F12/26 2Q Results: Continued Strong Momentum; Awaiting Real Acceleration of Foundayo

研报英文原文证据摘录

F12/26 2Q Results: Continued Strong Momentum; Awaiting Real Acceleration of Foundayo

IdeaMWaiting for Foundayo: For now, we think the main point to watch is whether Lilly's Jun Q

sales exceed $100mn. Lilly's direct sales channels are not included in prescription trends.

We will also be focusing on updates to Lilly's marketing strategy going forward.

Changes to our forecasts: We have revised our forecasts slightly. We raise our

assumption of Nemluvio sales, but lower our forecast for Foundayo. We maintain our bull-

case Foundayo sales assumption for 2035 at $38bn, but provisionally lower the risk

adjustment from 75% to 60%. For Nemluvio, we raise the risk adjustment from 70% to

75%. For other drugs, our adjustments are very small. As a result, we have lowered our

core OP forecasts for the next 3-4 years only slightly, by 3-4%.

Investment rating and price target: We remain OW on Chugai. We think the share price is

likely to hinge on the pace at which Foundayo sales ramp up. Lilly is slated to announce

2Q results on August 5, and this may provide new information that cannot be captured in

prescription trends alone. Therefore, we do not think it makes sense to materially revise

our growth expectations for Foundayo at this time. We lower our price target from

¥10,700 to ¥9,800 to reflect the revisions to our forecasts. Of this reduction, ¥450 is

related to Foundayo and ¥600 to base businesses (reflecting a decline in P/E valuations

for Japan pharmaceutical stocks as a whole), mitigated by a ¥150 increase related to

Nemluvio.

Exhibit 1: Chugai: Our new vs old earnings forecasts

(¥, bn) 2025 2026e 2027e 2028e 2029e 2030e

Act Old New Old New Old New Old New Old New

Sales 1,257.9 1,376.5 1,381.5 1,491.0 1,494.0 1,604.0 1,591.5 1,706.5 1,680.5 1,875.5 1,818.5