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[Interpreted] Thank you very much for joining our Fiscal Year 2021 Third Quarter Earnings Announcement. I am the moderator. I'm Chris O'Reilly, Head of the Global IR. And we have the interpretation button at the bottom of the Zoom. And if you'd like to listen to Japanese, please select the Japanese language. And if you like to listen to English, please select the English channel. And if you'd like to listen to the original audio, please turn the interpretation function off. Before starting, I'd like to remind everyone that we will be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in our most recent Form 20-F and in our other SEC filings. Please also refer to the important notice on Page 2 of the presentation material for today. Today, our presenters as well as the people to answer the questions we have Christophe Weber, President and CEO; and Andy Plump, R&D President; and Costa Saroukos, Chief Financial Officer; and Masato Iwasaki, Representative Director of Japan General Affairs; and Ramona Sequeira, President, U.S. Business Unit and Global Portfolio Commercialization; and Julie Kim, President of Plasma-Derived Therapies Business Unit. And first, we will have the presentation from Christophe, Andy and Costa, and we'll have some time to take any questions from all of you. Let's get started. Please go ahead.
Thank you, Chris, and thank you, everyone, on the phone for joining us today. If you could look at the Slide 4. At Takeda, our vision is to discover and deliver life-transforming treatments, guided by our commitment to patients, our people and the planet. And our growth strategy reflects that vision, and I'm pleased to discuss with you another quarter of growth and progress. In the context of Omicron. I'm so proud of the dedicated and patient-focused colleagues that live our values and work tirelessly to support our mission. This is an incredibly exciting time at Takeda. We are growing faster than ever with competitive scale and a diverse pipeline with approximately 40 molecules in clinical development.
Our portfolio is growing, as demonstrated by 2 new products approved in the past 6 months. As you will see today, our performance in the third quarter of fiscal year 2021 reinforce that we remain well positioned for long-term business growth. We are in a position of strength. We have solid margins, strong cash generation and top line growth driven by our 14 global brands.
We have consistently delivered on the fundamentals, and this quarter is no exception, with year-to-date underlying revenue growth at plus 7.1% and reported revenue growth at 11%. This growth continued to be driven by Takeda's 14 global brands with underlying growth of 12% year-to-date, which we expect to rise to the mid-teens for full year results.
Our diverse portfolio of 14 global brands represent an impressive 42% of our core revenue and should continue to grow. We expect significant revenue growth from our global brands over the near to medium term, particularly as we expand into new markets. Based on the strong third quarter results, we are upgrading our full fiscal year 2021 forecast for revenue, reported and core operating profit, reported and core EPS and free cash flow. Our strong margins will continue to drive important cash flow, which would allow us to invest in our growth drivers while also paying down debt towards our target of low 2s net debt to adjusted EBITDA by the end of fiscal year 2023.
We are confident in our global R&D strategy. We continue to advance highly innovative, life-transforming medicines in oncology, rare genetic and hematology disease, neuroscience and gastroenterology with strategic R&D investments in plasma-derived therapies and vaccines.
And we are delivering with the recent approvals of LIVTENCITY and EXKIVITY. And we just got a new indication approval just last week for VONVENDI. VONVENDI is the first and only routine prophylaxis to reduce the frequency of bleeding episodes in patients with severe Type 3 von Willebrand disease receiving on-demand therapy.
This approval is a significant advancement for those living with this serious disease. And just this week, we also received approval from the European Commission for a new indication for ENTYVIO. ENTYVIO is now approved for intravenous treatment of appropriate adult patients with moderately to severely active chronic pouchitis. ENTYVIO is the first treatment indicated for active chronic pouchitis across the European Union. We continue to invest in developing cutting-edge cell and gene therapies that have the potential to redefine how we treat serious and life-threatening disease. And we continue to actively enrich the pipeline through partnership and targeted acquisitions that align with our core therapeutic areas.
The planned acquisition of Adaptate Biotherapeutics is a good example of this strategy in action. This is a valuable and strategic play for us, adding a novel antibody-based gamma delta T cell engager platform to Takeda's immuno-oncology portfolio.
Following GammaDelta Therapeutics and Maverick Therapeutics, Adaptate is the third immuno-oncology build-to-buy acquisition we announced in less than a year. We go where the science is. You can expect to see Takeda continue to establish strategic collaboration with innovative partners, complementing our world-class laboratories and capabilities. We truly believe that the strength of our portfolio on pipeline set Takeda apart and will fuel sustainable growth. On the next slide, I'd also like to share a few updates on our executive leadership team. This change will help Takeda continue to advance our commitment to transform the life of patients and grow our business at a global scale. First, we are in the midst of a digital evolution that will fundamentally shift how we develop and deliver medicines to patients.
Unleashing the power of data and technology will be crucial to our next phase of growth. We are investing in this area, and I am pleased to announce that Gabriele Ricci has taken on a newly created role of Chief Data and Technology Officer. Gabriele previously led our data and technology effort within our PDT business unit, and he has a vision that will put Takeda at the forefront of this exciting new area. Next, we are increasing our focus on launching our new life-transforming therapies. To do this, we are creating a new global portfolio division, bringing together a critical global organization to power our launch capability such as global medical and global product launch strategy.
The Vaccines Business Unit, which we anticipate has important approvals ahead, will also be part of the global portfolio organization together with the regional business units, including Europe and Canada, our China business unit, as well as emerging markets. The global portfolio division will be led by Ramona Sequeira.
