The outlook for the global economy during the six months ended September 30, 2025 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 high prices and high interest rates. 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 companies is intensifying. Consequently, uncertainty about the future outlook is increasing. Under these circumstances, in the Long-Term Management Plan 2026 for the six-year period ending March 31, 2026, and the Medium-Term Management Plan 2026 for the three-year period ending 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. For the six months ended September 30, 2025, net sales decreased to ¥18,794 million (down 4.9% year-on-year) as sales of reagents, instruments, and gene therapy declined, despite an increase in CDMO sales. Cost of sales increased to ¥8,230 million (up 12.5% year-on-year) due to changes in the sales mix, and other reasons. As a result, gross profit decreased to ¥10,564 million (down 15.1% year-on-year). SG&A expenses were ¥12,907 million (up 7.3% year-on-year) due to the acquisition of Curio Bioscience, Inc. (“Curio”) and the recording of goodwill amortization, and operating loss was ¥2,342 million (compared with an operating profit of ¥417 million in the same period of the previous fiscal year). Due to the recording of an operating loss, the ordinary loss amounted to ¥2,485 million (compared with an ordinary profit of ¥549 million in the same period of the previous year). The semi-annual net loss before income taxes and other adjustments was ¥6,323 million (compared with a profit before income taxes and other adjustments of ¥427 million in the same period of the previous year), primarily due to the recording of an impairment loss of ¥3,870 million on unused manufacturing facilities for contract services. The income taxes-deferred amounted to ¥248 million due to the reversal of deferred tax assets, among other factors. Consequently, the semi-annual net loss attributable to owners of the parent was ¥6,911 million (compared with net income attributable to owners of parent of ¥513 million in the same period of the previous fiscal year).
Revisions was made to the consolidated financial forecasts announced on May 13, 2025. For the second half of the current fiscal year, the global life sciences research market is expected to remain sluggish. In Japan, factors such as the shortfall in acquiring new projects in the CDMO business are also having an impact. As a result, net sales are expected to be 42.1 billion yen, falling below the previously announced forecast. Despite efforts to review personnel structure, prioritize R&D activities, and reduce SG&A expenses, the significant impact of decline in sales is anticipated result in both operating profit and ordinary profit falling below the previously announced forecast. Operating loss is expected to be ¥4.0 billion, and ordinary loss is expected to be ¥4.4 billion. Furthermore, due to the recognition of extraordinary losses and the partial reversal of deferred tax assets, net income attributable to owners of the parent is expected to fall below the previously announced forecast for full fiscal year period, resulting in an anticipated net loss of 9.0 billion yen. In the reagent business, efforts will focus on expanding sales of Spatial products acquired through the acquisition of Curio Biosciences, Inc., providing OEM and custom products for B to B customers, and promoting C‘R’DMO services in the CDMO business to support ventures from the early stages of development. Additional initiatives include developing proprietary platform technologies and introducing new offerings such as spatial analysis and single-cell analysis. Furthermore, the Company will review its personnel structure, prioritize and focus R&D activities, reduce administrative costs, and aim to improve profitability.
The Company considers returning profits to shareholders to be an important management issue, while paying attention to enhancing internal reserves in order to actively implement R&D activities in both Bioindustry and Gene Therapy businesses. The basic policy of the Company is to return profits to shareholders based on a comprehensive consideration of its operating results and financial position. Specifically, the Company's policy is to pay dividends from retained earnings on the basis of 35% of the estimated net income, which is calculated without taking into account extraordinary gains and losses in the consolidated financial statements. With respect to dividend payments, the Company aims to promote management that focuses on market valuation, and therefore considers both its consolidated full-year financial forecasts and overall management policies in a comprehensive manner. However, in light of the anticipated significant net loss for the current fiscal year, and after careful deliberation, the Company has regretfully decided not to issue a year-end dividend.
We sincerely appreciate the continued understanding and support of our shareholders.
November 2025
Tsuyoshi Miyamura
President & CEO
