Form 20-F
FY2023
TAKEDA PHARMACEUTICAL COMPANY LIMITEDAs filed with the Securities and Exchange Commission on June 26, 2024

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549___________________________________________________________FORM 20-F___________________________________________________________☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2024
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromORto

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number: 001-38757___________________________________________________________

Takeda Yakuhin Kogyo Kabushiki Kaisha(Exact name of registrant as specified in its charter)___________________________________________________________

Takeda Pharmaceutical Company Limited(Translation of registrant’s name into English)___________________________________________________________

Japan

1-1, Nihonbashi-Honcho 2-Chome
Chuo-ku, Tokyo 103-8668, Japan(Jurisdiction of incorporation or organization)(Address of principal executive offices)

Milano Furuta
1-1, Nihonbashi-Honcho 2-Chome
Chuo-ku, Tokyo 103-8668, Japan
Tel: +81 3 3278-2306
Fax: +81 3 3278-2268
Email: Global.External.Reporting@takeda.com(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)___________________________________________________________

Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class

Trading Symbols

Name of Each Exchange On Which RegisteredTAK

New York Stock Exchange

TAK27

New York Stock Exchange

TAK29

New York Stock Exchange

1.375% Senior Notes due 2032

TAK32

New York Stock Exchange

2.000% Senior Notes due 2040

TAK40ANew York Stock Exchange

American Depositary Shares Representing Common Stock
Common Stock, no par value*
0.750% Senior Notes due 2027
1.000% Senior Notes due 2029

* Listed not for trading, but only in connection with the registration of the American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None___________________________________________________________

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
120,169,678 ADSs outstanding as of March 31, 2024
1,569,013,464 shares of common stock as of March 31, 2024
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ýNo ☐If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of1934.
Yes ☐ No ý
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated
filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerý

Accelerated filer☐

Non-accelerated filer☐

Emerging growth company☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after
April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of anerror to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐1

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐International Financial Reporting Standards as issued
by the International Accounting Standards Board ý

Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☐2

Table of Contents

TABLE OF CONTENTS
Special Note Regarding Forward-Looking Statements
PART I
Item 1. Identity of Directors, Senior Management and Advisers ....................................................................................................................

7

Item 2. Offer Statistics and Expected Timetable .............................................................................................................................................

7

Item 3. Key Information ..................................................................................................................................................................................

7

3.A [Reserved] ........................................................................................................................................................................................

7

3.B Capitalization and Indebtedness .......................................................................................................................................................

7

3.C Reason for the Offer and Use of Proceeds .......................................................................................................................................

7

3.D Risk Factors......................................................................................................................................................................................

8

Item 4. Information on the Company...............................................................................................................................................................

23

4.A History and Development of the Company......................................................................................................................................

23

4.B Business Overview ...........................................................................................................................................................................

24

4.C Organizational Structure ..................................................................................................................................................................

58

4.D Property, Plant and Equipment ........................................................................................................................................................

58

Item 4A. Unresolved Staff Comments .............................................................................................................................................................

59

Item 5. Operating and Financial Review and Prospects ..................................................................................................................................

60

5.A Operating Results .............................................................................................................................................................................

60

5.B Liquidity and Capital Resources ......................................................................................................................................................

80

5.C Research and Development, Patents and Licenses, etc. ...................................................................................................................

96

5.D Trend Information ............................................................................................................................................................................

96

5.E Critical Accounting Estimates ..........................................................................................................................................................

97

Item 6. Directors, Senior Management and Employees ..................................................................................................................................

98

6.A Directors and Senior Management...................................................................................................................................................

98

6.B Compensation ...................................................................................................................................................................................

108

6.C Board Practices.................................................................................................................................................................................

113

6.D Employees ........................................................................................................................................................................................

116

6.E Share Ownership ..............................................................................................................................................................................

117

6.F Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation ...................................................................

118

Item 7. Major Shareholders and Related Party Transactions...........................................................................................................................

119

7.A Major Shareholders ..........................................................................................................................................................................

119

7.B Related Party Transactions ..............................................................................................................................................................

119

7.C Interest of Experts and Counsel ......................................................................................................................................................

120

Item 8. Financial Information ..........................................................................................................................................................................

120

8.A Consolidated Statements and Other Financial Information .............................................................................................................

120

8.B Significant Changes..........................................................................................................................................................................

120

Item 9. The Offer and Listing ..........................................................................................................................................................................

121

9.A Offer and Listing Details..................................................................................................................................................................

121

9.B Plan of Distribution ..........................................................................................................................................................................

121

9.C Markets .............................................................................................................................................................................................

121

9.D Selling Shareholders ........................................................................................................................................................................

121

9.E Dilution .............................................................................................................................................................................................

121

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9.F Expenses of the Issue ........................................................................................................................................................................

121

Item 10. Additional Information ......................................................................................................................................................................

122

10.A Share Capital ..................................................................................................................................................................................

122

10.B Memorandum and Articles of Association.....................................................................................................................................

122

10.C Material Contracts ..........................................................................................................................................................................

130

10.D Exchange Controls .........................................................................................................................................................................

131

10.E Taxation ..........................................................................................................................................................................................

133

10.F Dividends and Paying Agents.........................................................................................................................................................

137

10.G Statement by Experts .....................................................................................................................................................................

137

10.H Documents on Display ...................................................................................................................................................................

137

10.I Subsidiary Information ....................................................................................................................................................................

137

10.J Annual Report to Security Holders .................................................................................................................................................

137

Item 11. Quantitative and Qualitative Disclosures about Market Risk ...........................................................................................................

137

Item 12. Description of Securities Other Than Equity Securities....................................................................................................................

138

12.A Debt Securities ...............................................................................................................................................................................

138

12.B Warrants and Rights .......................................................................................................................................................................

138

12.C Other Securities ..............................................................................................................................................................................

138

12.D American Depositary Shares..........................................................................................................................................................

138

PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies............................................................................................................................

140

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds...............................................................................

140

Item 15. Controls and Procedures ....................................................................................................................................................................

140

Item 16A. Audit Committee Financial Expert .................................................................................................................................................

140

Item 16B. Code of Ethics .................................................................................................................................................................................

141

Item 16C. Principal Accountant Fees and Services .........................................................................................................................................

141

Item 16D. Exemptions from the Listing Standards for Audit Committees .....................................................................................................

142

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers .........................................................................................

142

Item 16F. Change in Registrant’s Certifying Accountant ...............................................................................................................................

142

Item 16G. Corporate Governance ....................................................................................................................................................................

143

Item 16H. Mine Safety Disclosure...................................................................................................................................................................

144

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .............................................................................................

144

Item 16J. Insider Trading Policies ...................................................................................................................................................................

144

Item 16K. Cybersecurity ..................................................................................................................................................................................

144

PART III
Item 17. Financial Statements ..........................................................................................................................................................................

146

Item 18. Financial Statements ..........................................................................................................................................................................

146

Item 19. Exhibits ..............................................................................................................................................................................................

146

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As used in this annual report, references to the “Company,” “Takeda,” “we,” “us” and “our” are to Takeda Pharmaceutical Company
Limited and, except as the context otherwise requires, its consolidated subsidiaries.
In this annual report, we present our audited consolidated financial statements as of March 31, 2023 and 2024 and for the fiscal years
ended March 31, 2022, 2023 and 2024. Our consolidated financial statements are prepared in accordance with International Financial ReportingStandards as issued by the International Accounting Standards Board (“IFRS”). The term IFRS also includes International Accounting Standards(“IAS”) and the related interpretations of the committees (Standard Interpretations Committee (“SIC”) and International Financial Reporting
Interpretations Committee (“IFRIC”)).
As used in this annual report, “yen,” “¥” or “JPY” means the lawful currency of Japan, “U.S. dollar,” “$” or “USD” means the lawful
currency of the United States of America (“U.S.”) and “euro,” “€” or “EUR” means the lawful currency of the member states of the European
Monetary Union.
As used in this annual report, “ADS” means an American Depositary Share, representing 0.5 shares of the Company’s common stock,and “ADR” means an American Depositary Receipt evidencing one or more ADSs. See “Item 12. Description of Securities Other Than Equity
Securities—D. American Depositary Shares.” “Notes” refers to the series of notes issued by us and registered under Section 12(b) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) listed on the cover page of this annual report. References to “our securities” refer tocollectively to our ADSs, the shares of our common stock and the notes.
As used in this annual report, except as the context otherwise requires, the “Companies Act” means the Companies Act of Japan.
Amounts shown in this annual report have been rounded to the nearest indicated digit unless otherwise specified. In tables and graphswith rounded figures, sums may not add up due to rounding.

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Special Note Regarding Forward-Looking Statements
This annual report contains forward-looking statements. These statements appear in a number of places in this annual report and include
statements regarding the intent, belief, or current and future expectations of our management with respect to our business, financial condition andresults of operations. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,”“intend,” “project,” “plan,” “aim,” “seek,” “target,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or othersimilar terminology. These statements are not guarantees of future performance and are subject to various risks and uncertainties. Our actual results,
performance or achievements, or those of our industry, may differ materially from any future results, performance or achievements expressed or
implied by these forward-looking statements. In addition, these forward-looking statements are necessarily dependent upon assumptions, estimatesand data that may be incorrect or imprecise and involve known and unknown risks and uncertainties. These forward-looking statements include,
among other topics, statements regarding:•our goals and strategies;•

our ability to develop and bring to market new products, including expectations for our pipeline, our business development
activities and our ability to manufacture and supply;•

expected changes in our revenue, costs, expenditures, operating income or other components of our results;•

expected changes in the pharmaceutical industry or in government policies and regulations relating to it;•

the ability to achieve the expected benefits of businesses we may acquire;•the extent to which our efforts to increase efficiency, productivity or cost-savings, such as the integration of digital technologies,
including artificial intelligence (AI), in our business or other initiatives to restructure our operations will lead to the expected
benefits;•

developments regarding or the outcome of any litigation or other legal, administrative, regulatory or governmental proceedings;•

information regarding competition within our industry, including the timing of anticipated competition from generics or biosimilarsof our marketed products based on the expiration of patents or regulatory exclusivity or otherwise;•

our ability to reduce our greenhouse gas emissions, whether via internal energy conservation measures, future advancements inrenewable energy or low carbon energy technology; or•the effect of economic, political, legislative or other developments on our business or results of operations, including changes withrespect to interest rates, foreign exchange rates, inflation, third-party suppliers and payers.

Forward-looking statements regarding operating income and operating results are particularly subject to a variety of assumptions, some or
all of which may not be realized. Accordingly, the forward-looking statements included in this annual report should not be interpreted as predictions
or representations of future events or circumstances.
Potential risks and uncertainties include those identified and discussed in “Item 3. Key Information—D. Risk Factors,” “Item 4.
Information on the Company,” “Item 5. Operating and Financial Review and Prospects” and elsewhere in this annual report. Given these risks anduncertainties, undue reliance should not be placed on any forward-looking statements, which speak only as of the date of this annual report. Except as
required by law, we disclaim any obligation to update or review any forward-looking statements contained in this annual report, whether as a result of
new information, future events or otherwise.

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Part I
Item 1. Identity of Directors, Senior Management and Advisers
A. Directors and Senior Management
Not applicable.

B. Advisers
Not applicable.

C. Auditors
Not applicable.

Item 2. Offer Statistics and Expected Timetable
A. Offer Statistics
Not applicable.

B. Method and Expected Timetable
Not applicable.

Item 3. Key Information
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.

C. Reasons for the Offer and Use of Proceeds
Not applicable.

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D. Risk Factors
Any investment in our securities involves risk. Investors should carefully consider, in light of their own financial circumstances andinvestment objectives, the following risks before making an investment decision with respect to our securities. If any of the following risks actuallyoccur, it could have a material adverse effect on our business, financial condition, results of operations, future prospects, and the market value of our
securities.
The risks discussed below are those that we believe are material, but these risks and uncertainties may not be the only risks that we face.
Additional risks that are not known to us at this time, or that are currently believed to be not material, could also have a material adverse effect on
our business, financial condition, results of operations, future prospects and the market value of our securities.

Risks Relating to Development, Production and Marketing of Pharmaceutical Products
Research and development of pharmaceutical products are expensive and subject to significant uncertainties, and we may be
unsuccessful in bringing commercially successful products to market or recouping development costs.
Our ability to offset the effects of losses of exclusivity in our existing products and to continue to grow our business depends significantly
on the success of our research and development activities in identifying, developing and successfully commercializing new products in a timely andcost-effective manner. To accomplish this, we commit substantial efforts, funds and other resources to research and development, both in-house andthrough collaborations with third parties. However, these research and development programs are expensive and involve intensive preclinicalevaluation and clinical trials in connection with a highly complex and lengthy regulatory approval process. We discuss regulatory considerations
below under “—If we fail to comply with government regulations over product development, regulatory approvals and reimbursement requirements,
our business could be adversely affected.” The research and development process for a new biopharmaceutical product also requires us to attract andretain sufficient numbers of highly skilled employees and can often take more than ten years from discovery to commercial launch. Even if we
successfully develop and bring to market new products, there is only a limited available patent life in which to recoup these development costs.
During each stage of the approval process and post-approval life cycle of our products, there is a substantial risk that we will encounter
serious obstacles, including unfavorable results or indications of safety concerns regarding a new compound; difficulty or delays in enrolling patientsor in administering clinical trials; delays in completing formulation and other testing and work necessary to support an application for regulatory
approval; insufficient clinical trial data to support the safety or efficacy of the product candidate; difficulties in maintaining supply chains ininvestigational new drugs or commercial products; failure to bring a product to market prior to a competitor, or to develop a product sufficiently
differentiated from a competing product to achieve significant market share; difficulty in obtaining reimbursement at satisfactory rates for ourapproved products from governments and insurers; difficulty in obtaining regulatory approval for additional indications; failure to enter into or
implement successful alliances for the development and/or commercialization of products or the inability to manufacture sufficient acceptable
quantities of a product candidate for development or commercialization activities in a timely or cost-efficient manner. Moreover, the degree ofmarket acceptance of any approved product candidate by the medical community, including physicians, healthcare professionals and patients, will
depend on a number of factors, including changes in unmet medical needs, relative convenience and ease of administration, the prevalence andseverity of any adverse reactions, availability of alternative treatments, pricing and our sales and marketing strategy.
In addition, to the extent that new regulations cause increases in the costs of obtaining and maintaining product authorizations or limit theeconomic value of a new product to its originator, our profitability and growth prospects could be diminished. Development of new and innovative
products can also require the use of emerging platforms and technologies for which regulations either do not yet exist or are under development or
modification. This may lead to greater uncertainty and risk in establishing the necessary data for approvals to conduct clinical trials and/or receiving
marketing approvals.
As a result of the foregoing or other factors, we may decide to delay, discontinue, terminate or externalize the development of potential
pipeline products in which we have invested significant resources, even where the product is in the late stages of development, and have done so inthe past. For example, in 2021, we terminated Phase 2 clinical studies of TAK-994 due to the emergence of a liver-related safety signal. In June 2022,
we decided not to proceed with further development of TAK-994. Furthermore, we also announced in October 2023 that the Phase 3 ADMIRE-CD II
study, assessing the efficacy and safety of Alofisel (darvadstrocel) for the treatment of complex Crohn’s Perianal Fistulas (CPF), did not meet its
primary endpoint of combined remission at 24 weeks. As a result Takeda does not plan to file for regulatory approval in the U.S.
There can also be no assurance that we will be successful in bringing new products to market, marketing them, achieving sufficient
acceptance thereof and recouping our investments in their development. For example, our pipeline compounds may not receive regulatory approval,
obtain anticipated labeling, become commercially successful or achieve satisfactory rates of reimbursement.
Products approved for use and successfully marketed in one market may be unable to obtain regulatory approval, become commerciallysuccessful or achieve satisfactory rates of reimbursement in other markets. Even following initial regulatory approval, the success of a product may
be adversely affected by safety and efficacy findings in other clinical trials or larger real-world patient populations, as well as by the market entry ofcompetitive products or other product-related developments. For example, in March 2022, Takeda announced that it had received a Complete
Response Letter (CRL) from the U.S. Food and Drug Administration (the “FDA”) in response to a Prior Approval Supplement (PAS) for NATPARA(parathyroid hormone) for Injection that Takeda submitted to the FDA in late 2021. The PAS was intended to address the potential for rubber
particulate formation, which was the issue that led to the U.S. recall of NATPARA in September 2019. The CRL stated that it could not be approvedin its current form. Later in 2022, amid significant ongoing supply challenges specific to the product, Takeda announced its decision to discontinue
global manufacturing of NATPAR/NATPARA at the end of 2024.

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As a result, we may be unable to earn returns on investments that we originally anticipated or at all, or may be forced to revise our researchand development strategy, and our business, financial condition and results of operations could be materially and adversely affected.

If we fail to comply with government regulations over product development, regulatory approvals and reimbursement
requirements, our business could be adversely affected.
Obtaining marketing approval for pharmaceutical products is a lengthy, complex and highly regulated process that requires intensive
preclinical and clinical data, and the approval process can vary significantly depending on the regulatory authority. Relevant health authorities may,at the time of the filing of the application for a marketing authorization, or later during their review, impose requirements that can evolve over time,
including requiring additional clinical trials, and such authorities may delay or refuse to grant approval. Even where we have obtained marketing
approval for a product in one or more major markets, we may need to invest significant time and resources in applying for approval in other markets,and there is no assurance that we will be able to obtain such approval. For example, despite having received a positive opinion from the Committee
for Medicinal Products for Human Use of the European Medicines Agency (the “EMA”) for our dengue vaccine candidate, TAK-003, we announced
in July 2023 that we had voluntarily withdrawn our U.S. biologics license application (BLA) for TAK-003 following discussions with the FDA about
aspects of data collection that could not be addressed within that BLA review cycle. In addition, in October 2023, we announced the voluntary
withdrawal of EXKIVITY (mobocertinib) globally due to the outcome of the Phase 3 EXCLAIM-2 confirmatory trial, which did not meet its primary
endpoint and thus did not fulfill the confirmatory data requirements of the Accelerated Approval granted by the FDA, nor the conditional marketing
approvals granted in other countries.
Health authorities are increasingly focused on product safety and on the risk/benefit profile of pharmaceutical products, which could lead tomore burdensome and costly approval processes and negatively affect our ability to obtain regulatory approval for products under development. For
example, the FDA, the EMA, the Ministry of Health, Labour and Welfare (the “MHLW”) and the National Medical Products Administration (the“NMPA”) have been implementing strict requirements for approval, particularly in terms of the volume of data needed to demonstrate a product’s
efficacy and safety.
Even after regulatory approval is obtained, marketed products are subject to various post-marketing commitments, including continual
review, risk evaluations, comparative effectiveness studies and, in some cases, requirements to conduct post-marketing clinical trials to gather
additional safety and other data. Regulatory authorities in many countries have worked to enhance post-approval monitoring in recent years, which
has increased post-approval regulatory burdens. Post-regulatory approval reviews and data analyses can lead to the issuance of recommendations bygovernment agencies, specialized organizations, healthcare professionals or patients regarding the use of products. For example, such
recommendations could include a request to limit the patient population of a drug’s indication, the imposition of marketing restrictions, includingchanges in package insert or labeling, or the suspension or withdrawal of the product. Any such recommendation, whether implemented or not, could
result in reductions in sales volume and/or new or increased concerns about the adverse reactions or efficacy of a product. These substantial
regulatory requirements have, over time, increased the costs associated with maintaining regulatory approvals and achieving reimbursement for our
products.
If the regulatory approval process or post-approval, reimbursement, monitoring or other requirements become significantly moreburdensome in any of our major markets, we could become subject to increased costs and may be unable to obtain or maintain approval to market our
products. Any such adverse changes could materially and adversely affect our business, results of operations or financial condition.

If we fail to comply with laws and regulations governing the sales and marketing of our products, our business could be adversely
affected.
We engage in various marketing, promotional and educational activities pertaining to, as well as the sale of, pharmaceutical products in a
number of jurisdictions around the world. The promotion, marketing and sale of pharmaceutical products and medical devices are highly regulated
and the sales and marketing practices of market participants have been subject to increasing supervision by governmental authorities, and we believethat this trend will continue.
In the U.S., our sales and marketing activities are monitored by several regulatory authorities and law enforcement agencies, including the
FDA, the U.S. Department of Health and Human Services (the “HHS”), the U.S. Department of Justice, the Drug Enforcement Administration (the“DEA”) and the U.S. Securities and Exchange Commission (the “SEC”). In addition, our use of data, including sensitive patient information, and oftechnology, including machine learning and artificial intelligence (AI), is regulated by the Federal Trade Commission as well as various states underevolving standards. These authorities and agencies and their equivalents in other countries have broad authority to investigate market participants forpotential violations of laws relating to the sale, marketing and promotion of pharmaceutical products and medical devices, including the False Claims
Act, the Anti-Kickback Statute, the United Kingdom Bribery Act of 2010 and the Foreign Corrupt Practices Act, among others, for alleged improper
conduct, including corrupt payments to government officials, improper payments to medical professionals, off-label marketing of pharmaceuticalproducts and medical devices, the submission of false claims for reimbursement by the federal government and the use or misuse of data andtechnology. Healthcare companies may also be subject to enforcement actions or prosecution for such improper conduct. Any inquiries orinvestigations into our operations, or enforcement or other regulatory action against us, by such authorities could result in significant defense costs,
fines, penalties and injunctive or administrative remedies, distract management to the detriment of the business, result in the exclusion of certain
products, or us as a whole, from government reimbursement programs or subject us to regulatory controls or government monitoring of our activities
in the future. We are also subject to certain ongoing investigations by governmental agencies.

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Government policies and other pressures to reduce medical costs could have an adverse effect on sales of our pharmaceuticalproducts.
We are subject to governmental regulations mandating price controls in various countries in which we operate. The growth of overall
healthcare costs as a percentage of gross domestic product in many countries means that governments and consumers are under intense pressure tocontrol spending even more tightly. See “Item 4. Information on the Company—B. Business Overview-Third-Party Reimbursement and Pricing”.
In the U.S., managed care groups (including pharmacy benefit managers), as well as institutional and governmental purchasers, have put
significant pricing pressure on drug manufacturers. In particular, as managed care groups have grown in size due to market consolidation,
pharmaceutical companies have faced pressure in pricing and usage negotiations and are engaged in fierce competition to have their products
included in the care providers’ formularies. Moreover, as a result of the legislative and regulatory environment, in the U.S. we continue to experience
heightened pricing pressure on, and limitations on access to, our branded pharmaceutical products sold in the U.S. In 2022, Congress passed theInflation Reduction Act (the “IRA”), which significantly changes the compensation terms for drugs under the Medicare program, including by
imposing penalties on manufacturers who raise drug prices faster than inflation, instituting a cap on out-of-pocket expenditures by Medicare
beneficiaries and allowing the federal government to set prices for certain drugs covered under Medicare beginning in 2026. We expect the IRA tonegatively impact sales and profits and may lead to further political pressure or legislative, regulatory or other efforts to introduce lower prices,
reduce spending on the Medicare and Medicaid programs, expand and strengthen the Affordable Care Act, and lower the overall spending by thegovernment on prescription medicines. In addition, various state legislatures and regulators have enacted, or are pursuing, policy changes that could
further increase pricing pressure on our products. As a result, we expect the healthcare industry in the U.S. will continue to be subject to increased
pricing and spending pressure.
In Japan, manufacturers of pharmaceutical products must have new products listed on the National Health Insurance (the “NHI”) Drug
Price Standard, a price list published by the MHLW (the “NHI price list”). The NHI price list provides rates for calculating the price ofpharmaceutical products used in medical services provided under various public medical care insurance systems. Prices on the NHI price list havebeen previously subject to revisions based on the actual prices and amounts by which the pharmaceutical products are purchased by medical
institutions in Japan, and the average price of previously listed products generally decreases as a result of these price revisions. The Japanese
government is currently undertaking healthcare reform initiatives with the goal of sustaining the universal coverage of the NHI program. As part ofthese initiatives, the annual NHI price list revision has taken place since April 2021, which could lead to more frequent downward price revisions.
The government is also addressing the efficient use of drugs, with the target of 80% penetration in each prefecture by volume and 65% in value by
March 2030 with respect to products for which market exclusivity has expired. In addition, products on the NHI price list nominated based on predefined criteria, such as innovativeness and the financial impact, are subject to a cost-effectiveness evaluation under MHLW rules, and subject toprice adjustments depending on the outcome of this evaluation.
In Europe, drug prices have been subject to downward pressure due to measures implemented in each country to control drug costs, andprices continue to come under pressure due to parallel imports, generic competition, increasing use of health technology assessment based upon costeffectiveness and other factors. European pricing and reimbursement authorities have also intensified efforts to increase transparency of prices as well
as exchange of information among the various European pricing authorities in order to raise pressure towards the industry. This pricing debate has
impacted the overall political climate in Europe and has triggered a European policy initiative to review the pharmaceutical industry’s intellectual
property incentives with a particular emphasis on orphan drugs. The European Commission has also proposed to revise the European Union (“EU”)
pharmaceutical legislation, which contains a proposal to reduce and/or modulate Intellectual Property incentives, regulatory data protection andorphan market exclusivity. While we expect that any new legislation in this area would take at least two to three years to be adopted, it could havesignificant impact on our business model. Starting in 2025, the EU Regulation on Health Technology Assessment will be implemented, initially foroncology and advanced therapeutic medicinal products, expanding in 2028 to orphan drugs and from 2030 to all centrally registered products, adding
an additional layer of scrutiny to subsequent national-level pricing and reimbursement processes. While the exact impact of this regulation is not yet
known, it is expected to increase clinical evidentiary requirements on manufacturers by pooling specific data requirements from all EU member
states. If we are unable to meet these heightened requirements, our products could face potential adverse impacts on pricing and reimbursement in
EU markets.
We are also facing similar pricing pressures in other regions, such as various emerging countries including China. We expect such pricing
pressures to continue as we expand our business in those regions and countries.
We expect these efforts to control costs to continue as healthcare payers around the globe, in particular government-controlled healthauthorities, publicly funded or subsidized health programs, insurance companies and managed care organizations, increasingly pursue initiatives toreduce the overall cost of healthcare, restrict access to higher-priced new medicines, increase the use of generics and impose overall price revisions.
Such further implementation of these policies could have a material adverse effect on our business, financial condition and results of operations.

The expiration or loss of patent or regulatory data or marketing protection over our products or patent infringement by generic orbiosimilar manufacturers could lead to significant competition from generic versions or biosimilars of the relevant product and/or
lead to declines in market share and price levels of our products.
Our pharmaceutical products are generally protected for a defined period per jurisdiction by various patents (including those covering drug
substance, drug product, approved indications, methods of administration, methods of manufacturing, formulations and dosages) and/or regulatory
exclusivity, which are intended to provide us with exclusive rights to market the products for the life of the patent or duration of the regulatory dataprotection period. The loss of regulatory exclusivity for pharmaceutical products may open such products to competition from generic substitutes thatare typically priced significantly lower than the original products, which typically adversely affects the market share and prices of the original
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Generic or biosimilar substitutes have high market shares in a number of key markets, including the U.S., Europe, Japan and many
emerging countries, and the adverse effects of the launch of generic products are particularly significant in such markets. The introduction of genericor biosimilar versions of a pharmaceutical product typically leads to a swift and substantial decline in the sales of the original product. Our continued
innovation efforts cannot fully mitigate the impact of competition from generics or biosimilars. In the U.S., the EU and Japan for example, politicalpressure to reduce spending on prescription drugs has led to legislation and other measures that encourage the use of generic products. In Japan, thegovernment is implementing various measures to control drug costs, including by encouraging medical practitioners to use and prescribe genericdrugs, and in April 2021 announced its intention to raise generic drug penetration with respect to products for which market exclusivity has expired,to 80% by volume in all prefectures (regions) by the end of the fiscal year ending March 31, 2024. In addition, in April 2023, the government
announced that by the end of the fiscal year ending March 31, 2030, it aims to increase the ratio of Active Pharmaceutical Ingredients (APIs) with
80% or more of biosimilar replacement rates on a volume basis to at least 60% of all APIs that have biosimilar versions available. Legislation has
also been passed in the U.S. and Europe encouraging the use of biosimilar products. Similar to generics, biosimilars aim to provide less expensive
versions of innovative biologic products. Legislation has provided abbreviated pathways for the approval and marketing of biosimilar products,
which may affect the profitability and commercial viability of our biologic products.
Certain products of ours have begun, or are expected over the next several years, to face declining sales due to the loss of patent protection
or regulatory exclusivity. For example, following the expiration of patent protection covering the formulation of VELCADE and pediatric regulatory
exclusivity, generic bortezomib products entered the market in 2022. Patent protection covering VYVANSE and the associated pediatric exclusivity
expired in the U.S. in August 2023, which has negatively affected sales of this product. Furthermore, our current top selling product, ENTYVIO, will
face loss of regulatory exclusivity in the latter half of this decade and certain patents covering various aspects of this product are expected to expire in
2032. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” for details.
We may also be subject to competition from generic or biosimilar drug manufacturers prior to the expiration of patents if a manufacturer
successfully challenges the validity of our patents, if a manufacturer is able to design around our patents, or if a manufacturer obtains approval of
their product and launches it at risk (i.e., prior to a judicial determination). If such a launch occurred prior to completion of court proceedings, a court
may decline to grant a preliminary injunction. While we may be entitled to obtain damages subsequently, the amount we may ultimately be awarded
and able to collect may be insufficient to compensate for the loss of sales and other harm caused to us. Furthermore, if we lose patent protection as aresult of an adverse court decision or a settlement, in certain jurisdictions, we may face the risk that government and private third-party payers andpurchasers of pharmaceutical products may claim damages alleging they have over-reimbursed or overpaid for a drug.
If our patent and other intellectual property rights are infringed by generic or biosimilar drug manufacturers or other third parties, we may
not be able to take full advantage of the potential or existing demand for our products. The protection that we are able to obtain for our prescription
drugs varies from product to product and country to country and may not always be sufficient because of local variations in issued patents, ordifferences in national law or legal systems, including inconsistency in the enforcement or application of law and limitations on the availability of
meaningful legal remedies. In particular, patent protection in emerging markets is often less certain than in developed markets. Certain countries may
also engage in compulsory licensing of pharmaceutical intellectual property to other manufacturers as a result of local political pressure. Furthermore,
the attention of our management and other personnel could be diverted from their normal business activities if we decide to litigate against such
infringement. The realization of any such risks could adversely and materially affect our business, financial condition and results of operations.

We may have difficulty maintaining the competitiveness of our products.
The pharmaceutical industry is highly competitive, and in order to maintain the competitiveness of our product portfolio, we are required tomaintain ongoing, extensive research for technological innovations, including new compounds, to develop and commercialize existing pipeline
products, to expand our product portfolio through acquisitions, partnerships and in-licensing, and to market our products effectively, including bycommunicating the efficacy, safety and value of our products to healthcare professionals. However, healthcare professionals and consumers may
choose competitors’ products over ours, if they perceive these products to be safer, more reliable, more effective, easier to administer or lessexpensive. The success of any product depends on our ability to effectively communicate with and educate healthcare professionals and patients andconvince them of the advantage of our products over those of our competitors. We often carry out costly clinical trials even after our products havebeen launched to produce data to be utilized for these purposes, but such trials do not always produce the desired outcomes. Certain competitors havegreater financial and other resources to conduct such trials in more detail and with larger patient populations, which may ultimately enable them topromote their products more effectively than we do. Furthermore, if relevant regulators increase their approvals of new therapies developed bycompetitors for the conditions treated by our products, such as in order to increase the number of treatment options available for rare or orphan
diseases, our business and results of operations could be materially and adversely affected.
In recent years, competitors have introduced novel hemophilia products, or such products have been approved for additional uses, which
may affect (and in certain cases has affected) sales of our recombinant and plasma-based hemophilia products, such as our factor FVIII products andanti-inhibitor coagulant complex product. Certain competitors are developing other hemophilia therapies, including gene-based therapies. In 2022,
the FDA approved the first gene therapy for hemophilia B, and in 2023, the FDA approved the first gene therapy for hemophilia A. Thesedevelopments could also affect sales of our recombinant and plasma-based therapies. Increased competition from new products or therapies could
similarly affect our other products.
In Japan, the steady introduction of drugs already marketed outside Japan by overseas competitors has led to increased competition. In
addition, new competing products or the development of superior medical technologies and other treatment options could make our products or
technologies lose their competitiveness or become obsolete. As discussed above, our products are also subject to competition from inexpensive
generic versions or biosimilars of our products, as well as those of our competitors’ products, upon the expiration or loss of related patent protection
and regulatory data protection, which may result in loss of market share. If we are unable to maintain the competitiveness of our products, ourbusiness, financial position and results of operations could be materially and adversely affected.

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Furthermore, sales of the rare disease portfolio are particularly concentrated among small groups of customers, and we may bedisproportionately affected by changes in their purchasing patterns, including if we are unable to maintain the competitiveness of our products.

We may not be able to adequately expand our product portfolio through third-party alliance arrangements.
We expect that we will continue to collaborate with third parties for key aspects of our business, including the discovery and developmentof new products, in-licensing products, and the marketing and distribution of approved products. A major part of our research and development
strategy is to initiate alliances with third parties in the biotechnology industry, academia and the public sector, and we believe that the overall strengthof our research and development program and product pipeline depends on our ability to identify and initiate partnerships, in-licensing arrangements
and other collaborations with third parties. However, there can be no assurance that any of our third-party alliances will lead to the successful
development and marketing of new products. Moreover, reliance on third-party alliances subjects us to a number of risks, including:•We may be unable to identify suitable opportunities meeting our target return on investment at a reasonable cost and on terms thatare acceptable to us due to active and intense competition among pharmaceutical groups for alliance opportunities or other factors;•

Entering into in-licensing or partnership agreements may require the payment of significant upfront and/or milestone payments wellbefore the relevant products are placed in the market, without any assurance that such investments will ultimately become profitablein the long term. To the extent such payments are recorded as assets on our consolidated statement of financial position, any
termination of the relevant partnership could require us to recognize an impairment loss up to the full value of such assets;•

When we research and market our products through collaboration arrangements, the performance of certain key tasks or functions is
the responsibility of our collaboration partners, who may not perform effectively or otherwise meet our expectations; and•Decisions may be under the control of or subject to the approval of our collaboration partners, and we may have differing views or
be unable to agree upon an appropriate course of action. Any conflicts or difficulties that we may have with our partners during thecourse of these agreements or at the time of their renewal or renegotiation or any disruption in the relationships with our partners
may affect the development, launch and/or marketing of certain of our products or product candidates.

In addition, a licensor or partner may attempt to terminate its license or partnership agreement with us or elect not to renew it to pursue
other marketing opportunities. Our licensors or partners also could merge with or be acquired by another company or experience financial or othersetbacks unrelated to our alliance arrangements. Any of these events may force us to terminate a development project and adversely affect our ability
to adequately expand or maintain our product portfolio.

Our use of third parties for the performance of certain key business functions, particularly product manufacture andcommercialization, heightens the risks faced by our business.
We commonly use suppliers, vendors and partners, including alliances with other pharmaceutical companies, for certain key aspects of ourbusiness, including manufacturing and commercialization of products, support for information technology systems and certain human resource
functions. We do not control these partners, but we depend on them in ways that may be significant to us. If these parties fail to meet our expectations
or fulfill their obligations to us, we may fail to receive the expected benefits. These third parties are also exposed to cybersecurity risks that could
result in operational interruptions, regulatory fines under privacy laws, or reputational damage to Takeda. Some of these third parties haveexperienced cybersecurity attacks that have resulted in information about Takeda’s business, including our patients, being compromised. In addition,
if any of these third parties fails to comply with applicable laws and regulations in the course of its performance of services for us, there is a risk that
we may be held responsible for such violations as well. This risk is particularly serious in emerging markets, where corruption is often prevalent andwhere many of the third parties on which we rely do not have internal compliance resources comparable to our own. Any such failures by third
parties, in emerging markets or elsewhere, could adversely affect our business, reputation, financial condition or results of operations. Moreover,global supply chains have been affected by such varying but interconnected factors as increased geopolitical tensions and military conflicts, including
the Russian invasion of Ukraine, turmoil in the Middle East and resulting disruptions to logistics, transportation, energy and other industries andsignificantly increased inflation in a number of markets. These pressures on global supply chains may also harm the ability of our third-party partners
to supply us with the products and services we need to administer our business.

Our dependence on third parties for the inputs for our products subjects us to various risks, and changes in the costs of materials
may adversely affect our profitability.
Although we develop and manufacture the active ingredients used in some of our products at our own facilities, we are dependent on thirdparty suppliers for a substantial portion of the raw materials and compounds used in the products we produce. The price and availability of the raw
materials for our products, including chemical compounds and biologics, are subject to the effects of weather, natural disasters, market forces, theeconomic environment, pandemics (such as the recent COVID-19 pandemic), geopolitical events, fuel costs and foreign exchange rates. If our costfor such materials increases, we may not be able to make corresponding increases in the prices of our products due to regulations, market conditions
or our relationships with our customers, and as a result, our profitability could be materially and adversely affected.
In particular, we rely on third-party suppliers of key manufacturing inputs of certain drug products. Furthermore, certain active ingredientsfor these products are sourced from a single supplier. We also rely in part on third-party sources to provide the donated plasma necessary for ourplasma-derived therapies. In addition, although we often dual-source certain key products and/or active ingredients, we currently rely on a single
source for production of certain key products, and/or active ingredients and final drug products. Sources of some materials may be limited to a single
supplier, and if such a supplier faces any difficulty in supplying the materials, we may not be able to find an alternative supplier in a timely manner or
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at all. If materials become unavailable or if quality problems related to the materials arise, we may be forced to halt production and sales of productsthat use them. In the event that any of our third-party suppliers is delayed in its delivery of such raw materials or compounds, is unable to deliver thefull quantity ordered by us at the appropriate level of quality, or is unable to deliver any raw materials or compounds at all, our ability to sell our
products in the quantities demanded by the market may be impaired, which could damage our reputation and relationships with customers andpatients. In such a case, our business and results of operations could be adversely affected.

The manufacture of our products is technically complex and highly regulated, and supply interruptions, product recalls or otherproduction problems caused by unforeseen events may reduce sales, adversely affect our operating results and financial conditionand delay the launch of new products.
The manufacture of our products (from active pharmaceutical ingredients through to finished products) is technically complex and highly
regulated, and as a result we may experience difficulties or delays including but not limited to seizure or recalls of products or shut-downs of
manufacturing plants; problems with business continuity, including as a result of a natural or man-made disaster, at one of our facilities or at a criticalsupplier or vendor; failure by us or by any of our vendors or suppliers to comply with the Good Manufacturing/Laboratory Practice (the “GMP/
GLP”) and other applicable regulations and quality assurance guidelines, which could lead to manufacturing shutdowns, product shortages, delays inproduct manufacturing and/or administrative, enforcement or other actions by regulatory authorities if regulatory authorities deem our products to be
non-compliant with or otherwise in violation of applicable laws; problems with manufacturing, quality assurance/quality control, storage or supply,
or governmental approval delays, due to our consolidation and rationalization of manufacturing facilities and the sale or closure of certain sites;
failure of a sole source or single source supplier to provide us with necessary raw materials, supplies or finished goods for an extended period oftime, which could impact continuous supply; failure of a third-party manufacturer to supply us with semi-finished or finished products on time;
construction or regulatory approval delays related to new facilities or the expansion of existing facilities; the inability to obtain sufficient components
or raw materials on a timely basis or at a cost-effective price due to public health crises, medical epidemics or pandemics such as the COVID-19
pandemic; additional costs related to deficiencies identified by regulatory agencies in connection with inspections of our facilities, and enforcement,
remedial or punitive actions by regulatory authorities if we fail to remedy any deficiencies; and other manufacturing or distribution problems,
including limits to manufacturing capacity due to regulatory requirements (e.g. Registration, Evaluation, Authorisation and Restriction of Chemicals(“REACH”) regulation in the EU), changes in the types of products produced, physical limitations or other business interruptions, that could impact
continuous supply. For example, in 2019, we issued a recall in the United States of NATPARA (parathyroid hormone) due to the potential for rubber
particulate formation and, in 2022, the FDA issued a CRL in response to our Prior Approval Supplement (PAS) with respect to NATPARA(parathyroid hormone) to address this potential issue and indicated that it could not approve the PAS in its current form. In late 2022, Takeda madeits decision that it would discontinue manufacturing NATPARA for injection globally at the end of 2024 due to unresolved supply issues that are
specific to the product.
In addition, despite efforts at compliance, from time to time we or our partners may receive notices of manufacturing, quality-related, orother observations following inspections by regulatory authorities around the world, as well as official agency correspondence regarding compliance.
For example, on June 9, 2020 the FDA issued a warning letter related to our manufacturing plant in Hikari, Yamaguchi, Japan which included several
technical observations, including observations about procedures, personnel, records, investigations, training, equipment, and oversight. Based on our
responses and corrective actions, the FDA revised the inspection classification to Voluntary Action Indicated and determined that the conditions in
the Warning Letter were addressed and, as a result, the Waring Letter was closed. The corrective actions resulted in a temporary supply shortage ofLeuprorelin, a product which we supply to AbbVie, Inc. (“AbbVie”) pursuant to a supply agreement. AbbVie filed a lawsuit against us on November
6, 2020 specifying an alleged breach of contract, and a Delaware state court has ruled in favor of AbbVie on the alleged breach, with a final damages
award of USD 505 million including interest. We or our partners may receive additional or similar observations, correspondence and claims in the
future, whether regarding the Hikari plant or otherwise. If we are unable to resolve these observations and address regulator concerns and claims frompartners in a timely fashion, our business, financial condition and results of operations could be materially affected. See “—We are involved inlitigation relating to our operations on an ongoing basis, and such litigation could result in financial losses or harm our business” for further
discussion on risks associated with litigation and lawsuits relating to our operations.
The development and manufacture of biologics and cell therapies present heightened or additional risks. The manufacture of biologics,
including cell therapy products, is highly complex and is characterized by inherent risks and challenges, such as raw material inconsistencies,
logistical and sourcing challenges, significant quality control and assurance requirements, manufacturing complexity (including heightened
regulatory requirements), short shelf life and significant manual processing. Unlike products that rely on chemicals for efficacy, such as mostpharmaceuticals, biologics are more complex to characterize due to the inherent variability of biological input materials. As a result, assays of thefinished product may not be sufficient to ensure that the product will perform in the intended manner. Problems with the manufacturing process, evenminor deviations from the normal process, could result in product defects or manufacturing failures that result in, among other things, lot failures,product recalls, product liability claims or insufficient inventory, which could be costly to us or result in reputational damage.
Furthermore, sourcing and transportation of plasma and production and distribution of plasma-derived products is complex, capitalintensive and subject to extensive regulation. Efforts to increase the collection of plasma may require strengthening acquisition and third-party
contracting capacities and successful regulatory approval of additional plasma collection facilities and plasma fractionation facilitates. Further
development of such capacities and facilities involves a lengthy regulatory process and is highly capital intensive. In addition, access to and transport
as well as use of plasma may be subject to restrictions by governmental agencies. If we are unable to manage these inherent risks and challenges, we
may lose market share or customer confidence, be required to record charges related to idle capacity or impairment on facilities or take other actions
which could materially and adversely affect the Plasma-Derived Therapies business.
Any of the above may reduce sales, delay the launch of new products, and adversely affect our business, financial condition and results ofoperations.

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The illegal distribution and sale by third parties of counterfeit versions of our products or products stolen from us could have an
adverse effect on our reputation and business.
Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet the rigorous manufacturing andtesting standards to which our products are subject. A patient who receives a counterfeit drug may be at risk for a number of dangerous healthconsequences. Reports of adverse reactions to counterfeit drugs or increased levels of counterfeiting could materially affect patient confidence in our
products, which could have a material adverse effect on our reputation and financial results. In addition, thefts at warehouses, at plants, or in transit ofinventory that is not properly stored or that is sold through unauthorized channels could materially and adversely affect patient safety, our reputationand our results of operations.

Risks Relating to Our Business Strategies
We have substantial debt which may limit our ability to execute our business strategy, refinance existing debt or incur new debt,
and if we are unable to maintain sufficient financial strength, we could be at a greater risk of a downgrade of our credit ratings.
Our consolidated bonds and loans were JPY 4,843.8 billion as of March 31, 2024, the majority of which was incurred in connection withthe acquisition of the entire issued and to-be-issued share capital of Shire pursuant to a Scheme of Arrangement under the laws of Jersey (the “Shire
Acquisition”) or represents the related indebtedness of Shire that is included in our consolidated statements of financial position. This significant
amount of aggregate debt and the substantial amount of cash required for payments of interest and principal could adversely affect our liquidity. We
are also required to comply with certain covenants within various financing arrangements and violations of such covenants may require theacceleration and immediate repayment of the indebtedness, which may in turn have a material adverse effect on our financial condition, cash flows,business and results of operations. Furthermore, we may desire to or be required from time to time to incur additional borrowings, including in
relation to the repayment or refinancing of any of our currently outstanding indebtedness. Our ability to arrange new financing, or a refinancing andthe terms thereof will depend on our financial position and performance, prevailing market conditions (including fluctuations in market interest rates)and other factors beyond our control. Moreover, if we decide to refinance indebtedness, our overall leverage may not necessarily decrease (or may
increase temporarily pending the use of the proceeds of the refinancing transaction to repay outstanding debt), and interest expense may increase if,among other factors, market interest rates are higher than at the time we incurred the indebtedness being refinanced.
Credit rating agencies routinely evaluate our business, and their ratings are based on a number of factors, including our leverage, ability togenerate cash flows, overall financial strength and diversification, as well as other factors beyond our control, such as the state of the global economy
and our industry generally. While our credit ratings remain investment grade, each rating agency reviews its ratings periodically, and there is no
assurance that the current credit ratings assigned to us will not be downgraded. A downgrade of our credit rating may materially and adversely affectthe market prices of our equity and debt securities, including the notes, the interest rates at which our borrowings and debt securities are issued, andfees charged to us by current or future lenders. This could make it significantly more costly for us to borrow money, to issue debt securities and toraise certain other types of capital and/or complete additional financings. Such negative credit rating actions and the underlying reasons for suchactions could materially and adversely affect our cash flows, results of operations and financial condition and the market price of, and our ability to
pay the principal and interest on our debt securities.

We face risks from the pursuit of acquisitions, and the anticipated benefits and synergies resulting from acquisitions may not berealized.
We regularly pursue acquisitions for several reasons, including strengthening our pipeline, complementing existing lines of business,
adding research and development capabilities or pursuing other synergies. The pursuit of these acquisitions requires the commitment of significant
management and capital resources in various stages, from the exploration of potential acquisition targets to the negotiation and execution of an
acquisition to the integration of an acquired business into our own. The required commitment of time and resources may divert the attention ofmanagement or capital or other resources away from our day-to-day business. Moreover, we may not be able to recoup the investment of capital orother resources through the successful integration of acquired businesses, including the realization of any expected cost or other synergies.
Specifically, we may encounter the following difficulties: we may face significant challenges in combining the infrastructure, management andinformation systems of acquired companies with ours, including integrating research and development, manufacturing, distribution, marketing andpromotion activities and information technology systems; there may be difficulties in conforming standards, controls, procedures and accounting andother policies, as well as business cultures and compensation structures; we may not be able to retain key personnel at acquired companies, or ourown employees may be motivated to leave due to acquisitions; we may not be successful in identifying and eliminating redundancies and achieving
other cost savings as expected; and we may not be able to successfully realize benefits from acquired products, including pipeline products underdevelopment. For example, on February 8, 2023, we acquired all of the capital stock of Nimbus Lakshmi, Inc., a wholly owned subsidiary of Nimbus
Therapeutics, LLC, that owns or controls the intellectual property rights and other associated assets related to TAK-279, the allosteric TYK2 inhibitor
known internally at Nimbus as “NDI-034858”. While we seek to develop this molecule into an important part of our product portfolio, this remains
subject to ongoing development, and we may be unable to develop it into a marketed product as successfully as expected or at all, which could harm
our ability to recoup our investment in the acquisition, require us to record impairment charges for related intangible assets or otherwise adversely
affect our business, results of operations or financial condition.
We continue to pursue strategic business acquisitions globally as a key part of our continuous growth strategy. If we are not able to achieve
the anticipated benefits of any future acquisitions in full or in a timely manner, we could be required to recognize impairment losses, we may not beable to recoup our investment, and our business, financial position and results of operations could be materially and adversely affected. Particularly,
we may be unable to achieve the expected revenues pursuant to licensing, co-promotion or co-development agreements or collaborations. We may
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also assume unexpected contingent or other liabilities, or be required to mark up the fair value of liabilities (or mark down the fair value of assets)acquired upon the close of an acquisition.

Restructuring initiatives to improve efficiency in our business may not provide the expected benefits on the expected timeline
In the ordinary course of our business, we continuously seek to improve operational efficiency across our organization. In addition to these
improvements, we may also seek to implement more transformational initiatives. Most recently, on May 9, 2024, we announced a multi-year,
enterprise-wide program aimed at increasing efficiency and improving our profitability, including initiatives to increase the agility and simplicity ofour business organization, improve our procurement models and increase productivity and efficiency through the implementation of digital,
automation and artificial intelligence (AI) technologies. However, the design and implementation of both ordinary course and one-time initiatives arecomplicated and require the commitment of significant financial, managerial and other resources to complete. Moreover, there can be no assurance
that such initiatives will provide the benefits we seek, or that such benefits can be realized on the targeted schedule. Initiatives to simplify ourorganization, for example, will require changes to our organization and the reallocation of human and other resources, which can require extended
discussions with regulators, employees and other stakeholders, as well as the incurrence of significant costs, such as severance payments. Primarily
as a result of the initiatives announced in May 2024, we expect to record JPY 140.0 billion of restructuring expenses in the fiscal year ending March
31, 2025, and may incur lower expenses in the fiscal years to follow. Even if these initiatives are ultimately successful, we expect that such expenses
will negatively affect our consolidated profitability in the short term.

We have significant operations across the world, including emerging markets, and continued expansion into new and developing
markets is a key strategy, which expose us to additional risks.
Our global operations, which encompass approximately 80 countries and regions across the world, are subject to a number of risks,
including difficulties in monitoring and coordinating research and development, marketing, supply-chain and other operations in a large number ofjurisdictions; risks related to laws, regulations and policies, including those implemented following changes in political leadership and trade, capitaland exchange controls; changes with respect to taxation, including impositions or increases of withholding and other taxes on remittances and otherpayments by our overseas subsidiaries; varying standards and practices in the legal, regulatory and business cultures in which we operate, including
potential inability to enforce contracts or intellectual property rights; trade restrictions, including restrictions on investment and import/export
controls, cross-border data transfer restrictions, and changes in tariffs on cross border trade; complex sanctions regimes in various countries such as
the U.S., the EU and other jurisdictions, violations of which could lead to fines or other penalties; risks related to geopolitical and local politicalinstability and uncertain business environments; changes in global, regional or local economies, or the overall political, economic or social climate,including inter-country relationships in Asia and elsewhere; acts of terrorism, war, global climate change, extreme weather events, medical epidemics
or pandemics such as the recent COVID-19 pandemic, and other sources of social disruption; and difficulties associated with managing local
personnel and preventing misconduct by local third-party alliance partners.
Any one or more of these or other factors could increase our costs, reduce our revenues, or disrupt our operations, with possible material
adverse effects on our business, financial condition and results of operations. Further expansion overseas has been one of our key strategies, and, inthe fiscal year ended March 31, 2024, regions outside of Japan accounted for 89.4% of our consolidated revenue, with the U.S. in particular
contributing 51.5% of consolidated revenue. We expect that markets outside Japan, particularly the U.S. and also Europe and Canada, will continue
to be increasingly important to our business and results of operations, increasing the likelihood that any of these risks is realized. We have also been
taking steps to grow our business in most emerging markets, which we define to include Latin America, Asia (excluding Japan), Commonwealth of
Independent States (“CIS”) and Other (including the Middle East, Africa and Oceania). Our revenue from emerging markets was JPY 649.8 billion(or 15.2% of our total revenue) for the fiscal year ended March 31, 2024, and we intend to pursue further growth in such emerging markets. In
particular, we believe that there is an attractive opportunity to grow our business in China.
However, there is no guarantee that our efforts to expand sales in emerging markets will succeed. Some countries may be especiallyvulnerable to periods of global financial instability or may have very limited resources to spend on healthcare. Emerging markets present particularchallenges in obtaining funding, achieving market access for our products and successfully ensuring that we receive appropriate levels of
reimbursement. Emerging markets also tend to require substantial efforts in patient support and other programs. All of these factors may adversely
affect the profitability of our businesses in these emerging markets.
In response to the Russian invasion of Ukraine begun in February 2022, Takeda has taken action to discontinue activities in Russia that are
not essential to maintaining the supply of medicines to patients and providing ongoing support to our employees, subject to compliance with allinternational sanctions imposed on Russia. This includes suspending all new investments, suspending advertising and promotion, not initiating newclinical trials and stopping enrollment of new patients in ongoing clinical trials. In the fiscal year ended March 31, 2024, revenue attributable to
Russia/CIS represented 1.7% of our total consolidated revenue, and we did not experience a material impact from the invasion, international
responses thereto or our discontinuation of non-essential activities in Russia. Depending on the future status of the crisis, however, our results ofoperations and financial condition, and our strategy to increase our business in the region, could be adversely affected. Among other matters, certain
clinical trials may be delayed, and we may incur additional costs to find alternative locations in which to hold such trials. For example, due in part tothe effects of the invasion of Ukraine on our ability to conduct clinical trials, as well as other factors such as COVID-19-related lockdowns in China,
in 2022, we have announced delays in our target approval filing dates for soticlestat.
In order to successfully implement our emerging markets strategy, we must also attract and retain qualified personnel, despite thepossibility that some emerging markets may have a relatively limited number of persons with the required skills and training. We may also be
required to increase our reliance on third-party agents within less-developed markets, which may put us at increased risk of liability. In addition,
many emerging markets have currencies that fluctuate substantially, and if such currencies are devalued and we cannot offset the devaluations, ourfinancial performance in such countries may be adversely affected. Further, many emerging markets have relatively weak intellectual property
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protection and inadequate protection against crime, including counterfeiting, corruption and fraud. Operations in certain emerging countries, where
corruption may be more prevalent than in more developed countries and where internal compliance practices may not be well established, may alsopose challenges from a legal and regulatory compliance perspective. Moreover, we may face additional legal and regulatory barriers to achieving
growth, such as restrictions on the import of raw materials or other trade regulations (for example, on the import of plasma and plasma products into
China) that will require us to expend additional resources to achieve our goals.
For reasons including but not limited to the above, significant parts of our operations across the world including emerging markets present
significant risks, and the realization of such risks could have a material adverse effect on our business, financial condition and results of operations.

We may experience difficulty implementing and resourcing corporate sustainability-related measures, or complying with emerging
sustainability-related requirements and expectations.
Governmental and regulatory authorities, counterparties such as suppliers, investors, the public at large and others have increasingly
focused on sustainability, with new laws and regulations regarding such matters increasing in number and scope. This includes new public reporting
obligations such as the European Union’s Corporate Sustainability Reporting Directive (CSRD), the SEC’s final climate risk disclosure rules(currently stayed) as well as new sustainability disclosure rules expected to be adopted by Japan’s Financial Services Authority. These emerging
requirements, as well as other laws and regulations such as the EU’s Corporate Sustainability Due Diligence Directive, could increase costs
associated with our business operations, including the allocation of additional staffing and other resources and exposure to regulatory, litigation andreputational risk.
We have adopted certain corporate goals and programs to help us address environmental sustainability risks and may evolve them toaddress other sustainability related risks in the future as our stakeholders increasingly focus on these topics., We are committed to the achievement ofthese goals and are working to meet them, but we may nevertheless be unable to meet expectations and such goals and initiatives may also result inincreased costs. With respect to environmental sustainability, we have committed to reducing our carbon footprint, minimizing waste sent to landfill
from our operations, enhancing our water stewardship practices, and engaging with our vendors and suppliers to encourage them to cooperate withthese initiatives. We have also committed to achieve net-zero (as defined in the Science Based Targets initiative (SBTi) Corporate Net-Zero
Standard) in greenhouse gas (GHG) emissions related to our operations (Scope 1 and Scope 2) by 2035 and for our entire value chain (including
currently estimated Scope 3 GHG emissions) by 2040. Despite making progress in FY23, accurately estimating Scope 3 emissions remains achallenge to overcome as part of these efforts, and we may not be successful in doing so. Moreover, although we have not yet recorded material
expenses in connection with our net-zero initiatives, the costs of successfully implementing them, such as the costs of seeking renewable sources ofenergy or increasing the energy efficiency of our operations, are currently unclear, will depend on factors outside of our control (such as the effect ofgovernmental and societal initiatives to reduce greenhouse emissions and technological developments) and may become significant in the future.
Also, these initiatives may for example require us to seek alternative vendors or suppliers or impair our ability to procure or use certain materials.
To the extent that we are unable to meet the expectations of stakeholders, including governmental and regulatory authorities,
counterparties, investors, customers, or the public with respect to sustainability matters, our reputation may be harmed, we may face increased
compliance or other costs and demand for securities issued by us and our ability to participate in the debt and equity markets may decrease.
Furthermore, such standards and expectations are subject to ongoing change and refinement, and may shift in unexpected and potentially significant
ways, which we may struggle to accommodate.

Our digital transformation initiatives may be unsuccessful, and our profitability may be hurt or our business otherwise might be
adversely affected.
We have made and plan to continue to make significant investments in digital transformation initiatives, with the goal of modernizing ourplatforms, accelerating data services, enhancing our ability to innovate and equipping our employees with new skills and ways of working. These
digital transformation initiatives also represent a key part of our strategy for improving our profitability, in particular our operating profit margins.
These types of activities are complex and are dependent on a number of factors, including entering into successful partnerships and alliances withtechnology companies, as well as developing and deploying technology architecture successfully and, particularly with respect to the use of emerging
digital technologies such as AI, ensuring appropriate technology and data ethics practices. If we do not successfully manage our digitalization
initiatives and digital technologies, or any other related activities that we may take in the future, any expected efficiencies and benefits might bedelayed or not realized, our operations and business could be disrupted and our strategy for improving profitability may prove to be unsuccessful. If
we fail to adequately or ethically integrate digitalization into our business, or if we cannot overcome difficulties that may arise in developing andimplementing newly integrated technology, our reputation may be harmed and we may lose customers and market share. Even if our efforts are
successful, our competitors, including established competitors or new entrants with specialized expertise, may be better able to achieve digitalization
and realize its benefits, giving them a competitive advantage over us, displace any technology that we may develop or implement or make it obsolete.
In addition, the costs associated with implementing these initiatives might exceed expectations, which could result in additional future charges, andwe may be exposed to increased cybersecurity or related risks. The occurrence of any of these risks could have a material adverse effect on ourbusiness, financial position and results of operations.

We are increasingly dependent on information technology systems and our systems and infrastructure face the risk of misuse,
theft, exposure, tampering or other intrusions.
A variety of important processes relating to the research and development, production and sale of our products depend heavily on our
information systems, including cloud-based computing, or those of third-party providers to whom we outsource certain business functions, including
the storage and transfer of critical, confidential, sensitive or personal information regarding our patients, clinical trial subjects, vendors, customers,
employees and others. We also increasingly seek to develop and collaborate on technology-based digital health products, such as mobile applications
that aim to improve patient welfare in a variety of ways, which could lead us to store and transfer personal information about individual patients,
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customers and others. The size, age and complexity of our information technology systems make them potentially vulnerable to service interruptions,malicious intrusions and random attacks. Cyber-attacks are increasing in frequency, sophistication and intensity, and may occur opportunistically inresponse to Takeda’s public statements, such as the announcement of a new strategic partnership or key pipeline milestone. These and other cyberattacks are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, includingorganized criminal groups, hacktivists, nation-states and others. Cyber-attacks could include the deployment of harmful malware, denial of service
attacks, worms, social engineering and other means to affect service reliability and threaten data confidentiality, integrity and availability. The
development and maintenance of systems to safeguard against such attacks is costly and requires ongoing monitoring and updating as technologies
change and efforts to overcome security measures become increasingly more sophisticated. Moreover, the costs related to these security measures are
expected to continue to increase. For zero-day threats, or new vectors of attack which are currently unknown, the risk that our defenses will beinadequate is particularly pronounced. Despite our efforts, Takeda has been the target of cyberattacks and experienced data breaches and cannot
eliminate all risks associated with such attacks. For example, in March 2024, Takeda notified regulators and BioLife plasma donors of potential
unauthorized access of certain online donor accounts containing personal information and issued a password reset for impacted donor accounts.
If our data systems are compromised, our business operations may be impaired, we may lose profitable opportunities, or the value of thoseopportunities may be diminished, and we may lose revenue because of unlicensed use of our intellectual property or confidential or proprietary
information. Cyber-attacks could significantly impact the availability of data systems that are essential to conducting routine business operations
across the company, including product manufacturing or clinical development, and the recovery efforts could be both time consuming and costly. If
personal information of our customers, employees, plasma donors or the patients we serve is misappropriated, our reputation may be injured resulting
in loss of business and/or morale, and we may incur costs to remediate possible injury to those individuals and be required to pay fines or take otheraction with respect to judicial or regulatory actions arising out of such incidents. Data privacy or security breaches by employees and others withpermitted access to our systems, including in some cases third-party service providers to which we may outsource certain business functions, mayalso pose a risk that sensitive data, including intellectual property or personal information, will be exposed to unauthorized persons or to the public.
For more information on our risk management and governance for cybersecurity risks, as well as the impact of cyber incidents, refer to Item 16K –Cybersecurity.

We may not be able to attract and retain key management and other personnel.
In order to produce, develop, support and market our products, we depend on the expertise and leadership of our senior management teamand other key members of our organization and need to attract and retain talent to support our operations in highly competitive markets or areas. The
loss of key members of our organization, including senior members of our scientific and management teams, high-quality researchers anddevelopment specialists, could delay or prevent the achievement of major business objectives. The market is currently competitive in specificgeographic regions and in specialized fields. We continue to make targeted investments in recruitment, training and retention of qualified individuals,
including salary and other compensation to reward performance and incentivize employees. Despite our efforts to retain them, key employees could
terminate their employment with us for any reason and there is no assurance that we will be able to attract or retain key employees and successfully
manage them. Our inability to attract, integrate and retain highly skilled personnel, particularly those in leadership positions, may weaken our
succession plans and may materially adversely affect our ability to implement our strategy and meet our strategic objectives, which could ultimately
adversely affect our business and results of operations.

Legal and Regulatory Risks
We are involved in litigation relating to our operations on an ongoing basis, and such litigation could result in financial losses orharm our business.
We are involved in various litigation matters relating to our operations on an ongoing basis, including claims related to product liability,
intellectual property and commercial disputes, as well as claims related to antitrust, sales and marketing and other regulatory regimes. Given theinherent unpredictability of litigation, it is possible that an adverse outcome in one or more pending or future litigation matters could have a material
adverse effect on our operating results or cash flows. For a description of certain ongoing litigation, see Note 32 to our audited consolidated financial
statements included in this annual report.

Our products may have unanticipated adverse effects or possible adverse effects, which may restrict use of the product or give riseto product liability claims.
As a pharmaceutical company, we are subject to significant risks related to product liability. Unanticipated adverse reactions or unfavorable
publicity from complaints concerning any of our products, or those of our competitors, could have an adverse effect on our ability to obtain or
maintain regulatory approvals or successfully market our products, and may even result in recalls, withdrawal of regulatory approval or adverse
labeling of the product.
While our products are subject to comprehensive clinical trials and rigorous statistical analysis during the development process prior toapproval, there are inherent limitations with regard to the design of such trials, including the limited number of patients enrolled in such trials, thelimited time used to measure the efficacy of the product and the limited ability to perform long-term monitoring. In the event that such unanticipatedadverse reactions are discovered, we may be required to add descriptions of the adverse reactions as precautions to the packaging of our products,
recall and terminate sales of products or conduct costly post-launch clinical trials. Furthermore, concerns relating to potential adverse reactions could
arise among consumers or medical professionals, and such concerns, whether justified or not, could have an adverse effect on sales of our products
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and our reputation. We could also be subject to product liability litigation by patients who have suffered, or claim to have suffered, such adverse
reactions resulting in harm to their health.
Although we have from time to time maintained product liability insurance at coverage levels that we believe are appropriate, we could be
subject to product liability that significantly exceeds our policy limits. Product liability coverage is also increasingly difficult and costly to obtain andmay not be available in the future on acceptable terms. Therefore, it is possible that we may need to rely increasingly on self-insurance for the
management of product liability risk. In cases where we self-insure, the legal costs that we would bear for handling such claims and potential
indemnifications to be paid to claimants could materially and adversely affect our financial condition. In addition, the negative publicity from productliability claims, whether justified, may damage our reputation and may negatively impact the number of prescriptions of the product in question or
our other products. As a result, our business, financial condition and results of operations could be materially and adversely affected.

We are subject to the risk of intellectual property infringement claims directed at us by third parties.
We are subject to the risk of infringement claims directed at us by third parties, even if we do not knowingly infringe on any valid thirdparty intellectual property rights. Although we monitor our operations to prevent infringement on the intellectual property rights of third parties, if weare found to have infringed the intellectual property rights of others or if we agree to settle infringement claims, we may be required to recall the
relevant products, terminate manufacturing and sales of such products, pay significant damages or pay significant royalties.
We evaluate any such infringement claims to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount ofpotential losses. Based on these assessments and estimates, and in keeping with applicable accounting and disclosure standards, we establish reserves
and/or disclose the relevant litigation claims or decide not to establish reserves or disclose litigation claims. These assessments and estimates are
based on the information available to our management at such time and involve a significant amount of management judgment. Actual outcomes orlosses may differ materially from those envisioned by our current assessments and estimates. Although the parties to such patent and intellectual
property disputes in the pharmaceutical industry have often settled through licensing or similar arrangements, the costs associated with thesearrangements may be substantial and could include the payment of ongoing royalties. Furthermore, the necessary licenses may not be available on
acceptable terms or at all. Therefore, if we are unable to successfully defend against infringement claims by third parties, our financial results could
be materially and adversely affected.

We are subject to evolving and complex tax and related risks, which may have a material adverse effect on our business, financial
position and results of operations.
We are subject to evolving and complex tax laws in the jurisdictions in which we operate, and routinely obtain advice on tax-related
matters. Significant judgment is required in determining our tax liabilities, and our tax returns are periodically examined by various tax authorities.
We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our accrual for tax contingencies;
however, due to the complexity of tax matters, the ultimate resolution of any tax matters may result in payments greater or less than the amounts
accrued. Our tax liabilities are affected by many factors, including our intercompany transfer pricing related to the amounts we charge in cross borderintercompany transactions for inventory, services, licenses, funding and other items, which are subject to the use of assumptions and judgments.
Although we believe that we transact intercompany business in accordance with arm’s-length principles, tax authorities may disagree with ourintercompany charges, cross-jurisdictional transfer pricing or other matters, and may assess additional taxes as a result.
In addition, we may be affected by changes in tax laws, including tax rate changes, new tax laws, and revised tax law interpretations indomestic and foreign jurisdictions and between jurisdictions, including by the EU, which could materially adversely affect our tax expense and/or tax
balances, and changes in tax policies could materially adversely impact our business. The occurrence of any of these risks could have a material
adverse effect on our business, financial position and results of operations.
The Organization for Economic Co-operation and Development (OECD) introduced a new inclusive framework on Base Erosion and Profit
Shifting (BEPS 2.0) that contains a two-pillar solution to address the tax challenges arising from the digitalization of the economy. These changes are
now being progressively implemented by tax authorities around the world and represent a fundamental change to the international tax framework.
Pillar One provides for a new nexus standard/taxing right that allocates a portion of intangible/residual profits directly to market jurisdictions but only
for the largest and most profitable companies, including Takeda. Pillar Two provides for a global minimum level of taxation (15%) that establishes afloor for tax competition amongst jurisdictions. Since the introduction of the OECD Inclusive Framework, over 130 countries have endorsed theframework. On March 28, 2023 the Japanese Diet passed a tax reform bill containing laws to implement certain aspects of the OECD BEPS Pillar
Two initiative. These provisions generally reflect the rules established by the OECD and are applicable to fiscal years beginning on or after April 1,
2024. Takeda has reviewed the enacted rules and determined that top-up taxes may be applicable in some jurisdictions in which we operate.

Changes in data privacy and protection laws and regulations or any failure to comply with such laws and regulations, could
adversely affect our business and financial results.
We are subject to laws and regulations globally regarding privacy, data protection, and data security, including those related to thecollection, storage, handling, use, disclosure, transfer, and security of personal data. Significant uncertainty exists as privacy and data protection laws
may be applied differently from country to country and may create inconsistent or conflicting requirements. For example, the EU’s General Data
Protection Regulation (the “GDPR”) imposes significant data protection obligations on companies regarding the handling of personal data andprovides individuals with heightened privacy rights. EU regulators have also been imposing significant fines for non-compliant organizations inrecent years (the higher of EUR 20 million or 4% of annual global turnover for the most serious breaches). Following the GDPR example, othercountries have enacted enhanced privacy laws, including Brazil, multiple states in the U.S., Canada, China, India, Japan, Russia and Singapore. Of
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particular concern is China’s Personal Information Protection Law which imposes onerous and stringent cross border obligations and severe
enforcement penalties.
The increased use of digital technologies involving personal data, such as mobile health apps, wearables, digitalization of clinical trials or
artificial intelligence (AI) tools deployed on personal data pose additional risks for our company both in terms of the larger volume of personal data
we handle but also in terms of potential security threats of such technology and our ability to assess the deployment of each technology because of
the sheer volume and speed at which they are being developed. Compliance with existing, proposed and recently enacted laws and regulations can be
costly; failure to comply with these regulatory standards could also subject us to legal and reputational risks. Misuse of or failure to secure personal
information could also result in violation of data privacy laws and regulations, legal proceedings against us by governmental entities or others or
damage to our reputation and credibility and it could also have a negative impact on our company results.

We may incur claims relating to our use, manufacture, handling, storage or disposal of hazardous materials.
Our research and development and manufacturing processes require the transportation, storage and use of hazardous materials, including
chemicals and radioactive and biological materials, and may result in the generation of hazardous waste. National and local laws and regulations inmany of the jurisdictions in which we operate impose substantial potential liability for the improper use, manufacture, handling, storage,transportation and disposal of hazardous materials as well as for land contamination, and, in some cases, this liability may continue over long periodsof time. Despite our compliance efforts, we cannot eliminate the risk of industrial accidents that may lead to discharges or releases of hazardous
materials and any resultant injury, property damage or environmental contamination from these materials. For example, real properties that we owned
or used in the past or that we own or use now or in the future may contain detected or undetected contamination resulting from our operations at thosesites or the activities of prior owners or occupants. We may suffer from expenses, claims or liability which may fall outside of or exceed our
insurance coverage.
Furthermore, changes to current environmental laws and regulations may impose further compliance and tax related requirements on us that
may impair our research, development and production efforts as well as our other business activities. Examples of new or evolving regulatory
requirements include Registration, Evaluation, Authorisation and Restriction of Chemicals (“REACH”); Classification, Labelling, and Packaging of
substances and mixtures (“CLP”); the Globally Harmonized System of Classification and Labelling of Chemicals (“GHS”); producer responsibility
frameworks; and regulations related to addressing climate change such as the EU’s Carbon Border Adjustment Mechanism, or other emerging
environmental areas such as the EU Regulation on Deforestation-free Products. Increased environment, health and safety laws, regulations andenforcement could result in substantial costs and liabilities to us and could subject our use, manufacture, handling, storage, transportation, anddisposal of hazardous materials to additional constraints. Consequently, compliance with these laws could result in capital expenditures as well asother costs and liabilities, thereby adversely affecting business, financial position and results of operations.

Risks Relating to the Operating Environment
Our results of operations and financial condition may be adversely affected by foreign currency exchange rate fluctuations.
We manufacture and sell products to customers in numerous countries, and we have entered and will enter into acquisition, licensing,borrowings or other financial transactions that give rise to translation and transaction risks related to foreign currency exposure. Fluctuations incurrency exchange rates in the markets where we are active could negatively affect our results of operations, financial position and cash flows. For
the fiscal year ended March 31, 2024, 89.4% of our sales were in markets outside Japan. Our consolidated financial statements are presented inJapanese yen, and by translating the foreign currency financial statements of our foreign subsidiaries into Japanese yen, the amounts of our revenue,
operating profit, assets and equity, on a consolidated basis, are affected by prevailing rates of exchange.
We utilize certain hedging measures with respect to some of our foreign currency transactions. However, such hedging measures do notcover all of our exposures and, even to the extent they do, they may only delay, or may otherwise be unable to completely eliminate, the impact offluctuations in foreign currency exchange rates.

Our business may be adversely affected by climate change, extreme weather events, earthquakes, civil or political unrest, terrorism
or other catastrophic events.
We are exposed to both physical and transition risks associated with climate change. To date, we have not experienced material impacts
relating to climate change, including compliance or litigation-related impacts. However, in recent years, extreme weather events and changing
weather patterns such as storms, flooding, droughts and temperature changes have become more common. As a result, we are potentially exposed tovarious natural disasters or extreme weather risks such as hurricanes, tornadoes, droughts or floods, typhoons, tidal waves, wildfires or other eventsand chronic risks such as sea level rise, extreme heat and water stress that may result from the impact of climate change on the environment.
Moreover, despite our internal evaluations regarding climate-related risks, there may be additional effects of climate change not currently
contemplated by our internal models or by the market and society at large that may materialize in the future, leading to unexpected impacts on ourbusiness.
Climate change may also result in new or more stringent regulatory requirements globally. Climate-related regulations may requirecompanies to accelerate and/or increase investment in technology to reduce energy consumption, water consumption and greenhouse gas emissions
beyond current plans. Climate-related regulations could also lead to mandatory carbon pricing or climate risk disclosures. We are currently subject tocarbon emission-based taxation schemes in certain jurisdictions, including the EU and Japan. The EU, Japan and the U.S. have all either proposed or
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finalized (or are in the process of finalizing) new climate risk disclosure requirements, and the regulatory landscape continues to evolve. The net
impact of these climate-related transition risks could increase our operational expenses or that of our suppliers. We have also established a number of
initiatives relating to the environment voluntarily, including a commitment to achieve net-zero (as defined in the Science Based Targets initiative(SBTi) Corporate Net-Zero Standard) in greenhouse gas (GHG) emissions related to our operations (Scope 1 and Scope 2) by 2035 and for our entire
value chain (including currently estimated Scope 3 GHG emissions) by 2040. See “—Risks Relating to Our Business Strategies—We may experience
difficulty implementing sustainability-related measures, particularly those relating to the environment, or in meeting the expectations ofstakeholders.”
In addition, Japan, the U.S. and other regions in the world where we operate are subject to the risk of natural disasters such as earthquakes,
floods, tsunamis and/or volcanic eruptions. Other events outside our control, such as war, civil or political unrest, pandemics or the localized spreadof new diseases, deliberate acts of sabotage, terrorism or industrial accidents such as fire and explosion, whether due to human or equipment error,
could damage, cause operational interruptions, or otherwise adversely affect certain of our manufacturing or other facilities as well as potentiallycause injury or death to our personnel. In the event of a major natural disaster or other uncontrollable event or accident, our facilities, particularly our
production plants, may experience catastrophic loss, operations at such facilities may be halted, shipments of products may be suspended or delayed,
trials or other research and development activities may be halted or otherwise affected and large losses and expenses to repair or replace facilities
may be incurred. Such negative consequences could cause product shortages, significant losses of sales or require significant unexpected
expenditures, and materially adversely affect our business, financial condition and results of operations. In addition, our business may also be
adversely affected if our suppliers or business partners were to experience a catastrophic loss due to natural disasters, terrorism, accidents or otheruncontrollable events.
Although we purchase comprehensive global insurance to cover property damage and consequent business interruption for certain potential
losses at sites owned by us and at certain critical supplier sites, we do not maintain insurance policies to cover all potential losses and therefore our
insurance policies may not be adequate to cover all possible losses and expenses. For instance, we do not maintain earthquake insurance in Japan.

Social media platforms and new technologies present risks and challenges for our reputation and business.
Consumers, the media, pharmaceutical companies and other parties increasingly use social media to communicate about pharmaceuticalproducts and the diseases they are intended to treat, and may use other, newer technologies in a similar way in the future. For pharmaceuticalcompanies, the use of these technologies requires specific attention, monitoring programs and moderation of comments. For example, social media
platforms or other digital media may amplify negative or inaccurate posts or comments about us or our products and spread misinformation, causing
damage to our reputation and business. They could also be used to bring negative attention to us or to the pharmaceutical industry as a whole, which
could in turn cause reputational harm to Takeda, our employees, or our products and negatively impact our business. The nature of evidence-based
healthcare, however, may prevent us from rapidly and adequately defending our interests against such comments. In addition, our employees andpartners may use social media and other digital platforms and mobile technologies inappropriately or in ways that violate applicable laws or ourinternal policies, which may expose us to liability, or which could lead to breaches of data security, loss of trade secrets or other intellectual property
or public disclosure of sensitive information, including information about our employees, clinical trial subjects or customers.

Other Risks Affecting Our Business
Sales to wholesalers are concentrated, which exposes us to credit risks and pricing pressures.
A significant portion of our global sales are made to a relatively small number of wholesale distributors, retail chains and other purchasinggroups. In the fiscal year ended March 31, 2024, there were three wholesale distributors, AmerisourceBergen Group, McKesson Group and Cardinal
Health, Inc., that each individually accounted for over ten percent of Takeda’s total revenue. If one of our significant wholesale distributors
encounters financial or other difficulties, such a distributor may decrease the amount of business that it does with us, and we may be unable to collect
the amounts that the distributor owes us on a timely basis or at all. Furthermore, the concentration of wholesale distributors has been increasing
through mergers and acquisitions. In addition to increased credit risks, this has resulted in such distributors gaining additional purchasing leverage,
which may increase pricing pressure on our products. Such credit concentration risks and pricing pressure could adversely affect our business,financial condition and results of operations.

We may have to recognize additional charges on our statements of profit or loss due to impairment of goodwill, other intangible
assets and equity method investments.
We carry significant amounts of goodwill and intangible assets on our consolidated statements of financial position as a result of pastacquisitions, including the Shire Acquisition. As of March 31, 2024, we had goodwill of JPY 5,410.1 billion and intangible assets of JPY
4,274.7 billion. Goodwill and intangible assets recorded in relation to acquisitions are recognized on our consolidated statements of financial positionon the acquisition date. Under IFRS, we are required to examine such assets for impairment annually or whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable. See “Item 5. Operating and Financial Review and Prospects—A. Operating
Results-Critical Accounting Policies-Impairment of Goodwill and Intangible Assets”.
We may from time to time enter into business ventures with third-party entities where we have significant influence over the decisions on
financial and operating policies, but do not have control or joint control (referred to as investments in associates). We may also from time to timeenter into joint arrangements whereby we and the other parties that have joint control of the arrangement have rights to the net assets of thearrangement (referred to as joint venture). Our policy is to account for these investments using the equity method of accounting. As of March 31,
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2024, there were no joint arrangement of IFRS 11 in existence.
As of March 31, 2024, the carrying amount of investments accounted for using the equity method was JPY 89.8 billion. Under IFRS, ateach reporting period, we are required to determine whether there is objective evidence that the investment in each associate or joint venture is
impaired.
The recognition of such impairment charges may adversely affect our business, financial condition and results of operations. For example,
for the reporting period ended March 31, 2024, we disclosed a JPY 74.0 billion impairment charge for ALOFISEL (for complex Crohn's perianal
fistulas) following topline results of the phase 3 ADMIRE-CD II trial, a JPY 28.5 billion impairment charge following a decision to voluntarily
withdraw EXKIVITY (for non-small cell lung cancer) globally, and other impairment charges for certain in-process R&D assets including thoserelated to TAK-007 and modakafusp alfa (TAK-573) in Oncology as a result of decisions to terminate those programs. This was partially offset by areversal of an impairment loss of JPY 35.7 billion related to the approval of EOHILIA, a therapy for eosinophilic esophagitis (EoE), by the FDA in
February 2024. Takeda acquired the rights to ALOFISEL via its acquisition of TiGenix NV in 2018.

Risks Relating to the ADSs
A holder of ADSs has fewer rights than a holder of our common stock has, and a holder of ADSs has to act through the depositary
to exercise those rights.
The rights of shareholders under Japanese law to take various actions, including voting their shares, receiving dividends and distributions,bringing derivative actions, examining a company’s accounting books and records and exercising appraisal rights, are available only to holders ofrecord. Because the depositary, through its custodian agents, is the record holder of the shares underlying the ADSs, only the depositary can exercise
those rights in connection with the deposited shares. Pursuant to the deposit agreement, the depositary will endeavor, to the extent practicable, tomake efforts to vote or cause to be voted the shares underlying the ADSs as instructed by the holders and will pay to the holders the dividends anddistributions collected from the Company. The depositary and its agents may not be able to send voting instructions to holders of ADSs or carry out
their voting instructions in a timely manner. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any
instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, holders of ADSs may not be able toexercise their right to vote. Moreover, in the capacity as an ADS holder, such a holder will not be able to bring a derivative action, examine theCompany’s accounting books or records or exercise appraisal rights except through the depositary.

Rights of shareholders under Japanese law may be more limited than under the laws of other jurisdictions.
Our Articles of Incorporation, Board of Directors Charter, Audit and Supervisory Committee Charter and the Companies Act govern our
corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, directors’ and officers’ fiduciary duties, andshareholders’ rights may be different from those that would apply to a non-Japanese company. Shareholders’ rights under Japanese law may not be as
extensive as shareholders’ rights under the laws of other jurisdictions. ADS holders may have more difficulty in asserting their rights as a shareholder
than such holders would as shareholders of a corporation organized in another jurisdiction. In addition, Japanese courts may not be willing to enforce
liabilities against the Company in actions brought in Japan that are based upon the securities laws of other jurisdictions.

Because of daily price range limitations under Japanese stock exchange rules, a holder of ADSs who has surrendered his or her
ADSs in favor of shares of our common stock may not be able to sell his/her shares of our common stock at a particular price on
any particular trading day, or at all.
Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids and offers. These exchanges
are order-driven markets without specialists or market makers to guide price formation. To prevent excessive volatility, these exchanges set daily
upward and downward price fluctuation limits for each stock, based on the previous day’s closing price. Although transactions may continue at the
upward or downward limit price if the limit price is reached on a particular trading day, no transactions may take place outside these limits.
Consequently, a holder of ADSs who has surrendered his or her ADSs in favor of shares of our common stock wishing to sell on a Japanese stock
exchange at a price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular trading day, or at all.

U.S. investors may have difficulty in serving process or enforcing a judgment against us or our directors or executive officers.
We are a limited liability, joint stock corporation incorporated under the laws of Japan. Many of our directors and executive officers residein Japan, Europe or elsewhere outside of the U.S., and a large portion of our assets and the assets of these persons are located in Japan and elsewhereoutside the U.S. It may not be possible, therefore, for U.S. investors to effect service of process within the U.S. upon us or these persons or to enforce
against us or these persons judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the U.S.
There is doubt as to the enforceability in Japan, in original actions or in actions for enforcement of judgment of U.S. courts, of liabilities predicatedsolely upon the federal securities laws of the U.S.

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Investors holding less than a full unit of shares will have limited rights as shareholders.
Our Articles of Incorporation provide that 100 shares of our common stock constitute one unit. Although holders of ADSs may withdraw
shares of our common stock constituting less than one unit, in connection with the direct holding of the shares of our common stock, the Companies
Act imposes significant restrictions and limitations on holders of shares of our common stock that do not constitute a full unit. In general, holders ofshares of our common stock constituting less than one unit do not have the right to vote with respect to those shares.

Dividend payments and the amount you may realize upon a sale of our ADSs will be affected by fluctuations in the exchange rate
between the U.S. dollar and the Japanese yen.
Cash dividends, if any, in respect of the shares of our common stock represented by our ADSs will be paid to the depositary in Japanese
yen and then converted by the depositary into U.S. dollars, subject to certain conditions. Accordingly, fluctuations in the exchange rate between theJapanese yen and the U.S. dollar will affect, among other things, the U.S. dollar amounts a holder of ADSs will receive from the depositary in respectof dividends, the U.S. dollar value of the proceeds that a holder of ADSs would receive upon sale in Japan of the shares of our common stock
obtained upon surrender of ADSs and the secondary market price of ADSs.

Our shareholders of record on a given record date may not receive the dividend they anticipate.
The customary dividend payout practice of publicly listed companies in Japan may significantly differ from the practices widely followed
or otherwise deemed necessary or fair in foreign markets. We ultimately have a discretion to determine any dividend payment amount to ourshareholders of record as of a record date, including whether we will make any dividend payment to such shareholders at all, only after such record
date. For that reason, our shareholders of record on a given record date may not receive the dividends they anticipate.

ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result inless favorable outcomes to the plaintiff(s) in any such action.
The deposit agreement governing the ADSs provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial
for any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, which may
include any claim under the U.S. federal securities laws.
If we or the depositary were to oppose a jury trial based on this waiver, the court would have to determine whether the waiver was
enforceable based on the facts and circumstances of the case in accordance with applicable state and federal law. To our knowledge, theenforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finallyadjudicated by the U.S. Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable,
including under the laws of the State of New York, which govern the deposit agreement, or by a federal or state court in the City of New York, which
has jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver, courts
will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this would be the casewith respect to the deposit agreement and the ADSs. It is advisable that prospective investors consult legal counsel regarding the jury waiver
provision before investing in the ADSs.
As a result, if a holder or beneficial owner of ADSs brings a claim against us or the depositary in connection with matters arising under thedeposit agreement or the ADSs, including claims under federal securities laws, such a holder or beneficial owner may not be entitled to a jury trial
with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. If a lawsuit is brought
against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be
conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including outcomes that could
be less favorable to the plaintiff(s) in any such action.
Nevertheless, if this jury trial waiver is not enforced under applicable law, an action could proceed under the terms of the deposit
agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any holder or beneficial
owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules andregulations promulgated thereunder.

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Item 4. Information on the Company
A. History and Development of the Company
Takeda is a patient-focused, values-based, R&D-driven global biopharmaceutical company with a diverse portfolio, engaged primarily inthe research, development, production and global commercialization of biopharmaceutical products. Takeda focuses on five key business areas1:
Gastroenterology (“GI”), Rare Diseases, Plasma-Derived Therapies (“PDT”) Immunology, Oncology and Neuroscience. Our R&D efforts arefocused on core therapeutic areas: Gastrointestinal and Inflammation, Neuroscience and Oncology. We also make targeted R&D investments in PDT
and Vaccines. We are committed to rare diseases, and many of the life-transforming medicines we are pursuing will treat rare diseases in our core
therapeutic areas as well as in PDT. We are investing in new capabilities and next-generation platforms internally and through a network ofpartnerships. We are embracing data and digital technologies to improve the quality of innovation and accelerate execution. We focus on developing
innovative medicines that make a difference in people’s lives by advancing the frontier of new treatment options and leveraging our collaborative
R&D engine and capabilities to create a robust, modality-diverse pipeline. We focus on high unmet medical needs, both in rare and more prevalentconditions, to deliver high-quality medicines and vaccines to patients and communities as quickly as possible. We have a presence in approximately
80 countries and regions, a network of manufacturing sites around the world, and major research centers in Japan and the United States.
We are also committed to our three imperatives powered by data, digital and technology: Patient - We responsibly translate science into
highly innovative, life-transforming medicines and vaccines, and accelerate access to improve lives worldwide; People - We create an exceptional
people experience; Planet - We protect our planet.
Our 243-year history started in 1781, when Chobei Takeda began selling traditional Japanese and Chinese herbal medicines in
Doshomachi, Osaka. After Japan’s Meiji Restoration opened the country to increased overseas trade in the late 1860s, we were one of the firstcompanies to begin importing western medicines into Japan. In 1895, we began our pharmaceutical manufacturing business, and our researchdivision was formed in 1914, allowing us to begin to discover our own pharmaceutical products. In 1925, we were incorporated as Chobei Takeda &Co., Ltd. and our name was later changed to Takeda Pharmaceutical Company Limited. In 1949, our shares were listed on the Tokyo and Osaka stock
exchanges. We began expanding into overseas markets in the 1960s; first in Asia and, subsequently, other markets around the world. We beganenhancing our overseas business infrastructure in the late 1990s, with the formation of new subsidiaries in the U.S. and Europe.
In 2008, we acquired a leading U.S. biopharmaceutical company in Millennium Pharmaceuticals, Inc. We leveraged the complementarystrengths of Millennium and Takeda, with Millennium's innovative products, pipeline and expertise in oncology. Takeda also acquired Nycomed in2011, with a strong presence in Europe and emerging markets. This allowed Takeda to expand to over 70 markets and enhance its global sales
structure in order to deliver pharmaceutical products to more patients around the world. These two large acquisitions within a short time span allowed
Takeda to accelerate its globalization.
Since 2014, our efforts have been focused on enhancements to our R&D capabilities, prudent value enhancing acquisition activities andpost-acquisition integration. Specifically, Takeda implemented an R&D transformation process to diversify modalities in our research, actively
engage with innovative ecosystems around the world in the form of partnerships, and focus on our core therapeutic areas of Gastrointestinal andInflammation, Neuroscience and Oncology. As examples of acquisition activities, in January 2019, we acquired Shire plc., bringing together Takeda
and Shire’s complementary positions in gastroenterology and neuroscience, and establishing leading positions in rare diseases and PDT. In February
2023, we acquired all shares of Nimbus Lakshmi, Inc., a subsidiary of Nimbus Therapeutics, LLC, which brought into our pipeline TAK-279, ahighly selective oral TYK2 inhibitor with potential to demonstrate best-in-class efficacy, safety and convenience in the treatment of psoriasis as wellas multiple other immune-mediated diseases, including inflammatory bowel disease, psoriatic arthritis and systemic lupus erythematosus.
During the three fiscal years ended March 31, 2024, we also divested several businesses and assets in non-core areas. See “Item 5.
Operating and Financial Review and Prospects—A. Operating Results for further details on major businesses and assets acquired and divested.”
Our principal capital expenditures during the three fiscal years ended March 31, 2024, comprising the investment in, and acquisition ofproperty, plant and equipment and intangible assets. In the fiscal years ended March 31, 2022, 2023 and 2024, we made capital expenditures(comprising the investment in, and acquisition of property, plant and equipment and intangible assets recorded on our consolidated statements offinancial position) of JPY 239.9 billion, JPY 898.7 billion and JPY 496.7 billion, respectively, including the following highlights:•

In the fiscal year ended March 31, 2022, we broke ground on the first ‘positive energy’ building in our global network marking afirst-of-its-kind investment within the biotechnology industry in Singapore. The building, a USD 14 million expansion of Takeda’s
manufacturing operations in Singapore has been in operation since September 2023. We also continued investing in our plasmacollection center network, with the addition of 23 new centers in the U.S. and Europe to bring Takeda’s total footprint to 204
centers.

•

In the fiscal year ended March 31, 2023, we continued investing in our plasma collection center network, with the addition of 29
new centers in the U.S. and Europe to bring Takeda’s total footprint to 233 centers. We also executed several in-licensing deals andan acquisition to strengthen the pipeline, including TAK-279 from Nimbus Therapeutics, LLC, fruquintinib from HUTCHMED
Limited, and TAK-227 from Zedira GmbH and Dr. Falk Pharma GmbH.

1

Starting from the fiscal year ending March 31, 2025 (FY2024), “Plasma-Derived Therapies” will replace the previous category of “PDT Immunology” and will
include all plasma-derived products including those previously categorized within “Rare Diseases” (e.g., FEIBA, CINRYZE). “Vaccines” will be presented as a separate
key business area (previously included in “Others”), reflecting the strategic focus on our dengue vaccine, QDENGA.

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In the fiscal year ended March 31, 2024, we continued investing in our plasma collection center network, with the addition of 27
new centers in the U.S. and Europe to bring Takeda’s total footprint to 260 centers. We also signed a worldwide license andcollaboration agreement with Protagonist Therapeutics for the development and commercialization of rusfertide, an investigational
injectable hepcidin mimetic peptide of the natural hormone hepcidin, currently in a pivotal Phase 3 trial, VERIFY, for the treatmentof Polycythemia Vera (PV).

We currently have various capital expenditure projects in process, including the continued expansion of production capacity in our plasma
manufacturing network and the projects described in Item 4.D. (Property, Plant and Equipment). We are primarily financing these projects with funds
on hand. For additional information on our ongoing capital expenditure projects, see Note 10 and Note 12 to our audited consolidated financial
statements.
The address of our global head office is 1-1, Nihonbashi-Honcho 2-Chome, Chuo-ku, Tokyo, 103-8668, Japan; telephone number:
81-3-3278-2111. Takeda’s agent in the U.S. in connection with this annual report, as well as its agent for service of process for its registration
statements filed with the SEC, is Takeda Pharmaceuticals U.S.A., Inc., 500 Kendall Street, Cambridge, MA 02142 U.S.A., telephone number:
1-617-349-0200.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that fileelectronically with the SEC at www.sec.gov. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing thefurnishing and content of proxy statements to shareholders. Our corporate website is www.takeda.com.

B. Business Overview
We are a patient-focused, values-based, R&D-driven global biopharmaceutical company with a diverse portfolio, engaged primarily in the
research, development, production and global commercialization of biopharmaceutical products. Our intent is to translate science into highly
innovative life transforming medicines. We have built an R&D engine focused on three therapeutic areas, leveraging internal research and external
partners in order to have access to different modalities like biologics or small molecules. We have a geographically diversified global business baseand our prescription drugs are marketed worldwide.
We have approximately 49,000 employees worldwide dedicated to our purpose of better health for people and a brighter future for theworld through leading innovation in medicine. Our culture is based on our values of Takeda-ism which incorporates Integrity, Fairness, Honesty, andPerseverance, with Integrity at the core. They are brought to life through actions based on Patient-Trust-Reputation-Business, in that order.
Our commercial efforts are focused on five key business areas2 of GI, Rare Diseases, PDT Immunology, Oncology, and Neuroscience,
which in the fiscal year ended March 31, 2024 accounted for 91.3% of our total revenue. We believe these business areas will drive our future
revenue growth, and we will continue to make the necessary investments, as well as targeted acquisitions and divestitures, to further sharpen our
focus and maximize the contributions of our portfolios in these areas. As of March 31, 2024, the following Growth & Launch Products are ourgrowth driver products in our key business areas: ENTYVIO, ALOFISEL, EOHILIA, TAKHZYRO, LIVTENCITY, ADZYNMA, Immunoglobulin
products (including GAMMAGARD LIQUID/KIOVIG, HYQVIA and CUVITRU), Albumin products (including HUMAN ALBUMIN/FLEXBUMIN),ALUNBRIG, EXKIVITY, FRUZAQLA and QDENGA.
Our R&D engine is focused on translating science into highly innovative, life-transforming medicines that make a critical difference topatients. Takeda supports dedicated R&D efforts across three areas: Innovative Biopharma, Plasma-Derived Therapies and Vaccines. The R&D
engine for Innovative Biopharma is the largest component of our R&D investment and has produced exciting new molecular entities (“NMEs”) that
represent potential best-in-class and/or first-in-class medicines in areas of high unmet medical needs, both in rare and more prevalent conditions,
across our core therapeutic areas (Gastrointestinal and Inflammation, Neuroscience, and Oncology). Takeda is committed to rare diseases, and manyof the life-transforming medicines we are pursuing will treat rare diseases in our core therapeutic areas as well as in PDT. We are working to harness
the potential of cell and gene therapies by investing in new capabilities and next-generation platforms internally and through a network ofpartnerships. We are embracing data and digital technologies to improve the quality of innovation and accelerate execution.
We are also focused on optimizing our financial strength, delivering competitive margins and generating cash flows to invest in thebusiness, to maintain a solid investment grade credit rating and to return cash to shareholders.

2Starting from the fiscal year ending March 31, 2025 (FY2024), “Plasma-Derived Therapies” will replace the previous category of “PDT Immunology” and will
include all plasma-derived products including those previously categorized within “Rare Diseases” (e.g., FEIBA, CINRYZE). “Vaccines” will be presented as a separate
key business area (previously included in “Others”), reflecting the strategic focus on our dengue vaccine, QDENGA.

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The following is a summary of our principal products by business area.
In GI, our principal products include:•

ENTYVIO (vedolizumab), a treatment for moderate to severe ulcerative colitis and Crohn’s disease. Sales of ENTYVIO have grownstrongly since its launch in the U.S. and Europe in 2014 and was our top selling product in the fiscal year ended March 31, 2024.
ENTYVIO is now approved in more than 70 countries worldwide with a subcutaneously administered formulation approved in the
U.S., Europe, and Japan. We strive to maximize its potential by seeking approval in additional countries, examining use in further
indications. In the fiscal year ended March 31, 2024, our revenue from ENTYVIO was JPY 800.9 billion .

•ALOFISEL (darvadstrocel), a treatment for complex perianal fistulas in adult patients with nonactive/mildly active luminal Crohn’sdisease, when fistulas have shown an inadequate response to at least one conventional or biologic therapy. ALOFISEL wasapproved in Europe in 2018, becoming the first allogeneic stem cell therapy to receive central marketing authorization approval in
Europe. ALOFISEL was also approved in Japan in 2021. In the fiscal year ended March 31, 2024, our revenue from ALOFISEL was
JPY 3.5 billion.

•

EOHILIA (budesonide oral suspension), a therapy for eosinophilic esophagitis (EoE). EOHILIA is a corticosteroid, and the first andonly FDA-approved oral therapy indicated for 12 weeks of treatment in patients 11 years and older with EoE. EOHILIA wasapproved by the U.S. FDA in February of 2024 and subsequently launched, in the fiscal year ended March 31, 2024, our revenue
from EOHILIA was JPY 0.2 billion.

•

TAKECAB/VOCINTI (vonoprazan fumarate), a treatment for acid-related diseases. TAKECAB was launched in Japan in 2015 andhas achieved significant growth driven by its efficacy in reflux esophagitis and the prevention of recurrence of gastric and duodenal
ulcers during low-dose aspirin administration. TAKECAB (Chinese brand name: VOCINTI) was approved for reflux esophagitis in2019 in China. In the fiscal year ended March 31, 2024, our revenue from TAKECAB/VOCINTI was JPY 118.5 billion.

•

GATTEX/REVESTIVE (teduglutide[rDNA origin]), a treatment for patients with short bowel syndrome (SBS) who are dependent on
parenteral support. GATTEX/REVESTIVE has been launched in the U.S., Europe, and Japan with adult and pediatric indications. In
the fiscal year ended March 31, 2024, our revenue from GATTEX/REVESTIVE was JPY 119.3 billion.

In Rare Diseases, our principal products are:•

TAKHZYRO (lanadelumab-flyo), for the prevention of hereditary angioedema (HAE) attacks. TAKHZYRO is a fully humanmonoclonal antibody that specifically binds and decreases plasma kallikrein, an enzyme which is chronically uncontrolled in people
with HAE. TAKHZYRO was approved for patients 12 years of age and older in both the U.S. and Europe in 2018, in China in 2020,
and in Japan in 2022 and we are working to expand into further geographic areas. In 2023, TAKHZYRO was also approved by the
FDA and the European Commission in patients aged 2 years and older. In the fiscal year ended March 31, 2024, our revenue from
TAKHZYRO was JPY 178.7 billion.

•

LIVTENCITY (maribavir), a treatment for adults and pediatric patients (12 years of age and older and weighing at least 35 kg) for
post-transplant cytomegalovirus (CMV) infection/disease that is refractory to treatment (with or without genotypic resistance) with
ganciclovir, valganciclovir, foscarnet or cidofovir. LIVTENCITY launched in the U.S. in December 2021, and was approved inEurope in November 2022 and China in December 2023. LIVTENCITY continues to show strong launch performance driven by fast
uptake, rapid geographic expansion, and positive market access trends indicating high unmet medical needs. In the fiscal year ended
March 31, 2024, our revenue from LIVTENCITY was JPY 19.1 billion.

•

ADZYNMA (ADAMTS13, recombinant-krhn), a prophylactic and on-demand treatment of adult and pediatric patients withcongenital thrombotic thrombocytopenic purpura (cTTP). ADZYNMA is the first and only FDA-approved recombinant ADAMTS13(rADAMTS13) designed to address an unmet medical need in people with cTTP by replacing the deficient ADAMTS13 enzyme.
ADZYNMA (apadamtase alfa/cinaxadamtase alfa) has now also been approved in Japan for treatment of cTTP for individuals 12
years of age and older. In the fiscal year ended March 31, 2024, our revenue from ADZYNMA was JPY 0.4 billion.

•

ELAPRASE (idursulfase), an enzyme replacement therapy for the treatment of Hunter syndrome (also known as
Mucopolysaccharidosis Type II or MPS II). In the fiscal year ended March 31, 2024, our revenue from ELAPRASE was JPY 91.6
billion.

•

REPLAGAL (agalsidase alfa), an enzyme replacement therapy for the treatment of Fabry disease, marketed outside of the U.S., andalso approved in China in 2020. Additionally, Takeda has acquired the manufacturing and marketing approval and the marketingrights of REPLAGAL in Japan from Sumitomo Dainippon Pharma as of February 2022. Fabry disease is a rare, inherited genetic
disorder resulting from a deficiency in the activity of the lysosomal enzyme alpha-galactosidase A, which is involved in the
breakdown of fats. In the fiscal year ended March 31, 2024, our revenue from REPLAGAL was JPY 73.6 billion.

•

ADVATE (antihemophilic factor (recombinant)), a treatment for hemophilia A (congenital factor VIII deficiency) for control andprevention of bleeding episodes, for perioperative management, and routine prophylaxis to prevent or reduce the frequency of
bleeding episodes. In the fiscal year ended March 31, 2024, our revenue from ADVATE was JPY 122.9 billion.

•

ADYNOVATE/ADYNOVI (antihemophilic factor (recombinant) [PEGylated]), an extended half-life recombinant factor VIII
treatment for hemophilia A. ADYNOVATE/ADYNOVI uses the same manufacturing process as the standard half-life recombinantfactor VIII therapy ADVATE, and adds a proven technology, PEGylation (a chemical process that prolongs the amount of time acompound remains in circulation, potentially allowing for fewer injections), which we exclusively licensed from Nektar
Therapeutics. In the fiscal year ended March 31, 2024, our revenue from ADYNOVATE/ADYNOVI was JPY 66.3 billion.
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VPRIV (velaglucerase alfa), is indicated for long-term enzyme replacement therapy (ERT) in patients with type 1 Gaucher disease.
In the fiscal year ended March 31, 2024, our revenue from VPRIV was JPY 51.3 billion.

In Plasma-Derived Therapies (PDT) Immunology, our principal products are:•GAMMAGARD LIQUID/KIOVIG (Immune Globulin Intravenous (Human) 10%), a liquid formulation of the antibody replacement
therapy immunoglobulin (IG), for the treatment of adult and pediatric patients two years of age or older with primary
immunodeficiencies (PID) (administered either intravenously or subcutaneously), and adult patients with multifocal motor
neuropathy (MMN) (administered intravenously). GAMMAGARD LIQUID was approved for adult patients with chronic
inflammatory demyelinating polyneuropathy (CIDP) in the U.S. in January 2024. KIOVIG is the brand name used for
GAMMAGARD LIQUID in many countries outside of the U.S.; KIOVIG is approved in Europe for multiple indications including
CIDP.

•

HYQVIA (Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase), a product consisting of humannormal IG and recombinant human hyaluronidase (licensed from Halozyme). HYQVIA is the only subcutaneous IG treatment for
PID patients with a dosing regimen that requires only one infusion up to once per month and one injection site per infusion todeliver a full therapeutic dose of IG. HYQVIA is approved in the U.S. for adults with PID, and in Europe for patients with PID
syndromes and myeloma or CLL with severe secondary hypogammaglobulinemia and recurrent infections. In January 2024,
HYQVIA was approved for maintenance treatment in adult patients with chronic inflammatory demyelinating polyneuropathy(CIDP) in the U.S. and CIDP patients of all ages in Europe.

•

CUVITRU (Immune Globulin Subcutaneous (Human), 20% Solution), indicated as replacement therapy for primary humoral
immunodeficiency in adult and pediatric patients two years of age and older. CUVITRU is also indicated in Europe for the treatmentof certain secondary immunodeficiencies. CUVITRU is the only 20% subcutaneous IG treatment option without proline and withthe ability to infuse up to 60 mL (12 grams) per site and 60 mL per hour, per site as tolerated, resulting in fewer infusion sites andshorter infusion durations compared to other conventional subcutaneous IG treatments.
In the fiscal year ended March 31, 2024, the total revenue from our PDT immunology portfolio, including GAMMAGARD LIQUID/KIOVIG, HYQVIA, and CUVITRU, was JPY 644.6 billion.

•

FLEXBUMIN (Human Albumin in a bag) and Human Albumin (glass), available as 5% and 25% solutions, indicated for
hypovolemia, hypoalbuminemia due to general causes and burns, and for use during cardiopulmonary bypass surgery as acomponent of the pump prime. FLEXBUMIN 25% is also indicated for hypoalbuminemia associated with adult respiratory distresssyndrome (ARDS) and nephrosis, and hemolytic disease of the newborn (HDN). In the fiscal year ended March 31, 2024, the total
revenue from our albumin portfolio, including FLEXBUMIN and Human Albumin (glass) was JPY 134.0 billion.

In Oncology, our principal products include:•

ALUNBRIG (brigatinib), an orally administered small molecule anaplastic lymphoma kinase (“ALK”) inhibitor used to treat ALKpositive non-small cell lung cancer (NSCLC), was granted accelerated approval for patients who have progressed on or are
intolerant to crizotinib in the U.S. in 2017, and marketing authorization for patients previously treated with crizotinib in the EU in
2018. The indication of ALUNBRIG was expanded to include newly diagnosed ALK-positive NSCLC patients in both the U.S. andthe EU in 2020. ALUNBRIG was approved as a first and second-line therapy in Japan in January 2021. ALUNBRIG was also
approved in China in March 2022. In the fiscal year ended March 31, 2024, our revenue from ALUNBRIG was JPY 28.5 billion.

•

EXKIVITY (mobocertinib), a treatment for locally advanced or metastatic non-small cell lung cancer (NSCLC) with EGFR exon 20
insertion mutations whose disease has progressed on or after platinum based chemotherapy, was granted accelerated approval in the
U.S. in September 2021, and China National Medical Products Administration (“NMPA”) approval in January 2023. In October
2023, we announced the voluntary withdrawal of EXKIVITY globally due to the outcome of the Phase 3 EXCLAIM-2 confirmatory
trial, which did not meet its primary endpoint and thus did not fulfill the confirmatory data requirements of the Accelerated
Approval granted by the U.S. FDA, nor the conditional marketing approvals granted in other countries. In the fiscal year ended
March 31, 2024, our revenue from EXKIVITY was JPY 3.5 billion.

•

FRUZAQLA (fruquintinib), a treatment for adults with metastatic colorectal cancer (mCRC) who have been previously treated withfluoropyrimidine-, oxaliplatin-, and irinotecan-based chemotherapy, an anti-VEGF therapy, and, if RAS wild-type and medicallyappropriate, an anti-EGFR therapy. FRUZAQLA is the first and only selective inhibitor of all three VEGF receptor kinases approvedin the U.S. for previously treated mCRC regardless of biomarker status. Takeda has the exclusive worldwide license to further
develop, commercialize, and manufacture fruquintinib outside of mainland China, Hong Kong and Macau. Fruquintinib isdeveloped and marketed in China by HUTCHMED. In the fiscal year ended March 31, 2024, our revenue from FRUZAQLA was
JPY 10.1 billion.

•

LEUPLIN/ENANTONE (leuprorelin), a treatment for hormone-responsive cancers such as prostate cancer or breast cancer inwomen, as well as children with central precocious puberty, women with endometriosis, infertility, and to improve anemia in
women with uterine leiomyomata (fibroids). While leuprorelin is no longer protected by patent, there is limited generic competition
due to manufacturing considerations. In the fiscal year ended March 31, 2024, our revenue from LEUPLIN/ENANTONE was JPY
107.4 billion.

•

NINLARO (ixazomib), the first oral proteasome inhibitor for the treatment of multiple myeloma (MM), was approved in the U.S. in2015 for relapsed/refractory MM and was approved in Europe in 2016, in Japan in 2017, and in China in 2018. In Japan, NINLARO

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is also approved as a maintenance treatment for MM. In the fiscal year ended March 31, 2024, revenue from NINLARO was JPY
87.4 billion.
•

ADCETRIS (brentuximab vedotin), an anti-cancer agent used to treat Hodgkin lymphoma (HL) and systemic anaplastic large cell
lymphoma (sALCL), has received marketing authorization in more than 70 countries worldwide and was approved in China in May
2020. Takeda jointly developed ADCETRIS with Seagen Inc., now a wholly owned subsidiary of Pfizer Inc. (“Pfizer”), and havecommercialization rights in countries outside the U.S. and Canada. In the fiscal year ended March 31, 2024, our revenue fromADCETRIS was JPY 109.4 billion.

•

ICLUSIG (ponatinib),a tyrosine kinase inhibitor targeting BCR::ABL1 with indications across chronic myeloid leukemia (CML)and Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL), received full approval in the U.S. in 2016 andsubsequent U.S. approvals in expanded indications in 2020 and 2024. We have commercialization rights in the U.S. and Australia.
Outside of the U.S. and Australia, ICLUSIG is marketed over 60 markets by five authorized partners from whom Takeda receives
varying levels of supply, royalty and milestone payments. In the fiscal year ended March 31, 2024, our revenue from ICLUSIG was
JPY 54.7 billion.

In Neuroscience, our principal products are:•VYVANSE/ELVANSE (lisdexamfetamine dimesylate), a stimulant medication indicated for the treatment of attention deficit
hyperactivity disorder (ADHD) in patients aged six and above, and for the treatment of moderate to severe binge eating disorder in
adults. Sales declined in the U.S. in 2023 following the entry of generic competition. In the fiscal year ended March 31, 2024, ourrevenue from VYVANSE/ELVANSE was JPY 423.2 billion.

•

TRINTELLIX (vortioxetine), an antidepressant indicated for the treatment of major depressive disorder (MDD) in adults.
TRINTELLIX was co-developed with H. Lundbeck A/S, and Takeda has commercialization rights in the U.S., where it was launchedin 2014 and in Japan, where it was launched in 2019. In the fiscal year ended March 31, 2024, our revenue from TRINTELLIX was
JPY 104.8 billion.

In Others, our principal product is:•

QDENGA (Dengue Tetravalent Vaccine [Live, Attenuated]), a dengue vaccine that is based on a live-attenuated dengue serotype 2
virus, which provides the genetic “backbone” for all four dengue virus serotypes and is designed to protect against any of theseserotypes. QDENGA is available in 4 endemic countries and 17 European countries. In the fiscal year ended March 31, 2024, ourrevenue from QDENGA was JPY 9.6 billion.

For a breakdown of revenues by geographic region, see Note 4 to our audited consolidated financial statements.

Research and Development
Research and development expenses for the fiscal year ended March 31, 2024 were JPY 729.9 billion. Takeda does not reportdisaggregated R&D expenses, including by therapeutic area or clinical trial stage, as our R&D budget is determined on a company-wide basis andspecific expenditures may be subject to re-allocation depending on development results and priorities.
The research and development (R&D) of biopharmaceutical products is a lengthy and expensive process that can span more than 10 years.
The process includes multiple studies to evaluate a product’s efficacy and safety, followed by submission to regulatory authorities who review thedata and decide whether to grant marketing approval. Only a small number of therapeutic candidates pass such rigorous investigation and become
available for use in clinical treatment. Once approved, there is ongoing R&D support for marketed products, including life-cycle management,
medical affairs, and other investments.
Clinical trials, which must comply with regional and international regulatory guidelines, generally take five to seven years or longer, andrequire substantial expenditures. In general, clinical trials are performed in accordance with the guidelines set by the International Conference on
Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use. The relevant regional regulatory authorities are theFood and Drug Administration (FDA) for the United States, the European Medicines Agency (EMA) for the EU, the Ministry of Health, Labour andWelfare (MHLW) for Japan and National Medical Products Administration (NMPA) for China.
The three phases of human clinical trials, which may overlap with each other, are as follows:
Phase 1 (“P-1”) clinical trials
Conducted using a small group of healthy adult volunteers in order to evaluate safety and absorption, distribution, metabolism
and excretion of the drug.
Phase 2 (“P-2”) clinical trials
Conducted using a small group of patient volunteers in order to evaluate safety, efficacy, dosage and administration methods. P-2
clinical trials may be divided into two sub-categories, P-2a and P-2b. P-2a are usually pilot studies designed to demonstrateclinical efficacy or biological activity. P-2b studies look to find the optimum dose at which the drug shows biological activity
with minimal side-effects.
Phase 3 (“P-3”) clinical trials

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Table of Contents

Conducted using a large number of patient volunteers in order to evaluate safety and efficacy in comparison to other medications
already available or placebo.
Of these three phases, Phase 3 requires the largest expenditures and thus the decision to proceed with Phase 3 testing is a critical businessdecision in the drug development process. For those drug candidates that pass Phase 3 clinical trials, a New Drug Application ("NDA"), Biologics
License Application (“BLA”) or a Marketing Authorization Application (“MAA”) is submitted to the relevant governmental authorities for approval,
which if granted permits the subsequent launch of the drug. The preparation of an NDA, BLA or MAA submission involves considerable datacollection, verification, analysis and expense. Even after the launch of the product, health authorities require post-marketing surveillance of adverse
events, and they may request a post-marketing study to provide additional information regarding the risks and benefits of the product.
Takeda’s R&D engine is focused on translating science into highly innovative, life-transforming medicines that make a criticaldifference to patients. Takeda supports dedicated R&D efforts across three areas: Innovative Biopharma, Plasma-Derived Therapies and Vaccines.
The R&D engine for Innovative Biopharma is the largest component of our R&D investment and has produced exciting new molecular entities(“NMEs”) that represent potential best-in-class and/or first-in-class medicines in areas of high unmet medical needs, both in rare and moreprevalent conditions, across our core therapeutic areas (Gastrointestinal and Inflammation, Neuroscience, and Oncology). Takeda is committed torare diseases, and many of the life-transforming medicines we are pursuing will treat rare diseases in our core therapeutic areas as well as in PDT.
We are working to harness the potential of cell and gene therapies by investing in new capabilities and next-generation platforms internally andthrough a network of partnerships. We are embracing data and digital technologies to improve the quality of innovation and accelerate execution.
Takeda’s pipeline is positioned to support both the near-term and long-term sustained growth of the company. Once first approval of a
product is achieved, Takeda R&D is equipped to support geographic expansions of such approval and approvals in additional indications, as well as
post-marketing commitment and potential additional formulation work. Takeda’s R&D team works closely with the commercial functions tomaximize the value of marketed products and reflect commercial insights in its R&D strategies and portfolio.
In addition to our concentrated efforts to increase our in-house R&D capabilities, external partnerships with third-party partners are a key
component of our strategy for enhancing our R&D pipeline. Our strategy to expand and diversify our external partnerships allows us to take part inresearch of a wide variety of new products and increases the chances that we will be able to take part in a major research-related breakthrough.
Our key in-house R&D facilities include:•
Greater Boston Area Research and Development Site: Our Boston R&D site is located in Cambridge, Massachusettsin the United States. It is the center of our global gastrointestinal and inflammation, oncology, and other rare diseases programs R&D,
and also supports R&D in other areas including plasma-derived therapies and vaccines, as well as research in immunomodulation andbiologics. The site is home to the Takeda Cell Therapy engine with a state-of-the-art cell therapy manufacturing facility. Furthermore,
Takeda signed a 15-year lease for an approximately 600,000 square foot state-of-the-art R&D and office facility under construction in
Kendall Square, which Takeda plans to occupy from 2026.
•
Shonan Health Innovation Park: Located in Fujisawa and Kamakura in Kanagawa Prefecture in Japan, the Shonan
Health Innovation Park (“Shonan iPark”) was opened in 2018 when Takeda transformed its Shonan Research Center into the firstpharma-led science park in Japan by opening its doors to external parties and is the primary location for Takeda’s neuroscience research.
To attract more diverse partners and to further the success of the Shonan iPark, Takeda transferred ownership rights of Shonan iPark to atrustee in 2020 and transferred operation of Shonan iPark to a company established by Takeda in 2023. Takeda, as a flagship tenant, iscommitted to invigorating life science research in Japan.
•
San Diego Research and Development Site*: Our R&D site located in San Diego, California in the United States
supports R&D in the gastrointestinal and inflammation and neuroscience areas. The San Diego research center operates as a “biotechlike” site and leverages internal capabilities such as structural biology and biophysics to catalyze research internally and externally.
•
Vienna, Austria Research and Development Site: Our R&D site, located in Vienna, Austria, supports programs in
R&D and in PDT. The research center focuses on biologics programs in R&D and contains manufacturing sites for plasma derived
products. A new R&D laboratory is planned to be constructed in Vienna's Donaustadt district in 2026 as a “Green Building” and isdesigned to be certified as a Total Quality Building (TQB), which includes accessibility, comfort and adherence to environmental
sustainability standards.
* In May 2024, Takeda decided to close the research and development site in San Diego.
The following summarizes our R&D activities within each of our therapeutic and business areas. The therapeutic candidates in our pipeline
disclosed within the key therapeutic and business areas below are in various stages of development, and the contents of the pipeline may change ascandidates currently under development are removed and new candidates are introduced. Whether the candidates listed below are ever successfully
released as products depends on various factors, including the results of pre-clinical and clinical trials, market conditions for various drugs andregulatory approvals. This table primarily shows the indications for which we are actively pursuing regulatory approval and those regulatory
approvals granted in fiscal year 2023. We are also conducting additional studies of certain assets to examine their potential for use in further
indications and in additional formulations. The listings in the tables below are limited to the U.S., EU, Japan, and China, but we are also conducting
development activities in other regions. “Global” refers to U.S., EU, Japan, and China. Modality of our pipeline assets in the following table isclassified into either of the following categories: ‘small molecule’, ‘peptide/oligonucleotide’, ‘cell and gene therapy’ or ‘biologic and other’.

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Gastrointestinal and Inflammation
In Gastrointestinal and Inflammation, Takeda focuses on delivering innovative, life-changing therapeutics for patients with gastrointestinal
diseases, including those of the liver as well as immune-mediated inflammatory diseases. Takeda is maximizing the potential of our inflammatory
bowel disease (IBD) franchise around ENTYVIO, including development of a subcutaneous formulation and expansion into other indications such asactive chronic pouchitis. Takeda is also expanding its position with GATTEX/REVESTIVE to support further potential geographic expansion.
Furthermore, Takeda is progressing a pipeline built through in-house discovery, partnerships and business development, exploring opportunities in
inflammatory diseases (specifically in gastric, dermatological and rheumatic disorders, along with select rare hematological & renal diseases(mezagitamab (TAK-079), etc.)), liver diseases, and neurogastric diseases. Zasocitinib (TAK-279) is an example of an acquisition through businessdevelopment of a late-stage, potential best-in-class oral allosteric tyrosine kinase 2 (TYK2) inhibitor with potential to treat multiple immunemediated inflammatory diseases. Fazirsiran (TAK-999) is an example of an addition through partnership and a potential first-in-class RNAi foralpha-1 antitrypsin-deficiency associated liver disease in late-stage development.
Note: ADZYNMA (apadamtase alfa/cinaxadamtase alfa (recombinant) (Development code: TAK-755)) and mezagitamab (TAK-079)
have been developed in Gastrointestinal and Inflammation starting from FY2023 Q4.
Our gastrointestinal and inflammation pipeline in clinical development as of May 9, 2024 (the date of our annual earnings release), alongwith notes for major subsequent developments thereafter, is as follows:
Development code
<generic name>Brand name(country/region)

MLN0002<vedolizumab>
ENTYVIO(Global)TAK-438<vonoprazan>
TAKECAB (Japan)
VOCINTI (China)

Type of Drug(administration route)

Humanized monoclonal
antibody against α4β7integrin (injection)

Potassium-competitiveacid blocker (oral)

Modality

Biologic
and otherSmallmolecule

1

TAK-755<apadamtase alfa/
cinaxadamtase alfa>
ADZYNMA (U.S.)

ADAMTS13 enzyme
replacement therapy(injection)

Indications / additional formulations

Country/
RegionStage

Ulcerative colitis (subcutaneous formulation)

U.S.

Approved (Sep 2023)

Crohn's disease (subcutaneous formulation)

Japan
U.S.

Approved (Sep 2023)
Approved (Apr 2024)

Graft-versus-Host Disease prophylaxis in patients
undergoing allogeneic hematopoietic stem celltransplantation (intravenous formulation)

EU
Japan

P-III
P-III

Pediatrics Study (intravenous formulation for ulcerative
colitis, Crohn’s disease)

GlobalP-III

Acid related diseases (adjunct to Helicobacter pylori
eradication)

China

Approved (Nov 2023)

Congenital Thrombotic Thrombocytopenic Purpura

U.S.
Japan
EU
China

Approved (Nov 2023)
Approved (Mar 2024)
Filed (May 2023)2
P-III

Immune Thrombotic Thrombocytopenic Purpura

U.S.
EU

P-II (b)P-II (b)Eosinophilic esophagitis

U.S.

Approved (Feb 2024)

Biologic
and otherTAK-721<budesonide>
EOHILIA (U.S.)

Glucocorticosteroid (oral)

Smallmolecule

TAK-633<teduglutide>
GATTEX (U.S.)REVESTIVE (EU,Japan)

GLP-2 analogue(injection)

Peptide/oligonucleo Short bowel syndrome
tide

China

Approved (Feb 2024)

Biologic
and other

EU
Japan

P-III
P-III

A suspension of
Cx601
allogeneic expanded<darvadstrocel>
adipose-derived stem
ALOFISEL (EU, Japan)
cells (injection)

Pediatric indication for refractory complex perianal
fistulas in patients with Crohn’s disease29

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TAK-9993<fazirsiran>

GalNAc based RNAinterference (RNAi)(injection)

Peptide/oligonucleo Alpha-1 antitrypsin-deficiency associated liver diseasetide

TAK-6254<maralixibat>

IBAT inhibitor (oral)

Smallmolecule

TAK-1215<rusfertide>

Peptide/Hepcidin mimetic peptide
oligonucleo Polycythemia vera
(injection)tide

TAK-279<zasocitinib>

TYK2 inhibitor (oral)

Smallmolecule

U.S.
EU

P-III
P-III

Alagille syndrome

Japan

P-III

Progressive Familial Intrahepatic Cholestasis

Japan

P-III

U.S.

P-III

Psoriasis

U.S.
EU
Japan

P-III
P-III
P-III

Psoriatic Arthritis-

P-II (b)Crohn’s disease-

P-II (b)Ulcerative colitis-

P-II (b)6TAK-227/ZED12277

Transglutaminase 2
inhibitor (oral)

Smallmolecule

Celiac disease-

P-II (b)TAK-062<zamaglutenase>

Glutenase (oral)

Biologic
and other

Celiac disease

-

P-II

TAK-1018

Tolerizing Immune
Modifying nanoParticle(TIMP) (injection)

Biologic
and other

Celiac disease

-

P-II

TAK-079<mezagitamab>

Anti-CD38 monoclonal
antibody (injection)

Biologic
and other

Immune thrombocytopenia

-

P-II

Immunoglobulin A nephropathy-

P-I____________
Notes:(1) Partnership with KM Biologics.
(2) In May 2024, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicine Agency (EMA) recommended the approval, under
exceptional circumstances, of TAK-755for the treatment of ADAMTS13 deficiency in children and adult patients with cTTP.
(3) Partnership with Arrowhead Pharmaceuticals(4) Partnership with Mirum Pharmaceuticals.
(5) Partnership with Protagonist Therapeutics. Protagonist leads development.
(6) Study actively recruiting.
(7) Partnership with Zedira and Dr. Falk Pharma.
(8) Partnership with COUR Pharmaceuticals.

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Neuroscience
In Neuroscience, Takeda is focusing its R&D investments on potentially transformative treatments for neurological and neuromusculardiseases of high unmet medical needs and building its pipeline through a combination of in-house expertise and partnerships. By harnessing advancesin disease biology understanding, translational tools, and innovative modalities, Takeda is primarily focusing on rare neurology, in particular, on
potential investigative therapies for sleep-wake disorders such as narcolepsy and idiopathic hypersomnia with a franchise of orexin-2 receptor
agonists (TAK-861, danavorexton (TAK-925), etc.), and rare epilepsies with soticlestat (TAK-935). Additionally, Takeda makes targeted
investments to investigate well-defined segments of neuromuscular diseases, neurodegenerative diseases and movement disorders.
Our neuroscience pipeline in clinical development as of May 9, 2024 (the date of our annual earnings release), along with notes for major
subsequent developments thereafter, is as follows:
Development code
<generic name>Brand name(country/region)

Indications / additional formulations

Country/
RegionStage

Dravet syndrome

GlobalP-III 1

Lennox-Gastaut syndrome

GlobalP-III 1Small
molecule

Narcolepsy type 1-

P-II (b)Smallmolecule

Inadequate response to treatment in major depressive
disorder (MDD)

-

P-II

Type of Drug(administration route)

Modality

TAK-935<soticlestat>

CH24H inhibitor (oral)

Smallmolecule

TAK-861

Orexin 2R agonist (oral)

AMPA receptor
potentiator (oral)

TAK-653/
NBI-10658452

TAK-341/MEDI13413

Alpha-synuclein antibody Biologic(injection)and other

Multiple System Atrophy (MSA)

-

P-II

TAK-594/DNL5934

Brain-penetrant
progranulin fusion protein Biologic
and other(injection)

Frontotemporal dementia

-

P-II

Postanesthesia Recovery

-

P-II

Narcolepsy-

P-I

Narcolepsy type 2 and Idiopathic hypersomnia-

P-I

TAK-925<danavorexton>

TAK-360

Orexin 2R agonist(injection)

Smallmolecule

Orexin 2R agonist (oral)

Smallmolecule____________
Notes:(1) In June 2024, Takeda announced Phase 3 topline results in patients with Dravet syndrome and Lennox-Gastaut syndrome.
(2) Partnership with Neurocrine Biosciences. Neurocrine leads development.
(3) Partnership with AstraZeneca. P-I Parkinson’s disease study is completed.
(4) Partnership with Denali Therapeutics. Denali leads development.

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Oncology
In Oncology, we aspire to cure cancer, with inspiration from patients and innovation from everywhere. We are focused on: (1) building on
our legacy in hematologic malignancies with marketed products (NINLARO, ADCETRIS, and ICLUSIG, etc.); (2) growing a solid tumor portfoliowith marketed products (ALUNBRIG and FRUZAQLA [marketed in the U.S., development in other regions outside of mainland China, Hong Kongand Macau ongoing]); and (3) advancing a cutting-edge pipeline of highly innovative assets and platforms.
Our oncology pipeline in clinical development as of May 9, 2024 (the date of our annual earnings release), along with notes for major
subsequent developments thereafter, is as follows:
Development code
<generic name>Brand name(country/region)

Type of Drug(administration route)

Modality

Indications / additional formulations

Country/
RegionStage

Front line Hodgkin’s lymphoma – Stage III

EUApproved (Oct 2023)

Relapsed or refractory cutaneous T-cell lymphoma

Japan

Approved (Nov 2023)

Front line Hodgkin’s lymphoma – BrECADD regimen(brentuximab vedotin, etoposide, cyclophosphamide,
doxorubicin, dacarbazine, dexamethasone)2EU

Filed (Apr 2024)1

SGN-35<brentuximab
vedotin>
ADCETRIS(EU, Japan, China)

CD30 monoclonal
antibody-drug conjugate(injection)

TAK-1133<fruquintinib>
FRUZAQLA (U.S.)

VEGFR inhibitor (oral)

Biologic
and otherU.S.
Previously treated metastatic Colorectal Cancer (mCRC) EUJapan

Approved (Nov 2023)
Filed (Jun 2023)4
Filed (Sep 2023)

Front line Philadelphia chromosome-positive
Acute Lymphoblastic Leukemia

U.S.

Approved (Mar 2024)

Pediatric indication for Philadelphia chromosomepositive Acute Lymphoblastic Leukemia

-

P-I5

Small
molecule

Metastatic Castration-Resistant Prostate Cancer in
combination with atezolizumab7

Japan

P-III

Small
molecule

Solid tumors

-

P-II

TAK-500

STING agonist antibody Biologic
drug conjugate (injection) and other

Solid tumors-

P-I

TAK-186

T Cell Engager (injection)

Biologic
and other

EGFR expressing solid tumors-

P-I

TAK-280

T Cell Engager (injection)

Biologic
and other

B7-H3 expressing solid tumors-

P-I

TAK-012

Variable delta 1 (Vδ1)
gamma delta (γδ) T cells(injection)

Cell andgene
therapy

Relapsed/refractory Acute Myeloid Leukemia-

P-I<ponatinib>
ICLUSIG (U.S.)

BCR-ABL inhibitor (oral) Small
molecule<cabozantinib>6
Multi-targeted kinase
CABOMETYX (Japan) inhibitor (oral)
TAK-676<dazostinag>

Smallmolecule

STING agonist (injection)____________
Notes:(1) Partnership with Pfizer Inc.
(2) Submission based on data from German Hodgkin Study Group HD21 trial.
(3) Partnership with HUTCHMED(4) Approved by the European Commission (EC) in June 2024.
(5) ICLUSIG pediatric Ph+ ALL enrolment has been closed.
(6) Partnership with Exelixis, Inc.
(7) Partnership with Chugai Pharmaceutical. Takeda operates P-III development

Other Rare Diseases programs
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Takeda’s R&D engine is focused on areas of high unmet medical needs, both in rare and more prevalent conditions, acrossthree core therapeutic areas (gastrointestinal and inflammation, neuroscience, and oncology). In other Rare Diseases programs, Takeda
focuses on several areas of high unmet medical needs. In hereditary angioedema, Takeda aspires to transform the treatment paradigm, including
through TAKHZYRO, with continued investment in lifecycle management programs. In rare hematology, Takeda focuses on addressing today’sneeds in the treatment of bleeding disorders, including through ADVATE and ADYNOVATE/ADYNOVI. In addition, Takeda aims to redefine themanagement of post-transplant cytomegalovirus (CMV) infection/disease with LIVTENCITY. Takeda commits to fulfilling our vision to deliver lifetransforming medicines to patients with rare diseases. Takeda will continue to explore late-stage business development that may leverage our rarediseases capabilities as well as bolster our commitment and leadership in rare diseases.
Our other rare diseases pipeline in clinical development as of May 9, 2024 (the date of our annual earnings release), along with notes for
major subsequent developments thereafter, is as follows:
Development code
<generic name>Brand name(country/region)

TAK-6201<maribavir>
LIVTENCITY(U.S., EU)

TAK-743<lanadelumab>
TAKHZYRO (Global)

TAK-577
VONVENDI(U.S., Japan)
VEYVONDI (EU)Type of Drug(administration route)Benzimidazole ribosideinhibitor (oral)

Plasma kallikreininhibitor (injection)

von Willebrand factor[recombinant] (injection)

ModalitySmallmolecule

Biologic
and other

Biologic
and otherTAK-6723
OBIZUR (U.S., EU)

Porcine Coagulation
Factor VIII [recombinant] Biologic
and other(injection)

TAK-660
ADYNOVATE(U.S., Japan)
ADYNOVI (EU)Antihemophilic factor
Biologic[recombinant], PEGylated
and other(injection)

Indications / additional formulations

Country/
RegionStage

Post-transplant cytomegalovirus (CMV) infection/disease resistant/refractory to (val) ganciclovir, cidofovir China
or foscarnet

Approved (Dec 2023)

Treatment of CMV Infection/disease Post
Transplantation (Including HSCT)

Japan

Filed (Nov 2023)2

Treatment of children and teenage transplant recipientswith CMV infection

EU

P-III

Pediatric Hereditary Angioedema

EU

Approved (Nov 2023)

Adult prophylactic treatment of von Willebrand disease

EU

Approved (Nov 2023)

Adult on-demand and surgery treatment ofvon Willebrand disease

China

Filed (Jan 2023)

Pediatric on-demand and surgery treatment ofvon Willebrand disease

GlobalP-III

Acquired hemophilia A (AHA)

China
Japan

Approved (Feb 2024)
Approved (Mar 2024)

Pediatric Hemophilia A

EU

P-III

Hemophilia A

China

P-III

____________
Notes:(1) Partnership with GSK.
(2) Approved by the Japanese Ministry of Health, Labour and Welfare (MHLW) in June 2024.
(3) Partnership with Ipsen.

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Plasma-Derived Therapies (PDT)
Takeda has created a dedicated PDT business unit with a focus on managing the business end-to-end, from plasma donation to
manufacturing, R&D, and commercialization. In PDT, we aspire to develop life-saving plasma derived therapies, which are essential for patients witha variety of rare and complex chronic diseases. The dedicated R&D organization within PDT is charged with maximizing the value of existing
therapies, identifying new targeted therapies, and optimizing efficiencies across the PDT value chain, from plasma donation to productmanufacturing. Near-term, our priority is focused on delivering value from our broad immunoglobulin portfolio (HYQVIA, CUVITRU,GAMMAGARD LIQUID and GAMMAGARD S/D) through the pursuit of new indications, geographic expansions, and enhanced patient experiencethrough integrated healthcare technologies. In our hematology and specialty care portfolio, our priority is pursuing new indication and formulation
development opportunities for PROTHROMPLEX (4F-PCC), FEIBA and CEPROTIN. Additionally, we are developing next generation
immunoglobulin products with 20% fSCIg (TAK-881) and liquid low IgA IG (TAK-880) and are pursuing other early stage opportunities (e.g.
hypersialylated Immunoglobulin (hsIgG)) that would add to our diversified commercial portfolio of more than 20 therapeutic products distributed
worldwide.
Our PDT pipeline in clinical development as of May 9, 2024 (the date of our annual earnings release), along with notes for major
subsequent developments thereafter, is as follows:
Development code
<generic name>

Type of Drug

Brand name(country/region)(administration route)TAK-7711<IG Infusion 10%(Human) w/
Recombinant Human
Hyaluronidase>
HYQVIA (U.S., EU)

Immunoglobulin (IgG) +recombinanthyaluronidase
replacement therapy(subcutaneous infusion)

Modality

Biologic
and other

Indications / additional formulations

Country/
RegionStage

Pediatric indication for Primary Immunodeficiency

U.S.

Approved (Apr 2023)

Chronic inflammatory demyelinating
polyradiculoneuropathy

U.S.
EU

Approved (Jan 2024)
Approved (Jan 2024)

Primary Immunodeficiencies and Secondary
Immunodeficiencies

Japan

Filed (Feb 2024)

Chronic inflammatory demyelinating
polyradiculoneuropathy and Multifocal Motor
Neuropathy

Japan

P-III

Primary Immunodeficiencies and Secondary
Immunodeficiencies

Japan

Approved (Sep 2023)

Secondary Immunodeficiencies

EU

Approved (Jan 2024)

TAK-664<IG Infusion 20%(Human)>CUVITRU (U.S., EU,
Japan)

Immunoglobulin 20%[human](subcutaneous infusion)

Biologic
and other<Anti-Inhibitor
Coagulant Complex>
FEIBA (U.S., EU,
Japan)

Activated prothrombin
complex concentrate[human](injection)

Biologic
and other

FEIBA STAR label extension: Label updated to enable
up to 5x faster infusion and a new presentation whichallows for a 50% reduced volume of diluent for use inpatients with hemophilia A or B with inhibitors

U.S.
EU

Approved (June 2023)
Approved (Dec 2023)

TAK-339<IG Infusion 10%(Human)>GAMMAGARDLIQUID (U.S.)KIOVIG (EU)Immunoglobulin 10%[human](intravenous andsubcutaneous infusion)

Biologic
and other

Chronic inflammatory demyelinating
polyradiculoneuropathy

U.S.

Approved (Jan 2024)

TAK-662
Protein C concentrate
CEPROTIN (U.S., EU) [human] (injection)

Biologic
and other

Severe congenital protein C deficiency

Japan

Approved (Mar 2024)

Immunoglobulin (10%)
TAK-880
Biologic[human] (injection) (Low
<10% IVIG (Low IgA)>
and other
IgA)

Primary Immunodeficiencies and Multifocal Motor
Neuropathy

EU
U.S.

Filed (Mar 2024)
Complete Response
Letter (CRL) received(May 2023)

Four-factor prothrombin
TAK-330 PROTHROM
complex concentrate
PLEX TOTAL (EU)[human] (injection)

Coagulation Disorder, Direct Oral Anticoagulants(DOAC) reversal in surgical situations

U.S.

P-III

Biologic
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TAK-961<5% IVIG>GLOVENINI （Japan）

Immunoglobulin (5%)[human] (injection)

Biologic
and other

Autoimmune Encephalitis (AE)

Japan

P-III

TAK-881<Facilitated 20%
SCIG>

Immunoglobulin (20%)[human] + recombinanthyaluronidase
replacement
therapy (injection)

Biologic
and otherPrimary Immunodeficiencies

U.S.
EU

P-III

____________
Notes:(1) Partnership with Halozyme.

Vaccines

In Vaccines, Takeda is applying innovation to tackle some of the world’s most challenging infectious diseases such as dengue (QDENGA(development code: TAK-003)) and COVID-19 (NUVAXOVID). To support the expansion of our pipeline and the development of our programs, wehave entered into partnerships with government organizations in Japan and the U.S., and leading global institutions. Such partnerships have been
essential in building the critical capabilities that will be necessary to deliver on our programs and realize their full potential.
Our vaccines pipeline in clinical development as of May 9, 2024 (the date of our annual earnings release), along with notes for major
subsequent developments thereafter, is as follows:
Development code
Brand name(country/region)

TAK-0031
QDENGA (EU)2Type of vaccine(administration route)

Tetravalent dengue
vaccine (injection)

Modality

Biologic
and other

Indications / additional formulations

Country/
RegionStage

For the prevention of dengue fever of any severity, due
to any serotype, in individuals aged 4 and older

U.S.

Filing withdrawn (Jul2023)

For the prevention of dengue fever of any severity, due
to any serotype, in individuals aged 4 and older (booster
extension)

-

P-III

____________
Notes:(1) In October 2022, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicine Agency (EMA) recommended the approval of
TAK-003 in Europe and in dengue-endemic countries participating in the parallel EU-M4all procedure. QDENGA (TAK-003) was approved for use in the EU in
December 2022.
(2) QDENGA (TAK-003) is also approved in Indonesia, Brazil, the U.K., Argentina, Colombia, Malaysia and Thailand.

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Discontinued projects
Our discontinued projects since April 1, 2023 are as follows:
Development code

Indications (Region/Country, Stage)

ReasonSGN-35<brentuximab
vedotin>

Front line Peripheral T-cell lymphoma-Not
Otherwise Specified (PTCL-NOS) (EU,
Filed)

Following discussions with the European Medicines Agency (EMA), Takeda
decided to withdraw the type-II variation application.

<niraparib>

Breast cancer (Japan, P-III)

Following GSK’s permanent discontinuation of enrolment in the ZEST global
Phase 3 study due to eligibility challenges impacting the ability to fully enroll
targeted patients, Takeda discontinued enrollment in this study in Japan.

<generic name>

Previously treated Non-Small Cell Lung
Cancer with EGFR exon 20 insertion (Japan,
P-III)
TAK-788<mobocertinib>

Global voluntary withdrawal due to failure of confirmatory trial in 1L NSCLC
with EGFR Exon 20 insertion mutations.
Treatment Naïve Non-Small Cell Lung
Cancer with EGFR exon 20 insertion (Global,
P-III)

Cx601<darvadstrocel>

Refractory complex perianal fistulas inpatients with Crohn’s disease (U.S., P-III)

ALOFISEL Phase 3 ADMIRE CD-II study did not meet primary endpoint,
and as result Takeda does not plan to file regulatory applications in the US.

TAK-577

Adult prophylactic treatment of vonWillebrand disease (China, P-III)

A business decision considering the current unmet medical need in China.

MLN9708<ixazomib>

Maintenance therapy in patients with newly
diagnosed Multiple Myeloma following
autologous stem cell transplant(TOURMALINE-MM3) (U.S., EU, P-III)

Given the final analysis of the trial, Takeda will not pursue this indication in
the US, EU (NINLARO has been approved in the maintenance setting inJapan, South Korea, Thailand, Taiwan, and Brazil).

TAK-141/JR0141<pabinafusp alfa>

Hunter syndrome (CNS and somatic
symptoms) (EU, P-III)

Takeda and JCR entered into an agreement ending the geographically-focused
exclusive collaboration and license agreement to commercialize pabinafusp
alfa (JR-141; TAK-141) in Hunter syndrome, following Takeda's strategic
assessment of the alliance. JCR has been and remains the study sponsor for
JR-141, and JCR plans to continue the Phase 3 trial for participating patients.

TAK-611

Metachromatic leukodystrophy (P-II)

TAK-611 Phase 2 trial results did not meet primary and secondary endpoints,
which did not support further development.

TAK-041/NBI-1065846

Anhedonia in major depressive disorder(MDD) (P-II)

TAK-041/NBI-1065846 Phase 2 trial results did not meet primary andsecondary endpoints, which does not support further development in MDD.

Parkinson’s disease (P-II)

A business decision to maximize the value of TAK-071 for patients and for
Takeda through the pursuit of externalization options is in progress.

TAK-071

TAK-573<modakafusp alfa>

Relapsed/refractory Multiple Myeloma(P-II)

Takeda made a decision to discontinue the modakafusp alfa (TAK-573)
development programs based on strategic considerations.

Solid tumors (P-I)
TAK-861

Narcolepsy type 2 (P-II)

Takeda does not plan to advance TAK-861 in Narcolepsy type 2.

TAK-951

Nausea and vomiting (P-II)

Clinical data did not support further development.

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Development code

Indications (Region/Country, Stage)

ReasonMultiple cancers (P-II)

Strategic decision to discontinue clinical development of subasumstat basedon portfolio prioritization, informed by the currently available data andclinical development timelines.

Relapsed/refractory B cell malignancies (PII)

Data-driven decision to discontinue clinical development of TAK-007 forrelapsed/refractory B cell malignancies. TAK-007 will be examined forautoimmune diseases.

TAK-079<mezagitamab>

Myasthenia gravis (P-II)

There is no plan to advance TAK-079 in myasthenia gravis at this time due todeprioritization.

TAK-079<mezagitamab>

Systemic lupus erythematosus (P-I/II)

There is no plan to advance TAK-079 monotherapy in systemic lupus
erythematosus at this time due to deprioritization.

Nausea and vomiting (P-I)

Phase 1 data did not support further development.

Alzheimer disease (P-I)

Discontinuation based on the totality of Phase 1 clinical data and the treatment
landscape. Denali and Takeda will focus research efforts on back-up
molecules in preclinical development, including exploration of potential
combination therapy.

<generic name>TAK-981<subasumstat>TAK-007

TAK-105

TAK-920/DNL919

TAK-102

Solid tumors (P-I)

TAK-103

Solid tumors (P-I)

Takeda decided to terminate the further development of TAK-102 andTAK-103 due to the pipeline prioritization considerations and Takeda’s
strategic focus on developing allogeneic cell therapies, and is not related to
any concerns about the safety or efficacy of TAK-102 and TAK-103.

TAK-940

Solid tumors (P-I)

Takeda decided to terminate further development of TAK-940 due to thepipeline prioritization considerations and Takeda’s strategic focus ondeveloping allogeneic cell therapies, and is not related to any concerns about
the safety or efficacy of TAK-940.

TAK-426

Active immunization for the prevention of
disease caused by Zika virus (P-I)

Takeda decided to terminate further development of TAK-426 based onlimited potential use given the current state of Zika virus epidemiology.

Sickle cell disease (U.S., P-I)

There is no plan to advance TAK-755 in sickle cell disease at this time due todeprioritization.

TAK-755<apadamtase alfa/
cinaxadamtase alfa>

TAK-647

Metabolic dysfunction-associated
Takeda decided to discontinue further development of TAK-647 in MASH
steatohepatitis (MASH) (previously known as
Nonalcoholic Steatohepatitis (NASH)) (P-I) based on portfolio prioritization.

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Availability of Raw Materials
In the ordinary course of business, we purchase raw materials and supplies essential to our operations from suppliers around the world.
While we develop and manufacture the active ingredients used in some of our products at our own facilities, we are dependent on third-party
suppliers for a portion of the raw materials and compounds used in certain other products we produce. We believe that, in the event we are unable tosource any products or ingredients from any of our major suppliers, we could replace those products or substitute ingredients from other suppliers,
although we may not be able to do so without significant difficulty or significant increases in our cost of sales. While efforts are made to diversify oursources of components and materials, in certain instances we acquire components and materials from a sole supplier.
In the case of plasma-derived-therapies, we are dependent on healthy individuals to donate human plasma to develop and manufacture our
products. We own and operate plasma donation facilities, principally in the U.S., Austria, Hungary and Czech Republic, and we also maintainrelationships with other plasma suppliers for external sourcing to meet our planned supply commitments to patients.
We closely monitor, continuously review and revise the supply sourcing strategy for our products to identify in a timely manner any risks
in our supply chain, including risks arising from our dependency on outsourced manufacturing relationships with third-party suppliers. Where
necessary, inventory levels of either key materials or finished products are managed strategically to address potential risks relating to operational andquality issues, production capacity and single sourcing among others. For critical and strategic products, we have decided to make significant longterm capital investments to build internal manufacturing capacity and secure dual sources to reduce the dependency on outsourced manufacturing
relationships with third-party suppliers.

Manufacturing
The manufacturing of our products is highly regulated by governmental health authorities around the world, including the FDA, EMA,
Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”) and NMPA. Furthermore, many of our products involve technically complex
manufacturing processes or may require a supply of highly specialized raw materials.
We manufacture a certain number of our products in our own facilities within our global manufacturing network. In addition, we source
certain other products from third-party contract manufacturers. We have a network of approximately 100 contract manufacturers which provide
varying services such as the manufacture of active pharmaceutical ingredients, bulk drug product, aseptic fill finish and final packaging. In cases
where we utilize contract manufacturers, we are often dual sourced with an internal manufacturing site. In cases where we are not dual sourced, wemanage the risks associated with the reliance on a single source of production by carrying additional inventories.

Sales and Marketing
Our primary sales and marketing activities are organized around regional business units and select therapeutic area business units focusedon the U.S., Japan, Europe and Canada, China, and Growth and Emerging Markets. These business units make focused investments that support thegrowth potential of our portfolios in each market.
The U.S. is the largest pharmaceutical market in the world and is also Takeda’s largest region by revenue. The United States Business Unit(“USBU”) is focused on the successful launch of a subcutaneous administration of ENTYVIO (ENTYVIO Pen), approved for ulcerative colitis in
September 2023 and Crohn’s disease in April 2024, EOHILIA, approved in February 2024, and the expanded indications for HYQVIA and
GAMMAGARD LIQUID in patients with chronic inflammatory demyelinating polyneuropathy (CIDP) approved in January 2024. In addition, core
promoted products such as TRINTELLIX, GATTEX and TAKHZYRO will contribute to the growth as being supported by significant investment in themarketing and sales force promotion.
The Japan Pharma Business Unit (“JPBU”) is focused on retaining Takeda’s position as one of the leading pharmaceutical companies in
our home market of Japan. Although we continue to promote our strong primary care portfolio, with the Japanese government driving stricter controlof drug prices and promoting the penetration of generics, our strategy is to shift focus more towards the uptake of our highly innovative anddifferentiated specialty medicines such as ENTYVIO, GATTEX/REVESTIVE,ALOFISEL, TAKECAB, TRINTELLIX and TAKHZYRO.
The Global Portfolio Division (“GPD”) is focused on accelerating our growth through a global footprint, as well as a diverse portfolio andpipeline of transformational medicines and vaccines. The GPD comprises the China, EUCAN, GEM and Global Vaccine Business Units, and the
Global Medical and Global Product & Launch Strategy (“GPLS”) functions.
The Europe and Canada (“EUCAN”) business unit focuses on a specialized approach in the European and Canadian markets, where public
insurance has set a high bar for the reimbursement of medicines, requiring innovation and clear differentiation in order for products to be reimbursed.
The EUCAN business unit is focused on continuing to grow core products such as ENTYVIO, TAKHZYRO, ELVANSE/VYVANSE, and ourimmunoglobulin products and recently approved products such as LIVTENCITY.
The China Business Unit (“China BU”) focuses on unleashing the growth potential in the world’s second largest pharmaceutical market.
The China BU continues to maximize the value of brands such as ENTYVIO, ADCETRIS, TAKHZYRO, REPLAGAL, ALUNBIG, LIVTENCITY andHUMAN ALBUMIN/FLEXBUMIN while also aiming to bring more new medicines and treatment options to China in the future from the therapeuticareas of Gastrointestinal and Inflammation, Neuroscience, Oncology, and Rare Genetics and Hematology.
The Growth and Emerging Markets (“GEM”) Business Unit is focused on delivering highly innovative medicines to patients in GEM
countries living with complex and rare diseases in our five key business areas of GI, Rare Diseases, PDT, Oncology and Neuroscience.

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The Oncology Business Unit (“OBU”) is focused on the development and marketing of oncology medicines in the U.S., Japan, Europe andCanada. Our promoted oncology portfolio consists of three global brands (ALUNBRIG, NINLARO and FRUZAQLA) as well as products that wemarket on a regional basis including ICLUSIG in the U.S., ADCETRIS in markets outside of the U.S. and Canada,, and VECTIBIX, ZEJULA, andCABOMETYX in Japan.
The PDT Business Unit is focused on transforming the lives of patients from the collection of plasma to the production and delivery of lifesaving medicines worldwide. We offer a broad portfolio of greater than twenty therapies, four of which represent Global Brands for Takeda, HYQVIA
and CUVITRU, subcutaneous immunoglobulin, KIOVIG/GAMMAGARD LIQUID, intravenous immunoglobulin, and FLEXBUMIN, ourdifferentiated bag Albumin product.
The Global Vaccine Business Unit (“GVBU”) is applying innovation to tackle some of the world’s most challenging infectious diseases,
such as dengue (QDENGA), pandemic influenza, and COVID-19 through a partnered program in Japan with Novavax.

Intellectual Property
An important part of our business strategy is to protect our products and technologies using patents and trademarks, to the extent
available. We rely on trade secrets, proprietary know-how, technological innovations and contractual arrangements with third parties to maintain andenhance our competitive position. Our commercial success depends, in part, upon our ability to obtain and enforce strong patents, to maintain trade
secret protection, to operate without infringing the proprietary rights of others and to comply with the terms of licenses granted to us. Due to thelengthy development periods for new drugs, the high costs of R&D and the small percentage of researched therapeutic candidates that reach themarket, the protection of intellectual property plays an important role in the return on investments into R&D for a new drug.
We seek patent protection for proprietary technology whenever possible in the U.S., Japan and major European countries. Where
practicable, we seek patent protection in other countries on a selective basis. In all cases, we endeavor to either obtain patent protection itself or
support patent applications through licensors. Patents are our primary means of protecting the technologies we use. Patents provide the holder withthe right to exclude others from making, using, selling, or offering for sale an invention related to a pharmaceutical product during the term of thepatent. We use various types of patents to protect our biopharmaceutical products, including substance patents, which cover active ingredients, aswell as patents covering usage, manufacturing processes, and formulation of drugs.
Our products, especially small molecules, are mainly protected by substance patents. While the expiration of a substance patent can resultin a loss of market exclusivity for the protected pharmaceutical products, commercial benefits may continue to be protected by non-substance patentssuch as patents relating to the method of use of such substance, patents relating the manufacturing method of such substance, and patents relating to
the new composition or formulation of such substance. The products can be also protected by regulatory data protection under relevant laws in eachcountry even if the substance patent expired.
In the U.S., patents generally expire 20 years after the earliest non-provisional filing date of the application, subject to potential patentterm adjustments for delays in patent issuance based upon certain delays in prosecution by the U.S. Patent and Trademark Office. A U.S.
pharmaceutical patent that claims a product, method of treatment using a product or method of manufacturing a product may also be eligible for apatent term extension based on the time the FDA took to approve the product. This type of extension may only extend the patent term for a maximumof 5 years and may not extend the patent term beyond 14 years from regulatory approval. Only one patent may be extended for any product based on
FDA delay. In addition to patent exclusivities, the FDA may provide data or market exclusivity for a new chemical entity or an orphan drug, each ofwhich run in parallel to any patent protection. Regulatory data protection or exclusivity prevents a potential generic competitor from relying on
clinical trial data that were generated by the sponsor when establishing the safety and efficacy of its competing product for a period of 5 years for a
new chemical entity, or 7 years for an orphan drug. Market exclusivity prohibits any marketing of the same drug for the same indication.
In Japan, a patent can be issued for active pharmaceutical ingredients by the Japan Patent Office (“JPO”). Although claims directed tomethods of treating/diagnosing human diseases are not patentable in Japan, claims directed to pharmaceutical compositions for use to treat a specificconditions or indications are patentable, as well as processes to make a pharmaceutical composition are patentable. Patents in Japan generally expire
20 years after the filing date of the patent application. Patents for pharmaceuticals may be extended for up to 5 years, depending on the amount oftime spent for the drug approval process. Unlike the U.S., more than one patent per product can be extended in Japan. Japan also has a regulatory dataprotection system that offers a re-examination period of 8 years for pharmaceuticals that contain new active pharmaceutical ingredients and 4 years to
6 years for new combination products and 10 years for orphan drugs.
In the EU, patent applications may be filed in the European Patent Office (“EPO”) or in a country in Europe. The EPO system permits asingle application to be granted for the EU, plus certain other non-EU countries, such as Switzerland and Turkey. When the EPO grants a patent, it isthen validated in the countries that the patent owner designates. While the term of a patent granted by the EPO or a European country office may be
extended or adjusted, it is generally 20 years from the filing date of the patent application. Pharmaceutical patents covering an approved medicinal
product can be granted a further period of exclusivity under the Supplementary Protection Certificate (“SPC”) system. SPCs are designed tocompensate the owner of the patent for the time it took to receive marketing authorization by the European Medicines Agency or the National Health
Authorities. An SPC may only extend the patent term for a maximum of 5 years and not extend the patent term beyond 15 years from the date of thefirst European marketing authorization. The SPC duration can additionally be extended by a further Pediatric Extension of 6 months if the SPC
relates to a non-orphan medicinal product for which data has been submitted according to a Pediatric Investigation Plan (“PIP”). The post-grant phaseof patents, including the SPC system, is currently administered on a country-by-country basis under national laws. Therefore, although regulations
concerning patents and SPCs have been created at the EPO and EU level, respectively, due to different national implementation they may not always
lead to the same result, for example, if challenged in National Courts in the various EU countries. The EU also provides a system of regulatory data
exclusivity for authorized human medicines, which runs in parallel to any patent protection. The system for drugs being approved today is usuallyreferred to as 8+2+1 rule because it provides an initial period of 8 years of data exclusivity, during which a competitor cannot rely on the relevant
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data, a further period of 2 years of market exclusivity, during which the data can be used to support applications for marketing authorization but thecompetitive product cannot be launched and a possible 1-year extension of the market exclusivity period if, during the initial 8-year data exclusivity
period, the sponsor registered a new therapeutic indication for the concerned drug. However, the additional 1-year extension is only available if either
no therapy exists for the new indication or if the concerned product provides for the new indication a “significant clinical benefit over existing
therapies”. This system applies both to national and centralized authorizations. The EU also has an orphan drug exclusivity system for medicines
similar to the U.S. system. If a medicine is designated as an orphan drug, it benefits from 10 years of market exclusivity, during which time a similar
medicine for the same indication will not receive marketing authorization. Under certain circumstances, this exclusivity can be extended with a 2year Pediatric Extension for completion of a PIP.
Worldwide, we experience challenges in the area of intellectual property from factors such as the penetration of generic versions of our
products following the expiry of the relevant patents and the launch by competitors of over-the-counter versions of our products. Our Global GeneralCounsel is responsible for the oversight of our Intellectual Property operations, as well as our legal operations. Our Intellectual Property Department
supports our overall corporate strategy by focusing efforts on three main themes:•

maximization of the value of our products and research pipeline and protection of related rights aligned to the strategies of ourtherapeutic area units;•facilitation of more dynamic harnessing of external innovation through partner alliance support; and•securing and protection of intellectual property rights around the world, including in emerging markets.

As infringement of our intellectual property rights poses a risk of loss of expected earnings derived from those rights, we have internal
processes in place to manage patents and other intellectual property. This process includes both remaining vigilant against patent infringement byothers as well as exercising caution, starting at the R&D stage, to ensure that our products and activities do not violate intellectual property rights
held by others.
In the regular course of business, our patents may be challenged by third parties. We are party to litigation or other proceedings relating
to intellectual property rights. Details of material ongoing litigation are provided in Note 32 to our audited consolidated financial statements includedin this annual report.
The following table describes our outstanding substance patents and the regulatory protection (“RP”) (U.S. and EU) or re-examination
period (“RP”) (Japan) for the indicated product by territory and expiry date. Patent term extensions (“PTE”), SPC, and pediatric exclusivity periods(“PEP”) are reflected in the expiry dates to the extent they have been granted by the issuing authority. For PTE’s, SPC’s, and PEP’s in which theapplication is in process but not yet granted, the extended expiry is separately provided.
Our biologic products may face or already face competition from companies who produce similar products for the same indications, and/or biosimilars, regardless of expiry dates below. Certain European patents may be the subject of supplemental protection certificates that provide
additional protection for the product in certain countries beyond the dates listed in the table.
Our product

Gastroenterology (GI):ENTYVIO

Japan expiry dates(1)(2)

Patent: -U.S. expiry dates(1)Patent: (2)EU expiry dates(1)Patent: (7)RP: July 2028

RP: May 2026

RP: May 2025(7)DEXILANTPANTOLOC /CONTROLOC(PANTOPRAZOLE)TAKECAB(3)Not commercialized

Patent: -Patent: -Not commercialized

Patent: -Patent: -Patent: August 2031

Patent: -(3)Patent: -(3)GATTEX/REVESTIVE

Patent: -Patent: -(5)(2)

RP: June 2031
(3)

LIALDA/MEZAVANTRESOLOR/MOTEGRITYALOFISEL

Patent: RP: September 2024

Patent: - (3)Patent: -Patent: -Not commercialized

Patent: -Patent: -Patent: (2)

RP: September 2031

Not commercialized

40

Patent: RP: March 2028

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Our product

EOHILIA
Rare Metabolic:
ELAPRASE (3)REPLAGALVPRIVJapan expiry dates(1)(2)

Patent: -Not commercialized

RP: February 2031

Patent: - (3)Patent: Patent: RP: July 2024(2)Rare Hematology:
ADVATEADYNOVATE/ADYNOVIU.S. expiry dates(1)Patent: Patent: January 2026

EU expiry dates(1)Not commercialized

Patent: Not commercialized

Patent: Patent: -Patent: -Patent: -Patent: -Patent: -Patent: February 2026

Patent: February 2029

RP: November 2027

RP: January 2028

FEIBA(6)HEMOFIL(6)IMMUNATE(6)IMMUNINE(6)VONVENDI

Patent: Not commercialized
Not commercialized
Not commercialized
Patent: -Patent: Patent: Not commercialized
Not commercialized
Patent: December 2030

Patent: Not commercialized
Patent: Patent: Patent: -RECOMBINATEADZYNMA

RP: March 2030(2)Not commercialized
Patent: -RP: December 2027
Patent: Patent: -RP: August 2028
Not commercialized

RP: March 2034(2)

RP: November 2035

Hereditary Angioedema:
FIRAZYR

Patent: (2)

RP: September 2028
TAKHZYRO

Not commercialized

Patent: -Patent: -Patent: August 2032

Patent: November 2033

RP: August 2030

RP: November 2028

Patent: January 2031
Extended expiry of January 2036 if
PTE granted
RP: March 2032(2)CINRYZE(6)Not commercialized

Patent: -Patent: -Rare Diseases - Others:
LIVTENCITY

Not commercialized

Plasma-Derived Therapies (PDT) Immunology:
GAMMAGARD LIQUID(6)Not commercialized(6)
HYQVIA
Not commercialized

Patent: -Patent: -RP: November 2028

RP: November 2032

Patent: Patent: -Patent: -CUVITRU(6)Patent: -RP: September 2026
Patent: -FLEXBUMIN(6)HUMANALBUMIN(6)GLASSIA(6)

RP: September 2031
Not commercialized
Not commercialized
Not commercialized

RP: September 2028
Patent: Patent: Patent: -41

Patent: Patent: RP: July 2027
Patent: Not commercialized
Not commercializedTable of Contents

Our product(6)

ARALAST
Oncology:
VELCADE(3)LEUPLIN/ENANTONENINLARO

Japan expiry dates(1)(2)

U.S. expiry dates(1)Not commercialized

Patent: -Not commercialized

Patent: -(3)Patent: Patent: July 2031

Patent: Patent: -Patent: -(3)Patent: Patent: November 2031

Patent: November 2029

(2)

RP: March 2027
ADCETRIS(4)Patent: July 2028(8)(2)(9)

RP: May 2028
ICLUSIG(3)
ALUNBRIG

Patent: -(3)Patent: -(4)Patent: January 2027

Patent: November 2032
(2)

VECTIBIX(4)EXKIVITY

EU expiry dates(1)Patent: April 2031

RP: January 2029

RP: April 2024

Patent: -Patent: -(4)Patent: May 2035

Not commercialized

Extended expiry of September
2035 if PTE granted

RP: November 2026
Patent: October 2027
RP: October 2023
Patent: -(3)Patent: May 2029
Extended expiry of November 2033
if SPC granted
RP: November 2028
Patent: -(4)Not commercialized

RP: September 2028
(4)

ZEJULA

Patent: January 2033

CABOMETYX(4)RP: September 2028(2)Patent: September 2029
RP: March 2028(2)FRUZAQLA
Not commercialized
Neuroscience:
VYVANSE/ELVANSE

Patent: June 2029
RP: March 2027(2)TRINTELLIX

Patent: -(4)Patent: -(4)Patent: -(4)Patent: -(4)Patent: May 2028 (Extended expiryof March 2032 if PTE granted)
RP: Nov 2028

Not commercialized

Patent: -Patent: June 2024 (Extended expiryof February 2028 or September
2029 in certain countries)

Patent: December 2026

Patent: -(4)Patent: -Not commercialized
Patent: -(4)

Patent: October 2027
RP: September 2027(2)ADDERALL XR
INTUNIV

Not commercialized
Patent: RP: March 2025(2)Other:AZILVA-F
FOSRENOL(3)QDENGA

Patent: -Patent: Patent: -(3)Not commercialized
Patent: -Not commercialized

Not commercialized

RP: September 2025
Not commercialized
Not commercialized
Patent: RP: December 2032_____________
Notes:(1) A “-” within the table indicates the substance patent is expired or not applicable.
(2) In Japan, an application for a generic product is filed after the re-examination period ends, and the product is listed in the approval and drug price listing after aregulatory review. Therefore, the generic product would enter the market after a certain period of time from the expiry of the re-examination period.
(3) This product is not sold by Takeda in all regions because of out-licensing agreements to third parties.
(4) This product is not sold by Takeda in all regions because of in-licensing agreements from third parties exclusive to certain regions. See “—Licensing and
Collaboration” for further information on the licensing agreements.
(5) No generic has been launched as of March 2024. The exact timing of the market entry of the generic version of GATTEX/REVESTIVE is uncertain.
(6) Relates to plasma-derived therapies products.

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(7)
(8)
(9)

Takeda has been granted patents that cover various aspects of ENTYVIO, including formulation, dosing regimens and process for manufacturing, some of which
are expected to expire in 2032. Any biosimilar that seeks to launch prior to 2032 would need to address potential infringement and/or the validity of all relevant
patents and therefore the exact timing of biosimilar entry is uncertain.
Extended patent term (PTE) for (a) frontline Hodgkin’s lymphoma, (b) relapsed/refractory PTCL excluding ALCL, and (c) pediatric use for relapsed/refractory
Hodgkin’s lymphoma, relapsed/refractory PTCL and frontline Hodgkin’s lymphoma (PTE for each of relapsed/refractory Hodgkin’s lymphoma and relapsed/refractory ALCL expires in April 2026).
RP for pediatric frontline Hodgkin’s lymphoma only (RP for each of relapsed/refractory Hodgkin’s lymphoma, relapsed/refractory ALCL, frontline Hodgkin’s
lymphoma, PTCL and pediatric relapsed/refractory Hodgkin’s lymphoma and pediatric relapsed/refractory PTCL expired in January 2024, RP for relapsed/refractory CTCL is Sep 2029.)

Licensing and Collaboration
In the ordinary course of business, we enter into arrangements for licensing and collaboration for the development and commercializationof products with third parties. Our business does not materially depend on any one of these arrangements. Instead they form a portion of our strategy
and give us the ability to leverage a mix of internal and external resources to develop and commercialize new products. A sample of the agreements
which have led to successful commercialization to date are summarized below:•

ADCETRIS: We entered into a Collaboration Agreement with Pfizer Inc. (“Pfizer”) (Seagen, Inc. was acquired by Pfizer in
December 2023) in 2009 for the global co-development of ADCETRIS and its commercialization around the world (other than the
U.S. and Canada, where ADCETRIS is commercialized by Pfizer). We were required to pay milestone payments related toregulatory and commercial progress by us under the collaboration. We also pay tiered royalties with percentages ranging from the
mid-teens to the mid-twenties based on net sales of ADCETRIS within our licensed territories. We and Pfizer equally co-fund thecost of selected development activities conducted under the collaboration, but as of March 31, 2024, there are no further
incremental potential commercial milestone payments remaining under the ADCETRIS collaboration. Either party may terminate
the collaboration for cause, or by mutual consent. We may terminate the collaboration at will, and Pfizer may terminate thecollaboration in certain circumstances. If neither party terminates the collaboration agreement, then the agreement automaticallyterminates on the expiration of all payment obligations.

•

TRINTELLIX: We entered into a License, Development, Supply and Commercialization Agreement with H. Lundbeck A/S in 2007
for the exclusive co-development and co-commercialization in the U.S. and Japan of several compounds in Lundbeck’s pipeline forthe treatment of mood and anxiety disorders. Under the agreement, both partners commercialize TRINTELLIX in the U.S. andJapan and have agreed to jointly develop the relevant compounds, with most of development funding provided by us. Revenues for
TRINTELLIX are booked by us, and we pay Lundbeck a portion of net sales, as well as tiered royalties ranging from the low to
mid-teens on the portion of sales retained by us. We have also agreed to pay Lundbeck certain development and commercialization
milestone payments relating to regulatory and commercial progress under the collaboration, but as of March 31, 2024, there are nofurther incremental potential commercial milestone payments remaining under the TRINTELLIX collaboration. The term of theagreement is indefinite, but the agreement may be terminated by mutual decision of the parties or for cause.

The following tables describe other research & development collaborations/partnering and externalization projects entered into by
Takeda, but do not represent a comprehensive list of all Takeda R&D collaborations. All of the “subject” descriptions listed below are as of the dateof execution of the relevant agreement unless otherwise noted:
Gastrointestinal and Inflammation
Countryof incorporation

Subject

Arrowhead Pharmaceuticals

U.S.

Collaboration and licensing agreement to develop fazirsiran (TAK-999; ARO-AAT), an
investigational RNA interference (RNAi) therapy in development to treat alpha-1 antitrypsinassociated liver disease (AATLD). ARO-AAT is a potential first-in-class therapy designed to reduce
the production of mutant alpha-1 antitrypsin protein, the cause of AATLD progression.

COUR Pharmaceuticals

U.S.

Takeda has acquired an exclusive global license to develop and commercialize the investigational
medicine TIMP-GLIA (TAK-101), an immune modifying nanoparticle containing gliadin proteins.

Engitix

U.K.

Collaboration and licensing agreement to utilize Engitix’s unique extracellular matrix discovery
platform to identify and develop novel therapeutics for liver fibrosis and fibrostenotic inflammatory
bowel disease, including Crohn’s disease and ulcerative colitis.

Genevant Sciences Corporation

U.S.

Collaboration and License Agreements to leverage Genevant’s hepatic stellate cell-partitioning LNP
platform to deliver Takeda-designed RNAi oligonucleotides intended to halt or reverse theprogression of liver fibrosis.

Partner

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KM Biologics

Japan

Collaboration and license agreement for the development of therapeutic uses of rADAMTS13(TAK-755), including but not limited to TTP.

Mirum Pharmaceuticals

U.S.

Exclusive licensing agreement for the development and commercialization of maralixibat(TAK-625) in Japan for Alagille syndrome (ALGS), progressive familial intrahepatic cholestasis(PFIC), and biliary atresia (BA).

PfizerU.S.

2016 exclusive licensing agreement for development and commercialization of TAK-647
worldwide. Takeda decided to discontinue further development of TAK-647 in MASH based on
portfolio prioritization.

Protagonist Therapeutics

U.S.

Worldwide license and collaboration agreement for the development and commercialization ofrusfertide (TAK-121), an investigational injectable hepcidin mimetic peptide of the natural hormone
hepcidin for treatment of polycythemia vera.

Sosei Heptares

U.K.

Collaboration and License agreement to leverage Sosei Heptares’s StaR® technology and structural
biology expertise with GPCRs to enable structure based drug discovery to advance novel
therapeutics for gastroenterology diseases.

UCSD/Fortis Advisors

U.S.

Technology license for the development of oral budesonide formulation (TAK-721) for treatment of
eosinophilic esophagitis.

Zedira/Dr. Falk Pharma

Germany

Collaboration and license agreement to develop and commercialize a potential first-in-class therapy
TAK-227/ZED1227, a tissue transglutaminase 2 (TG2) inhibitor, designed to prevent the immune
response to gluten in celiac disease. Takeda has exclusive rights in the US and other territories
outside of Europe, Canada, Australia and China.

Countryof incorporation

Subject

Neuroscience
Partner

AcuraStemU.S.

Exclusive worldwide license agreement to develop and commercialize AcuraStem’s PIKFYVE
targeted therapeutics for the treatment of Amyotrophic Lateral Sclerosis (ALS).

Anima Biotech

U.S.

Strategic collaboration to discover and develop mRNA translation modulators for genetically-definedneurological diseases.

AstraZeneca

U.K.

Agreement for the joint development and commercialization of MEDI1341/TAK-341, an alphasynuclein antibody currently in development as a potential treatment for Multiple System Atrophy(MSA) and Parkinson’s disease.

BioMarin

U.S.

Agreement for the in-license of enabling technology for the exogenous replacement of Arylsulfatase
A enzyme with intrathecal (IT) administration directly into the central nervous system for the longterm treatment of patients with metachromatic leukodystrophy (MLD), a rapidly-progressive andultimately fatal neuro-degenerative rare disease (TAK-611).

BridGene Biosciences

U.S.

Research collaboration to discover small molecule drugs for “undruggable” targets using BridGene’s
chemoproteomics platform.

U.S.

Strategic option and collaboration agreement to develop and commercialize up to three specified
therapeutic product candidates for neurodegenerative diseases, incorporating Denali’s transport
vehicle (TV) platform for increased exposure of biotherapeutic products in the brain; options
exercised on DNL593/TAK-594 and DNL919/TAK-920 in Q3 FY2021. DNL919/TAK-920
molecule was discontinued in Q2 FY2023, and exploration for ATV:TREM2 backup is ongoing.

Denali Therapeutics

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Table of ContentsJapan

Exclusive worldwide license agreement for the use of Luxna’s breakthrough xeno nucleic acidtechnology for multiple undisclosed target genes in the area of neurological diseases.

Neurocrine Biosciences

U.S.

Collaboration to develop and commercialize 7 compounds in Takeda’s early-to-mid stage
neuroscience pipeline, including TAK-041/NBI-1065846, TAK-653/NBI-1065845 and TAK-831/
NBI-1065844 (luvadaxistat). Takeda will be entitled to certain development milestones, commercial
milestones and royalties on net sales and will, at certain development events, be able opt in or out of
a 50:50 profit share on all clinical programs on an asset-by-asset basis. In June 2021, Takeda decided
not to cost share further TAK-831/NBI-1065844 (luvadaxistat) development; Takeda maintains its
right to receive milestones and royalties regarding TAK-831/NBI-1065844 (luvadaxistat). In Nov
2023, Neurocrine announced that TAK-041/NBI-1065846 Phase 2 trial results did not meet primaryand secondary endpoints, which does not support further development of the asset.

PeptiDreamJapan

Collaborative research and exclusive license agreement to create peptide-drug conjugates (PDCs) for
neuromuscular and neurodegenerative diseases.

Singapore

Multi-program option agreement to co-develop and co-commercialize antisense oligonucleotides fora range of neurological diseases.

Countryof incorporation

Subject

Luxna Biotech

Wave Life Sciences

Oncology
Partner

AbbVie*U.S.

Exclusive licensing agreement to develop and commercialize mirvetuximab soravtansine-gynx inJapan for folate receptor-alpha (FRa) positive ovarian cancer.

AdimabU.S.

Agreement for the discovery, development and commercialization of three mAbs and three CD3 BiSpecific antibodies for oncology indications.

Crescendo Biologics

U.K

Collaboration and licensing agreement for the discovery, development and commercialization of
Humabody®-based therapeutics for cancer indications.

Egle Therapeutics

FranceIdentify novel tumor-specific regulatory T cell targets and develop unique anti-suppressor-based
immunotherapies.

Exelixis, Inc.

U.S.

Exclusive licensing agreement to commercialize and develop novel cancer therapy cabozantinib andall potential future cabozantinib indications in Japan, including advanced renal cell carcinoma andhepatocellular carcinoma.

F-starU.K

Discovery collaboration and worldwide, exclusive royalty-bearing license to Takeda to research,develop, and commercialize a bispecific antibody directed towards an undisclosed immuno-oncology
target using F-star’s proprietary Fcab™ and mAb2 ™ platforms. Takeda will be responsible for all
research, development and commercialization activities under the agreement.

GSK

U.K.

Exclusive licensing agreement to develop and commercialize novel cancer therapy niraparib for thetreatment of all tumor types in Japan, and all tumor types excluding prostate cancer in South Korea
and Taiwan.

Germany

Antibody-Drug-Conjugate (ADC) research collaboration on 2 targets and licensing agreement (αamanitin payload and proprietary linker).

China

Exclusive licensing agreement with HUTCHMED (China) Limited and its subsidiary HUTCHMED
Limited for the further development and commercialization of fruquintinib (TAK-113) in all
indications, including metastatic colorectal cancer, outside of mainland China, Hong Kong and
Macau.

Heidelberg Pharma

HUTCHMED

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KSQ Therapeutics

U.S.

Strategic collaboration to research, develop and commercialize novel immune-based therapies forcancer using KSQ’s CRISPRomics® technology.

Kumquat Biosciences

U.S.

Strategic and exclusive collaboration to develop and commercialize a novel immuno-oncology small
molecule inhibitor as a mono- and/or combination-therapy.

U.S.

Exclusive license and research agreement to utilize MDACC’s platform and expertise, and to leverage
Takeda’s development, manufacturing and commercialization capabilities to bring patients cord
blood-derived chimeric antigen receptor-directed natural killer (CAR-NK) cell therapies for thetreatment of B cell malignancies and other cancers. Takeda made a data-driven decision to discontinue
the clinical development of TAK-007 for relapsed/refractory B cell malignancies.

U.S.

Strategic research collaboration and license to develop novel chimeric antigen receptor T cell (CART) products for the treatment of multiple myeloma, acute myeloid leukemia and additional solid tumor
indications. The collaboration is co-led by Michel Sadelain, who is currently head of the Center for
Cell Engineering at Memorial Sloan Kettering. Takeda decided to terminate further development of
TAK-940 due to the pipeline prioritization considerations and Takeda’s strategic focus on developing
allogeneic cell therapies.

Noile-Immune Biotech

Japan

Collaboration agreement for the development of next generation CAR-T cell therapy, developed byProfessor Koji Tamada at Yamaguchi University. Takeda has exclusive options to obtain licensing
rights for the development and commercialization of Noile-Immune Biotech's pipeline and products
resulting from this partnership. Due to the success of the collaboration, Takeda licensed NIB-102 andNIB-103. In December 2023, Takeda decided to terminate the further development of TAK-102 andTAK-103 due to the pipeline prioritization considerations and Takeda’s strategic focus on developing
allogeneic cell therapies.

Teva Pharmaceutical Industries

IsraelAgreement for worldwide License to TEV-48573/TAK-573 (modakafusp alfa, Anti-CD38AttenukineTM) and multi-target discovery collaboration accessing Teva’s AttenukineTM platform.
Takeda made a decision to discontinue the modakafusp alfa (TAK-573) development programs basedon strategic considerations .

MD Anderson Cancer
Center (MDACC)

Memorial Sloan Kettering Cancer
Center*ImmunoGen acquired by AbbVie in February 2024.

Plasma Derived Therapies
PartnerCountryof incorporation

Subject

Halozyme

U.S.

Agreement for the in-license of Halozyme’s proprietary ENHANZE™ platform technology toincrease dispersion and absorption of HYQVIA.

KamadaIsraelIn-license agreement to develop and commercialize IV Alpha-1 proteinase inhibitor (GLASSIA);
Exclusive supply and distribution of GLASSIA in the U.S., Canada, Australia and New Zealand; workon post market commitments ongoing.

Johnson & Johnson/Momenta
Pharmaceuticals

U.S.

In-licensing agreement with Momenta Pharmaceuticals, Inc. which was acquired by Johnson &Johnson for an investigational hypersialylated immunoglobulin (hsIgG) candidate.

PreviPharma

EU

Research collaboration and option agreement to develop new targeted proteins46

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Vaccines
Countryof incorporation

Subject

U.S.

Partnership to develop TAK-426, a Zika vaccine candidate, for the U.S. with the option to use data
generated for filing also in affected regions around the world. Takeda decided to terminate further
development of TAK-426.

U.S.

Partnership for the development, manufacturing and commercialization of Nuvaxovid Intramuscular
Injection, Novavax’ COVID-19 vaccine in Japan, which is being funded by the Government ofJapan’s Ministry of Health, Labour and Welfare (MHLW) and Agency for Medical Research andDevelopment (AMED). Takeda finalized an agreement with the MHLW to supply 150 million dosesof Nuvaxovid, the supply of which will be dependent on many factors, including need. In February
2023, MHLW cancelled the order of the remaining doses not yet supplied. Takeda is working with
Novavax to develop vaccines against the future variants including the Omicron variant. In April
2024, Takeda submitted a New Drug Application to the MHLW for 2 dose vial of Nuvaxovid®
Intramuscular Injection (refrigerated at 2-8℃).

Countryof incorporation

Subject

Asklepios Biopharmaceuticals

U.S.

Agreement for multiple research and development collaborations using FVIII Gene Therapy for thetreatment of Hemophilia A and B.

Bridge Medicines

U.S.

Partnership with Sanders Tri-Institutional Therapeutics Discovery Institute, Bay City Capital and
Deerfield Management in the establishment of Bridge Medicines. Bridge Medicines will givefinancial, operational and managerial support to move projects seamlessly from a validating, proofof-concept study to an in-human clinical trial.

Center for iPS Cell Research
Application, Kyoto University(CiRA)

Japan

Collaboration agreement for clinical applications of iPS cells in Takeda strategic areas including
applications in neuroscience, oncology and gastroenterology as well as discovery efforts inadditional areas of compelling iPSC translational science.

Charles River Laboratories

U.S.

Collaboration on multiple integrated programs across Takeda’s core therapeutic areas using Charles
River Laboratories’ end-to-end drug discovery and safety assessment platform to progress these
programs towards candidate status.

Code Bio

U.S.

Collaboration and license agreement for Takeda and Code Bio to design and develop a targeted genetherapy leveraging Code Bio’s 3DNA platform for a liver-directed rare disease program, plus
conduct additional studies for central nervous system-directed rare disease programs. Takeda has theright to exercise options for an exclusive license for four programs.

Codexis, Inc.

U.S.

Strategic collaboration and license for the research and development of novel gene therapies forcertain disease indications, including the treatment of lysosomal storage disorders and blood factor
deficiencies.

EvozyneU.S.

Research collaboration and license agreement with Takeda to research and develop proteins that
could be incorporated into next-generation gene therapies for up to four rare disease targets.

GSK

U.K.

In-license agreement between GSK and University of Michigan for TAK-620 (maribavir) in thetreatment of human cytomegalovirus.

Ipsen

FrancePurchase agreement for the development of Obizur for the treatment of Acquired Hemophilia A
including for patients with Congenital Hemophilia A with inhibitors indication in elective or
emergency surgery.

Partner
U.S. Government - The
Biomedical Advanced Researchand Development Authority(BARDA)

Novavax

Other / Multiple Therapeutic Area
Partner47

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Massachusetts Institute ofTechnology

U.S.

MIT-Takeda Program to fuel the development and application of artificial intelligence (AI)capabilities to benefit human health and drug development. Centered within the Abdul Latif Jameel
Clinic for Machine Learning in Health (J-Clinic), the new program will leverage the combined
expertise of both organizations, and is supported by Takeda’s investment.

Schrödinger

U.S.

Agreement for the multi-target research collaboration combining Schrödinger’s in silico platformdriven drug discovery capabilities with Takeda’s deep therapeutic area knowledge and expertise instructural biology.

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Competition
Competition in each market where we conduct business is based on, among other things, product safety, efficacy, convenience of dosing,reliability, availability and pricing. Our competitors include large international companies whose capabilities cover the entire product creation
process from R&D to manufacturing and marketing, as well as biopharmaceutical companies with a focus on specific therapeutic areas.
We also face competition from generic drugs and biosimilars that enter the market when our patent protection or regulatory exclusivity
expires. See “—Intellectual Property” for additional description of our patents. Additionally, we may face competition from the introduction of ourown new products that treat similar diseases as our older products.
The competition we face often differs by product and geographic market, and competitors may emerge and fall away over time due toadvances in innovation, merger activity and other business and market changes.
The following table shows the principal sources of competition for our main products:
Our productGI:
ALOFISEL

DEXILANT, PANTOPRAZOLE (Protonix)

ENTYVIOEOHILIAGATTEX/REVESTIVETAKECAB

Rare Diseases:
ADVATE and ADYNOVATE

Principal competing productPrimary manufacturer or distributor

Chronic seton usage, surgery
Remicade
Infliximab biosimilars
Generic lansoprazole
Generic dexlansoprazole
Pantroprazole
NexiumPrilosec
Prevacid
Remicade
HumiraStelaraXeljanz
Velsipity
Omvoh
Infliximab biosimilars
Adalimumab biosimilars
RinvoqSkyrizi
Zeposia
Jyseleca
CarograZymfentra
SimponiCimziaDupixent
Jorveza—
NexiumGeneric lansoprazole, omeprazole,esomeprazole—
Janssen Biotech
Amgen, Pfizer, Organon
Various
VariousPfizerAstraZeneca
Procter and Gamble
TakedaJanssen Biotech
AbbvieJanssen Biotech
Pfizer
PfizerEli Lilly and Company
Amgen, Pfizer, Organon
Various
AbbVie
AbbVieBMS
Alphasigma / Galapagos
EA Pharma
Celltrion
Janssen Biotech
UCB
Regeneron / Sanofi
Dr. Falk Pharma—
AstraZeneca

Xyntha/Refacto AF
Kogenate

Pfizer and Sobi
Bayer

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Our productADZYNMA

ELAPRASE
FEIBA
LIVTENCITYREPLAGAL

TAKHZYROVPRIVPDT Immunology
FLEXBUMIN and
HUMAN ALBUMINGAMMAGARD LIQUID, HYQVIA,CUVITRU

Principal competing productPrimary manufacturer or distributor

Kovaltry
Eloctate/Elocta
Novoeight
Nuwiq
AfstylaJivi
EsperoctHemlibra
Roctavian
Altuviiio
AlhemoOctaplas
Koate-DVI
Dried Factor VIII Fraction Type 8Y
Hunterase
IZCARGO
Hemlibra
Novo 7
Ganciclovir
Valganciclovir
Valaciclovir
Aciclovir
Foscarnet
Letermovir
Fabrazyme
Galafold
FabagalElfabrio
Ruconest
Generic Icatibant
Haegarda
Berinert
OrladeyoAndrogens
Cerezyme
Elelyso/uplyso
Zavesca
Cerdelga
Abcertin

Bayer
Sanofi and Sobi
Novo Nordisk
Octapharma
CSL
Bayer
Novo Nordisk
Roche
Biomarin
Sanofi and Sobi
Novo Nordisk
Octapharma
KedrionBio Products Laboratory
Korean Green Cross
JCR Pharmaceuticals
Roche
Novo Nordisk
Various
Various
Various
Various
Various
Merck / MSD
Sanofi Genzyme
AmicusIsu Abxis
ChiesiPharming
Various
CSL
CSL
BioCryst
Various
Sanofi Genzyme
Pfizer/Protalix
Actelion [Janssen]
Sanofi Genzyme
Isu Abxis

Alburex/AlbuRxAlbuminar, Albumex
Plasbumin
Albutein/Albutein Flexbag
Albunorm
Kedbumin, Albuked
Hizentra
Xembify
Gamunex-C
Cutaquig/Gammanorm

CSL
CSL
Grifols
Grifols
Octapharma
KedrionCSL
Grifols
Grifols
Octapharma

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Our product

GAMMAGARD LIQUID/KIOVIG,GAMMAGARD S/DPrincipal competing productPrivigen
Gamunex-C
Flebogamma
Asceniv
BivigamGammaked
Gammaplex
Octagam
Panzyga

Primary manufacturer or distributor

CSL
Grifols
Grifols
ADMA
ADMA
Kedrion
BPL
Octapharma
Octapharma

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Our productOncology:
ADCETRISALUNBRIGEXKIVITYFRUZAQLAICLUSIGLEUPRORELIN (LEUPLIN)
NINLARO, VELCADE

Neuroscience:
ADDERALL XR

INTUNIV

TRINTELLIX

Principal competing product

Keytruda
OpdivoXalkori
Zykadia
Alecensa
Lorbrena
RybrevantLonsurf
Stivarga
Gleevec
Tasigna
SprycelBosulif
Zoladexgeneric leuprorelin
Revlimid
Pomalyst/Imnovid
Kyprolis
Darzalex
Empliciti
XpovioSarclisa
PapextoAbecmaMerck/MSD
Bristol-Myers Squibb
PfizerNovartis
Roche
PfizerJanssen Oncology
Taiho Pharmaceutical Co.
Bayer
Novartis
Novartis
Bristol-Myers Squibb
PfizerAstraZeneca—
Bristol-Myers Squibb
Bristol-Myers Squibb
Amgen
Janssen Biotech
Bristol-Myers Squibb
Karyopharm
Sanofi
Oncopeptide
Bristol-Myers Squibb

Lisdexamfetamine
Generic mixed salts of a single-entity
amphetamine
product:–
AdderallIR
Generic mixed salts of amphetamine
products:–
Dyanavel XR–
Azstarvs–
Concerta
Generic methylphenidate, extended
release:–
Jornay PM–
Adhansia XR–
Quillivant XRStrattera
Generic Guanfacine
Qelbree
Generic Vilazodone
Fetzima

VariousGenerics:
Amitriptyline, amoxapine, bupropion,
citalopram, clomipramine, desipramine,
desvenlafaxine, doxepin, duloxetine,
esketamine, escitalopram, fluoxetine,
fluvoxamine, imipramine, maprotiline,
mirtazapine, nefazodone, nomifensine,
nortriptyline, paroxetine, protriptyline,
sertraline,
trazodone,
trimipramine,
venlafaxine
VYVANSE

Primary manufacturer or distributor

Various
Tris Pharama
CoriumJanssen Pharmaceuticals
Ironshore Pharmaceuticals
Purdue Pharma
Tris Pharma
Eli Lilly and Company
Various
Supernus
Various
AbbVieVariousGeneric mixed salts of a single-entity
amphetamine product:–
Adderall IR
Various52

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Our productPrincipal competing product

Generic mixed salts of a single-entity
amphetamine product, extended release:–
Adderall XR–
Dyanavel XR–
Azstarys
Generic
methylphenidate,extendedrelease:–Concerta–
Jornay PM–
Adhansia XR–
Quillivant XR
Non-stimulants:– Strattera (atomoxetine)–
Intuniv (guanfacine)–
Kapvay (clonidine)–
Qelbree (viloxazine)
Other:AZILVAQDENGA

Generic candesartan, olmesartan
Dengvaxia

53

Primary manufacturer or distributor

Various
Tris Pharma
CoriumJanssen Pharmaceuticals
Ironshore Pharmaceuticals
Purdue Pharma
Tris Pharma
Eli Lilly and Company
TakedaShionogi
Supernus—
Sanofi Pasteur

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Regulation
The pharmaceutical industry is subject to extensive global regulation by regional, national, state and local agencies. The regulatory
agencies govern the testing, approval, production, labeling, distribution, post-market surveillance, advertising, dissemination of information andpromotion of our products. The following is a description of the major regulations affecting our products in the U.S., Japan and the EU, our largest
markets.
The introduction of new pharmaceutical products generally entails a lengthy approval process. Products must be authorized or registeredprior to marketing, and such authorization or registration must subsequently be maintained. In recent years, the registration process has required
increased testing and documentation for the approval of new drugs, with a corresponding increase in the expense of introducing a new product tomarket. To register a pharmaceutical product, a registration dossier containing evidence establishing the safety, efficacy and quality of the productmust be submitted to regulatory authorities. Generally, a therapeutic product must be registered in each country in which it will be sold. It is possiblethat a drug can be registered and marketed in one country while the registration authority in another country may, prior to registration, request
additional information from the pharmaceutical company or even reject the product. It is also possible that a drug may be approved for different
indications in different countries. The registration process generally takes between six months to several years, depending on the country, the qualityof the data submitted, the efficiency of the registration authority’s procedures and the nature of the product. Many countries provide for accelerated
processing of registration applications for innovative products of therapeutic interest. In recent years, efforts have been made among the U.S., Japanand the EU to harmonize registration requirements to achieve shorter development and registration times for medical products.

United States
In the U.S., applications for drug registration are submitted to and reviewed by the FDA, which regulates the testing, manufacturing,labeling and approval for marketing of pharmaceutical products intended for commercialization. The FDA continues to monitor the safety ofpharmaceutical products after they have been approved for sale in the U.S. market. When a pharmaceutical company has gathered data todemonstrate a drug’s safety, efficacy and quality, it may file for the drug an NDA or Biologics License Application (“BLA”), along with information
regarding the clinical experiences of patients tested in the drug’s clinical trials. A supplemental New Drug Application ("sNDA") or supplemental
Biologics License Application (“sBLA”) must be filed for new indications for a previously approved drug.
Once an application is submitted, the FDA assigns reviewers from its staff, including experts in biopharmaceutics, chemistry, clinicalmicrobiology, pharmacology/toxicology, and statistics. After a complete review, these content experts then provide written evaluations of the NDA
or BLA. These evaluations are consolidated and are used by senior FDA staff in its final evaluation of the NDA or BLA. Based on that final
evaluation, the FDA then provides to the NDA or BLA’s sponsor an approval, or a “complete response” letter if the NDA or BLA application is not
approved. If not approved, the letter will state the specific deficiencies in the NDA or BLA which need to be addressed. The sponsor must thensubmit an adequate response to the deficiencies to restart the review procedure. Once the FDA has approved an NDA, BLA, sNDA or sBLA
amendment, the company can make the new drug available for physicians to prescribe. The drug owner must submit periodic reports to the FDA,
including any cases of adverse reactions. For some medications, the FDA requires additional post-approval studies (Phase IV) to evaluate long-term
effects or to gather information on the use of the product under specified conditions. Throughout the life cycle of a product, the FDA requires
compliance with standards relating to good laboratory, clinical and manufacturing practices. The FDA also requires compliance with rules pertaining
to the manner in which we may promote our products.
The Drug Price Competition and Patent Restoration Term Act of 1984, known as the Hatch-Waxman Act, established the application
procedures for obtaining FDA approval for generic forms of brand-name drugs. Under these procedures, instead of conducting full-scale pre-clinicaland clinical trials, the FDA can accept data establishing that the drug formulation, which is the subject of an abbreviated application, is bio-equivalentand has the same therapeutic effect as the previously approved drug, among other requirements. This act also provides market exclusivity provisions
for brand-name drugs that can delay the submission and/or the approval of Abbreviated New Drug Applications (“ANDAs”), which are theapplications for generic drug registrations. The Orphan Drug Act of 1983 grants seven years of exclusive marketing rights to a specific drug for a
specific orphan indication. The term “orphan drug” refers, generally, to a drug that treats a rare disease affecting fewer than 200,000 persons in the
U.S. market exclusivity provisions are distinct from patent protections and apply equally to patented and non-patented drug products.
While the Hatch-Waxman Act addresses the development and approval of generic drugs, the Biologics Price Competition and Innovation
Act of 2009 (the “BPCIA”), enacted in the Affordable Care Act (the “ACA”) amended the Public Health Service Act (the “PHS Act”) to create anabbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to, or “interchangeable”, with an FDA-licensed
reference product. BPCIA allows for approval of a biosimilar if it is “highly similar” and has no clinically meaningful differences from its approvedand existing biological product. Furthermore, as codified in the 2016 Physician Fee Schedule Final Rule, effective January 1, 2016, the physician
reimbursement amount for a biosimilar is based on the average sales price (the “ASP”) of all National Drug Codes (the “NDCs”) assigned to thebiosimilars included within the same billing and payment code. In general, this meant that CMS grouped biosimilar products that were licensed witha common reference product with the same payment limit and HCPCS code. However, effective January 1, 2018 under the 2018 Physician Fee
Schedule Final Rule, newly approved biosimilar biological products with a common reference product were no longer grouped into the same billingcode. Instead, biosimilars are separately coded and paid for under Medicare Part B.

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Japan
Manufacturers and sellers of drugs, quasi-drugs, cosmetics, medical devices and regenerative medical products (collectively the“Designated Products”) in Japan are subject to the supervision of the MHLW primarily under the Act on Securing Quality, Efficacy and Safety of
Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics of Japan (“Pharmaceuticaland Medical Device Act” or the “PMD Act”). Under the PMD Act, the relevant licenses must be obtained from the MHLW in order to conduct thebusiness of manufacturing, marketing or selling Designated Products.
Applications for the approval of new products are made through the PMDA. The clinical trial data and other pertinent data must be attachedto the application for approval. If the drugs, medical devices or regenerative medical products under application are of types designated by ministerial
ordinance of the MHLW, the attached data mentioned above must be obtained in compliance with the standards established by the Minister, such as
the Good Laboratory Practice (the “GLP”) and the Good Clinical Practice (the “GCP”). Once an application for approval is submitted, a review teamis formed, which consists of specialized officials of the PMDA, including experts on chemistry/manufacturing, non-clinical, clinical, and biostatistics.
Team evaluation results are passed to the PMDA’s external experts, who then report back to the PMDA. After a further team evaluation, a report isprovided to the Minister; the Minister makes a final determination for approval and refers this to the Council on Drugs and Foods Sanitation, whichthen advises the MHLW on final approvability. Marketing and distribution approvals require a review to determine whether or not the product in theapplication is suitable as a drug to be manufactured and distributed with which a manufacturing and distribution business license for the type of drugconcerned has been obtained, and to confirm that the product has been manufactured in a plant compliant with the GMP.
Once the MHLW has approved the application, the company can make the new drug available for physicians to prescribe. After that, the
MHLW lists its NHI price within 60 days (or 90 days at the latest) from the approval, and physicians can obtain reimbursement. For somemedications, the MHLW requires additional post-marketing studies (Phase IV) to further evaluate safety and/or to gather information concerning thequality, efficacy, and safety of the product under specified conditions, in addition to post marketing surveillance including Early Post-marketing
Phase Vigilance (“EPPV”) based on the risk management plan (“RMP”) for all new medications. The MHLW also requires the drug’s sponsor to
submit periodic safety update reports. Within three months from the specified re-examination period, which is designated at the time of the approvalof the application for the new product, the company must submit a re-examination application to enable the drug’s quality, efficacy, and safety to bereassessed against approved labeling by the PMDA.
The PMD Act also provides for special regulations applicable to drugs, quasi-drugs, cosmetics and medical devices made of biological raw
materials. These regulations impose various obligations on manufacturers and other persons in relation to manufacturing facilities, explanation topatients, labeling on products, record-keeping and reporting to the Minister.
Under the PMD Act, the Minister may take various measures to supervise manufacturing and marketing license holders of Designated
Products. The Minister has the authority to order manufacturing and marketing license holders to temporarily suspend the marketing, leasing orproviding of the Designated Products to prevent risks or increases in risks to the public health. Also, the Minister may revoke a license or approval
granted to a manufacturing and marketing license holder or order a temporary business suspension under certain limited circumstances such as
violation of laws relating to drugs.

European Union
In the EU, there are three main procedures for an application for authorization to market pharmaceutical products in the EU Member States:
the Centralized Procedure, the Mutual Recognition Procedure (the “MRP”) and the Decentralized Procedure (the “DCP”). It is also possible to obtaina pure national authorization for products intended for commercialization in a single EU Member State only, or for additional indications for licensed
products.
Under the Centralized Procedure, applications are made to the EMA for an authorization which is valid throughout the EU. The Centralized
Procedure is mandatory for all biotechnology products and for new chemical entities in cancer, neurodegenerative disorders, diabetes, AIDS,
autoimmune diseases or other immune dysfunctions, and optional for other new chemical entities or innovative medicinal products or if in the interestof public health. When a pharmaceutical company has gathered data which it believes sufficiently demonstrates a drug’s safety, efficacy, and quality,
then the company may submit an application to the EMA. The EMA then receives and validates the application, and the Committee for Medicinal
Products for Human Use (the “CHMP”) appoints a Rapporteur and Co-Rapporteur to lead review of the dossier. The entire review cycle must becompleted within 210 days, although there is a “clock stop” at day 120, which allows the company to respond to questions set forth in the Rapporteurand Co-Rapporteur’s Assessment Report. After the company’s complete response is submitted to the EMA, the clock restarts on day 121. If there arefurther aspects of the dossier requiring clarification, the EMA will then request an Oral Explanation on day 180, in which case the sponsor must
appear before the CHMP to provide the requested additional information. On day 210, the CHMP will then take a vote to recommend the approval or
non-approval of the application. The final decision under this Centralized Procedure is a European Community decision which is binding in its
entirety on all EU Member States. This decision occurs on average 60 days after a positive CHMP recommendation. In the case of a negative
opinion, a written request for re-examination of the opinion can be made by the applicant within a time limit of 15 days from the date of the opinion.
The detailed grounds for re-examination must be submitted to the EMA within 60 days from the date of the opinion. In the EU, biosimilars areapproved under a specialized pathway of the centralized procedure. Similar to the pathway in the U.S., applicants seek and obtain regulatory approval
for a biosimilar once the data exclusivity period for the original reference product has expired relying in part on the data submitted for the originalreference product together with data evidencing that the biosimilar is “highly similar” in terms of quality, safety and efficacy to the original reference
product authorized in the European Economic Area.
Under both the MRP and DCP, the assessment is led by a single EU Member State, called the Reference Member State (the “RMS”), whichthen liaises with other EU Member States, known as the concerned member states (the “CMSs”). In the MRP, the company first obtains a marketing
authorization in the RMS, which is then recognized by the CMSs in 90 days. In the DCP, the application is done simultaneously in the RMS and all
CMSs. During the DCP, the RMS drafts an assessment report within 120 days. Within an additional 90 days, the CMSs review the application and55

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can issue objections or requests for additional information. On day 90, each CMS must be assured that the product is safe and effective, and that it
will cause no risks to the public health. Once an agreement has been reached, each member state grants national marketing authorizations for the
product.
After the Marketing Authorizations have been granted, the company must submit periodic safety reports to the EMA, if approval was
granted under the Centralized Procedure, or to the National Health Authorities, if approval was granted under the DCP or the MRP. In addition,
several pharmacovigilance measures must be implemented and monitored including Adverse Event collection, evaluation and expedited reportingand implementation, as well as update Risk Management Plans. For some medications, post approval studies (Phase IV) may be required tocomplement available data with additional data to evaluate long term effects (called a Post Approval Safety Study) or to gather additional efficacy
data (called a Post Approval Efficacy Study).
European Marketing Authorizations have an initial duration of five years. After this first five-year period, the holder of the marketing
authorization must apply for its renewal, which may be granted based on the competent authority’s full benefit-risk review of the product. Once
renewed, the marketing authorization is generally valid for an unlimited period. Any Marketing Authorization which is not followed within three
years of its granting by the actual placing on the market in any EU member state of the corresponding medicinal product ceases to be valid.

Third-Party Reimbursement and Pricing
We consider domestic and international competitive conditions, such as the price of competing products, in setting and revising the price ofour pharmaceutical products. Government regulation also has a significant effect in determining the price of pharmaceutical products in many of thecountries in which we operate due to the fact that government policy in many countries has emphasized and purchasers continue to seek large
discounts on pharmaceutical products.

United States
In the U.S. our sales are subject to various voluntary and mandatory rebates and ceiling prices, which vary depending on the type ofcoverage and can have a significant impact on our results. The most significant of these are rebates associated with commercial managed care,
Medicaid, Medicare and other government programs. In general, the details of these rebates are not disclosed publicly.
Commercial Managed Care
Payers negotiate rebates to reduce the pricing of products, and use formularies to encourage members to utilize preferred products tomanage their costs. Exclusion from a formulary, or a disfavored formulary position, can directly reduce product usage. Consolidation of payers,
pharmacy benefit managers and specialty pharmacies has resulted, and may continue to result, in increasing rebates and other discounts due to thepurchasing power of the consolidated entities. Copay assistance to help patients afford their prescribed drugs may also affect product usage. In recent
years, some states such as California and Massachusetts, have passed legislation that limits the use of manufacturer sponsored copay assistanceprograms, and some payers have limited manufacturer copay assistance benefits to patients.
Medicaid
Medicaid is a state administered program adhering to federal requirements that provides healthcare coverage to eligible low-income adults,
children, pregnant women, elderly adults and people with disabilities.
Takeda must pay rebates on purchases of our products under the Medicaid Drug Rebate Program. This includes a mandatory minimum
rebate, additional rebates if commercial discounts are greater than the mandatory minimum rebate and an inflation penalty if our prices haveincreased above inflation. These rebates guarantee that any patient in the Medicaid program can have access to Takeda’s products, although there
could be significant utilization management imposed by the state. In addition to the mandatory rebates, Takeda may also choose to offer
supplemental rebates to a state or Medicaid managed care organization to ensure Takeda’s drugs are on the preferred drug list (which is similar to a
formulary for Medicaid programs). Takeda must also calculate and report to government agencies the amount of the rebate. The required
calculations are complex, and a misrepresentation in the reported information may expose Takeda to penalties. We are required to report any
revisions to prior calculations, which could affect the rebate liability for prior quarters.

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Medicare
Medicare is a federally run program that provides healthcare to persons aged 65 and over, and certain persons under the age of 65 who havea long-term disability and meet certain eligibility requirements. Drugs are primarily covered under two different benefits for Medicare beneficiaries,
Medicare Part B and Medicare Part D. Medicare Part B covers outpatient health and medical services, which includes some drugs under the medical
benefit. These drugs tend to be the most biologically complex and are generally administered in a doctor’s office or hospital outpatient setting.
Medicare Part D is a voluntary drug offering available to Medicare beneficiaries through private health insurance plans that contract with thegovernment to deliver this benefit.
Part B covers drugs that are administered by infusion or injection in a doctor’s office or hospital outpatient setting, as well as certain drugs
furnished in the home. Medicare pays physicians and outpatient hospitals for most separately payable Part B-covered drugs they furnish to
beneficiaries at a rate of 106 percent of the manufacturer-reported ASP before sequestration. A product’s ASP reflects the average price realized by
the manufacturer for sales to all commercial purchasers net of rebates, discounts, and price concessions with certain exceptions. Takeda must also
calculate and report specific prices to government agencies, including the ASP used by the Medicare Part B program. The required calculations arecomplex, and a misrepresentation in the reported pricing may expose Takeda to penalties.
Part D covers most of the other outpatient prescription drugs. Except as set forth below with respect to drugs covered by the negotiation
provisions of the Inflation Reduction Act (“IRA”), rather than Medicare setting prices administratively, Medicare pays Part D plan sponsors (healthplans offering the benefit) that, through their pharmacy benefit managers, contract with pharmacies over payment rates for each prescription filled byan enrollee and negotiate with drug manufacturers for prices and post-sale rebates. Takeda may offer a rebate as part of the negotiation between plan
sponsors and manufacturers to ensure that our products are on the formulary. In addition, the Part D program also has an additional mandatory rebate
during part of the year, when beneficiaries are in the Medicare Part D coverage gap. Pharmaceutical manufacturers are required to provide a discountof 70% on brand drugs used during that portion of the benefit throughout 2024. In 2022, Congress passed the IRA, which imposes penalties on
manufacturers that raise Part D and Part B drug prices, AMP and ASP respectively, faster than the rate of inflation starting in 2022 for Part D drugs
and 2023 for Part B drugs; shifts greater liability to the manufacturer in the Part D program resulting in a 10% discount on brand drugs in the initialcoverage phase and 20% in the catastrophic phase, as well as implementing a USD 2,000 out-of-pocket cap for patients on drug expenses starting in
2025; and mandates the negotiation of a new Medicare “maximum fair price” for certain drugs in the Medicare Part D program and the Part B
program effective in 2026 and 2028 respectively.
340B and Federal Agency Discounted Pricing
Takeda must offer discounted pricing for purchases by certain designated health care entities and federal agencies under certain federal
programs, including the Public Health Service (the “PHS”) pharmaceutical pricing program (“340B”) and the Federal Supply Schedule (the “FSS”).
The 340B program was designed to assist safety net hospitals that serve a disproportionate share of indigent patients by requiring
manufacturers, as a stipulation of participation in the Medicaid Drug Rebate Program, to provide deep discounts on covered outpatient drugs. The
discounts adhere to a statutory formula, per product, that requires manufacturers to charge no more than a certain price. Entities that may apply toparticipate in the 340B program include qualifying hospitals, federal grantees, the Centers for Disease Control and Prevention, and the Indian HealthService.
The FSS is a list of contracts and prices for frequently used supplies and services available for purchase by federal agencies and otherentities such as the U.S. territories and tribal governments. Although there are no statutory ceilings on prices, the government often uses a favored
price as a starting point in negotiations to obtain below-market prices.
Health Care System Reform
For the past few years, there has been an increased focus and downward pressure on pricing which we expect to continue for a variety ofcircumstantial reasons. There are a number of legislative and regulatory proposals under consideration that would impact how drugs are reimbursedin the U.S., could restrict patient access, and have financial implications for manufacturers.

Japan
In Japan, manufacturers of pharmaceutical products must have new products listed on the National Health Insurance (the “NHI”), a pricelist published by the MHLW. The NHI price list provides rates for calculating the price of pharmaceutical products used in medical services provided
under various public medical care insurance systems. Prices on the NHI price list have been previously subject to revisions based on the actual prices
and amounts by which the pharmaceutical products are purchased by medical institutions in Japan, and the average price of previously listed products
generally decreases as a result of these price revisions. The Japanese government is currently undertaking healthcare reform initiatives with the goalof sustaining the universal coverage of the NHI program. As part of these initiatives, the annual NHI price list revision has taken place since April
2021, which could lead to more frequent downward price revisions. The government is also addressing the efficient use of drugs, with the target of
80% penetration in each prefecture by volume and 65% in value by March 2030 with respect to products for which market exclusivity has expired. In
addition, products on the NHI price list nominated based on pre-defined criteria, such as innovativeness and the financial impact, are subject to a
cost-effectiveness evaluation under MHLW rules, and subject to price adjustments depending on the outcome of this evaluation.

EuropeIn the EU, our operations are subject to significant price and marketing regulations. Many governments in the EU are introducing
healthcare reforms to curb increasing healthcare costs. The governments in the EU influence the price of pharmaceutical products through theircontrol of national healthcare systems that fund a large part of the cost of such products to patients. The general downward pressure on healthcare57

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costs, particularly regarding prescription drugs, has been increasing. In addition, prices for marketed products are referenced within and amongst the
EU Member States, which further affects pricing in each EU Member State. As an additional control for healthcare budgets, some EU Member States
have passed legislation to impose further mandatory rebates for pharmaceutical products and financial claw-backs on the pharmaceutical industry. In
this regard, many countries have health technology assessment organizations that use formal economic metrics such as cost-effectiveness todetermine prices, coverage and reimbursement of new therapies, and these organizations are expanding in established and emerging markets. We
expect that countries will continue to take aggressive actions to seek to reduce expenditures on drugs and biologics. Similarly, fiscal constraints may
also affect the extent to which countries are willing to approve new and innovative therapies and/or allow access to new treatments. Starting in 2025,
the EU Regulation on Health Technology Assessment will be implemented, initially for oncology and advanced therapeutic medicinal products,
expanding in 2028 to orphan drugs and from 2030 to all centrally registered products, adding an additional layer of scrutiny to subsequent nationallevel pricing and reimbursement processes. While the exact impact of this regulation is not yet known, it is expected to increase clinical evidentiary
requirements on manufacturers by pooling specific data requirements from all EU member states. If we are unable to meet these heightened
requirements, our products could face potential adverse impacts on pricing and reimbursement in EU markets.
The EU is currently undergoing an analysis of the rewards extended for intellectual property of pharmaceutical products as well as theoverall regulatory framework for the approval and commercialization of all medicinal products. This may lead to significant changes in the way
drugs are approved and commercialized as well as the duration of exclusivity, in particular for orphan drugs. These changes are likely to affect themarket within a 3-5-year timeframe.
Furthermore, certain European countries also utilize tendering to secure prescription drugs at controlled price level. Takeda often
participates in tendering in these regions, which usually results in a significant price discount.

Other
Many other countries around the world are also taking steps to control prescription drug prices. For example,China's National Health
Security Administration (NHSA) conducts annual price negotiations and assessments to determine which new drugs can be added to the national
reimbursement list. This has accelerated the inclusion of innovative drugs, with significant price discounts. Additionally, Volume-based Procurement(VBP) allows off-patent drugs to compete with their generics in a tendering process, where they must compete on price to win large volume
contracts. Canada has proposed amendments to its Patented Medicines Regulations that could reduce prices for specialty medicines, such as biologics
and medicines for rare diseases. Furthermore, certain other countries also utilize a tendering process to control prescription drugs, in which Takeda
often participates.

C. Organizational Structure
We are a holding company and administer our business through a number of subsidiaries worldwide. Information about Takeda’sorganizational structure, including a list of our subsidiaries, their country of incorporation and residence and our proportion of ownership interest, is
included in Note 29 to our audited consolidated financial statements included in this annual report.

D. Property, Plant and Equipment
Our registered head office is located in Osaka, Japan and our global head office is located in Tokyo, Japan. We generally own our facilities
or have entered into long-term lease arrangements for them.
As of March 31, 2024, the net book values of the buildings and structures, machinery and vehicles, tools, furniture and fixtures and land we
owned were JPY 1,171.6 billion, JPY 395.9 billion, JPY 49.8 billion and JPY 105.6 billion, respectively. We own the majority of our facilities, noneof which are subject to any material encumbrances. We believe our facilities are generally suitable for future needs. Please refer to Item 3.D Risk
Factors for more information about risks related to our manufacturing.
The following table describes our major facilities, including production facilities for biopharmaceutical products, plasma-derived therapies
and vaccines, as of March 31, 2024:
Land Area(in square meter)

Group company

Location(1)Takeda Pharmaceutical Company Limited

Chuo-ku,Tokyo, Japan and others

Takeda Pharmaceutical Company Limited

Chuo-ku, Osaka, Japan and others

Takeda Pharmaceutical Company Limited

Yodogawa- ku, Osaka, Japan

Takeda Pharmaceutical Company Limited

Hikari-shi, Yamaguchi, Japan

Takeda Pharmaceutical Company Limited

Narita-shi, Chiba, Japan

Production, research anddevelopment

27,644

Takeda Pharmaceutical Company Limited

Fujisawa-shi, Kanagawa, Japan

Research and development

21,009Use of facility

58

Global Headquarters(2)(Administrative and sales)
Head Office(2)(Administrative and sales)
Production, research anddevelopment
Production, research anddevelopment

16,052362,305
163,694
1,011,061

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Baxalta US Inc.

Covington, GA, U.S.

Production and others

503,695

BioLife Plasma Services LP

Bannockburn, IL, U.S.

Production and others

448,959

Shire Human Genetic Therapies, Inc

Lexington, MA, U.S.

Production and others

395,024

Takeda Pharmaceuticals U.S.A., Inc.

Cambridge, MA, U.S.

Administrative, sales and others

Takeda Manufacturing Austria AG

Vienna, Austria

Production and others

368,551

Baxalta Manufacturing S.à r.l.

Neuchatel, Switzerland

Production and others

87,040Baxalta Belgium Manufacturing S.A.

Lessines, Belgium

Production and others

150,581

Takeda Development Center Americas, Inc.

Cambridge, MA, U.S.

Research, development and others

73,382

ARIAD Pharmaceuticals, Inc.

Cambridge, MA, U.S.

Research, development and others—

Takeda Manufacturing Italia S.p.A.

Rome, Italy

Production and others

109,000

Takeda Ireland Limited

Kilruddery, Ireland

Production and others

202,679

Takeda Manufacturing Singapore Pte. Ltd.

Singapore

Production and others—

Takeda GmbH

Konstanz, Germany

Production and others—

Production and others

141

Takeda Singen Real Estate GmbH & Co. KG Singen, Germany—____________
Notes:(1)
For subsidiaries, location specified is the main location of the subsidiary. Certain production facilities may be in other locations in the country
specified.
(2)
Global Headquarters and Head Office mainly consist of buildings, accompanying facilities and lands (includes dormitory and company
housing, etc.).
In March 2023, we announced that we will invest in a new manufacturing facility for plasma-derived therapies in Yodogawa-ku, Osaka,
Japan. We expect our total investment with funds on hand to amount to JPY 95.0 billion. We expect this construction to start in the fiscal year ending
March 31, 2025 and to be completed in the fiscal year ending March 31, 2029.
In January 2024, we started construction of a production facility in Los Angeles, California, the U.S. for a plasma fractionation capacity
expansion. We expect this construction to be completed in June 2027 and our total investment with funds on hand in this construction to amount to
JPY 34.6 billion. As of March 31, 2024, the total amount paid on this construction was JPY 2.0 billion.
In January 2023, we started construction of One Cambridge Campus for research and development (R&D) and office space in Cambridge,
Massachusetts, the U.S. We expect this construction to be completed in March 2027 and our total investment with funds on hand to amount to JPY
281.7 billion. As of March 31, 2024, the total amount paid on this construction was JPY 6.1 billion. This total investment includes a lease term
payment obligation expected to start in 2025 based on a lease agreement we have entered into.
In February 2022, we started construction of a production facility and warehouse in Lessines, Belgium for the manufacturing of plasmaderived therapies. We expect this construction to be completed in December 2024 and our total investment with funds on hand in this construction toamount to JPY 47.3 billion. As of March 31, 2024, the total amount paid on this construction was JPY 25.1 billion.

Environmental Matters
We are subject to laws and regulations concerning the environment, safety matters, regulation of chemicals and product safety in the
countries where we manufacture and sell our products or otherwise operate our business. These requirements include regulation of the handling,
manufacture, transportation, use and disposal of materials, including the discharge of pollutants into the environment. In the normal course of ourbusiness, we are exposed to risks relating to possible releases of hazardous substances into the environment, which could cause environmental orproperty damage or personal injuries, and which could require remediation of contaminated soil and groundwater, in some cases over many years,
regardless of whether the contamination was caused by us, or by previous occupants of the property. See “Item 3. Key Information—D. Risk Factors—We may incur claims relating to our use, manufacture, handling, storage or disposal of hazardous materials.”

Item 4A. Unresolved Staff Comments
Not applicable.

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Item 5. Operating and Financial Review and Prospects
You should read the following discussion of our operating and financial review and prospects together with our consolidated financial
statements included in Item 18 in this annual report. Our consolidated financial statements are prepared in accordance with IFRS, as issued by theInternational Accounting Standards Board (“IASB”). IFRS includes IAS and related interpretations of the committees (SIC and IFRIC).
The following discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. Our actual
results may differ materially from those anticipated in these forward-looking statements as a result of factors, including, but not limited to, thoseunder Item 3. D “Risk Factors” and elsewhere in this annual report.

A. Operating Results
Overview
Takeda is a patient-focused, values-based, research and development (“R&D”) driven global biopharmaceutical company, headquartered inJapan. We have grown both organically and through acquisitions, completing a series of major transactions that have resulted in growth in our areasof therapeutic, geographic and pipeline focus. For more information on the history and development of our company, please refer to “Item 4.A.
History and Development of the Company”.
Our business is organized as a single operating segment, reflecting the presentation of information to our management for the purposes ofallocating resources, measuring performance and forecasting future periods. For the fiscal year ended March 31, 2024, our revenue and operating
profit were JPY 4,263.8 billion and JPY 214.1 billion, respectively.

Operating Environment
Over the past several years, we have extended our global reach, strengthened our presence in Oncology, GI and Neuroscience, andestablished a leading position in Rare Diseases and PDT, while adding significant assets to our growing R&D pipeline. Commercially, we havesignificantly strengthened our presence in the United States, Europe, and Growth and Emerging Markets. We have also accelerated our focus on data,
digital and technology to make our business operations more effective and efficient, leading to greater innovation and better serving our stakeholders.

Factors Affecting Our Results of Operations
Our results are affected by global industry trends and our operating environment as described in “Item 3.D. Risk Factors” and “Item 4.
Information on the Company” of this annual report and other factors described below.

Patent Protection and Generic Competition
For pharmaceutical products, in particular, patent protection and/or regulatory exclusivity benefit our results of operations by restricting
competition. Newly introduced products, particularly those which treat conditions for which alternative treatments may not be readily available, may
significantly contribute to sales. However, even protected products must compete with products of other manufacturers based on efficacy, lack ofadverse reactions and price. On the other hand, the loss or expiration of patent protection or regulatory exclusivity with respect to any of our principal
products could have a material adverse effect on our results of operations, as generic products, which tend to be quickly adopted once introduced,
may enter the market. Some of our principal products face, or are expected to face, considerable competition due to the expiration of patent or otherintellectual property protection. The following chart shows the performance of certain of our key products that have experienced the launch ofgeneric or biosimilar competitors in the last three years (CER, or constant exchange rate, % change is a non-IFRS measure. For additional
information on CER % change, see “Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda”).
Billion JPY or percentage
For the fiscal year ended March 31,
2023

Revenue:
VELCADE

¥

2024
27.8

¥

Change versus the previous fiscal year
Amount of Change

5.5¥

CER % change(22.2)(81.3)%VYVANSE

459.3

423.2

(36.1)(14.1)%AZILVA

72.9

33.6(39.3)(53.9)%

Billion JPY or percentage
For the fiscal year ended March 31,
2022

Revenue:
VELCADE

¥

2023
110.0

¥

Change versus the previous fiscal year
Amount of Change

27.8

¥

CER % change(82.3)(78.6)%VYVANSE*

327.1

459.3

132.2

18.2 %AZILVA

76.3

72.9

(3.4)

(4.5)%*Patent protection covering VYVANSE expired in the U.S. in August 2023.

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Generic erosion has negatively impacted sales of VELCADE following the expiration of patent protection over bortezomib, that product’s
active ingredient, in 2022, with revenue falling to JPY 110.0 billion in the fiscal year ended March 31, 2022 and to JPY 27.8 billion in the fiscal year
ended March 31, 2023, and declining even further to JPY 5.5 billion in the fiscal year ended March 31, 2024. Patent protections covering VYVANSE
expired in the U.S. in August 2023 and a generic version of AZILVA was approved by the PMDA in Japan in February 2023 (with a drug price listingfor the generic competitor approved in June 2023), which led to declines in sales for both products in the relevant jurisdictions. Sales of VYVANSE
decreased from JPY 459.3 billion in the fiscal year ended March 31, 2023 to JPY 423.2 billion in the fiscal year ended March 31, 2024; sales of
AZILVA decreased from JPY 72.9 billion to JPY 33.6 billion during the same period. We expect these decreasing trends for both of these products tocontinue in the fiscal year ending March 31, 2025.
In certain cases, generic competitors may successfully challenge the validity of patents, or the manufacturer may decide that the benefits ofprematurely launching the generic drug “at risk” outweigh the costs of defending infringement litigation. In situations where the validity of patents or
the value of the protection is challenged, we may record impairment losses with respect to the relevant intangible property.

Development and Commercialization of New Products and Expansion of Existing Products
The development and commercialization of new biopharmaceutical products is key to our business, as is the expansion of existing products
to additional indications and/or geographic markets, particularly as we seek to grow our revenue and to offset the effect of losses of exclusivity. The
process to achieve these goals is lengthy and expensive and requires us to incur significant research and development costs, which are recorded as acomponent of operating expenses in our consolidated statements of income. See “Item 4. Information on the Company—B. Business Overview—Research and Development” for information about our research and development efforts, and Note 3 to our audited consolidated financial statements
contained in elsewhere in this annual report for discussions of our accounting policies regarding research and development expenses and intangible
assets relating to products (including amortization and impairment thereof).
Takeda refers to certain products in its portfolio as “Growth & Launch Products.” Although, particularly for products early in their life
cycle, most of these products’ contribution to consolidated revenue is limited, Takeda’s management monitors these products in particular as key
drivers of future growth, and believes that information on these products is useful to investors to understand where Takeda expects growth to arise in
the future. The specific products that make up this group may vary over time, and products may be added or removed to this group depending on,among other things, the results of clinical trials and regulatory approvals being obtained. During the fiscal year ended March 31, 2024, Takeda
classified the following as Growth & Launch Products: ENTYVIO, ALOFISEL, EOHILIA, TAKHZYRO, LIVTENCITY, ADZYNMA, Immunoglobulin
products (including GAMMAGARD LIQUID/KIOVIG, HYQVIA and CUVITRU), Albumin products (including HUMAN ALBUMIN/FLEXBUMIN),ALUNBRIG, EXKIVITY, FRUZAQLA and QDENGA.
In the fiscal year ended March 31, 2024, these Growth & Launch Products accounted for JPY 1,833.0 billion, or 43%, of our consolidated
revenue. In particular, in the fiscal year ended March 31, 2024, ENTYVIO accounted for JPY 800.9 billion or 19% of our consolidated revenue, ourthree global immunoglobulin brands (GAMMAGARD LIQUID/KIOVIG, HYQVIA, CUVITRU) accounted for JPY 644.6 billion or 15% of ourconsolidated revenue, ALBUMIN accounted for JPY 134.0 billion or 3% of our consolidated revenue, and TAKHZYRO accounted for JPY 178.7
billion or 4% of our consolidated revenue. In addition, ALOFISEL and EXKIVITY experienced clinical trial failures during the fiscal year ended
March 31, 2024, and, accordingly, Takeda will remove them from the Growth and Launch Product category for the fiscal year ending March 31,
20253 in light of changed commercial expectations. On the other hand, recently launched products FRUZAQLA and QDENGA have been added basedon Takeda’s expectation that they will contribute to revenue more significantly over time as a result of their anticipated growth. The total contribution
to consolidated revenue of the updated classification during the year ended March 31, 2024 was JPY 1,826.0 billion, or 43% of total consolidated
revenue.

Acquisitions
We may acquire new businesses or assets to expand our R&D capabilities (including expanding into new methodologies) and to acquire
new products (whether in the development pipeline or at the marketing stage) or enter other strategic regions. Similarly, we divest from businesses
and product lines to maintain our focus on our key growth drivers and to manage our portfolio.
In February 2023, we acquired all of the capital stock of Nimbus Lakshmi, Inc. (“Lakshmi”), a wholly owned subsidiary of Nimbus
Therapeutics, LLC (“Nimbus”), that owns or controls the intellectual property rights and other associated assets related to TAK-279, a highly
selective oral TYK2 inhibitor. Under the terms of the agreement, we paid Nimbus USD 4.0 billion upfront following the closing of the transaction4,
and will pay two milestone payments of USD 1.0 billion each upon achieving annual net sales of USD 4.0 billion and USD 5.0 billion of products
developed from the TAK-279 program, formally known as NDI-034858 at Nimbus. In addition, in connection with the transaction, we have agreed toassume Nimbus’s obligations under a January 2022 settlement agreement with Bristol-Myers Squibb and its Celgene Corporation subsidiary(collectively, “BMS”) to make certain payments to BMS following the achievement of development, regulatory, and sales-based milestones for
products developed from the TAK-279 program.
We account for these acquisitions as business combinations or asset acquisitions. For business combinations, we record the assets acquired
and liabilities assumed at fair value, which impacts our results in future periods due to costs related to unwinding fair value step-ups of inventory andamortization expense of acquired property, plant and equipment and intangible assets. For assets acquisitions, we record the assets acquired attransaction price. Our results are also impacted due to additional interest expense when an acquisition is financed with incremental borrowings.
3

As of the date of this annual report, Growth and Launch products for the fiscal year ending March 31, 2025 consist of: ENTYVIO, EOHILIA, TAKHZYRO,LIVTENCITY, ADZYNMA, Immunoglobulin products (including GAMMAGARD LIQUID/KIOVIG, HYQVIA and CUVITRU), Albumin products (including HUMAN
ALBUMIN/FLEXBUMIN), ALUNBRIG, FRUZAQLA and QDENGA.
4
Of the USD 4.0 billion upfront payment, USD 3.0 billion, USD 0.9 billion, and USD 0.1 billion were paid in February 2023, April 2023, and August 2023,
respectively.

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As a result of our acquisitions, and the impacts described above, our results year over year may not be comparable.

Divestitures
In addition to acquisitions, we divested from businesses and product lines to maintain our focus on our key growth drivers and provide
additional cash flow to accelerate the repayment of debts. The following are major divestitures completed or announced in the fiscal years ended
March 31, 2022, 2023, 2024 and through the issuance of this annual report.
•

In April 2021, we completed the asset transfer associated with a portfolio of select non-core products in Japan to Teijin Pharma
Limited for a total value of JPY 133.0 billion. The transaction had a favorable impact of JPY 131.4 billion on profit before income
tax for the fiscal year ended March 31, 2022.

•

In March 2022, we completed the sale of a portfolio of non-core prescription pharmaceutical products sold in China to Hasten
Biopharmaceutic Co., Ltd. (China) for a total value of USD 230 million or JPY 34.8 billion5 and a gain of JPY 5.6 billion wasrecognized in the fiscal year ended March 31, 2022.

Impact of the Availability of Raw Materials
Our results of operations may be negatively impacted if we are not able to internally or externally source critical raw materials. For
example, human plasma is a critical raw material in our PDT. Efforts to increase the collection of plasma may require strengthening acquisition andthird-party contracting capacities and successful regulatory approval of additional plasma collection facilities and plasma fractionation facilitates.

5

Calculated using the Japanese yen—U.S. dollar exchange rate of JPY 151.47 as of March 31, 2024.

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Foreign Exchange Fluctuations
In the fiscal year ended March 31, 2022, 2023 and 2024, 81.5%, 87.3% and 89.4% of our revenue were from outside of Japan. Changes inforeign exchange rates, particularly for the U.S. dollar and the euro, relative to the yen, which is our reporting currency, will impact our revenues andexpenses. When the yen weakens against other currencies, our revenues attributable to such other currencies increase, having a positive impact on our
results of operations, which may be offset by increased expenses denominated in such currencies. Particularly, our revenues were positively impacted
by the weakened yen against other currencies during the fiscal years ended March 31, 2023 and 2024. Conversely, when the yen strengthens against
other currencies, our revenues attributable to such currencies decrease, having a negative impact on our results of operations, which may be offset bydecreased expenses denominated in such currencies.
In order to help investors understand the effect of exchange rate fluctuations year over year on its results, Takeda presents, on a
supplementary basis, year-over-year percentage changes calculated on the basis of constant exchange rates, which it refers to as “CER” change(Year-over-year changes calculated on the basis of actual exchange rates, in accordance with IFRS, are referred to as “AER” change.) See “Item 5.
Operating and Financial Review and Prospects —A. Operating Results” for the analysis of our operating results year over year with CER percentagechanges.
CER Change is a measure not presented in accordance with IFRS. See “Certain Supplemental Non-IFRS Measures as Defined andPresented by Takeda” for more information.
To mitigate the risk exposed by foreign exchange fluctuations, we utilize certain hedging measures with respect to some of our significant
foreign currency transactions, primarily forward exchange contracts, currency swaps and currency options for individually significant foreign
currency transactions.

Periodic Trends
Our revenues were lower in the fourth quarter of each of the fiscal years ended March 31, 2022, 2023, and 2024 partially due to thetendency of wholesalers to increase purchases ahead of the New Year holidays across the region, annual price increases and the reset of annual
insurance deductibles in the U.S. at the start of the calendar year.

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Critical Accounting Policies
Our consolidated financial statements have been prepared in accordance with IFRS. The preparation of our consolidated financial
statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure ofcontingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.
On an ongoing basis, management evaluates its estimates and assumptions. Management bases its estimates and assumptions on historical experienceand on various other factors that it believes to be reasonable at the time the estimates and assumptions are made. Actual outcomes may differ fromthose estimates and assumptions.
We believe the following critical accounting policies are affected by management’s estimates and assumptions, changes to which could
have a significant impact on our consolidated financial statements.

Revenue Recognition
See Note 3 “Material Accounting Policies—Revenue” to our audited consolidated financial statements

Impairment of Goodwill and Intangible Assets
We review goodwill and intangible assets for impairment whenever events or changes in circumstance indicate that the asset’s balance
sheet carrying amount may not be recoverable. Goodwill and intangible assets that are currently not amortized are tested for impairment annually andwhenever there is any indication of impairment. As of March 31, 2024, we have JPY 5,410.1 billion of goodwill and JPY 4,274.7 billion of intangible
assets which in aggregate represent 64.1% of our total assets.
An intangible asset associated with a marketed product is amortized on a straight-line basis over the estimated useful life, which is based on
expected patent life, and/or other factors depending on the expected economic benefits of the asset, ranging from 3 to 20 years. Intangible assets
related to in-process research and development (“IPR&D”) product rights are not amortized until the product is approved for sale by regulatory
authorities in specified markets. At that time, we will determine the useful life of the asset and begin amortization.
Goodwill and intangible assets are generally considered impaired when their balance sheet carrying amount exceeds their estimatedrecoverable amount. The recoverable amount of an intangible asset is estimated for each individual asset or at the larger cash generating unit (CGU)
level when cash is generated in combination with other assets. Our cash generating units or group of cash generating units are identified based on thesmallest identifiable group of assets that generate independent cash inflows. Goodwill is tested for impairment at the single operating segment level(one CGU), which is the level at which goodwill is monitored for internal management purposes. The estimation of the recoverable value requires us
to make a number of assumptions including:•amount and timing of projected future cash flows;•

behavior of competitors (launch of competing products, marketing initiatives, etc.);•

probability of obtaining regulatory approvals;•

future tax rates;•

terminal growth rate; and•discount rates.

The significant assumptions used in estimating the amount and timing of future cash flows are the probability of technical and regulatory
success related to IPR&D projects and the sales forecast of the products. The sales forecast related to certain products is one of the significant
assumptions used in estimating the recoverable amount of goodwill. Events that may result in a change in the assumptions include IPR&D projects
that are not successfully developed, fail during development, are abandoned or subject to significant delay or do not receive the relevant regulatory
approvals, and/or lower sales projections of certain commercially marketed products typically due to launch of newly competing products, and supply
constraints. If these events were to occur, we may not recover the value of the initial or subsequent R&D investments made subsequent to acquisitionof the asset project nor realize the future cash flows that we have estimated.
Due to changes in these assumptions in subsequent periods, we have recognized impairment and, excluding goodwill, reversal of
impairment related to intangible assets during the periods presented. See Notes 11 and 12 to our audited consolidated financial statements.

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Legal Contingencies
We are involved in various legal proceedings primarily related to product liability and commercial liability arising in the normal course of
our business. These contingencies are described in detail in Note 32 to our consolidated financial statements.
These and other contingencies are, by their nature, uncertain and based upon complex judgments and probabilities. The factors we consider
in developing our provision for litigation and other contingent liability amounts include the merits and jurisdiction of the litigation, the nature and thenumber of other similar current and past litigation cases, the nature of the product and the current assessment of the science subject to the litigation,and the likelihood of settlement and current state of settlement discussions, if any. In addition, we record a provision for product liability claims
incurred, but not filed, to the extent we can formulate a reasonable estimate of their costs based primarily on historical claims experience and data
regarding product usage. In cases we may become involved in significant legal proceedings for which it is not possible to make a reliable estimate of
the expected financial effect, if any, which may result from ultimate resolution of the proceedings, no provision is recognized for such cases. We also
consider the insurance coverage we have to diminish the exposure for periods covered by insurance. In assessing our insurance coverage, we consider
the policy coverage limits and exclusions, the potential for denial of coverage by the insurance company, the financial condition of the insurers, andthe possibility of and length of time for collection. Any provision and the related estimated insurance recoverable have been reflected on a gross basis
as liabilities and assets, respectively, on our consolidated statements of financial position. As of March 31, 2024, we have a provision of JPY 22.3
billion for outstanding legal cases and other disputes.

Income Taxes
We prepare and file our tax returns based on an interpretation of tax laws and regulations, and record estimates based on these judgments
and interpretations. In the normal course of business, our tax returns are subject to examination by various tax authorities, which may result in
additional tax, interest or penalty assessment by these authorities. Inherent uncertainties exist in estimates of many uncertain tax positions due tochanges in tax law resulting from legislation, regulation, and/or as concluded through the various jurisdictions’ tax court systems. When we conclude
that it is not probable that a tax authority will accept an uncertain tax position, we recognize the best estimate of the expenditure required to settle a
tax uncertainty. The amount of unrecognized tax benefits is adjusted for changes in facts and circumstances. For example, adjustments could result
from significant amendments to existing tax law, the issuance of regulations or interpretations by the tax authorities, new information obtained during
a tax examination, or resolution of a tax examination. We believe our estimates for uncertain tax positions are appropriate and sufficient based on
currently known facts and circumstances.
We also assess our deferred tax assets to determine the realizable amount at the end of each period. In assessing the recoverability ofdeferred tax assets, we consider the scheduled reversal of taxable temporary differences, projected future taxable profits, and tax planning strategies.
Future taxable profits according to profitability are estimated based on our business plan. The change in judgment upon determining the revenue
forecast related to certain products used for our business plan could have a significant impact on the amount of the deferred tax assets to berecognized. Based on the level of historical taxable profits and projected future taxable profits during the periods in which the temporary differences
become deductible, we determine the amount the tax benefits we believe are realizable. As of March 31, 2024, we had unused tax losses, deductible
temporary differences, and unused tax credits for which deferred tax assets were not recognized of JPY 1,186.1 billion, JPY 263.1 billion, and JPY
23.7 billion, respectively. A change in our estimates and assumptions in future periods could have a significant impact on our income tax provision.

Restructuring Costs
We incur restructuring costs associated with planned initiatives to reduce our costs. Our most significant restructuring costs are severance
payments. We establish a provision for restructuring costs when we have developed a detailed formal plan for the restructuring and, through an
execution of the plan or an announcement of its main features to those affected by it, a valid expectation has been raised in those affected by the planthat the plan will be implemented. The recognition of restructuring provision requires estimates including timing of payments and the number ofindividuals impacted by the restructuring. As a result of these estimates, the actual restructuring costs may differ from our estimates.
As of March 31, 2024, we have a provision of JPY 12.1 billion for restructuring costs. See Note 23 to our audited consolidated financial
statements for a further description of our restructuring provisions and the change between periods. Moreover, on May 9, 2024, we announced amulti-year, enterprise-wide program aimed at increasing efficiencies and improving our profitability, including initiatives to increase the agility andsimplicity of our business organization, improve our procurement models and increase productivity and efficiency through the implementation ofdigital, automation and artificial intelligence (AI) technologies. Primarily as a result of the initiatives announced in May 2024, we expect to record
JPY 140.0 billion of restructuring expenses in the fiscal year ending March 31, 2025, and may incur lower expenses in the fiscal years to follow.

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Results of Operations
The following table provides selected consolidated statements of profit or loss information for the years ended March 31, 2022, 2023 and2024.
For the fiscal year ended March 31,
2022

2023

2024

(billions of yen)

Revenue¥

Cost of sales

3,569.0¥

4,027.5¥

4,263.8(1,106.8)(1,244.1)(1,426.7)

Selling, general and administrative expenses(886.4)(997.3)(1,053.8)

Research and development expenses(526.1)(633.3)(729.9)Amortization and impairment losses on intangible assets associated with products(472.9)(542.4)(652.1)Other operating income

43.1

25.4

19.4

Other operating expenses(159.1)(145.2)(206.5)

Operating profit

460.8

490.5

214.1

Finance income

23.7

62.9

52.1

Finance expenses(166.6)(169.7)(219.8)

Share of profit (loss) of investments accounted for using the equity method(15.4)(8.6)

6.5

Profit before tax

302.6

375.1

52.8

Income tax (expenses) benefit(72.4)(58.1)

91.4

Net profit for the year

¥

230.2

¥

317.0

¥

144.2

In this section, changes versus the previous fiscal year are given both on an as-reported (IFRS) basis (also referred to as “AER”) and, on a
supplementary basis, using constant exchange rates (CER), as calculated by Takeda. CER % change is a Non-IFRS Measure. For additional
information on CER % change, see “Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda”.
Fiscal Year Ended March 31, 2024 compared with the Fiscal Year Ended March 31, 2023
Revenue
Revenue for the fiscal year ended March 31, 2024 was JPY 4,263.8 billion (JPY +236.3 billion and +5.9% AER, +1.5% CER). The
increase is primarily attributable to favorable foreign exchange rates and growth from business momentum of Plasma-Derived Therapies (“PDT”)
Immunology, Gastroenterology (“GI”), Rare Diseases and Oncology. The increase in these business areas was offset by the decrease in
Neuroscience. Revenue outside of these key business areas decreased mainly due to the decline in sales of AZILVA (for hypertension), which were
JPY 33.6 billion (JPY -39.3 billion and -53.9% AER, -53.9% CER) and impacted by generic entrants in Japan, as well as the lower revenue
contribution from COVID-19 vaccines in Japan.
Revenue by Geographic Region
The following shows revenue by geographic region:
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,
Revenue:Japan
United States
Europe and Canada
Asia (excluding Japan)
Latin America
Russia/CIS
Other(1)
Total

2023
¥

¥

512.0
2,103.8
842.7
225.0
160.4
88.4
95.2
4,027.52024¥¥____________Note:(1) Other includes the Middle East, Oceania and Africa.

66

451.4
2,195.7
966.8
261.2
198.1
72.6
117.9
4,263.8

AER
Amount of Change¥¥(60.7)
91.9
124.2
36.2
37.7
(15.8)
22.7
236.3

CER
% Change(11.8)%
4.4 %
14.7 %
16.1 %
23.5 %(17.9)%
23.9 %
5.9 %% Change(12.1)%(2.2)%
4.5 %
12.1 %
48.4 %(6.5)%
32.6 %
1.5 %Table of Contents

Revenue by Business Area
The following shows revenue by business area:
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,
2023
2024

AER
Amount of Change% Change

CER% Change

Gastroenterology:
ENTYVIO

98.2

14.0 %

6.6 %GATTEX/REVESTIVE

¥

93.1

119.3

26.2

28.1

22.7

TAKECAB/VOCINTI (1)

108.7

118.5

9.8

9.0

8.2

PANTOLOC/CONTROLOC (2)

45.5

46.5

1.0

2.1

(6.6)

DEXILANT

69.4

45.3

(24.1)(34.7)(39.6)

ALOFISEL

2.7

3.5

0.8

28.9

18.2

Others

72.4

82.2

9.8

13.6

6.6

1,094.5

1,216.2

121.7

11.1

4.7

ADVATE

118.2

122.9

4.7

4.0

1.1

ADYNOVATE/ADYNOVI

66.6

66.3

(0.2)

(0.4)

(3.6)

FEIBA

41.3

40.5

(0.7)

(1.8)

(5.3)

VONVENDI

12.2

16.2

4.0

32.5

23.1

RECOMBINATE

12.8

12.1

(0.7)

(5.6)

(11.8)

Others

53.7

47.3

(6.4)

(12.0)(13.0)

304.7

305.3

0.6

0.2

(2.9)

TAKHZYRO

151.8

178.7

26.9

17.7

11.6

ELAPRASE

85.3

91.6

6.2

7.3

7.3

REPLAGAL

66.7

73.6

6.8

10.2

15.1

VPRIV

48.4

51.3

2.9

6.0

9.1

LIVTENCITY

10.5

19.1

8.6

81.7

68.7

Total Gastroenterology

702.7

¥

800.9

¥

Rare Diseases:
Rare Hematology:

Total Rare Hematology
Rare Genetics and Other:

Others

56.0

51.2

(4.8)

(8.5)

(12.5)

Total Rare Genetics and Other

418.7

465.4

46.7

11.1

9.2

723.4

770.7

47.3

6.5

4.1

immunoglobulin

522.2

644.6

122.4

23.4

16.8

albumin

121.4

134.0

12.5

10.3

5.9

Others

34.8

40.0

5.2

15.0

8.4

678.4

818.6

140.1

20.7

14.4

ADCETRIS

83.9

109.4

25.5

30.4

31.3

LEUPLIN/ENANTONE

111.3

107.4

(4.0)

(3.6)

(7.1)

NINLARO

92.7

87.4

(5.3)

(5.7)

(9.2)

ICLUSIG

47.2

54.7

7.5

15.9

7.5

ALUNBRIG

20.6

28.5

8.0

38.8

35.3

FRUZAQLA

—

10.1

10.1

—

—

VELCADE

27.8

5.5(22.2)(80.0)(81.3)

Total Rare Diseases
PDT Immunology:(3)

Total PDT Immunology (3)Oncology:

EXKIVITY

3.7

3.5

(0.3)

(7.3)

(10.9)

Others

51.6

55.9

4.4

8.5

7.5

438.7

462.4

23.6

5.4

2.5

Total Oncology

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Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,
2023
2024

AER
Amount of Change% Change

CER% Change

Neuroscience:
VYVANSE/ELVANSE

459.3

423.2

TRINTELLIX

100.1

104.8

4.7

4.7

(1.1)

ADDERALL XR

28.6

41.8

13.2

46.0

36.6

INTUNIV

16.4

33.6

17.2

105.2

100.8

OthersTotal Neuroscience(36.1)(7.9)(14.1)

33.4

23.7

(9.7)

(29.1)(31.6)

637.7

627.0

(10.7)

(1.7)

(7.8)

72.9

33.6

(39.3)(53.9)(53.9)

Other:AZILVA-F (1)FOSRENOL

13.5

13.5

(0.0)

(0.0)

(8.3)

Others

368.2

321.7

(46.4)(12.6)(10.8)

454.6

368.9

(85.7)(18.8)(17.7)

Total Other (3)
Total

¥

4,027.5¥

4,263.8

¥

236.3

5.9 %

1.5 %

____________
Notes:(1) The figures include the amounts of fixed dose combinations and blister packs.
(2) Generic name: pantoprazole.
(3) Starting from the fiscal year ending March 31, 2025 (FY2024), “Plasma-Derived Therapies” will replace the previous category of “PDT Immunology” and will
include all plasma-derived products including those previously categorized within “Rare Diseases” (e.g., FEIBA, CINRYZE). “Vaccines” will be presented as aseparate key business area (previously included in “Others”), reflecting the strategic focus on our dengue vaccine, QDENGA.
If the new categories are applied, revenue from “Rare Disease” is JPY 688.4 billion for the fiscal year ended March 31, 2024 and JPY 639.8 billion for the fiscal year
ended March 31, 2023, revenue from “Plasma-Derived Therapies” is JPY 903.7 billion for the fiscal year ended March 31, 2024 and JPY 765.4 billion for the fiscal
year ended March 31, 2023, revenue from “Vaccines” is JPY 50.4 billion for the fiscal year ended March 31, 2024, and JPY 78.7 billion for the fiscal year ended
March 31, 2023, revenue from “Others” is JPY 315.7 billion for the fiscal year ended March 31, 2024 and JPY 372.7 billion for the fiscal year ended March 31,
2023.

Year-on-year change in revenue for this fiscal year in each of our main business areas was primarily attributable to the following products:•

GI. In GI, revenue was JPY 1,216.2 billion (JPY +121.7 billion and +11.1% AER, +4.7% CER).
Sales of ENTYVIO (for ulcerative colitis (“UC”) and Crohn’s disease) were JPY 800.9 billion (JPY +98.2 billion and +14.0% AER, +6.6%
CER). Sales in the U.S. were JPY 546.1 billion (JPY +54.2 billion and +11.0% AER). The increase was due to favorable foreign exchange rates
and demand in the first line biologic inflammatory bowel disease (“IBD”) population primarily in UC. Sales in Europe and Canada were JPY
195.8 billion (JPY +33.4 billion and +20.5% AER), supported by favorable foreign exchange rates and continued launches of the subcutaneous
formulation.
Sales of GATTEX/REVESTIVE (for short bowel syndrome) were JPY 119.3 billion (JPY +26.2 billion and +28.1% AER, +22.7% CER). The
increase was primarily due to increased demand in the U.S., Europe and Japan, expansion activities (infant indication label expansion andgeographic expansion), and favorable exchange rates.
Sales of TAKECAB/VOCINTI (for acid-related diseases) were JPY 118.5 billion (JPY +9.8 billion and +9.0% AER, +8.2% CER). The increase
was primarily due to increased sales in Japan and the Growth and Emerging Markets including Brazil and China.
Sales of DEXILANT (for acid reflux disease) were JPY 45.3 billion (JPY -24.1 billion and -34.7% AER, -39.6% CER). The decrease was due tothe loss of exclusivity and the termination of the authorized generics program in the U.S.

•

Rare Diseases. In Rare Diseases, revenue was JPY 770.7 billion (JPY +47.3 billion and +6.5% AER, +4.1% CER).
Revenue of Rare Hematology was JPY 305.3 billion (JPY +0.6 billion and +0.2% AER, -2.9% CER).
Sales of ADVATE (for hemophilia A) were JPY 122.9 billion (JPY +4.7 billion and +4.0% AER, +1.1% CER). The increase was attributable tofavorable foreign exchange rates as well as sales increase in the Growth and Emerging Markets such as Brazil and China.
Sales of VONVENDI (for von Willebrand disease) were JPY 16.2 billion (JPY +4.0 billion and +32.5% AER, +23.1% CER). The increase wasprimarily due to increased demand in the U.S.
Sales of FEIBA (for hemophilia A and B) were JPY 40.5 billion (JPY -0.7 billion and -1.8% AER, -5.3% CER). The decrease was mainly due tocompetition in Brazil.
Sales of RECOMBINATE (for hemophilia A) were JPY 12.1 billion (JPY -0.7 billion and -5.6% AER, -11.8% CER). The decrease was mainly
due to weaker demand in the U.S. attributable to increased adoption of next generation therapies.
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Decrease in revenue of other rare hematology products largely offset the net increase of the above products.
Revenue of Rare Genetics and Other was JPY 465.4 billion (JPY +46.7 billion and +11.1% AER, +9.2% CER).
Sales of TAKHZYRO (for hereditary angioedema) were JPY 178.7 billion (JPY +26.9 billion and +17.7% AER, +11.6% CER). The continued
growth was attributable to sustained launch momentum, expansion into new patient populations such as pediatrics, rising diagnosis rates, thegrowth of the prophylactic market, and favorable exchange rates.
Sales of LIVTENCITY (for post-transplant cytomegalovirus (“CMV”) infection/disease) were JPY 19.1 billion (JPY +8.6 billion and +81.7%
AER, +68.7% CER). The increase was primarily attributable to strong launch performance and fast uptake in the U.S., complemented bycontinued geographical expansion in Europe and positive market access trends.
Sales of enzyme replacement therapy REPLAGAL (for fabry disease) were JPY 73.6 billion (JPY +6.8 billion and +10.2% AER, +15.1% CER).
The increase was primary due to strong demand in the Growth and Emerging Markets.
Sales of enzyme replacement therapy ELAPRASE (for Hunter syndrome) were JPY 91.6 billion (JPY +6.2 billion and +7.3% AER, +7.3%
CER). The increase was primarily due to strong demand in the Growth and Emerging Markets.
•

PDT Immunology. In PDT Immunology, revenue was JPY 818.6 billion (JPY +140.1 billion and +20.7% AER, +14.4% CER).
Aggregate sales of immunoglobulin products were JPY 644.6 billion (JPY +122.4 billion and +23.4% AER, +16.8% CER). Sales of each of ourthree global immunoglobulin brands marked double digit percentage of revenue growth, due to continued strong demand globally and growing
supply, as well as favorable foreign exchange rates. Those include GAMMAGARD LIQUID/KIOVIG (for the treatment of primary
immunodeficiency (“PID”) and multifocal motor neuropathy (“MMN”)), and subcutaneous immunoglobulin therapies (CUVITRU andHYQVIA) which are growing due to their benefit to patients and convenience in administration compared to intravenous therapies.
Aggregate sales of albumin products including HUMAN ALBUMIN and FLEXBUMIN (both primarily used for hypovolemia andhypoalbuminemia) were JPY 134.0 billion (JPY +12.5 billion and +10.3% AER, +5.9% CER). The increase was primarily driven by strong
albumin demand in China.

•

Oncology. In Oncology, revenue was JPY 462.4 billion (JPY +23.6 billion and +5.4% AER, +2.5% CER).
Sales of ADCETRIS (for malignant lymphomas) were JPY 109.4 billion (JPY +25.5 billion and +30.4% AER, +31.3% CER). The increase was
led by strong growth in Growth and Emerging Markets and Europe.
Sales of FRUZAQLA (for colorectal cancer), which newly launched in November 2023 in the U.S., were JPY 10.1 billion.
Sales of ALUNBRIG (for non-small cell lung cancer) were JPY 28.5 billion (JPY +8.0 billion and +38.8% AER, +35.3% CER). The increase
benefited from strong demand across all regions.
Sales of ICLUSIG (for leukemia) were JPY 54.7 billion (JPY +7.5 billion and +15.9% AER, +7.5% CER). The increase was due to favorable
foreign exchange rates and higher demand in the U.S.
Sales of VELCADE (for multiple myeloma) were JPY 5.5 billion (JPY -22.2 billion and -80.0% AER, -81.3% CER. The decrease was due togeneric erosion in the U.S.
Sales of NINLARO (for multiple myeloma) were JPY 87.4 billion (JPY -5.3 billion and -5.7% AER, -9.2% CER). The decrease was due tointensified competition and decreased demand mainly in the U.S., partially aided by favorable foreign exchange rates.

•

Neuroscience. In Neuroscience, revenue was JPY 627.0 billion (JPY -10.7 billion and -1.7% AER, -7.8% CER).
Sales of VYVANSE/ELVANSE (for attention deficit hyperactivity disorder (“ADHD”)) were JPY 423.2 billion (JPY -36.1 billion and -7.9%
AER, -14.1% CER). The decrease was due to multiple generic entrants in the U.S. starting from August 2023, with the growth of the adultmarket in Europe and favorable foreign exchange rates partially offset the negative impacts.
Sales of ADDERALL XR (for ADHD) were JPY 41.8 billion (JPY +13.2 billion and +46.0% AER, +36.6% CER). The increase was primarily
due to a shortage of generic versions of the instant release formulation marketed by competitors in the U.S. and favorable foreign exchange
rates.
Sales of INTUNIV (for ADHD) were JPY 33.6 billion (JPY +17.2 billion and +105.2% AER, +100.8% CER). The increase was primarily due
to the buy-back of full rights in Japan effective in April 2023.
Cost of Sales

Cost of Sales was JPY 1,426.7 billion (JPY +182.6 billion and +14.7% AER, +9.8% CER). The increase was primarily due to revenue
growth in our key business areas with a change in product mix and the depreciation of Japanese yen as compared to the fiscal year ended March 31,
2023. This was partially offset by a decrease in non-cash charges related to the unwind of the fair value step up on acquired inventories recognized inconnection with the acquisition of Shire plc (“Shire”).
Selling, General and Administrative (SG&A) Expenses
SG&A expenses were JPY 1,053.8 billion (JPY +56.5 billion and +5.7% AER, +0.9% CER). The increase was mainly due to thedepreciation of Japanese yen and investments in Data, Digital and Technology ("DD&T") partially offset by various cost efficiencies.
Research and Development (R&D) expense
R&D expenses were JPY 729.9 billion (JPY +96.6 billion and +15.3% AER, +8.4% CER). The increase was mainly due to various
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investments in pipeline programs and the depreciation of Japanese yen.
Amortization and Impairment Losses on Intangible Assets Associated with Products
Amortization and Impairment Losses on Intangible Assets Associated with Products was JPY 652.1 billion (JPY +109.7 billion and+20.2% AER, +12.2% CER). The increase was mainly due to an increase in impairment charges for certain assets related to in-process R&D andmarketed products and an increase of amortization expenses due to the depreciation of Japanese yen. JPY 130.6 billion impairment losses recorded in
the fiscal year ended March 31, 2024 primarily includes JPY 74.0 billion impairment charges for ALOFISEL (for complex Crohn's perianal fistulas)following topline results of the phase 3 ADMIRE-CD II trial, JPY 28.5 billion impairment charges following a decision to voluntarily withdraw
EXKIVITY (for non-small cell lung cancer) globally, and other impairment charges for certain in-process R&D assets including those related toTAK-007 and modakafusp alfa (TAK-573) in Oncology as results of decisions to terminate those programs. The increase was partially offset by areversal of impairment loss of JPY 35.7 billion related to the approval of EOHILIA, a therapy for eosinophilic esophagitis (EoE), by the FDA in
February 2024.
Other Operating Income
Other Operating Income was JPY 19.4 billion (JPY -6.0 billion and -23.8% AER, -26.3% CER).
Other Operating Expenses
Other Operating Expenses were JPY 206.5 billion (JPY +61.3 billion and +42.2% AER, +34.5% CER). The increase was primarily driven
by increases of restructuring expenses, additional losses recorded for the supply agreement litigation with AbbVie, Inc. ("AbbVie") in the fiscal year
ended March 31, 2024 and changes in the fair value of financial assets and liabilities associated with contingent consideration arrangements mainly
from XIIDRA and EOHILIA.
Operating Profit
As a result of the above factors, Operating Profit was JPY 214.1 billion (JPY -276.4 billion and -56.4% AER, -50.3% CER).
Net Finance Expenses
Net Finance Expenses were JPY 167.8 billion (JPY +61.0 billion and +57.1% AER, +78.3% CER). The increase was primarily due to adecrease in financial income reflecting gains from acquisition of additional shares in companies accounted for using the equity method companies
and a positive impact from the remeasurement of warrants to purchase stocks of the company held by Takeda recorded in the fiscal year ended March
31, 2023, as well as an increase in financial expenses in the fiscal year ended March 31, 2024 due to factors including interest recorded for the supply
agreement litigation with AbbVie and increased expense on hyperinflationary accounting.
Share of Profit (Loss) of Investments Accounted for Using the Equity Method
Share of Profit of Investments Accounted for Using the Equity Method was JPY 6.5 billion (JPY +15.1 billion, compared to Share of Lossof Investments Accounted for Using the Equity Method of JPY 8.6 billion in the fiscal year ended March 31, 2023).
Income Tax (Expenses) Benefit
Income Tax Benefit was JPY 91.4 billion (JPY +149.5 billion, compared to Income Tax Expenses of JPY 58.1 billion in the fiscal year
ended March 31, 2023). The increase was primarily due to lower pretax earnings as well as a tax expense reduction of JPY 63.5 billion resulting fromthe reversal of the income taxes payable in excess of the settlement with the Irish Revenue Commissioners with respect to a tax assessment related tothe treatment of an acquisition break fee Shire received from AbbVie in 2014 ("AbbVie Break Fee Settlement"). These increases were partially offset
by the tax charges from legal entity restructuring and the reassessment of recoverability of deferred tax assets.
Net Profit for the YearAs a result of the above factors, Net Profit for the Year was JPY 144.2 billion (JPY -172.8 billion and -54.5% AER, -57.0% CER).

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Fiscal Year Ended March 31, 2023 compared with the Fiscal Year Ended March 31, 2022
Revenue
Revenue for the fiscal year ended March 31, 2023 was JPY 4,027.5 billion, an increase of JPY 458.5 billion, or 12.8% (CER % change:-0.8%), compared to the fiscal year ended March 31, 2022. The increase is primarily attributable to favorable foreign exchange rates and growth frombusiness momentum, fully offsetting the decrease of revenue due to the sale of a portfolio of diabetes products in Japan to Teijin Pharma Limited for
JPY 133.0 billion, which was recorded as revenue in the fiscal year ended March 31, 2022.
Revenue of our core business areas (i.e., Gastroenterology (“GI”), Rare Diseases, Plasma-Derived Therapies (“PDT”) Immunology,
Oncology, and Neuroscience) increased by JPY 628.0 billion, or 21.3%, compared to the fiscal year ended March 31, 2022, to JPY 3,572.9 billion.
Each of our core business areas, except Oncology, contributed to positive revenue growth due to favorable foreign exchange rates and growth frombusiness momentum. Generic erosion and intensified competition impacted certain Oncology products in the fiscal year ended March 31, 2023,
partially offset by the impacts of favorable foreign exchange rates.
Revenue outside of our core business areas significantly decreased by JPY 169.6 billion, or 27.2%, compared to the fiscal year ended
March 31, 2022 to JPY 454.6 billion, largely due to the aforementioned non-recurring JPY 133.0 billion selling price of the diabetes portfolio inJapan, which was recorded as revenue in the fiscal year ended March 31, 2022.
Revenue by Geographic Region
The following shows revenue by geographic region:
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,
2022

Revenue:
Japan(1)
United States
Europe and Canada
Asia (excluding Japan)
Latin America
Russia/CIS
Other(2)
Total

¥

¥

AER

2023

659.0
1,714.4
739.2
197.0
128.5
62.1
68.9
3,569.0¥512.0
2,103.8
842.7
225.0
160.4
88.4
95.2
4,027.5¥

CER

Amount of Change¥¥% Change(146.9)
389.4
103.5
28.0
31.9
26.4
26.2
458.5

(22.3)%
22.7 %
14.0 %
14.2 %
24.8 %
42.5 %
38.1 %
12.8 %% Change(22.5)%
2.0 %
5.1 %
2.0 %
8.0 %
9.5 %
41.3 %(0.8)%____________
Notes:(1) The JPY 133.0 billion selling price of the sale of diabetes portfolio in Japan is included in the fiscal year ended March 31, 2022.
(2) Other includes the Middle East, Oceania and Africa.

Revenue by Business Area
The following shows revenue by business area:
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,2022
Gastroenterology:
ENTYVIOTAKECAB/VOCINTI (1)GATTEX/REVESTIVE
DEXILANTPANTOLOC/CONTROLOC (2)ALOFISEL
OthersTotal Gastroenterology
Rare Diseases:
Rare Hematology:

¥

AER

2023
521.8
102.4
75.8
50.8
40.3
1.8
82.9
875.7

¥

702.7
108.7
93.1
69.4
45.5
2.7
72.4
1,094.5

71

Amount of Change

¥

181.0
6.3
17.3
18.6
5.2
0.9
(10.5)218.9

CER% Change

34.7 %
6.2
22.9
36.7
13.0
47.9
(12.7)
25.0% Change

15.2 %
4.1
4.0
14.8
2.9
35.6
(24.0)
8.7

Table of Contents

Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,2022
ADVATEADYNOVATE/ADYNOVIFEIBARECOMBINATEHEMOFIL/IMMUNATE/IMMUNINE
OthersTotal Rare Hematology
Rare Genetics and Other:
TAKHZYROELAPRASE
REPLAGALVPRIVLIVTENCITY
OthersTotal Rare Genetics and Other
Total Rare Diseases (4)PDT Immunology:
immunoglobulin
albumin
OthersTotal PDT Immunology (4)Oncology:
LEUPLIN/ENANTONENINLAROADCETRISICLUSIGVELCADEALUNBRIGEXKIVITY
OthersTotal Oncology
Neuroscience:
VYVANSE/ELVANSE
TRINTELLIX
OthersTotal Neuroscience
Other:AZILVA-F (1)
LOTRIGA
Others(4)Total Other (3) (4)
Total

¥

AER

2023

Amount of Change

CER% Change% Change

118.5
60.7
39.2
12.3
17.7
35.3
283.7

118.2
66.6
41.3
12.8
19.6
46.4
304.7

(0.3)
5.8
2.1
0.5
1.9
11.1
21.0

(0.3)
9.6
5.4
3.8
10.5
31.4
7.4

(12.4)(1.0)(5.2)(13.1)
0.3
12.5
(5.1)

103.2
73.1
51.7
42.4
1.3
55.7
327.5
611.2

151.8
85.3
66.7
48.4
10.5
56.0
418.7
723.4

48.6
12.2
15.0
6.0
9.2
0.3
91.2
112.2

47.0
16.7
29.1
14.1
692.4
0.5
27.9
18.4

25.0
5.5
24.2
2.5
561.7
(12.6)
13.4
4.8

385.9
90.0
31.1
507.0

522.2
121.4
34.8
678.4

136.3
31.4
3.7
171.5

35.3
34.9
12.0
33.8

16.0
19.0
(4.2)
15.3

106.5
91.2
69.2
34.9
110.0
13.6
1.0
42.4
468.7

111.3
92.7
83.9
47.2
27.8
20.6
3.7
51.6
438.7

4.9
1.5
14.7
12.3
(82.3)
6.9
2.8
9.2(30.0)

4.6
1.6
21.3
35.4
(74.8)
50.7
288.1
21.7
(6.4)

(0.3)
(12.2)
13.5
15.9(78.6)
35.2
228.4
20.7
(14.4)

327.1
82.3
72.9
482.3

459.3
100.1
78.3
637.7

132.2
17.8
5.4
155.4

40.4
21.6
7.4
32.2

18.2
2.1
(4.0)
12.1

76.3
32.7
515.2
624.2
3,569.0

72.9
16.7
365.0
454.6
4,027.5(3.4)(16.0)(150.2)(169.6)
458.5

(4.5)
(48.8)(29.2)(27.2)
12.8 %(4.5)(48.8)(35.4)(32.4)(0.8)%¥¥____________
Notes:(1) The figures include the amounts of fixed dose combinations and blister packs.
(2) Generic name: pantoprazole(3) The figure for the fiscal year ended March 31, 2022 includes the JPY 133.0 billion selling price on sales of four diabetes products (NESINA, LIOVEL, INISYNC
and ZAFATEK) in Japan to Teijin Pharma Limited recorded as revenue. As Takeda transferred only the assets, marketing rights and, eventually, marketing
authorization associated with the pharmaceutical products which do not entail transfer of employees or associated contracts, Takeda applied IFRS 15 to thetransaction and recorded the selling price in revenue.
(4) Starting from the fiscal year ending March 31, 2025 (FY2024), “Plasma-Derived Therapies” will replace the previous category of “PDT Immunology” and will
include all plasma-derived products including those previously categorized within “Rare Diseases” (e.g., FEIBA, CINRYZE). “Vaccines” will be presented as aseparate key business area (previously included in “Others”), reflecting the strategic focus on our dengue vaccine, QDENGA.

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If the new categories are applied, revenue from “Rare Disease” is JPY 639.8 billion for the fiscal year ended March 31, 2023 and JPY 531.1 billion for the fiscal
year ended March 31, 2022, revenue from “Plasma-Derived Therapies” is JPY 765.4 billion for the fiscal year ended March 31, 2023 and JPY 589.6 billion for the
fiscal year ended March 31, 2022, revenue from “Vaccines” is JPY 78.7 billion for the fiscal year ended March 31, 2023, and JPY 55.2 billion for the fiscal year
ended March 31, 2022, revenue from “Others” is JPY 372.7 billion for the fiscal year ended March 31, 2023 and JPY 566.4 billion for the fiscal year ended March
31, 2022.

Year-on-year change in revenue for this fiscal year in each of our main business areas was primarily attributable to the following products:•

GI. In Gastroenterology, revenue was JPY 1,094.5 billion, a year-on-year increase of JPY 218.9 billion, or 25.0% AER (CER % change: 8.7%).
Sales of ENTYVIO (for ulcerative colitis (“UC”) and Crohn’s disease (“CD”)), Takeda's top-selling product, were JPY 702.7 billion in total, an
increase of JPY 181.0 billion, or 34.7% AER (CER% change: 15.2%), versus the fiscal year ended March 31, 2022. Sales in the U.S. were JPY
491.9 billion, an increase of JPY 142.4 billion, or 40.7% AER, driven by favorable foreign exchange rates and a continued increase in the firstline biologic inflammatory bowel disease (“IBD”) population both in UC and CD. Sales in Europe and Canada were JPY 162.5 billion, an
increase of JPY 26.5 billion, or 19.5% AER, supported by continued launches of the subcutaneous formulation and favorable foreign exchange
rates. Sales in the Growth and Emerging Markets were JPY 34.9 billion, an increase of JPY 9.9 billion, or 39.6% AER, primarily led by growthin Brazil.
Sales of DEXILANT (for acid reflux disease) were JPY 69.4 billion, an increase of JPY 18.6 billion, or 36.7% AER (CER % change: 14.8%),
versus the fiscal year ended March 31, 2022, due to the increased sales of authorized generics in the U.S. and favorable foreign exchange rates.
Sales of GATTEX/REVESTIVE (for short bowel syndrome) were JPY 93.1 billion, an increase of JPY 17.3 billion, or 22.9% AER (CER %change: 4.0%), versus the fiscal year ended March 31, 2022, primarily due to increased market penetration after launch in Japan, pediatricindication demand, and favorable foreign exchange rates.
Sales of TAKECAB/VOCINTI (for acid-related diseases) were JPY 108.7 billion, an increase of JPY 6.3 billion, or 6.2% AER (CER %change: 4.1%), versus the fiscal year ended March 31, 2022, primarily due to increased sales in China, partially offset by the decrease of sales inJapan due to a negative impact from the market expansion re-pricing applied in April 2022, despite an increase in prescription volume.
Sales of PENTASA (for UC), included in Others, were JPY 8.4 billion, a decrease of JPY 11.8 billion, or 58.3% AER, versus the fiscal year
ended March 31, 2022, due to generic erosion in the U.S. from May 2022.

•

Rare Diseases. In Rare Diseases, revenue was JPY 723.4 billion, a year-on-year increase of JPY 112.2 billion, or 18.4% AER (CER % change:
4.8%).
Revenue of Rare Hematology was JPY 304.7 billion, a year-on-year increase of JPY 21.0 billion, or 7.4% AER (CER % change: -5.1%).
Sales of ADYNOVATE/ADYNOVI (for hemophilia A) were JPY 66.6 billion, an increase of JPY 5.8 billion, or 9.6% AER (CER % change:-1.0%), and sales of FEIBA (for hemophilia A and B) were JPY 41.3 billion, an increase of JPY 2.1 billion, or 5.4% AER (CER % change:-5.2%), versus the fiscal year ended March 31, 2022, primarily due to favorable foreign exchange rates largely offset by negative impacts fromcompetition in the U.S.
Sales of other Rare Hematology products in aggregate increased year-on-year, primarily due to additional indications, newly consolidated
products, and favorable foreign exchange rates.
Revenue of Rare Genetics and Other was JPY 418.7 billion, a year-on-year increase of JPY 91.2 billion, or 27.9% AER (CER % change:
13.4%).
Sales of TAKHZYRO (for hereditary angioedema) were JPY 151.8 billion, an increase of JPY 48.6 billion, or 47.0% AER (CER % change:
25.0%), versus the fiscal year ended March 31, 2022, driven by continued strong demand in the U.S., geographic expansion, and favorable
foreign exchange rates.
Sales of REPLAGAL (for Fabry disease) were JPY 66.7 billion, an increase of JPY 15.0 billion, or 29.1% AER (CER % change: 24.2%), versus
the fiscal year ended March 31, 2022, primarily due to the succession to Takeda of manufacturing and marketing rights in Japan upon expirationof the relevant license agreement in February 2022 and strong demand in the Growth and Emerging Markets.
Sales of other enzyme replacement therapies ELAPRASE (for Hunter syndrome) and VPRIV (for Gaucher disease) were JPY 85.3 billion, an
increase of JPY 12.2 billion, or 16.7% AER (CER % change: 5.5%), and JPY 48.4 billion, an increase of JPY 6.0 billion, or 14.1% AER (CER
% change: 2.5%), respectively, primarily due to favorable foreign exchange rates.
Sales of LIVTENCITY (for post-transplant cytomegalovirus (“CMV”) infection/disease), which was first launched in the U.S. in December
2021, followed by several other countries, were JPY 10.5 billion in the fiscal year ended March 31,2023.

•

PDT Immunology. In Plasma-Derived Therapies (“PDT”) Immunology, revenue was JPY 678.4 billion, a year-on-year increase of JPY 171.5
billion, or 33.8% AER (CER % change: 15.3%).
Sales of immunoglobulin products in aggregate were JPY 522.2 billion, an increase of JPY 136.3 billion, or 35.3% AER (CER % change:
16.0%), versus the fiscal year ended March 31, 2022. Sales of each of our three global immunoglobulin brands marked double digit percentageof revenue growth, due to continued strong demand globally and growing supply, especially in the U.S., where the pandemic pressure is now
easing, as well as favorable foreign exchange rates. Those include GAMMAGARD LIQUID/KIOVIG (for the treatment of primary
immunodeficiency (“PID”) and multifocal motor neuropathy (“MMN”)), and subcutaneous immunoglobulin therapies (CUVITRU andHYQVIA) which are growing due to their benefit to patients and convenience in administration compared to intravenous therapies.

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Sales of albumin products in aggregate, including HUMAN ALBUMIN and FLEXBUMIN (primarily used for hypovolemia andhypoalbuminemia), were JPY 121.4 billion, an increase of JPY 31.4 billion, or 34.9% AER (CER % change: 19.0%), versus the fiscal year
ended March 31, 2022, driven by strong albumin demand in the U.S. and China and favorable exchange rates.
•

Oncology. In Oncology, revenue was JPY 438.7 billion, a year-on-year decrease of JPY 30.0 billion, or 6.4% AER (CER % change: -14.4%),
impacted by the rapid generic erosion of VELCADE (for multiple myeloma) sales in the U.S.
Sales of VELCADE were JPY 27.8 billion, a decrease of JPY 82.3 billion, or 74.8% AER (CER % change: -78.6%), versus the fiscal year ended
March 31, 2022, predominantly due to multiple generic entrants in the U.S. starting in May 2022.
Sales of ADCETRIS (for malignant lymphomas) were JPY 83.9 billion, an increase of JPY 14.7 billion, or 21.3% AER (CER % change:
13.5%), versus the fiscal year ended March 31, 2022, led by strong growth in countries such as Argentina, Italy and Japan.
Sales of ICLUSIG (for leukemia) were JPY 47.2 billion, an increase of JPY 12.3 billion, or 35.4% AER (CER % change: 15.9%), versus the
fiscal year ended March 31, 2022, due to steady growth in the U.S. and favorable foreign exchange rates.
Sales of ALUNBRIG (for non-small cell lung cancer) were JPY 20.6 billion, an increase of JPY 6.9 billion, or 50.7% AER (CER % change:
35.2%), versus the fiscal year ended March 31, 2022, benefiting from strong demand in European countries, Growth and Emerging Markets
such as China, and Japan.
Sales of ZEJULA (for ovarian cancer), included in Others, were JPY 12.9 billion, an increase of JPY 4.9 billion, or 61.7% AER, versus the
fiscal year ended March 31, 2022, primarily led by increased sales in Japan due to a newly launched tablet formulation in June 2022 in addition
to existing capsule formulation.
Sales of LEUPLIN/ENANTONE (for endometriosis, uterine fibroids, premenopausal breast cancer, prostate cancer, etc.), an off-patent product,
were JPY111.3 billion, an increase of JPY 4.9 billion, or 4.6% AER (CER % change: -0.3%), versus the fiscal year ended March 31, 2022,
mainly due to favorable foreign exchange rates.
Sales of NINLARO (for multiple myeloma) were JPY 92.7 billion, an increase of JPY 1.5 billion, or 1.6% AER (CER % change: -12.2%),
versus the fiscal year ended March 31, 2022, aided by favorable foreign exchange rates, which were offset partially by intensified competitionand decreased demand mainly in the U.S.
Sales of EXKIVITY (for non-small cell lung cancer), which was first launched in the U.S. in September 2021, followed by several othercountries, were JPY 3.7 billion in the fiscal year ended March 31, 2023.

•

Neuroscience. In Neuroscience, revenue was JPY 637.7 billion, a year-on-year increase of JPY 155.4 billion, or 32.2% AER (CER % change:
12.1%).
Sales of VYVANSE/ELVANSE (for attention deficit hyperactivity disorder (“ADHD”)) were JPY 459.3 billion, an increase of JPY 132.2
billion, or 40.4% AER (CER % change: 18.2%), versus the fiscal year ended March 31, 2022, mainly due to the growth of the adult market
including an impact from a shortage of generic versions of the instant release formulation of ADDERALL in the U.S. and favorable foreignexchange rates.
Sales of TRINTELLIX (for major depressive disorder (“MDD”)) were JPY 100.1 billion, an increase of JPY 17.8 billion, or 21.6% AER (CER
% change: 2.1%), versus the fiscal year ended March 31, 2022, due to increasing prescriptions in Japan and favorable foreign exchange rates.
Sales of ADDERALL XR (for ADHD), included in Others, were JPY 28.6 billion, an increase of JPY 7.7 billion, or 36.9% AER, versus the
fiscal year ended March 31, 2022, mainly due to a shortage of generic versions of the instant release formulation marketed by competitors in the
U.S. and favorable foreign exchange rates.
Cost of Sales

Cost of Sales increased by JPY 137.2 billion, or 12.4% AER (CER % change: -0.1%), to JPY 1,244.1 billion. The increase waspredominantly due to the depreciation of the yen in the fiscal year ended March 31, 2023.
Selling, General and Administrative (SG&A) expenses
SG&A expenses increased by JPY 110.9 billion, or 12.5% AER (CER % change: -0.9%) compared to the fiscal year ended March 31,
2022, to JPY 997.3 billion, mainly due to the impact from the depreciation of the yen in the fiscal year ended March 31, 2023.
Research and Development (R&D) expenses
R&D expenses increased by JPY 107.2 billion, or 20.4% AER (CER % change: 3.5%) compared to the fiscal year ended March 31, 2022,
to JPY 633.3 billion, mainly due to the impact from the depreciation of the yen in the fiscal year ended March 31,2023.
Amortization and Impairment Losses on Intangible Assets Associated with Products
Amortization and Impairment Losses on Intangible Assets Associated with Products increased by JPY 69.5 billion or 14.7% AER (CER %change: -3.2%) compared to the fiscal year ended March 31, 2022, to JPY 542.4 billion, mainly due to the impact from the depreciation of the yen in
the fiscal year ended March 31, 2023.
Other Operating Income74

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Other Operating Income was JPY 25.4 billion, a decrease of JPY 17.7 billion, or 41.0% AER (CER % change: -44.2%), compared to thefiscal year ended March 31, 2022 primarily due to a change in fair value of financial assets and liabilities associated with contingent consideration
arrangements recognized and certain settlement proceeds recorded in the fiscal year ended March 31, 2022.
Other Operating Expenses
Other Operating Expenses were JPY 145.2 billion, a decrease of JPY 13.8 billion, or 8.7% AER (CER % change: -21.1%), compared to thefiscal year ended March 31, 2022, primarily due to decreases in restructuring expenses attributable to the substantially completed Shire integration in
the fiscal year ended March 31, 2022 and valuation reserve for pre-launch inventory, partially offset by increases in other reserves and provisions
including those for certain assets related to option fees Takeda paid as part of collaboration agreements and increase due to the impact from thedepreciation of the yen in the fiscal year ended March 31,2023.
Operating Profit.
As a result of the above factors, Operating Profit increased by JPY 29.7 billion, or 6.4% AER (CER % change: -1.8%) compared to thefiscal year ended March 31, 2022 to JPY 490.5 billion.
Net Finance Expenses
Net Finance Expenses were JPY 106.8 billion in the fiscal year ended March 31, 2023, a decrease of JPY 36.1 billion, or 25.3% AER (CER
% change: -28.8%) compared to Net Finance Expenses of JPY 142.9 billion for the fiscal year ended March 31, 2022. This decrease was mainly
driven by a positive impact from the remeasurement of warrants to purchase stocks of companies held by Takeda.
Share of Loss of Investments Accounted for Using the Equity Method
Share of Loss of Investments Accounted for Using the Equity Method was JPY 8.6 billion, a decrease of JPY 6.7 billion, or 43.8% AER(CER % change: -50.6%), compared to the fiscal year ended March 31, 2022. The decrease is mainly due to the negative impact from Takeda's shareof loss on an investment held by Takeda Ventures, Inc. recorded in the fiscal year ended March 31, 2022.
Income Tax (Expenses) Benefit
Income Tax Expenses were JPY 58.1 billion, a decrease of JPY 14.4 billion, or 19.8% AER (CER % change; -18.0%), compared to thefiscal year ended March 31, 2022. This decrease was primarily due to a tax charge of JPY 65.4 billion for tax and interest, net of JPY 0.5 billion of
associated tax benefit, arising from tax assessment involving Irish taxation of the break fee Shire received from AbbVie in connection with theterminated offer to acquire Shire made by AbbVie in 2014 in the fiscal year ended March 31, 2022 as well as increased tax benefits from recognitionof deferred tax assets. These decreases were partially offset by the benefits from the U.S. state tax rate change in the fiscal year ended March 31,
2022, in addition to higher pretax earnings.
Net Profit for the YearNet Profit for the Year increased by JPY 86.9 billion, or 37.7% AER (CER % change: 23.3%), compared to the fiscal year ended March 31,
2022 to JPY 317.0 billion.
Supplemental Discussion: Results of Core Financial Measures (Non-IFRS Measures)
In addition to its results prepared in accordance with IFRS, on a supplemental basis, Takeda also presents the results of its Core Financial
Measures. Takeda strongly encourages investors to review “Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” formore information on these metrics, including their definitions, limitations on their usefulness and reconciliations to the most directly comparable
financial measures calculated and presented in accordance with IFRS. Takeda also presents period-over-period change in its Core Financial Measures
on a CER % change basis; see “Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” for more information.
Fiscal Year Ended March 31, 2024 compared with the Fiscal Year Ended March 31, 2023
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core revenue
Core operating profit
Core net profit for the year
Core EPS (yen)¥2023
4,027.5
1,188.4
866.4
558

¥

75

2024
4,263.8
1,054.9
756.9
484

AER
Amount of Change

¥

236.3
(133.5)(109.5)(75)

CER% Change

5.9 %(11.2)%(12.6)%(13.4)%% Change

1.5 %(13.3)%(15.0)%(15.7)%

Table of Contents

Core Revenue.
Core Revenue for the fiscal year ended March 31, 2024 was JPY 4,263.8 billion (JPY +236.3 billion and +5.9% AER, +1.5% CER). The
increase is attributable to favorable foreign exchange rates and growth from business momentum primarily led by Takeda’s Growth and Launch
Products* which totaled JPY 1,833.0 billion (JPY +297.2 billion and +19.3% AER, +12.8% CER).
* Takeda’s Growth and Launch Products in the fiscal year ended March 31, 2024
GI: ENTYVIO, ALOFISEL, EOHILIA
Rare Diseases: TAKHZYRO, LIVTENCITY, ADZYNMAPDT Immunology: Immunoglobulin products including GAMMAGARD LIQUID/KIOVIG, HYQVIA, and CUVITRU,Albumin products including HUMAN ALBUMIN and FLEXBUMIN
Oncology: ALUNBRIG, EXKIVITY (Takeda decided to voluntarily withdraw the product globally), FRUZAQLAOther: QDENGA

Core Operating Profit.
Core Operating Profit for the fiscal year ended March 31, 2024 was JPY 1,054.9 billion (JPY -133.5 billion and -11.2% AER, -13.3%
CER). The components of Core Operating Profit are as below:
Billion JPY or percentage
For the fiscal year ended
March 31,Core revenue
Core cost of sales
Core selling, general and administrative (SG&A)
expenses
Core research and development (R&D) expenses
Core operating profit

¥

¥

2023
4,027.5 ¥(1,208.4)

Change versus the previous fiscal year
AER

Amount of Change
2024
4,263.8 ¥236.3(1,426.3)(217.9)CER% Change% Change

5.9 %18.0 %

1.5 %
13.0 %(997.3)(1,053.0)(55.6)

5.6 %

0.8 %

(633.4)
1,188.4 ¥(729.6)
1,054.9 ¥(96.3)(133.5)15.2 %(11.2)%

8.3 %(13.3)%

During the periods presented, these items fluctuated as follows:
Core Cost of Sales.
Core Cost of Sales was JPY 1,426.3 billion (JPY +217.9 billion and +18.0% AER, +13.0% CER). The increase was primarily due torevenue growth in our key business areas with a change in product mix and the depreciation of Japanese yen as compared to the fiscal year ended
March 31, 2023.
Core Selling, General and Administrative (SG&A) Expenses.
Core SG&A expenses were JPY 1,053.0 billion (JPY +55.6 billion and +5.6% AER, +0.8% CER). The increase was mainly due to thedepreciation of Japanese yen and investments in DD&T partially offset by various cost efficiencies.
Core Research and Development (R&D) Expenses.
Core R&D expenses were JPY 729.6 billion (JPY +96.3 billion and +15.2% AER, +8.3% CER). The increase was mainly due to various
investments in pipeline programs and the depreciation of Japanese yen.
Core Net Profit for the Year.
Core Net Profit for the Year was JPY 756.9 billion (JPY -109.5 billion and -12.6% AER, -15.0% CER) and is calculated from Core
Operating Profit are as below:

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Table of Contents

Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core operating profit
Core finance income and (expenses), net
Core share of profit of investments accounted forusing the equity method
Core profit before tax
Core income tax expenses
Core net profit for the year

¥

¥

2023
1,188.4 ¥(126.6)

AER

Amount of Change
2024
1,054.9 ¥(133.5)(142.0)(15.4)

CER% Change% Change(11.2)%
12.2 %(13.3)%
13.9 %

0.2

5.9

5.7

―

―

1,062.0(195.6)866.4 ¥

918.8
(161.9)756.9 ¥

(143.2)33.7(109.5)(13.5)%(17.2)%(12.6)%(16.0)%(20.2)%(15.0)%

During the periods presented, these items fluctuated as follows:
Core Net Finance Expenses.
Core Net Finance Expenses were JPY 142.0 billion (JPY +15.4 billion and +12.2% AER, +13.9% CER).
Core Share of Profit of Investments Accounted for Using the Equity Method.
Core Share of Profit of Investments Accounted for Using the Equity Method was JPY 5.9 billion (JPY +5.7 billion).
Core Profit Before Tax.
Core Profit Before Tax was JPY 918.8 billion (JPY -143.2 billion and -13.5% AER, -16.0% CER).
Core Income Tax Expenses.
Core Income Tax Expenses were JPY 161.9 billion (JPY -33.7 billion and -17.2% AER, -20.2% CER) and excludes the JPY 63.5 billion
impact from AbbVie Break Fee Settlement in the fiscal year ended March 31, 2024. The decrease was mainly due to lower core pretax earnings.
Core EPS.
Core EPS for the fiscal year ended March 31, 2024 was JPY 484 (JPY -75 and -13.4% AER, -15.7% CER).
Fiscal Year Ended March 31, 2023 compared with the Fiscal Year Ended March 31, 2022
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core revenue
Core operating profit
Core net profit for the year
Core EPS (yen)¥2022
3,420.5
955.2
663.8
425

¥

2023
4,027.5
1,188.4
866.4
558

AER
Amount of Change¥

CER% Change

606.9
233.2
202.6
134

17.7 %
24.4 %
30.5 %
31.5 %% Change

3.5 %
9.1 %
13.1 %
13.9 %

Core Revenue.
Core Revenue for the fiscal year ended March 31, 2023 was JPY 4,027.5 billion (JPY +606.9 billion and +17.7% AER, +3.5% CER). Core
revenue for the fiscal year ended March 31, 2022 was JPY 3,420.5 billion. Business momentum was led by Takeda’s Growth and Launch Products*
which totaled JPY 1,594.8 billion (JPY +435.8 billion and +37.6% AER, +18.8% CER).
* Takeda’s Growth and Launch Products in the fiscal year ended March 31, 2023
GI: ENTYVIO, ALOFISEL
Rare Diseases: TAKHZYRO, LIVTENCITY
PDT Immunology: Immunoglobulin products including GAMMAGARD LIQUID/KIOVIG, HYQVIA, and CUVITRU,Albumin products including HUMAN ALBUMIN and FLEXBUMIN
Oncology: ALUNBRIG, EXKIVITY
Other: SPIKEVAX Intramuscular Injection, NUVAXOVID Intramuscular Injection, QDENGA

Core Operating Profit.
Core Operating Profit for the fiscal year ended March 31, 2023 was JPY 1,188.4 billion (JPY +233.2 billion and +24.4% AER, +9.1%
CER). The components of Core Operating Profit are as below:
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Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core revenue
Core cost of sales
Core selling, general and administrative (SG&A)
expenses
Core research and development (R&D) expenses
Core operating profit¥

2022
3,420.5 ¥(1,060.6)¥

AER

Amount of Change
2023
4,027.5 ¥606.9(1,208.4)(147.8)CER% Change% Change

17.7 %
13.9 %

3.5 %
1.4 %

(880.2)(997.3)(117.1)

13.3 %(0.2)%(524.5)955.2 ¥

(633.4)
1,188.4 ¥(108.9)233.2

20.8 %
24.4 %

3.8 %
9.1 %

During the periods presented, these items fluctuated as follows:
Core Cost of Sales.
Core Cost of Sales was JPY 1,208.4 billion (JPY +147.8 billion and +13.9% AER, +1.4% CER). The increase was mainly due to thedepreciation of Japanese yen as compared to the fiscal year ended March 31, 2022.
Core Selling, General and Administrative (SG&A) Expenses.
Core SG&A expenses were JPY 997.3 billion (JPY +117.1 billion and +13.3% AER, -0.2% CER). The increase was mainly due to thedepreciation of Japanese yen as compared to the fiscal year ended March 31, 2022.
Core Research and Development (R&D) Expenses.
Core R&D expenses were JPY 633.4 billion (JPY +108.9 billion and +20.8% AER, +3.8% CER). The increase was mainly due to thedepreciation of Japanese yen as compared to the fiscal year ended March 31, 2022.
Core Net Profit for the Year.
Core Net Profit for the Year was JPY 866.4 billion (JPY +202.6 billion and +30.5% AER, +13.1% CER) and is calculated from Core
Operating Profit are as below:
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core operating profit
Core finance income and (expenses), net
Core share of profit of investments accounted forusing the equity method
Core profit before tax
Core income tax expenses
Core net profit for the year

¥

¥

2022
955.2 ¥
(121.9)AER

Amount of Change
2023
1,188.4 ¥
233.2(126.6)(4.7)

CER% Change% Change

24.4 %
3.9 %9.1 %(5.6)%

3.7

0.2

(3.5)

(95.1)%(85.8)%

837.0(173.2)663.8 ¥

1,062.0(195.6)866.4 ¥

224.9
(22.4)
202.6

26.9 %
12.9 %
30.5 %

10.9 %
2.4 %
13.1 %

During the periods presented, these items fluctuated as follows:
Core Net Finance Expenses.
Core Net Finance Expenses were JPY 126.6 billion (JPY +4.7 billion and +3.9% AER, -5.6% CER).
Core Share of Profit of Investments Accounted for Using the Equity Method.
Core Share of Profit of Investments Accounted for Using the Equity Method was JPY 0.2 billion (JPY -3.5 billion and -95.1% AER,
-85.8% CER).
Core Profit Before Tax.
Core Profit Before Tax was JPY 1,062.0 billion (JPY +224.9 billion and +26.9% AER, +10.9% CER).
Core Income Tax Expenses.

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Core Income Tax Expenses were JPY 195.6 billion (JPY +22.4 billion and +12.9% AER, +2.4% CER). The increase was mainly due tohigher core pretax earnings.
Core EPS.
Core EPS for the fiscal year ended March 31, 2023 was JPY 558 (JPY +134 and +31.5% AER, +13.9% CER).

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B. Liquidity and Capital Resources
Sources and Uses of Liquidity
Our liquidity requirements mainly relate to operating cash, capital expenditures, contractual obligations, repayment of indebtedness andpayment of interest and dividends. Our operating cash requirements include cash outlays for R&D expenses, milestone payments, sales andmarketing expenses, personnel and other general and administrative costs and raw material costs. Income tax payments also require significant cash
outlays as well as working capital financing.
Our capital expenditures for tangible assets consist primarily of enhancing and streamlining our production facilities, replacing fully
depreciated items, and promoting efficiency of our operations. Our capital expenditures for intangible assets represent mainly milestone payments
related to licensed products, where such assets have been acquired from third-party partners, as well as software development expenditures. Our
capital expenditures, which consist of additions to property, plant and equipment and intangible assets recorded on our consolidated statements offinancial position, were JPY 239.9 billion, JPY 898.7 billion and JPY 496.7 billion for the fiscal years ended March 31, 2022, 2023 and 2024,
respectively. As of March 31, 2024, we had contractual commitments for the acquisition of property, plant and equipment of JPY 31.1 billion. In
addition, we had certain contractual agreements related to the acquisition of intangible assets as of March 31, 2024. See Note 32 to our consolidated
financial statements for a description of our milestone payments of intangible assets. As part of our capital management, we periodically assess ourlevel of capital expenditures in light of capital needs, market and other conditions and other relevant factors.
Our dividend payments for the fiscal years ended March 31, 2022, 2023 and 2024 were JPY 284.2 billion, JPY 280.8 billion and JPY 288.5
billion, respectively. Takeda returned capital to shareholders using dividends at an annual level of JPY 188 per share, consisting of interim and fiscal
year-end dividends of JPY 94 per share for the fiscal year ended March 31, 2024. It is our intention to return capital to shareholders using dividends
at an annual level of JPY 196 per share in the fiscal year ending March 31, 2025, consisting of interim and fiscal year-end dividends of JPY 98 pershare. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information-Dividends” for a description of ourdividend policy.
We are required to make interest and principal payments on our outstanding borrowings. As of March 31, 2024, we had JPY 113.0 billionof interest due within one year and JPY 867.2 billion of principal payments on our borrowings due within one year. See “Borrowings and Financial
Obligations.”
Our primary sources of liquidity include cash and cash equivalents on hand, short-term commercial paper, committed borrowing lines fromfinancial institutions and long-term debt financing that includes bonds from the global capital markets. Additionally, we had access to short-term
uncommitted borrowing lines of JPY 150.0 billion and USD 750 million from financial institutions as of March 31, 2023 and 2024, respectively.
We monitor and adjust the amount of foreign cash based on projected cash flow requirements. As the majority of our business is conducted
outside Japan, we hold a significant portion of cash outside of Japan. Our ability to use foreign cash to fund cash flow requirements in Japan may be
impacted by local regulations and, to a lesser extent, income taxes associated with transferring cash to Japan.
We continue to closely monitor our funding situation and do not currently anticipate experiencing funding or liquidity shortfalls in the shortterm as a result of general market conditions. In addition to the ability to seek additional funding (if needed) from market and other sources, we may
also manage our funding and liquidity needs by reconsidering, to the extent necessary and appropriate, our capital expenditure plans.
As of March 31, 2024, we held JPY 457.8 billion in cash and cash equivalents on hand, of which JPY 107.8 billion was cash temporarily
held on behalf of third parties related to vaccine operations and a trade receivables sales program. In addition, Takeda had access to JPY 700.0 billion
in an undrawn bank commitment line. We believe that working capital is sufficient for our current business requirements. Furthermore, we
continually seek to ensure that our level of liquidity and access to capital market funding continues to be maintained to successfully support ourbusiness operations.

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Consolidated Cash FlowsThe following table shows information about our consolidated cash flows during the fiscal years ended March 31, 2022, 2023 and 2024:
For the fiscal year ended March 31,
2022

2023

2024

(billions of yen)

Net cash from operating activities¥

1,123.1

¥

977.2

¥

716.3

Net cash used in investing activities(198.1)(607.1)(463.9)Net cash used in financing activities(1,070.3)(709.1)(354.4)

Net decrease in cash and cash equivalents(145.3) ¥(339.1) ¥(101.9)Cash and cash equivalents at the beginning of the year

¥

966.2

849.7

533.5

Effects of exchange rate changes on cash and cash equivalents

28.8

22.9

26.2

Cash and cash equivalents at the end of the year

¥

849.7

¥

533.5

¥

457.8

Fiscal Year Ended March 31, 2024 compared with the Fiscal Year Ended March 31, 2023
Net cash from operating activities. Net cash from operating activities for the fiscal year ended March 31, 2024 was JPY 716.3 billion (JPY-260.8 billion). The decrease was due to unfavorable impacts from Changes in Assets and Liabilities, mainly driven by changes in Provision, andunfavorable impacts from a lower net profit for the year adjusted for non-cash items and other adjustments, which was partially offset by Other, Net.
Net cash used in investing activities. Net cash used in investing activities for the fiscal year ended March 31, 2024 was JPY 463.9 billion(JPY -143.2 billion). The decrease was mainly due to a decrease in Acquisition of Intangible Assets (JPY -187.7 billion)*1.
*1 USD 3.0 billion was paid to Nimbus for the acquisition of TAK-279 in the fiscal year ended March 31, 2023 while USD 1.0 billion and USD 0.4
billion were paid to Nimbus for the acquisition of TAK-279 and to HUTCHMED for the exclusive license agreement for FRUZAQLA,
respectively, in the fiscal year ended March 31, 2024.
Net cash used in financing activities. Net cash used in financing activities for the fiscal year ended March 31, 2024 was JPY 354.4 billion(JPY -354.7 billion). The decrease was mainly due to a net increase of JPY 237.0 billion in commercial paper drawings, a net decrease of JPY 60.9
billion in redemption of bonds, and the settlement of cross currency interest rate swaps related to bonds in the fiscal year ended March 31, 2024.
Fiscal Year Ended March 31, 2023 compared with the Fiscal Year Ended March 31, 2022
Net cash from operating activities. Net cash from operating activities was JPY 977.2 billion for the fiscal year ended March 31, 2023
compared to JPY 1,123.1 billion for the fiscal year ended March 31, 2022. The decrease of JPY 145.9 billion was primarily driven by an unfavorable
impact from net of changes in assets and liabilities related to the operating activities, mainly due to a change in trade and other payables andincreased income taxes paid. These were partially offset by higher net profit for the year adjusted for non-cash items and other adjustments.
Net cash used in investing activities. Net cash used in investing activities was JPY 607.1 billion for the fiscal year ended March 31, 2023
compared to JPY 198.1 billion for the fiscal year ended March 31, 2022. The increase of JPY 409.0 billion was mainly due to an increase of JPY
430.2 billion in acquisition of intangible assets primarily resulting from the acquisition of Nimbus Lakshmi Inc.*2 for the fiscal year ended March
31, 2023, partially offset by a decrease of JPY 49.7 billion in acquisition of business (net of cash and cash equivalents acquired).
*2 Of the USD 4.0 billion upfront payment, USD 3.0 billion was paid in February 2023 and USD 0.9 billion was paid in April 2023. Remaining USD
0.1 billion was paid in August 2023.
Net cash used in financing activities. Net cash used in financing activities was JPY 709.1 billion for the fiscal year ended March 31, 2023
compared to JPY 1,070.3 billion for the fiscal year ended March 31, 2022. The decrease of JPY 361.1 billion was mainly due to a decrease in
repayments of bonds and long-term loans, net of proceeds from issuance of bonds and long-term loans upon refinancing, of JPY 279.1 billion, as wellas an increase in commercial paper drawings of JPY 40.0 billion. In addition, there was a decrease in purchase of treasury shares of JPY 50.6 billion
resulting from the higher share buybacks conducted in the fiscal year ended March 31, 2022 compared to the fiscal year ended March 31, 2023.

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Supplemental Discussion: Free Cash Flow and Adjusted Free Cash Flow (Non-IFRS Measures)Free cash flow and Adjusted Free Cash Flow are non-IFRS measures, see “—Certain Supplemental Non-IFRS Measures as Defined andPresented by Takeda—Free Cash Flow and Adjusted Free Cash Flow” for further information. The most directly comparable measures under IFRS
for Free Cash Flow and Adjusted Free Cash Flow is Net Cash from Operating Activities.
For the Year Ended March 31
2022

2023

2024

(billions of yen)
Net cash from operating activities (IFRS)¥Free cash flow (non-IFRS)

1,123.1
999.9
894.0

Adjusted free cash flow (non-IFRS)

¥

977.2
836.5
446.2

¥

716.3
540.9
283.4

Fiscal Year Ended March 31, 2024 compared with the Fiscal Year Ended March 31, 2023
Adjusted Free Cash Flow for the fiscal year ended March 31, 2024 was JPY 283.4 billion (JPY -162.8 billion). The decrease was mainly
driven by lower Net Cash from Operating Activities after adjustment to the change in cash balance that is temporarily held by Takeda on behalf ofthird parties related to vaccine operations and the trade receivables sales program. These decreases were partially offset by a decrease in Acquisitionof Intangible Assets.
Fiscal Year Ended March 31, 2023 compared with the Fiscal Year Ended March 31, 2022
Adjusted Free Cash Flow for the fiscal year ended March 31, 2023 was JPY 446.2 billion (JPY -497.5 billion). The decrease was mainly
driven by a payment to Nimbus for the acquisition of TAK-279 and lower Net Cash from Operating Activities after adjustment to the change in cash
balance that is temporary held by Takeda on behalf of third parties related to vaccine operations and the trade receivables sales program.

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Borrowings and Financial Obligations
Our total bonds and loans were JPY 4,382.3 billion and JPY 4,843.8 billion as of March 31, 2023 and 2024, respectively. These borrowings
include unsecured bonds and senior notes issued by Takeda, bilateral and syndicated loans entered into by the Company, borrowings incurred to funda portion of the Shire Acquisition, debt assumed in connection with the Shire Acquisition and debt refinanced and are included in our consolidated
statements of financial position. Our borrowings are mainly incurred in connection with acquisitions and therefore are not exposed to seasonality.
On April 26, 2023, Takeda repaid JPY 100.0 billion in Syndicated Loans falling due and on the same day entered into new Syndicated
Loans of JPY 100.0 billion maturing on April 26, 2030. Following this, Takeda redeemed USD 1,000 million of unsecured senior notes issued in
September 2016 on their maturity date of September 23, 2023. Furthermore, Takeda redeemed USD 500 million of unsecured senior notes issued in
November 2018 on their maturity date of November 26, 2023. Takeda had short term commercial paper drawings outstanding of JPY 317.0 billion asof March 31, 2024.
As of March 31, 2024, we had certain outstanding borrowings that contained financial covenants. A key financial covenant requires
Takeda’s ratio of consolidated Adjusted Net Debt to Adjusted EBITDA, as defined in the loan agreements, for the previous twelve-month period to
not surpass certain levels as of March 31 and September 30 of each year. Takeda was in compliance with all financial covenants as of March 31,
2024 in a similar manner to the prior year ended March 31, 2023. There are no restrictions on the ability to draw from the JPY 700.0 billion
commitment line that was put in place in 2019 and matures at the end of September 2026.
We currently have a Japanese unsecured commercial paper program in place to facilitate short-term liquidity management. The total
amount drawn on the commercial paper program was JPY 40.0 billion as of March 31, 2023 and JPY 317.0 billion as of March 31, 2024. We further
have access to short-term uncommitted lines of JPY 150.0 billion and USD 750 million which were undrawn as of March 31, 2023 and 2024,
respectively.
For further description of our borrowings, see Note 20 to our audited consolidated financial statements.

Credit Ratings
Our credit ratings, which reflect each rating agency’s opinion of our financial strength, operating performance and ability to meet our
obligations, as of the date of this annual report are as follows:

Rating Agency

S&P Global Ratings

Moody’s

RatingOutlookRating Structure

Issuer credit rating/foreign
currency long-term and local
currency long-term

Category

BBB+

StableFourth highest of 11 rating categories and first within the
category based on modifiers (e.g. BBB+, BBB and BBB- arewithin the same category).

Issuer credit rating (short-term)

A-2

Long-term issuer rating andLong-term senior unsecured
rating

Baa1

Second highest of six rating categories
StableFourth highest of nine rating categories and first within the
category based on modifiers (e.g. Baa1, Baa2 and Baa3 arewithin the same category).

The ratings are not a recommendation to buy, sell or hold securities. The ratings are subject to revision or withdrawal at any time by theassigning rating agency. Each of the financial strength ratings should be evaluated independently.

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Material Cash Requirements from Contractual and Other Obligations
Material Contractual Obligations
The following table summarizes our contractual obligations as of March 31, 2024:
Total
contractual
amount(1)Within one
year

Between one
and three years(billions of yen)

Between threeand five years

More than fiveyears

Bonds and loans: (2) (3)Bonds (4)¥5,090.6
805.8
31.1
900.8
19.2

¥

913.3
67.0
31.1
66.2
19.2

¥

981.3
214.1
—
116.8
—

¥

512.1
423.8
—
104.7
—

¥

Loans
Purchase obligations for property, plant and equipment
Repayment of lease liabilities
Contributions to defined benefit plans (5)Total (6) (7)2,683.9
101.0
—
613.1
—

¥

6,847.5¥

1,096.8¥

1,312.2¥

1,040.6¥

3,398.0___________
Notes:
(1)
(2)
(3)
(4)
(5)
(6)

(7)

Obligations denominated in currencies other than Japanese yen have been translated into Japanese yen using the exchange rates as of March 31, 2024 andmay fluctuate due to changes in exchange rates.
Repayment obligations may be accelerated if we breach the relevant covenants under the relevant instruments.
Includes interest payment obligations.
The contractual amount of bonds in “Within one year” includes a JPY 500.0 billion principal amount of hybrid subordinated bonds (“Hybrid Bonds”) as
Takeda expects to make an early repayment of all of the principal of the Hybrid Bonds on the bond call date of October 6, 2024. For details of the principal
and interest rate associated with the Hybrid Bond, see Note 20 to our audited consolidated financial statements.
Pension and post-retirement contributions cannot be determined beyond the fiscal year ending March 31, 2025 because the timing of funding is uncertainand dependent on future movements in interest rates and investment returns, changes in laws and regulations and other variables.
Does not include contractual obligations whose timing we are unable to estimate, including defined benefit obligations, litigation reserves and long-term
income tax liabilities and does not include liabilities recorded at fair value as amounts will fluctuate based on any changes in fair value including derivative
liabilities and financial liabilities associated with contingent consideration arrangements. The carrying amounts of derivative liabilities and financial
liabilities associated with contingent consideration arrangements as of March 31, 2024 were JPY 25.1 billion and JPY 7.8 billion, respectively. Milestone
payments that are dependent on the occurrence of certain future events are not included.
Does not include purchase orders entered into for purchases made in the normal course of business.

Off-Balance sheet Arrangements
Milestone Payments
Under the terms of our collaborations with third parties for the development of new products, we may be required to make payments for theachievement of certain milestones related to the development of pipeline products and the launch and subsequent marketing of new products. As of
March 31, 2024, the contractual amount of potential milestone payments totaled JPY 1,331.4 billion, in each case excluding potential commercial
milestone payments. See Note 13 and 32 to our audited consolidated financial statements for further details.

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Supplemental Discussion of Financial Leverage (Adjusted Net Debt to Adjusted EBITDA Ratio) (NonIFRS Measure)
Particularly following the acquisition of Shire, investors, analysts and ratings agencies have closely monitored Takeda’s financial leverage,
as represented by the ratio of its Adjusted Net Debt to Adjusted EBITDA. Adjusted Net Debt, Adjusted EBITDA and the ratio thereof are all nonIFRS measures. See “—Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” for more information, includingreconciliations of bonds and loans to Adjusted Net Debt, and of Net Profit for the year to EBITDA and Adjusted EBITDA, in each case, to the mostdirectly comparable measures presented in accordance with IFRS. Takeda’s ratio of Adjusted Net Debt to Adjusted EBITDA, and the ratio of each of
the most directly comparable measures to Adjusted Net Debt and Adjusted EBITDA presented in accordance with IFRS as of the dates shown was asfollows:

For the Year Ended March 31,
2023
2024
(billions of yen, except for ratios)
IFRS:
Bonds and loans¥(4,382.3)¥(4,843.8)

Net profit for the year

317.0

144.2

Ratio of bonds and loans to net profit for the year

13.8x

33.6x

Non-IFRS:
Adjusted net debt¥

Adjusted EBITDA
Adjusted net debt to adjusted EBITDA ratio

85(3,716.1)¥(4,091.3)

1,421.8

1,319.9

2.6x

3.1x

Table of Contents

Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda
In addition to its results presented in accordance with IFRS, Takeda presents certain “Non-IFRS” financial measures on a supplemental
basis. These financial measures include Constant Exchange Rate (“CER”) change, Core Financial Measures, Net Debt, Adjusted Net Debt, EBITDA,
Adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow.
Takeda’s management evaluates its results of operations and financial condition and makes operating and investment decisions using both
IFRS measures and the non-IFRS measures presented herein. Accordingly, Takeda presents both types of measures to provide investors withadditional information to analyze Takeda’s results of operations and financial condition and understand how Takeda’s management assesses thesame. Takeda’s non-IFRS measures exclude or adjust the calculation of certain income, cost, cash flow or statement of financial position items which
are included in the most closely comparable measures presented in accordance with IFRS. These measures are not prepared in accordance with IFRS
and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared in accordance with IFRS (which
Takeda sometimes refer to as “reported” measures). Takeda strongly encourages investors to review its historical financial statements in their entirety
and to use the measures presented in accordance with IFRS as the primary means of evaluating its performance. Moreover, Takeda encourages
investors to review the definitions and reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures. Takeda also
encourages investors to review the discussions of these non-IFRS financial measures—particularly the limitations on their usefulness—and tounderstand how such measures differ from similarly titled measures that may be presented by other companies in the pharmaceutical industry or ingeneral.

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Core Financial Measures
Takeda’s Core Financial Measures, particularly Core Revenue, Core Operating Profit, Core Net Profit for the Year and Core EPS, exclude
revenue from divestments, amortization and impairment losses on intangible assets and other impacts unrelated to the underlying trends and businessperformance of Takeda’s core operations, such as non-recurring items, purchase accounting effects and transaction related costs. Core Revenue
represents revenue adjusted to exclude significant revenue items unrelated to the underlying trends and business performance of Takeda’s core
operations. Core Operating Profit represents operating profit adjusted to exclude other operating expenses and income, amortization and impairment
losses on acquired intangible assets and non-cash items or items unrelated to the underlying trends and business performance of Takeda’s core
operations. Core EPS represents net profit adjusted to exclude the impact of items excluded in the calculation of Core Operating Profit, and othernon-operating items (e.g. amongst other items, fair value adjustments and the imputed financial charge related to contingent consideration) that are
unusual, non-recurring in nature or unrelated to the underlying trends and business performance of Takeda’s ongoing operations and the tax effect ofeach of the adjustments, divided by the average outstanding shares (excluding treasury shares) of the reporting periods presented.
Takeda presents its Core Financial Measures because Takeda believes that these measures are useful to understanding its business without
the effect of items that Takeda considers to be unrelated to the underlying trends and business performance of its core operations, including items (i)which may vary significantly from year-to-year or may not occur in each year, or (ii) whose recognition Takeda believes is largely uncorrelated totrends in the underlying performance of our core business. Takeda believes that similar measures are frequently used by other companies in its
industry, and that providing these measures helps investors evaluate Takeda’s performance against not only its performance in prior years but on asimilar basis as its competitors. Takeda also presents Core Financial Measures because these measures are used by Takeda for budgetary planningand compensation purposes (i.e., certain targets for the purposes of Takeda’s Short-Term Incentive and Long-Term Incentive compensation
programs, including incentive compensation of the CEO and CFO, are set in relation to the results of Takeda’s Core Financial Measures. See “Item 6.
Directors, Senior Management and Employees—B. Compensation”).
The usefulness of Core Financial Measures to investors has significant limitations including, but not limited to, (i) they are not necessarily
identical to similarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) they exclude financial informationand events, such as the effects of non-cash expenses such as dispositions or amortization of intangible assets, that some may consider important inevaluating Takeda’s performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period
to period in the future (however, it is Takeda’s policy not to adjust out normal, recurring cash operating expenses necessary to operate our business)and (iv) they may not include all items which investors may consider important to an understanding of our results of operations, or exclude all items
which investors may not consider to be so.
The following tables reconcile, for each of the periods shown, Takeda’s Core Financial Measures to the most directly comparable financial
measures calculated and presented in accordance with IFRS, namely: (i) Core Revenue to Revenue as presented under IFRS; (ii) Core Operating
Profit to Operating Profit as presented under IFRS and (iii) Core Net Profit for the Year to Net Profit for the Year as presented under IFRS.
Adjustments to Revenue and Operating Profit to calculate Core Revenue and Core Operating Profit:

For the Year Ended March 31, 2024

Reported(IFRS)
Revenue¥

4,263.8

Amortizationof intangible
assetsOther
Impairment
operatingof intangible
income/assets(1)expenses(2)(billions of yen)

¥

¥

—

—

¥

—

Core
Financial
Measures(non-IFRS)Others¥—¥4,263.8

Cost of sales(1,426.7)

—

—

—

0.4

(1,426.3)

Selling, general and administrative expenses(1,053.8)

—

—

—

0.9

(1,053.0)

Research and development expenses(729.9)

—

—

—

0.3

(729.6)

Amortization of intangible assets(521.5)

521.5

—

—

—

—

Impairment of intangible assets(130.6)

—

130.6

—

—

—

Other operating income (expenses)
Operating profit(187.1)
¥

214.1

—
¥

521.5

—
¥

130.6

187.1
¥

187.1

—
¥

1.5

—
¥

1,054.9___________
Notes:(1) Intangible assets include IPR&D.
(2) Other operating income/expenses include changes in fair value of financial assets and liabilities associated with contingent consideration arrangements, gains/losses
on sales of property, plant and equipment and investment property, gain on divestment of business and subsidiaries, donations and contributions, rental income andlease expense for sublease, restructuring expenses, valuation reserves for pre-launch inventories, impairment of assets held for sale, legal provisions and write-offs
of option assets.

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Table of Contents

For the Year Ended March 31, 2023

Reported(IFRS)
Revenue¥

Cost of sales

4,027.5

Amortizationof intangible
assetsOther
Impairment
operatingof intangible
income/assets(1)expenses(2)(billions of yen)

¥

¥

—

—

¥

—

Core
Financial
Measures(non-IFRS)Others(3)¥—¥4,027.5(1,244.1)

—

—

—

35.7

(1,208.4)

Selling, general and administrative expenses(997.3)

—

—

—

(0.0)

(997.3)

Research and development expenses(633.3)

—

—

—

(0.0)

(633.4)

Amortization of intangible assets(485.1)

485.1

—

—

—

—

Impairment of intangible assets(57.3)

—

57.3

—

—

—

Other operating income (expenses)
Operating profit(119.8)
¥

490.5

—
¥

—

485.1

¥

57.3

119.8
¥

119.8

—
¥

35.6

—
¥

1,188.4___________
Notes:(1) Intangible assets include IPR&D.
(2) Other operating income/expenses include changes in fair value of financial assets and liabilities associated with contingent consideration arrangements, gains/losses
on sales of property, plant and equipment and investment property, change in estimate of liabilities related to SHP647, donations and contributions, rental income
and lease expense for sublease, restructuring expenses, valuation reserves for pre-launch inventories, impairment of assets held for sale, legal provisions and writeoffs of option assets.
(3) Others: cost of sales includes expenses related to the COVID-19 pandemic and the unwinding of acquisition accounting adjustments (i.e., step up) in value of
inventory and PP&E related to the Shire acquisition completed in the fiscal year ended March 31, 2019.

For the Year Ended March 31, 2022

Reported(IFRS)
Revenue¥

Other
Impairment
operatingof intangible
income/assets(1)expenses(2)(billions of yen)¥¥(148.5) ¥3,420.5

—

—

46.2

(1,060.6)

Selling, general and administrative expenses(886.4)

—

—

—

6.1

(880.2)

Research and development expenses(526.1)

—

—

—

1.6

(524.5)

Amortization of intangible assets(418.8)

418.8

—

—

—

—

Impairment of intangible assets(54.1)

—

54.1

—

—

—

Other operating income (expenses)(116.0)

—

—

116.0

—

—

(94.5) ¥

955.2

¥

460.8

¥

418.8

¥

—

54.1

¥

¥

—

Others(3)—Operating profit—

Core
Financial
Measures(non-IFRS)(1,106.8)

Cost of sales

3,569.0

Amortizationof intangible
assets

116.0

¥

¥

___________
Notes:(1) Intangible assets include IPR&D.
(2) Other operating income/expenses include changes in fair value of financial assets and liabilities associated with contingent consideration arrangements, gains/losses
on sales of property, plant and equipment and investment property, gain on divestment of business and subsidiaries, donations and contributions, rental income andlease expense for sublease, restructuring expenses, valuation reserves for pre-launch inventories, impairment of assets held for sale, legal provisions and write-offs
of option assets, and an accounting adjustment related to a divested business.
(3) Others: revenue includes one-time revenue of JPY 133.0 billion related to sale of selected non-core products in Japan to Teijin Pharma Limited in April 2021 andsale of some other non-core products; cost of sales, selling, general and administrative expenses and research and development expenses include expenses related to
the COVID-19 pandemic and the unwinding of acquisition accounting adjustments (i.e., step up) in value of inventory and PP&E related to the Shire acquisition
completed in the fiscal year ended March 31, 2019.

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Adjustments to Net Profit for the Year to calculate Core Net Profit for the Year:For the Year Ended March 31, 2024

Reported(IFRS)
Operating profit¥

Operating margin

214.1

Other
Amortization Impairment
operatingof intangible of intangible
income/assetsassetsexpenses
Others(1)(billions of yen, except for percentages)
¥

5.0 %

Finance income (expenses), net

521.5

¥

130.6

¥

187.1

¥

Core
Financial
Measures(non-IFRS)

1.5¥

1,054.9

—

—

—

—

(167.8)

—

—

—

25.8

(142.0)24.7 %

6.5

—

—

—

(0.5)

5.9

Share of profit (loss) of investments accounted for using theequity method
Profit before tax

52.8

521.5

130.6

187.1

26.8

918.8

Income tax (expenses) benefit(2)91.4(108.7)(28.6)(43.1)(73.0)(161.9)(46.2) ¥756.9

Net profit for the year

¥

144.2

¥

412.8

¥

102.0

¥

144.1

¥

___________
Notes:(1) Others: finance income (expenses), net includes the loss on non-monetary items for subsidiaries in hyperinflationary economies and for which, IAS29, Financial
Reporting in Hyperinflationary Economies, is applied, and finance income and expense related to non-core transactions; share of profit (loss) of investments
accounted for using the equity method includes gains and losses associated with divestments and liquidations, and other fair value adjustments.
(2) Taxes on the adjustments between IFRS Accounting Standards and core results, take into account the statutory tax rate applicable to the item based upon thejurisdiction where the adjustment is recorded. Total income tax expense on core profit before tax adjustments (JPY 866.0 billion) was JPY 253.3 billion, resulting inan average tax rate of 29.2% on core adjustments.
For the Year Ended March 31, 2023

Reported(IFRS)
Operating profit¥

Operating margin

490.5

Other
Amortization Impairment
operatingof intangible of intangible
income/assetsassetsexpenses
Others(1)(billions of yen, except for percentages)¥

12.2 %

Finance income (expenses), net

485.1

¥

57.3

¥

119.8

¥

Core
Financial
Measures(non-IFRS)

35.6

¥

1,188.4

—

—

—

—

(106.8)———(19.8)(126.6)29.5 %

(8.6)

—

—

—

8.8

0.2

Share of profit (loss) of investments accounted for using theequity method
Profit before tax

375.1

485.1

57.3

119.8

24.6

1,062.0

Income tax (expenses) benefit(2)(58.1)(103.5)(12.5)(25.5)

3.9(195.6)

Net profit for the year

¥

317.0

¥

381.6

¥

44.9

¥

94.4

¥

28.5

¥

866.4

___________
Notes:(1) Others: finance income (expenses), net includes the loss on non-monetary items for subsidiaries in hyperinflationary economies and for which, IAS29, Financial
Reporting in Hyperinflationary Economies, is applied, and finance income and expense related to non-core transactions; share of profit (loss) of investments
accounted for using the equity method includes gains and losses associated with divestments and liquidations, and other fair value adjustments.
(2) Taxes on the adjustments between IFRS Accounting Standards and core results, take into account the statutory tax rate applicable to the item based upon thejurisdiction where the adjustment is recorded. Total income tax expense on core profit before tax adjustments (JPY 686.8 billion) was JPY 137.6 billion, resulting inan average tax rate of 20.0% on core adjustments.

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Table of Contents

For the Year Ended March 31, 2022

Reported(IFRS)
Operating profit¥

Operating margin

460.8

Other
Amortization Impairment
operatingof intangible of intangible
income/assetsassetsexpenses
Others(1)(billions of yen, except for percentages)¥

12.9 %

Finance income (expenses), net

418.8

¥

54.1

¥

116.0

¥

Core
Financial
Measures(non-IFRS)(94.5) ¥

955.2

—

—

—

—

(142.9)

—

—

—

21.0

(121.9)27.9 %

—

—

19.1

3.7

Share of profit (loss) of investments accounted for using theequity method
Profit before tax(15.4)

—

302.6

418.8

54.1

116.0

(54.4)

837.0

Income tax (expenses) benefit(2)(72.4)(89.7)(15.2)(25.7)

29.8(173.2)(24.6) ¥663.8

Net profit for the year

¥

230.2

¥

329.1

¥

38.9

¥

90.3

¥

___________
Notes:(1) Others: finance income (expenses), net includes financial gain and expenses associated with non-core investments and premiums for early redemption of bonds andloans; share of profit (loss) of investments accounted for using the equity method includes gains and losses associated with divestments and liquidations, and otherfair value adjustments.
(2) Taxes on the adjustments between IFRS Accounting Standards and core results, take into account the statutory tax rate applicable to the item based upon thejurisdiction where the adjustment is recorded. Total income tax expense on core profit before tax adjustments (JPY 534.5 billion) was JPY 100.8 billion, resulting inan average tax rate of 18.9% on core adjustments.

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Table of ContentsConstant Exchange Rate (“CER”) Change
CER, or “constant exchange rate” change eliminates the effect of foreign exchange rates from year-over-year comparisons by translating
financial results in accordance with IFRS or core (non-IFRS) financial measures for the current period using corresponding exchange rates in thesame period of the previous fiscal year.
Takeda presents CER change because we believe that this measure is useful to investors to better understand the effect of exchange rates on
our business, and to understand how our results of operations might have changed from year to year without the effect of fluctuations in exchange
rates. These are the primary ways in which our management uses these measures to evaluate our results of operations. We also believe that this is a
useful measure for investors as similar performance measures are frequently used by securities analysts, investors and other interested parties in theevaluation of the results of operations of other companies in our industry (many of whom similarly present measures that adjust for the effect of
exchange rates).
The usefulness of this presentation has significant limitations including, but not limited to, that while CER change is calculated using thesame exchange rates used to calculate financial results as presented under IFRS for the previous fiscal year, this does not necessarily mean that thetransactions entered into during the relevant fiscal year could have been entered into or would have been recorded at the same exchange rates.
Moreover, other companies in our industry using similarly titled measures may define and calculate those measures differently than we do, andtherefore such measures may not be directly comparable. Accordingly, CER change at constant exchange rates should not be considered in isolationand is not, and should be viewed as, a substitute for change in financial results as prepared and presented in accordance with IFRS.

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Table of Contents

The following tables show our results of operations, including the year-over-year percentages changes thereto, in each case as calculated
and presented in accordance with IFRS, and reconcile the CER percentage changes for each line item to such presentation.
CER Change (IFRS):
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,
Revenue
Cost of sales
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
Finance income (expenses), net
Share of profit (loss) of investments accounted forusing the equity method
Profit before tax
Income tax (expenses) benefit
Net profit for the year

¥

¥

2023
4,027.5 ¥(1,244.1)(997.3)(633.3)

CER(1)

AER

Amount of Change
2024
4,263.8 ¥236.3(1,426.7)(182.6)(1,053.8)(56.5)(729.9)(96.6)% Change% Change

5.9 %14.7 %
5.7 %
15.3 %

1.5 %
9.8 %
0.9 %
8.4 %

(542.4)(652.1)(109.7)20.2 %

12.2 %

25.4(145.2)490.5(106.8)19.4(206.5)214.1(167.8)(6.0)(61.3)(276.4)(61.0)(23.8)%
42.2 %(56.4)%
57.1 %(26.3)%
34.5 %(50.3)%
78.3 %

(8.6)

6.5

15.1

―

―

375.1
(58.1)
317.0 ¥

52.8
91.4
144.2

(322.3)149.5(172.8)(85.9)%―(54.5)%(84.1)%―(57.0)%¥___________Note:(1) Starting from the quarter ending June 30, 2024, we will cease adjustments for CER change for the results of operations of subsidiaries in countries experiencing
hyperinflation and for which IAS29, Financial Reporting in Hyperinflationary Economies, is applied, because of the increased impacts of hyperinflation in thecalculation of CER change using corresponding exchange rates in the same period of the previous fiscal year, effectively keeping CER change for these subsidiaries
unchanged from those reported with IAS29. Had the methodology been used for FY2023 Reported Results with CER % change, CER changes for revenue,
operating profit and net profit would have been (0.3)%, (56.8)% and (55.7)%, respectively.

For the fiscal year ended
March 31,
Revenue
Cost of sales
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
Finance income (expenses), net
Share of loss of investments accounted for using
the equity method
Profit before tax
Income tax (expenses)
Net profit for the year

¥

¥

2022
3,569.0 ¥(1,106.8)(886.4)(526.1)

Billion JPY or percentage
Change versus the previous fiscal year
AER
CER

Amount of Change
2023
4,027.5 ¥458.5(1,244.1)(137.2)(997.3)(110.9)(633.3)(107.2)% Change% Change

12.8 %
12.4 %
12.5 %
20.4 %(0.8)%(0.1)%(0.9)%
3.5 %(472.9)(542.4)(69.5)

14.7 %(3.2)%

43.1(159.1)460.8(142.9)25.4(145.2)490.5(106.8)(17.7)
13.8
29.7
36.1

(41.0)%(8.7)%
6.4 %(25.3)%(44.2)%(21.1)%(1.8)%(28.8)%(15.4)(8.6)

6.7(43.8)%(50.6)%

302.6(72.4)
230.2 ¥

375.1
(58.1)
317.0 ¥

72.5
14.4
86.9

24.0 %(19.8)%
37.7 %

13.4 %(18.0)%
23.3 %

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CER Change (non-IFRS):
Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core revenue
Core cost of sales
Core selling, general and administrative expenses
Core research and development expenses
Core amortization and impairment losses on
intangible assets associated with productsCore other operating income
Core other operating expenses
Core operating profit
Core finance income (expenses), net
Core share of profit of investments accounted forusing the equity method
Core profit before tax
Core income tax (expenses)
Core net profit for the year

¥

¥

2023
4,027.5 ¥(1,208.4)(997.3)(633.4)

CER(1)

AER

Amount of Change
2024
4,263.8 ¥236.3(1,426.3)(217.9)(1,053.0)(55.6)(729.6)(96.3)% Change% Change

5.9 %18.0 %
5.6 %
15.2 %

1.5 %
13.0 %
0.8 %
8.3 %

—

—

—

―

―

—
—
1,188.4(126.6)——
1,054.9(142.0)——(133.5)(15.4)――(11.2)%
12.2 %――(13.3)%
13.9 %

0.2

5.9

5.7

―

―

1,062.0(195.6)866.4 ¥

918.8
(161.9)756.9 ¥

(143.2)33.7(109.5)(13.5)%(17.2)%(12.6)%(16.0)%(20.2)%(15.0)%___________Note:(1) Starting from the quarter ending June 30, 2024, we will cease adjustments for CER change for the results of operations of subsidiaries in countries experiencing
hyperinflation and for which IAS29, Financial Reporting in Hyperinflationary Economies, is applied, because of the increased impacts of hyperinflation in thecalculation of CER change using corresponding exchange rates in the same period of the previous fiscal year, effectively keeping CER change for these subsidiaries
unchanged from those reported with IAS29. Had the methodology been used for FY2023 Core Results with CER % change, CER changes for core revenue, core
operating profit and core net profit would have been (0.3)%, (16.0)% and (17.0)%, respectively.

Billion JPY or percentage
Change versus the previous fiscal year

For the fiscal year ended
March 31,Core revenue
Core cost of sales
Core selling, general and administrative expenses
Core research and development expenses
Core amortization and impairment losses on
intangible assets associated with productsCore other operating income
Core other operating expenses
Core operating profit
Core finance income (expenses), net
Core share of profit of investments accounted forusing the equity method
Core profit before tax
Core income tax (expenses)
Core net profit for the year

¥

¥

2022
3,420.5 ¥(1,060.6)(880.2)(524.5)AER

Amount of Change
2023
4,027.5 ¥606.9(1,208.4)(147.8)(997.3)(117.1)(633.4)(108.9)CER% Change% Change

17.7 %
13.9 %
13.3 %
20.8 %

3.5 %1.4 %(0.2)%
3.8 %

—

—

—

―

―

—
—
955.2
(121.9)——1,188.4(126.6)

—
—
233.2
(4.7)

―
―
24.4 %
3.9 %

―
―
9.1 %
(5.6)%

3.7

0.2

(3.5)

(95.1)%(85.8)%

837.0(173.2)663.8 ¥

1,062.0(195.6)866.4 ¥

224.9
(22.4)
202.6

26.9 %
12.9 %
30.5 %

10.9 %
2.4 %
13.1 %

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Free Cash Flow and Adjusted Free Cash Flow
Takeda defines Free Cash Flow as cash flows from operating activities less acquisition of property, plant and equipment (“PP&E”). Takeda
defines Adjusted Free Cash Flow as cash flows from operating activities, subtracting acquisition of PP&E, intangible assets and investments as well
as removing any other cash that is not available to Takeda’s immediate or general business use, and adding proceeds from sales of PP&E, and the net
effect of sales (including redemptions where relevant) and acquisition of investments and businesses, net of cash and cash equivalents acquired anddivested.
Takeda presents Free Cash Flow and Adjusted Free Cash Flow because Takeda believes that these measures are useful to investors as
similar measures of liquidity are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our
industry. Adjusted Free Cash Flow is also used by our management to evaluate our liquidity and our cash flows, particularly as they relate to ourability to meet our liquidity requirements and to support our capital allocation policies. Takeda also believes that Free Cash Flow and Adjusted Free
Cash Flow are helpful to investors in understanding how our strategic acquisitions and divestitures of businesses contribute to our cash flows andliquidity.
The usefulness of Free Cash Flow and Adjusted Free Cash Flow to investors has significant limitations including, but not limited to, (i)they may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) they do not reflect the effect ofour current and future contractual and other commitments requiring the use or allocation of capital and (iii) the addition of proceeds from sales andredemption of investments and the proceeds from sales of business, net of cash and cash equivalents acquired and divested do not represent cash
received from our core ongoing operations. Free Cash Flow and Adjusted Free Cash Flow should not be considered in isolation and are not, andshould not be viewed as, substitutes for cash flows from operating activities or any other measure of liquidity presented in accordance with IFRS. The
most directly comparable measure under IFRS for Free Cash Flow and Adjusted Free Cash Flow is net cash from operating activities.
The following table provides a reconciliation from Net Cash from Operating Activities, the most comparable measure presented inaccordance with IFRS, to Free Cash Flow and Adjusted Free Cash Flow for the fiscal year ended March 31, 2022, 2023 and 2024:
For the Year Ended March 31
2022

2023

2024

(billions of yen)
Net cash from operating activities (IFRS)¥

1,123.1

¥

977.2

¥

716.3

Acquisition of PP&E

(123.3)(140.7)(175.4)

Free cash flow (non-IFRS)

999.9

836.5

540.9

Adjustment for cash temporarily held by Takeda on behalf of third parties(1)(32.0)

81.7

18.0

1.8

1.0

8.6

(62.8)(493.0)(305.3)Acquisition of investments(8.3)(10.2)(6.8)

Acquisition of business, net of cash and cash equivalents acquired(49.7)——

Proceeds from sales and redemption of investments

16.9

22.3

8.0

Proceeds from sales of business, net of cash and cash equivalents divested

28.2
894.0

8.0
446.2

20.0
283.4

Proceeds from sales of PP&E
Acquisition of intangible assets(2)¥Adjusted free cash flow (non-IFRS)¥¥___________
Notes:(1) Adjustment for cash temporarily held by Takeda on behalf of third parties refers to changes in cash balances that are temporarily held by Takeda on behalf of third
parties related to vaccine operations and the trade receivables sales program, which are not available to Takeda’s immediate or general business use.
(2) Proceeds from sale of intangible assets are separately adjusted as they are recorded within operating cash flows, except certain immaterial transactions.

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EBITDA and Adjusted EBITDA
Takeda defines EBITDA as consolidated net profit before income tax expenses, depreciation and amortization and net interest expense.
Takeda defines Adjusted EBITDA as EBITDA further adjusted to exclude impairment losses, other operating income and expenses (excluding
depreciation and amortization), finance income and expenses (excluding net interest expense), our share of loss from investments accounted for underthe equity method and other items that management believes are unrelated to our core operations such as purchase accounting effects and transaction
related costs.
Takeda presents EBITDA and Adjusted EBITDA because Takeda believes that these measures are useful to investors as they are frequently
used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Primarily, Adjusted EBITDA is usedby Takeda for the purposes of monitoring its financial leverage. See “Item 5.B Liquidity and Capital Resources — Supplemental Discussion of
Financial Leverage (Adjusted Net Debt to Adjusted EBITDA Ratio) (Non-IFRS Measure)” and “—Adjusted Net Debt/Adjusted EBITDA Ratio”
below. Takeda further believes that Adjusted EBITDA is helpful to investors in identifying trends in its business that could otherwise be obscured bycertain items unrelated to ongoing operations because they are highly variable, difficult to predict, may substantially impact our results of operations
and may limit the ability to evaluate our performance from one period to another on a consistent basis.
The usefulness of EBITDA and Adjusted EBITDA to investors has significant limitations including, but not limited to, (i) they may not becomparable to similarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) they exclude financial
information and events, such as the effects of an acquisition, or amortization of intangible assets, that some may consider important in evaluating
Takeda’s performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in
the future and (iv) they may not exclude all items which investors may consider to be unrelated to Takeda’s long-term operations, such as the resultsof businesses divested during a period. EBITDA and Adjusted EBITDA should not be considered in isolation and are not, and should not be viewed
as, substitutes for operating income, net profit for the year or any other measure of performance presented in accordance with IFRS.
The following table provides a reconciliation from net profit to EBITDA and Adjusted EBITDA for the fiscal years ended March 31, 2023
and 2024:
For the Year Ended March 31,
2023

2024
(billions of yen)

Net profit for the year (IFRS)

¥

317.0

¥

144.2

Income tax expenses (benefit)

58.1(91.4)

Depreciation and amortization

664.4

728.0

Interest expense, net

111.5

108.2

EBITDA (non-IFRS)

1,151.0

889.0

Impairment losses

64.4

150.0

Other operating expense (income), net, excluding depreciation and amortization andother miscellaneous non-cash expenses

109.0

162.2

Finance expense (income), net, excluding interest income and expense, net

(4.7)

59.5

Share of loss (profit) on investments accounted for under the equity method

8.6

(6.5)

Other adjustments(1)

93.5

65.6

Adjusted EBITDA (non-IFRS)¥

1,421.8¥

1,319.9___________Note:(1) Other adjustments include expenses related to the COVID-19 pandemic, the impact on profit related to the “step up” in value of inventory related to the Shireacquisition and adjustments for EBITDA from divested products which are removed as part of Adjusted EBITDA.

Adjusted Net Debt/Adjusted EBITDA Ratio
Takeda defines Net Debt as the book value of bonds and loans adjusted only for cash and cash equivalents, and Adjusted Net Debt first by
calculating the sum of the current and non-current portions of bonds and loans as shown on our consolidated statement of financial position, which isthen adjusted to reflect (i) the use of prior 12-month average exchange rates for non-JPY debt outstanding at the beginning of the period and the useof relevant spot rates for new non-JPY debt incurred and existing non-JPY debt redeemed during the reporting period, which reflects themethodology our management uses to monitor our leverage, and (ii) the 50% “equity credit” applied to Takeda’s “hybrid” subordinated indebtedness
by S&P Global Rating Japan in recognition of the equity-like features of those instruments pursuant to such agency’s ratings methodology. To
calculate Adjusted Net Debt, Takeda deducts from this figure cash and cash equivalents, excluding cash temporarily held by Takeda on behalf ofthird parties related to vaccine operations and to the trade receivables sales program, and debt investments classified as Level 1 in the fair value
hierarchy being recorded as Other Financial Assets.
Takeda presents Net Debt and Adjusted Net Debt because Takeda believes that these measures are useful to investors in that ourmanagement uses it to monitor and evaluate our indebtedness, net of cash and cash equivalents, and, in conjunction with Adjusted EBITDA, tomonitor our financial leverage (for the avoidance of doubt, Adjusted Net Debt and the ratio of Adjusted Net Debt to Adjusted EBITDA are notintended to be indicators of Takeda’s liquidity). Takeda also believes that similar measures of indebtedness are frequently used by securities analysts,
investors and other interested parties in the evaluation of companies in our industry. Particularly following the acquisition of Shire, investors, analysts
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and, in particular, ratings agencies, have closely monitored Takeda’s leverage, as represented by the ratio of its Adjusted Net Debt to Adjusted
EBITDA. In light of the weight given by ratings agencies in particular to this ratio, Takeda believes that such information is useful to investors to
help understand not only Takeda’s financial leverage, but also how ratings agencies evaluate the level of financial leverage in evaluating Takeda’s
quality of credit. Accordingly, as described below, Takeda includes an adjustment to its Adjusted Net Debt to reflect the “equity treatment” afforded
to certain of its subordinated indebtedness by ratings agencies (such indebtedness does not qualify for treatment as equity under IFRS).
The usefulness of Adjusted Net Debt to investors has significant limitations including, but not limited to, (i) it may not be comparable tosimilarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) it does not reflect the amounts of interest
payments to be paid on Takeda’s indebtedness, (iii) it does not reflect any restrictions on Takeda’s ability to prepay or redeem any of ourindebtedness, (iv) it does not reflect any fees, costs or other expenses that Takeda may incur in converting cash equivalents to cash, in converting
cash from one currency into another or in moving cash within our consolidated group, (v) it applies to gross debt an adjustment for average foreignexchange rates which, although consistent with Takeda’s financing agreements, does not reflect the actual rates at which Takeda would be able toconvert one currency into another and (vi) it reflects an equity credit despite the fact that Takeda’s subordinated bonds are not eligible for equity
treatment under IFRS, although Takeda believes this adjustment to be reasonable and useful to investors. Adjusted Net Debt should not be
considered in isolation and is not, and should not be viewed as, a substitute for bonds and loans or any other measure of indebtedness presented inaccordance with IFRS.
Takeda’s ratio of Adjusted Net Debt to Adjusted EBITDA as of the dates shown was as follows.
For the Year Ended March 31,
2023
2024
(billions of yen, except for ratios)
Adjusted net debt¥

Adjusted EBITDA(3,716.1)¥(4,091.3)

1,421.8

1,319.9

2.6x

3.1x

Adjusted net debt to adjusted EBITDA ratio

The following table provides a reconciliation from bonds and loans to Adjusted Net Debt as of March 31, 2023 and 2024:
For the Year Ended March 31
2023

2024
(billions of yen)

Non-current portion of bonds and loans (IFRS)¥Current portion of bonds and loans (IFRS)
Bonds and loans (IFRS)Cash and cash equivalents (IFRS)(1)
Net debt (non-IFRS)Cash temporarily held by Takeda on behalf of third parties(1)(4,042.7)¥(4,476.5)(339.6)(367.3)(4,382.3)(4,843.8)

533.5

457.8

(3,848.8)(4,386.0)(125.8)(107.8)

Level 1 debt investments(1)——Foreign exchange adjustment(2)

8.5

152.5

Application of equity credit(3)250.0

Adjusted net debt (non-IFRS)¥(3,716.1)

250.0¥(4,091.3)___________
Notes:(1) Deducts cash and cash equivalents, excluding cash temporarily held by Takeda on behalf of third parties related to vaccine operations and to the trade receivables
sales program, which is not available to Takeda’s immediate or general business use, and debt investments classified as Level 1 in the fair value hierarchy being
recorded as Other Financial Assets.
(2) Foreign exchange adjustment refers to change from the month-end rate to the average rate used for calculation of debt denominated in currencies other thanJapanese yen to match the calculation of Adjusted EBITDA.
(3) Application of equity credit includes JPY 250.0 billion reduction in debt due to JPY 500.0 billion hybrid bond issuance in June 2019, given that the hybrid bondqualifies for a 50% equity credit for leverage purposes.

C. Research and Development, Patents and Licenses, etc.
The information required by this item is set forth in “Item 4. Information on the Company—B. Business Overview—Research andDevelopment” of this annual report.

D. Trend Information
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The information required by this item is set forth in “Item 5.A. Operating Results—Factors Affecting Our Results of Operations—
Periodic Trends” of this annual report.

E. Critical Accounting Estimates
The requirements of this item are not applicable to Takeda, as it prepares its financial statements in accordance with IFRS. Takeda
presents information about its critical accounting policies under “Item 5.A. Operating Results—Critical Accounting Policies” of this annual report.

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Item 6. Directors, Senior Management and Employees
A. Directors and Senior Management
Directors
The following table provides information about Directors of the Company as of the date of this annual report.
Name(Date of birth)

Christophe Weber(November 14, 1966)

Responsibilities andstatus within Takeda

Representative Director,
President and Chief Executive
Officer(“CEO”)

Milano Furuta(February 26, 1978)

Director and Chief Financial
Officer (“CFO”)

Andrew S. Plump, M.D.,
Ph.D.
(October 13, 1965)

Director and President,
Research and Development

Business experience

End of term

Christophe Weber is President and CEO of Takeda. He joined
Takeda in April 2014 as Chief Operating Officer and Corporate
Officer, was named President and Representative Director in
June 2014 and was subsequently appointed Chief Executive
Officer in April 2015. Since September 2020, Mr. Weber has
also served as Head of Global Business of Takeda
Pharmaceuticals U.S.A., Inc. Prior to joining Takeda,
Mr. Weber held positions of increasing responsibility at
GlaxoSmithKline, including President and General Manager at
GlaxoSmithKline Vaccines, Chief Executive Officer of
GlaxoSmithKline Biologicals SA in Belgium, and member of
the GlaxoSmithKline global Corporate Executive Team. From2008 to 2010, Mr. Weber served as Asia Pacific SVP andRegional Director at GlaxoSmithKline Asia Pacific in
Singapore.

Note 1

Milano Furuta has been Takeda’s Chief Financial Officer sinceApril 2024. He was appointed as and Director in June 2024. Mr.
Furuta joined Takeda in 2010 and has worked on various
projects in corporate strategy, corporate development, and postmerger integration in Japan and Switzerland. He managed the
Diabetes Business Unit in Mexico and served as General
Manager in Sweden. He went on to serve as Corporate Strategy
Officer and Chief of Staff in Japan for two years and President,
Japan Pharma Business Unit for three years before his
appointment to CFO. Prior to joining Takeda, Mr. Furuta
worked as an equity research analyst at Taiyo Pacific Partners
L.P. in the United States. He began his career in banking andprivate equity investment at The Industrial Bank of Japan,
Limited (currently Mizuho Financial Group, Inc.) in Japan,
where he was involved with several types of financialtransactions, including leveraged buyouts and debt
restructuring.
Andrew S. Plump, MD., Ph.D., is the President of Research andDevelopment at Takeda. Dr. Plump joined Takeda as Chief
Medical and Scientific Officer (“CMSO”) in 2015. In his
position, he leads our global research and development
organization, where he provides strategic direction andoversight. Prior to joining Takeda, Dr. Plump served as SeniorVice President, Research and Translational Medicine, Deputy to
the President of research and development at Sanofi, where he
was responsible for global research and translational medicine
across all therapeutic areas. Dr. Plump also spent more than 10
years at Merck in a Clinical Pharmacology group, working on
programs in neurodegeneration, immunology, metabolism andinfectious diseases.

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Note 1

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Name(Date of birth)

Masami Iijima(September 23, 1950)

Ian Clark(August 27, 1960)

Steven Gillis, PhD(April 25, 1953)

Emiko Higashi(November 6, 1958)

John Maraganore, PhD(October 11, 1962)

Responsibilities andstatus within Takeda

Business experience

End of term

External Director and Chair of
the Board of Directors

Masami Iijima served as External Director who is a member ofthe Audit and Supervisory Committee of Takeda from June
2021 to June 2022, and was appointed External Director of
Takeda and Chair of the Board of Directors meeting in June
2022. Mr. Iijima currently also serves as Counselor of Mitsui &Co., Ltd., External Director of SoftBank Group Corp.,
Counsellor at Bank of Japan and External Director of Kajima
Corporation . Mr. Iijima started his career at Mitsui & Co., Ltd.
in April 1974. At Mitsui & Co., Ltd., he served in several seniorleadership positions including Chairman of the Board of
Directors and Representative Director, President and Chief
Executive Officer.

Note 1

External Director

Ian Clark has been an External Director with Takeda since
January 2019. Prior to his appointment, Mr. Clark was anExternal Director of Shire plc. He also currently holds External
Directorships at Corvus Pharmaceuticals, Inc., Guardant Health,Inc., and Olema Pharmaceuticals, Inc. Mr. Clark served as CEO
and Director of Genentech Inc. (part of the Roche Group) andHead of North American Commercial Operations for Roche
until 2016. From 2003 to 2010 he held the positions of Head of
Global Product Strategy and Chief Marketing Officer,
Executive Vice President—Commercial Operations and SeniorVice President and General Manager—BioOncology at
Genentech.

Note 1

External Director

Steven Gillis has been an External Director with Takeda since
January 2019. Prior to his appointment, he was an External
Director of Shire plc. He also currently holds the positions ofManaging Director at ARCH Venture Partners, External
Director and Chairman of Codiak BioSciences, Inc., andExternal Director and Chairman, VBI Vaccines, Inc. He was afounder and Director of Corixa Corporation, acquired by
GlaxoSmithKline in 2005, and before that a founder andDirector of Immunex Corporation.

Note 1

External Director

Emiko Higashi served as External Director who is not a memberof the Audit and Supervisory Committee of Takeda from June
2016 to June 2019, and as External Director who is a member ofthe Audit and Supervisory Committee of Takeda from June2019 to June 2024. She was appointed External Director who is
not a member of the Audit and Supervisory Committee of
Takeda in June 2024. She currently also serves as Managing
Director of Tomon Partners, LLC, External Director of KLA
Corporation, External Director of Rambus Inc, and External
Director of Rapidus Corporation. Ms. Higashi previously served
as External Director of MetLife Insurance K.K., External
Director of InvenSense Inc., External Director of Sanken
Electric Co., Ltd., External Director of One Equity Partners
Open Water I Corporation, CEO of Gilo Ventures, LLC,
Managing Director of Investment Banking, Merrill Lynch &Co. and Director of Wasserstein Perella & Co., Inc.

Note 1

External Director

John Maraganore was appointed External Director of Takeda inJune 2022. He currently also holds External Directorships at
Beam Therapeutics, Inc., Kymera Therapeutics, Inc. and
ProKidney Corporation. He previously served as Senior Vice
President and Strategic Product Development at Millennium
Pharmaceuticals, Inc., Director and CEO of Alnylam
Pharmaceuticals, Inc. and Chairperson of Biotechnology
Innovation Organization.

Note 199

Table of Contents

Name(Date of birth)Michel Orsinger(September 15, 1957)

Miki Tsusaka(April 24, 1963)

Koji Hatsukawa(September 25, 1951)

Jean-Luc Butel(November 8, 1956)

Responsibilities andstatus within Takeda

Business experience

End of term

External Director

Michel Orsinger has served as External Director who is not amember of the Audit and Supervisory Committee of Takeda
from June 2016 to June 2019, and as External Director who is amember of the Audit and Supervisory Committee of Takeda
from June 2019 to June 2022. He was appointed External
Director who is not a member of the Audit and Supervisory
Committee of Takeda in June 2022. He previously served as a
Member of Global Management Team of Johnson & Johnson,
Worldwide Chairman, Global Orthopedics Group of DePuy
Synthes Companies of Johnson & Johnson and President andChief Executive Officer and Chief Operating Officer ofSynthes, Inc. (currently Johnson & Johnson). He has also held
several leadership positions at Novartis AG, including Chief
Executive Officer and President of OTC Division Worldwide,
Consumer Health; President of Global Medical Nutrition,
Consumer Health; and Regional President of Europe, Middle
East and Africa, Consumer Health.

Note 1

External Director

Miki Tsusaka was appointed External Director of Takeda inJune 2023. She currently also serves as President of Microsoft
Japan Co., Ltd. Prior to joining Microsoft Japan, she was a
Senior Partner and Managing Director at Boston Consulting
Group (BCG). She established strategic consulting groups
specializing in marketing, sales and pricing strategy
development and led the expansion of BCG's service areas. As
for BCG’s operation, she was a member of the Executive
Committee for two three-year terms and served as Chief
Marketing Officer (CMO) as well.

Note 1

External Director (Head ofAudit and Supervisory
Committee)

Koji Hatsukawa has served as External Director and member ofthe Audit and Supervisory Committee of Takeda since June
2016. He was appointed Head of Audit and Supervisory
Committee in June 2019. He currently also serves as External
Audit and Supervisory Board Member of Fujitsu Limited.
Mr. Hatsukawa started his career at Price Waterhouseaccounting office in March 1974. Mr. Hatsukawa has previously
served as CEO of PricewaterhouseCoopers Arata and has heldleadership positions at ChuoAoyama PricewaterhouseCoopers
and Aoyama Audit Corporation. In addition, he has also served
as External Audit and Supervisory Board Member of Accordia
Golf co., Ltd. as well as Audit and Supervisory Board Memberof The Norinchukin Bank.

Note 2External Director (Audit andSupervisory Committee
Member)Jean-Luc Butel served as External Director and member of the
Audit and Supervisory Committee of Takeda from June 2016 toJune 2019, and as External Director who is a not member of the
Audit and Supervisory Committee of Takeda from June 2019 toJune 2024. He was appointed External Director who is amember of the Audit and Supervisory Committee of Takeda inJune 2024. He currently also serves as Global Healthcare
Advisor, President of K8 Global Pte. Ltd., External Director of
Novo Holdings A/S and External Director of Rani Therapeutics.
Mr. Butel previously served as President, International,
Corporate Vice President and Operating Committee Member of
Baxter International Inc. and has held leadership positions at
Medtronic, Inc., Johnson & Johnson, Becton, Dickinson andCompany and Nippon Becton Dickinson Company, Ltd.

Note 2100

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Name(Date of birth)

Yoshiaki Fujimori(July 3, 1951)

Kimberly A. Reed
(March 11, 1971)

Responsibilities andstatus within Takeda

Business experience

End of term

External Director (Audit andSupervisory Committee
Member)Yoshiaki Fujimori served as External Director who is not amember of the Audit and Supervisory Committee of Takeda
from June 2016 to June 2022 and was appointed External
Director who is a member of the Audit and Supervisory
Committee of Takeda in June 2022. Mr. Fujimori currently also
serves as Senior Executive Advisor of CVC Asia Pacific(Japan) Kabushiki Kaisha, and External Director and Chairmanof Oracle Corporation Japan, External Director of Riraku K.K. .
He previously served as External Director of Tokyo ElectricPower Company, Incorporated (currently Tokyo Electric Power
Company Holdings, Incorporated), External Director of Toshiba
Corporation, External Director of Shiseido Company, Limited
and in a number of senior leadership positions within the LIXILGroup, including Representative Director, Chairman and CEO
of LIXIL Corporation. Mr. Fujimori has also served in a numberof senior positions in the General Electric Group, including
Chairman of GE Japan Corporation and Chairman, President
and CEO of General Electric Japan Ltd.

Note 2External Director (Audit andSupervisory Committee
Member)Kimberly A. Reed was appointed External Director who is amember of the Audit and Supervisory Committee of Takeda inJune 2022. She currently also serves as Distinguished Fellow ofCouncil on Competitiveness, External Director of Momentus,
Inc. and External Director of Hannon Armstrong Sustainable
Infrastructure Capital, Inc. Ms. Reed previously served asCounsel for United States House of Representatives, Senior
Advisor to United States Secretaries of the Treasury, Director
and Chief Executive Officer of Community Development
Financial Institutions Fund, Vice President, Financial Markets
Policy Relations of Lehman Brothers, President of International
Food Information Council Foundation, and Chairman of theBoard of Directors, President, and Chief Executive Officer ofExport-Import Bank of the United States.

Note 2_____________
Notes:(1)(2)

The term of office for Directors who are not members of the Audit and Supervisory Committee is from the end of the ordinary general meeting ofshareholders for the fiscal year ended March 31, 2024 through the end of the ordinary general meeting of shareholders for the fiscal year ending March 31,
2025.
The term of office for Directors who are also Audit and Supervisory Committee members is two years. The term of office for these Directors who are also
Audit and Supervisory Committee members is from the end of the ordinary general meeting of shareholders for the fiscal year ended March 31, 2024
through the end of the ordinary general meeting of shareholders for the fiscal year ending March 31, 2026.

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Takeda Executive TeamThe following table presents biographical information about the members of the Takeda Executive Team as of the date of this annual
report. For more information about the Takeda Executive Team, see “—C. Board Practices—Takeda Executive Team.”
Name(Date of birth)

Responsibilities andstatus within Takeda

Business experience

Marcello Agosti is Global Business Development Officer for Takeda Pharmaceutical
Company Limited and is responsible for Takeda’s business development activities,
including M&A and Corporate Development.

Marcello Agosti(June 2, 1971)

Global Business
Development Officer

Mr. Agosti led the Shire acquisition and several other strategic acquisitions for Takeda,
including ARIAD Pharmaceuticals, and TiGenix as well asset acquisitions such as
TAK-279 from Nimbus Therapeutics and fruquintinib from HUTCHMED. He also
spearheaded a number of strategic divestments of non-core assets as part of Takeda’s
commitment after the Shire acquisition. Mr. Agosti and his group continue to be active
on inbound transactions in Takeda’s core therapy areas.
Prior to joining Takeda, Mr. Agosti worked in business development at Novartis in the
U.K. and Switzerland. Before joining the pharmaceutical industry, he was a consultant
at McKinsey & Company.
He holds an MBA from the University of Oxford and a business administration degreefrom Bocconi University, Milan.
Akiko Amakawa is Corporate Strategy Officer & CEO Chief of Staff. She oversees theBoard of Directors & CEO Office, Corporate Strategy, and Corporate GovernanceManagement for Takeda Pharmaceutical Company Limited.

Akiko Amakawa(November 24, 1972)

Corporate Strategy Officer& CEO Chief of Staff

Since joining Takeda’s Corporate Business Development group in 2018, and mostrecently serving as the Global Business Development Head of Gastrointestinal &Inflammation, Neuroscience and Vaccines Corporate Development, she has led several
strategic business development initiatives, including the acquisition of Nimbus
Therapeutics’ TYK2 program (TAK-279), and partnering with Moderna, Novavax and
the Government of Japan to supply critical Covid-19 vaccines to Japan during theheight of the pandemic.
Ms. Amakawa has more than 20 years of corporate development, businessdevelopment, and corporate strategy experience across different countries andindustries, primarily in the Pharmaceutical, Life Sciences, Technology and Automotive
sectors in Japan, the U.S. and China. Prior to joining Takeda, she worked for Corning
Incorporated, Bristol-Myers Squibb, and Mitsubishi Corporation.
Ms. Amakawa holds a bachelor’s degree in economics from University of Tokyo and amaster’s degree in business administration from The Wharton School of the Universityof Pennsylvania.

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Name(Date of birth)

Responsibilities andstatus within Takeda

Business experience

Teresa Bitetti is President of Global Oncology Business Unit of Takeda Pharmaceutical
Company Limited. She oversees an in-line global portfolio consisting of therapies inhematological and solid tumors. Given her strong expertise and experience in productcommercialization and launches, she understands the importance of close alignment
with R&D to accelerate the science and to bring meaningful medicines to patientsquickly and efficiently.
Ms. Bitetti has extensive experience in the oncology field and has been highly
recognized for her adept ability to inspire and mobilize teams to deliver exceptional
performance throughout her career. Before joining Takeda, Ms. Bitetti was senior vicepresident, head of Worldwide Oncology Commercialization at Bristol-Myers Squibb(BMS), where she spearheaded the acceleration and augmentation of the oncology
pipeline and significantly enhanced the long-term strategic direction of the immunooncology portfolio.
Teresa Bitetti(September 21, 1962)

President, Global Oncology
Business Unit

During her 23 years at BMS, other key leadership roles included: senior vice president
and head of U.S. Oncology – where she managed the launch of the blockbuster drug,
Opdivo, and the entire U.S. portfolio President and GM of BMS Canada, andWorldwide Head of the BMS Virology business. Before BMS, Ms. Bitetti held various
roles of increasing responsibility at Mobil Oil Corporation, where she was part of theCapital Markets Group and responsible for the investment of Mobil's worldwide
pension assets.
Ms. Bitetti is a member of the Board of Directors of Osmol Therapeutics, a privately
held biopharmaceutical company focused on developing a treatment to prevent
chemotherapy-induced peripheral neuropathy. She is also on the Board of Directors for
Fusion Pharmaceuticals, a clinical-stage biopharmaceutical company developing nextgeneration radiopharmaceuticals as precision medicines for the treatment of cancer.
Ms. Bitetti holds an MBA in Finance from the Darden School of Business at the
University of Virginia and a B.A. in Classical Civilization from Wellesley College.
Lauren Duprey is Chief Human Resources Officer of Takeda Pharmaceutical Company
Limited with responsibility for delivering an exceptional people experience across theglobe. She joined Takeda in August 2019 as Head of Human Resources (HR) for U.S.
Business Unit, Global Product & Launch Strategy and the U.S. People Advisory Group.
Since joining Takeda, Ms. Duprey has implemented a transformation of HR, including
a new operating model, structure, capabilities and technology.

Lauren Duprey(May 13, 1984)

Chief Human Resources
OfficerPrior to joining Takeda, Ms. Duprey served as Head of HR, U.S. Organization &Worldwide Medical at Biogen where she developed and drove the talent andorganization strategy and served as a trusted advisor for key business, talent andorganizational decisions. She has held various HR roles at companies such as General
Electric and began her career in management consulting at Clarion Healthcare focusedon biopharma commercialization.
Ms. Duprey holds a bachelor’s degree in biology from Harvard University and an MBAfrom Massachusetts Institute of Technology (MIT) Sloan School of Management.

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Name(Date of birth)

Responsibilities andstatus within Takeda

Business experience

Julie Kim is President of U.S. Business Unit and U.S. Country Head of Takeda
Pharmaceutical Company Limited. The U.S. Business Unit portfolio encompasses
gastroenterology, neuroscience, plasma-derived therapies and rare diseases.
Ms. Kim joined Takeda in 2019 through the acquisition of Shire, where she held
several diverse roles with increasing responsibility. As part of Takeda, she became
President of Plasma-Derived Therapies Business Unit, the position she occupied until
April of 2022, when she became President of U.S. Business Unit and U.S. Country
Head.

Julie Kim
(June 6, 1970)

President, U.S. Business
Unit and U.S. Country Head

Ms. Kim has 30 years of experience in health care, with leadership positions at global,
regional, country and functional levels. In the biopharmaceutical industry, her
experiences have spanned a variety of therapeutic areas, international market access,country and regional general management, marketing and emerging market
development.
Ms. Kim is known for strong, collaborative and inclusive leadership that enables
Takeda to meet the needs of the people the company serves while driving innovations
that will improve patients’ lives. Her global outlook, a result of having worked in many
countries in Europe, Asia and Latin America, as well as having lived in the U.K.,
Switzerland and the U.S., has helped her create teams that are diverse in multiple
dimensions to enable inclusive decision-making that keeps the patient at the center.
Ms. Kim is also a member of the Board of Directors of Croda International Plc., acompany that uses smart science to create high performance ingredients andtechnologies that improve lives.
Ms. Kim earned an MBA from the J. L. Kellogg Graduate School of Management at
Northwestern University and a bachelor’s degree in economics from DartmouthCollege.
Asuka Miyabashira is President of Japan Pharma Business Unit of Takeda
Pharmaceutical Company Limited.

Asuka Miyabashira(December 30, 1979)

President, Japan PharmaBusiness Unit

Ms. Miyabashira joined Takeda in 2004 and has served in roles of increased
responsibility in marketing and medical in Japan and other countries. Her experiences
include leading regional sales in Japan as well as important international assignments,
such as country manager at Takeda Vietnam, where she led the development of thelocal business strategy and transformation. Prior to this role, she served as business
operation manager at Takeda Indonesia to build the foundation for Takeda Oncology’s
new product launch and access strategy. She served as Head of Neuroscience Business
Unit within Japan Pharma Business Unit for two years before the appointment to hercurrent role.
Ms. Miyabashira holds an MSc in Agriculture from Kyushu University, Japan.

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Name(Date of birth)Mwana Lugogo(January 30, 1970)

Responsibilities andstatus within Takeda

Chief Ethics andCompliance Officer

Business experience

Mwana Lugogo is Chief Ethics & Compliance Officer of Takeda Pharmaceutical
Company Limited. She joined Takeda in 2012 to establish the Compliance function for
Growth & Emerging Market Business Unit, and was appointed to lead the newlycreated Global Ethics & Compliance organization in 2015. In January 2019, she joined
the Takeda Executive Team. Ms. Lugogo is passionate about strengthening ethicsbased culture and bringing Takeda’s values to life, as part of our commitment topatients, to each other and to society.
Ms. Lugogo is the current co-chair of the Ethics and Business Integrity Committee andthe chair of the Chief Ethics & Compliance Officer Roundtable at the International
Federation of Pharmaceutical Manufacturers and Associations, which represents theinnovative pharmaceutical industry at the international level.
Ms. Lugogo is an international studies graduate of Virginia Polytechnic Institute &State University. She has a J.D. from Harvard Law School, and a master’s degree inpublic policy from Harvard’s John F. Kennedy School of Government.

Yoshihiro Nakagawa(July 26, 1960)

Global General Counsel

Yoshihiro Nakagawa is Global General Counsel of Takeda Pharmaceutical Company
Limited. Mr. Nakagawa joined Takeda in 1983, serving in a variety of roles including
Company Secretary of Takeda Europe Holdings in London and Senior Vice Presidentof Takeda Legal Department, prior to his 2014 appointment as Global General Counsel.
Mr. Nakagawa received a law degree from Kobe University in Japan.
Takako Ohyabu is Chief Global Corporate Affairs & Sustainability Officer overseeing
global corporate communications, global corporate social responsibility, global publicaffairs, global security, crisis management, and sustainability for Takeda
Pharmaceutical Company Limited. She joined Takeda in November 2019 as Chief
Communications and Public Affairs Officer Designate.

Takako Ohyabu(August 26, 1979)

Chief Global Corporate
Affairs & Sustainability
OfficerPrior to joining Takeda, Ms. Ohyabu led Global Corporate Communications at Nissan
Motor Corporation. Before that she was with General Electric (GE) Company
managing corporate communications for a variety of industries building the GE brandin both developed and emerging markets.
Ms. Ohyabu holds a master’s degree in public administration from Columbia
University’s School of International and public affairs and a bachelor’s degree inpolitical science from the International Christian University in Japan.
Giles Platford is President, of Plasma-Derived Therapies Business Unit of Takeda
Pharmaceutical Company Limited, which researches and delivers critical lifetransforming medicines used to treat a variety of rare and complex chronic diseases.
Mr. Platford also serves as the current global chair of the board for the Plasma Protein
Therapeutics Association, which represents the private sector manufacturers of plasma
protein therapies.

Giles Platford(April 26, 1978)

President, Plasma-Derived
Therapies Business Unit

Mr. Platford joined Takeda in 2009 as General Manager of Brazil, and later took on therole of Area Head for Middle East, Turkey & Africa. He then joined Takeda Executive
Team in 2014 as President of Emerging Markets. In 2017 he became President ofEurope & Canada, where he also represented Takeda as a board member of theEuropean Federation of Pharmaceutical Industries and Associations (EFPIA).
Prior to joining Takeda, Mr. Platford spent eight years in Asia Pacific, where he held anumber of roles of increasing responsibility in Business Development, Commercial andGeneral Management.
Mr. Platford holds a Bachelor of Arts degree in business and marketing managementfrom Oxford Brookes University, UK, and is currently based in Boston, USA.

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Name(Date of birth)

Responsibilities andstatus within Takeda

Business experience

Gabriele Ricci is Chief Data and Technology Officer of Takeda Pharmaceutical
Company Limited. He was appointed to this role in February 2022 and leads thetransformation of Takeda’s Data, Digital and Technology division.

Gabriele Ricci(October 18, 1978)

Chief Data and Technology
OfficerMr. Ricci joined Takeda in 2019 as Head of Plasma-Derived Therapies IT, during
which he drove initiatives to meet the large and growing demand for plasma-derived
products, with highly specialized services that require strategic capacity, innovative
business models, dedicated R&D and agile supply allocation on a global scale. Prior tojoining Takeda, Mr. Ricci served as Head of Digital Health and Emerging Technology
at Shire, where he leveraged new and emerging technologies to optimize internal
operations and deliver differentiated patient and customer experiences.
Mr. Ricci has also served as Shire’s Head of Technical Operations IT and heldleadership positions at Novartis, Johnson & Johnson and Bristol-Myers Squibb. Mr.
Ricci brings more than 20 years of information technology and engineering expertise in
the life sciences industry and sits on several advisory boards for non-profit
organizations focused on digital, life sciences and manufacturing.
Mr. Ricci holds an MBA from the MIB Trieste School of Management and a bachelor’s
degree in engineering from the University of Rome Tor Vergata.
Ramona Sequeira is President of Global Portfolio Division of Takeda Pharmaceutical
Company Limited where she leads Takeda’s Regional Business Units across Europe
and Canada, Growth and Emerging Markets, and China – as well as Takeda’s Global
Vaccine Business Unit and Global Medical and Global Product and Launch Strategyfunctions.

Ramona Sequeira(November 21, 1965)

President, Global Portfolio
Division

Joining Takeda in 2015 to lead Takeda’s U.S. Business Unit, Ms. Sequeira has been
instrumental in shifting the business structure, portfolio and investment mix to enablefocus, agility and resiliency while aligning her organization around common values,
vision and culture. Her focus on trust and collaboration has enabled Takeda to build
numerous strategic partnerships with other health care stakeholders to deliver
innovative solutions across a wide range of areas, including patient support, healthequity and value-based care. Ms. Sequeira emphasizes the need to keep decisions as
close to the patient as possible, recognizing that people – whether patients, colleagues,
customers or partners – are impacted by Takeda’s actions.
Ms. Sequeira spent seven years as a member of PhRMA’s board of directors, serving on
numerous committees, as treasurer, vice-president and most recently as the first woman
to serve as chair in the organization’s history. Ms. Sequeira is a member of the Board of
Directors of Edwards Life Sciences, and previously served on the Board of Trustees ofHarvey Mudd College.
Ms. Sequeira holds an MBA from McMaster University in Canada and a Bachelor of
Science degree with honours in molecular genetics and molecular biology from the
University of Toronto.

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Name(Date of birth)

Responsibilities andstatus within Takeda

Business experience

Elaine Shannon is Global Quality Officer of Takeda Pharmaceutical Company Limited,
where she oversees the enterprise quality organization that establishes consistent quality
management systems and programs across the network. As Global Quality Officer, Ms.
Shannon continues to lead best-in-class global quality operations globally, through one
quality management system.

Elaine Shannon(June 25, 1974)

Global Quality Officer

Prior to her role as Global Quality Officer, Ms. Shannon held several roles at Takeda,
where she has honed her expertise in quality, manufacturing and oncology. Most
recently, she served as site head for Takeda’s Massachusetts Biologics Operations
manufacturing site. Ms. Shannon also served as Global Head of Quality Oncology &External Supply Small Molecules and Global Head of Quality Audits and SupplierManagement. She joined Takeda’s Global Quality Compliance and Systems group inJune 2016 to develop Takeda’s knowledge management processes.
Ms. Shannon has 25 years of industry experience in quality, compliance, assurance andR&D, including work with Teva Pharmaceuticals and Pinewood Healthcare.
She holds a master’s degree in pharmaceutical manufacturing technology and abachelor’s degree in good manufacturing practice (GMP).
Thomas Wozniewski serves as Global Manufacturing & Supply Officer and Country
Head of Switzerland of Takeda Pharmaceutical Company Limited.
Dr. Wozniewski joined Takeda in this role in July 2014. Since then, he has focused on
the technological and digital transformation and the implementation of a continuous
improvement culture within the global network of more than 25 manufacturing sites.

Thomas Wozniewski,
Ph.D.
(July 26, 1962)

Global Manufacturing and
Supply Officer

Prior to joining Takeda, Dr. Wozniewski gained more than 25 years of experience inthe pharmaceutical industry, holding senior leadership roles in manufacturing, quality
and supply chain management at Bayer Consumer Care Switzerland, Bayer Healthcare
AG, Schering AG and Boehringer Ingelheim in Germany.
Outside of Takeda, Dr. Wozniewski is member of the Pharmaceutical Manufacturing
Forum, which facilitates the exchange of technical operations and supply leaders from
key global research and development based pharmaceutical companies.
Dr. Wozniewski holds a doctorate degree in pharmaceutical biology from the
University of Regensburg, Germany.

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B. Compensation
The following table provides information about our Internal Directors’ compensation on an individual basis in the fiscal year ended
March 31, 2024.

Name(Position)

Christophe
Weber (Director)

Total
consolidated
compensation(millions of yen)

¥

2,082

Company

Takeda Pharmaceutical
Company Limited

Amount of consolidated compensation by type (millions of yen)
Performance-based
compensation
Performance
Restricted
Basic
Share Unit
Stock Unit
compensation
Annual bonus
awards(1)awards(1)Other¥

241(3)¥

257¥

778(4)¥

426(4) ¥—Takeda Pharmaceuticals
U.S.A., Inc.(2)

76

145

72(5)

88(5)

—

Takeda Pharmaceutical
Company Limited

12

—

—

—

—

Takeda Development
Center Americas, Inc.(6)

174

252

424(7)

239(7)

53(8)Andrew S.
Plump (Director)

1,154

Costa Saroukos(Director)(9)811

Takeda Pharmaceutical
Company Limited

231(10)189241(11)150(11)—

Masato Iwasaki(Director)(12)120

Takeda Pharmaceutical
Company Limited

17—

75(13)

28(13)—_____________
Notes:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)

Compensation expense related to Performance Share Unit awards and Restricted Stock Unit awards are recognized over multiple fiscal years, depending on thelength of the period eligible for earning compensation. This column shows amounts recognized as expenses during the fiscal year ended March 31, 2024.
Shows the salary and annual bonus earned as Head of Global Business of Takeda Pharmaceuticals U.S.A., Inc.
Basic compensation includes the grossed-up amount paid for residence and pension allowances etc. for the relevant officer (JPY 110 million).
The amount recognized as an expense during the fiscal year for the stock incentive plan (Board Incentive Plan) grants awarded in fiscal years 2020-2023.
The amount recognized as an expense during the fiscal year for the stock incentive plan (the Long-Term Incentive Plan for Company Group Employees
Overseas (LTIP)) grants awarded in fiscal year 2023.
Shows the salary and other amounts earned as the President, Research and Development of Takeda Development Center Americas, Inc.
The amount recognized as an expense during the fiscal year for the stock incentive plan (the Long Term Incentive Plan for Company Group Employees
Overseas (LTIP)) grants awarded in fiscal years 2020-2023.
Amounts of local retirement plan contributions and other additional benefits paid by Development of Takeda Development Center Americas, Inc. during the
fiscal year, as well as the amount equal to taxes on such amounts.
Costa Saroukos retired at the close of 148th General Meeting of Shareholders held on June 26, 2024.
Basic compensation includes the grossed-up amount paid for residence, pension allowances, and educational allowances etc. for the relevant officer. (JPY 99
million).
The amount recognized as an expense during the fiscal year for the stock incentive plan (Board Incentive Plan) grants awarded in fiscal years 2020-2023.
Masato Iwasaki retired at the close of 147th General Meeting of Shareholders held on June 28, 2023.
The amount recognized as an expense during the fiscal year for the stock incentive plan (Board Incentive Plan) grants awarded in fiscal years 2020-2022.

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The following table provides information about our External Directors’ compensation on an individual basis in the fiscal year ended
March 31, 2024.
Amount of consolidated compensation by type (millions of yen)

Name
(Position)

Masami Iijima(Director)

Total
consolidated
compensation(millions of yen)

¥
(3)

43

Olivier Bohuon(Director)

43

Jean-Luc Butel(Director)

39

Ian Clark(Director)

44

Steven Gillis(Director)

44

John Maraganore(Director)

39

Michel Orsinger(Director)

46

(4)

Miki Tsusaka(Director)
Koji Hatsukawa(Director who is an
Audit and Supervisory
Committee Member)
Yoshiaki Fujimori(Director who is an
Audit and Supervisory
Committee Member)
Emiko Higashi(Director who is an
Audit and Supervisory
Committee Member)
Kimberly A. Reed
(Director who is an
Audit and Supervisory
Committee Member)

32

Performance-based
compensation

Company

Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited
Takeda Pharmaceutical
Company Limited

Basiccompensation

Annual bonus

Performance
Share Unitawards

¥

¥

¥

24

—

—

Restricted
Stock Unitawards(1)¥19Other(2)

¥

—

19

—

—

19

5

19

—

—

19

0

19

—

—

19

6

19

—

—

19

6

19

—

—

19

1

19

—

—

19

8

16

—

—

16

—

43

Takeda Pharmaceutical
Company Limited

24

—

—

19

—

41

Takeda Pharmaceutical
Company Limited

21

—

—

19

—

49

Takeda Pharmaceutical
Company Limited

24

—

—

19

6

42

Takeda Pharmaceutical
Company Limited

21

—

—

19

1

_____________
Notes:(1)(2)(3)

Compensation expense related to Restricted Stock Unit awards are recognized over multiple fiscal years, depending on the length of the period eligible for earningcompensation. This column shows amounts recognized as expenses during the fiscal year ended March 31, 2024.
The amounts represent expenses for adjustments on compensation to account for the impact of foreign exchange rates.
Olivier Bohuon passed away on May 5, 2024 and his term as director terminated on the same date as a result.

(4)

Miki Tsusaka was newly elected and took office at the 147th Ordinary General Meeting of Shareholders held on June 28, 2023.

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Share-based Compensation Payments
We maintain certain share-based compensation payment plans for the benefit of our directors and certain of our employees. In the fiscal
years ended March 31, 2022, 2023 and 2024, we recorded total compensation expense related to our share-based payment plans of JPY 43.7 billion,
JPY 61.0 billion and JPY 71.5 billion, respectively, in our consolidated statements of profit or loss. For detailed information about our share-based
compensation plans, including our stock option plan, stock incentive plan, phantom stock appreciation rights and restricted stock units, see Note 28 toour audited consolidated financial statements.

Director's Compensation Policy
Please see “Item 6.A Directors and Senior Management” for a list of Takeda’s directors and their positions, including their status as“Internal” or “External” directors and membership on the Audit & Supervisory Committee.
Since there are no Internal Directors who are Audit & Supervisory Committee Members in the Company, they are referred to simply
as "Internal Directors" hereinafter in this section.
1.

Guiding Principles

The following are the guiding principles of the Company's compensation system for Directors to achieve management objectives under
the corporate governance code: To attract, retain and motivate managerial talent to realize our Vision
 To increase corporate value through optimization of the Company’s mid- and long-term performance, while reinforcing our patientfirst values
 To be closely linked with company performance, highly transparent and objective
 To support a strong alignment with the interests of shareholders and enhance shareholder-oriented management perspective
 To encourage Directors’ spirit of challenge aligned with the values of Takeda-ism, perseverance
 To establish transparent and appropriate governance of Directors' compensation to establish the credibility and support of our
stakeholders
2.

Level of Compensation

We aim to be competitive in the global marketplace to attract and retain talent who will contribute to Takeda's continued transformation intoa Global, Values-based, R&D-driven Biopharmaceutical Leader.
Directors' compensation is intended to be competitive in the global market consisting of major global companies. Specifically, theglobal market data includes compensation data from major global pharmaceutical companies with which we compete, and from othermajor companies in Japan, the U.S. and Switzerland.
3.

Compensation Mix

3-1. Internal Directors
The compensation of Internal Directors consists of "Basic Compensation" (Base Salary and other fixed compensation (if applicable)), whichis paid at a fixed amount and "Performance-based Compensation", which is paid as a variable amount based on company and otherperformance factors.
"Performance-based Compensation" consists of an annual "Bonus (short-term incentive compensation)" to be paid based on financial
and other performance results for each fiscal year, and a "Long-term Incentive Plan (stock compensation)" linked with long-term
company performance results over a 3-year period and with Takeda's share price.
Both Bonus and Long-term incentives represent a significantly higher proportion of Total Direct Compensation putting Internal
Directors' pay at risk in alignment with the Company’s performance. The ratio of Long-term Incentives is particularly high within
Performance-based Compensation in order to ensure the alignment of interests of Internal Directors and shareholders and drive midterm and long-term company value creation. The targets range from 100%-250% of Base Salary for "Bonus" and range from 200% to600% of Basic Salary for "Long-term Incentive", reflecting the market practices of global companies.
• Standard Compensation Mix Model for Internal Directors* The ratio of Bonus and Long-term Incentives to Base Salary is determined according to the Internal Director’s position.

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3-2. External Directors who are not Audit & Supervisory Committee Members
The compensation of External Directors who are not Audit & Supervisory Committee Members consists of Basic Compensation, whichis paid as a fixed amount, and Long-term Incentive (stock compensation). As part of the Basic Compensation, Chair Retainers are paid
for the chair of the board of directors meeting, chairperson of the Compensation Committee, and chairperson of the Nomination
Committee, in addition to the Board Retainer. Bonus is not available for this category of Director.
The current compensation mix is "Basic Compensation" and "Long-term Incentive", which is a maximum of 100% of the Board Retainer.
The compensation of External Directors who are not Audit & Supervisory Committee Members based outside of Japan may be adjusted
to account for the impact of foreign exchange rates.
• Standard Compensation Mix Model for External Directors who are not Audit & Supervisory Committee Members

3-3. Directors who are Audit & Supervisory Committee Members
The compensation of Directors who are Audit & Supervisory Committee Members consists of Basic Compensation, which is paid as afixed amount, and Long-term Incentive (stock compensation). As part of the Basic Compensation, Committee Retainer is paid forExternal Directors who are Audit & Supervisory Committee Members, and Chair Retainers are also paid for External Directors who arehead of the Audit & Supervisory Committee, chairperson of the Compensation Committee, and chairperson of the Nomination
Committee, in addition to the Board Retainer. Bonus is not available for this category of Director.
The current compensation mix is "Basic Compensation" and "Long-term Incentive", which is a maximum of 100% of the Board
Retainer.
The compensation of External Directors who are Audit & Supervisory Committee Members based outside of Japan may be adjusted toaccount for the impact of foreign exchange rates.
• Standard Compensation Mix Model for Directors who are Audit & Supervisory Committee Members

4.

Performance-based Compensation

4-1. Internal Directors
For Internal Directors, the Company has introduced a Long-term Incentive Plan that is allocated as 60% for the plan designed based on
Performance Share Units (Performance Share Unit awards) and 40% for the plan designed based on Restricted Stock Units (Restricted
Stock Unit awards). Performance Share Unit awards are tied to company performance results to strengthen the link between
compensation and company performance and share price, and to reinforce Internal Directors' commitment to increasing corporate value
in the mid- and long-term. Restricted Stock Unit awards are linked only to share price.
Annual Performance Share Unit Awards
Performance Share Unit awards, which fall under Performance-based Compensation, will be linked to the latest mid- to long- term key
performance indicators (KPIs) over a three-year performance period. KPIs are intended to be transparent and objective and may include
top line revenues, cash flow, indicators on profit, R&D metrics and other performance factors. The payout range for Performance Share
Unit awards is from 0% to 200% (100% at target), based on performance achievement. For Long-term Incentive awarded in 2019 andafter, a two-year holding period will be mandated, and this includes Restricted Stock Unit awards if and when shares become vested.

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Special Performance Share Unit Awards
In addition to regular stock compensation, the Company may, from time to time, award one-time special Performance Share Unit awards
which are directly linked to point-in-time corporate initiatives and which are aligned with shareholder expectations. Performance against
established KPIs for one-time special Performance Share Unit awards are determined independently each year over a three-year period,
with shares becoming vested after the relevant performance metric(s) are determined to have been achieved for the applicable period.
There is no post-vesting holding period established for one-time special Performance Share Unit awards.
• Special Performance Share Unit Awards (stock compensation) Image• Annual Bonus (Short-Term Incentive)
Bonuses will be paid based on performance achievement of annual goals. Bonuses will be paid in the range of 0% to 200% (100% attarget) in accordance with the achievement of KPIs, which may include top line revenues, indicators on profit, and other performancefactors established for a single fiscal year. For President and CEO, the annual bonus is weighted as 100% to the achievement of thespecified Corporate KPI(s).
For other Internal Directors that have divisional responsibilities, 75% of their annual bonus opportunity is linked to achievement of thespecified Corporate KPI(s) to drive their commitment to group-wide goals, while 25% is linked to the achievement of the division KPI.
4-2. Directors who are Audit & Supervisory Committee Members and External Directors
The Long-term Incentive Plan (stock compensation) for Directors who are Audit & Supervisory Committee Members and External
Directors consists of Restricted Stock Unit awards linked only to share price and is not otherwise linked to company performance results.
The stock compensation awarded in 2019 and after will vest three years after the award date of base points used for the calculation and
Directors will be required to hold at least 75% of their vested share portion until they cease service as a director (however, stockcompensation awarded in or before 2018 will vest and be paid after they cease service as a director). Bonuses are not available for thesecategories of Director.

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1. Includes Special Performance Share Unit awards
2. Varies from 0% to 200% in accordance with the achievement of KPIs, which may include top line revenues, indicators on profit andother performance factors established for a single fiscal year
3. Varies from 0% to 200% in accordance with the achievement of KPIs, which may include top line revenues, cash flow, indicators on
profit, R&D metrics, and other performance factors over a three year performance period
4. During term of office
5. Vest and paid three years after the award date of the base points used for the calculation are granted

5.

Compensation Governance5-1. Compensation Committee
The Compensation Committee, with all the Committee members being External Directors, has been established, to serve as an advisory
body for the Board of Directors to ensure the appropriateness of Directors' compensation and the transparency in its decision-making
process. The level of compensation, compensation mix and performance-based compensation (Long-term Incentives and Bonus
programs) for Directors are reviewed by the Compensation Committee before resolution by the Board of Directors. The Company
delegated to the Compensation Committee, by resolution of the Board of Directors, the authority to determine Internal Directors'
individual compensation in order to ensure the objectivity and transparency in the decision making process. In order to enhancetransparency of the Company’s corporate governance, the Company has externally disclosed the Compensation Committee Charter as apart of the Company's corporate governance documents.
The Director's Compensation Policy may continue to evolve and be revised to guide the development of compensation programs thatalign with Directors' accountabilities and responsibilities, shareholder value creation and Takeda-ism.
5-2. Recoupment Policy
The Compensation Committee and Board of Directors adopted a clawback policy in 2020 and amended that policy in 2023. The amended
policy provides that, in the event of a restatement of financial results, Takeda will, in accordance with SEC and NYSE rules, recover fromits executive officers any erroneously paid incentive compensation, which consists of incentive-based compensation for the applicable
recovery period that would not have been granted absent the restatement (i.e., mandatory clawbacks). In addition, in the event of arestatement and/or significant misconduct, the independent External Directors may require Takeda to recoup additional incentive andother contingent compensation. This would include all or a portion of the incentive and other contingent compensation received by any
Internal Director, any other member of the Takeda Executive Team (TET), and any other individual designated by the independent
External Directors, within the fiscal year, and the three (3) prior fiscal years preceding the date of the Board of Directors’ determinationof the restatement or the date that independent External Directors determines that significant misconduct occurred, as applicable. The
amended policy became effective on October 2, 2023 and, with respect to mandatory clawbacks in the event of a restatement, applies toincentive compensation beginning in the fiscal year ended March 31, 2024.

C. Board Practices
See “—A. Directors and Senior Management.” for information about the terms of service of the members of our Board of Directors and thecommittees thereof.

Corporate Governance Structure
Under the Companies Act, joint stock corporations in Japan may adopt a corporate governance structure comprised of a board of directors
and an audit and supervisory committee, commonly referred to as the audit and supervisory committee system, in lieu of the traditional structure
comprised of a board of directors and a board of corporate auditors or the alternative structure comprised of a board of directors and three statutory
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committees. The members of the audit and supervisory committee consist of three or more directors. We adopted the audit and supervisorycommittee system in June 2016, in order to increase transparency and independence of our board of directors, and further enhance our corporate
governance, by establishing the systems of audit and supervision conducted by the Audit and Supervisory Committee and increasing the proportionof the number of External Directors and the diversity of our board of directors. This governance structure also enables us to enhance the separation ofbusiness execution and supervision by delegating certain decision-making authority to individual members of our board of directors, realizing
increased agility in decision-making and helping the board of directors focus more on discussions of business strategies and particularly importantbusiness matters.

Board of Directors
Pursuant to the audit and supervisory committee system, our board of directors is comprised of directors who are Audit and Supervisory
Committee members and directors who are not. Our articles of incorporation provide for a board of directors consisting of no more than 12 members
who are not Audit and Supervisory Committee members and no more than four directors who are Audit and Supervisory Committee members. All
directors are elected by our shareholders at a general meeting of shareholders, with directors who are Audit and Supervisory Committee members
elected separately from other directors. The term of office for directors who are not Audit and Supervisory Committee members expires at the closeof the ordinary general meeting of shareholders held with respect to the last fiscal year ending within one year after their election, and the term ofoffice for directors who are Audit and Supervisory Committee members expires at the close of the ordinary general meeting of shareholders held withrespect to the last fiscal year ending within two years after their election. The current terms of our directors are set forth under “Item 6. Directors,
Senior Management and Employees—A. Directors and Senior Management.” All directors may serve any number of consecutive terms. Except as
described below, none of our directors has entered service contracts with us or any of our subsidiaries providing for benefits upon termination of
employment.
Upon a termination by the relevant company, other than for cause, or the voluntary termination by the relevant director for good reason of
his appointment as director or employment relationship, in each case as defined in the relevant agreement, and subject to the other conditions
contained in such agreement, the following directors will be entitled to the severance payments or other benefits described below. The payments andbenefits described below are in addition to any accrued and unpaid amounts that may be owed to the relevant director at the time of such termination.
Name

Company

Severance Payment

Other Benefits

TakedaSum of (i) 100% of annual base salary, (ii) 100% of
annual target amount of bonus and (iii) 100% of
annual target value of Long-Term Incentive, subject
to the approval of the shareholders’ meeting, to theextent required by applicable law and to the extent
permitted in light of fiduciary duty and the duty ofloyalty of the directors of Takeda

Certain repatriationrelated benefits, subject
to the approval of theshareholders’ meeting,to the extent required byapplicable law and to theextent permitted in lightof fiduciary duty and the
duty of loyalty of thedirectors of Takeda

Takeda Pharmaceuticals
U.S.A., Inc.

Sum of (i) 100% of annual base salary, (ii) 100% of
annual target amount of Short-Term Incentive and(iii) 100% of annual target value of Long-Term
Incentive, subject to the approval of theNoneshareholders’ meeting, to the extent required byapplicable law and to the extent permitted in light offiduciary duty and the duty of loyalty of the directorsof Takeda

Costa Saroukos(1)TakedaSum of (i) 100% of annual base salary, (ii) 100% of
annual target amount of bonus and (iii) 100% of
annual target value of Long-Term Incentive, subject
to the approval of the shareholders’ meeting, to theextent required by applicable law and to the extent
permitted in light of fiduciary duty and the duty ofloyalty of the directors of Takeda

Certain repatriationrelated benefits, subject
to the approval of theshareholders’ meeting,to the extent required byapplicable law and to theextent permitted in lightof fiduciary duty and the
duty of loyalty of thedirectors of Takeda

Andrew S. Plump

Takeda Development
Center Americas, Inc.

Sum of (i) 12 months of current monthly base salary(24 months in the case where Mr. Plump voluntarily
terminates his employment for good reason) and (ii)
100% of annual target level bonus under the ShortTerm Incentive Program

Certain health insurance
benefits

Christophe Weber_____________
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Notes:(1)

Costa Saroukos retired from the board of directors at the close of 148th General Meeting of Shareholders held on June 26, 2024 upon the expiration of his term.

Our board of directors has the ultimate responsibility for the administration of our affairs. Our board of directors, however, may delegate by
its resolution some or all of its decision-making authority in respect of the execution of operational matters (excluding certain matters specified in the
Companies Act) to individual directors and has delegated such decision-making authority as described below. Our board of directors elect one ormore representative directors from among its members who are not Audit and Supervisory Committee members. Each of the representative directors
has the authority to represent us in the conduct of our affairs.
We entered into indemnity agreements with each of Takeda’s directors for liability arising from their status as directors or out of an alleged
wrongful act by them in such capacity to the extent permitted by applicable law.

Audit and Supervisory Committee
Our directors who are Audit and Supervisory Committee members are not required to be certified public accountants. They may not serve
concurrently as executive directors, managers or any other type of employee for us or for any of our subsidiaries, or as accounting advisors or
corporate executive officers for any of our subsidiaries. In addition, more than half of our directors who are Audit and Supervisory Committee
members at any one time must be external directors as defined under the Companies Act, who have not served as executive directors, corporate
executive officers, managers or any other type of employee for us or any of our subsidiaries for ten years prior to their election and fulfill certain
other requirements specified in the Companies Act.
The Audit and Supervisory Committee has a statutory duty to audit the administration of our affairs by our directors, to examine thefinancial statements and business reports to be submitted to the shareholders by a representative director, to prepare an audit report each year, todetermine details of proposals concerning the appointment and dismissal of independent auditors and the refusal to reappoint independent auditors for
submission to general meetings of shareholders and to determine the opinion on election, removal, resignation of or compensation for directors who
are not Audit and Supervisory Committee members, which may be expressed at a general meeting of shareholders. An Audit and Supervisory
Committee member may note his or her opinion in the audit report issued by the Audit and Supervisory Committee if such an opinion differs fromthat expressed in the audit report. Additionally, our Audit and Supervisory Committee serves as our “audit committee” for the purposes of Rule
10A-3 under the Exchange Act. We are required to appoint and have appointed an independent auditor, who has a statutory duty of examining thefinancial statements to be submitted to the shareholders by a Representative Director and preparing its audit report thereon. KPMG AZSA LLC
currently acts as our independent auditor.
As of the date of this annual report, Mr. Koji Hatsukawa, Mr. Yoshiaki Fujimori, Mr. Jean-Luc Butel and Ms. Kimberly A. Reed areappointed as the Audit and Supervisory Committee members.

Takeda Executive TeamAs management tasks continue to diversify, we have established a Takeda executive team under the President and Chief Executive Officer,
consisting of certain directors and employees in senior positions who manage and supervise our key functions. The Takeda executive teamparticipates in a Business and Sustainability Committee (BSC), which is responsible for corporate / business development matters and corporate
sustainability-related matters, a Portfolio Review Committee (PRC), which is responsible for R&D and products-related matters, and a Risk, Ethics
and Compliance Committee (RECC), which is responsible for internal audit, risk management and compliance matters. Our board of directors hasdelegated via Takeda Group’s Management Policy all of its decision-making authority in respect of operational matters (excluding certain mattersspecified in the Companies Act, as well as substantive matters valued at JPY 100 billion or more or those matters which will have substantial impact
on us or our stakeholders) to the President and Chief Executive Officer, and the three Internal Directors belonging to the BSC, PRC, and RECC, ineach case with respect to the BSC, PRC and RECC, for matters allocated under Takeda Group’s Management Policy for decisions by suchcommittees.

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Nomination Committee and Compensation Committee
We also have voluntarily established a Nomination Committee and a Compensation Committee as advisory committees of the board of
directors. All members of each Committee must be External Directors. Furthermore, at least one director who is an Audit and Supervisory Committee
member must be assigned to each committee and each committee must be chaired by an external director. As of the date of this annual report, theNomination Committee consists of one external director who serves as chairperson, and five other external directors. One other director who is not anexternal director attends the Nomination Committee as observer. The Compensation Committee consists of one external director who serves aschairperson, and three other external directors. Together, the committees serve to ensure transparency and objectivity in decision-making relating topersonnel matters for directors (including appropriate standards and procedures for appointment and reappointment and establishing andadministering appropriate succession plans) and the compensation system (including appropriate levels of compensation for the directors, appropriate
performance targets within the bonus system for directors and appropriate bonuses based on business results). Also, by resolution of the board of
directors, the authority to decide the amount of individual remuneration of Internal Directors who are not Audit and Supervisory Committee members
is delegated to the Compensation Committee, through which we have realized a more transparent process in determining individual remuneration.
As of the date of this annual report, Mr. Masami Iijima (Chairperson), Dr. Steven Gillis, Ms. Emiko Higashi, Mr. Michel Orsinger, Mr.
Jean-Luc Butel and Mr. Yoshiaki Fujimori are appointed as the Nomination Committee members, and Mr. Christophe Weber is appointed as anobserver. Ms. Emiko Higashi (Chairperson), Dr. John Maraganore, Mr. Michel Orsinger and Ms. Kimberly A. Reed are appointed as theCompensation Committee members.

Limitation of Liability of Directors
Under the Companies Act and our articles of incorporation, we may exempt, by resolution of the board of directors, our directors fromliabilities to us arising in connection with their failure to execute their duties in good faith and without gross negligence, within the limits stipulated
by applicable laws and regulations. In addition, our articles of incorporation provide that we may enter into agreements with our directors (excluding
executive directors as defined under the Companies Act) to limit their respective liabilities to us arising from their failure to execute their duties ingood faith and without gross negligence, subject to applicable laws and regulations.

D. Employees
As of March 31, 2022, 2023 and 2024, we had 47,347, 49,095 and 49,281 employees on a consolidated basis, respectively. These numbersof employees represent the number of permanent employees excluding temporary employees and were calculated on a full-time equivalent basis. The
following table shows our employees by geographic locations.

Japan
5,697

United States
21,632As of March 31, 2024
Europe andCanada14,443

Other
7,509

Total
49,281

We have concluded a collective bargaining agreement with the Takeda Pharmaceutical Workers Union, through which we have establishedsound relations with our employees in Japan. We hold regular dialogues with the union concerning, among other issues, conditions of employment
and human resources practices. Similarly, all of our group companies hold discussions with their respective workers unions and employee
representatives in accordance with local laws. We have an employee stock ownership association for employees of Takeda.

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E. Share Ownership
The following table shows the number of shares as of March 31, 2024 owned by directors of the Company as of the date of this annual
report.

Directors
Name

Number of shares held
(Number of shares to be provided)(1)

Number of ADSs held
(Number of ADSs to be provided)(2)785,900—(684,353)(211,810)

Christophe Weber
Milano Furuta
Andrew Plump
Masami Iijima
Ian Clark
Steven Gillis
Emiko Higashi
John Maraganore
Michel Orsinger
Miki Tsusaka
Koji Hatsukawa
Jean-Luc Butel
Yoshiaki Fujimori
Kimberly A. Reed
Total

13,200—(41,211)(—)—

276,845(—)(739,658)300—(14,522)

(—)

—

2,096

(16,878)

(—)

—

8,257

(16,878)

(—)

2,500

—

(21,054)

(—)

—

—

(9,373)(—)——(21,054)

(—)

—

—

(4,252)(—)

10,000—(19,040)

(—)

—

—

(21,054)(—)

12,500—(19,040)

(—)

—

1,375

(9,373)(—)

824,400

288,573(898,082)(951,468)_____________
Notes:(1) The number of shares held represents the number of ordinary shares held as of March 31, 2024. The number of shares to be provided includes
the number of ordinary shares vested but undelivered and scheduled to be vested, including those granted to directors based outside of Japan thatwill be converted to ADSs for settlement following vesting, under the Board Incentive Plan (“BIP”). The number of shares to be provided
pursuant to the BIP and the Employee Stock Ownership Plan (“ESOP”) are comprised of Restricted Stock Unit awards (“RSU awards”) andPSU awards. RSU awards vest one third each year over a three-year period and PSU awards vest three years from the date of grant. Included
PSU awards to be vested in the future years represent the total number of shares to be issued assuming that relevant targets are met at the 100%level; the actual number of shares issued may be fewer or greater depending on the level at which targets are met. If there are Performance Share
Unit awards (“PSU awards”) vested after March 31, 2024, the number of such shares to be provided has been adjusted to the results of KPI. In
addition, with regard to the Company's shares to be provided under the Plan, the voting rights thereof may not be exercised before such sharesare provided to each Director.
(2) The number of ADSs held represents the number of American Depositary Shares held as of March 31, 2024 and is rounded to the nearest whole
number. Each ADS represents one half of an ordinary share. The number of ADSs to be provided includes the number of American Depositary117

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Shares vested but undelivered and scheduled to be vested under Long-Term Incentive Plan for Company Group Employees Overseas (“LTIP”).
The number of ADSs to be provided pursuant to the LTIP is comprised of RSU awards and PSU awards. RSU awards vest one third each year
over a three-year period and PSU awards vest three years from the date of grant. Included PSU awards to be vested in the future years represent
the total number of ADSs to be issued assuming that relevant targets are met at the 100% level; the actual number of ADSs issued may be fewer
or greater depending on the level at which targets are met. If there are PSU awards vested after March 31, 2024, the number of such ADSs to beprovided has been adjusted to the results of KPI. In addition, with regard to the ADSs to be provided under the Plan, the voting rights thereof
may not be exercised before such shares are provided to each Director.
Each of our directors held less than one percent of our total issued shares as of March 31, 2024. Shares held by directors have equal voting
rights as common stock held by other holders.
For detailed information about our share-based compensation plans, including BIP and LTIP, see Note 28 to our audited consolidated
financial statements.

F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.

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Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders
The following table sets forth the number of shares held of record by each of our principal shareholders as well as the percentage of ourissued shares held by each of our principal shareholders as of March 31, 2024.
Number of shares
Percentage ofheld of record
issued shares(1)(thousands, except percentages)

Shareholder

The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
The Bank of New York Mellon as depositary bank for depositary receipt holders(Standing proxy: Sumitomo Mitsui Banking Corporation)
JP Morgan Chase Bank 385632(Standing proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.)State Street Bank West Client-Treaty 505234(Standing proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.)
Nippon Life Insurance Company(Standing proxy: The Master Trust Bank of Japan, Ltd.)
JPMorgan Securities Japan Co., Ltd.
SMBC Nikko Securities Inc.
SSBTC Client Omnibus Account(Standing proxy: The Hongkong and Shanghai Banking Corporation Limited Tokyo Branch)
JP Morgan Chase Bank 385781(Standing proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.)
Total

261,696
86,76316.62 %
5.51

60,085

3.82

37,2322.36

33,756

2.14

24,752

1.57

23,39622,032

1.49
1.40

21,344

1.36

21,1181.34

592,174

37.60 %___________Note:(1) Percentage of issued shares excludes treasury stock held as of March 31, 2024. As of March 31, 2024, we held 13,405,261 shares of common stock as treasury
stock, which include 7,514,277 shares held by us, 5,888,358 shares held in trust for our stock-based compensation plans and 2,626 shares held by equity-method
affiliates (based on our ownership percentage in them). The total number of issued shares, less treasury stock, used to calculate percentages in the above table
include such shares held in trust or by equity-method affiliates.

Our major shareholders of common stock have the same voting rights as other holders of common stock.
According to a statement on Schedule 13G (Amendment No. 3) filed on February 5, 2024, Sumitomo Mitsui Trust Holdings, Inc.
(including its affiliates) beneficially owned 87,400,834 shares of our common stock, representing 5.5% of our outstanding shares of common stock.
However, we have not confirmed the status of these shareholdings as of the date of this annual report.
According to a statement on Schedule 13G (Amendment No. 5) filed on February 6, 2024, BlackRock, Inc. (including its affiliates)
beneficially owned 121,185,145 shares of our common stock, representing 7.7% of our outstanding shares of common stock. According to anamendment to the Report of Substantial Shareholding (tairyo hoyu hokokusho) subsequently filed with the Director of the Kanto Local Finance
Bureau on April 18, 2024, affiliates of BlackRock, Inc. beneficially owned 115,988,638 shares of our common stock, representing 7.33% of ouroutstanding shares of common stock. However, we have not confirmed the status of these shareholdings as of the date of this annual report.
As of March 31, 2024, there were 363 holders of record of our common stock with addresses in the U.S., whose shareholdings represented
approximately 19% of our outstanding common stock on that date. One such shareholder was The Bank of New York Mellon as depositary forholders of ADSs, which held 60,085 thousand shares, or 3.82% of the total number of shares in issue, as of March 31, 2024. Because some of theseshares were held by brokers or other nominees, the number of holders of record with addresses in the U.S. might not fully reflect the number ofbeneficial owners in the U.S.
To the extent known to us, we are not directly or indirectly owned or controlled by any other corporation, by any foreign government or by
any other natural or legal person severally or jointly.
To our knowledge, there are no arrangements, which may at a subsequent date result in a change in control of us.

B. Related Party Transactions
From time to time, we enter into agreements and engage in transactions with our related parties, within the meaning of Item 7.B of Form
20-F, in the ordinary course of our business. For the fiscal year ended March 31, 2024, such transactions included, but were not limited to, R&Drelated services agreements and equity investments transactions. The terms and conditions of our related party transactions are consistent with thirdparty transactions and reflect market prices. Takeda does not consider the amounts involved in these transactions to be material to its business.

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C. Interests of Experts and Counsel
Not applicable.

Item 8. Financial Information
A. Consolidated Statements and Other Financial Information
Our audited consolidated financial statements are included under “Item 18—Financial Statements.”

Legal Proceedings
The information required by this item is set forth in our consolidated financial statements included in this annual report. See Note 32 to our
audited consolidated financial statements for a detailed discussion of legal proceedings.

Dividends
Takeda’s policy in the allocation of capital is as follows:• Invest in growth drivers; and• Shareholder returns.
In respect of “Invest in growth drivers”, Takeda makes strategic investments in internal and external opportunities to enhance the pipeline,
new product launches, and plasma-derived therapies. With regard to “Shareholder returns”, Takeda has adopted a progressive dividend policy of
increasing or maintaining the annual dividend per share each year, alongside share buybacks when appropriate.
As noted above, the return of capital to shareholders is one of the focus areas for our management, and we believe our dividend policy is an
important tool for accomplishing our goals.
The following table sets forth the dividends paid with respect to each of our fiscal years indicated.
JPY (billions)
Total dividends

Dividends per
share JPY

Record date

¥

¥

90.00

March 31, 2021

June 30, 2021

142.4

90.00

September 30, 2021

December 1, 2021

Q1 2022

140.4

90.00

March 31, 2022

June 30, 2022

Q3 2022

140.5

90.00

September 30, 2022

December 1, 2022

Q1 2023

140.5

90.00

March 31, 2023

June 29, 2023

Q3 2023

148.0

94.00

September 30, 2023

December 1, 2023

Dividends declared and paid

Effective date

April 1, 2021, to March 31, 2022
Q1 2021
Q3 2021141.9

April 1, 2022, to March 31, 2023

April 1, 2023, to March 31, 2024

Dividend declared for which the effective date falls in the following fiscal year are as follows:

Dividends declared

April 1, 2024, to March 31, 2025
Q1 2024

JPY (billions)
Total dividends

Dividends per
share JPY

Record date¥¥

March 31, 2024

148.0

94.00

B. Significant Changes
No significant change has occurred since the date of the annual financial statements.

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Item 9. The Offer and Listing
A. Offer and Listing Details
See “Item 9.C. Markets” of this annual report.

B. Plan of Distribution
Not applicable.

C. Markets
In Japan, our common stock has been listed since 1949 on the Tokyo Stock Exchange. Our common stock is also listed on the Nagoya
Stock Exchange, the Fukuoka Stock Exchange and the Sapporo Securities Exchange. On each of these markets, our common stock trades under the
securities identification code “4502.”
ADSs, each representing 0.5 shares of our common stock, have been listed on the New York Stock Exchange since 2018 and trade under
the symbol “TAK.”

D. Selling Shareholders
Not applicable.

E. Dilution
Not applicable.

F. Expenses of the Issue
Not applicable.

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Item 10. Additional Information
A. Share Capital
Not applicable.

B. Memorandum and Articles of Association
We are a joint-stock corporation incorporated in Japan under the Companies Act. The rights of our shareholders are represented by sharesof our common stock as described below, and shareholders’ liability is limited to the amount of subscription for such shares. As of March 31, 2024,
our authorized share capital consisted of 3,500,000,000 shares of common stock of which 1,582,418,725 shares were issued.
Only the holders of our common stock will be entitled to the shareholder rights described below. In order to exercise the rights described
below, holders of our ADSs will be required to withdraw their ADSs in favor of shares of our common stock in order to exercise their rights asshareholders. Additional information about the rights of ADSs is available in Exhibit 2.2.
Article 3 of our Articles of Incorporation, which are included as an exhibit hereto, set forth our objects and purposes, which are to engage
in the following businesses:•

Manufacture, purchase and sale of medicines, chemicals for non-medicinal uses, quasi-medicines, medical instruments, appliancesand supplies, measuring equipment, cosmetics, food products, beverages, food additives, livestock feed additives and other chemical
products, and instruments, appliances and equipment relating to any of the foregoing products;•

Computerized information processing services, development, purchase and sale of software, and information providing services;•

Support of businesses, and advice, training and assistance for management;•

Trucking and freight forwarding;•Warehousing;•Publishing;•

Management, purchase, sale and lease of real estate; and•Business ancillary or related to any of those specified in each foregoing clause.

Book-Entry Transfer System
The Japanese book-entry transfer system for listed shares of Japanese companies under the Book-Entry Act of Japan (the “Book-EntryAct”) applies to the shares of our common stock. Under this system, shares of all Japanese companies listed on any Japanese stock exchange aredematerialized. Under the book-entry transfer system, in order for any person to hold, sell or otherwise dispose of listed shares of Japanesecompanies, they must have an account at an account management institution unless such person has an account at Japan Securities Depository Center,
Incorporated (the “JASDEC”). “Account management institutions” are financial instruments business operators (i.e., securities firms), banks, trust
companies and certain other financial institutions that meet the requirements prescribed by the Book-Entry Act, and only those financial institutions
that meet the further stringent requirements of the Book-Entry Act can open accounts directly at JASDEC.
The following description of the book-entry transfer system assumes that the relevant person has no account at JASDEC.
Under the Book-Entry Act, any transfer of shares is affected through book-entry, and the title to the shares passes to the transferee at thetime when the transferred number of shares is recorded in the transferee’s account at an account management institution. The holder of an account at
an account management institution is presumed to be the legal owner of the shares held in such account.
Under the Companies Act, in order to assert shareholders’ rights against us, the transferee must have its name and address registered in theregister of our shareholders, except in limited circumstances. Under the book-entry transfer system, such registration is generally made upon receipt
of an all shareholders notice (soukabunushi tsuchi) (as described in “— Register of Shareholders”) from JASDEC. For this purpose, shareholders are
required to file their names and addresses with our transfer agent through the account management institution and JASDEC. See “ —Register of
Shareholders” for more information.
Non-resident shareholders are required to appoint a standing proxy in Japan or provide a mailing address in Japan. Each such shareholder
must give notice of its standing proxy or a mailing address to the relevant account management institution. Such notice will be forwarded to ourtransfer agent through JASDEC. Japanese securities firms and commercial banks customarily act as standing proxies and provide related services forstandard fees. Notices from us to non-resident shareholders are delivered to the standing proxies or mailing addresses.

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Register of Shareholders
Under the book-entry transfer system, the registration of names, addresses and other information of shareholders in the register of ourshareholders will be made by us upon the receipt of an all shareholders notice (with the exception that in the event of the issuance of new shares, wewill register the names, addresses and other information of our shareholders in the register of our shareholders without an all shareholders notice fromJASDEC) given to us by JASDEC, which will give us such an all shareholders notice based on information provided by the account management
institutions. Such an all shareholders notice will be made only in cases prescribed under the Book-Entry Act such as when we fix the record date andwhen we make a request to JASDEC with any justifiable reason. Therefore, a shareholder may not assert shareholders’ rights against us immediately
after such a shareholder acquires our shares, unless such a shareholder’s name and address are registered in the register of our shareholders upon ourreceipt of an all shareholders notice; provided, however, that, in respect of the exercise of rights of minority shareholders as defined in the BookEntry Act, a shareholder may exercise such rights upon giving us an individual shareholder notice (kobetsukabunushi tsuchi) through JASDEC only
during a certain period prescribed under the Book-Entry Act.

Distribution of Surplus
Under the Companies Act, the distribution of dividends takes the form of a distribution of Surplus (as defined in “—Restriction on
Distribution of Surplus”), and a distribution of Surplus may be made in cash and/or in kind, with no restrictions on the timing and frequency of such
distributions. The Companies Act generally requires a joint-stock corporation to make distributions of Surplus authorized by a resolution of a general
meeting of shareholders. However, in accordance with the Companies Act, our Articles of Incorporation provide that the board of directors has theauthority to make decisions regarding distributions of Surplus, except for limited exceptions, as provided by the Companies Act, as long as thecompany that has both of an independent auditor and an audit and supervisory committee satisfies the following requirements:(a)the normal term of office of directors who are not audit and supervisory committee members expires at the close of the ordinary general
meeting of shareholders held with respect to the last fiscal year ended within one year after their election (our Articles of Incorporation
currently satisfies this requirement); and(b)

its non-consolidated annual financial statements and certain documents for the latest fiscal year fairly present its assets and profit orloss, as required by the ordinances of the Ministry of Justice.

A resolution of a general meeting of shareholders or the board of directors authorizing a distribution of Surplus must specify the kind andaggregate book value of the assets to be distributed, the manner of allocation of such assets to shareholders and the effective date of the distribution.
If a distribution of Surplus is to be made in kind, we may, pursuant to a resolution of a general meeting of shareholders or the board of directors,
grant a right to the shareholders to require us to make such distribution in cash instead of in kind. If no such right is granted to shareholders, therelevant distribution of Surplus must be approved by a special resolution of a general meeting of shareholders. See “—Voting Rights” for more details
regarding a special resolution. Our Articles of Incorporation provide that we are relieved of our obligation to pay any distributions in cash that go
unclaimed for three years after the date they first become payable.

Restrictions on the Distribution of Surplus
Under the Companies Act, we may distribute a Surplus up to the excess of the aggregate of (a) and (b) below, less the aggregate of(c) through (f) below, as of the effective date of such distribution, if our net assets are not less than JPY 3,000,000:(a)

the amount of Surplus, as described below;(b)in the event that extraordinary financial statements as of, or for a period from the beginning of the fiscal year to, the specified date areapproved, the aggregate amount of (i) the aggregate amount as provided for by an ordinance of the Ministry of Justice as the net profit
for such period described in the statement of profit and loss constituting the extraordinary financial statements, and (ii) the amount ofconsideration that we received for the treasury stock that we disposed of during such period;(c)the book value of our treasury stock;(d)in the event that we disposed of treasury stock after the end of the previous fiscal year, the amount of consideration that we received forsuch treasury stock;(e)in the event described in (b) in this paragraph, the aggregate amount as provided for by an ordinance of the Ministry of Justice as thenet loss for such period described in the statement of profit and loss constituting the extraordinary financial statements; and(f)certain other amounts set forth in the ordinances of the Ministry of Justice, including (if the sum of one-half of goodwill and thedeferred assets exceeds the total of share capital, additional paid-in capital and legal earnings reserve, each such amount as it appears on
the balance sheet as of the end of the previous fiscal year) all or a certain part of such excess amount as calculated in accordance withthe ordinances of the Ministry of Justice.

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For the purposes of this section, the amount of “Surplus” is the excess of the aggregate of (I) through (IV) below, less the aggregate of(V) through (VII) below:(I)the aggregate of other capital surplus and other retained earnings at the end of the previous fiscal year;(II)in the event that we disposed of treasury stock after the end of the previous fiscal year, the difference between the book value of suchtreasury stock and the consideration that we received for such treasury stock;(III) in the event that we reduced our share capital after the end of the previous fiscal year, the amount of such a reduction less the portion
thereof that has been transferred to additional paid-in capital and/or legal earnings reserve (if any);(IV) in the event that we reduced additional paid-in capital and/or legal earnings reserve after the end of the previous fiscal year, the amountof such a reduction less the portion thereof that has been transferred to share capital (if any);(V)in the event that we canceled treasury stock after the end of the previous fiscal year, the book value of such treasury stock;(VI) in the event that we distributed a Surplus after the end of the previous fiscal year, the aggregate of the following amounts:(1)

the aggregate amount of the book value of the distributed assets, excluding the book value of such assets that would be
distributed to shareholders but for their exercise of the right to receive dividends in cash instead of dividends in kind;(2)

the aggregate amount of cash distributed to shareholders who exercised the right to receive dividends in cash instead ofdividends in kind; and(3)

the aggregate amount of cash paid to shareholders holding fewer shares than the shares that were required in order toreceive dividends in kind;(VII) the aggregate amounts of (1) through (4) below, less (5) through (8) below:(1)

in the event that the amount of Surplus was reduced and transferred to additional paid-in capital, legal earnings reserve and/or share capital after the end of the previous fiscal year, the amount so transferred;(2)

in the event that we distributed a Surplus after the end of the previous fiscal year, the amount set aside in additional paid-in
capital and/or legal earnings reserve;(3)

in the event that we disposed of treasury stock in the process of (w) a merger in which we acquired all rights and obligationsof a company, (x) a corporate split in which we acquired all or a part of the rights and obligations of a split company, (y) ashare exchange in which we acquired all shares of a company, or (z) a share delivery in which we acquired shares, stockacquisition rights or bonds with stock acquisition rights of a company and delivered our shares to the transferor of them as aconsideration for such acquisition after the end of the previous fiscal year, the difference between the book value of suchtreasury stock and the consideration that we received for such treasury stock;(4)

in the event that the amount of Surplus was reduced in the process of a corporate split in which we transferred all or a partof our rights and obligations after the end of the previous fiscal year, the amount so reduced;(5)

in the event of (w) a merger in which we acquired all rights and obligations of a company, (x) a corporate split in which we
acquired all or a part of the rights and obligations of a split company, (y) a share exchange in which we acquired all sharesof a company, or (z) a share delivery in which we acquired shares, stock acquisition rights or bonds with stock acquisitionrights of a company and delivered our shares to the transferor of them as a consideration for such acquisition after the endof the previous fiscal year, the aggregate amount of (i) the amount of other capital surplus after such merger, corporate split,
share exchange or share delivery, less the amount of other capital surplus before such merger, corporate split, shareexchange or share delivery, and (ii) the amount of other retained earnings after such merger, corporate split, share exchangeor share delivery, less the amount of other retained earnings before such merger, corporate split, share exchange or sharedelivery;(6)in the event that an obligation to cover a deficiency, such as the obligation of a person who subscribed for newly issued
shares with an unfair amount to be paid in, was fulfilled after the end of the previous fiscal year, the amount of other capitalsurplus increased by such payment;(7)in the event that we allotted our shares to the directors in consideration of providing service after the end of the last fiscal
year, the changes in other capital surplus by such allotment; and(8)in the event that we allotted our treasury stock to the directors in consideration of providing service and the directors
transferred these stock to us for free after the end of the last fiscal year, the amount of increase in treasury stock by suchtransfer.

In Japan, the “ex-dividend” date and the record date for any distribution of Surplus come before the date a company determines the amountof distribution of Surplus to be paid.
For information as to Japanese taxes on dividends, see “—Taxation — Japanese Taxation.”

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Capital and Reserves
Under the Companies Act, the paid-in amount of any newly-issued shares of stock is required to be accounted for as share capital, although
we may account for an amount not exceeding one-half of such a paid-in amount as additional paid-in capital. We may generally reduce additional
paid-in capital and/or legal earnings reserve by resolution of a general meeting of shareholders, subject to completion of protection procedures for
creditors in accordance with the Companies Act, and, if so decided by the same resolution, we may account for the whole or any part of the amountof such reduction as share capital. We may generally reduce share capital by a special resolution of a general meeting of shareholders subject tocompletion of protection procedures for creditors in accordance with the Companies Act, and, if so decided by the same resolution, we may accountfor the whole or any part of the amount of such reduction as additional paid-in capital or legal earnings reserve.

Stock Splits
Under the Companies Act, we may at any time split shares issued into a greater number of the same class of shares by a resolution of theboard of directors or by determination of an individual director to whom the authority to make such a determination has been delegated by resolutionof the board of directors. A company that has issued only one class of shares may amend its articles of incorporation to increase the number of theauthorized shares to be issued up to a number in proportion to the stock split by resolution of the board of directors or by determination of anindividual director to whom the authority to make such determination has been delegated by resolution of the board of directors, rather than a special
resolution of a general meeting of shareholders, which is otherwise required for amending the articles of incorporation. When a stock split is to be
made, we must give public notice of the stock split, specifying the record date therefor, at least two weeks prior to such record date.
Under the book-entry transfer system, on the effective date of the stock split, the numbers of shares recorded in all accounts held by ourshareholders at account management institutions will be increased in accordance with the applicable ratio.

Gratuitous Allocations
Under the Companies Act, we may allot any class of shares to our existing shareholders without any additional contribution by resolutionof the board of directors or by determination of an individual director to whom the authority to make such determination has been delegated byresolution of the board of directors; provided that although our treasury stock may be allotted to our shareholders, any allotment of shares will notaccrue to shares of our treasury stock.
When a gratuitous allocation is to be made and we set a record date therefor, we must give public notice of the gratuitous allocation,
specifying the record date therefor, at least two weeks prior to the record date.
Under the book-entry transfer system, on the effective date of the gratuitous allocation, the number of shares of our common stock recordedin accounts held by our shareholders at account management institutions will be increased in accordance with a notice from us to JASDEC.

Reverse Stock Split
Under the Companies Act, we may at any time consolidate our shares into a smaller number of shares by a special resolution of the general
meeting of shareholders. We must disclose the reason for the reverse stock split at the general meeting of shareholders. When a reverse stock split is
to be made, we must give public notice of the reverse stock split, at least two weeks (or, in certain cases where any fractions of shares are left as aresult of a reverse stock split, 20 days) prior to the effective date of the reverse stock split.
Under the book-entry transfer system, on the effective date of the reverse stock split, the numbers of shares recorded in all accounts held by
our shareholders at account management institutions will be decreased in accordance with the applicable ratio.

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Unit Share System
GeneralOur Articles of Incorporation provide that 100 shares constitute one “unit” of common stock. Our board of directors or an individual director
to whom the authority to make such determination has been delegated by resolution of the board of directors is permitted to reduce the number ofshares that will constitute one unit or to abolish the unit share system entirely by amending our Articles of Incorporation, without shareholders’approval, with public notice without delay after the effective date of such amendment.

Transferability of Shares Constituting Less Than One Unit
Under the book-entry transfer system, shares constituting less than one unit are transferable. Under the rules of the Japanese stock
exchanges, however, shares constituting less than one unit do not comprise a trading unit, except in limited circumstances, and accordingly may not
be sold on Japanese stock exchanges.

Voting Rights of a Holder of Shares Constituting Less Than One Unit
A holder of shares constituting less than one unit cannot exercise any voting rights pertaining to those shares. In calculating the quorum forvarious voting purposes, the aggregate number of shares constituting less than one unit will be excluded from the number of outstanding shares. A
holder of shares representing one or more full units will have one vote for each full unit represented.
A holder of shares constituting less than one unit does not have any rights related to voting, such as the right to participate in a demand forthe resignation of a director, the right to participate in a request for the convocation of a general meeting of shareholders and the right to join withother shareholders to propose a matter to be included in the agenda of a general meeting of shareholders.

Rights of a Holder of Shares Constituting Less Than One Unit to Require Us to Purchase Shares and to Sell Shares
Under the Companies Act, a holder of shares constituting less than one full unit may at any time request that we purchase such shares. In
addition, our Articles of Incorporation provide that, pursuant to our Share Handling Regulations, a holder of shares constituting less than one full unit
has the right to request that we sell to such a holder such number of shares constituting less than one full unit which, when added to the sharesconstituting less than one full unit currently owned by such a holder, will constitute one full unit.
Under the book-entry system, such a request must be made to us through the relevant account managing institution. The price at whichshares of common stock constituting less than one unit will be purchased or sold by us pursuant to such a request will be equal to (a) the closing priceof shares of our common stock reported by the Tokyo Stock Exchange on the day when the request is received by our transfer agent or (b) if no saletakes place on the Tokyo Stock Exchange on that day, the price at which the sale of shares of our common stock is executed on such stock exchange
immediately thereafter.

General Meeting of Shareholders
Our ordinary general meeting of shareholders is usually held every June in Japan. The record date for an ordinary general meeting ofshareholders is March 31 of each year. In addition, we may hold an extraordinary general meeting of shareholders whenever necessary by giving atleast two weeks’ advance notice to shareholders.
The time, the place, and the purpose thereof and certain other matters relating to the general meeting of shareholders, including theinformation contained in the reference materials, must be uploaded onto the website at least three weeks prior to the date set for the meeting, andnotice of the URL of the website to be used and certain other matters relating to the meeting must be mailed to each shareholder having voting rights(or, in the case of a non-resident shareholder, to his or her standing proxy or mailing address in Japan) at least two weeks prior to the date set for sucha meeting.
The Bill for Partially Amending the Industrial Competitiveness Act of Japan has been submitted to the Diet of Japan as of May 11, 2021,
which allows companies to add a provision to their Articles of Incorporation stating that a general meeting of shareholders may be held without
specifying a venue, subject to confirmation by the Minister of Economy, Trade and Industry and the Minister of Justice that such companies satisfy
the requirements specified by the Ordinance of the Ministry of Economy, Trade and Industry and the Ordinance of the Ministry of Justice, for fallingunder cases where holding a general meeting of shareholders without specifying a venue contributes to enhancing industrial competitiveness while
securing the interests of shareholders.
Assuming cases where an infectious disease such as COVID-19 spreads or a natural disaster occurs and the impact thereof is ongoing or isreasonably expected to be ongoing at the time of the general meeting of shareholders, we believe that setting a venue for a general meeting ofshareholders while asking shareholders to refrain from attending the venue out of consideration of shareholders’ health and safety, may not always be
the best option for us as the method of holding a general meeting of shareholders. Therefore, we submitted a proposal to our annual general meetingof shareholders held on June 29, 2021, which was approved by partially amending our Articles of Incorporation to the effect that we may hold ageneral meeting of shareholders without specifying a venue when our Board of Directors decides that, considering the interests of shareholders as
well, it is not appropriate to hold the general meeting of shareholders with a specific venue in situations such as the spread of an infectious disease or
the occurrence of a natural disaster. The partial amendment of our Articles of Incorporation based on this proposal came into effect on August 5,
2021 subject to the enactment in the Diet and the promulgation of the Act Partially Amending the Industrial Competitive Enhancement Act of Japan
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with the above mentioned content, and our obtaining the above mentioned confirmation by the Minister of Economy Trade and Industry and theMinister of Justice.
Any shareholder or group of shareholders holding at least 3% of the total number of voting rights for a period of six months or more may
require, with an individual shareholder notice (as described in “— Register of Shareholders”), the convocation of a general meeting of shareholders
for a particular purpose. Unless such a general meeting of shareholders is convened without delay or a convocation notice of a meeting which is to beheld not later than eight weeks from the day such a demand is dispatched, the requiring shareholder may, upon obtaining a court approval, convenesuch a general meeting of shareholders.
Any shareholder or group of shareholders holding at least 300 voting rights or 1% of the total number of voting rights for a period of six
months or more may propose a matter to be included in the agenda of a general meeting of shareholders, and may propose to describe such a matter
together with a summary of the proposal to be submitted by such a shareholder in a convocation notice to our shareholders, by submitting a request toa director at least eight weeks prior to the date set for such a meeting (provided that we are able to limit the number of such matters proposed by eachshareholder to 10), with an individual shareholder notice (as described in “— Register of Shareholders”).
The Companies Act enables a company to amend its articles of incorporation in order to loosen the requirements for the number of shares
held and shareholding period, as well as the period required for dispatching a convocation notice or submission of requests, all of which are required
for any shareholder or group of shareholders to request the convocation of a general meeting of shareholders or to propose a matter to be included in
the agenda of a general meeting of shareholders. Our Articles of Incorporation do not provide for loosening such requirements.

Voting Rights
A shareholder of record is entitled to one vote per unit (100 shares) of common stock, except that neither we nor any corporation,
partnership or other similar entity in which we hold, directly or indirectly, 25% or more of the voting rights shall exercise any voting rights in respectof shares held by us or such an entity, as the case may be. Except as otherwise provided by law or by our Articles of Incorporation, a resolution canbe adopted at a general meeting of shareholders by a majority of the voting rights represented at the meeting. Shareholders may also exercise theirvoting rights through proxies, provided that the proxy is granted to one of our shareholders having voting rights. The Companies Act and our Articles
of Incorporation provide that the quorum for the election of directors is one-third of the total number of voting rights. Our Articles of Incorporation
provide that the shares may not be voted cumulatively for the election of directors.
The Companies Act provides that a special resolution of the general meeting of shareholders is required for certain significant corporatetransactions, including:•any amendment to our Articles of Incorporation (except for amendments that may be made without the approval of shareholders
under the Companies Act);•a reduction of share capital, subject to certain exceptions under which a shareholders’ resolution is not required, such as a reductionof share capital for the purpose of replenishing capital deficiencies;•

transfer of the whole or a part of our equity interests in any of our subsidiaries, subject to certain exceptions under which ashareholders’ resolution is not required;•a dissolution, merger or consolidation, subject to certain exceptions under which a shareholders’ resolution is not required;•

the transfer of the whole or a substantial part of our business, subject to certain exceptions under which a shareholders’ resolution is
not required;•

the taking over of the whole of the business of any other corporation, subject to certain exceptions under which a shareholders’
resolution is not required;•a corporate split, subject to certain exceptions under which a shareholders’ resolution is not required;•a share exchange (kabushiki kokan) or share transfer (kabushiki iten) for the purpose of establishing 100% parent-subsidiary
relationships, subject to certain exceptions under which a shareholders’ resolution is not required;•a share delivery (kabushiki kofu) for the purpose of making another corporation a subsidiary, subject to certain exceptions underwhich a shareholders’ resolution is not required;•

any issuance of new shares or transfer of existing shares held by us as treasury stock at a “specially favorable” price and any
issuance of stock acquisition rights or bonds with stock acquisition rights at a “specially favorable” price or on “specially favorable”
conditions to any persons other than shareholders;•

any acquisition by us of our own shares from specific persons other than our subsidiaries;•

any reverse stock splits; or•the removal of directors who are audit and supervisory committee members.

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Except as otherwise provided by law or in our Articles of Incorporation, a special resolution of the general meeting of shareholders requires
the approval of the holders of at least two-thirds of the voting rights of all shareholders present or represented at a meeting where a quorum is present.
Our Articles of Incorporation provide that a quorum exists when one-third of the total number of voting rights is present or represented.

Liquidation Rights
If we are liquidated, the assets remaining after payment of all taxes, liquidation expenses and debts will be distributed among shareholders
in proportion to the number of shares they hold.

Rights to Allotment of Shares
Holders of shares of our common stock have no pre-emptive rights. Authorized but unissued shares may be issued at the times and on theterms as the board of directors or an individual director to whom the authority to make such determination has been delegated by resolution of theboard of directors determines, so long as the limitations with respect to the issuance of new shares at “specially favorable” prices (as described in “—
Voting Rights”) are observed. Our board of directors or an individual director to whom the authority to make such determination has been delegatedby resolution of the board of directors may, however, determine that shareholders shall be given rights to allotment regarding a particular issue of
new shares, in which case such rights must be given on uniform terms to all holders of the shares as of a record date for which not less than two
weeks’ prior public notice must be given. Each shareholder to whom such rights are given must also be given notice of the expiration date thereof atleast two weeks prior to the date on which such rights expire. The rights to allotment of new shares may not be transferred. However, the Companies
Act enables us to allot stock acquisition rights to shareholders without consideration therefor, and such stock acquisition rights are transferable. See“— Stock Acquisition Rights” below.
In cases where a particular issuance of new shares (i) violates laws and regulations or our Articles of Incorporation, or (ii) will be
performed in a manner materially unfair, and shareholders may suffer disadvantages therefrom, such shareholders may file an injunction with a courtof law to enjoin such issuance.

Stock Acquisition Rights
Subject to certain conditions and to the limitations on issuances at a “specially favorable” price or on “specially favorable” conditions
described in “— Voting Rights,” we may issue stock acquisition rights (shinkabu yoyakuken) and bonds with stock acquisition rights (shinkabu
yoyakuken-tsuki shasai) by a resolution of the board of directors or by determination of an individual director to whom the authority to make suchdetermination has been delegated by resolution of the board of directors. Holders of stock acquisition rights may exercise their rights to acquire acertain number of shares within the exercise period as set forth in the terms of their stock acquisition rights. Upon exercise of stock acquisition rights,
we will be obligated either to issue the relevant number of new shares or, alternatively, to transfer the necessary number of shares of treasury stock
held by us.

Record Date
The record date for annual dividends and the determination of shareholders entitled to vote at the ordinary general meeting of ourshareholders is March 31. The record date for interim dividends is September 30.
In addition, by a resolution of the board of directors or by determination of an individual director to whom the authority to make suchdetermination has been delegated by resolution of the board of directors, we may set a record date for determining the shareholders entitled to otherrights and for other purposes by giving at least two weeks’ prior public notice.
Under the rules of JASDEC, we are required to give notice of each record date to JASDEC promptly after setting such record date.
JASDEC is required to promptly give us notice of the names and addresses of the holders of shares of our common stock, the number of shares of ourcommon stock held by them and other relevant information as at each record date.

Purchase of Our Own Shares
Under the Companies Act and our Articles of Incorporation, we may acquire our own shares:•

by purchase on any stock exchange on which our shares are listed or by way of a tender offer, pursuant to a resolution of our boardof directors subject to certain requirements;•

by purchase from a specific party other than any of our subsidiaries, pursuant to a special resolution of a general meeting ofshareholders; and•by purchase from any of our subsidiaries, pursuant to a resolution of the board of directors or determination of an individual director
to whom the authority to make such determination has been delegated by resolution of the board of directors.

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If we acquire our own shares from a specific party other than any of our subsidiaries as specified above at a price higher than the greater of(i) (a) the closing price of the shares at the market trading such shares on the day immediately preceding the day on which the relevant special
resolution of a general meeting of shareholders is made or (b) if no sale takes place at such a market on that day, the price at which the sale of theshares is effected on such a market immediately thereafter and (ii) in the event that such shares are subject to a tender offer, the price set in thecontract regarding such a tender offer on that day, shareholders may request that we include him or her as the seller of his or her shares in the
proposed purchase. Any such acquisition of shares must satisfy certain requirements, such as that we may only acquire our own shares in an
aggregate amount up to the amount that we may distribute as a Surplus. See “— Distribution of Surplus” above for more details regarding thisamount.
Our own shares acquired by us may be held by us as treasury stock for any period or may be canceled by resolution of the board of
directors or by determination of an individual director to whom the authority to make such determination has been delegated by resolution of theboard of directors. We may also transfer the shares held by us to any person, subject to a resolution of the board of directors or determination of anindividual director to whom the authority to make such determination has been delegated by resolution of the board of directors, and subject also toother requirements similar to those applicable to the issuance of new shares, as described in “— Rights to Allotment of Shares” above. We may alsoutilize our treasury stock (x) for the purpose of transfer to any person upon exercise of stock acquisition rights or (y) for the purpose of acquiring
another company by way of merger, share exchange, share delivery or corporate split through exchange of treasury stock for shares or assets of theacquired company.

Request by Controlling Shareholder to Sell All Shares
Under the Companies Act and our Articles of Incorporation, in general, a shareholder holding 90% or more of our voting rights, directly or
through wholly-owned subsidiaries, shall have the right to request that all other shareholders other than us (and all other holders of stock acquisitionrights other than us, as the case may be) sell all shares (and all stock acquisition rights, as the case may be) held by them with our approval, whichmust be made by a resolution of the board of directors or by determination of an individual director to whom the authority to make suchdetermination has been delegated by resolution of the board of directors (kabushiki tou uriwatashi seikyu or a “Share Sales Request”). In order tomake a Share Sales Request, such a controlling shareholder will be required to issue a prior notice to us. If we approve such a Share Sales Request,
we will be required to make a public notice to all holders and registered pledgees of shares (and stock acquisition rights, as the case may be) not later
than 20 days before the effective date of such sales.

Sale by Us of Shares Held by Shareholders Whose Addresses Are Unknown
Under the Companies Act, we are not required to send a notice to a shareholder if notices to such shareholder fail to arrive for a continuous
period of five or more years at the registered address of such a shareholder in the register of our shareholders or at the address otherwise notified tous.
In addition, we may sell or otherwise dispose of the shares held by a shareholder whose location is unknown. Generally, if•

notices to a shareholder fail to arrive for a continuous period of five or more years at the shareholder’s registered address in theregister of our shareholders or at the address otherwise notified to us, and•the shareholder fails to receive distribution of Surplus on the shares for a continuous period of five or more years at the address
registered in the register of our shareholders or at the address otherwise notified to us;

then we may sell or otherwise dispose of the shareholder’s shares at the market price after giving at least three months’ prior public andindividual notices, and hold or deposit the proceeds of such sale or disposal for the shareholder.

Reporting of Substantial Shareholdings
The Financial Instruments and Exchange Law of Japan and its related regulations require any person who has become beneficially, solely
or jointly, a holder of more than 5% of total issued shares of our common stock, to file with the director of a relevant local finance bureau of the
Ministry of Finance within five business days a report concerning such shareholdings. With certain exceptions, a similar report must also be filed in
respect of any subsequent change of 1% or more in any such holdings or any change in material matters set out in reports previously filed. For thispurpose, shares of our common stock issuable to such a person upon exchange of exchangeable securities, conversion of convertible securities or
exercise of warrants or stock acquisition rights (including those incorporated in bonds with stock acquisition rights) are taken into account indetermining both the number of our shares held by the holder and our total issued shares.

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C. Material Contracts
Acquisition of Nimbus Lakshmi, Inc.
On December 13, 2022, we entered into a share purchase agreement with Nimbus Therapeutics, LLC (“Nimbus”) to acquire all of thecapital stock of Nimbus Lakshmi, Inc. (“Lakshmi”), a wholly owned subsidiary of Nimbus, that owns or controls the intellectual property rights andother associated assets related to the allosteric TYK2 inhibitor known internally at Nimbus as “NDI-034858”. Under the terms of the agreement, we
paid Nimbus USD 4.0 billion upfront following the closing of the transaction, and will pay two milestone payments of USD 1.0 billion each uponachieving annual net sales of USD 4.0 billion and USD 5.0 billion of products developed from the “TAK-279” program, formally known as“NDI-034858” at Nimbus. The transaction closed on February 8, 2023. In addition, in connection with the transaction, we have agreed to assume
Nimbus’s obligations under a January 2022 settlement agreement with Bristol-Myers Squibb and its Celgene Corporation subsidiary (collectively,“BMS”) to make certain payments to BMS following the achievement of development, regulatory, and sales-based milestones for products developed
from the TAK-279 program.
See “Item 5.A. Operating Results—Factors Affecting Our Results of Operations “Acquisitions””.

Licensing and Collaboration Agreements
In the ordinary course of our business, we enter into agreements for licensing or collaboration in the development and commercialization of
products. Our business does not materially depend on any one of these agreements. Instead, they form a portion of our overall strategy to leverage amix of internal and external resources to develop and commercialize new products. Certain of the agreements which have led to successfulcommercialization to date are summarized in “Item 4. Information on the Company—B. Business Overview—Licensing and Collaboration.” Our
Licensing and Collaboration Agreement with Seagen Inc., now a wholly owned subsidiary of Pfizer Inc. (“Pfizer”), is filed as an exhibit hereto toprovide investors with an example of one such agreement. We believe this agreement is representative of our licensing and collaboration agreements
for marketed products in that it provides for the payment of development and commercial milestone payments and sales-based royalties and sets forth
the parties’ responsibilities relating to the terms of co-development, co-manufacturing and co-marketing efforts, as well as providing for certain
geographic limitations and limitations on term for the relevant licensing and collaboration efforts. The specific terms of each of our licensing or
collaboration agreements are negotiated individually. Agreements for compounds still in development may have additional terms governing, forexample, equity investments or other financial and non-financial matters.

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D. Exchange Controls
The Foreign Exchange and Foreign Trade Act of Japan (Gaikoku Kawase oyobi Gaikoku Boueki Hou) (the “FEFTA”) and related cabinet
orders and ministerial ordinances, which we refer to collectively as the Foreign Exchange Regulations, govern certain aspects relating to theacquisition and holding of shares by “exchange non-residents” and by “foreign investors” (as these terms are defined below). It also applies in somecases to the acquisition and holding of ADSs representing shares of our common stock acquired and held by exchange non-residents and by foreign
investors. In general, the Foreign Exchange Regulations currently in effect do not affect transactions between exchange non-residents to purchase or
sell shares or ADSs outside Japan using currencies other than Japanese yen.
Exchange residents are defined in the Foreign Exchange Regulations as:(i)

individuals who reside within Japan; or(ii)

corporations whose principal offices are located within Japan.

Exchange non-residents are defined in the Foreign Exchange Regulations as:(i)

individuals who do not reside in Japan; or(ii)

corporations whose principal offices are located outside Japan.

Generally, branches and other offices of non-resident corporations located within Japan are regarded as exchange residents. Conversely,branches and other offices of Japanese corporations located outside Japan are regarded as exchange non-residents.
Foreign investors are defined in the Foreign Exchange Regulations as:(i)

individuals who do not reside in Japan;(ii)

corporations or other entities organized under the laws of foreign countries or whose principal offices are located outside Japan(excluding partnerships falling within (iv));(iii)

corporations of which 50% or more of the total voting rights are held, directly or indirectly, by individuals and/or corporations
falling within (i) and/or (ii) above;(iv)

general partnerships or limited partnerships under Japanese law or any similar partnerships under the laws of foreign countries,
where either: (A) 50% or more of the capital contributions to those entities are made by individuals who do not reside in Japan or
certain other foreign investors or (B) a majority of the general partners of such entities are individuals who do not reside in Japanor certain other foreign investors; or(v)

corporations or other entities of which a majority of either (A) directors or other persons equivalent thereto or (B) directors orother persons equivalent thereto having the power of representation are individuals who do not reside in Japan.

Acquisition of Shares
Acquisition by an exchange non-resident of shares of a Japanese corporation from an exchange resident requires post facto reporting by theexchange resident to the Minister of Finance of Japan through the Bank of Japan. No such reporting requirement is imposed, however, if:(i)the aggregate purchase price of the relevant shares is JPY 100 million or less;(ii)

the acquisition is affected through any bank, financial instruments business operator or other entity prescribed by the Foreign
Exchange Regulations acting as an agent or intermediary; or(iii)

the acquisition constitutes an “inward direct investment” described below.

Inward Direct Investment in Shares of Listed Corporations
Inward Direct Investment
If a foreign investor acquires shares or voting rights of a Japanese corporation that is listed on a Japanese stock exchange, such as the sharesof our common stock and ADSs, or that is traded on an over-the-counter market in Japan and, as a result of the acquisition, the foreign investor, in
combination with any existing holdings and holdings of its closely-related persons (as defined in the Foreign Exchange Regulations), directly or
indirectly holds 1% or more of (i) the total issued shares or (ii) the total voting rights of the relevant corporation (shares and voting rights of therelevant corporation to be acquired are referred to as the “Inward Direct Investment Shares”), such an acquisition constitutes an “inward direct
investment” under the FEFTA.

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Prior Notification
Where a foreign investor intends to acquire the Inward Direct Investment Shares, and any of the business conducted by the investee
Japanese corporation falls within any business sectors designated under the Foreign Exchange Regulations (the “Designated Business Sectors”,
Shitei-Gyoshu) (which is the case for Takeda), in principle, a notification of the acquisition must be made in advance to the Minister of Finance andany other competent Ministers having jurisdiction over that Japanese corporation (including the MHLW).
If such a notification is made, the proposed acquisition cannot be consummated until 30 days have passed from the date thereof (this period
is referred to as the “Screening Period”); provided, however, that the Screening Period will be shortened unless any of the relevant Ministers finds it
necessary to check whether the proposed acquisition should be restricted from the viewpoint of national security or certain other factors, and may be
shortened to 5 business days, if the proposed acquisition is determined not to raise such concerns. If the relevant Ministers find it necessary to check
whether the proposed acquisition should be restricted, the Ministers may extend the Screening Period for up to five months; and the Ministers may
eventually recommend any modifications to, or abandonment of, the proposed acquisition if necessary from the viewpoint of national security or
certain other factors. If the foreign investor does not accept any of the recommendations, the relevant Ministers may order that the proposed
acquisition be modified or abandoned.
Foreign investors acquiring the Inward Direct Investment Shares by way of a stock split are not subject to these notification requirements.
In addition, in the event a foreign investor, in combination with any holdings of its closely-related persons, directly or indirectly holds 1%
or more of the total voting rights of a Japanese listed corporation engaging in the Designated Business Sectors, certain other activities of such aforeign investor such as (i) voting for appointment of his/herself or a person related thereto (as defined in the Foreign Exchange Regulations) as adirector or corporate auditor of such corporation and (ii) proposal and voting for transfer or abolishment of business activities related to the
Designated Business Sectors of such a corporation also constitute “inward direct investments” and, as a result, are subject to the prior notification
requirements under the FEFTA.

Exemption from Prior Notification
Irrespective of the foregoing, where any of the business conducted by the investee Japanese corporation falls within certain DesignatedBusiness Sectors specified in the Foreign Exchange Regulations (the “Core Sectors”, Core Gyoshu) (we are currently conducting business fallingwithin the Core Sectors), the foreign investor (including (a) the foreign financial institutions specified in the Foreign Exchange Regulations and (b)sovereign wealth funds or public pension funds which have been accredited by the Japanese government and excluding the foreign financial
institutions specified in the Foreign Exchange Regulations), who (i) acquires less than 10% of the Inward Direct Investment Shares (comprised of theaggregate amount of any existing holdings and holdings of its closely-related persons) of such a Japanese corporation, and (ii) complies with thefollowing conditions is not required to make a prior notification upon his/her acquisition of the Inward Direct Investment Shares since an exemption
therefrom is applicable, as long as;(a)

the foreign investor and its related persons (as defined in the Foreign Exchange Regulations) will not become board members ofsuch corporation or its certain related corporations;(b)the foreign investor will not propose transfer or abolishment of the business activities related to the Designated Business Sectors
to or at a general meeting of shareholders;(c)the foreign investor will not access non-public information about the technology of such a corporation or its certain related
corporations in relation to business activities related to Designated Business Sectors;(d)the foreign investor will not attend the meetings of the board of directors or executive committees of corporation or its certain
related corporations that make important decisions in connection with business activities related to the Core Sectors; and(e)the foreign investor will not make any proposals, in a written form, to the board of directors or executive committees that makeimportant decisions or their members of such corporation or its certain related corporations requesting that they respond and/or
take any action in connection with business activities related to the Core Sectors by a certain deadline.

Further, foreign financial institutions specified in the Foreign Exchange Regulations who comply with conditions (a), (b) and (c) above are
exempted from prior notification requirements.
This exemption is not applicable to certain types of foreign investors (for example, a foreign investor with a certain record of sanctions due
to violation of the Foreign Exchange Regulations, or state-owned enterprises except those who are accredited by the Minister of Finance), and suchforeign investors must file the prior notification set forth above.

Post Transaction Report
A foreign investor who has made a prior notification, as mentioned above must file a post transaction report (the “Post Transaction
Report”) with the Minister of Finance and any other competent Ministers having jurisdiction over that Japanese corporation within 45 days after his/hers acquisition of the Inward Direct Investment Shares.
A foreign investor who has acquired the Inward Direct Investment Shares in reliance on an exemption from prior notification, must, inprinciple, file a Post Transaction Report within 45 days after such acquisition, if the ratio of the total number of shares or voting rights held directly
or indirectly by the foreign investor in combination with any existing holdings and holdings of its closely related persons after the acquisition to thenumber of (i) the total issued shares or (ii) the total voting rights of the relevant corporation reaches:(i)

1% or more but less than 3% for the first time;132

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3% or more but less than 10% for the first time; and(iii)

10% or more for each acquisition.

Provided, however, that foreign financial institutions specified in the Foreign Exchange Regulations are only required to file a Post
Transaction Report for (iii) above.
Foreign investors acquiring the Inward Direct Investment Shares by way of a stock split are not subject to the Post Transaction Reportrequirements.

Dividends and Proceeds of Sale
Under the Foreign Exchange Regulations, dividends paid on, and the proceeds from sales in Japan of, shares held by exchange nonresidents may generally be converted into any foreign currency and repatriated abroad.

E. Taxation
Material U.S. Federal Income Tax Consequences
This section describes the material U.S. federal income tax consequences of owning ADSs. It applies to you only if you are a U.S. holder(as defined below) and you hold your ADSs as capital assets for tax purposes. This discussion addresses only U.S. federal income taxation and does
not discuss all of the tax consequences that may be relevant to you in light of your individual circumstances, including foreign, state or local tax
consequences, estate and gift tax consequences, and tax consequences arising under the Medicare contribution tax on net investment income or thealternative minimum tax. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:•a dealer in securities,•a trader in securities that elects to use a mark-to-market method of accounting for securities holdings,•

a tax-exempt organization,•a life insurance company,•a person that actually or constructively owns 10% or more of the combined voting power of our voting stock or of the total value of
our stock,•a person that holds ADSs as part of a straddle or a hedging or conversion transaction,•a person that purchases or sells ADSs as part of a wash sale for tax purposes, or•a person whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations,published rulings and court decisions, all as currently in effect, as well as on the Convention Between the Government of the United States ofAmerica and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income(the “Treaty”). These laws are subject to change, possibly on a retroactive basis. In addition, this section is based in part upon the assumption thateach obligation in the deposit agreement will be performed in accordance with its terms.
If an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds the ADSs, the U.S. federal income tax
treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding the
ADSs should consult its tax advisor with regard to the U.S. federal income tax treatment of an investment in the ADSs.
You are a U.S. holder if you are a beneficial owner of ADSs and you are for U.S. federal income tax purposes:•

a citizen or resident of the U.S.,•

a domestic corporation,•an estate whose income is subject to U.S. federal income tax regardless of its source, or•a trust if a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized tocontrol all substantial decisions of the trust.

You should consult your own tax advisor regarding the U.S. federal, state and local tax consequences of owning and disposing of ADSs in
your particular circumstances.
In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, if you hold ADRs evidencing ADSs, youwill be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be
subject to U.S. federal income tax.
The tax treatment of your ADSs will depend in part on whether or not we are classified as a passive foreign investment company, or PFIC,
for U.S. federal income tax purposes. Except as discussed below under “PFIC Rules”, this discussion assumes that we are not classified as a PFIC for
U.S. federal income tax purposes.

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Distributions
Under U.S. federal income tax laws, if you are a U.S. holder, the gross amount of any distribution we pay out of our current or accumulated
earnings and profits (as determined for U.S. federal income tax purposes), other than certain pro-rata distributions of our shares, will be treated as adividend that is subject to U.S. federal income taxation. If you are a non-corporate U.S. holder, dividends that constitute qualified dividend income
will be taxable to you at the preferential rates applicable to long-term capital gains provided that you hold the ADSs for more than 60 days during the
121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements. Dividends that we distribute with respect
to the ADSs will be qualified dividend income if the ADSs are readily tradable on an established securities market in the U.S. in the year that we
distribute the dividend. Our ADSs are listed on the NYSE which is considered an established securities market in the U.S. We therefore expect that
dividends that we distribute on our ADSs will be qualified dividend income, provided that you satisfy the aforementioned holding periodrequirements.
You must include any Japanese tax withheld from the dividend payment in this gross amount even though you do not in fact receive it. The
dividend is taxable to you when the depositary receives the dividend, actually or constructively. The dividend will not be eligible for the dividendsreceived deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. The amount of the dividend
distribution that you must include in income will be the U.S. dollar value of the yen payments made, determined at the spot yen/U.S. dollar rate on
the date the dividend is distributed, even if the depositary (a) converts the yen into U.S. dollars at a different rate or (b) does not convert the dividend
payment into U.S. dollars. If the depositary converts the yen into U.S. dollars at a different rate, then you will recognize U.S. source ordinary income(that would not be treated as qualified dividends) or loss equal to the difference between the U.S. dollars that you receive and the U.S. dollar amountthat you included as dividend income. If the depositary does not convert the dividend payment into U.S. dollars, then you will recognize U.S. source
ordinary income (that would not be treated as qualified dividend income) or loss upon a conversion of the yen into U.S. dollars equal to the difference
between the U.S. dollars that you receive in the conversion and the U.S. dollar amount that you included as dividend income.
Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treatedas a non-taxable return of capital to the extent of your basis in the ADSs and thereafter as capital gain. However, we do not expect to calculateearnings and profits in accordance with U.S. federal income tax principles. Accordingly, you should expect to generally treat distributions we makeas dividends.
Subject to certain limitations, the Japanese tax withheld in accordance with the Treaty and paid over to Japan will be creditable ordeductible against your U.S. federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends
that are subject to the preferential tax rates. To the extent a reduction or refund of the tax withheld is available to you under Japanese law or under theTreaty, the amount of tax withheld that could have been reduced or that is refundable will not be eligible for credit against your U.S. federal income
tax liability.
Dividends will generally be income from sources outside the U.S. and will generally be “passive” income for purposes of computing theforeign tax credit allowable to you. However, if (a) we are 50% or more owned, by vote or value, by U.S. persons and (b) at least 10% of ourearnings and profits are attributable to sources within the U.S., then for foreign tax credit purposes, a portion of our dividends would be treated as
derived from sources within the U.S. With respect to any dividend paid for any taxable year, the U.S. source ratio of our dividends for foreign tax
credit purposes would be equal to the portion of our earnings and profits from sources within the U.S. for such taxable year, divided by the total
amount of our earnings and profits for such taxable year.
Distributions of additional shares to you with respect to ADSs that are made as part of a pro rata distribution to all of our shareholders
generally will not be subject to U.S. federal income tax.

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Sales or Dispositions
If you are a U.S. holder and you sell or otherwise dispose of your ADSs, you will recognize a capital gain or loss for U.S. federal income
tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, inyour ADSs. Capital gain of a non-corporate U.S. holder is generally taxed at preferential rates where the property is held for more than one year. The
gain or loss will generally be income or loss from sources within the U.S. for foreign tax credit limitation purposes.

PFIC Rules
We believe that ADSs should not currently be treated as stock of a PFIC for U.S. federal income tax purposes and we do not expect tobecome a PFIC in the foreseeable future. However, this conclusion is a factual determination that is made annually and thus may be subject tochange. It is therefore possible that we could become a PFIC in a future taxable year.
In general, if you are a U.S. holder, we will be a PFIC with respect to you if for any taxable year in which you held our ADSs:•

at least 75% of our gross income for the taxable year is passive income or•at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are
held for the production of passive income.

“Passive income” generally includes dividends, interest, gains from the sale or exchange of investment property, rents and royalties (otherthan certain rents and royalties derived in the active conduct of a trade or business) and certain other specified categories of income. If a foreign
corporation owns at least 25% by value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owningits proportionate share of the assets of the other corporation, and as receiving directly its proportionate share of the other corporation’s income.
If we are treated as a PFIC, and you are a U.S. holder that did not make a mark-to-market election, as described below, you will generally
be subject to special rules with respect to:•

any gain you realize on the sale or other disposition of your ADSs and•any excess distribution that we make to you (generally, any distributions to you during a single taxable year, other than the taxable
year in which your holding period in the ADSs begins, that are greater than 125% of the average annual distributions received by
you in respect of the ADSs during the three preceding taxable years or, if shorter, your holding period for the ADSs that preceded
the taxable year in which you receive the distribution).

Under these rules:•

the gain or excess distribution will be allocated ratably over your holding period for the ADSs,•

the amount allocated to the taxable year in which you realized the gain or excess distribution or to prior years before the first year inwhich we were a PFIC with respect to you will be taxed as ordinary income,•the amount allocated to each other prior year will be taxed at the highest tax rate in effect for that year, and•the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.
If we are a PFIC in a taxable year and our ADSs are treated as “marketable stock” in such year, you may make a mark-to-market election
with respect to your ADSs. If you make this election, you will not be subject to the PFIC rules described above. Instead, in general, you will include
as ordinary income each year the excess, if any, of the fair market value of your ADSs at the end of the taxable year over your adjusted basis in your
ADSs. You will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of your ADSs over their fair market
value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market
election). Your basis in the ADSs will be adjusted to reflect any such income or loss amounts. Any gain that you recognize on the sale or otherdisposition of your ADSs would be ordinary income and any loss would be an ordinary loss to the extent of the net amount of previously included
income as a result of the mark-to-market election and, thereafter, a capital loss.
Your ADSs will generally be treated as stock in a PFIC if we were a PFIC at any time during your holding period in your ADSs, even if weare not currently a PFIC.
In addition, notwithstanding any election you make with regard to the ADSs, dividends that you receive from us will not constitutequalified dividend income to you if we are a PFIC (or are treated as a PFIC with respect to you) either in the taxable year of the distribution or thepreceding taxable year. Dividends that you receive that do not constitute qualified dividend income are not eligible for taxation at the preferential
rates applicable to qualified dividend income. Instead, you must include the gross amount of any such dividend paid by us out of our accumulated
earnings and profits (as determined for U.S. federal income tax purposes) in your gross income, and it will be subject to tax at rates applicable toordinary income.
If you own ADSs during any year that we are a PFIC with respect to you, you may be required to file Internal Revenue Service Form 8621.
However, as mentioned above, we believe that ADSs should not currently be treated as stock of a PFIC for U.S. federal income tax purposes and we
do not expect to become a PFIC in the foreseeable future.

Japanese Taxation
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The following is a general summary of the principal Japanese tax consequences (limited to national tax) to owners of shares of our common
stock, in the form of shares or ADSs, who are non-resident individuals of Japan or who are non-Japanese corporations without a permanentestablishment in Japan, collectively referred to in this section as non-resident holders. The statements below regarding Japanese tax laws are based on
the laws and treaties in force and as interpreted by the Japanese tax authorities as of the date of this annual report, and are subject to changes inapplicable Japanese laws, tax treaties, conventions or agreements, or in the interpretation of them, occurring after that date. This summary is not
exhaustive of all possible tax considerations that may apply to a particular investor, and potential investors are advised to satisfy themselves as to theoverall tax consequences of the acquisition, ownership and disposition of shares of our common stock, including, specifically, the tax consequences
under Japanese law, under the laws of the jurisdiction of which they are resident and under any tax treaty, convention or agreement between Japanand their country of residence, by consulting their own tax advisors.
For the purpose of Japanese tax law and the tax treaty between the U.S. and Japan, a U.S. holder of ADSs will generally be treated as theowner of the shares underlying the ADSs evidenced by the ADRs.
Generally, a non-resident holder of shares or ADSs will be subject to Japanese income tax collected by way of withholding on dividends(meaning in this section distributions made from our retained earnings for the Companies Act purposes) we pay with respect to shares of our common
stock and such tax will be withheld prior to payment of dividends. Stock splits generally are not subject to Japanese income or corporation taxes.
In the absence of any applicable tax treaty, convention or agreement reducing the maximum rate of Japanese withholding tax or allowing
exemption from Japanese withholding tax, the rate of the Japanese withholding tax applicable to dividends paid by Japanese corporations on theirshares of stock to non-resident holders is generally 20.42% (or 20% for dividends due and payable on or after January 1, 2038) under Japanese tax
law. However, with respect to dividends paid on listed shares issued by a Japanese corporation (such as shares or ADSs) to non-resident holders,
other than any individual shareholder who holds 3% or more of the total number of shares issued by the relevant Japanese corporation (to whom theaforementioned withholding tax rate will still apply), the aforementioned withholding tax rate is reduced to (i) 15.315% for dividends due andpayable up to and including December 31, 2037 and (ii) 15% for dividends due and payable on or after January 1, 2038. The withholding tax rates
described above include the special reconstruction surtax (2.1% multiplied by the original applicable withholding tax rate, i.e., 15% or 20%, as thecase may be), which is imposed during the period from and including January 1, 2013 to and including December 31, 2037, to fund thereconstruction from the Great East Japan Earthquake.
If distributions were made from our capital surplus, rather than retained earnings, for the Companies Act purposes, the portion of such
distributions in excess of the amount corresponding to a pro rata portion of return of capital as determined under Japanese tax laws would be deemed
dividends for Japanese tax purposes, while the rest would be treated as return of capital for Japanese tax purposes. The deemed dividend portion, if
any, would generally be subject to the same tax treatment as dividends as described above, and the return of capital portion would generally betreated as proceeds derived from the sale of shares and subject to the same tax treatment as sale of shares of our common stock as described below.
Distributions made in consideration of repurchase by us of our own shares or in connection with certain reorganization transactions will be treatedsubstantially in the same manner.
Japan has income tax treaties whereby the withholding tax rate (including the special reconstruction surtax) may be reduced, generally to15%, for portfolio investors, with, among others, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, New Zealand, Norway andSingapore, while the income tax treaties with, among others, Australia, Belgium, France, Hong Kong, the Netherlands, Portugal, Sweden,
Switzerland, the United Arab Emirates, the U.K. and the U.S. generally reduce the withholding tax rate to 10% for portfolio investors and the income
tax treaty, among others, with Spain generally reduce the withholding tax rate to 5% for portfolio investors. In addition, under the income tax treaty
between Japan and the U.S., dividends paid to pension funds which are qualified U.S. residents eligible to enjoy treaty benefits are exempt fromJapanese income taxation by way of withholding or otherwise unless the dividends are derived from the carrying on of a business, directly or
indirectly, by the pension funds. Similar treatment is applicable to dividends paid to pension funds under the income tax treaties between Japan and,among others, Belgium, Denmark, the Netherlands, Spain, Switzerland, and the U.K. Under Japanese tax law, any reduced maximum rate applicable
under a tax treaty shall be available when such maximum rate is below the rate otherwise applicable under the Japanese tax law referred to in thesecond preceding paragraph with respect to the dividends to be paid by us on our shares or ADSs.
Non-resident holders of our shares who are entitled under an applicable tax treaty to a reduced rate of, or exemption from, Japanese
withholding tax on any dividends on our shares, in general, are required to submit, through the withholding agent to the relevant tax authority prior to
the payment of dividends, an Application Form for Income Tax Convention regarding Relief from Japanese Income Tax and Special Income Tax for
Reconstruction on Dividends together with any required forms and documents. A standing proxy for a non-resident holder of shares of our common
stock or ADSs may be used in order to submit the application on a non-resident holder’s behalf. In this regard, a certain simplified special filingprocedure is available for non-resident holders to claim treaty benefits of reduction of or exemption from Japanese withholding tax, by submitting aSpecial Application Form for Income Tax Convention regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on
Dividends of Listed Stock, together with any required forms or documents. If the depositary needs investigation to identify whether any non-resident
holders of ADSs are entitled to claim treaty benefits of exemption from or reduction of Japanese withholding tax, the depositary or its agent submits
an application form before payment of dividends so that the withholding cannot be made in connection with such holders for eight months after therecord date concerning such payment of dividends. If it is proved that such holders are entitled to claim treaty benefits of exemption from or
reduction of Japanese withholding tax within the foregoing eight-month period, the depositary or its agent submits another application form together
with certain other documents so that such holder can be subject to exemption from or reduction of Japanese withholding tax. To claim this reduced
rate or exemption, such a non-resident holder of ADSs will be required to file a proof of taxpayer status, residence and beneficial ownership, asapplicable, and to provide other information or documents as may be required by the depositary. Non-resident holders who are entitled, under any
applicable tax treaty, to a reduced rate of Japanese withholding tax below the rate otherwise applicable under Japanese tax law, or exemption
therefrom, as the case may be, but fail to submit the required application in advance may nevertheless be entitled to claim a refund from the relevantJapanese tax authority of withholding taxes withheld in excess of the rate under an applicable tax treaty (if such non-resident holders are entitled to a
reduced treaty rate under the applicable tax treaty) or the full amount of tax withheld (if such non-resident holders are entitled to an exemption under136

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the applicable tax treaty), as the case may be, by complying with a certain subsequent filing procedure. We do not assume any responsibility toensure withholding at the reduced treaty rate, or exemption therefrom, for shareholders who would be eligible under an applicable tax treaty but who
do not follow the required procedures as stated above.
Gains derived from the sale of our shares or ADSs outside Japan by a non-resident holder that is a portfolio investor will generally not be
subject to Japanese income or corporation taxes. Japanese inheritance and gift taxes, at progressive rates, may be payable by an individual who has
acquired from another individual our shares or ADSs as a legatee, heir or done, even if none of the acquiring individual, the decedent or the donor isa Japanese resident.

F. Dividends and Paying Agents
Not applicable.

G. Statement by Experts
Not applicable.

H. Documents on Display
We have filed this annual report with the SEC under the Exchange Act with respect to the ADSs. We are subject to the information
requirements of the Exchange Act and, in accordance therewith, we are required to file annual reports on Form 20-F and furnish other reports andinformation on Form 6-K with the SEC.
A copy of our filings may be reviewed without charge at the SEC’s web site at www.sec.gov that contains reports and other information
regarding registrants that file electronically with the SEC. Such filings can be also viewed on our web site at https://www.takeda.com/investors/
reports/sec-filings/. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxystatements to shareholders.

I. Subsidiary Information
Not applicable.

J. Annual Report to Security Holders
We intend to submit any annual report to security holders required to be furnished on Form 6-K in electronic format in accordance with the
EDGAR Filer Manual.

Item 11. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks primarily from changes in foreign currency exchange rates, interest rate changes and changes in the valueof our investment securities. The information required under this Item 11 is set forth in Note 27 to our audited consolidated financial statements
included in this annual report.

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Item 12. Description of Securities Other Than Equity Securities
A. Debt Securities
Not applicable.

B. Warrants and Rights
Not applicable.

C. Other Securities
Not applicable.

D. American Depositary Shares
Each ADS represents one-half of one share of our common stock deposited with our depositary’s (The Bank of New York Mellon)
custodian (Sumitomo Mitsui Banking Corporation) in Japan. Each ADS will also represent any other securities, cash or other property which may beheld by the depositary from time to time. The deposited shares of our common stock, together with any other securities, cash or other property heldby the depositary are referred to as the “deposited securities.”

Fees and Expenses
Persons depositing or withdrawing shares of our common stock or ADS
holders must pay:For:

5.00 USD (or less) per 100 ADSs (or portion of 100 ADSs)

Issue of ADSs, including issues resulting from a distribution of sharesof our common stock or rights or other property
Cancellation of ADSs for the purpose of withdrawal, including if thedeposit agreement terminates
Any cash distribution to ADS holders
Distribution of securities distributed to holders of deposited securities(including rights) that are distributed by the depositary to ADS holders

0.05 USD (or less) per ADS
A fee equivalent to the fee that would be payable if securities
distributed to ADS holders had been shares of our common stock andthe shares of our common stock had been deposited for issuance ofADSs
0.05 USD (or less) per ADS per calendar year
Registration or transfer fees

Depositary services
Transfer and registration of shares of our common stock on our shareregister to or from the name of the depositary or its agent when persons
deposit or withdraw shares of our common stock
Cable and facsimile transmissions (when expressly provided in thedeposit agreement)
Converting foreign currency to U.S. dollars
As necessary

Expenses of the depositary

Taxes and other governmental charges the depositary or the custodian
have to pay on any ADSs or shares of our common stock underlying
ADSs, such as stock transfer taxes, stamp duty or withholding taxes
Any charges incurred by the depositary or its agents for servicing thedeposited securities

As necessary

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares of our common stock orsurrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions toinvestors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may
collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry
system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable (or by
selling a portion of securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may generally refuse
to provide fee-attracting services until its fees for those services are paid.
In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service
providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

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The depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not
as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it willretain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion
made under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account.
The depositary makes no representation that the exchange rate used or obtained in any currency conversion under the deposit agreement will be themost favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to ADS
holders, subject to the depositary’s obligations under the deposit agreement. The methodology used to determine exchange rates used in currency
conversions is available upon request.

Payment of Taxes
ADS holders will be responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities
represented by any of their ADSs. The depositary may refuse to register any transfer of ADSs or allow an ADS holder to withdraw the deposited
securities represented by his or her ADSs until those taxes or other charges are paid. It may apply payments owed to such ADS holder or sell
deposited securities represented by such ADS holder’s ADSs to pay any taxes owed and such ADS holder will remain liable for any deficiency. If thedepositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, orsend to ADS holders any property, remaining after it has paid the taxes.

Direct and Indirect Payments by the Depositary
The depositary has agreed to make revenue sharing payments to us based on a fixed portion of the net issuance, net cancellation and net
depositary servicing fees received by it under the deposit agreement, subject to a minimum annual payment based on the total of such fees received
by the depositary. In the fiscal year ended March 31, 2024, we received USD 1.8 million of such revenue sharing payments.
The depositary has also agreed to waive fees and expenses for services provided to us, to ADS holders or to their respective brokers by thedepositary in connection with the establishment, administration and ongoing servicing of the ADS program. Furthermore, the depositary has agreed
to waive fees for certain value-added services, including training for our staff, investor relations advisory services and access to the depositary’s
analytics and reporting platform. Accordingly, in the fiscal year ended March 31, 2024, the depositary waived approximately USD 0.1 million of feesand expenses.

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Part II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use ofProceeds
Not applicable.

Item 15. Controls and Procedures
Disclosure Controls and Procedures
We have carried out an evaluation under the supervision and with the participation of our management, including our CEO and CFO, of theeffectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the ExchangeAct, as of March 31, 2024. Disclosure controls and procedures require that information to be disclosed in the reports we file or submit under the
Exchange Act is recorded, processed, summarized and reported as and when required, within the time periods specified in the applicable rules andforms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely
decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures,
including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure
controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our CEO and CFO
have concluded that, as of March 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f)and 15d-15(f) under the Exchange Act. Takeda’s internal control over financial reporting is designed to provide reasonable assurance to management
regarding the reliability of financial reporting and the preparation and fair presentation of its consolidated financial statements in accordance with
IFRS. Management assessed the effectiveness of Takeda’s internal control over financial reporting as of March 31, 2024 based on the framework inInternal Control - Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on the assessment, management concluded that, Takeda’s internal control over financial reporting is effective as of March 31, 2024. The
effectiveness of internal control over financial reporting as of March 31, 2024 has been audited by KPMG AZSA LLC, our independent registeredpublic accounting firm. Its audit report on the effectiveness of Takeda’s internal control over financial reporting is included in the audited
consolidated financial statements.

Attestation Report of the Registered Public Accounting Firm
See “—Report of Independent Registered Public Accounting Firm” included in the audited consolidated financial statements.

Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the ExchangeAct) that occurred during the fiscal year ended March 31, 2024 that have materially affected, or were reasonably likely to materially affect, ourinternal control over financial reporting.

Item 16A. Audit Committee Financial Expert
Our board of directors has determined that Mr. Koji Hatsukawa, an external director and member of our Audit and Supervisory Committee,
is an “audit committee financial expert” as defined in Item 16A of Form 20-F and is “independent” as defined in the listing standards of the New
York Stock Exchange as applicable to Takeda and as further set forth in Rule 10A-3 under the Exchange Act.

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Item 16B. Code of Ethics
We have adopted the Takeda Global Code of Conduct, which applies to all of our employees, including our principal executive officer,
principal financial officer, principal accounting officer and persons performing similar functions. The Takeda Global Code of Conduct is posted on
our corporate website at https://www.takeda.com/who-we-are/global-ethics-compliance/. No waivers to the Global Code of Conduct were granted toour principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions in the fiscal year
ended March 31, 2024.

Item 16C. Principal Accountant Fees and Services
Audit and Non-Audit Fees
The following table sets forth the fees billed to us by our independent certified public accountant, KPMG AZSA LLC (including its Japaneseand non-Japanese affiliates), in the fiscal years ended March 31, 2023 and 2024:
For the fiscal year ended
March 31,
2023

2024
(billions of yen)

Audit fees

(1)

Audit-related fees¥
(2)

Other fees (3)Total fees

¥

3.64

¥

3.71

0.05

0.05

0.02

0.20

3.71

¥

3.97

____________
Notes:(1)(2)(3)

Audit fees were related to the audit of our consolidated financial statements and other services provided in connection with statutory and regulatory filings orengagements.
Audit-related fees include fees related to services for consent letter regarding the issuance of Form S-8.
Other fees include services related to non-financial information and do not include any tax fees.

Pre-Approval Policies and Procedures
Pursuant to Rule 2-01(c)(7)(i) of Regulation S-X, we have adopted policies and procedures under which all services (including permissible
non-audit services) for which we or our subsidiaries engage our independent certified public accountant, KPMG AZSA LLC, and its affiliates must
be approved by our Audit and Supervisory Committee prior to entering into an engagement.
All audit services are subject to the pre-approval by the Audit and Supervisory Committee in principle, regardless of monetary value. Audit
services include statutory or financial statement audits for us and our subsidiaries, services associated with the audit of internal control over financial
reporting and services associated with the review of our quarterly financial statements. On a yearly basis, our management, following a review by our
Chief Financial Officer, presents the proposed audit services to our Audit and Supervisory Committee for approval, and proposes audit fees on an
entity basis to the Audit and Supervisory Committee for its consent. Once such services and fees are approved or consented to, as applicable, any
additional audit services must be separately presented to and approved by our Audit and Supervisory Committee.
Permissible non-audit services, which are limited to certain services permissible under applicable regulation and our internal rules, are preapproved by the Audit and Supervisory Committee for individual services below JPY 25 million annually, subject to an aggregate annual limit of up
to JPY 250 million for all such services. These services are subject to review by our management for compliance with our internal policies. All nonaudit services exceeding the applicable monetary limits or which are not clearly within the scope of permitted non-audit services must be presented toand pre-approved by the Audit and Supervisory Committee. All services relating to tax or internal control are also subject to separate presentation toand pre-approval by the Audit and Supervisory Committee regardless of monetary value.

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Item 16D. Exemptions from the Listing Standards for Audit Committees
As of the date of this annual report, we do not rely on any of the exemptions contained in paragraph (b)(1)(iv), the general exemption
contained in paragraph (c)(3) or the last sentence of paragraph (a)(3) of Rule 10A-3 under the Exchange Act.

Item 16E. Purchases of Equity Securities by the Issuer and AffiliatedPurchasers
The following table sets forth purchases of our common stock by us and our affiliated purchasers during the fiscal year ended March 31,2024:

Total number ofshares purchased(1)

Average pricepaid per share (yen)Total number ofshares purchased
as part of publicly
announced plansor programs (2)Maximum
approximate valueof shares that
may yet bepurchased under
the plansor programs(billions of yen)

April 1 to April 30, 2023

279

4,445.45—

May 1 to May 31, 2023

520,688

4,506.28

520,000—

June 1 to June 30, 2023

635

4,485.25——

July 1 to July 31, 2023

293

4,394.85——

August 1 to August 31, 2023

391

4,383.64——

September 1 to September 30, 2023

306

4,631.78——

October 1 to October 31, 2023

646

4,449.50——

November 1 to November 30, 2023

463

4,197.29——

December 1 to December 31, 2023

550

4,117.48——

January 1 to January 31, 2024

487

4,330.91——

February 1 to February 29, 2024

246

4,383.72——

March 1 to March 31, 2024

530

4,389.72——

4,392.99

520,000

Total

525,514

¥

¥

¥

¥

—

—

___________
Notes:(1)(2)

Total number of shares purchased in the above table reflect purchases of shares in relation to stock-based incentive compensation plans and purchases of sharesconstituting less than one “unit” (100 shares).
A total of 5,514 shares were purchased other than through publicly announced plans or programs during the fiscal year ended March 31, 2024, due to ourpurchase of shares constituting less than one “unit” (100 shares) from holders of shares constituting less than one unit at the current market price of thoseshares.
Total number of shares purchased as part of publicly announced plans or programs in the above table reflect purchases of shares in May 2023 in relation to
stock-based incentive compensation plans.
On May 11, 2023, we announced that our board of directors resolved to continue the stock compensation plan which was introduced as a long-term incentive
plan for members of the board of directors in the fiscal year ended March 31, 2017, as well as to continue the stock grant system which was introduced in thefiscal year ended March 31, 2015 as a global long-term incentive plan for Company Group Management in Japan.

Item 16F. Change in Registrant’s Certifying Accountant
Not applicable.

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Item 16G. Corporate Governance
Our ADSs have been listed on the NYSE since 2018. NYSE-listed companies are required to comply with corporate governancestandards under Section 303A of the NYSE Listed Company Manual. However, as a foreign private issuer, we are permitted to follow home country
practices in lieu of certain provisions of Section 303A. Below, we provide a brief description of significant differences between the NYSE listing
standards applicable to U.S. domestic issuers and our corporate governance policies pursuant to 303A.11 of the NYSE Listed Company Manual.

Composition of the Board (303A.01)
Under the NYSE listing standards, U.S. domestic issuers are required to have a majority of directors meeting the independence tests set
forth in the NYSE listed company manual.
Takeda is a “company with audit and supervisory committee” as defined in the Companies Act. Companies with audit and supervisorycommittees are not required to have a majority of independent directors. Such companies must have a board of directors as well as an audit andsupervisory committee consisting of at least three of its directors. A majority of the members of the audit and supervisory committee must be“external directors” as defined under the Companies Act, which differs from, and may be considered to be less stringent than, the director
independence standards under the NYSE listed company manual in that the former constitute prescriptive requirements relating to service ascompany management. Additionally, under the regulations of the Tokyo Stock Exchange, we are required to have at least one director who is“independent” for the purposes of such regulations, which are more stringent than the requirements for “external directors” under the Companies Act,but also constitute certain prescriptive requirements relating to the director’s current or previous relationships with the company.
Our board of directors consists of 14 directors, of which 11 are external directors under the Companies Act. Our Audit and Supervisory
Committee is comprised of four of our directors, all of whom qualify as external directors under this standard. Each of our external directors also
qualifies as “independent” as described under “Director Independence (303A.02)” below, and each of the members of our Audit and Supervisory
Committee qualifies as “independent” for purposes of Rule 10A-3 under the Exchange Act.
Directors who are Audit and Supervisory Committee members are elected separately from our other directors. The term of office for a
director who is an Audit and Supervisory Committee member is two years, whereas the term of office for other directors is one year.

Director Independence (303A.02)
We deem a director as being an “independent director” when such director also meets independence requirements stipulated in theregulations of the Tokyo Stock Exchange, on which our common stock is listed, and independence requirements established internally. These
requirements differ in certain respects from the requirements under the NYSE listed company manual. Our internal independence standards
emphasize the satisfaction of certain skills- or experience-based criteria in addition to meeting applicable regulatory and statutory independence
standards.

Executive Sessions (303A.03)
The NYSE listed company manual requires that non-management directors of U.S. domestic issuers meet in regularly scheduled executive
sessions without management. Although not required under Japanese law or Tokyo Stock Exchange rule, our independent external directors holdregularly scheduled executive sessions without management.

Composition of Committees (303A.04, 05, 06 and 07)
The NYSE listed company manual requires that U.S. domestic issuers establish a nomination/corporate governance committee and acompensation committee, each of which much be composed entirely of independent directors. The NYSE listed company manual also requires that
all listed companies, including a foreign private issuer (as defined in the Exchange Act) such as us, establish an audit committee satisfying therequirements of Rule 10A-3 under the Exchange Act. Audit committees of U.S. domestic issuers are also subject to certain additional requirements
under Section 303A.07 of the NYSE listed company manual.
Although the Companies Act does not require companies with audit and supervisory committees to establish nomination committees orcompensation committees, we have voluntarily established such committees in order to ensure transparency. Our Nomination Committee consists offive directors (all of which are independent external directors for the purposes of Japanese law and the rules of the Tokyo Stock Exchange) plus one
director as an observer who is not an external director. Director candidates nominated by our Board of Directors based on the advice of our
Nomination Committee must be approved at our general meeting of shareholders. Unlike the nomination/corporate governance committees of U.S.
domestic issuers, our Nomination Committee is not also responsible for corporate governance policies.
Our Compensation Committee consists of four directors (all of which are independent external directors for the purposes of Japanese law
and the rules of the Tokyo Stock Exchange). The maximum total amount of compensation for our directors must be approved at our general meetingof shareholders, provided that the maximum total amounts for directors who are Audit and Supervisory Committee members and for other directors
must be separately approved. The individual amounts of compensation for our directors (other than Audit and Supervisory Committee members) isdetermined in accordance with the compensation standards determined by our board of directors or a resolution of our board of directors. The Boardof Directors delegates the decision on the amount of compensation for individual directors to the Compensation Committee. The individual amounts

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members.
Our Audit and Supervisory Committee consists of four directors (all of whom are independent external directors for the purposes ofJapanese law and the rules of the Tokyo Stock Exchange), and all of whom currently satisfy the independence requirements of Rule 10A-3 under the
Exchange Act. Our Audit and Supervisory Committee does not necessarily satisfy all of the additional audit committee requirements applicable to
NYSE-listed U.S. domestic companies under Section 303A.07, nor is it required to under the standards applicable to foreign private issuers under
Section 303A. U.S. domestic issuers listed on NYSE are also required to disclose the respective charters of their nomination/corporate governancecommittee, their compensation committee and their audit committee. Although Japanese law and the regulations of the Tokyo Stock Exchange do not
require us to disclose these charters, we voluntarily publish our Nomination Committee Charter, Compensation Committee Charter and Audit andSupervisory Committee Charter on our website in order to increase the transparency of our corporate governance.

Equity Compensation Plans (303A.08)
U.S. domestic issuers listed on NYSE are required to obtain the approval of shareholders for equity compensation plans and any materialchanges thereto, subject to certain limited exceptions.
Under Japanese law and the regulations of the Tokyo Stock Exchange, the adoption of an equity compensation plan, including for directors,
requires shareholder approval. Pursuant to the approval of our general meeting of shareholders, we grant certain stock-based compensation to thedirectors. Stock acquisition rights or shares of common stock may be granted by resolution of the board of directors, except that, if stock acquisitionrights or shares of common stock are to be granted on particularly favorable conditions, a special resolution of the general meeting of shareholders is
required. The passage of a special resolution of the general meeting of shareholders requires the approval of two-thirds or more of the voting rights
represented at a quorate general meeting of shareholders.

Corporate Governance Guidelines (303A.09)
U.S. domestic issuers listed on the NYSE must adopt and disclose corporate governance guidelines as set forth in the NYSE listed company
manual. Japanese law and the regulations of the Tokyo Stock Exchange require us to disclose our basic views on corporate governance. In
accordance with these requirements, we publish our Corporate Governance Report annually, which is posted on our website and furnished to the SEC
under cover of Form 6-K, although this may not necessarily cover all of the same items as contemplated by the NYSE listed company manual.

Code of Business Conduct and Ethics (303A.10)
U.S. domestic issuers listed on NYSE are required to adopt and disclose a code of business conduct and ethics for directors, officers andemployees, and promptly disclose any waivers of the code for directors or executive officers. Although not required to do so under the NYSE listedcompany manual, we have established a global code of business conduct and ethics, known as the Takeda Global Code of Conduct, which is posted
on our website. Although the Takeda Global Code of Conduct functions as a code of business conduct and ethics, it is not required to cover all of thesame areas as that of a U.S. domestic issuer under the NYSE listed company manual. Pursuant to the requirements of Form 20-F, waivers, if any, to
the Takeda Global Code of Conduct given to our directors or senior management are disclosed by us in our annual reports on Form 20-F. No such
waivers were granted in the fiscal year ended March 31, 2024.

Item 16H. Mine Safety Disclosure
Not applicable.

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

Item 16J. Insider Trading Policies
Takeda has adopted a Global Insider Trading Policy governing the purchase, sale, and other dispositions of securities by directors, senior
management, and employees that is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any
applicable listing standards. A copy of the policy is included as Exhibit 11.1.

Item 16K. Cybersecurity
Risk management and strategy
Cybersecurity Risk Management Framework
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Takeda maintains a cybersecurity controls framework designed to identify, protect from, detect, respond to and recover from cybersecurity
threats consistent with the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework.
Preventive control measures are deployed across Takeda’s application, cloud, end-user device, networking and manufacturing infrastructure.
Takeda’s Chief Information Security Officer (“CISO”) oversees our cybersecurity risk management framework, reporting to the Chief Data andTechnology Officer (“CDTO”). Our CISO has over 30 years of experience in information technology, including more than 10 years serving in a
CISO capacity at companies in various industries, including pharmaceuticals.
Experienced and trained cyber risk professionals in the Cybersecurity & Risk team (“TCR”) within Takeda’s global data, digital &technology function (“DD&T”), many of whom hold certifications from established cybersecurity organizations, are responsible for identifying andmanaging cybersecurity risks from various sources, including proactive control evaluations, reporting by Takeda personnel, third-party security
assessments, penetration testing, threat modeling, and vulnerability scanning of information systems. Takeda’s internal audit function performs
periodic assessments on our cybersecurity controls framework. Third-party security assessments are performed during the vendor selection process
or when significant changes are made to a vendor relationship, with each vendor assigned a residual risk rating which determines the frequency of reassessment. Our commercial agreements typically include contractual provisions to ensure third-party vendors meet Takeda’s standards for dataprotection.
TCR risk professionals assess identified risks for their perceived severity of impact on Takeda and likelihood of occurrence, and design andimplement appropriate responsive measures in collaboration with relevant business units. TCR provides to the CISO on a monthly basis, and to othermembers of DD&T senior management on a quarterly basis, operational reports regarding the number and nature of cyber incidents detected and thestatus of controls and program enhancements. Cybersecurity risk management is integrated into Takeda’s Enterprise Risk Management (“ERM”)
program and addressed as a principal risk in our annual Enterprise Risk Assessment, which is reported to the RECC and the Board of Directors, eachof which is responsible for approving the reported risks and associated mitigation plans, as well as assessing the effectiveness of the mitigation. In
addition, all Takeda employees receive online training on cyber threats as well as periodic e-mail reminders about best practices to safeguard fromthose threats.
Cybersecurity Incident Response
The TCR team has established an incident response procedure that governs our response to cybersecurity events and regularly conducts
tabletop incident response exercises during the year. In the event a potential cybersecurity incident is detected, TCR’s core Information Security
Incident Response Team (“ISIRT”) is responsible for investigation, analysis, containment and eradication of the threat, as well as recovery efforts, incoordination with other functions, such as Takeda’s Privacy Office, Human Resources, Crisis Management, Compliance and Legal, as needed
depending on the severity and scope of the incident. Following recovery from an incident, ISIRT analyzes the underlying cause of the incident to
identify and, as applicable, implement potential improvements to internal controls. While Takeda’s cybersecurity risk management program isprincipally managed by TCR risk professionals, it does engage third parties on an as-needed basis, including with respect to technical consulting andthird-party digital forensic or cyber recovery partners in connection with incident response activities.

Cyber Incident Impacts
During the three fiscal years ended March 31, 2024, no risks from cybersecurity threats, including previous incidents, have materiallyaffected or are reasonably likely to materially affect Takeda, including its business strategy, results of operations or financial condition.
Notwithstanding our risk management efforts described above, we have been the target of cyberattacks and anticipate they will continue. Takeda
cannot completely eliminate all risks associated with such attacks, which could have a material adverse effect on Takeda’s business strategy, resultsof operations or financial condition as further described in “Item 3.D. Risk Factors — Risks Relating to Our Business Strategies—We are
increasingly dependent on information technology systems and our systems and infrastructure face the risk of misuse, theft, exposure, tampering orother intrusions”.

GovernanceTakeda’s Board of Directors (the “Board”) is ultimately responsible for overseeing Takeda’s management of cybersecurity risk andprovides strategic direction for Takeda’s information security program and responses to cybersecurity risks and incidents. Takeda’s CISO generally
provides an annual update to the Board on the status of Takeda’s information security program, including significant developments, and the Board
receives reports of any decisions by any of Takeda’s Business and Sustainability Committee, Portfolio Review Committee or Risk, Ethics andCompliance Committee (see “Item 6. Directors, Senior Management and Employees—C. Board Practices—Takeda Executive Team”) related tocybersecurity. In addition, the Board reviews and approves the Enterprise Risk Assessment, which includes significant cybersecurity risk matters, onan annual basis. On an as-needed basis, the Board is informed of, and provides strategic direction on, significant cybersecurity risks or incidents, if
and when identified, by the CISO and CDTO.
The Risk, Ethics & Compliance Committee (“RECC”) is the governing management committee responsible for overseeing risk
management, including cybersecurity risk. The RECC is composed of the Takeda Executive Team, including Takeda’s CDTO and is chaired by
Takeda’s Chief Ethics and Compliance Officer. In addition, Takeda’s CISO attends RECC meetings for relevant agenda items and generally
provides an update to the RECC on the status of Takeda’s information security program, including significant developments, on at least annual basis.
On an as-needed basis, DD&T senior management escalates decisions regarding significant cybersecurity risks to the RECC, which also reviews andapproves Takeda’s annual Enterprise Risk Assessment before it is approved by the Board. For a description of the relevant expertise of the CISO andof management’s role and processes in assessing and managing material risks from cybersecurity threats, see “—Risk management and strategy—
Cybersecurity Risk Management Framework.”

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Part III
Item 17. Financial Statements
The Company has responded to Item 18 in lieu of this item.

Item 18. Financial Statements
The information required by this item is set forth in our consolidated financial statements included in this annual report.

Item 19. Exhibits
ExhibitNo.

Exhibit 1.1
Exhibit 1.2

Exhibit 1.3
Exhibit 2.1

Exhibit 2.2

Exhibit 4.1+
Exhibit 4.2+
Exhibit 4.3
Exhibit 4.4+
Exhibit 8.1
Exhibit 11.1*
Exhibit 12.1*
Exhibit 12.2*
Exhibit 13.1*
Exhibit 13.2*
Exhibit 15.1*
Exhibit 97.1*
101.INS*
101.SCH*
101.CAL*
101.DEF*
101.LAB*
101.PRE*
104**

Exhibit

Articles of Incorporation of Takeda Pharmaceutical Company Limited (English Translation) (incorporated by reference to
Exhibit 99.1 to the Current Report on Form 6-K of the registrant furnished on March 1, 2023)
Board of Directors Charter of Takeda Pharmaceutical Company Limited (English Translation) (incorporated by reference to
Exhibit 1.2 to the Annual Report for the Fiscal Year Ended March 31, 2023 on Form 20-F of the registrant, filed on June 28,2023).
Company Share Policy of Takeda Pharmaceutical Company Limited (English Translation) (incorporated by reference to Exhibit
1.3 to the Annual Report for the Fiscal Year Ended March 31, 2022 on Form 20-F of the registrant, filed on June 29, 2022).
Form of Amended and Restated Deposit Agreement among the Takeda Pharmaceutical Company Limited, The Bank of New
York Mellon, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder(incorporated by reference to Exhibit 2.1 to Amendment No. 1 to the Registration Statement on Form 20-F of the registrant,
filed on December 17, 2018).
Description of the rights of each class of securities that is registered under Section 12 of the Exchange Act as of the end of theperiod covered by this report (incorporated by reference to Exhibit 2.2 to the Annual Report for the Fiscal Year Ended March
31, 2021 on Form 20-F of the registrant, filed on June 29, 2021).
Collaboration Agreement dated December 14, 2009 by and between Seagen Inc. (f/k/a Seattle Genetics, Inc.) and Takeda
Manufacturing U.S.A., Inc. (as successor in interest to Millennium Pharmaceuticals, Inc) (incorporated by reference to Exhibit
4.1 to the Annual Report for the Fiscal Year Ended March 31, 2021 on Form 20-F of the registrant, filed on June 29, 2021).
Amendment to Collaboration Agreement dated November 7, 2022 by and between Seagen Inc. and Takeda Manufacturing
U.S.A., Inc. (incorporated by reference to Exhibit 10.2 to the Annual Report of Seagen Inc. on Form 10-K filed on February 15,2023).
Takeda Pharmaceutical Company Limited Long Term Incentive Plan (incorporated by reference to Exhibit 99.1 to theRegistration Statement on Form S-8 of the registrant filed on June 25, 2020).
Stock Purchase Agreement dated December 13, 2022 by and between Takeda Pharmaceuticals U.S.A., Inc. and Nimbus
List of subsidiaries of Takeda Pharmaceutical Company Limited, as of March 31, 2024: See “Item 4. Information on the
Company—C. Organizational Structure.”
Global Insider Trading Policy of Takeda Pharmaceutical Company Limited
Certification of the principal executive officer required by 17 C.F.R. 240. 13a-14(a).
Certification of the principal financial officer required by 17 C.F.R. 240. 13a-14(a).
Certification of the chief executive officer required by 18 U.S.C. Section 1350.
Certification of the chief financial officer required by 18 U.S.C. Section 1350.
Consent of Independent Registered Public Accounting Firm.
Compensation Recoupment Policy of Takeda Pharmaceutical Company Limited
Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags areembedded within the Inline XBRL document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
The cover page for the registrant’s Annual Report on Form 20-F for the year ended March 31, 2024, has been formatted in Inline
XBRL

Filed herewith.
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Certain confidential information contained in this exhibit, marked by brackets therein, has been omitted, because it is both not material andwould likely cause competitive harm if publicly disclosed.

We have not included as exhibits certain instruments with respect to our long-term debt where the amount of debt authorized under eachsuch debt instrument does not exceed 10% of our total assets on a consolidated basis. We will furnish a copy of any such instrument to the SEC uponrequest.

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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized theundersigned to sign this annual report on its behalf.

TAKEDA PHARMACEUTICAL COMPANY LIMITED

By: /s/ Milano Furuta
Name: Milano Furuta
Title: Director and Chief Financial Officer
Date: June 26, 2024

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TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Index
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 1009)

F-2

Consolidated Statements of Profit or Loss for the years ended March 31, 2022, 2023 and 2024

F-5

Consolidated Statements of Comprehensive Income for the years ended March 31, 2022, 2023 and 2024

F-6

Consolidated Statements of Financial Position as of March 31, 2023 and 2024

F-7 - F-8

Consolidated Statements of Changes in Equity for the years ended March 31, 2022, 2023 and 2024

F-9 - F-11

Consolidated Statements of Cash Flows for the years ended March 31, 2022,2023 and 2024

F-12

Notes to Consolidated Financial Statements
1. Reporting Entity

F-13

2. Basis of Preparation

F-13

3. Significant Accounting Policies

F-15

4. Operating Segment and Revenue Information

F-24

5. Other Operating Income and Expenses

F-28

6. Finance Income and Expenses

F-29

7. Income Taxes

F-30

8. Earnings per Share

F-33

9. Other Comprehensive Income (Loss)

F-34

10. Property, Plant and Equipment

F-35

11. Goodwill

F-38

12. Intangible Assets

F-39

13. Collaborations and Licensing Arrangements

F-41

14. Investments Accounted for Using the Equity Method

F-42

15. Other Financial Assets

F-43

16. Inventories

F-43

17. Trade and Other Receivables

F-44

18. Cash and Cash Equivalents

F-44

19. Assets and Disposal Groups Held for Sale

F-45

20. Bonds and Loans

F-46

21. Other Financial Liabilities

F-48

22. Employee Benefits

F-48

23. Provisions

F-53

24. Other Liabilities

F-54

25. Trade and Other Payables

F-54

26. Equity and Other Equity Items

F-55

27. Financial Instruments

F-56

28. Share-based Payments

F-71

29. Subsidiaries and Associates

F-75

30. Related Party Transactions

F-76

31. Business Combinations

F-76

32. Commitments and Contingent Liabilities

F-77

33. Subsequent Events

F-79

F-1

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Takeda Pharmaceutical Company Limited:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Takeda Pharmaceutical Company Limited and its subsidiaries(the Company) as of March 31, 2024 and 2023, the related consolidated statements of profit or loss, comprehensive income, changes in equity, andcash flows for each of the years in the three-year period ended March 31, 2024, and the related notes (collectively, the consolidated financial
statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as ofMarch 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2024, inconformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theCompany’s internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control – Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated June 26, 2024 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that werecommunicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to theconsolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating thecritical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the provisions for U.S. Medicaid and U.S. commercial managed care rebates
As discussed in Notes 3 and 23 to the consolidated financial statements, the Company recorded provisions for contractual and statutory rebates
payable under Commercial healthcare provider contracts and U.S. State and Federal government health programs (collectively, “U.S. rebates”) of
253,832 million JPY which included U.S. Medicaid and U.S. commercial managed care programs as a reduction to gross sales to arrive at net sales asof March 31, 2024. The provisions for U.S. rebates are recorded in the same period that the corresponding revenues are recognized; however, theU.S. rebates are not fully paid until subsequent periods.
We identified the evaluation of the provisions for U.S. Medicaid and U.S. commercial managed care rebates as a critical audit matter. A high degreeof auditor judgement was required to evaluate the expected product specific assumptions used to estimate the provisions for the U.S. Medicaid andU.S. commercial managed care rebates. The expected product specific assumptions relate to estimating which of the Company’s revenue transactions
will ultimately be subject to the U.S. Medicaid and U.S. commercial managed care programs.

F-2

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested operating
effectiveness of certain internal controls over the Company’s U.S. Medicaid and U.S. commercial managed care programs provision process. This
included controls related to the determination of the expected product specific assumptions used to estimate the provisions for U.S. Medicaid andU.S. commercial managed care programs. We developed independent expectations of U.S. Medicaid and U.S. commercial managed care programs
provisions based on the ratios of historical U.S. Medicaid and U.S. commercial managed care programs claims paid to historical gross sales andcompared the results to the Company’s estimated U.S. Medicaid and U.S. commercial managed care programs provisions. We compared a selectionof U.S. Medicaid and U.S. commercial managed care programs claims paid by the Company for consistency with the contractual terms of theCompany’s rebate agreements. We evaluated the Company’s ability to accurately estimate the provisions for U.S. Medicaid and U.S. commercial
managed care programs by comparing historically recorded provisions to the actual amounts that were ultimately paid by the Company.
Valuation of goodwill
As discussed in Notes 3 and 11 to the consolidated financial statements, the Company recorded goodwill of 5,410,067 million JPY as of March 31,
2024. Goodwill was tested for impairment at the single operating segment level (one cash generating unit (CGU)), which was the level at which
goodwill was monitored for internal management purposes. Goodwill was tested for impairment annually and whenever there is any indication of
impairment. Impairment loss for goodwill is recognized if the recoverable amount of goodwill is less than the carrying amount. The recoverable
amount of goodwill was assessed based on fair value less costs of disposal. The fair value less costs of disposal was determined by discounting theestimated future cash flows based on a 10-year projection using a terminal growth rate and a discount rate as well as deducting the estimated costs ofdisposal. The projection included the sales forecast related to certain products as the significant assumption. The Company did not record an
impairment loss for goodwill as a result of the impairment testing.
We identified the valuation of goodwill as a critical audit matter. Subjective and challenging auditor judgment was required to evaluate the sales
forecast related to certain products used to determine the fair value in the impairment testing of goodwill.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating
effectiveness of the internal control over the sales forecast related to certain products in the Company’s fair value measurement process for the annual
goodwill impairment test. We evaluated the reasonableness of the Company’s sales forecast related to certain products. We compared such sales
forecast with a sales forecast independently developed using forecasted revenue growth rates from external information such as analysts’
expectations, industry trends and market trends based on the most recent actual sales. We evaluated the Company’s ability to accurately forecast sales
related to certain products by comparing the Company’s previous sales forecast to the actual sales.

/s/ KPMG AZSA LLC
We have served as the Company’s auditor since 2007.
Tokyo, Japan
June 26, 2024

F-3

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Takeda Pharmaceutical Company Limited:
Opinion on Internal Control Over Financial Reporting
We have audited Takeda Pharmaceutical Company Limited and its subsidiaries’ (the Company) internal control over financial reporting as of March
31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as ofMarch 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theconsolidated statements of financial position of the Company as of March 31, 2024 and 2023, the related consolidated statements of profit or loss,
comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended March 31, 2024, and the related notes(collectively, the consolidated financial statements), and our report dated June 26, 2024 expressed an unqualified opinion on those consolidated
financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We
are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis forour opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could havea material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate.

/s/ KPMG AZSA LLC
Tokyo, Japan
June 26, 2024

F-4

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Profit or Loss for the Year Ended March 31,

JPY (millions, except per share data)
Note
Revenue

42022¥

Cost of sales

2023

3,569,006¥

2024

4,027,478¥

4,263,762(1,106,846)(1,244,072)(1,426,678)

Selling, general and administrative expenses(886,361)(997,309)(1,053,819)

Research and development expenses(526,087)(633,325)(729,924)

Amortization and impairment losses on intangible assets associated with products

12(472,915)(542,443)(652,117)

Other operating income

543,12325,424

19,379Other operating expenses

5(159,075)(145,247)(206,527)

460,844490,505

214,075

6

23,70062,91352,093Finance expenses

6(166,607)(169,698)(219,850)

Share of profit (loss) of investments accounted for using the equity method

14(15,367)(8,630)

6,473

302,571375,090

52,791(72,405)(58,052)

91,406

Operating profit
Finance income

Profit before tax
Income tax (expenses) benefit

7

Net profit for the year¥

230,166¥

317,038¥

144,197¥230,059¥

317,017¥

144,067

Attributable to:
Owners of the Company

8

Non-controlling interests

107

Net profit for the year

21

130

¥

230,166¥

317,038¥

144,197¥147.14¥204.29¥92.09

Earnings per share (JPY)
Basic earnings per share

8

Diluted earnings per share8

See accompanying notes to consolidated financial statements.

F-5

145.87201.94

91.16

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Comprehensive Income for the Year Ended March 31,

JPY (millions)Note
Net profit for the year

2022
¥

2023

230,166¥2024

317,038¥

144,197

Other comprehensive income (loss)
Items that will not be reclassified to profit or loss:
Changes in fair value of financial assets measured at fair value through othercomprehensive income
Remeasurement of defined benefit pension plans

9(14,626)(2,654)2,309

920,78317,752(5,002)

6,158

15,098(2,693)

Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations

9583,969

618,773

968,842

Cash flow hedges

9

2,173

(21,451)

23,456

Hedging cost

9

2,457

(16,993)

7,197

Share of other comprehensive loss of investments accounted for using the equity
methodOther comprehensive income for the year, net of tax

9, 14
9

Total comprehensive income for the year

(497)

(892)

(1,793)588,103579,437

997,702594,261594,535

995,009¥824,427¥

911,574¥

1,139,206¥

824,258¥

911,529¥

1,139,033

Attributable to:
Owners of the Company
Non-controlling interests

168

Total comprehensive income for the year¥

824,427

See accompanying notes to consolidated financial statements.

F-6

45
¥

911,574173¥

1,139,206

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Financial Position as of March 31,

JPY (millions)
Note

2023

2024

AssetsNon-current assets:
Property, plant and equipment

10

Goodwill

11

4,790,723

5,410,067

Intangible assets

12

4,269,657

4,274,682

Investments accounted for using the equity method

14

99,17489,831Other financial assets

15

279,683

340,777

63,325

51,214

366,003393,865

11,559,794

12,550,212

Other non-current assets
Deferred tax assets

7

Total non-current assets¥

1,691,229¥

1,989,777

Current assets:
Inventories

16

986,457

1,209,869

Trade and other receivables

17

649,429

668,403

Other financial assets

15

20,17415,08932,26429,207

Income taxes receivable
Other current assets

160,868

168,875

Cash and cash equivalents

18

533,530

457,800

Assets held for sale

19

15,235

9,337

Total current assets
Total assets

See accompanying notes to consolidated financial statements.
F-7

2,397,956

2,558,580¥ 13,957,750¥ 15,108,792

JPY (millions)
Note

2023

2024

Liabilities and Equity
Liabilities:
Non-current liabilities:
Bonds and loans

20

Other financial liabilities

21534,269

687,833

Net defined benefit liabilities

22

127,594

143,882

24,558

4,381

Income taxes payable¥

4,042,741¥

4,476,501

Provisions

23

55,96914,373

Other non-current liabilities

24

65,38980,938Deferred tax liabilities

7

Total non-current liabilities

270,620

113,777

5,121,138

5,521,684

Current liabilities:
Bonds and loans

20

339,600

367,251

Trade and other payables

25

649,233

547,521

Other financial liabilities

21

185,537

143,421232,377

109,906

Income taxes payable
Provisions

23

508,360

524,420

Other current liabilities

24

566,689

619,174

Liabilities held for sale

19

144

1,410

Total current liabilities

2,481,940

2,313,103

Total liabilities

7,603,078

7,834,788

Share capital

1,676,345

1,676,596

Share premium

1,728,830

1,747,414

Treasury shares(100,317)(51,259)Retained earnings

1,541,146

1,391,203

Other components of equity

1,508,119

2,509,310

6,354,122

7,273,264

Equity:Equity attributable to owners of the Company
Non-controlling interests
Total equity
Total liabilities and equity

See accompanying notes to consolidated financial statements.

F-8

549

741

6,354,672

7,274,005¥ 13,957,750¥ 15,108,792

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Changes in Equity

JPY (millions)
Equity attributable to owners of the Company
Other components of equity

Share
capital
As of April 1, 2021 ............................................. ¥Sharepremium

1,668,145¥

Treasuryshares1,688,424¥

Retainedearnings(59,552)¥

Net profit for the year .........................................

1,509,906

Exchangedifferenceson translationof foreign
operations

Changes in fairvalue of financial
assetsmeasured at fairvalue throughothercomprehensive
income¥¥41,983¥(68,075)

Hedging
cost¥(8,592)

Total
other
componentsof equity

Total
equityattributableto owners of
the Company

¥

¥

¥

—

230,059

Other comprehensive income (loss) ..................
Comprehensive income (loss) for the year .........

400,798

Cash flow
hedgesRemeasuremen
ts of defined
benefit pension
plans

—

—

8,118

14,036—230,059

366,1145,173,037

Noncontrollinginterests
¥

4,140

Total
equity¥5,177,177—

230,059107

230,166

583,343(14,558)

2,173

2,457

20,783594,200

594,200

61

594,261

583,343(14,558)

2,173

2,457

20,783594,200

824,258

168

824,427

Transactions with owners:
Issuance of new shares (Note 26) ..................
Acquisition of treasury shares (Note 26) .......

(79,447)

Disposal of treasury shares ............................

(0)

1

Dividends (Note 26).......................................

(284,246)

Changes in ownership ....................................

(2,143)

Transfers from other components of equity ...

26,141

Share-based compensation (Note 28) ............

As of March 31, 2022 ......................................... ¥(20,783)

43,374

Exercise of share-based awards (Note 28) .....
Total transactions with owners ...........................

(5,357)8,118
1,676,263¥(36,960)

22,992

20,450(56,454)

1,708,873¥(116,007)(260,249)¥

1,479,716—¥

984,141(5,357)¥22,068—¥(65,901)—¥(6,135)

See accompanying notes to consolidated financial statements.

F-9(20,783)
¥

—

¥

—

22,154

22,154—(79,447)(79,447)

—

1

1

—

(284,246)(284,246)—(2,143)(26,141)———

43,37443,374—(13,968)(26,141)(314,276)

934,173¥

5,683,019(3,804)(5,948)(13,968)(3,804)¥504(318,080)¥

5,683,523

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Changes in Equity

JPY (millions)
Equity attributable to owners of the Company
Other components of equity

Share
capital
As of April 1, 2022 ................................................ ¥Sharepremium

1,676,263¥

Treasuryshares1,708,873¥

Retainedearnings(116,007)¥

Effect of hyperinflation ....................................
Restated opening balance .......................................

1,676,263

1,708,873

Exchangedifferencesontranslationof foreign
operations(116,007)

Net profit for the year ...........................................

1,479,716¥¥

22,068Cash flow
hedges¥(65,901)

Hedging
cost¥(6,135)(1,960)4,121

1,477,756

988,263

22,068(65,901)(6,135)

617,866(2,663)(21,451)

617,866(2,663)(21,451)

Remeasuremen
ts of defined
benefit pension
plans

Total
other
componentsof equity

Total
equityattributableto owners of
the Company

¥

¥

¥

—

—

—

82

82

—

317,017934,173

5,683,019

Noncontrollinginterests
¥

504

Total
equity¥5,683,523

4,121

2,161

—

938,294

5,685,180

504

5,685,684—

317,01721

317,038(16,993)

17,752594,512594,51224

594,535(16,993)

17,752594,512911,52945

911,574

317,017

Other comprehensive income (loss).......................
Comprehensive income (loss) for the year ............

984,141

Changes in fairvalue of financial
assetsmeasured at fairvalue throughothercomprehensive
income2,161

Transactions with owners: .....................................
Issuance of new shares (Note 26) ......................
Acquisition of treasury shares (Note 26) ...........

(5)(27,060)

Disposal of treasury shares ................................

0

0

Dividends (Note 26) ..........................................

(278,313)

Transfers from other components of equity ......

24,687

Share-based compensation (Note 28) ................
Exercise of share-based awards (Note 28) ........
Total transactions with owners .............................
As of March 31, 2023 ............................................ ¥(6,935)(17,752)

62,67082
1,676,345¥(42,791)

42,74919,956

15,6891,728,830¥(100,317)(253,626)¥

1,541,146—¥

1,606,128(6,935)¥

12,470—¥(87,352)—¥(23,127)

See accompanying notes to consolidated financial statements.

F-10(17,752)
¥

—

¥

—

164

164

—

(27,065)(27,065)

—

1

1

—

(278,313)(278,313)(24,687)———

62,67062,670—(42)(24,687)(242,586)

1,508,119¥

6,354,122

(42)
—
¥

549

(242,586)¥

6,354,672

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Changes in Equity

JPY (millions)
Equity attributable to owners of the Company
Other components of equity

Share
capital
As of April 1, 2023 ................................................ ¥Sharepremium

1,676,345¥

Treasuryshares1,728,830¥

Retainedearnings(100,317)¥

Net profit for the year ...........................................

1,541,146

Exchangedifferenceson translationof foreign
operations

Changes in fairvalue of financial
assetsmeasured at fairvalue throughothercomprehensive
income¥¥12,470¥(87,352)

Hedging
cost¥(23,127)

Total
other
componentsof equity

Total
equityattributableto owners of
the Company

¥

¥

¥

—

144,067

Other comprehensive income (loss).......................
Comprehensive income (loss) for the year ............

1,606,128

Cash flow
hedgesRemeasuremen
ts of defined
benefit pension
plans

—

—

251

251

—

144,067

1,508,119

6,354,122

Noncontrollinginterests
¥

549

—

144,067130

Total
equity¥6,354,672
144,197

967,279

2,036

23,456

7,197(5,002)994,966

994,96644995,009967,279

2,036

23,456

7,197(5,002)994,966

1,139,033

173

1,139,206

Transactions with owners: .....................................
Issuance of new shares (Note 26) ......................
Acquisition of treasury shares ...........................

(2,367)

Disposal of treasury shares ................................

0

0

Dividends (Note 26) ..........................................

(287,785)

Changes in ownership .......................................
Transfers from other components of equity ......

(6,226)

Share-based compensation (Note 28) ................

As of March 31, 2024 ............................................ ¥5,002

69,836

Exercise of share-based awards (Note 28) ........
Total transactions with owners .............................

1,224

251
1,676,596¥(51,503)

51,426

18,58449,0591,747,414¥(51,259)(294,011)¥

1,391,203—¥

2,573,407

1,224¥

15,729—¥(63,896)—¥(15,930)

See accompanying notes to consolidated financial statements.

F-11

5,002
¥

—

¥

—

502

502

—

(2,367)(2,367)

—

1

1

—

(287,785)(287,785)

—

—

6,226

—

—

—

69,836

69,836

—

(77)

6,226

(219,892)

2,509,310¥

7,273,264

18

18

(77)
18
¥

741

(219,873)¥

7,274,005

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows for the Year Ended March 31,
NoteCash flows from operating activities:
Net profit for the year
Depreciation and amortization
Impairment losses
Equity-settled share-based compensation
Loss on sales and disposal of property, plant and equipment
Gain on divestment of business and subsidiaries
Change in fair value of financial assets and liabilities associated with contingent consideration arrangements, net
Finance (income) and expenses, net
Share of loss (profit) of investments accounted for using the equity method
Income tax expenses (benefit)
Changes in assets and liabilities:
Decrease in trade and other receivables
Increase in inventories
Increase (decrease) in trade and other payables
Increase (decrease) in provisions
Increase (decrease) in other financial liabilities
Other, net
Cash generated from operations
Income taxes paid
Tax refunds and interest on tax refunds received
Net cash from operating activities
Cash flows from investing activities:
Interest received
Dividends received
Acquisition of property, plant and equipment
Proceeds from sales of property, plant and equipment
Acquisition of intangible assets
Acquisition of investments
Proceeds from sales and redemption of investments
Acquisition of businesses, net of cash and cash equivalents acquired
Proceeds from sales of business, net of cash and cash equivalents divested
Payments for the settlement of forward exchange contracts designated as net investment hedges
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans and commercial papers
Proceeds from issuance of bonds and long-term loans
Repayments of bonds and long-term loans
Proceeds from the settlement of cross currency interest rate swaps related to bonds
Acquisition of treasury sharesInterest paid
Dividends paid
Repayments of lease liabilities
Other, net
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year

¥

27
27
27
27

27

18
18

¥

See accompanying notes to consolidated financial statements.

F-12

JPY (millions)
2023

2022
230,166
583,151
54,51543,374655(7,829)(11,195)
142,907
15,36772,405¥

317,038
664,400
64,39460,672
10(6,807)
3,991
106,785
8,630
58,052

2024¥

144,197
728,002150,01770,871
6,052(7,832)
20,757
167,757(6,473)(91,406)

127,294(46,148)
125,157(58,090)(49,608)
41,4091,263,528(147,724)
7,301
1,123,105

75,127(79,155)(84,804)
31,89931,669(88,778)
1,163,122(198,439)
12,473
977,156

15,104(115,743)(9,895)(126,901)(18,568)(7,556)918,383(219,941)
17,902
716,344

2,919
3,401
(123,252)
1,815(62,785)(8,341)
16,921(49,672)
28,196—(7,328)(198,125)

5,054
3,562
(140,657)
962(493,032)(10,151)
22,254—
7,958—(3,052)(607,102)

11,161
13,191(175,420)
8,606(305,310)(6,766)
8,021—
19,959(33,300)(4,003)(463,862)(2)
249,334(810,115)—(77,531)(108,207)(283,665)(39,694)(385)(1,070,265)(145,285)
966,22228,758
849,695

40,00075,000(356,670)—(26,929)(108,555)(279,416)(43,401)(9,178)(709,148)(339,094)
849,695
22,929533,530

277,000
100,000(320,901)
60,063(2,326)(100,375)(287,188)(54,586)(26,102)(354,416)(101,934)
533,530
26,204
457,800¥¥

TAKEDA PHARMACEUTICAL COMPANY LIMITED AND ITS SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Reporting Entity
Takeda Pharmaceutical Company Limited (the “Company”) is a public company incorporated in Japan. The Company and its subsidiaries(collectively, “Takeda”) is a global, values-based, R&D-driven biopharmaceutical company with a diverse portfolio, engaged primarily in the
research, development, production and global commercialization of pharmaceutical products. Takeda’s principal pharmaceutical products include
medicines in the following key business areas: Gastroenterology (“GI”), Rare Diseases, Plasma-Derived Therapies (“PDT”) immunology, Oncology,
and neuroscience.
2. Basis of Preparation
Compliance with International Financial Reporting Standards
Takeda’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by
the International Accounting Standards Board (“IASB”). The term IFRS also includes International Accounting Standards (“IASs”) and the related
interpretations of the interpretation’s committees (Standard Interpretations Committee (“SIC”) and International Financial Reporting Interpretations
Committee (“IFRIC”)).
Approval of Financial Statements
The Company’s consolidated financial statements presented were approved on June 26, 2024 by Representative Director, President & Chief
Executive Officer (“CEO”) Christophe Weber and Director & Chief Financial Officer (“CFO”) Milano Furuta.
Basis of Measurement
The consolidated financial statements have been prepared on a historical cost basis, except for certain assets and liabilities recorded at fair value
including equity investments, derivative financial instruments, financial assets and liabilities associated with contingent consideration arrangements,
and the application of hyperinflationary accounting at subsidiaries.
Functional and Presentation Currency
The consolidated financial statements are presented in Japanese Yen (“JPY”), which is the functional currency of the Company. All financial
information presented in JPY has been rounded to the nearest million JPY, except when otherwise indicated. In tables with rounded figures, sums
may not add up due to rounding.
New Accounting Standards and Interpretations Adopted
On May 23, 2023, amendments to IAS 12 Income Taxes (“IAS 12”) were issued to clarify requirements relating to the International Tax Reform Pillar Two model rules. As required by the amended IAS 12, Takeda adopted immediately and retrospectively the exception to neither recognize nor
disclose information about deferred tax assets and liabilities related to Pillar Two model rules. Takeda incorporated new disclosures regarding theexposure of Pillar Two model rules into Note 7 of the consolidated financial statements for the fiscal year ended March 31, 2024.
New Accounting Standards and Interpretations Issued and Not Yet Adopted
On April 9, 2024, the IASB has issued IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”), which replaces IAS 1
Presentation of Financial Statements.
IFRS 18 introduces certain new requirements to improve the reporting of companies’ financial performance and comparability in the statement of
profit or loss between entities. The accounting standard introduces three new defined categories for income and expenses-operating, investing andfinancing, and requires all companies to provide certain new defined subtotals. IFRS 18 also requires companies to disclose explanations ofcompany-specific measures that are related to the income statement, referred to as management-defined performance measures. Furthermore, theaccounting standard sets out enhanced guidance on how to organize information and whether to provide it in primary financial statements or in thenotes and requires companies to provide more transparency about operating expenses. IFRS 18 will not impact the recognition or measurement of
items in the financial statements. The accounting standard is effective for annual reporting periods beginning on or after January 1, 2027, with early
adoption permitted.
Takeda is currently in the process of assessing the impact from meeting the new disclosure requirements and will adopt the standard from the fiscal
year beginning April 1, 2027.

F-13

Use of Judgments, Estimates, and Assumptions
The preparation of consolidated financial statements in accordance with IFRS requires management to make certain judgments, estimates, andassumptions that affect the application of accounting policies and the reported amount of assets, liabilities, revenues and expenses, and the disclosureof contingent assets and liabilities. Actual results could differ from these estimates.
These estimates and underlying assumptions are reviewed on a continuous basis. Changes in these accounting estimates are recognized in the period
in which the estimates are revised and in any future periods affected.
Information about judgments and estimates that have been made in the process of applying accounting policies and that have significant effects on
the amounts reported in the consolidated financial statements, and information about accounting estimates and assumptions that have significant
effects on the amounts reported in the consolidated financial statements, are as follows:
•
•
•
•
•
•

Recognition and measurement of taxes based on uncertain tax positions (Note 7)
Recoverability of deferred tax assets (Note 7)
Impairment of goodwill and intangible assets (Note 11 and Note 12)
Measurement of provisions (Note 23)
Estimation of rebates and return reserves associated with Takeda’s product sales (Note 3 and Note 23)
Probability of an outflow of resources embodying economic benefits on contingent liabilities (Note 32)

F-14

3. Material Accounting Policies
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries that are directly or indirectly controlled by theCompany. All significant intercompany balances and transactions have been eliminated in consolidation.
Takeda controls an entity when it is exposed or has rights to variable returns from involvement with the entity and has the ability to affect those
returns using its power, which is the current ability to direct the relevant activities, over the entity. To determine whether Takeda controls an entity,
status of voting rights or similar rights, contractual agreements and other specific factors are considered.
The financial statements of the subsidiaries are included in the consolidated financial statements from the date when control is obtained until the datewhen control is lost. The financial statements of subsidiaries have been adjusted in order to ensure consistency with the accounting policies adopted
by the Company as necessary.
Changes in ownership interest in subsidiaries that do not result in loss of control are accounted for as equity transactions. Any difference between theadjustment to non-controlling interests and the fair value of consideration transferred or received, is recognized directly in equity attributable toowners of the Company. When control over a subsidiary is lost, the investment retained after the loss of control is re-measured at fair value as of thedate when control is lost, and any gain or loss on such re-measurement and disposal of the interest sold is recognized in profit or loss.
Investments in Associates and Joint Arrangements
Associates are entities over which Takeda has significant influence over the decisions on financial and operating policies but does not have control orjoint control. Investments in associates are accounted for using the equity method and recognized at cost on the acquisition date. The carrying amountis subsequently increased or decreased to recognize Takeda’s share of profit or loss and other comprehensive income of the associates. Intra-groupprofits on transactions with associates accounted for using the equity method are eliminated against the investment to the extent of Takeda’s equity
interest in the associates. Intra-group losses are eliminated in the same way as intra-group profits unless there is evidence of impairment.
Joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of anarrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Takeda
classifies joint arrangement into either joint operations or joint ventures. The classification of a joint arrangement as a joint operation or a joint
venture depends upon the rights and obligations of the parties to the arrangement. Joint operation is a joint arrangement whereby the parties that havejoint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint venture is a joint
arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. The assets, liabilities,
revenues and expenses in joint operations are recognized in relation to Takeda’s interest. The investment in joint ventures is accounted for using theequity method. At each reporting date, the Company determines whether there is objective evidence that the investment in the associate or joint
venture is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount of
the associate or joint venture and its carrying value, and then recognizes the loss in profit or loss.
Business Combinations
Business combinations are accounted for using the acquisition method. The identifiable assets acquired and the liabilities assumed are measured at
the fair values at the acquisition date. Goodwill is measured as the excess of the sum of the fair value of consideration transferred, the amount of any
non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree less the fair value ofidentifiable assets acquired, net of liabilities assumed at the acquisition date. As part of business combinations, when the acquired entity consists offoreign operations with multiple functional currencies, Takeda allocates goodwill recognized upon the acquisition to the foreign operations based on
the estimated cash flows of the acquired foreign operations.
The consideration transferred for the acquisition of a subsidiary is measured as the fair value of the assets transferred, the liabilities incurred to former
owners of the acquiree, and the equity interests issued by Takeda at the acquisition date. Non-controlling interests is initially measured either at fairvalue or at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets on a transaction-bytransaction basis. The consideration for certain acquisitions includes amounts contingent upon future events, such as the achievement of development
milestones and sales targets.
Any contingent consideration included in the consideration payable for a business combination is recorded at fair value at the date of acquisition.
These fair values are generally based on risk-adjusted future cash flows discounted using appropriate discount rates. The fair values are reviewed at
the end of each reporting period. The changes in the fair value based on the time value of money are recognized in finance expenses and the otherchanges are recognized in other operating income or other operating expenses in the consolidated statements of profit or loss.
Acquisition related costs are recognized as expenses in the period they are incurred. Changes in Takeda’s ownership interests in subsidiaries arisingfrom transactions between Takeda and non-controlling interests that do not result in Takeda losing control over a subsidiary are treated as equity
transactions and therefore, do not result in adjustments to goodwill.

F-15

Foreign Currency Translations
Foreign Currency Transactions
Foreign currency transactions are remeasured into the functional currency of each entity within Takeda using the exchange rates at the dates of thetransactions or rates that approximate the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies are remeasured into the functional currency using the spot rates of exchange at the end of each reporting period. Non-monetary assets andliabilities that are measured at fair value in foreign currencies are remeasured using historical exchange rates at the date when the fair value wasdetermined. Non-monetary assets and liabilities measured based on historical cost that are denominated in foreign currencies are remeasured at theexchange rate at the date of the initial transaction. Exchange differences arising from the remeasurement or settlement are recognized in profit or loss
except when related to financial assets measured at fair value through other comprehensive income, as well as financial instruments designated ashedges of net investments in foreign operations and cash flow hedges subsequently recognized as other comprehensive income. The gain or loss
arising from remeasurement of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change infair value of the item. Translation differences on items whose fair value gain or loss is recognized in other comprehensive income or profit or loss,
are also recognized in other comprehensive income or profit or loss, respectively.
Foreign Operations
The assets and liabilities of foreign operations are translated using the spot exchange rates at the end of the reporting period, while income andexpenses of foreign operations presented in profit or loss and other comprehensive income are translated using the exchange rates at the dates of thetransactions or rates that approximate the exchange rates at the dates of the transactions. When a foreign operation’s functional currency is thecurrency of a hyperinflationary economy, adjustments are made to its separate financial statements to reflect current price levels, and income andexpenses of the foreign operation are translated into the presentation currency at the exchange rate at the end of the reporting period. The impact of
the restatement of the non-monetary assets and liabilities with the general price index at the beginning of the period is recorded in othercomprehensive income. The subsequent gains and losses resulting from the restatement of non-monetary assets and liabilities are recorded in financeincome or finance expenses in the consolidated statements of profit or loss. Exchange differences arising from translation are recognized as othercomprehensive income.
In cases in which foreign operations are disposed of, the cumulative amount of exchange differences related to the foreign operations is recognized aspart of the gain or loss on disposal.
Revenue
Takeda’s revenue is primarily related to the sale of pharmaceutical products and is generally recognized when control of the products is passed to thecustomer in an amount that reflects the consideration to which Takeda expects to be entitled in exchange for those products. Control is generallytransferred at the point in time of shipment to or receipt of the products by the customer, or when the services are performed. The amount of revenue
to be recognized is based on the consideration Takeda expects to receive in exchange for its goods or services. If a contract contains more than one
contractual promise to a customer (performance obligation), the consideration is allocated based on the standalone selling price of each performanceobligation. The consideration Takeda receives in exchange for its goods or services may be fixed or variable. Variable consideration is only
recognized to the extent it is highly probable that a significant reversal will not occur.
Takeda’s gross sales are subject to various deductions, which are primarily composed of rebates and discounts to retail customers, government
agencies, wholesalers, health insurance companies and managed healthcare organizations. These deductions represent estimates of the related
obligations, requiring the use of judgment when estimating the effect of these sales deductions on gross sales for a reporting period. These
adjustments are deducted from gross sales to arrive at net sales. Takeda monitors the obligation for these deductions on at least a quarterly basis andrecords adjustments when rebate trends, rebate programs and contract terms, legislative changes, or other significant events indicate that a change inthe obligation is appropriate. Historically, adjustments to rebate accruals have not been material to net earnings. The United States (the “U.S.”)
market has the most complex arrangements related to revenue deductions.
The following summarizes the nature of the most significant adjustments to revenue:•

U.S. Medicaid: The U.S. Medicaid Drug Rebate Program is administered by state governments using state and federal funds to provide
assistance to certain qualifying individuals and families, who cannot finance their own medical expenses. Calculating the rebates to be paid
related to this program involves interpreting relevant regulations, which are subject to challenge or change in interpretative guidance bygovernment authorities. Provisions for Medicaid rebates are estimated based upon identifying the products subject to a rebate, historicalexperience, patient demand, product pricing and the mix of contracts and specific terms in the individual state agreements. The provisions
for Medicaid rebates are recorded in the same period that the corresponding revenues are recognized; however, the Medicaid rebates are notfully paid until subsequent periods. There is often a time lag of several months between Takeda recording the revenue deductions andTakeda’s final accounting for Medicaid rebates. These expected product specific assumptions relate to estimating which of Takeda’s
revenue transactions will ultimately be subject to the U.S. Medicaid program.

•

U.S. Medicare: The U.S. Federal Medicare Program, which funds healthcare benefits to individuals age 65 or older and certain disabilities,
provides prescription drug benefits under Part D section of the program. This benefit is provided and administrated through privateprescription drug plans. Provisions for Medicare Part D rebates are calculated based on the terms of individual plan agreements, patientdemand, product pricing and the mix of contracts. The provisions for Medicare Part D rebates are recorded in the same period that thecorresponding revenues are recognized; however, the Medicare Part D rebates are not fully paid until subsequent periods. There is often a
F-16

time lag of several months between Takeda recording the revenue deductions and Takeda’s final accounting for Medicare Part D rebates.
These expected product specific assumptions relate to estimating which of the Takeda’s revenue transactions will ultimately be subject tothe U.S. Medicare program.
•

Customer rebates: Customer rebates including commercial managed care in the U.S. are offered to purchasing organizations, healthinsurance companies, managed healthcare organizations, and other direct and indirect customers to sustain and increase market share, andto ensure patient access to Takeda’s products. Since rebates are contractually agreed upon, the related provisions are estimated based on theterms of the individual agreements, historical experience, and patient demand. The provisions for commercial managed care rebates in the
U.S. are recorded in the same period that the corresponding revenues are recognized; however, commercial managed care rebates in the
U.S. are not fully paid until subsequent periods. There is often a time lag of several months between Takeda recording the revenue
deductions and Takeda’s final accounting for commercial managed care rebates in the U.S. These expected product specific assumptions
relate to estimating which of Takeda’s revenue transactions will ultimately be subject to the commercial managed care in the U.S.

•

Wholesaler chargebacks: Takeda has arrangements with certain indirect customers whereby the customer is able to buy products fromwholesalers at reduced prices. A chargeback represents the difference between the invoice price to the wholesaler and the indirect
customer’s contractual discounted price. Provisions for estimating chargebacks are calculated based on the terms of each agreement,
historical experience and product demand. Takeda has a legally enforceable right to set off the trade receivables and chargebacks and it
intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. Thus the provision for chargebacks
are recorded as a deduction from trade receivables on the consolidated statements of financial position.

•

Return reserves: When Takeda sells a product providing a customer with the right to return, Takeda records a provision for estimated sales
returns based on its sales return policy and historical return rates. Takeda estimates the proportion of recorded revenue that will result in a
return by considering relevant factors, including past product returns activity, the estimated level of inventory in the distribution channel
and the shelf life of products.

Because the amounts are estimated, they may not fully reflect the final outcome, and the amounts are subject to change dependent upon, amongst
other things, expected product specific assumptions used in estimating which of Takeda’s revenue transactions will ultimately be subject to therespective programs.
Takeda generally receives payments from customers within 90 days after the point in time when goods are delivered to the customers. Takeda usually
performs those transactions as a principal, but Takeda also sells products on behalf of others in which case revenue is recognized at an amount ofsales commission that Takeda expects to be entitled as an agent.
Takeda also generates revenue in the form of royalty payments, upfront payments, and milestone payments from the out-licensing and sale ofintellectual property (“IP”). Royalty revenue earned through a license is recognized when the underlying sales have occurred. Revenue from upfront
payment is generally recognized when Takeda provides a right to use IP. Revenue from milestone payments is recognized at the point in time when it
is highly probable that the respective milestone event criteria is met, and a significant reversal in the amount of revenue recognized will not occur.
Revenue from other services such as R&D of therapeutic candidates that are out-licensed is recognized over the service period.
Takeda generally receives payments from customers within 60 days after entering into out-licensing contracts or confirmation by customers thatconditions for the milestone payments are met. Takeda licenses its own intellectual property rights to customers and performs those transactions as aprincipal. Takeda also provides other services as a principal or an agent.
Takeda identifies a contract modification in case of a change in the scope or price (or both) of a contract. If a contract modification is not accounted
for as a separate contract, both of the revenue recognized before and after contract modification is presented in the same categories of thedisaggregation of revenue information.
Government Grants
Government grants are recognized when there is reasonable assurance that Takeda will comply with the conditions attached to them and receive thegrants. Government grants for the purchasing of property, plant and equipment are recognized as deferred income and then recognized in profit orloss and offset the related expenses on a systematic basis over the useful lives of the related assets. Government grants for expenses incurred arerecognized in profit or loss and offset the related expenses over the periods in which Takeda recognizes costs for which the grants are intended tocompensate.

F-17

Research and Development Expenses
Research costs are expensed in the period incurred. Internal development expenditures are capitalized when the criteria for recognizing an asset are
met in accordance with IAS 38 Intangible Assets, usually when a regulatory filing has been made in a major market and approval is considered highly
probable. Where regulatory and other uncertainties are such that the criteria are not met, the expenditures are recognized in profit or loss in the
consolidated statements of profit or loss. Property, plant and equipment used for R&D is capitalized and depreciated over the estimated life of theasset.
Income Taxes
Income taxes consist of current taxes and deferred taxes. Current and deferred taxes are recognized in profit or loss, except for income taxes resulting
from business combinations, and income taxes recognized in either other comprehensive income or equity related to items that are recognized, in thesame or different period, outside of profit or loss.
Current Taxes
The current taxes payable or receivable is based on taxable profit for the year. Taxable profit differs from reported profit because taxable profit
excludes items that are either never taxable or tax deductible or items that are taxable or tax deductible in a different period. Income taxes payable
and income taxes receivable, including those from prior fiscal years, are measured at the amount that is expected to be paid to or received from thetaxation authorities using tax rates and tax law that have been enacted or substantively enacted by the reporting date, reflecting uncertainty related toincome taxes, if any. Takeda’s current taxes also include liabilities related to uncertain tax positions. Inherent uncertainties exist in estimates of many
uncertain tax positions due to changes in tax law resulting from legislation, regulation, and/or as concluded through the various jurisdictions’ tax
court systems. When Takeda concludes that it is not probable that a tax authority will accept an uncertain tax position, Takeda recognizes the best
estimate of the expenditure required to settle a tax uncertainty. This is measured either based on the most likely amount or the expected value
amount, depending on which method provides a better prediction of the resolution of the uncertainty. The amount of unrecognized tax benefits isadjusted for changes in facts and circumstances. Takeda’s current tax assets and liabilities are calculated using tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred Taxes
Deferred taxes are calculated based on the temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes at the end of the reporting period. Deferred tax assets are recognized for deductible temporary
differences, unused tax credits and unused tax losses to the extent that it is probable that future taxable profit will be available against which theassets can be utilized. This requires Takeda to evaluate and assess the probability of future taxable profit and Takeda’s business plan, which are
inherently uncertain. The change in judgment upon determining the revenue forecast used for Takeda's business plan could have a significant impact
on the amount of the deferred tax assets to be recognized. Uncertainty of estimates of future taxable profit could increase due to changes in
economies in which Takeda operates, changes in market conditions, effects of currency fluctuations, or other factors. Takeda’s deferred taxes also
include liabilities related to uncertain tax positions. Deferred tax liabilities are generally recognized for taxable temporary differences.
Deferred tax assets and liabilities are not recognized for the following temporary differences:••••

Taxable temporary differences arising on the initial recognition of goodwill
The initial recognition of assets and liabilities in transactions that are not business combinations and affect neither accounting profit nor
taxable profit (loss) at the time of the transaction
Deductible temporary differences arising from investments in subsidiaries and associates, when it is not probable that the temporary
differences will reverse in the foreseeable future and that taxable profit will be available against which the temporary differences can beutilized
Taxable temporary differences arising from investments in subsidiaries and associates when the timing of the reversal of the temporary
differences is controllable and it is not probable that they will reverse in the foreseeable future

Further, Takeda has not recognized nor disclosed deferred tax assets and liabilities of income taxes relating to the Pillar Two model’s rules publishedby the Organization for Economic Cooperation and Development (“OECD”) , as required by IAS 12 as amended on May 23, 2023.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the periods in which the temporary differences are
expected to reverse based on the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred
tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and the deferred
tax assets and liabilities for those related to income taxes levied by the same taxation authority on the same taxable entity.
Earnings per Share
Basic earnings per share is calculated by dividing profit or loss for the year attributable to owners of ordinary shares of the Company, by theweighted-average number of ordinary shares outstanding during the reporting period, adjusted by the number of treasury shares. Diluted earnings per
share is calculated by adjusting all the effects of dilutive potential ordinary shares.

F-18

Property, Plant and Equipment
Property, plant and equipment are measured using the cost model and is stated at cost less accumulated depreciation and accumulated impairment
loss. Acquisition cost includes mainly the costs directly attributable to the acquisition and the initial estimated dismantlement, removal, andrestoration costs associated with the asset. Except for assets that are not subject to depreciation, such as land and construction in progress, assets are
depreciated mainly using the straight-line method over the estimated useful life of the asset. Right of use (“ROU”) assets are depreciated using thestraight-line method over the shorter of the lease term or the estimated useful life unless it is reasonably certain that Takeda will obtain ownership by
the end of the lease term. The depreciation of these assets begins when they are available for use.
The estimated useful life of major asset items is as follows:•••

Buildings and structures
Machinery and vehicles
Tools, furniture and fixtures

3 to 50 years
2 to 20 years
2 to 20 years

Goodwill
Goodwill arising from business combinations is stated at its cost less accumulated impairment losses. Goodwill is not amortized. Goodwill isallocated to cash-generating units (CGUs) or groups of cash-generating units that represent the lowest level within the entity for which information
about goodwill is available and monitored for internal management purposes and are not larger than an operating segment. Goodwill is only allocatedto CGUs or groups of CGUs that are expected to benefit from synergies related to the business combination from which goodwill arose and themethod of allocation depends on the facts and circumstances of the business combination. Goodwill is tested for impairment annually and whenever
there is any indication of impairment. Impairment losses on goodwill are recognized in the consolidated statements of profit or loss and no
subsequent reversal will be made.
Intangible Assets Associated with Products
Amortization and impairment losses on intangible assets associated with products is separately stated in the consolidated statements of profit or loss
because intangible assets associated with products have various comprehensive rights and contribute to our ability to sell, manufacture, research,market and distribute products, compounds and benefit multiple business functions.
Marketed Products
An intangible asset associated with a marketed product is amortized on a straight-line basis over the estimated useful life, which is based on expected
patent life, and/or other factors depending on the expected economic benefits of the asset, ranging from 3 to 20 years, from marketing approval.
These intangible assets are assessed for impairment if indicators of a potential impairment exist. An impairment is recorded if the carrying value
exceeds the recoverable amount of the intangible assets. Intangible assets relating to marketed products of which Takeda recalls or ceases sales forany reason are written down to their recoverable amount. Amortization, impairment and reversal of impairment related to intangible assets associatedwith marketed products are included in amortization and impairment losses on intangible assets associated with products in the consolidated
statements of profit or loss.
In-Process R&D
Takeda enters into collaboration and in-license agreements with third parties for products and compounds for R&D projects. Payments forcollaboration agreements generally take the form of subsequent development milestone payments. Payments for in-license agreements generally takethe form of up-front payments and subsequent development milestone payments. Up-front payments for in-license agreements are capitalized uponcommencement of the in-license agreements, and development milestone payments are capitalized when the milestone is achieved.
These intangible assets relating to products in development that are not yet available for use are not amortized. These intangible assets are assessed
for impairment on an annual basis, and more frequently if indicators of a potential impairment exist. An impairment is recorded if the carrying value
exceeds the recoverable amount of the intangible assets. Intangible assets relating to in-process R&D which fail during development or for whichdevelopment ceases for any reason are written down to their recoverable amount which is typically nil. Impairment and reversal of impairment
related to intangible assets associated with in-process R&D are included in amortization and impairment losses on intangible assets associated withproducts in the consolidated statements of profit or loss.
If and when Takeda obtains approval for the commercial application of a product in development, the related in-process R&D assets will bereclassified to intangible assets associated with marketed products.
Intangible Assets – Software
Software is recognized at cost and amortized on a straight-line basis over the expected useful life. The useful life used for this purpose is 3 to 10
years. Amortization of intangible assets – software is included in cost of sales, selling, general and administrative expenses, and research anddevelopment expenses in the consolidated statements of profit or loss.

F-19

Leases
As Lessee
Takeda assesses whether a contract is or contains a lease at inception of a contract. As a lessee, Takeda recognizes a ROU asset and a corresponding
lease liability for all contracts in which it is a lessee in the consolidated statements of financial position at the lease commencement date.
The ROU asset is initially measured at cost, being the initial amount of the lease liability adjusted for any lease payments made at or before the leasecommencement date and subsequently at cost less any accumulated depreciation and impairment losses. The ROU asset is subsequently depreciatedusing the straight-line method over the shorter of the lease term or the estimated useful life of the underlying asset. The ROU asset is subject toimpairment assessment.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using theinterest rate implicit in the lease or, if not readily determinable, the Takeda’s incremental borrowing rate.
Generally, Takeda uses its incremental borrowing rate as the discount rate. The lease term comprises a non-cancellable period of lease contracts andperiods covered by an option to extend or terminate the lease if Takeda is reasonably certain to exercise that option. After initial recognition, the leaseliability is measured at amortized cost using the effective interest method. If there is a change in future lease payments, such as from reassessment of
whether an extension or termination option will be exercised, the lease liability is remeasured. A corresponding adjustment is made to the ROU asset
or is recorded in the consolidated statements of profit or loss when the right-of-use asset has been fully depreciated.
Takeda has elected to apply recognition exemption for leases that have a lease term of 12 months or less and leases of low-value assets. The lease
payments for such leases are recognized as an expense on a straight-line basis over the lease term.
As a practical expedient, Takeda has elected not to separate non-lease components from lease components, and instead accounts for each lease
component and any associated non-lease components as a single lease component.
Impairment of Non-Financial Assets
Takeda assesses whether there is any indication of impairment for non-financial assets at the end of each reporting period, excluding inventories,
deferred tax assets, assets held for sale, and net defined benefit assets. If any such indication exists, and in cases in which an impairment test isrequired to be performed each year, the recoverable amount of the asset is estimated. In cases the recoverable amount cannot be estimated for each
asset, they are estimated at the cash-generating unit level. The recoverable amount of an asset or a cash-generating unit is determined at the higher of
its fair value less costs of disposal or its value in use. Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. In determining the value in use, the estimated future cash flows are
discounted to their present value using a discount rate that reflects the time value of money and the risks specific to the asset. If the carrying amountof the asset or cash-generating unit exceeds the recoverable amount, impairment loss is recognized in profit or loss and the carrying amount isreduced to the recoverable amount. An asset or a cash-generating unit other than goodwill, for which impairment losses were recognized in prioryears, is assessed at the end of the reporting period to determine whether there is any indication that the impairment loss recognized in prior periods
may no longer exist or may have decreased. If any such indication exists, the recoverable amount of the asset or cash-generating unit is estimated. In
cases the recoverable amount exceeds the carrying amount of the asset or cash-generating unit, the impairment loss is reversed up to the lower of theestimated recoverable amount or the carrying amount, net of depreciation and amortization, that would have been determined if no impairment loss
had been recognized in prior years. The reversal of impairment loss is immediately recognized in profit or loss.
Inventories
Inventories are measured at the lower of cost or net realizable value. The cost of inventories is determined mainly using the weighted-average cost
formula. The cost of inventories includes purchase costs, costs of conversion, and other costs incurred in bringing the inventories to the present
location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion andthe estimated costs necessary to make the sale. Pre-launch inventory is held as an asset when there is a high probability of regulatory approval for the
product. Before that point, a provision is made against the carrying value to its recoverable amount. The provision is then reversed at the point whena high probability of regulatory approval is determined.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known
amounts of cash and subject to insignificant risk of change in value and due within three months from the date of acquisition.
Assets Held for Sale
An asset or disposal group for which the cash flows are expected to arise principally from sale rather than continuing use is classified as an asset held
for sale when it is highly probable that the asset or disposal group will be sold within one year, the asset or disposal group is available for immediatesale in its present condition, and the management of Takeda is committed to the sale. In such cases, the asset held for sale is measured at the lower of
its carrying amount and fair value less costs to sell.
Property, plant and equipment and intangible assets classified as held for sale are not depreciated or amortized. Assets and liabilities classified as held
for sale are presented separately as current items in the consolidated statements of financial position.
F-20

Post-employment Benefit
Takeda sponsors lump-sum payments on retirement, pensions and other plans such as post-retirement medical care as post-employment benefit plans.
They are classified as defined benefit plans or defined contribution plans, depending on the characteristics of the plans.
Defined Benefit Plans
Takeda uses the projected unit credit method to determine the present value, the related current service cost, and the past service cost by each defined
benefit obligation. The discount rate is determined by reference to market yields on high quality corporate bonds at the end of the reporting period.
The net defined benefit liabilities (assets) in the consolidated statements of financial position are calculated by deducting the fair value of the plan
assets from the present value of the defined benefit obligations. If the defined benefit plan has a surplus, the net defined benefit asset is limited to thepresent value of any future economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Past
service cost defined as the change in the present value of the defined benefit obligation resulting from a plan amendment or curtailment is recognizedin profit or loss upon occurrence of the plan amendment or curtailment.
Remeasurement of net defined benefit plans is recognized in full in other comprehensive income and transferred to retained earnings in the period inwhich they are recognized.
Defined Contribution Plans
The costs for defined contribution plans are recognized as expenses when employees render related services.
Provisions
Takeda recognizes rebates and return reserves if Takeda receives consideration from a customer and expects to refund some or all of thatconsideration to the customer. In addition, provisions are recognized when Takeda has present legal or constructive obligations as a result of past
events, it is probable that outflows of resources embodying economic benefits will be required to settle the obligations and reliable estimates can bemade of the amount of the obligations. Takeda’s provisions consist primarily of rebates and return reserves, as well as provisions for litigation andrestructuring.
Financial Instruments
Takeda’s financial instruments include financial instruments related to lease contracts, trade and other receivables and payables, financial assets andliabilities associated with contingent consideration arrangements, derivative instruments, and rights and obligations under employee benefit plans,
which are dealt with in specific accounting policies.
Financial Assets
Initial Recognition and Measurement
Financial assets are recognized in the consolidated statements of financial position when Takeda becomes a party to the contract of the instruments.
Financial assets, except for investments in debt instruments measured at fair value through profit or loss (“FVTPL”), are initially measured at fairvalue plus transaction costs that are directly attributable to the acquisition.
•

Investments in debt instruments measured at amortized cost: Assets such as trade and other receivables that are held within a business model
whose objective is to hold financial assets in order to collect contractual cash flows and whose contractual terms give rise on specified dates tocash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortized cost. Trade
receivables are initially recognized at their invoiced amounts, including any related sales taxes less adjustments for deductions such as
impairment loss allowance and cash discounts.

•

Investments in debt instruments measured at fair value through other comprehensive income (“FVTOCI”): Assets that are held within a businessmodel objective whose objective is achieved by both collecting contractual cash flows and selling financial assets whose contractual terms giverise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at
FVTOCI.

•

Investments in debt instruments measured at FVTPL: Assets that do not meet the criteria for amortized cost or FVTOCI are measured at
FVTPL.

•

Equity instruments measured at FVTOCI: On initial recognition, Takeda makes an irrevocable FVTOCI election (on an instrument-byinstrument basis) to present the subsequent changes in the fair value of equity instruments in other comprehensive income for certain equity
instruments held for the long term for strategic purposes. At the reporting date, Takeda designates all of its equity instruments as financial assets
measured at FVTOCI.

F-21

Subsequent Measurement and Derecognition
Takeda derecognizes a financial asset only when the contractual right to receive the cash flows from the asset expires or when Takeda transfers thefinancial asset and substantially all the risks and rewards of ownership of the asset to another entity.
•

Investments in debt instruments measured at amortized cost: These assets are subsequently measured at amortized cost using the effective
interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment arerecognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

•

Investments in debt instruments measured at FVTOCI: These assets are subsequently measured at fair value. Interest income calculated using
the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses
arising from changes in fair value are recognized in other comprehensive income. Upon derecognition of the investments, the gains and losses
accumulated in other comprehensive income related to the investment is reclassified to profit or loss.

•

Investments in debt instruments measured at FVTPL: These assets are subsequently measured at fair value, and a gain or loss on debt
instruments that is subsequently measured at FVTPL is recognized in profit or loss.

•

Equity instruments measured at FVTOCI: These assets are subsequently measured at fair value. Dividends are recognized as income in profit orloss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in othercomprehensive income and are never reclassified to profit or loss. Upon derecognition of the investments, the amounts in other comprehensive
income related to the investment is reclassified within equity to retained earnings.

Impairment
Loss allowances are established using an Expected Credit Loss (“ECL”) model. The provisions are based on a forward-looking ECL, which includes
possible default events on the trade receivables over the entire holding period of the trade receivables. Takeda has elected to measure provisions for
trade receivables, contract assets and lease receivables at an amount equal to lifetime ECL. Takeda uses a provisions matrix based on historical loss
rates adjusted for forward looking information to calculate ECL. These provisions represent the difference between the contractual amount of the
trade receivables, the contract assets and the lease receivables in the consolidated statements of financial position and the estimated collectible net
amount.
Financial Liabilities
Initial Recognition and Measurement
Financial liabilities are recognized in the consolidated statements of financial position when Takeda becomes a party to the contract of financial
instruments. Financial liabilities are classified, at initial recognition, as financial liabilities measured at FVTPL, bonds and loans, or payables.
Financial liabilities, except for those measured at FVTPL, are initially measured at fair value less transaction costs that are directly attributable to theissuance.
Subsequent Measurement•

Financial liabilities measured at FVTPL: Financial liabilities measured at FVTPL are subsequently measured at fair value, and any gains orlosses arising on re-measurement are recognized in profit or loss. Financial liabilities measured at FVTPL include derivatives and financial
liabilities associated with contingent consideration arrangements.

•

Other financial liabilities, including bonds and loans: Other financial liabilities are measured at amortized cost mainly using the effective interest
method.

Derecognition
Takeda derecognizes a financial liability only when the obligation specified in the contract is discharged, canceled, or expires. On derecognition of afinancial liability, the difference between the carrying amount and the consideration paid or payable is recognized in profit or loss.
Derivatives
Takeda hedges the risks arising mainly from its exposure to fluctuations in foreign currency exchange rates and interest rates using derivatives suchas foreign exchange forward contracts, currency options, interest rate swaps, cross currency interest rate swaps and interest rate future. In addition,
Takeda hedges the risks arising from its exposure to fluctuations in prices of renewable energy using forward contracts. Takeda does not enter into
derivative transactions for trading or speculative purposes. Derivatives are measured at FVTPL unless the derivative contracts are designated as
hedging instruments. The gains and losses on derivatives that are not designed as hedging instruments are recognized in profit or loss. The treatmentof the change in fair value for derivatives designated as hedging instruments varies based on the type of hedge as described below.

F-22

Hedge Accounting
For foreign currency exposure as a result of translation risk, Takeda designates certain non-derivatives, such as foreign currency denominated debt
and certain derivatives such as foreign currency forwards, as net investment hedges of foreign operations. For foreign currency exposure due toforeign currency denominated transactions, Takeda designates certain derivatives, such as foreign currency forwards, currency options and crosscurrency interest rate swaps, as cash flow hedges of forecasted transactions. For interest risk exposure, Takeda designates derivatives such as interest
and cross currency interest rate swaps and forward rate agreements, as cash flow hedges of forecasted transactions. Within the designation
documentation at inception, Takeda documents the risk management objective, nature of the risk being hedged, and relationship between hedging
instruments and hedged risk based on the strategy for undertaking the hedging relationships. At inception and on a quarterly basis, Takeda also
assesses whether the hedging instruments are highly effective in offsetting changes in the fair value or the cash flows of the hedged item.
•

Cash flow hedges: the effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recognized inother comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. The cumulative gainor loss that was previously recognized in other comprehensive income is reclassified to profit or loss in the same period when the cash flows of
the hedged items are recognized in profit or loss and in the same line item in the consolidated statements of profit or loss. The currency basis
spread and the time value of the foreign currency options are accounted for and presented as hedging cost under other components of equity
separately from cash flow hedges.

•

Net investment hedges in foreign operations: the gain or loss on hedging instruments in foreign operation is recognized in other comprehensive
income. At the time of disposal of the foreign operations, the cumulative gain or loss recognized in other comprehensive income is reclassified
to profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or when the hedge no longer qualifies forhedge accounting.
The cash flows of hedging instruments qualified for hedge accounting are classified in the same manner as the cash flows of the items being hedged.
Transaction costs of financial liabilities
Transaction costs relating to the financial liabilities of debt issued are recorded against the corresponding debt and amortized to the consolidated
statements of profit or loss over the period to the earliest redemption date of the debt, using the effective interest rate method. On extinguishment of
the related debt, any unamortized deferred transaction costs are written off and charged to interest expense in the consolidated statements of profit orloss.
Share-based Payments
Takeda has implemented share-based payment programs and provides equity and cash-settled share-based payments.
Equity-settled Share-based Payments
Equity-settled share-based payments are granted based on the service performed by the employees, directors, and senior management. The service
received and the corresponding increase in equity are measured at the fair value of the equity instruments at the grant date. The fair value of theequity instruments granted to employees, directors, and senior management are recognized as expense over the vesting period of the awards with acorresponding amount as an increase in equity.
Cash-settled Share-based Payments
Cash-settled share-based payments are granted based on the service performed by the employees, directors, and senior management. The service
received and the corresponding liability are measured at the fair value of the corresponding liability. The fair value of the liability-classified awards
granted to employees, directors, and senior management are recognized as expense over the vesting period of the awards with a corresponding
amount as an increase in liability. Takeda re-measures the fair value of the liability at the end of each reporting period and at the date of settlement
and recognizes any changes in fair value in profit or loss.
CapitalOrdinary Shares
Proceeds from the issuance of ordinary shares by Takeda are included in share capital and share premium.
Treasury Shares
When Takeda acquires treasury shares, the consideration paid is recognized as a deduction from equity. When Takeda sells the treasury shares, thedifference between the carrying amount and the consideration received is recognized in share premium.

F-23

4. Operating Segment and Revenue Information
Takeda comprises a single operating segment and is engaged in the research, development, manufacturing, marketing and out-licensing ofpharmaceutical products. This is consistent with how the financial information is viewed in allocating resources, measuring performance, andforecasting future periods by the CEO who is Takeda’s Chief Operating Decision Maker.
Disaggregation of Revenue Information
Takeda’s revenue from contracts with customers is comprised of the following:
Revenue by Type of Good or Service
JPY (millions)
For the Year Ended March 31
Sales of pharmaceutical products¥

Out-licensing and service income

2022
3,295,723¥

273,283

Total¥

3,569,006

2023
3,922,280¥

105,198¥

4,027,478

2024
4,163,652
100,110¥

4,263,762

Revenue by Business Area and Product
JPY (millions)
For the Year Ended March 31
2022

2023

2024

Gastroenterology:
ENTYVIOGATTEX/REVESTIVE¥

521,778
75,751TAKECAB/VOCINTI (1)102,397108,719

118,526

PANTOLOC/CONTROLOC (2)40,27545,51846,495

DEXILANT

50,763

69,37145,278

ALOFISEL

1,843

2,725

3,513

Others82,877

72,38882,226875,685

1,094,541

1,216,207

ADVATE

118,491

118,188

122,911ADYNOVATE/ADYNOVI

60,726

66,553

66,308

FEIBA

39,162

41,26840,543VONVENDI
RECOMBINATE

8,774

12,217

16,18812,297

12,762

12,050

Others44,23953,73047,298283,689

304,718

305,297

TAKHZYRO

103,242

151,800

178,677

ELAPRASE

73,11985,321

91,561

REPLAGAL

51,714

66,74173,553

VPRIV42,40848,372

51,295LIVTENCITY

1,325

10,501

19,085

Total Gastroenterology¥

702,744
93,076¥800,919
119,252

Rare Diseases:
Rare Hematology:

Total Rare Hematology
Rare Genetics and Other:

Others55,69855,98951,232

Total Rare Genetics and Other

327,507418,724

465,403

Total Rare Diseases (4)611,196

723,442

770,701

F-24

JPY (millions)
For the Year Ended March 31
2022

2023

2024

PDT Immunology:
immunoglobulin

385,864

522,211644,587

albumin

90,035

121,446

133,990

Others

31,052

34,78639,993506,951

678,443

818,570

ADCETRIS

69,19083,937

109,425

LEUPLIN/ENANTONE

106,459

111,311

107,350NINLARO

91,203

92,69187,361ICLUSIG

34,86047,20654,706

ALUNBRIG

13,644

20,55628,524FRUZAQLA—
110,046—
27,75910,0805,539

Total PDT Immunology (4)Oncology:

VELCADE
EXKIVITY

962

3,732

3,459

42,36751,551

55,917468,730

438,742462,362

VYVANSE/ELVANSE

327,052

459,289423,221

TRINTELLIX

82,315100,081

104,797

ADDERALL XR

20,88528,59441,756INTUNIV
Others

18,93816,35433,555

33,10433,393

23,686482,294

637,711

627,014AZILVA-F (1)76,29772,897

33,636

FOSRENOL

13,612

13,532

13,529534,242

368,168

321,743

OthersTotal Oncology
Neuroscience:

Total Neuroscience
Other:

Others(3)

Total Other(4)624,150

Total

¥

(1)

3,569,006

454,598¥

4,027,478

368,908¥

4,263,762

The figures include the amounts of fixed dose combinations and blister packs.
Generic name: pantoprazole(3)
The figure for the year ended March 31, 2022 includes the JPY 133,043 million selling price on sales of four diabetes products (NESINA, LIOVEL, INISYNC and
ZAFATEK) in Japan to Teijin Pharma Limited recorded as revenue. As Takeda transferred only the assets, marketing rights and, eventually, marketing authorization
associated with the pharmaceutical products which do not entail transfer of employees or associated contracts, Takeda applied IFRS 15 to the transaction andrecorded the selling price in revenue.
(4)
Starting from the fiscal year ending March 31, 2025 (FY2024), “Plasma-Derived Therapies” will replace the previous category of “PDT Immunology” and will
include all plasma-derived products including those previously categorized within “Rare Diseases” (e.g., FEIBA, CINRYZE). “Vaccines” will be presented as aseparate key business area (previously included in “Others”), reflecting the strategic focus on our dengue vaccine, QDENGA.
If the new categories are applied, revenue from “Rare Disease” is JPY 688,423 million for the year ended March 31, 2024, JPY 639,774 million for the year ended
March 31, 2023, JPY 531,098 million for the year ended March 31, 2022, revenue from “Plasma-Derived Therapies” is JPY 903,699 million for the year ended
March 31, 2024, JPY 765,359 million for the year ended March 31, 2023 and JPY 589,571 million for the year ended March 31, 2022, revenue from “Vaccines” is
JPY 50,355 million for the year ended March 31, 2024, JPY 78,664 million for the year ended March 31, 2023 and JPY 55,225 for the year ended March 31, 2022,
revenue from “Others” is JPY 315,701 million for the year ended March 31, 2024, JPY 372,685 million for the year ended March 31, 2023 and JPY 566,403 million
for the year ended March 31, 2022.
(2)

F-25

Geographic Information
Takeda’s revenue from contracts with customers is based in the following geographic locations:
JPY (millions)
For the Year Ended March 31
2022
2023
2024
Japan

¥

U.S.

658,983¥

512,043¥

451,391

1,714,421

2,103,772

2,195,711

Europe and Canada

739,168

842,668

966,835

Asia (excluding Japan)

196,964

225,007261,218

Latin America

128,467

160,375

198,100

Russia/CIS

62,05788,431

72,594

Other

68,945

Total¥

95,1823,569,006¥

117,9114,027,478¥

4,263,762“Other” includes the Middle East, Oceania and Africa. This disaggregation provides revenue attributable to countries or regions based on thecustomer location.
Takeda’s non-current assets are held in the following geographic locations:
JPY (millions)
As of March 31
2023
Japan

¥

373,1332024¥

366,276

U.S.

7,560,491

8,223,949

Ireland792,382

885,496

Switzerland

799,325

860,795

1,258,787

1,361,811

Other
Total

¥

10,784,117¥

11,698,327

Non-current assets exclude financial instruments, deferred tax assets and net defined benefit assets.
Information Related to Major Customers
During the year ended March 31, 2022, AmerisourceBergen Corporation and its subsidiaries (collectively, “AmerisourceBergen Group”) and
McKesson Corporation and its subsidiaries (collectively, “McKesson Group”) represented more than 10% of Takeda’s sales. The sales to
AmerisourceBergen Group and McKesson Group were JPY 504,487 million and JPY 406,709 million for the year ended March 31, 2022.
During the year ended March 31, 2023, AmerisourceBergen Group, McKesson Group and Cardinal Health, Inc. and its subsidiaries (collectively,“Cardinal Health Group”) represented more than 10% of Takeda’s sales. The sales to AmerisourceBergen Group, McKesson Group and Cardinal
Health Group were JPY 575,294 million, JPY 540,356 million and JPY 424,527 million, respectively, for the year ended March 31, 2023.
During the year ended March 31, 2024, AmerisourceBergen Group, McKesson Group and Cardinal Health Group represented more than 10% of
Takeda’s sales. The sales to AmerisourceBergen Group, McKesson Group and Cardinal Health Group were JPY 579,065 million, JPY 578,767
million and JPY 436,951 million, respectively, for the year ended March 31, 2024.

F-26

Other Revenue Information
Contract Balances
JPY (millions)
As of March 31
2023

2024

Receivables from contracts with customers
Trade receivables (Note 17)¥575,431¥

612,439

Contract assets
Unbilled receivables

2,628

2,574

8,609

8,259

19

45

Contract liabilities
Deferred income (Note 24)
Advance payments

Takeda’s contract assets relate to the right to receive consideration where performance was completed based on the contract, and trade receivables arerecognized when the right to receive consideration becomes unconditional.
Takeda’s contract liabilities primarily relate to out-licensing arrangements or product purchase and supply agreements where Takeda receives cash
consideration prior to the completion of its performance obligations under the agreements. The revenue recognized during the years ended March 31,
2022, 2023, and 2024 that was included in the contract liability balance as of the beginning of the year was JPY 30,022 million, JPY 49,319 million,
and JPY 5,526 million, respectively. The revenue recognized during the years ended March 31, 2022, 2023, and 2024 from performance obligations
satisfied (or partially satisfied) in previous periods was JPY 49,220 million, JPY 79,251 million, and JPY 80,794 million, respectively, and primarily
relates to royalty income.
Transaction price allocated to the remaining performance obligations
JPY (millions)
Duration of the remaining performance obligations
Total
Contract liabilities as of March 31, 2023
Contract liabilities as of March 31, 2024¥

Between one andfive years

Within one year
8,628

¥

6,394

8,304

6,119

F-27

¥

458

More than five
years
¥
1,775

517

1,668

5.

Other Operating Income and Expenses
JPY (millions)
For the Year Ended March 31
2022

2023

2024

Other operating income:Change in fair value of financial assets and liabilities associated with contingent
consideration arrangements (Note 27)¥

11,195¥—¥—Gain on sales of property, plant and equipment and investment property

1,148

2,094

144

Gain on divestment of business to Teva Takeda Yakuhin

1,414

6,807

588

Gain on divestment of business and subsidiaries

5,602

—

7,243

Change in estimate of liabilities related to SHP647

—

4,102

—

Other

23,762

Total

12,421

11,404¥

43,123¥25,424¥

19,379

¥

8,255

¥

7,685

¥

7,009

Other operating expenses:
Donations and contributions
Restructuring expenses (Note 23)

83,83659,23481,358—3,991

20,757

Valuation reserve for pre-launch inventories

20,723

9,466

11,052

Impairment of assets held for sale (Note 19)

—

4,693

1,685

46,26160,17884,666

Change in fair value of financial assets and liabilities associated with contingent
consideration arrangements (Note 27)

Other
Total

¥

159,075¥

145,247¥

206,527

For the year ended March 31, 2022, other in other operating income includes a compensation for damages and settlement proceeds Takeda receivedof JPY 8,487 million.
For the year ended March 31, 2023, other in other operating expenses includes a JPY 16,470 million write-off of option fees Takeda paid as part ofcollaboration agreements.
For the years ended March 31, 2022, 2023 and 2024, other in other operating expenses includes legal provision for certain legal proceeding of
JPY 20,319 million, JPY 16,455 million and JPY 45,212 million, respectively. The legal provision for certain legal proceeding for the year ended
March 31, 2024 includes additional losses recorded for the supply agreement litigation with AbbVie, Inc. ("AbbVie") of JPY 26,405 million.

F-28

6.

Finance Income and Expenses
JPY (millions)
For the Year Ended March 31
2022

2023

2024

Finance Income:Interest income
Interest income from financial assets measured at amortized cost

¥

3,880

¥

4,187

¥

8,850

Interest income from financial assets measured at fair value through P&L

700

1,318

2,442

Interest income on sublease

11

3

1

Total interest income

4,591

5,508

11,293

8

6

—

164

267

335

172
—

273

335

Gain on derivative financial assets – Foreign currency exchange

4,476

31,053Gain on derivative financial assets – Warrants—

15,896—

Gain on derivative financial assets – Virtual power purchase agreement

—

6,843

3,393

Dividend income
Dividend income from financial assets measured at fair value through OCI and disposed ofduring the period
Dividend income from financial assets measured at fair value through OCI and held at endof the period
Total dividend income

Gain on derivative financial assets – Cross currency interest rate swap

—

—

4,144

Remeasurement to fair value of pre-existing interest in an acquiree

8,482

22,416—

Other

10,455

7,501

1,875

Total

¥

23,700¥62,913¥52,093¥

108,498¥

100,393¥

98,710Finance Expenses:
Interest expense
Interest expense on financial debt
Interest expense on lease liabilities
Total interest expense

13,934122,432

16,580116,973

20,826
119,535

Loss on derivative financial assets – Foreign currency exchange

2,112

—

—

Loss on derivative financial assets – Warrants

20,483

—

—

—

6,843

3,393

Loss on foreign currency exchange, net

1,791

14,20544,665Hyperinflation effect expense

3,698

12,25618,160Other

16,091

19,421

34,096

Loss on derivative financial assets – Virtual power purchase agreement

Total

¥

F-29

166,607¥

169,698¥

219,850

7.

Income Taxes

Income Tax Expense (Benefit)
The composition of income tax expense (benefit) is as follows:
JPY (millions)
For the Year Ended March 31
2022
Current tax expense¥

Deferred tax benefit

2023

208,513¥(136,108)

Total

¥

2024

246,578¥(188,526)

72,405¥

107,349(198,755)

58,052¥(91,406)

Current tax expense includes the benefits arising from previously unrecognized tax losses, tax credits and temporary differences of prior periods.
These effects decreased current tax expense by JPY 11,315 million, JPY 17,529 million and JPY 4,952 million for the years ended March 31, 2022,
2023 and 2024, respectively.
Deferred tax benefit includes the benefits arising from previously unrecognized tax losses, tax credits and temporary differences of prior periods.
These effects decreased deferred tax expense by JPY 11,914 million, JPY 54,974 million and JPY 32,290 million for the years ended March 31,
2022, 2023 and 2024, respectively.
Takeda is mainly subject to income taxes, inhabitant tax, and deductible enterprise tax in Japan. The statutory tax rate calculated based on these taxes
is 30.6% for the years ended March 31, 2022, 2023 and 2024.
The following is a reconciliation from income tax expense at Takeda's domestic (Japanese) statutory tax rate to Takeda's income tax expense (benefit)
reported for the year ended March 31:
JPY (millions)
2022
Profit before tax¥

Income tax expense at Takeda’s domestic (Japanese) statutory tax rate of 30.6%
Non-deductible expenses for tax purposes

302,5712023¥

92,526(1)2024

375,090¥

52,791

114,703

16,143

6,071

15,15821,353

Changes in unrecognized deferred tax assets and deferred tax liabilities (2)(8,831)(21,791)(3,512)

Tax credits(32,948)(26,676)(30,654)

24,496(31,446)(29,782)(20,359)

6,174(1,737)

Differences in applicable tax rates of overseas subsidiaries(3)

Changes in tax effects of undistributed profit of overseas subsidiaries
Effect of changes in applicable tax rates and tax law(4)(39,661)

2,482(11,994)

Tax contingencies (5)58,54013,991(83,784)

Effect of prior year items(4,762)(7,524)(2,479)Entity reorganizations/Divestments

2,041(6,321)

33,469Other(4,708)

Income tax expense (benefit) reported for the year¥

72,405(698)¥

58,052

1,571¥(91,406)(1)

Amounts for the years ended March 31, 2022, 2023 and 2024 include the impact from intra territory eliminations, the pre-tax effect of which has been eliminated inarriving at Takeda’s consolidated income from continuing operations before income taxes. Additionally, amounts for the years ended March 31, 2023 and 2024 include
non-deductible interest due to Japanese earnings stripping rules.
(2)

Amounts for the years ended March 31, 2022, 2023 and 2024 include deferred tax expenses (benefits) associated with carried forward net operating losses. The
amount for the year ended March 31, 2023 is driven by recognition of tax benefits from previously unrecognized tax losses as result of internal entity restructuringtransactions.
(3)

Amounts for the years ended March 31, 2022, 2023 and 2024 include unitary and minimum taxes on overseas subsidiaries.

(4)

Amount for the year ended March 31, 2022 includes JPY 39,106 million deferred tax benefit related to a blended state tax rate change as a result of legal entity
restructuring in the US. Amount for the year ended March 31, 2024 includes JPY 4,206 million deferred tax expense related to US state law change and JPY 16,200
million deferred tax benefit relating to extension of the carryforward period relating to Japanese earnings stripping rules.
(5)

Tax expense amount for the year ended March 31, 2022 includes JPY 65,942 million from the AbbVie break fee case. Tax benefit for the year ended March 31, 2024
is from favorable resolution of tax contingencies including JPY 63,547 million relating to the AbbVie break fee settlement.

F-30

The decrease in Takeda’s income tax expense between the years ended March 31, 2022 and 2023 was primarily due to increased tax benefits fromrecognition of deferred tax assets and decreased tax charges for US international tax provisions in the year ended March 31, 2023. Tax expense forthe year ended March 31, 2022 includes a charge for the AbbVie break fee case (a tax assessment related to the treatment of an acquisition break fee
Shire received from AbbVie in 2014) partially offset by the benefits from the US state blended tax rate change and reductions of deferred tax
liabilities on undistributed earnings.
The decrease in Takeda’s income tax expense between the years ended March 31, 2023 and 2024 was primarily due to lower pretax earnings as well
as a tax expense reduction of JPY 63,547 million resulting from the reversal of the income taxes payable in excess of the settlement with the Irish
Revenue Commissioners with respect to the AbbVie break fee case. These decreases were partially offset by the tax charges from legal entity
restructuring and the reassessment of recoverability of deferred tax assets.
As a company with worldwide operations, Takeda is subject to several factors that may affect future tax charges, principally the levels and mix ofprofitability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms. In December 2021, the OECD issued
model rules for a new global minimum tax framework (Pillar Two).
Pillar Two legislation was enacted by Japanese Diet on March 28, 2023. Since the newly enacted tax legislation in Japan is only effective from April
1, 2024, there is no current tax impact for the year ended March 31, 2024. Takeda has applied the temporary mandatory relief from deferred tax
accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred. Takeda has performed an assessment of its
potential exposure to Pillar Two income taxes based on the most recent tax filings, country-by-country reporting and financial statements for theconstituent entities in the group. Based on this assessment, Takeda expects that the top-up tax related to Pillar 2 will only arise in a limited number ofjurisdictions and the amount of additional tax charge will not be material.
Deferred Taxes
Deferred tax assets and liabilities reported in the consolidated statements of financial position are as follows:
JPY (millions)
As of March 31
2023
Deferred tax assets¥

Deferred tax liabilities

2024

366,003¥(270,620)

Net deferred tax assets¥

95,383393,865(113,777)¥

280,088

The major items and changes in deferred tax assets and liabilities are as follows:
JPY (millions)

As of April 1,
2022
Research and development expenses¥

33,199

Recognized inothercomprehensive
incomeRecognized in
profit or (loss)¥

98,057¥—

As of March 31,
2023

Other(1)
¥

4,974

¥

136,230

Inventories

94,53011,863—

4,518

110,911

Property, plant and equipment(69,775)

2,834—(4,818)(71,759)

Intangible assets(497,480)

86,244—(41,358)(452,594)

Financial assets measured at FVTOCI(6,759)

—

214

1,417

(5,128)

Accrued expenses and provisions

155,330(6,402)—

16,115

165,043

Defined benefit plans

13,456(2,855)(5,563)

1,368

6,406

Deferred income

11,225(3,911)

—

118

7,432

Unused tax losses

119,453(24,662)—

6,301

101,092

Tax credits

38,912

9,389

—

3,790

52,091

Investments in subsidiaries and associates(31,210)(5,581)—(47)(36,838)

Cash flow hedges

29,031

—

9,449

—

38,480(8,134)44,017(15,756) ¥95,383

Other
Total

¥

21,11623,550(88,972) ¥188,526

F-31

7,485
¥

11,585¥JPY (millions)

As of April 1,
2023
Research and development expenses¥

Inventories

136,230

Recognized inothercomprehensive
incomeRecognized in
profit or (loss)¥

110,911

77,180¥—20,482—As of March 31,
2024

Other(1)
¥

3,600

¥

217,010

7,009

138,402

Property, plant and equipment(71,759)

9,249—(5,999)(68,509)

Intangible assets(452,594)

99,039—(36,715)(390,270)

Financial assets measured at FVTOCI(5,128)—(2,056)(455)(7,639)Accrued expenses and provisions

165,043

7,469—

13,081

185,593

6,406

667

2,170

5,485

14,728

Defined benefit plans
Deferred income

7,432(1,955)

—

16

5,493

Unused tax losses

101,092(15,970)—

3,549

88,671

Tax credits

52,091(11,230)—

5,298

46,159Investments in subsidiaries and associates(36,838)

10,183—(146)(26,801)

Cash flow hedges

38,4802,227(19,062)—

21,645

Other

44,017

1,414(3,171)

13,34655,606(22,119) ¥

8,069

Total

¥

95,383¥

198,755¥¥

280,088(1)

Other consists primarily of foreign currency translation differences, reclassification of deferred tax assets and liabilities classified as held for saleand the tax impact of items charged directly to equity. The aggregate amount of deferred tax related to items charged directly to equity for the years
ended March 31, 2023 and 2024 was JPY 2,204 million and JPY 506 million, respectively.
Takeda considers the probability that a portion or all of the future deductible temporary differences, unused tax losses, or unused tax credits can beutilized against future taxable profits upon recognition of deferred tax assets. In assessing the recoverability of deferred tax assets, Takeda considers
the scheduled reversal of taxable temporary differences, projected future taxable profits, and tax planning strategies.
Based on the level of historical taxable profits and projected future taxable profits during the periods in which the temporary differences become
deductible, Takeda has determined that it is not probable a portion of the tax benefits can be utilized.
The unused tax losses, deductible temporary differences, and unused tax credits for which deferred tax assets were not recognized are as follows:
JPY (millions)
As of March 31
2023
Unused tax losses

¥

2024

1,181,757¥

1,186,106

Deductible temporary differences

259,784

263,143

Unused tax credits

11,18623,724The unused tax losses and unused tax credits for which deferred tax assets were not recognized will expire as follows:
JPY (millions)
As of March 31
Unused tax losses

2023

1st year

¥

2024
76

¥

812

2nd year762

85

3rd year

307

1,989

4th year

896

6,233

5th year

2,081

578,648

1,114,021

590,81363,614

7,526

After 5th year
Indefinite
Total

¥

F-32

1,181,757¥

1,186,106

JPY (millions)
As of March 31
Unused tax credits

2023

Less than 5 years¥

5 years or more
¥

¥

3,901

9,034

19,823——

Indefinite
Total

2024

2,151

11,186¥23,724

The aggregate amounts of temporary differences associated with investments in subsidiaries for which deferred tax assets were not recognized were
JPY 515,052 million and JPY 65,232 million as of March 31, 2023 and 2024, respectively.
The aggregate amounts of temporary differences associated with investments in subsidiaries for which deferred tax liabilities were not recognized
were JPY 416,417 million and JPY 532,960 million as of March 31, 2023 and 2024, respectively.
Changes in the amounts of unrecognized deferred tax assets and liabilities associated with investments in subsidiaries are primarily due to changes in
temporary differences that had no impact on the consolidated statements of profit or loss.
8.

Earnings per Share

The basis for calculating basic and diluted earnings per share (“EPS”) (attributable to owners of the Company) is as follows:
For the Year Ended March 31
2022

2023

2024

Net profit for the year attributable to owners of the Company:
Net profit for the year attributable to owners of the Company JPY (millions)
Net profit used for calculation of earnings per share JPY (millions)¥

230,059¥

317,017¥

144,067

230,059

317,017

144,067

1,563,501

1,551,809

1,564,450

13,66818,064

15,893

1,577,169

1,569,872

1,580,343

Basic (JPY)147.14204.2992.09

Diluted (JPY)145.87201.9491.16

Weighted-average number of ordinary shares outstanding during the year (thousands ofshares) [basic]
Dilutive effect (thousands of shares)
Weighted-average number of ordinary shares outstanding during the year (thousands ofshares) [diluted]
Earnings per share

Basic EPS is calculated by dividing the net profit for the year attributable to owners of the Company, with the weighted average number of ordinary
shares outstanding during the year. This calculation excludes the average number of treasury shares. Diluted EPS is calculated by dividing the net
profit for the year attributable to owners of the Company, with the weighted-average number of ordinary shares outstanding during the year plus theweighted-average number of ordinary shares that would be issued upon conversion of all the dilutive ordinary shares into ordinary shares.
There were 2,643 thousand shares, 814 thousand shares, and 814 thousand shares that are anti-dilutive stock options, and therefore not included in thecalculation of diluted EPS for the years ended March 31, 2022, 2023, and 2024, respectively.

F-33

9.

Other Comprehensive Income (Loss)

Amounts arising during the year, reclassification adjustments to profit or loss, and tax effects for each component of other comprehensive income(loss) are as follows:
JPY (millions)
For the Year Ended March 31
2022

2023

2024

Items that will not be reclassified to profit or loss:
Changes in fair value of financial assets measured at fair value through OCI:
Amounts arising during the year
Tax effects
Changes in fair value of financial assets measured at fair value through OCI
Remeasurement of defined benefit pension plans:
Amounts arising during the year
Tax effects
Remeasurement of defined benefit pension plans

¥
¥

¥
¥

(17,295) ¥2,669(14,626) ¥(2,868) ¥214(2,654) ¥4,365(2,056)2,309

26,890 ¥(6,107)
20,783 ¥23,315 ¥(5,563)17,752 ¥(7,172)
2,170(5,002)

558,102—558,102
25,867583,969¥

566,683—
566,683
52,090618,773¥956,254—956,254
12,588968,842

—
—
—
—
—

¥

¥

(9,118) ¥
9,118
—
—
— ¥

(16,150)
16,150———82,780 ¥(79,321)
3,459(1,286)2,173 ¥

56,437 ¥(87,337)(30,900)
9,449(21,451) ¥171,059(137,265)
33,794(10,338)
23,456

6,611 ¥
(3,071)
3,540(1,083)2,457 ¥

(21,426) ¥(3,052)(24,478)
7,485(16,993) ¥12,392(2,024)
10,368(3,171)
7,197(497) ¥—
(497)—
(497) ¥
594,261 ¥(892) ¥—
(892)—(892) ¥
594,535 ¥(1,793)—(1,793)—(1,793)995,009

Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations:
Amounts arising during the year
Reclassification adjustments to profit or (loss)
Before tax effects
Tax effects
Exchange differences on translation of foreign operations¥¥

Changes in fair value of financial assets measured at fair value through OCI:
Amounts arising during the year
Reclassification adjustments to profit or (loss)
Before tax effects
Tax effects
Changes in fair value of financial assets measured at fair value through OCI
Cash flow hedges:
Amounts arising during the year
Reclassification adjustments to profit or (loss)
Before tax effects
Tax effects
Cash flow hedges

¥

¥

¥

¥

Hedging cost:
Amounts arising during the year
Reclassification adjustments to profit or (loss)
Before tax effects
Tax effects
Hedging cost¥¥

Share of other comprehensive income of investments accounted for using the equity method:Amounts arising during the year
Reclassification adjustments to profit or (loss)
Before tax effects
Tax effects
Share of other comprehensive loss of investments accounted for using the equity method
Total other comprehensive income for the year
F-34

¥

¥
¥

¥

¥

10.

Property, Plant and Equipment
JPY (millions)
Buildings andstructures¥
1,288,578

Machinery andvehicles¥
772,024

Tools,
furniture, andfixtures¥135,895

Additions and other increases

46,15525,628Transfers

21,02637,743

Disposals and other decreases(22,876)

Reclassification to assets held forsale (Note 19)
Foreign currency translationdifferences
As of March 31, 2023

Acquisition cost
As of April 1, 2022

Additions and other increases
Transfers
Disposals and other decreases
Reclassification to assets held forsale (Note 19)
Foreign currency translationdifferences
As of March 31, 2024¥

Land
98,654

Constructionin progress¥
157,856

9,025

349

104,059

185,217

5,962—(64,731)—(16,084)(11,096)

(201)

(574)

(50,830)(14,915)(10,968)(4,013)(5,471)(965)(36,331)

82,13943,039

6,093

4,895

11,755

147,9221,400,108 ¥
158,460
26,434(45,337)

851,382 ¥
27,66239,784(11,583)

141,867 ¥
11,50810,803(10,694)

98,227 ¥5—(9)207,400 ¥126,788(77,021)(2,817)2,698,984
324,423—(70,440)(9,188)(6,236)

(483)

(597)

(53)

(16,558)

148,576

80,936

11,946

8,220

24,391

274,069¥

981,944¥

164,945¥¥

1,679,054¥¥(344,123) ¥(431,287) ¥(91,491) ¥(72,900)(60,428)(17,052)

Impairment losses(560)(1,410)

Disposals and other decreases

5,429

Reclassification to assets held forsale (Note 19)
Foreign currency translationdifferences
As of March 31, 2023

105,845¥

278,689¥

Total
2,453,007¥

3,210,478(411) ¥

(2,896) ¥(870,207)——(150,379)

(121)

—

(239)

(2,331)

14,207

10,393

195—

30,224

8,209

9,276

3,499

—

—

20,983(15,585)(16,976)(3,435)

(28)

(21)

(36,045)(419,530) ¥(486,618) ¥(98,207) ¥(243) ¥

(3,156) ¥(1,007,755)(80,067)(71,588)(18,684)——(170,339)

Impairment losses(1,082)(4,039)(781)—(9,552)(15,454)

Disposals and other decreases

22,173

8,682

10,127—

1,210

42,192

Reclassification to assets held forsale (Note 19)
Foreign currency translationdifferences
As of March 31, 2024

7,961

5,353

419

—

—

13,733(36,879)(37,869)(8,058)

(30)

(242)

(83,078)(507,425) ¥(586,080) ¥(115,184) ¥(273) ¥

(11,739) ¥(1,220,701)

Accumulated depreciation andaccumulated impairment losses
As of April 1, 2022
Depreciation expenses¥

Depreciation expenses¥

JPY (millions)
Buildings andstructures¥
944,455

Machinery andvehicles¥
340,737

Tools,
furniture, andfixtures¥44,404As of March 31, 2023

980,578364,763

As of March 31, 2024

1,171,629

395,865

Carrying amount
As of April 1, 2022

F-35

Land
98,243

Constructionin progress¥
154,960

43,66097,983204,245

1,691,229

49,761

105,572

266,950

1,989,777

¥

¥

Total
1,582,800

Leases
The changes in acquisition cost of property, plant and equipment for the years ended March 31, 2023 and 2024 include the following changes in
ROU assets:
JPY (millions)
Acquisition cost of ROU Assets
As of April 1, 2022

Buildings andstructures¥

525,118

Machineryand vehicles

Tools,
furniture, andfixtures¥¥13,940

351

Total
¥

539,410Additions and other increases

31,5856,828

238,416

Disposals and other decreases(21,134)(4,842)(40)(26,016)

Foreign currency translation differences
As of March 31, 2023

38,016892

738,915¥573,585¥

16,818Additions and other increases

136,969

7,950

Disposals and other decreases(36,468)(408)
68,220Reclassification to assets held for sale (Note 19)
Foreign currency translation differences
As of March 31, 2024¥

741,898

¥

¥

320

¥

590,724

31

144,950(4,840)(33)(41,341)

(38)

(127)

(573)

1,988

20

70,22821,880¥211¥

763,989

The changes in accumulated depreciation and accumulated impairment losses for the years ended March 31, 2023 and 2024 include the followingchanges in accumulated depreciation and accumulated impairment losses related to ROU assets:
JPY (millions)
Accumulated depreciation and accumulated
impairment losses of ROU Assets
As of April 1, 2022
Depreciation expenses
Impairment losses
Disposals and other decreases
Foreign currency translation differences
As of March 31, 2023

Tools,
Buildings andMachineryfurniture, andstructuresand vehicles
fixtures¥(124,166) ¥(7,072) ¥(234) ¥
(43,260)(4,535)
(60)
(43)
—
—

Total
(131,472)(47,856)
(43)

4,039

3,999

39

8,077

(8,719)(172,149) ¥(429)(8,037) ¥(9)(264) ¥

(9,157)(180,450)

Depreciation expenses(45,635)(5,286)(33)(50,954)

Disposals and other decreases
Reclassification to assets held for sale (Note 19)
Foreign currency translation differences
As of March 31, 2024

17,251
405

4,221
38

33
120

21,505562¥¥(20,368)

(865)

(16)

(21,249)(220,496) ¥(9,930) ¥(160) ¥

(230,586)

The carrying amount of property, plant and equipment includes the carrying amount of following ROU assets:
JPY (millions)

Carrying amount of ROU Assets
As of April 1, 2022
As of March 31, 2023
As of March 31, 2024

Buildings andstructures¥
400,952
401,437
521,403

Machineryand vehicles
¥
6,868
8,781
11,950F-36

Tools,
furniture, andfixtures
¥
118
56
51

¥

Total
407,938
410,274
533,403

Takeda recognized expenses related to leases not included in the measurement of the lease liabilities as follows:

2022
Expense relating to short-term leases
Expense relating to leases of low-value assets that are not short-termleases expenses
Expense relating to variable lease payments
Total expenses not included in lease liabilities
Total cash outflow for leases not included in lease liabilities¥

JPY (millions)
For the Year Ended March 31
2023
4,458 ¥
4,521 ¥
1,304

¥
¥

2024
4,312

1,255

4,006
9,768
9,768

887

4,794
10,570
10,570¥¥10,954
16,152
16,152¥¥The total cash outflow for leases on lease liabilities for the years ended March 31, 2022, 2023 and 2024 was JPY 53,628 million, JPY 59,981 million
and JPY 75,412 million, respectively. Also, the total future cash outflow for leases not yet commenced to which Takeda is committed for the year
ended March 31, 2024 is JPY 225,027 million.
Impairment
Takeda recognized the following impairment losses, which are reflected as follows, in the consolidated statements of profit or loss:
JPY (millions)
For the Year Ended March 31
2022
Cost of sales¥

Selling, general and administrative expenses

2023

2024

(261) ¥

(375) ¥

(6,225)

(34)

(75)

—

Research and development expenses——(1,307)

Other operating expenses(92)(1,881)(7,923)(388) ¥

(2,331) ¥(15,454)

Total¥

Impairment losses for the year ended March 31, 2022 resulted primarily from discontinued production facilities in Japan.
Impairment losses for the year ended March 31, 2023 resulted primarily from a decision to discontinue a production facility in Europe.
Impairment losses for the year ended March 31, 2024 resulted primarily from production facilities, whose recoverable amounts were nil, related to
ALOFISEL (for complex Crohn's perianal fistulas) following topline results of the phase 3 ADMIRE-CD Ⅱ trial.
The carrying amounts of the impaired assets were reduced to the recoverable amounts, which were measured at fair value less costs of disposal. This
fair value is classified as Level 3 in the fair value hierarchy.

F-37

11.

Goodwill
JPY (millions)
For the Year Ended March 31
2023

2024

Acquisition cost
As of beginning of the year¥

Reclassification to assets held for sale (Note 19)

4,407,749¥(5,951)

Foreign currency translation differences and others(6,626)

388,925

As of end of the year

4,790,723
625,970¥

4,790,723¥

5,410,067¥

4,407,749¥

4,790,723

Carrying amount
As of beginning of the year
As of end of the year

4,790,723

5,410,067

Impairment Testing of Goodwill
For the years ended March 31, 2023 and 2024, respectively, goodwill was tested for impairment at the single operating segment level (one CGU),
which is the level at which goodwill is monitored for internal management purposes. Impairment loss for goodwill is recognized if the recoverable
amount of goodwill is less than the carrying amount. The recoverable amount is the greater of fair value less costs of disposal, or value in use of the
CGU.
For the years ended March 31, 2023 and 2024, respectively, Takeda did not record an impairment loss for goodwill as a result of the impairment
testing performed as of January 1. Takeda’s market capitalization was compared to the book value of Takeda’s net assets and indicated a surplus as ofJanuary 1, 2023.
For the years ended March 31, 2023 and 2024, the recoverable amount of goodwill was assessed based on fair value less costs of disposal. The fairvalue less costs of disposal was determined by discounting the estimated future cash flows based on a 10-year projection using a terminal growth rate
and a discount rate as well as deducting the estimated costs of disposal. The projection included the sales forecast related to certain products as thesignificant assumption, associated with product launches, competition from rival products and pricing policy as well as the possibility of generics
entering the market and loss of exclusivity. In setting the sales forecast, Takeda considered past experience, external sources of information,knowledge of competitor activity, and industry trends. The valuation methodology uses significant inputs which are not based on observable market
data. Therefore, this fair value less costs of disposal is classified as level 3 in the fair value hierarchy.
Terminal growth rate and discount rate used in the discounted cash flow models for the impairment tests are as follows:
For the Year Ended March 31
2023

2024

Terminal growth rate

0.0%

0.0%

Discount rate (post-tax)

6.8%

6.2%

Terminal growth rate is based on management’s estimate of future long-term average growth rates. Discount rate is based on weighted average costof capital (“WACC”) of Takeda.
The fair value less costs of disposal exceeded the carrying amount of the CGU, and a reasonable change in the assumptions used for the recoverable
amount calculation would not result in an impairment.

F-38

12.

Intangible Assets

JPY (millions)
Acquisition cost
As of April 1, 2022

Intangible assets
associated withproducts

Software¥

182,778¥6,240,818

Other
¥

Total

11,554¥

6,435,150

Additions and other increases

36,984

676,156295

713,436

Disposals and other decreases(11,798)(126,610)(13)(138,420)

Reclassification to assets held for sale (Note 19)(1,012)——(1,012)Foreign currency translation differences
As of March 31, 2023

12,607¥

219,559

533,707¥7,324,072

3¥

11,839546,317¥

7,555,471

Additions and other increases

47,179124,878

206

172,263

Disposals and other decreases(4,885)(57,869)(149)(62,903)(266)(33,052)—(33,318)

27,529942,404

48

969,980

Reclassification to assets held for sale (Note 19)
Foreign currency translation differences
As of March 31, 2024¥

289,116

Accumulated amortization andaccumulated impairment losses
As of April 1, 2022¥

(76,634) ¥(25,561)

Amortization
Impairment losses
Disposals and other decreases
Reclassification to assets held for sale (Note 19)
Foreign currency translation differences
As of March 31, 2023¥¥

8,300,433¥

11,944¥8,601,492(2,539,461) ¥(510) ¥

(2,616,606)(485,465)(30)(511,056)—(57,341)—(57,341)

10,756

101,888—

112,643

397

—

—

397

(5,177)(208,672)(2)(213,851)(96,220) ¥(3,189,051) ¥(542) ¥

(3,285,813)

Amortization(32,587)(521,998)(83)(554,668)

Impairment losses(3,126)(166,278)—(169,405)

Reversal of impairment losses—

35,686—35,686

Disposals and other decreases

4,614

57,83811

62,462

Reclassification to assets held for sale (Note 19)
Foreign currency translation differences
As of March 31, 2024
Carrying amount
As of April 1, 2022

203

26,558—26,761(12,366)(429,462)(5)(441,833)¥(139,483) ¥(4,186,707) ¥(620) ¥

(4,326,810)¥

106,143

3,701,357¥¥

11,044¥

3,818,544

As of March 31, 2023

123,340

4,135,020

11,297

4,269,657

As of March 31, 2024

149,632

4,113,726

11,3244,274,682

There were no material internally generated intangible assets recorded in the consolidated statements of financial position.

F-39

The intangible assets associated with products are comprised of the following:
JPY (millions)Marketed products
As of April 1, 2022¥

3,389,453

In-process R&D¥

311,904

Carrying amount¥

3,701,357

As of March 31, 2023

3,164,380

970,640

4,135,020

As of March 31, 2024

3,148,680

965,045

4,113,726

Marketed products mainly represent license rights associated with commercialized products. In-process R&D mainly represents products indevelopment and license rights obtained in connection with Takeda’s collaboration, in-licensing agreements and other asset acquisitions. These
agreements relate to the right to sell products that are being developed (Note 13).
The table below provides information about significant intangible assets.
JPY (millions)
Carrying amount

Remainingamortization period

As of March 31

As of March 31

2023
¥

2024
766,459¥2024

Immunoglobulins

Marketed products

795,903

11 YearsTAK-279

In-process R&D

533,999

613,329-

TAKHZYRO

Marketed products

546,336

562,434

10 Years

ADVATE & ADYNOVATE/ADYNOVIMarketed products

278,463

269,275

6 Years

VYVANSE/ELVANSE

Marketed products

306,242

223,589

2 Years

ALUNBRIG

Marketed products

213,706

212,376

7 Years

Impairment
Takeda’s impairment assessment for intangible assets requires a number of significant judgments to be made by management to estimate therecoverable amount, including the estimated pricing and costs, likelihood of regulatory approval, and the estimated market and Takeda’s share of themarket. The most significant assumption for intangible assets associated with marketed products is the product market share of the therapeutic areaand estimated pricing, whereas the most significant assumption with pre-marketed products and in-process R&D is the probability of regulatory
approval. A change in these assumptions may have a significant impact on the amount, if any, of an impairment charge recorded during a period. For
example, negative results from a clinical trial may change the assumption and result in an impairment. Products in development may be fully
impaired when a trial is unsuccessful and there is no alternative use for the development asset.
During the year ended March 31, 2022, Takeda recorded impairment losses of JPY 67,721 million. The recoverable amount of the combined
impaired assets amounted to JPY 38,951 million. The impairment losses primarily resulted from a decision to terminate development of a GI productand deterioration of the sales forecast for a rare diseases product. This was offset by a reversal of previously recorded impairment losses of
JPY 13,595 million mainly related to a rare diseases product which Takeda made a decision to divest. The recoverable amount of the assets related to
the reversal was JPY 22,415 million.
During the year ended March 31, 2023, Takeda recorded impairment losses of JPY 57,341 million, primarily resulted from a decision to terminate
development of GI products, a decision to terminate a collaboration agreement of an oncology product, and a decision to discontinue manufacturingof a rare diseases product. The recoverable amount of the combined impaired assets amounted to JPY 20,545 million.
During the year ended March 31, 2024, Takeda recorded impairment losses of JPY 169,405 million, primarily resulted from JPY 73,979 million
impairment losses for ALOFISEL (for complex Crohn's perianal fistulas) following topline results of the phase 3 ADMIRE-CD Ⅱ trial, JPY 28,477
million impairment charges for EXKIVITY (for the treatment of non-small cell lung cancer) following a decision to initiate a voluntary withdrawal
globally, and impairment charges for certain assets related to in-process R&D assets including those related to TAK-007 and modakafusp alfa
(TAK-573) in Oncology as results of decisions to terminate those programs. There were no recoverable amounts of the combined impaired assets.
This was offset by a reversal of impairment losses of JPY 35,686 million related to EOHILIA (TAK-721), a therapy for eosinophilic esophagitis(EoE), following its approval by the U.S. Food and Drug Administration (FDA).
These losses are recognized mainly in amortization and impairment losses on intangible assets associated with products in the consolidated
statements of profit or loss.

F-40

Impairment losses were calculated by deducting the recoverable amount from the carrying amount.
For the years ended March 31, 2022 and 2023, the recoverable amount was calculated at value in use and the significant assumptions used are as
follows:
Discount rate
(Post-tax)

Discount rate
(Pre-tax)

For the year ended March 31, 2022

6.5% - 14.0%

8.3% - 17.5%

For the year ended March 31, 2023

6.5% - 22.0%

8.6% - 27.5%

For the year ended March 31, 2024, the recoverable amount was measured at fair value less costs of disposal. This fair value is classified as Level 3
in the fair value hierarchy. The discount rate (post-tax) used for the measurement was 7.2%.
13.

Collaborations, Licensing Arrangements, and Other Asset Acquisitions

Takeda is a party to certain collaborations, in-licensing agreements, out-licensing arrangements and other asset acquisitions.
Out-licensing agreements
Takeda has entered into various licensing arrangements where it has licensed certain products or intellectual property rights for consideration such as
up-front payments, equity interest of partners, development milestones, sales milestones and/or sales-based royalty payments. The receipt of thevariable considerations related to these substantive milestones is uncertain and contingent on the achievement of certain development milestones orthe achievement of a specified level of annual net sales by the licensee.
Collaborations, in-licensing arrangements, and other asset acquisitions
These agreements generally provide for commercialization rights to a product or products being developed by the partner, and in exchange, often
resulted in an up-front payment being paid upon execution of the agreement and resulted in an obligation that may require Takeda to make future
development, regulatory approval, or commercial milestone payments as well as sales-based royalty payments. In some of these arrangements,
Takeda and the licensee are both actively involved in the development and commercialization of the licensed products and have exposure to risks andrewards that are dependent on its commercial success. Other asset acquisitions include acquisitions of legal entities that do not qualify as businesscombinations under IFRS3, such as acquisitions of entities where the value of these acquired entities largely consists of the rights to a single productor group of products.
Under the terms of these collaborations, in-licensing arrangements, and other asset acquisitions, Takeda made the following payments:
JPY (millions)
For the Year Ended March 31
Initial up-front payments, milestone payments, and other asset acquisitions
Acquisition of shares of collaboration and in-licensing partners¥

2022
44,944785¥

2023
676,156
494

¥

2024
124,878
2,050

The following is a description of Takeda’s significant collaborations, and in-licensing agreements, and other asset acquisitions which Takeda enteredinto for the past three fiscal years.
Nimbus Therapeutics, LLC (“Nimbus”)
In December 2022, Takeda entered into an agreement to acquire all shares of Nimbus Lakshmi, Inc., a wholly-owned subsidiary of Nimbus. The
transaction closed in February 2023. Through this transaction, Takeda acquired TAK-279, formally known as NDI-034858, an oral, selective
allosteric tyrosine kinase 2 (TYK2) inhibitor being evaluated for the treatment of multiple autoimmune diseases following successful recent Phase 2b
results in psoriasis. Under the terms of the agreement, Takeda agreed to pay USD 4.0 billion upfront following the closing of the transaction*, andwill pay 2 milestone payments of USD 1.0 billion each upon achieving annual net sales of USD 4.0 billion and USD 5.0 billion of products
developed from the TAK-279 program.
In addition, in connection with the transaction, Takeda agreed to assume Nimbus’s obligations under a January 2022 settlement agreement with
Bristol-Myers Squibb and its Celgene Corporation subsidiary (collectively, “BMS”) to make certain payments to BMS following the achievement ofdevelopment, regulatory, and sales-based milestones for products developed from the TAK-279 program.
*

Of the USD 4.0 billion upfront payment, USD 3.0 billion, USD 0.9 billion, and USD 0.1 billion were paid in February 2023, April 2023, andAugust 2023, respectively.

F-41

HUTCHMED (China) Limited and its subsidiary HUTCHMED Limited (collectively, “HUTCHMED”)
In January 2023, Takeda entered into an exclusive licensing agreement with HUTCHMED, for the further development and commercialization of
fruquintinib outside of mainland China, Hong Kong and Macau. Approved in China in 2018 , fruquintinib is a highly selective and potent inhibitor ofvascular endothelial growth factor receptors (VEGFR) -1, 2 and 3. Fruquintinib is orally administered and has the potential to be used acrosssubtypes of refractory metastatic colorectal cancer (CRC), regardless of biomarker status. Under the terms of the agreement, Takeda received an
exclusive worldwide license to develop and commercialize fruquintinib in all indications and territories outside of mainland China, Hong Kong and
Macau. The transaction closed in March 2023. Subject to the terms of the agreement, Takeda paid HUTCHMED USD 400 million upfront in April
2023, and will pay up to USD 730 million in additional potential payments relating to regulatory, development and commercial sales milestones, aswell as royalties on net sales.
Protagonist Therapeutics, Inc. (“Protagonist”)
In January 2024, Takeda signed a worldwide license and collaboration agreement with Protagonist for the development and commercialization ofrusfertide, an investigational injectable hepcidin mimetic peptide of the natural hormone hepcidin, currently in a pivotal Phase 3 trial, VERIFY, forthe treatment of Polycythemia Vera (PV). Under the terms of the agreement, Takeda paid USD 300 million upfront in April 2024. Protagonist iseligible to receive additional worldwide development and regulatory milestone payments, as well as commercial milestones and tiered royalties on
ex-U.S. net sales. Protagonist remains responsible for research and development through the completion of the Phase 3 clinical trial and U.S.
regulatory approval while Takeda has rights for ex-U.S. development and is responsible for leading global commercialization activities.
14.

Investments Accounted for Using the Equity Method

Financial information for associates accounted for using the equity method is as follows:
These amounts are based on the ownership interests of Takeda.
JPY (millions)
For the Year Ended March 312022
Net profit (loss) for the year

¥
¥

2024

(15,367) ¥(8,630) ¥

6,473

(497)

(892)

(1,793)(15,863) ¥(9,522) ¥4,681

Other comprehensive income (loss)
Total comprehensive income (loss) for the year2023

The carrying amount of the investments in associates accounted for using the equity method is as follows:
JPY (millions)
As of March 31
2023
2024
Carrying amount of investments accounted for using the equity method

¥

F-42

99,174¥89,831

15.

Other Financial Assets

JPY (millions)
As of March 31
2023
Derivative assets (Note 27)

¥

2024

79,654¥120,223

Investment in convertible notes at fair value through P&L (Note 27)

11,435

13,459Investment in debt instruments at fair value through P&L (Note 27)

1,063

1,113

Investment in equity instruments at fair value through OCI (Note 27)

157,731

182,887

Financial assets associated with contingent consideration arrangements (Note 27)

23,806

12,293

Other

26,16825,892

Total¥

299,857¥

355,866

Non-current¥

279,683¥

340,777

Current¥

20,174¥15,089As of March 31, 2023 and 2024, equity instruments included JPY 74,495 million and JPY 93,962 million, respectively, of investments in publiccompanies. These are considered Level 1 in the fair value hierarchy as defined in Note 27. The remainder of the equity instruments primarily relates
to investments acquired in connection with collaborations and licensing agreements (Note 13) and are considered Level 3 investments in the fairvalue hierarchy.
As of March 31, 2023 and 2024, financial assets associated with contingent consideration arrangements are assets mainly recognized in relation to thedivestiture of XIIDRA (Note 27) and are considered Level 3 investments in the fair value hierarchy.
16.

Inventories
JPY (millions)
As of March 31
2023

Finished products and merchandise¥Work-in-process

269,0422024¥

436,508

Raw materials and supplies

522,667

280,908

Total¥

986,457

349,590337,612¥1,209,869

The amount of inventory write-offs recognized was JPY 25,018 million, JPY 18,392 million, and JPY 26,335 million for the years ended March 31,
2022, 2023 and 2024 respectively, and was included in cost of sales.

F-43

17.

Trade and Other Receivables
JPY (millions)
As of March 312023

Trade receivables

¥

2024

674,691¥

718,675

Other receivables

73,99955,964

Impairment loss allowance(7,356)(8,376)Chargebacks and other allowances(91,904)

Total¥

649,429(97,860)¥

668,403

Takeda utilizes programs to sell certain trade and other receivables to a select group of banks on a non-recourse basis. Under these programs, tradeand other receivables sold are derecognized when the risks and rewards of ownership have been transferred. These trade and other receivables relate
to specific customers determined in advance and are eligible for sale, but which of them will be sold will be determined by both parties on a monthly
basis. Therefore, these trade and other receivables are held for both collecting cash from customers as well as selling to banks.
Trade and other receivables due from customers that Takeda has the option to factor are classified as investments in debt instruments measured at
FVTOCI since they are held to collect and sell. As of March 31, 2023 and 2024, trade and other receivables measured at FVTOCI were JPY 71,080
million and JPY 83,734 million, respectively.
18.

Cash and Cash Equivalents
JPY (millions)
As of March 31
2023

Cash and deposits¥

Short-term investments

229,5572024¥

303,973

Total

¥

F-44

533,530

205,190
252,611¥457,800

19.

Assets and Disposal Groups Held for Sale

Takeda has classified certain assets as held for sale in the consolidated statements of financial position. Non-current assets and disposal groups aretransferred to assets held for sale when it is expected that their carrying amounts will be recovered principally through a sale and the sale isconsidered highly probable. The non-current assets and disposal groups held for sale are held at the lower of carrying amount or fair value less costs
to sell.
Gains or losses recognized from measuring the disposal groups classified as held for sale at the lower of their carrying amounts or fair value lesscosts to sell are recorded as other operating income or expenses.
Disposal Groups Held for Sale
JPY (millions)
As of March 31
2023
Property, plant and equipment
Goodwill
Intangible assets
Inventories
Trade and other receivables
Deferred tax assets
Other assets
Total assets¥

Trade and other payables
Deferred tax liabilities
Other liabilities
Total liabilities

¥

¥

¥

2024
9,847
3,347
402
1,200
—
45
395
15,235

¥

—
—
144
144

¥

¥

¥

3,162
3,745
62
1,242
767
347
13
9,337
660
307
442
1,410

The disposal groups held for sale consisted of the following and its fair value are classified as Level 3 in the fair value hierarchy as of March 31,
2023.
•
The assets and liabilities such as intangible assets related to Shonan Health Innovation Park in Japan were classified as held for sale,following management decision and signing an agreement to transfer its operation business to iPi Business Preparation Company (iPark
Institute Co., Ltd). The transfer of its operation business was completed in April 2023, and the impact from this transfer on the consolidated
statements of profit or loss for the fiscal year ended March 31, 2023 was not material.
•
Takeda entered into an agreement to transfer manufacturing operation of TACHOSIL in Austria and classified the corresponding assets
such as goodwill and property, plant and equipment as held for sale.
•
The assets such as property, plant and equipment were classified as held for sale following a sales agreement of Center for Learning andInnovation (CLI) in Japan.
Also, during the fiscal year ended March 31, 2023, Takeda classified the assets such as property, plant and equipment as held for sale related to anagreement to divest the manufacturing site in Norway and completed the divestiture. The proceeds from this divestiture comprised the majority of
Takeda’s proceeds from sales of business (net of cash and cash equivalents divested) in the consolidated statements of cash flows of JPY 7,958
million for the fiscal year ended March 31, 2023.
The disposal groups held for sale consisted of the following and its fair value are classified as Level 3 in the fair value hierarchy as of March 31,
2024.
•
The assets such as goodwill and property, plant and equipment were classified as held for sale during the fiscal year ended March 31, 2023,
following an agreement Takeda entered into to transfer manufacturing operation of TACHOSIL in Austria. The transfer of the operation iscompleted in May 2024.
•
Takeda entered into an agreement to divest Takeda’s entire shares of a wholly-owned subsidiary, Nihon Pharmaceutical Co. Ltd, andclassified the corresponding assets and liabilities such as property, plant and equipment as held for sale.
In addition, during the fiscal year ended March 31, 2024, Takeda classified the assets and liabilities such as intangible assets and goodwill as held forsale related to an asset purchase agreement to transfer Instanyl and Matrifen and completed the divestiture in January 2024 (Note 5). The proceedsfrom this divestiture comprised the majority of Takeda’s proceeds from sales of business (net of cash and cash equivalents divested) in the
consolidated statements of cash flows of JPY 19,959 million for the fiscal year ended March 31, 2024.
When disposal groups were classified as held for sale, Takeda recorded an impairment loss of JPY 4,693 million and JPY 1,685 million in otheroperating expenses (Note 5) during the year ended March 31, 2023 and 2024, respectively.

F-45

20.

Bonds and Loans
JPY (millions)
As of March 31
2023

Bonds

¥

2024

3,658,314

Short-term loans¥

4,092,879

256

Long-term loans

251

723,772

750,622

Total¥

4,382,341¥

4,843,752

Non-current¥

4,042,741¥

4,476,501

Current¥

339,600¥

367,251

The composition of bonds is as follows:
JPY (millions)
Carrying amountPrincipal amount incontractual currency(millions)

Instrument

As of
March 31, 2023

As ofMarch 31, 2024

Interest rate (%)

MaturityHybrid subordinated bonds¥

500,000

498,876499,6141.720% per annum throughOctober 6, 2024 and 6 month
LIBOR (5) + margin(1.750-2.750%) thereafter

2018 EUR Unsecured SeniorNotes – fixed rate

€

3,000

433,611487,3812.250-3.000%

November 2026 November 2030

298,842

263,701

5.000%

November 2028 (3)515,298

439,725

3.200%

September 2026 (2)$2,250 as of March 31,
2023$1,750 as of March 31,
2024$4,000 as of March 31,
2023$3,000 as of March 31,20242018 USD Unsecured SeniorNotes – fixed rate

Unsecured Senior Notes
Assumed in Shire Acquisition

June 2079

Unsecured Senior Notes
Assumed in Shire Acquisition

$

1,301

174,239

198,1164.000-5.250%

June 2025 - June 2045

2020 USD Unsecured SeniorNotes – fixed rate

$

7,000

928,210

1,053,742

2.050-3.375%

March 2030 - July 2060

2020 EUR Unsecured SeniorNotes – fixed rate

€

3,600

519,808

584,1050.750-2.000%

July 2027 - July 2040

JPY Unsecured Senior Bonds –fixed rate¥

250,000

249,429

249,495

0.400%

October 2031

Commercial Paper¥40,000 as of March 31,2023¥317,000 as of March 31,
2024

40,000317,000

—

Total

¥

3,658,314

F-46¥

4,092,879

May 2024 - June 2024

The composition of loans is as follows:
JPY (millions)
Carrying amount

Instrument

Principal amount incontractual currency(millions)

As of
March 31, 2023

As ofMarch 31, 2024

Syndicated Loans 2016

¥200,000 as of March
31, 2023¥100,000 as of March
31, 2024

200,000

100,000

113,500

113,500

Syndicated Loans 2017¥

Interest rate (%)

Maturity

0.300%

April 2026 (1)113,500

0.350%

April 2027
April 2027

USD Syndicated Loans 2017

$

1,500

199,993

227,018

6 months Term SOFR +0.42826% (4) + 0.500%

Syndicated loans 2023¥

100,000—

100,000

0.679%

April 2030 (1)Bilateral Loans¥

210,000

210,000

210,000

0.190–0.815%

April 2024-March 2029

534

355

Other
Total
¥

724,027¥

750,873

On April 26, 2023, Takeda repaid JPY 100.0 billion in Syndicated Loans falling due and on the same day entered into new Syndicated Loans of JPY
100.0 billion maturing on April 26, 2030(1). Following this, Takeda redeemed USD 1,000 million of unsecured senior notes issued in September 2016
on their maturity date of September 23, 2023(2). Furthermore, Takeda redeemed USD 500 million of unsecured senior notes issued in November 2018
on their maturity date of November 26, 2023(3). Takeda had short term commercial paper drawings outstanding of JPY 317.0 billion as of March 31,
2024.
Takeda transitioned away from LIBOR as a benchmark rate from July 1, 2023 in respect of the USD 1,500 million Syndicated Loans 2017 where 6months USD LIBOR was replaced by 6 months Term SOFR + 0.42826% on interest payment dates from October 2023(4). The impact of thetransition is not significant. In respect of the Hybrid subordinated bonds that attract a fixed interest rate until October 6, 2024 and 6 month JPY
LIBOR plus margin thereafter, Takeda plans to call and replace the bond in full on the bond call date of October 6, 2024(5) with any replacement bondbeing priced off a Japanese Government Bond benchmark. There are no changes in Takeda’s risk management strategy arising from the replacementof the benchmark rate.
In September 2019, Takeda reached an agreement on a commitment facility of JPY 700.0 billion with various Japanese and non-Japanese banks. The
commitment facility has a maturity of September 2026 and is available for general business use. There were no drawdowns on the JPY 700.0 billion
commitment facility as of March 31, 2023 and 2024, respectively.
There are long-term financing agreements that contain financial covenants, a key one of which requires Takeda’s ratio of consolidated Adjusted Net
Debt to Adjusted EBITDA, as defined in the loan agreements, for the previous twelve-month period to not surpass certain levels as of March 31 and
September 30 of each year. Takeda was in compliance with all financial covenants as of March 31, 2023 and 2024, respectively.
In 2017, Takeda entered into USD to JPY cross currency interest rate swap agreements to fix the interest rate for USD 925 million of the floating rate
USD Syndicated Loans 2017. In respect of the remaining USD 575 million of the floating rate USD Syndicated Loans 2017, Takeda entered into across currency interest rate swap agreement to fix the applicable interest rate. Furthermore, in 2020, Takeda entered into USD to JPY cross currencyinterest rate swaps of USD 5,750 million in respect of USD 1,750 million of the fixed rate 2018 USD Unsecured Senior Notes and USD 4,000
million of the fixed rate 2020 USD Unsecured Senior Notes. During the fiscal year ended March 31, 2024, cross currency interest rate swaps of USD
4,250 million out of the USD 5,750 million entered in 2020 were terminated, and Takeda entered into new cross currency interest rate swaps of sameamount and terms in June and July 2023.

