In its quarterly update on Wednesday, Takeda executives said the Japan-based pharma giant’s $900 million restructuring is in “full swing” as the pipeline has been reconfigured to focus on late-stage hopefuls.
Layoffs have hit multiple units in recent months, but leadership defended the drugmaker’s recent Alzheimer’s pact with AC Immune and remained upbeat on its mega-bet in the TYK2 space in response to analysts’ questions about underperformance from competitors.
Milano FurutaThe company beat Wall Street’s revenue expectations as it posted a 14% year-over-year gain, but operating profit declined about 1.3% in the same timeframe. While Takeda overperformed on revenue, the company didn’t change its full-year guidance as it expects generic erosion for Vyvanse to pick up in the coming quarters and to spend more heavily on R&D for late-stage studies later this year, chief financial officer Milano Furuta said on the earnings call.
An R&D day in mid-December will “illuminate [the] path ahead,” TD Cowen analyst Michael Nedelcovych wrote in a Tuesday morning note in reaction to the earnings update. Most products were “ahead of expectations,” he wrote.
Jefferies analyst Stephen Barker wrote in a note that “although management warned of tougher quarters ahead, we expect investors to be pleased with this strong start to the year.”
Below are some takeaways from Takeda’s first-quarter earnings call.
‘Right-sized’ organization: The company’s “efficiency program” is in “full swing,” Takeda R&D president Andy Plump told analysts. It’s “really designed to ensure that we have an organization that can drive fully that pipeline forward,” he added. The company has laid off workers in Massachusetts, where it expects to remain the state’s largest life sciences employer, and shut down a San Diego research site. A spokesperson didn’t immediately respond to an Endpoints News inquiry about the total number of workers impacted so far and whether the company expects further workforce reductions.
Still a future in Dravet? Despite taking an approximately $140 million hit on its Ovid-licensed drug soticlestat, the company still sees promise in moving forward in one of two indications that the enzyme therapy failed in last month. Plump told analysts the drug did have a “narrow miss” on the primary endpoint in Dravet syndrome, but the “totality of data from this study, with meaningful effects on key secondary endpoints, combined with the highly significant results from the large Phase 2 study, suggest clear clinical benefits.”
Andy PlumpWith that in mind, and the “large unmet medical need” in the rare form of epilepsy that begins early in a kid’s life, Takeda is “investigating a potential regulatory path forward,” Plump said.
Defending the AC Immune tie-up: Analysts questioned Takeda’s decision to move into the anti-amyloid field for the memory-robbing disease after slow uptake for Eisai and Biogen’s antibody Leqembi and the recent arrival of Eli Lilly’s Kisunla. Takeda plopped down $100 million upfront on AC Immune’s early-stage vaccine in May and could dish out up to another $2.1 billion.
“It’s clear that the uptake of these antibodies has been slow, but we think that the vaccine has a very different profile that could really potentially transform the treatment of this disease,” Plump told analysts. Takeda doesn’t yet have Phase 2 data, but a vaccine could lead to a better safety profile and could have better efficacy by “going in earlier” in a patient’s Alzheimer’s diagnosis, the R&D leader said.
Julie KimDon’t read into Sotyktu’s launch: Takeda made one of the biggest single-asset drug purchases in history with its $4 billion upfront for Nimbus’ TYK2 inhibitor at the end of 2022. On the earnings call, an analyst asked about the “fate” of the drug after Bristol Myers Squibb’s approved TYK2 drug Sotyktu has had a “quite underwhelming” launch. Takeda US business unit president Julie Kim responded by saying its late-stage asset, now named zasocitinib, has a “differentiated profile” and that it could have a “very strong position from a commercial standpoint” if clinical data continue to bear fruit. The drug is in Phase 3 in psoriatic arthritis and will soon undergo a head-to-head against Sotyktu in psoriasis. Phase 2b studies in Crohn’s and ulcerative colitis are enrolling and will read out in 2026, Plump said.
On Monday’s Ventyx update: Meanwhile, the R&D executive also said Takeda’s “internal sense” is that recent data from Ventyx’s TYK2 inhibitor is “actually encouraging for” zasocitinib. Ventyx said this week it is shelving its drug after a Phase 2 primary endpoint fail. Based on Ventyx’s limited data, Plump said a more “robust, objective” secondary endpoint of endoscopic response showed “dose-dependent positive effects.”