Editing Daiichi Sankyo Company, Limited
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=== Sociocultural === | === Sociocultural === | ||
Changing sociocultural factors such as an aging population and growing obesity rates has a positive impact on Daiichi Sankyo, as it | Changing sociocultural factors such as an aging population and growing obesity rates has a positive impact on Daiichi Sankyo, as it specializes in a variety of pharmaceuticals associated with treating diseases linked to aging (e.g. Anti-hypertensives, Anti-epileptics, and drugs for: Type 2 diabetes, pain, bone erosion associated with rheumatoid arthritis, lowering cholesterol, etc.)<ref>https://www.daiichisankyo.com/products/</ref> | ||
=== Technological === | === Technological === | ||
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== Industry Overview == | == Industry Overview == | ||
Daiichi Sankyo operates in the pharmaceutical industry, which is | Daiichi Sankyo operates in the pharmaceutical industry, which is characterized by high levels of research and development, stringent regulatory environments, and intense competition. The industry is driven by innovation, with companies constantly seeking to develop new treatments and therapies. The industry has been positively impacted by the COVID-19 pandemic, with increased focus on healthcare and accelerated vaccine development. | ||
== Competitor Comparison == | == Competitor Comparison == | ||
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The 5-Year Plan is built upon 4 key strategic pillars<ref>https://www.daiichisankyo.com/files/investors/library/materials/2021/20210405_5th_MTP_E.pdf</ref>, with these being: | The 5-Year Plan is built upon 4 key strategic pillars<ref>https://www.daiichisankyo.com/files/investors/library/materials/2021/20210405_5th_MTP_E.pdf</ref>, with these being: | ||
=== | === Maximize 3ADCs === | ||
* | * Maximize ENHERTU and DAto-DXd through strategic alliance with AstraZeneca | ||
* | * Maximize HER3-DXd without a partner | ||
* Expand work force and supply capacity flexibly depending on changes around product potential | * Expand work force and supply capacity flexibly depending on changes around product potential | ||
=== Profit growth for current business and products === | === Profit growth for current business and products === | ||
* | * Maximize Lixiana profit | ||
* Grow Tarlige, Nilemdo, etc. quickly | * Grow Tarlige, Nilemdo, etc. quickly | ||
* Transform to profit on structure focused on patented drugs | * Transform to profit on structure focused on patented drugs | ||
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== Products == | == Products == | ||
The company | The company specializes in a diverse array of pharmaceutical goods, with drugs devoted primarily for oncological and cardiovascular treatment, with its 2 flagship products being '''ENHERTU®''' a HER2 directed antibody drug conjugate (ADC) used in the treatment of HER2 positive breast cancer, and '''LIXIANA®''' a direct factor Xa inhibitor, used to prevent blood clots and thus inhibiting risk of heart attack and stroke.<ref>https://www.daiichisankyo.com/products/</ref> | ||
The company entered a collaboration with AstraZeneca in 2020 for a Daiichi Sankyo DXd (potent DNA topoisomerase I inhibitor) antibody drug conjugate (ADC), with $1 billion being paid upfront to Daichii Sankyo from AstraZeneca and a further $5 billion upon achievement of future regulatory and sales milestones. The company is developing a number of DXd drugs, known as the "3ADCs" in the company's R&D pipeline, however the agreement with AstraZeneca concerns '''Dato-DXd''' drugs. Both companies will jointly develop and | The company entered a collaboration with AstraZeneca in 2020 for a Daiichi Sankyo DXd (potent DNA topoisomerase I inhibitor) antibody drug conjugate (ADC), with $1 billion being paid upfront to Daichii Sankyo from AstraZeneca and a further $5 billion upon achievement of future regulatory and sales milestones. The company is developing a number of DXd drugs, known as the "3ADCs" in the company's R&D pipeline, however the agreement with AstraZeneca concerns '''Dato-DXd''' drugs. Both companies will jointly develop and commercialize Dato-DXds worldwide, except with Daiichi Sankyo holding exclusive rights in Japan<ref>https://www.daiichisankyo.com/media/press_release/detail/index_3126.html</ref>. This is the second global collaboration with AstraZeneca, with the first being a similar agreement for Daiichi Sanyo's ENHERTU'''®'''. | ||
