Decline in Pharmaceutical Companies’ Outsourcing Volumes and Insourcing of Clinical Trials

「The number of contracts awarded to the Group could decline as major customers, including pharmaceutical companies and emerging biopharmaceutical companies, change their development strategies, including by reviewing priority areas and development programs, promoting joint development and licensing agreements with other companies, and reviewing their insourcing and outsourcing policies in connection with these changes.」

「In South Korea, revenue declined year on year because the medical strike that occurred in the previous fiscal year continued to affect progress on existing trials and the acquisition of new projects, while several existing projects were suspended for customer-related reasons.」

「In Japan, revenue declined significantly year on year because order acquisition did not progress as expected, and revenue for the current fiscal year was also affected by the cancellation of several existing projects and contract changes shortening their terms during the previous fiscal year.」

「In addition, as the difficulty of developing new drugs increases and competition intensifies, demand is growing for faster development and cost control through more efficient development processes. If development efficiency improves faster than expected through the use of real-world data, advances in digital transformation and other measures, the scale of clinical trials outsourced to the Group could shrink, affecting the Group's performance.」

「In Europe, existing trials were cancelled, the start of new projects was postponed and progress on existing trials fell below expectations. In addition, the European economy continued to face surging energy prices and high inflation amid heightened geopolitical risks, including the Russia-Ukraine conflict. The high-interest-rate policies introduced to address these issues negatively affected economic conditions in Europe, particularly Germany, and new project wins also fell below expectations amid a difficult funding environment for biotech ventures. As a result, revenue declined year on year and an operating loss was recorded.」

「In Europe, revenue declined year on year and an operating loss was recorded because existing trials were cancelled, the start of new projects was postponed, and progress on existing trials fell below expectations. In addition, the difficult funding environment for biotech ventures caused new project wins to fall below expectations.」

「Japan recorded a decline in revenue in the nine-month period as well, largely because revenue was affected by changes in the timing of clinical trial starts due to circumstances on the sponsor's side during the first half.」

「In Europe and the United States, operating loss was recorded because the start of a large international collaborative trial was delayed following a revision to the sponsor's clinical trial plan, temporarily reducing staff utilisation, among other factors.」

「In Japan and Asia, securing orders that would contribute to revenue during the nine-month period of the current fiscal year was slow, reflecting the impact of revisions to pharmaceutical companies' research and development plans, including the narrowing of development activities for the current fiscal year.」

「Pharmaceutical companies have also been significantly affected in their research and development plans, prioritising research and development related to COVID-19 while being forced to narrow their development focus for the current fiscal year in other areas, even for highly innovative new drug development projects.」

「However, if pharmaceutical companies that are major customers of the Group change their drug development strategies or shift clinical trials in-house, or otherwise change their outsourcing policies, the number of clinical trials contracted by the Group could decline, affecting the Group's performance.」

「In Japan, one project whose contract had been provisionally secured at the beginning of the fiscal year was cancelled after the start of development was delayed, while several projects scheduled to begin in the third quarter were postponed to the next fiscal year following revisions to pharmaceutical companies' development plans. Although the Company pursued new projects that had not been anticipated at the beginning of the fiscal year and secured several contracts, this was insufficient to offset the impact, and both revenue and profit fell below forecasts.」

「However, if pharmaceutical companies that are customers of the Group change their drug development strategies or shift clinical trials in-house, or otherwise change their outsourcing policies, the number of clinical trials contracted by the Group could decline, affecting the Group's performance.」

「However, if pharmaceutical companies that are customers of the Group change their drug development strategies or shift clinical trials in-house, or otherwise change their outsourcing policies, the number of clinical trials contracted by the Group could decline, affecting the Group's performance.」

「However, if pharmaceutical companies that are customers of the Group change their drug development strategies or shift clinical trials in-house, or otherwise change their outsourcing policies, the number of clinical trials contracted by the Group could decline, affecting the Group's performance.」