NIPPON CHEMIPHAR CO., LTD.

Business Details

This is the core business of the Nippon Chemiphar Group, engaged in the manufacturing and sale of prescription pharmaceuticals comprising three categories: Generic Drugs, Core Products / New Drugs, and clinical diagnostic reagents. Participants include the subsidiary Nippon Yakuhin Kogyo Co., Ltd. (manufacturing), Nippon Chemiphar Vietnam Co., Ltd. (overseas expansion), and the equity-method affiliate Japan Sofal Chime Co., Ltd. The segment covers the entire Pharmaceuticals Business including contract manufacturing, with medical institutions and wholesalers both in Japan and overseas as its main customers.

Recent Overview

Revenue rose slightly, but operating profit deteriorated sharply, down 63.1% year on year, due to rising costs

In FY2026 (ending March 2026), Pharmaceuticals Business revenue was ¥31,868 million (up 1.5% year on year), only a slight increase, while operating profit deteriorated significantly to ¥187 million (down 63.1% year on year). The clinical diagnostic reagent "Dropscreen" drove growth with an 11.3% revenue increase, but Core Products / New Drugs saw a 25.7% revenue decline due to the impact of drug price revisions. Generic Drugs revenue increased by 1.8%. Additionally, because the consolidated fiscal year-end of the overseas subsidiary Nippon Chemiphar Vietnam Co., Ltd. was changed from December 31 to March 31, the current fiscal year consolidates a 15-month period (January 1, 2025 to March 31, 2026).

Key Products

Growth Drivers

• Achieving over 1,800 cumulative domestic installations of the clinical diagnostic reagent "Dropscreen," continued expansion in adoption, and progress in preparations for overseas expansion
• Increased sales volume from selection and concentration on Generic Drugs products prioritized for expanded sales, and contributions from recently launched products (3 active ingredients across 8 products newly launched during the fiscal year)
• Promotion of the switch to Generic Drugs driven by the selective treatment scheme for long-listed products
• Strengthening of manufacturing capacity and stable supply systems through the start of shipments from new equipment on the 2nd floor of Building No. 3 at the Nippon Yakuhin Kogyo Co., Ltd. Tsukuba Plant from May 2026
• Improved supply capacity through strengthened inter-company collaboration, including participation in a consortium initiative involving multiple generic drug companies
• Progress in patient enrollment for the Phase IIa clinical trial of the new drug pipeline candidate "NC-2800" (27 sites in Japan, targeting depression) and progress of the Phase III trial for "DFP-14323"
• Expansion of overseas sales channels centered on Vietnam and China (approval obtained for "Allopurinol Tablets 100mg" in Vietnam, preparations for entry into the Middle East and Africa)

Risks

• Pressure on profitability from continuous drug price reductions, including mid-year drug price revisions (implemented every year since 2020)
• Revenue decline in the Core Products / New Drugs category due to the impact of drug price revisions (down 25.7% year on year in FY2026, ending March 2026)
• Changes in market structure due to the revised positioning of authorized generics (AG) under drug pricing in the FY2026 drug pricing system reform
• Intensifying competition in the generic drugs market and rising costs to ensure stable supply
• Increased manufacturing costs and deteriorating profitability due to rising raw material and other prices
• Increased complexity in performance comparisons due to the change in the fiscal year of an overseas subsidiary (15-month consolidation)
• Risk of clinical trial delays or failures in the new drug pipeline (NC-2800, DFP-14323, etc.)