Takeda Pharmaceutical Company Annual Report 2023

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FY2023 Annual Report · Takeda Pharmaceutical Company

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20 23 ANNUAL
I NTEGRATED
REP ORT

Fiscal Year ended March 31, 2023

About

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2
2

T A K E D A I S A G L O B A L
values-based, research and development

(R&D)-driven biopharmaceutical company

committed to achieving our corporate

purpose: better health for people and a

brighter future for the world. We strive to
deliver truly transformative treatments,

signifcantly increasing the value that we

bring to society.

2023 Annual Integrated Report

2023
Annual
Integrated
Report

CE O L ETTER

D E A R S T A K E H O L D E R S ,

policies adopted in some countries in

At Takeda, the patients we serve — and

achieving outcomes for them and their

health — have been at the heart of

an efort to alleviate the pressure, raise

concerns about the impact on R&D

investment and innovation.

everything we do for more than 240 years.

I believe that health care systems need to

Today, with health care systems increasingly

urgently move toward value-based health

under strain as life expectancies rise,

care, an approach that pays for outcome

populations age and innovative treatment

and care quality and is set up around

options expand, our patient-centered

delivering results for patients. This is the

and outcomes-focused approach is more

true purpose of any health care system.

relevant than ever.

At the same time, we are realistic about the

In our 2023 Annual Integrated Report, I’m

scale of the challenge and recognize that

pleased to share the progress we have

a successful transition to a value-based

made over the past year to deliver on

system in the public market is unlikely in

our purpose of better health for people

the near-term and would not be sustainable

and a brighter future for the world. We

without an accompanying increase in

are positioning ourselves for long-term

government funding.

sustainable growth, innovation and

resilience while staying rooted in our core

values of Integrity, Fairness, Honesty and

Perseverance, brought to life through

actions based on patient, trust, reputation

and business, in that order.

Innovating with Patients in Mind

Public health care systems built on a fee-

for-service model are facing signifcant

fnancial and resource strain, and the

restrictive drug pricing and reimbursement

That is why Takeda’s global growth

strategy is centered on the discovery

and development of innovative, life-

transforming medicines and vaccines that

have the potential to be best-in-class or
frst-in-class. At the same time, we are

building resilience against external risks and

making bold investments in data, digital

and technology (DD&T) to upskill our

people and drive value creation.

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3
3

Christophe Weber
President and CEO

2023 Annual Integrated Report

Advancing Our Pipeline to Deliver Life-
Transforming Treatments to Patients

Our innovative R&D strategy is delivering. In
2022, we achieved a signifcant milestone as
our dengue vaccine, QDENGA®  (Dengue
tetravalent vaccine [live, attenuated]), was
approved for use in the European Union
(EU). This followed a positive opinion
from the European Medicines Agency’s
(EMA) Committee for Medicinal Products
for Human Use (CHMP), recommending
approval in the EU and in dengue-endemic
countries participating in the parallel EU-
Medicines-for-all (EU-M4all)1 procedure.
QDENGA has now also been approved for
use in Indonesia, Brazil, Argentina, the U.K.
and Thailand, with broad labels, for use
regardless of serostatus.

Other pipeline highlights include pediatric
approval for hereditary angioedema (HAE)
prophylaxis TAKHZYRO® (lanadelumab) in
the U.S.; continued growth of gut-selective
ENTYVIO® (vedolizumab); and approvals of
EXKIVITY® (mobocertinib), for non-small cell
lung cancer, and LIVTENCITYTM (maribavir),
for post-transplant cytomegalovirus
infection/disease, in key geographies.

Together, these achievements will enable
us to serve new patient populations, help
prevent serious illness and reduce the
treatment burden for many patients.

Complementing our in-house R&D engine,
we reinforced our long-term growth
potential through business development to
bring three highly innovative programs into
our mid-to-late stage pipeline. We acquired,

from Nimbus Therapeutics, a potentially
best-in-class oral, selective allosteric
tyrosine kinase 2 (TKY2) inhibitor that has
possible application across a broad range
of diseases, including psoriasis, psoriatic
arthritis, infammatory bowel disease (IBD)
and systemic lupus erythematosus. This
TYK2 inhibitor — now named TAK-279 — has
the potential to ofer the convenience of
an oral therapy while addressing unmet
medical needs.

We also signed an exclusive licensing
agreement to further develop and
commercialize fruquintinib, a potential
new treatment for refractory metastatic
colorectal cancer, expanding our oncology
portfolio. And we signed a licensing
agreement to develop a frst-in-class celiac
disease therapy with TAK-227.

Recognizing the Power of Our People

Ultimately, it is our people who drive our
success. I continue to be inspired by our
approximately 50,000 Takeda employees
who live our values every day. Results from
our annual global Employee Experience
Survey confrm that our employees
overwhelmingly understand how their work
impacts patients and that they are able to
make decisions guided by our values.

We are building an exceptional people
experience that promotes well-being and
performance, embraces fexibility and
emphasizes the value of regular face-to-
face interactions. We believe that executing
this transformation well could be a
competitive advantage.

I am proud that our people policies and
practices have been recognized by the Top
Employers Institute, which named Takeda
as a Global Top Employer for the sixth
consecutive year, one of only 15 companies
to achieve this recognition.

A Steadfast Focus on the Future of
Our Planet

Taking care of patients goes beyond
developing life-transforming treatments. It's
also about being responsible and ethical while
protecting our planet. We remain focused on
achieving net-zero2 by 2035 for our own value
chain and by 2040 across our entire value
chain, including our suppliers and customers,
in accordance with the Science Based Targets
initiative’s (SBTi’s) Corporate Net-Zero
Standard. Our initiatives include conserving
natural resources and designing our products
with sustainability principles in mind.

Better Health, Brighter Future

This is a very exciting time for Takeda. The
continued strengthening of our pipeline is
a direct refection of our fnancial discipline
and success in deleveraging, driven by our
strong free cash fow.

In fscal year 2022, we delivered core
revenue3 growth at constant exchange
rate (CER) of +3.5%, driven by sales of our
Growth & Launch Products.4 On a reported
basis, revenue was 4,027.5 billion yen (USD
30.3 billion), with a year-over-year increase
of +12.8%. And we delivered or exceeded our
management guidance for core revenue, core
operating proft and core EPS growth at CER.

Takeda delivered core operating proft
growth of +9.1% at CER and a robust
margin of 29.5%. This strong performance
was driven by a combination of momentum
in our Growth & Launch Products, solid
commercial execution across the portfolio
and disciplined cost control.

We also continued to deliver important
cash fow (446.2 billion yen free cash
fow in FY2022), allowing us to invest in
strategic business development activities
and returning value to shareholders,
while paying down debt. Our success in
rapid deleveraging resulting in net debt
to adjusted EBITDA of 2.6x at the end of
March 2023. Excluding the upfront cash
payment for TAK-279, this ratio would have
been 2.3x. We have updated our capital
allocation policy as a refection of our
deleveraging progress and our new phase
of investment for growth and shareholder
returns, and in FY2023 we intend to raise
the dividend to underscore confdence in
our future growth.

Looking ahead, I’m confdent that we
have the right strategy, values and people
capability to deliver our vision of providing
life-transforming treatments to patients and
our purpose of better health for people and
a brighter future for the world.

Christophe Weber

President and CEO

1 The European Medicines Agency. Medicines for use outside the EU — EU-M4all. July 2020. Retrieved June 2023.

2 Takeda defines carbon neutrality and net-zero emissions in accordance with The Greenhouse Gas Protocol and the SBTi guidelines. SBTi’s Corporate Net-Zero Standard requires companies to reduce GHG emissions by more than 90% and

use permanent carbon removal and storage technologies to counterbalance the remaining <10% of residual GHG emissions that cannot otherwise be eliminated.

3 Core revenue, core operating proft, core operating proft margin, core EPS, CER % Change, net debt, adjusted EBITDA, and free cash flow are non-IFRS measures, i.e., measures not calculated and presented in accordance with IFRS.
See the fnancial appendix at the end of Takeda's FY2022 investor presentation (available at takeda.com/investors/ﬁnancial-results) for further information about Takeda’s Non-IFRS Measures and reconciliations to the most directly
comparable measures calculated and presented in accordance with IFRS.

4 Please refer to page 49 for definition of Growth and Launch Products.

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2023 Annual Integrated Report

B E TT ER
H EALT H FOR
P E OP L E,
B R IG HTER
F UT U RE
F OR TH E
WO RLD

A M E S S A G E F R O M

Takako Ohyabu
Chief Global Corporate Affairs
and Sustainability Officer

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W H I L E M U C H H A S changed
since Takeda was established in 1781,

our founding philosophy has remained

constant: to serve patients with integrity in

a way that also benefts society. By doing

so, Takeda has expanded its business to

become the global values-based, R&D-

driven biopharmaceutical company it is

today. We are guided by our values, which

incorporate Integrity, Fairness, Honesty

and Perseverance, with Integrity at the

core. Our unwavering values are embedded

in Takeda’s global growth strategy and

drive our business decisions. We aim to

make decisions that put the focus frst on

patients, trust and reputation, with the

goal of building a sustainable and high-

performing business in the long term.

A little more than one year ago, I embarked

on the journey to operationalize sustainability

as an integral part of Takeda’s way of doing

business. In this time, I’ve met and listened

to many internal and external stakeholders.

As I refect on these conversations, I realize

how much more we must accomplish to truly

fulfll our purpose. Yet these conversations

also instilled in me great confdence in the

future for three reasons.

First, creating a positive impact through

our corporate values is in our heritage. This

is a unique strength of Takeda. Second, our

employees are giving life to these values.

Each and every colleague I work with,

2023 Annual Integrated Report

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wherever they are in the organization, is a

and empowered our people to accelerate

leader who makes values-based decisions

innovation, enabling us to not only develop

and is empowered to do what’s right for
patients. (Read more about our values-
based culture on page 12.) Last, but not
least, our corporate philosophy refects

the product, but also to ensure timely

supply while fulflling our commitment to

our planet. At our Singen manufacturing

site, data and digital solutions are further

stakeholder expectations, helping to ensure

augmenting our ingenuity, and the adoption

that sustainability is an integral part of our

of new technologies is allowing us to

business strategy. This fuels not only our

reimagine ways of working that foster

business growth but also our resilience.

creativity, enabling lifelong learning and

(Read more about our sustainability
framework on page 14.)

employee well-being.

I am hopeful that this and other examples

Take for example the development and

in our report will illustrate how we are

introduction of our QDENGA vaccine.

anchoring sustainability at the heart of our

Dengue fever is among the most common

business and underscore my confdence

mosquito-borne viral disease worldwide,

in our long-term growth and future

endangering half of the world’s population.

contributions to global health.

Climate change has accelerated its spread,

especially among under-served communities

with limited access to health care.

Achieving great things is not without

challenge and risk. But we are not afraid
of moving forward, constantly asking

For more than 70 years, Takeda has focused

ourselves how we can make a positive

on vaccine development, most recently

diference in patients' and people's lives,

by being at the forefront of innovation in

guided by our values and feedback from

developing this potentially life-transforming

our stakeholders. As we do, I will continue

vaccine, which expands dengue prevention

to encourage and support our people, who

options for communities in need of

make our progress possible. Together, I have

protection. We are prioritizing countries

no doubt that not only Takeda, but also the

with the highest burden of disease and

society in which we operate, will continue

where barriers to access for vaccines are

to grow stronger and more resilient.

particularly complex. We have challenged

2023 Annual Integrated Report

T H E Q D E N G A S T O R Y

TACKL IN G PUB LI C
HEA LTH THRE AT S
IN A R APIDLY
CHAN GING WOR LD

D E N G U E — prevalent in more than
100 countries¹ — has had a signifcant

impact on public health for decades. This

viral disease often has the greatest impact

on the most vulnerable populations with

limited access to care, mostly in Asia and

Latin America, although it can afect people

worldwide. This includes people most likely

to struggle with out-of-pocket medical

payments who face difculty making ends

meet when out of work due to illness.

