shareholders)
Shareholders
No. of shares held (1,000) % of shares outstanding Nippon Life Insurance Company The Master Trust Bank of Japan, Ltd. (Trust account) Japan Trustee Services Bank, Ltd. (Trust account) JP Morgan Chase Bank 380055 Takeda Science Foundation Barclays Securities Japan Limited JP Morgan Chase Bank 385147 State Street Bank West Client-Treaty 505234 State Street Bank and Trust Company 505225 The Bank of New York Mellon Sa/Nv 10 Monthly Stock Price Range (Tokyo Stock Exchange)
Stock Price (Yen) Monthly Trading Volume
Millions of Shares * TOPIX (Tokyo Stock Price Index) is an intellectual property that belongs to the Tokyo Stock Exchange, Inc. (TSE). All the rights to calculate, publicize, disseminate, and use the index value are reserved by the TSE.
For further information,
Head Office
1-1, Doshomachi 4-chome Chuo-ku, Osaka-shi, Osaka 540-8645, Japan Tel: +81-6-6204-2111 Fax: +81-6-6204-2880 Tokyo Head Office
12-10, Nihonbashi 2-chome Chuo-ku, Tokyo 103-8668, JapanTel: +81-3-3278-2111 Fax: +81-3-3278-2000 Takeda Annual Report 2015
Published in July 2015 Takeda Pharmaceutical Company Limited
This report is printed using vegetable oil ink.

Source: https://www.ecosearch.jp/pdfdata/2015/1021e_2015.pdf

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The Vermont Tobacco Evaluation & Review Board Annual Report the Governor the General Assembly January 2008 TABLE OF CONTENTS EXECUTIVE SUMMARY I. VERMONT TOBACCO CONTROL PROGRAM OVERVIEW Program Goals Program Components and Structure Program Funds