PeptiDream Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥12.86B
• Operating Income: ¥-4.06B
• Net Income: ¥17.62B
• EPS: ¥-24.88

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

PeptiDream (4587) reported FY2025 Q3 consolidated IFRS results marked by a sharp revenue contraction and a return to losses, but with notably strong operating and investing cash inflows. Revenue was 128.57 (100M JPY), down 69.1% YoY, consistent with the company’s milestone/license-driven business model that can create significant period-to-period volatility. Operating income was -40.58, indicating a widened operating loss (+263.1% YoY in loss magnitude), while net income came in at -32.17 (+397.6% YoY in loss magnitude). An unusual gross profit of 325.39 against revenue of 128.57 yields a gross margin of 253.1%, suggesting classification effects (e.g., licensing income or other operating income recognized above the operating line, or cost allocation differences), a common feature among platform biopharma companies under IFRS. SG&A was 56.80, implying that the operating loss is driven by factors outside of SG&A alone—likely R&D or other operating expenses that were not separately disclosed in this dataset. The effective tax rate was -154.0%, reflecting significant tax expense of 66.80 despite a pre-tax loss, likely due to non-deductible items, changes in deferred tax assets/liabilities, or prior-period adjustments. DuPont analysis shows ROE at -6.1%, driven by a net margin of -25.0% and very low asset turnover of 0.166, with modest leverage at 1.47x. The balance sheet appears strong on an equity basis with an equity ratio of 67.8% and reported debt-to-equity of 0.68x, though some line items are unreported, and totals suggest classification gaps. Cash generation was a bright spot: operating cash flow was 238.44, and investing cash flow was positive at 94.37, driving reported free cash flow of 332.81. Capex was modest at -14.18, consistent with an asset-light, partnership-intensive model. Cash and equivalents were sizable at 481.18, providing liquidity to fund pipeline progress and platform investments. Working capital is reported at 572.10 (current assets only; current liabilities are unreported), limiting precision in liquidity analysis. EPS was -24.88 JPY on 129.34 million average shares, and BVPS was 407.05 JPY, indicating book value support despite the loss. Revenue visibility remains limited given dependence on milestone timing, but the robust cash position and positive OCF mitigate short-term funding risk. Overall, profitability metrics deteriorated on lower milestone revenue, but the company preserved financial flexibility through strong cash flows and a solid equity base. Data limitations (notably R&D, other income/expense breakdowns, and current liabilities) constrain deeper margin decomposition and liquidity ratio precision.

Profitability Analysis

ROE_decomposition: ROE -6.1% = Net margin (-25.0%) x Asset turnover (0.166) x Financial leverage (1.47x). The negative ROE is primarily driven by the sharp contraction in net margin and low turnover; leverage is modest and does not materially amplify returns. margin_quality: Reported gross margin of 253.1% is atypically high for biopharma and implies significant non-product income (e.g., licensing/upfront/milestone) or classification of other operating income above the gross profit line. Operating income at -40.58 versus gross profit 325.39 and SG&A 56.80 indicates substantial other operating expenses (likely R&D and/or impairments) not itemized here. EBITDA was -23.64 (margin -18.4%), highlighting underlying operating losses even before D&A. operating_leverage: With revenue at 128.57 and SG&A at 56.80, the fixed cost base remains high relative to quarterly revenue, amplifying operating leverage. The steep YoY revenue decline magnified losses; conversely, any recovery in licensing/milestone revenue can swing profitability quickly. Depreciation & amortization of 16.94 indicates some non-cash cost burden but not the primary driver of the loss.

Growth Assessment

revenue_sustainability: Revenue fell 69.1% YoY to 128.57, reflecting timing of milestone/license revenue and potential slowdown in new deals or milestone achievements. Recurring elements (e.g., platform fees) are not disclosed, limiting visibility. The business model remains inherently volatile on a quarterly/period basis. profit_quality: Net loss of -32.17 was impacted by an anomalous tax expense (66.80) and likely significant R&D/other operating costs not disclosed. The gap between gross profit and operating income suggests material costs below the gross profit line. The reported gross margin is not a clean indicator of core product profitability due to mix effects and revenue classification. outlook: Near-term results will depend on the cadence of partner milestones, new licensing agreements, and potential expansion of downstream economics. A normalization of milestone flow could rapidly improve margins and ROE, while continued softness would keep results loss-making. No guidance is provided in this dataset; visibility remains low.

