Takeda 1Q16 (F4Q15) – Nesina (alogliptin) sales grow 3% YOY to $93M; Japanese Actos (pioglitazone) revenues decline 32% YOY to $13M; Contrave (naltrexone/bupropion extended-release) revenues grow 8% sequentially to $14M - May 11, 2016

Takeda recently provided its 1Q16 (F4Q15) update in a call led by CEO Mr. Christophe Weber. There was no commentary on diabetes during the call and according to the supplementary materials, global DPP-4 inhibitor Nesina (alogliptin) sales grew 3% year-over-year (YOY) operationally to $93 million (10.7 billion JPY) and declined 21% sequentially. By region, much of the growth has been driven by ex-Japan sales. This slight steady growth over recent quarters may be attributed to the somewhat favorable comparison of EXAMINE vs. SAVOR (which was again highlighted in the supplementary materials). Similar to the last two quarterly updates, the supplementary materials stated that Takeda submitted an NDA for the fixed-dose combination of Nesina and metformin for type 2 diabetes in Japan last September – a smart move in our eyes as metformin combinations seem to be driving much of the DPP-4 inhibitor class’ growth.

As for TZD Actos (pioglitazone), similar to the 4Q15 update, Takeda only released revenues in Japan (confirming the company’s declining attention toward the drug): sales continued its downward trend, declining 32% YOY and 35% sequentially to $13 million (1.5 billion JPY). As for the bladder cancer litigation, the supplementary materials state that Takeda has lost 274 billion JPY (~$2.5 billion); the company agreed to pay $2.4 billion into a settlement fund. We are slightly surprised that Actos received no positive attention, given the drug’s recent positive CV findings from the IRIS trial. We have heard significant optimistic commentary on the TZD class at recent meetings and will be curious to see if Takeda will dedicate any more attention to the drug and the possibility of an expanded label indication for the generic product or use in combination with GLP-1 agonists or SGLT-2 inhibitors in the future. We do think there is still significant class overhang given the weight gain and rest of the side effect profile though we have heard multiple experts say that if patients can take a lower dose, much of this dissipates.  

Lastly, on the obesity front, management noted during the call that it “decided to sell Contrave (naltrexone/bupropion extended-release) back to Orexigen,” commenting that Takeda “did try” and “had a good launch,” but decided that there are “better investments” to make in the US – so much for Big Pharma and obesity, we think, outside Novo Nordisk. See our coverage of the initial announcement from Orexigen in March. Not much other commentary on Contrave was discussed during the call but we learned of Contrave’s total 1Q16 revenues from Takeda’s supplementary materials: $14 million, representing a 22% YOY and 8% sequential increase, which was not bad in our view given industry weakness. Compared to Contrave’s recent quarters, 1Q16 actually did, however, see slower growth than in the past; but in our eyes, Orexigen/Takeda are lucky to have not seen a decline, when comparing to the recent historic lows of Arena and Vivus – see our coverage of Orexigen’s 1Q16 update for more.

• Regarding the overall class, DPP-4 inhibitor revenues grew 3% YOY in 1Q16 to $2.1 billion. Sequentially, the class declined 2%. Regarding market shares, Nesina’s market share in the class has remained relatively consistent over the past year at ~4% of the market, while Merck’s Januvia continues to lead with almost 70% of the market by revenue.

-- by Melissa An and Kelly Close