The outlook for the global economy in the fiscal year under review is uncertain due to factors such as prolonged inflation in the United States and Europe, economic recession in China, and heightened geopolitical risks caused by regional conflicts and other factors, and the ongoing blocking of the global economy.
In the life science industry as well, the research budget has been reduced due to the impact of global inflation and high interest rates in Europe and the United States. In the United States, the government policy has substantially reduced research grants, and the activity of research and development in the industry and academia is declining. In China, competition with rival domestic competitors is intensifying. Consequently, uncertainty about the outlook is increasing.
Under these circumstances, in the Long-Term Management Plan 2026 for the six-year period ended March 31, 2026, and the Medium-Term Management Plan 2026 for the three-year period ended March 31, 2026, we have promoted the development of biotechnology-based biologics development technologies through Reagents / Instruments business and CDMO business and have promoted initiatives aimed at becoming a global platform provider responsible for the infrastructure of the life science industry.
In the fiscal year under review, net sales decreased to \40,318 million (down 10.5% year-on-year) as sales of all categories of Reagents, Instruments, CDMO, and Gene Therapy declined. Cost of sales increased to \20,057 million (up 5.7% year-on-year) due to changes in the sales mix, and other reasons. As a result, gross profit decreased to \20,261 million (down 22.3% year-on-year). Selling, general and administrative (SG&A) expenses were \24,949 million (up 4.8% year-on-year) due to the acquisition of Curio Bioscience, Inc. (“Curio”) and the recording of goodwill amortization, and operating loss was \4,688 million (compared with an operating profit of \2,263 million in the previous fiscal year).
Due to the recording of the operating loss, the ordinary loss amounted to ¥4,992 million (compared with an ordinary profit of ¥2,592 million in the previous year).
The net loss before income taxes was ¥9,200 million (compared with a profit before income taxes of ¥1,997 million in the previous year), primarily due to the recording of an impairment loss of ¥3,876 million on unused manufacturing facilities for contract services, among other factors. The income taxes-deferred amounted to ¥183 million due to the reversal of deferred tax assets, among other factors. Consequently, the net loss attributable to owners of the parent was ¥9,599 million (compared with net profit attributable to owners of parent of \1,041 million in the previous fiscal year).
Following the completion of the tender offer by Takara Holdings Inc. for our common stock, we will be a wholly-owned subsidiary of Takara Holdings following the prescribed procedures and will be delisted.
We have positioned the early improvement of profitability as a top priority, we will pursue more flexible and agile decision-making while leveraging the resources and expertise of Takara Holdings. Through initiatives including reforming the earnings structure by reviewing business domains and personnel allocation, improving operational efficiency in manufacturing and administrative functions, strengthening business development in new business fields, and promoting active personnel exchanges to facilitate mutual knowledge sharing, we aim to transform the business structure into one that sustainably generates profits commensurate with the asset scale.
As stated in the press release announced on May 13, titled “Implementation of Structural Reforms for Profit Improvement,” we will strive for an early recovery in profitability and aim for sustainable medium- to long-term growth."
We would like to express our sincere gratitude to our investors for their support and ask for your continued understanding of the Company.
May 2026
Tsuyoshi Miyamura
President & CEO
