Takeda Earnings: Results Beat Expectations and Guidance Raised; Shares Undervalued

Takeda’s second quarter beat our expectations again, driven by the outperformance of several drugs including Entyvio (inflammatory bowel disease), Vyvanse (attention deficit hyperactivity disorder), and Fruzaqla (oncology). Additionally, the company raised its full-year guidance, citing currency rate tailwinds as well as resilient Vyvanse sales in the first half. We maintain our fair value estimate of JPY 4,700 per share. We view the current share price as undervalued, but caveat that price appreciation is likely dependent on pipeline progression over the next few years.