Rajeev Venkayya who has led the Vaccines Business will leave Takeda to become the CEO of a venture-backed company focused on pandemic threats. Gary Dubin, currently Head of our Vaccines Global Medical Office, has been promoted to lead this Global Vaccines Business Unit.
And with that, Julie Kim will transition from her role of leading our global PDT business unit and will become the new President of our U.S. business unit. Julie will focus on building momentum for our business in the U.S., obviously, a very key market for our success.
Giles Platford will be named President of our PDT business unit, which will remain one of the growth drivers for Takeda over the coming years. His experience with Europe, Canada and emerging markets, will be critical as we continue to expand our PDT business globally.
Finally, I am pleased to share that Takako Ohyabu will expand her leadership role as our Chief Global Corporate Affair and Sustainability Officer, with the goal of accelerating our leadership in purpose-led sustainability. As our first Chief Sustainability Officer, I am confident that Takako will make a big impact in this important area. I am personally very energized by the path ahead and totally confident that this group of dynamic and visionary leaders will help take us to the next level. On the next slide, I would like to update you on our efforts to mitigate the COVID-19 pandemic, and we are proud of the role we are playing to help bring vaccines to the people of Japan, and are accelerating our efforts to meet the growing demand. We are partnering with Novavax in Japan for the development, manufacturing and commercialization of TAK-019, which is a COVID-19 vaccine candidate.
We have also entered into an agreement with the government of Japan for the purchase of 150 million doses of TAK-019. We are planning to distribute the first doses in Japan in early 2022, subject to regulatory approval. We also continue to deliver on our 3-way agreement with Moderna and the Government of Japan to import and distribute Moderna COVID-19 vaccines. To date, 50 million doses of Moderna vaccines have been imported to Japan, and we began importation of our -- of an additional 93 million booster dose from the beginning of 2022, making it a planned total of 143 million. On the next slide, I would like to talk about our recent pipeline wins, which delivered near-term momentum to our growth strategy using LIVTENCITY as an example. I'm very pleased to note once again that the FDA approved LIVTENCITY in November 2021, right on the heel of the approval of EXKIVITY in September.
These approvals have demonstrated that we are successfully building a portfolio of new therapies that are well positioned to not only drive Takeda's future growth, but most importantly, make true impact in patient lives. Transplant organs provide patients a second chance at life but are in limited supply. Imagine the loss of hope on a transplant phase. It is devastating to patients and their loved ones. LIVTENCITY is redefining the way cytomegalovirus infection is treated. It is the first and only treatment indicated for transplant recipient that are 12 and older with refractory cytomegalovirus infection and disease with or without resistance.
Patients now have access to the only approved therapy that can enable sustained and effective treatment against post-transplant CMV infection, which could save an organ or a life that might otherwise be lost. We are seeing promising momentum. More than 150 patients have been treated already with LIVTENCITY in the weeks following the launch and demand is continuing to grow. This speaks to the unmet need and the unique value of LIVTENCITY. Patient by patient we are seeing the impact we are making.
In fact, the team has shared inspiring stories of patients who were able to be home with their families for the holidays. Patients who would otherwise be vulnerable to CMV and unable to leave the hospitals now have hope on the better quality of life. This focus on the patient needs is what fuels our innovation strategy. We strive to transform lives. We do that by addressing what really matters to patients, caregivers and care providers. In closing, we are confident about the path we are on. Our diverse portfolio will position us to continue to generate steady organic top line performance, while also drive competitive margin and strong cash flow to fuel future innovation for patients.
With the approval of -- and launch of 2 new therapies in 2021, we are even more confident today that the strength of our commercial execution, combined with the potential of our pipeline will help to fuel our long-term growth. And this brings us back to the vision that drive us, to discover and deliver life-transforming treatments catered by our commitment to patients, our people and the planet. With that, I would like to provide Andy with an opportunity to focus on our exciting R&D strategy. Andy?
Thank you very much, Christophe. If we can please move to the next, Slide 9. We have had a number of significant pipeline events since October, starting with the U.S. approval for LIVTENCITY in resistant or refractory post-transplant CMV infection as Christophe has mentioned. This is our second FDA approval this fiscal year and notably, the most FDA approvals Takeda has had since 2014.
Additionally, we are proactively submitting our final 4.5-year dengue vaccine data to the CHMP as part of the EU medicines for all procedure designed to enable approval of high priority medicines in markets across the globe. These 4.5-year data continue to support the overall benefit-risk profile and reinforce our regulatory package.
Now this will lead to a short pause in our review as we gather and submit in the coming months. We are very confident in the profile and public health benefits of our vaccine, and continue to believe we will see an approval in fiscal year 2022. As previously disclosed, we received a CRL from the FDA for Eohilia in eosinophilic esophagitis or EOE. Now we had judged the overall benefit/risk profile for Eohilia to be positive, and we are very keen to bring this therapeutic option to patients. After an extended set of interactions and analyses, the FDA ultimately did not agree that our pivotal data supported registration. We have thus decided to discontinue Takeda's development of Eohilia. Now please let me provide a brief summary of events that have led to this decision in full transparency. In 2016, FDA granted a breakthrough designation for this program. In 2019, Eohilia completed and met the Phase III induction study, co-primary endpoint with statistical significance. In October 2020, we completed our rolling submission of the new drug application. And in December 2020, FDA granted a priority review.
