Please note that this telephone conference contains certain forward-looking statements and other projected results which involve the known and unknown risks, delays, uncertainties and other factors not under the company’s control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these projections. Such factors include economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of transactions. During the presentation from the company, all the telephone lines are placed for listening-mode only and the question-and-answer session will be held after the presentation. This conference call is being broadcasted through internet live, but only for listening-mode. Now we start the conference. Mr. Hohman, please go ahead.

Thank you very much for your participation in the conference call of the Third Quarter Financial Results for Fiscal Year 2013 of Takeda Pharmaceutical Company Limited. My name is Christopher Hohman, Senior Vice President of the Investor Relations and Corporate Communications Department. Now please let me introduce today’s presenters and panel. Mr. François-Xavier Roger, CFO; and Mr. Tsudoi Miyoshi, Senior Vice President, Head of CMSO Office. First, we would like to start with the presentation on the topic of R&D activities followed by the third quarter financial results for fiscal year 2013. After that, we will have a question-and-answer session. Now we start the presentation. Please have the presentation materials in hand. First of all, we would like to start with the presentation from Mr. Miyoshi.

Last month, we obtained approval in Japan for ADCETRIS for the treatment of relapsed or refractory CD30 positive Hodgkin lymphoma, and relapsed or refractory CD30 positive anaplastic large cell lymphoma. ADCETRIS has been approved in over 35 countries. Regarding CONTRAVE, the interim results of the cardiovascular outcome study, Light Study was submitted by Orexigen to the FDA in December 2013. The PDUFA Action Date has been assigned as June 10, 2014. As for MLN9708, we have begun the Japanese Phase III study in patients with relapsed or refractory multiple myeloma, which would be a part of the global Phase III program which is really underway in the U.S. and Europe. MLN0002, we have begun Phase III studies in Japan. It has already being filed in the U.S. and Europe for ulcerative colitis and Crohn’s disease. AMITIZA is already marketed in the U.S., and now we have commenced a Phase III program for the indication of pediatric functional constipation. TAK-659, we are disclosing for the first time today. It has entered Phase I. This is a tyrosine kinase inhibitor for solid tumors and hematological malignancies. As we have previously announced at the end of the December 2013, development of TAK-875, which was in Phase III was terminated due to concerns about liver safety. Patient safety is Takeda’s highest priority. We had plans to file in Japan in FY14 and the U.S. and Europe in FY15. So this was unfortunate, but we still have a deep and rich pipeline including the high potential later stage assets such as, MLN9708 and MLN0002 as well as many assets in earlier stages which are progressing steadily. We will continue to invest in R&D to deliver innovative medicine to patients. Onto next slide. The slide shows data presented at the 55th Annual Meeting of the American…

Next is a presentation from Mr. Roger, CFO. François-Xavier Roger: Good afternoon. I am François-Xavier Roger, Chief Financial Officer of Takeda. Thank you for joining on our earnings conference call today. I am happy to give a brief description of our earnings performance and forecast. First, I would like to open by saying that we are pleased with our Q3 and year-to-date returns, which we believe mark important early steps in achieving our strategic targets relating to growth, innovation and efficiency. Please move to Slide 2 of our earnings presentation were you can find the highlights of our quarterly announcement. First of all, we are pleased to achieve underlying sales growth in Q3 at 5% on a like-for-like basis which is in line with our mid-range guidance. On the product side, we saw a good start of new products such as ADCETRIS in Europe, NESINA in Japan and the U.S. and we are happy to say that we have launched BRINTELLIX in the U.S. in January 2014. So you are aware, we announced in December the termination of Fasiglifam, TAK-875. And I can confirm once again that these have no material impact on our mid-range guidance, which we are therefore fully reiterating. On the other hand, we are pleased with the positive recommendation of the FDA’s Advisory Committee for ENTYVIO, MLN0002 for both ulcerative colitis and Crohn’s disease indication. In terms of capturing efficiencies, I can report a strong start to our Project Summit with over 30 billion yen of expected savings in fiscal year 2013. We think that these results will present the beginning of a sustainable improvement of our cost base and demonstrate as well our ability to execute such transformational projects. As I have mentioned before, Takeda has a strong balance sheet and low net debt. And…

Now, we would like to field your questions. We will be taking questions from listeners in both Japanese and English. And please limit your questions to two. In addition, please state both questions in the beginning.

