Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/eisai-co-ltd" target="_blank" data-smartkarma-citation="entities:21001:1" rel="noopener">Eisai Co Ltd (4523 JP)</a> shares corrected more than 60% from highs over the disappointment from Alzheimer’s disease drug Leqembi. During H1FY24, Leqembi reported revenue of just ¥400M ($3M).</li>
<li>With approximately 40% revenue contribution, anti-cancer drug Lenvima is the top selling drug of Eisai. In the U.S., Lenvima patent protection will start to expire in US in October 2025.</li>
<li>In December, Eisai has submitted a marketing authorization application in Japan for tasurgratinib for biliary tract cancer. If approved, tasurgratinob will be a late entrant in a crowded market.</li>
</ul>



Eisai Co Ltd (4523 JP) shares corrected more than 60% from highs over the disappointment from Alzheimer’s disease drug Leqembi. During H1FY24, Leqembi reported revenue of just ¥400M ($3M).
With approximately 40% revenue contribution, anti-cancer drug Lenvima is the top selling drug of Eisai. In the U.S., Lenvima patent protection will start to expire in US in October 2025.
In December, Eisai has submitted a marketing authorization application in Japan for tasurgratinib for biliary tract cancer. If approved, tasurgratinob will be a late entrant in a crowded market.


Eisai Co Ltd (4523 JP): Why Performance Reversal Is Not Expected in Near-Term

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Taisho Pharmaceutical Holdin / Event-Driven

<ul>
<li>Japan Catalyst’s <a href="https://www.japancatalyst.com/pdf/JCI_TAISHO_20231201_eng.pdf" target="_blank" rel="noopener">press release</a> supports the idea of a <a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdin (4581 JP)</a> MBO but not the proposed offer price as it implies a P/B less than 1.0x.</li>
<li>The press release is a discovery exercise encouraging other like-minded shareholders to show their hand. The shares are trading marginally above the JPY8,620 offer.</li>
<li>While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5% premium to the undisturbed price.</li>
</ul>


Japan Catalyst’s press release supports the idea of a Taisho Pharmaceutical Holdin (4581 JP) MBO but not the proposed offer price as it implies a P/B less than 1.0x.
The press release is a discovery exercise encouraging other like-minded shareholders to show their hand. The shares are trading marginally above the JPY8,620 offer.
While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5% premium to the undisturbed price.


Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdin (4581 JP)</a> has recommended an MBO tender offer of JPY8,620 per share, a 55.5% premium to the undisturbed (24 November). </li>
<li>The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 66.67% ownership ratio.</li>
<li>Irrevocables represent a 40.31% ownership ratio. The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.</li>
</ul>



Taisho Pharmaceutical Holdin (4581 JP) has recommended an MBO tender offer of JPY8,620 per share, a 55.5% premium to the undisturbed (24 November). 
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 66.67% ownership ratio.
Irrevocables represent a 40.31% ownership ratio. The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.


Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Takeda’s 2QFY03/2024 revenues increased 4.1% YoY beating consensus estimates by 6%. However, Takeda reported an operating loss of ¥49.3bn for the quarter due to impairment losses.</li>
<li>As we expected, recent setback in some of Takeda’s clinical trials have led to write-downs and triggered a downward revision to full-year profit guidance.</li>
<li>There has been excessive price reaction to these setbacks, however, Takeda continues to progress with its pipeline development with some newly launched drugs showing great potential.</li>
</ul>


Takeda’s 2QFY03/2024 revenues increased 4.1% YoY beating consensus estimates by 6%. However, Takeda reported an operating loss of ¥49.3bn for the quarter due to impairment losses.
As we expected, recent setback in some of Takeda’s clinical trials have led to write-downs and triggered a downward revision to full-year profit guidance.
There has been excessive price reaction to these setbacks, however, Takeda continues to progress with its pipeline development with some newly launched drugs showing great potential.


Takeda: Guidance Lowered Due to Setbacks in Clinical Trials but Pipeline Development Continues

<ul>
<li>Astellas Pharma (4503 JP) reported just 0.6% YoY revenue growth to ¥767B in H1FY24, while operating profit plunged 57% YoY and net profit decreased 67% YoY.</li>
<li>Generic competition in Lexiscan impacted topline. Increase in SG&amp;A expenses related to new drug launch and higher amortization of intangible assets, pulled down the operating as well as net profit.</li>
<li>Astellas has downwardly revised FY24 forecasts for profit items by more than 50% after taking into consideration the increases in higher expenses.</li>
</ul>


Astellas Pharma (4503 JP) reported just 0.6% YoY revenue growth to ¥767B in H1FY24, while operating profit plunged 57% YoY and net profit decreased 67% YoY.
Generic competition in Lexiscan impacted topline. Increase in SG&amp;A expenses related to new drug launch and higher amortization of intangible assets, pulled down the operating as well as net profit.
Astellas has downwardly revised FY24 forecasts for profit items by more than 50% after taking into consideration the increases in higher expenses.


Astellas Pharma (4503 JP): Underwhelming H1 Result; Massive Cut in FY24 Profit Guidance

Japan

Chugai Pharmaceutical Company Ltd., manufactures and sells pharmaceuticals in the domestic and international markets through its subsidiaries. The Company develops drugs in the fields of cancer, infectious diseases, bone, blood, and circulatory systems. Chugai Pharmaceutical also conducts research studies on drugs with private and public medical research institutions.

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Chugai Pharmaceutical (4519 JP)

Eisai Co Ltd (4523 JP): Why Performance Reversal Is Not Expected in Near-Term

Eisai shares are on downtrend due to disappointment with Alzheimer's drug. Top-selling drug Lenvima faces patent expiration in 2025. Eisai seeks...

Tina Banerjee

Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5%...

Arun George

Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620

The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.

Arun George

Takeda: Guidance Lowered Due to Setbacks in Clinical Trials but Pipeline Development Continues

As we have highlighted, Takeda continues to make good progress with its development pipeline where the company has received FDA approval for...

Shifara Samsudeen, ACMA, CGMA

Astellas Pharma (4503 JP): Underwhelming H1 Result; Massive Cut in FY24 Profit Guidance

In H1FY24, Astellas Pharma reported just 0.6% YoY revenue growth, while operating profit plunged 57% YoY and net profit decreased 67% YoY. The...

Tina Banerjee

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52-week Range

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Eisai Co Ltd (4523 JP): Why Performance Reversal Is Not Expected in Near-Term

​Eisai shares are on downtrend due to disappointment with Alzheimer's drug. Top-selling drug Lenvima faces patent expiration in 2025. Eisai seeks...

Tina Banerjee

Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5%...

Arun George

Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620

The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.

Arun George

Takeda: Guidance Lowered Due to Setbacks in Clinical Trials but Pipeline Development Continues

As we have highlighted, Takeda continues to make good progress with its development pipeline where the company has received FDA approval for...

Shifara Samsudeen, ACMA, CGMA

Astellas Pharma (4503 JP): Underwhelming H1 Result; Massive Cut in FY24 Profit Guidance

In H1FY24, Astellas Pharma reported just 0.6% YoY revenue growth, while operating profit plunged 57% YoY and net profit decreased 67% YoY. The...

Tina Banerjee

Eisai shares are on downtrend due to disappointment with Alzheimer's drug. Top-selling drug Lenvima faces patent expiration in 2025. Eisai seeks...