As Takeda folds in Shire, the Japanese pharma is looking into the future, which includes waves of blockbuster hopefuls, less debt and more room for cost cuts.
The company is looking to launch 12 drugs by 2024, which by its estimates could collectively generate $10 billion in peak sales. These include the latest addition of a plasma-based therapy for COVID-19, which the company hopes to file for approval by the end of the year if everything goes according to plan.
In the here and now, Takeda’s top-selling med, inflammatory bowel disease therapy Entyvio, is propelling much of its growth, if its latest financial results are any indication. For the fiscal year ended in March, Takeda recorded total revenues of JPY 3,291 billion ($30.74 billion), up 1.6% year over year—while Entyvio itself grew 29% to JPY 347 billion ($3.24 billion), more than 10% of its top line.
Unlike its fellow Big Pharmas, Takeda didn't see much of an effect on its sales from the COVID-19 pandemic, CEO Christophe Weber said on a Wednesday conference call. Most of the company's products treat chronic, life-threatening diseases that do not require surgery, and therefore are not dependent on hospital activities that have suffered as the virus spreads.
Entyvio does require intravenous administration by a healthcare professional, and sales growth in the quarter ended in March did slow to 22.7%. But Weber maintained that, given the drug’s strong efficacy, “stopping your treatment is not an option.”
Entyvio has beaten AbbVie’s market-leading Humira in a head-to-head ulcerative colitis trial, and Takeda is trying to make dosing easier and more convenient. Last week, the European Commission approved a subcutaneous formulation in both a prefilled syringe and a prefilled pen. In the U.S., discussions are still ongoing with the FDA to resolve a complete response letter for the under-the-skin formula, which Takeda said is unrelated to the clinical data.
Takeda has a large pool of other offerings, but industry watchers have questioned the company’s lack of blockbuster opportunities in its pipeline—part of the reason it shelled out $59 billion to buy Shire.
During Wednesday’s call, Weber outlined two waves of emerging clinical-stage drugs. In the first wave, he laid out 12 candidates Takeda aims to launch between now and 2024 that could together deliver $10 billion in peak sales.
The drug nearest to market is CoVIg-19, formerly TAK-888, a plasma-based polyclonal hyperimmune globulin medicine for COVID-19. Takeda recently teamed up with global plasma companies, including CSL Behring, to work together on the unbranded therapy. In concert with the National Institutes of Health’s National Institute of Allergy and Infectious Diseases, the group plans to kick off a global clinical trial as early as July, Julie Kim, president of Takeda’s plasma-derived therapies unit, told reporters on the call.
Other drugs Weber highlighted include mobocertinib (TAK-788), a potential first-in-class EGFR/HER2 tyrosine kinase inhibitor meant for a subset of non-small cell lung cancer patients with EGFR exon 20 insertion mutations. Readout from a pivotal phase 2 trial in previously treated patients is expected this year with potential approval in 2021. The drug recently won FDA breakthrough designation after it triggered a response in 43% of patients in a phase 1/2 study.
Dengue vaccine TAK-003 represents a much bigger opportunity with regulatory decisions expected in 2021, Weber said.
Besides developing new therapies to improve top-line performance, a priority at Takeda has been paring down the huge debt load it incurred with the Shire deal. The company has pledged to sell $10 billion worth of products outside of its focus areas of oncology, gastroenterology, rare diseases, neuroscience and plasma-based therapy, which collectively make up about 80% of Takeda’s revenue.
So far, Takeda has inked divestment deals for $7.7 billion. Rumors recently surfaced that the company is looking to top its goal by hiving off its Japanese consumer health franchise for JPY 400 billion ($3.72 billion).
Consumer health is obviously not part of Takeda’s core business, but on the other hand, its “OTC franchise is very strong in Japan,” Weber said. He acknowledged that these consumer brands have not been growing in the past few years, but “our focus is about … finding the best way of developing these brands,” he added.
Thanks partly to the sell-offs, Takeda has lowered its net debt/adjusted EBITDA ratio to 3.8x from 4.7x a year ago. The company also raised its cost-savings target for the second time since the Shire buyout to $2.3 billion annually from the previous $2 billion, which was itself a markup from the original $1.4 billion.
For the next fiscal year, Takeda is expecting underlying revenue growth at low single digits.