Towa Pharmaceutical: Updating our forecasts: Continuing with proactive strategic investments

研报英文原文证据摘录

Towa Pharmaceutical: Updating our forecasts: Continuing with proactive strategic investments

Global Markets Research

9 July 2026Towa Pharmaceutical

4553.T 4553 JP / EQUITY: JAPAN PHARMACEUTICALS

RatingUpdating our forecasts: Continuing with proactive

Remains Neutralstrategic investments

Target price

Aiming for production capacity of 30bn tablets via acquisition of Tanabe Increased from 4,400 JPY 4,500

Pharma Factory

Closing price JPY 4,060We retain Neutral rating, company working to strengthen supply setup over longer term 8 July 2026

Towa Pharmaceutical held a briefing from 15:30 JST on 8 July to discuss the acquisition of Tanabe

Implied upside +10.8%Pharma Factory and the transfer of its manufacturing and sales approvals. See our 6 July 2026 Quick

Note TowaPharmaceutical(4553JP)(Neutral)-TanabePharmaFactorytobecomesubsidiaryof

TowaPharmaceutical for an overview of this acquisition. We raise our forecasts on the expectation that

Tanabe Pharma Factory will feature in consolidated accounts following its acquisition (scheduled for

Relative performance chartNovember) and that this acquisition will translate into increased supply capacity over the medium term.

We also revise our risk-free rate assumption in our DCF model from 1.5% to 2.0% and our WACC

assumption from 4.8% to 5.3%, yielding a target price of ¥4,500. The share price rose 6.5% on 6 July,

the trading day after the acquisition was announced, but then fell slightly. We reiterate our Neutral rating.

Acquisition of Tanabe Pharma Factory and prospective benefits from transfer of its

approvals

Towa Pharmaceutical is aiming to build a stable supply ecosystem for off-patent drugs that

encompasses authorized generics, long-listed drugs, and generics. (1) Turning Tanabe Pharma Factory