FORM 6-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Commission File Number: 001-38757
For the month of October 2019
TAKEDA PHARMACEUTICAL COMPANY LIMITED
(Translation of registrant’s name into English)
1-1, Nihonbashi-Honcho 2-Chome
Chuo-ku, Tokyo 103-8668
Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Information furnished on this form:
EXHIBIT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TAKEDA PHARMACEUTICAL COMPANY LIMITED | ||||||
Date: October 31, 2019 | By: | /s/ Takashi Okubo | ||||
Takashi Okubo | ||||||
Global Head of Investor Relations |
Summary of Financial Statements for the Six Month Period Ended September 30, 2019 (IFRS, Consolidated)
October 31, 2019
Takeda Pharmaceutical Company Limited | Stock exchange listings: | Tokyo, Nagoya, Fukuoka, Sapporo | ||||
TSE Code: | 4502 | URL: http://www.takeda.com | ||||
Representative: | Christophe Weber, President & CEO | |||||
Contact: | Takashi Okubo | Telephone: +81-3-3278-2306 | ||||
Global Head of IR, Global Finance |
Scheduled date of securities report submission: November 12, 2019
Scheduled date of dividend payment commencement: December 2, 2019
Supplementary materials for the financial statements: Yes
Presentation to explain for the financial statements: Yes
(Million JPY, rounded to the nearest million)
1. | Consolidated Financial Results for the Six Month Period Ended September 30, 2019 (April 1 to September 30, 2019) |
(1) | Consolidated Operating Results (year to date) |
(Percentage figures represent changes over the same period of the previous year) | ||||||||||||||||||||||||
Revenue | Operating profit | Profit before tax | Net profit for the period | |||||||||||||||||||||
(Million JPY) | (%) | (Million JPY) | (%) | (Million JPY) | (%) | (Million JPY) | (%) | |||||||||||||||||
Six month period ended September 30, 2019 | 1,660,169 | 88.5 | 50,310 | (70.7 | ) | (27,557 | ) | — | 33,280 | (73.7 | ) | |||||||||||||
Six month period ended September 30, 2018 | 880,611 | (0.1 | ) | 171,956 | (26.6 | ) | 160,780 | (31.0 | ) | 126,489 | (26.7 | ) | ||||||||||||
Net profit attributable to owners of the Company | Total comprehensive income for the period | Basic earnings per share | Diluted earnings per share | |||||||||||||||||||||
(Million JPY) | (%) | (Million JPY) | (%) | (JPY) | (JPY) | |||||||||||||||||||
Six month period ended September 30, 2019 | 33,184 | (73.8 | ) | (162,879 | ) | — | 21.32 | 21.25 | ||||||||||||||||
Six month period ended September 30, 2018 | 126,668 | (26.7 | ) | 207,395 | (23.2 | ) | 161.76 | 160.93 | ||||||||||||||||
Core Operating Profit | Underlying Core EPS | |||||||||||||||||||||||
(Billion JPY) | (%) | (JPY) | ||||||||||||||||||||||
Six month period ended September 30, 2019 | 541.6 | 155.5 | 249.25 | |||||||||||||||||||||
Six month period ended September 30, 2018 | 212.0 | 13.3 | n/a |
(2) | Consolidated Financial Position |
Total assets (Million JPY) | Total equity (Million JPY) | Equity attributable to owners of the Company (Million JPY) | Ratio of equity attributable to owners of the Company to total assets (%) | Equity attributable to owners of the Company per share (JPY) | |||||||||||
As of September 30, 2019 | 12,880,141 | 4,869,684 | 4,865,714 | 37.8 | 3,123.56 | ||||||||||
As of March 31, 2019 | 13,884,107 | 5,163,588 | 5,159,582 | 37.2 | 3,318.53 |
2. Dividends |
Annual dividends per share (JPY) | |||||||||||||||
1st quarter end | 2nd quarter end | 3rd quarter end | Year-end | Total | |||||||||||
Fiscal 2018 | — | 90.00 | — | 90.00 | 180.00 | ||||||||||
Fiscal 2019 | — | 90.00 | |||||||||||||
Fiscal 2019 (Projection) | — | 90.00 | 180.00 |
3. | Forecasts for Consolidated Operating Results for Fiscal 2019 (April 1, 2019 to March 31, 2020) |
(Percentage figures represent changes from previous fiscal year) | ||||||||||||||||||||||||||||||
Revenue | Core Operating Profit | Operating profit | Profit before income taxes | Net profit attributable to owners of the Company | Basic earnings per share | |||||||||||||||||||||||||
(Million JPY) | (%) | (Million JPY) | (%) | (Million JPY) | (%) | (Million JPY) | (%) | (Million JPY) | (%) | (JPY) | ||||||||||||||||||||
Fiscal 2019 | 3,260,000 | 55.4 | 930,000 | 102.5 | (110,000 | ) | - | (290,000 | ) | - | (273,000 | ) | - | (175.31 | ) |
(Note) Modifications in forecasts of consolidated operating results from the latest announcement: Yes
Fiscal 2019 Management Guidance | |
Underlying Revenue Growth | Flat to slightly increasing |
Underlying Core Operating Profit Margin | High- twenties % |
Underlying Core EPS | 370 - 390 yen |
(Note) Please refer to page 5 for details of "Underlying growth".
From FY2019, Takeda renamed "Core Earnings" to "Core Operating Profit". Its definition has not changed.
▪ | Additional Information |
(1) Changes in significant subsidiaries during the period | : No | ||
(changes in specified subsidiaries resulting in the change in consolidation scope) | |||
(2) Changes in accounting policies and changes in accounting estimates | |||
1) Changes in accounting policies required by IFRS | : Yes | ||
2) Changes in accounting policies other than 1) | : No | ||
3) Changes in accounting estimates | : No | ||
(Note) For details of changes in accounting policies, refer to “2. Condensed Interim Consolidated Financial Statements [IFRS] and Major Notes (6) Notes to Condensed Interim Consolidated Financial Statements (Significant Accounting Policies)” on page 21. | |||
(3) Number of shares outstanding (common stock) | |||
1) Number of shares outstanding (including treasury stock) at term end: | |||
September 30, 2019 | 1,576,356,908 shares | ||
March 31, 2019 | 1,565,005,908 shares | ||
2) Number of shares of treasury stock at term end: | |||
September 30, 2019 | 18,610,286 shares | ||
March 31, 2019 | 10,225,845 shares | ||
3) Average number of outstanding shares (for the six month period ended September 30): | |||
September 30, 2019 | 1,556,734,754 shares | ||
September 30, 2018 | 783,061,602 shares |
▪ | This summary of quarterly financial statements is not subject to quarterly review by the external auditor |
▪ | Note to ensure appropriate use of forecasts, and other noteworthy items |
• | Takeda has adopted International Financial Reporting Standards (IFRS), and the disclosure information in this document is based on IFRS. |
• | All forecasts in this document are based on information currently available to management, and do not represent a promise or guarantee to achieve these forecasts. Various uncertain factors could cause actual results to differ, such as changes in the business environment and fluctuations in foreign exchange rates. Should any significant event occur which requires the forecast to be revised, Takeda will disclose it in a timely manner. |
• | For details of the financial forecast, please refer to "1. Financial Highlights for the Six Month Period Ended September 30, 2019 (3) Outlook for Fiscal 2019" on page 11. |
• | Supplementary materials for the financial statements (Data Book and Earnings Presentation of October 31, 2019) and the video of the conference will be promptly posted on Takeda’s website. |
(Takeda Website):
http://www.takeda.com/investors/reports/
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
Attachment Index
1
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
1. Financial Highlights for the Six Month Period Ended September 30, 2019
(1) Business Performance
(i) Consolidated Financial Results (April 1 to September 30, 2019)
Billion JPY | ||||||||
FY2018 H1 | FY2019 H1 | Change versus the same period of the previous fiscal year | ||||||
Revenue | 880.6 | 1,660.2 | 779.6 | 88.5 | % | |||
Cost of Sales | (231.3 | ) | (572.3 | ) | (341.0 | ) | 147.4 | % |
Selling, General and Administrative expenses | (293.8 | ) | (462.5 | ) | (168.7 | ) | 57.4 | % |
Research and Development expenses | (151.4 | ) | (230.4 | ) | (78.9 | ) | 52.1 | % |
Amortization and Impairment Losses on Intangible Assets Associated with Products | (48.3 | ) | (273.7 | ) | (225.4 | ) | 466.7 | % |
Other Operating Income | 32.3 | 11.3 | (21.0 | ) | (65.0 | )% | ||
Other Operating Expenses | (16.1 | ) | (82.4 | ) | (66.2 | ) | 410.4 | % |
Operating Profit | 172.0 | 50.3 | (121.6 | ) | (70.7 | )% | ||
Finance Income | 4.4 | 17.4 | 13.0 | 293.8 | % | |||
Finance Expenses | (19.6 | ) | (99.3 | ) | (79.6 | ) | 406.0 | % |
Share of Profit of Investments Accounted for Using the Equity Method | 4.0 | 4.0 | 0.0 | 0.0 | % | |||
Profit (Loss) Before Income Tax | 160.8 | (27.6 | ) | (188.3 | ) | (117.1 | )% | |
Income Tax (Expenses) Benefit | (34.3 | ) | 60.8 | 95.1 | (277.4 | )% | ||
Net Profit for the Period | 126.5 | 33.3 | (93.2 | ) | (73.7 | )% |
Revenue. Revenue for the six month period ended September 30, 2019 was 1,660.2 billion JPY, an increase of 779.6 billion JPY, or 88.5%, compared to the same period of the previous year. The revenue contribution of the products obtained through the acquisition of Shire (767.5 billion JPY) was the main driver of revenue growth.
