SUSMED,Inc. Q2 FY2025 earnings call

• Corporate Vision & Business Overview

  • The company's vision is to achieve "Sustainable Medicine" through ICT utilization, with business covering therapeutic digital app development, clinical trial system services for drug/medical device development, medical big data collection and analysis infrastructure, and post-market data utilization initiatives.
  • The company owns three core technology platforms: QDTx (a therapeutic app development platform that enables accelerated pipeline development with pre-built patented common technologies), SUSMED SourceDataSync (a blockchain-enabled clinical trial system that automates regulatory compliance work previously done manually by CROs to improve trial efficiency), and Awesome Intelligence (an automated machine learning cloud-based data analysis system that enables efficient analysis of big data from commercialized therapeutic apps without dedicated data scientist support).

• Pipeline Development Progress

  • The insomnia disorder therapeutic app has already obtained regulatory approval, with a partial change approval application for insurance coverage submitted in August 2024, and post-coverage marketing plans being developed in collaboration with Shionogi Pharma.
  • A collaboration with Asuka Pharmaceutical on PMS/PMDD therapeutic apps reached the milestone of first patient enrollment in February 2025, triggering a 100 million yen additional milestone payment (combined with 200 million yen in upfront contract fees, 300 million yen total will be recorded as revenue in Q3).
  • A tinnitus therapeutic app collaboration with Kyorin Pharmaceutical has completed subject enrollment for a specific clinical study; other ongoing pipelines include breast cancer exercise therapy, chronic kidney disease therapy, persistent positional vertigo therapy, and diagnostic medical devices for perinatal depression and ADHD.

• Platform Business Operational Progress

  • The company's blockchain-enabled clinical trial system has launched operations for an investigator-initiated trial of rituximab for chronic fatigue syndrome at the National Center of Neurology and Psychiatry.
  • A blockchain-based venous disease registry system, hosted at Tohoku University, has launched operations; this system addresses the historical issue of unvalidated registry data by enabling GCP-compliant high-quality data collection for post-market utilization, and is provided to medical device manufacturers.

1. DTx Product Business: 0 yen revenue recorded through the first half (Q2), with 300 million yen in confirmed revenue to be recorded in Q3 from the collaboration milestone with Asuka Pharmaceutical. 2. DTx Platform Business: Generated stable revenue through the first half (Q2), turned profitable at the segment level as additional development launched in the prior period began contributing to revenue. Total consolidated business revenue through the first half was 73 million yen, with a consolidated operating loss of 308 million yen. Revenue contribution percentage was not provided for either segment in the transcript.

• The full-year 2025 June fiscal year total business revenue guidance was maintained at the original level, with no changes made.
• Operating loss guidance was revised upward (reduced the projected loss size): the original projected operating loss of 583 million yen was revised to 378 million yen.
• The upward revision was driven by cost reductions including lower recruitment expenses, unspent personnel costs, and compressed clinical development expenses, with R&D expenses also expected to be reduced via improved clinical development efficiency.

• The timeline for regulatory review of the insomnia disorder therapeutic app's partial change approval application is controlled by Japanese regulatory authorities (PMDA and the Ministry of Health, Labour and Welfare), and the company cannot guarantee it will be completed within the current fiscal year to meet the planned insurance coverage timeline.
• Regulatory and stakeholder uncertainty related to the insurance coverage process for therapeutic apps, including potential misinterpretation of statements from academic societies that could impact market adoption or regulatory timelines, is present.
• While the company maintains ample cash reserves and a stable financial position currently, clinical development of multiple pipelines carries inherent cost and timeline risks.

Q: What is the current status of the partial change approval application for the insomnia disorder therapeutic app, and are there any outstanding issues holding up review? Is the goal of in-fiscal-year insurance coverage still maintained? / A: Regulatory review is proceeding steadily with no outstanding issues blocking the process. The approval timeline is controlled by the PMDA and Ministry of Health, Labour and Welfare, and the company is waiting for regulatory procedures to conclude as scheduled. The company still holds to the target of achieving insurance coverage in the current fiscal year.

Q: What impact does the joint statement from two Japanese academic societies requesting technical fee evaluation for in-person cognitive behavioral therapy have on the insomnia app's insurance coverage approval? Is the relationship with academic societies strained? / A: The Japanese Ministry of Health, Labour and Welfare has already confirmed that therapeutic apps will be evaluated as specified insurance medical materials rather than technical fees, so the statement does not change the already established evaluation framework. The statement primarily reflects the societies' request for evaluation of in-person therapy, not opposition to app approval, and the societies continue to collaborate on developing appropriate use guidelines for the insomnia app, with no negative impact on the approval process.

Q: What is the breakdown of the full-year revenue forecast, after accounting for the 300 million yen milestone from Asuka Pharmaceutical? / A: The 300 million yen milestone from the DTx product business will be added to prior revenue, and the remaining portion of the full-year revenue target will come from the DTx platform business. Revenue contributions are already visible from ongoing projects including the National Center of Neurology and Psychiatry trial and the venous disease registry system, which are already operational and will contribute to full-year results.

Q: Can you provide an update on the market adoption of insomnia therapeutic apps overseas to contextualize the Japanese market opportunity? / A: Over the past two years, European guidelines have been updated to add digital CBT (via therapeutic app) as a first-line treatment option for insomnia, prioritized over sleeping pills. In Germany, multiple apps including HelloBetter have received approval and insurance coverage, with published data showing more than half of German primary care physicians have experience prescribing these apps, indicating solid clinical adoption, even as financial results for the mostly private developer firms are not publicly disclosed.