JCR Pharmaceuticals : FY2025 Third Quarter Results Briefing Session - Script（1,742KB）

FY2025 Third Quarter Results Briefing Session January 28, 2026

(Total: 57 minutes, Presentation: 19 minutes, Q&A: 38 minutes)

Yoh Ito Senior Executive Officer, Corporate Strategy, Executive Director, Corporate Strategy Division

Kazunori Tanizawa Expert Fellow

Shinichiro Muraoka Morgan Stanley MUFG Securities Kota Maeda Nomura Securities

Miyabi Yamakita Jefferies Japan

Hidemaru Yamaguchi Citigroup Global Markets Japan

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives.

We would like to mention some points before the start of the briefing. In this presentation, we may state forward-looking statements based on our current expectations, all of which are subject to risks and uncertainties.

Today's presentation and the materials used are intended to provide information about our business to shareholders, investors, and the press. The information on the developed products and pharmaceuticals is not intended as advertising, medical advice, or the like. A script of today's presentation and Q&A session will be available on our official website at a later date.

Let me now introduce today's speakers. Yoh Ito, Senior Executive Officer, Executive Director, Corporate Strategy Division. Kazunori Tanizawa, Expert Fellow. These two members.

The materials to be used today were posted on our website at 17:00 PM today. If you need the documents at hand, please refer to them.

This presentation will last approximately one hour and will include a presentation and Q&A session. Questions will be taken in batches after all presentations have been completed. The Q&A session will last approximately 40 minutes.

Ito will now explain the consolidated financial results for Q3 of the fiscal year ending March 31, 2026. Thank you very much.

First of all, the financial results this time show that net sales for Q3 totaled JPY30,353 million, operating profit was JPY427 million, and profit attributable to owners of parent was JPY1,744 million, representing an increase in both sales and profit compared to the same period last year.

There are two points: One is that we have recorded an upfront payment for the contract with Italfarmaco, which was released on December 24. The other one, which also took quite a long time, is our Kobe Science Park Center API plant. This was constructed with the support of a subsidy, and the subsidy has finally been confirmed, and as a result, the subsidy income has been recorded as extraordinary income. A stand-alone release on this has also been issued today.

Before going into the details of the financial results, I would like to first explain the sales by product on the next page.

First, sales of GROWJECT, IZCARGO, and TEMCELL all remained steady. Sales of GROWJECT totaled JPY13,500 million, a decrease of JPY600 million from the previous year, but the number of units sold was slightly higher than the previous year, so the decrease was mainly due to the NHI price revision.

Sales of IZCARGO totaled JPY5,100 million, an increase of JPY700 million from the previous year. TEMCELL sales were JPY2,200 million, a decrease of JPY80 million from the previous year, but as you can see here, the annual progress rate for both drugs are steady.

The sales of Epoetin Alfa and Darbepoetin Alfa are based on the supply plan with Kissei Pharmaceutical, which is our sales partner. The sales of Agalsidase Beta are based on the supply plan with Sumitomo Pharma.

As for Epoetin Alfa, sales were approximately JPY600 million, a decrease of JPY650 million compared to the previous year, and sales of Darbepoetin Alfa were JPY1,750 million, an increase of JPY400 million compared to the previous year. Sales of Agalsidase Beta were JPY860 million, a decrease of JPY285 million from the previous year.

However, we have revised the sales figures for all three products in the revised earnings forecast, which I will explain later.

Under this, income from contractual payment totaled JPY5,249 million, an increase of JPY4,732 million over the previous year. In Other, sales were JPY961 million, an increase of JPY273 million over the previous year, which was due to increased sales from the NPS program.

Total sales were JPY30,300 million, or JPY4,470 million more than the same period last year.

Let me go back to page one and explain the contents of the financial statements.

As I mentioned, net sales were JPY30,300 million and cost of sales was JPY6,767 million, a decrease of JPY239 million compared to the previous year. However, please see the cost of sales ratio, top of the table at the bottom right. The cost of sales ratio, excluding income from contractual payment, is shown in the second row, and it is 26.4%, which is a positive increase of 0.5% compared to the same period last year.

