Company Reports

First fiscal quarter revenue and core operating profit both declined 0.5% year-on-year. Reported figures benefited from currency tailwinds of 10% and 11%, respectively. Management reiterated full-year guidance of 3% reported revenue growth and about 25% core operating profit margin.

No-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japanese market, management has undertaken an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The megadeal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, but it also granted Takeda much greater penetration into US markets and diversification away from Japan’s cost-cutting policies.

Takeda's fourth-quarter revenue declined 2.2% at constant currencies compared with the prior-year period. Full-year revenue declined 2.7% with 26% core operating profit margin. Guidance for the next fiscal year includes low single-digit reported revenue growth and 25% core operating profit margin.

No-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japanese market, management has undertaken an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The mega-deal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, but it also granted Takeda much greater penetration into US markets and diversification away from Japan’s cost-cutting policies.

Takeda's third-quarter revenue declined 0.6% at constant currency compared with the same period last year, and core operating profit margin was 27.9%. Management slightly raised its guidance for full-year core operating profit to JPY 1.15 trillion from JPY 1.13 trillion.

For its second fiscal quarter, Takeda reported year-on-year revenue declines of 4% at constant currency and 5.4% on a reported basis. Management has lowered its full-year guidance for core operating profit to JPY 1.13 trillion, a 0.8% decrease from previous guidance.

Takeda reported first-quarter revenue of JPY 1.11 trillion, or a 3.7% decline at constant currency and 8.4% decline on a reported basis. Management reiterated its full-year guidance and continues to expect broadly unchanged financial metrics compared with fiscal 2024.

No-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japan market, management has undertaken an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The mega-deal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, it also granted Takeda much greater penetration into United States' markets and diversification away from Japan’s cost-cutting policies.

Takeda reported fourth-quarter revenue of JPY 1.05 trillion, a 2% decline at constant currency but unchanged on a reported basis. Guidance for fiscal 2025's financial metrics, including revenue, core operating margin, and earnings per share, is broadly unchanged from fiscal 2024.

Takeda’s third-quarter earnings were in line with expectations. The company raised full-year guidance yet again, citing lower-than-expected erosion from Vyvanse generics and strong growth in other products. Christophe Weber announced that he will step down as CEO and will be succeeded by Julie Kim, who joined Takeda in 2019 from the Shire acquisition and has strong commercial experience running the plasma business and the US business. We maintain our fair value estimate of JPY 4,700 per share and view the current share price as undervalued. Takeda also announced a share buyback program of up to JPY 100 billion, which we view as incrementally positive given the market price. We believe pipeline progression is the most important catalyst for further price appreciation, and this year could have significant news flow on this front.

Takeda’s second quarter beat our expectations again, driven by the outperformance of several drugs including Entyvio (inflammatory bowel disease), Vyvanse (attention deficit hyperactivity disorder), and Fruzaqla (oncology). Additionally, the company raised its full-year guidance, citing currency rate tailwinds as well as resilient Vyvanse sales in the first half. We maintain our fair value estimate of JPY 4,700 per share. We view the current share price as undervalued, but caveat that price appreciation is likely dependent on pipeline progression over the next few years.

Narrow-moat Takeda’s first-quarter earnings beat our expectations even after adjusting for significant currency tailwinds, driven by the outperformance of a handful of drugs, including dengue fever vaccine Qdenga. Sales grew 14% on a reported basis and 2% on a constant-currency basis. Gross profit margin declined 1.8 percentage points compared with the same period last year, which we think is a useful reference point as it reflects recent loss-of-exclusivity events. Takeda reiterated its full-year guidance of JPY 4.35 trillion in revenue and JPY 1 trillion in core operating profit. We maintain our fair value estimate of JPY 4,700 per share and view the current share price as slightly undervalued.

No-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japan market, management is undertaking an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The mega-deal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, it also granted Takeda much greater penetration into United States' markets and diversification away from Japan’s cost-cutting policies.

Takeda’s fourth-quarter earnings and fiscal 2024 guidance were in line with our expectations. Separately, we lower our moat rating to no-moat from narrow. Despite our downgraded rating, we maintain our fair value estimate of JPY 4,700, as our previous fair value reflected sufficiently conservative assumptions.

No-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japan market, management is undertaking an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The mega-deal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, it also granted Takeda much greater penetration into United States' markets and diversification away from Japan’s cost-cutting policies.

Narrow-moat Takeda’s third-quarter earnings were in line with expectations and the company’s full-year guidance. Revenue for the nine months has grown 4.6% compared with the same period last year, which is entirely due to foreign exchange. On a constant-currency basis, revenue growth is flat, as the growth from products like Entyvio and immunoglobulin were offset by declining sales from drugs facing the loss of exclusivity, or LOE, including Vyvanse, Azilva, Velcade, and Dexilant. Cost of sales for the quarter rose 3.4 percentage points compared with the same period last year, which we think is a useful reference point as it reflects the LOE events. Takeda maintained its full-year guidance of JPY 3.98 trillion revenue and JPY 1.015 trillion core operating profit.

Narrow-moat Takeda’s fiscal second-quarter earnings were in line with expectations on a constant currency basis. Revenue was JPY 1.04 trillion, which is 4% year-on-year growth and negative 0.8% on a constant currency basis. Core operating profit was JPY 262 million, or 25.2% of revenue, which is 5.3 percentage points worse than the same period last year. We think this is mostly attributable to loss of revenue from high-margin coronavirus products and also elevated research and development expense. The company revised its guidance for reported figures to account for JPY weakness and asset impairments but did not change its constant currency guidance for core figures.

Narrow-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japan market, management is undertaking an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The mega-deal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, it also granted Takeda much greater penetration into United States' markets and diversification away from Japan’s cost-cutting policies.

Narrow-moat Takeda’s first-quarter earnings were in line with our estimates on a constant-currency basis. Revenue was JPY 1,057 billion, which is 9% year-on-year growth but only 3.7% on a constant-currency basis. Core operating profit margin was 30.8% of revenue, or 2 percentage points worse than the same period last year. We think the company is on track to meet or perhaps exceed its full-year guidance of JPY 3.84 trillion in revenue and JPY 1 trillion in core operating profit. However, while earnings upside is possible, we think Takeda is fairly valued presently.

Narrow-moat Takeda Pharmaceutical is Japan’s leading pharmaceutical company by revenue. While the firm historically focused on the Japan market, management is undertaking an ambitious overhaul to diversify away from its stagnant local market and overcome patent expiries with acquisitions. In January 2019, it closed its purchase of Shire Plc for approximately $57 billion. The mega-deal not only gave Takeda access to Shire’s rare-disease and plasma-derived therapies, it also granted Takeda much greater penetration into United States' markets and diversification away from Japan’s cost-cutting policies.