Takeda Pharmaceutical Company Limited (NYSE:TAK) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 05:30 am ET

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Takeda Pharmaceutical Company Limited (NYSE:TAK) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] The first question is from Mr. Yamaguchi, Citigroup. Mr. Yamaguchi, please. The first question is from Mr. Yamaguchi, Citigroup. Mr. Yamaguchi, please go ahead.

Analyst
Hidemaru Yamaguchi

Can you hear? This is Yamaguchi speaking.

Executive
Takashi Okubo

Yes. Thank you, Mr. Yamaguchi.

Analyst
Hidemaru Yamaguchi

Let me ask you questions, and I may put all the questions I have. My first question is about PDT business. What is the reason to driving this PDT business, which is quite strong? And the second is about PDT collection. And many people are now saying that -- or many other companies are saying that they have some impact in the US regarding PDT collection, what about you? And number three, warning letter. We had many different comments. And in the normal operation, in order to solve these inspection-related issues, probably several quarters or more than that, maybe [Indecipherable]. I would like you to tell how long it would take to solve the issues relating to the inspection? That's my third question.

Executive
Christophe Weber

Thank you, Yamaguchi-san. It's Christophe here. I will answer the question regarding the Hikari situation. And Julie, who is online, I believe, will answer the question regarding the PDT business and the collection situation. So, regarding the Hikari situation, the FDA audit happened last November. And so, we were aware of the issues and the situation and we immediately started working on the remediation. We -- typically if you look at the industry, it takes 12 to 18 months to be ready and be, what we call, inspection-ready. So that means that you have remediated the issues. And that's what we are seeing right now at Takeda. So, we believe that -- closer to 12 months, we believe that within 12 months, we will be ready for inspection, if you like. And we'll have remediated the issues, which means that will bring us at the end of the calendar year. Julie?

Executive
Julie Kim

Yeah, hello. Thank you for the question, Yamaguchi-san. In terms of the drivers of the growth, so first, I do need to point out that part of the exceptionally high growth is driven by the fact that we had timing issues in Q1 of 2019. So, Q1 2019 was particularly low in terms of IG, but there is strong underlying demand growth, particularly for our subcutaneous portfolio. And as you have seen, since the close of the transaction, we have continued to grow our collections and our capacity, so we've been able to provide more medicines to meet the demand for our IG portfolio. So there is strong underlying growth, but part of the exceptional growth is due to the comparison of a low Q1 of 2019.

In terms of the impact that we see on our collections, so we did see a decrease in our collections as the various different quarantine and shelter-in-place orders went into effect across Europe and in the US. At this point, our European -- I'm sorry, our European collections have recovered. And in the US, we do still see some impact