Terumo : Q&A Session at the Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2026

Published November 13, 2025 at 9:17 a.m. UTC

Source: MarketScreener

Terumo Corporation November 13, 2025

Q&A Session at the Financial Results Briefing for the Second Quarter of FY25

Outlined below are the Q&As from the financial results briefing on November 12, 2025.

Motoya Kohtani: This is Kohtani speaking from Mizuho Securities. Let me just ask two questions on innovation. First question is about DSS. I think it's about 10 billion JPY, mostly in Japan, and it's going to go up to 30 billion JPY. I was quite surprised because this was much bigger than what I was expected.

As you said, there was a good reason for that. The ACC/AHA guidelines have been revised as Class 1, Level A in 2025. In Europe, it has already been classified as Class 1, Level A in 2024. For IVL, although OCT is slightly advantageous, both of them are going to be used.

My question is, for IVUS and OCT, you can use them because they are already been reimbursed, but this device integrates in one single catheter. So maybe a new code or National Coverage Determination, maybe not to that extent, but I guess you are taking a new Medicare code. How am I assuming that this is going to progress?

IVUS and OTC, I don't think none of the competitors have that in one catheter. I just want to clarify this as well. That's my first question.

Hikaru Samejima, Chief Executive Officer, Terumo: Existing IVUS or OFDI, our price target is higher than that. That will be our pricing strategy, premium price. With that, we plan to be launching it in Japan and the US in the near future.

One device with the two sensors, there's nothing like that. I mean, who has the manufacturing capability to produce that? It's very rare to find a company who has that capability. It goes back to our high-quality manufacturing process. This is going to be a big barrier entry.

Kohtani: Going back to slide 10, I want to clarify, this device can do all of this which is written here. Samejima: That's right. Kohtani: My second question about OrganOx. 120M USD, I was quite surprised by this number. NMP today is becoming widely adopted. I guess that number is quite high, driving big contribution to this target.

My question, for the next several years, NMP will keep becoming bigger, but after that several years, the growth will become saturated. What are the things that you are doing to prepare for that time. In liver cancers, for example, implant standards has changed in Japan. It doesn't change much in the US. How are you going to address that? Downstage of cancer is another one. Microcatheter of your product has a perfect match like that. Are you going to be running trial to that? Let me just ask a question about the growth after plateauing in several years potentially.

In September, OPO's license was revoked in Florida state, and investigation to OPOs will start. There is an article written about that. Is there any impact from that or expected impact coming from that?

Samejima: For liver transplant, NMP will be driving. Especially for the donor from cardiac death, that will be the growth driver for the next several years, like you have implied, and that's exactly right. After that, as I talked about it last time, we are going to plan to get into the other organ, kidney.

Also, another item in the pipeline is what is commonly referred to as ELC, For example, for somebody who cannot be registered for the transplant but somebody who is having a damaged liver, by circulating blood extracorporeally, allowing the liver to rest, and then returning it. This approach is essentially ECMO-like, and by doing so, patients can be addressed, with the pipeline to help somebody with the poor-performing livers.

As for the liver transplantation, the supply was the bottleneck in the past. The registration as a recipient requires very high, strict demand. Even if your liver is damaged quite heavily, you couldn't become registered as recipients. Those numbers of population will go up. That will also drive the market growth. By combining these three, we are quite confident OrganOx is expected to grow in the long run to come.

Kohtani: HHS investigation, or OPO revocation in the Florida state, any impact? Should we expect an impact coming next year onwards? Samejima: There is some impact, more in the short term, but liver transplant will be saving patient life. That value is absolutely strong. That hasn't changed. This impact only remains to be short term. Mid- to long term, organ transplant is actually a very strong growth driver in the long run. Hidemaru Yamaguchi: In your explanation, you were looking at imaging. The MSK, I think that was one thing you mentioned, MSK. I'd just like to ask you for your current initiatives around that and what are your expectations in this for going to market. Samejima: Currently, whether we are proactively approaching this at the moment, we're not so aggressive. But on the other hand, the Access or TLAs, the high quality that we have is becoming

increasingly recognized across various medical specialties. I mean, MSK was given as one example today, but there are guidewires and microcatheters that are used in many other domains, and the perception of that is getting wider and wider. So, I think rather than us aggressively going to market here, as with our catheter intervention, it's different to that. It's a departure from that, but it's starting to take off. Our fundamental Access and our TLA, which will continue to grow in the mid- to double-digit growth, I think will be one factor in that.

