The Point for Japan

Research evidence excerpt

The Point for Japan

maintain our valuation multiple at around the industry average. We maintain our

Neutral rating.

Hiroki Watanabe

Daiichi Sankyo (4568.T) - Trop-2 ADC competitor succeeds in first-line lung

cancer trial in China. Somewhat positive

China's Kelun Biotech (partnered with Merck) announced yesterday that the Trop-

2 ADC sac-TMT succeeded in a first-line lung cancer trial (please see Merck & Co

(MRK.N) - Positive topline from Kelun supports late stage investigation of sac-

TMT). In the first-line trial on PD-L1-negative non-small cell lung cancer subjects

(sac-TMT + Keytruda vs. chemotherapy + Keytruda) there was significant

extension for PFS and a trend toward OS extension as well, so the trial was a

success. This trial resembles Daiichi Sankyo's Datroway TL-07 trial in content. We

see no implications for TL-07's probability of success given different compounds

and medical environments. Daiichi Sankyo is separately evaluating Trop-2-

positive patients, and we see a high probability of success there. However, as

progress for Trop-2 ADCs we think this news is positive and may be slightly

positive for Daiichi Sankyo.

Hidemaru Yamaguchi

Fujifilm Holdings (4901.T) - Nikkei Veritas - CFO comments point to strong

current earnings

Nikkei Veritas published an interview with Fujifilm Holdings CFO Higuchi on July

15. New information included that demand for semiconductor materials is

"extremely strong", that demand for magnetic tape for data center applications is

expanding rapidly (expected to double YoY in FY3/27), that initial FY3/27 guidance

(OP of ¥365bn) assumes FCF of ¥90bn-¥100bn, and that the firm will take a

cautious approach to investments where the debt/EBITDA ratio exceeds 2x (no

comment on JSR). Our impression is somewhat positive.

Masahiro Shibano