Business revenue: focus on the pace toward the full-year forecast and the repeatability of income

Business revenue for the fiscal year ended March 2026 was ¥68.554 million, down 48.3% from ¥132.693 million in the previous fiscal year. The company forecasts ¥43 million for the fiscal year ending March 2027, a further 36.4% decline from the previous year's actual result. With a revenue model centered on upfront contract fees, milestones and commissioned research income, the progress of each project and the timing of revenue recognition have a significant impact on annual results, making it difficult to assume a simple pattern of consecutive revenue growth.

Business revenue for the first quarter of the fiscal year ending March 2027 was ¥10 million. Progress against the full-year forecast of ¥43 million was 23.3%, not significantly different from the 25% of the fiscal year that had elapsed. However, reaching half of the full-year forecast in the first half requires cumulative revenue of ¥21.5 million, meaning that second-quarter revenue alone must exceed first-quarter revenue by reaching ¥11.5 million. The first quarter recorded an operating loss of ¥82 million, an ordinary loss of ¥81 million and a net loss of ¥82 million, indicating that the structure in which R&D and business expenses precede limited revenue remains in place.

First-quarter business revenue came from milestone income related to the development of AI-equipped hemodialysis medical equipment by Toray Medical. By contrast, revenue for the fiscal year ended March 2026 included milestone income from Toray Medical, an upfront contract fee from Nipro and commissioned research income from an AMED project. In the next earnings release, we will check whether new milestones or upfront contract fees arose in the second quarter, whether income from existing contracts is one-off or recurring, and whether amounts by source of income are disclosed.

Because the company operates as a single segment, it does not disclose revenue or profit for pharmaceuticals, medical devices and AI medical solutions separately. Accordingly, in the first-half results, it will be important to see how much detail is provided on the relationship between total business revenue, contract income by pipeline, public funding such as AMED, and R&D expenses. Even if the full-year forecast of ¥43 million is maintained, if first-half revenue falls below ¥21.5 million, a specific explanation will be needed for the assumption that income will be concentrated in the second half.