Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

Equity Bottom-Up

Key Drivers<ul>
<li>Stable income of ¥ 0.5b - ¥1b from Animal Healthcare segment</li>
<li>Pharma segment – royalty income from Tegoprazan (South K approved June 2018) and Ziprasidone (PhIII, approval expected in FY20e)</li>
<li>Potential upfront/milestones from the partnered assets and/or or out-licensing activity but timeline uncertain</li>
</ul>Valuations<ul><li>Our explicit revenue projection until 2030e, which includes probability adjusted royalty from tegoprazan (PoS 100%), Ziprasidone (PoS 90%) and tamibarotene (PoS 30%) yields DCF based fair value of ¥ 800 / share. We add acquisition premium of ~50% to arrive at target price of ¥1,200 / share</li></ul>

Key Drivers
Stable income of ¥ 0.5b - ¥1b from Animal Healthcare segment
Pharma segment – royalty income from Tegoprazan (South K approved June 2018) and Ziprasidone (PhIII, approval expected in FY20e)
Potential upfront/milestones from the partnered assets and/or or out-licensing activity but timeline uncertain
ValuationsOur explicit revenue projection until 2030e, which includes probability adjusted royalty from tegoprazan (PoS 100%), Ziprasidone (PoS 90%) and tamibarotene (PoS 30%) yields DCF based fair value of ¥ 800 / share. We add acquisition premium of ~50% to arrive at target price of ¥1,200 / share

Raqualia Pharma

Investment Thesis and Valuation