Message from Christophe Weber, President & CEO

Letter to Shareholders1

May 2023

Christophe Weber

President & CEO

Takeda Pharmaceutical Company Limited

Contents

02 Introduction

03 Examining the Macro Environment

05 Advocating for a Patient-Centric Health Care System Reform

07 Advancing Our Pipeline to Deliver Life- Transforming Treatments to Patients

09 Enhancing Innovation in Our Pipeline Through Strategic Asset Acquisitions

10 Business Momentum to Sustain Long-Term Growth

01

1. Crediting the Power of Our People
2. Unleashing Data, Digital and Technology in Our Transformation Efforts
3. A Steadfast Focus on the Future of Our Planet
4. Living Our Values:
   Corporate Governance Update
5. Our Commitment to Delivering on Our Purpose: Better Health for People, Brighter Future for the World
6. Appendix

1 In this letter, the words "we", "us" and "our" are also used to refer to subsidiaries of Takeda in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. In addition, this letter may contain forward-looking statements, beliefs or opinions regarding Takeda's future business, future position and results of operations, including estimates, forecasts, targets and plans for Takeda. The cautionary language regarding forward-looking statements included on page 46 of the Notice of Convocation of the 147th Ordinary General Meeting of Shareholders distributed with this letter is hereby incorporated by reference.

Introduction

Examining the Macro Environment

Advocating for a Patient-Centric Health Care System Reform

Advancing Our Pipeline to Deliver Life-Transforming Treatments to Patients

Enhancing Innovation in Our Pipeline Through Strategic Asset Acquisitions

Business Momentum to Sustain Long- Term Growth

Crediting the Power of Our People

Unleashing Data, Digital and Technology in Our Transformation Efforts

A Steadfast Focus on the Future of Our Planet

Living Our Values: Corporate

Governance Update

Our Commitment to Delivering on Our Purpose: Better Health for People, Brighter Future for the World

Appendix

Dear Takeda Shareholder,

I hope you and your family are well, safe and healthy.

On behalf of the Takeda Board of Directors, I am delighted to invite you to our Annual Shareholders Meeting on June 28, 2023.

This is a very exciting time for Takeda. After several years of business transformation, integration and deleveraging, we have built competitive global scale with a strong financial foundation and are now firmly focused on long-term growth and shareholder returns. This is why in fiscal year 2023 (FY2023) we are proposing to increase our dividend from JPY 180 to JPY 188 per share, reflecting our improved debt profile and strong cash flow, and underscoring our confidence in our future growth. Our Total Shareholder Return (TSR) of approximately 30% in FY2022 is recognition that market sentiment has evolved and is taking note of the strength of the business and our potential.

Everything we do is guided by our values, which are fundamental to our strategy, our identity and our culture. Takeda's core values are Integrity, Fairness, Honesty and Perseverance. They are brought to life through actions based on putting the Patient at the center, building Trust with society, reinforcing our Reputation and developing our Business, in that order. Our values are shown in our annual employee survey to be the highest differentiator of what makes our 50,000 colleagues so proud to work at Takeda, as they are for me. Our values are shaped by our more than 240-year heritage and we focus on company performance over the long term (10 years and beyond), medium-term (three to 10 years) and short term (one to three years).

How we chose to price our recently approved vaccine for dengue fever, QDENGA®, is an excellent example of our values in action. The price per dose of QDENGA in Indonesia is USD 26 ex-factory (our price to distributor), which will ultimately result in a recommended price to consumers of USD 40 in the private market. In Germany, meanwhile, the ex-factory price will be USD 85, which translates to a recommended retail price of USD 119 per dose. This reflects not only our tiered-pricing strategy, which takes into consideration each country's economic development and health system maturity, but also our willingness to ensure broader access to this innovative vaccine. We hope that it will lead to broader long-term adoption by endemic countries facing this serious public health challenge. We are determined and proud to roll out such an innovative pricing model - a first in vaccine pricing - and to continue to deliver highly innovative, life-transforming medicines for patients with high unmet medical needs.

02

Introduction

Examining the Macro Environment

Advocating for a Patient-Centric Health Care System Reform

Advancing Our Pipeline to Deliver Life-Transforming Treatments to Patients

Enhancing Innovation in Our Pipeline Through Strategic Asset Acquisitions

Business Momentum to Sustain Long- Term Growth

Crediting the Power of Our People

Unleashing Data, Digital and Technology in Our Transformation Efforts

A Steadfast Focus on the Future of Our Planet

Living Our Values: Corporate

Governance Update

Our Commitment to Delivering on Our Purpose: Better Health for People, Brighter Future for the World

Appendix

03

Examining the Macro Environment

As a global company, our business is impacted by political, economic, social and technological developments around the world. We continuously monitor, assess and make predictions about the external environment and adapt our strategy to position Takeda for success. In this letter, I highlight some of the major trends in the global macro environment, including what I believe is the most urgent challenge facing the health care sector today, and discuss our strategy for resilience and growth within this environment.

Global Tensions and Challenges

While some impacts of the global COVID-19 pandemic have now eased, economic pressures and geopolitical risks have intensified over the past year, creating an uncertain outlook and a tough environment for the global economy.

First, it's clear that the devastating war in Ukraine is far from over. The war is a humanitarian crisis for the people of Ukraine and continues to put stress on the global economy. Consistent with our values and ethical responsibility, Takeda provided support and humanitarian relief to our patients and colleagues in Ukraine. In Russia, we discontinued activities that are not essential to maintaining supply of medicines to patients, many of which are life-saving.

