4554.T

• Company Background & Core Positioning

  • Founded in 1965, celebrated its 60th anniversary in 2024, headquartered in Tokyo with manufacturing at a Toyama plant and 100% owned Thai subsidiary OLIC, ~1,700 total employees, listed on the Tokyo Stock Exchange Prime Market.
  • Core business focuses on prescription pharmaceuticals, with a focus on two high-barrier, high-potential areas aligned with Japan's national policy priorities: addressing unmet needs in women's health (to reduce large macroeconomic losses from undiagnosed/untreated women's health conditions) and developing biosimilars to curb rising healthcare costs from aging population. Both areas have large untapped potential and limited entry from large megapharmaceutical companies.
  • Entered the women's health segment in 1974, began developing new drugs for women's health in 2008, started overseas expansion in 2012, and entered biosimilar development more than 10 years ago. Growth was temporarily stagnant from 2020 due to overlapping patent expirations and sales contract expirations for existing products, but newly prepared products are now in the commercialization phase and the company has returned to a growth trajectory.
  • Current corporate mission is to "contribute to people's healthy lives through excellent pharmaceuticals" and align company growth with employee growth.

• Long-term and Mid-term Strategy

  • Long-term Vision 2035 was launched in 2025, with the mission to "continue creating new value in women's healthcare and contribute to a society where everyone can experience well-being."
  • 5-year Mid-term Management Plan runs through the 2029/9 fiscal period, with four growth drivers: women's healthcare, biosimilars, global CMO, and securing growth investment for the future. Three core initiatives to strengthen the management foundation: human resource development, organizational sophistication, and digital transformation.
  • Mid-term target for 2029/9: 80.0 billion yen total revenue, 10.0 billion yen operating profit, EPS of 240 yen, and double-digit ROE. By 2029/9, women's healthcare and biosimilars are expected to represent two-thirds of total revenue, both of which have high gross margins that will improve overall profitability.

• Operational Highlights for Q1 FY2026/9

  • Q1 results were stronger than expected, leading to an upward revision of full-year 2026/9 revenue guidance to just under 60.0 billion yen. Revenue, gross profit, operating profit, and ordinary profit were all revised upward; net profit was revised downward due to valuation losses on equity holdings.
  • The upward revision was driven by two main factors: 1) エフメノカプセル recorded sales that exceeded forecasts, supported by market expansion and supply shortages/outbound adjustments for some competing products; 2) the ophthalmology biosimilar aflibercept (アイリーア) launched in December 2025 has outperformed sales expectations due to no competing biosimilars entering the market, with strong backorders driven by growing adoption among ophthalmologists.
  • Emergency contraception レソエル72 was launched OTC through drugstores via Alinamin Pharmaceutical starting March 9, 2026, with the company targeting share growth in the OTC market leveraging its existing 90% share in the clinical segment.
  • A strategic collaboration agreement was signed with Gedeon Richter (GR), a European company with strength in women's healthcare, to jointly explore, evaluate, and acquire new drug pipelines for the women's health segment. No specific product names have been announced yet, with further disclosures planned as progress is made.

• The current 5-year mid-term management plan (through 2029/9) is on track after a smooth first 1.5 years, with the 80.0 billion yen total sales target for 2029/9 maintained. The plan expects additional strong growth starting from FY26/9 centered on women's healthcare and biosimilars.
• Full-year 2026/9 guidance was updated after Q1 results: total revenue guidance was revised upward to just under 60.0 billion yen, with revenue, gross profit, operating profit, and ordinary profit all upward revised. Net profit guidance was downward revised due to valuation losses on held equity shares. Management notes there is solid potential for further upside to full-year results before the end of the fiscal period in September.
• Women's healthcare total revenue is projected to grow from the current ~26.0 billion yen to 38.0 billion yen by 2029/9, with アリッサ配合錠 alone expected to contribute 10.0 billion yen in revenue by the end of the mid-term plan.
• エフメノカプセル's current growth trajectory is expected to continue for the next 5 to 10 years in Japan, supported by growing patient awareness and increasing adoption.
• All approved and pipeline biosimilars are expected to deliver significant growth over a 3 to 5 year time horizon, with ゴリムマブBS and デノスマブBS expected to become new growth drivers after launch.
• The company maintains its progressive dividend policy: the projected full-year dividend is 47 yen, and the policy will be maintained even after the dilution from the recent exercise of share warrants that raised approximately 3.3 billion yen.
• Management expects the low penetration of women's hormone therapy in Japan will gradually rise toward Western/regional average levels over the coming years, creating sustained long-term growth for the segment.

