Shionogi's Strong Core Offers More Capital Return Possibilities

Japanese drug companies are quite a bit different than U.S. and European pharma companies, partly because the pricing/reimbursement environment is much different, but those differences aren’t always bad. In the case of Shionogi (OTCPK:SGIOY) (4507.T), investors can take advantage of a highly profitable company with a strong HIV franchise and a willingness to simultaneously walk that fine line between reinvesting in the growth potential of the business and sharing the benefits with shareholders.

Shionogi’s ADRs are not particularly liquid, and that is an issue for investors to consider, though the shares listed in Japan offer ample liquidity. Although I’d like to see a more efficient sales and marketing operation from Shionogi, the company’s pipeline has exciting assets both in late and early stages of development, and I believe investors can reasonably expect a high single-digit/low double-digit long-term annualized return from these shares.

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Shionogi's Strong Core Offers More Capital Return Possibilities