Summary of Financial Results

Summary of Results for the Second Quarter of Fiscal Year Ended March 31, 2018

Net sales ¥15,495 million (+2.7% year on year )

 In the first six months (April 1 to September 30, 2017) of the fiscal year ending March 31, 2018 (fiscal 2017), net sales rose 2.7% year on year to ¥15,495 million. This is attributable to factors including an increase in shipments due to an inventory build-up of SUPARTZ FX in the U.S. and the impact of yen depreciation, despite a backlash from a high level in the same period of fiscal 2016 in shipments of ARTZ in Japan and inventory adjustments of ARTZ in China. 

Operating income ¥2,218 million (+183.4% year on year )

 With regard to earnings, operating income rose 183.4%, year on year to ¥2,218 million, reflecting the sales increased coupled with a decrease in selling, general and administrative expenses as a result of partial slippage of planned R&D expenses to the third quarter or later. 

Ordinary income ¥4,794 million (+248.3% year on year )
Net income ¥3,550 million (+250.4% year on year )

 Ordinary income rose 248.3% year on year to ¥4,794 million, and net income attributable to owners of parent rose 250.4% year on year to ¥3,550 million, reflecting a sharp increase in royalty income and a gain on valuation of foreign currency-denominated assets compared with a loss in the same period of fiscal 2016.

Net Sales by Business Segment

Pharmaceuticals Business ¥12,559 million (+2.3% year on year )

Domestic Pharmaceuticals ¥8,453 million (-0.8% year on year )


 In a flat overall market, deliveries to medical institutions of ARTZ, a joint function improving agent, increased slightly due to strengthening of sales promotion activities accompanying the introduction of new syringes in April 2016. The Company’s sales to the sales partner decreased as a result of the impact of NHI drug price reductions.

 Deliveries to medical institutions and market share of the OPEGAN series, ophthalmic surgical aids, increased as market penetration of SHELLGAN, launched in July 2016, steadily progressed as a result of active sales measures. The Company’s sales to the sales partner also rose, compensating for the impact of NHI drug price reductions.

 The Company’s sales of MucoUp, a surgical aid for endoscopic mucosal resection, were at nearly the prior-year level due to a one-time increase in shipments accompanying a change in sales partner in April 2016.

Overseas Pharmaceuticals ¥3,586 million (+11.1% year on year )

 U.S. sales volumes of Gel-One, a single-injection joint function improving agent, continue to increase. The Company’s sales were at the prior-year level due to the impact of concentration of shipments associated with a label change in the same period of fiscal 2016 and a decline in local selling prices accompanying price adjustments for some major customers, despite the impact of yen depreciation.

 Although U.S. sales of SUPARTZ FX, a 5-injection joint function improving agent, fell slightly amid increasingly fierce competition, the Company’s sales increased as a result of concentration of shipments accompanying a local inventory buildup.

 The impact of the Chinese government’s price-curbing policy is running its course, and sales of ARTZ in China (P.R.C.) increased slightly. The Company’s sales decreased due to local inventory adjustments.

Bulk Products ¥519 million (-3.1% year on year )

 Although sales of hyaluronic acid were at the prior-year level, overall sales declined slightly, reflecting timing factors of chondroitin sulfate shipment.

LAL Business ¥2,936 million (+4.7% year on year )

 Sales of the LAL business rose 4.7% year on year to ¥2,936 million as a result of increase 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 2017(Forecast) 30,300 1,500 3,750 2,700

* Although earning of first six months for Fiscal 2017 reached the forecast of consolidated financial results, disclosed on May 12, 2017, there is no change to the forecast due to concentration of R&D expenses in third quarter or later.


(As of November 7, 2017)

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