We have a question-and-answer session now. (Operator Instructions) The first question is from Mr. Yamaguchi, Citi Securities. Hidemaru Yamaguchi – Citigroup: Can you hear me?

Yes, we can. Hidemaru Yamaguchi – Citigroup: My first question is on Project Summit, its progress status. This time 30 billion yen was disclosed. And percentage-wise 4% down, that’s also disclosed. Out of 30 billion yen, by Q3, how much savings have you already achieved? And 4% – does all of 4% come from the Summit Project? That’s my first question. My second question is TAK-875. I understand it’s terminated, and there was a liver safety concern and warning sign. Have you ever seen any warning signs in Phase II, because I think that is quite mature to terminate it at the very end? So haven’t you seen any warning signs of this liver safety concern during the quarter in Phase II? That’s my second question. François-Xavier Roger: Mr. Yamaguchi, to answer your question regarding Summit. We don’t disclose the amount that we have achieved in Q3. So we just provide the guidance for the full-year as we have already almost 10 months out of 12 in the year, we are very well advanced out of this total amount, and we will come back with a final number which will be above 30 billion yen in May, the occasion of our full-year quarter results. Regarding the 4% that you were mentioning which is a cost reduction, most of it is coming from Summit, as we are really focusing the entire organization on the project. There are always a little bit of additional savings here and there, but you can consider that the bulk of it is coming from Summit. As you can see the reduction that we have achieved year-to-date is significant, we may end up with a reduction of costs on a like-for-like basis in absolute value. That would be a little bit lower than what we have achieved year-to-date that it will be obviously in negative territory. So taking into consideration the fact that we grow at constant rate of about 5% on the top line. So we will have an absolute reduction in our cost base in both, in SG&A and R&D. This means that we are obviously improving significantly our operating profit. I will let now Tsudoi to answer the second question.

Regarding the TAK-875, during the quarter of the development, the side-effect levels were comparable to the other diabetic agents, but coming into December, highs and lows for the first time was seen and we discussed with independent moderating level. And highs low actually was observed. And their maybe some possibility of such liver concern in the diabetic patients in the future, that’s why we terminated this development of the project. Thank you very much.

Next question please.

From Barclays, Mr. Seki. Please go ahead. Mr. Seki, please go ahead. Hello? Atsushi Seki – Barclays Capital: I have two questions. One is mentioned in [indiscernible] royalty income and service revenue in the quarter, overseas 28.6 billion yen is mentioned. Do you have any breakdown of this? There seems one-off event related to this. So can you disclose details? And the second question is on TAK-875. In the presentation, you mentioned no major changes in the strategies and the guidance inclusive – or the impact of termination of 875, and why there is no major impact? For example in R&D organization, maybe you thought of reorganize some teams, you won’t have anything like that? Thank you. François-Xavier Roger: I will take the first question on the royalties. We don’t disclose the detail of the royalties by product. One of the reasons why there was a significant increase in Q3 is linked to a certain extent to the fact that there has been tender for VELCADE in Russia and that has contributed to increase the value of royalties in the quarter. Regarding TAK-875, I will let Tsudoi answer.

It is true that for the huge revenue obviously, we expect some decline but as you know we have vedolizumab or ENTYVIO and also Vortioxetine, 9708 CONTRAVE, BRINTELLIX, we have those major assets as you know or those candidates associated with probability of success. We make sure that those products will successfully deliver to the market and then it will offset the impact of 875. And regarding R&D team, our organization reshuffling, what we happen to see now in this diabetic area and this is a very important area and we have very strong presence globally in this therapeutic area, we will continue to invest. And as of now, although it is still in early stage, we have some promising assets and there are some unmet needs in this area. And we will continue to research and development. Thank you.

Next question please.

