Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kaken-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:18819:1" rel="noopener">Kaken Pharmaceutical (4521 JP)</a> reported 42% YoY jump in revenue during H1FY25 on one-time upfront payment, while operating profit also witnessed hefty growth of 255% YoY.</li>
<li>Top selling products are impacted by NHI drug price revision and increasing competition. The company has reiterated FY25 guidance. Profitability is expected to deteriorate sequentially in H2.</li>
<li>The respite from one time receipt will not compensate for the revenue loss from the negative impact from NHI drug price revision and generic competition for top selling products.</li>
</ul>



Kaken Pharmaceutical (4521 JP) reported 42% YoY jump in revenue during H1FY25 on one-time upfront payment, while operating profit also witnessed hefty growth of 255% YoY.
Top selling products are impacted by NHI drug price revision and increasing competition. The company has reiterated FY25 guidance. Profitability is expected to deteriorate sequentially in H2.
The respite from one time receipt will not compensate for the revenue loss from the negative impact from NHI drug price revision and generic competition for top selling products.


Kaken Pharmaceutical (4521 JP): One-Off Payment Boosts H1FY25 Revenue; Headed for Another Bleak H2

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the September rebalance of the S&amp;P/ASX family of indices ends on Friday. There will be a lot of changes across the family.</li>
<li>Hang Seng Indices will announce the changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a> and the HSCI after market close on Friday.</li>
<li>There were HUGE inflows to onshore China focused ETFs during the week with <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500 Index</a> and <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index</a> ETFs taking in the largest amounts.</li>
</ul>


The review period for the September rebalance of the S&amp;P/ASX family of indices ends on Friday. There will be a lot of changes across the family.
Hang Seng Indices will announce the changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI after market close on Friday.
There were HUGE inflows to onshore China focused ETFs during the week with CSI 300 Index, CSI 500 Index and SSE50 Index ETFs taking in the largest amounts.


Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning - India, Japan, Korea

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nisshin-seifun-group-inc" target="_blank" data-smartkarma-citation="entities:640:1" rel="noopener">Nisshin Seifun Group</a>, <a href="https://www.smartkarma.com/entities/oji-holdings-corp" target="_blank" data-smartkarma-citation="entities:11348:1" rel="noopener">Oji Holdings</a>, <a href="https://www.smartkarma.com/entities/nippon-shinyaku-co-ltd" target="_blank" data-smartkarma-citation="entities:6634:1" rel="noopener">Nippon Shinyaku</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc</a>, <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" data-smartkarma-citation="entities:12580:1" rel="noopener">NGK Insulators</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group</a> and <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp</a> have all underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> over the last 3-4 months.</li>
<li>The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.</li>
<li>Short interest has started to increase and there could be more pre-positioning yet to come over the next few weeks.</li>
</ul>



Nisshin Seifun Group, Oji Holdings, Nippon Shinyaku, CyberAgent Inc, NGK Insulators, Lixil Group and Sharp Corp have all underperformed the Nikkei 225 (NKY INDEX) over the last 3-4 months.
The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
Short interest has started to increase and there could be more pre-positioning yet to come over the next few weeks.


Japan - Increase in Shorts on Some Interesting Stocks

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-shinyaku-co-ltd" target="_blank" data-smartkarma-citation="entities:6634:1" rel="noopener">Nippon Shinyaku (4516 JP)</a>'s FY24 revenue guidance is 3% below mid-term target, while operating and net profits guidance are 20% and 17% below the target, respectively.  </li>
<li>Revenue growth of Viltepso is expected to decelerate to 28% in FY24 from 85% in FY23, dragged by the U.S. sales, which contributes 74% of Viltepso revenue.</li>
<li>Rival <a href="https://www.smartkarma.com/entities/sarepta-therapeutics-inc" target="_blank" data-smartkarma-citation="entities:17729:1" rel="noopener">Sarepta Therapeutics (SRPT US)</a> is expected to receive FDA approval for its next DMD gene therapy drug this month, leading to a new competition for Viltepso.</li>
</ul>



Nippon Shinyaku (4516 JP)'s FY24 revenue guidance is 3% below mid-term target, while operating and net profits guidance are 20% and 17% below the target, respectively.  
Revenue growth of Viltepso is expected to decelerate to 28% in FY24 from 85% in FY23, dragged by the U.S. sales, which contributes 74% of Viltepso revenue.
Rival Sarepta Therapeutics (SRPT US) is expected to receive FDA approval for its next DMD gene therapy drug this month, leading to a new competition for Viltepso.


Nippon Shinyaku (4516 JP): FY24 Guidance Falls Short of Mid-Term Target; DMD Drug Growth Slows Down

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chugai-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:4489:1" rel="noopener">Chugai Pharmaceutical (4519 JP)</a> recorded double and triple-digit revenue growth from Hemlibra in domestic and export markets, respectively during 9M2022. Growth momentum is expected to continue.</li>
<li>Both Actembra and Ronapreve have limited revenue potential from COVID-related indications. Ronapreve reported revenue of ¥60.8 billion in 1Q22 in domestic market, with no reported revenue in two subsequent quarters.</li>
<li>Actemra will face biosimilar competition. This month China has approved first Actembra biosimilar, while a couple of others are under review of the FDA.  </li>
</ul>



Chugai Pharmaceutical (4519 JP) recorded double and triple-digit revenue growth from Hemlibra in domestic and export markets, respectively during 9M2022. Growth momentum is expected to continue.
Both Actembra and Ronapreve have limited revenue potential from COVID-related indications. Ronapreve reported revenue of ¥60.8 billion in 1Q22 in domestic market, with no reported revenue in two subsequent quarters.
Actemra will face biosimilar competition. This month China has approved first Actembra biosimilar, while a couple of others are under review of the FDA.  


Chugai Pharmaceutical (4519 JP): Hemlibra Is the Only Saviour; Competition Bites Mainstay Drugs

Japan

Nippon Shinyaku Co., Ltd. manufactures pharmaceutical and health foods products. The Company produces drugs for urinary, nerve, respiratory, and circulatory systems as well as analgesic and anti-inflammatory drugs.  Nippon Shinyaku also develops synthetic anti-bacterial agents.

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Nippon Shinyaku (4516 JP)

Kaken Pharmaceutical (4521 JP): One-Off Payment Boosts H1FY25 Revenue; Headed for Another Bleak H2

Kaken Pharmaceutical sees strong revenue and profit growth in H1FY25, but faces challenges ahead with NHI drug price revisions and increased...

Tina Banerjee

Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning - India, Japan, Korea

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Japan - Increase in Shorts on Some Interesting Stocks

There are a bunch of stocks in Japan that have underperformed the NKY over the last few months and that could lead to a liquidity event due to the...

Brian Freitas