MITSUBISHI TANABE: Multiple Catalysts Warrant Short Term Correction Opportunity - Offer Good Entry Point!
A number of maturing catalysts are expected to unfold favorably for Mitsubishi Tanabe (MT) - 1) Upcoming Catalysts From Diabetes Franchise: Canagliflozin is showing promise of better safety and efficacy, among pipeline SGLT2 inhibitors and we are expecting favorable US PhIII data at ADA-2012, based on data available so far and our talk with MT. Launch of MT’s teneligliptin, though it will be fifth DPP-4 in Japan, it will have its share backed by two of the strongest marketing muscles in Japan. 2) Royalty Income from Gilenya Continues to Grow: As an oral drug, Gilenya has the first mover advantage and addresses a huge unmet need in the MS market. Considering the recent safety issue with Gilenya and upcoming competition, we have estimated peak sales potential of $1.6b by 2015 assuming royalty rate of 10%. 3) MT has out-licensed Avanafil to Vivus in the pre-clinical stage, restricting its royalty income to ~3-5%. Nevertheless, large market size (~$5b) coupled with proven track record of other PDE5 inhibitors justifies the importance of this compound to MT. We are expecting peak sales potential of this drug to be $500m if it can get a strong marketing partner.
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MITSUBISHI TANABE
MITSUBISHI TANABE
