CMIC HLDG (Note) This translation is prepared and provided for readers' convenience only. In the event of any discrepancy between this translated document and the original Japanese document, the original document shall prevail.
November 5, 2021
CMIC HOLDINGS Co., Ltd. Consolidated Financial Results
For the Year Ended September 30, 2021
(The Fiscal Year Ended September 30, 2021, Japan Accounting Standards)
Highlights:
◆Net sales grew 12.7% year on year to ¥85,788 million on a consolidated basis ◆Operating income increased 88.8% to ¥4,920 million
◆Earnings per share: ¥111.85
◆Order backlog of contract services grew 10.2% year on year
Tokyo, November 5, 2021 - CMIC HOLDINGS Co., Ltd. (TSE Code: 2309 ) today reported financial results for the year ended September 30, 2021
CMIC Group is rolling out a PVC (Pharmaceutical Value Creator) model, which is our unique business model contributing to increasing additional values of pharmaceutical companies. We provide extensive support for development, manufacturing, sales and marketing value chains of pharmaceutical companies with our CRO (Contract Research Organization) business, CDMO (Contract Development Manufacturing Organization) business, CSO (Contract Sales Organization) business, and Healthcare business. In addition, our IPM (Innovative Pharma Model) business is providing new business solutions to pharmaceutical companies that combine marketing authorization licenses (intellectual properties) and value chains.
In the pharmaceutical industry, while the creation of innovative drugs is expected through technological innovation and industry-government-academia collaboration towards providing personalized medicine or "precision medicine," NHI price revisions are implemented on an annual basis starting in FY2021. In the first mid-year revision, a large number of drugs were subject to NHI price reductions, which has put pressure on the earnings of pharmaceutical companies. In response, pharmaceutical companies are expanding their development pipelines through M&A and other means, strengthening their overseas operations, and improving management efficiency.
Furthermore, in R&D, the development of pharmaceuticals using new basic drug discovery technologies, efforts to provide total care for diseases ranging from prevention to diagnosis to treatment to prognosis, and research and development using new technologies such as artificial intelligence (AI) and IoT are being accelerated. On the other hand, since the last year, there have been a series of voluntary recalls by generic drug manufacturers and cases of production using non- approved manufacturing methods have been uncovered. Here once again, the quality of pharmaceutical products is being required to be strictly controlled.
Though it is taking time to bring the coronavirus pandemic under control due to the emergence of multiple variants, as vaccination programs at workplaces and large-scale sites run by municipalities are progressing, strain on hospital capacity has been lessened and the environment surrounding drug development is improving. Timely and efficient drug development is pursued through remote clinical trials, remote collection of adverse events, and utilization of real-world data. Some companies are
transitioning from existing business models following the advancement of digitalization.
CMIC Group is executing the focus activities in the mid-term business plan (FY2019-2021) to adapt ourselves to the rapidly changing external environment. While promoting various measures, including
-
Acceleration of PVC model, 2) Promoting globalization, and 3) Creation of healthcare business, we have started the "Healthcare Revolution" project to transform ourselves from a business model centering on pharmaceutical drugs to the creation of new healthcare business. We are now creating new businesses that will contribute to maintaining and improving personal health, and utilizing our talents in the healthcare arena.
CMIC Group will support the development of effective treatment and preventive measures against the COVID-19 infection, contribute to providing efficacious treatment for early recovery of patients and maintaining the medical system, and deliver our mission as a healthcare company.
Sales and Operating Income
In the current consolidated fiscal year, we focused on sales activities to win new projects such as those of developmental and post-marketing support services for COVID-19 infection treatment drugs, while addressing the top-priority items identified in the mid-term plan, including utilization of CMIC Group talents in the healthcare arena and providing support services for local governments in their fight against COVID-19 pandemic. Due to the spread of COVID-19 infection, we are still self-imposing restrictions on visits to medical institutions and facing delays in the progress of some developmental projects, while remote-based business activities have taken root and inquiries are increasing.
