Takeda announces splitting off (Summary Absorption-type Split) a part of Takeda Development Center Japan businesses to its wholly-owned subsidiary and establishing a New Joint Venture with PRA Health Sciences via share transfer of the subsidiary’s shares

Osaka, Japan, April 7, 2017 Takeda Pharmaceutical Company Limited (TSE: 4502) (“Takeda”) today announced that it has entered into an agreement for absorption-type company split with its wholly-owned subsidiary which was established in March 2017 (“NewCo”) and intends to enter into another agreement for joint venture with Pharm Research Associates (UK) Ltd. (“PRA(UK)”), a subsidiary of PRA Health Sciences, Inc. (“PRA”), aiming for transferring a part of Takeda Development Center Japan (“TDC Japan”) businesses to PRA. Takeda and PRA announced the expansion of their partnership to Japan on February 15, 2017.
http://www.takeda.com/news/2017/20170215_7713.html

Since the company split is an absorption-type split carried out between Takeda and its wholly-owned subsidiary, certain details are omitted from disclosure, in line with Tokyo Stock Exchange disclosure guidelines.

1. Purpose of transaction
Takeda is in the process of implementing the steps to accelerate research and development (R&D) transformation by refocusing on three key therapeutic areas - Oncology, Gastroenterology and Central Nervous System, plus Vaccines, and concentrating R&D activities in Japan and the U.S. This transformation is critical to provide the company with the necessary organizational and financial flexibility to drive innovation, enhance partnerships, and improve R&D productivity for long-term, sustainable growth. As a part of this initiative, the company entered into a global partnership agreement with PRA in August 2016, followed by an agreement to expand their global partnership in February 2017 to include Japan. A joint venture between Takeda and PRA(UK) will provide clinical development operations and pharmacovigilance and other operational services for both development and marketed product portfolios of Takeda in close alignment with Takeda's TDC Japan. This partnership is expected to provide access to a more flexible operational capability to support development, as well as further globalizing Takeda's development business in Japan building on Takeda’s capability in Japan and PRA’s capability in Asia Pacific.

Subsequent to the company split, a half of the issued shares in NewCo will be transferred to PRA(UK). Through this transaction, NewCo will become a joint venture between Takeda and PRA(UK), and then its name will become “Takeda-PRA Development Center KK”, which is scheduled to be effective as of June 1, 2017.

2. Details of transaction
1) Schedule of transaction

Date of conclusion of framework agreement on establishment of joint
venture via company split (between Takeda and NewCo) and share
transfer of NewCo shares (between Takeda and PRA(UK))

February 14, 2017

Date of establishment of NewCo

March 30, 2017

Date of decision on company split by the Director delegated by the Board
of Directors

April 7, 2017

Date of conclusion of absorption-type split agreement

April 7, 2017

Effective date of the company split

June 1, 2017 (scheduled)

Date of execution of joint venture agreement

June 1, 2017 (scheduled)

Date of transfer of shares

June 1, 2017 (scheduled)

(Note) The company split is to be conducted by Takeda in accordance with Paragraph 2, Article 784, of the Companies Act. Accordingly, no approval by a general meeting of shareholders as defined in Paragraph 1, Article 783 of the Companies Act is required.

2) Method of company split
In this company split, Takeda will be the splitting company and NewCo will be the succeeding company.

3) Details of stock allocation
As consideration for the company split, NewCo will issue 17,800 shares of common stock and allocate them to Takeda.

4) Treatment of stock options and corporate bonds with stock options for the splitting company
Although Takeda has issued stock options, there will be no change to the treatment of these stock options due to the company split.

5) Increase or decrease of capital stock due to the company split
There will be no increase or decrease of capital stock of Takeda.

6) Rights and obligations to be succeeded by the succeeding company
NewCo will succeed the assets relating to the business to be split off in accordance with the terms and conditions of the absorption-type company split agreement, as well as the rights and obligations incidental thereto.

7) Capability of satisfying liabilities
Takeda has judged that NewCo will not have any problem in performing its obligations relating to the liabilities it will bear following the effective date of the absorption-type company split; however, Takeda will not be liable for NewCo's liabilities as a guarantor.

3. Outline of the companies

 

Splitting company (As of September 30, 2016)

(1)

Company name

Takeda Pharmaceutical Company Limited

(2)

Location

1-1, Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, Japan

(3)

Representative

President & CEO: Christophe Weber

(4)

Scope of business

Research & development, manufacturing, sales and marketing of
pharmaceutical products, etc.