Financial Health

liquidity: Current assets were 572.10, but current liabilities were unreported, preventing calculation of current/quick ratios. Cash & equivalents were 481.18, indicating ample near-term liquidity. Working capital was reported at 572.10, likely representing current assets alone. solvency: Total liabilities were 360.08 against total equity of 525.96 (equity ratio 67.8%). Debt-to-equity was 0.68x, with short-term loans at 25.93 and long-term loans at 170.42, a manageable leverage profile for a company with substantial cash. capital_structure: Interest-bearing debt specifics are partially unreported, but disclosed loans sum to 196.35, implying moderate gross leverage supported by a large cash balance. Equity base remains strong (BVPS 407.05 JPY), providing cushion for R&D investment.

Cash Flow Quality

earnings_quality: Despite a net loss of -32.17, operating cash flow was strong at 238.44, yielding an OCF/Net Income ratio of -7.41x (positive OCF versus negative NI). This suggests favorable working capital movements and/or non-cash charges, though the precise drivers are not disclosed. FCF_analysis: Reported free cash flow was 332.81, supported by OCF of 238.44 and positive investing CF of 94.37; capex was modest at -14.18, consistent with an asset-light platform. Positive investing CF likely reflects asset sales/redemptions rather than growth investments. working_capital: Accounts receivable were 52.83 and inventories 26.72; payables were 53.32. The combination of strong OCF and limited disclosed working capital balances suggests collection and payables management contributed to cash generation, but incomplete disclosure limits attribution.

Dividend Sustainability

payout_ratio_assessment: Dividends and payout ratios were unreported. With negative net income and high earnings volatility, a cash dividend would typically be constrained absent explicit policy; no payout calculation can be made. FCF_coverage: Given positive reported FCF of 332.81 and substantial cash, coverage would be ample if a dividend were pursued, but sustainability would hinge on recurring cash generation rather than one-time investing inflows. policy_outlook: No dividend policy details are provided. Given the development-stage, partnership-driven profile and current losses, reinvestment in R&D and platform capabilities likely remains the priority.

Risk Assessment

Business Risks:

• Milestone and licensing revenue timing volatility leading to lumpy earnings
• Partner dependency for program advancement and milestone triggers
• R&D execution risk, including clinical and regulatory uncertainties
• Concentration risk if revenue is reliant on a small number of key partnerships
• Intellectual property protection and competitive platform technologies
• FX exposure on USD/EUR-denominated deals and milestones

Financial Risks:

• Negative operating margin and EBITDA despite positive OCF
• Potential tax volatility, evidenced by a large tax expense in a loss period
• Refinancing risk on 196.35 of loans if cash burn re-accelerates
• Potential need for external funding or dilution if milestone cadence weakens
• Measurement/classification risks under IFRS impacting comparability

Key Concerns:

• Severe YoY revenue decline (-69.1%) and widened operating loss
• Unusual gross margin (253.1%) and lack of expense disclosure (R&D) obscure core profitability
• Large tax expense (66.80) driving net loss below operating loss
• Visibility on near-term revenue recovery is limited due to milestone timing

Investment Implications

Key Takeaways:

• Revenue down 69.1% YoY to 128.57 with operating income at -40.58 and net income at -32.17
• ROE -6.1% driven by -25.0% net margin and low asset turnover (0.166)
• Strong cash generation: OCF 238.44, investing CF 94.37, reported FCF 332.81
• Cash & equivalents 481.18 support liquidity; equity ratio 67.8% indicates balance sheet strength
• Debt moderate (short-term 25.93, long-term 170.42; D/E 0.68x)
• Anomalous tax expense (66.80) despite pre-tax loss (-43.39) depresses bottom line
• Expense disclosure gaps (notably R&D) constrain margin diagnostics
• Earnings volatility inherent to milestone/licensing model remains the central driver

Metrics to Watch:

• New licensing deals, milestone achievements, and their revenue timing
• R&D expense run-rate and pipeline progress updates
• Operating cash flow trajectory versus net income
• Cash balance and debt maturity/repayment schedule
• Tax items and deferred tax movements affecting effective tax rate
• Backlog/contracted revenue visibility and partner concentration
• EBITDA margin normalization and any impairment/one-off charges

Relative Positioning: Within Japan’s biotech/platform peers, PeptiDream exhibits stronger balance sheet resilience and cash liquidity, but also heightened revenue and earnings volatility tied to milestone recognition. Its partnership-driven model can deliver step-function swings in profitability relative to peers with more recurring product sales.

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