Memorandum

Takeda F2Q15 Quick Take – November 3, 2015

Takeda recently provided its F2Q15 update in a call led by CEO Mr. Christophe Weber. There was no commentary on diabetes but according to the supplementary materials, global DPP-4 inhibitor Nesina (alogliptin) sales grew 12% year-over-year (YOY) to $102 million (JPY 12.4 billion) and 2% sequentially. This slight steady growth over recent quarters may be attributed to the somewhat favorable comparison of EXAMINE vs. SAVOR, which the supplementary materials again highlighted. We believe that more importantly, this class appears to suit those in Japan better than elsewhere geographically. Similar to F1Q15, quarterly growth was driven by ex-Japan sales. Notably, the supplementary materials stated that Takeda submitted an NDA for the fixed-dose combination of Nesina and metformin in Japan. We expect metformin combinations to be drivers of class growth – Merck’s Janumet (sitagliptin/metformin), for example, has driven much of the Januvia (sitagliptin) franchise’s growth. The presentation slides also noted that Nesina was recently launched in Brazil and Russia, expanding the drug’s global presence. Including Takeda, Merck, Novartis, and Lilly, the DPP-4 inhibitor class now totals revenues of $2.1 billion, a YOY growth of 8%. Regarding Actos (pioglitazone), the product received almost no attention throughout the company’s materials. Revenues grew 12% YOY to $54 million (JPY 6.6 billion), due to an easy comparison (F2Q14 totaled JPY 5.9 billion), and declined 10% sequentially – we don’t watch this as closely anymore since the drug has gone generic. As for the litigation, the supplementary materials provided JPY 274 billion (~$2.2 billion) as the amount lost due to this legal battle. Otherwise, Orexigen-partnered Contrave (naltrexone/bupropion) sequentially declined 19% to $13 million – the drug’s first sequential decline since its launch late last year. No commentary was provided on Contrave, but we expect to hear more when Orexigen reports on Thursday – this certainly wasn’t an optimistic preview. For more background on Takeda’s latest, please see our F1Q15 report.

 

-- by Melissa An and Kelly Close