Second Phase Of Takeda’s Globalization Plan Calls For Partial Integration Of Millennium

The next phase of Takeda’s globalization strategy emphasizes organizational house cleaning. Millennium, which had operated as a standalone oncology outpost, will be partially integrated into Takeda R&D but the commitment to oncology in terms of resources and investment remains firm.

The next phase of Takeda Pharmaceutical Co. Ltd.’s ongoing globalization plan emphasizes organizational efficiency. Certain aspects of Millennium’s R&D will be integrated with the global parent as its management and reporting structure changes at the top. However, Takeda’s commitment to oncology remains unshaken and will continue as before.

On May 9, Takeda unveiled aspects of a new mid-term strategy that put an emphasis on efficiency within its operations (Also see "Takeda Uses Fine Tooth Comb To Find Inefficiencies After Poor Results" - Pink Sheet, 14 May, 2013.). At that time, Chief Medical and Scientific Officer Tachi Yamada briefly summarized how this new industry-wide push, called Project Summit, would affect Millennium by aligning the operational aspects of clinical development at the global level.

Takeda recently tapped EVP Global Business Development Anna Protopapas to replace outgoing Millennium CEO Deborah Dunsire in the newly created position of president of Takeda Oncology In a May 20 interview with “The Pink Sheet” DAILY, Protopapas detailed some of the changes taking place in oncology at Takeda as well as other changes across the company.

Protopapas, who will also continue in her global business development role, described the first phase of Takeda’s globalization strategy as “inorganic.” That period, beginning roughly in 2008, was marked by the importation of new, Western processes, new top management from outside the firm, and bold acquisitions that expanded Takeda’s portfolio and geographic reach.

She cited as examples the 2008 dissolution of the TAP joint venture with AbbVie Inc. (formerly Abbott Laboratories Inc.); the acquisitions of Millennium in 2008 and of Nycomed in 2011; and the recruitment of senior executives with extensive, hands-on Western management experience, such as Yamada to run R&D, and Frank Morich to run commercial operations, both in 2011 (Also see "Takeda’s Strategic Run Up To Nycomed" - In Vivo, 30 Jul, 2012.). Protopapas herself, who arrived with the Millennium acquisition, was named to the top business development slot in 2010.

The next phase will bring internal, organic change to the organization. For example, Millennium recently promoted chief medical officer Karen Ferrante to head up the core components of oncology clinical development (Also see "Millennium Poised To Deliver Late-Stage Pipeline: Q&A With Dr. Karen Ferrante" - Pink Sheet, 5 Jun, 2012.). Ferrante reports directly to Yamada.

Protopapas explained how the Ferrante appointment captures the efficiencies that Takeda is after. With respect to Millennium, the goal is to align the operational aspects of oncology development with the global parent, while keeping “core strategic” tasks such as clinical research at the Takeda Cambridge site. Ferrante will oversee these core components. “Other aspects are more operational and scalable, and benefit from critical mass,” she added, citing regulatory operations and pharmacovigilance as examples. Takeda recently selected Millennium’s head of pharmacovigilance, Veronique Kugener, to play the same role company-wide.

Takeda has also recently hired a global head of human resources to oversee that department worldwide rather than on a divisional basis. Protopapas said more announcements are on the way.

The quest to put the more generic and scalable aspects of R&D on a global footing extends to platforms as well. “Millennium has built a great platform around personalized medicine and biomarkers,” said Protopapas, adding that the company is actively looking at ways to employ these novel tools across therapeutic areas other than oncology.

Protopapas acknowledged that Takeda may reduce staff soon as it seeks to eliminate duplication and “capture organizational efficiencies.” Still, she emphasized that Takeda’s commitment to oncology, particularly its late-stage pipeline, is unwavering. Oncology currently represents one-third of Takeda’s R&D budget. Millennium’s commercial organization, led by Executive Vice President Christophe Bianchi, will remain intact.

