The spread of novel coronavirus infections is starting to make one thing clear: More vaccine investment is needed, the CEO of Asia’s biggest drugmaker said.
“The world has to be more proactive than reactive,” Christophe Weber, CEO of Takeda Pharmaceutical Co., said in an interview.
Although vaccine sales totaled $54.2 billion in 2019, that was less than 5 percent of total global revenue for pharmaceutical companies, according to data from Statista.
With more than 2,100 deaths and 75,000 infected, the outbreak from China’s Hubei province is drawing attention to the industry’s lack of investment in vaccines, which are less profitable than specialty drugs.
Weber used to run the vaccines business of GlaxoSmithKline PLC before joining Takeda and later leading its $62 billion purchase of Shire in 2019. Weber aims to make vaccines a core business segment. While Takeda doesn’t disclose how much it has invested in its vaccines unit, it is seeking approval for its first vaccine for dengue fever within the next two years. Takeda’s main efforts focus on oncology, neuroscience and gastrointestinal therapies and rare diseases.
“Whatever you do, it will always take time to bring a treatment for vaccines,” Weber said.
There will be more outbreaks as the global population increases and the climate changes, the CEO said. “We talk a lot about coronavirus because it is impacting developed countries,” he said. “But there are threats like Ebola, which people don’t talk too much about. We forget there are many threats like that which are already here.”
That also highlights one of Weber’s challenges at the 200-year-old Takeda: balancing the need for lucrative drugs in a cutthroat industry with its mission of bringing medicine to all and improving public health. Takeda joined the ranks of top 10 global drugmakers by sales after the Shire acquisition, which was completed in early 2019. The deal, the biggest outbound acquisition by a Japanese firm, was noteworthy for its size and the amount of debt Takeda took on.
Even more than a year later and with cost savings from the acquisition ahead of schedule, doubts still persist about Weber’s vision and Takeda’s drug candidate pipeline — which some analysts view as too sparse in terms of late-state development drugs and with too many unknowns. Takeda’s stock price remains sluggish, and is down more than 20 percent from just before the merger’s unveiling.
“In the near-term pipeline for Takeda’s drugs, only a handful has blockbuster potential. The other interesting drug candidates and their approval are more longer term from now,” Jay Lee, an analyst at Morningstar Investment Service, said. The distant time line makes analysis and predictions on future revenue more volatile, he added.
One of Takeda’s top drugs, a blood-cancer treatment called Velcade, has already lost patent protection, and its current best-selling drug for ulcerative colitis is expected to face market competition and lose patent protection starting in 2024.
Weber said he thinks two medicines in the pipeline — one for narcolepsy and another to treat blood cancer using cell engineering — could have the highest potential for sales. Both are in late-stage testing but aren’t projected to be up for market approval until around 2023.
China’s market is also critical for Weber, who expects it to surpass Japan to become the company’s No. 2 market in the next 10 to 20 years, as market reforms incentivize more innovative drugs. The current outbreak doesn’t change Takeda’s long-term plans in China, where it expects to introduce 15 drugs over the next three years.
To tackle Takeda’s ¥5.2 trillion ($47.4 billion) in net debt, Weber has been divesting noncore assets that include a mixture of off-patent drugs and over-the-counter medicines, although some have questioned their attractiveness. The company is seeking to cut its debt-to-earnings ratio by half by 2024. Weber said he thought it would be easy to sell off baskets of businesses in certain markets, and that negotiations on divestments are always ongoing.
Looking beyond that, Weber thinks the big-figure acquisition days for Takeda are over. “We don’t need scale anymore. We are big enough,” he said. “We will grow in the future because of our current portfolio and our pipeline.”
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.
Your news needs your support
Since the early stages of the COVID-19 crisis, The Japan Times has been providing free access to crucial news on the impact of the novel coronavirus as well as practical information about how to cope with the pandemic. Please consider subscribing today so we can continue offering you up-to-date, in-depth news about Japan.