Takeda sees big profit slump on Millennium costs
Japan’s Takeda Pharmaceutical Co Ltd (4502.T: Quote, Profile, Research) posted a 77 percent drop in quarterly operating profit on Friday, and forecast a sharp fall in annual income on costs for its $8.8 billion purchase of U.S. biotech firm Millennium Pharmaceuticals.
The announcement pushed shares of Japan’s largest drug maker down 2.8 percent to 5,490 yen, helping drive the benchmark Nikkei average .N225 2.1 percent lower.
The acquisition of Millennium (MLNM.O: Quote, Profile, Research), one of the few profitable U.S. biotech companies, will significantly bolster Takeda’s cancer drug pipeline but could weigh on earnings for several years.
“There are some in the market who view the premium we paid as a little too high, there are others who see our strategy as sound and the price reasonable. I think the view in the market is still fluid,” Takeda President Yasuchika Hasegawa told a news conference pay day loans.
“It’s our job to see that we get our money’s worth from this investment.”
Takeda said its group operating profit slipped 8 percent to 423.1 billion yen ($4.1 billion) for the year ended March, hurt by higher operating expenses and costs to buy rights to Amgen Inc’s (AMGN.O: Quote, Profile, Research) drugs.
The annual result gave Takeda an operating profit of 17.3 billion yen for the January-March quarter, falling well short of a Reuters consensus estimate of 81.8 billion yen derived from the annual forecasts of 19 analysts.
Takeda said operating profit for this business year ending March 2009 would drop 43 percent to 240 billion yen as it books costs such as in-process research and development and amortization of goodwill on the Millennium acquisition.
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