Thank you very much for joining the FY 2022 earnings announcement of Takeda. I will serve as MC, Head of IR. My name is Aravi. First, let me explain how to set the language. At the bottom of the Zoom screen, you find a Language button. For those who wish to listen to the call in Japanese, please select Japanese. If you want English, please select English. 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 other SEC filings.
Please also refer to the important notice on page two of the presentation regarding forward-looking statement and our non-IFRS financial measures, which will be discussed during this call. Definition of our non-IFRS measures and reconciliations with comparable IFRS measures are included in the appendix to the presentation. Now let's move to the presentations. President and CEO, Christophe Weber, and R&D President Andy Pomp, CFO Kostas Savvoukos will provide you with presentation. We will have Q&A session. Let's start.
Thank you, Chris. Thank you everyone for joining us today. It's a great pleasure to be with you. Fiscal year 2022 has been a very successful year during which we have been putting our corporate philosophy into action to create long-term business and societal value. Everything we do is guided by our values, brought to life through action based on patient, trust, reputation, and business in that order. This is fundamental to our strategy, our identity, and our culture. We have been steadily executing towards our vision to discover and deliver life-transforming treatments with a commitment to patients, our people, and the planet. A good example is how we have chosen to price our recently approved dengue vaccines, QDENGA. We are prioritizing countries with the highest burden of disease and where barriers to access to medicines and vaccines are particularly complex.
In line with our tier pricing strategy, we will adjust QDENGA price according to a country's economic stage and health system maturity to ensure broader access. For example, the private market price for QDENGA in Indonesia will be about one-third its European price and far lower than other innovative vaccines in Indonesia. With regard to our people imperative, our intention is to create an exceptional, inclusive people experience wherever we work. For our colleagues who can work virtually as well as in our offices, we emphasize effectiveness, flexibility, and inclusion with fit-for-purpose and regular face-to-face interaction, and are leveraging data insight to inform our approach. We are also committed to delivering a high standard of environmental leadership, and we made important progress toward our greenhouse gas emission goals in fiscal year 2022.
As an example of the multiple initiatives we have underway, in March this year, we officially opened our first positive energy manufacturing support building at our site in Singapore. This building actually produces more electricity than it consumes, and it is the first of its kind in the biopharmaceutical industry in Singapore. In the U.S., our virtual power purchase agreement with Enel North America is expected to create up to 350,000 megawatt-hours of renewable energies credit per year. That accounts for approximately 20% of Takeda's current enterprise scope one and two greenhouse gas emission. We are also doubling down on our investment in data technology and AI with a 10% investment increase in 2022 to improve our productivity across our entire value chain.
In these ways, through our core business, Takeda is creating long-term value for patients, shareholders, and society while making a positive impact on our people, communities, and the planet. Turning to slide five to our financial performance, I am pleased to say that fiscal year 2022 was an excellent year for Takeda as we delivered or exceeded management guidance for revenue and profit growth. On the top line, we booked revenue of more than JPY 4 trillion for the first time, representing core growth of 3.5% at a constant exchange rate. This performance was driven by our growth and launch product, which increased 19% at a constant exchange rate and now represent 40% of our total revenue.
Core operating profit was nearly JPY 1.2 trillion, representing growth of 9.1% at a constant exchange rate. Core earning per share was JPY 558, with growth of 13.9% at the constant exchange rate. I also want to highlight our continued progress in reducing our debt. We have now brought our leverage ratio down to 2.6. This includes the impact of a $3 billion payment we made in Q4 to acquire TAK-279 from Nimbus. Excluding that, we will have reached 2.3 x or the low 2s target we set as one of our key financial metrics commitment after the Shire acquisition. This achievement enable us to pivot to a new phase of investing for growth and shareholder returns. Moving to the right-hand side of the slide and our pipeline progress.
In fiscal year 2022, our dengue vaccine, QDENGA, received approval in multiple countries, including Indonesia, the European Union, U.K., and Brazil. We have since received additional approvals in Argentina and Thailand and have launched in a number of European and Nordic countries. The U.S. FDA also accepted QDENGA for priority review, we are looking forward to a potential approval in the U.S. and to expanding access to these vaccines to other regions later this year. Also this year, we had positive late-stage clinical trial data readouts for TAK-755 and Fazirsiran. Based on favorable interim phase III result, we are on track towards the filing of TAK-755 as a treatment for congenital thrombotic thrombocytopenic purpura, or TTP, a rare blood clotting disorder with limited therapeutic option. We also announced positive phase II result for Fazirsiran in alpha-1 antitrypsin deficiency associated liver disease.
This year, we have begun dosing patients in the phase III studies. Our Orexin franchise is also advancing. We began a phase IIB study for TAK-861 in narcolepsy type 1 and type 2, and published positive phase I data for TAK-925 in a post-anesthesia setting. We continue to strengthen our pipeline with external opportunities to complement our innovative internal R&D engine. This included the acquisition of TAK-279 for immune-mediated disease, as well as in-licensing agreement for fruquintinib for colorectal cancer and TAK-227 for celiac disease. We are optimistic about these late-stage programs and the potential of these molecules to bring meaningful advancement for patients. Looking ahead to fiscal year 2023 on slide 6. We have been communicating for some time that this coming year will be challenging due to the impact from loss of exclusivity, most significantly Vyvanse in the U.S. and AZILVA in Japan.
These are temporary headwinds and do not alter the momentum of our growth on launched products, nor our excitement in the pipeline to deliver medium- and long-term growth. As a result of the strong deleveraging progress I highlighted on the previous slide, we are now entering a new phase for the company in terms of capital allocation. I am pleased to announce a planned dividend increase from JPY 180 to JPY 188 per share in fiscal year 2023, underscoring our confidence to grow beyond the near-term challenges in fiscal 2023. With regard to our guidance for the coming year, for revenue, we expect momentum from our growth on launched product to largely offset the impact of generic entrants. We do have an additional headwinds from COVID-19 vaccines expectation.
In fiscal year 2022, we actually exceeded our revenue forecast for COVID-19 vaccines in Japan with almost JPY 60 billion in sales. As a result of softening demand and the government cancellation of their order for Nuvaxovid, we now expect fiscal year 2023 revenue to be minimal. As a result, our management guidance is for core revenue to decline by low single-digit percentage at a constant exchange rate, with COVID-19 vaccines being the main difference from our previously communicated goal of holding revenue flat this year. With regard to profits, we do expect an impact from losing the high-margin product going generic in 2023, but we are doubling down on our cost discipline to limit the impact as much as possible.
That said, we are not holding back from making the necessary investments to secure future growth, and we continue to invest in R&D and data and technology to secure Takeda long-term competitiveness. Although we expect core operating profit to decline in the low 10 percentile, we are still forecasting an absolute amount of more than JPY 1 trillion. Core EPS is expected to be JPY 434. After several years of business transformation, integration, and deleveraging, we have built competitive global scale with a strong financial foundation and are confident in our future growth. This enable us to pivot our capital allocation policy to place less emphasizes on rapid debt paydown and instead allocate more capital towards growth investments and shareholder returns.
