■Performance and financial status

1. Performance trends

(1) Consolidated financial results for the fiscal year ending 2023/12

The consolidated financial results for the fiscal year ended 2023/12 of Kubota Pharmaceutical Holdings ＜4596＞ were 39 million yen (up 31 million yen from the previous fiscal year) in terms of business revenue, 1,504 million yen (same reduction of 534 million yen) in operating losses, 1,489 million yen (same reduction of 526 million yen) due to loss before income taxes, and 1,489 million yen (same reduction of 526 million yen) due to net loss attributable to owners of the parent company.

As for business revenue, sales revenue of “Kubota Glass” increased. Of the project expenses, research and development expenses decreased 724 million yen from the previous fiscal year to 788 million yen due to a decrease in development costs for emixstat hydrochloride and wearable myopia devices. Also, SG&A expenses increased by 31 million yen to 632 million yen due to an increase in sales promotion expenses related to the Kubota Glass business. Furthermore, impairment losses of 110 million yen were recorded as other operating expenses. This is due to re-examining the recoverability of assets related to the Kubota Glass business* and reducing the book value to a recoverable amount.

*As of 2024/3/18, impairment losses will be recorded for the fiscal year ending 2023/12, partial revisions to performance figures etc. have been announced.

(2) Earnings forecast for the fiscal year ending 2024/12

The consolidated earnings forecast for the fiscal year ending 2024/12 has not been disclosed. Sales revenue of “Kubota Glass” is expected to account for almost all of the business revenue, but it is a highly novel product, and since it is currently difficult to determine objective demand, and in terms of cost, additional development priorities are determined while continuously reducing manufacturing costs while reflecting customer opinions etc. on current products, and there is a possibility that development costs will fluctuate, so it is judged that it is difficult to rationally estimate performance forecasts at this stage That's because I did. Based on future business progress, it is planned to promptly disclose it at the stage where rational calculation becomes possible.

There is no change in the policy of narrowing down business expenses as a whole, excluding development costs and sales-related costs related to “Kubota Glass.” We are planning to reduce costs for our US subsidiary as the target of the cost review. In the past few years, as the depreciation of the yen has progressed, the cost of an American subsidiary has been a factor in increasing costs in yen conversion.

(3) Future business strategies

In the medium term, it is a strategy to expand sales of “Kubota Glass” as an AR device, generate profits by minimizing development costs, then expand development and sales as a medical device for myopia suppression/treatment globally while forming partner companies, further advance development of other products based on the profits obtained, and expand profits while also acquiring license revenue and milestones.

(Author: FISCO Visiting Analyst Joe Sato)