F-47

21.

Other Financial Liabilities
JPY (millions)
As of March 31
2023

Derivative liabilities (Note 27)

¥

2024

40,721¥

25,108

Lease liabilities (Note 27)479,351

619,639

Financial liabilities associated with programs to sell certain receivables

78,041

79,062Financial liabilities associated with contingent consideration arrangements (Note 27)

8,139

7,772

113,554

99,673

Other
Total

¥

719,806¥

831,254

Non-current¥

534,269¥

687,833

Current¥

185,537¥

143,421“Other” mainly includes deposits related to certain vaccines operations.
22.

Employee Benefits

Defined Benefit Plans
The Company and some of its subsidiaries have various defined benefit plans such as lump-sum retirement payments plans and defined benefit
pension plans, which define the amount of benefits that an employee will receive on or after retirement, usually based on one or more factors, such asage, years of employment, compensation, classes, and service.
The Company’s defined benefit plans are the most significant plans among Takeda’s defined benefit obligations and plan assets.
Defined benefit pension plans
Japan
The Company’s corporate defined benefit pension plan in Japan is a funded defined benefit pension plan, which is regulated by the Defined-Benefit
Corporate Pension Act, one of the Japanese pension laws. Benefits are paid in exchange for services rendered by employees who worked for morethan a specified period, typically three years, considering their years of service and the degree of their contribution to the Company.
The Company’s pension fund (the “Fund”) is an independent entity established in accordance with the Japanese pension laws, and Takeda has an
obligation to make contributions. The Director(s) of the Fund has the fiduciary duty to comply with laws; the directives by the Minister of Health,Labour and Welfare, and the Director-Generals of Regional Bureaus of Health and Welfare made pursuant to those laws; and the by-laws of the Fundand the decisions made by the Board of Representatives of the Fund. Contributions are also regularly reviewed and adjusted as necessary to theextent permitted by laws and regulations.
Foreign
Other types of defined benefit pension plans operated by Takeda are generally established and operated in the same manner as described above and inaccordance with local laws and regulations where applicable.
The present value of the defined benefit obligation is calculated annually based on actuarial valuations that are dependent upon a number ofassumptions, including discount rates and future salary (benefit) increases. Service costs charged to operating expense related to defined benefit plans
represent the increase in the defined benefit liability arising from pension benefits earned by active participants in the current period. Takeda is
exposed to investment and other experience risks and may need to make additional contributions where it is estimated that the benefits will not be
met from regular contributions, expected investment income, and assets held.

F-48

The amounts recognized in the consolidated statements of profit or loss and the consolidated statements of financial position are as follows:
Consolidated statements of profit or loss
JPY (millions)
For the Year Ended March 31
2022
Japan

¥

Foreign

2023

2,992

2,990

¥

16,772

14,387

Defined benefit costs¥

17,3792024¥¥

13,782

2,741
15,956¥

18,697

Consolidated statements of financial position
JPY (millions)
As of March 31, 2023
Japan
Present value of defined benefit obligations¥

Fair value of plan assets

Foreign

153,371¥247,725

217,296

Effect of asset ceiling¥

128,333

41,311

Net defined benefit liabilities (assets)

Total
401,096345,630—

41,311¥(22,614) ¥119,392¥

96,777¥

8,202

119,392¥

127,594

Consolidated statements of financial position
Net defined benefit liabilities
Net defined benefit assets
Net amount of liabilities (assets) recognized in the consolidated statements of financial
position¥

30,816¥—(22,614) ¥119,392

30,816¥

96,777

JPY (millions)
As of March 31, 2024
Japan

Foreign

Total

Present value of defined benefit obligations¥

143,712¥301,078¥444,790

Fair value of plan assets¥

226,229¥

165,514¥391,743

Effect of asset ceiling

63,422

Net defined benefit liabilities (assets)¥—

63,422(19,096) ¥135,564¥

116,469

8,317

135,564¥

143,882

Consolidated statements of financial position
Net defined benefit liabilities¥

Net defined benefit assets
Net amount of liabilities (assets) recognized in the consolidated statements of financial
position¥

27,413¥(19,096) ¥Net defined benefit assets were included in other non-current assets on the consolidated statements of financial position.

F-49—
135,564

27,413¥

116,469

Defined benefit obligations
A summary of changes in present value of the defined benefit obligations for the periods presented is as follows:
JPY (millions)
For the Year Ended March 31, 2023
Japan
At beginning of the year¥

Foreign

168,449¥

254,462

Total¥

422,912Current service cost

3,174

10,787

13,961

Interest cost

1,371

5,838

7,209

164

102

266

(10,735)(42,603)(53,338)

459

3,477

3,935

Remeasurement of defined benefit pension plans
From changes in demographic assumptions
From changes in financial assumptions
Experience adjustments
Past service cost
Benefits paid
Contributions by the employees

—

(38)

(38)

(9,511)—(9,955)
3,807(19,467)
3,807—

21,84921,849Foreign currency translation differences
At end of the year¥

153,371¥247,725¥

401,096

JPY (millions)
For the Year Ended March 31, 2024Japan
At beginning of the year¥

Foreign

153,371¥247,725

Total¥

401,096

Current service cost

3,004

11,233

14,236

Interest cost

2,078

9,427

11,505Remeasurement of defined benefit pension plans
From changes in demographic assumptions
From changes in financial assumptions
Experience adjustments

(341)

197

(143)

(5,508)

11,387

5,879

426(4,628)(4,202)

Past service cost

—

(67)

(67)

Benefits paid

(9,318)(12,939)(22,257)

Contributions by the employees

—

4,610

4,610

Foreign currency translation differences—

34,132

34,132At end of the year¥

143,712¥301,078¥444,790

The remaining weighted average duration of the defined benefit obligations was 12.6 years and 12.5 years as of March 31, 2023 and 2024,
respectively.
Significant actuarial assumptions used to determine the present value are as follows:
Discount rate

Future salary increases

As of March 31, 2023
Japan

1.3%

—

Foreign

3.4%

3.0%

Japan

1.7%

—

Foreign

3.0%

3.1%

As of March 31, 2024

F-50

Takeda has cash balance plans and the future salary increases are not used to determine the present value of the defined benefit obligations for thoseplans. As of March 31, 2023 and 2024, future salary increases were not used to determine the present value of the defined benefit obligations related
to all the defined benefit plans in Japan and certain plans in foreign countries.
A 0.5% change in these actuarial assumptions would affect the present value of defined benefit obligations at the end of the reporting period, while
holding all other assumptions constant, by the amounts shown below:
JPY (millions)
Discount Rate
Change inassumption
ImpactFuture Salary Increases
Change inassumption
ImpactAs of March 31, 2023
Japan

+0.50 %

(9,235)+0.50 %—

-0.50 %

10,000-0.50 %—

Foreign+0.50 %

(14,411)+0.50 %

3,578

-0.50 %

15,931-0.50 %

(3,278)Japan+0.50 %

(8,414)+0.50 %—

-0.50 %

9,092

-0.50 %—

Foreign+0.50 %

(17,458)+0.50 %

4,463

-0.50 %

19,599-0.50 %

(4,129)As of March 31, 2024

Plan assets
The defined benefit plans are independent of Takeda and funded only by contributions from Takeda. Takeda’s investment policies are designed tosecure the necessary returns in the long-term within acceptable risk levels to ensure payments of pension benefits to eligible participants, including
future participants. The acceptable risk level in the return rate on the plan assets is derived from a detailed study considering the mid- to long-term
trends and the changes in income such as contributions and payments. Based on policies and studies, after consideration of issues such as the
expected rate of return and risks, Takeda formulates a basic asset mix which aims at an optimal portfolio on a long-term basis with the selection of
appropriate investment assets.
A summary of changes in fair value of plan assets for the periods presented is as follows:
JPY (millions)
For the Year Ended March 31
2023
Balance at beginning of the year¥

342,503

2024¥

345,630

Interest income on plan assets
Remeasurement of defined benefit plans
Return on plan assets

4,608

7,527

(15,712)

15,923Contributions by the employer

12,76914,758Contributions by the employees

3,807

4,610

Benefits paid

(13,589)(15,161)

Foreign currency translation differences

11,244

18,457

Balance at end of the year¥

Takeda expects to contribute JPY 19,222 million to the defined benefit plans for the year ending March 31, 2025.

F-51

345,630¥

391,743

The breakdown of fair value by asset class is as follows:
JPY (millions)
As of March 31
2023

2024

With quoted
prices in active
markets

No quoted
prices in active
markets

With quoted
prices in active
markets

No quoted
prices in active
markets

¥

¥

¥

¥

Equities:
Japan
Foreign

9,911

2,178

11,796

2,803

38,277

81,26553,39686,372

Japan

14,567

17,405399

17,276

Foreign

10,40733,89333,153

79,251—

70,775—70,070Investment trust funds—

40,026——

Cash and cash equivalent

7,681

—

10,951—

Bonds:

Life insurance company general accounts

Others517
Total plan assets¥

81,36018,727¥264,269

1,541¥

24,736111,236¥

280,507

Equities and bonds with no quoted prices in active markets include pooled funds that are primarily invested in listed securities on active markets. Life
insurance company general accounts are accounts with guaranteed capital and minimum interest rate, in which life insurance companies manage
funds on a pooled basis.
Changes in effect of asset ceiling for the periods presented are as follows:
JPY (millions)
For the Year Ended March 31
2023
Balance at beginning of the year
Interest income
Remeasurement
Changes in effect of asset ceiling¥

Balance at end of the year

¥

2024

30,953248¥

41,311
549

10,11021,561

41,311¥

63,422

Defined Contribution Plans
The Company and some of the Company’s subsidiaries offer defined contribution benefit plans.
Benefits of defined contribution plans are linked to contributions paid, the performance of each participant’s chosen investments, and the form inwhich participants choose to redeem their benefits. Contributions made into these plans are generally paid into an independently administered fund.
Contributions payable by Takeda for these plans are charged to operating expenses. Takeda has no exposure to investment risks and other experiencerisks with regard to defined contribution plans.
The amount of defined contribution costs was JPY 37,345 million, JPY 46,446 million, and JPY 60,521 million for the years ended March 31, 2022,
2023, and 2024, respectively. These amounts include contributions to publicly provided plans.
Other Employee Benefit Expenses
Major employee benefit expenses other than retirement benefits for each fiscal year are as follows:
JPY (millions)
For the Year Ended March 31
2022
Salary¥458,0392023¥

573,0802024¥

688,316

Bonuses

127,888

133,792

161,821

Other

187,440

237,857

274,094

The above table does not include severance expenses.
F-52

23.

Provisions

The movements in the provisions are as follows:
JPY (millions)
Litigation(Note 32)
As of April 1, 2022¥

42,869Restructuring

Rebates andreturnreserves¥¥

13,353

Other404,982¥

Total

34,497¥495,701

Increases

25,096

7,807

1,005,330

17,095

1,055,328

Decreases (utilized)(3,981)(12,098)(953,287)(16,538)(985,905)

Decreases (reversed)(95)(1,066)(25,624)(11,200)(37,985)

Foreign currency translation differences
As of March 31, 2023

402¥

64,290956¥

33,813

8,951¥

465,2142,019¥

25,87437,190¥564,329

Increases

54,67914,326956,682

10,864

1,036,551

Decreases (utilized)(93,016)(10,716)(993,456)(12,106)(1,109,294)

Decreases (reversed)(6,864)(1,664)(30,307)(5,734)(44,568)

Foreign currency translation differences
As of March 31, 2024

3,253

1,205

85,127

2,191

91,775¥22,342¥

12,102¥483,259¥

21,089¥538,793

The current portion of the provision is JPY 443,502 million, JPY 508,360 million and JPY 524,420 million as of April 1, 2022, March 31, 2023 and2024, respectively. The non-current portion of the provision is JPY 52,199 million, JPY 55,969 million and JPY 14,373 million as of April 1, 2022,
March 31, 2023 and 2024, respectively.
Restructuring
Takeda has various restructuring efforts in place during the years ended March 31, 2022, 2023 and 2024, in connection with the following:• Integration of Shire - In the years ended March 31, 2022 and 2023, Takeda directed various restructuring efforts following the Shireacquisition. The integration of Shire includes initiatives to consolidate systems, sites, and functions, and to optimize the workforce.
• Various other efforts to improve the efficiency of its operations and related facilities.
A restructuring provision is recorded when Takeda has developed a detailed formal plan for the restructuring and, through an execution of the plan or
an announcement of its main features to those affected by it, a valid expectation has been raised in those affected by the plan that the plan will be
implemented. Takeda records the provision and associated expenses based on estimated costs associated with the plan. The ultimate cost and thetiming of any payments under the plan will be impacted by the actual timing of the actions and the actions of employees impacted by the
restructuring activities.
Restructuring expenses recorded for the fiscal years ended March 31, 2022, 2023 and 2024 are as follows:
JPY (millions)
For the Year Ended March 31
2022

2023

2024

Cash:
Severance¥

15,230¥10,605¥

13,685

Consulting fees

2,963

12,70911,528Other

65,16333,601

48,622

Total¥

83,357¥56,915¥73,835

¥

479

¥

2,320

¥

7,523

¥

83,836¥59,234¥81,358

Non-Cash:
Depreciation and impairment
Total

Other restructuring expenses for the fiscal years ended March 31, 2022, 2023 and 2024 include personnel expenses of JPY 9,420 million, JPY 9,683
million, and JPY 9,769 million, respectively, and mainly related to retention bonus and salary of employees fully dedicated to restructuring programs.
Also, other restructuring expenses for the fiscal years ended March 31, 2022 and 2023 include expenses related to system optimization by the
integration of Shire in digital transformation initiatives and those expenses for the fiscal year ended March 31, 2024 include expenses related to leasetermination agreement to consolidate the offices for the purpose of maximizing organizational effectiveness.
The Company’s Board of Directors held on May 9, 2024 approved a multi-year efficiency program and, primarily as a result of the program, a
restructuring expense of JPY 140,000 million is projected to be incurred in the fiscal year ending March 31, 2025.
F-53

Rebates and Returns
Takeda has recognized a provision related mainly to sales rebates and returns for products and merchandises. The balances stated in the summary
table above include provisions of JPY 293,385 million and JPY 253,832 million as of March 31, 2023 and 2024, respectively, for contractual andstatutory rebates payable under Commercial healthcare provider contracts and U.S. State and Federal government health programs, such as U.S.
Medicaid and U.S. commercial managed care programs. These are expected to be paid out generally within one year. Return reserves are recorded
primarily for credits expected to be issued to customers for certain expired product that will be returned. Sales rebates and sales returns reserves arereviewed and updated monthly or when there is a significant change in its amount.
Other
Other provisions are primarily related to asset retirement obligations, contract termination fees and onerous contracts.
24.

Other Liabilities
JPY (millions)
As of March 31
2023

Accrued expenses

¥

2024

531,891¥

627,659

Deferred income

32,10330,015

Other

68,08342,439Total¥

Non-current
Current

632,078¥

700,112¥65,389¥80,938¥566,689¥

619,174

Accrued expenses include accrued employee benefit expenses of JPY 229,130 million and JPY 283,359 million as of March 31, 2023 and 2024,
respectively.
Deferred income includes contract liabilities related to out-licensing agreements, product procurement and supply agreements, and government grants
for the purchase of property, plant and equipment. The grants received were JPY 15,894 million and JPY 14,211 million during the years ended
March 31, 2023 and 2024, respectively. The primary government grants relate to funding a portion of Takeda’s investment in the development andproduction of vaccines. Takeda was reimbursed for investments it made in facilities. The grant income is recognized over the life of the associatedassets and is recorded as an offset to the depreciation expense included in cost of sales, selling, general and administrative expenses, and research anddevelopment expenses.
25.

Trade and Other Payables
JPY (millions)
As of March 312023

Trade payables¥

Other payables

2024
307,453¥

341,780

Total

¥

F-54

649,233

319,955
227,566¥

547,521

26.

Equity and Other Equity Items

Thousands of Shares
For the Year Ended March 31
2023
Authorized shares as of the beginning of the year2024

3,500,000

3,500,000

Shares issued:
At the beginning of the year

1,582,253

1,582,296

Exercise of stock options

44

123

Issuance of shares——

1,582,296

1,582,419

As of the end of the year

The shares issued by the Company are ordinary shares with no par value that have no restrictions on any rights. The number of treasury shares
included in the above shares issued was 31,892 thousand shares, 27,767 thousand shares, and 13,405 thousand shares as of April 1, 2022, March 31,
2023, and 2024, respectively. The number of treasury shares as of April 1, 2022, March 31, 2023 and 2024 includes 9,161 thousand shares, 6,215
thousand shares and 5,888 thousand shares, respectively, held by the Employee Stock Ownership Plan (“ESOP”) Trust and the Board Incentive Plan(“BIP”) Trust. During the year ended March 31, 2023, the ESOP and BIP Trust acquired 554 thousand shares and sold 3,500 thousand shares. During
the year ended March 31, 2024, the ESOP and BIP Trust acquired 520 thousand shares and sold 847 thousand shares.
During the year ended March 31, 2023, the Company conducted the disposal of 8,091 thousand treasury shares under Long Term Incentive Plan(“LTIP”) for the Company Group employees overseas. The disposal of treasury shares resulted in a decrease in treasury shares of JPY 27,599
million. During the year ended March 31, 2024, the Company conducted the disposal of 13,958 thousand treasury shares under LTIP for theCompany Group employees overseas. The disposal of treasury shares resulted in a decrease in treasury shares of JPY 47,614 million. The shares of
the Company’s common stock and treasury shares were converted into the Company’s American Depositary Shares (“ADSs”) and settled with
employees.
During the year ended March 31, 2023, Takeda acquired 6,908 thousand shares of its common stock for JPY 24,993 million, and the acquisition inaccordance with the resolution on the acquisition of its own shares at the Board of Directors Meeting held on October 28, 2021 was completed.

Dividends declared and paid

JPY (millions)
Total dividends

April 1, 2021, to March 31, 2022
Q1 2021¥

Q3 2021
April 1, 2022, to March 31, 2023
Q1 2022
Q3 2022
April 1, 2023, to March 31, 2024
Q1 2023
Q3 2023

141,859

Dividends per
share JPY¥

Record date

Effective date

90.00

March 31, 2021

June 30, 2021

142,387

90.00

September 30, 2021

December 1, 2021

140,365

90.00

March 31, 2022

June 30, 2022

140,47490.00

September 30, 2022

December 1, 2022

140,475

90.00

March 31, 2023

June 29, 2023

148,037

94.00

September 30, 2023

December 1, 2023

Dividends per
share JPY

Record date

Effective date

94.00

March 31, 2024

June 27, 2024

Dividends declared for which the effective date falls in the following fiscal year are as follows:
Dividends declared

JPY (millions)
Total dividends

April 1, 2024, to March 31, 2025
Q1 2024

148,041

F-55

¥

27.

Financial Instruments

Takeda promotes risk management to reduce the financial risks arising from business operations. The principal risks to which Takeda is exposed
include market risk, counterparty credit risk, and liquidity risk caused by changes in the market environment such as fluctuations in foreign exchange
rates, interest rates and market prices of commodities and other financial holdings. Each of these risks is managed in accordance with Takeda’s
policies.
Financial Assets and Liabilities
JPY (millions)
As of March 31, 2023
Financialassetsmeasured atamortized
cost

Measured atfair value
through othercomprehensive
incomeMeasured atfair value
through
profit or loss

Derivative
hedging
instruments

¥

¥

¥

¥

Other
financialliabilities

Total

Financial assets measured at fair value
Other financial assets Equity instruments—

157,731

—

—

¥

—

¥

157,731

Derivative financial instruments——

17,131

62,522—

79,654

Investments in convertible notes——

11,435——

11,435Investments in debt instruments
Financial assets associated with
contingent consideration arrangements

—

—

1,063

—

—

1,063

—

—

23,806——23,806—

71,080———71,080Trade and other receivables
Total

¥

—

¥

228,811¥53,435¥62,522¥—¥

344,769¥

26,168

¥

—

¥

—

¥

—

¥

—

¥

26,168Financial assets not measured at fair value
Other financial assets Other
Trade and other receivables

578,349

—

—

—

—

578,349

Cash and cash equivalents

533,530

—

—

—

—

533,530

Total¥

1,138,047

¥

—

¥

—

¥

—

¥

—

¥ 1,138,047

¥

—

¥

—

¥

15,261¥

25,460¥—¥40,721

Financial liabilities measured at fair value
Other financial liabilities Derivative financial instruments
Financial liabilities associated with
contingent consideration arrangements
Total

—

—

8,139

—

—

8,139

¥

—

¥

—

¥

23,400¥25,460¥—¥48,860

¥

—

¥

—

¥

—

¥

—

¥

479,351¥

479,351

Financial liabilities not measured at fair value
Other financial liabilities Lease liabilities
Other
Trade and other payables
Bonds and loans
Total

—

—

—

—

191,595

191,595

—

—

—

—

649,233

649,233

—
¥

—

—
¥

—

F-56

—
¥

—

—
¥

—

¥

4,382,341

4,382,341

5,702,520¥ 5,702,520

JPY (millions)
As of March 31, 2024
Financialassetsmeasured atamortized
cost

Measured atfair value
through othercomprehensive
incomeMeasured atfair value
through
profit or loss

Derivative
hedging
instruments

¥

¥

¥

¥

Other
financialliabilities

Total

Financial assets measured at fair value
Other financial assets Equity instruments—

182,887

—

—

¥

—

¥

182,887

Derivative financial instruments——

17,617

102,606—

120,223

Investments in convertible notes——

13,459——13,459Investments in debt instruments
Financial assets associated with
contingent consideration arrangements

—

—

1,113

—

—

1,113

—

—

12,293——

12,293—83,734———

83,734

Trade and other receivables
Total

¥

—

¥

266,621¥44,482¥

102,606¥—¥

25,892

¥

—

¥

—

¥

—

¥

—

¥

413,709

Financial assets not measured at fair value
Other financial assets Other¥

Trade and other receivables

584,669

Cash and cash equivalents

—
—

—

—

—

—

25,892584,669—

457,800¥

1,068,361

¥

—

¥

—

¥

—

¥

—

¥ 1,068,361

Derivative financial instruments¥
Financial liabilities associated with
contingent consideration arrangements

—

¥

—

¥

13,783¥

11,325

¥

—

¥

—

—

7,772

—

—

7,772

Other

—

—

1,797

—

—

1,797

Total

457,800—

Financial liabilities measured at fair value
Other financial liabilities -Total

25,108

¥

—

¥

—

¥

23,352¥

11,325¥—¥34,677

¥

—

¥

—

¥

—

¥

—

¥

619,639¥

619,639

Financial liabilities not measured at fair value
Other financial liabilities Lease liabilities
Other

—

—

—

—

Trade and other payables

—

—

—

—

547,521547,521

Bonds and loans

—

—

—

—

4,843,752

4,843,752

6,187,850¥ 6,187,850

Total

¥

—

¥

—

¥

—

¥

—

176,938¥

176,938

Fair Value Measurement
Derivative and non-derivative financial instruments measured at fair value are categorized in the following three-tier fair value hierarchy that reflects
the significance of the inputs in making the measurements. Level 1 is defined as observable inputs, such as quoted prices in active markets for an
identical asset or liability. Level 2 is defined as inputs other than quoted prices in active markets within Level 1 that are directly or indirectly
observable. Level 3 is defined as unobservable inputs.

F-57

JPY (millions)
As of March 31, 2023
Level 1

Level 2

Level 3

Total

Assets:Financial assets measured at fair value through profit or loss
Derivatives

¥

—

¥

10,542

¥

6,589

¥

17,131

Investment in convertible notes——

11,435

11,435Investment in debt instruments
Financial assets associated with contingent consideration
arrangements

—

—

1,063

1,063

—

—

23,80623,806—62,522—62,522—

71,080—71,08074,495—

83,236

157,731

Derivatives for which hedge accounting is applied
Financial assets measured at fair value through OCI
Trade and other receivables
Equity instruments
Total

¥

74,495¥

144,144¥

126,129¥

344,769

¥

—

¥

8,672

¥

6,589

¥

15,261

Liabilities:
Financial liabilities measured at fair value through profit or loss
Derivatives
Financial liabilities associated with contingent consideration
arrangements
Derivatives for which hedge accounting is applied
Total

¥

—

—

8,139

8,139

—

25,460—25,460—¥34,131¥

14,728¥48,860JPY (millions)
As of March 31, 2024
Level 1

Level 2

Level 3

Total

Assets:Financial assets measured at fair value through profit or loss
Derivatives

¥

—

¥

8,511

¥

9,106

¥

17,617

Investment in convertible notes——

13,45913,459Investment in debt instruments
Financial assets associated with contingent consideration
arrangements

—

—

1,113

1,113

—

—

12,293

12,293—

102,606—

102,606—

83,734—

83,734

Derivatives for which hedge accounting is applied
Financial assets measured at fair value through OCI
Trade and other receivables
Equity instruments
Total

93,962—

88,925

182,887¥

93,962¥

194,851¥

124,896¥

413,709

¥

—

¥

4,677

¥

9,106

¥

13,783Liabilities:
Financial liabilities measured at fair value through profit or loss
Derivatives
Financial liabilities associated with contingent consideration
arrangements

—

—

7,772

7,772

Other

—

—

1,797

1,797

Derivatives for which hedge accounting is applied
Total

—
¥

—

F-58

11,325¥16,002—¥

18,675

11,325¥34,677

Valuation Techniques
The fair value of derivatives classified as Level 2 is measured based on Treasury management system valuation models or the Black-Scholes model,
whose significant inputs are based on observable market data.
Derivatives classified as Level 3 include those recognized in connection with settlements of cash flows arising from differences between the fixedprices and floating market prices of renewable energy in a virtual power purchase agreement and those recognized in an agreement to offset thevolatility of such cash flows. The fair value of derivatives in Level 3 is measured using the discounted cash flow method. The key assumptions taken
into account include forecasted renewable energy prices and the expected generation of the renewable energy generating facility.
The fair value of the investment in convertible notes is measured using techniques such as the discounted cash flow and option pricing models.
The fair value of trade and other receivables, which are due from customers that Takeda has the option to factor, are measured based on the invoiced
amount.
Equity investments and investments in debt instruments are not held for trading. If equity instruments or investments in debt instruments are quoted
in an active market, the fair value is based on price quotations at the period-end-date. If equity instruments or investments in debt instruments are notquoted in an active market, the fair value is calculated utilizing an adjusted book value per share method or EBITDA multiples approach based on
available information as of each period-end-date and comparable companies. The principal input that is not observable and utilized for the calculationof the fair value of equity instruments and investments in debt instruments classified as Level 3 is the EBITDA rate used for the EBITDA multiples
approach, which ranges from 5.2 times to 13.0 times. During the years ended March 31, 2023 and 2024, cumulative gains or losses on equity
investments of JPY 6,935 million and JPY (1,224) million were reclassified from other comprehensive income to retained earnings, respectively,
upon the disposal of certain equity investments in publicly traded companies. The fair value of these investments on the dates of disposal during theyears ended March 31, 2023 and 2024 were JPY 21,800 million and JPY 6,458 million, respectively. The investments were disposed of after
management’s assessment of these investments relative to the investment strategy.
Financial assets and liabilities associated with contingent consideration arrangements are measured at fair value at the time of the divestiture or theacquisition date of business combination. When the contingent consideration arrangement meets the definition of a financial asset or liability, it issubsequently re-measured at fair value at each closing date. The determination of the fair value is based on models such as scenario-based methods
and discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target, forecasted revenue
projections, and the discount factor. The financial assets associated with contingent consideration arrangements are recognized mainly in relation to
the divestiture of XIIDRA. The financial liabilities associated with contingent consideration arrangements are discussed in Financial liabilities
associated with contingent consideration arrangements.
The fair value of the other financial liabilities is measured using the discounted cash flow model.
Transfers between levels
Takeda recognizes transfers between levels of the fair value hierarchy, at the end of the reporting period during which the change has occurred. There
were transfers from Level 3 to Level 1 recorded in the years ended March 31, 2023 and 2024. These transfers resulted from the investments in thecompanies whose shares were previously not listed on an equity or stock exchange and had no recent observable active trades in the shares. During
the years ended March 31, 2023 and 2024, the companies listed its equity shares on an exchange and are currently actively traded in the market. As
the equity shares have a published price quotation in an active market, the fair value measurement was transferred from Level 3 to Level 1 on the fairvalue hierarchy during the years ended March 31, 2023 and 2024, respectively. There were no other significant transfers between levels of the fairvalue hierarchy during the years ended March 31, 2023 and 2024.
Level 3 financial assets fair values
Takeda invests in equity instruments mainly for research collaboration. The following table shows a reconciliation from the opening balances to theclosing balances for Level 3 financial asset fair values for the years ended March 31, 2023 and 2024. The disclosure related to Level 3 financial
liabilities which are financial liabilities associated with contingent consideration arrangements are included in Financial liabilities associated with
contingent consideration arrangements. There are no significant changes in fair value during the changes in certain assumptions which influence thefair value measurement for Level 3 financial assets.

F-59

JPY (millions)
For the Year Ended March 31
2023
Financial assets
associated with
contingent
consideration
arrangements

As of the beginning of the year¥

26,852

Changes recognized as finance income (expenses)
Changes in fair value of financial assets associated with
contingent consideration due to other elements than time value

2024
Financial assets
associated with
contingent
consideration
arrangements

Equityinstruments¥

64,263¥23,806Equityinstruments¥

83,236

1,905

—

(702)

—

(3,412)—(12,415)—

Changes in fair value of financial assets measured at fair value
through OCI and exchange differences on translation of foreign
operations

2,182

8,244

1,604

4,900

Settled and received during the period(3,722)———

Purchases

—

8,527

—

1,760

Sales

—

(22)

—

(217)

Transfers to Level 1—(1,711)—(5,008)Acquisition from conversion of convertible notes
Transfers from investments accounted for using the equity method

—
—

1,368
3,404

—
—

4,254
—

Transfers to investments accounted for using the equity method
As of the end of the year—¥

23,806(837)¥

83,236—¥

12,293—¥88,925

Financial liabilities associated with contingent consideration arrangements
Financial liabilities associated with contingent consideration arrangements represent consideration related to business combinations or license
agreements that are payable only upon future events such as the achievement of development milestones and sales targets, including pre-existing
contingent consideration arrangements of the companies that are acquired by Takeda. At each reporting date, the fair value of financial liabilities
associated with contingent consideration arrangements is re-measured based on risk-adjusted future cash flows discounted using an appropriate
discount rate.
As of March 31, 2023 and 2024, the balance primarily relates to pre-existing contingent consideration arrangements from historical acquisitions.
The fair value of financial liabilities associated with contingent consideration arrangements could increase or decrease due to changes in certain
assumptions which underpin the fair value measurements. The assumptions include probability of milestones being achieved.

F-60

The fair value of financial liabilities associated with contingent consideration arrangements are classified as Level 3 in the fair value hierarchy. The
following table shows a reconciliation from the opening balances to the closing balances and payment term for financial liabilities associated with
contingent consideration arrangements for the years ended March 31, 2023 and 2024, respectively. There are no significant changes in fair value
during the changes in significant assumptions which influence the fair value measurement for financial liabilities associated with contingent
consideration arrangements.
JPY (millions)
For the Year Ended March 312023
As of the beginning of the year

¥

2024

5,844

¥

8,139

Changes in the fair value during the period

2,605

8,678

Settled and paid during the period(728)(9,032)Foreign currency translation differences

418

(13)

As of the end of the year

¥

8,139

¥

7,772

JPY (millions)
As of March 31
2023

2024

Payment term (undiscounted)
Within one year

¥

918

¥

2,207

Between one and three years

4,537

3,698

Between three and five years

2,980

1,855

More than five years

1,031

1,171

Financial instruments not measured at fair value
The carrying amount and fair value of financial instruments that are not measured at fair value in the consolidated statements of financial position are
as follows. Fair value information is not provided for financial instruments, if the carrying amount is a reasonable estimate of fair value due to therelatively short period of maturity of these instruments.
JPY (millions)
As of March 31
2023
Carrying
amount
Bonds¥

Long-term loans

3,618,314
723,772

2024
Carrying
amountFair value¥

3,291,147
721,419¥

3,775,879
750,622

Fair value¥

3,420,668
746,831

Long-term financial liabilities are recognized at their carrying amount. The fair value of bonds is measured at quotes whose significant inputs to thevaluation model used are based on observable market data. The fair value of loans is measured at the present value of future cash flows discounted
using the applicable market rate on the loans in consideration of the credit risk by each group classified in a specified period. The fair value of bonds
and long-term loans are classified as Level 2 in the fair value hierarchy.

F-61

Market Risk
Major market risks to which Takeda is exposed are 1) foreign currency risk, 2) interest rate risk and 3) price fluctuation risk. Financial instruments
affected by market risk include loans and borrowings, deposits, equity investments and derivative financial instruments.
Foreign Currency Risk
Takeda’s exposure to foreign exchange rates primarily relates to its foreign currency denominated operations and Takeda’s net investments in foreignsubsidiaries. Takeda manages foreign currency risks in a centralized manner using derivative financial instruments. Takeda’s policy does not permit
the use of speculative foreign currency financial instruments or derivatives.
Takeda uses forward exchange contracts, currency swaps, and currency options to hedge individually significant foreign currency transactions.
Takeda has also designated loans and bonds denominated in the US dollar and Euro and certain forward exchange contracts as hedging instrumentsof net investments in foreign operations. As of March 31, 2023 and 2024, the total fair value of the foreign currency denominated loans was JPY
200,491 million and JPY 227,309 million, respectively, and the total fair value of the foreign currency denominated bonds was JPY 2,548,795
million and JPY 2,679,660 million, respectively.
Takeda is exposed mainly to foreign currency risks of the US dollar and Euro. The fair values of Takeda’s financial instrument holdings are analyzed
to determine their sensitivity to changes in foreign exchange rates. Our analysis shows that if the JPY were to change against all other currencies by
5%, as of March 31, 2023 and 2024, the hypothetical impact on net income would not be material. This analysis assumes that all other variables, inparticular interest rates, remain constant and that a change in one currency’s rate relative to the JPY would not have any effect on another currency’s
rate relative to the JPY. In addition, this analysis does not include the effects of foreign currency translation on financial instruments that are
denominated in the functional currency of the entity holding them.
JPY (millions)
As of March 31, 2023
Contract amount to besettled in more than one
year

Contract amount

Fair value

Forward exchange contracts:
Selling:Euro¥

United States Dollar

975,368¥—¥(4,799)179,942—(341)

1,056,070—

31

717,114717,11441,044

Buying:Euro
Currency swaps:
Buying:United States Dollar

JPY (millions)
As of March 31, 2024
Contract amount to besettled in more than one
year

Contract amount

Fair value

Forward exchange contracts:
Selling:Euro
United States Dollar¥

710,301¥—¥(9,663)

170,364—(2,618)336,271—

6,268

874,974874,974

95,368

Buying:Euro
Currency swaps:
Buying:United States Dollar

The above currency swaps, designated as hedging instruments in a cash flow hedge, were related to foreign currency denominated bonds and loans.
The cash flow hedge reserve related to the currency swaps were reclassified to profit or loss in the same period as the hedged expected future cash
flows occur.

F-62

Interest Rate Risk
Takeda’s exposure to the risk of changes in benchmark interest rates and foreign exchange rate relates to the outstanding debts with floating interest
rates as well as the trade and other receivables due from customers that Takeda has the option to factor. Takeda uses interest rate swaps, forward
interest rate contracts, and cross currency interest rate swaps that fix the amount of future payments to manage interest and foreign exchange raterisks through cash flow hedge strategies. Takeda may also use derivatives that effectively convert its fixed rate debt to floating through fair-value
hedge strategies. The following summarizes interest rate swaps, forward interest rate contracts, and cross currency interest rate swaps designated as
cash flow hedges as of March 31:
JPY (millions)
As of March 31

Contract amount
2023

¥

2024

1,098,862
1,322,069

Contract amount tobe settled in morethan one year¥

1,048,862
1,052,069

Fair value¥

44,042
101,128

The fair values of Takeda’s financial instrument holdings are analyzed to determine their sensitivity to interest rate changes. Our analysis shows that
if there were a 1% change in interest rates, as of March 31, 2023 and 2024, the hypothetical impact on net income would not be material. This
analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
Price Fluctuation Risk Management
Commodity Price Risk
For its business operations, Takeda is exposed to risks from commodity price fluctuations. Takeda manages this risk primarily by utilizing fixed pricecontracts but may also use financial instruments to lock in a fixed price.
Market Price Risk
Market pricing and valuations of Takeda’s fixed-income financial assets and liabilities are impacted by changes in currency rates, interest rates andcredit spreads, which are managed as described above. For equity instruments, Takeda manages the risk of price fluctuations in the instruments byregularly reviewing share prices and financial positions of the issuers.
Our analysis shows that if the market price of equity instruments held by Takeda and investments in trusts which hold equity instruments on behalf ofTakeda had changed by 10%, as of March 31, 2023 and 2024, the hypothetical impact on other comprehensive income would not be material. This
analysis assumes that all other variables, in particular interest rates and foreign currency exchange rates, remain constant. There is no impact on net
income because the changes in the fair value of equity instruments are recognized directly in equity.
Derivative Financial Instruments
As described above, Takeda is exposed to effects related to foreign exchange fluctuations in connection with our international business activities thatare denominated in various currencies and Takeda’s overseas entities that have different functional currencies. Takeda is also exposed to currency
and interest rate fluctuations on our borrowings that we use to finance our business operations and our acquisitions. In addition, Takeda is exposed tointerest rate fluctuations on the trade and other receivables due from customers that Takeda has the option to factor. These are denominated in various
currencies and may bear interest at variable rates, resulting in the risk related to the currency and interest rate movements.
In order to manage the risk of currency exchange rate and interest rate fluctuations, Takeda may enter into derivative contracts with highly rated
financial institutions. Takeda enters into derivative contracts based on our risk management policies, which determine the authority for entering intosuch transactions and the transaction limits. The policy, which has been consistently followed, is that financial derivatives be used only for hedging
foreign currency and interest rate exposure and not for speculative purposes.
Takeda generally designates its derivatives as hedges for accounting purposes. In certain instances, Takeda enters into derivative contracts (“balance
sheet hedges”) that do not qualify for hedge accounting but are nevertheless utilized to manage the underlying foreign currency exposure risk.
Balance sheet hedges are used to offset the foreign currency impact from assets and liabilities on Takeda balance sheet that are denominated in nonfunctional currencies. Given these foreign currency derivatives work on an offset basis they do not require hedge accounting. Takeda has establishedguidelines for risk assessment procedures and controls for the use of financial instruments. These guidelines include a clear segregation of duties
between execution and administration, and then again between accounting and controlling.

F-63

Summary of Financial Position and Financial Performance for Derivative and Hedging Activities
The following tables represent the items designated as hedging instruments, amounts within other components of equity related to items designated ashedged items and amounts of changes in fair value of hedging instruments recorded in other comprehensive income and the amounts reclassified
from the hedging reserve to profit or loss as of and for the year ended March 31, 2023:
JPY (millions)
As of March 31, 2023
Carrying
amount –assets

Notional

Carrying
amount –liabilities

Line item in thestatement of financial
position where hedging
instrument is included

Average rate used
for the fair valueof the hedging
instrument

Cash flow hedges
Interest risk
Interest rate swaps
Forward interest rate

USD 575 million—

Other financial assets

2.83 %

JPY 75,000 million

¥

5,148
—

¥

50

Other financial liabilities

0.56 %

JPY 230,000 million

—

2,100

Other financial liabilities

0.54 %USD 6,675 million

55,223

14,179Other financial assets /liabilities

USD 4,086 million—

545,327

Bonds and loans

EUR 6,591 million—

957,993

Bonds and loans

USD 1,368 million

728

1,069

EUR 4,384 million

1,424

8,062

Currency and interest risk
Currency and interest rate swaps

107.43 JPY
1.85%

Net investment hedges
Foreign currency denominatedbonds and loans

Forward exchange contracts

Other financial assets /liabilities
Other financial assets /liabilities
JPY (millions)
As of March 31, 2023

Cash flow hedges
Interest risk
Interest rate swaps
Forward interest rate
Currency and interest risk
Currency and interest rate swaps
Currency risk
Hedge related to acquisition
Net investment hedges
Foreign currency denominated bonds and loans
Forward exchange contracts

F-64

Balance in cash flow hedges
and net investment hedges

Balance in hedge cost reserve

¥

¥

2,948

—

(21,182)—(72,678)(23,127)

3,560—

188,343—

80,584—

JPY (millions)
For the year ended March 31, 2023
Amounts recognized in OCI
Amount reclassified to profit or loss
Change in fairLine item in which
value of hedging
reclassification adjustment
instruments
Hedging costs
Cash flow hedge
Hedging costs
is included
Cash flow hedges
Interest risk
Interest rate swaps
Forward interest rate
Currency and interest risk¥

3,993 ¥
(2,123)——¥(360) ¥
2,312——

Finance income
Finance expenses

income and Finance(3,052) Financeexpenses

Currency and interest rate swaps

54,566(21,426)(89,289)

Net investment hedges
Foreign currency denominatedbonds and loans
Forward exchange contracts

142,456———

25,806———

The following tables represent the items designated as hedging instruments, amounts within other components of equity related to items designated ashedged items and amounts of changes in fair value of hedging instruments recorded in other comprehensive income and the amounts reclassified
from the hedging reserve to profit or loss as of and for the year ended March 31, 2024:
JPY (millions)
As of March 31, 2024
Carrying
amount –assets

NotionalLine item in thestatement of financial
position where hedging
instrument is included

Carrying
amount –liabilities

Average rate used
for the fair valueof the hedging
instrument

Cash flow hedges
Interest risk
Interest rate swaps

Forward interest rate

USD 575 million

¥

7,172

¥

—

Other financial assets
Other financial assets /liabilities
Other financial assets /liabilities

2.83 %

Other financial assets

131.08 JPY(0.09)%

JPY 90,000 million

33

0

JPY 270,000 million

34

1,477

USD 6,675 million

95,368—

USD 3,581 million—

542,399

Bonds and loans

EUR 6,628 million—

1,081,796

Bonds and loans

USD 1,168 million

—

2,618

Other financial liabilities

EUR 1,000 million

—

7,229

Other financial liabilities

0.57 %
0.53 %

Currency and interest risk
Currency and interest rate swaps
Net investment hedges
Foreign currency denominatedbonds and loans

Forward exchange contracts

F-65

JPY (millions)
As of March 31, 2024

Cash flow hedges
Interest risk
Interest rate swaps

Balance in cash flow hedges
and net investment hedges

Balance in hedge cost reserve

¥

¥

4,063

Forward interest rate
Currency and interest risk
Currency and interest rate swaps
Currency risk
Hedge related to acquisition
Net investment hedges
Foreign currency denominated bonds and loans
Forward exchange contracts—(19,283)—(52,236)(15,930)

3,560—

344,866—

189,796—

JPY (millions)
For the year ended March 31, 2024
Amounts recognized in OCI
Amount reclassified to profit or loss
Change in fairLine item in which
value of hedging
reclassification adjustment
instruments
Hedging costs
Cash flow hedge
Hedging costs
is included
Cash flow hedges
Interest risk
Interest rate swaps
Forward interest rate
Currency and interest risk

¥

4,098
387

¥

—
—

¥

(2,492) ¥
2,349

—
—

Finance income
Finance expenses

income and Finance(2,024) Financeexpenses

Currency and interest rate swaps

166,574

12,392(137,122)

Net investment hedges
Foreign currency denominatedbonds and loans
Forward exchange contracts

169,111———109,212———

The amount relating to the ineffectiveness recorded in profit or loss was immaterial for the years ended March 31, 2023 and 2024. The amount ofhedging gains/losses recorded in other comprehensive income and reclassified to profit or loss as hedged future cash flows were no longer expected
to occur was not material for the years ended March 31, 2023 and 2024.
Capital Management
The capital structure of Takeda consists of shareholders’ equity (Note 26), bonds and loans (Note 20), and cash and cash equivalents (Note 18). The
fundamental principles of Takeda’s capital risk management are to build and maintain a steady financial base for the purpose of maintaining
soundness and efficiency of operations and achieving sustainable growth. According to these principles, Takeda conducts capital investment, profit
distribution such as dividends, and repayment of loans based on steady operating cash flows through the development and sale of competitive
products.
Takeda utilizes factoring arrangements for selected trade receivables. Under these programs, trade receivables sold are derecognized when the risks
and rewards of ownership have been transferred. Amounts due from customers that are subject to the factoring arrangements but have not beenfactored at fiscal year end are disclosed in Note 17.
Takeda balances and monitors its capital structure between debt and equity and adheres to a conservative financial discipline.

F-66

Credit Risk
Takeda is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits withbanks and financial institutions, foreign exchange transactions, and other financial instruments. The maximum exposure to credit risk, without taking
into account any collateral held at the end of the reporting period, is represented by the carrying amount of the financial instruments which is exposedto credit risk on the consolidated statements of financial position. Takeda regularly monitors the status of credit risk exposure with banks andfinancial institutions.
Customer Credit Risk
Trade and other receivables are exposed to customer credit risk. Takeda monitors the status of overdue balances, reviews outstanding balances foreach customer and regularly examines the credibility of major customers in accordance with Takeda’s policies for credit management to facilitate theearly evaluation and the reduction of potential credit risks. In parallel, Takeda utilizes programs to sell certain trade and other receivables due fromcertain customers to a select group of banks on a non-recourse basis which in turn minimizes the credit risk associated with such customers. If
necessary, Takeda obtains rights to collateral or guarantees on the receivables.
The following represents the carrying amount of the trade receivables categorized by due date and the analysis of impairment loss allowance as ofMarch 31, 2023 and 2024:
JPY (millions) except for percentage
As of March 31, 2023
Amount past due

Gross carrying amount
Impairment loss allowance
Net carrying amount
Weighted average loss rate

Over 30 days Over 60 days Over 90 days
Within 30
but within 60 but within 90
but within
Over one
Current
days
days
days
one yearyear¥ 499,795¥
23,676¥14,999¥8,975¥
19,912¥
15,430¥(2,219)
(66)
(66)
(33)
(694)
(4,278)497,576
23,61014,933
8,942
19,218
11,152
0.4 %
0.3 %
0.4 %
0.4 %
3.5 %
27.7 %

Total
582,787(7,356)575,431
1.3 %

JPY (millions) except for percentage
As of March 31, 2024
Amount past due

Gross carrying amount
Impairment loss allowance
Net carrying amount
Weighted average loss rate

Over 30 days Over 60 days Over 90 days
Within 30
but within 60 but within 90
but within
Over one
Current
days
days
days
one yearyear¥ 527,383¥
34,960¥12,645¥
3,956¥
21,492¥
20,379¥(2,482)
(107)
(143)
(99)
(450)
(5,095)524,901
34,853
12,502
3,857
21,042
15,284
0.5 %
0.3 %
1.1 %
2.5 %
2.1 %
25.0 %

Total
620,815(8,376)
612,439
1.3 %Management believes that the unimpaired amounts that are past due are still collectible in full, based on historical payment behavior and extensive
analysis of customer credit risk.
As of March 31, 2023 and 2024, Takeda has provided loss allowance on trade receivables and other receivables not past due based on an analysis ofcredit histories. Loss allowance for trade receivables are measured based on expected credit losses on a collective basis using the simplified approach.
However, when events that have a detrimental impact on the estimated future cash flows such as customers’ deterioration of financial conditions or
failure of payment overdue have occurred, expected credit losses are measured on an individual basis as credit-impaired financial assets. Takeda
considers a financial asset to be in default when the customer is unlikely to pay the obligation in full, without recourse by Takeda to take actions suchas realizing collaterals, if any.

F-67

The following is a summary of the change in the impairment loss allowance for trade receivables for the years ended March 31, 2023 and 2024. The
impairment loss allowance recognized for other than trade receivables is immaterial.
JPY (millions)
Bad debt provisioncalculated by simplified
approach
As of April 1, 2022

¥

3,411

Increases

Bad debt provision
recognized to creditimpaired financial assets
¥

5,979

Total
¥

9,390

92

190

282

Decreases (written off)(719)

(2,509)(3,228)Decreases (reversed)

(119)

(213)

(332)

Foreign currency translation differences
As of March 31, 2023

662
¥

3,327

582
¥

4,029

1,244
¥

7,356

Increases

857

561

1,419

Decreases (written off)

(437)

(377)

(814)

Decreases (reversed)

(324)

(231)

(555)

Foreign currency translation differences
As of March 31, 2024

410
¥

3,833

561
¥

4,543

971
¥

8,376

Other Counterparty Credit Risk
Cash reserves of Takeda are concentrated mostly with the Company and entities acting as the cash pool leader in the U.S. and Europe. These cash
reserves are primarily managed exclusively by investments in highly rated short-term bank deposits and bonds of highly rated issuers within theinvestment limits determined by reviewing the investment ratings and terms under Takeda’s policies for fund management, resulting in limited credit
risk. Cash reserves, other than those subject to the group cash pooling system, are managed by each consolidated subsidiary in accordance with theCompany’s fund management policies. For derivatives, Takeda enters into contracts only with financial counterparties rated investment grade or
higher in order to minimize counterparty risk.

F-68

Liquidity Risk
Takeda manages liquidity risk and establishes an adequate management framework for liquidity risk to secure stable short-, mid-, and long-term
funds and sufficient liquidity for operations. Takeda manages liquidity risk by monitoring forecasted cash flows and actual cash flows on an ongoingbasis. In addition, Takeda has commitment lines with some counterparty financial institutions to manage liquidity risk (Note 20). Takeda strives tomaximize the available liquidity with a combination of liquid short-term investments and committed credit lines with strong rated counterparties. The
objective is to maintain levels in excess of project cash needs to mitigate the risk of contingencies.
The table below presents the balances of financial liabilities by maturity. The total contract amount below reflects cash flows presented on an
undiscounted cash flow basis, including interest expense. The amounts disclosed as of March 31, 2023 and 2024 are undiscounted cash flows using
the respective spot foreign exchange rates as of March 31, 2023 and 2024.
JPY (millions)
Carrying
amountWithin one
year

Total

Between one
and twoyears

Between two
and three
years

¥

¥

Betweenthree andfour years

Between fourand five years

More than
five years

As of March 31, 2023
Bonds and loans
Bonds

¥

3,658,314¥

4,640,222¥

331,223

586,179
60,482

182,261¥

92,999685,321¥

107,483

164,573¥

317,706

2,690,665

Loans

724,027

767,558

113,404

Trade and other payables

649,233

649,233

649,233

—

—

—

—

—

Lease liabilities

479,351

665,983

59,62356,00951,22946,111

41,281

411,730

Derivative liabilities

40,721(64,835)

15,858(509)(2,324)(2,231)(2,243)(73,386)

Derivative assets(79,654)(234,200)(28,814)(17,443)(13,297)(13,302)(33,858)(127,486)

75,484As of March 31, 2024
Bonds and loans
Bonds

¥

4,092,879¥

5,090,592¥

913,282¥

206,481
100,467¥

774,784
113,605¥

185,176
347,612¥

326,949
76,162¥

2,683,919

Loans

750,873805,847

66,983

Trade and other payables

547,521547,521547,521

—

—

—

—

—

Lease liabilities

619,639

900,755

66,20860,94455,83153,45951,235613,078

101,019

Derivative liabilities

25,10827,590

16,547

762

1,053

1,113

1,096

7,019

Derivative assets(120,223)(400,354)(56,538)(40,327)(39,186)(73,404)(35,218)(155,681)

The contractual amount of bonds in “Between one and two years” as of March 31, 2023 and “Within one year” as of March 31, 2024, includes JPY
500,000 million principal amount of the hybrid subordinated bonds (the “Hybrid Bonds”) as Takeda expects to make an early repayment of all of theprincipal of the Hybrid Bonds on each interest payment date beginning October 6, 2024. For details on the principal and interest rates associated withthese bonds and loans, see Note 20.

F-69

Reconciliation of liabilities arising from financing activities
JPY (millions)Long-term
loans

Bonds
As of April 1, 2022¥

3,637,355¥

707,770

Short-term
loans
¥

285

Lease
liabilities¥

465,238

Derivative
assets used
for hedge ofdebts¥(22,749) ¥Derivative
liabilities
used forhedge ofdebts
14,063

Total¥

4,801,964

Cash flows from financing activities
Net increase (decrease) in short-termloans and commercial papers

40,000

—

—

—

—

—

Proceeds from issuance of bonds—

75,000————75,000

Repayments of long-term loans—(75,181)

—

—

—

—

(75,181)

Repayments of bonds

40,000(281,489)

—

—

—

—

—

(281,489)

Repayments of lease liabilities

—

—

—

(43,401)——(43,401)

Interest paid

—

—

—

(16,580)——(16,580)

32,173——

301,723

Non-cash items
Foreign exchange movement

253,390

16,13525

Change in fair value

—

—

—

—

(32,474)

116(32,358)

New, amended and terminated leases

—

—

—

25,341——

25,341

9,058

48

(54)

16,580——

Others
As of March 31, 2023¥

3,658,314¥

723,772¥256¥

479,351¥(55,223) ¥14,17925,632¥4,820,649

JPY (millions)Long-term
loans

Bonds
As of April 1, 2023¥

3,658,314¥

723,772

Short-term
loans
¥

256

Lease
liabilities¥

479,351

Derivative
assets used
for hedge ofdebts¥(55,223) ¥Derivative
liabilities
used forhedge ofdebts
14,179Total¥

4,820,649

Cash flows from financing activities
Net increase (decrease) in short-termloans and commercial papers

277,000

—

—

—

—

—

Proceeds from long-term loans—

100,000

—

—

—

—

100,000

Repayments of long-term loans—(100,351)

—

—

—

—

(100,351)———(220,550)

Repayments of bonds

277,000(220,550)——

Proceeds from the settlement of crosscurrency interest rate swaps related tobonds
Repayments of lease liabilities

—

—

—

—

60,063—60,063———(54,586)——(54,586)

Interest paid

—

—

—

(20,826)——(20,826)

369,442

27,68639

58,169——455,336

—

—

—

—

(100,207)(14,179)(114,386)
136,705

Non-cash items
Foreign exchange movement
Change in fair value
New, amended and terminated leases
Others
As of March 31, 2024

¥

—

—

—

136,705

—

—

8,673

(485)

(44)

20,826——(95,368) ¥—4,092,879¥

750,622¥

Others includes an increase in debts due to application of amortized cost method.

F-70

251

¥

619,639¥

28,970¥5,368,024

28.

Share-based Payments

Takeda maintains share-based compensation payment plans for the benefit of its directors and certain employees of the Company and its subsidiaries
and affiliates worldwide. Takeda recorded total compensation expense related to its share-based payment plans of JPY 43,730 million, JPY 61,024
million, and JPY 71,510 million for the years ended March 31, 2022, 2023 and 2024, respectively, in its consolidated statements of profit or loss.
Equity-settled Plans
Stock Options
Takeda previously provided a stock option plan under which it granted awards to members of Takeda’s board of directors (the “Board”) and senior
management through the year ended March 31, 2014. There were no stock options granted for the years ended March 31, 2023 and 2024 and all
previously granted awards are fully vested. These awards generally vested three years after the grant date. The stock options are exercisable for 10
years after the grant date for options held by members of the Board and 20 years for options held by senior management. The individual must beeither a Board member or an employee of the Company or one of its subsidiaries or affiliates to exercise the options, unless the individual retired dueto the expiration of their term of office, mandatory retirement or other acceptable reasons.
There was no compensation expense recorded during the years ended March 31, 2022, 2023 and 2024 as all awards were fully vested.
The following table summarizes the stock option activity:
For the Year Ended March 31
2022
Number ofoptions(shares)
As of beginning of the year
Exercised
As of end of the year

3,357,2002023

Weighted
average
exercise price(JPY)¥

Number ofoptions(shares)

4,082

3,347,100(10,100)

1

3,347,100

4,094

2024

Weighted
average
exercise price(JPY)¥

Weighted
average
exercise price(JPY)

Number ofoptions(shares)

4,094

3,303,600

¥

4,111

(43,500)

2,802(122,700)

3,464

3,303,600

4,111

3,180,900

4,136

All of the stock options were exercisable as of March 31, 2022, 2023 and 2024.
The weighted-average share price at the date of exercise was JPY 3,815, JPY 3,852 and JPY 4,540 during the years ended March 31, 2022, 2023 and2024, respectively. The weighted-average exercise price and weighted-average remaining contractual life of the share options outstanding were JPY
4,094 and 10 years, JPY 4,111 and 9 years, and JPY 4,136 and 8 years, as of March 31, 2022, 2023 and 2024, respectively.
Stock Incentive Plans
Takeda has the following 3 stock-based incentive compensation plans for its directors and eligible employees including members of senior
management:
Board incentive plan (“BIP”) Trust -The BIP Trust is an incentive plan for board directors designed based on Restricted Stock Units and Performance
Share Units, whereby Restricted Stock Unit awards and Performance Share Unit awards are granted to board directors. Each award is settled in asingle share of the Company’s common stock. Under the BIP, Restricted Stock Unit awards are subject to certain service-based conditions and vest
ratably over three years. Performance Share Unit awards are granted to internal directors and are subject to certain service-based conditions and also
subject to the achievement of certain performance metrics that are intended to align with Takeda’s strategic focus and long-term growth. Performance
Share Unit awards vest three years from the date of grant. For purposes of the Performance Share Unit awards, the performance metrics may include
top line revenues, cash flow, indicators on profit, R&D metrics and other performance factors over a three-year performance period. The settlement
value of the awards is based on stock price and subject to, among other things, applicable tax withholding, foreign exchange rates (in countries otherthan Japan) and the value of company dividends during the vesting period. Takeda, through a wholly owned trust, buys shares of the Company’scommon stock in the market on the grant date, and uses these shares to settle the awards upon vesting. The number of shares the individual receives(either through physical settlement or cash) is based on the achievement of the performance criteria and vesting of the award. The trust settles theawards through the issuance of shares to individuals residing in Japan. For individuals residing outside of Japan, the trust sells the shares theindividual is eligible to receive and pays cash to the individual in settlement of the award.
Employee Stock Ownership Plan (“ESOP”) Trust - The ESOP Trust is an employee incentive plan designed based on Restricted Stock Units andPerformance Share Units, whereby Restricted Stock Unit awards and Performance Share Unit awards are granted to certain employees, including
members of senior management of the Company. Each award is settled in a single share of the Company's common stock. Restricted Stock Unitawards and Performance Share Unit awards are granted to certain members of senior management while Restricted Stock Unit awards are granted to
the remainder of employees. Restricted Stock Unit awards are subject to certain service-based conditions and vest ratably over three years.
Performance Share Unit awards are subject to certain service-based conditions and also subject to the achievement of certain performance metrics
that are intended to align with Takeda’s strategic focus and long-term growth. Performance Share Unit awards vest three years from the date of grant.
For purposes of the Performance Share Unit awards, the performance metrics may include top line revenues, cash flow, indicators on profit, R&D
metrics and other performance factors over a three-year performance period. The settlement value of the awards is based on stock price and subject
to, among other things, applicable tax withholding and the value of company dividends during the vesting period. Takeda, through a wholly owned
F-71

trust, buys shares of the Company's common stock in the market or issues shares the Company's common stock on the grant date and uses theseshares to settle the awards upon vesting. The number of shares the individual receives is based on the achievement of the performance criteria andvesting of the award. The trust settles the awards through the issuance of shares to individuals residing in Japan. For individuals residing outside ofJapan, the trust sells the shares the individual is eligible to receive and pays cash to the individual in settlement of the award.
Long-Term Incentive Plan for Company Group Employees residing outside of Japan (“LTIP”) - The LTIP was approved by the Board on June 24,
2020 and is an incentive plan that provides for the grant of awards to eligible employees, including members of senior management of the Company
and its subsidiaries and affiliates outside of Japan. The LTIP provides for the grant of Restricted Stock Units and Performance Stock Units, as wellother equity based awards. Grants under the LTIP may be settled in American Depositary Shares (“ADSs”) or cash, or a combination thereof.
Takeda first granted awards under the LTIP on July 1, 2020 in the form of Restricted Stock Unit awards and Performance Stock Unit awards, and noother forms of awards have been granted under the LTIP to date. Restricted Stock Unit awards are subject to certain service-based conditions and vest
ratably over three years. Performance Stock Unit awards are subject to certain service-based conditions and also subject to the achievement of certain
performance metrics that are intended to align with Takeda’s strategic focus and long-term growth. Performance Stock Unit awards vest three years
from the date of grant. For purposes of the Performance Stock Unit awards, the performance metrics may include top line revenues, cash flow,
indicators on profit, R&D metrics and other performance factors over a three-year performance period. The value of such awards when such awards
are to be settled in ADSs is based on the fair market value of the shares of the Company's common stock converted into ADSs, subject to, among
other things, applicable tax withholding, foreign exchange rates and the value of company dividends during the vesting period. Restricted Stock Unitawards and Performance Stock Unit awards granted under the LTIP are to be settled in ADSs to award recipients residing and employed in countries
outside of Japan where settlement in ADSs is permitted by local law and regulation. In countries outside of Japan where such form of settlement is
not permissible due to legal, regulatory and/or administrative reasons, Restricted Stock Unit awards and Performance Stock Unit awards are
structured such that settlement is to be made in cash and accounted as a “Cash-Settled LTIP Award” (please refer to Cash-Settled LTIP Awards).
The total compensation expense recognized related to these plans was JPY 43,374 million, JPY 60,672 million and JPY 70,871 million during theyears ended March 31, 2022, 2023 and 2024, respectively.
The weighted average fair value of the awards at the grant date is as follows (in JPY):
For the Year Ended March 31
2022

2023

2024

BIP:
Weighted average fair value at grant date

¥

3,738

¥

3,759

¥

4,527

ESOP:
Weighted average fair value at grant date

3,738

3,759

4,527

1,877
(USD16.90 incontractual currency)

1,909(USD14.09 incontractual currency)

2,273(USD15.71 incontractual currency)

Equity-Settled LTIP:
Weighted average fair value at grant date

The grant date fair value for BIP and ESOP was calculated using the share price of the Company's common stock on the grant date while the grant
date fair value for LTIP was calculated using the share price of ADS as it was determined to be approximately the same as the fair value of theawards. One ADS equals 0.5 of the Company's common stock.

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The following table summarizes the award activity related to the BIP (the number of awards) (1 award represents 1 share of the Company's common
stock), ESOP (the number of awards) (1 award represents 1 share of the Company's common stock) and Equity-settled LTIP (the number of awards)(1 award represents 1 share of the ADS). One ADS equals 0.5 of the Company's common stock:
For the Year Ended March 312022

At beginning of the year

2023

2024

BIP

ESOP

EquitySettled
LTIP

BIP

ESOP

EquitySettled
LTIP

BIP

ESOP

EquitySettled
LTIP

1,035,843

7,751,952

23,412,994

1,216,361

3,372,452

40,861,734

1,311,989

773,844

59,752,598

536,121534,437

29,211,506

544,491

450,340

38,897,622

338,189363,559

36,531,621(552,490) (4,270,590)(13,554)(96,015)(4,682,948)—(39,545)(4,747,804)(435,309) (2,949,200) (15,237,880)(450,206)

GrantedForfeited/expired
before vesting—

Vested(355,603) (4,361,447) (7,466,212)

Transfer to CashSettled LTIP——

(25,964)——(85,930)(351,096) (25,916,216)——(209,715)

Transfer to CashSettled RSU

—

—

—

—

(3,733)

—

—

—

—

At end of the year

1,216,361

3,372,452

40,861,734

1,311,989

773,844

59,752,598

1,199,972

746,762

65,410,484

The balance as of March 31, 2022, 2023, and 2024, each represents unvested awards. The weighted average remaining contractual life of theoutstanding awards was one year for the BIP as of March 31, 2023 and 2024, one year for the ESOP as of March 31, 2023 and 2024, and one year for
the Equity-Settled LTIP plans as of March 31, 2023 and 2024.
Cash-Settled Awards
Takeda previously provided a phantom stock appreciation rights (“PSARs”) plan through the year ended March 31, 2014, and a restricted stock units(“RSUs”) plan through the year ended March 31, 2021 for certain employees of subsidiaries of the Company. The value of these awards is linked toshare price of the Company and are settled in cash. Moreover, where settlement of awards granted under the LTIP described under “—Equity Settled
Plans” above in ADSs or shares of common stock is not permissible due to legal, regulatory and/or administrative reasons, such awards are settled in
cash. The total compensation expense recorded associated with these plans was JPY 356 million, JPY 352 million and JPY 639 million during theyears ended March 31, 2022, 2023 and 2024, respectively. The total liability reflected in the consolidated statements of financial position as of March
31, 2022, 2023 and 2024 is JPY 1,583 million, JPY 1,026 million and JPY 1,018 million, respectively.
Phantom stock appreciation rights (“PSARs”)
The PSARs vest one third each year over a three-year period from the end of the fiscal year during which the awards were granted and can be
exercised for a period of ten years from the end of the fiscal year during which the awards were granted. The awards are settled through a cash
payment to the holder based on the difference between the share price of the Company at the date of exercise, and the share price at the date of grant.
The following table summarizes the award activity related to the PSARs (the number of awards) (1 award represents 1 share of the Company's
common stock) :For the Year Ended March 31
2022
Number of
PSARs
As of beginning of the year

2,270,439

2023

Weighted
average
exercise price(JPY)¥

Number of
PSARs

4,997

1,471,095

2024

Weighted
average
exercise price(JPY)¥

Number of
PSARs

5,481

217,530

Weighted
average
exercise price
(JPY)
¥

5,956

Forfeited/expired after
vesting(799,344)

5,134(1,253,565)

6,054(217,530)

6,428

As of end of the year

1,471,095

5,481

217,530

5,956

—

—

All PSARs were vested and expired as of March 31, 2024. There was no intrinsic value of vested cash-settled share-based payments as of March 31,
2022 and 2023.

F-73

Restricted stock units (RSUs)
The RSUs vest one third each year over a three-year period from the end of the fiscal year during which the awards were granted. The RSUs aresettled upon vesting based on the share price at the vesting date plus any dividends paid on shares during the vesting period. There is no exercise
price payable by the holder.
The following table summarizes the award activity related to the RSUs (the number of awards) (1 award represents 1 share of the Company’scommon stock):
For the Year Ended March 31
2022

2023

2024

As of the beginning of the year

778,451

317,734—

Forfeited/expired before vesting(62,649)(8,208)—Vested(398,068)(313,259)

—

—

3,733

—

317,734——

Transfer from Equity-Settled ESOPAs of the end of the year
There are no unvested balance as of March 31, 2024.

Cash-Settled LTIP Awards
As noted above, for purposes of restricted stock unit awards and performance stock units granted under the LTIP in countries where settlement in
ADSs is not permissible due to legal, regulatory and/or administrative reasons, such grants are structured such that settlement is to be made in cash
and accounted for as Cash-Settled LTIP Awards.
The following table summarizes the award activity related to the Cash-Settled LTIP Awards (the number of awards) (1 award represents 1 ADS):

For the Year Ended March 31
2022

2023

2024

As of the beginning of the year

262,994

296,640

367,642

Granted153,604

213,224

197,798

Forfeited/expired before vesting(25,682)(30,372)(38,245)

Vested(120,240)(197,780)(341,148)

Transfer from Equity-Settled LTIP

25,96485,930209,715

As of the end of the year

296,640

367,642395,762

The balance as of March 31, 2022, 2023 and 2024, each represents unvested awards.

F-74

29.

Subsidiaries and Associates

The number of consolidated subsidiaries decreased by 11 in the year ended March 31, 2024, primarily due to liquidations to reorganize capital insubsidiaries. The number of associates accounted for using the equity method decreased by 1 primarily due to a change of ownership ratio.
The following is a listing of the Company’s consolidated subsidiaries (including partnerships): 169 subsidiaries as of March 31, 2024

Company name

Ownership ofVoting Rights(%)

Takeda Argentina S.A.

Country
Argentina

Takeda Austria GmbH

Austria100.0%

Takeda Manufacturing Austria AG

Austria100.0%

Baxalta Innovations GmbH

Austria100.0%

Takeda Distribuidora Ltda.

Brazil100.0%

Takeda Pharma Ltda.

BrazilTakeda Canada Inc.

Canada100.0%
100.0%

Takeda APAC Biopharmaceutical Research and Development Co., Ltd.

China

100.0%

Takeda (China) Holdings Co., Ltd.

China

100.0%

Takeda (China) International Trading Co., Ltd.

China

100.0%

Tianjin Takeda Pharmaceuticals Co., Ltd

China

100.0%

Takeda France S.A.S.

France100.0%

Takeda GmbHGermany

100.0%

Takeda Ireland Limited

Ireland100.0%

Shire Pharmaceuticals International Unlimited Company

Ireland100.0%

Shire Acquisitions Investments Ireland Designated Activity Company

Ireland100.0%

Shire Ireland Finance Trading Limited

Ireland100.0%

Takeda Italia S.p.A.

Italy

100.0%

Takeda Pharmaceuticals Korea Co., Ltd.

Korea

100.0%

Takeda Mexico S.A.de C.V.

100.0%

Mexico100.0%

Netherlands

100.0%

Takeda Pharmaceuticals Limited Liability Company

Russia100.0%

Takeda Development Center Asia, Pte. Ltd.

Singapore

100.0%

Takeda Manufacturing Singapore Pte. Ltd.

Singapore

100.0%

Takeda Farmaceutica Espana S.A.

Spain

100.0%

Takeda Pharma AB

Sweden100.0%

Takeda Pharmaceuticals International AG

Switzerland

100.0%

Baxalta Manufacturing S.à r.l.

Switzerland

100.0%

Takeda Pharma AG

Switzerland

100.0%

Takeda UK Limited

United Kingdom

100.0%

Takeda Pharmaceuticals U.S.A., Inc.

U.S.

100.0%

ARIAD Pharmaceuticals, Inc.

U.S.

100.0%

Takeda Vaccines, Inc.

U.S.

100.0%

Takeda Development Center Americas, Inc.

U.S.

100.0%

Baxalta Incorporated

U.S.

100.0%

Dyax Corp.

U.S.

100.0%

Takeda Ventures, Inc.

U.S.

100.0%

Baxalta US Inc.

U.S.

100.0%

Takeda Nederland B.V.

F-75

Country
U.S.

Ownership ofVoting Rights(%)
100.0%

BioLife Plasma Services LP

U.S.

100.0%

Takeda Manufacturing U.S.A., Inc.

U.S.

100.0%

Company nameShire Human Genetic Therapies, Inc.

Other 128 subsidiaries

Associates accounted for using the equity method: 16 associates as of March 31, 2024.
30.

Related Party Transactions

Compensation for Key Management Personnel
Key management personnel are defined as members of the Board. The compensation for key management personnel is as follows:
JPY (millions)
For the Year Ended March 31
2022
Basic compensation and bonuses¥

Share-based compensation (expensed amount)
Other
Total

31.

¥

Business Combinations

Acquisitions during the Years ended March 31, 2022, 2023, and 2024
There was no material business combination during the years ended March 31, 2022, 2023, and 2024.

F-76

2023

1,614

¥

2024

1,640

¥

1,839

2,547

2,403

2,749

38

43

85

4,199

¥

4,085

¥

4,673

32.

Commitments and Contingent Liabilities

Purchase commitments
The amount of contractual commitments for the acquisition of property, plant and equipment was JPY 31,083 million as of March 31, 2024.
Milestone Payments
As discussed in Note 13, Takeda has certain contractual agreements related to the acquisition of intangible assets that require it to make paymentsof up to JPY 1,331,364 million as of March 31, 2024. These commitments include development, regulatory approval and launch milestone
payments in relation to R&D programs under development. The related commercial milestone payments were not included in the commitments
given the payments were not deemed reasonably likely to occur.
Litigation
Takeda is involved in various legal and administrative proceedings. The most significant matters are described below.
Takeda may become involved in significant legal proceedings for which it is not possible to make a reliable estimate of the expected financial
effect, if any, which may result from ultimate resolution of the proceedings. In these cases, appropriate disclosures about such cases would be
included in this note, but no provision would be made for the cases.
With respect to each of the legal proceedings described below, other than those for which a provision has been made, Takeda is unable to make areliable estimate of the expected financial effect at this stage. This is due to a number of factors, including, but not limited to, the stage ofproceedings, the entitlement of parties to appeal a decision, if any, and lack of clarity as to the merits of theories of liability, the merits of Takeda’s
defenses, the amount and recoverability of damages and/or governing law. Takeda does not believe that information about the amount sought by
the plaintiffs, if that is known, is, by itself, meaningful in every instance with respect to the outcome of those legal proceedings.
Legal expenses incurred and charges related to legal claims are recorded in selling, general and administrative expenses. Provisions are recorded,
after taking appropriate legal and other specialist advice, where an outflow of resources is considered probable and a reliable estimate can be madeof the likely outcome of the dispute. The factors Takeda considers in developing a provision include the merits and jurisdiction of the litigation, thenature and the number of other similar current and past litigation, the nature of the product and the current assessment of the science subject to thelitigation, and the likelihood of settlement and current state of settlement discussions, if any. As of March 31, 2023 and 2024, Takeda’s aggregate
provisions for legal and other disputes were JPY 64,290 million and JPY 22,342 million, respectively. The ultimate liability for legal claims mayvary from the amounts provided and is dependent upon the outcome of litigation proceedings, investigations and possible settlement negotiations.
Unless otherwise stated below, Takeda is unable to predict the outcome or duration of these matters at this time.
Takeda’s position could change over time, and, therefore, there can be no assurance that any losses that result from the outcome of any legal
proceedings will not exceed, by a material amount, the amount of the provisions reported in these consolidated financial statements. Matters thatwere previously disclosed may no longer be reported because, as a result of rulings in the case, settlements, changes in our business or otherdevelopments, in our judgment, they are no longer material to our financial condition or operating results.
Product Liability and Related Claims
Pre-clinical and clinical trials are conducted during the development of potential products to determine the safety and efficacy of products for use
by humans following approval by regulatory bodies. Notwithstanding these efforts, when drugs and vaccines are introduced into the marketplace,unanticipated safety issues may become, or be claimed by some to be, evident. Takeda is currently a defendant in a number of product liability
lawsuits related to its products. For the product liability lawsuits and related claims, other than those for which a provision has been made, Takeda
is unable to make a reliable estimate of the expected financial effect at this stage.
Takeda’s principal pending legal and other proceedings are disclosed below. The outcomes of these proceedings are not always predictable and canbe affected by various factors. For those legal and other proceedings for which it is considered at least reasonably possible that a loss has been
incurred, Takeda discloses the possible loss or range of possible loss in excess of the recorded loss contingency provision, if any, where suchexcess is both material and estimable.
ACTOS
Economic Loss Cases
Takeda has been named in ACTOS-related lawsuits brought by plaintiffs who do not assert any claims for personal injuries. Instead plaintiffs
claim they suffered an economic loss by paying for ACTOS prescriptions that allegedly would not have been written had Takeda provided
additional information about the alleged risks of bladder cancer associated with ACTOS in its US product label. A putative class of third-party
payors and consumers brought suit against Takeda in the U.S. District Court for the Central District of California.

F-77

Proton Pump Inhibitor (“PPI”) Product Liability Claims
As of March 31, 2024, more than 6,100 product liability lawsuits related to the use of PREVACID and DEXILANT have been filed against
Takeda in U.S. federal and state courts. Most of these cases are pending in U.S. federal court and are consolidated for pre-trial proceedings in a
multi-district litigation in federal court in New Jersey. The plaintiffs in these cases allege they developed kidney injuries or, in some cases, gastriccancer as a result of taking PREVACID and/or DEXILANT, and that Takeda failed to adequately warn them of these potential risks. Similar cases
were filed against other manufacturers of drugs in the same PPI class as Takeda’s products, including AstraZeneca plc (“AstraZeneca”), Procter &Gamble Company (“Procter & Gamble”) and Pfizer Inc. (“Pfizer”). Outside the U.S., one proposed class action is pending in Canada(Saskatchewan). The defendants include Takeda, AstraZeneca, Janssen Pharmaceutical Companies (“Janssen”) and several generic manufacturers.
In April 2024, Takeda has reached an agreement in principle to resolve the U.S. cases for a non-material amount. The settlement has no material
impact on Takeda’s consolidated statements of profit or loss.
Intellectual property
Intellectual property claims include challenges to the validity and enforceability of Takeda’s patents on various products or processes as well as
assertions of non-infringement of those patents. A loss in any of these cases could result in loss of patent protection for the product at issue. The
consequences of any such loss could be a significant decrease in sales of that product and could materially affect future results of operations for
Takeda.
TRINTELLIX
Takeda has received notices from sixteen generic pharmaceutical companies that they have submitted ANDAs with paragraph IV certifications
seeking to sell generic versions of TRINTELLIX. Takeda filed patent infringement lawsuits against the ANDA filers in federal court in Delaware.
Lawsuits against ten ANDA filers were resolved before trial. A trial took place from January 15 to January 28, 2021 with six ANDA filers,
including Alembic Pharmaceuticals Limited and Alembic Pharmaceuticals, Inc., Lupin Limited and Lupin Pharmaceuticals, Inc. (“Lupin”),
Macleods Pharmaceuticals Ltd., Sigmapharm Laboratories, LLC, Sandoz, Inc., and Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare
Limited. The Court issued its decision on September 30, 2021 and found that US Patent 7,144,884, which covers vortioxetine (the active ingredientin Trintellix), is valid. For the rest of the asserted patent, only US Patent 9,101,626, which covers processes for synthesizing vortioxetine, wasfound to be infringed by Lupin. Other patents (including crystalline form and certain method of use patents) were found to be valid but not
infringed by any of the defendants.
Takeda filed a notice of appeal on November 24, 2021. Lupin filed a notice of appeal on November 29, 2021 and other defendants filed a notice ofappeal on December 8, 2021. Oral argument at the Federal Circuit took place on September 8, 2023. On December 7, 2023, the Federal Circuit
Court affirmed the district court decision that the method of use patents are valid but not infringed and the process patent is infringed by Lupin.
Takeda did not appeal to the Supreme Court (petition for the Supreme Court to grant a writ of certiorari). Lupin did not appeal to the Supreme
Court by the deadline of March 6, 2024. The impact of this decision was not material to Takeda’s consolidated statements of profit or loss.
Other
In addition to the individual cases described above, there are no other patent litigations that have a material impact on Takeda’s consolidated
financial statements as of and for the year ended March 31, 2024.
Sales, Marketing, and Regulation
Takeda has other litigations related to its products and its activities, the most significant of which are describe below.
ACTOS Antitrust Litigation
In December 2013, the first of two antitrust class action lawsuits was filed against Takeda in the U.S. District Court for the Southern District of
New York by a putative class of patients who were prescribed ACTOS. The second class action was filed against Takeda in the same court in April
2015 by a putative class of wholesalers that purchased ACTOS from Takeda. In both actions, plaintiffs allege, inter alia, that Takeda improperly
characterized certain patents for ACTOS in the FDA Orange Book, which they claim imposed requirements on generic companies that filed
Abbreviated New Drug Applications and, in turn, resulted in delayed market entry for generic forms of ACTOS. In October 2019, the District
Court denied Takeda’s motion to dismiss. Takeda subsequently sought an interlocutory appeal of the District Court’s decision, which was denied.
INTUNIV Antitrust Litigation
In January 2017, an antitrust class action was filed against Shire plc, Shire LLC, and Shire U.S. Inc. (collectively, “Shire”) in the U.S. District
Court for the District of Massachusetts. The plaintiffs, a putative class of wholesalers, allege that Shire’s settlement in 2013 of patent litigation
claims against Actavis Elizabeth LLC related to its generic formulation of INTUNIV constituted an anticompetitive “reverse payment.”
In June 2024, Takeda reached an agreement to resolve the matter on a class basis for an amount that is immaterial. The final settlement, once
consummated, will be subject to court approval. The settlement has no material impact on Takeda’s consolidated statements of profit or loss.
AMITIZA Antitrust Litigation
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In August 2021, an antitrust class action was filed against Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”) in the U.S. District Court for theDistrict of Massachusetts. The plaintiffs, a putative class of wholesalers, allege that a settlement that Takeda and Sucampo Pharmaceuticals, Inc.
entered into in 2014 with Par Pharmaceutical, Inc. (“Par”) to resolve patent litigation claims related to Par’s generic formulation of AMITIZA were
anticompetitive. In December 2023 and in January 2024, additional complaints were filed in the U.S. District Court for the District ofMassachusetts by a health insurer plaintiff as well as by individual retail pharmacies plaintiffs.
COLCRYS Antitrust Litigation
In September 2021, an antitrust class action was filed against Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”) in the U.S. District Court for the
Eastern District of Pennsylvania. The plaintiffs, a putative class of wholesalers, allege that settlements that Takeda entered into in 2015 and 2016
to resolve patent litigation claims against several generic drug manufacturers related to generic formulations of COLCRYS were anticompetitive.
In September 2023, Takeda reached an agreement in principle to resolve the antitrust matter for an amount that is immaterial, which was fully
executed in December 2023. The settlement had no material impact on Takeda’s consolidated statements of profit or loss.
In November 2023, a subsequent antitrust class action challenging the same settlements was filed in the U.S. District Court for the Southern
District of New York by plaintiffs seeking to represent a putative class of end payors.
AbbVie Supply Agreement Litigation
In November 2020, AbbVie brought suit against Takeda Pharmaceutical Company Limited (“Takeda”) in Delaware Chancery Court alleging
Takeda breached its agreement with AbbVie related to the supply of LUPRON in the U.S. due to shortages arising from quality issues the U.S.
Food & Drug Administration identified concerning Takeda’s production facility in Hikari, Japan as part of a Form 483 issued in November 2019
and a Warning Letter issued in June 2020. In the litigation, AbbVie sought both preliminary injunctive relief and monetary damages. In September
2021, the court issued an order denying AbbVie’s request for injunctive relief. The court subsequently issued a decision finding Takeda in breachof the supply agreement. In September 2023, the court issued a decision regarding the quantification of AbbVie’s monetary damages andsubsequently entered judgment in December 2023. In accordance with the judgment, Takeda paid USD 505 million, including interest, in March2024 with a total financial impact of JPY 26,405 million loss in other operating expenses and JPY 7,141 million in finance expenses for theinterest for the fiscal year ended March 31, 2024.
Investigation of Patient Assistance Programs
In November 2016, the U.S. Department of Justice (“DOJ”) (through the U.S. Attorneys’ Office in Boston) issued a subpoena to Ariad
Pharmaceuticals, Inc. (“Ariad”), which was acquired by Takeda during the year ended March 31, 2017, seeking information from January 2010 tothe present relating to Ariad’s donations to 501(c) (3) co-payment foundations, financial assistance programs, and free drug programs available to
Medicare beneficiaries and the relationship between these co-payment foundations and specialty pharmacies, hubs or case management programs.
Takeda is cooperating with the investigation.
In June 2019, the DOJ (through the U.S. Attorney’s Office in Boston) issued a subpoena to Shire Pharmaceuticals LLC, which was acquired by
Takeda during the year ended March 31, 2019 (through Takeda’s acquisition of Shire plc). The subpoena generally seeks information about Shire’s
interactions with 501(c)(3) organizations that provide financial assistance to Medicare patients taking Shire drugs, including the hereditaryangioedema medications FIRAZYR and CINRYZE. Takeda cooperated with the investigation and in December 2023, Takeda reached a settlement
for an amount that is immaterial. The settlement had no material impact on Takeda’s consolidated statements of profit or loss.
Department of Justice Civil Investigative Demands
On February 19, 2020, Takeda received a Civil Investigative Demand (“CID”) from the DOJ (through its office in Washington, DC). The CID
seeks information as part of an investigation of possible off-label promotion and violations of the Anti-Kickback Statute in connection with thepromotion and sale of TRINTELLIX. Takeda is cooperating with the DOJ’s investigation.
On February 28, 2020, Takeda received a CID from the DOJ (through its office in Washington, DC). The CID seeks information as part of aninvestigation of possible kickbacks to a Florida allergy center in connection with the promotion and sale of Takeda’s subcutaneous IG products,
CUVITRU, HYQVIA and GAMMAGARD. Takeda is cooperating with the DOJ’s investigation.
Brazilian Investigation Related to ELAPRASE and REPLAGALOn November 30, 2021, the Brazilian federal authorities executed a search warrant at Takeda offices in Brazil. The warrant sought records about
information Takeda received from the Brazilian National Sanitary Surveillance Agency (AVISA) as well as any records related to donations madeto charitable organizations which provide funding to patients who are pursuing claims for reimbursement from the Brazilian government forprescriptions of ELAPRASE and REPLAGAL. Takeda is cooperating with the investigation.
33.

Subsequent Events

On June 25, 2024, Takeda issued subordinated JPY Hybrid Bonds (“the 2nd Hybrid Bonds”) with an aggregate principal amount of JPY 460,000
million. The proceeds from the 2nd Hybrid Bonds offering will be used to replace the 1st Hybrid Bonds with an aggregate principal amount of JPY
500,000 million issued on June 6, 2019. The 2nd Hybrid Bonds will mature on June 25, 2084. Under the terms and conditions of the 2nd Hybrid
Bonds, Takeda may make an early repayment of all of the principal of the 2nd Hybrid Bonds on each interest payment date beginning June 25, 2029.
Interest is payable semi-annually at a rate per annum subject to revision. The 2nd Hybrid Bonds are unsecured, and Takeda is not subject to any
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financial covenants related to these bonds.

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