The FINANCIAL -- With underlying revenue growth of 2.8% and underlying core earnings -2.1%, Takeda met its operational guidance for FY2014. Reported revenue grew by 5.1% to 1,777.8 billion yen.
The booking of a $2.7 billion provision to cover the Actos settlement and estimated costs associated with remaining cases and other related litigations, along with other one-time exceptional items, impacted operating profit (-129.3 billion yen), net profit (-145.8 billion yen) and earnings per share (-185 yen).
Revenue growth was driven by new products – mainly Entyvio and Brintellix in the US, Entyvio and Adcetris in Europe, and Azilva in Japan – adding 97.2 billion yen. Performances in the US (+14.5% underlying revenue growth) and Europe and Canada (+5.4%) were very strong. Emerging Markets grew at 8.1%, with key countries China and Russia both achieving double-digit growth, while several other markets were impacted by a volatile economic environment. Excluding inventory adjustment, sales in Emerging Markets grew 10% year-on-year, in line with our mid-term ambition. In Japan, new products contributed 35.6 billion yen, a growth of 6.2%, which could not yet overcome the impact from generics and price pressure (Japan total -4.1%).
Project Summit – a company-wide strategic initiative to increase efficiency – delivered savings of 28 billion yen in FY2014, bringing the accumulated total achieved in the first two years to 62 billion yen. Thus, the company has achieved over 50% of its 5-year target of 120 billion yen in just 2 years, according to Takeda.
Takeda is positioned for organic growth, with innovative products in the United States and Value Brands in Emerging Markets being the main growth drivers. Entyvio is expected to be a key global contributor to sales growth over the next few years, and Azilva and Takecab are among the new products in Japan that will enable Takeda to overcome increased generic penetration and price pressure and maintain a leading position. The ongoing efforts of the R&D organization will contribute in the mid- and long-term, with assets such as ixazomib for multiple myeloma that is currently in late phase 3 development with approval expected in FY2016. From FY2018 onward, Takeda expects to globally launch a range of innovative products in all its therapeutic areas and vaccines.
The new company structure, effective from April 1, 2015, reflects the new strategic growth focus, prioritizing patients’ needs, clarifying accountabilities, and increasing operational efficiency. The company continues to be R&D driven, focusing on four therapeutic areas and vaccines.
Christophe Weber, President and Chief Executive Officer of Takeda, commented:
“FY2014 was a year of transformation for Takeda, and at the same time, a year during which we delivered our business targets. We obtained approval for four important new treatments with Entyvio, Contrave, Takecab and Zafatek, and achieved significant pipeline milestones, including the phase 3 interim results for ixazomib. EPS was mainly impacted by the Actos settlement agreement expected to resolve the vast majority of Actos product liability lawsuits pending in the U.S, which will reduce financial uncertainties for the company and allow us to focus on developing innovative medicines for patients around the world.
Last year, I outlined my plan for the new Takeda organization, and we are steadily progressing to execute our strategic roadmap on all fronts to continue building a patient and customer centric organization with a focused world class R&D engine. Takeda’s growth drivers are gastroenterology, value brands in emerging markets, and oncology along with the launch of ixazomib. 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."