Good day everyone and welcome to the Conference Call of Takeda Pharmaceutical Company Limited. During the opening remarks from the company, all the telephone lines will be in listening mode only. We will then hold a question-and-answer session. Now we start the conference. Mr. Okubo, please go ahead..

Thank you very much for your participating in the conference call of 2019 financial results of Takeda Pharmaceutical Company today. My name is Takashi Okubo, Global Head of Investor Relations.

Before starting, I would like to remind everyone that we will be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today.

The factors that could cause our actual results to differ materially are discussed in our most recent Form 20-F and in our other SEC filings. Now, let me introduce today's Participants from Takeda. Mr. Christophe Weber, President and CEO; Dr. Andrew Plump, President of R&D. Mr. Costa Saroukos, Chief Financial Officer; Ms.

Ramona Sequeira, President of USBU and Global Portfolio Commercialization; and Ms. Julie Kim, President of Plasma-Derived Therapies Business Unit. First, we would like to start with some opening remarks from Christophe and the brief comments from Costa. Then we will have a question and answer session. Christophe, please go ahead..

Thank you Takashi, and good morning everyone. Thank you for joining us. I will just say that we are very pleased and proud of what we have achieved in 2019. At the time of huge integration. And in our long history, we have been able to do this integration. We have been operating as one Takeda, back in December.

So in a way we are very fascinated that we could do this integration at the speed that we did, so that we were operating as one Takeda up before the Coronavirus crisis started in January. And we were able to do this integration and at the same times, keep our business momentum and deliver on our commitment and Costa will elaborate more.

When it comes to the COVID-19 crisis, we have been acting on it very early on in January. We have been fortunate to have in house infectious disease experts, and epidemiologist and public health experts. So we have really looked at keeping our employees safe, at the same time to maintain our business continuity, especially under supply.

And we have to add the new supply disruption and we don't expect supply disruption. And on the other end, we are working very hard to develop potential therapies against COVID-19 both within our pipeline as well as within our plasma derived therapy. And we are developing a hyperimmune globulin and we are progressing fast on that.

And we have been part of the creation of an Alliance in order to do it faster and on a bigger scale. So for us, it has been a huge year. It puts us in a very strong position in 2020 and beyond because we are also benefiting from the R&D transformation that we initiated back in 2016.

And we are starting to really see concretely the pipeline that will benefit from with Wave 1 product, first 12 product that we could launch between now and 2024. And then Wave 2 product and all products which are lifesaving products. So very pleased with where we are. Of course, we are dealing with crisis never seen before.

We are confident about our guidance. We think that our portfolio of product is quite resilient because most of our medicines are lifesaving medicines, and they are not dependent on surgery or elective procedures.

So, I think even though the healthcare system has been paralyzed in many countries, we have not seen a huge impact on the prescription of our product, because our life saving medicines. So again, we’re very proud on behalf of all Takeda employees, more than 60,000 employees. I can say that it has been -- we can be proud of.

And we’re in a good position to move forward in 2020 and beyond. Costa over to you. .

Hello everyone. This is Costa Saroukos, speaking. I’d like to take a few moments to emphasize that Takeda has delivered and will continue to deliver on its financial commitments. First I am pleased to report that we delivered solid fiscal 2019 results, driven by our five key business areas, accelerated synergies and OpEx efficiencies.

Reported revenue was approximately ¥3.3 billion or $30.2 billion, with pro forma growth of 1.6%. This was driven by our five key business areas growing at 6% and 14 global brands growing at 22%. Cooperating profit was ¥962.2 billion benefiting from accelerated synergies and OpEx efficiencies. And core EPS was ¥387.

Fiscal 2019 free cash flow was robust at ¥968 billion or approximately $8.9 billion with strong operating cash flow supplemented by divestitures. As well as paying off all debt that matured in 2019 we also prepaid approximately $2.1 billion of higher interest debt that had longer maturities.