As we have said in our two previous quarterly results presentations, this is a slight increase due to lower factory utilization rates. Gross profit after deductions was JPY23,585 million, an increase of JPY4,700 million compared to the same period last year.

SG&A expenses are JPY23,158 million, of which selling, general, and administrative expenses are JPY9,786 million. This is an increase of JPY83 million, mainly due to an increase in commissions paid to co-promotion partners.

R&D expenses totaled JPY13,372 million, an increase of JPY3,447 million. As I mentioned at the beginning of this presentation, we have included in R&D expenses an upfront payment for the licensing rights we obtained as a result of the agreement with Italfarmaco. On the other hand, normal development is progressing smoothly.As a result, operating profit was JPY427 million. Non-operating income of JPY895 million is about JPY700 million more than in the previous year, mainly due to foreign exchange gains. Non-operating expenses totaled JPY611 million. Ordinary profit was JPY711 million.

Extraordinary income of JPY2,091 million was recorded. In this extraordinary income, the subsidy for the API plant at the Kobe Science Park Center, which I mentioned earlier, has been finalized, and the associated subsidy income has been recorded here. The amount is approximately JPY1,880 million.

Extraordinary losses amounted to JPY31 million, resulting in profit before income taxes of JPY2,700 million, and after deducting income taxes, profit for Q3 amounted to JPY1,744 million.

Now, I will explain the revision to the consolidated financial forecast announced simultaneously this time. As you can see, we have revised profits downward.

Net sales figures are shown on the next page.

As you can see here, GROWJECT, IZCARGO, and TEMCELL are all assumed to be as initially announced and forecast.

On the other hand, for Epoetin Alfa, Darbepoetin Alfa, and Agalsidase Beta, we expect to add JPY300 million, JPY200 million, and JPY500 million, respectively. These are all increases in collaboration with Kissei Pharmaceutical and Sumitomo Pharma, and I hope you will understand that these figures are based on discussions with them.

Income from contractual payment was JPY5,800 million, an increase of JPY300 million from the original budget of JPY5,500 million. This means that there is an expected one-time contract payment by the end of this March, and we are increasing the figure by that amount.

Other shows an increase of JPY400 million in sales, totaling JPY1,600 million, primarily due to anticipated growth in NPS program sales. Total net sales are expected to be JPY39,500 million, an increase of JPY1,700 million.

Please go back to the previous page.

As I mentioned earlier, we are projecting an increase in net sales of JPY1,700 million from JPY37,800 million to JPY39,500 million, but operating profit has been revised downward by JPY2,200 million.

The first factor is cost of sales. The cost of sales increases partly due to higher sales volume, but the increase is often amplified by changes in the product mix. We expect an increase of JPY1,200 million over our initial forecast.

Regarding SG&A expenses, as I have mentioned several times, the subsidy for the Kobe Science Park Center API plant has been finalized. Depreciation incurred up to this finalization is recorded. The reason why we are deliberately stating that the depreciation is being recorded here is that we originally assumed that the finalization of the subsidy would occur earlier in the fiscal year, but since it was delayed until this December, we are recording depreciation for that portion of the subsidy.

In addition, we have increased the amount by JPY1,200 million, taking into account the past performance and the increase in royalties on sales, as I mentioned earlier.

Next, R&D expenses have been revised upward by JPY1,500 million from the previously announced forecast, as an upfront payment for Givinostat, which was in-licensed from Italfarmaco, has been included in R&D expenses in Q3 of this fiscal year.

The above are the revisions to the consolidated financial forecast.

We recently had a briefing on January 23; we released a press release regarding the contract with Italfarmaco on December 24 of last year. We have obtained the rights for the development and commercialization of Givinostat for the treatment of Duchenne muscular dystrophy, and this is a conclusion of an exclusive license agreement in Japan.

We have also entered into a strategic alliance for the treatment of rare diseases to expand our portfolios and explore joint opportunities using our R&D pipeline and platform technologies.

