Takeda FY22 sales grow but FY23 outlook weighed down by generic impact

Takeda Pharmaceutical (NYSE:TAK) FY22 revenue grew but noted that its FY2023 outlook reflects challenges from generics impact and lower COVID-19 vaccine contributions.

The Japanese drugmaker's Core EPS grew +31.5% at actual % change (+13.9% at CER basis) Y/Y to ¥558.

On a reported basis, revenue increased +12.8% Y/Y to ~¥4.028T.

The company said the increase was mainly due to favorable foreign exchange rates and growth from business momentum, fully offsetting the decrease of revenue due to the sale of a portfolio of diabetes products in Japan to Teijin Pharma Limited for ¥133B.

Gastroenterology segment reported revenue grew +25% Y/Y (+8.7% CER) to ¥1.094T, driven by sales of ulcerative colitis/Crohn's disease (UC/CD) drug Entyvio.

Takeda's top-selling product Entyvio's sales were ¥702.7B +34.7% Y/Y, due to favorable foreign exchange rates and an increase in the first line biologic inflammatory bowel disease (“IBD”) population both in UC and CD.

Acid reflux disease drug Dexilant sales grew +36.7% Y/Y to ¥69.4B.

UC drug Pentasa sales fell -58.3% to ¥8.4B due to generic erosion in the U.S. from May 2022.

Rare Diseases segment revenue grew +18.4% Y/Y (+4.8% CER) to ¥723.4B.

Sales of Hereditary Angioedema therapy Takhzyro grew +47% (+25% CER) to ¥151.8B mainly due to expansion of the prophylactic market, geographic expansion and strong patient demand.

Sales of Livtencity, for cytomegalovirus infection, were ¥10.5B, driven by the strong launch momentum in the U.S. and geographic expansion with the European Commission approval in November 2022.

Plasma-Derived Therapies (PDT) Immunology business rose +33.8% (+15.3% CER) to ¥678.4B. The growth was mainly due to higher sales of immunoglobin products (for primary immunodeficiency, multifocal motor neuropathy and subcutaneous immunoglobin therapies), +16% Y/Y at CER, particularly in the U.S. amid easing of pandemic pressures coupled with increasing supply.

Takeda said Oncology segment revenue declined -6.4% Y/Y ( -14.4 % CER) to ¥438.7B mainly due to the impact of generic competition to VELCADE. Sales of VELCADE fell -74.8% Y/Y to ¥27.8B.

Revenue from Neuroscience division increased +32.2% Y/Y to (+12.1% CER) to ¥637.7B, driven by increased adult ADHD demand for VYVANSE in the U.S., Europe, and Canada for VYVANSE/ELVANSE.

Sales of VYVANSE/ELVANSE rose +40.4% Y/Y to ¥459.3B.

Dividend: Takeda said it plans to increase dividend to ¥188 per share from ¥180/share.

Outlook:

"Our outlook for FY2023 reflects the challenges of anticipated generic impact and lower coronavirus vaccine contributions, but we still anticipate delivering core operating profit above 1 trillion yen. Our forecasted reported EPS growth rates are also impacted by one-time items which are not reflective of our core business momentum," said Takeda CFO Costa Saroukos.

Takeda expects FY23 Core Revenue of ¥3.840T, representing a -4.7% Y/Y decline. Meanwhile Core EPS is expected ¥434, reflecting -22.2% Y/Y decline.

Core Operating Profit expected ¥1.015T, reflecting -14.6% Y/Y decline.

TAK -1.47% to $16.73 premarket May 11