Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sawai-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:35512:1" rel="noopener">Sawai Group Holdings (4887 JP)</a> is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.</li>
<li>Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.</li>
<li>The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.</li>
</ul>



Sawai Group Holdings (4887 JP) is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.
Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.
The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.


Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess

Thematic (Sector/Industry)

<ul>
<li>Over the last six months, <a href="https://www.smartkarma.com/entities/sosei-group-corp" target="_blank" data-smartkarma-citation="entities:770:1" rel="noopener">Sosei Group (4565 JP)</a> gained 37%, while <a href="https://www.smartkarma.com/entities/takara-bio-inc" target="_blank" data-smartkarma-citation="entities:10766:1" rel="noopener">Takara Bio Inc (4974 JP)</a> plunged 21%. During the same time, benchmark indices Nikkei 225 and Topix gained 1.8%.</li>
<li>Sosei is expected to continue its outperformance driven by clinical progress of the existing collaboration programs. Sosei’s strong track record of drug discovery enhances conviction on its future growth potential.</li>
<li>Takara has been on an accelerated growth path since FY21, thanks to COVID-19 testing revenue. The company will be negatively impacted by the declining demand for the COVID-19 tests.</li>
</ul>


Over the last six months, Sosei Group (4565 JP) gained 37%, while Takara Bio Inc (4974 JP) plunged 21%. During the same time, benchmark indices Nikkei 225 and Topix gained 1.8%.
Sosei is expected to continue its outperformance driven by clinical progress of the existing collaboration programs. Sosei’s strong track record of drug discovery enhances conviction on its future growth potential.
Takara has been on an accelerated growth path since FY21, thanks to COVID-19 testing revenue. The company will be negatively impacted by the declining demand for the COVID-19 tests.


Japan Healthcare: Pair Trade Ideas- Long Sosei Group (4565 JP), Short Takara Bio (4974 JP)

Equity Long-Short Analyst

Pyari Menon

<ul>
<li>Legal and regulatory changes have spawned cannabis companies, focused on cannabis-based medical and recreational products and the development of new breeds of crop </li>
<li>In Cannabis innovations <a href="https://www.smartkarma.com/entities/philip-morris-international" target="_blank" data-smartkarma-citation="entities:13328:1" rel="noopener">Philip Morris International (PM US)</a>, <a href="https://www.smartkarma.com/entities/canopy-growth-corp" target="_blank" data-smartkarma-citation="entities:25083:1" rel="noopener">Canopy Growth (WEED CN)</a>, <a href="https://www.smartkarma.com/entities/jazz-pharmaceuticals-plc" target="_blank" data-smartkarma-citation="entities:15881:1" rel="noopener">Jazz Pharmaceuticals (JAZZ US)</a><a href="https://www.smartkarma.com/entities/merck-co-inc" target="_blank" data-smartkarma-citation="entities:1130:1" rel="noopener">Merck &amp; Co Inc. (MRK US)</a> and <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a> lead</li>
<li>In overall plant-based extracts innovations <a href="https://www.smartkarma.com/entities/jazz-pharmaceuticals-plc" target="_blank" data-smartkarma-citation="entities:15881:1" rel="noopener">Jazz Pharmaceuticals (JAZZ US)</a>, <a href="https://www.smartkarma.com/entities/eid-parry-india-ltd" target="_blank" data-smartkarma-citation="entities:6925:1" rel="noopener">Eid Parry India (EID IN)</a>, <a href="https://www.smartkarma.com/entities/abbott-laboratories" target="_blank" data-smartkarma-citation="entities:11987:1" rel="noopener">Abbott Laboratories (ABT US), </a>Indena, Mars Incorporated, and Liveleaf are the leaders.</li>
</ul>


Legal and regulatory changes have spawned cannabis companies, focused on cannabis-based medical and recreational products and the development of new breeds of crop 
In Cannabis innovations Philip Morris International (PM US), Canopy Growth (WEED CN), Jazz Pharmaceuticals (JAZZ US)Merck &amp; Co Inc. (MRK US) and Takeda Pharmaceutical (4502 JP) lead
In overall plant-based extracts innovations Jazz Pharmaceuticals (JAZZ US), Eid Parry India (EID IN), Abbott Laboratories (ABT US), Indena, Mars Incorporated, and Liveleaf are the leaders.


