Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/otsuka-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12292:1" rel="noopener">Otsuka Holdings (4578 JP)</a> ended 2023 on a mixed note. Both revenue and business profit were ahead of guidance. However, operating and net profits missed guidance, dragged by impairment loss.</li>
<li>Four global pharmaceutical products as well as the nutraceuticals business led the business performance. Even after excluding the impact of foreign exchange, the business remained above plan.</li>
<li>The company has guided for 6% YoY growth in 2024 revenue and business profit to ¥2,140B and ¥330B, respectively. 2024 net profit is expected to jump 106% YoY to ¥250B.</li>
</ul>



Otsuka Holdings (4578 JP) ended 2023 on a mixed note. Both revenue and business profit were ahead of guidance. However, operating and net profits missed guidance, dragged by impairment loss.
Four global pharmaceutical products as well as the nutraceuticals business led the business performance. Even after excluding the impact of foreign exchange, the business remained above plan.
The company has guided for 6% YoY growth in 2024 revenue and business profit to ¥2,140B and ¥330B, respectively. 2024 net profit is expected to jump 106% YoY to ¥250B.


Otsuka Holdings (4578 JP): Impairment Charges Bite 2023 Profit; 2024 Guidance Initiated

<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> reported 5% YoY decline in core revenue in 2023, due to the decrease in the supply of COVID-19 treatment Ronapreve to the government.</li>
<li>For 2024, Chugai expects core revenue to decline mainly due to the absence of Ronapreve revenue and decline in Actemra export. However, operating and net profits are expected to increase.</li>
<li>Hemlibra export and new launches such as Vabysmo, Phesgo, Polivy, and Alecensa are expected to drive long-term growth of the company.</li>
</ul>



Chugai Pharmaceutical (4519 JP) reported 5% YoY decline in core revenue in 2023, due to the decrease in the supply of COVID-19 treatment Ronapreve to the government.
For 2024, Chugai expects core revenue to decline mainly due to the absence of Ronapreve revenue and decline in Actemra export. However, operating and net profits are expected to increase.
Hemlibra export and new launches such as Vabysmo, Phesgo, Polivy, and Alecensa are expected to drive long-term growth of the company.


Chugai Pharmaceutical (4519 JP): Ronapreve Killed Joy in 2023; New Products to Drive Growth Ahead

<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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Japan Catalyst Fund is a relatively young effort in the Japan "engagement activism" space, having been founded by Monex Group in September 2019. Total assets remain apparently small.</li>
<li>Championed by Monex Group founder Oki Matsumoto, despite small AUM, the fund has decent access. As of end-October, <a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdings (4581 JP)</a> was #5 and 5.26%. Now it's #2.</li>
<li>Friday, they released a statement about the MBO. It isn't a barn-burner, but the stock has traded through terms since announcement at a too-low price. And nobody else has commented.</li>
</ul>


Japan Catalyst Fund is a relatively young effort in the Japan "engagement activism" space, having been founded by Monex Group in September 2019. Total assets remain apparently small.
Championed by Monex Group founder Oki Matsumoto, despite small AUM, the fund has decent access. As of end-October, Taisho Pharmaceutical Holdings (4581 JP) was #5 and 5.26%. Now it's #2.
Friday, they released a statement about the MBO. It isn't a barn-burner, but the stock has traded through terms since announcement at a too-low price. And nobody else has commented.


Japan Activism:  Japan Catalyst Fund Calls Out Taisho Pharma Committee on MBO Price

Japan

Takeda Pharmaceutical Co Ltd focuses on the Research & Development, Manufacturing, Sales and Marketing and Import/Export of Pharmaceutical Drugs. The Company focuses on the following core therapeutic areas: Cardiovascular & Metabolic, Oncology, Central Nervous System, Respiratory & Immunology, General Medicine (Gastrointestinal & Genitourinary) and Vaccine.

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Takeda Pharmaceutical (4502 JP)

Otsuka Holdings (4578 JP): Impairment Charges Bite 2023 Profit; 2024 Guidance Initiated

Otsuka missed 2023 operating and net profit targets due to impairment loss. 6% YoY growth is expected for 2024 revenue and business profit. Net...

Tina Banerjee

Chugai Pharmaceutical (4519 JP): Ronapreve Killed Joy in 2023; New Products to Drive Growth Ahead

Chugai reported 5% decline in 2023 revenue, dragged by Ronapreve. Despite no revenue from Ronapreve, 2024 revenue is expected to decline just 4%...

Tina Banerjee

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

Japan Activism: Japan Catalyst Fund Calls Out Taisho Pharma Committee on MBO Price

Japan Catalyst Fund (an engagement activist) operated by Monex is small, but Taisho Pharm was their 5th largest position at end-Oct. They appear to...

Travis Lundy

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52-week Range

Market Cap (USDm)

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Otsuka Holdings (4578 JP): Impairment Charges Bite 2023 Profit; 2024 Guidance Initiated

​Otsuka missed 2023 operating and net profit targets due to impairment loss. 6% YoY growth is expected for 2024 revenue and business profit. Net...

Tina Banerjee

Chugai Pharmaceutical (4519 JP): Ronapreve Killed Joy in 2023; New Products to Drive Growth Ahead

​Chugai reported 5% decline in 2023 revenue, dragged by Ronapreve. Despite no revenue from Ronapreve, 2024 revenue is expected to decline just 4%...

Tina Banerjee

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

Japan Activism: Japan Catalyst Fund Calls Out Taisho Pharma Committee on MBO Price

Japan Catalyst Fund (an engagement activist) operated by Monex is small, but Taisho Pharm was their 5th largest position at end-Oct. They appear to...

Travis Lundy

Otsuka missed 2023 operating and net profit targets due to impairment loss. 6% YoY growth is expected for 2024 revenue and business profit. Net...

Chugai reported 5% decline in 2023 revenue, dragged by Ronapreve. Despite no revenue from Ronapreve, 2024 revenue is expected to decline just 4%...

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