Takeda Simplifies Portfolio and Accelerates Deleveraging Thr

Agrees to Sell Xiidra^® to Novartis for up to $5.3 billion

Company to Also Divest TachoSil^® to Ethicon* for approximately $400 million

OSAKA, Japan -- (BUSINESS WIRE) --

Takeda Pharmaceutical Company Limited (TSE:4502/NYSE:TAK) (“Takeda”) today announced that it has entered into agreements to divest its Xiidra^® (lifitegrast ophthalmic solution) 5% product (“Xiidra^®”) to Novartis and its TachoSil^® Fibrin Sealant Patch (“TachoSil^®”) to Ethicon as part of its strategy to focus on business areas core to its long-term growth and facilitate rapid deleveraging following its acquisition of Shire.

"These initial divestitures represent important steps in advancing the growth strategy Takeda outlined following our transformational acquisition of Shire earlier this year,” said Christophe Weber, President and Chief Executive Officer of Takeda. “We are working to strategically simplify and optimize our portfolio, while also rapidly deleveraging and continuing to invest in our growth drivers as a global, values-based, R&D-driven biopharmaceutical leader.”

Takeda will focus on its key business areas – Gastroenterology (GI), Rare Diseases, Plasma-Derived Therapies, Oncology and Neuroscience. This focus enables Takeda to continue to deliver highly-innovative medicines and transformative care to patients around the world, creating long-term value for Takeda shareholders.

Takeda will receive $3.4 billion upfront in cash and up to an additional $1.9 billion in potential milestone payments from Novartis, and approximately $400 million upfront in cash from Ethicon. Takeda intends to use the proceeds from these divestitures to reduce its debt and accelerate deleveraging toward its target of 2.0x net debt/adjusted EBITDA in the medium term. Takeda is committed to rapid deleveraging driven by strong cash flow and divestiture proceeds, while also simplifying its portfolio.

At present, Takeda does not expect these divestitures to have a material impact on its FY2019 consolidated earnings forecast, scheduled to be announced on May 14th. The FY2019 forecast will be updated at a later date to reflect these divestitures once a reliable estimate of their impact can be made, which will depend upon the exact timing of transaction close.

Xiidra^® (lifitegrast ophthalmic solution) 5% product
Takeda has entered into an agreement to sell Xiidra^® to Novartis for a $3.4 billion upfront payment and up to an additional $1.9 billion in potential milestone payments. For the fiscal year ended December 31, 2018 adjusted net sales reported for Xiidra^® were $388 million. Following a robust process, Takeda determined that this transaction would create the most value for Takeda shareholders, and ensure the business will continue delivering innovative therapeutics to the patients and professionals who rely on them.

Xiidra^® is the first and only prescription treatment approved by the U.S. Food and Drug Administration for both signs and symptoms of dry eye disease, with a mechanism of action that targets inflammation. Upon close, approximately 400 employees, who are based primarily in the U.S. and Canada, will transition to Novartis.

The agreement is expected to close in the second half of calendar year 2019, subject to the satisfaction of customary closing conditions, receipt of required regulatory clearances and, where applicable, satisfaction of local works council requirements.

Evercore Group LLC is acting as financial advisor to Takeda and Davis, Polk & Wardwell LLP is acting as Takeda’s legal advisor in this transaction.

TachoSil^® Fibrin Sealant Patch
Separately, Takeda has entered into an agreement to sell TachoSil^®, a surgical patch designed to achieve safe, fast and reliable bleeding control, to Ethicon. Upon close, approximately 80 employees will transition to Ethicon. Takeda recorded full year adjusted net sales for TachoSil^® of approximately $155 million in the fiscal year ended March 31, 2018.

Under the terms of the agreement, upon close, Ethicon will acquire the assets and licenses that support the manufacturing, licensing and commercialization of TachoSil^®, while Takeda will maintain ownership of the manufacturing facility in Linz, Austria. Takeda has entered into a long-term manufacturing services agreement, under which it will continue to manufacture TachoSil^® products and supply them to Ethicon.

The agreement is expected to close in the second half of calendar year 2019, subject to the satisfaction of customary closing conditions, receipt of required regulatory clearances and, where applicable, satisfaction of local works council requirements.

Nomura is acting as financial advisor to Takeda and Linklaters LLP is acting as Takeda’s legal advisor in this transaction.

About Takeda Pharmaceutical Company Limited
Takeda Pharmaceutical Company Limited (TSE:4502/NYSE: TAK) is a global, values-based, R&D-driven biopharmaceutical leader headquartered in Japan, committed to bringing Better Health and a Brighter Future to patients by translating science into highly-innovative medicines. Takeda focuses its R&D efforts on four therapeutic areas: Oncology, Gastroenterology (GI), Neuroscience, and Rare Diseases. We also make targeted R&D investments in Plasma-Derived Therapies and Vaccines. We are focusing on developing highly innovative medicines that contribute to making a difference in people's lives by advancing the frontier of new treatment options and leveraging our enhanced collaborative R&D engine and capabilities to create a robust, modality-diverse pipeline. Our employees are committed to improving quality of life for patients and to working with our partners in health care in approximately 80 countries and regions.

For more information, visit https://www.takeda.com

*Ethicon represents the products and services of Medos International S.á.r.l and Sythes GmBH

Forward-looking Statements
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