Takeda Pharmaceuticals' stock has hit its lowest value in 11 years as sales of its flagship type 2 diabetes pill Actos continue to plummet. Actos sales, which accounted for 20 percent of Takeda's revenue in 2011, were down by 23.6 percent in March 2012. Takeda has said it expects its profits to fall by 40 percent in the next few years.
The decline of Actos sales followed a Food and Drug Administration (FDA) announcement in 2010 that the medication is linked to an increased risk of bladder cancer. Actos already carries the FDA's most severe black-box warning for congestive heart failure. The company's Actos sales are expected to be further dampened by generic versions of the drug, scheduled to hit the U.S. market in August.
Takeda has stated higher research costs and the its recent acquisitions of two drug companies are the primary cause of its financial woes. Takeda claims the purchase of Nycomed and URL will eventually make up for lost revenue by allowing Takeda to expand into new markets. Analysts are skeptical whether the expansion will offset the loss of Actos profits. Actos has become the most popular type 2 diabetes drugs of all time, with more than $16 billion in sales since its U.S. release 1999. Around the world, more than 10 million people have taken the drug.
Meanwhile, Takeda will lay off 2,800 people in the United States and Europe in the next four years to save operation costs. In January, Takeda closed its San Francisco base and consolidated its California operations in San Diego.
Takeda was dealt a major blow when its attempts to launch a replacement drug for Actos were dashed by the FDA. Regulators denied the Algoliptin application, saying Takeda needed to provide additional safety data on side effects. Algoliptin contains pioglitazone, the active ingredient in Actos.
Mounting evidence confirming Actos' link to bladder cancer may force Takeda to pay massive patient injury settlements in the coming years. Four medical studies have confirmed that Actos can cause bladder cancer when patients use the drug for more than 12 months. The most significant findings indicate Actos can increase the risk of bladder cancer by as much as 83 percent. Final results of an FDA-mandated, 10-year medical study on Actos will be published in 2013.
Thousands of Actos patients are suing Takeda after developing bladder cancer. A multidistrict litigation (MDL) is moving forward in the U.S. District Court for the Western District of Louisiana.
Patients injured by Actos are also joining two massive court cases in Illinois and California. The injury lawsuits in both cases are consolidated in their state courts. None of the cases has been scheduled for trial, but attorneys are hopeful they will begin in 2013.