This includes the adoption of a progressive dividend policy, which means that going forward, we intend to increase or maintain our dividend every year, reflecting a new chapter for Takeda with a clear focus on investing for growth and shareholder return. Moving to the right of the slide, our upcoming pipeline milestones also support our confidence in the future. First, we are expecting some significant life cycle management extension this fiscal year as we anticipate regulatory decision in the US for ENTYVIO subcutaneous formulation for ulcerative colitis and for HYQVIA and GAMMAGARD LIQUID for CIDP. We also expect the readout for Alofisel phase III and ADMIRE-CD II study, which we believe will support the US filing of this highly innovative cell therapy for complex perianal fistula.
As I mentioned, we also anticipate further approval decision for QDENGA, including in the U.S., as well as an approval decision in the U.S. for TAK-755 for cTTP. Lastly, we expect to obtain phase IIB results for TAK-279 in psoriatic arthritis and initiate a pivotal phase III program in psoriasis. Andy will share additional information on these programs later in the presentation. Turning to slide seven on our high-level outlook for the near, medium, and long term. Based on our current assumption for fiscal 2023, we expect to return to revenue, profit, and margin growth in the near term, driven by continued expansion of our growth and launch products such as ENTYVIO, TAKHZYRO, LIVTENCITY, and our plasma-derived therapies. We will also start to see meaningful contribution from QDENGA.
We are also excited about our late-stage pipeline and anticipate significant milestone in 23 and onwards, as I have already touched upon. Following the temporary generic headwinds we faced this year, we have no significant loss of exclusivity exposure until the launch of ENTYVIO biosimilars, which could be as late as 2032. Therefore, the momentum from our growth on launch product, coupled with new launches from the pipeline, will continue to drive growth into the medium term. Beyond that, we expect our investment in R&D to continue to pay off in the medium and long term with progress in our clinical pipeline. As we look to the future, we remain committed to returning to a core operating profit margin in the low to mid-30s, supported by productivity improvements driven by data, digital, and technology.
We will also continue to evaluate asset-specific business development opportunities to further enhance the pipeline and reinforce our growth profile. Finally, as I mentioned, our updated capital allocation policy include our progressive dividend policy of increasing or maintaining our dividend each year. In closing, fiscal year 2022 was a year of growth and strategy execution. We continue to deliver on our long-term commitment, progress our pipeline, and return value to our stakeholders while living up to our values and bringing life-transforming treatments to patients. With that, I will turn the call over to Andy to update you on our pipeline. Thank you.
Thank you very much, Christophe. Hello to everyone on today's call. If we can go to the next slide, please. Slide 9. We continued to build forward momentum with our innovative pipeline this past year. I'm very excited to share our progress and highlight major milestones achieved in fiscal year 2022, as well as highlight expected major events in the coming year, 2023. As Christophe mentioned, we had multiple pipeline successes this past year. We received several approvals for QDENGA in endemic markets. We also had approval in Europe and a positive CHMP opinion that could support the approval in 8 additional dengue endemic countries participating in the first-ever EU Medicines for All Procedure.
The WHO estimates around 4 billion people are at risk of dengue infection globally, with an estimated 400 million infections, 500,000 hospitalizations, and 25,000 deaths each year, and most of these deaths occurring in children. In our 4-and-a-half-year TIDES clinical outcomes trial, QDENGA demonstrated an 84% reduction in hospitalizations. As we work to provide broad access to enda-endemic regions around the world, we now have the potential to significantly reduce the hospitalizations and deaths caused by dengue infection in the decades to come. We also had a number of positive study readouts that further advanced our pipeline this year, and as Christophe mentioned, these include a phase III readout for TAK-755, a phase II readout for Fazirsiran, and proof-of-concept data for our Orexin franchise. These positive studies support important program stage-ups.
We are on track to file TAK-755 for the treatment of congenital TTP in the U.S., with submissions in other regions to follow. We initiated a phase III pivotal trial for Fazirsiran. Fazirsiran is an innovative and very promising RNA interference therapy that may stop the buildup of harmful protein aggregates in the liver, which can cause inflammation, fibrosis, and ultimately liver failure. Fazirsiran has the potential to reduce the inflammation and fibrosis and prevent liver failure in patients with alpha-1 antitrypsin deficiency. We also advanced TAK-861 into phase IIB dose-ranging studies for patients with both narcolepsy type 1one and narcolepsy type two. While this has been a strong year for pipeline growth, it has not been without its headwinds.
Based on feedback from regulatory agencies, we decided not to pursue approval for LIVTENCITY in first-line CMV infections. We continue to believe there was a net positive benefit shown against the standard of care in the frontline trial. After discussions with regulatory agencies, have decided to make the trial results available to transplant physicians via publications, but not pursue a label supplement. LIVTENCITY remains the only approved therapy for refractory CMV infection and has made meaningful impact to the lives of patients in the post-transplant setting. In the coming year, we see significant opportunities to further expand our growth in launch products. The potential approval of ENTYVIO subQ in the U.S. for ulcerative colitis and potential approvals for HYQVIA and GAMMAGARD LIQUID in the U.S. for CIDP. Both represent expansion opportunities for two of our largest franchises.
In fiscal year 2022, we also made significant investments to enhance our long-term growth prospects with a number of pipeline-enhancing deals. These include TAK-279, which I will highlight in more detail later in the presentation. fruquintinib, a highly selective oral potent inhibitor of VEGF receptor one, two, and three, with very strong overall survival data in previously treated metastatic colorectal cancer. This program has already been filed in the United States. TAK-227, a potential first-in-class oral celiac disease therapy with strong data in a human gluten challenge study that was recently published in The New England Journal of Medicine. Next slide, please. Through our disciplined prioritization process, we also made a number of strategic and data-driven decisions to prioritize investments in our most promising programs, which further propelled the progression of our pipeline.
We achieved 41 clinical stage ups and 8 approvals from the 4 major regulatory agencies around the world. We also continued to evolve our strategic focus. As an example of our disciplined decision-making, we discontinued R&D efforts in adeno-associated virus, or AAV, gene therapy. This decision will allow us to focus even more deeply in areas of cell and gene therapy where we believe we can offer transformative therapies to patients and become industry leaders. These include our innovative allogeneic NK and gamma delta cell therapy platforms, as well as next-generation delivery mechanisms for gene therapy. Slide 11, please. Depicted here are our late-stage development programs. TAK-755 had strong interim results from our phase III trial in congenital TTP, a rare disease caused by a deficiency of the protease ADAMTS13.
TAK-755, our recombinant ADAMTS13 designed to replace this missing enzyme, showed a 60% reduction in the incidence of thrombocytopenic events versus the standard of care. TAK-755 was also better tolerated. Treatment-related adverse events were 9% for TAK-755 and 48% for the standard of care. We are on track for a first filing in the U.S. As previously mentioned, we have an exciting late-stage addition to our pipeline in TAK-279, a highly selective oral allosteric TYK2 inhibitor. We'll be starting a pivotal development program in psoriasis in fiscal year 2023. Additionally, we will have a phase IIb readout for psoriatic arthritis this fall and are preparing at-risk to start a pivotal development program for these patients in early fiscal year 2024.