During the new drug application evaluation, we engaged in a series of data exchanges that resulted in an extended review cycle, and importantly, a delayed action date. Following over a year, the year of active NDA review which involved in-depth data requests and responses containing additional analyses, approximately 6 weeks ago in December, we received the CRL, which notified Takeda that the NDA could not be approved based on the current data package. As part of the CRL, it was communicated that data from an additional clinical trial would be required to support an approval. After a deep and careful assessment of the evolving treatment landscape in EOE, as well as considerations, including operational challenges required for an additional clinical study, we could not justify further Eohilia development. We do, however, remain fully committed to our R&D focus in GI diseases. Now continuing on this slide, our geographic and label expansion efforts for our global and regional brands continue to progress well. As Christophe mentioned, we received an approval of VONVENDI in the U.S. for von Willebrand disease prophylaxis. In Japan, we continue to advance the fight against the COVID-19 pandemic with approval for the 50-microgram booster of Spikevax, the mRNA vaccine against COVID-19. And we submitted an NDA to the MHLW for our Novavax partnered TAK-019. Additionally, again, as Christophe has alluded to, we received an EU approval for ENTYVIO in acute -- in active chronic pouchitis, significantly earlier than had been expected.
And finally, in business development, as Christophe mentioned earlier, we intend to acquire Adaptate Biotherapeutics, a gamma delta T cell engager platform, targeting solid tumors in oncology. Along with Maverick and GammaDelta Therapeutics, Adaptate is our third build-to-buy acquisition this year, further enhancing our oncology ambitions.
We believe build-to-buys are good deals because we work closely with the partner company throughout the build process. We know exactly what we are getting, the price we are paying and the steps remaining to fully develop the technology platform. If we can go to the next Slide 10, please. As just mentioned, we received approval of VONVENDI as the first recombinant treatment for prophylaxis of adults with severe forms of von Willebrand disease. This label expansion to prophylaxis will greatly benefit patients with this disorder.
As you can see on this slide from our Phase III trial, where we compared bleeding rates in severe von Willebrand's disease patients on prophylactic VONVENDI to on-demand treatment. We saw overall the median reduction for all bleeds was about 55%, for spontaneous bleeds about 76% and for the particularly crippling joint bleeds, 100%. So if we can go to the next, Slide 11, please. Our R&D strategy is working, and it's beginning to deliver on our ambitious aspirations. As another example of our strong Takeda laboratories, we have added a promising new targeted STING agonist, TAK-500 to our early-stage oncology pipeline. As we've noted, 90% of our pipeline did not exist 6 years ago. Takeda's R&D engine is advancing an ambitious stream of next-generation therapies as you will continue to see in the coming months and years. If we can go to the next, Slide 12, please. Okay, let's focus now on our late-stage pipeline. This few highlights, 10 of our late-stage approval and expansion opportunities for the coming years, we start at the bottom with the recent FDA approvals of EXKIVITY and LIVTENCITY in the U.S. Moving up the chart, we have filed TAK-019 in Japan.
Next, our Dengue vaccine, TAK-003, as mentioned, is currently under review with various dengue-endemic countries and with the European authorities. We anticipate a decision in fiscal year 2022. Next, with TAK-755, soticlestat and TAK-611, we expect near-term pivotal readouts potentially providing transformative treatments for targeted patient populations with high unmet needs.
And finally, again, moving up on this chart, 3 of our Wave 2 programs are starting pivotal trials this or next year. We recently presented exciting early data at ASH for Modakafusp alfa in extensively pretreated multiple myeloma patients. TAK-999, our collaboration with Arrowhead in Alpha-1 antitrypsin-associated liver disease will be starting Phase III development in the coming year. And Pabinafusp alfa, our collaboration with JCR Pharmaceuticals to address neuronopathic and somatic symptoms in Hunter syndrome patients has already begun enrolling in its global Phase III study. We can expect potential approvals for these new stage ups to our late development pipeline between 2025 and 2027. Going forward, we see great potential to further enrich our pipeline and are excited by our robust partnership network. We will continue to access and nurture innovation by integrating collaborations in emerging areas of science with our own world-class laboratories to deliver sustainable innovation. We will also complement our exciting and maturing pipeline with selective late-stage in-licensing as we have done with JCR and Arrowhead. If we can go to the next slide, 13, please. And as you can see here, there is more to come as we continue to derisk our early development programs. I'd like to highlight 5 high-potential molecules that will have important proof-of-concept readouts in the coming 2 years, including our longer-lasting oral Orexin agonist TAK-861, and first-in-class cancer therapy, subasumstat. These are just the first of many Wave 2 molecules of a rich and transformative early-stage pipeline being continuously filled through partnerships and our own powerful research engine. I want to underscore the importance of having built an innovative R&D engine that will continue to generate new opportunities going forward. Our pipeline is dynamic in nature. We follow the science. Some of our programs have faced unexpected challenges, but we are encouraged by the emergence of strong proof-of-concept data in programs like Modakafusp alfa.
And we expect to further fortify our pivotal pipeline with more and more positive data inflections. I can say with a high level of confidence that as we continue to advance our development programs and generate new data, the value of our pivotal stage pipeline will continue to increase. I'll now hand it over to you. Costa.