Yamaguchi: One thing within the financial results, you mentioned that the revision of TIS, I think from last year, that's been in motion since last year. I mean, it came up several times throughout the presentation. So, have you gone over the mountain already? In terms of the variability in financial results, I felt that there are quite a few. Kojiro Otaka, General Manager of Corporate Planning Department, Terumo: I will respond to your question. I think Hagimoto will address the future prospects of that after me.

Let me just explain, first of all, the slide that I'm showing you here. As you can see on this slide, for TIS, the portfolio review in the middle was Orchestra Bio. They have also put a press release about this, but we had this exclusive distribution agreement with them. We decided to review the exclusive distribution agreement with them, and the impairment has been recorded in Q2.

We also recorded the same amount in the second half. To maintaining the relationship with them and maintaining our preferential position, it will be a 30 million fund. In terms of the market cap, that's been taken into account as well. We have put that in for our guidance for the end of the full period.

Jin Hagimoto, Chief Financial Officer, Terumo: Let me give you a bigger picture view of this. On this occasion, regarding operating income, we gave some guidance regarding operating income. We made some adjustments to that based on the information we currently have.

There may be some structural reforms going ahead and some lawsuits that are in process, so it's hard to give an absolutely set in stone guidance in terms of amounts. But the portfolio review that we are aggressively promoting at the moment, that will continue. But for the current fiscal year, all anticipated expenses are provided in this guidance. I would hope that you would take those as face value.

Takahiro Mori: This is Mori speaking from Nomura Securities. About 5 billion JPY for Leverkusen, is this a onetime? Or should we expect that to come again? What's happening in Leverkusen? What kind of cost we should be expecting from that? Otaka: Leverkusen, 5 billion JPY in H2, we are expecting that to be posted in H2 in our projection. Now, this is 30 million in Euro. That acquisition was 150 million EUR assets, with assets including

equipment amounting to about 70 million EUR. The depreciation of those assets is 10 million EUR. We have a lot of great talents in the Leverkusen. We have retainment talent cost of 7 to 8 million Euro. Maintenance of equipment, some of the costs are PMI-related. In all, 30 million EUR, or 5 billion JPY to be posted on H2.

The impact of the cost after that is, since PMI cost is included, it's not going to be doubling, not simply as that, but we are going to be expecting some depreciation and talent costs in next financial year as well.

Mori: My second question is about OrganOx. Expected to drive high growth, and from the supply, donor side, it makes sense. But for centers, how many capacity, how many head counts in terms of doctors? How do those centers increase cases? How long it will take to keep that full capacity that you're expecting? Samejima: To that question, the medical practitioners capacity is your question. We don't have a quantified assessment. We haven't done that yet. But what we can sat is after adoption of NMP, everything before that was very emergent practices. Suddenly a donor becomes available, and you have to do the implement within several hours.

Daytime, they are busy with the other, so the hospital needs to call up the doctors in the middle of the night. But now, they can do it for 12 hours, or 24 hours in Europe. They can do the plans. It will be giving more leeway for medical practitioners. Right now, we believe that lack of resources is not going to be a problem. But we will check the data, and we will get back to you after checking some of the clarifications and get back to your question.

Mori: It's been already several years since NMP started, right? I thought maybe the initial impact is going to go down. That was my concern, that this is going to be reduced quickly. Thank you. Tomoko Yoshihara: This is Yoshihara from UBS Securities. For OrganOx, I would like to ask about the amortization. I think it was on page 16 of the presentation, and it says provisional at the moment. The amount of this is for intangible asset amortization, I would understand. It says provisional in brackets for the amortization of intangible assets. I just wanted confirmation, where possible, of what is meant by provisional there.

Hypothetically, it seems that if there will not be such a large difference in profitability next year, amortization of OrganOx's intangible assets could be a significant minus. I just want to know if my presumption is correct regarding OrganOx.

Otaka: For the OrganOx costs here, there are two types here. One is the PMI-related costs, which are 5 billion JPY in H1, which is a temporary.

For the depreciation and the amortization of intangible assets, it says provisional tentative in

brackets, but as we move forward with implementing PPT, we think it would be 4 billion JPY in H2. For next year, these will fully be reflected for the entire year.

The goodwill and the intangible assets and so on, you mentioned that most of it was intangible assets, but that's not really the case. The outlook for H2, once these are fully established and set in stone, I will then make another announcement once these are no longer provisional but set in stone.

Yoshihara: For OrganOx margins for now into next year, will they not differ so much for the core business? What will those look like? Otaka: Regarding the business for OrganOx, we intend to expand it in future going forward. In line with that business expansion, I think profitability will definitely expand in line with that. Yoshihara: My second question is regarding Rika. I think, in Hagimoto-san's presentation at the beginning, I might have not have understood this correctly. Disposables, the demand was lower than expected because of its efficiency improvement. Is that correct? I wondered if the production amount was slightly down. Is that correct?