Year-on-year change in revenue for this six month period in each of our main therapeutic areas was primarily attributable to the following products:
• | GI. In Gastroenterology, revenue was 341.6 billion JPY, a year-on-year increase of 89.5 billion JPY, or 35.5%. Growth was driven by ENTYVIO (for ulcerative colitis (UC) and Crohn’s disease (CD)), Takeda's top-selling product, with sales of 168.4 billion JPY, a year-on-year increase of 40.0 billion JPY, or 31.2%. Market share growth in the U.S. and in Europe was driven by further penetration of bio-naïve segment in UC and CD. In Japan, sales increased primarily as a result of the newly approved CD indication. Sales of TAKECAB (for acid-related diseases) were 35.0 billion JPY, an increase of 7.7 billion JPY, or 28.3% versus the same period of the previous year. The increase was driven by the expansion of new prescriptions in the Japanese market due to TAKECAB's efficacy in reflux esophagitis and the prevention of recurrence of gastric and duodenal ulcers during low-dose aspirin administration. Sales of GATTEX/REVESTIVE (for short bowel syndrome), obtained through the acquisition of Shire, added 29.3 billion JPY to our revenue. |
• | Rare Diseases. Products obtained through the acquisition of Shire contributed 327.2 billion JPY of revenue in Rare Diseases in the period. The biggest contributors in each therapeutic area were ELAPRASE in Rare Metabolic (for Hunter syndrome), ADVATE in Rare Hematology (for hemophilia A), and TAKHZYRO, a prophylaxis against Hereditary Angioedema, with sales of 35.5 billion JPY, 83.2 billion JPY, and 30.7 billion JPY, respectively. |
• | PDT Immunology. In PDT (Plasma-Derived Therapies) Immunology, revenue increased by 183.7 billion JPY compared to the same period of the prior year to 191.7 billion JPY, predominantly due to the addition of products obtained through the acquisition of Shire. Aggregate sales of immunoglobulin products were 146.5 billion JPY, and in particular, GAMMAGARD LIQUID (mainly for the treatment of primary immunodeficiency (PID) and multifocal motor neuropathy (MMN)) continued to build its position as a highly recognized |
2
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
intravenous immunoglobulin brand that is the standard of care treatment for PID and MMN in the U.S. Aggregate sales of albumin products including ALBUMIN GLASS and FLEXBUMIN (primarily used for hypovolemia and hypoalbuminemia) were 34.1 billion JPY and other PDT immunology products added 11.1 billion JPY of aggregate sales.
• | Oncology. In Oncology, revenue was 214.8 billion JPY, a year-on-year increase of 16.4 billion JPY, or 8.3%. Sales of NINLARO (for multiple myeloma) were 38.3 billion JPY, an increase of 8.9 billion JPY, or 30.2%, versus the same period of the previous year, reflecting strong growth in global sales particularly in the U.S. and China. Additionally, sales of ADCETRIS (for malignant lymphomas) increased by 4.7 billion JPY, or 22.1%, to 25.8 billion JPY, reflecting strong growth in sales particularly in Japan where it has obtained an additional indication as a frontline treatment option for CD30-positive Hodgkin lymphoma. Revenue attributable to ALUNBRIG (for non-small cell lung cancer) increased by 1.1 billion JPY, or 48.3% to 3.4 billion JPY, as it continues to launch in European countries. Sales of VELCADE (for multiple myeloma) decreased by 1.3 billion JPY, or 1.9% compared to the same period of the previous year to 63.6 billion JPY, of which ex-US royalty income was 6.5 billion JPY, a year-on-year decrease of 5.1 billion JPY, or 44.1%. |
• | Neuroscience. In Neuroscience, revenue was 213.9 billion JPY, a year-on-year increase of 167.4 billion JPY, or 360.5%. This increase was largely attributable to the neuroscience portfolio obtained through the acquisition of Shire, including VYVANSE (for attention deficit hyperactivity disorder (ADHD)) which added 131.5 billion JPY of sales. TRINTELLIX (for major depressive disorder (MDD)) sales were 34.6 billion JPY, an increase of 7.5 billion JPY, or 27.6%, versus the same period of the previous year driven by increase in new patients and improved persistence on therapy. |
(Note) For more details of sales by product, please refer to the Data Book which is the supplementary material for the financial statements.
Takeda’s web-site
https://www.takeda.com/investors/reports/
Revenue by Geographic Region:
Billion JPY; percentages are portion of total revenue
Revenue: | FY2018 H1 | FY2019 H1 | |||||||||
Japan | 274.2 | 31.1 | % | 299.4 | 18.0 | % | |||||
United States | 321.1 | 36.5 | % | 805.9 | 48.5 | % | |||||
Europe and Canada | 158.6 | 18.0 | % | 321.8 | 19.4 | % | |||||
Russia/CIS | 27.5 | 3.1 | % | 36.9 | 2.2 | % | |||||
Latin America | 34.7 | 3.9 | % | 75.8 | 4.6 | % | |||||
Asia (excluding Japan) | 51.9 | 5.9 | % | 83.9 | 5.1 | % | |||||
Other | 12.6 | 1.4 | % | 36.5 | 2.2 | % | |||||
Total | 880.6 | 100.0 | % | 1,660.2 | 100.0 | % |
Cost of Sales. Cost of Sales increased 341.0 billion JPY, or 147.4%, to 572.3 billion JPY compared to the same period of the previous year. This was primarily caused by the inclusion of Cost of Sales related to the sale of products obtained in the acquisition of Shire and by 137.8 billion JPY in non-cash charges, mainly from the unwinding of the fair value step up on inventory. These effects were partially offset by a decrease in Cost of Sales for legacy Takeda products, primarily due to a more favorable product mix.
Selling, General and Administrative (SG&A) expenses. SG&A expenses increased 168.7 billion JPY, or 57.4%, to 462.5 billion JPY compared to the same period of the previous year, primarily due to expenses relating to the acquired operations of Shire. This increase was partially offset by the favorable impact of the Global Opex Initiative* and cost synergies from the integration of Shire.
* | Takeda's global operating expense reduction initiative with the aim of delivering annual margin improvements driven by reduced consumption, procurement initiatives and organizational optimization. |
3
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
Research and Development (R&D) expenses. R&D expenses increased 78.9 billion JPY, or 52.1%, to 230.4 billion JPY, primarily resulting from costs for the R&D programs acquired from Shire.
Amortization and Impairment Losses on Intangible Assets Associated with Products. Amortization and Impairment Losses on Intangible Assets Associated with Products increased by 225.4 billion JPY, or 466.7%, to 273.7 billion JPY compared to the same period of the previous year. This primarily represents 211.3 billion JPY amortization of intangible assets related to the assets obtained through the acquisition of Shire and an impairment charge of 15.6 billion JPY related to our decision to terminate the SHP616 AMR program following the interim readout in May 2019.
Other Operating Income. Other Operating Income decreased 21.0 billion JPY, or 65.0%, to 11.3 billion JPY compared to the same period of the previous year. The decrease was primarily due to an 18.4 billion JPY gain on sale of 100% of the shares that Takeda held in Guangdon Techpool Bio-Pharma Co., LTD. recorded in the same period of the previous year and decreased gains on sale of Property, Plant and Equipment of 5.0 billion JPY compared to the same period of the previous year, which was partially offset by a 2.2 billion JPY gain on sale of the shares Takeda held in Axcelead Drug Discovery Partners, Inc. recorded in the current period.
Other Operating Expenses. Other Operating Expenses were 82.4 billion JPY, an increase of 66.2 billion JPY, or 410.4%, compared to the same period of the previous year, primarily due to an increase of 49.6 billion JPY in restructuring expenses resulting from the progress of the Shire integration program. The valuation reserve for pre-launch inventories also was negatively impacted by 16.2 billion JPY comprised of 8.5 billion JPY recorded for the six month period ended September 30, 2019 and 7.7 billion JPY reversal of valuation reserve for pre-launch inventories recorded in the same period of the previous year.
Operating Profit. As a result of the above factors, Operating Profit decreased by 121.6 billion JPY, or 70.7% compared to the same period of the previous year to 50.3 billion JPY.
Net Finance Expenses. Net Finance Expenses were 81.9 billion JPY in the current period, an increase of 66.7 billion JPY compared to the same period of previous year, mainly due to interest on bonds and loans used to partially fund the acquisition of Shire as well as interest on debt assumed from Shire.
Income Tax (Expenses) Benefit. We recorded an income tax benefit of 60.8 billion JPY in the current period, compared to income tax expenses of 34.3 billion JPY for the same period of the previous year. This decrease was mainly due to the recognition of a non-cash deferred tax benefit of 56.3 billion JPY as a result of the enactment of a new taxing regime in Switzerland (Swiss Tax Reform).
Net Profit for the Period. Net Profit for the Period decreased 93.2 billion JPY, or 73.7%, compared to the same period of the previous year to 33.3 billion JPY.
4
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(ii) Underlying Results (April 1 to September 30, 2019)
Definition of Core and Underlying Growth
Takeda uses the concept of Underlying Growth for internal planning and performance evaluation purposes.
Underlying Growth compares two periods (fiscal quarters or years) of financial results under a common basis and is used by management to assess the business. These financial results are calculated on a constant currency basis and exclude the impacts of divestitures and other amounts that are unusual, non-recurring items or unrelated to our ongoing operations. Although these are not measures defined by IFRS, Takeda believes Underlying Growth is useful to investors as it provides a consistent measure of our performance.
Takeda uses "Underlying Revenue Growth", "Underlying Core Operating Profit Growth", and "Underlying Core EPS Growth" as key financial metrics.
Underlying Revenue represents revenue on a constant currency basis and excluding non-recurring items and the impact of divestitures that occurred during the reported periods presented.
Underlying Core Operating Profit represents Core Operating Profit (as defined below) on a constant currency basis and further adjusted to exclude the impacts of divestitures that occurred during the reporting periods presented.
Core Operating Profit* represents net profit adjusted to exclude income tax expenses, the share of profit or loss of investments accounted for using the equity method, finance expenses and income, other operating expenses and income, amortization and impairment losses on acquired intangible assets and other items unrelated to Takeda’s core operations, such as purchase accounting effects and transaction related costs.
* From FY2019, Takeda renamed "Core Earnings" to "Core Operating Profit". Its definition has not changed.
Underlying Core EPS represents net profit based on a constant currency basis, adjusted to exclude the impact of divestitures, items excluded in the calculation of Core Operating Profit, and other non-operating items (e.g. amongst other items, fair value adjustments and the imputed financial charge related to contingent consideration) that are unusual, non-recurring in nature or unrelated to Takeda’s ongoing operations and the tax effect of each of the adjustments, divided by the outstanding shares (excluding treasury shares) as of the end of the comparative period.