Net sales during this consolidated cumulative period was 85,788 million (grew 12.7% year-on-year), operating income was 4,920 million (up 88.8% year-on-year), which both exceeded the previous consolidated fiscal year, mainly thanks to the growth of healthcare business.
Segment Information
The business results by segment are listed as below:
- CRO (Contract Research Organization) Business
(Millions of yen) | ||||
FY2021 | FY2020 | YoY Change | YoY Change | |
Amount | % | |||
Sales | 34,954 | 34,242 | +712 | +2.1 |
Operating income | 4,364 | 5,052 | (687) | (13.6) |
In this business, we provide services primarily to pharmaceutical companies to support drug development.
In the current consolidated fiscal year, we supported overseas companies entering the Japanese market and non-healthcare companies entering the healthcare sphere and promoted measures to address increasingly sophisticated development needs, including biopharmaceuticals and regenerative medicines, while helping to maximize the speed of drug development by offering one-
stop service from non-clinical to post-marketing.
For clinical services, we are working to improve the efficiency of clinical trial process by using the healthcare communication channel harmo®, proposing a new clinical trial model in the age of the New Normal, and improving the expertise and technical capabilities of our talents.
For non-clinical services, our laboratories in Japan and the United States are in collaboration to actively provide drug discovery support for advanced medicine, including nucleic acid drugs and regenerative medicines.
Sales exceeded the previous consolidated fiscal year thanks to the growth of non-clinical business and acquisition of new post-marketing and clinical operations projects related to COVID-19. Operating income, on the other hand, was below the previous consolidated fiscal year due to factors such as generation of retirement benefit expenses.
- CDMO (Contract Development Manufacturing Organization) Business
(Millions of yen) | ||||
FY2021 | FY2020 | YoY Change | YoY Change | |
Amount | % | |||
Sales | 21,196 | 20,832 | +364 | +1.7 |
Operating income | (153) | (412) | +259 | － |
In this business, we provide services primarily to pharmaceutical companies to support drug formulation development and manufacturing.
In the current consolidated fiscal year, CDMO business is further improving technical capabilities and quality, developing a low-cost production structure, and enhancing competitiveness through strategic capital investment as a global pharmaceutical drug manufacturing platform that includes formulation design, investigational new drug manufacturing, and commercial production. We are focusing on a large-scale commercial production project that is scheduled to start production in the fiscal year ending September 30, 2022, the launch of new facility and production line in the United States, and the acquisition of new projects.
Sales were above the previous consolidated fiscal year due to factors such as an increase in contracted production volume. As for operating income, while operating loss was recorded due to prior investment costs for the contract manufacturing business of biopharmaceutical APIs, due to the increase in sales, degree of deficit decreased compared to the previous consolidated fiscal year.
- CSO (Contract Sales Organization) Business
(Millions of yen) | ||||
FY2021 | FY2020 | YoY Change | YoY Change | |
Amount | % | |||
Sales | 8,977 | 8,626 | +351 | +4.1 |
Operating income | 890 | 834 | +55 | +6.7 |
In this business, we provide sales- and marketing-support services, primarily to pharmaceutical companies.
In the current consolidated fiscal year, in addition to the medical representative (MR) dispatch and other related new services, we are strengthening the sales activities for Medical Affairs-related operations and providing comprehensive solution that combines multiple communication channels and various services.
Sales and operating income exceeded the previous consolidated fiscal year, thanks to the acquisition of new MR dispatch service projects.
- Healthcare Business
(Millions of yen) | ||||
FY2021 | FY2020 | YoY Change | YoY Change | |
Amount | % | |||
Sales | 17,876 | 9,903 | +7,972 | +80.5 |
Operating income | 3,590 | 583 | +3,007 | +515.8 |
In this business, we provide SMO (Site Management Organization) services, as well as healthcare services related to treating and maintaining and promoting the health mainly for medical institutions, patients, and general consumers.
