Takeda hikes annual profit forecast by a third after second-quarter profit jump

Takeda is working to close a $62 billion acquisition of London-listed Shire. The upgraded forecast includes costs related to the acquisition incurred in the first half of the financial year but not costs from the latter half or projected earnings from Shire post-acquisition.

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By Takashi Umekawa

TOKYO: Japan’s Takeda Pharmaceutical Co Ltd on Wednesday boosted its annual operating profit outlook by a third after second-quarter earnings surged on strong global sales of its drugs for bowel disease and multiple myeloma.

It now expects to post 268.9 billion yen ($2.4 billion) in operating profit for the year ending in March, beating an average Refinitiv estimate of 222.7 billion yen from eight analysts.

Takeda is working to close a $62 billion acquisition of London-listed Shire. The upgraded forecast includes costs related to the acquisition incurred in the first half of the financial year but not costs from the latter half or projected earnings from Shire post-acquisition.

Shire-related costs for this financial year are expected to total 40 billion to 60 billion yen, Chief Executive Christophe Weber told a news conference in Tokyo.

For the second-quarter, Takeda booked an 86 percent rise in operating profit to 73.1 billion yen.

First-half sales figures showed sales of Entyvio, a treatment for Crohn’s disease and ulcerative colitis that is Takeda’s biggest-selling drug, jumped 32.4 percent to 128.4 billion yen. Sales of Ninlaro, which treats multiple myeloma, a cancer of plasma cells, rose 35 percent.

Sales of blood cancer treatment Velcade, which lost exclusivity in the U.S. last year, fell 10 percent. That was less than expected by the company, which pushed back its expectation of generic competition entering the market to March 2019.

Takeda has gained approval for the Shire deal, potentially the biggest-ever acquisition by a Japanese company, from U.S., Japan and China regulators but is still waiting for the nod from European authorities.

It has proposed selling a Shire Phase 3 inflammatory bowel disease drug to gain European approval for the deal and does not expect its talks with the European Commission will delay closure of the deal.

The Shire deal is aimed at strengthening Takeda’s late-stage pipeline. According to Takeda, the rare disease specialist has seven drug candidates in Phase 3 clinical trials while the Japanese firm has only three.

“This Shire acquisition will allow us to increase our R&D budget to a level higher than 400 billion yen which will make us very competitive globally,” Weber told reporters.

Of the 20-member executive team post-Shire acquisition, two members would come from Shire, Weber said.

Takeda, which had a market value of roughly $31 billion, has secured a $30.9 billion bridge loan to help finance the acquisition. But some analysts say they remained concerned about how well the company will cope with its debt repayments – most of which have to be made in a year.

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