What’s more, dengue is only getting worse
as the world gets warmer.2 During the past
20 years, climate change and urbanization
have expanded the geographic range of

the mosquitoes that transmit this disease

and increased the speed of its spread. This

has led to an eightfold increase in dengue
cases globally.3

Addressing the Burden Through
Innovative Research

The dengue virus, which has four serotypes,

has challenged vaccine development

for years. Takeda’s dengue research

eforts stretch back more than a decade.

Throughout, we have worked to address

the complexity of the disease as well as its

global prevalence. For example, Takeda’s

pivotal trial for its dengue vaccine included

populations across eight dengue-endemic

countries in Asia and Latin America.

O N E O F O U R C O N T R I B U T I O N S to building resilience to
the impact of climate change is through cutting-edge
R&D to help prevent climate-accelerated diseases such as
dengue. (See the Planet section for more information on
how we are taking urgent climate action.)

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2023 Annual Integrated Report

Learn how we are working
to reduce our greenhouse
gas emissions at our
manufacturing sites in the
Planet section.

cutting-edge anti-counterfeiting technology

to help ensure all products that enter the

legitimate supply chain are verifable. It

also allows us to easily identify counterfeit

vaccines, further supporting vaccine

confdence and population uptake.

To support the goal of providing seamless

and equitable supply of vaccines once

the vials leave our site, we have invested

in creating a local network of in-country

distributors.

Progressing Toward
Global Availability

Takeda was invited by the CHMP of the

EMA to participate in the frst-ever parallel
assessment of a product for use in the EU

T A K E D A H A S B E E N
helping to prevent serious
diseases through vaccine
development for more than
70 years through our efforts.

In August 2022, Takeda succeeded in

Preparing to Meet Global Demand

“Through large, diverse trials, we focused

vaccine. To augment our expanding internal

securing its frst approval for a new dengue

vaccine, QDENGA, in Indonesia. QDENGA is
the only dengue vaccine approved to help
protect people against dengue regardless

of previous dengue exposure and without

pre-vaccination testing — a previously

unmet need in dengue prevention.

on demonstrating the favorable safety

and efcacy profle of QDENGA and

that it can be used and trusted by the

communities most in need of protection,”

said Derek Wallace, vice president and

head of Global Dengue Program. “We also

invested in four and a half years of follow-

up, in line with World Health Organization

recommendations, to demonstrate its

long-term impact on symptoms and

hospitalizations, as well as safety.”

To prepare for the scale up required for

the global supply of QDENGA, Takeda

and for countries outside the EU.

has invested in digital-driven strategies

and built two cutting-edge manufacturing

facilities at our site in Singen, Germany.

Additionally, we are converting an existing

building on the site to manufacture the

capabilities, we partner with external

companies to support global supply as well.

In October 2022, the CHMP issued a

positive opinion for the EU and dengue-

endemic countries that took part in the

EU-M4all procedure. In December 2022,

the European Commission (EC) approved

QDENGA for use in the EU. EC approval

will be taken into account by the EU-

M4all countries as they consider their own

Digital technologies are helping improve
product quality and productivity. For

regulatory reviews. In 2023, we received
approvals in multiple dengue-endemic

example, we are working with an academic

countries. We believe that these approvals

research institute to develop an advanced

are just the beginning in our efort to

AI system that can detect potential vial

provide a new prevention tool to a broad

defects with a higher degree of accuracy

population and may substantially impact

at a faster speed than human inspection

the spread of dengue.

would allow. We are also leveraging our

T H E I M P A C T
O F D E N G U E

• Dengue is a rapidly spreading
mosquito-borne viral disease
that poses a risk to half of
the world’s population.4

• Nearly 90% of estimated

dengue burden is in
middle-income countries5
where barriers to care are
particularly complex.

• Each year, there are an
estimated 390 million
dengue cases worldwide.6

• Up to 80% of infections are
asymptomatic. Symptoms
can vary greatly, ranging from
mild, undiferentiated fever,
to fu-like symptoms and joint
and muscle pains. Although
uncommon, severe cases can
lead to organ impairment and/
or plasma leakage, which may
lead to serious complications
including death.7

• There are approximately

20,000 to 25,000 deaths
globally, mainly among
children, due to the virus.8

• Hospital systems can quickly
become overwhelmed during
dengue outbreaks, which can
have repercussions on the
care of non-dengue infected
patients.

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2023 Annual Integrated Report

Paving the Way for Broad and
Equitable Access

We are working with diverse stakeholders,

including governments, health care

providers and other trusted local and

international stakeholders to accelerate

access to QDENGA. Together, we are

prioritizing countries with the highest

burden of dengue — mainly in Latin America

and Asia.

We are frst launching in private, endemic

and travel markets, pricing the vaccine

comparable or lower-than-average

compared to the price of other innovative

vaccines. Our pricing for QDENGA will

be determined on a country-by-country

basis using factors such as gross domestic

product, out-of-pocket health expenditure,

national policies covering vaccinations and

available health care resources. We will also

T H E I N T E R N A T I O N A L S O C I E T Y
for Pharmaceutical Engineering
recognized the value of our dengue
vaccine manufacturing innovations
naming Takeda’s Singen factory as
its 2022 Facility of the Year Awards
Overall Winner.

Continuing the Journey

The story of QDENGA is step one. To

comprehensively mitigate the efects of

mosquito-borne diseases, we will continue

to collaborate with local partners to help

strengthen health systems and supply

chains, help create new solutions to reduce

mosquito breeding and invest in public

health education.

support initiatives at the national, provincial

“Our eforts to improve public health and

and individual levels, including exploring

private payer and innovative fnancing

reduce the economic burden of dengue

on health systems and individuals are just

options, as well as value-based contracting.

beginning,” said Alberta Di Pasquale, head

Over time, our aim is to make the

vaccine as accessible as possible through

National Immunization Programs, which

are government-funded programs that

typically provide free vaccination to eligible

participants. We are also developing

educational materials to help health care

providers increase awareness of the

benefts of vaccination and investing in

digital education tools for consumers such
as KnowDengue.com.

of Vaccines Medical Afairs, Growth and

Emerging Markets Business Unit. “We are

committed to serving the most vulnerable

communities at risk of dengue through our

vaccine and our eforts to support health

system strengthening, to help ensure no

one is left behind.”

1 World Health Organization. Fact Sheet. Dengue and Severe Dengue. January 2022. Retrieved April 2023.

2 World Health Organization. Fact Sheet. Dengue and Severe Dengue. January 2022. Retrieved August 2022.

3 Trivedi S, Chakravarty A. Neurological Complications of Dengue Fever. Curr Neurol Neurosci Rep. 2022 Aug;22(8):515-529.

Retrieved Nov. 11, 2022.

4 World Health Organization. Fact Sheet. Dengue and Severe Dengue. January 2022. Retrieved August 2022.

5 Supplement to Stanaway JD, Shepard DS, Undurraga EA, et al. “The global burden of dengue: an analysis from the

Global Burden of Disease Study,” 2013. Lancet Infectious Diseases, Volume 16, Issue 6, pages 712-723, June 2016; http://
dx.doi.org/10.1016/S1473-3099(16)00026-8.; Income Classifcation: World Bank: List of Economies, June 2018. https://
datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups; 2018 World
Development Indicators. World Bank. https://databank.worldbank.org/data/reports.aspx?source=2&series=NY.GDP.
MKTP.CD&country=#.

6 Trivedi S, Chakravarty A. “Neurological Complications of Dengue Fever.” Curr Neurol Neurosci Rep. 2022 Aug;22(8):515-529.

Retrieved Nov. 11, 2022.

7 European Centre for Disease Prevention and Control. Fact Sheet about Dengue. April 2023.

8 European Centre for Disease Prevention and Control. Fact Sheet about Dengue. April 2023.

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2023 Annual Integrated Report

TA KED A AT A GLANCE

F Y 2 0 2 2 G L O B A L R E V E N U E 1

E M P L O Y E E S

14%

15%

21%

A P P R O X .

$30.3

B I L L I O N

52%

13%

A P P R O X .

30%

T H O U S A N D

12%

United States

43%

Japan

Europe & Canada

Growth & Emerging Markets

R & D A N D P A R T N E R S H I P S

O U R A R E A S O F F O C U S

$4.8

billion1, 2 in R&D
investments

200+

partnerships to help
us bring innovation
to patients

~40

new molecular entity
clinical stage assets

Gastrointestinal
and Infammation

Rare Diseases

Plasma-Derived
Therapies

Oncology

Neuroscience

Vaccines

1 Convenience translations have been made at an exchange rate of 1USD = 132.75 JPY.

2 All numbers as of end of June 2023, other than fiscal year 2022 global revenue and R&D investments.

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F O U N D E D

1781

O S A K A , J A P A N

C O U N T R I E S A N D R E G I O N S

~80

R E S E A R C H S I T E S

M A N U F A C T U R I N G S I T E S

25+

G L O B A L
H E A D Q U A R T E R S

Tokyo

J A P A N

G L O B A L H U B

Cambridge

M A S S A C H U S E T T S , U S A

2023 Annual Integrated Report

SUS TA INED
GROWTH,
ENDU RING
VA LU ES

T A K E D A B E G A N in 1781 selling
traditional Japanese and Chinese medicines

in a local market in Osaka, guided by the

principle of SANPO-YOSHI. It means good

for the seller, good for the buyer and good

for society. Successive Takeda CEOs have

remained true to this principle in both word

and action for more than 240 years. They

have used their generation’s context and

language to link Takeda’s business actions

with this business principle: when we serve

patients with integrity, we also beneft

business and society. Today, Takeda’s

corporate philosophy articulates why we

exist (our purpose), where we are going
(our vision) and how we deliver on our

vision (our values).

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O U R C O R P O R A T E P H I L O S O P H Y

P U R P O S E
Better health for people, brighter future
for the world.

V I S I O N
Discover and deliver life-transforming
treatments, guided by our commitment
to patients, our people and the planet.

VA L U E S
We are guided by our values of Takeda-
ism, which incorporate Integrity, Fairness,
Honesty and Perseverance, with Integrity
at the core. They are brought to life
through actions based on Patient-Trust-
Reputation-Business, in that order.

2023 Annual Integrated Report

FOSTER ING
A VALU ES-BASED
CULTURE

A T T A K E D A , we describe ourselves
as having a “values-based” culture. This

• Global Induction Forum, which is hosted
twice a year by our CEO with members

• Takeda Values Ambassadors, who

through various internal mechanisms,

work with our ethics and compliance

including the Takeda Ethics Line. In fscal

means that in addition to complying with

of the Takeda Executive Team, ofers new

ofcers to help our employees bring

year 2022, we launched a refreshed

all applicable laws and regulations, it is

senior leaders around the world a unique

our values to life. To date, more than

speak-up campaign to empower our

essential for us to make decisions and take

opportunity to learn about Takeda’s rich

1,000 Takeda people in more than 60

people by raising awareness of why,

actions that are purposeful and meet the

highest ethical and moral standards at all

times. We re-enforce our values to shape

our culture through various mechanisms

heritage, values and vision. In keeping

countries have volunteered or been

when and how to voice a concern and

with our patient focus, leaders at the

nominated to serve as role models for

how to respond when someone speaks

latest Forum had an opportunity to meet

Takeda’s values. Their colleagues can

up. The campaign went beyond simply

with a patient virtually and took deep

turn to them with concerns or questions.

voicing concerns, to encourage speaking

and learning programs, from new employee

dives into our strategy, global business,

Coming together as a global community,

up for our values and creating a culture

orientation to practical, ethical decision-

values-based decision-making and

Values Ambassadors share ideas and

of psychological safety more broadly.

making tools and beyond. Examples include:

leadership behaviors.

