ENVALITH
ラクオリア創薬株式会社 logo

RaQualia Pharma Inc.

4579・Growth Market・Pharmaceuticals

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ラクオリア創薬株式会社 logo
RaQualia Pharma Inc.4579

Business

RaQualia Pharma Inc. is a research and development-focused drug discovery venture established in 2008 following the closure of Pfizer Inc.'s Central Research Division. Starting from the gastrointestinal and pain disease areas, the company now conducts research and development across a broad range of disease areas, including cancer and neurological disorders. It conducts everything in-house from discovery research through preclinical and early-stage clinical trials (mainly Phase I), and adopts a business model that generates revenue through out-licensing to pharmaceutical companies. As a group including its consolidated subsidiary Temrick (merged by absorption in January 2026) and Fimecs, the company is also advancing into new modalities such as targeted protein degraders (TPD) in addition to small-molecule compounds. Major customers include global pharmaceutical companies such as HK inno.N Corporation (South Korea), Astellas Pharma, and Elanco Animal Health.

Business Model

By licensing out development compounds to pharmaceutical companies, the company earns revenue through a three-tier structure: upfront payments at contract signing, milestone income tied to development progress, and royalty income linked to post-launch sales. Since the licensee handles late-stage clinical trials, the company can run multiple pipelines in parallel while limiting development costs and risk. Of the ¥3,979 million in business revenue for FY2025, HK Inno.N accounted for 51.5%, Astellas Pharma for 26.4%, and Elanco for 21.4%.

Company Strengths

The gastric acid secretion inhibitor Tegoprazan (K-CAB®) has maintained the No. 1 market share (15%) in the peptic ulcer treatment market in Korea, with FY2025 sales in Korea reaching KRW 217.9 billion (up 10.7% year on year). It is currently sold in 19 countries, with business activities underway in 57 countries. The Korean substance patent won all cases at the Supreme Court (final instance), establishing exclusive sales rights through 2031.

In the TRIUMpH trial conducted by Braintree in the United States, Tegoprazan achieved all primary and secondary endpoints in both the erosive and non-erosive gastroesophageal reflux disease (EE and NERD) trials. In August 2025, the maintenance therapy trial was also completed, establishing the clinical basis for entry into the U.S. market.

In the joint research with Astellas Pharma utilizing the RaPPIDS™ Platform (Fimecs) owned by Fimecs, the company received an upfront payment of ¥200 million in March 2025, and ¥400 million in November 2025 in connection with the addition of two new targets. Under the contract, the company is eligible to receive milestone payments of over ¥15 billion in total, as well as sales royalties, upon identification of development candidate compounds and commercialization.

ENVALITH's Perspective

Cumulative 1Q FY2026 business revenue was ¥801 million (down 16.9% year on year), with an operating loss of ¥160 million (versus operating income of ¥93 million in the same period last year), marking a sharp deterioration. R&D expenses ballooned to ¥477 million (up 23.9% year on year), and SG&A expenses also rose to ¥304 million (up 14.9%). The full-year forecast remains unchanged at ¥3,980 million in revenue and ¥165 million in operating income, but the 1Q progress rate was only 20.1% for revenue, with an operating loss recorded, highlighting a pronounced skew toward the second half of the year. Whether the full-year targets are achieved will depend on the timing of milestone income recognition.

Braintree's US FDA approval application was submitted on January 9, 2026, with approval expected in January 2027. Entry into the US market, which accounts for roughly 20% of the global peptic ulcer treatment market, could structurally expand royalty income. As an external factor, changes in US trade policy and the regulatory environment pose a risk of affecting the FDA review schedule and post-approval business development. Whether and when approval is granted remains the most important item to monitor for the time being.

Effective January 1, 2026, the company absorbed its oncology subsidiary Temric (aimed at improving operational efficiency and reducing costs), shrinking the scope of consolidation. Separately, AskAt terminated its license agreement with OCT for the CB2 Agonist (RQ-00202730) on the grounds of OCT's breach of contract, and is currently seeking a new partner. While this is said not to be due to development-related reasons, it has created a temporary gap in the pipeline, and the status of securing an alternative partner will be a key point of attention going forward. Amid continuing increases in R&D expenses, the timing of new out-licensing agreements will be key to stabilizing revenue.

Growth Strategy

Entry into the US and Japanese markets for Tegoprazan and pipeline diversification through TPD and other next-generation modalities

Braintree submitted an application to the US FDA on January 9, 2026 seeking approval for EE, NERD, and EE maintenance therapy. Approval is expected in January 2027, and entry into the US market—which accounts for approximately 20% of the global peptic ulcer treatment market—is expected to drive structural expansion of royalty income.

Payment for the third-party allotment of new shares (¥1,400 million) was completed on January 29, 2026. HK inno.N has been granted exclusive rights to develop, manufacture, and sell Tegoprazan in Japan, and efforts toward initiating late-stage clinical trials are underway. Obtaining approval in Japan is expected to generate additional milestone and royalty income.

As of the end of 1Q, the product was being sold in 20 countries, with business activities underway in 57 countries. During 1Q, sales commenced newly in Russia, and marketing approval was obtained in Uzbekistan. Preparations for approval applications are also underway in Brazil, the Middle East region, and elsewhere. The Company aims for long-term growth in royalty income linked to HK inno.N's target of KRW 3 trillion in global annual sales by 2030.

Centered on consolidated subsidiary Fimecs, the Company continues TPD discovery research targeting multiple oncology targets in collaboration with Astellas Pharma, leveraging the proprietary RaPPIDS™ Platform (Fimecs). The Company aims to diversify its pipeline through new modalities and build next-generation revenue sources.

Preclinical studies for the in-house developed ghrelin receptor agonist have been completed, and business development activities are underway to secure a partner. The Company is conducting agile activities combining in-person and online meetings, and expects to obtain milestone income upon conclusion of an out-licensing agreement.

Last updated: July 17, 2026