FiercePharmaAsia—Takeda's cost-saving progress; Dr. Reddy's shortfall

Takeda is "well on track" with its cost-cutting goal of saving $2 billion by the end of 2021 as it folds in Shire, Chief Financial Officer Costa Saroukos told investors. The company has chosen employees for 79% of the jobs on its payroll, with "minimal" refusals from its staffers. For the previous quarter, it booked 36.7 billion yen ($338 million) in one-time integration costs, and its margins hit 32.4% thanks to some "phasing of costs and loss of exclusivity timing," he said.

Job cuts will deliver a big chunk of that savings; the company has said it plans to cut 6% to 7% of the combined Takeda-Shire workforce, or around 3,600 employees. So far, the company has chosen employees for 79% of the jobs on its payroll, with "minimal" changes among those who were picked, Saroukos said. For the quarter ended June 30, Takeda booked 36.7 billion yen ($338 million) in one-time integration costs. 

The company's been working with vendors to shave costs, too. Takeda gathered 40 of its largest suppliers for a summit in Boston in June, and thanks to that gathering, it confirmed about $200 million worth of potential cost reductions and gained some $200 million of extra cash-flow room by extending payment terms, he said.

Takeda's huge debt load was the very concern opponents of the Shire deal raised when it was first proposed. To pay down debt, Takeda previously said that it planned to sell as much as $10 billion worth of assets outside its key areas of gastrointestinal disorders, rare disease, plasma-derived therapies, oncology and neuroscience.

By the end of June, Takeda had reduced its debt-to-earnings ratio to 4.4, down from 4.7 at the end of March. And that was before it collected $3.4 billion from Novartis in the sale of Shire's Xiidra eye drug, which was completed on July 1.