Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/peptidream-inc" target="_blank" data-smartkarma-citation="entities:13514:1" rel="noopener">Peptidream Inc (4587 JP)</a> aspires to be a world leader in drug discovery and development to address unmet medical needs by leveraging on proprietary PDPS technology, a peptide discovery platform.</li>
<li>Driven by expanding research collaboration programs and progressing pipelines, Peptidream guided for revenue of ¥13–15B from drug discovery and development business in 2022, up from ¥9.4B in 2021.</li>
<li>Foray into Radiopharma adds a regular revenue stream. Peptidream expects the business to report revenue of ~¥11.5B and remain marginally profitable for 2022.</li>
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Peptidream Inc (4587 JP) aspires to be a world leader in drug discovery and development to address unmet medical needs by leveraging on proprietary PDPS technology, a peptide discovery platform.
Driven by expanding research collaboration programs and progressing pipelines, Peptidream guided for revenue of ¥13–15B from drug discovery and development business in 2022, up from ¥9.4B in 2021.
Foray into Radiopharma adds a regular revenue stream. Peptidream expects the business to report revenue of ~¥11.5B and remain marginally profitable for 2022.


Peptidream (4587 JP): Rising Drug Discovery Collaborations To Drive Growth; New Revenue Stream Added

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<a href="https://www.smartkarma.com/entities/ono-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:8979:1" rel="noopener">Ono Pharmaceutical (4528 JP)</a> is an innovation driven pharmaceutical company, with major focus on oncology. Opdivo, Forxiga, and Orencia are the top three products, together contributing ~75% of product revenue.</li>
<li>While the competition intensified, use of Opdivo for malignant tumors was expanded to first-line treatment for NSCLC, esophageal cancer, and gastric cancer, resulting in FY22 sales of ¥112.4B (+14% y/y).</li>
<li>Ono’s second largest drug Forxiga is also on a double-digit growth path. The company has been expanding its pipeline beyond Opdivo by reinforcement of in-house research and in-licensing activities.</li>
</ul>



Ono Pharmaceutical (4528 JP) is an innovation driven pharmaceutical company, with major focus on oncology. Opdivo, Forxiga, and Orencia are the top three products, together contributing ~75% of product revenue.
While the competition intensified, use of Opdivo for malignant tumors was expanded to first-line treatment for NSCLC, esophageal cancer, and gastric cancer, resulting in FY22 sales of ¥112.4B (+14% y/y).
Ono’s second largest drug Forxiga is also on a double-digit growth path. The company has been expanding its pipeline beyond Opdivo by reinforcement of in-house research and in-licensing activities.


Ono Pharmaceutical (4528 JP): Key Drugs On High Growth Trajectory; Pipeline Expands Beyond Opdivo

Thematic (Sector/Industry)

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<li>In terms of geography, Japan is still our top pick, primarily due to attractive multiple, favorable Fx, and low leverage. Despite macroeconomic headwinds, Australia biotech is another area of interest.</li>
<li>Among our four top picks, Gland Pharma reported year-over-year decline across all parameters during Q2FY23 due to supply woes. Near-term outlook is uncertain.</li>
<li>Apollo Hospitals reported strong quarterly performance, with all operating parameters improving year-over-year. Olympus remained a prime beneficiary of weak yen, while Samsung Biologics’ robust order book entail visibility.</li>
</ul>


In terms of geography, Japan is still our top pick, primarily due to attractive multiple, favorable Fx, and low leverage. Despite macroeconomic headwinds, Australia biotech is another area of interest.
Among our four top picks, Gland Pharma reported year-over-year decline across all parameters during Q2FY23 due to supply woes. Near-term outlook is uncertain.
Apollo Hospitals reported strong quarterly performance, with all operating parameters improving year-over-year. Olympus remained a prime beneficiary of weak yen, while Samsung Biologics’ robust order book entail visibility.


APAC Healthcare Series (Part 4)- Japan Continues to Be in a Sweet Spot; Top Picks Quarterly Update

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<li>The Japanese yen has been depreciating at a rate never seen before. Amid weakening domestic currency, Japan’s healthcare stocks have mostly outperformed their regional peers, due to their export-led growth.</li>
<li>Cash rich and fundamentally strong healthcare companies in Japan, with large international revenue exposure should be the key focus areas now.</li>
<li>Two of our top picks are sitting on double-digit gains, while the other two are facing temporary setbacks. Long-term fundamental story remains intact for all of them.   </li>
</ul>


The Japanese yen has been depreciating at a rate never seen before. Amid weakening domestic currency, Japan’s healthcare stocks have mostly outperformed their regional peers, due to their export-led growth.
Cash rich and fundamentally strong healthcare companies in Japan, with large international revenue exposure should be the key focus areas now.
Two of our top picks are sitting on double-digit gains, while the other two are facing temporary setbacks. Long-term fundamental story remains intact for all of them.   


APAC Healthcare Series (Part 3)- Focus Is on Japan; Top Picks Are Mostly in The Pink of Health

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<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> has raised revenue guidance for H1FY23 by 6%, due to continued strong performance of its four global brands, which contribute more than 35% of total revenue.</li>
<li>However, the company has cut operating and net profit guidance for H1FY23, mainly due to one-off charge related to elimination of unrealized gains on inventories caused by yen depreciation.</li>
<li>Otsuka received positive CHMP opinion for lupus nephritis drug, Lupkynis. This will pave the way for gaining marketing approval of the drug in Europe.</li>
</ul>



Otsuka Holdings (4578 JP) has raised revenue guidance for H1FY23 by 6%, due to continued strong performance of its four global brands, which contribute more than 35% of total revenue.
However, the company has cut operating and net profit guidance for H1FY23, mainly due to one-off charge related to elimination of unrealized gains on inventories caused by yen depreciation.
Otsuka received positive CHMP opinion for lupus nephritis drug, Lupkynis. This will pave the way for gaining marketing approval of the drug in Europe.


Otsuka Holdings (4578 JP): Revenue Guidance Raise and New Products Line-Up Enhance Conviction

Japan

ONO PHARMACEUTICAL CO., LTD. manufactures and sells pharmaceutical products. The Company mainly researches and develops prescription drugs.

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Ono Pharmaceutical (4528 JT)

Peptidream (4587 JP): Rising Drug Discovery Collaborations To Drive Growth; New Revenue Stream Added

In long-term, Peptidream targets ¥100B revenue from ¥9.4B in 2021. While base business is poised for steady growth via expansion of collaboration...

Tina Banerjee

Ono Pharmaceutical (4528 JP): Key Drugs On High Growth Trajectory; Pipeline Expands Beyond Opdivo

Driven by indication expansion, Ono expects Opdivo sales to reach ¥155B in FY23, up 38% y/y. The company is developing clinical pipeline beyond...

Tina Banerjee

APAC Healthcare Series (Part 4)- Japan Continues to Be in a Sweet Spot; Top Picks Quarterly Update

Japan healthcare companies with high export revenue, continue to benefit from favorable Fx. Three of our top picks reported strong quarterly...

Tina Banerjee

APAC Healthcare Series (Part 3)- Focus Is on Japan; Top Picks Are Mostly in The Pink of Health

Two of our top picks in APAC healthcare sector are sitting on double-digit gains, while the other two are facing temporary setbacks. Long-term...

Tina Banerjee

Otsuka Holdings (4578 JP): Revenue Guidance Raise and New Products Line-Up Enhance Conviction

Otsuka has raised H1FY23 revenue guidance. However, profits will be negatively impacted by one-off charges. Guidance raise and new product line-up...

Tina Banerjee

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