12 Takeda Pharmaceutical Co.
1-1, Doshomachi 4-chome HEADCOUNT 19,654 Chuo-ku, Osaka 540-8645 YEAR ESTABLISHED 1781 Japan PHARMA REVENUES $14,829 4%/-4%" Tel: (81) 66 204 2111 TOTAL REVENUES $16,607 5%/-3%* Fax: (81) 66 204 2880 NET INCOME $2,900 -10%-17%* WWW.TAKEDA.COM R&D BUDGET $3,380 6%/-3%* * Converted at av. exch. rate / based on reported currency (JPY) DRUGS APPROVED/LAUNCHED Drug Indication MEPACT non-metastatic osteosarcoma febuxostat hyperuricemia in patients with gout galantamine Alzheimer's disease (Japan) hydrobromicie EDARBI hypertension NESINA type 2 diabetes (Japan) Takepron & prevention of recurrence of NSAIDs(*)- Takepron OD associated qastric ulcer/duodenal ulcer (Japan) DRUG PROGRAMS CANCELLED/WITHDRAWN Drug Indication TAK-536 hypertension MLN0415 inflammatory diseases TAK-285 HER2 inhibitor TAK-442 venous/arterial thromboembolism TAK-065 Alzheimer disease, Parkinson's disease DRUG PENDING APPROVAL Drug Indication mifamurtide diabetes melitus azilsartan hypertension (Japan) Contrave obesity Feraheme iron deficiency anemia peginesatide chronic renal failure azilsartan essential hypertension medoxomil DRUG IN PHASE IIB AND BEYOND Drug Indication alogliptin diabetes melitus ramelteon insomnia azilsartan hypertension medoxomil TAK-700 prostate cancer Sovrima friedreich's ataxia, duchenne muscular dystrophy AMG706 advanced non-squamous non-small cell lung cancer vedolizumab ulcerative colitis, Crohn's disease Lu AA21004 major depressive disorders, generalized anxiety disorders peginesatide chronic kidney disease related anemia obesity TAK-085 hypertriglyceridaemia brentuximab relapsed or refractory Hodgkin lymphoma vedotin AMG 386 recurrent ovarian cancer ganitumab metastatic pancreas cancer LATUDA schizophrenia, bipolar disorder EARLY RESEARCH PROJECTS Drug Indication AMG706 breast cancer SGN-35 first line Hodgkin lymphoma, front line systemic anaplastic large cell lymphoma MLN8237 progressive cancer MLN9708 advanced malignancies Lu AA24530 major depressive and generalized anxiety disorders conatumumab progressive cancer TAK-329 diabetes mellitus TAK-591 hypertension TAK-448 prostate cancer DRUGS COMING OFF PATENT Drug Indication Actos/Actoplus Met type 2 diabetes (Eli Lilly) TOP-SELLING DRUGS Drug Indication $ (+/- %) Actos diabetes $4,538 10% Blopress hypertension $2,551 8% Prevacid GERD $1,563 -33% Lupron prostate cancer $1,362 5% Velcade multiple myeloma $594 19% Account for 72% of total pharma sales, down from 73% in 2009.
A FAVORABLE SHIFT IN EXCHANGE RATES makes Takeda look better than it is. In yen, Takeda fell 4% in pharma sales, walloped by the loss of patent protection for Prevacid in the U.S. Revenues dropped by a third to $1.5 billion for Prevacid, while that 9% currency boost provides an artificial $1.2 billion boost in Takeda's revenues.
Prevacid's precipice provides prelude to Takeda's primary problem: Actos' U.S. patent expiration. In December 2010, Takeda settled with a dozen generic companies to stave off their challenges to the diabetes franchise's patent protection. Four of the generic firms will be licensed to hit the U.S. market in August 2012, while the others will be allowed in after the 180-day exclusivity period. ACTOplus met and duetact will see generic competition in December 2012. Actos sales in the Americas region amounted to $3.5 billion in 2010.
In June 2011, France and Germany banned use of Actos after a study showed an increased risk of bladder cancer for some users. Actos only posted $345 million in sales in Europe for Takeda, so the ban won't be too damaging to Takeda's prospects. The FDA has also asked that Takeda update Actos' label to warn about that cancer risk in patients taking the drug for more than a year at its highest dose. So much for Actos benefiting from the withdrawal of competitor Avandia.
So with Prevacid down the tubes and Actos facing a 2012 cliff, what can Takeda do to stay relevant? Buy another pharma!