In parallel, we will be accelerating the development of TAK-279 in Crohn's disease, ulcerative colitis, and systemic lupus erythematosus, as well as exploring a broad range of additional indications. Next slide 12, please. Now I'd like to remind you why we are so excited about TAK-279. Firstly, TAK-279 is over 1.4 million fold selective for TYK2 versus the JAK family receptors. Important for a best-in-class TYK2 inhibitor, given the known safety concerns associated with the JAK inhibitors. Secondly, as presented at the American Academy of Dermatology in March, TAK-279 has very strong phase IIb clinical data in moderate to severe plaque psoriasis. 33% of patients taking a 30-milligram pill achieved clear skin or PASI 100 with a once-daily administration. In addition to this strong efficacy profile, adverse events were generally low.
The most common adverse events were COVID-19 and acne. Importantly, acne and its related forms resolved while patients continued treatment in all but one study participant by week 12. We are looking forward to advancing TAK-279 into 2 phase III trials in psoriasis and conducting a head-to-head trial against deucravacitinib based on these promising data. The figure at the bottom of this slide shows a high-level timeline of our anticipated clinical milestones over the next 2 years. Next slide 13, please. I'd like to now focus on our promising mid-stage pipeline. We are quite energized by recent developments in our orexin franchise. Earlier this year, we advanced TAK-861, our oral orexin program, into phase IIB.
Thanks to our knowledge of the narcolepsy space, experience with orexin agonists, and close site engagement, we were able to start phase IIB studies in both narcolepsy type 1 and narcolepsy type two within days of establishing proof of concept. We recently started enrollment in our long-term extension study that will provide valuable insights on both long-term safety as well as efficacy. We recently presented data for TAK-925, our intravenous orexin agonist at the International Anesthesia Research Society. There is significant unmet need in post-anesthesia recovery due to respiratory depression caused by anesthetics, leading to complications and admission to the intensive care unit. In our study, healthy volunteers recovering from opioid-induced respiratory depression had significant benefits following TAK-925 administration. In this trial, we saw the potential of TAK-925 to reverse respiratory depression while maintaining analgesic effect, thus having the potential to reduce complications.
TAK-925 is now recruiting in a large phase II study to explore potential postoperative benefits in patients with obstructive sleep apnea and others at high risk for respiratory complications. We are evaluating accelerated paths to approval in a variety of surgical settings. Next, TAK-227 is a potential first-in-class therapy designed to prevent the immune response to gluten in celiac disease, and is now the most advanced program in our celiac disease portfolio. These are the first of many new molecular entities that will emerge from our rich and transformative early to midstage pipeline, which we are confident will add to our growing late-stage portfolio. Next slide, 14, please. My last slide. 2022 was a strong year for our pipeline. In addition to the progress already mentioned, we had significant life cycle advances for our marketed growth and launch products.
Based on the progress in 2022, in the coming year, we have the potential approval of ENTYVIO subcutaneous in the U.S. for ulcerative colitis. The potential approval of HYQVIA as a maintenance therapy for CIDP in the U.S. and Europe, potentially a large growth driver for plasma-derived therapy. Alofisel, our mesenchymal stem cell therapy, will have a phase III readout. If positive, we plan to submit a BLA in the U.S. for complex perianal fistulas this year. We expect these data to support the concept of cell-mediated closure, which could drive significant growth for Alofisel. Overall, we are pleased with how we progressed the pipeline in fiscal year 2022, and excited about the strong momentum and meaningful advances we can make in 2023. Thank you, and I will now turn it over to Costa.
Thank you, Andy. Hello, everyone. This is Costa Saroukos speaking. Today, I'll walk you through the financial highlights of our fiscal 2022 full year results and our outlook for 2023. Starting with fiscal 2022 results. I'm pleased to say that it was an excellent year for the company as we delivered or exceeded management guidance and booked a record JPY 4 trillion in revenue and core operating profit of almost JPY 1.2 trillion. Starting from the top line, core revenue for the full year was JPY 4.03 trillion, or approximately $30.3 billion. Despite the entry of VELCADE generics in May 2022, we delivered solid revenue growth, up 3.5% versus prior year at constant exchange rate, driven by our growth and launch products.
These products now represent 40% of total revenue and grew at 19% on a constant exchange rate. Reported revenue growth was 12.8%, with business momentum and FX upside more than offsetting the impact of a JPY 133 billion gain from the sale of the Japan diabetes business that was booked in Q1 of the prior year. Core operating profit grew at 9.1% at a constant exchange rate to JPY 1.19 trillion, breaking the JPY 1 trillion threshold for the first time in Takeda's long history. Our core operating profit margin was 29.5%, an increase of 1.6 percentage points on a year-over-year basis. This year-on-year margin improvement is an indicator of our financial discipline and our ability to control costs.
In fact, at constant exchange rate, our SG&A spend was lower than last year. Reported operating profit grew at 6.4% versus prior year, overcoming the high hurdle set by the gain on the diabetes portfolio in the prior year. Free cash flow for fiscal 2022 was JPY 446.2 billion, but excluding the $3 billion upfront payment we made in Q4 for the acquisition of TAK-279 from Nimbus, it would have been JPY 837.3 billion or $6.3 billion. As a reminder, the total upfront consideration for TAK-279 was $4 billion, and the remaining $1 billion will be paid in the first half of fiscal 2023. We finished March with net debt to adjusted EBITDA of 2.6 x.
If we exclude the Nimbus upfront payment from the calculation, it would have been 2.3 x, meaning we would have achieved the low 2s deleveraging one year ahead of our target. This closes the chapter on the last major financial target from the Shire integration. Going forward, we'll continue to focus on financial discipline and maintaining solid investment-grade credit ratings, but we are no longer in a phase of rapid deleveraging. After a record year for core earnings in fiscal 2022, we face significant loss of exclusivity headwinds in 2023, making it a challenging year. Momentum of our growth in launch products is expected to largely offset the revenue impact of losses of exclusivity, predominantly from Vyvanse in the U.S. and AZILVA in Japan. However, year-over-year revenue and profit growth will also be impacted by lower expectations for coronavirus vaccines in Japan.
In fiscal 2022, we booked almost JPY 60 billion in revenue for Nuvaxovid and Spikevax. We expect the contribution in fiscal 2023 to be minimal. On the OpEx line, we will stay disciplined to limit the margin impact from generic entry of Vyvanse and AZILVA, which are high-margin products. That said, we will not compromise on making the necessary investments in R&D and data and digital to secure long-term competitiveness. Lastly, but importantly, we are updating our capital allocation policy to reflect the achievement of our de-leveraging target with a planned dividend increase, our first in 15 years, to underscore our confidence in the mid to long-term growth outlook of the company. Slide 17 shows our results versus full year guidance for fiscal 2022.