In the current consolidated fiscal year, we are focusing on supporting the development of effective treatment and preventive measures against COVID-19 infection, as well as supporting the PCR testing and vaccination by local governments. We will continue to work on the healthcare communication channel harmo® business and create new healthcare business that contributes to the early detection of disease and prevention of disease aggravation, while winning new SMO business orders and aiming to expedite the in-flow of income for the new healthcare business.
Sales were significantly above the previous consolidated fiscal year due to growth in the BPO and personnel services for vaccination support and SMO operations. Operating income was also significantly above the previous consolidated fiscal year due to an increase in sales, despite prior investments for the creation of new healthcare business.
- IPM (Innovative Pharma Model) Business
(Millions of yen) | ||||
FY2021 | FY2020 | YoY Change | YoY Change | |
Amount | % | |||
Sales | 3,683 | 3,395 | +288 | +8.5 |
Operating income | (19) | 169 | (188) | － |
IPM business provides new business solutions to pharmaceutical companies that combine value chains and marketing authorization licenses (intellectual properties) possessed by our Group. We are mainly delivering development and marketing services for orphan drugs and diagnostics.
In addition to selling orphan drugs, etc., including products developed in-house, we are strengthening our business foundation through the provision of IPM platform that includes supporting foreign pharmaceutical companies entering the Japanese market and providing strategic options to
pharmaceutical companies following changes in their business models. Multiple projects are progressing with increased demand in recent years from foreign pharmaceutical companies to use our IPM platform. In January 2021, we received a manufacturing and marketing approval in Japan of ORLADEYO Capsules 150mg for the suppression of the onset of attacks in acute hereditary angioedema (HAE). In July 2021, we launched Lynspad™ for Intravenous Infusion 1000 mg of Grifols Therapeutics LLC in Japan for which we provided support toward the approval as an appointed marketing authorization holder. We will further expand our business scale and secure profitability by continuing to provide new business solutions.
Sales exceeded the previous consolidated fiscal year thanks to new product launches. Operating income, on the other hand, went below the previous consolidated fiscal year due to an increase of orphan drug R&D expenditure and recording an inventory valuation loss.
Ordinary Income
Ordinary income for the current fiscal year was ¥5,091 million (up 77.6％ YoY).
For non-operating income, we recorded ¥399 million of foreign exchange gains, subsidy income and other, for non-operating expenses we recorded ¥228 million of Interest expenses and other.
Profit attributable to owners of parent
Profit attributable to owners of parent for the current fiscal year was ¥2,023 million (up 34.4％ YoY). We recorded ¥714 million as gain on sale of investment securities, gain on forgiveness of debts and other for extraordinary income, ¥2,331 million as impairment loss and loss on valuation of investment securities and other for extraordinary losses, ¥2,397 million for total income taxes, and ¥946 million as net loss attributable to non-controlling interests.
We recorded an impairment loss of ¥2,102 million on the fixed assets of the Ashikaga Plant (excluding the new sterile injectable production facility) owned by CMIC CMO Co., Ltd. due to a drop in the production volume of our mainstay products and the deterioration of facilities, which led to the start of a drastic improvement plan to establish stable production foundation.
Overview of the financial condition and Cash Flow
Assets, liabilities, and net assets
Total assets at the end of the current fiscal year increased by ¥1,674 million YoY to ¥91,192 million. This is due mainly to an increase in notes and accounts receivable-trade, and a decrease in cash and deposits and others.
Total liabilities increased by ¥1,200 million YoY to ¥56,706 million. This is due mainly to increases of income taxes payable, long-term loans, and "other" of the current liabilities and, decrease in short-term loans.
Total net assets increased by ¥474 million YoY to ¥34,485 million. This is due mainly to an increase
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original document
- Permalink
Disclaimer
CMIC Holdings Co. Ltd. published this content on 05 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2021 07:32:23 UTC.
