OSAKA, Japan-Sunday 17 May 2020 [ AETOS Wire ]
(BUSINESS WIRE)-- Takeda Pharmaceutical Company Limited (TOKYO: 4502) (NYSE: TAK)
(“Takeda”) today announced financial results for the year ended March
31, 2020 (FY2019). As a top 10 global R&D-driven biopharmaceutical
company, Takeda is demonstrating its innovation and values in its
response to COVID-19 and in positioning itself for long-term success.
- FY2019 reported revenue JPY 3,291 billion, up 57% in first full year following acquisition of Shire.
- FY2019 reported operating profit greatly exceeded initial guidance to reach over JPY 100 billion, despite significant non-cash acquisition-related impact.
- Core operating profiti increased 110% year on year to JPY 962 billion.
- Takeda raised its cost synergy target to $2.3 billion and is on track to deliver on its targets to rapidly pay down debt and continue to divest non-core assets.
- Free cash flow up sharply by 156% to JPY 968 billion, enabling Takeda to sustain its well-established dividend policy of 180 yen per share.
- Takeda delivered positive reported net profit of JPY 44 billion for FY2019.
- Reported operating profit forecast to more than triple to JPY 355 billion in FY2020; Takeda’s growth momentum expected to continue this year and accelerate in the medium term.
Takeda President and Chief Executive Officer Christophe Weber commented:
“Our
transformation into a top 10 global biopharmaceutical company
accelerated this year and helped us deliver another set of excellent
results. We’re fully operating as one Takeda, with growth driven by our
five key business areas and a geographic footprint aligned with global
market opportunities. Above all, we’re a values-based company that is
translating science into life-changing medicines.
“In line with
our values, Takeda is taking a lead in meeting the challenges of the
COVID-19 outbreak. We initiated a global industry alliance, sharing our
world-class Plasma-Derived Therapy R&D, plasma collection and
manufacturing capabilities to work collaboratively with other global and
regional plasma companies to accelerate development of CoVIg-19, a
potential plasma-derived therapy for patients at risk from serious
complications of COVID-19. Clinical trials are on track to begin in the
summer and if successful, CoVIg-19 has the potential to be one of the
earliest approved treatment options.”
“Our guidance
for FY2020 reflects confidence in Takeda’s growth momentum,” Weber
continued. “We are positioned for success with our next wave of growth
driven by promising product candidates in our R&D pipeline targeted
for launch in the next five years, and a potentially transformative
early-stage pipeline for longer-term growth.”
HIGHLIGHTS
Solid Results as Takeda’s Transformation Accelerated in FY2019
Reported Results for FY2019 Ended March 31, 2020ii,iii,iv
|
(billion yen)
|
REPORTED
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CORE
|
UNDERLYING
|
||
|
FY2019
|
vs. PRIOR
YEAR |
FY2019
|
vs. PRIOR
YEAR |
|
|
|
Revenue
|
3,291.2
|
+56.9 %
|
3,291.2
|
+56.9 %
|
+1.6 % y-o-y
(pro-forma)
|
|
Operating Profit
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100.4
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-57.8 %
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962.2.
|
+109.5 %
|
|
|
Margin
|
3.1 %
|
-8.3pp
|
29.2%
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+7.3 pp
|
28.9%
|
|
Net Profit
|
44.2
|
-67.3 %
|
602.2
|
+87.4 %
|
|
|
EPS (JPY)
|
28 yen
|
-79.8%
|
387 yen
|
+52 yen
|
395 yen
|
|
Free Cash Flow
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968.0
|
+156.0%
|
|
|
|
- 5 key business areas, which represent approx. 79% of total FY2019 revenues, grew 6% year on year pro forma on an underlying basis.
- Our leading
GI therapy, ENTYVIO, our treatment for rare hereditary angioedema,
TAKHZYRO, and our Plasma-Derived Therapies all delivered strong growth.
Notable contributors to underlying FY2019 growth include:
- ENTYVIO +33% (Gastroenterology);
- TAKHZYRO +318% (Rare Diseases);
- NINLARO +29% (Oncology);
- TRINTELLIX +25% (Neuroscience); and
- ALBUMIN/FLEXBUMIN +20% (PDT Immunology).
- Our PDT Immunology business area delivered a strong improvement with 9% underlying revenue growth year-on-year.
