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

<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

<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> reported 7% YoY revenue growth in Q1FY24, due to the growth of anticancer agent Lenvima mainly in the U.S. and insomnia treatment Dayvigo in Japan.</li>
<li>The company has reiterated FY24 guidance, which calls for 4% YoY revenue decline, 25% YoY growth in operating profit, and 31% YoY decline in net profit.</li>
<li>On July 6, 2023, Eisai received full FDA approval for Leqembi (lecanemab) injection for the treatment of Alzheimer’s disease. Leqembi is progressing steadily toward treating 10K U.S. patients in FY24.</li>
</ul>



Eisai Co Ltd (4523 JP) reported 7% YoY revenue growth in Q1FY24, due to the growth of anticancer agent Lenvima mainly in the U.S. and insomnia treatment Dayvigo in Japan.
The company has reiterated FY24 guidance, which calls for 4% YoY revenue decline, 25% YoY growth in operating profit, and 31% YoY decline in net profit.
On July 6, 2023, Eisai received full FDA approval for Leqembi (lecanemab) injection for the treatment of Alzheimer’s disease. Leqembi is progressing steadily toward treating 10K U.S. patients in FY24.


Eisai Co (4523 JP): Better-Than-Expected Q1FY24 Result; Reaffirmed FY24 Guidance

Japan

Eisai Co., Ltd. produces prescription drugs and medical equipment and sells mainly to sales agents and subsidiaries.  Through its subsidiary, Sanko Junyaku, the Company produces and sells diagnostic drugs.  Eisai also markets its products through related companies in the US, Europe, and Asia.  The Company also manufactures and sells foods, livestock feeds, chemical, and agrochemicals.

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Eisai Co Ltd (4523 JP)