Over a year into a stunning FDA warning letter, Takeda has resolved manufacturing problems at home as it gears up to make Novavax’s COVID-19 vaccine for Japan.
On Oct. 13, the FDA changed the warning letter slapped on Takeda’s Japanese Hikari plant last June to “voluntary action indicated,” as the agency determined the company had addressed the citations, Takeda CEO Christophe Weber said during an investors’ call Thursday.
The U.S. regulatory win comes as Takeda prepares to manufacture Novavax’s COVID-19 vaccine candidate for the Japanese market from the Hikari facility.
Reports emerged last week that Novavax was struggling with meeting manufacturing standards for the adjuvanted shot, dubbed NVX-CoV2373, raising doubts about whether the biotech could meet its supply commitment. But Takeda doesn’t anticipate any delay in manufacturing, Masato Iwasaki, who oversees Takeda’s Japan general affairs, said during the call. The Japanese pharma aims to start distribution in early 2022.
Problems at the Hikari plant triggered a shortage of hormone therapy Lupron and a legal tussle in which the drug’s U.S. distributor AbbVie accused Takeda of breaching contract.
“We are making every effort to remedy the Lupron supply situation and ensure a stable supply of products, while also working to prevent such situations from recurring,” a Takeda spokesperson said in a statement.
Besides Lupron, U.S. marketing of Takeda’s rare disease drug Natpara has been on halt since impurities of rubber particles in the injectable prompted a recall in 2019. The company in August filed a prior approval supplement with the FDA to gain a go-ahead to change the product, which it hopes addresses the underlying problem, according to a presentation Thursday. But the company still doesn’t expect a U.S. relaunch of the hypoparathyroidism therapy before April 2022.
Takeda’s late-stage pipeline recently suffered several setbacks. In April, eosinophilic esophagitis candidate Eohilia, an oral suspension of the corticosteroid budesonide, missed its FDA target decision date. During Thursday’s call, Takeda’s R&D chief Andy Plump said the issue isn’t related to manufacturing inspections and that the company has been responding to FDA information requests. Takeda still doesn’t have an update on the drug’s new FDA action date.
In addition, blood cancer hopeful pevonedistat flunked a phase 3 trial in September. Furthermore, a few days ago, Takeda paused phase 2 narcolepsy trials of its oral orexin agonist, TAK-994, after noticing a serious safety signal. One patient had a significant worsening of liver function, and liver side effects caused an increased number of discontinuations across the two studies, Plump explained during the call.
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The orexin programs represent the largest assets in Takeda’s Wave 1 pipeline. For narcolepsy type 1 alone, the company has projected peak sales potential of up to $4 billion. But now, the company is shifting its focus to TAK-861, which Plump said had a distinct profile to TAK-994. The newer program entered phase 1 in April.
The TAK-994 setback hit Takeda’s stock price hard. To boost investor confidence, Takeda unveiled Thursday that it plans to buy back as much as 100 billion Japanese yen ($880 million) worth of its shares. Takeda is buying the shares at a significant discount, Chief Financial Officer Costa Saroukos said during the call. Takeda’s current share price is 30% below the average value by analysts, he noted during a separate call with reporters.
Since its gigantic acquisition of Shire, Takeda has been trying to lower its debt level to twice its EBITDA by fiscal year 2023. The share buyback won’t disturb that plan, Saroukos added. As of the end of September, that ratio was 3.1.
The back-to-back pipeline flops also raised concerns about Takeda’s near-term ability to generate sales growth. To hear Weber tell it, Takeda’s in good shape until at least 2026.
“We only have a growth question mark when Entyvio will face biosimilar,” Weber said, noting that the worst case for that date is 2026 in the U.S. The inflammatory bowel disease drug is currently Takeda’s top-selling drug, with sales between July and September at 130.5 billion Japanese yen ($1.15 billion) after a 23.4% year-over-year increase. The med leads a group of 14 global brands that Takeda counts on for revenue growth.
“It’s really in the later part of the decade that we need to have the pipeline really starting to deliver to continue to grow,” Weber said. “And we believe we have a lot of ammunition in our pipeline.” Still, the company will continue with dealmaking, mainly focused on earlier-stage candidates, he added.
Entyvio has its own problem. Back in late 2019, the FDA dealt a complete response letter to an under-the-skin version of the biologic drug in ulcerative colitis. The company now expects a potential approval of the new device in fiscal year 2023, Plump said, a delay from the firm’s previous guidance of fiscal 2022.
For the six months ended in September, Takeda’s revenue reached 1,794 billion Japanese yen ($15.8 billion), up 6.8% at constant currencies without considering M&A contributions.