- Revenue growth of Immunoglobulin products accelerated to 17% in Q4 on a pro forma underlying basis compared to the same period last year, driven by successful expansion of subcutaneous IG (SCIG).
- During Q4 Takeda received approval for ENTYVIO (Vedolizumab) in China for the treatment of patients with moderate to severe active Ulcerative Colitis (UC) and Crohn's Disease (CD).
- Reported operating profit was over JPY 100 billion, greatly exceeding initial guidance, despite significant non-cash items related to the acquisition of Shire.
- Cost synergies and operating expenditure efficiencies contributed to a 110% increase in core operating profit year-on-year to nearly 1 trillion yen (JPY 962 billion), and to a 7 percentage point improvement in underlying core operating margin from 22% last year to 28.9% for FY2019.
- Strong free cash flow of nearly 1 trillion yen (JPY 968 billion) from operations and divestitures enabled debt repayment of JPY 701 billion and supported a 180 yen per-share dividend, in line with Takeda’s long-standing dividend policy.
FY2020 Guidance: Growth Momentum Expected to Continue
|
(billion yen)
|
FY2019
Results
|
FY2020
Forecast
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Underlyingv
(Management Guidance)
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Revenue
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3,291.2
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3,250.0
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Low-single-digit growth
|
|
Reported Operating Profit
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100.4
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355.0
|
|
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Core Operating Profit
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962.2
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984.0
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High-single-digit growth
|
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Core Operating Profit Margin
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29.2%
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30.3%
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Low-30s%
|
|
Reported EPS (Yen)
|
28
|
39
|
|
|
Core EPS (Yen)
|
387
|
420
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Low-teen growth
|
|
Annual Dividend per Share (Yen)
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180
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180
|
|
Takeda has
strong growth momentum heading into FY2020 and prospects for accelerated
underlying revenue and underlying core operating profit growth and
underlying core operating profit margin in the mid-30s over the medium
term.
FY2020
reported operating profit is forecast to more than triple as the company
will be less impacted by the non-cash acquisition related expenses
taken in FY2019. Takeda expects underlying core operating profit growth
in the high single digits and underlying core earnings per share growth
in the low teens for FY2020. Takeda expects to maintain its dividend to
shareholders of 180 yen per share.
Company
guidance reflects management’s expectations for continued business
momentum across Takeda’s 5 key business areas, underlying revenue growth
of our 14 global brands, and accelerated realization of cost synergies.
FY2020 guidance also reflects the following key assumptions, including
(i) that there will not be an additional 505(b)2 competitor for
subcutaneous VELCADE to launch in the U.S. within FY2020; (ii) no impact
of any potential further divestitures beyond what has already been
disclosed by Takeda; and (iii) management’s current expectations
regarding COVID-19.
To date,
Takeda has not experienced a material effect on its financial results as
a result of the global spread of the novel coronavirus infectious
disease COVID-19, despite the various effects on its operations as
detailed in Takeda’s Quick Report for the quarter and year ended March
31, 2020, released today. Based on currently available information,
Takeda believes that its financial results for FY2020 will not be
materially affected by COVID-19 and, accordingly, Takeda's FY2020
forecast reflects this belief. However, the situation surrounding
COVID-19 remains highly fluid, and future COVID-19-related developments
in FY2020, including new or additional COVID-19 outbreaks and additional
or extended lockdowns, shelter-in-place orders or other government
action in major markets, could result in further or more serious
disruptions to Takeda’s business, such as slowdowns in demand for
Takeda’s products, supply chain related issues or significant delays in
its clinical trial programs. These events, if they occur, could result
in additional impacts on Takeda’s business, results of operations or
financial condition, as well result in significant deviations from
Takeda’s FY2020 forecast.
Strategic Update: Multi-year Transformation to Top 10 Global Biopharma Company
Takeda’s
FY2019 results underscore the extent of our multi-year transformation.
Since FY2014, Takeda has risen from a top 20 to a top 10 global
biopharmaceutical company in revenue terms, with revenues nearly
doubling to JPY 3,291 billion. Underlying core operating margin has
improved by 12 percentage points in that time and is on a medium-term
trajectory to industry top-tier levels.
Takeda’s
prospects are driven by a much-transformed global business platform and
innovation engine for delivering patient impact and shareholder value.