As a result of that, from H2 onwards, the Rika business, as you start to monetize that more, I believe that there may be some time lag due to that lack in demand for disposables. From the next period, incoming period, will that have any impact on your profit in the upcoming quarters? Could you let me know regarding that?

Otaka: For the TBCT domain profit, I think the operating profit ratio is improving. The monetization of Rika is definitely on the up as per the figures provided.

Looking ahead now, it's slightly ironic, the plasma demand is definitely increasing, but the collection efficiency of our disposable sets is improved compared to expectations, the demand is going slightly down ironically. I think in H2, the production adjustments would be made under our current plan. In H2, yes, to an extent, the operating profit margin from Rika may be slightly lower than 15%. There is certainly that possibility.

Yoshihara: Just to confirm that, is it correct to understand that the production adjustments will be completed within this fiscal year? Otaka: Plasma demand itself will grow from now on, definitely. We will implement production adjustments, and from next fiscal year, we expect it to improve to its current levels after production adjustments. Tony Ren: Hi. Tony Ren from Macquarie. Just a couple of quick ones from me. Actually, both of

them are related to TMCS business. The first one is about the German Leverkusen losses. How long do you think it will take for you to stop the losses at that factory to turn it around?

Hagimoto: Thank you for the question. In terms of the running cost, as Otaka has mentioned, we are looking at somewhat of 30 million EURO on a semiannual basis. This cost, we do not project will be going down anytime soon. The overall profitability, when that will be coming, will depend on how soon, how fast we can get the contract from the pharmaceutical companies.

Currently, many of the major pharmaceutical companies, we are in discussions. Based on the input from all the teams of pharmaceutical in our organization, they are mentioning that there is a strong interest from the major pharmaceutical companies to be able to utilize the location within the European region.

At this point in time, our outlook for the profitability contribution is not within the GS26 period. We do foresee that within the next midterm projections, it is going to become improvement of the contract situation. We will be able to utilize the manufacturing plants. Therefore, contribution on a profit basis should be in the midterm of the next midterm strategy period.

Ren: Receiving a regulatory clearance typically takes about two years or so, right? You probably also need to do some fixing up at the factory. We are probably looking at three years from now? Hagimoto: Yes. The overall facility itself is, of course, we have done our due diligence and have determined that it is a high-quality manufacturing facility already. There are some investments that we will need to make to bring it up to sort of a Terumo standard level of the quality, but we do not see any kind of issues in getting the regulatory approval. As you mentioned, there are going to be some lead time required to get the regulatory approvals. But whether we can get the approvals, we feel very strongly that there is no obstacle in getting the approvals for that location. Ren: My second question is also in your CDMO business, your LEQEMBI auto-injector. The CDMO revenue related to the LEQEMBI auto-injector, do you book it in Japan, or do you book it in other geographic regions? Hagimoto: Based on our contract with Eisai, we do have the shipment in the Japan area. We will consider the revenue within the Japan region. Naoko Saito: This is JPMorgan Securities, Saito. In Q2, looking at the effect of the tariffs, could you just delve a bit more into the three months in Q2? Otaka: The effects of the tariffs in the three months in Q2, I think it would have been 2.5 billion JPY in impact, but we had strong price effects as with Q1. We made 4 billion JPY in profit, which

was way beyond the impact of the customs.

In terms of inflation, there were some effects from inflation and tariffs impact, but we rebounded from that and have surpassed the negative effects of the tariffs and the inflation.

Saito: From the next year onwards, some price rising effects will come into play. Is that correct? Otaka: In terms of our pricing strategy in terms of the customs and so on, when we do re-contracting, we will aim to have some price rising. From next year onwards, at the time of contracting, price rises will continue to come into effect. Saito: Just a very precise point. But for SG&A, I'd just like to ask for sales, general, and administrative expenses. I believe that you shifted offices to a new office this year. Your headquarters changed. Will that play out this year, or will that continue to have an impact into next year? Otaka: For SG&A, I think it has been managed within the trend of net sales, our net revenues. There is a very, very small diminutive impact, but it will, however, be well controlled within the scope of revenues. Saito: My second question is regarding the plasma innovation business. I think Q2, Rika devices were at full pace, and the net sales from facilities, the volume of disposables reached a peak in Q2, I understand. I think in the lower half, I believe the production is going to go down, but have we already reached the peak of full production in Q2 for plasma innovation devices? Otaka: Yes, we are already in the full peak of that. We have full tilt in Q2. You are correct in your assumption.

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