We're delighted with our performance as we delivered growth at a constant exchange rate at or above management guidance for revenue and profits. For core revenue, we achieved strong top-line growth of 3.5% at the high end of our guidance for low single-digit growth, driven by our growth and launch products, which more than offset the impact of VELCADE generics from May 2022. Core operating profit grew at 9.1%, also at the high end of our guidance range for high single-digit growth. This strong performance was driven by the expansion of high-margin products, coupled with our OpEx discipline to deliver operating leverage.
For core EPS, I'm pleased to say we exceed the guidance of high single-digit growth, growing at 13.9 at constant exchange rate, reflecting strong business performance and a more favorable core tax rate due to recognition of previously unrecognized tax losses. Finally, on free cash flow, the Nimbus deal was not factored into our estimates when we gave a forecast of JPY 650 billion-JPY 750 billion at Q2 earnings, which itself was an upgrade from the initial guidance of JPY 600 billion-JPY 700 billion given in May last year. Including the Nimbus payment we made in Q4, free cash flow for fiscal 2022 was JPY 446.2 billion. However, excluding Nimbus, it would have been JPY 837.3 billion, well exceeding our forecast.
Slide 18 goes into more detail on the full year 2022 performance versus prior year. As already highlighted, we delivered excellent results this year, driven by business momentum demonstrated in our constant exchange rate growth in the far right column of the slide. If we look at the actual numbers, we also saw a significant tailwind from FX due to the depreciation of the JPY, resulting in double-digit reported and core revenue growth and reported in core EPS growth of over 30%. I'd like to highlight again our core operating profit of almost JPY 1.2 trillion, the highest amount in Takeda history, with a 1.6 percentage point year-on-year margin improvement to 29.5%. Core EPS for the year was JPY 558. Let me go into more detail on the full year revenue performance versus prior year on slide 19.
On the left is a waterfall chart for reported revenue, which grew at 12.8% year-on-year, with business momentum and FX favorability more than offsetting the impact of JPY 150 billion in one-off revenue we booked last year related to asset transfers, including the Japan diabetes portfolio, and JPY 150 billion of loss of exclusivity impact, most significantly from VELCADE in the U.S. Core revenue on the right-hand side adjusts the 2021 baseline to exclude the one-off revenue booked from asset transfers last year. You can see that our business momentum, driven by the growth in launched products, delivered 3.5% growth at constant exchange rate, with the additional tailwind of FX raising total core revenue growth to 17.7%.
On slide 20, you can see the key driver of top-line growth is our portfolio of growth and launch products, which generated approximately JPY 1.6 trillion or 40% of total revenue, with 19% growth at constant exchange rate. Incrementally, these products added JPY 435.8 billion or $3.3 billion of revenue compared to last year. This is the portfolio driving total company growth this year despite the VELCADE loss of exclusivity, and we expect that continued momentum of these products will allow us to largely offset the impact of loss of exclusivities, including Vyvanse in 2023. Within our five key business areas, GI, our largest area by revenue, grew at 9% on a constant exchange rate basis.
This was spearheaded by ENTYVIO, which grew at 15% and is now the number one prescribed biologic for IBD in the U.S. We will see significant growth potential for ENTYVIO towards its peak sales estimate of seven and a half to nine billion dollars, achieved an important milestone with the recent resubmission of the subcutaneous formulation in the U.S. In rare diseases, we see continued demand and geographic expansion for TAKHZYRO, including recent listings on the NRDL in China to deliver growth of 25%. We have also delivered a very successful launch of LIVTENCITY, with 98% of transplant centers in the U.S. having now initiated therapy on at least one patient. Real-world physician utilization demonstrating longer duration of treatment than we had initially anticipated.
PDT Immunology continues to be very strong, with 15% growth, including 16% growth of immunoglobulin and 19% growth of albumin, reflecting strong demand. We have continued to expand our plasma donation center network, adding 29 centers in the fiscal year to date, bringing our total global footprint now to 233 centers. I'm very pleased to announce that we have now achieved our target of over 65% increase in plasma supply and manufacturing capacity versus the 2018 baseline, one year ahead of plan. This is despite the COVID-19 pandemic, during which we consistently outperformed the industry and met all our planned commitments to patients. A fantastic achievement by the team and a testament to how successfully we are managing our end-to-end PDT business.
We are continuing to make investments in data, digital and technology-led transformation, and capacity expansion across the value chain, including plans to increase our donation center network by another 20+ centers in fiscal 2023, and investments across the manufacturing network, including the recently announced facility we plan to build in Japan. We intend to give an update on our future capacity increase goals at a PDT-focused investor event later in the fiscal year. Next is Oncology, which is declining year-on-year as expected, given that VELCADE generics entered the U.S. market from May 2022. Excluding VELCADE, the rest of the portfolio grew 5%, driven by ALUNBRIG, EXKIVITY, Etcetera, and Exclusiv. Finally, Neuroscience continues to perform very well, with growth of 12% driven by Vyvanse and Trintellix.
As we have previously communicated, we expect generic versions of Vyvanse to launch in the US in August of 2023, which means that we do expect the Neuroscience business to decline in the coming year. Finally, the other segment is declining mainly due to some regional loss of exclusivities in Japan. This other segment now includes our newly launched vaccine, Qdenga, for the prevention of dengue disease, which we are also classifying as our newest growth and launch product. We've already had a number of important approvals, including Brazil, Indonesia, Thailand, and the EU, and we look forward to ramping up our vaccine rollout in 2023. The other segment also includes our COVID-19 vaccines in Japan. These generate almost JPY 60 billion in revenue in fiscal 2022.
As we look ahead to fiscal 2023, we expect them to decline based on lower market demand and the Japanese government's canceled purchase order for the vaccine. As a result, we expect to see minimal revenue contribution from the COVID-19 vaccines in 2023, and therefore, they will no longer be classified as growth and launch products going forward. Moving down to the P&L on slide 21, we show the key drivers of reported and cooperating profit performance for fiscal 2022. Reported operating profit was JPY 490.5 billion, growing at 6.4% versus prior year. With business momentum and FX benefits more than overcoming the impact of the sale of the Japan diabetes portfolio, which generated or contributed JPY 131.4 billion to reported operating profit in fiscal 2021.
On the right side of the slide, you can see the core operating profit was almost JPY 1.2 trillion, with our growth and launch products, coupled with OpEx discipline, driving a very strong performance of 9.1% growth at constant exchange rate. FX was an additional benefit, resulting in actual cooperating profit growth of 24.4%. Slide 22 shows our net debt balance compared to the end of March 2022 and demonstrates the continuation of our steady deleveraging progress from 2.8 down to 2.6 x. This number reflects the $3 billion upfront payment that we made to Nimbus in Q4 for TAK-279.
