Takeda Pharmaceutical Co. Ltd. CFO James Kehoe said the company plans to launch seven innovative products in China over the next five years to stimulate greater revenue growth in the market.
"We will get [the China] business back on a very fast growth track. We are very convinced that you have to be successful in China to be successful overall as a pharmaceutical company."
The Japanese drugmaker recorded 1.9% revenue growth in its emerging market segment, with headwinds in China offsetting strong performances from Brazil and Russia, Kehoe said during a conference call for the company's fiscal nine-month results.
"While we are not happy with the emerging market's performance, the majority of the impacts are temporary in nature and we expect improved trends in the coming quarters."
"I think it's going to be a slow improvement. We're expecting it to return to flat probably next quarter or the one after, and probably end up with growth next year."
According to Kehoe, the company has taken hits from changes in China's regulatory environment, including a greater emphasis on generic substitution, regionalized drug procurement, and the implementation of the two-invoice system, which restricts the supply chain to only one distributor between the drug manufacturer and the hospital.
"They eliminated the two invoice system that takes a lot of inventory out of the system. It hit us very, very hard."
However, the CFO said China Food and Drug Administration's efforts to speed up the drug approval process is a big positive for the company because it has a number of products it is looking to launch.
Competition expectations shift on Velcade
Takeda raised its outlook for the full fiscal year ending March 31, 2018, because the company is now expecting sales for its multiple myeloma drug Velcade to grow. It had been facing competition from a recently approved generic version manufactured by Fresenius SE & Co. KGaA that was ultimately ruled to be different in its formulation to Velcade.
"Although a competing product has been launched by Fresenius Kabi, it has been classified by the FDA as not therapeutically equivalent to Velcade," Kehoe said.
According to the CFO, two other products — one from Pfizer Inc.'s InnoPharma Inc. and the other Dr. Reddy's Laboratories Ltd. — have filed an application with the regulator but they also do not contain the same ingredient as Velcade.
"To our knowledge, they have not received approval and we cannot speculate as to when the FDA will make a decision."
In its 2016 fiscal year ending March 31, Velcade netted the company $1.48 billion in sales, according to Takeda's annual report.
