Daiichi Sankyo Earnings: Company Gives Strong Guidance, Has Robust Pipeline Progression

Narrow-moat Daiichi Sankyo’s fourth-quarter revenue grew 30% year on year, which is in line with our optimistic expectations. Guidance for fiscal 2024 is above our expectations because of the company’s forecast of 28% growth in global Enhertu sales. Additionally, the company reviewed several recently initiated or planned clinical trials for the pipeline, including I-DXd and R-DXd. We raised our fair value estimate to JPY 5,500 per share from JPY 5,100 to include revenue for Enhertu from its second-line pan-tumor approval in HER2-expressing patients. We also incorporated higher risk-adjusted revenue for Dato-DXd now that its applications in lung cancer and breast cancer have been accepted by the US Food and Drug Administration.