The 3ADCs are a crucial strategic pillar of Daiichi Sankyo's 5-Year Plan, with oncology making up a significant portion of the revenue target by FY2025 (Total Revenue: 1.6 Tr HPY, Oncology > 600.0 Bn JPY), and ENHERTU'''®''' being a significant portion of oncology revenue (~90%).<ref>https://www.daiichisankyo.com/files/investors/library/materials/2021/20210405_5th_MTP_E.pdf</ref> | The 3ADCs are a crucial strategic pillar of Daiichi Sankyo's 5-Year Plan, with oncology making up a significant portion of the revenue target by FY2025 (Total Revenue: 1.6 Tr HPY, Oncology > 600.0 Bn JPY), and ENHERTU'''®''' being a significant portion of oncology revenue (~90%).<ref>https://www.daiichisankyo.com/files/investors/library/materials/2021/20210405_5th_MTP_E.pdf</ref> | ||
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=== Dato-DXd === | === Dato-DXd === | ||
Trophoblast cell surface antigen 2 (TROP2) is highly expressed on a variety of epithelial tumours and correlates with a poor prognosis, Dato-DXd is being developed as a novel TROP2-directed ADC. Dato-DXd demonstrated potent antitumor activity against TROP2-expressing tumors via efficent payload delivery into tumors alongside acceptable safety profiles in preclinical models, suggesting Dato-DXd could be a valuable treatment | Trophoblast cell surface antigen 2 (TROP2) is highly expressed on a variety of epithelial tumours and correlates with a poor prognosis, Dato-DXd is being developed as a novel TROP2-directed ADC. Dato-DXd demonstrated potent antitumor activity against TROP2-expressing tumors via efficent payload delivery into tumors alongside acceptable safety profiles in preclinical models, suggesting Dato-DXd could be a valuable treatment. | ||
Daiichi Sankyo has a variety of Dato-DXd products currently in different phases of clinical trials: | Daiichi Sankyo has a variety of Dato-DXd products currently in different phases of clinical trials: | ||
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HER3-DXd is a novel ADC, which specifically targets HER3. In a study 57 patients recieving HER3-DXd the <u>objective response rate</u>**** was found to be 39% and the median <u>progression-free survival</u>***** was 8.2 months. Responses were also observed in patients with known and unknown EGFR TKI resistance mechanisms<ref>https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9401524/</ref> | HER3-DXd is a novel ADC, which specifically targets HER3. In a study 57 patients recieving HER3-DXd the <u>objective response rate</u>**** was found to be 39% and the median <u>progression-free survival</u>***** was 8.2 months. Responses were also observed in patients with known and unknown EGFR TKI resistance mechanisms<ref>https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9401524/</ref> | ||
A list of | A list of T-DXd drugs currently in clinical trials can be found [https://www.daiichisankyo.com/files/rd/pipeline/index/pdf/pipeline2304_en.pdf here] in green. | ||
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=== 3ADC Conclusion === | === 3ADC Conclusion === | ||
In conclusion, Daiichi Sankyo is developing a '''wide range''' of '''cancer-targeting drugs''', with a primary focus on breast | In conclusion, Daiichi Sankyo is developing a '''wide range''' of '''cancer-targeting drugs''', with a primary focus on breast cancer, with Dato-DXds targeting hormone receptor positive, HER2 low or HER2 negative breast cancer, and triple negative breast cancer. T-DXds (such as ENHERTU®) targeting HER2 positive breast cancer, particularly when a patient has received prior anti-HER2 treatment. HER3-DXds targeting HER3 positive breast cancer, and particularly in cases where the patient has become resistant to first-line treatments (such as EGFR TKIs). | ||
== Leadership == | == Leadership == | ||
