Full-year profitability depends heavily on upfront contract payments and milestone revenue in the second half.

FY2026 H1 revenue was ¥9,226.971 million, representing progress of 28.8% against the full-year forecast of ¥32,000 million. As half the fiscal year had elapsed, revenue progress was 21.2 percentage points below a simple time-apportioned level. Operating loss was ¥2,534.782 million, interim loss before tax was ¥2,659.790 million, and interim loss attributable to owners of the parent was ¥1,999.424 million, so profitability has not yet been confirmed.

To achieve the full-year operating profit forecast of ¥4,600 million, the company would need to cover the H1 operating loss of ¥2,534.782 million and generate ¥7,134.782 million in operating profit in the second half alone. The gap to the full-year revenue forecast is ¥22,773.029 million. The company expects to recognize upfront contract payments and R&D milestone revenue from its drug discovery and development business in the second half and report operating profit for the full year, but as of H1 it had not disclosed the amounts, breakdown by counterparty or program, or timing of recognition.

Revenue is highly volatile. Income from upfront contract payments, milestone fees and royalties was ¥27,554.551 million in FY2024 H1 and ¥29,530.472 million for FY2024 as a whole, but was only ¥200 million in FY2026 H1. A summary of recent news states that the achievement and receipt of a milestone under joint research and development with MSD were disclosed on 7 October 2026. At the next earnings announcement, it will be necessary to confirm whether this project was recognized as Q3 revenue or contract-related income.

In FY2026-Q3, in addition to nine-month cumulative revenue and operating results, we want to confirm the actual amount, remaining amount and recognition timing of contract-related income expected in the second half. Unless the company discloses which categories, including upfront contract payments, R&D support payments, milestone fees and royalties, support the earnings plan, it will be difficult to assess quantitatively how reproducible the full-year profitability forecast is. Even if the full-year forecast is maintained, if the revenue and operating profit required in Q4 remain excessive as of Q3, explaining the likelihood of achievement will be more important than the mere maintenance of the forecast.