Second, the lingering impacts of the pandemic, coupled with geopolitical factors, have driven supply disruptions for some major industries, energy price increases and labor-market pressures. The average inflation rate worldwide remains high despite concerted efforts by central banks to tamp down inflation by raising interest rates, resulting in an increased risk of a global recession. Crucially, Takeda had the foresight to negotiate 100% of our debt at fixed interest rates averaging approximately 2%, giving us resilience against high interest rates, and our continued financial discipline and strong free cash flow put us in a position of strength in a challenging macro environment. During economic recession, the pharmaceutical industry faces significant price pressure as many governments struggle to fund their health care systems. Our intent is to constantly improve our effectiveness to offset this effect.

Third, continued tensions between China and the U.S., EU and other countries further add to geopolitical and economic uncertainties and pose risks for global companies. Nevertheless, the provision of quality health care to its citizens appears to be a strategic imperative for the Chinese government and we see encouraging signs of a more open, pro-innovation posture in the country. Takeda is experiencing rapid growth in China thanks to the launch of 10 new products in the past three years - the highest among non-China headquartered companies. We will continue to invest in providing patients in China with innovative medicines and treatments while actively managing any risk of economic decoupling that

Introduction

Examining the Macro Environment

Advocating for a Patient-Centric Health Care System Reform

Advancing Our Pipeline to Deliver Life-Transforming Treatments to Patients

Enhancing Innovation in Our Pipeline Through Strategic Asset Acquisitions

Business Momentum to Sustain Long- Term Growth

Crediting the Power of Our People

Unleashing Data, Digital and Technology in Our Transformation Efforts

A Steadfast Focus on the Future of Our Planet

Living Our Values: Corporate

Governance Update

Our Commitment to Delivering on Our Purpose: Better Health for People, Brighter Future for the World

Appendix

04

may impact health care. Meanwhile, we continue to reinforce our position in the U.S., where we now generate nearly 50% of our total revenue, driven by our Growth & Launch Products2.

Despite the global uncertainties, we as an organization have shown continued resilience and growth through innovation to deliver life-transforming treatments to patients. We remain confident that our headquarters and global hubs, research centers and global supply chains, located in Japan, the United States, Europe and Singapore will help ensure our resilience in a more complex globalized world.

A More Sustainable Approach to Pandemic Preparedness

In my letter last year, I reflected on the impact of the pandemic on our global health care systems and communities and advocated for significant reforms. I acknowledge that while the global health community has made some progress in certain areas, including funding research to better understand these diseases and how to prevent and treat them, more work is needed in the realm of health equity.

The world missed the opportunity to provide vaccine equity globally during the COVID-19 pandemic. If well prepared, we can have far greater success the next time a pandemic occurs. Despite well-intentioned initiatives by the World Health Organization and other health authorities, the discussion of waivers for intellectual property rights and some other provisions is concerning. This approach positions intellectual property rights as a deterrent to equity, when we know that there are far more pertinent factors, such as pricing, supply allocation and adherence to a first come first served principle as seen during the COVID-19 pandemic. Weakening intellectual property rights would undermine the necessary economic incentive to conduct long-term, costly, research and development (R&D) investment. Takeda is committed to providing the broadest possible access to our innovative medicines and vaccines, and we believe that intellectual property should not be viewed as a barrier to access.

In fact, expanding access and reducing health inequities remains a key focus for us and is something that's ingrained in the work we do every day. At the World Economic Forum, Takeda was among the few pharmaceutical companies to sign the Zero Health Gaps Equity Pledge. The Takeda Center for Health Equity and Patient Affairs has collaborated with a diverse global network of health equity partners since 2020 to empower communities to identify and address health inequities sustainably, leading to improved care and expanded access at every stage of the patient journey. It is our promise to continue applying our resources and capabilities to make sure everyone has access to proper health care. The Zero Health Gaps Equity Pledge is a reminder that there's much work to be done and I look forward to seeing what we can achieve during this fiscal year.

2 Please refer to slide 20 of the FY2022 Earnings Announcement (available at https://www.takeda.com/investors/financial-results/quarterly-results/) for definition of Growth & Launch Products.

Introduction

Examining the Macro Environment

Advocating for a Patient-Centric Health Care System Reform

Advancing Our Pipeline to Deliver Life-Transforming Treatments to Patients

Enhancing Innovation in Our Pipeline Through Strategic Asset Acquisitions

Business Momentum to Sustain Long- Term Growth

Crediting the Power of Our People

Unleashing Data, Digital and Technology in Our Transformation Efforts

A Steadfast Focus on the Future of Our Planet

Living Our Values: Corporate

Governance Update

Our Commitment to Delivering on Our Purpose: Better Health for People, Brighter Future for the World

Appendix

05

Advocating for a Patient-Centric Health Care System Reform

The post-World War II period was a watershed for human health, with the creation of health care systems throughout Japan, Europe and the United States and the introduction of significant scientific innovations such as the first influenza vaccine and penicillin, to name just two. Today, while treatments and medicines have drastically expanded beyond the vaccines and antibiotics of the 1960s to include cell and gene therapies, biologics, small molecules and other solutions, health care systems overall remain largely unchanged.

Diagnosing the Problem

The 20+ year average increase in life expectancy and rapidly aging populations have exacerbated these systems' limitations, causing significant financial and resource strain. Aging populations, extended life expectancy and scientific innovation have been putting tremendous strain on health care systems in the U.S., Japan, and European countries for decades. Aging demographics are a global trend (see chart in the appendix) and according to Chinese government projections, by 2035, an estimated 400 million people in China will be aged 60 and over, representing 30% of the population.

The impact of an aging population on health care costs is often underappreciated, but is in fact very significant, as illustrated in the graph below.

Average medical care expenditure per patient in Japan in fiscal year 2019, by age group

Many countries in Europe and Japan where health care systems are based on a fee-for-service model have responded to this trend by increasing the volume of health care service provided while keeping fees for those services flat and reducing the prices of medicines. One consequence of this has been that doctors