PRISM BioLab Co.,LTD

Business Details

A drug discovery business that leverages the company's proprietary peptide-mimetic technology, "PepMetics technology," to create small-molecule compounds targeting protein-protein interactions (PPIs), which have historically been considered difficult drug discovery targets. The business operates on two axes: an in-house development business (from drug discovery target selection through to creation and out-licensing of clinical candidate compounds) and a joint development business (hit/lead compound exploration for pharmaceutical companies' targets). Revenue consists of upfront payments, collaborative research income, milestones, and royalties. Net sales for H1 FY2026 (October 2025 to March 2026) were ¥253 million (up 15.8% year on year).

Recent Overview

Net sales rose 15.8% year on year to ¥253 million, but losses expanded due to a sharp rise in research and development expenses

Net sales for H1 FY2026 (October 2025 to March 2026) were ¥253 million (up 15.8% year on year), boosted by the achievement of the first milestone and receipt of collaborative research fees under the partnership with Ono Pharmaceutical. Meanwhile, research and development expenses surged to ¥456 million (up 55.0% year on year), and total selling, general and administrative expenses reached ¥666 million (up 30.2%), resulting in an expanded operating loss of ¥584 million (compared to ¥460 million in the same period of the previous year). The net loss for the interim period was ¥603 million. In investing activities, ¥1,500 million was placed into time deposits, resulting in a cash and cash equivalents balance of ¥954 million at the end of the interim period, although cash and deposits (including time deposits) totaled ¥2,454 million. In the in-house development business, four new programs were launched during the interim period, and hit compounds were successfully created in January and April 2026 respectively, advancing to the "lead compound exploration" stage. The joint research with SERVIER was terminated in a developmental manner in October 2025.

Key Products

Growth Drivers

• Achievement of the first milestone and receipt of collaborative research fees under the drug discovery partnership with Ono Pharmaceutical (the total amount of the upfront payment and collaborative research fees is equivalent to approximately 80% of the previous fiscal year's net sales)
• Full-scale operation of HTS based on the plan to conduct 10 library screenings per year, and creation of new hit compounds (two successes during the interim period, advancing to the "lead compound exploration" stage)
• Progress in the Phase II (dose optimization part) trial of E7386, and Eisai's target of obtaining topline data during FY2026 (Eisai's fiscal year) and approval by March 2031
• Launch of an out-licensing business to new partners based on hit compounds from self-selected targets (starting this fiscal year), and the goal of initiating one to two new joint development programs
• Creation of new partnership opportunities through the expansion of PepMetics technology's scope of application (in addition to intracellular PPI targets, expansion into diverse targets such as kinases and membrane proteins)
• Future milestone acquisition opportunities through progress in the Phase II clinical trial of PRI-724 targeting MASH-induced decompensated liver cirrhosis (patient enrollment completed, scheduled to end December 2027)

Risks

• Most revenue depends on irregular income such as milestones and lump-sum payments, making the timing and amount of receipts difficult to predict, resulting in significant year-to-year fluctuations in performance (unable to disclose full-year earnings forecasts)
• Risk that programs may be discontinued due to changes in partner companies' strategies, as seen in the dissolution of the joint research with SERVIER
• Losses have expanded due to a sharp increase in research and development expenses (up 55.0% year on year), raising the risk of continued depletion of cash on hand (cash and deposits of ¥2,454 million as of end-March 2026)
• Risk that the clinical trials for E7386 and PRI-724 are led by the licensee partners, meaning the development schedule and the likelihood of obtaining approval are outside the company's control
• Pipeline risk arising from the inherently low probability of success in drug discovery programs, which could result in multiple programs being discontinued (during the interim period, one program in the "hit compound exploration" stage was discontinued due to failure to meet certification requirements)
• An event exists that raises material doubt about the company's ability to continue as a going concern, due to continued operating losses and negative operating cash flow (however, the company recognizes no material uncertainty)