Takeda Announces $900-M Restructuring Plan 

Takeda has announced a multi-year $900-million restructuring plan focused on organizational agility, spending efficiencies, and leveraging the company’s capabilities in data, digital and technology (DD&T). The program, which was approved by the company’s Board of Directors, aims to improve growth through continued advancement of Takeda’s Growth & Launch Products and progressing the company’s late-stage pipeline with the goal of achieving a core operating profit margin in the low- to mid-30% range.  

The program will start in fiscal year (FY) 2024 and includes initiatives to optimize its workforce—simplifying some division structures—and prioritize its R&D pipeline while investing in DD&T to increase productivity and efficiency across the organization. Procurement-led initiatives will be centered on optimizing external spend with the goal of achieving cost savings and efficiencies in Takeda’s supply chain and vendor-management processes. The company says that details and timing of specific actions within the framework of these broader initiatives will be decided in due course. 

Takeda estimates that efficiencies and savings resulting from the multi-year program, offset by investments in its late-stage pipeline and DD&T, will drive 100-250 basis points of its core operating profit margin improvement each year from FY 2025 toward its target of low- to mid-30%—with the amount of basis point improvement each year dependent upon various factors, including the business environment and foreign exchange rates. Primarily as a result of the initiatives, Takeda estimates it will incur one-time restructuring expenses of JPY 140.0 billion ($900.8 million) in FY 2024, with lower restructuring expenses also anticipated in FY2025 and FY 2026. 

The company announced its full-year FY 2023 (ending March 31, 2024) earnings this week (May 9, 2024). While revenues for FY 2023 increased 5.8% (at actual exchange rates) to JPY 4,264 billion ($27.4 billion), its net profit fell 54.5% to JPY 144.1 billion ($926 million). For FY 2024, the company expects core revenues of approximately JPY 4,350 billion ($28.0 billion), representing flat to slightly declining growth. 

Takeda’s profit has been negatively impacted by generic-drug incursion of certain key products, the attention-deficit/hyperactivity disorder (ADHD) medication, Vyvanse (lisdexamfetamine), which lost US exclusivity in 2023, and Azilva (azilsartan), an anti-hypertensive drug, which lost exclusivity in Japan.

Source: Takeda (restructuring plan) and Takeda (earnings release)