Building a short-, medium- and long-term monetization pipeline for the healthcare business

「The “AI program medical device for conversational cognitive function testing (SDS-881)” has been designated by the Ministry of Health, Labour and Welfare as a “product subject to priority review for program medical devices.” The company subsequently completed submission of a clinical trial notification to the Pharmaceuticals and Medical Devices Agency (PMDA) and began clinical trials in May 2025.」

「The company subsequently completed submission of a clinical trial notification to the Pharmaceuticals and Medical Devices Agency (PMDA) and began clinical trials in May 2025. Development toward obtaining manufacturing and marketing approval in Japan and implementing the product in society is currently progressing smoothly.」

「In February 2025, the product was designated for priority review by the Ministry of Health, Labour and Welfare’s program medical device review committee, and the company also completed submission of a clinical trial notification to the Pharmaceuticals and Medical Devices Agency (PMDA) in February 2025. The company aims to obtain approval in fiscal 2026 as a medical device using natural language processing AI, ahead of the rest of the world.」

「The company has also begun discussions on projects aimed at collaboration and alliances for developing AI medical devices targeting schizophrenia and ADHD, among other neuropsychiatric disorders. It aims to accelerate obtaining manufacturing and marketing approval in Japan for medical devices using natural language processing AI, ahead of the rest of the world.」

「On 14 February 2024, the company entered into a “Strategic Business Partnership Agreement Concerning the Dementia and Depression Diagnosis Support AI Program Business” with Shionogi & Co., Ltd. and began building a medium- to long-term earnings base in the life sciences AI business.」

「On 14 February 2024, the company entered into a “Strategic Business Partnership Agreement Concerning the Dementia and Depression Diagnosis Support AI Program Business” with Shionogi & Co., Ltd.」

「Following the “conversational dementia diagnosis support AI program,” the company also reached an agreement with the School of Medicine at Keio University, its joint research partner, on exclusive development and sales of the “depression diagnosis support AI program” in September 2023.」

「For the “conversational dementia diagnosis support AI program,” the company is steadily developing a program that uses conversation audio as input data, with an automatic speech transcription function. It is also proceeding in parallel with the development of consumer products using the high-quality datasets and development expertise collected during the development process.」

「The company will also continue developing, in parallel, consumer products that use the high-quality datasets and development expertise collected during the development process.」

「For the “conversational dementia diagnosis support AI program,” the company had initially planned to prioritize development of a program using transcribed conversation text as input data, followed by development of a program using conversation audio as input data (the “program with automatic speech recognition functionality”). However, because development of the program with automatic speech recognition functionality is progressing smoothly, among other reasons, the company decided to consolidate all future development into that program.」

「In the Medical Device segment, clinical trials for the “conversational dementia diagnosis support AI program” have been completed, and the company is proceeding with analysis of the data collected and preparations for an application for regulatory approval. Development also progressed for multiple programs, including the “fracture screening AI program,” “depression diagnosis support AI program” and “schizophrenia diagnosis support AI program.”」

「On 25 November 2021, the company reached a basic agreement with Suzuken Co., Ltd. on a comprehensive business partnership covering sales activities and other matters for software as a medical device. Through this partnership, post-launch development of the AI medical device made substantial and concrete progress.」

「In the Medical Device segment of the life sciences AI business, the company filed a notification with the Tokyo Metropolitan Government on 7 September 2021 for a business selling controlled medical devices, and the notification was accepted. The company had already obtained a Class I marketing authorization for medical devices from the Tokyo Metropolitan Government in January 2021. With this notification, FRONTEO became able to distribute and sell medical devices it had developed itself to medical institutions and other customers. Clinical trials for the “conversational dementia diagnosis support AI program,” the first of its kind in Japan, are progressing smoothly with the positive cooperation of the participating medical institutions. The company also began research into an AI program supporting the diagnosis of schizophrenia.」

「In the Medical Device segment of the life sciences AI business, clinical trials for the “conversational dementia diagnosis support AI program,” which is being developed for launch as the world’s first language-based AI medical device, are progressing smoothly, and the company received a milestone fee from Kyowa Pharmaceutical Industry Co., Ltd. in the first quarter. The company also announced that on 29 June 2021 it had reached an agreement with Keio University on the terms for exclusive development and sales in the United States, Europe, China and South Korea, with a view to overseas expansion after obtaining manufacturing and marketing approval for the product in Japan. In addition, on 12 May 2021 the company announced that it had begun developing a “fracture screening AI program” aimed at preventing fractures as a new pipeline product in language-based AI medical devices.」

