Takeda Pharmaceuticals is plotting a $900 million restructuring effort amid slumping profits and challenges from generics.

The Japanese pharma giant announced the plan Thursday morning in conjunction with the rollout of its latest earnings report.

As part of the program, which was approved by the board of directors, the drugmaker will focus on advancing its line of growth and launch products and aim to boost its core operating profit margin by low- to mid-30%.

Takeda stated that some aspects of the restructuring program include “simplifying some division structures,” as well as investing in its late-stage drug candidate pipeline, its research and development capabilities and its data, digital and technology.

Takeda said that while it will offer more specifics related to timing and actions for the restructuring at a later date, it expects to incur a one-time expense of ¥140 billion ($900 million) for fiscal year 2024.

As for fiscal year 2023, Takeda’s core revenue grew 1.5% at constant exchange rate (CER), though its core operating profit tumbled 13.3% due to the rise of generic competition.

Additionally, Takeda’s earnings per share (EPS) fell 15.7% to ¥484, while its net profit declined 15% to ¥756.8.

Takeda CEO Christophe Weber said in a statement the company’s quarterly results indicate that its pipeline holds potential amid what was an otherwise challenging year. He said the company expects to have up to six programs in Phase 3 development in the coming fiscal year as Takeda renews its focus on R&D during the restructuring program.

“In addition to revenue growth from our Growth & Launch Products and significant decline in generic exposure, we expect this program will help drive Core Operating Margin improvement of 100 – 250 basis points per year from FY 2025,” he stated.

Looking forward, Takeda issued a full year guidance projecting core revenue ¥435 billion, an operating profit of ¥225 million, a net profit of ¥58 million and EPS of ¥37. Compared to its prior financial outlook, Takeda’s core revenue projection is flat to slightly declining, its core operating profit represents a 10% decline and its core EPS represents a double digit slide.

For a May 2024 article on Takeda nabbing AC Immune Alzheimer’s therapy for $100M upfront, click here.