Heartseed Inc.

Business Details

Heartseed, Inc. is a single-segment pharmaceutical business company aiming to commercialize "Remuscularization" therapy, in which allogeneic iPS cell-derived cardiac spheroids are transplanted into the hearts of patients with severe heart failure. For its lead pipeline HS-001 (open-chest administration), the company is currently compiling data from all 10 cases in the Phase I/II clinical trial (LAPiS trial) and having the data interpreted by a third-party organization. For HS-005 (catheter administration), a clinical trial notification has been submitted to the PMDA, and the company is advancing collaboration with clinical trial sites and Japan Lifeline Co., Ltd., targeting the start of patient administration in the first half of 2026.

Recent Overview

First-ever revenue recorded, significantly narrowing the Q1 operating loss; HS-005 catheter administration trial launched following clinical trial notification submission

In the first quarter of FY2026 (ending December 2026) (January to March 2026), the company recorded its first-ever revenue of ¥466 million, and the operating loss narrowed significantly to -¥75 million from -¥485 million in the prior first quarter. While the breakdown of revenue is not disclosed in the report, cost of sales was zero, resulting in gross profit of ¥466 million. Selling, general and administrative expenses were ¥541 million. Regarding HS-005, a clinical trial notification was submitted to the PMDA, with progress made toward the goal of starting patient administration in the first half of 2026. The LAPiS trial (HS-001) continues with the compilation of data from all 10 cases and third-party data interpretation. Earnings forecasts were revised due to the impact of foreign exchange rates on overseas transactions, with full-year revenue projected at ¥467 million and operating loss at -¥2,207 million. Cash and deposits decreased by ¥424 million during the quarter to ¥6,412 million.

Key Products

Growth Drivers

• Initiation of the domestic clinical trial for HS-005 (catheter administration) following completion of the PMDA clinical trial notification submission, targeting the start of patient administration in the first half of 2026
• Progress toward an approval application through the compilation of data from all 10 cases in the LAPiS trial (HS-001) and third-party data interpretation
• Development of the regulatory environment supporting the societal implementation of regenerative medicine, including multiple conditional and time-limited approvals granted for iPS cell-based products in March 2026
• Continued securing of capital-raising means, including a ¥5 million increase each in common stock and capital surplus through the exercise of stock acquisition rights
• Establishment of the HS-005 clinical trial framework through collaboration with Japan Lifeline Co., Ltd.

Risks

• Fragile revenue structure, with full-year revenue forecast for FY2026 (ending December 2026) limited to ¥467 million following termination of the license agreement with Novo Nordisk A/S, and operating loss and net loss projected at -¥2,207 million and -¥2,158 million, respectively
• Uncertain overseas expansion strategy, as securing a new global partner has not yet been determined following the recovery of worldwide rights for HS-001 and HS-005
• Risk that approval application and market launch could be delayed or rendered impossible depending on the results of clinical trials (the LAPiS trial and the domestic HS-005 trial)
• Funding risk of accelerated consumption of cash and deposits (¥6,412 million) due to continued high expense levels centered on selling, general and administrative expenses (Q1 actual of ¥541 million)
• Foreign exchange rate risk related to overseas transactions (explicitly cited as a factor in the revision of earnings forecasts)
• Disclosure constraint limiting detailed understanding of cash flow trends, as a quarterly cash flow statement has not been prepared