I would like to mention Givinostat, although this is a duplicate of the explanation I gave the other day. This is an oral, non-steroidal DMD treatment.

It has a different mechanism of action from existing drugs and is an HDAC inhibitor that can be used independently of genetic mutations, making it suitable for a wider range of patients.

This drug has been approved in the US, Europe, and other major countries, and from the Japanese point of view, there is a drug lag, and we are aware that this is a long-awaited drug. We believe that the drug has solid evidence shown in placebo-controlled clinical trials.

We have introduced this drug, which we believe is a product that synergizes with our strengths. As you know, we have extensive development experience in the pediatric and rare disease areas. We also have a strong network of doctors who follow up with these DMD patients. We believe that we have already covered more than 60% of the facilities that follow DMD patients in the sales of our existing products.

We also believe that this drug has great commercial potential. We believe that there are approximately 3,500 DMD patients in Japan. This is indicated in the US for patients 6 years of age and older, which means that there are more than 3,000 patients, considering that they are 6 years of age and older. In Europe, it is indicated for patients aged 6 years and older who are ambulatory; even considering this, there would be over 1,000 patients.

When we speak of commercial potential, we mean that it is a drug with broad applicability in situations where steroids are the only option; we believe this is a drug that can be widely adopted. We believe that if you estimate the annual treatment cost of non-steroidal drugs currently approved in Japan, you can get an idea of the scale of the applicability.

As for when the product will be put on the market, as I mentioned the other day, we are aiming to obtain approval by 2028.

My explanation, the last slide, is about the clinical or late preclinical pipeline.

JR-141, from the top, is in Phase 3 of the global trial and is progressing well. As we have said in the past, approvals in the US, Europe, and Brazil are planned in FY2027.

JR-142, this is a weekly formulation of growth hormone, and patient enrollment is progressing well. It is in Phase 3. JR-171, we are negotiating for its out-licensing.

JR-441, a drug for mucopolysaccharidosis type IIIA, has collected one year of clinical data in the initially planned treatment groups during the Phase1/2 trials in Germany. The target number of patients has also been enrolled in the Phase 1 trial in Japan. We are taking steps to obtain approval in Japan as soon as possible.

We have completed the enrollment of the first cohort of patients for JR-446, a drug for mucopolysaccharidosis type IIIB, and we are working to obtain approval for this drug as soon as possible in Japan. This drug has been licensed to MEDIPAL HOLDINGS.

JR-471, fucosidosis treatment. We have started natural history research on this drug, which is also licensed out to MEDIPAL HOLDINGS.

JR-479 is another drug licensed to MEDIPAL HOLDINGS this year. It is in the preclinical stage.

The bottom is Givinostat, which I mentioned earlier, and I would like to reiterate that we are currently discussing the development plan with the authorities with the aim of obtaining approval in Japan as early as possible, by 2028.

That is all I have to say.

When it is your turn to ask a question, I will make a nomination. Please mention your company name and your name before asking questions. Questions will be asked in a question-and-answer format, with a limit of two questions per person, but you may raise your hand as many times as you like.

I will now begin the question-and-answer session. First of all, Mr. Yamaguchi, please go ahead.

Or, you may not be sure whether you'll pursue R&D next fiscal year or beyond, but if you do, I'd like to know more about the total costs involved, such as how much it would cost.

As for development, it is still not clear what kind of development will take place, so it is difficult to say how much it will cost, but we would like to do it as quickly as possible with as little cost as possible. That is the kind of plan we would like to follow.

When future milestones are achieved, they will be recognized as R&D expenses; however, there are questions regarding when these expenses will be incurred and what they will be charged against. This time, they are being recognized as development expenses. For example, if a one-time payment is made after approval, this can be capitalized as an asset and then amortized over time. That will also depend on when we make the payment.

In other words, there will be no increase in R&D expenses in Givinostat in the next fiscal year, since I believe the launch was scheduled for 2028. There may be some in 2027 if you can apply just in time, but the possibility is slim. I think it would be very natural, in my opinion, to assume that there will be a one-time payment at the application milestone in 2028, and that R&D will increase a bit then. Any comments on my own arbitrary assumption would be appreciated.