Excluding this payment, we would be at 2.3 x, which is comfortably in the low 2s, a target we had set to hit by fiscal 2023 as part of the Shire integration. With this target achieved, we can close out the final chapter of the integration and look ahead to a new phase of capital allocation. We continue to make progress with debt repayments in fiscal 2022, paying over JPY 280 billion, the amount of debt on our balance sheet in Japanese yen terms increased over the period due to the depreciation of the yen versus the dollar and the euro, and this movement is captured within the other bar in the chart. As a reminder, the depreciation of the yen also benefited EBITDA, which means the impact of FX on our leverage ratio is minimal.
We have structured the currency denomination of our debt to mirror our cash flow, which ensures that over time, we'll be able to pay down debt with minimal impact from FX movements. On slide 23, you can see our debt maturity ladder as of March 2023. We paid off a significant amount of debt again this fiscal year, including a total of $1.2 billion of higher interest USD-denominated bonds and EUR 750 million of floating rate bonds. We also did some recent refinancing of 2022 and 2023 JPY-denominated loans, with new maturities in fiscal years 2028 and 2030. As a result, we are able to maintain a very comfortable debt maturity profile over the coming years.
Importantly, our debt remains at 100% fixed rates, with a weighted average interest of approximately 2%. Moving to slide 24 and our outlook for fiscal 2023. We've communicated for some time, fiscal year 2023 will be a challenging year due to loss of exclusivity impacts, including Vyvanse in the U.S. and AZILVA in Japan. In fact, the total revenue impact from generic entry is expected to be approximately JPY 330 billion this coming year. We expect our growth in launch products to offset much of this impact on revenue, we also face the additional headwind from lower expectations from COVID-19 vaccine revenues. Starting with core revenue, we are forecasting JPY 3.84 trillion or a decline of 4.7%.
In addition to the loss of exclusivity in coronavirus impact, this also reflects a slight headwind from F.X. Excluding that on a constant exchange rate basis, our management guidance is for a low single-digit % revenue decline. Core operating profit is being impacted by product mix due to high-margin products facing generic entry, but we are striving to minimize the impact through OpEx discipline. We still forecast to land above JPY 1 trillion core operating profit in fiscal 2023, with a year-on-year decline in the low 10s percentile on a constant exchange rate basis. Core EPS is projected to be JPY 434, with a year-on-year decline in the low 20s percentile, reflecting a more normalized tax rate versus the benefit we had in fiscal year 2022.
We expect reported EPS to decline by 56%, reflecting some one-time items on top of the headwinds impacting our core numbers, including an expectation for higher restructuring costs and lower financial income. Free cash flow, where we expect to generate between JPY 400 billion-JPY 500 billion next year. Please note that this forecast reflects JPY 180 billion of CapEx related to the remaining $1 billion upfront payment for TAK-279, the Nimbus acquisition, and the $400 million we paid to HUTCHMED in April for fruquintinib. Adjusting for those deals, you can calculate that free cash flow would be in the JPY 600 billion-JPY 700 billion range, which is the same as our initial forecast for fiscal year 2022.
We believe this guidance demonstrates our ability to weather the storm through the loss of exclusivity headwind in the coming year. Importantly, we are confident in our ability to return to growth in the near term and to continue to grow the business into the future. Underscoring this confidence and supported by our robust cash flow outlook is our decision to adopt a progressive dividend policy with an increase from JPY 180 to JPY 188 in our fiscal 2023 forecast. On the next couple of slides, let me go into a little more detail on the pushes and pulls in fiscal year 2023 forecast. Starting with revenue on slide 25, you can see that the growth and launch products are expected to offset a significant portion of the JPY 330 billion loss of exclusivity impact.
However, we are now expecting the additional headwind of COVID-19 vaccine revenue declining year on year. In fiscal year 2022, we recognized revenue of JPY 58.9 billion from our COVID vaccine program in Japan, higher than our forecast of JPY 50 billion. However, revenue is expected to decline in fiscal 2023 based on outlook for lower demand and the Japanese government cancellation of the Novavax supply contract in February of 2023. Previously, we had been expecting coronavirus vaccine revenues to grow in fiscal 2023, which would have enabled us to maintain total revenue broadly flat on a constant exchange rate basis.
However, this change in vaccine expectation is the main reason why we are now projecting low single-digit decline at constant exchange rate. On an actual currency basis, we also expect FX to be a headwind in 2023, resulting in a total revenue decline of -4.7% year-over-year. Slide 26 shows the factors impacting our core operating profit forecast. We have bucketed the loss of exclusivity and coronavirus impact together here. In total, these do represent higher margin products, which is why the impact on profit growth is more substantial than the impact on revenue. I did want to highlight on this slide that we are continuing to make the necessary investments in R&D and data and digital to support the long-term growth of the company, but that we are being very disciplined in our approach to OpEx.
As you can see from the chart, while we plan to increase R&D investment by 4%, we expect non-R&D OpEx to be flat year-on-year on a constant exchange rate basis, despite the inflationary challenges that we face. FX is also a headwind to our forecast, but in spite of that, we are still projecting to deliver cooperating profit of more than JPY 1 trillion in fiscal year 2023. Moving on to slide 27. I want to speak to the updates we are making to our capital allocation policy. You will recall that previously, our policy consisted of three pillars: investing for growth, deleveraging rapidly, and shareholder returns. As we have shown today, we would have reached low twos net debt to Adjusted EBITDA in March 2023 if we exclude the upfront payment to Nimbus for TAK-279.
We are really proud of this deleveraging achievement as it reflects on the excellent work we have been doing day to day to grow revenues while maintaining strong OpEx discipline and continuing to invest in our future growth. We have made great progress in creating a strong financial foundation. Precisely because of that progress, we are now able to enter into a new phase. While focusing on maintaining our solid investment-grade credit ratings, we no longer include deleveraging rapidly as a core pillar of our capital allocation policy. Meaning we can pivot more towards investing in growth and shareholder returns. Investing for growth will continue to consist of strategic investments in internal and external opportunities to enhance the pipeline with the recent Nimbus and HUTCHMED deals as a good example.
We will also continue to invest in maximizing the potential of our marketed portfolio while maintaining our focus on expanding our plasma-derived therapies business to reinforce our leading position and maximize our growth potential. With regards to shareholder returns, we are adopting a progressive dividend policy, which means our intention will be to increase or maintain the dividend each year going forward. The incremental amounts may fluctuate each year depending on our cash flow outlook. For fiscal 2023, we are raising the dividend to JPY 188 per share from JPY 180 per share. Share buybacks when appropriate, also remain an option for reinforcing shareholder returns. Although we do not anticipate implementing a buyback in the immediate future. To close out today's presentation, I'd like to revisit the slide Christophe showed you, outlining our long-term commitment to growth and shareholder returns.
While fiscal year 2023 will be a challenging year, the headwinds we face are temporary, we expect to return to sales, profit, and margin growth in the near term. Our growth and launch products continue to deliver strong momentum, representing 40% of our portfolio and growing at 19% at constant exchange rate in fiscal year 2022. We expect these products to further expand over the coming years, including our newest launch, QIDENGA. On top of that, we expect further launches from our late-stage pipeline such as Pacritinib, TAK-755, and soticlestat in the near term, TAK-279 and Fazirsiran later in the decade. Once Vyvanse and AZILVA are behind us, we anticipate limited loss of exclusivity exposure until ENTYVIO biosimilar launch, potentially as late as 2032.
