FY2026-Q3: the key issue remains a revenue model dependent on partnership events

Business revenue for the fiscal year ended December 2025 was only ¥314 thousand, and was ¥0 million in the first quarter of 2026. Business revenue rose to ¥1,854 thousand in the FY2026 interim period, mainly from sales of functional peptides, but was shown as ¥1 million on the cover of the earnings summary, still far below a level capable of absorbing the fixed costs of an R&D-focused company. The key point is that revenue has remained low after falling from ¥6.127 million to ¥314 thousand in the fiscal year ended December 2025.

The quality of revenue also requires review. In the FY2026 interim-period revenue breakdown, no upfront payments, development milestones, R&D collaboration payments, royalties or sales milestones were recognized. Only ¥1,854 thousand of product supply revenue was recorded. The company describes a model that moves from upfront payments, collaboration payments and milestones generated by early partnerships to royalties after future product launches, but there is currently insufficient evidence to conclude that revenue has entered that stage.

Improvement in profit and loss must also be considered separately from revenue growth. The FY2026 interim-period operating loss was ¥538 million and the interim net loss attributable to owners of the parent was ¥566 million, down from an operating loss of ¥909 million and a net loss of ¥894 million in the same period of the previous year. However, the company says that business revenue depends on the status of negotiations with potential new partners and other factors, making a reasonable full-year forecast difficult to calculate. A smaller loss alone therefore does not indicate a transformation of the business model.

In FY2026-Q3, we will assess not only whether cumulative business revenue exceeds ¥1.854 million, but also whether the breakdown includes partnership-related income. Other key points are whether the names of potential new partners, contract structures, conditions for upfront payments and milestones, and full-year earnings guidance can now be disclosed. As the company has a single segment, segment revenue cannot be compared. The types of revenue recognized and disclosed, together with progress in partnerships, will provide the most direct indication of the underlying situation.