If I were to speak on the assumption of 2028, I think it is conceivable that what you just mentioned is something like that. I may not have answered your question, but this is what I can say at this moment.

Is it a share among those who can walk or is it a share among those over 6 years old? It's hard to imagine the product having that many sales. Or, the month when ELEVIDYS rapidly lost momentum, I'm not quite sure which stage you're referring to, so could you please explain it again?

I don't think this has been explained before, but I was wondering if it is correct to understand that you are aiming for an early conditional approval based on the results of the Phase 1 or Phase 1/2 trials that have been conducted this time. And at this point, have you obtained sufficient data for such an application, or do you expect to do so in the future?

The situation may be different for each drug, but could you give us more details?

Is this a matter of temporarily settling the issue in a manner of bringing forward the next period, or has the content of the drug price revision become sufficiently clear, leading to a change in the price compared to previous assumptions? I would appreciate it if you could tell me as much as possible, including how the story might affect the outlook for the next fiscal year and beyond.

We have been exchanging information with Kissei Pharmaceutical on a regular basis;, so we expect to have additional orders or sales.

The sales projection of Agalsidase Beta has also been revised upward due to strong sales by Sumitomo Pharma to medical institutions.

Or if there are any positives or negatives, such as the loss of something that was originally thought to be there, I would like to know about that as well.

I would like to know if your company's accounting approach is to offset upfront contract income with one-time in-licensing expenses, or to keep R&D expenses at a certain level, or to bring the final profit to a positive level somehow, if there is any such approach.

How we handle this is that it is a positive addition to R&D expenses, but it is naturally an investment in the future, and we decide whether or not to invest based on the anticipated benefits of that investment. If we believe that it will have a very significant effect, and we decide that we should conduct in-licensing even if it means increasing R&D expenses or increasing costs, or even reducing profits, then we will conduct it, even if it means increasing costs and reducing profits.

Does this answer your question?

Last year, we incurred a large deficit, which caused a great deal of inconvenience, and we are always thinking about how to avoid such a situation. In other words, how far can we go within that range? We may have to make adjustments in various areas, but we will be basically considering whether it is possible to do so.

I thought the amount of up-front payment was a bit low after hearing the positive figure of 20% share in the US, but since Italfarmaco is not a biotech company, it does not need that much cash, so it is not so strange to think that the payment is concentrated on royalties, sales milestones, and the latter half. If there is anything you can comment on, please do.

However, this time, we are looking to form a long-term partnership with Italfarmaco, not just a contract for this one drug. As you mentioned, they are a company mainly focusing on small molecules and we are a biopharmaceutical company. Therefore, we believe this agreement is based on the expectation that by focusing on the distinct strengths of both companies, we can explore various forms of collaboration moving forward.

If Re-Genex and Denali lose two in a row, does your company have any prospects for a partner who would sign on rather quickly? If so, can we hear, for example, that we can expect a one-time payment well into May?

I am very sorry that this question is too hypothetical, but it is very critical for the next term and I would appreciate any hints you can give me.

Naturally, there are a number of potential partners we are talking with, but it is difficult to say how this will affect the situation. That said, I have to admit that it is difficult to answer whether we are talking about something like April or May in itself. Sorry.

I don't know what has happened in the past with MEDIPAL products that have progressed this far, but what expectations should I have in terms of performance?

However, we are sure that we would be very grateful for such a thing. I think it can be said that it is definitely something that is appreciated in terms of sales.

The situation that your company is in right now, where your business performance goes up and down drastically due to slight changes in R&D expenses, and where you are unable to have a good conversation with the capital market, I would appreciate it if you could give us your thoughts on this recent increase in buyouts. What do you think?

This has led to a structure in which the main profit and loss is dependent on income from contractual payment, and we believe that the most important issue for us is how to break away from this structure.