In May 2011, Takeda made a $9.1 billion acquisition of Nycomed, after rumors of courtship swirled. (The deal also includes assumption of net debt, bringing the total value to $13.7 billion.) The acquisition, provided it passes antitrust muster, will add around $4.0 billion to Takead's revenues/ excluding the U.S. dermatology franchise, which was excluded from, the acquisition. Those sales will help diminish the impact of Actos' post-2012 decline. (Nycomed was dealing with its own post-patent plunge for Protonix.)
A week before the acquisition, Takeda rolled out a 2011-2013 business plan to "transform the company into a new Takeda." The new plan modifies the 2010-2012 policy known as "the Vision," retaining the goal of making 2015 comparable to 2010's financial levels, with room for growth. To that end, the company will move away from mature, large-scale products (by necessity), and try to develop a "diverse product lineup centered on new treatments." The company also planned to accelerate its moves into "newly penetrated countries and emerging markets," according to the new plan. The U.S. and Japan account for around 85% of Takeda's revenues.
So how does the Nycorned acquisition fit into the strategy? Well, Nycomed has a diverse portfolio and a marketing infrastructure in Europe and some emerging regions, so it could help jump-start Takeda's strategy. More than half of Nycomed's growth comes from emerging regions. Takeda has been looking to boost is presence in Russia and the former Soviet states. Nycomed has more than 12,000 employees, four R&D centers in Europe and India, and 15 manufacturing sites. Takeda projects approximately $350 million in synergies (read: layoffs of overlapping functions) from the deal.
Also, Nycomed's commercialization partner, Forest Labs, received approval in March for Daxas, a first-in-its-class maintenance treatment for Chronic obstructive pulmonary disease (COPD). The approval triggered a $182 million milestone payment to Nycomed. Takeda will receive royalties from Forest's U.S. sales of Daxas. Daxas was approved in April 2010 in Europe and Takeda esti mates its non-royalty portion of sales could reach $720 million by 2015.
Takeda's not just going for inorganic growth. The company gained FDA approval in February 2011 for Edarbi, a once-daily antihypertensive that proved more effective at lowering blood pressure than Diovan and Benicar. Estimates of Edarbi's sales potential varied pretty widely, topping out at $750 million by 2015.
Takeda's last major acquisition, the $8.8 billion purchase of Millennium Pharmaceuticals in 2008, has yet to bear fruit, outside of the performance of cancer drug Velcade, which posted 19% sales growth to hit $594 million last year (10% growth in yen). We'll see if the big revenue boost that Nycomed offers, along with its marketing structure and pipeline, are enough to keep Takeda relevant and fulfill the Vision for 2015.
RELATED ARTICLE: OUTSOURCING NEWS.
In February 2011, Takeda entered into strategic partner-I ships with Covance and Quintiles. The CROs will help Takeda plan and execute global development programs to support new compounds in all therapeutic areas, except oncology, and will contribute clinical development capabilities and central laboratory services.
The move is part of the company's global program-level sourcing strategy to increase operational efficiency. "Through these relationships, Takeda will move toward a fully virtual outsourcing model combining the expertise and capabilities of Takeda with those of Covance and Quintiles to improve productivity and facilitate Takeda's global growth," according to a company statement.
In October 2010, Takeda North America signed a strategic IT services outsourcing pact with Accenture. Accenture will provide Takeda with application and infrastructure outsourcing services, including development, testing, and maintenance of all applications supporting Takeda's operations, and service desk management, data center management, server and storage management, end-user computing, and network management.
RELATED ARTICLE: ACQUISION NEWS.
Price: $13.7 billion
Announced: May 2011
What they said: "Nycomed enables Takeda to maximize the value of our portfolio and gives us an immediate strong presence in the high-growth emerging markets while doubling Takeda's European sales,"
--Yasuchika Hasegawa, president and CEO of Takeda
RELATED ARTICLE: THE LOWE DOWN.
Takeda, the flagship of the Japanese pharma industry, has been sneaking up on people. Every year or so they make another acquisition (Millennium, Nycomed) and sign another batch of codevelopment deals. I'm still pretty sure that their name would never come up if you stopped people on the street and asked them to name a bunch of drug companies, but that doesn't seem to bother them much. They just keep on expanding.
I notice, though, that when they bought Nycomed, the CEO said that the hoped the smaller company's entrepreneurial culture could seep over into the rest of the company. Wasn't that supposed to happen when they bought Millennium, too? You could also wonder about a company that's looking to We Swiss to bring in some of wild, freewheeling style, but all things are relative.
Takeda does seem be experiencing the Curse of the PPARs with Actos, which isn't very timely, since the company just lost Prevacid this year. But compared to some of the other patent problems around the business, Takeda's look relatively benign. Things should be quiet for the next couple of years, and then we'll see what happens when the new drugs kick in.--DL