October 5, 2018
Costas Saroukos
Chief Financial Officer
Takeda Pharmaceutical Company Limited
1-1, Nihonbashi-Honcho 2 Chome
Chuo-ku, Tokyo 103-8668 Japan
Re: Takeda Pharmaceutical Company Limited
Draft Registration Statement on Form 20-F
Submitted on September 11, 2018
CIK No. 0001395064
Dear Mr. Saroukos:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement Form 20-F filed September 11, 2018
Risk Factors
Risks Relating to the Shire Acquisition
We may not be able to complete the Shire Acquisition on the expected schedule,
or at all....,
page 5
1. Please expand your risk factor disclosure to highlight the risk that the
consideration you
will pay in the Shire acquisition is not subject to adjustment based on
fluctuations in the
market price for your common stock relative to the market price for
Shire's ordinary
shares.
Costas Saroukos
FirstName LastNameCostas Saroukos
Takeda Pharmaceutical Company Limited
Comapany 2018
October 5, NameTakeda Pharmaceutical Company Limited
October 5, 2018 Page 2
Page 2
FirstName LastName
Risks Related to our Business
Government policies and other pressures to reduce medical costs....., page 18
2. We note your disclosure on page 69 concerning the current market
penetration of generics
in the Japanese market. Please expand your risk factor disclosure, or
alternatively your
Item 5 disclosures, to quantify, to the extent known, the impact of
the Japanese
government measures to restrain drug costs and achieve generic market
penetration at the
80% level by 2020.
The manufacture of our products is technically complex and highly
regulated...., page 20
3. We refer to your disclosure on page 27 indicating that you recently
acquired TiGenix NV
which develops novel stem cells therapies for serious medical
conditions. Please revise
your risk factor disclosure, as appropriate, to address risks
attendant to the development
and manufacuring of stem cell products such as Alofisel as well as
other biologics.
Risks Relating to the ADSs
A holder of ADSs will have fewer rights..., page 25
4. We note the disclosure that the depositary "will make efforts" to vote
the shares
underlying the ADSs as instructed by the holders. Please revise here,
or elsewhere as
applicable, to explain the depository's obligations under the
depositary agreement
concerning voting and the reasons for any uncertainty concerning
whether the depositary
will cast votes as instructed.
Because of daily price limitations under Japanese stock exchange rules....,
page 26
5. Please revise the header and expand your disclosure to clarify whether
daily price range
limitations apply to trading in your ADSs or whether the limitations
only apply to trading
in your common shares on Japanese stock exchanges. To the extent that
daily price
limitations apply to ADS trading, please revise here, or elsewhere as
applicable, to explain
how these limitations operate. For instance, please explain when the
daily price
limitations for ADSs would be established for a "particular trading
day" and how ADS
holders and market participants will know the applicable range.
Item 4.B. Business Overview
GI Pipeline, page 32
6. It is unclear whether the countries/regions listed in the first column
of your pipeline tables
on pages 32 to 36 denote commercial rights, approved or intended
markets. Also, it is not
clear why the first table on page 33 and the bottom table on page 36
do not include any
Costas Saroukos
FirstName LastNameCostas Saroukos
Takeda Pharmaceutical Company Limited
Comapany 2018
October 5, NameTakeda Pharmaceutical Company Limited
October 5, 2018 Page 3
Page 3
FirstName LastName
country/region information with respect to the drug or the stage of
development. Accordingly, please revise your disclosure to clarify the
information
presented or advise.
Intellectual Property, page 38
7. Please expand your disclosure to discuss your material patents,
including the scope of
protection, expiry and relevant jurisdiction. Please provide
corresponding disclosure
concerning Shire's material patents. Refer to Item 4.B.6 of Form 20-F.
Certain Non-IFRS Performance Measures , page 80
8. Please address the following regarding your non-IFRS measures:
Tell us how you determined that the title "Core Earnings" accurately
reflects the
measure presented. Specifically address how you considered whether
the measure is
an accurate reflection of what your core operations would be when
backing out the
finance expense for debt used to fund your operations and
amortization costs of
purchased intangibles for product sales that are still included in
your revenue line item
for the period presented. Consider revising the title to more
accurately describe the
measure presented.
Provide a statement disclosing the reasons why management believes
the presentation
of the non-IFRS measures provides useful information to investors
regarding your
financial condition and results of operations; and, to the extent
material, a statement
disclosing the additional purposes, if any, for which management
uses the non-IFRS
measures in accordance with Item 10(e)(i) (C) and (D) of Regulation
S-K.
Revise to more clearly discuss the limitations on the usefulness of
the measures
presented. Address the inherent limitations posed by the factors
identified in the first
bullet above.
Item 10. Additional Information
B. Memorandum and Articles of Association
Unit Share System, page 145
9. Please revise to clarify whether the depositary agreement will provide
ADS holders with
similar rights or whether ADS holders would have to withdraw their
ADSs in favor of
common shares in order to exercise these rights.
Item 10.C. Material Contracts, page 150
10. We note your disclosure on page 17 that a number of your key products,
including
Adcetris, Trintellix and Amitiza, are in-licensed products developed
through alliances
with third parties. Please expand your disclosure to include the
material terms of your
license agreements related to these products, including the following:
each parties' rights and obligations;
Costas Saroukos
Takeda Pharmaceutical Company Limited
October 5, 2018
Page 4
financial terms, including potential milestone payments and royalty
rate or range not
to exceed ten percent;
duration of the agreement and royalty term; and
termination provisions.
Please also file such agreements as exhibits to your registration
statement, or tell us why
you believe such filing is not required. Refer to Instruction 4 to Item
19 of Form 20-F.
Takeda Pharmaceutical Company Limited And Its Subsidiaries
Notes to Consolidated Financial Statements
33. Subsequent Events
Acquisition of TiGenix NV , page F-76
11. Please reference the authoritative guidance on which you relied as your
basis to recognize
the fair value of the hedging instrument of 3,381 million JPY as an
increase to goodwill at
the acquisition date. Confirm whether this forward exchange contract was
entered into
with an independent third party. Tell us how you considered the guidance
of paragraph 12
of IFRS 3.
Unaudited Pro Forma Condensed Combined Financial Data , page P-1
12. Please address the following regarding your disclosure on page 54 that
Shire plc sold its
oncology franchise to Servier on August 31, 2018 for $2.4 billion:
Tell us how you considered whether to disclose the sale in this
section, providing
quantification of the impact.
Tell us how you considered whether your pro forma presentation should
reflect the
impact of this disposition.
You may contact Sasha Parikh at 202-551-3627 or Kevin Vaughn at
202-551-3494 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Christine Westbrook at 202-551-5019 or Joe McCann at 202-551-6262 with
any other
questions.
Sincerely,
FirstName LastNameCostas Saroukos
Division of Corporation
Finance
Comapany NameTakeda Pharmaceutical Company Limited
Office of Healthcare &
Insurance
October 5, 2018 Page 4
cc: Keiji Hatano, Esq.
FirstName LastName