Takeda's (NYSE:TAK) acquisition of Shire, one of the largest deals in the history of the pharmaceutical space, has shadowed the company ever since the start of the process in late March of 2018, with the shares underperforming the sector by about 40% since then. While there were legitimate objections and concerns to the deal, the cost synergy performance since the deal close has been better than expected, and Takeda has made steady progress on billions of dollars' worth of non-core asset sales. On top of that, Shire's plasma therapy business is producing strong growth in an attractive market.
I'm not particularly enthusiastic about Takeda's pipeline, but that's not a new development, and the company does have some credible oncology, neuro, and rare disease drugs in the pipeline, as well as a dengue fever vaccine that could generate over $1b in revenue. Between discounted cash flow and an earnings-based approach, I believe it could be significantly undervalued today, with double-digit annualized total return potential.
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Takeda Executing On Synergies And Asset Sales, But Not Getting Much Credit
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