Thank you, Andy, and hello, everyone, this Costa Saroukos speaking. I'm pleased to report that in the first 3 quarters of fiscal 2021 we have continued to make excellent progress in terms of top line growth, margins and cash flow. Our top line growth continues to accelerate with underlying revenue growth of 7.1%, driven by our 14 global brands, which grew at 12%.
This truly demonstrates the resilience of our portfolio through the COVID-19 pandemic, including the recent wave of Omicron. We remain focused on maintaining competitive margins and delivered an underlying core operating profit margin of 29.4% in quarter 3 year-to-date, with underlying core operating profit growth of 5.4%. We also continued to generate robust free cash flow with JPY 671.3 billion year-to-date, and opportunities in unlocking working capital have enabled us to raise our full year target to JPY 700 billion to JPY 800 billion. We saw steady progress with deleveraging, reaching 3.0x net debt to adjusted EBITDA, and our abundant cash has allowed us to recently call an additional USD 1.5 billion of fiscal 2023 debt for prepayment.
With regard to the full year outlook, we are upgrading our forecast across the reported and core P&Ls, reflecting business momentum, OpEx discipline and also some foreign exchange favorability. We are also well on track towards our management guidance and trending towards the high end of mid-single-digit growth for underlying revenue, underlying cooperating profit and underlying core EPS. Let me go into more detail on the year-to-date performance on Slide 16. Q3 year-to-date reported revenue was almost JPY 2.7 trillion, up 11% versus the prior year, benefiting from JPY 133 billion booked as revenue from the sale of our Japan diabetes portfolio in quarter 1. Core revenue, which adjust out this onetime impact, grew at plus 5.6% as business momentum and favorable foreign exchange more than offset the impact of divestitures. Underlying revenue, which further adjusts for foreign exchange and divestitures delivered strong growth of plus 7.1%.
Reported operating profit was JPY 462.5 billion, with significant growth of 28.9% versus prior year. This was partially driven by the gain on the sale of the diabetes portfolio in Japan, as well as lower purchase price accounting and integration costs compared to the prior year. Core operating profit, which adjust for purchase accounting and nonrecurring items, was JPY 757.9 billion. This was a decline of 2.9% and versus prior year, mainly due to the impact of divestitures and also reflecting an increase in R&D investment. If we adjust for foreign exchange divestitures, underlying core operating profit increased by 5.4%.
Our core and underlying core operating profit margins are both above 29% even with the increase in R&D investments we've made this year. This also reflects the impact of a lower gross margin due to product mix, largely driven by temporary cost of goods dynamics within the plasma-derived therapies.
Reported EPS was JPY 154 with growth of 34.5% and core EPS was JPY 333. Underlying core EPS growth was 9.9%. Operating cash flow was JPY 747.5 billion, up 22.6% versus prior year, while free cash flow was JPY 671.3 billion a reduction of 6.4% due to higher noncore asset sales in the previous year.
Slide 17 gives more insight into our top line growth dynamics. Reported revenue for Q3 year-to-date grew at 11% to almost JPY 2.7 trillion, including JPY 133 billion or 5.5 percentage point benefit from the sale of the Japan Diabetes portfolio. Adjusting that out, core revenue grew at 5.6% to JPY 2.56 trillion. This reflected 7.1 percentage points of underlying growth driven by business momentum plus 4.8 percentage points from favorable FX. This was partially offset by 6.3 percentage point headwinds from divestitures of noncore assets we have completed over the past year. Turning to Slide 18, our underlying revenue growth of 7.1% is supported by an innovative and balanced portfolio across 5 key business areas. GI, which represents approximately 1/4 of total core revenue delivered 8% growth spearheaded by ENTYVIO. Rare Diseases declined by 1% impacted by the continued decline of rare hematology as expected.
And PDT Immunology grew at 10% as we continue to deliver improvements across the value chain and remain on track towards our full year revenue and plasma volume targets. Oncology grew at 8%. Neuroscience was up 10% and with VYVANSE and Trintellix both posting double-digit growth as market dynamics return towards pre-COVID levels.
For more details on each of the 5 key business areas, please refer to the slide in the Appendix. And finally, on the other column, products grew at 11%, reflecting the completed divestitures of several declining portfolios and also including distribution revenue for the Moderna COVID-19 vaccine in Japan. Slide 19 shows the revenue of our 14 global brands, which are driving Takeda's top line growth. In total, these products generated over JPY 1 trillion or USD 9.3 billion of revenue year-to-date, with growth of 12% on an underlying basis.
To highlight a couple of brands, in particular, ENTYVIO performance remained strong as our #1 product with JPY 395 billion in sales year-to-date and underlying growth of 17%. Now this is despite a slowdown in biological new starts due to the pandemic with a reduction in colonoscopies and diagnosis impacting the initiation and switching of therapies.
IG growth of 7.3% is on track towards full year guidance, fueled by continued expansion of our subcutaneous portfolio. Albumin is also strong at approximately 30% growth driven by growing demand for FLEXBUMIN in China.