• Code of Conduct, which encourages

• Values Journey Curriculum, which lays

experiences through internal social media

tools, meetings and global events.

personal accountability of our people

out global expectations for all employees,

through a principles-based approach,

helping move them along a journey from

• Takeda’s speak-up culture initiatives and
campaigns aim to create a safe place

guiding their actions under a wide range

basic awareness of our values when they

for employees to raise concerns about

of circumstances. It empowers us to
confdently make decisions that are

consistent with our values and helps

join, to understanding what our values
mean, to practical application so they can

potential misconduct and any actions
that are not aligned with our values,

confdently apply these values every day

while also ofering protection against

ensure our commitment to maintaining

and become role models for others.

retaliation. Concerns can be raised

the highest ethical standards at all times.

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OUR VAL UES
IN AC TION

D A T A , D I G I T A L A N D
T E C H N O L O G Y continue to drive
innovation and breakthrough discoveries

commercial and patient services teams as

they develop and utilize health data and AI

in their products and services. Additionally,

in health care. As they do, we continue to

as the use of advanced analytics and AI

lead through our values-based approach to

continues to accelerate, the TRUST team

help ensure we remain true to the highest

partnered with our Cyber Digital Trust

standards of ethics and integrity. One way

team to issue guidance on the use of large

is through Takeda’s Responsible Use of

language models such as ChatGPT.

Science and Technology (TRUST) team.

The TRUST team translates bioethics and

In 2022, the Notre Dame-IBM Technology
Ethics Lab selected a proposal from the

technological ethics into our responsible

TRUST team that addresses the need for

innovation approach, which guides the day-

auditing methodologies for AI within the

to-day activities of each employee. Through
an enterprise-wide hack-a-thon,1 the team
developed employee-owned foundational

principles and various learning resources

that employees can use. In 2022, together

with the Takeda Ethics Advisory Council,

the TRUST team created and published
Takeda’s Position Papers on Data Sharing
and Reuse of Health Data and the Use of
Artificial Intelligence (AI). These principles
provide foundational guidance to R&D,

life sciences sector. With this research

award, Takeda will leverage its expertise to

design an end-to-end AI audit process for

our business and the broader life sciences
industry.2

Additionally, within our governance

structure, we have integrated our Global

Privacy Ofce into our Global Ethics &
Compliance organization to responsibly

accelerate Takeda’s digital ambition.

1 Hack-a-thon is an event in which people gather and solve a problem in a collaborative and rapid way.

2 Takeda elected not to receive a monetary award.

2023 Annual Integrated Report

SUS TA INABILITY FR AMEWORK
AND ME TRICS

I N F O R M E D B Y an ESG materiality
assessment of nonfnancial issues

strategically important to our company and

stakeholders, we developed our corporate

philosophy imperatives (Patient, People and

Planet), which identify where Takeda must

invest to deliver on our vision and purpose.

In fscal year 2022, we engaged with

external stakeholders, including investors,

on our imperatives. Based on the feedback,

we evolved them to create a simplifed

framework and sustainability focus areas.

We measure our progress toward our

corporate philosophy imperatives and

sustainability focus areas through our

corporate philosophy metrics. We

developed these metrics with employees

from across the company in a bottom-up

approach and provide employees with

frequent progress updates in our internal
metrics dashboard. By doing so, we are

creating ownership among all employees

in all parts of our operations. These

metrics also help hold us accountable for

delivering sustainable growth and building

trust with our external stakeholders.

O U R S U S T A I N A B I L I T Y F R A M E W O R K

P A T I E N T

Translates science to discover
and deliver life-transforming
treatments and vaccines for
patients and communities with
limited or no options.

P E O P L E

Attract and develop highly
skilled talent and invest in
creating a diverse, equitable
and inclusive workplace that
supports our staf s well-being.

’
’

P L A N E T

As global warming and
pollution increasingly impact
human health, we remain
committed to environmental
leadership.

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• Deliver innovative life-transforming

medicines and vaccines

• Provide health benefts that are valued by

patients and society

• Accelerate global, equitable access to

medicines and vaccines

• Develop talent and invest in lifelong learning

• Advance diversity, equity and inclusion

• Create a culture of well-being

• Achieve net-zero ambition

• Conserve natural resources

• Design with sustainability in mind

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2023 Annual Integrated Report

I M P E R A T I V E S

M E T R I C S

W H Y I T M A T T E R S

R E S U LT S

C O R P O R A T E P H I L O S O P H Y M E T R I C S 1

P A T I E N T

Achieving Pipeline Milestones
# of pivotal study starts and approvals

Disclosing Clinical Trial Results
% of achievement for timely disclosure of clinical trial summary results
on public registries

Maintaining Uninterrupted Supply
% of order lines dispatched on-time-in-full

Upholding Manufacturing Quality
# of health authority inspections without critical observations

Global Access to Growth & Launch Products2
# of key countries where patients have access to the product through
reimbursement

Access to Medicines Programs in Low- and Middle- Income Countries
and Evolving Healthcare Systems
# of newly enrolled patients in Takeda’s afordability-based PAPs

Engaging Employees
% of favorable responses to questions regarding engagement in the
Annual Employee Experience Survey

Upskilling Employees in Progressive Technologies
Cumulative % of employees who have taken at least one data, digital and
technology training course since the frst quarter of FY2020

P E O P L E

Improving Employee Well-being
% of favorable responses to questions regarding well-being in the Annual
Employee Experience Survey

Embracing DE&I (Gender Representation)
Enterprise-wide gender breakdown

Reducing Scope 1 & 2 GHG Emissions
% reduction in Scope 1 & 2 GHG emissions

Engaging Suppliers towards Scope 3 GHG Reduction
% of Takeda’s Scope 3 GHG emissions that are from suppliers who have
committed to setting science-based GHG reduction goals, aligning with
SBTi standards

Diverting Waste from Landfill
% of waste diverted from landflls

P L A N E T

Conserving Freshwater
% reduction in freshwater withdrawal

Pivotal clinical studies generate the data that the regulatory authorities use to decide whether
or not to approve a treatment or vaccine. The initiation of these studies, together with the
number of approvals, demonstrates our progress on delivering innovative life-transforming
medicines and vaccines. Timely sharing of clinical trial information ofers clinical research
transparency that will spur scientifc innovation, improve medical care and build public trust.
Our disclosures include results from interventional phase 1 - 4 clinical trials.

Uninterrupted supply of our treatments is essential to achieve our purpose. In order to track
our supply and quality performance, we track on-time and full delivery of products, as well as
successful Health Authority Good Manufacturing Practice (GMP) inspections.

Delivering life-transforming treatments and vaccines requires more than developing medical
breakthrough treatments and ensuring a safe and uninterrupted supply. To achieve our purpose,
we must make our innovation broadly accessible to those who need it most. This is why we
partner with local governments and organizations to register our products in multiple countries
and secure sustainable access as soon as possible. In addition, our afordability-based Patient
Assistance Programs (PAPs) provide fnancial support for eligible patients who otherwise would
be unable to aford treatment. These programs are based on individual means testing criteria and
medical eligibility.

Engagement rate refects employees’ motivation for work and their commitment to high
performance. By empowering life-work alignment for our people, we are enhancing well-being,
building a foundation for meaningful work and high engagement, as well as ensuring our people
feel their best so they aspire to learn and grow more each day. By building our employees’ skills
in data, digital and technology, we can speed innovation and improve outcomes for patients
and society. We also measure our progress on DE&I, starting with focusing on enterprise-wide
gender representation.

The predicted impacts of severe climate change scenarios present a threat to global public health
and business operations. Takeda takes this threat seriously and has committed to achieving net-
zero greenhouse gas (GHG) emissions in our own operations (scopes 1 and 2) before 2035 and
across our entire value chain before 2040. Accelerating our eforts to achieve this goal, we are
working closely with our suppliers to secure science-based GHG emissions reduction goals from
suppliers representing 67% of our Scope 3 emissions [Categories 1, 2 and 4] by December 2024.

As a science-driven company, Takeda recognizes that preserving natural resources and promoting
biodiversity are critically important to the environment, for human health, and the economy.
Mankind depends on healthy ecosystems to provide the air we breathe, the food we eat, the
water we drink, and the medicines on which we rely. We measure our progress on two aspects
which have signifcant impact on human well-being: committing to achieve zero waste-to-landfll
status for all major locations by 2030 and committing to reduce our freshwater withdrawal by 5%
while growing our business by 2025.

Making Paper and Paperboard Packaging from Sustainable Forest
Certified or Recycled Content3
% of the company’s secondary and tertiary packaging paper/
paperboard by weight that is recycled content or sustainable forest
certifed

One of the primary materials used in our packaging is paper and paperboard related products.
Using certifed, sustainable and recycled packaging helps to preserve natural resources and
contribute to resource circularity. We measure our progress by committing to having 50% of
our secondary and tertiary paper and paperboard product packaging by weight to be either
recycled content or sustainable forest certifed by 2025.

100%

99.3%

100%

ALUNBRIG 9
TAKHZYRO 9
4
ALOFISEL
2
EXKIVITY
LIVTENCITY 2

1,366

82%

37%

70%

48.0% (Male)
51.8% (Female)
0.2% (Other / Non-binary)

34%

45%

78%

7.9%

42%

B U S I N E S S

Global Growth Products + New Product Incremental Core Revenue
% of year-over-year core revenue growth in global growth products +
new product vs target

Both are indicators of strong business success and potential revenue growth: Global Growth
Products + New Product are the key driver of future revenue growth, key indicator of driving
pipeline growth and commercial revenue success.

96.1%

1 Unless otherwise indicated, our corporate philosophy metrics have been assured by KPMG AZSA Sustainability Co., Ltd. (KPMG). Details on assurance methodology are available on our website.

2 This metric is not assured by KPMG, and details of background, definition and calculation method are available here.

3 The reporting period for this metric is the fiscal year 2021. The data collection process for fiscal year 2022 will be concluded in fall of 2023 and the metric will be reported in the following year.

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VAL U E S - B A S E D

GOVE RNANCE

W E U N D E R S TA N D our
responsibility to always meet

the highest standards of ethical

behavior, because our business

impacts the most vital aspect of

people’s lives — their health. Our

governance sets the foundation for

us to make better decisions, living

our values at every level, in every

country in which we operate.

2023 Annual Integrated Report

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17
17

OUR
LEADERSHIP

O U R L E A D E R S H I P , comprised
of our Board of Directors (Board) and

the Takeda Executive Team (TET), is

accountable to our stakeholders and

responsible for Takeda’s sustained business

growth by delivering our commitments

to patients, people and the planet.

As a global values-based, R&D-driven

biopharmaceutical company, we are built to

operate on a worldwide scale with robust

and transparent corporate governance.

Board of Directors

The primary function of the Board is to

provide oversight to ensure we execute

a sound strategy, monitor and address

risks, and instill efective governance

for Takeda to create long-term value for

its stakeholders. It discusses and makes

decisions on strategic matters regarding
company management, mid- to long-term

strategies and management policies.

Composition of the Board

As of June 28, 2023, the Board has 15

directors with diverse global experiences.

Miki Tsusaka joined the Board as an

independent director also on the same day,

bringing the total number of independent

external directors, including the Chair of the

Board Meeting, to 12. For more information

on our executive leadership, visit our
website.

The Board is comprised of directors

who have the knowledge, experience

and capability needed for leading and

overseeing the company’s management on

a global scale. In nominating candidates

for director roles, the Board considers

diverse criteria, including gender, age, work

experience, race, ethnicity and cultural

background. Current Board members

represent a broad array of skills in areas

such as global business and strategy;

science and medicine; legal, regulation

and public policy; corporate governance

and sustainability; fnance and accounting;

health care industry; data and digital;

and management, leadership and human
capital. See our Board skills matrix.

