TOKYO (Reuters) - Japan’s Takeda Pharmaceutical Co Ltd (4502.T) on Tuesday reported that its operating profit halved from the year-ago quarter, when the drugmaker had booked gains from asset sales.
Takeda has sold off assets it sees as non-core or underperforming, with Chief Executive Christophe Weber saying on Tuesday he was open to further disposals as the drugmaker looks to shore up its stretched finances.
Many of Takeda’s top-performing drugs posted stronger sales in the first quarter, but the company is facing a weak late-stage pipeline. To plug the gap, the company agreed in May to acquire London-listed Shire (SHP.L) for $62 billion dollars.
Shire-related costs helped push up Takeda’s net debt to earnings before interest, taxes, depreciation and amortization to 2 times at the end of June, compared with 1.8 times at the end of March.
Those costs, including advisory and bridge loan fees, came to 10.6 billion yen in the first quarter. Takeda declined to quantify the impact for the year, saying this would depend on the speed at which the transaction progresses.
The Shire deal, which will send Takeda’s debt levels sharply higher, is still awaiting the nod from regulators in EU, China and elsewhere.
Expected to close in the first half of 2019, it will increase Takeda’s pipeline of Phase III programmes to 10 from three and turn it into one of the world’s largest drugmakers.
In the first quarter, sales of bowel disease drug Entyvio hit 61.3 billion yen, up 34 percent on year. Multiple myeloma drug Ninlaro sales were 14 billion yen, up 40 percent.
The company is bracing for lower sales of blockbuster blood cancer drug Velcade, which lost market exclusivity in the United States last year.
Takeda has recently reported a slew of potentially positive pipeline news.
Last week, the company said its targeted lung cancer drug Alunbrig demonstrated a statistically significant improvement in progression-free survival of patients.
The interim results from a Phase 3 trial could lead to expansion of the drug’s use against rivals Xalkori from Pfizer Inc (PFE.N) and Alecensa from Chugai Pharmaceutical Co Ltd (4519.T), a unit of Roche Holding AG (ROG.S).
Earlier this month Takeda said Ninlaro improved survival when used as a maintenance therapy for cancer patients following stem cell transplants.
Other upcoming readouts awaited by analysts include Takeda’s next generation dengue vaccine and a vaccine for the Norovirus.
($1 = 111.2100 yen)
Reporting by Sam Nussey; editing by Richard Pullin and Sunil Nair