Summary of Financial Results

Summary of Results of Fiscal Year Ended March 31, 2018

Net sales ¥30,175 million (+2.0% year on year )

In the fiscal year ended March 31, 2018 (fiscal 2017), net sales were \30,175 million, up 2.0% year on year. The result is attributable to higher sales volumes of pharmaceuticals to the U.S. and strong overseas sales in the LAL business, despite a decrease in sales of domestic pharmaceuticals

Operating income ¥1,421 million (+10.9% year on year )

With regard to earnings, operating income rose 10.9% year on year to ¥1,421 million, reflecting the sales increase as well as a decrease in the cost of sales ratio, which resulted in part from production efficiency improvement, despite an increase in selling, general and administrative expenses. These were mainly R&D expenses accompanying progress with development themes such as SI-613, an osteoarthritis treatment.

Ordinary income ¥5,327 million (+115.1% year on year )
Net income ¥3,922 million (+119.4% year on year )

Ordinary income rose 115.1% year on year to ¥5,327 million, and net income attributable to owners of parent rose 119.4% year on year to ¥3,922 million, reflecting a substantial increase in royalty income, among other factors.

Net Sales by Business Segment

Pharmaceuticals Business ¥24,244 million (+0.4% year on year )

Domestic Pharmaceuticals ¥16,125 million (-0.9% year on year )


Deliveries to medical institutions and the Company’s sales of ARTZ, a joint function improving agent, declined, partly as a result of the impact of restrained purchasing by medical institutions in connection with National Health Insurance (NHI) drug price reductions implemented in April 2018.

Deliveries to medical institutions and market share of the OPEGAN series, ophthalmic surgical aid, rose sharply as a result of vigorous sales promotion activities for SHELLGAN, and the Company’s sales increased as well.

The Company’s sales of MucoUp, submucosal injection agent for endscopic surgery, were at the prior-year level.

Overseas Pharmaceuticals ¥7,113 million (+5.0% year on year )

U.S. sales of Gel-One, a single-injection joint function improving agent, increased as a volume increase compensated for the impact of a decline in local selling unit prices accompanying price adjustments for some major customers. The Company’s sales increased due to the local sales increase coupled with the impact of yen depreciation.

U.S. sales of SUPARTZ FX, a 5-injection joint function improving agent, fell, reflecting a preference in the U.S. market for products that require a low number of injections, such as single-injection and 3-injection products. The Company’s sales increased due to a sales partner inventory buildup.

The impact of a government price-curbing policy is running its course, and sales of ARTZ in China (P.R.C.) returned to growth. The Company’s sales decreased, following a concentration of shipments in fiscal 2016 accompanying a local inventory buildup.

Bulk Products ¥1,005 million (-9.6% year on year )

Sales decreased due to fierce competition in the market for hyaluronic acid.

LAL Business ¥5,931 million (+9.1% year on year )

Sales of the LAL business rose 9.1% year on year to \5,931 million as a result of strong overseas sales of endotoxin-detecting reagents and other products, mainly at the U.S. subsidiary, despite a decrease in sales to dialysis facilities in Japan.

Forecasts for the Fiscal Year Ending March 31, 2018

Millions of yen Net sales Operating income Ordinary income Net income
 Fiscal 2018(Forecast) 28,100 400 2,250 1,700

※The forecast shown in these materials are based on information currently available and certain assumptions that the Company regards as reasonable. Actual performance and other results may differ materially from these forecasted figures due to various factors.

(As of May 11, 2018)

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