Underlying Results
FY2019 H1 | |
Underlying Revenue Growth* | -0.2% |
Underlying Core Operating Profit Margin | 32.2% |
Underlying Core EPS | 249.25 JPY |
* Growth versus FY2018 H1 pro-forma revenue (6-month April-September 2018 combined revenue of Legacy Takeda and Legacy Shire, which was previously reported under US GAAP and conformed to IFRS without material differences, and excluding Legacy Shire's oncology business, which was sold in August 2018, prior to Takeda acquisition.)
Underlying Revenue Growth was -0.2% compared to the same six month period of the previous year. Revenue attributable to Takeda’s 14 global brands* grew by 20.5%, which was fully offset by the negative impact of intensified competition and generic erosion.
* Takeda's 14 global brands
GI: ENTYVIO, GATTEX/REVESTIVE, ALOFISEL
Rare Diseases: NATPARA, ADYNOVATE/ADYNOVI, TAKHZYRO, ELAPRASE, VPRIV
PDT Immunology: GAMMAGARD LIQUID/KIOVIG, HYQVIA, CUVITRU, ALUBUMIN/FLEXBUMIN
Oncology: NINLARO, ALUNBRIG
5
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
• | GI. In Gastroenterology, underlying revenue increased by 8.9% compared to the same period of the previous year. Growth of ENTYVIO (+33.9%) and TAKECAB (+28.3%) fully absorbed the declines of off-patented products such as pantoprazole (-16.0%), lansoprazole (-28.1%), and LIALDA (-50.0%), which all faced further generic erosion. GATTEX/REVESTIVE (+17.0%) further reinforced our leadership in GI, partly benefitting from a pediatric indication obtained in the U.S. this year. |
• | Rare Diseases. In Rare Diseases, underlying revenue decreased by 10.5% due to higher competitive pressure and product recall of NATPARA. Competitive pressure was strong in Rare Hematology (-12.7%), as our hemophilia A products were especially impacted by competition, with significant decreases in ADVATE (-15.9%) and FEIBA (-24.4%), and lower revenue growth of ADYNOVATE (+5.4%), our extended half-life product. Declines in therapies for Hereditary Angioedema (-19.2%) reflect lower sales of CINRYZE (-56.0%) and FIRAZYR (-58.8%) due to stocking in the prior year, fewer patients on CINRYZE, and less utilization and impact from loss of exclusivity of FIRAZYR, partially offset by TAKHZYRO sales in the U.S. In Rare Metabolic (+1.0%), parathyroid hormone, NATPARA (-2.2%) was recalled in the U.S. in September this year due to an issue related to the rubber septum of its cartridge. |
• | PDT Immunology. Underlying revenue of PDT Immunology increased by 3.6% compared to the same period of the previous year. Immunoglobulin product revenue increased by 3.0% driven by the growth across both SCIG (subcutaneous immunoglobulin) and IVIG (intravenous immunoglobulin). Albumin product revenue increased by 16.9%. |
• | Oncology. In Oncology, the year-over-year increase was 10.5%, led by NINLARO (+32.7%) and ADCETRIS (+32.7%). ALUNBRIG also marked a growth rate of 50.7%. The only major Oncology product that declined on an underlying basis was VELCADE (-1.5%) with a 43.8% decrease in ex-US royalty income due to generic entry in Europe in late April. |
• | Neuroscience. In Neuroscience, underlying revenue increased by 5.6% due to the growth of VYVANSE (+5.4%) and TRINTELLIX (+28.1%), both of which are leading branded medications in the U.S. for ADHD and MDD, respectively. ADDERALL XR declined by 38.7% due to greater impacts from generic competition. |
Underlying Revenue Growth* by Therapeutic Area | |
GI | +8.9% |
Rare Diseases | -10.5% |
Rare Metabolic | +1.0% |
Rare Hematology | -12.7% |
Hereditary Angioedema | -19.2% |
PDT Immunology | +3.6% |
Oncology | +10.5% |
Neuroscience | +5.6% |
Other | -8.2% |
Total | -0.2% |
* Growth versus FY2018 H1 pro-forma revenue (6-month April-September 2018 combined revenue of Legacy Takeda and Legacy Shire, which was previously reported under US GAAP and conformed to IFRS without material differences, and excluding Legacy Shire’s oncology business, which was sold in August 2018, prior to the Takeda acquisition.)
Major non-recurring items and the impact of divestitures excluded to calculate Underlying Revenue:
• | Revenue of former subsidiaries, Guangdong Techpool Bio-Pharma Co., Ltd. ("Techpool"), and Multilab Indústria e Comércio de Produtos Farmacêuticos Ltda. ("Multilab"), is excluded from the same period of the prior year consolidated revenue as both subsidiaries were divested in the fiscal year ended March 31, 2019. |
• | Net sales from XIIDRA, the divestiture of which was completed in July 2019, and net sales from TACHOSIL are excluded from both the current period and the same period of the prior year as Takeda agreed in May 2019 to divest these products, with completion of divestiture of TACHOSIL also expected to occur within FY2019. |
6
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
Underlying Core Operating Profit Margin for the current period was 32.2%, reflecting a favorable impact of the Global Opex Initiative and cost synergies from the integration of Shire.
Core Operating Profit for the current period, which excludes items unrelated to Takeda's core operations such as the integration of Shire related costs and non-cash expenses from purchase accounting, was 541.6 billion JPY.
Underlying Core EPS for the current period was 249.25 JPY.
7
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(2) Consolidated Financial Position
Assets. Total Assets as of September 30, 2019 were 12,880.1 billion JPY, reflecting a decrease of 1,004.0 billion JPY compared to the previous fiscal year-end. Goodwill and Intangible assets decreased by 157.5 billion JPY and 421.8 billion JPY, respectively, mainly due to FX impact and amortization of intangible assets. In addition, Assets Held for Sale decreased by 431.5 billion JPY mainly from the completion of the XIIDRA divestiture. Cash and Cash Equivalents also decreased by 158.6 billion JPY primarily from paying dividends and redemption of bonds. These decreases were partially offset by an increase of 125.1 billion JPY in Property, Plant and Equipment mainly due to the newly adopted accounting standards for leases (IFRS 16)*.
* IFRS 16 requires the value of leases to be recorded on the balance sheet as long term assets with a corresponding long term liability, see below for discussion regarding the liability.
Liabilities. Total Liabilities as of September 30, 2019 were 8,010.5 billion JPY, reflecting a decrease of 710.1 billion JPY compared to the previous fiscal year-end mainly driven by a decrease in Bonds and Loans of 726.3 billion JPY to 5,024.6 billion JPY** due to FX impact, the redemption of bonds, and repayment of loans. We issued 500.0 billion JPY of Hybrid (subordinated) bonds in June while Loans decreased as a result of the repayment of 500.0 billion JPY Syndicated Loans. There were early redemptions totaling 1,404.5 million USD (150.2 billion JPY) of unsecured USD denominated senior notes in August 2019. Further, we redeemed 3,300.0 million USD (350.7 billion JPY) of unsecured USD denominated senior notes in September 2019. In addition to the decrease in Bonds and Loans, Liabilities Held for Sale decreased by 128.4 billion JPY primarily due to the completion of sale of the XIIDRA.These decreases were partially offset by an increase of 173.5 billion JPY in Other Non-Current Financial Liabilities mainly due to the adoption of IFRS 16 as noted above.
** The carrying amount of Bonds was 3,066.1 billion JPY and Loans was 1,958.5 billion JPY as of September 30, 2019. Breakdown of Bonds and Loans carrying amount is as follows.
Bonds:
Billion JPY | ||||
Name of Bond (Denominated in Foreign Currency) | Issuance | Maturity | Carrying Amount | |
15th Unsecured straight bonds | July, 2013 | July, 2020 | 60.0 | |
Unsecured US dollar denominated senior notes (1,520 million USD) | June, 2015 | June 2022~ June 2045 | 163.7 | |
Unsecured US dollar denominated senior notes (8,800 million USD) | September, 2016 | September 2021~ September 2026 | 900.6 | |
Unsecured US dollar denominated senior notes (500 million USD) | July, 2017 | January, 2022 | 53.8 | |
Unsecured Euro denominated senior notes (7,500 million EUR) | November, 2018 | November 2020~ November 2030 | 878.4 | |
Unsecured US dollar denominated senior notes (4,500 million USD) | November, 2018 | November 2021~ November 2028 | 483.1 | |
Hybrid bonds (subordinated bonds) | June, 2019 | June, 2079 | 496.4 | |
Commercial Papers | July, 2019 | October, 2019 | 30.0 | |
Total | 3,066.1 |
8
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
Loans:
Billion JPY | ||||
Name of Loans (Denominated in Foreign Currency) | Execution | Maturity | Carrying Amount | |
Syndicated Loans | July, 2013 | July, 2020 | 60.0 | |
Syndicated Loans | April, 2016 | April, 2023 ~ April, 2026 | 200.0 | |
Syndicated Loans | April, 2017 | April, 2027 | 113.5 | |
Syndicated Loans | April, 2017 | April, 2027 | 161.6 | |
(1,500 million USD) | ||||
Syndicated Loans | January, 2019 | January, 2024 | 430.6 | |
(3,987 million USD) | ||||
Syndicated Loans | January, 2019 | January, 2024 | 359.0 | |
(3,047 million EUR) | ||||
Japan Bank for International Cooperation | January, 2019 | December, 2025 | 399.4 | |
(3,700 million USD) | ||||
Other | 234.4 | |||
Total | 1,958.5 |
In September 2019, Takeda reached an agreement on a commitment facility of 700.0 billion JPY with three mega Japanese banks as well as other Japanese and non-Japanese banks. The commitment facility is effective from October 2019 for five years at minimum. In connection with entering into this new commitment facility, Takeda's existing short-term commitment facility of 300.0 billion JPY expiring in March 2020 was canceled in September 2019. The purpose of the new commitment facility is for general business use.
Equity. Total Equity as of September 30, 2019 was 4,869.7 billion JPY, a decrease of 293.9 billion JPY compared to the previous fiscal year-end. This was mainly due to a decrease of 91.8 billion JPY in Retained Earnings resulting from Dividends payment of 140.8 billion JPY, and a 212.6 billion JPY decrease in Other Components of Equity mainly due to fluctuation in currency translation adjustments reflecting the appreciation of yen.