As a result, we were able to reduce our net debt to adjusted EBITDA ratio to 3.8 times a significant reduction from 4.7 times in March, 2019. We also finished the year with strong liquidity with over $12 billion in cash and committed lines of credit.

With regards to cost synergies, I'm delighted to announce that in addition to the acceleration in 2019 we've also identified further cost synergy opportunities. And we're now increasing our target from $2 billion to $2.3 billion by the end of fiscal year 2021.

We are excited by this additional opportunity and have decided to reinvest the $300 million upside into the business for future growth specifically in China, plasma derived therapies and R&D. The strong progress we have seen to date on synergies and OpEx efficiencies means we are very confident in our midterm target of reaching top tier margins.

Non-core asset divestitures are another important part of our strategy. And during 2019 we made great progress towards our $10 billion target with five our divestitures announced to-date with up to $7.7 billion U.S. dollars.

Now moving to fiscal 2020 guidance, where we expect the business momentum we saw last year to continue, with an outlook for strong underlying earnings growth. Our reported revenue forecast is ¥3.25 trillion, slightly less than prior year due to foreign exchange and divestiture impact.

Underlying revenue which adjust for both these items is projected to show solid growth in the low single digits. Our core operating profit forecast is ¥984 billion benefited from accelerated synergies and OpEx discipline. This will more than offset the negative impact of FX and divestitures.

The divestiture impact includes the profit contribution of deals closed in fiscal year 2019 and also an assumption that the recently announced divestiture in Latin America closes in mid-2020. With that FX and the Latin America divestiture, our guidance would have exceeded ¥1 trillion.

Adjusting for FX and divestitures, our underlying core operating profit guidance is very robust, at high single digit growth. Reported EPS is expected to be ¥39 and core EPS is expected to be ¥420 an increase of ¥33 versus prior year.

Finally, our guidance is for significant underlying core EPS growth of low teens, also benefiting from an improved underlying tax rate. In closing, I want to emphasize that we believe Takeda is a strong growth story. We delivered solid results in fiscal year 2019.

And we are positive about our momentum in 2020 and our potential to accelerate growth in the midterm. That concludes my opening remarks. And would now like to open it up for questions and answers. Thank you. .

Thank you, Christophe. Thank you, Costa. Now we would like to take questions..

We have a question and answer session now. [Operator Instructions] The first question is from Ken Cacciatore from Cowen & Company. Please go ahead..

Good morning, everyone. Thanks for taking the question and congratulations on all the great progress. Just had a couple quick questions. First on immunology continue to do very well.

Can you just talk about the underlying growth of that business? And then maybe discuss if you're having any impact on the collection centers due to COVID or how you're navigating around any potential issues there? And then second question is on business development. As I can see, Costa you layout very clearly, the priorities.

And it doesn't seem as if you're looking to do any larger acquisitions.

But for a company of your size and such a great job you've done of deleverage, just wondering if you would be willing to look at multibillion dollar kind of more tuck in acquisitions, given all the nice developments occurring even outside of Takeda? Just what's the appetite for potentially more strategic, not necessarily too large, but more strategic acquisitions? And then just my final question is on VELCADE, any new information about that the potential market to give you confidence that we're not going to see much competition through the balance of this year from a generic.

Thank you. .

Thank you, Ken. Good question [Indiscernible]. Julie will answer the first question on the immunology. Costa will I guess the second answer will be the BD question regarding data acquisition. And I will cover the third question VELCADE.

So Julie if you could start?.

So I thank you, Christophe and thanks for the question Ken. In terms of the underlying growth driver for immunology, I think we continue to see very strong growth for our IG portfolio driven primarily by our subcutaneous brands IQVIA and CUVITRU, but as well as our albumin portfolio driven by growth in China.

In terms of the impact of COVID on our plasma collection, so we have seen a decline in our collections due to the stay at home policies that have been put in place, even though plasma collection centers are designated as critical infrastructure and has remained open.

