In his debut earnings report since assuming his role as CEO of Japanese drugmaker Takeda, Christophe Weber had to tell investors today that the company had a small loss in its last fiscal year. The company’s first non-Japanese leader promised shareholders that a corner had been turned and Takeda would be slightly profitable this year. That promise is contingent, however, on some drugs whose performance are not guaranteed, like weight-loss drug Contrave.
“FY2014 was a year of transformation for Takeda, and at the same time, a year during which we delivered our business targets,” Weber said in the earnings release. “Financial discipline will sustain our business momentum, and I anticipate FY2015 will be a turnaround year for Takeda as we have positioned the company for long-term sales and profit growth.”
Long-term was the operative phrase. The company reported that revenue was up 5.1% to ¥1,777.8 billion ($14.8 billion) but its net profit was in the red to the tune of ¥129.3 billion ($12 million). Its loss of $1.50 per share, Takeda said, was mainly tied to the hit it took after agreeing recently to settle for $2.3 billion cases tied to risks of it diabetes drug Actos, a product whose patent loss contributed to Takeda’s need for a turnaround.
The company expects the current fiscal year will be better, but only a bit. It forecast sales of about $15.2 billion for 2015 and a profit of about $567 million. Toward that end, Weber is steering the company’s focus to oncology, gastrointestinal meds and emerging markets. Takeda said that emerging markets in 2014 provided a 10% revenue boost, with double-digit growth in China and Russia, although some other, unnamed markets posed problems because of economic conditions. It didn’t give specific revenue numbers.
Weber, who took over April 1, also said that inflammatory bowel disease drug Entyvio performed well enough in the U.S. and Europe that he is confident it will hit its $2 billion peak sales target. But Entyvio faces challenges. It was approved last year as a second-line treatment for Crohn’s and ulcerative colitis, not as a first-line treatment, and must compete against well-established products like AbbVie’s ($ABBV) Humira, Amgen’s ($AMGN) Enbrel, and Johnson & Johnson’s ($JNJ) Remicade and follow-up Simponi.
Weber also pointed to the Contrave launch as being a key to Takeda’s near-term future, but didn’t mention the dust-up it is having with partner and developer Orexigen ($OREX). Orexigen angered the FDA when it released some early positive data on cardio risks. Takeda this week threatened to end its marketing arrangement with Orexigen, although a Takeda spokeswoman told Bloomberg the companies were working closely to try to salvage their accord.
The Japanese company is demanding that Orexigen pick up the tab on a postmarketing study of the drugs cardio risks which the Cleveland Clinic will conduct at an estimated to cost about $200 million. The two were going to split the cost, but that was before Orexigen got hasty about talking up the drug’s profile. The executive committee of the current study, which is also being led by the clinic, told the pair they needed to dump it since it was comprised by the release of data, whose positive results have since been erased by analysis of 50% of the data.
Weber, who was brought in by Takeda’s now chairman Yasuchika Hasegawa to provide an international perspective to the Japanese-centric drugmaker, today remained upbeat about the future of the company he is tasked with remaking. “I anticipate FY2015 will be a turnaround year for Takeda as we have positioned the company for long-term sales and profit growth,” he said today.
By Eric Palmer