Slide 20 emphasizes the momentum of these 14 global brands as they delivered 12% underlying growth year-to-date and remained on track towards full year guidance of mid-teen growth. As we look towards fiscal 2022 and beyond, we expect the momentum to continue as we expand market penetration in launch countries, increase disease awareness, expand access and continue global rollout of products, including in Japan, in China and other emerging markets. Also, as we recently announced, we no longer expect ENTYVIO biosimilars to launch upon anticipated end of data exclusivity timing, which gives us the potential for significant upside in the second half of this decade. Moving to Slide 21, which shows the factors impacting the 2.9% decline of our Q3 year-to-date core operating profit versus prior year. Starting from the left-hand side of the chart, you can see the first dark gray bar indicating a strong profit improvement from our underlying business, primarily driven by our 14 global brands and also reflecting SG&A discipline.
This underlying business momentum was partially offset by a step-up in R&D investment, which we have called out in the red bar next to it. Next to that is a larger decline, which indicates a profit loss as a result of divestitures. This is having a significant impact on growth rates this fiscal year as a result of multiple noncore asset divestitures that were closed in fiscal year 2020 or early 2021.
While this is a major headwind for fiscal year 2021, the impact should be much smaller from fiscal year 2022, and our core operating profit growth rate should more closely correlate to our underlying profit performance. As a result of these factors as well as some benefits from FX, our core operating profit landed at JPY 757.9 billion, giving us the confidence to raise our full year forecast as I will explain shortly. Moving now to the cash flow, please refer to Slide 22 which shows the evolution of our cash balance over the first 9 months of the year. Operating cash flow was JPY 747.5 billion. This includes cash from the sale of the Japan Diabetes portfolio and proceeds from working capital optimization initiatives, partially offset by a litigation settlement in quarter 1. The free cash flow was JPY 671.3 billion, comfortably covering the full year dividend payment, interest costs and initial progress of our share buyback.
Furthermore, we made significant debt prepayments in the first 9 months of the year. In total, we prepaid JPY 635 billion, or approximately USD 5.5 billion of debt maturing in fiscal year 2021, fiscal year 2022 and fiscal year 2025. A part of this prepayment was refinanced with the 10-year JPY 250 billion bond issued in quarter 3. In spite of this substantial debt prepayment, we still ended December with healthy levels of liquidity. Slide 23 shows the net debt balance over the first 3 quarters. We continue to make steady progress with deleveraging. And as of December 31, our net debt to adjusted EBITDA ratio had come down to 3.0x even after the full year dividend payment has been reflected. Slide 24 is the latest snapshot of our debt maturity ladder. As shown on the previous slides, we paid off approximately $5.5 billion of debt in the first 9 months of the year, including all remaining debt due in fiscal year 2021, as well as prepayments for fiscal year '22 and fiscal year '25 maturities.
Furthermore, our abundant cash flow enables us to call additional USD 1.5 billion of debt maturing in fiscal year 2023, which we expect to pay in March. I'm very pleased with how we have structured our debt profile with weighted average interest rate of approximately 2% and importantly, 98% of our total debt at fixed interest rates, giving us protection from any potential rate hikes. In terms of the maturity profile, we are also very comfortable with an average of approximately JPY 200 billion per annum out to fiscal year 2025. As a reminder, our free cash flow forecast for this year is JPY 700 billion to JPY 800 billion. Going forward, we are very comfortable with our ability to continue servicing this debt while maintaining the dividend and also making the right investments in the business. Moving now to Slide 25 and our revised outlook for the full fiscal year. We are raising our forecast for reported revenue to JPY 3.51 trillion, an increase of JPY 140 billion versus previous forecast, reflecting strong performance across the portfolio, additional revenue from Moderna vaccine in Japan and also FX benefits.
Reported operating profit is now expected to be JPY 515 billion and we are raising our forecast for core operating profit to JPY 970 billion, an increase of JPY 40 billion. These upgrades largely reflect the increase in revenue with OpEx discipline, offsetting a slight increase in cost of goods versus our initial plan. Reported EPS is now expected to be JPY 155 with a revised reported tax rate assumption of 37% for the full year. While we expect the tax rate to increase in Q4 due to timing of some tax cost of legal entity restructuring, the total of these costs is now expected to be lower than in our previous forecast. Core EPS is expected to be JPY 416 with a core tax rate of 24%. Free cash flow, as explained earlier, is now expected to be JPY 700 billion to JPY 800 billion. On the right-hand side of the slide, we show our management guidance on an underlying basis, which excludes the impact of foreign exchange and divestitures. While we are maintaining our previous guidance of mid-single-digit growth, for underlying revenue, underlying core operating profit and underlying core EPS, we now expect to deliver at the high end of the range. So finally, on Slide 26, I'd like to close by once again emphasizing our focus on top line on margins and on cash flow. Underlying revenue growth for Q3 year-to-date was 7.1%, putting us well on track to land at the high end of our full year guidance of mid-single-digit growth. On margins and profitability, our year-to-date core operating profit was JPY 757.9 billion, and we are raising full year forecast to JPY 970 billion. Our year-to-date underlying core operating profit margin is 29.4%, in line with our projections for the full year. Finally, on free cash flow, we have delivered a strong year-to-date result of JPY 671.3 billion, and we are raising our forecast to JPY 700 billion to JPY 800 billion. We continue to maintain a focus on deleveraging towards low 2x net debt to adjusted EBITDA target by fiscal year 2023. And with our leverage at 3.0x at the end of Q3, we are well on track to potentially breaking the 3x threshold within this fiscal year.
Thank you for your attention, and we will now open it up for Q&A.
