Takeda Earnings: Inline Results, Full-Year Guidance Raised, Shares Undervalued

Takeda’s third-quarter earnings were in line with expectations. The company raised full-year guidance yet again, citing lower-than-expected erosion from Vyvanse generics and strong growth in other products. Christophe Weber announced that he will step down as CEO and will be succeeded by Julie Kim, who joined Takeda in 2019 from the Shire acquisition and has strong commercial experience running the plasma business and the US business. We maintain our fair value estimate of JPY 4,700 per share and view the current share price as undervalued. Takeda also announced a share buyback program of up to JPY 100 billion, which we view as incrementally positive given the market price. We believe pipeline progression is the most important catalyst for further price appreciation, and this year could have significant news flow on this front.