Takeda accelerates from walk to jog

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For a company in the midst of an earnings trough, Takeda has performed well of late as investors look beyond its huge patent expiries. Readout of interim phase III data for the multiple myeloma pill ixazomib has sparked hope that Japan’s biggest pharma group will be able to defend the franchise it established with Velcade.

With perhaps its biggest R&D catalyst of the year out of the way, the group now needs to achieve satisfactory launch trajectories for its two newest drugs, Entyvio and Brintellix. Thanks to better performing M&A and licensing, its pipeline is looking better than it has for a number of years. The next events, though, are a little less certain than ixazomib.

Millennial acquisition

The clinical success of ixazomib and the launch of Entyvio show that the 2008 buyout of Millennium Pharmaceuticals – which looked expensive for the time at $8.8bn – was about more than just Velcade, serving as the fuel for Takeda’s growth engine.

By comparison, assets like motesanib (AMG 706), which reported disappointing lung cancer data yesterday, were also acquired for relatively big amounts – motesanib for $100m upfront – but turned out duds (In licensing, you don’t always get what you pay for, July 23, 2013).

Among Takeda’s other missteps are its foray into blood products, including its partnerships on Feraheme and the now-withdrawn Omontys for $60m and $105m up front respectively, and obesity, exemplified by its tie-up on the underperforming Contrave for $50m up front.

But now the company seems to have displayed R&D acumen in oncology, perhaps as a result of the Millennium deal. If it achieves regulatory approval and is launched, ixazomib would join an armoury that includes not only Velcade but also lymphoma drug Adcetris, which Takeda licensed in 2009 for territories outside North America.

Queued up behind ixazomib in the pipeline are legacy Millennium products MLN8237 in lymphoma and MLN0128 in breast cancer, both of which have gained increasing attention from equity analysts in recent months.

For my next trick ...

After spending 2014 in the doldrums, Takeda shares took off in January and are now up 22% on the year (2014 another growth year as big cap stocks hold up, January 7, 2015). In a note published following the ixazomib readout, Deutsche Bank analyst Tim Race wrote that the positive interim data were an “easy gain”, as they were expected, but now investors will look for the momentum to be sustained.

Takeda is in the midst of launching two drugs expected to deliver blockbuster sales – though Brintellix revenue will be shared with Lundbeck – and quarterly numbers will be closely watched. Aside from those results, Mr Race feels that fewer events capable of sparking investor enthusiasm are immediately visible, and the possibility of big legal settlements over diabetes drug Actos remains a threat.

For investors paying closest attention to the pipeline, release of fuller ixazomib data, potentially at the Asco meeting, may be a headline – so far, Takeda has only stated that it met the primary endpoint of progression free survival and an interim analysis. As multiple myeloma has an increasing number of agents to address it, the complete data set will be needed to assess where ixazomib fits in treatment protocols and, therefore, its true potential.

Trial Setting ID
Tourmaline-MM1 With lenalidomide and dexamethasone in 722 patients with relapsed or refractory multiple myeloma NCT01564537

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @JonEPVantage on Twitter

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