TAUNS Laboratories,Inc.

Business Details

The company manufactures antigen test kits using its proprietary immunochromatographic assay method (Black Line, based on platinum-gold colloid technology) and sells them to hospitals and clinics via pharmaceutical wholesalers. Its mainstay products are test kits for infectious diseases such as COVID-19, influenza, and RSV. Domestic sales account for the vast majority of revenue, with the Suzuken Group as the largest customer (59.4% of sales in FY2025, ended June 2025). In FY2026 (ending June 2026), the company is experiencing a substantial decline in both revenue and profit due to the combination of a shrinking COVID-19 epidemic and wholesalers working down their inventory in the market.

Recent Overview

Both net sales and operating income declined sharply due to the combined effects of a shrinking COVID-19 epidemic and wholesaler inventory drawdown

In the nine months ended March 2026 (9M FY2026, ending June 2026), net sales fell sharply to ¥10,663 million (down 39.4% year on year) and operating income to ¥3,509 million (down 62.4% year on year), reflecting both the reversal of the prior-year buildup in wholesaler inventory—which led to inventory drawdown this period—and a COVID-19 epidemic that was smaller in scale than the prior-year period. The decline was especially pronounced in the third quarter alone, with net sales of ¥2,386 million (down 57.6% year on year) and operating income of ¥257 million (down 90.8% year on year). On the other hand, the company recorded ¥414 million in government subsidy income as extraordinary income, while also booking a ¥241 million valuation loss on shares of an affiliated company as extraordinary loss. Long-term borrowings increased due to capital expenditure related to the new plant, causing the equity ratio to decline from 47.7% to 39.3%. The full-year forecast (net sales of ¥15,048 million, operating income of ¥4,368 million) remains unchanged from the revised forecast announced on March 30, with cumulative nine-month progress against the full-year forecast at 70.9% for net sales.

Key Products

Growth Drivers

• Support for test demand from the early onset (late September) and prolonged duration of the influenza season
• Expanded production capacity from the new plant, enhanced business continuity through a two-site production system, and reduced logistics costs
• Expected demand recovery from the fourth quarter onward as wholesalers' inventory drawdown progresses
• Maintaining sales share through continued market demand growth and stable supply of the combo test kit (SARS-CoV-2/Flu)
• Expansion of the business domain through new product development in D-IA and the chronic disease/preventive care fields

Risks

• Seasonality and uncertainty in performance due to fluctuations in infectious disease epidemic levels (the shrinking COVID-19 epidemic became apparent in FY2026 (ending June 2026))
• Timing mismatches in sales due to fluctuations in wholesalers' market inventory levels (the primary cause of the sharp cumulative revenue decline in 9M FY2026 (ending June 2026))
• Revenue dependence on specific products such as COVID-19 and influenza tests (the combo and standalone COVID-19 products together account for roughly 63% of cumulative sales)
• Customer concentration risk from sales concentrated in the Suzuken Group (59.4% of sales in FY2025, ended June 2025)
• Increased financial burden and interest rate risk from higher borrowings associated with new plant construction (short-term borrowings of ¥7,500 million and long-term borrowings of ¥12,422 million)
• Progress toward the full-year forecast stood at only 70.9% on a cumulative nine-month basis, requiring a recovery in the fourth quarter