Takeda Cuts Profit Forecast on Shire Deal, Lifts Revenue Outlook

(Bloomberg) -- Takeda Pharmaceutical Co. lowered its annual operating profit forecast by 24 percent to include the impact of its $62 billion acquisition of Shire Plc, while at the same time raising its revenue outlook.

  • Operating profit will be 205 billion yen ($1.8 billion) for the year ended March 31, down from the previous forecast of 268.9 billion yen, the company said in a statement Thursday. The total cost incurred from Shire acquisition was 126 billion yen.
  • Takeda issued guidance to reflect both before and after the merger. For Takeda alone, it raised its operating profit forecast by 47 percent for the full year, due to higher drug sales and cost cuts. The revenue outlook for Takeda was lifted by 2.2 percent, while the revenue view for the combined company was raised by 20 percent.

Key Insights

  • This is the most detailed picture Takeda has given yet for costs related to the acquisition and the combined earnings, after the deal closed in January. Takeda’s takeover of Shire vaulted it into the ranks of the world’s 10 biggest drugmakers and brought lucrative therapies for rare diseases.
  • The merger picture still isn’t complete. Takeda withdrew its net income and per share forecast as it’s still calculating the taxes. It’s expected to update on that, and also give its first earnings outlook for the current fiscal year, when it releases full results on May 14.
  • Investors are still awaiting news on asset sales. Takeda more than doubled its debt with the Shire deal, and has laid out a scenario of a potential $10 billion in divestments in an effort to deleverage.

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  • For more on Takeda’s forecast, click here.

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