PRISM BioLab Co.,LTD FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥677M
• Operating Income: ¥-774M
• Net Income: ¥-833M
• EPS: ¥-22.82

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

PRISM BioLab reported FY2025 Q4 (JGAAP, non-consolidated) results featuring a sharp top-line increase alongside continued sizable losses typical of a drug discovery/licensing-stage biotech. Revenue rose 121.6% YoY to ¥677m, suggesting milestone or licensing-related inflows rather than broad-based commercial scaling. Despite the revenue step-up, operating loss remained large at ¥774m (flat YoY), and net loss was ¥833m (also flat YoY), indicating that cost intensity, likely R&D and SG&A, offset growth. Reported gross profit was ¥160.5m, implying a gross margin of 23.7%, though the relationship between reported gross profit (¥160.5m) and cost of sales (¥145.1m) against revenue appears non-standard for classic manufacturing accounting, which is common in research-driven models. DuPont analysis points to deeply negative profitability (NPM -123.0%) combined with low asset turnover (0.219x), yielding ROE of -30.8% on modest financial leverage (1.14x). Operating cash flow was a significant outflow at -¥1,468m, leading to negative free cash flow of -¥1,537m after modest investing cash outflows of -¥69m. Liquidity ratios are reported as very strong (current ratio and quick ratio both 439.6%), but the balance sheet presentation shows current assets (¥4,483m) exceeding total assets (¥3,085m), which indicates reporting classification differences or data mapping issues across statements; analysis therefore emphasizes directional, not absolute, balance sheet interpretation. Total liabilities were ¥1,025.7m against equity of ¥2,708.0m, implying a comfortable capital cushion and low leverage (D/E 0.38x). Ordinary income loss (-¥748m) was slightly better than operating loss, consistent with small non-operating gains or lower non-operating expenses. The OCF-to-net income ratio of 1.76 (greater cash burn than accrual loss) indicates lower earnings quality and heavy cash consumption typical of R&D ramp. No dividends were paid (DPS ¥0), and payout/FCF coverage are unsurprisingly zero given losses. With revenue likely milestone- or option-driven and inherently lumpy, near-term top-line visibility remains limited absent disclosed backlog or contracted milestones. The company appears funded for the near term given low leverage and large reported working capital, but sustained cash burn will remain an overhang until milestone cadence or partnerships widen. Overall, the quarter reflects a classic biotech profile: improving revenue from deals, structurally negative operating leverage due to R&D intensity, and a balance sheet that seems adequate for near-term execution but must be monitored closely for runway.

Profitability Analysis

ROE_decomposition: ROE -30.76% = Net Profit Margin (-123.04%) × Asset Turnover (0.219x) × Financial Leverage (1.14x). The negative NPM dominates the ROE outcome, while low turnover reflects a pre-commercial R&D model and leverage remains modest. margin_quality: Gross profit ¥160.5m on revenue ¥677.0m implies a 23.7% gross margin, but the provided cost of sales (¥145.1m) and gross profit figures do not reconcile to standard definitions, suggesting non-traditional cost classification typical in biotech licensing models. Operating margin is deeply negative (operating loss ¥774m), indicating heavy R&D and SG&A burden relative to revenue. Ordinary loss (-¥748m) and net loss (-¥833m) confirm persistent negative bottom-line margins. operating_leverage: Revenue grew +121.6% YoY but operating loss was flat, implying some incremental scale benefits; however, total costs still materially outpaced gross profit gains. The business continues to exhibit negative operating leverage at current scale given the R&D-driven expense base.

Growth Assessment

revenue_sustainability: The +121.6% YoY revenue increase (to ¥677m) likely reflects milestone/licensing variability rather than recurring product revenue. Visibility into future periods is limited without disclosed pipeline milestones or contracted schedules. profit_quality: Net loss (-¥833m) and operating loss (-¥774m) despite revenue growth point to limited drop-through. The gross margin profile (23.7%) is modest and potentially mix/methodology-dependent. Ordinary loss smaller than operating loss suggests minor non-operating support but not enough to change the trajectory. outlook: Absent evidence of repeatable revenue streams, growth will likely remain lumpy and event-driven. Near-term profitability remains unlikely without larger, recurring partner payments or a shift to later-stage milestones/royalties. Cost discipline and milestone conversion will be key to narrowing losses.

