Member Info for Jatw

It is undoubtedly true that the more different shares you hold, the more average your return will be.

It is also said that being in the right sector is more important than individual shares……my portfolio is heavily weighted to financials, healthcare and tech. I hold a tracker type fund for each sector and a couple of larger stocks with growth/dominant positions in each (trying to pick the winners). Will need to calculate a compound return…….but 18% sounds very respectable well done..

With a week to go to results, I find it a little concerning that Just has been retreating as the FTSE has been hitting all time highs.

I think H1 sales will be down on 2024 (bulk annuities are lumpy so only to be expected), but that will be a reason for lots of negative press and a reason to sell ahead of results.

However I think we will find the company will continue to enhance its capital position (SCR and quality of capital) which is a reason to buy…..as well as the PIC equivalent valuation (whatever number that produces is a considerable upside from here). Management may still consider that undervalues the company and its growth prospects……..

I really have no idea how the market will react to the HY results, I am hoping for an uplift back to 140, but it could also be a negative down to 110……lets see what management say in response to analyst questions - that will add some colour to the market.

So there we have it , II is the jewel in this crown…..how long before it is II plc (or II gets de merged)

I wonder if we should read the Joslin announcement as

‘Clinicians dont like our current product, if we replace it with the Joslin tool it might go better”

I think we can see how AZ is going to approach Trump tariffs….

1 promise big US investment ( $50bn already)

2 manufacture in the US for the US

3 US pricing includes the higher US costs to manufacture

4 discover and initial testing outside US for lower costs, final tests for FDA approval and share of discovery costs US built into US costings

5 minimise transfer pricing and imports to claim the US pays its costs and a fair share of global shared cost of discovery

US science will start to take second place to China in discovery. Europe probably wants lower prices so will take a China/European mix and not import US manufactured pharma.

The sales value was 12.3bn JPY which equates to 82-85m USD depending on the exchange rate. So there is an increase to the run rate to USD 330-340m. Now available in 30 countries.

They also reported that NICE has now approved for NHS use (with restricted set of pts) - it was 25 July so there has been 6m of negotiation and further discussion…..search Nice Fruqintinib for full details.

There was unsurprisingly no indication of pipeline development….does not mean it is not happening, just not important yet for TAK.

Today’s rise to over hk$30 seems to be a bit of catch up…..

Tomorrow Takeda reports its Q1 results (Apr-Jun) and we can get an updated run rate for their Fruzaqla sales. (JPY/USD varied between 140 and 155 over the quarter ending around 145)…..there should be increasing sales across the EU and around the world where it has been approved…..but state health spending decisions dictate volume (eg UK not recommended for NHS so only available privately). There also appears to be an initial take up by L4+ patients before a steady state emerges.

I will be happy to see a gradual increase in run rate so looking for Q1 sales of about US$80m tomorrow….some pipeline news indicating label expansion plans would be very welcome.

AZ reported today and noted the SACHI approval but did not disclose H1 Savo sales (too small and they are included in other oncology which was flat).

Cant see HCM pulling a product sales surprise out in the HY results. Incremental sales of Fruq (new EMC indication), and Tazverik (approved for 3 months should show some promise with initial sales…..

The big approval when it comes is Sovleplenib which may then lead to a sizeable licensing deal.

Have said it before, but there is a boom in advice to mitigate the governments search for revenue.

SJP, QLT set to be major benficiaries

I am not sure what benefit delaying results beyond the CMA reporting in September. Surely that is just going to create a lot of questions about the cost of the remedies which mgmt can guesstimate but they will not really know for another year.

Ooh - maybe the IFRS results will not be that good, revenues were marginally ahead, but costs will surely be much higher - so they will distract by wanting to talk down the impact of remedies.

I am not sure I understand why HCM has a new platform that no one else appears to be using - there is nothing that innovative in the congested world of pharma….so it must be known by other names in the larger pharma. If it turns out to be something that others have been using for 5 years they will look a bit silly.

Hoping for an R&D day soon where they can set it out their plans more clearly.

