Takeda & Protagonist: Rusfertide Clinical Success Bolsters Investment Returns

2025-04-01 14:27:17 ET

Summary

• Takeda's AI-powered "returning to growth" program has improved profit margins, leading to upgraded FY2024 guidance and a JPY100 billion share buyback program.
• Takeda's Rusfertide and Protagonist's Icotrokinra show strong Phase III results, with potential regulatory approvals and launches by 2026, boosting revenue prospects.
• Protagonist's financial stability, with a cash runway until 2028, supports a "Strong Buy" rating for high-risk tolerant investors.
• Takeda's positive developments and shareholder-friendly measures justify a moderate "Buy" rating for conservative long-term investors.

Overview

My previous analysis of Takeda Pharmaceutical Company Limited ( TAK ) highlighted the implementation of the “returning to grow program”. The program was defined as an enterprise-wide AI-powered business restructuring, with the potential to optimise operations, reduce operational costs, improve profit margins, and streamline research and development operations, among others.

In the Q3 2024 earnings call , Takeda’s Chief Financial Officer, Milano Furuta, reported a 10.1% operating profit and a 28.5% operating margin increase, which was partially attributed to the positive impact of the returning to growth program. The positive momentum of the growth and launch products (see image below), together with a lower than expected effect of generics on VYVANSE’s revenues, led to 9.8% revenue growth, an 86% operating profit increase, 43.5% net profit growth, and a 42% EPS raise when compared against the same quarter of 2023....

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