Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

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<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> reported 4QFY03/2022 results yesterday. Reported revenue grew 13.4% YoY to JPY873.3bn (vs consensus JPY825.7bn) while the company reported operating losses of JPY1.7bn.</li>
<li>Revenue from Top 14 drugs grew 20.3% YoY, while revenue from top-seller Entyvio grew 15.0% YoY during the quarter. Excluding Entyvio, other top 13 drugs grew 23.3% during the period.</li>
<li>Takeda’s shares moved down 2.0% at the end of yesterday’s trading and down 3% during today’s trade as profit drop disappointed the market.</li>
</ul>



Takeda Pharmaceutical (4502 JP) reported 4QFY03/2022 results yesterday. Reported revenue grew 13.4% YoY to JPY873.3bn (vs consensus JPY825.7bn) while the company reported operating losses of JPY1.7bn.
Revenue from Top 14 drugs grew 20.3% YoY, while revenue from top-seller Entyvio grew 15.0% YoY during the quarter. Excluding Entyvio, other top 13 drugs grew 23.3% during the period.
Takeda’s shares moved down 2.0% at the end of yesterday’s trading and down 3% during today’s trade as profit drop disappointed the market.


Takeda 4QFY22: Top Line Expands and Pipeline Development Progresses Despite OP Drop

Global Healthcare Analyst

Tina Banerjee

Equity Capital Markets

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<a href="https://www.smartkarma.com/entities/hillevax-inc" target="_blank" data-smartkarma-citation="entities:35844:1" rel="noopener">HilleVax (HLVX US)</a>, a novel vaccine developer intends to raise $100 million through an IPO. Its lead program HIL-214, intended to prevent norovirus infection is in phase 2 clinical trial.</li>
<li>The number of shares to be offered and the price range are yet to be disclosed. Post listing, the company will trade under the ticker HLVX on the Nasdaq.</li>
<li>HIL-214’s large addressable market, with huge unmet need, HilleVax’s earlier fund-raising history, and Takeda’s backing are some of the positives of this new offering.  </li>
</ul>



HilleVax (HLVX US), a novel vaccine developer intends to raise $100 million through an IPO. Its lead program HIL-214, intended to prevent norovirus infection is in phase 2 clinical trial.
The number of shares to be offered and the price range are yet to be disclosed. Post listing, the company will trade under the ticker HLVX on the Nasdaq.
HIL-214’s large addressable market, with huge unmet need, HilleVax’s earlier fund-raising history, and Takeda’s backing are some of the positives of this new offering.  


HilleVax Pre-IPO: Lead Candidate Has Potential to Become First Approved Vaccine for Norovirus

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

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

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<li>
<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> has been aggressively expanding its rare disease portfolio following recent hiccups in its development pipeline through Tie-Ups with different gene therapy developers.</li>
<li>Rare diseases biz is the second largest business segment for Takeda generating about 17.1% of total revenues for the company.</li>
<li>Takeda’s share price started plunging after suspending a phase 2 study of TAK-994 in October 2021 and price started moving up since January and we think there is further upside.</li>
</ul>



Takeda Pharmaceutical (4502 JP) has been aggressively expanding its rare disease portfolio following recent hiccups in its development pipeline through Tie-Ups with different gene therapy developers.
Rare diseases biz is the second largest business segment for Takeda generating about 17.1% of total revenues for the company.
Takeda’s share price started plunging after suspending a phase 2 study of TAK-994 in October 2021 and price started moving up since January and we think there is further upside.


Takeda Strengthens Rare Disease Portfolio Through Tie-Ups with Gene Therapy Developers

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<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> shares declined 2% since we published our bearish note on the company in December. We remain bearish on the name.</li>
<li>Chugai is betting big on Actemra, Hemlibra, and Ronapreve for achieving 2022 revenue target. However, these have bleak outlook due to competition and uncertainty regarding COVID-19 prevalence globally.</li>
<li>Chugai does not have any big launches expected this year. Pipeline has less visibility for compensating the revenue loss from the patent expired products.</li>
</ul>



Chugai Pharmaceutical (4519 JP) shares declined 2% since we published our bearish note on the company in December. We remain bearish on the name.
Chugai is betting big on Actemra, Hemlibra, and Ronapreve for achieving 2022 revenue target. However, these have bleak outlook due to competition and uncertainty regarding COVID-19 prevalence globally.
Chugai does not have any big launches expected this year. Pipeline has less visibility for compensating the revenue loss from the patent expired products.


Chugai Pharmaceutical (4519 JP): Key Drugs Are Facing Competition; 2022 Target Seems Aggressive

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)

Takeda 4QFY22: Top Line Expands and Pipeline Development Progresses Despite OP Drop

The decline in OP was due to divestitures which remained a key headwind for margins during the last fiscal year. Excluding these, core OP for 4Q...

Shifara Samsudeen, ACMA, CGMA

HilleVax Pre-IPO: Lead Candidate Has Potential to Become First Approved Vaccine for Norovirus

Norovirus vaccine developer, Hillevax, formed by Takeda Pharmaceutical and PE firm Frazier Healthcare Partners, is seeking to raise up to $100...

Tina Banerjee

TOPIX FFW Transition - Big Flows from April to June

Changes to the Topix FFW methodology will result in a turnover of 2.87% & trade of ¥2,285bn from April to June. There is a lot to trade on some...

Brian Freitas

Takeda Strengthens Rare Disease Portfolio Through Tie-Ups with Gene Therapy Developers

Takeda has been aggressively expanding its rare disease portfolio following recent hiccups in its development pipeline through Tie-Ups with...

Shifara Samsudeen, ACMA, CGMA

Chugai Pharmaceutical (4519 JP): Key Drugs Are Facing Competition; 2022 Target Seems Aggressive

We remain bearish on Chugai Pharmaceutical as its largest selling drugs are facing competition. For 2022, the company is expecting just 1.4% y/y...

Tina Banerjee

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