Consolidated Cash Flow
Billion JPY | ||||
FY2018 H1 | FY2019 H1 | |||
Net Cash from (used in) operating activities | 117.8 | 341.1 | ||
Net Cash from (used in) investing activities | (2.1 | ) | 330.4 | |
Net Cash from (used in) financing activities | (97.2 | ) | (811.7 | ) |
Net increase (decrease) in cash and cash equivalents | 18.5 | (140.2 | ) | |
Cash and cash equivalents at the beginning of the year | 294.5 | 702.1 | ||
Effects of exchange rate changes on cash and cash equivalents | 3.6 | (19.0 | ) | |
Net increase (decrease) in cash and cash equivalents resulting from a transfer to assets held for sale | 0.5 | 0.6 | ||
Cash and cash equivalents at the end of the period | 317.1 | 543.5 |
Net cash from operating activities was 341.1 billion JPY for the current period compared to 117.8 billion JPY for the same period of the previous year. The increase of 223.3 billion JPY was driven by certain favorable non-cash adjustments such as an increase in depreciation and amortization of 264.0 billion JPY mainly attributable to intangible assets recorded upon the acquisition of Shire, a decrease in inventories of 92.5 billion JPY primarily attributable to the unwinding of the fair value step up recorded in relation to the acquisition of Shire, and an increase in provision of 46.0 billion JPY.
9
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
The increase in net cash from operating activities also includes other favorable adjustments such as an increase in net finance expenses of 66.7 billion JPY primarily due to the interest expenses in connection with the financing for the acquisition of Shire.
These increases were partially offset by a decrease in net profit for the period of 93.2 billion JPY and an increase of income taxes paid of 77.2 billion JPY mainly resulting from higher tax payments by the legacy Shire entities as well as other unfavorable adjustment such as a decreased income tax expenses of 95.1 billion JPY.
Net cash from investing activities was 330.4 billion JPY for the current period compared to net cash used in investing activities of 2.1 billion JPY for the same period of the previous year. This increase in net cash from investing activities of 332.6 billion JPY was mainly due to an increase in proceeds from sales of business of 348.3 billion JPY reflecting the sale of XIIDRA of 375.5 billion JPY for the current period as well as a decrease in acquisition of business of 62.2 billion JPY primarily resulting from the acquisition of TiGenix of 66.7 billion JPY for the same period of the previous year. This increase was partially offset by a 71.8 billion JPY decrease in proceeds from withdrawal of restricted deposit mainly used for the acquisition of TiGenix.
Net cash used in financing activities was 811.7 billion JPY for the current period compared to 97.2 billion JPY for the same period of the previous year. This increase in net cash used of 714.5 was mainly due to repayment of bonds and loans of 623.1 billion JPY in the current period. There were also an increase of dividends paid by 69.4 billion JPY and an increase of interest paid by 56.6 billion JPY mainly resulting from the financing for the acquisition of Shire.
For the current period, the proceeds from issuance of bonds and long-term loans were 496.2 billion JPY including the 500.0 billion JPY issuance of hybrid bonds, and net decrease in short-term loans was 461.4billion JPY mainly due to repayment of 500.0 billion JPY for the short-term syndicated loans.
10
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(3) Outlook for Fiscal 2019
The full year forecast for consolidated reported results for fiscal 2019 has been revised from the previous forecast (announced on July 31, 2019), as follows:
FY2019 Reported Forecast
Billion JPY
Previous Forecast (July 31, 2019) | Revised Forecast (October 31, 2019) | vs. Previous Forecast | vs. Fiscal 2018 | |||||||
Revenue | 3,300.0 | 3,260.0 | (40.0 | ) | +1,162.8 | +55.4 | % | |||
Operating profit | (166.0 | ) | (110.0 | ) | +56.0 | (315.0 | ) | — | % | |
Profit before tax | (342.0 | ) | (290.0 | ) | +52.0 | (384.9 | ) | — | % | |
Net profit for the period (attributable to owners of the Company) | (367.7 | ) | (273.0 | ) | +94.7 | (382.1 | ) | — | % | |
EPS (JPY) | (236.05 | ) | (175.31 | ) | +60.74 | (288.81 | ) | — | % | |
Core Operating Profit* | 910.0 | 930.0 | +20.0 | +470.7 | +102.5 | % |
* For FY2019, Takeda renamed "Core Earnings" to "Core Operating Profit". Its definition has not changed as described in section (ii) Underlying Results (April 1 to September 30, 2019), Definition of Core and Underlying Growth.
The revised forecast in the table above reflects the business momentum of Takeda’s 14 global brands and favorability of operating expenses and cost synergies.
The revenue forecast has been decreased by 40.0 billion JPY, or 1.2%, to 3,260.0 billion JPY, predominantly reflecting the negative impact of foreign currency, most notably the appreciation of the yen and the NATPARA recall in the U.S*1., partially offset by upwardly revised assumptions for products such as ENTYVIO, TAKECAB and VYVANSE.
Core Operating Profit has been increased by 20.0 billion JPY, or 2.2%, to 930.0 billion JPY, reflecting the positive impact from cost efficiencies and synergies. The Operating Profit forecast has been increased by 56.0 billion JPY, or 33.7%, to a loss of 110.0 billion JPY, reflecting the increase in Core Operating Profit, and revised assumptions for the full year impact of purchase price accounting expenses*2.
Reported EPS has been increased by 60.74 JPY to a loss of 175.31 JPY, benefitting from the recognition of a non-cash deferred tax benefit relating to the Tax Reform in Switzerland.
*1 In September 2019, NATPARA was recalled in the U.S. due to an issue related to the rubber septum of its cartridge.
*2 Takeda has made adjustments to the provisional fair value as of the acquisition date of assets acquired through the acquisition of Shire including NATPARA, and accordingly revised assumptions for the full year impact of purchase price accounting. The revised forecast reflects decrease in amortization expense of intangible assets and decreased amount charged to cost of sales from unwinding of the fair value step-up on inventory.
11
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
Major assumptions used in preparing the FY2019 Revised Reported Forecast
Billion JPY | ||||
Fiscal 2018 | Fiscal 2019 | |||
FX rates | 1 USD = 111 JPY 1 Euro = 129 JPY 1 RUB = 1.7 JPY 1 BRL = 29.5 JPY 1 CNY = 16.5 JPY | 1 USD = 109 JPY 1 Euro = 121 JPY 1 RUB = 1.7 JPY 1 BRL = 26.9 JPY 1 CNY = 15.5 JPY | ||
R&D expenses | (368.3) | (484.0 | ) | |
Shire acquisition related costs | ||||
Operating expenses (acquisition costs, etc.) | (25.3) | (7.0 | ) | |
Other operating expenses (integration costs) | (59.6) | (146.0 | ) | |
Financial expenses (interest costs, etc.) | (41.3) | (80.0 | ) | |
Financial expenses | (83.3) | (172.0 | ) | |
Impact from Shire's purchase accounting (major items) | ||||
Cost of sales (unwind of inventory fair value adjustment) | (82.2) | (211.0 | ) | |
Amortization of intangibles assets (Shire acquisition) | (99.2) | (423.0 | ) | |
Other non-cash items | ||||
Amortization of intangible assets (Legacy Takeda) | (95.4) | (93.0 | ) | |
Impairment losses on intangible assets | (8.7) | (121.0 | ) | |
Capital expenditures | 244.6 | 180.0 - 230.0 | ||
Depreciation and amortization (excluding intangible assets associated with products) | (77.2 | ) | (150.0) |
Management Guidance
Previous Guidance (July 31, 2019) | Revised Guidance (October 31, 2019) | |
Underlying Revenue Growth* | Flat to slightly increasing | Flat to slightly increasing |
Underlying Core Operating Profit Margin | Mid-to-high-twenties % | High-twenties % |
Underlying Core EPS | 360 - 380 yen | 370 - 390 yen |
Annual dividend per share | 180 yen | 180 yen |
* Constant Exchange Rate growth compared to baseline of 3,300 billion JPY. This baseline revenue is a pro-forma which adds Legacy Shire’s (April - December 2018) revenue previously reported under US GAAP and conformed to IFRS without material differences, excluding Legacy Shire’s oncology business, which was sold in August 2018, and converted to JPY using FY2018 full year average rate (111 JPY/USD). Baseline revenue is also adjusted for divested assets such as Techpool, Multilab, and TACHOSIL from Legacy Takeda and XIIDRA from Legacy Shire.
Takeda has upwardly revised its full-year profit and margin guidance with business momentum more than offsetting the recall of NATPARA in the U.S.
Forward looking statement
All forecasts in this document are based on information currently available to management, and do not represent a promise or guarantee to achieve these forecasts. Various uncertain factors could cause actual results to differ, such as changes in the business environment and fluctuations in foreign exchange rates. Should any significant event occur which requires the forecast to be revised, the Company will disclose it in a timely manner.
12
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(4) Interim Dividend for Fiscal 2019
Takeda maintains its annual dividend policy of 180 JPY per share.
For the six-month period ended September 30, 2019, Takeda’s Board of Directors approved the payment of an interim dividend of 90 JPY per share. The dividend will be paid on December 2, 2019.
