On October 31, 2019 Takeda Pharmaceutical Company Limited (TOKYO:4502)(NYSE:TAK) (Press release, Takeda, OCT 31, 2019, View Source [SID1234550063]):
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Underlying Revenue declined -0.2% vs FY2018 H1 pro-forma revenue2
Takeda’s 14 global brands with reported revenue of 547.0 billion yen in aggregate posted a strong year-over-year underlying growth of +21%, driven by ENTYVIO growing +33.9%, ALBUMIN/FLEXBUMIN growing +16.9%, and NINLARO growing +32.7%, offset by the negative impact of intensified competition and generic erosion.
Underlying growth in key business areas for FY2019 H1: GI (+9%), Oncology (+11%), Neuroscience (+6%), and Plasma Derived Therapy (PDT) Immunology (+4%), offset by Rare Disease (-11%) due to decline as expected in Rare Hematology.
Within Rare Disease, Rare Hematology continues to be impacted by competition and price pressure, and growth in Hereditary Angioedema (HAE) was negatively affected by stocking in the prior year as well as generic entry for FIRAZYR.
Immunoglobulin returned to growth as expected in the 3 months of FY2019 Q2 at an underlying growth rate of +7.6% and +3% for H1, over the same period of last year.
Underlying Core Operating Profit Margin of 32.2% for FY2019 H1 with cost synergies and OPEX efficiencies driving margins
Reported Operating Profit declined -70.7% to 50.3 billion yen, largely impacted by non-cash purchase accounting expenses including unwinding of inventory step-up, increased amortization of intangibles, as well as one-time integration costs.
Core Operating Profit increased +155.5% to 541.6 billion yen primarily due to the acquisition of Shire, solid performance of 14 global growth brands and improved operating efficiency partially offset by the negative impact of intensified competition and generic erosion.
Underlying Core Operating Profit Margin for FY2019 H1 was 32.2% reflecting continued OPEX discipline and cost synergies.
Underlying Core EPS for H1 was 249 yen.
Investing in future growth by adding 23 plasma collection centers since the closing of the Shire acquisition, acquiring license for first-in-class celiac disease therapy (TAK-101) from COUR Pharmaceuticals, and continued investment in our R&D engine.
1
Please refer to note iii in Reported Results for H1 (April – June) FY2019 table for Core Operating Profit definition.
2
Growth versus FY2018 H1 pro-forma revenue (6-month April-September 2018 combined revenue of Legacy Takeda and Legacy Shire, excludes its oncology business and US GAAP results were conformed to IFRS, without material differences). Please see the appendix for more details.
Achieved Several Important Pipeline Milestones
Data presented at World Sleep Congress demonstrated early evidence of efficacy for TAK-925 in Narcolepsy Type 1.
ENTYVIO head-to-head study and TAK-620 (Maribavir) Ph-2 data published in The New England Journal of Medicine.
TRINTELLIX approved in Japan for the treatment of depression and depressed state.
Submitted a Marketing Authorization Application (MAA) in Japan for a subcutaneous formulation of ENTYVIO for patients with moderately to severely active ulcerative colitis.
8 potential best-in-class or first-in-class New Molecular Entities (NMEs) in pivotal studies.
Divesting non-core assets to accelerate deleveraging and focus the business
Paid down 584.5 billion yen of debt and de-levered from 4.7x at end of FY2018 to 3.9x Net debt / adjusted EBITDA as of September 2019. This does not include the sale of OTC and prescription pharmaceutical assets in certain Near East, Middle East and Africa countries to Acino for more than $200 million.
Negotiations ongoing for further potential divestments.
Christophe Weber, Chief Executive Officer, commented:
"We are pleased with our recent financial results, which reflect strong underlying performance across our 14 global brands and OPEX improvements that has allowed us to raise our guidance. I am particularly encouraged by the rapid de-leveraging year-to-date.
We are also satisfied with the progress of our integration efforts. Takeda employees are excited and engaged around our next phase of growth and our undeniable progress towards becoming one integrated company.
Our excitement around the future of Takeda is also derived from the strength and breadth of our pipeline. We look forward to providing some additional insight and commentary around our portfolio, pipeline, and growth strategy at our upcoming R&D Day in November."
Reported Results for FY2019 H1 (April – June)
(billion yen)
REPORTED
CORE
UNDERLYING i.
FY2019 H1
VS. PRIOR YEAR
FY2019 H1
VS. PRIOR YEAR
Revenue
1,660.2
+88.5%
1,660.2
+88.5%
-0.2% y-o-y ii.
(pro-forma)
Operating Profit
50.3
-70.7%
541.6 iii.
+155.5%
Margin
3.0%
-16.5pp
32.6%
+8.6pp
32.2%
Net Profit iv.
33.2
-73.8%
380.4
+130.3%
EPS (JPY)
21 yen
-140 yen
244 yen
+33 yen
249 yen
i.
Underlying Growth compares two periods (quarters or years) of financial results under a common basis and is used by management to assess the business. These financial results are calculated on a constant currency basis and excluding the impact of divestitures and other amounts that are unusual, non-recurring items or unrelated to our ongoing operations.
ii.
Growth versus FY2018 H1 pro-forma revenue. Pro-forma revenue is the 6-month April-September 2018 combined revenue of Legacy Takeda and Legacy Shire, US GAAP results conformed to IFRS, without material differences. The adjustments also include removal of impacts related to Shire’s oncology business which was divested in August 2018.
iii.
Core Operating Profit represents net profit adjusted to exclude income tax expenses, our share of profit or loss of investments accounted for using the equity method, finance expenses and income, other operating expenses and income, amortization and impairment losses on intangible assets associated with products and other items that management believes are unrelated to our core operations, such as purchase accounting effects and transaction related costs.
iv.
Attributable to the owners of the company.
FY2019 Management Guidance: Upgrading guidance to reflect positive business momentum
Previous Guidance
(July 31, 2019)
Revised Guidance
(October 31, 2019)
Underlying Revenue Growth i.
Flat to slightly increasing
Flat to slightly increasing
Underlying Core Operating Profit Margin
Mid-to-high-twenties %
High-twenties %
Underlying Core EPS
360 – 380 yen
370 – 390 yen
Annual Dividend per Share
180 yen
180 yen
i.
Constant Exchange Rate growth (applying FY2018 full year average foreign exchange rate of 111 JPY/USD) compared to baseline of JPY 3,300 billion (Rounded pro-forma April 2018-March 2019 combined revenue of Legacy Takeda and Legacy Shire, converted at April 2018-March 2019 average exchange rate of 111 JPY/USD; also adjusted to remove the revenue from divested assets such as Techpool, Multilab, and TACHOSIL from Legacy Takeda, and the oncology portfolio and XIIDRA from Legacy Shire) and conformed from US GAAP to IFRS, without material differences.
FY2019 Reported Forecast: Revenue decreasing due to FX impact, but profit increasing
For more details on Takeda’s FY2019 Q2 results and other financial information, please visit View Source
Takeda to Host R&D Day on November 14 in New York, Plasma-Derived Therapies Day on November 15 in Covington, GA, and R&D and Plasma-Derived Therapies Day on November 21 in Tokyo;
At each event, Takeda executives are expected to discuss, among other things, the Company’s near-term and sustained growth strategies and next-generation platforms. Each event will be accessible via a live webcast on the Investors section of the Company’s website: View Sourcequarterly-announcements/quarterly-announcements-2019/.
A replay of each webcast will be archived on the website along with the presentation slides associated with each event.