Takeda F2Q13 – Worldwide Actos sales down 74% from F2Q12; Nesina sales rebound to ¥11.1 billion (~$112 million) – November 13, 2013

Takeda reported F2Q13 financial results in a call led by CEO Yasuchika Hasegawa. Global Actos (pioglitazone) franchise sales totaled ¥9.5 billion (~$96 million), down 74% year-over-year (YOY) as reported and down 10% sequentially. As with previous quarters, management attributed the poor performance to generic competition (another contributing factor is likely the likely association between pioglitazone and bladder cancer). In F2Q13, Takeda stopped reporting Actos revenue by individual regions, instead reporting global revenue and Japanese revenue.

Global Nesina (alogliptin) franchise sales rose 35% YOY and 52% sequentially to ¥11.1 billion (~$112 million), representing a rebound from the poor performance seen in F1Q13, and (for the first time) eclipsing Actos sales. Management highlighted that the franchise gained regulatory approval in Europe in September and was recently launched (specific markets and timeframe unspecified). Additionally, Nesina received an import drug license in China. Although the franchise has been on the US market since June, sales outside Japan in F2Q13 were only ¥500 million (~$5 million), which represents rather slow initial uptake. During the call, management discussed the results of the Nesina’s CVOT (EXAMINE), highlighting the differences between Nesina and BMS/AZ’s Onglyza (saxagliptin), which include the lack of a significant difference in hypoglycemia or hospitalization seen in EXAMINE treatment arm. During Q&A, management discussed the implications of the growth of SGLT-2 inhibitors for Nesina’s performance.

Management shared guidance from partner Orexigen that a resubmission of the NDA for the anti-obesity drug Contrave (bupropion/naltrexone) could come by the end of calendar year 2013. The company also shared that an interim data readout from Contrave’s CVOT (LIGHT STUDY) should occur in late November or early December. Keeping with previous guidance, management forecast a Japanese regulatory decision for the first-in-class GPR40 agonist TAK-875 (fasiglifam; for type 2 diabetes) in FY2015 (calendar 2Q13-1Q16), with US and EU decisions following in FY2016-17 (calendar 2Q16-1Q18). TAK-875’s phase 3 program is underway in the US, EU, and Japan; currently available data demonstrate a ~1.0% placebo-adjusted A1c drop at 24 weeks from a baseline of ~7.8%, along with a 2% incidence of hypoglycemia (compared to 19% with glimepiride). We learned that cetilistat (a lipase inhibitor for obesity) was approved in Japan, while trelagliptin (SYR-472), a once-weekly DPP-4 inhibitor, remains in phase 3 in Japan and phase 2 in the US and EU. Disappointingly, we learned that Takeda’s phase 1 glucokinase activator (TAK-329) and phase 2 candidate for diabetic neuropathy (TAK-428) were dropped from the pipeline.

Financial Results — Actos and Basen

• Worldwide Actos (pioglitazone) franchise sales totaled ¥9.5 billion (~$96 million), down 74% as reported from F2Q12 and down 10% sequentially. These results continue the sharp decline in Actos sales seen since 2011 — sales fell 12% as reported in calendar year 2011 and 42% as reported in calendar year 2012. During the call, management attributed the poor continued F2Q13 performance to generic competition, consistent with previous quarters (Actos’ patent protection expired in August of 2012). Another factor that we imagine contributed to pioglitazone’s decline (albeit a factor that the company rarely mentions) is the safety issue regarding Actos therapy and bladder cancer. As background, during FY2012, Takeda spent roughly ¥8 billion (~$87 million) on settlements for Actos lawsuits.
  
  • We note that the company provided less granularity on the franchise’s geographic performance than it has previously. While sales for Japan, the Americas, Europe, and Asia/Others were broken out in past updates, Takeda’s F2Q13 update only included total sales and Japanese sales (from which we could calculate performance for the rest of the world in aggregate). Sales in Japan were down 20% as reported from F2Q12 to ¥4.0 billion (~$40 million), while sales in the rest of the world were down 88% to ¥5.5 billion (~$56 million). We imagine it is likely that much of the decrease in the rest of the world was due to the Americas, as Actos sales were down a striking 95% year-over-year (YOY) in the Americas in F1Q13. The fact that Takeda is reporting less data on Actos performance is due to the drug having gone generic; other issues like bladder cancer, of course, and other side effect issues didn’t co-exist as positives associated with the TZD. We remember that the once-mighty franchise (peak sales were approximately $4.4 billion in 2010) was once compared to the Lantus franchise at Sanofi (2010 sales were $4.7 billion).
• Basen (voglibose) sales totaled ¥4.2 billion (~$42 million), down 16% YOY and 5% sequentially. As a reminder, the alpha-glucosidase inhibitor is marketed only in Japan and has experienced declining sales in recent years. The product was not mentioned in the call or press release, but earlier this year, Takeda management guided for Basen sales to decrease through FY2013.

