4890.T

• Core Pipeline Progress
  • TLM-003 (myopia progression suppression eye drop): Japan Phase 2 trial initiated, co-developed with Rohto Pharmaceutical domestically and partnered with Laboratoires Théa for Europe and the US; targets ER stress to improve sclera health, could be the first clinical product for ER stress-related conditions
  • TLM-001 (meibomian gland dysfunction (MGD) treatment): entered Phase 2a trial; partnered globally with Maruho; MGD causes ~80% of dry eye cases and is an area of high unmet need with no approved treatments globally
  • TLG-001 (myopia progression suppression violet light irradiation device): achieved Last Patient Out (LPO) in domestic clinical trial; data analysis ongoing, results expected early next year
  • TLG-021 (violet light device for irregular menstruation): achieved LPO in specific clinical study, funded by public research grants; data is currently being fixed and analyzed
  • TLG-020 (violet light treatment for retinitis pigmentosa): received clinical research ethics committee approval, preparing to initiate specific clinical research; animal studies show violet light improves retinal dysfunction, targets all genetic forms of the disease (a currently untreatable leading cause of blindness)
  • TLM-017 (eye drop for severe Ocular GVHD dry eye): planning to initiate specific clinical research in H2 2026
  • TLM-023 (new myopia progression suppression eye drop): completing preclinical data packaging for upcoming clinical entry
• Corporate Operational Milestones
  • New office and base opened in the US to support future domestic clinical trials and partnership development with US firms
  • Obtained Japanese cosmetic manufacturing and sales licenses; planning to enter science-backed anti-aging cosmetics leveraging cross-pollination from ocular surface research, in partnership with David Sinclair's team
  • Operates a 'lab-less' light-asset R&D model partnered with 44 contracted academic researchers; runs a closed confidential in-house Tsubota Lab meeting to facilitate collaborative innovation that cannot be delivered by single universities
  • Grew headcount from 9 at listing to 19 currently; increased internship intake from 2 last year to 6 confirmed for 2024
• Business Model
  • Short-term: generates revenue from contract upfront payments and development milestone payments; no product sales or royalty revenue to date
  • Long-term: targets stable revenue from product sales royalties once pipeline candidates are launched

• Full-year 2026 March term guidance is maintained at the originally announced levels: 1.4 billion yen in revenue, 0.2 billion yen in operating profit, 0.22 billion yen in ordinary profit, and 0.15 billion yen in net profit
• Multiple key clinical readouts are expected in the second half of the fiscal year: preliminary clinical data for TLG-001 (myopia device) and TLG-021 (irregular menstruation device)
• Management plans to initiate new specific clinical studies for TLM-017 (Ocular GVHD) and TLG-020 (retinitis pigmentosa) in the second half of the fiscal year
• Preclinical development for TLM-023 (third myopia eye drop) will continue to progress toward clinical entry as soon as possible
• The company will continue efforts to maximize the value of existing pipelines and actively search for new partnership deals for unpartnered programs

Tsubota Lab is an early-stage R&D-focused biotech/medical device company, with all current revenue coming from contract upfront payments and milestone payments from partnered pipeline development. For the 2025 September half-year period: Total revenue was 0.102 billion yen, with an R&D spend of 0.107 billion yen, operating loss of 0.351 billion yen, ordinary loss of 0.333 billion yen, and net loss of 0.333 billion yen. No separate product segment financials or revenue contribution percentages were reported.

• Clinical trial regulatory approvals (such as ethics committee review) can experience delays that impact the timing of R&D expenditure and cash flow
• Partnership contract closing can take longer than initially expected, leading to near-term revenue shortfalls and net operating losses
• All pipeline candidates are still in development, with no approved products launched to date, so there is inherent risk of failure to meet clinical endpoints or obtain regulatory approval
• Retinitis pigmentosa gene therapy is limited by extremely high cost (100 million yen per treatment for one genetic subtype) and only works for a small subset of patients, but the company's violet light approach is still early stage with unproven clinical benefit in humans

Q: Why is R&D expenditure only 20% of the original plan at the half-year point? Does this indicate delayed research progress? / A: Management explains the lower spend does not reflect research delays, as all clinical programs are progressing on track. The timing gap comes from delayed payments and expenditure due to occasional lags in ethics committee approvals for clinical studies, not slower research activity.

Q: What is the reasoning for maintaining the full-year earnings guidance, and is a revision likely? / A: The company is still in the upfront/milestone revenue stage with no royalties from launched products. While contract closing has taken longer than planned and the company is currently running a small half-year loss, management sees no need for a major guidance revision at this point and will continue working toward the original targets.

Q: What is the strategy behind the new US base, and are there plans for additional international hubs? / A: The US base was opened to support future in-house US clinical trials and make partnering with US companies easier, following the successful experience of the China base that advanced partnerships with major Chinese firms. There are no current plans to open a European base, but the company will update the market if it enters that expansion phase.

Q: What is the positioning of the new sirtuin-activating cosmetics business, and what is its scientific background? / A: The business is a science-backed consumer product extension of the company's core ophthalmic R&D, leveraging shared epidermal biology between skin and the ocular surface. It is developed in partnership with anti-aging researcher David Sinclair's team, using space-returnee lactobacillus to develop scientifically validated sirtuin-activated anti-aging cosmetics, not generic feel-good products.

Q: What differentiates Tsubota Lab's R&D model from other biotech firms? / A: The company uses a unique light-asset lab-less model, rather than heavy in-house laboratory infrastructure. It runs a closed, confidentiality-guaranteed internal research collaborative forum called Tsubota Lab Meeting, where contracted researchers co-create new knowledge, which is different from standard outsourced contract research models.