Revenue growth driven by one-off payments, with focus now shifting to the sustainability of earnings

Revenue for the nine months ended 30 September 2026 was ¥369.677 million, an increase of ¥59.944 million, or 19.4%, from ¥309.733 million in the same period of the previous year. Although the increase in revenue is confirmed, the operating loss was ¥829.803 million, so revenue growth does not currently translate directly into improved earnings power. At the next earnings announcement, it will be necessary to assess not only whether full-year revenue exceeds the ¥677.330 million recorded in the fiscal year ended September 2025, but also to break down the quality of the revenue growth.

The company identified the initial milestone achievement payment and joint research fees from its joint research with Ono Pharmaceutical, as well as a milestone achievement payment from an undisclosed partner, as factors behind the increase in revenue. However, the amounts have not been disclosed, so it is not possible to determine what percentages of the ¥369.677 million in revenue comprised milestone payments, joint research fees and other recurring research income. At the next earnings announcement, the amounts of at least the one-off payments and joint research fees, contract-level revenue recognition and whether any remaining performance obligations exist should be confirmed.

Revenue volatility is also evident in the company’s past results. Revenue for the fiscal year ended September 2025 was ¥677.330 million, including ¥663.479 million of contract liabilities released and recognized as revenue on the grounds that no remaining performance obligations existed following the termination of the joint research agreement with Lilly. The timing and amount of revenue recognition can change substantially depending on contract terminations and development progress, so the headline 19.4% year-on-year growth alone does not indicate whether the revenue base can be replicated in the following fiscal year.

The company states that it is difficult to reasonably calculate a full-year earnings forecast because its income depends on the research and development strategies of licensees and joint development partners, development schedules and the timing of contract execution. At the next earnings announcement, it will be necessary to confirm not only FY2026 results for one-off payments and joint research fees, but also whether the company can present numerical guidance for FY2027 and, if not, which contracts or development events remain uncertain.