In that sense, we are determined to develop Givinostat quickly and bring it to market in Japan. We believe that this drug has the potential to significantly transform our sales and profit figures, so we aim to realize that potential. Or, as we are talking about a little further down the road, we will work with SanBio to stabilize our profit and loss base by realizing the Akugo project, in which we expect to be contracted to manufacture products for SanBio.

As you asked earlier on what would happen if the one-time payment increased, we would like to quickly bring our financial situation and profit/loss to a point where we can withstand such a situation, and we consider this to be a major issue. We are taking various measures to achieve this goal.

In particular, are they making good progress in acquiring the non-clinical data they plan to acquire by early 2026? What bottlenecks, if any, are occurring? I would appreciate any hints you can give me in this area. Thank you very much.

How much of your company is ready to adopt such new methods? Is there a clear indication that you have had quite a few discussions with the FDA about such areas in the US? Or are you going to be cautious after the precedent has been set? Please make a comment if there is any policy.

I thought Bayesian-related matters might significantly impact your company's assets, so I asked because I was curious about the possibility of implementation and practical application.

We have heard that various new approaches are emerging in the field of rare diseases, and if such approaches are useful in accelerating our development, we would like to consider coordinating with them as much as possible.

However, there are various potential partners that are interested in this, and we hope to be able to make good announcements as soon as possible, but we have no particular progress to offer in response to your questions over the past three months. I think that is the answer to your question.

Mr. Okada, please go ahead.

I think you mentioned earlier that sales to medical institutions are increasing, but I was wondering if you could tell us a little bit more about the factors.

So I think we will be able to talk about specifics when that happens, but at this point, we are still in the process of signing a contract for the trial production, so there is no specific schedule that I can talk about.

This concludes the FY2025 Q3 results briefing session of JCR Pharmaceuticals. Thank you very much for your participation today.

Document Notes

1. Portions of the document where the audio is unclear are marked with [inaudible].

2. Portions of the document where the audio is obscured by technical difficulty are marked with [TD].

3. Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides an answer from the Company, or [M] neither asks nor answers a question.

4. This document has been translated by SCRIPTS Asia.

SCRIPTS Asia reserves the right to edit or modify, at its sole discretion and at any time, the contents of this document and any related materials, and in such case SCRIPTS Asia shall have no obligation to provide notification of such edits or modifications to any party. This event transcript is based on sources SCRIPTS Asia believes to be reliable, but the accuracy of this transcript is not guaranteed by us and this transcript does not purport to be a complete or error-free statement or summary of the available data. Accordingly, SCRIPTS Asia does not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of the information contained in this event transcript. This event transcript is published solely for information purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.

In the public meetings and conference calls upon which SCRIPTS Asia's event transcripts are based, companies may make projections or other forward-looking statements regarding a variety of matters. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the applicable company's most recent public securities filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are accurate and reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the anticipated outcome described in any forward-looking statements will be realized.

THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE PUBLIC MEETING OR CONFERENCE CALL. ALTHOUGH SCRIPTS ASIA ENDEAVORS TO PROVIDE ACCURATE TRANSCRIPTIONS, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE TRANSCRIPTIONS. IN NO WAY DOES SCRIPTS ASIA OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BY ANY PARTY BASED UPON ANY EVENT TRANSCRIPT OR OTHER CONTENT PROVIDED BY SCRIPTS ASIA. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S PUBLIC SECURITIES FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. THIS EVENT TRANSCRIPT IS PROVIDED ON AN "AS IS" BASIS. SCRIPTS ASIA DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, AND ACCURACY, COMPLETENESS, AND NON-INFRINGEMENT.

None of SCRIPTS Asia's content (including event transcript content) or any part thereof may be modified, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of SCRIPTS Asia. SCRIPTS Asia's content may not be used for any unlawful or unauthorized purposes.

The content of this document may be edited or revised by SCRIPTS Asia at any time without notice. Copyright © 2026 SCRIPTS Asia K.K. ("SCRIPTS Asia"), except where explicitly indicated otherwise. All rights

reserved.