「In the Medical Device segment of the newly established core life sciences AI business, the company announced that it had submitted a clinical trial notification to the Pharmaceuticals and Medical Devices Agency (PMDA) on 12 March 2021 for the language-based AI medical device “conversational dementia diagnosis support AI program” under development.」

「In digital health, the company is in final discussions with the Pharmaceuticals and Medical Devices Agency (PMDA) toward commencing clinical trials for the “conversational dementia diagnosis support AI system” under development. It will continue preparing for approval and launch as the world’s first language-based AI medical device. In addition, the company obtained a Class I marketing authorization for medical devices in January 2021, for which it had applied the previous year.」

「In digital health, the company completed a preparatory consultation with the Pharmaceuticals and Medical Devices Agency (PMDA) in September 2020 concerning its “dementia diagnosis support AI system” under development. This made it possible to hold a formal consultation with the PMDA regarding the clinical trial, representing significant progress toward approval and launch as an AI medical device. In drug discovery, the company entered into license agreements with the University of Tokyo Graduate School and Tokushima University Graduate School for use of the academic plan for the drug discovery support AI system “Amanogawa” by educational and research institutions.」

「In drug discovery, the company entered into a license agreement for a “drug discovery support AI system” with Chugai Pharmaceutical Co., Ltd. in May 2020. The system is currently used in the drug discovery processes of several major pharmaceutical companies. In digital health, the company entered into a development and sales partnership with Kyowa Pharmaceutical Industry Co., Ltd. in June 2020 concerning a “dementia diagnosis support AI system (medical device),” advancing the system toward approval and launch as an AI medical device.」

「In drug discovery, the company entered into a license agreement for a “drug discovery support AI system” with Takeda Pharmaceutical Company Limited in March 2020, marking a major step toward expanding the business. In digital health, it began selling the “Coroban®” AI fall prediction system and pursued initiatives to support sales, including obtaining a patent and having the product certified as a recommended product by the Japanese Society for Fall Prevention.」

「In the healthcare field, we began offering Coroban®, a fall prediction system using the new artificial intelligence (AI) engine Concept Encoder, which combines objectivity, transparency and reproducibility.」

「The drug discovery research support AI system is based on the technology for discovering new drug candidates announced in November 2018. It packages in advance a database containing information such as literature and gene expression data, and provides it as a cloud service to help pharmaceutical companies accelerate the discovery of candidate compounds in drug discovery research more efficiently.」

「In the healthcare field, we began providing pharmaceutical companies with a technology for searching for novel drug candidates using the new artificial intelligence (AI) engine Concept Encoder, which combines objectivity, transparency and reproducibility.」

「In the healthcare field, we conduct data analysis across a broad range of areas, including diagnostic support, nursing and care-work support, and support for the pharmaceutical industry, using the Group's second proprietary artificial intelligence (AI) engine, Concept Encoder (hereinafter, CE).」

「We are already using these technologies for data analysis across a broad range of areas, including diagnostic support, nursing and care-work support, and support for the pharmaceutical industry, and will continue addressing the diverse needs of the healthcare sector in the next fiscal period and beyond.」

「In addition to securing a business-improvement consulting project for the pharmaceutical industry, development progressed smoothly on medium- to long-term projects, including joint research and contract development projects such as a fall prediction system, a pain-care support AI system and an objective assessment device for mental disorders.」

「During the current third quarter, in addition to winning 3 new orders from the pharmaceutical industry, development progressed smoothly on medium-term projects and products including a fall prediction system, a pain-care support AI system and an objective assessment device for mental disorders.」

「In the healthcare field, we welcomed a new representative to subsidiary FRONTEO Healthcare in May and strengthened the organization by establishing an end-to-end structure covering research and development, analysis and sales based on an evidence-based approach. During the current second quarter, we won 4 orders from the pharmaceutical and nursing-care industries and have been steadily building the pipeline.」

「In healthcare, we regard the field as a pillar of medium- to long-term growth because of its large potential market and are actively investing in it. We also expanded our sales structure into fields where solutions using existing KIBIT-enabled software can contribute by applying expertise developed in Business Intelligence. As a result, consideration of implementing KIBIT-enabled software has progressed in areas including systems to prevent staff working in medical and nursing-care settings from leaving, MR efficiency and adverse-event analysis.」

「The healthcare field requires processes such as joint development with medical institutions, demonstration testing and clinical trials, and generally takes longer to monetize than other fields. However, some projects, including systems to prevent staff working in medical and nursing-care settings from leaving and solutions to improve MR efficiency, can be monetized in the short term by applying expertise developed in Business Intelligence. Accordingly, we will focus on strengthening our short-, medium- and long-term project pipelines.」