Expansion of the North American Business Through the Acquisition of Accelovance

「Accordingly, in our U.S. business, we steadily worked through existing contracted projects, and revenue and operating profit reached record highs for a cumulative third quarter. As a result, revenue and operating profit increased substantially year on year.」

「In our U.S. business, the impact of the COVID-19 pandemic declined substantially as initially expected. We steadily worked through existing contracted projects, recorded additional revenue from contract amendments, and benefited from revenue contributions from multiple projects won during the fiscal year. As a result, revenue and operating profit reached record highs for a cumulative second quarter, and the recovery trend that began after the second quarter of the previous fiscal year continued, resulting in substantial year-on-year increases in revenue and operating profit.」

「Measures were taken to enable clinical trials to be conducted remotely, and the U.S. subsidiary responded promptly. It steadily worked through the contracted projects accumulated substantially through the strengthening of the sales structure from the previous fiscal year, and, together with the effects of improving organizational and operational efficiency, achieved stable operating profitability from August 2020 onward. As a result, for the full fiscal year, it made up for the delayed performance caused by the impact of COVID-19 in the first half and achieved a substantial operating profit after goodwill amortization.」

「Measures were taken to enable clinical trials to be conducted remotely, and the U.S. subsidiary responded promptly. As a result, it steadily worked through the scheduled hours for contracted projects that had been accumulated substantially through the strengthening of the sales structure in the previous fiscal year, and remained operating-profitable from August onward. The results of the business recovery efforts since the acquisition of Linical Accelovance America, Inc. in 2018 consequently began to emerge, and the Company achieved operating profitability after goodwill amortization for the cumulative consolidated third quarter under review.」

「In the United States, the benefits of strengthening management and the sales structure and reducing costs through restructuring emerged steadily, and operating profit excluding goodwill amortization and the legal fees described above became positive. The backlog of contracted projects, which will contribute to revenue from the next fiscal year onward, also increased substantially from the end of the previous fiscal year.」

「Against this backdrop, at Linical Accelovance America, Inc. in the United States (hereinafter, LAA), the effects of strengthened management, expanded sales capabilities and restructuring initiatives carried over from the previous fiscal year began to emerge. The company achieved operating profitability on a monthly basis, creating a situation that offered promise for the future.」

「In the United States, the effects of strengthening management, expanding sales capabilities and restructuring initiatives carried over from the previous fiscal year began to emerge, laying the groundwork for a V-shaped recovery from the second half onward.」

「In the Group's CRO business, we continued to vigorously promote the establishment of a global contract services structure in Japan, Asia, the United States and Europe. As contracted projects, primarily international joint clinical trials, increased, this contributed to higher revenue. Profit also increased because the burden of one-time acquisition-related expenses incurred in connection with the acquisition of LAA in the previous fiscal year had ended and the effects of LAA's cost-cutting measures had begun to emerge.」

「To strengthen our ability to address the global development needs of pharmaceutical companies, including those in North America, on 16 April 2018 (U.S. Eastern Standard Time) we acquired 100% of the issued shares of Accelovance, Inc., a CRO based in the United States, through LINICAL USA, INC. (head office: New York), making it a wholly owned subsidiary. Accelovance, Inc. (head office: Maryland; now Linical Accelovance America, Inc., hereinafter "LAA") has been included in consolidated results since the fiscal year ending March 2019.」

「Across the Group, we have promoted sales activities using LAA's track record in clinical trials in the United States and China as a new strength, based on an understanding of the operating environments at each site. As a result, we have received many inquiries regarding international joint clinical trial projects, including those involving the United States and China, and the acquisition of LAA is beginning to produce benefits in the Group's sales activities as well.」

「Accordingly, Accelovance (now Linical Accelovance America, Inc.) and its 7 subsidiaries were included in the scope of consolidation. As a result, as of 30 June 2018, the Group consisted of the Company and 23 subsidiaries.」

「On 16 April 2018 (U.S. Eastern Standard Time), Linical USA acquired 100% of the issued shares of Accelovance, making it a wholly owned subsidiary of the Company and Linical USA.」