Alogliptin Franchise

• Global Nesina (alogliptin) franchise sales totaled ¥11.1 billion (~$112 million), up 35% YOY and up 52% sequentially, as reported. The high sequential growth was due in large part to Nesina’s poor performance in F1Q12 (in which sales were down 39% sequentially). The relatively strong performance in F2Q13 is in line with management’s previous predictions for stronger franchise growth in F2H13 based on prescription trends and increased marketing investments. Sales in Japan, which constitute the majority of the franchise’s sales, were up 29% YOY to ¥10.6 billion (~$107 million). As background, the Nesina franchise includes alogliptin monotherapy along with an alogliptin/metformin FDC (Kazano/Vipidomet in Europe) and an alogliptin/pioglitazone FDC (Liovel in Japan, Oseni in the US, Incresync in Europe).
  
  • Liovel sales in Japan were ¥2.2 billion (~$22 million), up 38% sequentially. During their F4Q12 update, management projected FY2013 sales of approximately ¥6.5 billion (~$65 million) — the F2Q13 results actually pace Liovel slightly ahead of that goal. 
• Management commented during the call that the alogliptin franchise has been approved and launched in Europe. As background, in July, the EU’s Committee for Medicinal Products for Human Use (CHMP) delivered a positive opinion on the alogliptin franchise, and in September the European Commission (EC) delivered its final approval. Management characterized the franchise’s launch in the US and Europe, collectively, as having “good results,” but did not comment on the specifics of the Europe launch. During Takeda’s F1Q13 update, management stated that the company had received an import drug license from the China Food and Drug Administration (CFDA) for alogliptin, but management has not shared any news on a product launch in that market (where reimbursement for branded drugs can occasionally be a challenge).
• Takeda reported alogliptin franchise sales outside of Japan (¥500 million, or ~$5 million) for the first time. These figures (which we calculated as the difference between global sales and Japanese sales) likely consist predominantly of sales in the US, where Nesina was launched in June of this year, rather than of sales in Europe (where the franchise was launched either at the very end of F2Q13 or in F3Q13). These modest launch-quarter sales likely reflect the increasingly crowded state of the US DPP-4 inhibitor market: BMS/AZ’s Onglyza (saxagliptin), the second DPP-4 inhibitor on the US market (3Q09), posted $20 million in its launch quarter (despite mid-quarter approval), while Merck’s Januvia (sitagliptin), the first DPP-4 inhibitor on the market, achieved sales of $42 million in its first quarter on the market (4Q06).
• During the call, management discussed the results of the EXAMINE cardiovascular outcomes trial for Nesina, highlighting that the drug was non-inferior compared to placebo in terms of cardiovascular safety, and resulted in an significant reduction in A1c levels. Management focused on EXAMINE data that distinguished Nesina from BMS/AZ’s Onglyza (saxagliptin), which also recently completed its cardiovascular outcomes trial (SAVOR-TIMI 53), although management never mentioned Onglyza specifically by name. Nesina was not associated with a significant increase in hypoglycemia, whereas Onglyza did lead to a significant increase in hypoglycemia (although the increase was mostly seen in patients also on a sulfonylurea, a drug class known for its hypoglycemia risk). Management also emphasized that no significant increase in hospitalization for heart failure was seen in EXAMINE (although there was a trend to that effect) — a statistically significant 27% increase in hospitalization was seen in SAVOR-TIMI 53 with Onglyza. For our coverage on the initial presentation of SAVOR and EXAMINE results, read our ESC 2013 Day #1 Report.
• A significant future determinant of the success of the overall DPP-4 inhibitor class is the entry of SGLT-2 inhibitors, which share with DPP-4 inhibitors the advantage of oral administration, but boast greater efficacy (albeit along more side effects). During Q&A, management stated that the company is keeping an eye on the SGLT-2 inhibitor situation very carefully, but noted that it is too early to judge exactly what place the new class will occupy in the continuum of diabetes care, especially given the undetermined long-term clinical implications of SGLT-2 inhibitors’ side effects. Management did acknowledge the potentially promising possibility of DPP-4 inhibitor/SGLT-2 inhibitor fixed-dose combinations (FDCs), but stated that Takeda has no plans to acquire rights to any SGLT-2 inhibitor to pursue such an option.