The buyers in HK are not chasing HCM as hard as they are others….almost any other (not sanctioned) pharma has been doing relatively better. Taking some shares in HK and looking at the % of peak over 5 years provides the following:

Innovent 90%

Be One (previously Beigene) 65%

Innocare 60%

Hutchmed 40%

Junshi 30%

The league table suggests investors are rewarding broader pipelines, global asset ownership (over out licensing).

Several companies in the list are coming to regular profitability including HCM.

HCM is not at the top of this table because it it not in control of its assets globally, AZ has been slow walking Savolitinib ex-China, Takeda is yet to show signs of wanting to invest in extending the Fruzaqla franchise

I think HCM needs to demonstrate the value of its new ATTC platform, it has the funding in place to be self sustaining but it does need to deliver more effective treatments and get them to the global market.

2026 potential catalysts: The SACHI approval significantly lifts Savo royalties and manufacturing revenues. Sovleplenib is finally approved, generates significant new sales in China and gains a global partner in 26 and NRDL inclusion for 2027.

This new reinvention of VLG as a brand manager and product developer is looking like the best iteration so far.

MKI was buy older brands and extract economies of scale on the manufacturing side, make own brand versions

MKII was buy smaller new products (funded by the large share placing @90p)

MKIII buy brands and develop them (funded by the sale of the manufacturing and some products)

Once the oral health brands are sold there will be very little left of the MKI business.

Hopefully this new business model is a winning formula

The agreed price for PIC is approx £5.7bn. In the 2024 accounts, the ‘equity own funds’ were assessed as £5.8bn.

There will likely be some writedowns on surplus assets so the offer price is close to the own funds value.

That probably equates closest to the 254p TNAV cited by Just in its results. There may be some adjustments…but that is a considerable premium over the market price for Just.

Not sure about the downtrend….i thought the PIC story might perk it up ….but maybe the terms are not so favourable for valuation of Just..

I suspect that H1 sales will disappoint….the market as a whole will have been affected by the macroeconomics interest rates inflation outlook as well as the tariff issues…but that does not mean Just will be in a weaker financial position as its cash from operations may be higher as it reinvests less in new business…..

If AZ leaves the UK market a lot of pharmas will not be far behind. Not sure what HCM gets out of being listed on AIM….I would be quite happy to hold HK registered shares instead.

I dont think Soriot can really complain about NICE decisions - and it is up to each country to say how much they value each year of quality life……the UK is getting poorer so it is not surprising it sees less value in extending life.

He does have more cause for complaint about the rebates forced on suppliers caused by the size of the drug spend within approved NICE guidelines, this is a retrospective levy to punish the pharmaceutical companies for making drugs the doctors want to use. The NHS wants to have its cake, eat it and ask for a refund….disgraceful.

SACHI is the China equivalent of SAFFRON so it bodes well for AZ getting FDA approval when it needs it.

Royalties in China may not really move the dial for HCM (let’s see what the sales are but it should be a strong seller) an extra 20-30m USD in profit is not to be sniffed at but $100m from US sales will make the market look up.

The NMPA surpassed themselves and my expectation for a Q3 approval…..let’s hope Sovleplenib can get over the line….as a wholly owned drug that has the potential to move HCMs dial.

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Sky news is reporting that Athora (part of Apollo) is looking at taking control of PIC (PE owned) in a £4-5bn deal.

There have been several new entrants into the market and there will be a consolidation to come.

While MNG is a niche player in annuities at present, it is encouraging to see there is appetite for larger UK deals in the life insurance sector.

Sky News is reporting that Athora (part of Apollo) is talking to the PE owners of PIC about taking a stake or a full acquisition valuing PIC between £4-5bn.

Some M&A in the bulk annuity players would be very interesting for Just shareholders, if only to have a benchmark price set.

As it is an off market transaction it may take some time to be confirmed.

Robleo, I think there will be a new range established, we have moved from a 190-220 range to a 230-260 ish range.

I think it is doing well to hold on to 260, if Middle East tensions ease then it will rise with the market, but I dont see it going beyond 280. Even a bid would likely be around 300 and no more.

While I would love to be proven wrong, 400 in the next couple of years is fanciful in my opinion (I could entertain it on a 10 year view) - sorry we have to disagree on this DC.