Linical Co., Ltd.

Business Details

The CRO Business undertakes clinical trial operations for new drug development on behalf of pharmaceutical and biotech companies. Centered on monitoring operations, it provides a one-stop service covering data management, statistical analysis, medical writing, pharmacovigilance, and drug discovery support consulting. With locations in Japan, the United States, Europe, and Asia (South Korea, China, Taiwan, Australia, and Singapore), the company operates globally with a focus on international multi-regional clinical trials. Following the organizational change in April 2025, the company has been reorganized into a single reportable segment, the CRO Business.

Recent Overview

Revenue declined 17% due to completion and delayed start of large-scale projects in the US and Europe, while impairment losses caused net loss to expand significantly

In FY2026 (ending March 2026), performance deteriorated significantly, with revenue of ¥8,665 million (down 17.0% year on year) and an operating loss of ¥2,073 million (compared with a loss of ¥583 million in the prior period). In the United States, the start of clinical trials for several large-scale projects was delayed due to factors including a government shutdown, resulting in a substantial revenue decline. Europe also saw revenue decline and an expanded loss due to increased outsourcing costs. Meanwhile, Japan, China, and Taiwan achieved revenue growth and either a reduced loss or profitability. At the end of the period, the company recorded impairment losses on goodwill related to the European business (¥829 million) and fixed assets in the Japanese business (¥159 million), and combined with the write-down of deferred tax assets, the net loss expanded to ¥3,329 million. For FY2027 (ending March 2027), the company expects revenue of ¥10,680 million (up 23.2% year on year) and a recovery to operating profit of ¥256 million.

Key Products

Growth Drivers

• Full-scale operation of multiple large-scale international multi-regional clinical trial projects, including the US, Europe, and Australia, for which preliminary order acceptance has already been obtained (sequential resumption of delayed-start projects)
• Increased acquisition of new projects from Asian regions, including Taiwanese biotech companies (Asia order backlog up 25.4% compared with the end of FY2025 (ended March 2025); ¥1,801 million as of May 15, 2026)
• Attraction of Phase I trials leveraging the Australian subsidiary and orders for Australian/Asian trials from Japanese pharmaceutical companies (manifestation of the effect of establishing the Australian base)
• Realization of global synergies through strengthened collaboration between the Japan/Asia and US/Europe sales teams (attracting US/European biotech companies to Asia, supporting Asian biotech companies' entry into the US market)
• Increased inquiries from local pharmaceutical companies and biotech companies and achievement of sales profitability in China through strengthened local sales structure
• Lowering of the breakeven point through personnel reductions implemented at the end of the prior period in regions where no improvement in utilization rates was foreseeable

Risks

• Risk of delayed clinical trial start times due to external factors such as government shutdowns in the United States (a continued difficult business environment is expected in the first half)
• Continuation of a difficult business environment in the Japanese market stemming from the drug loss problem
• Risk of interruption or delay of existing projects in South Korea due to client circumstances
• Risk of deteriorating profitability in Europe due to increased outsourcing costs to other locations
• Risk that projects not yet reflected in the order backlog (large-scale international multi-regional trials in the US and Europe, prior to contract execution) may not result in signed contracts
• Risk of additional impairment of the remaining goodwill (¥2,176 million) even after the impairment of European business goodwill
• Risk of expanded net loss due to additional write-down of deferred tax assets
• Risk of weakening financial base due to the decline in the equity ratio (33.1%)