Insights from Data Mining Technical Publications - Plant Extracts Including from Cannabis

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>Before the end of 2021, Japanese stocks have to disclose their desired section of listing under the new structure of the Tokyo Stock Exchange. Most have already done so.</li>
<li>However, some are yet to announce their intentions. As discussed in <a href="https://www.smartkarma.com/insights/topix-inclusions-who-is-ready-4-0" target="_blank" data-smartkarma-citation="insights:61777" rel="noopener">TOPIX Inclusions: Who Is READY? 4.0</a> some of these names could be potential TOPIX Inclusion Candidates.</li>
<li>With ten days to the finish line, below is an update on these potential TOPIX Inclusion Candidates and a discussion on potential trading opportunities. </li>
</ul>


Before the end of 2021, Japanese stocks have to disclose their desired section of listing under the new structure of the Tokyo Stock Exchange. Most have already done so.
However, some are yet to announce their intentions. As discussed in TOPIX Inclusions: Who Is READY? 4.0 some of these names could be potential TOPIX Inclusion Candidates.
With ten days to the finish line, below is an update on these potential TOPIX Inclusion Candidates and a discussion on potential trading opportunities. 


TOPIX Inclusions: Who Is READY? 4.1 - Quick Update

<ul>
<li>The new market structure of the Tokyo Stock Exchange (TSE) consisting of Prime and Standard Sections is about to become functional in a few months.</li>
<li>Some companies have already announced their desired Market Sections under this new structure. However, some companies are yet to make such announcements.</li>
<li>In this insight, we take a look at those who are yet to make such announcements to identify attractive TOPIX Inclusion Pre-event candidates. </li>
</ul>


The new market structure of the Tokyo Stock Exchange (TSE) consisting of Prime and Standard Sections is about to become functional in a few months.
Some companies have already announced their desired Market Sections under this new structure. However, some companies are yet to make such announcements.
In this insight, we take a look at those who are yet to make such announcements to identify attractive TOPIX Inclusion Pre-event candidates. 


Japan

Sosei Group Corporation is a holding company which was established through reorganization.  The Group companies are biopharmaceutical companies specializing in drug development.  Sosei Group enters into license agreements primarily with US, EU, and Japanese companies to market the licensed drugs in Japan and find alternative usage on such drugs.

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Sosei Group (4565 JP)

Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess

In H1FY23, revenue from Japan declined 7%, mainly due to drug price revisions in several consecutive years. Generic drug makers are more affected...

Tina Banerjee

Japan Healthcare: Pair Trade Ideas- Long Sosei Group (4565 JP), Short Takara Bio (4974 JP)

Over the last six months, Sosei shares gained 37%, while Takara Bio shares plunged 21%. No immediate reversal is expected. The performance gap...

Tina Banerjee

Insights from Data Mining Technical Publications - Plant Extracts Including from Cannabis

Herbal medicinal and nutraceutical extracts are seen as instruments to maintain health and treat some conditions. Cannabis, in particular, will see...

Pyari Menon

TOPIX Inclusions: Who Is READY? 4.1 - Quick Update

Before the end of 2021, Japanese stocks have to disclose their desired section of listing under TSE's new structure. Some are yet to announce and...

Janaghan Jeyakumar, CFA

TOPIX Inclusions: Who Is READY? 4.0

In this insight, we take a look at potential pre-event candidates who could move to the First Section of the Tokyo Stock Exchange in the next few...

Janaghan Jeyakumar, CFA

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