Takeda Axes Turnstone's Cancer Drug as U.S. Revenue Surges
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Thursday morning, Takeda reported its quarterly sales ending June 30, 2022. The company reported a 2.4% increase in revenue for the quarter from the same period in 2021, as well as changes to its pipeline, including a decision to drop a cancer therapeutic developed with Turnstone Biologics.
It is returning the rights to TAK-605 to Turnstone Biologics only 31 months after licensing the drug. TAK-605 is an oncolytic virus designed to treat cancer. The concept of an oncolytic virus is that it can turn so-called “cold” tumors “hot.”
Cold tumors typically have fewer proinflammatory cytokines and T-cell infiltration than hot tumors, and as such, have a worse response to immunotherapies. Oncolytic viruses are designed to turn tumors “hot,” which would allow checkpoint inhibitors to be more effective.
Takeda cited "strategic reasons" for dropping TAK-605 and plans to continue working on discovering new drug candidates using Turnstone’s technology platform.
It is also abandoning TAK-994, a narcolepsy candidate it picked up for $120 million. TAK-994 is an oral orexin agonist. In October 2021, Takeda halted two clinical trials of the drug after safety issues emerged.
Takeda's revenue increased from 9.49 billion yen ($7.06 billion U.S.) to 972 billion yen ($7.22 billion, U.S.). However, U.S. sales climbed 22% to Y501.1 billion ($3.72 billion, U.S).
“Takeda has delivered strong first quarter performance with Growth and Launch Products continuing to drive robust core revenue growth,” Costa Saroukos, Takeda’s chief financial officer, stated in the report. “Our results reflect continued momentum and solid commercial execution across key business areas.”
The growth was largely driven by its Gastroenterology program, which grew 28.4% from the previous period in 2021. There was also strong growth in Rare Genetics and Other (23.1%), PDT Immunology (32.3%) and Neuroscience (25.6%). A big drop was reported in “Other,” of 50.9%, but the sales of its diabetes portfolio in Japan was included in that category. This occurred in April 2021, when it sold off four diabetes product to Teijin Pharma for Y133.0 billion.
Takeda’s core business areas are Gastroenterology (GI), Rare Diseases, Plasma-Derived Therapies (PDT), Oncology, and Neuroscience. The diabetes assets were outside their chosen business areas.
The big driver for GI was sales of Entyvio for ulcerative colitis, which increased 34% from the previous year to Y168.3 billion. Its Vyvanse for attention deficit hyperactivity disorder, in its Neuroscience division, climbed 26% to Y100.0 billion.
Operating profit for the quarter was Y150.5 billion ($1.11 billion, U.S.), significantly lower than Y249 billion ($1.85 billion, U.S.) in the same period in 2021. Despite that, the company maintained its annual projections for the year, citing an increase of 13%.
The company is waiting on a decision by the European Medicines Agency (EMA) on its Dengue fever vaccine, which will have a major impact on earnings and shares. Otherwise, the company has a significant role in Japan’s COVID-19 vaccine strategy. It imported Moderna’s vaccines. It also domestically produced Novavax’s COVID-19 vaccines, which were approved by Japan’s regulators in April.
Global inflation has hit Japan hard, with the yen depreciating to a 24-year low. This is a factor the company is taking into consideration in its annual projections.
In a conference call, Saroukos said, “If we apply the June-end FX rates to the rest of fiscal year 2022, for example, 136 yen to the U.S. dollar, we would expect to see over 10 percentage points of incremental growth to our forecasts.”