13
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
2. Condensed Interim Consolidated Financial Statements [IFRS] and Major Notes
(1) Condensed Interim Consolidated Statements of Income
JPY (millions) | ||||||
Six month period ended September 30, | ||||||
2018 | 2019 | |||||
Revenue | 880,611 | 1,660,169 | ||||
Cost of sales | (231,341 | ) | (572,302 | ) | ||
Selling, general and administrative expenses | (293,783 | ) | (462,469 | ) | ||
Research and development expenses | (151,432 | ) | (230,363 | ) | ||
Amortization and impairment losses on intangible assets associated with products | (48,288 | ) | (273,652 | ) | ||
Other operating income | 32,331 | 11,316 | ||||
Other operating expenses | (16,142 | ) | (82,389 | ) | ||
Operating profit | 171,956 | 50,310 | ||||
Finance income | 4,411 | 17,370 | ||||
Finance expenses | (19,618 | ) | (99,268 | ) | ||
Share of profit of investments accounted for using the equity method | 4,031 | 4,031 | ||||
Profit (loss) before tax | 160,780 | (27,557 | ) | |||
Income tax (expenses) benefit | (34,291 | ) | 60,837 | |||
Net profit for the period | 126,489 | 33,280 | ||||
Attributable to: | ||||||
Owners of the Company | 126,668 | 33,184 | ||||
Non-controlling interests | (179 | ) | 96 | |||
Net profit for the period | 126,489 | 33,280 | ||||
Earnings per share (JPY) | ||||||
Basic earnings per share | 161.76 | 21.32 | ||||
Diluted earnings per share | 160.93 | 21.25 |
14
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(2) Condensed Interim Consolidated Statements of Other Comprehensive Income
JPY (millions) | ||||||
Six month period ended September 30, | ||||||
2018 | 2019 | |||||
Net profit for the period | 126,489 | 33,280 | ||||
Other comprehensive income (loss) | ||||||
Items that will not be reclassified to profit or loss: | ||||||
Changes in fair value of financial assets measured at fair value through other comprehensive income (loss) | 13,008 | (9,916 | ) | |||
Re-measurement loss on defined benefit plans | (163 | ) | (4,612 | ) | ||
12,845 | (14,528 | ) | ||||
Items that may be reclassified subsequently to profit or loss: | ||||||
Exchange differences on translation of foreign operations | 66,680 | (180,311 | ) | |||
Cash flow hedges | 1,704 | (1,256 | ) | |||
Hedging cost | (152 | ) | (67 | ) | ||
Share of other comprehensive income (loss) of investments accounted for using the equity method | (171 | ) | 3 | |||
68,061 | (181,631 | ) | ||||
Other comprehensive income (loss) for the period, net of tax | 80,906 | (196,159 | ) | |||
Total comprehensive income (loss) for the period | 207,395 | (162,879 | ) | |||
Attributable to: | ||||||
Owners of the Company | 207,742 | (162,996 | ) | |||
Non-controlling interests | (347 | ) | 117 | |||
Total comprehensive income (loss) for the period | 207,395 | (162,879 | ) | |||
15
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(3) Condensed Interim Consolidated Statements of Financial Position
JPY (millions) | ||||||
As of March 31, 2019 | As of September 30, 2019 | |||||
ASSETS | ||||||
NON-CURRENT ASSETS: | ||||||
Property, plant and equipment | 1,331,932 | 1,457,060 | ||||
Goodwill | 4,187,006 | 4,029,507 | ||||
Intangible assets | 4,846,981 | 4,425,199 | ||||
Investments accounted for using the equity method | 114,658 | 124,708 | ||||
Other financial assets | 192,241 | 225,870 | ||||
Other non-current assets | 87,472 | 92,449 | ||||
Deferred tax assets | 88,991 | 150,908 | ||||
Total non-current assets | 10,849,281 | 10,505,701 | ||||
CURRENT ASSETS: | ||||||
Inventories | 953,474 | 840,840 | ||||
Trade and other receivables | 741,907 | 779,431 | ||||
Other financial assets | 23,276 | 13,916 | ||||
Income tax receivables | 7,212 | 26,306 | ||||
Other current assets | 109,666 | 104,697 | ||||
Cash and cash equivalents | 702,093 | 543,517 | ||||
Assets held for sale | 497,198 | 65,733 | ||||
Total current assets | 3,034,826 | 2,374,440 | ||||
Total assets | 13,884,107 | 12,880,141 | ||||
LIABILITIES AND EQUITY | ||||||
LIABILITIES | ||||||
NON-CURRENT LIABILITIES: | ||||||
Bonds and loans | 4,766,005 | 4,853,219 | ||||
Other financial liabilities | 235,786 | 409,237 | ||||
Net defined benefit liabilities | 156,513 | 158,564 | ||||
Accrued income taxes | 61,900 | 60,159 | ||||
Provisions | 33,760 | 28,497 | ||||
Other non-current liabilities | 73,881 | 61,725 | ||||
Deferred tax liabilities | 869,313 | 804,422 | ||||
Total non-current liabilities | 6,197,158 | 6,375,823 | ||||
CURRENT LIABILITIES: | ||||||
Bonds and loans | 984,946 | 171,391 | ||||
Trade and other payables | 327,394 | 280,409 | ||||
Other financial liabilities | 47,340 | 68,658 | ||||
Accrued income taxes | 118,910 | 175,698 | ||||
Provisions | 388,920 | 428,634 | ||||
Other current liabilities | 439,076 | 421,517 | ||||
Liabilities held for sale | 216,775 | 88,327 | ||||
Total current liabilities | 2,523,361 | 1,634,634 | ||||
Total liabilities | 8,720,519 | 8,010,457 |
16
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
JPY (millions) | ||||||
As of March 31, 2019 | As of September 30, 2019 | |||||
EQUITY | ||||||
Share capital | 1,643,585 | 1,668,092 | ||||
Share premium | 1,650,232 | 1,666,141 | ||||
Treasury shares | (57,142 | ) | (87,082 | ) | ||
Retained earnings | 1,569,365 | 1,477,589 | ||||
Other components of equity | 353,542 | 140,974 | ||||
Equity attributable to owners of the Company | 5,159,582 | 4,865,714 | ||||
Non-controlling interests | 4,006 | 3,970 | ||||
Total equity | 5,163,588 | 4,869,684 | ||||
Total liabilities and equity | 13,884,107 | 12,880,141 |
(Note) Takeda revised the provisional fair value for the assets acquired and the liabilities assumed related to business combinations during the six month period ended September 30, 2019. For this reason, the corresponding balances in Condensed Interim Consolidated Statements of Financial Position as of March 31, 2019 were retrospectively revised. For details, please refer to "(6) Notes to Condensed Interim Consolidated Financial Statements (Business Combinations)".
17
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(4) Condensed Interim Consolidated Statements of Changes in Equity
Six month period ended September 30, 2018 (From April 1 to September 30, 2018)
JPY (millions) | |||||||||||||||||||||
Equity attributable to owners of the Company | |||||||||||||||||||||
Share capital | Share premium | Treasury shares | Retained earnings | Other components of equity | |||||||||||||||||
Exchange differences on translation of foreign operations | Changes in fair value of financial assets measured at fair value through other comprehensive income | Net changes on revaluation of available-for-sale financial assets | |||||||||||||||||||
As of April 1, 2018 | 77,914 | 90,740 | (74,373 | ) | 1,557,307 | 272,597 | — | 73,037 | |||||||||||||
Cumulative effects of changes in accounting policies | 15,401 | 84,672 | (73,037 | ) | |||||||||||||||||
Adjusted opening balance | 77,914 | 90,740 | (74,373 | ) | 1,572,708 | 272,597 | 84,672 | — | |||||||||||||
Net profit for the period | 126,668 | ||||||||||||||||||||
Other comprehensive income (loss) | 61,937 | 12,954 | |||||||||||||||||||
Comprehensive income (loss) for the period | — | — | — | 126,668 | 61,937 | 12,954 | — | ||||||||||||||
Transaction with owners: | |||||||||||||||||||||
Issuance of new shares | 28 | 28 | |||||||||||||||||||
Acquisition of treasury shares | (1,158 | ) | |||||||||||||||||||
Disposal of treasury shares | (0) | 3 | |||||||||||||||||||
Dividends | (71,188 | ) | |||||||||||||||||||
Changes in ownership | (2,126 | ) | 230 | ||||||||||||||||||
Transfers from other components of equity | 22,032 | (22,196 | ) | ||||||||||||||||||
Share-based compensation | 9,384 | ||||||||||||||||||||
Exercise of share-based awards | (18,375 | ) | 18,361 | ||||||||||||||||||
Basis adjustment related to acquisitions | |||||||||||||||||||||
Total transactions with owners | 28 | (8,963 | ) | 17,206 | (51,282 | ) | 230 | (22,196 | ) | — | |||||||||||
As of September 30, 2018 | 77,942 | 81,777 | (57,167 | ) | 1,648,094 | 334,764 | 75,430 | — |
Equity attributable to owners of the Company | ||||||||||||||||||||||||
Other components of equity | Other comprehensive income related to assets held for sale | |||||||||||||||||||||||
Cash flow hedges | Hedging cost | Re-measurement gain or loss on defined benefit plans | Total | Total | Non-controlling interests | Total equity | ||||||||||||||||||
As of April 1, 2018 | 3,391 | 1,606 | — | 350,631 | (4,795 | ) | 1,997,424 | 19,985 | 2,017,409 | |||||||||||||||
Cumulative effects of changes in accounting policies | (1,378 | ) | 10,257 | 25,658 | (10 | ) | 25,648 | |||||||||||||||||
Adjusted opening balance | 2,013 | 1,606 | — | 360,888 | (4,795 | ) | 2,023,082 | 19,975 | 2,043,057 | |||||||||||||||
Net profit for the period | — | 126,668 | (179 | ) | 126,489 | |||||||||||||||||||
Other comprehensive income (loss) | 1,704 | (152 | ) | (164 | ) | 76,279 | 4,795 | 81,074 | (168 | ) | 80,906 | |||||||||||||
Comprehensive income (loss) for the period | 1,704 | (152 | ) | (164 | ) | 76,279 | 4,795 | 207,742 | (347 | ) | 207,395 | |||||||||||||
Transaction with owners: | ||||||||||||||||||||||||
Issuance of new shares | — | 56 | 56 | |||||||||||||||||||||
Acquisition of treasury shares | — | (1,158 | ) | (1,158 | ) | |||||||||||||||||||
Disposal of treasury shares | — | 3 | 3 | |||||||||||||||||||||
Dividends | — | (71,188 | ) | (168 | ) | (71,356 | ) | |||||||||||||||||
Changes in ownership | 230 | (1,896 | ) | (15,657 | ) | (17,553 | ) | |||||||||||||||||
Transfers from other components of equity | 164 | (22,032 | ) | — | — | |||||||||||||||||||
Share-based compensation | — | 9,384 | 9,384 | |||||||||||||||||||||
Exercise of share-based awards | — | (14 | ) | (14 | ) | |||||||||||||||||||
Basis adjustment related to acquisitions | 2,347 | 2,347 | 2,347 | 2,347 | ||||||||||||||||||||
Total transactions with owners | 2,347 | — | 164 | (19,455 | ) | — | (62,466 | ) | (15,825 | ) | (78,291 | ) | ||||||||||||
As of September 30, 2018 | 6,064 | 1,454 | — | 417,712 | — | 2,168,358 | 3,803 | 2,172,161 |