2023 Annual Integrated Report

CORP OR ATE
GO VERN ANCE
STR UCTURE

T E T includes 16 members
diverse in nationality (nine
countries), age (30s-60s)
and gender (10 men and six
women). Women make up
more than 37% of the TET.

As of June 28, 2023.

Committees

Takeda is a “Company with an Audit and

Director and Executive
Compensation

Supervisory Committee” as stipulated in the

Takeda’s director compensation is

Japanese Company Act. Takeda voluntarily

designed to attract, retain and motivate

establishes Nomination and Compensation

managerial talent to realize our vision,

Committees as advisory committees of the
Board. Each committee consists entirely of

enhance corporate value by optimizing
the company’s mid- and long-term

independent external directors, including

performance, and support a strong

the committee chairpersons, which ensures

independence and objectivity of the

committee.

alignment with shareholders. Please refer
to our Directors’ Compensation Policy for
further details.

We disclose charters
including the Board of
Directors Charter and
committee Charters on
our website.

Takeda’s executive compensation

structure refects our position as a patient-

focused, values-based, R&D-driven

biopharmaceutical company. Our executive

compensation programs are designed to

be globally competitive and performance-
oriented, while also considering local

market factors. We closely link pay with

performance and long-term shareholder

value creation, while minimizing excessive
risk-taking. Please refer to Takeda’s
Executive Compensation Overview for
further details.

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Nomination Committee:

Examines the Board diversity and

the skills of directors, the criteria

and process for Board members’

appointment/reappointment,

succession plans and its

implementation status.

Compensation Committee:

Examines the Director’s

Compensation Policy and the

appropriateness of each director’s

compensation and bonus amount

based on performance results and

evaluation. In addition, to ensure

the objectivity and transparency

of compensation determinations,

the Compensation Committee

decides the amount of

compensation for individual

internal directors.

M A N A G E M E N T S T R U C T U R E

Shareholders’ Meeting

A D V I S O R Y C O M M I T T E E

Nomination
Committee

Compensation
Committee

Board of Directors

Audit and Supervisory
Committee

T A K E D A E X E C U T I V E T E A M

Business and
Sustainability
Committee

Portfolio Review
Committee

Risk, Ethics
and Compliance
Committee

Global Portfolio Division & Business Units/Business Functions/Business Partners

Audit and Supervisory Committee:

Ensures its independence

and efectiveness in line with
the Audit and Supervisory
Committee Charter. This
committee conducts audits of

directors’ performance of duties

and performs any other duties

stipulated in applicable laws
and regulations and the Articles
of Incorporation, including
supervision of the integrity of the

company’s fnancial reporting and

risk management system.

Takeda Executive Team:

Consists of the President and

CEO and function heads, to

ensure the agility of business

execution. The Board delegates

several responsibilities for

decision-making to certain

directors, carried out through

three management committees

consisting mainly of TET

members including the directors.
See more in Takeda’s Corporate
Governance Report. For more
information on our executive
leadership, visit our website.

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ETHICAL GOV ERNANCE

Enterprise Risk Management
(ERM)

Risk management helps protect the

company’s people, assets and reputation

while supporting Takeda’s long-term

strategy for growth and success. The

overall ERM process is the responsibility

of the Chief Ethics & Compliance Ofcer,

with oversight from the Board of Directors.

We incorporate our values into our risk

Human Rights

management methodology. It identifes

and assesses the company’s risks, mapped

against our Patient-Trust-Reputation-

Business impact scale and fve-year

likelihood scale, to create an enterprise

risk heatmap.

Taxation

We are committed to respecting and

promoting internationally recognized

human rights within every aspect of our

business, across our supply chain and

in the communities where we operate.

We expect the same from suppliers and

third parties operating on our behalf. We

do this in accordance with the United

Principal enterprise risks and their

Takeda is committed to responsible

Nations Guiding Principles on Business

mitigation efectiveness are approved by

corporate citizenship; we comply with

and Human Rights, the International

the Risk, Ethics and Compliance Committee

the tax laws in the jurisdictions in which

Bill of Human Rights, comprised of the

(RECC) and Board of Directors on an

we do business, and we engage in open

Universal Declaration of Human Rights,

annual basis.

In addition to the continuous day-to-day

assessment and mitigation of risk, which we

expect from all our leaders, we also conduct

an annual enterprise risk assessment

process. It is designed to generate a holistic

view of risks for the company and drive a

culture of risk-based decision-making. Each

relevant functional area within the business

is responsible for managing its key risks and

responses to them.

and transparent dialogue with relevant
tax authorities. As stated in our Position
on Taxation, Takeda supports the
Organization for Economic Co-operation

the International Covenants on Civil and

Political Rights, and Economic, Social

and Cultural Rights, and the International

Labour Organization Core Labor

and Development’s Base Erosion and Proft

Conventions.

Shifting initiative concerning international

tax reform and opposes the use of artifcial

tax arrangements that do not have sufcient

business or economic substance. Our

values provide a foundation for policies and
governance, which support our compliance

with tax laws and regulations where we

operate and require us to identify and

mitigate material tax risks.

In fscal year 2021, we conducted a human

rights impact assessment in which we

identifed our most salient human rights

impacts. Our eforts to address them are

referenced throughout this report.

F O R M O R E I N F O R M A T I O N
on Ethical Governance, visit our website.

2023 Annual Integrated Report

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21
21

C O M M I T M E N T T O T H E

PATIE NT

W E B E L I E V E in responsible
innovation for all. We deliver this

through our life-transforming

medicines and vaccines that provide

real-world health benefts and

measurable value to patients and

society while increasing availability

of our innovative products to people

around the world through our global

presence and commitment to access.

2023 Annual Integrated Report

2023
Annual
Integrated
Report

PUTTING
PATIENT S FIRST

the materials and active pharmaceutical

ingredients required to manufacture our

products. We also consider geopolitical

risks in our sourcing approach.

Takeda implements robust strategies to

facilitate access and supports policies that

foster value-based health care that can

help deliver greater benefts to patients

and society. We advocate for creating

ecosystems that bolster equitable patient

W E A R E P U S H I N G boundaries
to accelerate access to health care for

access to treatments and reward medical

innovation fairly, based on proven clinical

patients worldwide.

and societal value.

We are developing and advancing our
pipeline through expert R&D capabilities
within our laboratories and external

As a part of our strategy to provide timely

and broad access to our products worldwide,

including in underserved communities with

partnerships. We also collaborate with

evolving health systems, we follow a tiered

patient communities to address health

pricing approach. This helps us ensure that

equity and access challenges.

We recognize that delivering life-

transforming medicines and vaccines with

valued health benefts requires more than

breakthrough innovation. No treatment or

vaccine can reach those in need without

trained and motivated health workers, well-

maintained technology and infrastructure,

local prices are based on a country’s specifc
level of economic development and the
maturity of its health system. (Read more
about our pricing approach in the QDENGA
story on page 7.) We also ofer patient
assistance programs to provide medicines

to patients who may be unable to aford the

treatments they need.

a reliable supply chain and policies that

Delivering on our ambition to facilitate

support sustainable and equitable access.

access requires a holistic and collaborative

We also build resiliency into our global
supply chain to support the goal of

uninterrupted supply of our products.

Among our strategies, Takeda implements

a dual-source/multi-source approach for

approach. Together with Duke University,
we have developed an Access to Health
Framework Guidebook that enables
collective measurement and action through

continuous feedback and engagement.

W H I L E O U R P R O D U C T S A R E G L O B A L , we act locally.
Our employees, guided by our values, are empowered to
work with local communities to deliver tailored solutions
that provide timely access to our treatments.

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2023 Annual Integrated Report

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S P O T L I G H T

DEL IVE RING VALUE
VEI N -TO-VEIN WITH
OU R PLASMA-DERIVE D
THER APIES

P L A S M A - D E R I V E D therapies
(PDTs) are critical life-transforming

medicines that people with rare and

complex chronic diseases around the world

In fscal year 2022, we continued to make

progress toward this goal. We reported

positive data from our Phase III clinical trial

for HYQVIA® (Immunoglobulin (IG) Infusion

rely on every day. For many, these therapies

10% (Human) with Recombinant Human

represent their only efective treatment
option.1 Today, Takeda supplies more than
20 plasma medicines to patients in more

than 80 countries and regions. While

we currently ofer one of the broadest

portfolios of PDTs, we aim to do much

more — for the patients we serve today

and for those who can beneft from our

therapies in the future.

Core to our approach is applying

patient and caregiver insights and novel

technologies to bring forward next-

generation products, new formulations,

new indications and new solutions that can

ease the burden of disease and treatment.

Hyaluronidase) in chronic infammatory

demyelinating polyneuropathy, a debilitating

neurological disorder that targets the

body’s nerves, and submitted applications

for registration in the U.S. and EU. HYQVIA

is the only immunoglobulin therapy that

can be administered subcutaneously at

home every three to four weeks. We also

continued to advance the next generation

of PDTs by in-licensing an investigational

hyper-sialylated immunoglobulin TAK-441,

which has the potential to signifcantly

reduce the volume of medicine required to

treat autoimmune indications.

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23

1 Wasserman R, et al. Immunotherapy 2017; 9(12):1035–1050.

M A I N T A I N I N G C O N T I N U I T Y O F P A T I E N T S U P P LY

When the supply of our PDTs is constrained, we follow our values,
prioritizing patients already on therapy who require continuity of
care. We do this ahead of pursuing new business opportunities.
We have met every planned commitment to patients on our
plasma therapies throughout and since the pandemic despite
signifcant impact on plasma donations.

See the Planet section to
learn how we are using
fewer resources to produce
more PDTs.

2023 Annual Integrated Report

Helping Ensure Global,
Continuous and Equitable Access

PDTs are not just among the most vital

therapies, but also the most difcult

and costly in the world to produce. They

can only be made with human plasma.

Through a dual focus on expansion and

transformation of our operations, we

are working to improve our ability to

sustainably deliver our growing portfolio

of plasma medicines and integrated care

solutions to more patients.

In 2019, we set a target of increasing

our plasma supply and manufacturing

capacity by more than 65% by the end

of fscal year 2023. Through investments,

agility and industry-leading operational

resilience throughout the COVID-19

pandemic, we met this goal one year

we use AI tools to optimize stafng and

early. Our commitment to long-term
sustainable growth in an area of high unmet

maximize appointment scheduling to help
ensure every donor can be attended to

patient need continues. We’ve also begun
construction of a $300 million brownfeld1
manufacturing site in Belgium. Additionally,

we are planning a new global plasma

manufacturing facility in Japan, expected to

be operational by 2030.

promptly upon arrival. This eliminates the

need for waiting rooms and better uses

available space.

“Transformation across our entire end-to-

end operations is making us bigger, better

and faster — good news for donors, patients

We are also driving transformational

and our business,” said Rob de With, head

changes through data, digital and

of Strategy & Program Execution, Plasma-

technological disruption. Use of data plays

Derived Therapies Business Unit. “And our

a key role in attracting more plasma donors

patient-led innovation means therapies

and helping ensure they have the best

are just the beginning. Our aspiration is to

possible donation experience across our

leverage cutting-edge technology to create

230+ BioLife donation centers. Our goal is

a fully integrated ecosystem of support

to increase the number of plasma donors

that helps patients manage all aspects of

who walk through our doors and encourage

their disease throughout their lives.”

them to donate regularly. For example,

P R O D U C I N G P L A S M A - D E R I V E D T H E R A P I E S

Donor and plasma

screening, virus

inactivation and removal

and testing are crucial

steps in the overall

production process

that can take up to
12 months1, 2

Plasma collection

30 to 60-day holding period
required for testing
30- to 60-day holding
period required for testing

Fractionation

Purifcation

Fractionation

Purifcation

Filling

Start

3 months

6 months

9 months

Packaging and
distribution
Packaging,
Quality Release
and Distribution

Administration

12 months

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1 A brownfeld is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.

