Citi — Otsuka Holdings (4578.T): Strong Zipalertinib First-Line Data Could Lift Expectations — Positive
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Key Views
On August 12, Otsuka presented REZILIENT3 first-line data for zipalertinib in Exon-20-mutant lung cancer at WCLC in a symposium reserved for major reports. PFS HR was 0.5, with PFS of 14.5 months versus 8.5 months for control—essentially best-in-class among oral drugs. HR in brain metastases was 0.38; OS remains limited but an HR of 0.72 is encouraging. A second-line filing carries a PDUFA date of end-February 2027, and the trial brings first-line expansion into view. Citi models peak sales of ¥30bn (¥400 per share) versus consensus ¥110bn; strong data may lift market expectations.
Outlook
Watch the PDUFA date and OS maturation. Upside risks include Voyxact and Simtriyo outperformance; downside risks cover Rexulti weakness, rising R&D spend, front-loaded investment, and pipeline setbacks.
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Otsuka Holdings (4578.T): Buy, target price ¥18,600 (market cap ¥5,946,451M / US$38,728M). Valuation uses a 10-year DCF: 2% risk-free rate, 6% equity risk premium, zero terminal growth after year seven, beta 0.9 reflecting key-product patent expiries, 24% tax, WACC 6.96%.