Company Reports

Narrow-moat Chugai's first-quarter earnings were slightly below our expectations mostly due to lower-than-expected royalty income. However, this is still well within the usual quarterly variability, and overall we think the company remains on track to meet its full year guidance. We maintain our fair value estimate of JPY 5,200 per share. Although the market price is close to our fair value estimate, given our positive view of Chugai's pipeline, we think this stock is worth watching closely and potentially buying on dips.

Narrow-moat Chugai’s full-year earnings were in line with expectations. Full-year revenue was JPY 1.11 trillion and operating profit margin was 36.9%. We've increased our fair value estimate to JPY 5,200 per share from JPY 4,860 due to incrementally higher forecasts for its hemophilia franchise, and we now view shares as fairly valued.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Narrow-moat Chugai's third-quarter earnings were slightly better than expectations on strong overseas shipments of Hemlibra to Roche, which were buoyed by robust demand as well as favorable currency rates. The company is on track to meet its full-year guidance of JPY 1.07 trillion revenue and JPY 415 billion operating profit and may even outperform slightly. We maintain our fair value estimate of JPY 4,860. We view shares as close to fairly valued.

Narrow-moat Chugai’s second-quarter earnings were in line with expectations. We think the company is on track to meet its full-year guidance or even outperform slightly, due to strong sales of Hemlibra to Roche. We maintain our fair value estimate of JPY 4,860. Shares have rallied about 20% since May and are now at an 8% discount to our fair value.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Narrow-moat Chugai’s first-quarter earnings were in line with expectations, with no change in full-year guidance. Revenue for the quarter was JPY 292 billion, which is nominally 13% lower than the same period last year, but 11% higher after excluding Ronapreve shipments and the JPY 91.9 billion lump-sum settlement from Alexion last year. This is on track with the company’s full-year guidance of JPY 1.1 trillion, which remains unchanged. We expect the lumpiness from COVID-19-related sales of Ronapreve and Actemra to be insignificant going forward.

Narrow-moat Chugai Pharmaceutical’s full-year earnings and guidance were in line with expectations. Revenue for fourth-quarter 2022 and the full year, excluding the JPY 92 billion lump-sum settlement from Alexion in the first quarter, were JPY 439 billion and JPY 1.17 trillion respectively, or 36% and 17% year-on-year growth. The quarterly lumpiness is related to coronavirus-related sales, especially Ronapreve (neutralizing antibodies) and Actemra (IL-6 inhibitor) exports to Roche. The company expects to supply Ronapreve to the Japanese government in the first quarter of calendar 2023, after which we think further sales are unlikely given Ronapreve’s lack of efficacy against omicron subvariants.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Narrow-moat Chugai Pharmaceutical's third-quarter results were in line with our expectations. Revenue of JPY 225 million was down 21.6% year on year. The decline was due to the lumpiness of COVID-19-related sales, namely Ronapreve (neutralizing antibodies) and Actemra (IL-6 inhibitor) exports to Roche. The company expects to supply Ronapreve to the Japanese government in the fourth quarter and said Actemra exports were delayed due to manufacturing timing. The company’s guidance suggests a JPY 140 million order for Ronapreve in the fourth quarter, although we are more conservative since this cocktail does not seem to have strong efficacy against omicron subvariants.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Narrow-moat Chugai Pharmaceutical’s second-quarter results were slightly better than expected, although first-half results are in line. After removing JPY 92 million of lump-sum patent infringement settlement from Alexion in the first quarter, revenue for the six months was JPY 504 million, or 29% growth year on year. The second quarter’s revenue was JPY 236 million, or 6% year-on-year growth, which is above our expectation after considering the fact that there was no revenue from Ronapreve (Regeneron’s neutralizing antibody cocktail for COVID-19 treatment). Although the firm has guided approximately JPY 200 million of revenue from Ronapreve in 2022, we are modeling no further revenue from this drug as it is not effective against omicron subvariants.

Narrow-moat Chugai’s first quarter was in line with expectations. After removing JPY 92 million of lump-sum settlement from Alexion related to patent infringement claims on its C5 inhibitor Ultomiris, revenue was JPY 269 million, or a 4.5% decline year on year. The top line was slightly better than our expectations, driven primarily by strong sales in Ronapreve, but this was offset by cost of sales that was 5 percentage points higher than expectation due to shifting product mix.

Narrow-moat Chugai reported full-year earnings and guidance for 2022 stronger than our expectations. Fourth-quarter revenue grew 53% year on year to JPY 264 billion, which is in line with our expectation. Operating income grew 88% year on year to JPY 139 billion, which is above our expectation largely due to greater-than-expected contribution from ex-Japan Hemlibra sales (exports to Roche and royalties from Roche’s sales).

Narrow moat Chugai Pharmaceutical reported third-quarter earnings that surprised to the upside due to higher-than-expected sales of Ronapreve in Japan, the neutralizing antibodies in-licensed from Regeneron for treating mild and moderate COVID-19 cases. Full-year guidance for 2021 revenue was revised upward from JPY 800 billion to JPY 970 billion, and the company also indicated it will achieve growth in 2022. Although we have revised our fiscal 2021 and 2022 estimates to reflect this, we attribute most of this to temporary COVID-19-related sales, and our fair value estimate remains unchanged at JPY 4,860 per share. We think the stock is undervalued and especially think that disclosures on its pipeline will be positive.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Narrow moat Chugai’s reported second-quarter earnings that were in line with our expectations. Top-line revenue was JPY 221 billion, or 17% higher than the same period last year, mostly due to increased sales of Hemlibra, Tecentriq, and Alecensa that was only partially offset by declines in Actemra and Edirol. Progress now for the year is now 43% of our full-year expectation of JPY 704 billion, with similar progress in operating income.

Japanese drug firm Chugai Pharmaceutical has established competitive advantages due to its alliance with majority shareholder Roche as well as its internal research and development engine. While current top products could see new branded and biosimilar threats over the next several years, the combined Roche-Chugai pipeline is robust and promising.

Narrow-moat Chugai’s first quarter was in line with our expectations. Top-line revenue was JPY 169 billion, or 10% lower than the same period last year, mostly due to declines in Edirol and Actemra. Although progress for the year has started off slowly, with the JPY 167 million of revenue representing only 19% progress on our full-year forecast, this is within the usual range of fluctuation given the lumpiness of exports to Roche.