The next question is from Mr. Race from Deutsche Bank. Please go ahead. Tim Race – Deutsche Bank: Hi there gentlemen. This is Tim Race here from Deutsche Bank. Just a couple of questions please. First of all, I suppose just talking about your U.S. primary care sales force. We’ve seen now six months of prescription data from NESINA and the various combination products. And according to IMS data, the launch looks pretty weak so far. Could you perhaps talk to me about how you are incentivizing your sales force and how you can get to the NESINA launch going back to outside of Japan? And then just perhaps a certain question just on the BRINTELLIX. Can you talk about how the launch is going so far in the U.S. and what we should expect in the early stages? And just maybe a little comment on why the delay to BRINTELLIX in Japan? Thank you. François-Xavier Roger: Thank you. Regarding BRINTELLIX, I think it’s too early to comment and discuss because we have just launched in January. So it’s not even a month I think since we launched. Regarding the NESINA in the U.S., so far we are in line with our plans, so there is no significant disappointment. I think that the data are publicly available might not be fully accurate I think at this stage. The only thing I can comment as well regarding NESINA in the U.S. is that we saw that actually the development of the combination was greater than what we expected. So this is the only change I would say versus what the original expectations, but in terms of sales, there is no deviation against our original plans at this stage.

Miyoshi talking. Regarding BRINTELLIX Japan, as I told you earlier, additional study is planned and we are now reviewing the timeline of the studies. Therefore it will be delayed from the timeline shown in the table in these materials, but we would like to disclose the timing soon after we revised our plan.

Would you please go to the next question?

Next question is from Mr. Urushihara from Nomura Securities. Ryoichi Urushihara – Nomura Securities: Hello, you hear me all right?

Yes, go ahead. Ryoichi Urushihara – Nomura Securities: Two questions to Mr. Miyoshi. The first question, TAK-875. Development is terminated. Regarding GPR40 you said, it that a class effect, did that impact the liver, is that your view? So I suppose you have backup compounds but regarding the GPR40 development. Is it completely terminated as a project? That’s my first question. And the second question is about ACTOS, KPNC 10-year study. I suppose you more or less data available, and what’s the progress so far? Thank you.

Regarding TAK-875 whether the side-effect is class effect or not. Well, until December the development has been smooth and we have no other liver effect. And we need to investigate exactly why that was the case. We can’t really say whether it is a class effect or not. And in that sense, this therapeutic area including the compounds that we have as backup, we will continue to discuss and review. Regarding the second question, ACTOS, pioglitazone, KPNC 10-year study. KNPC study is already available, but I suppose data is more or less available for the 10-year study. What’s the situation regarding KPNC 10-year, it will be published with the end of FY2014. And I told you that in the beginning of the fiscal year that is, that we still have to wait. Now regarding the timeline, we can’t really say for sure. We expect the data will be available within FY2014. Ryoichi Urushihara – Nomura Securities: So you don’t know whether it’s going to be the first half or second half?

No. Ryoichi Urushihara – Nomura Securities: Thank you.

Thank you. Next question please.

Next question is from Mr. Muraoka, Morgan Stanley MUFG. Shinichiro Muraoka – Morgan Stanley MUFG: Muraoka speaking. My first question is regarding cost forecast for Q4. As you continue, you say that you will be spending in R&D but are you going to really spending that much? And are there any possibility – I think I heard that you won’t spend up all the forecasted numbers for R&D. And other SG&A expenses other than R&D, I expect probably in Q4 it will be greater than the last year at the same time build by more than 10 billion yen, but is it really that high level spending in Q4? I couldn’t really understand the reasons behind. Second question is regarding termination of TAK-875. You mentioned that it doesn’t have any impact on the mid-term forecast, but R&D, I think that from next fiscal, it will be reduced in terms of the investment. And also in the U.S., enrolled 1,700 people. I believe that you will be able to achieve major savings in terms of number of enrollments. Could you comment on that?

Regarding the R&D expenses. From R&D perspective, I would like to answer to your questions and others will be answered by François. Concerning R&D expenses, last fiscal in this timing, if you look at Q3, Q4 of the last year, the same sort of growth progress was experienced due to the impact of patient recruitment. C&O [ph] expenses are always generated in Q4. And Japanese invoice of course also will take place at this timing of the year. We need to conserve balance but some already finalized therefore we believe that that we’ll be able to grow in line with the forecast. François-Xavier Roger: From that we expect to spend the amount that we have indicated in our guidance, both in terms of R&D and once again there is some phasing which has happened last year, which is essentially linked to the enrollment of patient which is not something that we fully control ourselves, but as I said in December there is hardly any enrollment of patients and then there is kind of a capture in January where we enroll more patient. Regarding SG&A, as I mentioned earlier, there is a specific case this year because we will spend significantly more than last year as a consequence of the launch of BRINTELLIX in the U.S., so which is something that didn’t happen last year. So the comparison has to be adjusted for the specific case of the launch of BRINTELLIX. Just one other word on TAK-875, because we have the questionnaires earlier, so I want to make sure that we clarify the issue. TAK-875 did not impact our medium term guidance. Why? Because there were obviously some sales in the later part of the planning period, but there were a lot of costs as well. So even this sounds well…

Next question please.