[Interpreted] [Operator Instructions] First question is from Yamaguchi-san from Citi.
Yamaguchi from Citi. Congratulations on the good numbers. Two questions, please. The first one is that you changed the full year guidance, and you gave me some numbers. Just give me the reason why the sales up by JPY 140 billion. And with the cost control, operating profit, core earnings acquire OP goes up by 40 billion which sounds like the cost isn't higher than expected, which you mentioned. Can you elaborate what kind of the reason behind it, including PDT and other things? That's the first question. The second question is that the full year number chart shows that you raised the globally sales range from 5 to 10 to 10 to 20. Can you give me the reason behind it? And also, can you give me your pricing and the collection which is the usual kind of questions on the PDT front ?
Costa first and then Julie.
Thank you, Yamaguchi-san. What I understood from your first part of the question was the reason for the upgrade in revenue of JPY 140 billion. So what we're seeing is strong business momentum overall, and in particular, the 14 global brands are driving that momentum.
In addition to the 14 global brands, we're also adding additional doses of Spikevax in Japan. So we're seeing, as we mentioned, we're including approximately anywhere between 40% to 50% of the incremental 93 million doses of the Spikevax vaccine, and then we also have some portion of favorability FX. So I didn't get the other question that you had. Was it OpEx, what was the other [indiscernible]?
And given the sales was up by JPY 140 billion as a delta, but OP delta is JPY 40 billion, which sounds like little bit low. So you hinted cost is higher than expected on the COGS range. Can you give me the reason why COGS is higher on your new guidance compared to old guidance?
So we have seen some cost of goods headwinds, as we alluded to in the first half of the fiscal year driven by some -- the donor fee and the dynamics in the U.S. for PDT. We have also seen on the cost of goods, an increase due to FX, mainly because a lot of our operations in Europe on the manufacturing and it's in euros. So that's really the key message. And remember, in Q4, we typically have more phasing on acceleration of expenses, and we do expect an uptick in R&D investment to accelerate in Q4.
So it's -- so COGS basically is more on donor fee and FX. That's the 2 big reasons rather than...
That's correct.
[indiscernible] it should be good, right?
That's correct.
And maybe I'll jump in. This is Chris O'Reilly speaking. On your second question around the PDT guidance. So yes, we have upgraded the reported forecasts for immunoglobulin, but this essentially reflects FX. You'll see the underlying growth forecast is unchanged at 5% to 10% growth.
Okay. It's currency.
It's currency, yes.
Can you elaborate quickly on the pricing environment currently and the collection trend in the U.S., if you have any words?
Julie, are you on the line and able to answer that one?
Yes, this is Julie Kim. Thank you for the question. In terms of the pricing dynamics in the U.S, the continued impact of the pandemic is prolonging the ability to return to more normal levels. So at this point, what we do see is continued fluctuation in the pricing in terms of donor fees. We continue to moderate and push towards normal levels, leveraging our transformation efforts throughout the BioLife organization, which is our plasma infrastructure.
So as you've heard from both Costa and Chris, we continue to try to mitigate the impact of that, but the prolongation of the pandemic does make it a bit harder to completely offset those costs.
[Interpreted] We'd like to move on to the next. Next is Stacy Ku from Cowen.
Stacy Ku from Cowen. Congratulations on the progress. My 2 questions. First, given your updated commentary on ENTYVIO LOE, can you remind us of your thoughts on the ENTYVIO market share in Crohn's disease as we approach the loss of exclusivities for Humira and Stelara in 2023?
Do you expect differentiation to be protective in Crohn's disease as we expect it to be in ulcerative colitis? That's the first question. And then the second question is could you narrow the timing for when we would expect investor disclosure of the Phase I data for orexin 861 program in the healthy volunteers in type 1 narcolepsy patients.
Perhaps Ramona first question and Andy second one.
Yes, absolutely. Stacy, thanks for your question. So yes, if you look at, first of all, what we see in the biosimilar market in the U.S. right now, we don't see an impact outside of molecule for the biosimilars. So we're not seeing an impact on ENTYVIO either on our payer access or on our uptake or prescribing as a result of biosimilars.
As you start looking at the Crohn's situation, we would expect much the same to continue. So what's happening with Crohn's now is that as physicians start to treat earlier, ENTYVIO actually becomes a better and better choice. So people might prefer some of those other products when they've got a crisis patient with Crohn's.
But as we're starting to see more earlier use of biologics in Crohn's, people actually are preferring ENTYVIO because it's safe and it's effective and it's got really good long-term data available. And so we don't expect any impact outside of molecule to ENTYVIO from the other biosimilars.
And Stacy, this is Andy. So we'll spend some time at 4Q mapping out timelines for the Orexin program. But I'll remind you, there are 4 ongoing relevant activities. The first is our evaluation of the 994 Phase IIb data set. There's some very important information in that data set, including chronic dosing and the effects of an orexin agonist in chronic dosing.
The second, as you mentioned, we are accelerating our TAK-861 next-generation molecule. So we'll have data from our Phase I studies and plans to move forward into later development. Thirdly, we're bringing back TAK-925, our oral TAK-925 program. And then lastly, as we've mentioned, we'll have next-generation molecules that will be coming into the clinic. And so we'll have at least a time line for each of those 4 events to share in 4Q.
[Interpreted] Next question from Jefferies [indiscernible].
