Takeda Pharmaceutical, in its first year counting the Shire business, has managed to turn up revenue growth. But the upcoming fiscal year could be a different story.
Inflammatory bowel disease therapy Entyvio and multiple myeloma drug Ninlaro were the main growth drivers for legacy Takeda, having each jumped more than 30% year over year. However, for the 2019 fiscal year, the Japanese pharma is expecting revenue to come in flat or slightly decline for the combined business.
“In '19, we have some quite significant generic exposure, which will be much lower in 2020 and 2021, but that’s something we have to deal with, and this is slowing down our growth,” CEO Christophe Weber told reporters at a conference Tuesday, adding that “intrinsically, our business momentum is there.”
First up, Ninlaro’s blockbuster predecessor Velcade, which has already lost U.S. exclusivity, saw sales drop 6.9% to 127.9 billion Japanese yen ($1.17 billion) in the previous fiscal year ended in March. That was a lot less severe than the 30%-plus decline Takeda once projected.
Fresenius Kabi has already launched a nonequivalent Velcade copycat, but that drug doesn’t seem to have eaten much into the originator’s sales. But now, Takeda is expecting the fast decline will happen this year, partly on the condition that another generic launches in July. If that entrance doesn’t happen, the company could be looking at a better year with revenue growth “flat to slightly increasing.”
Besides Velcade, gout drug Uloric, which pulled in 51.1 billion yen in full-year 2018, could also plummet 30%-plus this year, versus growing 9.1% last year. The drug just recently got pushed later into treatment after the FDA decided it carries an increased risk compared with older drug allopurinol. And, to make things worse, the drug is slated to fall off the patent cliff around June.
Despite a tough 2019, Weber still touted 14 growing products that post-Shire Takeda holds global rights to that “give us a lot of confidence for growth in the future,” the CEO said during the news conference.
The gigantic Shire buyout, which elevated Takeda into the world’s top 10 pharmas by sales, dragged down Takeda’s net profit from expected growth to a 41.6% decrease. But because they’re related to one-time, noncash acquisition costs, Weber said he is “not worried” about the results.
The integration is on track, Weber said, and the company has found more costs it can cut, raising the target to $2 billion by the end of fiscal 2021 from $1.4 billion. Weber said the additional savings could help Takeda's margin reach the mid-thirties in the mid-term, up from the mid-twenties in fiscal 2019.
Meanwhile, Weber restated that Takeda is looking to sell $10 billion worth of assets to help bring down its debt level. Divestments will be picked from “hundreds of products” outside of its core business areas of gastroenterology, rare diseases, plasma-derived therapies, oncology and neuroscience, he said. Together, they constitute about 25% of the new Takeda that boasts total revenues of around $30 billion.
In its first step toward that target, Takeda last week inked deals with Novartis and Johnson & Johnson to sell Xiidra eye drops and the TachoSil surgical patch, respectively, for potentially $5.7 billion in total.