The next question is Ms. Falcetti from Cantor Fitzgerald. Emilia Falcetti – Cantor Fitzgerald: Hi, good afternoon. This is Emilia Falcetti from Cantor Fitzgerald. I have two questions. One on CONTRAVE. You mentioned that this drug is one of the contributing drivers. And even in the other obesity treatments you launched in the U.S. in the last three years have disappointed significantly. I was just wondering if you could give me, your thoughts on the markets and how this products or maybe some Takeda’s sales force is going to differentiate from the others. And secondly on the emerging markets given what sort of going to experience, a little bit of a slowdown in Q4. What impact is that going to have on the margin, i.e., what sort of level of profitability have we reached in the emerging markets overall? And the question is – sort of the question on the targeted a little bit to China. I’m trying to understand what the profitability of that market is and whether it has sort of anything from repercussions of the Glaxo bribery scandal. That’s it.

This is Miyoshi speaking. In U.S. in obesity patients, 70% of those who receive prescription medicines are female. Recently there are other obesity drugs, but [indiscernible] is a concern with those competitive products, but CONTRAVE have no concerns for female. It is very female friendly. And regarding other new products, two products from competitors, they are scheduled drugs that means that we would tend to have addiction, but CONTRAVE have no addiction, so it is very safe and it is easy to use. And also CONTRAVE has really only and the first obesity – anti-obesity drug with new logical data. So we are competitive enough against those two Asians in the market. François-Xavier Roger: I mentioned earlier, we have seen already significant slowdown in our growth between Q2, were we had a growth of 28%. In Q3 where we were at about 15%. And we can see that there is a possibility even that this growth will even slowdown even further in Q4, but this further slowdown in Q4 could be linked to some exceptional items. This slowdown in emerging markets is obviously something that we are looking with lot of attention. We are absolutely convinced as of today that this is not linked to any specific issues with Takeda that is more linked to momentums in emerging markets. And most of our peers have actually provided this information regarding emerging market growth in terms of slowdown. We don’t see that as significant issue and it doesn’t impact our guidance, neither for Q4. I said earlier that we expect in Q4 to have a top line growth, which will be in line with what we experienced in both Q2 and Q3. So no impact in terms of slowdown. You were mentioning about margin. We don’t expect an impact in terms…

Thank you very much. Next question please.

Next question is from Mr. Sakai, Credit Suisse. Fumiyoshi Sakai – Credit Suisse: Thank you. Sakai speaking. I would like to ask a question regarding products. TAK-700. So your conclusion will be coming around the summer this year. I might have misheard you. Regarding this compound, at some stage in time – well, I think it would be not disclosed but do you have any backups? That’s my first question. Second question is on ADCETRIS. Compared with your forecast, I think still it has been progressing better. It’s not a great, but especially in Europe in the first half about 4.5 billion, I think was the number. So what’s the sales up to Q3, and what is the further forecast both for ADCETRIS sales, not in Australia and Japan, but in Europe and other countries?

Well, regarding the TAK-700. As I told you, pre-chemo study, currently Phase III study is underway. We expect that this study will be ending earlier, but around summer I believe that we’ll be able to disclose some information, but we cannot make any promise at this moment. After having the results of this pre-chemo study, then together with the results of 21005, we will decide the strategy and then we will disclose. Fumiyoshi Sakai – Credit Suisse: How about your backup project? Do you have any backup compounds that you can disclose to us?

In the same TAK-700, I don’t have any to disclose. François-Xavier Roger: We do provide the details of – we provide detail indications, so you have chart in my presentation that gives you the level of sense, so you can draw conclusion from that. You are absolutely right in saying that ADCETRIS is doing better than expected, doing really significantly better than expected, which we are very pleased with. So we are satisfied with that. Fumiyoshi Sakai – Credit Suisse: You were satisfied. That’s fine, but can’t you explain the situation in more details? Takeda has been marketing in Europe and so I think you know the situation over there.