2 PPTA. Uniquely Saving Lives. January 2020.

2023 Annual Integrated Report

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DELIVE RING INNOVATIVE
LIFE -TR ANSFORMING
MEDICINES AND VACCINES

O U R R E S E A R C H E R S translate
science into life-transforming medicines

Developing Potential Treatment
for a Devastating Diagnosis

and vaccines for people around the world

facing serious, debilitating diseases.

In addition to our own research, we

collaborate with world-class partners to

advance cutting-edge science wherever

it originates, helping us build a modality-

diverse and innovative pipeline.

O U R P I P E L I N E C O N T A I N S
approximately 40 new
molecular entities, many
with the potential to become
life-transforming treatments
in the next decade. You
can learn more about our
pipeline here.

Congenital thrombotic thrombocytopenic

purpura (cTTP) is an ultra-rare sub-type

of thrombotic thrombocytopenic purpura

(TTP), a rare, chronic and debilitating blood
clotting disorder caused by a defciency in
an enzyme known as ADAMTS13 protease.1
TTP can lead to life-threatening conditions,

including acute episodes characterized by

a reduction in platelets, hemolytic anemia

and ischemic organ damage. The current

standard of care for cTTP does not always

fully address the condition and for many,

health outcomes remain sub-optimal.

1 ADAMTS13 is a constitutively active enzyme that catalyses the breakdown of a large protein involved in blood

clotting into smaller multimers, reducing their thrombogenic potential.

2023 Annual Integrated Report

We are working to change this with TAK-755
(apadamtase alfa/cinaxadamtase alf),1
the frst and only recombinant ADAMTS13

replacement investigational therapy

targeting the underlying cause of TTP.

Results from a pre-planned interim analysis

of a pivotal Phase III study support the

efcacy and safety of TAK-755 as a

treatment for cTTP. If approved, it has the

potential to transform TTP treatment.

Recognizing the potential TAK-755 could

have on patient health, the U.S. Food and

Drug Administration (FDA) has granted

the investigational molecule both Orphan

Drug and Fast Track Designation for the

treatment and prevention of TTP including

its congenital, acquired idiopathic and

secondary forms.

“The development of recombinant ADAMTS13
(TAK-755) will likely have immediate and
long-term benefits for patients. The increased
ease of administration, paired with the ability
to achieve sustained improvements in the
ADAMTS13 activity, also has the potential
to treat and prevent numerous long-term
vascular complications of TTP that we are just
now beginning to recognize.”

—

D R . S P E R O C A T A L A N D
Director of Benign Hematology at the Ohio State
University Comprehensive Cancer Center
and an expert in the management of TTP

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1 TAK-755 has not been approved for the use or indications under investigation in

clinical trials and there is no guarantee it will be approved for such use or indication.

2023 Annual Integrated Report

PRO VID ING HE A LT H
BEN EFITS VA LUE D B Y
PATIENTS AND SOCIE TY

H E A LT H C A R E S Y S T E M S
face increasingly limited and fxed

budgets for the purchase of health care

treatments and services, while demand

is ever increasing. This requires that we

demonstrate the value of our medicines in

new and innovative ways.

Outcomes that Matter

For patients living with the rare and

potentially life-threatening genetic

condition known as hereditary angioedema

(HAE), life can often be difcult. HAE

causes recurrent attacks of severe swelling
in various parts of the body. If untreated,

We work early, before product

attacks can last for three days, and can

authorization, with patient organizations,

occur multiple times a month. When they

payers and other stakeholders to determine

do, they often interrupt work, caregiving

what meaningful and measurable value

and school.

looks like to them. Together, we identify

current gaps and opportunities for

improved outcomes in terms of care, budget

or system efciencies. We then develop

metrics to measure the outcome — or

“value” — that our products deliver when
the right patient is treated at the right

TAKHZYRO helps patients better manage

HAE and prevents attacks. As the frst

approved monoclonal antibody to treat

patients with types I and II HAE, it marks

a signifcant advance over the existing

standard of care.

time. Value-based payments based on the

To achieve broader and more timely access

achievement of these metrics form the basis

to this innovative and efective treatment,

of what we call value-based health care.

we designed a scalable framework of

value-based contracting, which can be

used in multiple health delivery systems

around the world. The framework allows

us to engage with local stakeholders to

address uncertainties and create shared

understanding around value at a local level.

For example, based on local factors, some

countries may fnd increasing access to

new patient segments most meaningful.

Others may value data showing that a

high percentage of patients can maintain

efcacy even at less-frequent dosing after

the frst six months of treatment.

Using a value-based approach, Takeda has

achieved broad access for TAKHZYRO in 29

countries in just over three years post-launch.

Learn more about why
Takeda believes health
systems must shift away
from the traditional fee-for-
service approach toward
a value-based health care
model: Value-based Health
Care Position Statement.

T R A N S F O R M I N G
H E A L T H S Y S T E M S

Takeda is working to
accelerate change through
the World Economic Forum’s
Global Coalition for Value in
Healthcare.

In January 2023, the
Coalition launched its
latest report, “The Moment
of Truth for Healthcare
Spending: How Payment
Models Can Transform
Healthcare Systems.”
Takeda contributed to the
publication highlighting
outcomes that matter for
patients living with HAE
and the Health Outcomes
Observatory (H2O).

We co-founded H2O, a
public-private consortium
across the EU, which is
striving to improve the
quality and sustainability
of care based on outcomes
data provided by patients.
Learn more in our 2022
Annual Integrated Report,
page 33.

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2023 Annual Integrated Report

ACC ELERAT ING
GLOB AL, EQUITAB LE
ACC ES S

A L L P E O P L E should have access to
quality health care. However, this is not the

case for many. While the underlying factors

that lead to this reality are complex, deep-

rooted and difer by region, we believe that

by partnering with diverse stakeholders

we can help address barriers to access and

strengthen health systems globally.

F O R M O R E I N F O R M A T I O N ,
see our position on health
equity.

A W O R L D W I T H Z E R O H E A L T H G A P S

We were among the first of 39 companies
to sign the Global Health Equity Network
Zero Health Gaps Pledge at the 2023 World
Economic Forum Annual Meeting.

To help ensure everyone has a fair and just
opportunity to be as healthy as possible,
Takeda’s Center for Health Equity and Patient
Affairs works with our global network of teams
and partners to embed health equity principles
into every aspect of our business. It also builds
trust with local partners, allowing us to better
understand the underlying causes of health
inequities and how we can co-create solutions
with communities to drive sustainable change.

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2023 Annual Integrated Report

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Advocating for Equitable Access

part of an advisory committee at the Czech

A rare disease is one that afects less than
1 in 2,000 people,1 yet, around the world,
more than 300 million patients, families,

friends and caregivers are impacted by
one.2 A common hurdle for these patients
and families is the lengthy diagnostic

journey and lack of reimbursement for

medicines to treat many rare diseases.

In the Czech Republic, we supported local

patient advocacy groups and professional

societies to help raise awareness of these

challenges through roundtables, whitepapers

and educational events. This, along with the

eforts of others, contributed to the passage

of legislation that took efect in 2022
providing a pathway for reimbursement

of medicines for rare diseases. In addition,

patient advocacy groups now have a seat

at the table for reimbursement decisions as

Ministry of Health.

In Japan, we are working with patient

advocacy groups, medical organizations

and our sector peers to drive discussion

around regional disparities in access to

genomic medicines to treat cancer. In

fscal year 2022, we jointly published a
discussion paper Towards the Tomorrow
of Cancer Genomic Medicine (Japanese
only), which shines a light on the disparities

and possible solutions. In addition, we

collaborated with the Health and Global
Policy Institute to issue a policy proposal3
to integrate personalized cancer medicine

into the medical system. In fscal year 2023,

we will continue to bring stakeholders

together as well as support the collection

and analysis of real-world data to help

develop a pathway for patient-oriented

equitable cancer care in Japan.

B U I L D I N G C O M M U N I T Y - L E V E L
P A R T N E R S H I P S

Since 2017, Takeda has worked with Seeding Labs,
a non-profit that supports scientists in developing
countries. By sharing knowledge, clinical expertise
and medical and scientific equipment, we are helping
advance the diagnostic and clinical trials capabilities
of community-based research institutions. Together,
we have facilitated the donation of more than
2,000 pieces of equipment from Takeda labs and
supported training at 98 institutions in 39 countries.

One of these is the Universidad Iberoamericana
(UNIBE) in the Dominican Republic. With Takeda and
Seeding Labs’ support, UNIBE established the Institute
of Tropical Medicine and Global Health and UNIBE
Diagnostic Center. The frst-of-its-kind in the country,
the center has trained nearly 30 lab personnel in
molecular testing techniques and more than 100
health community workers on disease education
and diagnosis from April 2020 through December
2021. As of the end of fscal year 2022, it performed
approximately 55,000 diagnostic tests in a community
that previously had limited access to such services.

“It has been an incredible partnership,” said Dr.
Robert Paulino-Ramirez, principal investigator at the
institute. “With the resources we now have, we are
able to address health inequities in the Dominican
Republic and help reduce barriers to scientific
discovery and delivery.”

1 EURODIS. Press Release. 21 Member States endorse Czech EU Presidency’s Call to Action on rare diseases at EPSCO Council Meeting.” December 2022.

“

2 EURODIS. Rare Disease Day 2022: Information Pack.

3 Source: Health and Global Policy Institute.

2023 Annual Integrated Report

Supporting Patients Throughout
Their Lives

Once diagnosed through testing, patients

face similar challenges paying for

Providing patients with equitable access to

health care is not a one-step process but

requires ongoing support, from awareness

and diagnosis to treatment and sustained

care. This is especially true for patients

facing the threat of cancer in under-

resourced settings.

In the Philippines, we work closely with

the Philippine Cancer Society to provide

support and fnancial assistance to

Hodgkin lymphoma patients, starting

with CD30 testing. As the frst step to

detect rarer forms of the condition, CD30

testing is usually paid for out of pocket

in the Philippines. In a country with a per
capita income of $3,460,1 this can be an
insurmountable barrier for many. Over

the past two years, we have made testing

available to 62 patients from 24 hospitals.

treatments, many of which are not covered

under national insurance schemes. Through

Takeda’s Patient Assistance Program

(PAP) in the Philippines, we provide access

to our oncology medicines to eligible

patients. This allows them to complete the

full course of treatment at the intervals

prescribed by their physician.

Since 2017, more than 300 Filipino patients

have been able to access and complete

their course of treatment for Hodgkin

lymphoma through our PAP. Jho-Ann Pulgo

was one of them. With limited savings, she

could only aford one of the 16 rounds of

treatment. Through our PAP, she was able

to complete treatment and focus on getting

better. “Being able to have more time with

my family, especially my four young nieces,

and watching them grow up, is more than I

dreamed of,” she says.

Moving forward, we plan to broaden our

partnership approach in the Philippines

by establishing a Blueprint for Innovative

Access program, which is based on a model

we frst piloted in Kenya.

For more information, see the Takeda
Access to Medicines Progress Report 2022.

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1 World Bank Data.

2023 Annual Integrated Report

2023
Annual
Integrated
Report

C OM M I T M E N T T O

PE OP L E

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O U R P E O P L E create Takeda’s
unique culture and put the patient

at the center of everything they do.

We recognize that no matter how

far science and technology advance,

meaningful change is always driven

by people. We develop talent

and invest in diversity, equity and

inclusion, well-being and lifelong

learning to help our people thrive

personally and professionally.