But we do expect to see as the states are opening up, some of that to come back and there are other levers that we can use to drive further growth in the coming months. So it's too early to say that the decline that we have seen would have a permanent impact on our overall growth projections. Costa, to you for BD..

Sure, thanks. Thanks, Ken, for the question. With respect to any larger acquisitions, I would just go back to our capital allocation policy. And the first area of focus is to deleverage rapidly. We're committed to deleveraging to net debt to adjusted EBITDA two times. And that's really our top priority here.

Now, having said that, of course, as part of our R&D model, we are always looking at opportunities in the R&D partnership model, but these are more smaller type $100 million type acquisitions, which already factored into our current cash flow modeling. So hopefully I answered your question, Ken. .

Thank you, Costa. And it's Christophe here. I think we also have to keep in mind that we need to continue to reinvest and to allocate capital on our R&D pipeline. We have a lot of programs now that we need to form. So that's also a huge priority for us to progress a wave one on the wave two pipeline.

On the VELCADE question, this is always based on competitive intelligence and we always will gather as much intelligence as possible. We assume this time that we won't have a separate new formulation and the most generic entry in fiscal year 2020. This is the best guess we can make at this time. And this is why we included into our guidance..

Congratulations to the team on all the progress and good performance..

Thank you Ken..

The next question is from Mr. Trevor from Polischuk [ph]. Please go ahead. .

Hi everyone. It's Trevor Polischuk from OrbiMed.

You hear me okay?.

Yes. .

Okay, four questions, please. The first and Christophe, I think you touched on it a little bit. But I'm just wondering if you can discuss more specifically and more quantitatively the impact that the pandemic has had on the business in 4Q and articulate a little bit more the potential impact for the coming fiscal year.

We've seen a very common phenomenon across large cap pharma reporting period that the quarter that just ended was positively impacted in many ways from some prescription strength that might reverse in the following quarter. So just wanted to comment on that. The second question maybe for Costa.

Last year, last May, when you provide guidance for the fiscal year it turned out to be conservative. But at the same time, there were many uncertainties that the company was facing 12 months ago. So, I guess I'm wondering how would you describe the guidance today.

Is it also conservative? Because it seems like there are less uncertainties that are facing the company today, compared to a year ago, but maybe you would disagree with that. Question three is for Julie. I was wondering about timelines on any specifics you can give us for the development of a plasma-derived therapy for the COVID-19 treatment.

Coming out of the coalition. I'm wondering, when might we see the proof-of-concept data? I'm curious about the manufacturing ramp? When do you think commercialization could begin? I'm also curious about the capacity that you have? And then a question just about how the proprietary business of that opportunity.

And then finally if I may, a question for Andy, I'm just wondering what you think the key pipeline related catalysts are to watch out for in the next six months? And thanks for taking all my questions..

Thank you, Trevor. I will start with the first question by saying that we reduce key fluctuation. It's not that the fluctuation, we see some fluctuation. It's very country dependent when the SCT stem and when the confinement has started. We have seen also a pattern sometimes of longer prescription, treatments prescription in some countries.

But overall, we have not seen -- we have seen quite good stability in our, in the first quarter of the calendar year and our fourth quarter. And our portfolio of product is really treating therapy rare disease, life-threatening disease in many cases. So we think it would be quite resilient.

But I will ask Ramona also for us to describe what she has seen on the U.S. market.

Ramona, if you could?.

Sure. Hi, Trevor. And it's Ramona Sequeira here. So yes, I think if you look at the U.S., particularly on the small molecules, certainly we've seen an increase in 90-day scripts. And we saw that starting in kind of the second half of March, as you indicated, and other companies have signaled that.

We don't anticipate that there was a big impact between fiscal years for us of that impact. We obviously had been quite ahead of managing the situation with the pandemic across our business. And we're very careful with ensuring that ordering was appropriate, so that we could make sure supply was maintained, as well for patients.

