4506 JP

Sumitomo Dainippon Pharma Co.,Ltd.

Healthcare


Presented:06/16/2020
Price:¥1,508.00
Cap:$5.01B
Current Price:¥659.00
Cap:$2.19B

Presented

Date06/16/2020
Price¥1,508.00
Market Cap$5.01B
Ent Value$7.15B
P/E Ratio14.7x
Book Value¥1,332.73
Div Yield1.86%
Shares O/S397.30M
Ave Daily Vol1,155,473
Short IntN/A

Current

Price¥659.00
Market Cap$2.19B
Sumitomo Dainippon Pharma Co., Ltd. engages in manufacture, sale, import, and export of pharmaceutical products. It operates through the Pharmaceutical Business and Other Business segments. The Pharmaceutical Business segment manufactures and sells generic and prescription drugs in Japan, North America, China, and other overseas countries. The Other Business segment division includes food ingredients, additives, chemical products, veterinary drugs, and diagnostic reagents. The company was founded on May 14, 1897 and is headquartered in Osaka, Japan.

Publicly traded companies mentioned herein: Myovant Sciences Ltd (MYOV), Sumitomo Dainippon Pharma Co Ltd (4506 JP), Takeda Pharmaceutical Co Ltd (4502 JP; TAK)

Highlights

According to the presenter, Japanese pharmaceutical companies have not historically adapted well to situations where generic competition impacts a key drug. As such, he believes there’s a structural short case to be made for Sumitomo Dainippon Pharma (4506 JP) shares due to Latuda’s 2023 patent cliff. Neither the current valuation ($6B market cap) or forward Street estimates reflect the risk to revenue and profits that’s just ~2.5 years out, and if Sumitomo’s EBIT margin declines as expected once competition for Latuda enters the market, 2023 earnings could be “decimated.” Also, the presenter does not see any pipeline opportunities that could offset the risk to Latuda, and the recent $3B deal with Roivant puts Sumitomo at over two turns of leverage heading into the cliff. He expects to remain short the stock until it re-rates materially lower.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.