[[File:Manabe.jpg|thumb|189x189px|Sunao Manabe - Representative Director, Executive Chairperson & CEO | [[File:Manabe.jpg|thumb|189x189px|Sunao Manabe - Representative Director, Executive Chairperson & CEO[[File:Okuzawa-san 2021.jpg|thumb|189x189px|Hiroyuko Okuzawa - Representative Director, President & COO[[File:Hirashima-san 2021.jpg|thumb|187x187px|Shoji Hirashima - Representative Director, SEO, Head of Japan Business Unit[[File:Ohtsuki-san 2021.jpg|thumb|184x184px|Masahiko Ohtsuki - Director, SEO, Head of Global DX CDXO[[File:Fukuoka-san.jpg|thumb|181x181px|Takashi Fukuoka - Director, SEO, Head of Global Corporate Strategy[[File:Kama-san 2021.jpg|thumb|176x176px|Kazuaki Kama - Outside Director (Independent Director), Chairperson of the Board[[File:Nohara-san 2021.jpg|thumb|177x177px|Sawako Nohara - Outside Director (Independent Director), Chairperson of the Compensation Committee[[File:Komatsu-san 2206.jpg|thumb|171x171px|Yasuhiro Komatsu - Outside Director (Independent Director)]]]]]]]]]]]]]]]] | ||
=== Board Of Directors: === | === Board Of Directors: === | ||
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'''Yasuhiro Komatsu''' is an '''Outside Director''' and has been since Jun. 2022. He has been a Director and Chairman at a diverse array of Hospitals and Healthcare Departments. Assisting the company with a key strategic pillar, creating shared value with stakeholders, providing insight on creating a "Patient Centric Mindset" | '''Yasuhiro Komatsu''' is an '''Outside Director''' and has been since Jun. 2022. He has been a Director and Chairman at a diverse array of Hospitals and Healthcare Departments. Assisting the company with a key strategic pillar, creating shared value with stakeholders, providing insight on creating a "Patient Centric Mindset" | ||
== Financials == | == Financials == | ||
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| colspan="5" |'''Liabilities:''' | | colspan="5" |'''Liabilities:''' | ||
|- | |- | ||
| colspan="5" |'''Current Liabilities:''' | | colspan="5" |'''Current Liabilities:''' | ||
|- | |- | ||
|Current Provisions | |Current Provisions | ||
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|530,263,000 | |530,263,000 | ||
|- | |- | ||
| colspan="5" |'''Non-Current Liabilities:''' | | colspan="5" |'''Non-Current Liabilities:''' | ||
|- | |- | ||
|Long Term Provisions | |Long Term Provisions | ||
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|1,917 million | |1,917 million | ||
|} | |} | ||
Daiichi Sankyo has shown strong financial performance with revenues increasing by 22% to 1.278 trillion yen and net income increasing by 63% to 108.95 billion yen for the fiscal year ending in March 2023. The company's return on equity (ROE) is 7.8%, indicating efficient use of equity. | Daiichi Sankyo has shown strong financial performance with revenues increasing by 22% to 1.278 trillion yen and net income increasing by 63% to 108.95 billion yen for the fiscal year ending in March 2023. The company's current ratio is 2.8, indicating a strong liquidity position. The company's debt ratio is 9.7, which is relatively low, indicating a manageable level of debt. | ||
The company's return on assets (ROA) is 4.6% and return on equity (ROE) is 7.8%, indicating efficient use of assets and equity. The company's gross margin is 71.6% and net profit margin is 8.5%, indicating strong profitability. | |||
== Valuation == | == Valuation == | ||
The company's current price-to-earnings (P/E) ratio is 69.15, which is relatively high, indicating that the company's stock may be overvalued. The company's price-to-book (P/B) ratio is 5.21, which is also relatively high. | |||
== Technical Analysis == | |||
The company's stock price has shown some volatility, with a 1-year return of 11.47%. However, the stock price has declined by 6.29% year-to-date. The company's beta is 1.06, indicating that the stock is slightly more volatile than the market. | |||
== Catalysts == | == Catalysts == | ||
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== Risk == | == Risk == | ||
Investing in Daiichi Sankyo involves risks such as market risk, regulatory risk, and competition risk. The company's high valuation ratios also indicate a risk of overvaluation. | Investing in Daiichi Sankyo involves risks such as market risk, regulatory risk, and competition risk. The company's high valuation ratios also indicate a risk of overvaluation. | ||
== Investment Thesis == | == Investment Thesis == |