I'd like to ask about TAK-003, your dengue vaccine candidate, you're pushing back guidance for a possible CHMP advisory decision from the second half of the current fiscal year to sometime next fiscal year. And at the same time, the head of your vaccine business is leaving the company. What's going on there? I can think of a couple of different reasons, either the European authorities have a problem with the data, or is it something else? You did say that you're in discussions with the governments of the countries where you actually hope to sell the vaccine. Are there some reservations coming from that side? Any color would be appreciated.
First, there is -- we have submitted the data. And the data is complex. That's why -- remember that we had a fast track process first. But then when the EMEA saw the data, they do that in many cases, they decided that they will go back to the normal review because of the complexity of the data. We are submitting more long-term data as well.
So we shouldn't see this new timeline as a sign that there is a problem with the data. It's just the complexity of the data, the fact that we are submitting long-term data. As Andy mentioned, we are fully convinced of the value and the public impact that these vaccines will have in the countries where dengue is endemic. Don't read anything between that on the departure of Rajeev. Rajeev has been leading the vaccines business unit for 10 years. He's going for a new step in his career. We have a very strong leader with Gary to lead the Vaccines Business Unit. We are very committed to it so there is really no connection between the 2. And regarding the other countries, at the same time we file in Europe, we file in endemic countries and the processes that they are actually reviewing the dossier, and in parallel, they can use the expertise of the EMEA if they want. So that's the current regulatory process.
So again, we are very excited about the vaccines. It's complex dengue because you have 4 serotypes, you have seropositive, seronegative, of course. There is increased scrutiny because of what happened with the previous vaccines. So that's also probably why there is also a lot of debate. But we are very convinced about the value of the vaccines.
[Interpreted] Next is JPMorgan, Wakao-san, please.
[Interpreted] This is Wakao, JPMorgan. I have 2 questions. The first is about SG&A cost. And as a percentage of sales, I think your management is now at the lower level than the previous year. But at an absolute level, I think it exceeded the previous year. Do you think in the absolute term, it will be further increasing? Core OP margin, 30% is the target of your management. We understand that. But how do you view the absolute amount of SG&A?
And the second is VELCADE. Last time, generic launch was expected to be in the middle of FY 2021. But now it is expected to be at the end of FY 2021. If you have any information and if we can disclose, what is the latest situation? And is there any possibility that it won't come within 2021 fiscal?
Costa, can you take the first question, I'll take the second one?
Thank you very Wakao-san for your question. In the appendix Slide 39, you can see the SG&A expenses on a reported basis for Q3 year-to-date. They have gone up versus last year by 3.4%. However, excluding FX impact, were flat. So we -- I think the organization has a major focus on cost optimization and management, in particular, in SG&A. We're leveraging a lot more data, digital and technology here of TBS organization is ramping up. So SG&A very well managed. The only incremental here is FX driven.
And regarding VELCADE, we still believe that there will be a 505(b)(2) sub-q launch in Q4 fiscal year '21. So that's our current estimate. And that's our guidance. Now when it comes to VELCADE and actually NINLARO , as our growth rate does not necessarily reflect the long-term dynamic of the product because there has been some pandemic effect last year, especially. So VELCADE and both NINLARO were impacted depending on the cycle of the pandemic issue like. So one needs to be careful when reading the growth rate of the product.
[Interpreted] Next question from Credit Suisse, Haruta-san or Sakai-san.
Sakai.
Sakai speaking.
Two questions to you. I have a follow-up question Julie-san. Congratulations for your new role, Sequeira, really good. So we've been hearing about the shortage of blood supply in the U.S. because of the Omicron situation. Can you just give us the overall observation, how the business is running? And this situation persists assuming, is it going to be upside or downside with not anymore your business, but targeted business for FY '22. That's my first question.
The second question is for Costa-san as always. Your cash growth. I'm not going to ask you have guidance for FY 2022, but given that you're having more flexibility and maneuverability in your cash management, are you expecting same level of the cash flow generation for FY 2022? If so, if you could say just yes, but if not, can you just give me some variables that you're thinking about going forward?
Sakai-san, this is Julie. So in regards to your first question around the dynamics in the U.S. market, clearly, because of the impact of Omicron and the ongoing pandemic, it is still challenging for the entire industry to collect at levels that are equivalent to or better than the pre-pandemic.
For Takeda, as we've shared previously, we did surpass our pre-pandemic levels back in April of 2021, and we continue to be able to grow our collection. So -- while we can't give specifics going into FY '22 at this point, what I can confirm is that we are going to be in that 15% to 25% range for growth of our plasma collections this year, which is where we wanted to land and that will support our ongoing growth of our IG portfolio and albumin across the globe.
So while I cannot comment specifically on what is happening from the competitor standpoint, we are monitoring the situation quite closely, and we will continue to do what we can to make sure that patients will have continued access to therapy.
And Sakai-san, thank you for your question. We're not giving guidance on cash flow now in Q3. In principle, we're seeing acceleration of our revenue. We're also seeing acceleration on our core operating profit margins as we move forward. And as a result, that will reflect in our overall free cash flow as well. So there's no reason why we will be going, we'll defer from that strategy.
Okay, I mean, just a brief follow-up question. I mean it's nice to hear that 98% of debt is fixed rate. What about currencies? I could see U.S. dollars dominated euro dominated. What are Japan? I mean Japanese and dominated. How much your exposure the foreign currencies of your total of JPY 4 trillion debt?
