Company: TAK
Filing Date: 2025-06-25
Form Type: 20-F
Source: 0001395064-25-000095
Chunk: 266

Company: TAKEDA PHARMACEUTICAL CO LTD
Filing Date: 2025-06-25
Form: 20-F
Item: Item 19
Chunk 266
---
                                                                                  —                                                                                          —                                   —                                                                           ( 809)                             
  As of the end of the year                                                                                                                       ¥                                                                              12,293      ¥                       88,925      ¥                                                                           ¥                          73,614  

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, 2024 and 2025, 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, 2024 and 2025, 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 31                                      
                                                   2024                                        2025                 
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  As of the beginning of the year                  ¥                                8,139      ¥             7,772  
  Changes in the fair value during the period                                       8,678      ( 2,059)             
  Settled and paid during the period               ( 9,032)                                    ( 774)               
  Foreign currency translation differences         ( 13)                                       ( 577)               
  As of the end of the year                        ¥                                7,772      ¥             4,362  
                                                   JPY (millions)                                                   
                                                   2024                                        2025                 
  Payment term (undiscounted)                                                                                       
  Within one year                                  ¥                                2,207      ¥             3,003  
  Between one and three years