So we don't anticipate a big impact from that. And in fact, across our portfolio, we're seeing better adherence. And so that is kind of helping as we are entering the first part of fiscal '20..

Thank you, Ramona. Costa, the second question. .

Sure, thanks for the question, Trevor. So let’s maybe start from the beginning. So your comment around the guidance last year, there were some variances, mainly couple key areas was the VELCADE assumption. So we originally believe that we’re going to have a competitor entry in the U.S. which didn’t happen.

And so we’re very clear on that moving forward in fiscal year '20 that we don’t expect an entry in the U.S. There was also variability around the purchase price accounting. I mean, there was a significant amount from that standpoint that we had up to 12 months to complete. And we did that in January of this year. So now that's behind us.

And then we also gave greater granularity on our loss of exclusivity, so much more alignment there. And that helps the investors and analysts better aligned to the guidance and forecast. Having said that, when we step back and look at our actual guidance.

Our underlying guidance, we said in the beginning that in May 14 of 2019 we said that our underlying revenue growth would be flat to slightly increasing and we delivered 1.6%. We said our underlying cooperating profit margin would be mid-20s in the beginning, but then we increased it to high 20s and we delivered 28.9%.

And that was just because we were able to execute more effectively in respect to integration, faster synergy capture. And then our underlying core EPS in our recent guidance was ¥385 to ¥405 and we delivered ¥395 pretty much right in the middle of that. So yes, we had some moving parts in the beginning of the guidance.

But I think some of those are behind us now. It's all about focusing on how we executed in 2019 and starting off the right base for 2020. .

Julie, the third question. .

Thanks Chris. Hi Trevor. So in terms of the COVID-19 program with the Alliance, a couple of milestones for you I guess from a timeline perspective, you'd asked a number of questions about when certain things were starting. So last week we did share that the Alliance is going to be conducting their clinical study with NIAID under the NIH.

This will be a global study and that will take place in U.S., Europe and Japan. We shared earlier today that we started the first clinical manufacturing batch today and that the clinical study we hope to start in July. So those are some timelines for you to take note of.

And then in terms of when product could be available, so we do intend to explore both expanded use and there is a possibility that the FDA would also provide emergency use authorization if the data proves to be positive in terms of the effectiveness of the hyperimmune.

So when the product would be available beyond the clinical study, it's still a little bit unclear. But we do expect that before the end of the year we should see some information in terms of the broader use of the hyperimmune. In terms of capacity, this is one of the reasons why we formed the Alliance.

One is that it does provide a broader collections footprint to capture the raw material, the convalescent plasma, but it also provides a broader manufacturing capacity capability towards the end. So the end intent of the Alliance is to have all of the Alliance members be able to manufacture a hyper-immune.

And to your question about the proprietary nature of manufacturing, each of the Alliance members would leverage their existing IG manufacturing processes and we are working on the comparability approach for the hyper-immune based on the neutralization assay so that the Alliance members would be able to produce the hyper-immune without having to complete their own clinical studies as we would have completed that clinical studies as an Alliance.

.

Thank you, Julie, I mean the credit to Julie. I can share with you that she has been really the catalyst for this Alliance. And I think it is a huge example of profiting our competitiveness and moving forward in order to try to help to solve the crisis. Andy, the last question. .

Great, Trevor, hello. So lots of things, lots of stuff going on over the next six months. I'll just go through our Wave 1, briefly Wave 2 and then marketed products. So in Wave 1, we'll be filing our first Wave 1 program TAK 71 for eisinophilic esophagitis.

We will see data from a completed Phase 2 study, which is a pivotal registered -- which is registration enabling study for TAK 788 in exon 20 positive EGF receptor, non-small cell lung cancer. We will later in the year file off of those data.

We will present our Phase 2 data next month for high-risk myelodysplastic syndrome and then later in the year, we'll have our first readout from the PANTHER Phase 3 study in the same population that should serve as a pivotal dataset. So we'll have three data level filing and then two datasets that we will be filing in the next six months.