(5)

Capital

64,955 million yen

(6)

Date established

January 29, 1925

(7)

Number of shares issued

790,396,895 shares

(8)

Fiscal year end

March 31

(9)

Major shareholders and

ratio of shares held

Nippon Life Insurance Company

The Master Trust Bank of Japan, Ltd. (Trust account)

Japan Trustee Services Bank, Ltd. (Trust account)

JP Morgan Chase Bank 380055

Takeda Science Foundation

6.42%

5.01%

4.67%

4.40%

2.27%

(10) Financial results of the previous fiscal year (consolidated, IFRS)

 

Total equity

1,948,692 million yen

 

Total assets

3,824,085 million yen

 

Equity attributable to owners of the Company per share

2,487.04 yen

 

Revenue

1,807,378 million yen

 

Operating profit

130,828 million yen

 

Profit before income taxes

120,539 million yen

 

Profit attributable to owners of the Company

80,166 million yen

 

Basic earnings per share

102.26 yen

 

Dividend per share

180.00 yen

 

 

Succeeding company (NewCo) (As of March 30, 2017)

(1)

Company name

Takeda Development JV Business Preparation Company KK

(2)

Location

1-1, Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, Japan

(3)

Representative

Representative Director: Atsushi Ogawa

(4)

Scope of business

Providing outsourced clinical trial and pharmacovigilance services, etc.

(5)

Capital

10 million yen

(6)

Date established

March 30, 2017

(7)

Number of shares issued

200 shares

(8)

Fiscal year end

December 31

(9)

Major shareholders and
ratio of shares held

Takeda Pharmaceutical Company Limited

100%

Name of the succeeding company will be changed immediately after the execution of absorption-type split and the subsequent share transfer. The company name will become Takeda-PRA Development Center KK effective as of June 1, 2017 subject to the approval of the amendment to the Articles of Incorporation (Company Name) by NewCo shareholders’ meeting.

4. Outline of the business to be split off from Takeda to the succeeding company
1) Details of the business to be split off
The portion of the business to be split off is a part of Takeda’s business related to clinical trials, pharmacovigilance services for both development and marketed products which are operated by TDC Japan.

2) Financial results of the business to be split off
The business has not recorded external revenue.

3) List and amount of assets and liabilities to be split off (As of December 31, 2016)

Assets

Liabilities

Item

Book value

Item

Book value

Current assets

910 million yen

Current liabilities

0 yen

Fixed assets

0 yen

Fixed liabilities

20 million yen

Total

910 million yen

Total

20 million yen

 

5. Status after the company split
1) There will be no change in Takeda’s company name, location, representative, scope of business, capital and fiscal year end after the company split.

2) The amount of NewCo's capitals increases from 10 million yen to 450 million yen through the company split.

3) With respect to NewCo, Takeda will transfer a half of outstanding shares in NewCo to PRA(UK) through share transfer. NewCo (joint venture) will be an affiliated company of Takeda accounted for using the equity method.

6. Share transfer
1) Profile of the subsidiary (succeeding company) to undergo changes
Please see 3. above.

2)  Transferee of the share transfer
Pharm Research Associates (UK) Ltd.

3) Change in ownership ratio of shares through the share transfer

(1)

Number of shares held

prior to the transfer

18,000 shares

(Number of votes: 18,000 votes)

(% of total votes: 100%)

(2)

Number of shares to be

transferred

9,000 shares

(Number of votes: 9,000 votes)

(3)

Number of shares held

after the transfer

9,000 shares

(Number of votes: 9,000 votes)

(% of total votes: 50%)

Transfer price is undisclosed in accordance with an agreement with the transferee of the share.

7. Future outlook
There is no change in Takeda's financial forecast for FY2016 as a result of this transaction. Takeda’s financial forecast for FY2017, including the impact of this transaction, will be announced when Takeda reports year-end earnings in May 2017.

(Reference) Consolidated earnings forecast for this fiscal year (As of February 1, 2017) and consolidated results for the previous fiscal year (in million yen)

 

Revenue

Operating
profit

Profit before
income taxes

Profit attributable to
owners of the Company

Forecast for the current
FY ending March 2017

1,700,000

135,000

132,500

93,000

Results for the previous
FY ended March 2016

1,807,378

130,828

120,539

80,166

 


 

Media Contacts:
Kazumi Kobayashi
kazumi.kobayashi@takeda.com
+81 (0) 3-3278-2095

 

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