By then, we plan to further build out our pipeline and portfolio through internal R&D efforts as well as asset-specific business development, enabling us to secure long-term growth into the next decade. Meanwhile, we will remain focused on cost discipline, with data and digital playing a huge role in how we optimize our cost base and increase productivity, supporting our return to low to mid-30s operating profit margins. We're extremely confident in the near term, as underscored by our dividend increase this year and look forward to delivering growth and shareholder returns over the near, medium, and long term. Thank you. Now we'll open it up for some Q&A.
I'd like to take questions from the participants. In this Q&A session, we have Christophe, Andy, Costa, and Ramona Sequeira, Global Portfolio Division President, Julie Kim, U.S. Business Unit President, Milano Furuta, Japan Pharma Business Unit President, Giles Platford, PDT Business Unit President, and Teresa Bitetti, Global Oncology Business Unit President, are also on the panel. If you have a question, please click a button of raising your hands in Zoom. If you are participating in the Japanese line, please ask your question in Japanese. If you are on English line, please speak in English. If you set the translation feature off, then you'll be able to ask a question in either one of the languages. Please kindly limit the number of the question per person to up to two.
The first question is, Yamaguchi-san, Citi group, please.
Thank you. This is Yamaguchi, Citi. Thank you very much. This is Yamaguchi. I will make sure to state that first of all. The first question is, it's just the beginning of March 2024, but, because March 2024 is now very clear, investors are interested in March 2025, where the Vyvanse cliff is getting much smaller, but still there is. Do you see March 2025 sales gonna grow, I understand that, but operating profit is going to come back to growth as well? That's what you see? That's the first question. The second question is that, Nimbus product, dose finding questions.
Even though, it is a great data so far, but, do you see there's a need to add one more higher dose, like a 45 milligram per day to push up the efficacy because there is a good balance of efficacy and side effects? Thank you. That's the second question.
Thank you, Yamaguchi-san. I think for the first question on the growth outlook for year-end in March 2025, I'd like Christophe to answer that. Your question on TAK-279, whether we would do any further dose finding, I'd like to ask Andy to comment on that.
Thank you, Yamaguchi-san. It's Christophe. We, if you look, our growth is very much impacted by Vyvanse, especially because it's such a big product. We have modelized a very significant decline of Vyvanse starting in August, 2023. There will still be, have been an impact on fiscal year 2024, but much more, much less than 2023. That's a big parameter, if you like, that we'll have to monitor moving forward. We expect to return to growth in within near term because we are not 100% sure about the Vyvanse decline. If it is as we have forecasted, we will rebalance in 2024.
If, for example, the decline of Vyvanse is less in 2023, more in 2024, it could have an impact on our return to growth. For sure, once the Vyvanse is washed out, if you like, our growth on most product are there as we continue to grow. We have much less exposure to generic until the introduction of biosimilars of ENTYVIO. We will return to growth in revenue on profit, and our margin will start re-expanding, if you like, towards low to mid 30s as it is our goal.
Thank you. It's really up to the Vyvanse sales decline speed, which could be quicker or slower. That's gonna have a legitimate impact for next fiscal year, which is still unknown. That's what you're saying?
Yeah. Yeah. Look at our forecast. I mean, this is our best assessment at the moment.
Right.
We'll have to monitor that because it's Vyvanse is also a controlled substance.
Right.
More complicated than usual. That could have a big swing on our 2023 actually numbers, but as well as 2024. At the moment, that's our best assessment. If you have more specific question on Vyvanse, Julie is here. She can answer as well.
Thank you.
Hey. Hello, Yamaguchi-san. It's Andy. On your question with respect to TAK-279 and dose ranging, a couple of comments. The first is that we feel very confident in the dose range that we have and the 30 milligram dose. We're not intending to do additional dose ranging at this point in psoriasis. You know, we feel that with the 30 milligram dose, we have a best-in-class molecule with a best-in-class dose. We do think in other indications based on the genetics of TYK2 biology and based on some of the preclinical studies, we think that there's a potential that we may need higher exposures and activity in some diseases, for example, IBD. We'll be considering additional dose ranging in other diseases.
It, the biology is quite complex with TYK2, as you know.
You're talking about the inhibition of multiple pathways, multiple inflammatory pathways, many of which are actually quite difficult to measure in humans. We feel with the 30 milligram dose, we have outstanding 24-hour coverage to support a best-in-class profile in psoriasis.
Thank you.
Great. Thank you, Yamaguchi-san. Okay. We would like to take the next question. For the next question, I would like to call on Tony Ren from Macquarie. Tony, please unmute and ask your question.
Sure. Yeah. Thank you for the opportunity to pose this question, and congratulations on a set of very strong results and achieving your deleveraging target, I think slightly ahead of schedule. A couple questions from me. The first one is also on the TYK2 TAK-279 program. Just wanted to get some understanding on how many trials you guys are looking to run. I think looking at the slide. Just give me one second. Going back to the slide here. I think if I look at slide 12, looks like you guys are proposing two trials plus a head-to-head trial against an opponent, likely deucravacitinib. I just wanna understand your thinking on that, and perhaps a little bit also on the dose.
You guys circled the 30 milligram dose on that slide 12. Is that the dose you guys are thinking about taking into your phase III studies? This is probably more of a business question, not a clinical development question. Will you guys put the TAK-279 under the GI business unit? That's on TAK-279. Also, you know, about your ENTYVIO subQ submission, that you guys handed in to the U.S. F.D.A. in April. I recall, this application was rejected by the U.S. F.D.A. related to the injection device back in 2019. Just wanna understand how important do you think this will be in possibly delaying biosimilar competition?
Great. Thank you, Tony. I think the first question on the study plans for TAK-279, if Andy could kindly comment on that. Then on the subcutaneous for ENTYVIO, I don't know, maybe perhaps Andy, but then maybe also Julie might want to add some comments on that from the U.S. business perspective as well.
Great. Thanks, Christian. Thanks, Tony. TAK-279 is hands down our most heavily resourced program at this point, and we have a project team that underneath it has a group that's focusing in dermatology, in inflammatory disorders and then in exploring additional range of additional disorders. In terms of the number of studies, it'll be quite significant. Firstly, we'll be running a half dozen phase I studies this year to support the overall program and registration across multiple indications. I know that's not what you're asking, but those are critical as we move forward to filing to understand activity in special populations, to understand drug-drug interactions, et cetera. All part of a regulatory package. For psoriasis, we'll start 2 phase III studies this year.
We'll start a head-to-head study around deucravacitinib next year minimally. Then for psoriatic arthritis, as I mentioned, we were planning at risk for favorable phase II data. We're planning for a phase III study to start early next year. We're also going to be starting phase IIB studies in Crohn's disease and ulcerative colitis and lupus. Our aspirational goal is to have those studies started in this fiscal year or early next year. It's a very substantive program and, you know, by the end of this year, actually, our hope is that we have an ongoing phase III program, multiple ongoing phase IIB programs, phase I studies to support registration and then an exploratory package to look beyond those 5 core indications. I think, Julie, I'll hand...