Remaining Metabolic Pipeline

• The presentation also covered Takeda’s partnership with Orexigen on the anti-obesity drug Contrave (bupropion/naltrexone). Management guided for a potential NDA resubmission in calendar year 2013 with a six-month review cycle (matching previous guidance), placing potential approval as early as June 2014. Management also stated that an interim analysis of the LIGHT STUDY (the FDA-mandated CVOT) should be available later in November, although the presentation slides guided for early December. If Contrave receives FDA approval, it would compete against Vivus’ Qsymia (phentermine/topiramate XR) and Eisai/Arena’s Belviq (lorcaserin), both of which are currently on the US market.  
• Management dedicated a presentation slide to TAK-875 (fasiglifam), Takeda’s first-in-class GPR40 agonist for type 2 diabetes, which is in phase 3 in Japan. Mechanistically, GPR40 is believed to improve glycemic control by stimulating insulin release in a glucose-dependent manner. Management commented that the candidate has many of the features of sulfonylureas (also insulin secretagogues) without the poor durability and hypoglycemia associated with sulfonylureas. The presentation slides included phase 3 data demonstrating a 2% incidence of hypoglycemia with fasiglifam versus 19% in a glimepiride comparator arm. Clinical results to date indicate that fasiglifam is effective in terms of A1c lowering (placebo-adjusted decrease of 1.0% after 24 weeks from a baseline of ~7.8%), is well tolerated, and (notably) does not require dose adjustment in patients with renal impairment. Phase 3 trials are underway in the US, EU, and Japan, and management stated during the call that the company is moving aggressively towards registration. The presentation slides guide for a Japanese regulatory decision in FY2015 (calendar 2Q15-1Q16), with US and EU decisions following in FY2016-17 (calendar 2Q16-1Q18). Management also noted that the extensive phase 3 trial program for TAK-875 (which includes a 5,000 patient CVOT in the US) will contribute to an elevation of Takeda’s R&D budget in F3Q13 and beyond.
• Although management did not discuss the oral lipase inhibitor cetilistat during the call, the presentation supplement indicated that the candidate was recently approved in Japan. No details were provided on the product’s launch. Trelagliptin (SYR-472), a once-weekly DPP-4 inhibitor candidate, remains in phase 3 in Japan and in phase 2 in the US and EU. It is expected to receive a regulatory decision in Japan in FY2014.
• Unfortunately, there was also a pair of pipeline discontinuations. TAK-428, a candidate for diabetic neuropathy that was previously in phase 2 testing in the US and EU, was discontinued based on “reassessment of portfolio priorities.” Additionally, the phase 1 oral glucokinase activator TAK-329 was listed as discontinued due to clinical data failing to meet the criteria for advancement to the next stage of testing. As background, a number of glucokinase activators have been discontinued due to hypoglycemia risk flags, including candidates from Lilly, AZ, Roche, and Merck. In September of this year, Amgen decided to return rights to the phase 2 glucokinase activator AMG 151 to Array for unspecified reasons. Pfizer, Advinus Therapeutics, Ligand, and Zydus Cadilla are developing liver-specific glucokinase activators that are reportedly associated with less hypoglycemia.

Questions and Answers

Q: In Europe and the US, SGLT-2 inhibitors are launched. What is your view on the potential impact of SGLT-2 inhibitors on alogliptin? And both in and outside of Japan, do you have any possibilities to in-license or partner with any companies regarding the introduction of an SGLT-2 inhibitor as your product?

A: We have launched alogliptin in the US and are observing the situation very carefully. I think that at this point in time, it’s a little bit too early to judge where these new therapies will find their place in the therapeutic repertoire. In Europe, we have alogliptin approved, but as many of you know, the situation for DPP-4 inhibitors in Europe is rather complex because they are reimbursed in some countries but not in others. So there is no single answer on the situation in Europe. So we’re observing this very carefully. Is there a potential to combine them? Mechanistically, I would say yes. But I don’t think that we have any rights to a SGLT-2 inhibitor compound that would allow us to pursue this.

A: It is, of course, possible to combine SGLT-2 inhibitors and DPP-4 inhibitors, and I believe some companies are moving ahead with that combination. From a strategic standpoint, it might make sense because the way SGLT-2 inhibitors work is essentially to decrease the glucose load, while DPP-4 inhibitors increase the insulin response to that load. But I think we will only learn over time how SGLT-2 inhibitors will perform from the standpoint of safety. There is no question that there is an increased incidence of urinary tract infections with SGLT-2 inhibitors, but we don’t know the long-term implications of those effects on a chronic basis.

--by Manu Venkat and Kelly Close