Japan’s Takeda has already set low expectations for investors for the fiscal year that is about to close. Revenues and profits will be down for the second year running. But COO Christophe Weber is also promising better things to come. With a reorganization in place and some new drugs in the market and the pipeline, he said investors can expect growth going forward.
“This year is an investment year. Next year, we should start to see sales growth and also profit growth, core earnings growth,” Weber told Bloomberg in Singapore, where the company has moved operations for its emerging markets division, one of three areas of emphasis for the company. “That’s for us a turnaround that should happen.”
The company this month said it was expecting a nearly 40% fall in net income to about $548 million for the current fiscal year which ends March 31, according to Bloomberg. That will follow the 28% decline for the previous fiscal year after the drugmaker’s key product, diabetes drug Actos, lost patent protection. Weber says midterm growth should be in the mid-single digits.
To get the drugmaker’s numbers moving up, Weber has laid out a plan to focus on emerging markets, oncology and gastrointestinal meds. Executing on that focus, the drugmaker Tuesday announced a $121 million deal to buy a portfolio of drugs from Neutec, one of the top drugmakers in Turkey. Last year it got approval for its inflammatory bowel disease drug Entyvio, which came into a crowded market but is forecast to hit $1 billion in peak sales by 2020. This month it also announced positive data on ixazomib, its top oncology prospect that the company hopes can succeed its blockbuster Velcade.
To capitalize on these areas, Weber spent the last year reorganizing Takeda, giving it a more global outlook, the task handed to him by current CEO Yasuchika Hasegawa when he brought the former GlaxoSmithKline ($GSK) exec in last year and set him up as his successor. To do that, Weber has acquired talent from around the industry and around the world. Weber will be Takeda’s first non-Japanese CEO. That fact and his recruitment of execs that also are not Japanese have stirred up some discontent in Japan.
One exec is Giles Platford, a U.K. national who came to Takeda in 2009. He was promoted to head of emerging markets, and recently announced in the new 14,000 square foot office building in Singapore. The operation was moved from Switzerland to get closer to the action. Platford tells the Business Times, that his division is projecting 10% growth for the coming year. It will get about half of that from “value brands,” he said, and the rest from new meds, leveraging the commercial base of Nycomed, the Swiss drugmaker that Takeda bought in 2011 for $14 billion.
The reason to buy Nycomed, Platford said, “was to marry the broad commercial footprint of Nycomed in emerging markets with the innovative pipeline that Takeda has to offer. So we are in the process of accelerating registration and launch of those products in gastroenterology, diabetes and of course, in oncology.”
Being in Singapore will accelerate the process, he said. Platford tells the newspaper that the new address also signifies “the conclusion of the integration process and recognition of the fact that Takeda is now truly a global organization.”
By Eric Palmer