Company: TAK
Filing Date: 2025-06-25
Form Type: 20-F
Source: 0001395064-25-000095
Chunk: 89

Company: TAKEDA PHARMACEUTICAL CO LTD
Filing Date: 2025-06-25
Form: 20-F
Item: Item 5
Chunk 89
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 2025, the new U. S. administration has announced new tariffs, including measures on China, Mexico and Canada and global tariffs for many goods (but excluding pharmaceuticals), which has resulted in or may result in retaliatory measures by affected countries, including China. The U. S. administration has also announced an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects of imports of pharmaceuticals and pharmaceutical ingredients on national security and certain administration officials have indicated that they expect to impose tariffs on pharmaceutical products as a result of this investigation. The duration and scope of tariffs that are or may be implemented whether by the United States or other countries, is unknown and it is unclear whether or to what extent our business will ultimately be affected thereby. Nevertheless, based on our current assumptions, we believe the effects of tariffs imposed by the U. S. and Chinese governments will be limited. Based on our financial results for the fiscal year ended March 31, 2025, we estimate that approximately 8-10% of our U. S. revenue (or approximately 4-5% of our consolidated revenue) was attributable to the customs value of products from a non-U. S. country of origin and therefore subject to U. S. tariffs, while the U. S.-country of origin value of our products sold in China was approximately 12-15% of our revenue in China (or approximately 0.5-0.6% of our consolidated revenue). We are also implementing mitigation measures, primarily in our inventory and supply chain management, to manage potential tariff impacts through our global network, which included 22 global manufacturing sites as of May 8, 2025, of which a total of 20 served the United States and seven were located in the United States.

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 of adverse 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