Takeda's board swept aside concerns over having the company run by a non-Japanese executive, setting up Frenchman Christophe Weber to carry out the plans he believes are needed to turn around the faltering drugmaker. He will lay those out by year-end, but says they will include acquisitions and expansions in emerging markets like India.
"We are not strong in India," COO Weber told Bloomberg. "We need to in the future understand precisely what we do in India," explained Weber, who last week was named to the board of directors of the 230-year-old company. He is in line to become Takeda's first non-Japanese CEO when that position is vacated next year by Yasuchika Hasegawa, who brought Weber in to shake things up.
The reason Takeda needs a jolt is clear from its financials. Its mainstay product, blockbuster diabetes drug Actos, went off patent in 2012 and the company has been unable so far to cut costs or build its pipeline fast enough to compensate for the lost revenue. Its net income of ¥107 billion ($1.05 billion) for the year ended in March was a 15-year low, Bloomberg points out. It has forecast a 7.7% increase in operating profit this year.
Hasegawa has already set Takeda on a path to expand in emerging markets like Latin America, but the company has even struggled there, missing a quarterly earnings forecast last year when R&D and marketing costs for emerging markets came in much higher than budgeted. There have also been some wins in R&D. The company in May got approval in the U.S. and Europe for Entyvio, its new treatment for ulcerative colitis and Crohn's disease. The drug has been predicted to hit blockbuster status by CFO François-Xavier Roger, another non-Japanese exec that Hasegawa hired.
Weber, a former GlaxoSmithKline ($GSK) executive, has been on the job since April but must prove himself quickly. Ahead of the vote to put him on the board, a contingent of 112 former employees presented directors with a letter protesting Takeda's move toward hiring so many "foreigners." But SMBC Nikko Securities analyst Yasuhiro Nakazawa says his ethnicity is not the point. His ability to execute is.
"We'll see what he's capable of," Nakazawa told Bloomberg. "I want to see him cutting costs to increase profit margins in emerging markets, spending cash to bring in new technologies for innovation and building a portfolio in the pipeline with products that meet unmet medical needs."
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