Takeda Expects Swing to Profit as Shire Integration Gains Pace

(Bloomberg) -- Takeda Pharmaceutical Co.’s integration of its $62 billion purchase of Shire Plc is netting faster savings than expected, leading Japan’s largest drugmaker to expect an annual profit, reversing an earlier forecast for a loss.

The shares of Takeda rose as much as 4.4% in early trading in Tokyo on Wednesday, after reporting that operating profit will probably reach 10 billion yen ($92 million). That compares with its previous forecast for a loss of 110 billion yen. The average analyst estimate was for a loss of 57 billion yen.

Chief Executive Officer Christophe Weber has been focused on integrating Shire after the acquisition closed this January, and reducing debt through the sale of non-core assets. Takeda has achieved about half of its target of $10 billion worth of divestments after the Shire deal.

“Our impression is positive,” Yasuhiro Nakazawa, an analyst at SMBC Nikko Securities, wrote in a note, citing steady expansion of sales across its 14 global brands, improvements in operating cost savings and “steady progress” in Shire integration.

This is the third time the drugmaker has revised its annual earnings forecast this fiscal year on faster-than-expected synergies in the operations of the two companies.

Takeda shares were trading at 4,402 yen as of 9:14 a.m. in Tokyo. Of the 14 analysts covering the stock, 12 rate it a buy, while 2 recommend holding shares. The average 12-month price target is 5,620 yen among the analysts who provided one.

To contact the reporters on this story: Lisa Du in Tokyo at ldu31@bloomberg.net;Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Reed Stevenson, Dave McCombs

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