Takeda reports 1st quarter results of FY2015 with underlying revenue growth of 6.1%

Christophe Weber, President and Chief Executive Officer of Takeda, commented:

"Takeda started FY2015 on a positive trend, with underlying revenue growing 6.1%. This will help us make the planned turnaround this year, in building a patient and customer centric organization. Our new products Entyvio and Adcetris contributed strongly to this result. Furthermore, strong performance of Brintellix and Azilva in CNS and CVM areas, and Value Brands in Emerging Markets, contributed to our growth. Operating profit was mainly impacted by an increase in expenses for several recent launches and in R&D. This should even out over the coming quarters, and we expect to achieve the full-year guidance."

Key figures for 1Q of FY2015

Underlying revenue growth was 6.1% while Underlying Core Earnings and Underlying Core EPS were flat, with no changes in our operational guidance for FY2015. Reported revenue grew 8.5% to 446.3 billion yen. Increase in expenses for new launch products, as well as a decrease in other income related to sale of real estate in 2014, resulted in a year-to-year decline in Operating Profit, Net Profit and EPS, by 14.1 billion yen, 8.8 billion yen and 11 yen, respectively.

Revenue growth was mainly driven by Entyvio and Brintellix in the U.S., Entyvio and Adcetris in Europe, and Azilva and Lotriga in Japan – adding 33.7 billion yen. Performance in the U.S. (+15.7% underlying revenue growth) and Europe and Canada (+6.8%) was very strong. Emerging Markets grew by 8.0%, led by Value Brands, with strong growth in China and Russia. In Japan, new products contributed 10.5 billion yen, but as a result of increasing generic competition, total revenue declined -1.2%.

Project Summit – a company-wide strategic initiative to increase efficiency -- continued to produce results, with 5 billion yen savings in Q1. Execution of Summit initiatives in recent months include the completion of the European Finance shared service hub consolidation in Poland; the closure of manufacturing sites in Denmark and Norway; the continued re-organization of select commercial areas in Emerging Markets and Europe; the implementation of global initiatives for IT service management; and the transformation of the procurement process. Our efficiency initiatives as part of Project Summit remain on track and we are committed to this project.

Entyvio is expected to be a key global contributor to Takeda's sales growth over the next few years, and Azilva, Takecab and Zafatek are the new products in Japan that are expected to enable Takeda to overcome increased generic penetration and maintain a leading position. The ongoing efforts of the R&D organization will contribute assets in the mid- and long-term. Importantly, a New Drug Application (NDA) for ixazomib for multiple myeloma has been submitted to the U.S. Food and Drug Administration (FDA), and Takeda expects to submit a marketing authorization application to the European Union (EU) soon.

The new company structure, effective April 1, 2015, reflects the new strategic growth focus, prioritizing patients’ needs, clarifying accountability, and increasing operational efficiency. The company continues to be R&D driven, focusing on four therapeutic areas and vaccines.

In May, Takeda set the following management guidance for FY2015:

Management Guidance for FY2015