Takeda’s first half revenue rose 8.4 percent at actual exchange rates to 2,407.0 billion yen, from 2,219.5 billion yen a year earlier, the company reported on October 29 in results furnished to the SEC. Reported operating profit rose 60.4 percent to 406.7 billion yen and net profit rose 171.8 percent to 305.6 billion yen, with earnings per share of 193 yen against 72 yen. On the company’s core measures, which strip out amortization, impairments and divestment effects, revenue was flat to down: core revenue fell 1.0 percent at constant exchange rates, while core operating profit rose 11.2 percent at actual rates and 0.7 percent at constant rates, to 710.6 billion yen.
The second quarter drove the profit swing. Net profit for the three months ended September was 192.4 billion yen, against a net loss of 11.8 billion yen a year earlier, when impairment charges tied to the cell therapy research Takeda discontinued in a portfolio review weighed on the result, Dow Jones reported. Second quarter revenue grew 6.7 percent to 1,187.1 billion yen, with sales of the ulcerative colitis drug Entyvio up 11 percent to 273.4 billion yen and plasma derived product sales up 8.1 percent to 277.2 billion yen.
Takeda raised its full year forecast, and was explicit that foreign exchange is the main reason. Revenue is now expected at 4,700.0 billion yen, up from 4,640.0 billion yen; net profit at 209.0 billion yen, up from 166.0 billion yen; earnings per share at 131 yen, up from 104 yen; and core earnings per share at 482 yen, up from 472 yen. Adjusted free cash flow guidance moved to 700.0 to 800.0 billion yen, from 650.0 to 750.0 billion yen. The constant currency management guidance barely moved: core revenue is still expected to decline by a low single digit percentage, with the core operating profit decline narrowed from 5 to 8 percent to a mid single digit decline.
The pipeline notes in the release carry the forward story. The Food and Drug Administration has accepted Takeda’s application for zasocitinib in moderate to severe plaque psoriasis under Priority Review, its orexin agonist for narcolepsy type 1 launched in Japan and China on October 15 with a United States launch subject to DEA scheduling expected in early November, and its hepcidin mimetic for polycythemia vera launched in the United States in August. The forecast raise buys time; those launches decide whether constant currency growth returns.