2023 Annual Integrated Report

CREATING AN
EXC E PTION AL
PEOP LE EXPE RIENCE

T H E K E Y to harnessing the power
of our people is actively and continuously

listening to them. Through employee surveys,

• Investing in more eforts to help employees

feel a stronger sense of belonging.

town halls, employee resource groups

Becoming More Agile

and team discussions, our people take an

active role in shaping our workplace. Their

engagement and feedback on how we can

better support them leads to continuous

improvements and enables us to carry out

our purpose for patients.

To deliver on our corporate purpose,

employees must be able to get the
information they need, make decisions

and execute priorities quickly without

undue complexity. Based on the Employee

Experience Survey, we learned this was a

In 2022, we received feedback from our

priority for improvement across Takeda.

people through our annual Employee

Experience Survey. While we saw

improvement in many areas, including

diversity, equity and inclusion (DE&I) and

manager support, we also heard that we

could do more in several areas, including:

• Increasing opportunities and tools to help

employees build successful careers at

Takeda.

• Helping employees achieve better

alignment between work and life.

In fscal year 2022 and continuing in 2023,

we are simplifying systems, redesigning

processes and introducing new tools — from

new technology solutions that enhance

how we collaborate across the globe, to a

streamlined procurement process to reduce
cycle time. We also invest in building the

skills of our people leaders to foster agility.

While we are not done yet, already our

employees are telling us we are on the right

track with an eight-point increase in our 2022

Employee Experience Survey score for agility.

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T A K I N G P R I D E I N O U R P U R P O S E

Results from our 2022 Employee Experience Survey show increasing employee

engagement — 87% completed the survey, up from 82% in 2021. Of respondents:

92%

understand how our

90%

agree our decisions are

87%

take pride in working

work impacts patients

aligned with our values

at Takeda

2023 Annual Integrated Report

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EMPO WERING
OUR PEO PLE TO
THRIVE AND GRO W

T O P E R F O R M and lead well, we
must be well. Well-being and lifelong

To kick of our eforts, we introduced the

global platform, Thrive, to everyone at

learning create a virtuous cycle, unleashing

Takeda. This online platform embeds well-

people’s creativity, productivity and an

increased sense of purpose. At Takeda,

we are focused on creating a culture

that fosters both well-being and lifelong

learning in all areas of our business.

Prioritizing Employee Well-being

We believe it is vital to take care of

ourselves and each other so we can

continue to create better health for people

and a brighter future for the world.

Based on insights from our 2021 and

2022 Employee Experience Surveys, we

introduced Well-Being@Takeda, a new

approach focused on improving our

people’s emotional, physical, social and

fnancial well-being.

being directly into people’s daily lives. It

ofers content such as “micro steps” — too-

small-to-fail behavior change goals that

can be personalized. Another tool the

platform ofers is how to incorporate

"resets” — 60-90 second mindfulness

and stretch breaks designed to reduce

cumulative stress. The platform is available

to our employees in 10 languages and with

closed captions to increase accessibility.

Given our diverse employee base, we

know that challenges to well-being can

be diferent based on the employees’ role,

location and personal situation. To create

an inclusive workplace on a global scale,

we strive to ensure that all employees

have access to our global well-being

programs and that those programs can be

customized to accommodate the diverse

needs of our people — no matter where,

when or how they work.

2023 Annual Integrated Report

Based on our 2022 Employee Experience

Survey results, we know we can do more to

provide equitable access to tools such as

Thrive for employees at our manufacturing

sites and BioLife donation centers who

have less access in their workdays to email

and digital tools. Many also work diferent

hours than our ofce-based hybrid and

remote staf.

To better understand employee needs

and how to deliver tools to them most

efectively, we invited leaders from Thrive

to visit our manufacturing operations

in Covington, Georgia. During the visit,

they met with every shift of worker,

introduced them to Thrive and listened to

their feedback. Our people told us they

need additional resources to help manage

stress, improve sleep and incorporate more

healthy movements into their day. We also

discussed ways to deliver content in new
ways, such as podcasts, so people can

enjoy and listen on their commute to and

from work. In 2023, we will work to develop

these additional resources.

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P R O M O T I N G
E M P L O Y E E S A F E T Y

A safe and healthy
workplace is foundational
for employee well-being.
Our manufacturing sites
share a strong safety
culture focused on
preventing serious injuries
and fatalities (SIFs).
We complete SIF risk
assessments annually at
our manufacturing sites
worldwide to proactively
identify areas that can be
strengthened. Each quarter,
we share lessons learned
across our manufacturing
network and discuss
actions to mitigate re-
occurrence of any identified
safety events. Our
manufacturing leadership
teams also participate in
safety leadership coaching
to help prevent SIFs
and develop site-level
improvements. For more
information on employee
safety, see our online
sustainability disclosures.

2023 Annual Integrated Report

I NV ESTING IN
LI FE LONG LE AR NING

R O O T E D I N O U R corporate
philosophy, we aspire to foster an

environment that encourages a growth

mindset, enabling our people to thrive

inside and outside of Takeda through

lifelong learning.

just in time and just for me.” Within this

platform, our people can:

• Select topics relevant to them.

• Explore everyday learning opportunities

as well as learning experiences and

Our approach to personal and professional

resources.

development is owned by the individual

and supported by our people leaders. We
empower this growth through opportunities

that enable individuals to learn skills they

• Share what they have learned with

one another to create a community of

learners.

need for today and tomorrow informally,

Feedback from our people has led to

in the fow of work and formally through

new approaches to how we ofer learning

programs and courses. We also encourage

resources. From web-based courses and

people to actively contribute to the

mentoring to short articles on targeted

development of others.

In 2022, we introduced Bloom. It is our

cornerstone digital solution to help enable a

culture where our people can continuously

learn and discover opportunities for

personal growth and career development.

Bloom is an online learning experience

platform, which provides a single-entry

point for learning that is “just enough,

topics and job shadowing, we are committed

to making resources available to our people

in ways that best meet their needs.

“Since I have a family and three kids,
my family time is my priority. I try to
find spare time in between tasks and
use that time to learn.”

–

M A S AYA S U T E R A J I M A
Lead, Financial Planning and Analysis,
PDT Business Unit

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35
35

2023 Annual Integrated Report

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AC CELERATING
DIV ERSITY, EQUITY
AN D INCL USION

A C R O S S T A K E D A , we embrace
and celebrate diversity and strive to give

Our culture is enhanced by the diversity

of our people who represent more than

patients and our people equitable access to

opportunities so they can achieve their full

80 countries and regions and a wide

range of backgrounds, perspectives

potential. We take a values-based approach

and experiences. We continue to build a

to inclusive patient experiences, inclusive

workforce as diverse as the communities

work environments, workforce diversity and

we serve and are committed to providing

sustainable societal impact.

O U R D E I C O M M I T M E N T S

Inclusive Patient
Experience

For more information, see
the Patient section

Sustainable
Societal Impact

For more information, see
the CSR section

Workforce
Diversity

Inclusive Work
Environment

compensation opportunities that are

competitive and equitable. We aspire to

achieve 50% diverse gender representation

at our senior-most levels — including women

and non-binary individuals — by fscal year

2027. In fscal year 2022, we achieved 42%

(which marked a two percent increase from

the previous year). Ensuring we have a

diverse slate of qualifed candidates for all

senior positions is one of many actions we

are taking.

2023 Annual Integrated Report

E M B R A C I N G A N I N C L U S I V E C U L T U R E I N J A P A N

Someone's Day is an innovative app we are leveraging to help
build inclusion through understanding the experiences of others.
Developed by our people in Japan, Someone’s Day was inspired
by an app Takeda launched called In Their Shoes that helps
health care providers and other stakeholders better understand
what it is like to live with infammatory bowel disease.

—

Someone’s Day embeds users into three immersive real-life
experiences parenting, providing elder care and supporting ill
family members. Each demonstrates the pressures many of us
face. The use of the app is coupled with team discussion as part
of a two-week program. In just a few months since launch, more
than 500 people participated in Someone's Day, of which 94%
responded positively about their experience in a post-program
survey.

“Someone’s Day is a powerful experience that helps users
understand challenges that many colleagues face, which may
be diferent than your own,” said Tsuyoshi Yurita, head of Rare
Hematology Franchise, Japan Pharma Business Unit. “I do not
have children myself, but, with this app, I received a message
notifying me of an emergency with ‘my child’ during a meeting
and I had to leave to take care of the situation. This experience
put me in the shoes of parents.

“As a team leader, having a greater understanding of people’s
lived experiences can help create a supportive environment
where, for example, our team members don’t need to apologize
for having to step out to care for their children. I want my
team to feel comfortable bringing their whole selves to work,
including instances where life intersects with work.”

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38

C O M M I T M E N T T O T H E

PLAN E T

W E R E C O G N I Z E that people
and the planet have a huge impact

on one another. Risks to the health

of the environment pose risks to

human health. We are working with

our suppliers, peers and strategic

partners to foster responsible

innovation to protect the planet.

2023 Annual Integrated Report

HEL PING THE
PLA N ET TO
HEL P PATIENTS

T H E H E A L T H of the planet is
inextricably linked with human health.

This is particularly true relative to climate

change, which threatens global health

through diminished biodiversity, declining

food security and increased exposure to

heat waves, extreme weather and vector-

borne diseases.

Takeda has the knowledge and experience

to help address critical environmental

health issues, such as the disease-related

impacts of climate change, through

our core mission of developing life-

transforming medicines and vaccines for
people around the world. (See the example
of QDENGA on page 7.) In addition, guided
by our purpose, we are taking focused

climate action within our operations and

extended value chain to do our part to

minimize the harmful efects of climate

change.

O U R A P P R O A C H

Our commitment to the planet consists of three interrelated focus areas — climate

action, natural resource conservation and sustainability by design — around which we

structure our activities and actions. Guided by a holistic global approach, site teams

implement local activities to identify and tackle specifc risks and opportunities:

• Climate Action Program works to fundamentally change how we power our

operations by maximizing efciencies and steadily transitioning to low-carbon and

renewable energy sources. We are also working closely with our suppliers to help

them set and achieve science-based targets.

• Natural Resources Conservation Program works to identify and adopt innovative

approaches to conserve natural resources in our operations and beyond and

minimize our impacts on the natural environment. A healthy ecosystem not only

contributes to business continuity but also supports our net-zero ambition. For

example, by using less resources like water and generating less waste, we can reduce

our energy use and greenhouse gas (GHG) emissions.

• Sustainability by Design Program aims to signifcantly reduce and minimize the
environmental impacts of our products and services right from the start. This

program works to embed sustainability considerations into our decision-making

for all aspects of a product’s lifecycle. It also sets a foundation for reducing GHG

emissions, waste, ecotoxicity and energy and materials consumption.

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TA KING CLIMATE
AC TION NOW

I N 2 0 2 2 , we announced our
accelerated goal to achieve net-zero

GHG emissions related to our operations,

including Scopes 1 and 2, by 2035 and for

our entire value chain, including currently
estimated1 Scope 3 GHG emissions, by
2040. Our goals support the Paris Climate

Agreement to limit global warming to 1.5

improve resource circularity. We have taken

the next step in our journey by starting

work on a comprehensive net-zero strategy.

It will incorporate global best practices for

decarbonization and defne the actions and

timing necessary to achieve our net-zero

ambitions. Executed through our Climate

Action Program, our strategy includes four

degrees Celsius and meet the criteria set by

approaches: reduce, embed, invest and

the Science-based Targets initiative (SBTi)

infuence.

Net Zero Standard.

We have a long history of investing

in projects that reduce our emissions,

See our online sustainability disclosures
for more information about our Scope 1,

2 and 3 GHG emissions for FY2022 and

minimize our reliance on fossil fuels and

other key performance indicators, including

methodologies and results.

1 A lack of transparency into, and a difficulty measuring, actual Scope 3 emissions remains an important challenge to

overcome as Takeda works toward net-zero GHG emissions across its entire value chain.