18
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
Six month period ended September 30, 2019 (From April 1 to September 30, 2019)
JPY (millions) | |||||||||||||||||||
Equity attributable to owners of the Company | |||||||||||||||||||
Other components of equity | |||||||||||||||||||
Share capital | Share premium | Treasury shares | Retained earnings | Exchange differences on translation of foreign operations | Changes in fair value of financial assets measured at fair value through other comprehensive income | ||||||||||||||
As of April 1, 2019 | 1,643,585 | 1,650,232 | (57,142 | ) | 1,569,365 | 302,791 | 46,380 | ||||||||||||
Cumulative effects of changes in accounting policies | (512 | ) | |||||||||||||||||
Adjusted opening balance | 1,643,585 | 1,650,232 | (57,142 | ) | 1,568,853 | 302,791 | 46,380 | ||||||||||||
Net profit for the period | 33,184 | ||||||||||||||||||
Other comprehensive income (loss) | (180,331 | ) | (9,914 | ) | |||||||||||||||
Comprehensive income (loss) for the period | — | — | — | 33,184 | (180,331 | ) | (9,914 | ) | |||||||||||
Transaction with owners: | |||||||||||||||||||
Issuance of new shares | 24,507 | 24,507 | |||||||||||||||||
Acquisition of treasury shares | (52,737 | ) | |||||||||||||||||
Disposal of treasury shares | (0) | 0 | |||||||||||||||||
Dividends | (140,836 | ) | |||||||||||||||||
Transfers from other components of equity | 16,388 | (21,000 | ) | ||||||||||||||||
Share-based compensation | 13,524 | ||||||||||||||||||
Exercise of share-based awards | (22,122 | ) | 22,797 | ||||||||||||||||
Total transactions with owners | 24,507 | 15,909 | (29,940 | ) | (124,448 | ) | — | (21,000 | ) | ||||||||||
As of September 30, 2019 | 1,668,092 | 1,666,141 | (87,082 | ) | 1,477,589 | 122,460 | 15,466 |
Equity attributable to owners of the Company | |||||||||||||||||||||
Other components of equity | |||||||||||||||||||||
Cash flow hedges | Hedging cost | Re-measurement gain or loss on defined benefit plans | Total | Total | Non-controlling interests | Total equity | |||||||||||||||
As of April 1, 2019 | 2,959 | 1,412 | — | 353,542 | 5,159,582 | 4,006 | 5,163,588 | ||||||||||||||
Cumulative effects of changes in accounting policies | — | (512 | ) | (512 | ) | ||||||||||||||||
Adjusted opening balance | 2,959 | 1,412 | — | 353,542 | 5,159,070 | 4,006 | 5,163,076 | ||||||||||||||
Net profit for the period | — | 33,184 | 96 | 33,280 | |||||||||||||||||
Other comprehensive income (loss) | (1,256 | ) | (67 | ) | (4,612 | ) | (196,180 | ) | (196,180 | ) | 21 | (196,159 | ) | ||||||||
Comprehensive income (loss) for the period | (1,256 | ) | (67 | ) | (4,612 | ) | (196,180 | ) | (162,996 | ) | 117 | (162,879 | ) | ||||||||
Transaction with owners: | |||||||||||||||||||||
Issuance of new shares | — | 49,014 | 49,014 | ||||||||||||||||||
Acquisition of treasury shares | — | (52,737 | ) | (52,737 | ) | ||||||||||||||||
Disposal of treasury shares | — | 0 | 0 | ||||||||||||||||||
Dividends | — | (140,836 | ) | (153 | ) | (140,989 | ) | ||||||||||||||
Transfers from other components of equity | 4,612 | (16,388 | ) | — | — | ||||||||||||||||
Share-based compensation | — | 13,524 | 13,524 | ||||||||||||||||||
Exercise of share-based awards | — | 675 | 675 | ||||||||||||||||||
Total transactions with owners | — | — | 4,612 | (16,388 | ) | (130,360 | ) | (153 | ) | (130,513 | ) | ||||||||||
As of September 30, 2019 | 1,703 | 1,345 | — | 140,974 | 4,865,714 | 3,970 | 4,869,684 |
19
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(5) Condensed Interim Consolidated Statements of Cash Flows
JPY (millions) | ||||||
Six month period ended September 30, | ||||||
2018 | 2019 | |||||
Cash flows from operating activities: | ||||||
Net profit for the period | 126,489 | 33,280 | ||||
Depreciation and amortization | 77,976 | 341,970 | ||||
Impairment losses | 690 | 18,557 | ||||
Equity-settled share-based compensation | 9,384 | 13,524 | ||||
Loss (gain) on sales and disposal of property, plant and equipment | (5,623 | ) | 240 | |||
Gain on divestment of business and subsidiaries | (16,631 | ) | (3,516 | ) | ||
Loss on liquidation of foreign operations | — | 399 | ||||
Change in fair value of contingent consideration liabilities | (1,230 | ) | 2,605 | |||
Finance income and expenses, net | 15,207 | 81,898 | ||||
Share of profit of investments accounted for using the equity method | (4,031 | ) | (4,031 | ) | ||
Income tax expenses (benefit) | 34,291 | (60,837 | ) | |||
Changes in assets and liabilities: | ||||||
Increase in trade and other receivables | (44,721 | ) | (53,938 | ) | ||
Decrease (increase) in inventories | (21,485 | ) | 70,981 | |||
Decrease in trade and other payables | (230 | ) | (41,477 | ) | ||
Increase in provisions | 1,594 | 47,591 | ||||
Other, net | (35,001 | ) | (15,575 | ) | ||
Cash generated from operations | 136,679 | 431,671 | ||||
Income taxes paid | (20,407 | ) | (97,656 | ) | ||
Tax refunds and interest on tax refunds received | 1,562 | 7,072 | ||||
Net cash from operating activities | 117,834 | 341,087 | ||||
Cash flows from investing activities: | ||||||
Interest received | 1,037 | 7,116 | ||||
Dividends received | 1,575 | 1,141 | ||||
Acquisition of property, plant and equipment | (37,314 | ) | (55,083 | ) | ||
Proceeds from sales of property, plant and equipment | 6,046 | 69 | ||||
Acquisition of intangible assets | (21,105 | ) | (21,354 | ) | ||
Acquisition of investments | (10,340 | ) | (3,946 | ) | ||
Proceeds from sales and redemption of investments | 38,196 | 40,582 | ||||
Acquisition of businesses, net of cash and cash equivalents acquired | (66,749 | ) | (4,580 | ) | ||
Proceeds from sales of business, net of cash and cash equivalents divested | 27,199 | 375,536 | ||||
Proceeds from withdrawal of restricted deposits | 71,774 | — | ||||
Other, net | (12,461 | ) | (9,067 | ) | ||
Net cash from (used in) investing activities | (2,142 | ) | 330,414 | |||
Cash flows from financing activities: | ||||||
Net decrease in short-term loans | (362 | ) | (461,371 | ) | ||
Proceeds from issuance of bonds and long-term loans | — | 496,190 | ||||
Repayment of bonds and long-term loans | — | (623,119 | ) | |||
Purchase of treasury shares | (1,158 | ) | (3,724 | ) | ||
Interest paid | (4,467 | ) | (61,039 | ) | ||
Dividends paid | (71,448 | ) | (140,811 | ) | ||
Acquisition of non-controlling interests | (2,392 | ) | (1,700 | ) | ||
Repayment of lease liabilities (2018: Repayment of obligations under finance lease) | (1,284 | ) | (14,624 | ) | ||
Facility fees paid for loan agreements | (15,404 | ) | — | |||
Other, net | (659 | ) | (1,472 | ) | ||
Net cash used in financing activities | (97,174 | ) | (811,670 | ) | ||
Net increase (decrease) in cash and cash equivalents | 18,518 | (140,169 | ) | |||
Cash and cash equivalents at the beginning of the year | 294,522 | 702,093 | ||||
(Consolidated statements of financial position) | ||||||
Cash and cash equivalents reclassified back from assets held for sale | 451 | 629 | ||||
Cash and cash equivalents at the beginning of the year | 294,973 | 702,722 | ||||
Effects of exchange rate changes on cash and cash equivalents | 3,589 | (19,036 | ) | |||
Cash and cash equivalents at the end of the period | 317,080 | 543,517 |
20
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(6) Notes to Condensed Interim Consolidated Financial Statements
(Significant Uncertainty Regarding Going Concern Assumption)
Six month period ended September 30, 2019 (April 1 to September 30, 2019)
Not applicable.
(Significant Accounting Policies)
Significant accounting policies adopted for the condensed interim consolidated financial statements are the same as those adopted for the consolidated financial statements of the fiscal year ended March 31, 2019 except for the policies required by IFRS 16 'Leases'.
Takeda calculated income tax expenses for the six month period ended September 30, 2019, based on the estimated average annual effective tax rate.
IFRS 16 'Leases' (“IFRS 16”)
Takeda adopted IFRS 16 on April 1, 2019. The standard replaces IAS 17 'Leases' (“IAS 17”) and IFRIC 4 'Determining whether an Arrangement contains a Lease' ("IFRIC 4") and introduces a single lease accounting model requiring a lessee to recognize lease liabilities and right-of-use (ROU) assets for almost all leases. Of the costs from operating leases previously included within cost of sales, selling, general and administrative expenses, research and development expenses, and other operating expenses, the portion related to the financing element is classified and reported as finance expenses. In the statements of cash flow, the lease payments previously included within cash flows from operating activities are reported within cash flows from financing activities.
Takeda adopted IFRS 16 using the modified retrospective approach and the cumulative effect of adopting the standard was recognized on April 1, 2019. At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the incremental borrowing rate as of April 1, 2019. ROU assets were measured at an amount equal to the lease liabilities, adjusted for any prepaid or accrued lease payments, onerous lease provisions and business combination related fair value adjustments.
The adoption of IFRS 16 resulted in the recognition of lease liabilities (included in "Other financial liabilities") of 217,325 million JPY and ROU assets (included in "Property, plant and equipment") of 199,256 million JPY, excluding the amount related to leases previously classified as finance leases under IAS 17 in the consolidated statements of financial position as of April 1, 2019. The weighted average incremental borrowing rate applied to the lease liabilities on April 1, 2019 was 2.8%. In the condensed interim consolidated statements of cash flows, cash outflow of 17,901 million JPY for the six month ended September 30, 2019 was presented in 'net cash from (used in) financing activities' instead of 'net cash from (used in) operating activities'. Other impact of applying IFRS 16 to the condensed interim consolidated financial statements was immaterial.