Should I hand it over to you to talk a bit about the business construct for TAK-279 and the ENTYVIO?
Oh, the.
Sure.
-dose of, 30 milligram.
I'm sorry. Our intent is to move forward with the 30 milligram dose. Of course-
Okay.
That's gonna require discussions with regulatory agencies before we have a final decision on dose. Sorry about that, Tony.
Okay. Great. Thanks.
Yes. In terms of the way that we're looking at TAK-279 from a commercial perspective, I'll share a few comments with you. First, when you look at our launch of LIVTENCITY was in a new therapeutic area for us, and we were able to build a commercial team and launch that product successfully. We're confident in our ability to build the commercial capabilities to support TAK-279 when it is ready to launch in psoriasis. In addition, we're also very excited about the opportunity for TAK-279 to expand our presence in IBD beyond ENTYVIO.
About the 2019 FDA rejection, was that related to the medical device used for injection? You know, would this be critical in delaying a biosimilar competition till 2032?
This will not have an impact in terms of delaying biosimilar competition, but in terms of the FDA response in 2019, yes, it was related to the device, and there was no concern about the product itself, and we're very much looking forward to being able to launch ENTYVIO subQ in the U.S. later this year. It's been doing quite well in other geographies, and Ramona can speak to that if needed.
Okay, great. Yeah, thanks. Actually, I also have a question on the fruquintinib, but I'm happy to go back to the queue if there are a lot of people waiting.
Thanks, Tony. Maybe we'll move on to another questioner for now, but we'll come back to you later.
Sure.
if necessary. Thanks, Tony.
Sure. Mm-hmm.
I'd like to take the next question then, from JP Morgan, Wakausan.
This is Wakao from JP Morgan. I have two questions. The first is after 2024, the focus for the R&D. In the 2024, you don't have much the large budget for the R&D. According to the explanation, TAK-279 is also going to run for the R&D. There will be a net growth for the R&D even after 2024. The OpEx, then the 30% or to the mid will be the amount of the budget you're considering for the R&D, and also that's the balance of the Op margins. Second is regarding the increase of the increase of share and the diverging and the increase the stock share.
You indicated this would be good, but in what occasion are you going to increase the share, cost of the share? Also if that profit will increase, then are you going to increase the stock price or next term or the next? There's not that major, the return, re-return of the X finance. According to, considering from this, the current situation, from the next year on, are you also going to increase the stock price?
Thank you, Wakausan for your question. The first question was on the outlook for R&D expenses from fiscal 2024 and beyond, what impact that could have on our margin targets. The second question on the criteria for a dividend increase. Maybe I'd like Costa to take these questions, and then perhaps, Andy, if you have anything to add, you could jump in later.
Sorry, Chris. You've broken up. Can you repeat those questions again?
Yes, certainly. The first question was on the outlook for R&D expenses from fiscal year 2024 onwards. Obviously, we have with TAK-279 coming into the pipeline, is that going to need a sign
ificant step up in R&D spend from fiscal 2024? If so, what impact does that have on our target to return to the low-to-mid 30s? The second question was on the dividend increase. What would be the criteria for dividend increases in the future? Is it linked to profit growth, cash flow outlook? What are the criteria?
Right. Wakausan, thank you very much for your question. You know, when we communicate the getting back to returning to our low-to-mid 30s in the near to medium term, that factors in the incremental investment in R&D. It also follows the, you know, moving pipeline as it progresses as well. In our assumptions, in our financials, it does include that. You know, what we're seeing is a very much, you know, laser focus on the other operating expenses, in particular SG&A. We're really doubling down on our focus on finding productivity gains there. In fact, like you saw in fiscal year 22, we did increase R&D, but, you know, SG&A was actually declining at a constant exchange rate. We're leveraging data digital technology throughout the value chain.
We're seeing improvements in manufacturing, in sales and marketing and back office G&A. We'll continue down that path, and we'll again, align to our capital allocation policy. We're investing for growth, and part of that is definitely investing in R&D, as the pipeline declares itself. At the same time, in fiscal year 23, we're doubling down on our focus on R&D, factoring in TAK-279, TAK-861 and other TAK-999, yet the R&D cost is increasing at 4% at a constant exchange rate. Andy is also managing the budget based on prioritization as well. That's really something that we'll continue to keep an eye on. With regards to dividend, we're very much excited about the dividend policy or the capital allocation policy.
One reason, as I highlighted, we've been able to, you know, really deleverage faster than what we expected. We did get down to low two times, excluding the TAK-279, Nimbus deal. Off the back of that closes the Shire financial criteria that we had to address, and it really switches the focus, and we pivot more towards investing for growth and shareholder returns. This dividend policy, which we've added is a progressive dividend policy where we increase or maintain each year. The determining factor will be, you know, what is determining whether we increase the dividend. There'll be some financial metrics that we look at. For example, free cash flow ratio to the dividend and also dividend payout ratios, et cetera.
We will look at all these ratios and make those decisions at the executive team and at the board each year and communicate that accordingly. Thank you very much.
Thank you very much.
Thank you. Well, I would like to move on to the next question. Next is BofA Securities, Shinichiro Muraoka-san, please.
Shinichiro Muraoka. Can you hear me?
Yes, I can. Thank you.
I have two questions. One is on PDT. Concerning PDT business, the supply and manufacturing capacity expansion, over 60%. You achieved it with 1 year acceleration. That's great achievement. In your pipeline, TAK-771 and 881 are also ongoing. These assets, whether or not they would just further accelerate the expansion of the PDT business. That's my first question. Second question is about TAK-755. In cTTP, you had a positive result. Currently, I think you are preparing or filing in the U.S. Whereas iTTP seems to be a little delayed. If so, what is the reason behind?
Thank you for your question. The first question on plasma bio therapies, achieving the 65% capacity a year ahead of plan. What were the drivers for that? Also referring to some of the programs we have in development. For example, TAK-881 in the pipeline and what the potential impact of these could be in the future. I'd like to ask Giles to answer that question. The second question was on TAK-755. We've talked about our submission on track in cTTP, but has there been a delay with the iTTP program? If you can provide any comments on that, I'd like to ask Andy to comment on that one.
Yes, thank you very much for the question. This is Giles. We're very happy to announce that we have achieved the commitment that we made in 2019 to expand our capacity between 2018-2023 by more than 65%. We have achieved that one year early, thanks to continued and consistent investment in capacity expansion, both in our plasma sourcing network and across our network of manufacturing sites around the world, combined with improvements in efficiency and productivity. We are confident that the investments that are ongoing to expand our capacity and further improve efficiency will support the growth both of our on-market portfolio, our near-term launches like HYQVIA and C1-INH, which is expected to be approved and launched in the U.S. and Europe in fiscal 2023.
As well as the launch of our pipeline, including TAK-881, the high concentration facilitated SCIG, which will start phase III study in fiscal 23. Thank you.
