Takeda Pharmaceutical Company Limited (NYSE: TAK) announced its 2019 financial year results on Wednesday i.e. 13th May,2020. The Financial results of the company accelerated its transformation. It is one of the largest pharmaceutical companies in Asia and the top 20 largest pharmaceutical companies in the world by revenue. The Company has completed its acquisition with Shire Private limited Company in this financial year.
The company is focused on 5 key business segments with growing brands. These segments have grown extensively and contributed overall 79% in this financial year revenue. The contribution made by different segments in financial year sales is given below:-
- Gastroenterology:-This segment contributed 21% in the financial year 2019 sales in which ENTYVIO is its notable contributor. This therapy has been approved by China, for the treatment of patients suffering from Ulcerative Colitis (UC) and Crohn’s Disease (CD).
- Rare Diseases:-This segment contributes 20% in the FY 2019 sales in which TAKHZYRO is its notable contributor used for the treatment of rare hereditary angioedema.
- Oncology:- This segment contributed 12% in the FY sales where NINLARO therapy was its main contributor
- Neuroscience:-This segment contributed 13% in the financial year 2019 sales where TRINTELLIX therapy contributed more than 25% in comparison to other brands
- PDT Immunology:- The segment has experienced a 9% increase in comparison to last year and contributed 20% in the overall revenue
The total revenue of the company stood at JPY 3291 billion for this year. There was a 56.9% increase in revenue this year. This increase in revenue is majorly because of the acquisition done by the company in this financial year. Since the last five years the company has almost doubled its revenue and is expecting a positive momentum in the future as well.
The operating profit of the company stands at JPY 962 billion which has increased by almost 110% when compared to the last year. Further the company reported JPY 44 billion net profit in the current financial year.
The Free cash flow of the company increased by 156% to JPY 968 billion which further helped the company to sustain its 180 yen per share dividend policy. Also, the company raised its cost synergy target to $2.3 billion. This will help the company to deliver its targets and pay all its debt rapidly.
The company has stated in its reports that ” Takeda paid down JPY 701 billion debt in FY2019, including JPY 230 billion of prepayments, bringing the net debt to EBITDA ratio down from 4.7x to 3.8x over the previous year. The company’s $10 billion divestiture program is on track, with 5 transactions worth up to $7.7 billion completed or announced to date.”This means that the net debt of the company is reduced and the possibility of profitability with lower debt has increased. Also the goodwill of the company has increased as there was a consistency in the dividend distributed by the company.
Considering the current outbreak of Covid-19 in the economy, the company stated that it has not experienced any material effect on its financial results till now.
In order to meet the challenges of Covid-19, the company initiated a global industry alliance.It is in the process of developing a plasma-derived therapy namely “Covig-19” for its patients who are facing severe complications. For this, the company stated that it is sharing its world-class Plasma-Derived Therapy R&D, plasma collection, and manufacturing capabilities in order to work collaboratively with other global plasma companies. So if the company is successful in developing this therapy then it will be the earliest treatment available for patients in this economy.
Thus this company has displayed solid results in this financial year and it could be inferred that there was a positive momentum experienced by the company in this year. The revenue earned by the company increased especially after its acquisition with Shire. Company displayed positive reports in terms of revenue and profitability. These financial results of the company has accelerated its transformation.
The consistent increase in the stock price of the company shows the company stock will be a defensive play in the market.
So it can be said that the company has performed quite well in this financial year. Also the acquisition with the Shire was a smart move made by the company which has increased its revenue and profit by more than 50% in comparison to last year. There is no material effect on the company because of the pandemic crisis till now. As displayed in the reports the company expects positive results for 2020 as well if the operations of the company are not affected by the crisis. Overall the company showed solid results for this financial year.