2023 Annual Integrated Report

W E A R E T A K I N G A C O M P R E H E N S I V E A P P R O A C H T O R E A C H N E T - Z E R O

Energy Efficiency

Fuel Switch

Reduce emissions by
optimizing processes to
reduce energy usage

Electrify equipment or
switch to lower carbon
emission fuels

Fleet Electrification

Transition to electric
vehicles

Renewable Power
Generation

Renewable Power
Sourcing

Install on-site renewable
energy where feasible

Secure renewable energy
sourcing contracts

S C O P E 1
P R I O R I T I E S

S C O P E 2
P R I O R I T I E S

Product and Process

Value Chain

S C O P E 3
P R I O R I T I E S

Optimize product design
and business processes to
reduce emissions

Collaborate with suppliers
to decarbonize their
operations and engage
in industry collaborations
to reduce supply chain
emissions

Transport and Travel

Optimize and reduce
product transport and
business travel to reduce
emissions

Ownership

Data and Digital

Incentives and Funding

Communications

E N A B L E R S

Empower initiative owners
to take action

Maximize accuracy,
efciency, management
and transparency of data
and reporting

Align internal investments
with net-zero goals and
invest in credible and high-
impact carbon removal
projects

Engage internal and
external stakeholders
on net-zero eforts and
the connection between
climate change and health

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Pioneering New Approaches to
Reduce Emissions

Pharmaceutical production is typically

energy intensive and, to date, most of

the energy required has been derived

from natural gas. We are pursuing several

avenues to eliminate this dependency. One

example is in Austria where we are working

through a public-private partnership at

our largest manufacturing site in Vienna to

develop a ground-breaking process that

would replace natural gas with steam-

generating heat pumps.

What will make this project innovative is

the use of steam-generating heat pumps.
They will be operated exclusively with

100% natural refrigerants in combination

with electricity from renewable sources.

These refrigerants are highly efcient and

will not emit emissions contributing to

climate change. The heat pumps work by

repurposing heat waste from on-site chiller

systems, but which can currently only heat

to about 120 degrees Celsius. By combining

them with steam compressors, the pumps

will be able to generate steam at 184

degrees Celsius, hot enough to meet the

Known as AHEAD (Advanced Heat Pump

site’s production requirements. AHEAD is

Demonstrator), the project is expected to

intended to serve as a practical example for

reduce GHG emissions by up to 90% within

the entire pharmaceutical industry, as well

one operation at the site. It will mark the frst

as other industries aiming to reduce their

time that natural gas-free, steam-generating

GHG emissions.

heat pumps will be integrated into industrial

operation when in use in 2024.

A H E A D P A R T N E R S

Powering Our U.S. Operations
with Renewable Energy

In 2022, we signed a virtual power purchase

agreement to purchase approximately

350,000 megawatt hours (MWh) of

renewable energy certifcates (RECs)

annually from Enel’s North America’s Seven

Cowboy Wind Project in Oklahoma. We

will apply these RECs to our global GHG

reduction goals. The project, which became

operational in April 2023, will generate

enough clean, renewable energy to power

our anticipated electricity needs for our
facilities throughout the United States. This

agreement accounts for more than 100,000

tons of the company’s current total GHG

emissions or approximately 22% of our

current annual enterprise Scope 1 and 2

emissions.

2023 Annual Integrated Report

O U R G H G E M I S S I O N S

T C F D 2 0 2 2 P R O G R E S S

91%

Addressing Our Main Source of
Emissions: Scope 3

Currently, more than 90% of our estimated

GHG emissions are from our value chain

Scope 3 emissions. We are helping our

highest-emitting suppliers switch to

renewable energy and develop emissions

goals that are aligned with the SBTi by

2024 — as well as strategies to achieve them.

In 2022, we hosted our annual Partner

Value Summit for 175 suppliers

(representing approximately 40% of our

Scope 3 emissions) to share our journey,

our expectations and best practices for

decarbonization. Following the event,

nearly 10% of participating suppliers

submitted GHG reduction targets to SBTi

for approval, while many others have

indicated they plan to do so in the months

ahead.

We also updated our Supplier Code of
Conduct to include expectations for
the reporting of GHG emissions and the

Scope 1

Scope 2

Scope 3

91%

Optimizing Product Distribution

One way we are working to reduce Scope

3 emissions is by changing how we

Aligning with the Task Force
on Climate-Related Financial
Disclosures

G O V E R N A N C E

• Every member of the TET now has

goals for their functions related

to our commitment to the planet,

beginning in fscal year 2023.

S T R A T E G Y

• We are focusing our eforts on

developing vaccines to help mitigate

the spread of vector-borne diseases

such as dengue and Zika virus. In

August 2022, Takeda succeeded in
securing its first approval for our new
dengue vaccine, QDENGA.

R I S K M A N A G E M E N T

• As climate change has progressed,

we have responded by continuing to
integrate the assessment of climate

risks and opportunities throughout

our existing ERM process to help

ensure a consistent approach to risk

assessment and mitigation within our

business.

adoption of energy efciency measures.

distribute our products. Globally, we are

As a supporter of the Financial Stability

To help suppliers understand these

implementing more efcient transport

Board’s Task Force on Climate-Related

expectations, we are developing associated

modes for some products, including

training and a toolkit. Moving forward, we

transitioning from truck to rail or from

will integrate consideration of a supplier’s

air to sea. In 2022, our sea freight ratio

Financial Disclosures (TCFD), we issued
our frst comprehensive assessment of
Takeda’s climate change resilience in 2022.

• We announced our accelerated goals

M E T R I C S A N D T A R G E T S

to achieve net-zero GHG emissions

climate program into our supplier selection

versus air stabilized at 47.5%, avoiding an

We are pleased to provide the following

process. We are also working with others in

estimated 42,000 tons of GHG emissions

update to our TCFD disclosure. Integrating

our industry through the Energize Program,

for our entire product portfolio. At the

our environmental targets into our

related to our operations by 2035 and
for our entire value chain by 2040.

which aims to accelerate the adoption

local level, small changes can also make

business strategy is critical to achieving

of renewable energy and reduce GHG

a big diference. For example, in Japan,

our ambitious GHG reduction goals. We

• We are working toward a

comprehensive strategy in

emissions among pharmaceutical suppliers.

we shifted from three to two warehouses

are committed to making steady progress

support of our net-zero transition.

and increased the number of products

toward them.

transported per truck.

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CONSERVING
NATURAL
RE SOURCE S

T A K E D A I S W O R K I N G to
use less water and other natural resources,

technology will also help us ensure waste

bins are fully utilized to reduce pick-up

send less waste to landfll and protect

biodiversity. Doing so not only supports the

health of our communities and nature, but

also our eforts to reach net-zero.

Optimizing Waste

Landflls are a major source of groundwater

frequency, which, in turn, can help reduce
Scope 3 emissions. (See the Patient section
to learn more about our BioLife donation

centers and how we are transforming lives

through our plasma-derived treatments.)

Reducing Fresh Water Use

pollution and contributor of GHG

The production of many types of

emissions (methane), which will last in the

medicines, including biologics, requires

Employee-driven Innovation
Sparks Water Savings

When we invited employees at our Los

Angeles manufacturing facility to join our

Water Use Reduction Innovation Challenge,

Tyler Calamoneri, senior automation

engineer, already had an idea. In his

building, distilled water was employed to

sterilize equipment used in manufacturing.

The sterilized distilled water was stored

in a tank. After each cleaning, the unused

distilled water was fushed into the drain.

Tyler realized that the unused water being

fushed could be stored in the tank for up

to 24 hours and still retain its sterility. "The

system was unnecessarily fushing the tank

after every cleaning — wasting more than

220 liters every time,” he noted.

Knowing how important sterility is to the

quality of the product, Tyler analyzed the

average number of cleanings and cycle

times to determine that the site could

save more than 6.8 million liters of water

annually by adjusting the fushing and

atmosphere for decades. Like our water

conservation eforts, we support our

signifcant amounts of water at the highest

standards of purity. We recognize that

Climate Action Program to drive and track

water is a fnite resource that we share with

cleaning cycles — and it could be done at no

additional expense to the site. This would

save water while also reducing the site’s

progress at our major sites toward our

zero-waste-to-landfll goal. This includes

setting local goals and taking action to
reduce, reuse and recycle waste. In fscal

year 2022, we diverted more than 80% of

our waste from landfll.

For example, we implemented AI

technology at our BioLife donation

centers to better understand our impact

and identify reduction opportunities. This

the communities near our sites and are

GHG emissions.

working to conserve it.

While we have active programs to reduce
and conserve our fresh water use globally,

we are prioritizing our eforts at six of our

manufacturing sites in areas considered to

have “high” or “extremely high” water risk.
For more information, see our 2022 Annual
Integrated Report, page 54.

Tyler’s idea became reality after

implementation in 2022.

F O R M O R E I N F O R M A T I O N
see our position on water
stewardship.

2023 Annual Integrated Report

P R O M O T I N G L O C A L I N I T I A T I V E S

At our Lessines, Belgium, site we are working
to protect three rare local species identified
on-site: the Blue-winged Oedipodid (cricket),
the Wandering Andrene (solitary bee) and
the Heleborine Epipactis (flowering plant).
Efforts include planting melliferous plants
and indigenous trees, creating ponds and
installing beehives and a flower meadow.

Preserving and Restoring
Biodiversity

Biodiversity loss will have profound

consequences for human health if impaired

ecosystems can no longer provide clean

water, energy, food, recreation and other

services that contribute to well-being.

We seek to support biodiversity through

responsible business practices and

conservation eforts, many of which are

employee-led.

We have conducted biodiversity

assessments at all Takeda manufacturing

eforts. We are also evaluating methods to

assess our biodiversity footprint throughout

sites globally. Assessments included

our value chain.

screening of risks based on the potential

presence of threatened or protected

biodiversity areas in proximity to our

facilities and the potential pressures on

biodiversity from our activities. Based on

the results of these initial assessments, we

conducted in-depth studies at fve high-

priority sites. Results did not identify any

site activities that materially contribute

to the pressure on biodiversity. They

did, however, surface opportunities for

improvement, which we are evaluating in

2023. Opportunities include improving

onsite wastewater pre-treatment and

reducing freshwater withdrawal, which we

will incorporate into our water optimization

We are working beyond our sites to

preserve biodiversity. Established in

1933 as a cultivation area for medicinal

plants, the Takeda Garden for Medicinal

Plant Conservation in Kyoto, Japan, has

gathered numerous medicinal and other

useful plants from around the world

for experimental purposes. The garden

includes approximately 3,200 species of

plants on its 94,000-square-meter site.

Of these, about 1,900 are medicinal plants

and about 240 are endangered or near-

endangered species on the Ministry of the

Environment's Red List.

F O R M O R E I N F O R M A T I O N
see our position on biodiversity and
the responsible use of plastics.

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DESIGNING WITH
SUS TA INABILITY IN MIND

M O R E T H A N 8 0 % of a product’s
environmental impact is locked in before it
even reaches the market.1

to assess the environmental performance

of our products during three phases of

product development to identify and report

Through our Sustainability by Design

framework, we are integrating processes

on improvements for all new pipeline

products by the end of 2023.

Delivery

Raw Materials

Reducing Environmental Impacts
of Existing Medicines

We are also looking for opportunities to

R&D and
Manufacturing

improve the sustainability of our medicines

already available to patients. One example

and building strategies to minimize lifecycle

Tracking Sustainability Throughout

environmental impacts of our products,

Development

including supporting our net-zero GHG

emissions goal across our value chain.

Developing Product-Level
Sustainability Metrics

In 2022, we identifed four product-level

sustainability metrics: GHG emissions,

waste generation, water use and hazardous

substance use. We are using TAK-755, our

investigational product for Congenital

Thrombotic thrombocytopenic purpura
(cTTP) (see page 25), to pilot how we
calculate the metrics and develop a

Phase I: Complete baseline life-cycle
assessments using sustainability metrics

before an investigational product begins

clinical trials and conduct scenario analysis.