Megano-san, it's Andy Plump. Just on your question with respect to 755. We're on track for submission in cTTP. You know, the results have been quite extraordinary against the standard of care, both in terms of efficacy and safety. On track to submit in the U.S. and then plans to expand globally. For ITP, the original proof of concept study that we had done was on top of standard of care, which is quite burdensome, the plasma exchange. It was actually difficult to demonstrate significant differences of the combined therapy. Actually, we're in the process now of starting a second proof of concept study with a very different approach that's intended to fundamentally change the standard of care, where TAK-755 will go up against the standard of care plasma exchange.
Plasma exchange is quite burdensome, high volumes, poorly tolerated and variable efficacy. TAK-755, very low injection volume, very well tolerated. We're quite excited to get that study up and running this year and see the results.
Thank you very much.
Thank you. Next question from Morgan Stanley, Muraoka-san. Please ask your question.
Hello, from Morgan Stanley. My name is Muraoka. Do you hear me?
Yes.
Thank you. AAV gene therapy development was discontinued. Let me clarify. Gene therapy, cell therapies will continue, but specifically AAV development is discontinued. That's my understanding. Is that right? Why AAV only is discontinued? Can you explain the background, please? That's my first question. Second question. PDT Japan, plant to be constructed. To have a plant in Japan, what's the advantage? That's my question. Is that a cost, regulations or any other factors? In Japan to have a plant and, what are advantage? I don't know much in pharma or other industries. Can you explain that, please?
Research in AAV gene therapy. The question is, will we continue to research other gene therapies and cell therapy? If it's only AAV that we're discontinuing, what is the reason for that? I'd like to ask Andy to comment on that question. The second question on our recently announced new plasma-derived therapies manufacturing facility in Japan, what are the advantages of building that facility in Japan? Is it from a cost basis or a regulatory basis? I'd like to ask Giles to comment on that.
Thanks, Chris, thanks, Morikawa-san. Firstly, you're correct. We made the focused decision to discontinue AAV gene therapy. We're still very much engaged in cell therapy, in particular in our plasma, in our human-derived NK and gamma delta platforms. We have earlier efforts in non-viral gene therapy. The question, why did we decide to discontinue the AAV platform? Two comments. The first is, we're always looking at our portfolio and making prioritization decisions to ensure that we're investing in the programs that are most likely to emerge and deliver transforming medicines to patients and drive growth for Takeda. AAV gene therapy has two main ch
allenges.
The first is that there are a substantial number of individuals in the population that have neutralizing antibodies to AAV and can never be administered an AAV, gene therapy. That's probably somewhere in between 30% and 50% of the population. Secondly, there's a limited repertoire of tissues that you can target AAV to.
We actually had made great progress in our platform, but as we started to move forward, as we started to recognize some of the cost structures which have grown considerably over the years, as we started to experience some of the challenges in the external landscape, the regulatory and payer bars started to change to what they were when we started this program four or five years ago, we came to the conclusion that while there's still opportunity, our resources are better invested in other platforms.
With regards to the question on the investment in an end-to-end manufacturing facility in Japan, plasma-derived therapies remain a high unmet need area in Japan. While demand is growing, timely diagnosis and treatment rates with immunoglobulins are currently much lower than other parts of the world. Regulatory efforts are underway to elevate the standard of care in Japan and introduce more of our global plasma-derived therapies portfolio into Japan through the next decade to improve patient access. This will be our first global plasma facility in Japan, our biggest ever manufacturing investment in the country, and the largest facility of its kind in the country, reflecting our commitment to our long and proud heritage and to Japanese patients.
Investment in a state-of-the-art facility with global processes and capabilities that fully leverage the latest automation and digitalization technologies will enable us to better serve the growing market in Japan sustainably in line with local requirements to secure local supply, as well as to add incremental capacity to our global network. We'll be the only leading company to have both local and global plasma products in Japan, and the only local fractionator to have a global footprint, bringing greater supply resilience domestically and overseas. I would also say that investment in existing Takeda manufacturing location where we have multiple operations like Japan, enables us to find cost savings, synergies and efficiencies by leveraging adjacent infrastructure, services and relationships. Thank you.
Thank you very much for the question. Okay, for the next question, we would like to take from TD Cowen, Michael Nedelcovych. Please unmute and ask your question.
Hi. Thank you for the question. There's been a recent proliferation of oral agents in development for immunology indications, including IBD and dermatology. This would seem to be a near midterm risk to drugs in your portfolio like vedolizumab, especially the subcutaneous formulation, but of course, also an opportunity if those markets do shift more toward oral agents from biologics, given your own development efforts in that space. I'm curious how you think about the competitive landscape across these therapeutic areas over the next, say, five years, and where you see Takeda's participation being most important. Thank you.
Thank you, Michael, for that question. Perhaps I'd call on Ramona to answer this question.
Yes, absolutely. It's Ramona here, Michael. Thanks for the question. You know, that is something that we're keeping a close eye on really across our therapy areas. Of course, as you mentioned in IBD, and you know, our autoimmune areas in general. That was one of the drivers behind our acquisition of TAK-279. You know, I would say we have a very, very high bar for efficacy and safety in this space. You know, if we believe something is oral and can come in and really transform the treatment paradigm, that is where we wanna focus. We believe we have that with TAK-279. It's a product that can come in and actually transform the treatment paradigm in psoriasis and the other areas, for instance, IBD, where we'll be investigating it.
If we feel something is gonna come in as an oral and just provide more convenience but not really be transformative in the treatment paradigm, we are not going to invest and focus there. We're looking at assets across the board, and we're keeping a close eye on things, including the one in development for IBD, as you mentioned, oral Veto. Really, we'd like to see a little bit more data before we determine if that's really gonna meet the bar that we have set for efficacy and for transforming the treatment paradigm. Thank you.
Thank you.
Thank you very much. Okay, I think we probably have time for one final question. I would like to call on Miki Sogi from Bernstein to ask a question. Please unmute and ask your question.
Thank you very much. I have a couple of question regarding TAK-279. On the page 19, you disclose the high level of the plan for development program. My first question is, this head-to-head study, this is superiority study or non-inferiority study against the deucravacitinib? Also the duration of study for this head-to-head appear to be much longer than the other phase III studies that you are planning. Is this because of the longer treatment duration or because of the size of the sample size that require a longer enrollments? Thank you.
Andy, would you like to comment on that?
Yeah, no, sure. Miki, thank you for the question. We haven't finalized the design of the head-to-head study yet, but it's our intent to run the head-to-head study 'cause we believe that TAK-279 is a superior molecule and that we can demonstrate that in a clinical study. Secondly, please don't look at the size of the, of the graphic to as an indication of the study timeline. Those are just kind of general indicators as to approximate start times for the, for the various studies.
Thank you.
Okay, thank you for your question. With that, I'd like to bring today's conference call to a close. Thank you very much everybody for participating today. If you have any follow-up questions, please reach out to the investor relations team. Thank you very much and have a good evening or a good day.