Japan’s Takeda has posted healthy net income growth for the year ended March 2008 but warned that profits next year will be battered by the effects of its $8.8 billion acquisition of the USA’s Millennium Pharmaceuticals.
For the last fiscal year, net profit came in at 355.45 billion yen ($3.4 billion), up 5.9%, though operating profit fell 7.7% to 423.12 billion yen, the first fall in 16 years, hit by increased drug licensing costs. Revenues reached 1.37 trillion yen, up 5.3%.
That growth was driven by the diabetes drug Actos (pioglitazone), which brought in 396.2 billion yen, a rise of 17.8%. Blood pressure drug Blopress (candesartan cilexetil) posted a 8.2% increase in sales to 223.1 billion yen, though gastrointestinal drug Prevacid/Takepron (lansoprazole) dipped 1.4% to 148.7 billion yen, as a result of patent expiries in Europe. Turnover from the prostate cancer treatment Leuplin (leuprorelin) was down 2.7% to 124.0 billion yen.
A reasonable set of results but Takeda is noew looking to face up to the US patent loss on Prevacid in 2009 and then Actos in 2011. To help cover the shortfall in sales, it has bought Millennium but that deal is going to hurt its finances.
Specifically the firm has warned of a 55% decline in net profits in the current fiscal year, due to costs stemming from the Millennium acquisition and it expects to book 200 billion yen in R&D write downs, plus goodwill and intangible assets. Net income will be 160 billion yen in the year to March 2009, while operating profit is estimated to reach 240 billion yen, down 43.3%, although revenues should rise 14.2% to 1.57 trillion yen.
“I believe that it is my duty to secure profit growth for the long-term even if I have to sacrifice near-term profits,” said Yasuchika Hasegawa, president of Takeda at a press conference. He acknowledged that analysts are split as to whether the firm has paid too much for Millennium but he is confident the deal will prove successful and predicted “further upside potential” to near-term sales of its flagship drug Velcade (bortezomib) for multiple myeloma and mantle cell lymphoma.