We'll have data readouts from our first TAK 620 regular study. Right now there are no drugs that are labeled to treat relapsed and refractory CMV. So this will be the first trial to demonstrate an activity in that population.

And we've got great Phase 2 data that was just published recently in the New England Journal of Medicine because this immense confidence in that study. And that will be registration enabling that single study with the second study in, bone marrow transplant to follow.

You'll continue to see in the near future, maturing data from the dengue [ph] vaccine to your data. And each time we see the maturing data, and we feel more and more confident about the robustness and the opportunity that this vaccine affords patients and Takeda.

So those would be in the next six months, a lot of Wave 1 activity and very little risk around COVID because all these activities all these studies are fully enrolled. They're in essentially data generation or patient continuation phase. In Wave 2, a little less certainty, but CAP 981 is emerging as a really interesting novel immunomodulator.

It's an only in class agent for Takeda as a simulation inhibitor. We presented at the earlier disclosure in Japan to some of the data that we're starting to see in just the first couple of dozen patients. And we see very interesting, diverse immunomodulatory facts, and we're starting to see a couple of responses.

So, we hope to see that play out further over the next six months. And then finally, on the brands. We have a really interesting study that we haven't spoken a lot about with VONVENDI, which is an adult prophylaxis study in 1 milligrams disease that we will lead out shortly.

Right now, personally, it's the only recombinant factor that's available and treatment is predominantly on demand. So this opens up the possibility for us to be thinking about 5 milligrams disease is one thing so that haemophilia in terms of prophylaxis.

We hope to refile in KVL, subcutaneous and address the issues that we received in the CRL with the FDA over the next six months. And then we hope to have a plan for resupply of manpower. So despite everything that's going on, it's keeping us at home. It's really busy half year coming up for us in Takeda R&D..

Thank you, everyone. Appreciate the color..

[Operator instructions] The next question is from Mr. [Shinichiro Manaka] from Morgan Stanley. Please go ahead..

Hello, this is Shinichiro Muraoka from Morgan Stanley Japan.

Can you hear me?.

Yes. .

Okay. Great. Thank you. The first question is about plasma business. In your guidance for this fiscal year 10% to 20% growth of IZ. And could you -- if you're okay, could you break down the sequential growth rate i.e.

for example, in the first quarter, our first half is 10% growth and the second half or that fourth quarter is 20% growth? So, I'd like to know the growth rate, acceleration or growth stay up to high growth rate for all the four quarters? And second guidance would be appreciated.

The second one is the recent Japanese article of your asset disposal of Japanese OTC business. Generally both were distributed at the end of April. If you are okay, could you comment something on that? And finally, this fiscal year's guidance, in your core operating cost to guidance is ¥984 billion.

But if you are okay, could you give us your gross margin assumption at a core basis? I guess you're expecting the gross margin to deteriorate by up to 100 basis year-over-year. But if you guide that quantitative information that would be quite helpful. That's all. Thank you. .

Thank you, Muraoka. Costa will cover the last questions. Regarding the two first questions, so we don't give guidance by quarter because especially this year, where we see on top of that the coronavirus situation. We will see some situation quarter by quarter that we used to see normally. So I think we should be really careful on the quarterly guidance.

Having said that, and Julie if you will comment further on some of my comment. We have seen a huge turnaround on customer business in 2019, 9% growth in 2019. And that's the result of focusing on this business but also having created the customer derived key business unit, which is managing end to end. This business now is very important.

I don't think we would have been able to get a result like that without this organization led by Julie.

Julie, if you want to comment on that?.

Sure. I guess the only thing that I would add is that the growth that you're seeing now is the acceleration in our plasma collections that we started shortly after the close of the transaction last year. So we will continue to invest in that growth. We are continuing to open new plasma collection centers.