Takeda elected the following transition practical expedients, to leases previously classified as operating leases under IAS 17;
– | Applying the recognition exemption for lease contracts for which the term ends within 12 months at the date of initial application |
– | Adjusting the ROU assets by the amount of onerous contract provision recognized under IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' immediately before the date of initial application, as an alternative to an impairment review |
Takeda has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before April 1, 2019, Takeda relied on its assessment made applying IAS 17 and IFRIC 4.
21
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
As a result of the adoption of IFRS 16, Takeda has updated and revised the related accounting policy for leases, effective April 1, 2019, as follows:
As Lessee
Takeda assesses whether a contract is or contains a lease at inception of a contract. As a lessee, Takeda recognizes a ROU asset and a corresponding lease liability for all contracts in which it is a lessee in the consolidated statements of financial position at the lease commencement date.
The ROU asset is initially measured at cost, being the initial amount of the lease liability adjusted for any lease payments made at or before the lease commencement date and subsequently at cost less any accumulated depreciation and impairment losses. The ROU asset is subsequently depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the underlying asset. The ROU asset is subject to impairment assessment.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if not readily determinable, the Takeda's incremental borrowing rate.
Generally, Takeda uses its incremental borrowing rate as the discount rate. The lease term comprises a non-cancellable period of lease contracts and periods covered by an option to extend or terminate the lease if Takeda is reasonably certain to exercise that option. After initial recognition, the lease liability is measured at amortized cost using the effective interest method. If there is a change in future lease payments, such as from reassessment of whether an extension or termination option will be exercised, the lease liability is remeasured. A corresponding adjustment is made to the ROU asset or is recorded in the consolidated statements of income when the ROU asset has been fully depreciated.
Takeda has elected to apply recognition exemption for leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments for such leases are recognized as an expense on a straight-line basis over the lease term.
As a practical expedient, Takeda has elected not to separate non-lease components from lease components, and instead accounts for each lease component and any associated non-lease components as a single lease component.
(Significant Changes in Equity Attributable to Owners of the Company)
Six month period ended September 30, 2019 (April 1 to September 30, 2019)
Not applicable.
22
Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Six Month
Period Ended September 30, 2019 (Consolidated)
(Business Combinations)
There were no significant business combinations for the six month period ended September 30, 2019.
On January 8, 2019, Takeda completed the acquisition of 100% of the outstanding shares of Shire plc ("Shire") in a cash and equity transaction valued at 6,213,335 million JPY. Shire was a leading global biotechnology company focused on serving people with rare diseases.
The fair values of the assets acquired, and the liabilities assumed, which Takeda assessed as of March 31, 2019, were provisional and subject to change. Takeda has made adjustments as it obtained more information about facts and circumstances that existed as of the acquisition date during the six month period ended September 30, 2019. Accordingly, the provisional fair values for certain assets acquired and the liabilities assumed were adjusted as follows:
JPY (millions) | ||||||||
Fair value of assets acquired, liabilities assumed as of the acquisition date (January 8, 2019) | ||||||||
Provisional fair value assessed as of March 31, 2019 | Adjustments | Provisional fair value assessed as of September 30, 2019 | ||||||
Cash and cash equivalents | 227,223 | — | 227,223 | |||||
Trade and other receivables | 326,154 | — | 326,154 | |||||
Inventories | 825,985 | (32,716 | ) | 793,269 | ||||
Property, plant and equipment | 684,487 | 15,144 | 699,631 | |||||
Intangible assets | 3,899,298 | (13,164 | ) | 3,886,134 | ||||
Assets held for sale | 463,526 | 17,147 | 480,673 | |||||
Other assets | 103,283 | — | 103,283 | |||||
Trade and other payables | (61,382 | ) | — | (61,382 | ) | |||
Provisions | (342,202 | ) | 5,327 | (336,875 | ) | |||
Bonds and loans | (1,603,199 | ) | — | (1,603,199 | ) | |||
Deferred tax liabilities | (809,667 | ) | (2,214 | ) | (811,881 | ) | ||
Liabilities held for sale | (196,294 | ) | (15,369 | ) | (211,663 | ) | ||
Other liabilities | (354,139 | ) | 669 | (353,470 | ) | |||
Basis adjustments | (37,107 | ) | — | (37,107 | ) | |||
Goodwill | 3,087,369 | 25,176 | 3,112,545 | |||||
Total | 6,213,335 | — | 6,213,335 | |||||
As a result of the adjustments, Takeda restated the corresponding balances as of March 31, 2019 in the condensed interim consolidated statements of financial position. Property, plant & equipment, goodwill, assets held for sale, deferred tax liabilities, other current liabilities, and liabilities held for sale increased by 15,401 million JPY, 25,603 million JPY, 17,438 million JPY, 2,252 million JPY, 1,188 million JPY, and 15,630 million JPY, respectively while intangible assets, inventories, provisions (non-current liabilities), other non-current liabilities, income tax payable (current liabilities) and provisions (current liabilities) decreased by 13,387 million JPY, 33,270 million JPY, 1,604 million JPY, 1,293 million JPY, 575 million JPY, and 3,813 million JPY, respectively.
Further assessment of the basis for the measurement of the assets acquired and the liabilities assumed are still on-going, and therefore the purchase price allocation has not been completed and remains provisional. The provisional fair values are primarily consisted of intangible assets, deferred tax liabilities and goodwill.
(Significant Subsequent Events)
Not applicable.
23
APPENDIX
1 Reconciliation from Reported Revenue to Underlying Revenue
2 Reported and Underlying Growth of Legacy Shire Product/Therapeutic Area Sales
3 FY2019H1 Reconciliation from Reported to Core/Underlying Core
4 FY2018H1 Reconciliation from Reported to Core
1 Reconciliation from Reported Revenue to Underlying Revenue
H1 | |||||||||
(BN YEN) | FY2018*1 | FY2019 | vs. PY | ||||||
Revenue | 880.6 | 1,660.2 | +779.6 | +88.5 | % | ||||
Shire Revenue | 848.9 | — | |||||||
Pro-forma Revenue | 1,729.5 | 1,660.2 | (69.3 | ) | (4.0 | )% | |||
FX effects*2 | +2.8pp | ||||||||
Divestitures*3 | +1.0pp | ||||||||
Techpool & Multilab | +0.4pp | ||||||||
XIIDRA & TACHOSIL | +0.7pp | ||||||||
Others | (0.1)pp | ||||||||
Underlying Revenue Growth | (0.2 | )% |
*1 FY2018 H1 revenue is a pro-forma which adds Legacy Shire's 6 month (April - September 2018) revenue previously reported under US GAAP and conformed to IFRS without material differences, excluding Legacy Shire’s oncology business, which was sold in August 2018, and converted to JPY using FY2018 actual rate for the period.
*2 FX adjustment applies constant FY2018 actual full year average rate to both years (1USD=111 yen, 1EUR=129 yen).
*3 Major adjustments are the exclusion of FY2018 H1 revenue of former subsidiaries, Guangdong Techpool Bio-Pharma Co., Ltd., and Multilab Indstria e Comrcio de Produtos Farmacuticos Ltda., both divested in FY2018, and FY2018 H1 and FY2019 H1 revenue of XIIDRA which was divested in July 2019 and TACHOSIL as Takeda agreed in May 2019 to divest this product, with completion of divestiture expected to occur within FY2019.
2 Reported and Underlying Growth of Legacy Shire Product/Therapeutic Area Sales
FY2018 H1 | FY2019 H1 | ||||||||||||
(BN YEN) | Reported*1 | FX | Reported | FX | Underlying Growth | ||||||||
GI | 319.8 | (1.4 | ) | 341.6 | (8.2 | ) | +8.9% | ||||||
Legacy Shire | 67.7 | (0.4 | ) | 57.2 | (1.3 | ) | (14.1 | )% | |||||
LIALDA | 25.3 | (0.1 | ) | 12.2 | (0.5 | ) | (50.0 | )% | |||||
GATTEX / REVESTIVE | 25.3 | (0.2 | ) | 29.3 | (0.6 | ) | +17.0% | ||||||
Rare Diseases | 380.8 | (0.2 | ) | 327.2 | (13.8 | ) | (10.5 | )% | |||||
Rare Metabolic | 97.4 | +0.5 | 92.1 | (5.7 | ) | +1.0% | |||||||
NATPARA | 12.7 | (0.1 | ) | 12.4 | (0.1 | ) | (2.2 | )% | |||||
Rare Hematology | 207.3 | (0.3 | ) | 174.7 | (6.5 | ) | (12.7 | )% | |||||
ADVATE | 103.2 | +0.3 | 83.2 | (3.3 | ) | (15.9 | )% | ||||||
ADYNOVATE | 28.6 | (0.1 | ) | 29.8 | (0.6 | ) | +5.4% | ||||||
FEIBA | 38.7 | (0.1 | ) | 27.8 | (1.5 | ) | (24.4 | )% | |||||
Hereditary Angioedema | 76.2 | (0.4 | ) | 60.3 | (1.6 | ) | (19.2 | )% | |||||
FIRAZYR | 38.5 | (0.2 | ) | 15.3 | (0.7 | ) | (58.8 | )% | |||||
TAKHZYRO | 5.7 | +0.0 | 30.7 | (0.6 | ) | +449.9% | |||||||
CINRYZE | 27.8 | (0.2 | ) | 12.0 | (0.3 | ) | (56.0 | )% | |||||
PDT Immunology | 189.1 | (0.7 | ) | 191.7 | (4.8 | ) | +3.6% | ||||||
Legacy Shire | 181.1 | (0.7 | ) | 183.2 | (4.8 | ) | +3.4% | ||||||
Immunoglobulin | 145.0 | (0.6 | ) | 146.5 | (3.5 | ) | +3.0% | ||||||
Legacy Shire | 139.1 | (0.6 | ) | 140.1 | (3.5 | ) | +2.8% | ||||||
Albumin | 30.1 | (0.1 | ) | 34.1 | (1.2 | ) | +16.9% | ||||||
Legacy Shire | 29.3 | (0.1 | ) | 33.3 | (1.2 | ) | +17.4% | ||||||
Others | 13.9 | (0.1 | ) | 11.1 | (0.1 | ) | (19.6 | )% | |||||
Legacy Shire | 12.7 | (0.1 | ) | 9.9 | (0.1 | ) | (21.7 | )% | |||||
Neuroscience | 205.0 | (1.3 | ) | 213.9 | (3.9 | ) | +5.6% | ||||||
Legacy Shire | 158.5 | (0.9 | ) | 160.1 | (3.3 | ) | +2.5% | ||||||
VYVANSE | 126.4 | (0.8 | ) | 131.5 | (2.6 | ) | +5.4% | ||||||
ADDERALL XR | 17.4 | (0.1 | ) | 10.6 | (0.1 | ) | (38.7 | )% |
*1 Pro-forma based Legacy Shire's product sales and therapeutic area sales include Legacy Shire's products. FY2018 H1 revenue is a pro-forma which adds Legacy Shire's 6 month (April - September 2018) revenue previously reported under US GAAP and conformed to IFRS without material differences, excluding Legacy Shire’s oncology business, which was sold in August 2018, and converted to JPY using FY2018 actual rate for the period.
