February 4, 2020 / 12:06 PM / 16 days ago

Takeda sees surprise full-year operating profit on post-merger savings

TOKYO (Reuters) - Takeda Pharmaceutical Co Ltd expects to make an operating profit this fiscal year, compared with its previous forecast for a loss, thanks to sales growth in its core brands and savings from its purchase of Shire Plc, it said on Tuesday.

FILE PHOTO: A Takeda logo is seen in its research hub in Cambridge, Massachusetts, U.S., November 26, 2018. Picture taken November 26, 2018. REUTERS/Julie Steenhuysen/File Photo

Japan’s largest drugmaker expects an operating profit of 10 billion yen ($92 million) for the year ending in March, versus its previous estimate for a loss of 110 billion yen, it said alongside its third-quarter results.

That compares with analysts’ average forecast for a full-year loss of 75.6 billion yen from a poll of 13 by Refinitiv.

“The way business is progressing, the way we are delivering our synergies and managing our margin is very encouraging for next year,” Takeda CEO Christophe Weber said on conference call.

Takeda surprised markets in May last year when it reversed its full-year profit forecast to a loss, citing costs linked to its $59 billion Shire deal. It later revised the forecast to a smaller loss on strong sales of its core drugs.

The Shire acquisition, completed in January 2019, expanded Takeda’s pipeline and diversified its global sales, with half now coming from the United States.

The drugmaker, now the 15th largest in the world by revenue, told investors in November it expected to launch 14 new products through fiscal 2024 that combined would deliver about $10 billion in peak yearly sales.

But while the Shire purchase gave Takeda global heft, it left the drugmaker with a large debt pile, which stood at about $40 billion at the end of December.

To pare down debt, Takeda has pledged to dispose of $10 billion worth of non-core assets.

It completed $7 billion of divestments in calendar 2019, including assets in the Middle East and Africa and a dry-eye drug sold for $5.3 billion to Novartis, Refinitiv data show.

The company’s 14 global drug brands saw sales growth of 20% in the nine months through December, led by ulcer drug Entyvio. Overall revenue jumped 83% to 2.5 trillion yen in the period, while operating profit slid 43% to 162.5 billion yen.

Takeda is focusing on five key business areas: oncology, gastroenterology, neuroscience, rare diseases, and plasma-derived therapies.

Takeda’s shares rose 0.9% in Tokyo before the release of the results, versus a 0.5% gain in the broader market.

($1 = 109.03 yen)

Reporting by Rocky Swift; Editing by Kim Coghill and Mark Potter

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