DAIKEN MEDICAL CO.,LTD.

The company invests in research and development of new technologies and products, but if development capabilities fail to keep pace with environmental trends and other factors, business performance could be affected. The degree of novelty and inventiveness of development themes significantly influences the likelihood of occurrence. The company is working to make effective use of development resources through selection and concentration based on field needs, product concepts, and investment profitability, as well as by strengthening checking functions at each phase.

Reimbursement prices are on a downward trend due to national healthcare cost containment policies, and price-cutting pressure from medical institutions through joint purchasing arrangements and other means is also intensifying. If cost reduction and operational efficiency improvement efforts prove insufficient, business performance could be affected. The company is addressing this by strengthening the development and provision of highly original medical devices.

The company holds Type I Medical Device Marketing Authorization and other permits based on the Pharmaceuticals and Medical Devices Act, and if grounds for revocation arise for any reason, this could have a material impact on business performance. Responses to overseas regulations such as the European MDD/MDR and the US FDA are also necessary, and changes to or strengthening of legal regulations could affect business continuity. Overseas sales accounted for 3.2% in FY2026 (ending March 2026), so the current impact is limited, but risk is expected to increase as overseas sales expansion progresses.

The company handles medical devices requiring advanced technology, and the possibility of defective products or improper handling at medical sites cannot be completely ruled out. If a medical accident occurs, it could develop into product liability disputes or voluntary recalls, resulting in recall-related expenses recorded as extraordinary losses that could affect business performance. The company seeks to mitigate this risk by enrolling in product liability insurance.

Sales of suction device-related products, centered on the mainstay product Fit Fix, account for over 60% of total sales, with suction device-related sales reaching ¥6,529 million (63.5%) in FY2026 (ending March 2026). If excessive price competition leads to a decline in average selling prices, this would significantly affect business performance and continuity. The company is working to improve its earnings structure by expanding its lineup of micropump-related products and other items and expanding overseas sales.

The company works to secure intellectual property rights and prevent infringement by other companies, but the possibility of disputes arising cannot be completely ruled out, and this could affect business performance. There are also concerns about the impact on business performance if competition intensifies due to new entrants following patent expiration. The company strives to minimize the impact of patent expiration by advancing new product development incorporating new patents.

Improving customer satisfaction at medical sites requires the acquisition and accumulation of specialized knowledge, and if the company is unable to secure and develop the human resources necessary for business promotion in a timely and appropriate manner, this could affect business performance. The company is actively implementing measures to strengthen human capital investment, such as raising salary levels and practicing efficient work styles. It also strives to develop and appropriately place personnel who combine the ability to carry forward corporate culture with creativity.

Injector-related products are mainly manufactured at the Assembly Center in Izumi City, Osaka Prefecture, and if a disaster such as an earthquake or fire causes production equipment to stop functioning or incurs repair costs, this could affect business performance. There is also a risk that production could be disrupted by a breakdown in the supply chain, such as deterioration in the performance of manufacturing contractors. The company addresses this by maintaining, as a basic policy, a multi-supplier purchasing system and multiple production sites, while balancing risk and cost.

Key raw materials are petroleum-related products such as plastics, and if raw material prices surge due to geopolitical risks such as conditions in the Middle East or international market and exchange rate trends, this could affect business performance through increases in manufacturing costs. There is also a risk of supply interruption or delay due to tight supply-demand conditions among suppliers or logistics disruptions, and profitability could decline if price pass-through cannot be implemented in a timely manner. The company is working to build a stable supply system by purchasing from multiple suppliers, diversifying procurement sources, and considering alternative raw materials.

The company utilizes IT in core operations such as production management, sales management, accounting, and development design, and if a service outage or leakage of confidential information occurs due to a cyberattack or other external threat, this could affect business performance. The company seeks to reduce this risk through the development of document and information management regulations, the establishment of information security infrastructure, and employee training.