3-D Matrix,Ltd.

Business Details

Based on self-assembling peptide technology (RADA16) for which exclusive licensing rights were obtained from MIT, the company conducts research and development, manufacturing, and sales of medical devices and pharmaceuticals in the surgical, tissue regeneration, and DDS (drug delivery system) fields. Its flagship product is the Absorbable Local Hemostat (PuraStat), which has obtained manufacturing and marketing approval in Japan, the US, and Europe. In the US, it is sold directly in the gastrointestinal endoscopy and otorhinolaryngology fields, while in Europe it is sold through distributors in the gastrointestinal endoscopy field. In the fiscal year under review, the company achieved full-year operating profit profitability for the first time.

Recent Overview

Achieved full-year operating profit profitability for the first time in the fiscal year ended April 2026, and the note regarding going concern uncertainty was also resolved.

In the fiscal year ended April 2026, net sales reached ¥10,886 million (+57.0% year on year) and operating profit reached ¥1,335 million, achieving full-year operating profit profitability from products already on the market for the first time. US sales significantly exceeded plan, driving growth at ¥6,249 million (+98.2% year on year). Due to the yen's depreciation (from ¥142.57/USD at the start of the period to ¥160.40/USD at the end of the period), a foreign exchange gain of ¥2,661 million arose from the revaluation of loans to subsidiaries, expanding ordinary profit to ¥3,971 million and net profit for the period to ¥4,155 million. With the full redemption and conversion of the convertible bond-type bonds with subscription rights to shares issued to Heights, the material uncertainty regarding the going concern assumption was resolved. For the fiscal year ending April 2027, the company plans net sales of ¥13,422 million (+23.3%) and operating profit of ¥1,652 million (+23.7%).

Key Products

Growth Drivers

• Continued high growth in hemostat sales in the US gastrointestinal endoscopy field (+98.2% in the fiscal year under review), and a 37% growth target for the fiscal year ending April 2027 through new customer acquisition, expansion of usage by existing customers, and reorganization of the sales team
• Establishment of a strategy shifting the appeal points in the US otorhinolaryngology field from hemostasis to wound healing and anti-adhesion, and renewal of record-high sales
• Expansion of evidence through the publication of a paper on the large-scale POPS registry trial in Europe (continued high growth in the UK and Ireland), and high growth in direct sales in new fields such as otorhinolaryngology and urology
• Obtaining European approval for the next-generation hemostat in December 2025 (for multiple fields including neurosurgery, gastrointestinal tract, cardiovascular, and solid organs) and plans to obtain approval application data (PMCF) in the US and Japan
• Expansion of indications through progress in preparing US approval applications for multiple new indications (pediatric cardiac surgery, tonsillectomy, prostate hypertrophy surgery, radiation cystitis, post-biopsy hemostasis, etc.)
• Establishment of a new product category through the completion of the European approval application for the mucosal wound healing material in March 2026 and preparation of the US De Novo application
• Expansion of capacity for business investment through the resolution of the note regarding going concern assumption and stabilization of the financial base (equity ratio of 66.7%, cash balance of ¥2,830 million)

Risks

• Continued reluctance to purchase among existing facilities due to sporadic cases of insurance reimbursement claim rejections by hospitals in some prefectures in the Japanese market (Japan sales for the fiscal year ending April 2027 are planned to decrease 12% year on year)
• Risk that the nationwide rollout of growth recovery measures in Germany, Europe, will not proceed as expected and will result in only a slight increase
• Risk of significant foreign exchange losses from revaluation of loans to subsidiaries (28 million USD + 21 million EUR) if the yen appreciates (in the fiscal year under review, yen depreciation generated a gain of ¥2,661 million, but the impact would be large in the event of a reversal)
• Risk of continued sales suspension of the Endoscopic Submucosal Injection Material (PuraLift) due to the change in manufacturing facility
• Increasing overall difficulty of sales operations as the business scale expands in the US (maintaining a balance between new customer acquisition, existing customer retention, and usage expansion is a challenge)
• Limitations on sales control under the distributor-dependent model in the European gastrointestinal endoscopy field
• Risk of delays in approval applications for the R&D pipeline (resubmission response due to changes in FDA application category, etc.)
• Impact on earnings forecasts from deviations from the assumed exchange rates (USD 160.40 yen, EUR 187.36 yen)