1. Women's Healthcare: Current total segment revenue is approximately 26.0 billion yen, holding 42 approved prescription pharmaceutical products (the largest product lineup in Japan for this field). Key products include: エフメノカプセル (menopause disorder treatment) that outperformed sales expectations in Q1 FY2026/9, アリッサ配合錠 (dysmenorrhea treatment), ウトロゲスタン腟用カプセル (infertility treatment for in vitro fertilization) that outperformed conservative forecasts, ファボワール錠 and ラベルフィーユ錠 (oral contraceptives) that hold 55% to ~60% unit market share in Japan and also outperformed conservative plans, and レソエル72 (emergency contraception) which was launched OTC via drugstores in March 2026, with Fuji Pharma holding ~90% share in the hospital/clinic segment. The 2029/9 target for women's healthcare revenue is 38.0 billion yen, accounting for 47.5% of the total 80.0 billion yen full-year target sales.
2. Biosimilars: Fuji Pharma holds approvals for 5 biosimilar components, all of which are first-to-market approved or expected to be first-to-market in Japan, the largest number of approved biosimilar components in Japan. Three biosimilars are already launched (all first-to-market), with three additional approved products expected to launch as first-to-market. Current key products include: アイリーア (aflibercept) biosimilar for ophthalmology, launched December 2025, which is outperforming sales expectations due to no competing biosimilars entering the market yet; ウステキヌマブBS currently approved only for psoriasis, with additional approvals for Crohn's disease and ulcerative colitis pending that will open access to 90% of the total 60.0 billion yen originator market; ゴリムマブBS planned for launch in May 2026 targeting a ~40.0 billion yen market as a single-player, and デノスマブBS also planned for solo market launch. The 2029/9 revenue target for biosimilars is 13.0 billion yen.
3. Global CMO (Contract Manufacturing Organization): The 2029/9 revenue target for this segment is +2.0 billion yen.
4. Overseas Business: Centered on the 100% owned Thai subsidiary OLIC, the 2029/9 revenue target for overseas expansion is 2.0 billion yen. Full year 2024/9 total company revenue was 46.1 billion yen, and as of Q1 FY2026/9 total revenue is just over 50.0 billion yen. For 2029/9, women's healthcare and biosimilars combined are expected to account for two-thirds of total company revenue.

• Biosimilar development has very high barriers to entry: development costs range from 5.0 billion yen to 30.0 billion yen, far higher than the 0.1 billion yen to 1.0 billion yen required for conventional small-molecule generics, and requires clinical trials in human patients, demanding significant corporate financial strength to succeed.
• ウステキヌマブBS currently only has approval for 10% of its potential total market (psoriasis only), with approval for additional indications (Crohn's disease and ulcerative colitis) still pending, so full market access is dependent on successful regulatory approval of these additional indications.
• Annual national drug price revisions generally lower the price of most pharmaceuticals, which can pressure revenue and margins, though Fuji Pharma's average drug price reduction of 0.75% in the most recent revision was far lower than the industry average of 4%, reducing this risk for the company.
• Women's healthcare currently represents less than 5% of the total prescription pharmaceutical market, so it is less attractive to large megapharmaceutical companies at present, but if the market grows larger, increased entry by large competitors could erode market share.
• Menopause and dysmenorrhea treatment adoption in Japan remains far lower than in Western markets, so growth depends on continued increases in patient awareness and physician adoption, which may progress slower than currently expected.

Q: エフメノカプセル sales grew strongly in 2025/9, and seems solid in the near term. What is driving this growth?

A: Growth is driven by two main factors: First, the overall market for menopause treatment is gradually expanding. While the domestic market still has huge untapped potential compared to Western markets, it is currently growing slowly, and has potential for rapid expansion if any catalyst increases awareness. Second, switching from other products to エフメノカプセル is ongoing. This is a highly safe product that is standard in Western markets, but only approved and launched in Japan around 4 years ago. Ongoing switching combined with overall market expansion is driving sustained growth.

Q: Is the growth driven in large part by new patient seeking care who previously put up with symptoms without seeing a doctor?

