Takeda Lowers Profit Forecast Amid Vyvanse Exclusivity Loss, Plans $900M Restructuring in 2024

Takeda has unveiled its business report for the 2023 fiscal year, showcasing a slight rise in annual revenue while signaling a projected profit decline for the upcoming year. This anticipated downturn is largely due to the ongoing decline in sales of its ADHD therapy, Vyvanse (lisdexamfetamine dimesylate).

For the fiscal year concluding on March 31, 2024, Takeda reported over $27 billion in revenue, a 1.5% increase from the previous fiscal year's $25.8 billion. However, despite this revenue growth, the company's net profit plummeted by 57%, dropping to $925 million from roughly $2 billion the previous year. Additionally, Takeda's operating profit saw a significant reduction, falling 50.3% from $3.15 billion to $1.37 billion.

According to Takeda’s investor presentation, this decline in operating profit is linked to increased operating expenses and impairments associated with its Crohn’s disease stem cell therapy Alofisel (darvadstrocel) and lung cancer treatment Exkivity (mobocertinib). In October 2023, Alofisel did not meet the primary endpoint in its Phase III ADMIRE-CD II trial, failing to achieve significant improvement in 24-week combined remission for patients with complex Crohn’s perianal fistulas. Consequently, Takeda chose not to pursue regulatory approval for Alofisel in the U.S. Furthermore, the company decided to withdraw Exkivity from the global market after it failed to meet the necessary criteria in the Phase III EXCLAIM-2 study.

Looking forward to the upcoming fiscal year, Takeda has adjusted its core operating profit projections downward by about 10%, anticipating roughly $6.4 million (¥1 billion). The company also expects revenue to be flat or slightly declining. This cautious outlook is primarily due to the anticipated continued sales decline of Vyvanse as generic versions become available. Vyvanse, first approved in 2003, lost critical patent protections in 2023, leading to the introduction of generic versions from companies such as Sandoz, Teva, and Mylan.

To counterbalance the loss of exclusivity on Vyvanse, Takeda has planned several key pipeline developments. In the coming fiscal year, the company intends to initiate a Phase III trial of its tyrosine kinase 2 inhibitor zasocitinib for psoriatic arthritis, as well as a comparative study against Bristol-Myers Squibb’s Sotyktu (deucravacitinib) in treating psoriasis. Additionally, Takeda is expecting Phase III results in the first half of the fiscal year for its cholesterol 24-hydroxylase inhibitor soticlestat, which is being investigated for Dravet syndrome and Lennox-Gastaut syndrome, both of which are rare forms of epilepsy.

Beyond its pipeline prospects, Takeda is set to implement an "enterprise-wide efficiency program" starting in fiscal year 2024. This strategic initiative is projected to cost nearly $900 million and is aimed at improving overall operational efficiency.

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