The business is focused on 5 key business areas with growing brands –
Gastroenterology (21% of FY2019 sales), Rare Diseases (20%), Plasma
Derived Therapies (12%), Oncology (13%), and Neuroscience (13%), with
growing brands and a strong R&D pipeline of promising therapies in
these areas.
Takeda’s
geographic footprint is now strongly aligned with global
biopharmaceutical industry growth opportunities: United States (48% of
FY2019 sales), Japan (18%); Europe and Canada (20%) and Growth and
Emerging Markets (14%). Our increased scale strengthens our competitive
position and platform for growth from developing and delivering
innovative therapies in key geographic markets.
Strong Progress on Cost Synergies, Deleveraging and Divestiture Programs
The
integration of Shire is now almost complete, and we are operating fully
as one Takeda. We raised our cost synergy target to an annual run rate
of $2.3 billion from $2.0 billion by the end of FY2021, with a run rate
of $1.1 billion of cost savings already achieved. Takeda paid down JPY
701 billion debt in FY2019, including JPY 230 billion of prepayments,
bringing the net debt to EBITDA ratio down to 3.8x as of March 31, 2020
from 4.7x as of March 31, 2019. The company’s $10 billion divestiture
program is on track, with 5 transactions worth up to $7.7 billion
completed or announced to date.
Next Wave of Growth with Strong R&D Pipeline
Takeda has
built a world-class, state-of-the-art R&D engine leveraging our
internal research capabilities, while also actively engaging with
innovative ecosystems around the world to translate science into highly
innovative medicines.
The main
drivers for new product launches are 12 unique New Molecular Entities
(NMEs) in Wave 1, which represent several potential best-in-class /
first-in-class therapies targeted for launch by FY 2024 with potential
peak sales of >$10 billion. Our research engine is quickly advancing
next generation therapies designed to provide transformative or curative
potential for targeted populations with high unmet needs for FY 2025
onward. These programs are based on targets with strong human
validation, represent diverse modalities and leverage new platform
capabilities in cell therapy, gene therapy and data sciences.
- 14 global brands with more than 20 ongoing pivotal studies in new indications / geographies.
- Expanding in China with more than 15 planned approvals over the next 5 years.
- 12 best-in-class / first-in-class NMEs with potential approval through FY 2024 and 9 ongoing registration enabling studies.
- Sustained growth (FY2025 and beyond) through ~30 clinical-stage early development NMEs and next generation platforms.
- 38 new R&D collaborations with biotech and academia signed in FY2019, adding to the more than 200 partnerships already in place.
For more details on Takeda's FY2019 results and other financial information, please visit: https://www.takeda.com/investors/reports/quarterly-announcements/
About Takeda Pharmaceutical Company Limited
Takeda Pharmaceutical Company Limited (TOKYO:4502/NYSE:TAK)
is a global, values-based, R&D-driven biopharmaceutical leader
headquartered in Japan, committed to bringing Better Health and a
Brighter Future to patients by translating science into
highly-innovative medicines. Takeda focuses its R&D efforts on four
therapeutic areas: Oncology, Rare Diseases, Neuroscience, and
Gastroenterology (GI). We also make targeted R&D investments in
Plasma-Derived Therapies and Vaccines. We are focusing on developing
highly innovative medicines that contribute to making a difference in
people's lives by advancing the frontier of new treatment options and
leveraging our enhanced collaborative R&D engine and capabilities to
create a robust, modality-diverse pipeline. Our employees are committed
to improving quality of life for patients and to working with our
partners in health care in approximately 80 countries.
For more information, visit https://www.takeda.com.
For more information, visit https://www.takeda.com.
Important Notice
For the
purposes of this notice, “press release” means this document, any oral
presentation, any question and answer session and any written or oral
material discussed or distributed by Takeda Pharmaceutical Company
Limited (“Takeda”) regarding this release. This press release (including
any oral briefing and any question-and-answer in connection with it) is
not intended to, and does not constitute, represent or form part of any
offer, invitation or solicitation of any offer to purchase, otherwise
acquire, subscribe for, exchange, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval in any
jurisdiction. No shares or other securities are being offered to the
public by means of this press release. No offering of securities shall
be made in the United States except pursuant to registration under the
U.S. Securities Act of 1933, as amended, or an exemption therefrom. This
press release is being given (together with any further information
which may be provided to the recipient) on the condition that it is for
use by the recipient for information purposes only (and not for the
evaluation of any investment, acquisition, disposal or any other
transaction). Any failure to comply with these restrictions may
constitute a violation of applicable securities laws.