Phase II: Update product report card;
develop further mitigation opportunities

and resource investment in process

improvements.

Phase III: Complete a second life-cycle
assessment before launch to report on

improvements against baseline and inform

post-approval decisions for further product

product “report card” that will live with the

improvements.

product throughout its lifecycle. We plan

Sustainability
in the Product
Lifecycle

Packaging

Reuse or
Recycling

End-of-Life

Distribution

Use

is PANTOLOC® (pantoprazole), frst

approved for use in Europe in 2009 to

treat heartburn, acid refux and gastro-

oesophageal refux disease. In 2022, we
introduced alternative packaging for

PANTOLOC made from 100% recycled

cardboard. When fully implemented, we

expect to save an estimated 87,000 kg of

virgin fber board annually.

“We want to deliver products to patients that transform
their lives, while minimizing the impact on the environment.
Research and development play a key role in this equation
by building environmental sustainability in from the start.”

–

E S T E R L O V S I N B A R L E
Global Head, Product Sustainability and Stewardship

1 Product sustainability: Back to the drawing board | McKinsey

2023 Annual Integrated Report

2023
Annual
Integrated
Report

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FIN AN CIAL

P E R F O R M A N C E

W E A R E P O S I T I O N E D for
long-term growth through our actions

based on patient, trust, reputation and

business, in that order. By focusing on

our corporate philosophy imperatives

(Patient, People & Planet), we are

confdent in our ability to deliver better

health for people and a brighter future

for the world as well as sustainable

returns for our shareholders.

2023 Annual Integrated Report

TAKED A’S FISC AL YE AR 202 2
FI NANCIAL PERF ORMA NCE

R E S U L T S F O R F I S C A L Y E A R 2 0 2 2

(Billion yen, except percentages and per share amounts)

IFRS Metrics

Revenue

Operating Proft

Margin

Net Proft

EPS (yen)

Non-IFRS1, 3

Core Revenue

Core Operating Proft

Margin

Core Net Proft

Core EPS (yen)

Cash Flows and Dividend

Operating Cash Flow

Free Cash Flow2

Dividend

Leverage Metrics

Net Debt (Cash)

Adjusted EBITDA (last 12 months)

Net Debt/Adjusted EBITDA Ratio

FY2021

FY2022

Change vs. Prior Year

Actual % change

CER % change4

-0.8%

-1.8%

-0.1pp

+23.3%

+24.3%

+3.5%

+9.1%

+1.5pp

+13.1%

+13.9%

+12.8%

+6.4%

-0.7pp

+37.7%

+38.8%

+17.7%

+24.4%

+1.6pp

+30.5%

+31.5%

-13.0%

-52.7%

3,569.0

4,027.5

460.8

490.5

12.9%

230.2

147

12.2%

317.0

204

3,420.5

4,027.5

955.2

27.9%

663.8

425

1,188.4

29.5%

866.4

558

1,123.1

943.7

180

977.2

446.2

180

3,233.8

3,716.1

1,168.0

1,421.8

2.8x

2.6x

I N F I S C A L Y E A R 2 0 2 2 ,
Takeda delivered on or exceeded

management guidance, with Core Revenue

growing +3.5% on a CER basis to 4,027.5
billion yen (US$30.3 billion5). Our Core
Operating Proft grew at 9.1% on a CER basis
to reach 1,188.4 billion yen (US$9.0 billion5),
a record high for Takeda, and Core EPS

grew at +13.9% on a CER basis to 558 yen

per share. In addition, our Core Operating

Proft margin increased by 1.6 percentage

points to 29.5%. This year-on-year margin

improvement is an indicator of our fnancial

resilience and our ability to control costs — in

fact, on a CER basis, our selling, general

and administrative (SG&A) spend was lower

than fscal year 2021.

A key driver for our revenue growth was

the performance of our Growth & Launch

Products. They contributed around 40%
of revenue and grew at 19% year over year

at CER.

With strong fundamentals and fnancial

discipline, we invested in our future growth,

generated free cash fow of 446.2 billion

yen, and continued to deleverage, reaching

a net-debt-to-adjusted EBITDA of 2.6x as of

March 31, 2023. Excluding the approximately

400 billion yen upfront cash payment we

made to acquire TAK-279, our free cash

fow would have been 837.3 billion yen, and

the leverage ratio would have reached 2.3x.

This achievement in deleveraging closes the

chapter on our last major fnancial target

from the Shire integration.

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48
48

See page 51 for footnotes.

2023 Annual Integrated Report

Growth and Launch Products

Our FY2022 revenue growth was largely

driven by our Growth & Launch Products,

which generated around 40% of total

revenue, and grew at 19% on a constant

exchange rate basis.

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See page 51 for footnotes.

2023 Annual Integrated Report BUSINESS AREAGROWTH & LAUNCH PRODUCTSINDICATIONREVENUE (BN JPY)CER % CHANGE4Gastroenterology (GI)Moderate to severe ulcerative colitis or Crohn’s disease702.7+15.2%Refractory complex perianal fistulas with Crohn’s disease2.7+35.6%Rare DiseasesPrevention of hereditary angioedema attacks151.8+25.0%Post-transplant CMV infection (refractory, with or without resistance)10.5+561.7%PDT immunologyPrimary and secondary immunodeficiencies and multifocal motor neuropathy522.2+16.0%Hypovolemia, hypoalbuminemia, for use during cardiopulmonary bypass surgery, and hemolytic disease of the newborn121.4+19.0%OncologyALK-positive non-small cell lung cancer20.6+35.2%Previously treated non-small cell lung cancer with EGFR exon 20 insertion3.7+228.4%OtherPrevention of dengue diseaseNot DisclosedNew LaunchActive immunization for the prevention of COVID-19 (primary and booster)Total coronavirus vaccines revenue of 58.9Not DisclosedActive immunization for the prevention of COVID-19 (primary and booster)Not Disclosed

NEAR -TE RM HE A DWINDS, BUT CO N FID E NT
I N O UR GROWTH OUTLOOK

O U T L O O K F O R F I S C A L Y E A R 2 0 2 3

(Billion yen, except percentages and per share amounts)

Results
FY2022

Forecast
FY2023

Change vs. Prior Year

FY2023 Management Guidance
CER % Change4

W E A N T I C I P A T E signifcant
headwinds in fscal year 2023 from

the loss of high-margin VYVANSE®

(lisdexamfetamine dimesylate) to generic

erosion in the United States and AZILVA®

IFRS Metrics

Revenue

(azilsartan) in Japan. We expect revenue

Operating Proft

to decline by low single-digit percent on

a CER basis as a result, and Core EPS to

decline at low-20s% CER.

Net Proft

EPS (yen)

Nevertheless, based on our current
assumptions, we expect to return to

revenue, proft and margin growth in the
near-term driven by continued expansion

Non-IFRS1, 3

Core Revenue

Core Operating Proft

of our Growth & Launch Products, such as

Core EPS (yen)

ENTYVIO, TAKHZYRO, LIVTENCITY and our

Immunoglobulin and Albumin portfolio. We

also expect to see meaningful contribution

from QDENGA as it continues to roll-out.

Cash Flows and Dividend

Free Cash Flow2

Dividend (per share)

4,027.5

490.5

317.0

204

4,027.5

1,188.4

558

3,840.0

349.0

142.0

3,840.0

1,015.0

434

-187.5

-141.5

-175.0

-114

-187.5

-173.4

-124

-4.7%

-28.8%

-55.2%

-55.6%

-4.7%

-14.6%

-22.2%

446.2

400.0-500.0

180

188

+4.4%

Low single-digit % decline

Low-10s% decline

Low-20s% decline

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2023 Annual Integrated Report

Following the temporary generic

headwinds we will face this year, we expect

limited loss-of-exclusivity exposure until

the launch of ENTYVIO biosimilars, which

could be as late as 2032. We expect that

the momentum from our Growth & Launch

Products, coupled with new launches from

our pipeline, will return us to growth in the

near term and form the cornerstone of our

future growth profle.

As we look to the future, we remain

committed to returning to a Core Operating

Proft margin in the low-to-mid 30%,

supported by productivity improvements

driven by data, digital and technology.

As we prepare for our next phase of

growth, we will continue to maintain

a solid investment grade credit rating,

while allocating more capital toward our

growth drivers and shareholder returns.

Investing for growth will continue to

consist of strategic investments in internal

and external opportunities to enhance

our pipeline, as well as investment in new

product launches, our PDT business and

data, digital and technology. We also plan

to raise our dividend from 180 yen to 188

yen per share in fscal year 2023 — Takeda’s

frst dividend increase in 15 years. Moving

forward, we are committed to a progressive

dividend policy.

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Near-term
(FY2024-2025)

Medium-term
(FY2026-early 2030s)

Long-term
(FY2030s and beyond)

Return to sales, proft and margin growth

Continued expansion of Growth & Launch products

Further launches from innovative late-stage pipeline

Limited loss of exclusivity exposure until ENTYVIO biosimilars launch

Additional contribution from robust R&D strategy, including clinical pipeline of ~40 NMEs

• Returning to low-to-mid 30% Core Operating Proﬁt margins

• Increasing productivity enabled by data, digital and technology

• Continuing to pursue asset-speciﬁc business development to enhance pipeline

• Progressive dividend policy of increasing or maintaining dividend each year

1 Further information regarding certain of Takeda’s Non-IFRS measures is posted on Takeda’s investor relations website.

2 We defne Free Cash Flow as cash fows from operating activities, subtracting acquisition of property, plant and equipment (“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, as well as from sales of investments and
businesses, net of cash and cash equivalents divested. Free cash fow is a non-IFRS fnancial measure.

3 Core results adjust our reported results calculated and presented pursuant to IFRS to exclude the efect of items unrelated to Takeda’s core operations, such as, to the extent applicable

for each line item, non-recurring items, purchase accounting efects and transaction related costs, as well as amortization and impairment of intangible assets and other operating
income and expenses and the tax efect of each of the adjustments.

4 CER (constant exchange rate) change eliminates the efect of foreign exchange rates from year-over-year comparisons by translating Reported or Core results for the current period

using corresponding exchange rates in the same period of the previous fscal year.

5 Convenience translations have been made at an exchange rate of 1USD = 132.75 JPY.

2023 Annual Integrated Report

2023
Annual
Integrated
Report

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C O M M I T T E D T O M A K I N G H E A L T H C A R E

ACCESSIBLE TO ALL

O U R G L O B A L C S R Program
prioritizes partnerships that help

expand access to quality health care

for people in low- and middle-income

countries. We encourage innovation

beyond commercial products in support

of sustainable health systems for all

people, everywhere. Our long-term

funding commitments recognize that

there are no quick fxes to complex

health system challenges and that

equitable impact takes time.

2023 Annual Integrated Report

G LO BAL
CS R

O U R E M P L O Y E E S P L AY
a key role in our Global CSR Program.

Our employee-led Application Review

Committee helps select proposals from

non-proft organizations before a company-

wide vote determines the fnal programs

we fund each year.

Since the launch of our Global CSR program

in 2016, we have provided $140.7 million
to 24 programs in nearly 80 countries.

In 2022, 45% of
employees voted
to select our fiscal
year 2022 Global
CSR partners:

Ipas to improve access to
and use of comprehensive

Plan International to
expand access to health

Pure Earth to help protect
children in Colombia, India,

UNFPA to support survivors
of gender-based violence

sexual and reproductive

services for marginalized

Indonesia, Kyrgyzstan and

in Azerbaijan, El Salvador,

health services for hard-

populations, especially girls

Peru from lead poisoning.

Indonesia, Madagascar and

to-reach women and girls

and women experiencing

in Ethiopia, Indonesia and

complications from female

Pakistan.

genital mutilation in

Somalia.

Zimbabwe.