FUJIFILM Holdings Corporation

Business Details

Comprised of three businesses: the Medical Systems business (endoscopes, X-ray, CT/MRI, ultrasound, IVD, medical IT), the Bio CDMO business (contract manufacturing of antibody drugs and other biopharmaceuticals), and the LS Solutions business (drug discovery support media/reagents, pharmaceuticals, cosmetics, CRO). The segment operates globally, centered on Japan, the US, and Europe, and works to solve social challenges in the medical field through products and services leveraging AI and biotechnology. It is the largest segment, accounting for approximately 32.7% of consolidated net sales.

Recent Overview

Net sales rose 4.9% to ¥1,098,925 million, but operating income fell 20.3% due to increased upfront investment

In FY2026 (ending March 2026), the Healthcare segment saw increased sales driven by the Bio CDMO business (large-scale equipment operations at the Denmark site, recovery of operations at the Texas site) and the life science business (increased sales of culture media and reagents, increased COVID-19 vaccine contract manufacturing). On the other hand, operating income declined to ¥63,637 million (down 20.3% year on year), and the operating margin fell to 5.8% (from 7.6% in the prior period), due to increased depreciation expenses (up ¥11,722 million year on year) associated with upfront investments such as the new North Carolina plant and the expansion of the UK site, as well as reduced demand for medical materials in China. The upfront investment phase is expected to continue into FY2027 (ending March 2027).

Key Products

Growth Drivers

• Full-scale expansion of operations at the new North Carolina, US plant (eight 20,000-liter animal cell culture tanks) in the Bio CDMO business and robust growth in antibody drug contract manufacturing demand (long-term contracts with Johnson & Johnson, Regeneron, and others)
• Continued strong sales of Medical Systems business products—endoscopes, medical IT (SYNAPSE), IVD (FUJI DRI-CHEM)—in Japan, the US, Europe, and the Middle East, and expansion of the recurring business (maintenance services, consumables)
• Growth in sales of culture media and reagents in the life science business amid a market recovery, and increased culture media usage by major pharmaceutical companies
• Expansion of AI-enabled diagnostic support products and services (pre-/intra-operative support solutions, etc.) and accelerated rollout of the "NURA" health screening centers in emerging markets (already deployed in five countries)
• Expansion of the domestic CDMO business through one of Japan's largest bio-pharmaceutical CDMO plants at the Toyama site (scheduled to begin operations in FY2027) and construction of a dual-use system supporting antibody drugs, ADCs, and mRNA vaccines

Risks

• Risk of declining demand for medical materials and devices in China and economic slowdown (continued weak demand in China expected to weigh on the Medical Systems business in FY2027 as well)
• Continued pressure on profit margins from increased upfront costs associated with the launch and operational ramp-up of new Bio CDMO sites (second-phase investment in North Carolina, US, expansion of the UK site, etc.)
• Risk of fluctuations in contract manufacturing demand in the cell and gene therapy field (small- and medium-scale manufacturing equipment) due to changes in the investment environment for biotech companies
• Adverse impact of a stronger yen on the yen-denominated value of overseas sales (the assumed exchange rate for FY2027, ending March 2027, is ¥150 to the US dollar)
• Risk of a decline from one-time revenue such as patent license income in the pharmaceuticals business and intensifying competition