On October 27, 2022 Takeda (TOKYO:4502/NYSE:TAK) reported financial results for the first half of fiscal year 2022 (period ended September 30, 2022), upgrading reported and core forecasts and free cash flow outlook for the fiscal year and reconfirming Management Guidance for core growth at constant exchange rate (CER) (Press release, Takeda, OCT 27, 2022, View Source [SID1234622519]).
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Takeda chief executive officer, Christophe Weber, commented:
"We succeeded in several major milestones in the first half of our fiscal year, including the first approval for Takeda’s dengue vaccine, QDENGA, in Indonesia and more recently the CHMP positive opinion for Europe and dengue-endemic countries. These milestones, together with our financial results, continue to demonstrate our ability to advance our robust pipeline and deliver new solutions for people and patients around the world."
Takeda chief financial officer, Costa Saroukos, commented:
"Our first half results are driven by strong momentum from our Growth and Launch Products, which grew at 19% year-on-year at constant exchange rate, and continued success in commercial execution, including new launches, contributing to core profit growth. Our core revenue and core operating profit grew 5.5% and 14.5% at constant exchange rate, respectively, enabling us to reconfirm our Management Guidance for FY2022.
"We have remained resilient amid rising inflation globally as a result of careful, long-term planning and strong execution and we continue to deleverage rapidly, finishing the first half with net debt to adjusted EBITDA at 2.6x, with 98% of our debt at fixed interest rates with a weighted average of 2%.
"We are upgrading our peak sales estimate for our biggest selling product, ENTYVIO, based on potential for further biologic market growth and share expansion, and our updated assumption for biosimilar entry timing. We are also raising our reported and core forecasts and free cash flow outlook for the full year, primarily reflecting favorable foreign exchange rates.
"We look forward to building on our first half business momentum throughout FY2022."
FINANCIAL HIGHLIGHTS
(a) Further information regarding certain of Takeda’s Non-IFRS measures is posted on Takeda’s investor relations website at View Source
(b) We define Free Cash Flow as cash flows from operating activities, subtracting acquisition of property, plant and equipment ("PP&E"), intangible assets and investments as well as removing any other cash that is not available to Takeda’s immediate or general business use, and adding proceeds from sales of PP&E, as well as from sales of investments and businesses, net of cash and cash equivalents divested.
(c) Core results adjust our reported results calculated and presented pursuant to IFRS to exclude the effect of items unrelated to Takeda’s core operations, such as, to the extent applicable for each line item, non-recurring items, purchase accounting effects and transaction related costs, as well as amortization and impairment of intangible assets and other operating income and expenses.
(d) CER (Constant Exchange Rate) change eliminates the effect of foreign exchange rates from year-over-year comparisons by translating Reported or Core results for the current period using corresponding exchange rates in the same period of the previous fiscal year.
COMMERCIAL UPDATES ACROSS FIVE KEY BUSINESS AREAS
Growth in our key business areas in the first half of FY2022 was driven largely by Growth & Launch Products1, which delivered revenue of 759.8 billion yen, marking a 19% increase on a CER basis.
Gastroenterology (GI), with 546.4 billion yen in reported revenue, grew +12% on a CER basis driven by 17% global sales growth for ENTYVIO on a CER basis in the first half. Due to this strong performance and other factors, we are raising the peak sales outlook range for ENTYVIO to $7.5-9.0 billion, from a previous estimate of $5.5-6.5 billion.
Rare Diseases, with 362.2 billion yen in reported revenue, grew +8% on a CER basis driven by strong sales of hereditary angioedema treatment TAKHZYRO, which grew 31% year-over-year on a CER basis due to the expansion of the prophylactic market, continued geographic expansion and strong patient uptake. LIVTENCITY, which launched in the U.S. in December 2021, continues to generate high interest and strong uptake with 75% of U.S. transplant centers having initiated therapy with at least one patient.