So you should see continued growth from the overall patent business with Takeda..

Regarding the second question on Japan OTC business, so this report has not been -- is coming from Takeda. So we don't comment on speculation like that. I would just say that what you see is not call for us anywhere in the world because we are not focusing on OTC. So it's an income business.

In Japan, we have a unique position because we have a brand size but also brand awareness, which is very strong with an [indiscernible]. So our goal is to maximize the potential of this brand. And so I think the brand is very strong, this one is very strong. The business has not been growing in the last few years.

So, it's not an easy business to grow as the overall equity market in Japan is not growing. So I think that's as far as I can comment. But we don't make comment on market speculation like that. .

I think I'll take the last comment around the gross margin. And so thank you very much for the question. I think you can really -- you can draw -- I want to draw your attention to Slide 46 if you have a copy in front of you. But this is the evolution of our underlying core operating profit margin.

You saw how we went from 22% to 28.9% in fiscal year '19. And we expect to deliver low 30% underlying core operating profit margin which is predominantly driven by the additional synergies that we expect to derive and also some OpEx efficiencies.

Having said that, you see a bar next to that column, and we have highlighted that we expect some gross margin erosion. And on top of that, we are investing, as I mentioned, in areas such as R&D, plasma drive therapy in China. Now, with respect to the core gross margin decline, we don't comment on the percentage of that.

But what the main reason for the decline is a combination of product mix, including loss of exclusivity impact from products such FIRAZYR, CINRYZE and also the NATPARA, RECALL in the U.S. However, we do expect that this erosion will recover in fiscal year 2021. Thank you. .

Thank you. .

Thank you, Muraoka..

The next question is from Mr. Fumiyoshi Sakai from Crédit Suisse. Please go ahead. .

Thank you for taking my question. I guess I have one question. I think this is a question for whoever assigned from your expertise. Where do you stand with the COVID-19 vaccine development? Now some companies are very hopeful about commercializing the vaccine within a very short period of time.

But I really doubt the vaccine is going to be developed so easily, takes time. And every company is now working different standards. I know there's some experts saying we need the vaccine to be effectively defend the infection. But obviously I'm stopping there, when we going to go [ph]. So, I appreciate your input on this.

Obviously from input from [indiscernible]..

Thank you very much, Sakai. So my view is that it's good to have multiple technology progressing in parallel, because it would be too risky for the world to bet on one technology, so to have four or five technologies is right. And we see what we have today with the RNA vaccines and demobilize vaccines as a more traditional types of technology.

There is -- we shouldn't have too many because you have a huge resource. If you have like 50 candidates, I think it's a waste of resource. But perhaps that we will get I think that we shouldn't forget that developing a vaccine is very hard. Some vaccines will have no efficacy, some vaccines will have efficacy which will wane overtime.

And sometimes we need a booster and some vaccines will have 50-50 fingers as well potentially. So the world might think that it's a slam dunk production come, but it's far from shore. I'm optimistic that she [ph] will succeed.

The question will be how much risk the world wants to take by shortening the development period of the vaccines, which normally take five to 10 years. I mean if you shorten to one to two years, you have less data. And therefore we need to see how we assess that. And then the last point I will make is that the big issue in the manufacturing scaling.

And so stating the production of vaccines is not that easy it usually takes time, and bottleneck not necessarily where you anticipate them. So one of the well-known bottlenecking industry is actually the syringe and the feeding of the syringe, which is more late stage downstream manufacturing process. But that's a huge bottleneck.

Another bottleneck which is huge in the world today is a lyophilization process. So I jumped out because there is a scarcity of big lyophilizators. So I think that we should be careful at managing expectations, not one vaccine will succeed. There will be some bad news, some good news as well.

I think if you would succeed and then the scale up will take time. The scale up will take time. And so if you are looking at the successful vaccines and the vaccine age, the majority of the population worldwide, you are taking about five to 10 years. .

