Takeda posts surprise profit a year after Shire mega-merger

Japan’s Takeda has posted a surprise profit after its $59 billion merger with Shire just over a year ago, as the company shakes off the huge debts it incurred to get the deal done. 

Analysts had expected Takeda to turn a small loss after taking out huge bank loans worth around $32 billion to get the merger done in January 2019.

But Takeda has been busy selling off unwanted assets to cut its debts, such as over-the-counter businesses in Europe and the Middle East. 

The company has also benefited from the revenues that have been generated from Shire’s portfolio of rare disease drugs. 

Japan’s largest pharma said it expects to make around 355 billion yen ($3.3 billion) in operating profit for the year to March. 

For the financial year that ended in March, Takeda’s profit was around 100 billion yen ($92 million). 

Like many pharma companies Takeda has had to rapidly adapt to meet the demands of the COVID-19 pandemic. 

It has halted new drug trials and is now focusing on an investigational plasma-derived therapy for the disease codenamed TAK-888. 

It is working with an alliance of 10 global plasma companies to develop the therapy, based on immune cells derived from the blood of recovered coronavirus patients. 

Clinical trials for the new product, which is called CoVig-19, could begin in June. 

But the work to reshape the company after the merger has only just begun – Takeda has pledged to sell off non-core assets worth $10 billion. 

Last month it announced it would sell a portfolio of OTC and prescription products to Denmark’s Orifarm for about $670 million. 

In total assets sold last year were worth around $7 billion, according to Reuters, citing data from Refinitiv.

Most of this came from selling the dry eye drug Xiidra to Novartis for $5.7 billion, a deal that made sense for both parties. 

Xiidra was originally developed by Shire and fitted well with Novartis’ portfolio of ophthalmology products, while Takeda focuses on oncology, gastroenterology, neuroscience, rare diseases, and plasma-based therapies. 

Shares in Takeda ticked up following the announcement, while the rest of the market slid.

President and CEO Christophe Weber said: “In line with our values, Takeda is taking a lead in meeting the challenges of the COVID-19 outbreak. We initiated a global industry alliance, sharing our world-class plasma-derived Therapy R&D, plasma collection and manufacturing capabilities to work collaboratively with other global and regional plasma companies to accelerate development of CoVIg-19, a potential plasma-derived therapy for patients at risk from serious complications of COVID-19.

“Clinical trials are on track to begin in the summer and if successful, CoVIg-19 has the potential to be one of the earliest approved treatment options.”

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