One-off factors knock Takeda to operating loss
This article was originally published in Scrip
After further digesting the impact of its recent acquisition of Millennium Pharmaceuticals and the dissolution of the TAP Pharmaceutical joint venture with Abbott in the US, Takedahas added ¥40 billion ($370.7 million) to its earlier forecasts for operating and net profit this fiscal year.
While the sales outlook remains unchanged at ¥1,570.0 billion (+14% compared with the previous year), the two figures are now expected to come in at ¥280.0 billion (–34%) and ¥200.0 billion (–44%) respectively. While this is an improvement over the guidance issued in May (Scrip Online, May 9th, 2008), a loss in interest income from depleted cash reserves and substantial amortisation and in-process R&D costs from the deals will still have a big impact.
Japan's largest drugs firm made the adjustments as it reported a 9% rise in global pharmaceutical sales to ¥359.3 billion for the first three months to June 30th, boosted by the inclusion of US sales of former TAP product Prevacid (lansoprazole). Global sales of the proton pump inhibitor jumped by 77% to ¥72.4 billion as a result, and Takeda also booked a one-off gain of ¥74.2 billion from the transfer to Abbott of US rights to Leupron (leuprorelin) as part of the TAP breakup.
But the stronger yen saw global revenues from top product Actos (pioglitazone) slip by 3% to ¥103.3 billion, although in local currency terms sales of the antidiabetic and its combinations through Takeda's US subsidiary were up by $42 million, pushing Takeda Pharmaceuticals North America total sales to S855 million (+4%). Currency effects sliced ¥16.2 billion off the group total sales figure of ¥396.9 billion (+8%).
Takeda said it had decided to book the full ¥166.2 billion in in-process R&D costs from the Millennium and TAP deals this quarter, which resulted in an operating loss of ¥27.2 billion, although the net figure stayed just in the black at ¥2.5 billion (-98%), giving earnings per share of ¥3.01. Excluding the extraordinary factors, EPS would have fallen by 4% to ¥127.25.
Product | Worldwide | % chg | Americas | % chg | Japan | % chg |
pioglitazone | 103.3 | – 3 | 80.6 | – 8 | 12.0 | +17 |
lansoprazole | 72.4 | +77 | 46.2 | +239 | 17.5 | + 8 |
candesartan | 59.9 | + 8 | – | – | 34.7 | – 4 |
leuprorelin | 32.7 | – 3 | 4.4 | – 20 | 16.5 | – 6 |
Prescription sales in Japan were held back by the industry-wide price cut in April, falling by 2% to ¥138.4 billion. Number four product Basen (voglibose) continued to suffer from competition and sales of the antidiabetic slid by 12% to ¥12.6 billion, although Enbrel (etanercept, licensed from Wyeth) again put in another strong performance, jumping by 62% to ¥6.7 billion.
pipeline losses
In a research update, Takeda noted a couple of recent losses from its development portfolio. TAK-583 has been dropped at the Phase II stage after US and European studies in post-herpetic neuralgia, painful diabetic neuropathy and diabetic peripheral neuropathy failed to show proof of concept. The compound was also in Phase II in Japan. Also discontinued at Phase II was TAK-591, a topical immune response modifier which missed its efficacy endpoints in a US study for human papillomavirus infection and was also in European development.