3 FY2019H1 Reconciliation from Reported to Core/Underlying Core
FY2019H1 | ||||||||||||||||||||||
(BN YEN) | REPORTED | REPORTED TO CORE ADJUSTMENTS | CORE | CORE TO UNDERLYING CORE ADJ. | UNDERLYING CORE | |||||||||||||||||
Amortization & impairment of intangible assets | Other operating income/expense | Shire acquisition related costs | Shire purchase accounting adjustments | Swiss Tax Reform | Others | FX | Divestitures | |||||||||||||||
Revenue | 1,660.2 | 1,660.2 | 44.2 | (21.2 | ) | |||||||||||||||||
Cost of sales | (572.3 | ) | 137.8 | (434.5 | ) | (11.0 | ) | 3.0 | ||||||||||||||
Gross Profit | 1,087.9 | 137.8 | 1,225.7 | 33.1 | (18.2 | ) | ||||||||||||||||
SG&A expenses | (462.5 | ) | 1.4 | 2.3 | (458.8 | ) | (11.9 | ) | — | |||||||||||||
R&D expenses | (230.4 | ) | 5.2 | (0.1 | ) | (225.3 | ) | (3.0 | ) | — | ||||||||||||
Amortization of intangible assets | (256.3 | ) | 45.0 | 211.3 | — | — | — | |||||||||||||||
Impairment losses on intangible assets | (17.3 | ) | 17.3 | — | — | — | ||||||||||||||||
Other operating income | 11.3 | (11.3 | ) | — | — | — | ||||||||||||||||
Other operating expenses | (82.4 | ) | 23.6 | 58.8 | — | — | — | |||||||||||||||
Operating profit | 50.3 | 62.3 | 12.3 | 65.3 | 351.4 | — | — | 541.6 | 18.2 | (18.2 | ) | |||||||||||
Margin | 3.0 | % | 32.6 | % | 32.2 | % | ||||||||||||||||
Financial income/expenses | (81.9 | ) | 3.5 | 8.4 | (0.4 | ) | (70.3 | ) | 4.2 | — | ||||||||||||
Equity income/loss | 4.0 | 1.2 | 5.3 | 0.0 | — | |||||||||||||||||
Profit before tax | (27.6 | ) | 62.3 | 12.3 | 68.8 | 359.8 | — | 0.9 | 476.5 | 22.4 | (18.2 | ) | ||||||||||
Tax expense | 60.8 | (11.1 | ) | 1.6 | (13.1 | ) | (68.1 | ) | (56.3 | ) | (9.9 | ) | (96.1 | ) | (1.4 | ) | 4.3 | |||||
Non-controlling interests | (0.1 | ) | (0.1 | ) | (0.0) | — | ||||||||||||||||
Net profit | 33.2 | 51.3 | 14.0 | 55.7 | 291.6 | (56.3 | ) | (9.0 | ) | 380.4 | 21.0 | (13.9 | ) | |||||||||
EPS (yen) | 21 | 244 | 14 | (9 | ) | 249 | ||||||||||||||||
Number of shares (millions) | 1,557 | 1,557 | 1,555 |
4 FY2018H1 Reconciliation from Reported to Core
FY2018 H1 | ||||||||||||
(BN YEN) | REPORTED | REPORTED TO CORE ADJUSTMENTS | CORE | |||||||||
Amortization & impairment of intangible assets | Other operating income/ expense | Shire acquisition related costs | Others | |||||||||
Revenue | 880.6 | 880.6 | ||||||||||
Cost of sales | (231.3 | ) | (231.3 | ) | ||||||||
Gross Profit | 649.3 | 649.3 | ||||||||||
SG&A expenses | (293.8 | ) | 7.9 | (285.9 | ) | |||||||
R&D expenses | (151.4 | ) | (151.4 | ) | ||||||||
Amortization of intangible assets | (47.6 | ) | 47.6 | — | ||||||||
Impairment losses on intangible assets | (0.6 | ) | 0.6 | — | ||||||||
Other operating income | 32.3 | (32.3 | ) | — | ||||||||
Other operating expenses | (16.1 | ) | 13.0 | 3.2 | — | |||||||
Operating profit | 172.0 | 48.3 | (19.3 | ) | 11.1 | — | 212.0 | |||||
Margin | 19.5 | % | 24.1 | % | ||||||||
Financial income/expenses | (15.2 | ) | 8.8 | 1.4 | (5.1 | ) | ||||||
Equity income/loss | 4.0 | 1.8 | 5.8 | |||||||||
Profit before tax | 160.8 | 48.3 | (19.3 | ) | 19.8 | 3.1 | 212.7 | |||||
Tax expense | (34.3 | ) | (11.6 | ) | 2.1 | (3.4 | ) | (0.6 | ) | (47.7 | ) | |
Non-controlling interests | 0.2 | 0.2 | ||||||||||
Net profit | 126.7 | 36.7 | (17.2 | ) | 16.5 | 2.6 | 165.2 | |||||
EPS (yen) | 162 | 211 | ||||||||||
Number of shares (millions) | 783 | 783 |
The companies in which Takeda Pharmaceutical Company Limited (Takeda) directly and indirectly owns investments are separate entities. In this report, "Takeda" is sometimes used for convenience where references are made to Takeda and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.
Forward-Looking Statements
This report and any materials distributed in connection with this report may contain forward-looking statements, beliefs or opinions regarding Takeda’s future business, future position and results of operations, including estimates, forecasts, targets and plans for Takeda. Without limitation, forward-looking statements often include words such as "targets", "plans", "believes", "hopes", "continues", "expects", "aims", "intends", "ensures", "will", "may", "should", "would", "could" "anticipates", "estimates", "projects" or similar expressions or the negative thereof. Forward-looking statements in this document are based on Takeda’s estimates and assumptions only as of the date hereof. Such forward-looking statements do not represent any guarantee by Takeda or its management of future performance and involve known and unknown risks, uncertainties and other factors, including but not limited to: the economic circumstances surrounding Takeda’s global business, including general economic conditions in Japan and the United States; competitive pressures and developments; changes to applicable laws and regulations; the success of or failure of product development programs; decisions of regulatory authorities and the timing thereof; fluctuations in interest and currency exchange rates; claims or concerns regarding the safety or efficacy of marketed products or product candidates; the timing and impact of post-merger integration efforts with acquired companies; and the ability to divest assets that are not core to Takeda’s operations and the timing of any such divestment(s), any of which may cause Takeda’s actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by such forward-looking statements. For more information on these and other factors which may affect Takeda’s results, performance, achievements, or financial position, see "Item 3. Key Information-D. Risk Factors" in Takeda’s most recent Annual Report on Form 20-F and Takeda’s other reports filed with the U.S. Securities and Exchange Commission, available on Takeda’s website at: https://www.takeda.com/investors/reports/sec-filings/ or at www.sec.gov. Future results, performance, achievements or financial position of Takeda could differ materially from those expressed in or implied by the forward-looking statements. Persons receiving this report should not rely unduly on any forward-looking statements. Takeda undertakes no obligation to update any of the forward-looking statements contained in this report or any other forward-looking statements it may make, except as required by law or stock exchange rule. Past performance is not an indicator of future results and the results of Takeda in this report may not be indicative of, and are not an estimate, forecast or projection of Takeda’s future results.
Certain Non-IFRS Financial Measures
This report includes certain non-IFRS financial measures and targets. Takeda's management evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this report. Non-IFRS results exclude certain income and cost items which are included in IFRS results. By including these non-IFRS measures, management intends to provide investors with additional information to further analyze Takeda's performance, core results and underlying trends. Non-IFRS results are not prepared in accordance with IFRS and non-IFRS information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with IFRS. Investors are encouraged to review the reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures, which are on appendices 1-4.
Medical information
This report contains information about products that may not be available in all countries, or may be available under different trademarks, for different indications, in different dosages, or in different strengths. Nothing contained herein should be considered a solicitation, promotion or advertisement for any prescription drugs including the ones under development.
Financial information
Takeda’s financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").
The acquisition of Shire closed on January 8, 2019, and our consolidated results for the fiscal year ended March 31, 2019 include Shire’s results from January 8, 2019 to March 31, 2019. References to "Legacy Takeda" businesses are to our businesses held prior to our acquisition of Shire. References to "Legacy Shire" businesses are to those businesses acquired through the acquisition of Shire.
This report includes certain pro forma information giving effect to the acquisition of Shire as if it had occurred on April 1, 2018. This pro forma information has not been prepared in accordance with Article 11 of Regulation S-X. This pro forma
information is presented for illustrative purposes and is based on certain assumptions and judgments based on information available to us as of the date hereof, which may not necessarily have been applicable if the acquisition of Shire had actually happened as of April 1, 2018. Moreover, this pro forma information gives effect to certain transactions and other events which are not directly attributable to the acquisition of Shire and/or which happened subsequently to the acquisition of Shire, such as divestitures and the effects of the purchase price allocation for the acquisition of Shire, and therefore may not accurately reflect the effect on our financial condition and results of operations if the acquisition of Shire had actually been completed on April 1, 2018. Therefore, undue reliance should not be placed on the pro forma information included herein.