The companies
in which Takeda directly and indirectly owns investments are separate
entities. In this press release, “Takeda” is sometimes used for
convenience where references are made to Takeda and its subsidiaries in
general. Likewise, the words “we”, “us” and “our” are also used to refer
to subsidiaries in general or to those who work for them. These
expressions are also used where no useful purpose is served by
identifying the particular company or companies.
Forward-Looking Statements
This press
release and any materials distributed in connection with this press
release may contain forward-looking statements, beliefs or opinions
regarding Takeda’s future business, future position and results of
operations, including estimates, forecasts, targets and plans for
Takeda. Without limitation, forward-looking statements often include
words such as “targets”, “plans”, “believes”, “hopes”, “continues”,
“expects”, “aims”, “intends”, “ensures”, “will”, “may”, “should”,
“would”, “could” “anticipates”, “estimates”, “projects” or similar
expressions or the negative thereof. These forward-looking statements
are based on assumptions about many important factors, including the
following, which could cause actual results to differ materially from
those expressed or implied by the forward-looking statements: the
economic circumstances surrounding Takeda’s global business, including
general economic conditions in Japan and the United States; competitive
pressures and developments; changes to applicable laws and regulations;
the success of or failure of product development programs; decisions of
regulatory authorities and the timing thereof; fluctuations in interest
and currency exchange rates; claims or concerns regarding the safety or
efficacy of marketed products or product candidates; the impact of
health crises, like the novel coronavirus pandemic, on Takeda and its
customers and suppliers, including foreign governments in countries in
which Takeda operates, or on other facets of its business; the timing
and impact of post-merger integration efforts with acquired companies;
the ability to divest assets that are not core to Takeda’s operations
and the timing of any such divestment(s); and other factors identified
in Takeda’s most recent Annual Report on Form 20-F and Takeda’s other
reports filed with the U.S. Securities and Exchange Commission,
available on Takeda’s website at: https://www.takeda.com/investors/reports/sec-filings/ or at www.sec.gov.
Takeda does not undertake to update any of the forward-looking
statements contained in this press release or any other forward-looking
statements it may make, except as required by law or stock exchange
rule. Past performance is not an indicator of future results and the
results or statements of Takeda in this press release may not be
indicative of, and are not an estimate, forecast, guarantee or
projection of Takeda’s future results.
Certain Non-IFRS Financial Measures
This press
release and materials distributed in connection with this press release
include certain IFRS financial measures not presented in accordance with
International Financial Reporting Standards (“IFRS”), such as
Underlying Revenue, Core Operating Profit, Underlying Core Operating
Profit, Core Net Profit, Underlying Core EPS, Net Debt, EBITDA, Adjusted
EBITDA and Free Cash Flow. Takeda’s management evaluates results and
makes operating and investment decisions using both IFRS and non-IFRS
measures included in this press release. These non-IFRS measures exclude
certain income, cost and cash flow items which are included in, or are
calculated differently from, the most closely comparable measures
presented in accordance with IFRS. By including these non-IFRS measures,
management intends to provide investors with additional information to
further analyze Takeda’s performance, core results and underlying
trends. Takeda’s non-IFRS measures are not prepared in accordance with
IFRS and such non-IFRS measures should be considered a supplement to,
and not a substitute for, measures prepared in accordance with IFRS
(which we sometimes refer to as “reported” measures). Investors are
encouraged to review the reconciliation of non-IFRS financial measures
to their most directly comparable IFRS measures.
Further information on certain of Takeda’s Non-IFRS measures is posted on Takeda’s investor relations website at https://www.takeda.com/investors/reports/quarterly-announcements/quarterly-announcements-2019/
Medical information
This press
release contains information about products that may not be available in
all countries, or may be available under different trademarks, for
different indications, in different dosages, or in different strengths.
Nothing contained herein should be considered a solicitation, promotion
or advertisement for any prescription drugs including the ones under
development.
Financial information
Takeda’s
financial statements are prepared in accordance with International
Financial Reporting Standards (“IFRS”). The revenue of Shire plc
(“Shire”), which was historically, presented by Shire in accordance with
accounting principles generally accepted in the United States (“U.S.
