Ever since Takeda closed its Shire takeover, the company has prioritized cutting its debt. After selling off some dispensable assets, the Japanese pharma is moving closer to its goal and is increasingly shifting its focus to growing revenue with new drugs.
After paying off 560.8 billion Japanese yen ($4.32 billion) worth of debt during the company’s 2021 fiscal year, Takeda has lowered its debt to earnings ratio to 2.8x as of the end of March versus 3.2x the same time last year.
The debt level is coming closer to the company’s target of 2x, or “low twos,” by fiscal year 2023. For this year, Takeda aims to pay another 500 billion yen toward its debt, Chief Financial Officer Costa Saroukos said during a conference call Wednesday.
Takeda has paid off much of its debt by jettisoning “non-core” assets beyond the areas of gastrointestinal diseases, rare diseases, plasma-derived therapies, oncology and neuroscience. Now, as the series of divestments are “essentially complete,” Takeda is shifting its focus toward driving revenue growth.
The company feels urgency to grow because its third-largest product, attention-deficit/hyperactivity disorder therapy Vyvanse, is expected to lose market exclusivity in August 2023. During the 12 months that ended in March, Vyvanse grew sales by 20.4% to 327.05 billion yen ($2.52 billion), ranking next to inflammatory bowel disease drug Entyvio’s 521.8 billion yen and immunoglobulin’s 385.9 billion yen.
Still, Takeda expects Entyvio, hereditary angioedema drug Takhzyro and other new launches to grow substantially into the end of the decade and offset losses of exclusivity, CEO Christophe Weber said on the call.
Thanks to those meds, Takeda expects to have “enough momentum” to hold revenue roughly flat in 2023 during the Vyvanse generic entries, Weber said.
After an FDA nod in September, Exkivity is now splitting new patients with Johnson & Johnson’s rival EGFR exon 20 medicine Rybrevant, Weber said. As for Livtencity, the drug has reached more than 400 patients since its launch in December. Roughly a third of about 300 transplant centers in the U.S. have prescribed the drug, he added.
Overall, Takeda recorded total revenues of 3,569 billion yen ($27.4 billion) during its fiscal-year 2021, an increase of 7.4% after taking out the effects of foreign exchanges rates and divestitures.
For 2022, Takeda plans to file for approvals to move Livtencity from drug-resistant CMV to front-line treatment. In addition, the company plans to submit its dengue vaccine TAK-003 in the U.S. later this year. A potential approval would serve as a steppingstone for nods in endemic regions. The vaccine is currently under review with the European Medicines Agency.
Besides those new drugs, Weber also singled out China as a growth driver during his opening remarks of Wednesday’s call. Takeda won the most approvals in China among multinational pharma companies in the past two years, Weber said, and it hopes to double its revenue in China over the next three years.
But Takeda has also suffered quite a few setbacks in the past few months. Wednesday, Takeda revealed that “after extensive regulatory discussions,” it has decided to discontinue development of TAK-609, an intrathecal formulation of Elaprase for Hunter syndrome, because “data are not sufficient for filing.” It marks a relatively small asset, carrying prior peak sales estimates of less than $100 million.
That’s on top of a recent FDA complete response letter Takeda got for hypoparathyroidism drug Natpara related to a manufacturing update to address the potential of rubber particulates shedding into the medicine. In a presentation Wednesday, Takeda says it’s evaluating next steps and the commercial relaunch of Natpara remains “delayed indefinitely.”
Meanwhile, Takeda is pushing back its target filing date for Exkivity in newly diagnosed non-small cell lung cancer to fiscal year 2024. The delay was caused by Russia’s invasion of Ukraine, the COVID-related lockdown in China as well as difficulty in enrolling U.S. patients after the approvals of Exkivity and J&J’s Rybrevant, Takeda R&D chief Andy Plump, M.D., Ph.D., said.
Similarly, phase 3 program soticlestat is also experiencing a delay in a filing in rare pediatric epilepsy disorders to fiscal year 2024 because of similar clinical sites challenges in Russia, Ukraine and China.