Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/sumitomo-pharma-co" target="_blank" data-smartkarma-citation="entities:1935:1" rel="noopener">Sumitomo Pharma (4506 JP)</a> reported double-digit revenue growth in Q1FY25, driven by North America. Operating loss narrowed. Net profit stood at ¥16B in Q1FY25 (Q1FY24 net loss: ¥39B).</li>
<li>Robust performance of key products, gross margin expansion, achievement of sizable benefits from the North America business restructure, and streamlining R&amp;D initiatives are the key positives in Q1FY25 result.</li>
<li>Sumitomo is expected to revise FY25 guidance during H1FY25 result announcement. Better-than-expected performance from key drugs as well as favorable Fx should lead to upward revision of revenue guidance.</li>
</ul>



Sumitomo Pharma (4506 JP) reported double-digit revenue growth in Q1FY25, driven by North America. Operating loss narrowed. Net profit stood at ¥16B in Q1FY25 (Q1FY24 net loss: ¥39B).
Robust performance of key products, gross margin expansion, achievement of sizable benefits from the North America business restructure, and streamlining R&amp;D initiatives are the key positives in Q1FY25 result.
Sumitomo is expected to revise FY25 guidance during H1FY25 result announcement. Better-than-expected performance from key drugs as well as favorable Fx should lead to upward revision of revenue guidance.


Sumitomo Pharma (4506 JP): Q1FY25 Result Shows Early Sign of Performance Reversal

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<a href="https://www.smartkarma.com/entities/sumitomo-pharma-co" target="_blank" data-smartkarma-citation="entities:1935:1" rel="noopener">Sumitomo Pharma (4506 JP)</a> cut FY24 revenue guidance by 1% to ¥314.6B (-43% YoY) and raised operating loss guidance by ¥199B to ¥355B. Impairment loss of ¥180B negatively impacted bottomline.</li>
<li>Sumitomo has set FY25 revenue guidance at ¥338B (down 27% from MTBP 2027) and core operating profit at ¥1B (down 98% from MTBP 2027). The company suspended FY25 dividend.</li>
<li>The company will announce FY25 guidance for operating and net profits during the announcement of FY24 result, scheduled for May 14, 2024.</li>
</ul>



Sumitomo Pharma (4506 JP) cut FY24 revenue guidance by 1% to ¥314.6B (-43% YoY) and raised operating loss guidance by ¥199B to ¥355B. Impairment loss of ¥180B negatively impacted bottomline.
Sumitomo has set FY25 revenue guidance at ¥338B (down 27% from MTBP 2027) and core operating profit at ¥1B (down 98% from MTBP 2027). The company suspended FY25 dividend.
The company will announce FY25 guidance for operating and net profits during the announcement of FY24 result, scheduled for May 14, 2024.


Sumitomo Pharma (4506 JP): FY24 Guidance Revised Lower; Further Cost Cuts in FY25 to Turn Profitable

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<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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<a href="https://www.smartkarma.com/entities/sumitomo-pharma-co" target="_blank" data-smartkarma-citation="entities:1935:1" rel="noopener">Sumitomo Pharma (4506 JP)</a> still expects FY24 revenue of ¥362 billion (down 35% YoY). This implies H2FY24 revenue of ¥209.4 billion, up 37% compared with H1FY24.</li>
<li>To achieve this target, North America needs to perform strongly. H1FY24 revenue from North America has shown a progress rate of just 35% against full-year FY24 revenue guidance.</li>
<li>With the absence of any strong catalyst, we expect recent rally in Sumitomo shares fueled by encouraging clinical trial result and new drug approval in China, will be short-lived.</li>
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Sumitomo Pharma (4506 JP) still expects FY24 revenue of ¥362 billion (down 35% YoY). This implies H2FY24 revenue of ¥209.4 billion, up 37% compared with H1FY24.
To achieve this target, North America needs to perform strongly. H1FY24 revenue from North America has shown a progress rate of just 35% against full-year FY24 revenue guidance.
With the absence of any strong catalyst, we expect recent rally in Sumitomo shares fueled by encouraging clinical trial result and new drug approval in China, will be short-lived.


Sumitomo Pharma (4506 JP): FY24 Guidance Seems to Be Aggressive; Downtrend Will Likely To Continue

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Japan Petroleum Exploration / Event-Driven

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<li>Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.</li>
<li>The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.</li>
<li>In this insight I look at several possible rankings for potential large buyback targets.</li>
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Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.
The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.
In this insight I look at several possible rankings for potential large buyback targets.


JAPAN GOVERNANCE CHANGES II - Who Could Surprise on Buybacks? Quant Rankings

Japan

Sumitomo Dainippon Pharma Co., Ltd. mainly manufactures and markets pharmaceuticals for human and veterinary use. The Company also produces and sells livestock feeds, food additives, and chemical products, as well as conducts clinical pathology tests for animals. Sumitomo Dainippon Pharma conducts businesses across worldwide.

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Sumitomo Pharma (4506 JP)