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> has guided for FY25 Leqembi revenue of ¥56.5B (~$366M), with ¥43.5B from U.S., and ¥10.0B from Japan. In FY24, Leqembi reported worldwide revenue of ¥4.2B.</li>
<li>Leqembi is expected to grow significantly due to increase in prescriptions following the progress in the development of AD diagnosis and treatment pathways in the U.S. and Japan.</li>
<li>The current rally can be short lived, as the competitor drug is expected to get FDA approval in 3Q24.</li>
</ul>



Eisai Co Ltd (4523 JP) has guided for FY25 Leqembi revenue of ¥56.5B (~$366M), with ¥43.5B from U.S., and ¥10.0B from Japan. In FY24, Leqembi reported worldwide revenue of ¥4.2B.
Leqembi is expected to grow significantly due to increase in prescriptions following the progress in the development of AD diagnosis and treatment pathways in the U.S. and Japan.
The current rally can be short lived, as the competitor drug is expected to get FDA approval in 3Q24.


Eisai Co Ltd (4523 JP): Leqembi Is Gathering Momentum; Imminent Competition May Spoil the Party

<ul>
<li>In Q1FY24, <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.  </li>
<li>Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).</li>
<li>Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.</li>
</ul>


In Q1FY24, Shionogi &amp; Co (4507 JP) recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.  
Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).
Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.


Shionogi & Co (4507 JP): Non-Recurring Income Lifts Q1 Revenue; FY24 Guidance Reiterated

Thematic (Sector/Industry)

<ul>
<li>We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.</li>
<li>Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  </li>
<li>Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.</li>
</ul>


We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.
Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  
Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.


Top APAC (Ex-China) Investment Worthy Healthcare Companies Using Smartkarma’s Smart Score Screener

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<li>
<a href="https://www.smartkarma.com/entities/sumitomo-dainippon-pharma-co" target="_blank" data-smartkarma-citation="entities:1935:1" rel="noopener">Sumitomo Dainippon Pharma Co (4506 JP)</a>'s flagship drug Latuda will loss patent protection in the U.S. in 2023. Latuda is already seeing revenue erosion.  </li>
<li>Sumitomo is expected to reap the benefit of new products launched in the U.S. market in 2020 and 2021. These are expected to gradually become next growth drivers.  </li>
<li>The company has a rich pipeline and targets to launch at least two new drugs in the U.S. in next two years.  </li>
</ul>



Sumitomo Dainippon Pharma Co (4506 JP)'s flagship drug Latuda will loss patent protection in the U.S. in 2023. Latuda is already seeing revenue erosion.  
Sumitomo is expected to reap the benefit of new products launched in the U.S. market in 2020 and 2021. These are expected to gradually become next growth drivers.  
The company has a rich pipeline and targets to launch at least two new drugs in the U.S. in next two years.  


Sumitomo Dainippon Pharma Co (4506 JP): New Launches Ensure Post-Latuda Growth Trajectory

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<li>
<a href="https://www.smartkarma.com/entities/astellas-pharma-inc" target="_blank" data-smartkarma-citation="entities:6091:1" rel="noopener">Astellas Pharma (4503 JP)</a> reported ¥85B revenue increase in FY24 over FY23, while Fx impacted the revenue positively by ¥96B. In local currency terms, the U.S. revenue declined 5% YoY.</li>
<li>FY24 operating and net profit declined 80%+, due to amortization and impairment loss of intangible assets. Astellas is changing accounting policy to smoothen core operating and net profits in FY25.</li>
<li>For FY25, Astellas guided for just 3% revenue growth. Core operating profit is expected to decline 10%, while net profit is anticipated to take a bigger hit and decrease 17%.</li>
</ul>



Astellas Pharma (4503 JP) reported ¥85B revenue increase in FY24 over FY23, while Fx impacted the revenue positively by ¥96B. In local currency terms, the U.S. revenue declined 5% YoY.
FY24 operating and net profit declined 80%+, due to amortization and impairment loss of intangible assets. Astellas is changing accounting policy to smoothen core operating and net profits in FY25.
For FY25, Astellas guided for just 3% revenue growth. Core operating profit is expected to decline 10%, while net profit is anticipated to take a bigger hit and decrease 17%.


Astellas Pharma (4503 JP): Fx Drives FY24 Revenue; Impairment Loss Dents Profits; Pain to Continue

Japan

Shionogi & Company Ltd., is a pharmaceutical company. The Company develops prescription & over-the-counter drugs and diagnostics.

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Shionogi & Co (4507 JP)

Eisai Co Ltd (4523 JP): Leqembi Is Gathering Momentum; Imminent Competition May Spoil the Party

Eisai expects 13x jump in Leqembi revenue for FY25 to ¥56.5B, driven by progress in AD treatment pathways in U.S. and Japan, and China launch. A...

Tina Banerjee