Plasma-Derived Therapies (PDT) Immunology, with 314.0 billion yen in reported revenue, delivered strong growth of +14% on a CER basis driven by strong demand for Immunoglobulin (+17% growth at CER), particularly in the U.S. amid increasing supply, as well as solid growth for Albumin (+8% at CER) tempered by the impact of lockdowns in China. The PDT business continues to innovate and deliver for patients with life-threatening conditions.
Oncology, with 225.3 billion yen in reported revenue, declined -12% on a CER basis as a result of expected entry of multiple VELCADE generic entrants that began in the U.S. in May 2022. Besides VELCADE, all other revenue totaled 204.5 billion JPY, a year-over-year increase of 6% at CER, led by strong demand for ALUNBRIG in Japan, Europe and Growth & Emerging Markets, and ADCETRIS, which continues to gain from increased access and uptake in frontline indications, and ICLUSIG in the U.S.
Neuroscience, with 302.3 billion yen in reported revenue, grew +11% on a CER basis, driven by an expanding ADHD adult market in the U.S. for VYVANSE/ELVANSE. Sales of TRINTELLIX were 49.8 billion yen (+5% growth at CER), due to continued recovery of the Major Depressive Disorder (MDD) market in the U.S. and strong market share gains in Japan.
PIPELINE UPDATE
Takeda has continued to deliver on its ability to bring new therapies to patients and capitalize on momentum within its innovative pipeline. Updates since the FY2022 Q1 announcement include:
TAK-003, Takeda’s dengue vaccine candidate, was recommended for approval by the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) for use in individuals four years of age and older in the European Union (EU) and dengue-endemic countries. This was the CHMP’s first-ever parallel assessment of a medicinal product for use in the EU and non-EU dengue-endemic countries participating in the EU-M4all procedure. Marketing authorization in Europe is expected in the coming months and regulatory reviews are in progress in dengue-endemic countries in Latin America and Asia.
Additional information related to this announcement is available here.
The Indonesia National Agency for Drug and Food Control approved QDENGA for use in individuals six to 45 years of age regardless of prior dengue exposure. This approval is the first for Takeda’s dengue vaccine candidate and marks the company’s first marketed vaccine outside of Japan. The decision was based on the ongoing Phase 3 TIDES trial that enrolled more than 20,000 children and adolescents living in dengue-endemic countries across Asia and Latin America.
Additional information related to this announcement is available here.
Takeda entered a collaboration and licensing agreement to develop a potential first-in-class therapy for the treatment of celiac disease. TAK-227 is designed to prevent the immune response to gluten in celiac disease, a serious autoimmune disease. There are currently no approved therapies for the treatment of celiac disease and Takeda now has three celiac disease programs in Phase 2 development.
Additional information related to this announcement is available here.
The U.S. FDA accepted Takeda’s supplemental biologics license application for TAKHZYRO to prevent hereditary angioedema (HAE) attacks in children from age 2 to <12. If approved, this would be the first and only prophylaxis treatment for HAE patients younger than six years of age.
Additional information related to this announcement is available here.
The EMA’s CHMP recommended the approval of maribavir for adults with post-transplant cytomegalovirus (CMV) refractory (with or without resistance) to prior therapies. If approved, maribavir would be the first and only inhibitor of CMV-specific UL97 protein kinase in the EU for this patient population.
Additional information related to this announcement is available here.
In October, Takeda submitted a new drug application (NDA) to Japan’s Ministry of Health, Labor and Welfare (MHLW) for its immune globulin subcutaneous (human) 20% solution for use in patients with primary immunodeficiency (PI) or secondary immunodeficiency (SID). Approved as CUVITRU in more than 30 countries, approval in Japan would offer a new treatment option to patients with agammaglobulinemia or hypogammaglobulinemia.
FY2022 OUTLOOK
Upgrading Full-Year FY2022 Reported and Core Forecasts and Free Cash Flow Outlook, and Reconfirming Management Guidance
Based on Takeda’s first half results, and primarily reflecting expected favorable foreign exchange rates during the remaining second half of FY2022, Takeda’s reported and core forecasts and free cash flow outlook have been revised from the original forecast.
For more details on Takeda’s first half FY2022 results and other financial information including key assumptions in FY2022 forecast and management guidance, please visit: View Source