Protopapas said that the second phase of globalization was always part of the master plan. However, she acknowledged that this recent round of changes was given a push by several factors, both internal and external. She cited the rapid loss of revenues from Actos (pioglitazone) which recently went off patent, the voluntary withdrawal of Omontys (peginesatide) in the U.S., reimbursement pressures in Europe, and unexpected competition from generics in Japan that have restrained sales of the DPP-4 inhibitor Nesina (alogliptin) and other products (Also see "Affymax’s Omontys Recalled After Deaths; Uncertain Future Ahead For Company" - Pink Sheet, 25 Feb, 2013.) and (Also see "Takeda Treads Carefully With DPP-4 Late-Arrival Nesina, Plans Summer Launch" - Pink Sheet, 4 Feb, 2013.).

During its fourth quarter earnings call on May 9, Takeda pulled back on its top line and marginal guidance for 2013. Management expects its pipeline to start delivering growth by fiscal 2015, abetted by the implementation of Project Summit, the set of initiatives aimed at creating a more robust and efficient global operating model. The Millennium R&D integration is one of the first steps.

Looking Ahead

Earlier this year, Takeda signed a lease on a new 246,000-square-foot building on Massachusetts Avenue near the MIT campus. “Takeda looks at Cambridge as a great source of talent, and we’re committed to staying here and, potentially, placing additional talent in other therapeutic areas in Cambridge,” Protopapas said.

And while Millennium scientists are no longer engaged in inflammatory and immune research – Takeda’s promising, late stage anti-adhesion antibody against inflammatory bowel disease, vedolizumab, is a product of that earlier era – Protopapas says that Millennium is currently collaborating with Takeda scientists to re-purpose oncology assets in other therapeutic areas . The company also plans to apply Millennium’s work in protein homeostasis, of which the oral proteasome inhibitor MLN9708 is a product, across other therapeutic areas.

The performance of Millennium’s late-stage pipeline, particularly ‘9708, the successor to Velcade (bortezomib), will test Takeda’s commitment to oncology. Protopapas singled out the Phase III candidates TAK700 in prostate cancer, ‘9708 in multiple myeloma, and MLN8237 (alisertib), an aurora A kinase inhibitor against peripheral T cell lymphoma (PTCL). All are on track and slated to launch in “the near term.”

She spoke enthusiastically about the steroid-sparing androgen blocker TAK700, particularly in the non-metastatic prostate cancer setting. “There is a very large pool of patients in the early stage of the disease before it becomes metastatic,” she said. She also touted Phase III data on ‘8237, “where we’ve seen very significant, single-agent durable and deep responses. PTCL is a disease with high unmet medical need. The KOLs who treat the disease are very excited about the results they’ve seen.”

Nonetheless, these late-stage products will face challenges. The prostate cancer market has changed significantly in the past few years with the launch and rapid uptake of the anti-androgen drugs Zytiga (abiraterone) and more recently Xtandi (enzalutamide) (Also see "Astellas/Medivation Strengthen Case For Xtandi In Advance Of Second Filing" - Pink Sheet, 6 May, 2013.).

Meanwhile, the aurora kinase field has progressed slowly and experienced some setbacks. Merck and Vertex stopped enrolling patients in 2007 to a Phase II trial of their pan-aurora agent MK-0457; the problem was QTc prolongation which can increase the risk of cardiac death . This came after an earlier aurora kinase-inhibiting compound being jointly developed by the two companies failed its pharmacokinetic objectives in a Phase I trial.

Finally, although clinical data on ‘9708 look good, it will enter an unsettled market where Celgene’s Revlimid (lenalidomide) holds sway, but where the recent launches of Pomalyst (pomalidomide) and Kyprolis (carfilzomib) are triggering experimentation with new multi-drug cocktails in first-line and maintenance settings (Also see "Multiple Myeloma Market Snapshot: New Combos Offer Greater Longevity, But Payers May Push Back" - Pink Sheet, 13 May, 2013.).