MEDIPAL HOLDINGS CORPORATION

Business Details

This segment serves hospitals, clinics, dispensing pharmacies, and similar customers, engaging in the wholesale of prescription pharmaceuticals, medical devices, medical materials, and clinical laboratory reagents. Key subsidiaries include Mediceo Corporation and Medisquet Corporation. The segment operates on two pillars: a high-functioning logistics network through 14 ALCs (Area Logistics Centers) nationwide, and medical information provision activities carried out by approximately 2,000 AR (Assist Representatives), together responsible for stable supply and the creation of new distribution value. This is the core segment, accounting for approximately 64% of the Group's consolidated revenue.

Recent Overview

Revenue increased, but operating profit declined due to higher business investment expenses; underlying profit improved

In FY2026 (ending March 2026), revenue rose to ¥2,466,109 million (+4.0% year on year), an increase in revenue. This was driven by expansion of the pharmaceutical market, growth in specialty pharmaceutical sales, and expansion through hospital and dispensing pharmacy channels, while demand for COVID-19-related products declined. Operating profit decreased to ¥24,292 million (-3.6% year on year), but underlying operating profit, excluding business investment expenses etc. and goodwill amortization, improved to ¥28,620 million (+7.8% year on year). The Tokyo ALC (the 14th ALC) commenced operations in January 2026. Gross profit margin declined to 6.18% (from 6.34% in the prior period) due to higher procurement costs stemming from drug price revisions and other factors.

Key Products

Growth Drivers

• Expansion of the pharmaceutical market and growth in sales of specialty pharmaceuticals (biopharmaceuticals, rare disease treatments, etc.)
• Expanded transactions through hospital and dispensing pharmacy channels and market expansion driven by the introduction of routine shingles vaccination, among other factors
• Strengthening of the stable supply system leveraging the nationwide network of 14 ALCs, and creation of new revenue opportunities through external logistics outsourcing
• Deepening of medical information provision activities by approximately 2,000 ARs and expansion of partnerships with manufacturers and biotech ventures
• Strengthened provision of GDP-compliant, high-quality logistics services through Medisquet Corporation's ISO9001 certification
• Global rollout of new drugs in the ultra-rare disease field (Mucopolysaccharidosis type IIIB and GM2 Gangliosidosis) in collaboration with JCR Pharmaceuticals

Risks

• Risk of suppressed growth in the pharmaceutical market and rising procurement costs due to drug price revisions (implemented annually)
• Risk of demand fluctuation for COVID-19-related products (treatments, testing reagents, vaccines)
• Risk of increased delivery and logistics costs due to rising logistics costs and driver shortages
• Short-term pressure on operating profit from increased growth investment (business investment expenses etc. and goodwill amortization) based on the MEDIPAL 2027 mid-term vision
• Risk of market contraction for certain products due to the end of the HPV vaccine catch-up vaccination period and the abolition of the COVID-19 vaccine subsidy program, among other factors
• Uncertainty in revenue recognition estimates arising from the business practice of delivering prescription pharmaceuticals before transaction prices are finalized