Japan Medical Dynamic Marketing, INC.
7600・Prime Market・Precision Instruments
Business
Nippon Medical & Development Co., Ltd. is primarily engaged in the import, development, manufacture, and sale of medical devices specialized in the orthopedics field. Domestically, the company sells bone fixation materials, artificial joints, and spinal fixation devices directly to medical institutions, and it maintains a Japan-US integrated business structure in which its US subsidiary, Ortho Development Corporation (ODEV), handles product development and manufacturing. In addition to supplying products for the Japan market, ODEV independently sells artificial joints and spinal fixation devices in the US market as well. Consolidated net sales for FY2026 (ending March 2026) totaled ¥23,917 million, with the proportion of sales from proprietary products reaching 79.2%. Through a capital and business alliance with Mitsui Chemicals, the company is also working to leverage technology and sales resources.
Business Model
ODEV develops and manufactures orthopedic implants in the United States under a vertically integrated model, with the Japanese parent company selling to domestic medical institutions. As the proprietary product ratio of 79.2% indicates, sales of high-value-added products with limited reliance on OEM form the core of revenue. In the United States, sales to external customers proceed in parallel with internal supply to Japan (inter-segment transfer amount of ¥4,605 million), achieving both economies of scale and product development capability.
Company Strengths
The US subsidiary ODEV is responsible for the development and manufacturing of Bone Fixation Materials Products, artificial joints, and Spinal Fixation Devices, with the proportion of proprietary products in consolidated net sales reaching 79.2% (FY2026 (ending March 2026)). R&D expenses of ¥864 million (of which ¥818 million was in the United States) were invested, maintaining an in-house development structure capable of continuously launching new products such as the Trivicta Hip Stem.
With net sales of ¥13,109 million in the Japan Segment and net sales of ¥10,807 million to external customers in the United States, the company maintains independent sales bases in both Japan and the United States. Its portfolio, diversified across three fields—Bone Fixation Materials Products, artificial joints, and Spinal Fixation Devices—reduces the risk of dependence on any specific item.
As of the end of FY2026 (ending March 2026), the equity ratio stood at 71.2%, with total net assets of ¥25,427 million. Net interest-bearing debt remained low at ¥2,763 million, indicating a low level of financial leverage. While maintaining capacity for fund procurement through borrowings from financial institutions, the company continues its shareholder return policy targeting a dividend payout ratio of 30% or more.
ENVALITH's Perspective
Performance Trend
Revenue grew for four consecutive periods, from ¥19,193 million in FY2022 (ending March 2022) to ¥25,114 million in FY2025 (ending March 2025), but FY2026 (ending March 2026) saw a decline to ¥23,917 million (down 4.8% year on year), the first decrease in this period. Operating profit peaked at ¥2,662 million in FY2022 (ending March 2022) and has declined for four consecutive periods, reaching a record-low ¥574 million (down 63.1% year on year) in FY2026 (ending March 2026). The decline in revenue was driven by lost adoption due to a reported incident in Japan (Artificial Joint Products down 6.4%) and supply constraints for the Balanced Knee System – Revision in the United States (leading to a decrease in TKA). As external factors, yen appreciation (from ¥152.50 to ¥150.98) reduced the yen-converted value of US sales, while US reciprocal tariffs pushed up procurement costs. Net income recovered to a profit of ¥263 million from a loss of ¥461 million in the previous period, but this was mainly due to the disappearance of ¥1,555 million in settlement-related expenses recorded in the prior period, which reduced extraordinary losses; the recovery of underlying operating profitability remains only partial.
Growth Strategy
Aiming to rebuild the profit structure through cost reform under the SAICO Project and new product launches in Japan and the United States
Integrated promotion of four initiatives: advancing in-house production, diversifying suppliers, optimizing procurement through utilization of Asia and Europe, and increasing the proportion of proprietary products. The cost of sales ratio deteriorated to 40.9% (37.7% in the previous fiscal year), making medium-term improvement in the cost ratio an urgent priority. In parallel, the company is advancing the relocation of production to Asian regions and building a direct supply system to Japan in order to mitigate the impact of tariffs.
Promoting supplier diversification and geographic diversification of procurement sources to resolve supply constraints for the Balanced Knee System – Revision. Continuing nationwide rollout of the Trivicta Hip Stem across the United States to expand the number of THA cases. An operating loss of ¥260 million is forecast for the first half of FY2027 (ending March 2027), with normalization of the supply system being key to recovery in the second half.
Continuing to launch new products addressing the medical needs of an aging society, aiming to recover the number of cases acquired and improve market share. In parallel, strengthening compliance and governance systems in response to the media reporting incident (including establishing an independent legal function, revising internal regulations, and enhancing the internal whistleblowing system), with the goal of restoring trust from medical institutions.
Against a backdrop of declining profitability, PBR has remained below 1x. The company aims to improve ROE through the twin approaches of accelerating sales growth via new product launches and improving profitability through the SAICO Project. It maintains a stable dividend policy targeting a payout ratio of 30% or higher for shareholder returns.
Last updated: July 19, 2026