So it's a great question. And we've -- the way we've refinanced our debt was really to match our currencies of our business. So very much equal to the currencies that we receive on U.S., euros and also Japanese yen. So it's very well matched. Therefore, we got that much exposure there.
All right. So that's neutral, you're saying.
That's correct.
[Interpreted] Morgan Stanley, Muraoka-san, please.
[Interpreted] This is Muraoka, Morgan Stanley. Novavax vaccine, I have a question. The JPY 140 billion revenue was up, but Novavax vaccine sales was not included. Is that right? And according to Japanese media report, PMDA's review pointed out [ rhabdovirus ] impact and which may delay the program. Is it true, the fact? And if that's the case, what is the progress going forward? That's about Novavax vaccine related question.
Another question I'd like to ask you is Page 58 of your slide. Entyvio, needless syringe, the injector, I think, is discussed. And however, there are some technical issues. And as a result, the pivotal study is delayed to be in FY 2023. Could you elaborate what is this technical issue? How it will be solved? That's my second question.
Masato, if you can take the first question on Novavax, and then Ramona on the needle-free.
[Interpreted] This is Iwasaki. Thank you for your question. Concerning rhabdovirus, I'd like to answer. And regarding financial aspect, I think Costa can supplement. Concerning rhabdovirus, during -- in the manufacturing process, well, because of our contract with Novavax. I cannot disclose the details of manufacturing process. However, rhabdovirus issue, we exchanged information with PMDA, and we are discussing it. And of course, properly, we will address this issue. And the EU authority EMA -- there is an assessment report and full clearance of rhabdovirus is proven. Therefore, it is not a concern. That's the conclusion the report says. That's all for me.
[Interpreted] Iwasaki-san, sorry. So there is no risk of delay?
[Interpreted] At the moment, we don't see any delay due to that particular reason.
And it's Costa here. Just to confirm, in our guidance -- updated guidance, there's no revenue factored in for Novavax for this fiscal year 2021.
And Christophe, I can step in and take the question around ENTYVIO and the device strategy. So maybe I'll just comment on both devices that are part of our LCM program. We've got our subcu that we've been talking about. And I will mention that, that has been launched in Europe and the launch uptake is going really well. So we're very pleased with what we're seeing, particularly in markets like the U.K. and Germany, which are some of our early launch markets, and we're definitely seeing the subcu driving incremental growth for ENTYVIO.
In the U.S., based on our discussions with the FDA, we have now more clarity on the actual path forward for the subcu in the U.S. And so we've disclosed that we expect to be able to launch that in FY '23 in the U.S.
And then the other program we have for ENTYVIO is the needle-free device. And that's one that's a little bit earlier in the process through development, but we're continuing to look at that. There's a great opportunity there for patients who don't like needles or a needle phobic to be able to bring that needle-free device forward into the future.
[Interpreted] The next question is going to be the last question. The last question is from Nikkei Newspaper, Akama-san.
[Interpreted] Akama from Nikkei newspaper. I have 2 questions. First, about Novavax, around the beginning of 2022, you will start the supply, but then we are already into February. So when you talk about early 2022, what is exactly the timing? Are you talking about January to March or up to June maybe? And booster vaccination has started in Japan. And Novavax vaccine, could it be also used for booster vaccination. So that's my first question.
The second question, and this is to Mr. Weber, and this is a very broad question. For instance, in France or in Europe, I think economic activities have been returning even with the spread of the Omicron variant. Normal restrictions on economic activities or lifting of those restrictions. But here in Japan, we are still continuing to see -- it's not so much as an emergency declaration, but then the government has not really relaxed those restrictions. And in terms of vaccination and Omicron variant spread, there are kind of differing responses among different countries. How do you see that Mr. Weber?
[Interpreted] First Iwasaki will answer your first question.
[Interpreted] As announced already or -- we have already submitted a letter which is under review right now. So we can't really mention a particular month for the launch of Novavax. But regardless of the timing of the launch, we have had tech transfer and manufacturing. So as early as possible during this calendar year 2022, we would like to get an approval and right after the approval, we would like to launch the product. That is the schedule.
As for the booster of Novavax, the data submitted -- the data package submitted for application. A part of that data includes the booster vaccination. As this is under review right now, it is really up to the Japanese authorities to determine.
First, I would say that the Omicron pandemic wave is not synchronized. So in Europe, this pandemic wave of Omicron started before the wave in Japan, right? So in many European countries, they are seeing a declining number of Omicron case, which is -- we're not in this phase in Japan. So of course, countries, every country is managing that situation, while at the same time it's managing the economic impact.
One thing I can say, on the other hand, is that -- it's pretty clear that the Omicron wave is unstoppable because the Omicron is very transmissible. And therefore, I don't believe into a Zero-COVID strategy, which is not the strategy of Japan. So I think that when there will be a sign of declining number, it will be time to restimulate the economy because the Omicron will be with us for a long time.
And so this is, I think, the new reality that many governments are facing is that the pandemic is still with us, might still be with us for a long time. And therefore, we need to find a way to manage that while keeping the economy going because we cannot stop the economy forever. I think this is really what the new reality that governments are facing.
[Interpreted] With this, we conclude the webinar. Thank you for your attendance out of your very busy schedule. Thank you all, and I look forward to working with you. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]