Takeda Reports Moderate Revenue GrowthBy
Following taking on the additional role of chief executive officer (CEO) in April 2015, Christophe Weber, president and CEO of Takeda, reported moderate revenue growth for the company and a decline in profitability, which was further impacted by the company’s $2.4 billion charge for settling US litigation for its diabetes drug,Actos (pioglitazone HCl).
Takeda reported a 5.1% increase in FY 2014 revenue to 1,777.8 billion yen ($14.9 billion) and a 8.2% decline in core earnings to 314.2 billion yen ($2.4 billion). Core earnings are calculated from operating profit by excluding the impact of exceptional items, such as purchase accounting, amortization and impairment loss of intangible assets, restructuring costs, and litigation costs.
Revenue growth was driven by new products, mainly Entyvio (vedolizumab) for treating ulcerative colitis and Crohn’s disease, the anti-depressant Brintellix (vortioxene) in the US, Entyvio and the cancer Adcetris (brentuximab vedotin) in Europe, and the hypertensive drug Azilva (azilsartan) in Japan, which added 97.2 billion yen ($814.6 million). Performances in the US (+14.5% underlying revenue growth) and Europe and Canada (+5.4%) were very strong. In Japan, new products contributed 35.6 billion ($298.4 million) yen, a growth of 6.2%, which could not yet overcome the impact from generics and price pressure (Japan total -4.1%). Emerging markets grew at 8.1%, with key countries China and Russia both achieving double-digit growth while several other markets were impacted by a volatile economic environment.
“FY 2014 was a year of transformation for Takeda, and at the same time, a year during which we delivered our business targets,” said Christophe Weber, president and chief executive officer of Takeda, in a company statement. “We obtained approval for four important new treatments with Entyvio, Contrave, Takecab and Zafatek, and achieved significant pipeline milestones, including the Phase IIIinterim results for ixazomib. EPS [earnings per share] was mainly impacted by the Actos settlement agreement expected to resolve the vast majority of Actos product liability lawsuits pending in the US, which will reduce financial uncertainties for the company and allow us to focus on developing innovative medicines for patients around the world.”
Weber outlined a plan for a new Takeda organization with key growth drivers being gastroenterology, value brands in emerging markets, and oncology along with the launch of ixazomib, a drug for treating multiple myeloma that is currently in late Phase III development with approval expected in FY 2016 Key products for Takeda going forward are: Entyvio (vedolizumab), Azilva (azilsartan), and Takecab (vonopraza), a gastrointestinal drug. Project Summit, a company-wide strategic initiative to increase efficiency, delivered savings of 28 billion yen in FY 2014, bringing the accumulated total achieved in the first two years to 62 billion yen ($520 million). Thus, the company has achieved over 50% of its five-year target of 120 billion yen ($1.0 billion) in two years. The new company structure, effective from April 1, 2015, reflects the new strategic growth focus and programs for increasing operational efficiency.