Japan's Takeda badly missed its earnings projections in May, as R&D and marketing costs for emerging markets came in much higher than expected. But Takeda CEO Yasuchika Hasegawa insists the company is righting itself and that its bet on emerging markets will be key. He is upping that wager with a new operation in the rapidly-growing Latin American market, where the company already has a significant foothold.
Takeda said today it is opening a subsidiary in Peru, after already establishing a presence in Brazil, Mexico, Argentina, Venezuela, Colombia and Ecuador. Citing IMS Market Prognosis statistics, the company said drug sales in those countries hit $60 billion in 2012 and are expected to grow at a compound annual rate of 12.5% between 2013 and 2017. While Peru is not a large country, Takeda sees promise there in its growing economy. It says drug sales last year were $1.5 billion and are slated to grow 8% this year.
Takeda is trying to get on track after the loss of the patent for its long-time workhorse, Actos. The diabetes treatment had accounted for more than half of Takeda's U.S. revenue and 18% of its overall sales. In its May earnings report, the company recalculated its revenue picture for the year, saying it now expects to bring in an operating profit of ¥140 billion ($1.4 billion), dramatically off the ¥225 billion ($2.3 billion) it had projected. That news shocked markets at the time and spanked Takeda's stock.
In Peru, the company will focus on treatment areas that include gastroenterology, cardiology, metabolism, oncology and respiratory diseases. The new operation will be headed by Julio Cesar Acevedo Orrego, who came to the company with Farmacol Laboratories. Takeda picked up the Colombia-based Farmacol in its $13.6 billion acquisition of the Swiss company Nycomed. It made the Nycomed acquisition in large part to expand in emerging markets, where Nycomed was deriving about 40% of its revenues.
- here's the announcement
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