GAAP”), has been conformed to IFRS, without material difference.
The Shire acquisition closed on January 8, 2019, and our consolidated results for the fiscal year ended March 31, 2019 include Shire’s results from January 8, 2019 to March 31, 2019. References to “Legacy Takeda” businesses are to our businesses held prior to our acquisition of Shire. References to “Legacy Shire” businesses are to those businesses acquired through the Shire acquisition.
This press release includes certain pro forma information giving effect to the Shire acquisition as if it had occurred on April 1, 2018. This pro forma information has not been prepared in accordance with Article 11 of Regulation S-X. This pro forma information is presented for illustrative purposes and is based on certain assumptions and judgments based on information available to us as of the date hereof, which may not necessarily have been applicable if the Shire acquisition had actually happened as of April 1, 2018. Moreover, this pro forma information gives effect to certain transactions and other events which are not directly attributable to the Shire acquisition and/or which happened subsequently to the Shire acquisition, such as divestitures and the effects of the purchase price allocation for the Shire acquisition, and therefore may not accurately reflect the effect on our financial condition and results of operations if the Shire acquisition had actually been completed on April 1, 2018. Therefore, undue reliance should not be placed on the pro forma information included herein.
The Shire acquisition closed on January 8, 2019, and our consolidated results for the fiscal year ended March 31, 2019 include Shire’s results from January 8, 2019 to March 31, 2019. References to “Legacy Takeda” businesses are to our businesses held prior to our acquisition of Shire. References to “Legacy Shire” businesses are to those businesses acquired through the Shire acquisition.
This press release includes certain pro forma information giving effect to the Shire acquisition as if it had occurred on April 1, 2018. This pro forma information has not been prepared in accordance with Article 11 of Regulation S-X. This pro forma information is presented for illustrative purposes and is based on certain assumptions and judgments based on information available to us as of the date hereof, which may not necessarily have been applicable if the Shire acquisition had actually happened as of April 1, 2018. Moreover, this pro forma information gives effect to certain transactions and other events which are not directly attributable to the Shire acquisition and/or which happened subsequently to the Shire acquisition, such as divestitures and the effects of the purchase price allocation for the Shire acquisition, and therefore may not accurately reflect the effect on our financial condition and results of operations if the Shire acquisition had actually been completed on April 1, 2018. Therefore, undue reliance should not be placed on the pro forma information included herein.
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i
|
Please refer to definitions on page 2 of this press release and in Takeda’s financial statements for more details.
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ii
|
Underlying
growth compares two periods (quarters or years) of financial results
under a common basis and is used by management to assess the business.
These financial results are calculated on a constant currency basis and
excluding the impact of divestitures and other amounts that are unusual,
non-recurring items or unrelated to our ongoing operations.
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iii
|
Underlying
growth for the fiscal year ended March 31, 2020 versus the previous
fiscal year ended March 31, 2019, pro-forma. The pro-forma baseline
represents the sum of Takeda revenue for the previous fiscal year (April
2018 to March 2019) plus Legacy Shire revenue from April 2018 through
the acquisition date (January 8, 2019), both adjusted to remove the
revenue from divested assets, with Legacy Shire revenue converted to JPY
at the rate of 1 USD = 111 JPY (average FX rate for the previous fiscal
year ended March 31, 2019) and converted from US GAAP to IFRS with no
material differences.
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iv
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Core
Operating Profit represents net profit adjusted to exclude income tax
expenses, the share of profit or loss of investments accounted for using
the equity method, finance expenses and income, other operating
expenses and income, amortization and impairment losses on acquired
intangible assets and other items unrelated to Takeda’s core operations,
such as purchase accounting effects and transaction related costs.
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v
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Underlying
growth adjusts for divestitures (assets divested in FY2019 and
disclosed divestitures expected to close in FY2020) and applies a
constant exchange rate (FY2019 full year average FX rate).
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View source version on businesswire.com: https://www.businesswire.com/news/home/20200512006003/en/
Contacts
Investor Relations:
Takashi Okubo
takashi.okubo@takeda.com
+81-(0)3-3278-2306
Media Contacts:
Japanese Media
Kazumi Kobayashi
kazumi.kobayashi@takeda.com
+81 (0) 3-3278-2095
Media outside Japan
Tsuyoshi Tada
tsuyoshi.tada@takeda.com
+1 (617) 551-2933