That's very long. But [indiscernible] Takeda on a very specific project right now and going. .

Yes. So in fact, when we see this finalize back in December, January, we assessed that if we could -- if we should have our own programs, but we didn't have the best technology to launch our own programs.

So, we didn't launch our own vaccine programs, but we are keen to partner and we are in dialogue with a few vaccines manufacturers or two vaccines company and programs to be a partner so that we can help with this coming-up..

Okay, alright, thank you..

The next question is from Mr. Umer Raffat from Evercore. Please go ahead..

Hi, thanks so much for taking my questions. And thank you for all your efforts on hyperimmune globulin for COVID. I had a few questions, if I may. Perhaps first, it's very -- I was very intrigued when I saw that you're expecting an approval this fall and second half '20, I think is what you said on slides.

And it almost sounded like FDA is possibly being more helpful and shrinking the timeframe involved in making the hyperimmune product to perhaps six months or less. Am I understanding that right first? Second, I know there's been confusion around what's the actual threshold for neutralizing antibody titers when you're collecting.

And I'm curious if you have a certain threshold in mind as you're going after patients. And on that same note, do you think you can make product for one patient with five or less persons worth of product.

And finally, if you could just give us a sense for how many patients worth of supply you could possibly have by the time you launch this fall? Thank you so much..

Thanks you Umer. Julie, I think it's all for you..

Thanks, Christophe. So, I'll try to remember all of your questions. So first in terms of the FDA, so that they are obviously prioritizing potential therapeutics for COVID-19 and they are working not just with us, but with many companies to expedite approvals where appropriate.

So, part of the reason why we chose to do the clinical study with NIAID under the NIH is to help facilitate a potential accelerated approval. So, we don't have any a guarantee though regulatory agency provide guarantee around early approvals. But there is the intent to accelerate as quickly as possible.

And I think you've seen from some of the other treatments out there, the use of the emergency use authorization to provide earlier access. And so again, if we have good data coming from our clinical study, we would expect that the hyperimmune would be a candidate for emergency use authorization as well.

In terms of the neutralization assay level, so we have developed a neutralization assay within the Alliance to measure what the appropriate titer would be in the final product. But as we have not yet completed the manufacturing run, we haven't been able to validate it yet. So, we will have that shortly.

And in terms of the ratio of what we would expect, based on past experience, there's quite a wide range of the number of donations required to create dose for an adult. And so again until we finalize them in the first manufacturing run, we won't have the data to give a precise answer to that.

But we hope to be better than the ratio that you just indicated. In terms of supply, in the end, as I mentioned, for the earlier question, we are trying to through the Alliance, maximize the potential supply available. And allow all of the Alliance members to be able to create hyperimmune supply in the end.

Now, of course, all of that manufacturing capacity that is available is still dependent on the convalescent plasma collection. So, this is really the key here.

And I think you will see not just from us, but from the academic centers, who are running convalescent plasma for direct transfusion studies, overall efforts to increase the awareness around the need for convalescent plasma so that we can make as much product available to treat patients worldwide..

Thank you so much for that. .

The next question is from Mr. Lee from [indiscernible]. Please go ahead..

Hi, congratulations for the strong result. And I was pleasantly surprised by that somewhat relieving guidance. And also I think improvement in the disclosure has been very helpful. Thank you very much. I guess it's good to know that at this point Takeda has not been materially impacted by the COVID-19.

But to Christophe I'm just wondering how COVID-19 has changed your priority. I know that probably at this point. You're focusing on the plasma therapy. But I'm curious to know which area you wanted to focus but due to COVID-19, you decided to deprioritize as well. Thank you. .

Thank you very much Lee for this question. So as COVID-19 treatment that we are discussing with Julie has not deprioritized other programs, and it's even not also destabilizing our manufacturing process of plasma derived therapy, which are vital for patients. So far, the COVID-19 has not changed our overall strategy, which is an R&D driven strategy.

So, of course, some clinical trial has not been able to start. So we need to assess that. But we want to progress our pipeline. So that's very important. On the five business areas, we continue to focus on those. So we have not seen requirement to check our strategy or to deprioritize on business based on the COVID-19. .

Thank you. .

[Operator Instructions]. .

Andy would you like to add something new? I think you can give. .

Maybe [indiscernible] waiting for another question. I just like thinking about the great question. And it's not so much a change in priority. It's just an opportunity to leverage the crisis to change the way we operate. I mean, there's an immense amount of inefficiency on the R&D side.

And particularly in terms of how we run clinical trials, how we manage, how we monitor patients, and how we manage data. And I think we've started to activities internally and externally to try to drive step function change into elements of trial operations.

So examples will be use of digital technology, which are essentially from a technical standpoint already for implementation. But there are behavioral barriers. We're going to use this opportunity to overcome those behavioral barriers. There's the way we interface with the FDA and other regulatory agencies.

And as Julie was commenting there is a level of engagement of the agency with the industry broadly. I think that's incredibly productive around COVID. We should be able to leverage this and drive regulatory reform beyond today. How we run trials? There's a great spirit. The COVID Alliance is an example of this. But it extends well beyond that.

There's a great spirit of how we can more effectively work together to enhance the efficiency of our business. The idea of using a master protocol to test multiple different medicines against a single control arm, the use of real world evidence to drive synthetic control arms. These are happening in real time around COVID.

I think we have a huge opportunity to transition these changes into the future and enhance our efficiency and speed. .

That's great. Yeah. It's actually great that you mentioned that Andy because, we are seeing some shift in R&D. but we'll see some shift across the entire company. We are working right now on the new phase of [indiscernible].

It's not going back to where we were before, but in a country where there is a reopening of the economy, what do we do? And we will reuse for example our offices but not in the way we are using it before. We'll have alternate people. And so many of our employees actually do like working from home. Habits are changing.

The way we are interacting with doctors is changing as well. So our thinking is to actually use this opportunity to change the way we work and probably never go back where we were before. .

Okay. Thank you very much. We have one shy investor who would like to ask a question probably to Costa. And his question is as follows. Well the presentation highlights the impact of divestitures on revenue. Could you please quantify the impact of these divestitures for modeling purpose? Costa, please. .

Takashi, thank you very much. It might be the impact of divestitures for modeling purposes. Okay. Thanks for the question. So I think the best slide to really reinforce the movements there is, slide 48 of the presentation where you can see that our actual reported revenue is ¥3291.2 billion and then forecast for 2023 to 50.

You see, we have impact of divestitures closed in fiscal year 2019. And then another column where it says impact of divestures expected to close in fiscal year 2020. Combined, that's approximately a ¥60 billion of impact due to the divestitures. Now again, reinforcing the point that strategically these diversities are our non-core portfolio.

And having said that, it allows us to really focus on our five key business areas, which you've seen in 2019, really driving the growth momentum. On top of that, we see that the FX, we expect ¥43.5 billion, we've actually quoted out the impact of ¥43.5 billion of FX impact. It largely impacted in recent months.

You've seen some, several currencies have significantly depreciated. And our guidance assumes the midpoint of January to March, 2020 FX rates for some of these markets such as a Russian ruble, Brazilian riyal and Mexican peso.

Now, on the flip side, there could be a positive outcome here, if the rates return to the December 2019 levels or further risk of April 2020 levels continue for the full year. Thank you for the question. .

Thank you. Thank you, Costa. Operator, next question, please. .

[Operator Instructions].

Okay, everyone. Now we would like to end the conference. And we appreciate you spending your time with us and thank you very much. And I wish this year we will spend attention to Takeda continuously. Thank you everyone. Have a good day. Good night. .

Thank you everyone. .

Thank you, everyone..

Thank you for taking time and that concludes today's conference call. You may now disconnect your lines..