Financial Health

liquidity: Reported current ratio and quick ratio are both 439.6%, implying substantial liquid assets relative to current liabilities (current assets ¥4,483.1m vs current liabilities ¥1,019.9m). Note, however, that current assets exceed total assets (¥3,085.0m), indicating cross-statement mapping or classification differences; the directional takeaway still implies strong near-term liquidity. solvency: Total liabilities ¥1,025.7m against total equity ¥2,708.0m yields low leverage (D/E 0.38x). Financial leverage in DuPont (1.14x) also reflects a conservative capital structure. capital_structure: Debt appears modest given the D/E ratio and the absence of reported interest expense (0 reported; treated as undisclosed). Equity finances the majority of the balance sheet, aligning with typical biotech funding models.

Cash Flow Quality

earnings_quality: OCF/Net Income of 1.76 indicates cash burn outpaced accounting loss, consistent with significant cash costs (e.g., R&D payments, working capital movements) and limited non-cash add-backs (depreciation reported as 0, treated as undisclosed). FCF_analysis: Free cash flow was -¥1,537m (OCF -¥1,468m plus investing CF -¥69m), reflecting substantial cash consumption. Financing inflows were minimal at ¥33m, implying limited external funding in the period. working_capital: Working capital is reported at ¥3,463.2m (current assets minus current liabilities), indicating ample cushion. Given the data inconsistency between current and total assets, this figure should be interpreted cautiously but suggests a supportive runway if current assets are largely cash and equivalents/receivables.

Dividend Sustainability

payout_ratio_assessment: No dividend (DPS ¥0.00) and losses imply no capacity for distributions under current conditions. Payout ratio is effectively not meaningful in a loss-making context. FCF_coverage: FCF is negative (-¥1,537m), so dividend coverage is not applicable. Cash preservation remains a priority. policy_outlook: Given the company’s development stage and cash burn profile, dividend initiation is unlikely until sustainable positive earnings and FCF are achieved. Management focus is expected to remain on funding R&D and milestone generation.

Risk Assessment

Business Risks:

• Revenue concentration and milestone timing risk inherent in licensing-driven models
• Clinical and development risk across the pipeline impacting future milestones
• Partner dependency and counterparty execution risk
• Commercialization timing uncertainty and lumpy revenue recognition under JGAAP
• Competition for partnering capital and deal terms within biotech
• Regulatory approval timelines and outcomes

Financial Risks:

• Sustained negative operating and free cash flow
• Potential need for future equity financing and dilution
• Accounting presentation variability (e.g., gross profit vs cost classifications) adding volatility to reported margins
• Runway sensitivity to milestone receipts and payment schedules
• FX exposure if partnerships are denominated in foreign currencies

Key Concerns:

• Large, persistent operating losses despite revenue growth
• OCF burn (-¥1,468m) exceeding accrual losses, indicating heavy cash needs
• Data inconsistencies (current assets > total assets) complicate precise liquidity assessment
• Limited visibility into the sustainability of revenue growth absent disclosed backlog/milestones

Investment Implications

Key Takeaways:

• Top-line up +121.6% YoY to ¥677m, likely milestone-driven and non-recurring
• Operating loss remains large at -¥774m; net loss -¥833m
• Gross margin reported at 23.7%, but cost classification appears non-standard
• OCF -¥1,468m and FCF -¥1,537m indicate substantial cash burn
• Balance sheet shows low leverage (D/E 0.38x) and large working capital
• Liquidity appears strong directionally, though statement inconsistencies warrant caution
• ROE -30.8% driven by deeply negative NPM and low asset turnover
• Financing inflow minimal (¥33m), implying reliance on existing resources in the near term

Metrics to Watch:

• Cash runway (proxy: working capital ¥3,463m vs annualized OCF burn ~¥1.5bn)
• Milestone cadence, contracted backlog, and partner pipeline updates
• R&D expense trajectory and operating expense discipline
• Revenue mix (upfront vs milestones vs services) and margin evolution
• Ordinary vs operating income gap (non-operating items/FX impacts)
• Any equity or debt issuance plans and terms

Relative Positioning: Within the TSE biotech cohort, PRISM BioLab exhibits a typical R&D-stage profile: low leverage and ample working capital, improving but inherently lumpy licensing revenue, and sustained operating losses pending milestone scale-up or later-stage economics.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
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