Takeda facing internal strife, external trouble
SHIMAO OJIMA, Nikkei staff writer
TOKYO -- A group of Takeda Pharmaceutical shareholders have objected to Chief Operating Officer Christophe Weber's planned appointment as president this month, adding another wrinkle to the array of problems before the Japanese drugmaker.
Former company officials and others lodging the written complaint point to recent cases of highly compensated foreign executives leaving their posts after a year or two, apparently concerned that Weber will not make management decisions from a long-term perspective.
The inquiry submitted to the company raises concerns that appointing a leader who lacks understanding of Takeda's research and development methods may cause researchers to leave the company.
About 100 people signed the document, including members of the former management team and some in the founding family.
"(Former Chairman and President) Kunio Takeda is not included," one former executive said Thursday evening after the inquiry came to light, adding that no leading members of the family were involved.
The market took the sudden conflict in stride Thursday, and Takeda closed up 1.6% at 4,876 yen ($47.34). Analysts noted that with investors focused on the recovery Takeda engineered through cost cutting, it is unlikely that opposition to its choice of president will have much impact.
In all likelihood, the inquiry will be treated as a shareholder question at the shareholders meeting scheduled for June 27. Executives will explain the selection process, with the issue likely to be put to rest. But Takeda remains in a tough spot.
Operating profit grew for the first time in four years last fiscal year, but that was mainly achieved by reducing expenses. Patents on such major drugs as the diabetes treatment Actos have expired, leaving the company without a clear path to growth.
In an announcement Thursday, the company said it will end development of TAK-700, a promising prostate cancer drug candidate. The treatment had entered the final stage of clinical trials in Japan, the U.S. and Europe, but performed no better than existing options.
The company has also faced unexpected troubles. In April, a U.S. federal court jury ordered it to pay $6 billion in damages related to cancer risks posed by Actos. Other courts have accepted Takeda's argument, but investors fearing massive payouts turned bearish, and its share price still lacks momentum.
President Yasuchika Hasegawa took over from Kunio Takeda in 2003. He has poured more than 2 trillion yen into overseas acquisitions, aiming to accelerate cancer treatment R&D and entry into emerging markets to compensate for the expiration of patents on mainstay drugs.
This strategy, which Hasegawa calls "gap filling," has met with some success. The acquisition of U.S. drug developer Millennium Pharmaceuticals helped to commercialize a drug candidate. Buying Switzerland's Nycomed gave Takeda a stronger foothold in emerging markets.
But shareholders have been looking for rewards commensurate with these massive investments.
The industry shakeout continues
The appointment of Weber, formerly of GlaxoSmithKline, to succeed Hasegawa is an attempt to dispel this sense of stagnation.
Takeda had built up a strong position in industrialized countries, but factors such as the push to reduce medical costs will make further expansion there unlikely.
"We're having difficulty governing our overseas business and developing emerging markets," Hasegawa says.
The company is entrusting to Weber the task of cultivating such emerging markets as Africa and speeding up the implementation of its growth strategy. Hasegawa, who will become chairman, intends to leave the chief executive officer position to Weber as well in a year.
Consolidation in the pharmaceutical industry is gaining momentum overseas with such developments as Pfizer's 69.3 billion pound ($119 billion) bid last month for AstraZeneca. To allay his critics' fears, Weber must get clear results that both the market and shareholders can accept.