A: That is a large contributing factor. Similar to dysmenorrhea, many patients tolerate symptoms without treatment, and for menopause many patients initially see a primary care physician rather than a gynecologist, so hormone replacement therapy was not widely adopted. Now, public understanding that menopausal symptoms are largely caused by a sharp drop in estrogen, and that hormone replacement therapy treats the root cause by replacing deficient hormones, has grown deeper, which is driving the market expansion.

Q: Given the market expansion, can we expect sustained sales growth with reasonably high certainty?

A: That is correct. This growth trend is expected to continue in Japan for the next 5 to 10 years.

Q: What is the background for expected continued expansion of the dysmenorrhea treatment market for アリッサ配合錠?

A: Hormone therapy for dysmenorrhea is already widely adopted in Europe, the US, and other Asian countries, with a large patient population. Penetration rates range from 20% to 40% in most countries, but in Japan penetration is just over 10%, which is a low level similar to the environment for menopause treatment.

Q: If awareness continues to grow, could the market expand at least to the average level of other countries?

A: That is the correct expectation. Obstetricians and gynecologists are working every day to expand adoption of appropriate treatment in Japan.

Q: Why are there very few large mega-players in the women's health segment?

A: Globally, women's health prescription pharmaceuticals, especially the obstetrics and gynecology sub-field, only accounts for approximately 5% of the total prescription market. Large megapharmaceutical companies prioritize developing products that can deliver 100.0 billion yen in revenue per product, so the market size of women's health does not align well with their growth priorities. That said, if the market expands and the environment changes in the future, it is not impossible that large pharmaceutical companies will enter the space. At present, though, it remains a niche market with limited entry from large companies.

Q: Can you update on the pipeline for new products in women's health?

A: We recently announced that we have started a joint initiative with Gedeon Richter, a European company with strength in women's healthcare, to jointly explore, evaluate, and acquire new drug pipelines to support future growth. We have not disclosed specific product names at this stage, but we plan to make disclosures sequentially going forward.

Q: What is the impact of drug price revisions and regulatory rule changes on your business?

A: Prescription drug prices in Japan are set by the government as official drug prices, which are revised annually each April, with most revisions resulting in price cuts. In the most recent revision, the industry average price reduction was 4%, while Fuji Pharma's average price reduction was only 0.75%. This lower rate is because we specialize in specialty pharmaceuticals, and we are able to sell at prices close to the official drug price. The lower average price cut stabilizes our business and profitability.

Q: What explains the upward revision to FY26/9 guidance after Q1?

A: We only revised the guidance to reflect confirmed results after Q1 completed, driven by two key points: First, エフメノカプセ recorded higher sales than expected in women's healthcare, supported by market expansion and supply issues for some competing products that worked in our favor. Second, our ophthalmology biosimilar aflibercent (アイリーア), launched this past December, has grown faster than expected because no competing biosimilars have entered the market. These two factors drove the upward revision. We distribute this product through Nitto Medic, which has strong relationships with ophthalmologists, and we have received very large backorders due to strong demand from ophthalmologists, so there is further upside going forward.

Q: Can you revisit the growth potential of current core products and the potential for new products to become new core pillars?

A: Beyond エフメノカプセル and アリッサ配合錠 that we already discussed, ウトロゲスタン腟用カプセル, a new drug used in infertility treatment especially for IVF, was expected to face more competitive pressure, but it has performed steadily and delivered results above plan. Next, our two contraceptive products ファボワール錠 and ラベルフィーユ錠 hold 55% to just under 60% unit market share in Japan, and are widely supported by patients and physicians. We set a conservative plan for these products because some competitors have entered the market, but they have delivered strong results. For biosimilars, ウステキヌマブBS targets an originator market of approximately 60.0 billion yen, but we currently only have approval for a subset of indications. We are waiting for additional approval for the indications that represent 90% of the total market: we currently have approval for psoriasis (dermatology), and are waiting for approval to add Crohn's disease and ulcerative colitis. Once approved, we will be able to capture a large share of the patent-expired market, so we have high expectations for this product. We also plan to launch ゴリムマブBS in May of this year, targeting a 40.0 billion yen market as a solo player, and this product already has high expectations from clinicians, so we expect strong growth. We also plan to launch デノスマブBS as a solo market entrant. We expect significant growth from these biosimilars over a 3 to 5 year horizon.