Miyoshi speaking. Well, rather than marketing, the data that we have shown to you indicates that whether it’s Hodgkin lymphoma or the anaplastic large cell lymphoma, for both indications, a very high efficacy which couldn’t be seen in any other proteasomes [ph] were shown. And that’s how widely affected, therefore it would be widely used. And so we could actually also get additional indications for this, we thought – we expect greatly for this compound. Fumiyoshi Sakai – Credit Suisse: I’m sorry to ask you for that questions and I think that you said the profitability is very high and it is in-licensed product, but still as of today, is it true that you have been making profit, substantial level of profit from ADCETRIS sales? François-Xavier Roger: It’s third-party product, so we have a good margin but we need to remunerate the company that they got the product originally. So the margin is obviously lower in a product that would come from Takeda originally, but the margin is very satisfactory to us. The one additional thing that I can say that in some markets we have very high market share, for the indication that we have got, which mean that even in some market the potential for further growth might be limited today because we are close to having, as we’ve said most of the patient that we could address for these specific product, but we are still developing the product in some new countries as well. So there will be some additional growth coming from that product.

Thank you very much. Well, the next question will be the last question because of the time limitation.

Next question is from SMBC Nikko Securities, Mr. Nakazawa. Yasuhiro Nakazawa – SMBC Nikko Securities: Hello my name is Nakazawa from SMBC Nikko Securities. I have two questions. Regarding pipeline, TAK-875, it was mentioned already before, but in GPR40 with a certain mechanism, you will be challenged. Is that your policy? According to some news reports, [indiscernible] to deliver because of the structure of this kind of compound, it is likely to impact the liver and so if you are to continue development, are you going to challenge different structure of compounds. That’s the first question.

As I said before, it’s not exactly the same type of products we work on sort of every option and we would continue our investment in this area including backups, and whether the structure itself is a problem or not, we don’t have a definite answer yet and we do not comment on this as of now. Yasuhiro Nakazawa – SMBC Nikko Securities: Thank you. For example, SGLT2 inhibitors with DPP-4 inhibitor to be combined, that could be a golden standard for pharma companies to promote and SGLT2 maybe in-licensed?

Well, diabetic area is very important area for Takeda and we will consider every option, but to have fixed-dose combination with specific SGLT2, no, we can’t comment regarding. Yasuhiro Nakazawa – SMBC Nikko Securities: Thank you. And my last question regarding SG&A, as of course you have room and I am not fully convinced that you will use that for the budget, according to what you had in the third quarter and the fourth quarter, 30 billion yen increase in SG&A that is your plan, but you mentioned the BRINTELLIX sales cost and also impact of FX, all that could expand this much increase? May I ask that question once again… François-Xavier Roger: I confirm that we expect to spend up to 19 billion yen in Q4 which is the reason why we provided the revised guidance. I confirm that the main driver is indeed the investments in BRINTELLIX. There are other factors, but I mean there is a collection of different other factors, none of them being significant in itself, but we do confirm the fact that we expect to – that increase which is mainly driven by the investments in BRINTELLIX in the U.S. There is a minor impact in terms of LTIP, but it’s not significant. It’s part of traditional item that I was mentioning, none of them being very significant in itself, but I mean all of them combined may contribute to the increase in Q4 versus Q3. Regarding LTIP, we have made an assumption of share price at closing at 5,000 yen, which on our guidance with a revised operating profit at [indiscernible] is based on this assumption of 5,000 yen. So there is a little bit of cost increase coming from LTIP as a consequence because of share price when we closed at the end of December, was at lower level.

Thank you very much. With this… Yasuhiro Nakazawa – SMBC Nikko Securities: Hello, just one more clarification. In Europe, lurasidone was approved and you paid – you will pay 8 billion yen to Dainippon. Is that an R&D item?

No. It’s not in R&D cost. Yasuhiro Nakazawa – SMBC Nikko Securities: So are that SG&A?

Yes. Yasuhiro Nakazawa – SMBC Nikko Securities: Thank you.

Thank you very much. With this we conclude today’s conference call. Thank you very much for your participation.

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