Medrx Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥118M
• Operating Income: ¥-742M
• Net Income: ¥-320M
• EPS: ¥-14.84

Income Statement

Balance Sheet

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

Medrx Co., Ltd. (4586) reported FY2025 Q3 (cumulative) consolidated results under JGAAP showing severe loss-making conditions alongside a very strong balance sheet. Revenue was ¥118 million, down 53.9% YoY, underscoring the volatility typical of development-stage biopharma dependent on milestone/licensing income. Cost of sales was ¥0.6 million, producing gross profit of ¥255.17 million and an unusually high gross margin of 216.2%, suggesting a revenue mix dominated by high-margin licensing or service income and/or low reported COGS. Operating loss was ¥742 million (essentially flat YoY per disclosure), ordinary loss ¥757 million, and net loss ¥769 million, translating to EPS of -¥14.84. The DuPont ROE decomposition indicates a calculated ROE of -35.78%, driven by a deeply negative net margin (-651.69%), low asset turnover (0.053x), and modest financial leverage (1.03x). The balance sheet remains robust with total assets of ¥2,211 million and very low total liabilities of ¥105.6 million, implying leverage of just 0.05x liabilities-to-equity. Based on the balance sheet, implied equity ratio is approximately 97.2% (¥2,149m equity / ¥2,211m assets), despite the reported equity ratio reading 0.0% (likely a disclosure artifact). Liquidity appears ample with current assets of ¥2,072.7 million and current liabilities of ¥105.6 million, yielding a current ratio of about 19.6x and working capital of ¥1,967.1 million. Cash flow statements are unreported in this dataset (zeros reflect non-disclosure), so operating cash flow, investing/debt financing flows, and cash balance cannot be assessed directly. With losses persisting and revenue falling sharply, profit quality is weak and reliant on non-recurring or high-variance items. Nevertheless, the company’s low liability structure and sizeable current assets provide a buffer for continued R&D investment. Dividend remains nil, consistent with a development-stage profile. Key near-term sensitivities include the timing of pipeline milestones, licensing deals, and expense discipline. Overall, the company presents a classic early-stage biotech profile: strong capitalization and low leverage offset by high cash burn and revenue volatility. Data gaps, particularly in cash flow, D&A, and share count, limit precision in runway and coverage analyses; conclusions are therefore contingent on these disclosures.

Profitability Analysis

ROE_decomposition: ROE -35.78% = Net margin (-651.69%) × Asset turnover (0.053x) × Financial leverage (1.03x). The loss-making margin is the dominant driver of negative ROE, while low turnover reflects limited revenue generation on the asset base and leverage contributes minimally. margin_quality: Gross margin of 216.2% (¥255.17m GP on ¥118m revenue) indicates revenue largely from high-margin sources such as licensing/technology fees or accounting effects (e.g., low COGS recognition). Operating margin is deeply negative due to R&D/SG&A burden not disclosed in detail here but implied by the ¥742m operating loss. operating_leverage: Revenue declined 53.9% YoY while operating loss remained large and effectively flat YoY, indicating high fixed-cost intensity. Sensitivity to incremental revenue should be high; however, absent consistent revenue drivers, operating leverage benefits are not realized.

Growth Assessment

revenue_sustainability: Revenue fell to ¥118m (-53.9% YoY), highlighting low visibility and dependence on irregular, non-recurring items typical in biotech (milestones/licensing). No evidence of recurring product sales is visible in the data. profit_quality: Net loss of ¥769m despite high reported gross margin underscores that operating expenses dominate the P&L. Gross margin above 100% suggests non-standard revenue mix rather than underlying unit economics improvement of a marketed product. outlook: Near-term growth hinges on pipeline progress and partnering activity. If milestones or upfronts materialize, revenue can rebound, but absent such events, losses are likely to continue. Expense discipline will be critical to extend cash runway.

Financial Health

liquidity: Current assets ¥2,072.7m vs. current liabilities ¥105.6m yield a current ratio ~19.6x and quick ratio ~19.6x (no inventories reported), with working capital of ¥1,967.1m, indicating strong short-term liquidity. solvency: Total liabilities ¥105.6m vs. equity ¥2,149m result in very low leverage (debt-to-equity ~0.05x). Implied equity ratio is ~97.2% based on BS values, despite the reported 0.0% figure. capital_structure: Balance sheet is equity-heavy with minimal liabilities, affording flexibility. Interest expense is unreported (0 in dataset); given low liabilities, financial risk from debt service appears limited.

Cash Flow Quality

earnings_quality: OCF is unreported; thus OCF/Net Income ratio shows as 0.00 by default and cannot be interpreted. With substantial net losses and revenue volatility, earnings quality is weak and dominated by R&D/SG&A outlays. FCF_analysis: Free cash flow is unreported in this dataset. Given the scale of losses, true FCF is likely negative absent material non-cash charges or working-capital releases. working_capital: Current assets substantially exceed current liabilities, providing cushion. However, without cash and receivables breakdown, it is unclear how much is immediately deployable cash versus other current items.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 and payout ratio is 0.0%, consistent with ongoing losses. With ROE at -35.78% and negative net income, maintaining a dividend is not feasible. FCF_coverage: FCF coverage is unreported (0.00x in dataset). Given expected negative FCF, dividend coverage would not be supportable if a dividend were contemplated. policy_outlook: The company is likely to prioritize funding R&D and partnering over shareholder distributions until profitability or recurring cash inflows are established.

Risk Assessment

Business Risks:

• Revenue concentration and timing risk from milestone/licensing income leading to high volatility
• Clinical and regulatory risk inherent in drug/device development pipelines
• Execution risk in partnering and commercialization strategy
• Market access and competitive risk if/when products approach commercialization

Financial Risks:

• Sustained losses (¥769m NI loss) requiring continued cash burn
• Potential future financing needs if cash runway shortens and milestones slip
• Limited visibility on cash balances and OCF due to unreported cash flow statements
• Currency and funding environment risk affecting capital access

Key Concerns:

• Sharp revenue decline (-53.9% YoY) with no evidence of recurring sales
• Deeply negative margins leading to ROE of -35.78%
• High dependence on non-recurring income to offset fixed operating costs
• Data gaps on cash, OCF, and D&A that constrain runway and FCF analysis

Investment Implications

Key Takeaways:

• Loss-making with ROE -35.78% driven by extremely negative net margin
• Revenue base (¥118m) is volatile and appears non-recurring/high-margin in nature
• Balance sheet strong: implied equity ratio ~97% and leverage ~0.05x
• Liquidity ample with current ratio ~19.6x and working capital ~¥1.97bn
• Cash flow data not disclosed; true cash burn and runway uncertain
• Dividend unlikely near term given losses and probable negative FCF

Metrics to Watch:

• Cash and equivalents balance and quarterly operating cash flow
• R&D and SG&A run-rate and trends
• Pipeline milestones and new licensing/upfront payments
• Revenue mix (recurring vs. one-off) and contract timing
• Equity issuance or other financing activity and resulting dilution
• Asset turnover improvement as programs advance

Relative Positioning: Within Japan’s small-cap biotech cohort, Medrx appears financially conservative with low leverage and strong liquidity but exhibits weaker profitability and revenue visibility than peers with marketed products; performance will hinge on milestone timing and cost control until commercialization or recurring revenues materialize.

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
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis