Bridge Report:（2183）Linical the Fiscal Year ended March 2026

Kazuhiro Hatano CEO	Linical Co., Ltd. (2183)

Company Information

Stock Information

* Stock price is as of closing on June 30, 2026. These figures were taken from the brief report on financial results in the fiscal year ended March 2026. Number of shares issued is the term-end figure stated in the summary of financial results excluding treasury shares.
* BPS and ROE are based on FY 3/26 results. DPS and EPS are based on the company’s forecast for the fiscal year ending March 2027.

Consolidated Earnings Trend

*Unit: Million yen.
*Estimates are those of the company.

This Bridge Report reviews on the overview of Linical Co., Ltd.’s earnings results for the fiscal year ended March 2026 and its forecast for the fiscal year ending March 2027.

Table of Contents

Key Points
1. Company Overview
2. Management Strategy
3. Fiscal Year ended March 2026 Earnings Results
4. Fiscal Year ending March 2027 Earnings Forecasts
5. Conclusions
<Reference：Regarding Corporate Governance>

Key Points

• In the fiscal year ended March 2026, sales fell 17.0% year on year, with an operating loss of 2,073 million yen (an operating loss of 583 million yen in the previous fiscal year). Sales fell significantly due to factors such as delays in the commencement of major projects in the U.S. and Europe. In terms of profit, the impact of the decline in sales in the U.S. and Europe was significant, resulting in an operating loss. Net loss attributable to owners of the parent company grew following the recognition of impairment losses on goodwill relating to the European business and on fixed assets relating to the Japanese business.

   

• For the fiscal year ending March 2027, they forecast a 23.2% year-on-year increase in sales and an operating income of 256 million yen (an operating loss of 2,073 million yen in the fiscal year ended March 2026). The company anticipates increased sales and profitability driven by the recovery in the U.S. and Europe, as well as growth in Asia. In the U.S. and European regions, work has resumed on some of the several projects whose commencement had been delayed due to factors such as the U.S. government shutdown; furthermore, the remaining projects and recently ordered projects are expected to commence operations one by one in the future.In addition, the company plans to pay an ordinary dividend of 8 yen per share, unchanged from the previous fiscal year.

   

• As of May 22, 2026, order backlog was 13 billion yen, up 10.9% from the end of the fiscal year ended March 2025. In the U.S., the company secured informal agreements for several large-scale international collaborative clinical trials covering the U.S., Europe and Australia. Order backlog increased from the end of the fiscal year ended March 2025 due to the signing of contracts for some of these projects, the completion of contract amendments resulting in increased man-hours, and the concluding of contracts for new projects to be conducted primarily in the U.S. In Europe, too, the figure increased from the end of the fiscal year ended March 2025, driven not only by contract amendments to existing projects and the recognition of the European portion of the large-scale international collaborative clinical trials secured in the U.S. (as mentioned above) for which contracts have been finalized, but also by the finalization of contracts for several new projects to be conducted mainly in Europe. Going forward, we would like to pay attention to how much the company can expand its order backlog, a leading indicator of business performance with a view to a full-scale recovery in performance during the second half of the fiscal year.

   

   

1. Company Overview

The company is a global contract research organization (CRO) based in Japan, which provides a comprehensive range of services ranging from the initial phase of clinical trials to post-marketing studies as a professional in development of pharmaceutical products. Linical Co., Ltd. provides contract research organization (CRO) services that support the drug development processes of pharmaceutical companies on an outsourced consignment basis, and sales and marketing functions for pharmaceutical products and post market launch clinical research and surveys on a consigned basis in the Contract Medical Affairs Business (CMA). In addition, the company offers meticulous services to meet the requests from clients and optimal solutions as a global CRO. They give full support with proposals for planning of early small-scale trials, late-stage trials, and applications for approval, which can be achieved because the scale is medium, and contribute to healthcare as a partner required for developing new treatment methods, including pharmaceutical products. In the past 5 years, they have dealt with over 600 clinical trials, the retention rate of clients exceeds 85%, and they registered cases for over 80% of trials. Then, they offer services in about 30 countries.
Linical has conducted various efforts to eradicate oncology, central nervous system and other diseases globally since its founding, and it has deployed its CRO Business in therapeutic areas where there is strong demand for new drug development. Linical is a leading company in the field of clinical trials for cancer treatment, and has a vast amount of experience in the field of central nervous system (CNS) diseases. In addition, since the inauguration of business, they have focused on immune system diseases, and have plenty of experience of Phases I to IV trials and profound knowledge of rare diseases and common diseases, and made clinical trials of clients successful. As an awarded CRO, the company possesses expertise for supporting a variety of therapeutic areas.

[Management philosophy]

The management philosophy is “Linical promotes the greater wellbeing of all our stakeholders—patients, clients and employees— we strive constantly to offer professional, high-quality services to support all aspects of new drug development.”

The blue color represents “Integrity&Honesty,”
the red color “Unending Enthusiasm,” and
the yellow color “Continuing Spirit of Inquiry.”
This corporate logo depicts the company’s hope of pursuing the wellbeing of patients around the world through business, and the company has the mission to “wings to new drugs.”

[Corporate History]

Linical Co., Ltd. was established in June 2005 by nine members who worked at Fujisawa Pharmaceutical Co., Ltd. (Currently known as Astellas Pharma Inc.) on the development of immunosuppressant drugs. Established with the objective of becoming the ideal drug development outsourcing (CRO) company from Osaka, Linical focused its efforts upon the realms of central nervous system diseases (CNS) and oncology since its founding, and received one of its first orders from Otsuka Pharmaceutical Company shortly after its establishment. Thereafter, the Company fortified its staffing as part of its efforts to strengthen its order taking capabilities. In addition, Linical is benefitting from the bountiful experiences of its employees in the realm of oncology pharmaceutical product development and experiences having worked at foreign pharmaceutical companies. Consequently, Linical is successfully expanding orders in the near term.
With its advance into the site management organization (SMO, clinical trial facility support organization) business, Aurora Ltd. was turned into a subsidiary in January 2006. However, all shares held in Aurora were later sold in May 2007 in order to focus management resources upon the CRO Business. In July 2008, Linical USA, Inc. was established in California, United States to provide support to Japanese pharmaceutical companies seeking to enter the United States market. Also, in October of the same year, Linical listed its shares on the Mothers Market of the Tokyo Stock Exchange, and subsequently moved its listing to the First Section of the Tokyo Stock Exchange in March 2013. In May 2013, Linical Taiwan Co., Ltd. and Linical Korea Co., Ltd. were established in Taiwan and Korea respectively. In April 2014, Linical teamed up with its Linical Korea to acquire the Korean CRO company P-pro. Korea Co., Ltd. On October 29, 2014, all of the shares of Nuvisan CDD Holding GmbH, which conducts CRO Business in Europe, were acquired and it was converted to a 100% owned subsidiary effective on December 1, 2014. In order to strengthen the collaboration within the Group, the company name of Nuvisan CDD was changed to Linical Europe GmbH. In addition, Linical U.K. Ltd. was established in March 2016, and a local subsidiary called Linical Poland SP. Z.O.O. was also established in October of the same year. Moreover, LINICAL Czech Republic s.r.o was established in September 2017. In addition, Accelovance, Inc. was acquired in April 2018 and its company name was changed to Linical Accelovance America, Inc. In addition, Linical Hungary Kft. was established in March 2019, and Linical China Co., Ltd. was established in May 2019. Furthermore, the company further strengthened their system for undertaking global joint clinical trials, through the enhancement of their business in the European region by integrating the European subsidiary of Linical Accelovance America, Inc. (LAA) into LINICAL Europe GmbH in December 2019, and the establishment of a Shanghai branch in February 2020. In April 2020, Linical Benelux BV and Linical Accelovance Europe BV were merged to form Linical Netherlands BV, and Linical China Co., Ltd. and Linical Accelovance China Ltd. are scheduled to be integrated in the fiscal year ending March 2023. The company grew steadily through overseas mergers and acquisitions, and achieved record sales consecutively in fiscal year ended March 2022 and fiscal year ended March 2023. In the fiscal year ended March 2024, profit declined due to the decrease in sales in Japan and Europe, and in the fiscal year ending March 2025, too, sales and profit declined due to the drop in sales in Japan and other Asian countries. Furthermore, in the fiscal year ended March 2026, sales fell significantly and operating loss increased due to factors such as delays in the commencement of large-scale projects in the U.S. and Europe.

[International Certification]

All business establishments of the Linical Group obtained the certification of the international standard ISO/IEC 27001 regarding an information security management system (ISMS).

(Source: Linical)

Produced by Investment Bridge Co., Ltd. with reference to disclosed material.

Mainly the overseas business is growing after the overseas M&A in South Korea, Europe, and the U.S.

[Strengths]

[Business Description]

As a global CRO founded in Japan, the company operates primarily in Japan, and also in Asia, Europe and the U.S, providing a comprehensive range of services ranging from the drug discovery stage to clinical development to post-marketing drug development. The company has extensive experience and achievements in the trending areas of drug development, notably in oncology, neurology , and immunology.
A CRO is an organization that receives requests from pharmaceutical companies and others to act on their behalf and provide support for clinical trials conducted during the development phase of a pharmaceutical product. It is an organization with high expertise in clinical trials and is a professional in the field of drug development. The scope of work includes monitoring activities to ensure that clinical trials are conducted in compliance with regulatory requirements and the clinical trial protocol, including data management and medical writing activities.
Linical mainly conducts contract research organization (CRO) business, post market launches clinical trial and clinical research and marketing support activities in the Contract Medical Affairs Business, and new drug development support business. As a true partner, the company contributes to the maximization of the value of the medical drugs by helping the procedure from the non-clinical tests to clinical development and after-release surveys and clinical trial, and making it possible to shorten the time needed to start selling the drugs and prolong the life-cycle of the products. On top of that, the company supports not only pharmaceutical companies but also the bio-ventures in various ways including exit strategies.

(Source: Linical)

CRO Business (Contract Research Organization)
A clinical trial is a study conducted to evaluate the efficacy and safety of a new drug candidate in humans, with the aim of obtaining authorization as a pharmaceutical product from regulatory authorities such as the Ministry of Health, Labour and Welfare in Japan and other countries; it is an essential process in pharmaceutical development. These trials are conducted at medical institutions with healthy volunteers or patients as participants. The sponsor (pharmaceutical company, etc.) is legally obliged to ensure (monitor) that clinical trials are being conducted ethically and scientifically at medical institutions in accordance with the Act on Securing the Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices and Other Products (Pharmaceuticals and Medical Devices Act) and GCP (Note 1), among other laws and regulations.
Clinical trial operations includes monitoring, which is the core activity, associated quality control services, data management tasks, such as designing databases for case reports (Note 2) and cleaning entered data, which record efficacy and safety data for cases in which the investigational drugs have been administered; statistical analysis tasks, which involve the statistical and scientific verification of the efficacy and safety of the investigational medicinal product; medical writing, which involves drafting the clinical trial protocol (Note 3) and documents required for notifications and applications to regulatory authorities; auditing, which involves investigating the conduct of clinical trials to ensure the reliability of trial data; and pharmacovigilance, which involves the collection, evaluation, analysis and reporting of safety information such as adverse events; and many other tasks. The sponsor may outsource some or all of these tasks to a CRO, taking into account the availability of its own personnel and other resources.
In particular, monitoring is a key aspect of clinical trials. The CRA (Note 4), who acts as a monitoring officer, is responsible for assessing the suitability of healthcare institutions to conduct clinical trials, requesting healthcare institutions to participate in trials, handling the procedures for concluding contracts regarding the conduct of clinical trials in accordance with legislation (tripartite contracts between a sponsor, such as a pharmaceutical company, a healthcare institution and a CRO), explaining the Investigational Medicinal Product Summary (Note 5) and the clinical trial protocol to the principal investigator and others, delivering investigational medicinal products to healthcare institutions; verifying compliance with legislation and the clinical trial protocol during trial conduct; managing and facilitating the progress of clinical trials; verifying clinical trial data and collecting case reports; and retrieving investigational medicinal products. The Group undertakes contracts centered on monitoring activities in clinical trials, as well as associated services such as quality control, data management, statistical analysis, medical writing and pharmacovigilance.

Contract Medical Affairs Business
While the CRO Business undertakes medicine development, the Contract Medical Affairs Business undertakes support services following the launch (manufacture and sale) of medicines. Even after a drug's launch, data on its safety and efficacy continue to be collected; this is provided to healthcare settings as information on appropriate use and evidence, thereby promoting its widespread adoption. On April 1, 2018, the Clinical Research Act, which sets out the procedures and other requirements for clinical research, came into force with the aim of contributing to the improvement of public health by ensuring the reliability of clinical research and promoting its implementation; this has made it necessary to take appropriate measures in accordance with the legal regulations.
The Group’s Contract Medical Affairs Business utilizes the expertise gained from its CRO Business to differentiate itself from competitors by undertaking the establishment of organizational structures for company- and investigator-initiated clinical trials, which require a higher level of specialization, as well as post-marketing planning, monitoring and auditing services.

Innovative Drug Development Business
In recent years, bioventure companies both in Japan and overseas have become the sources of many new drug candidates, and the company operates Innovative Drug Development Business to assist these firms in their drug development efforts. In the corporate group, individuals who have worked in roles such as licensing, business development, clinical development, regulatory affairs and marketing at major domestic pharmaceutical companies and possess a strong track record and extensive experience in areas ranging from the evaluation of development candidates to in-licensing and out-licensing negotiations, as well as clinical development take the initiative in providing consultancy services including market analysis and research for development candidates, the formulation of development and regulatory strategies, regulatory compliance, and support for partnering and licensing.

(Note 1) GCP (Good Clinical Practice) is a comprehensive concept referring, in plain terms, to the proper conduct of clinical trials. In Japan, it refers to the Ministry of Health, Labour and Welfare Ordinances setting out these standards—namely, the Ministerial Ordinance on Good Clinical Practice for Clinical Trials of Drugs and the Ministerial Ordinance on Good Clinical Practice for Clinical Trials of Medical Devices (March 27, 1997) and their related operational guidelines.
(Note 2) A case report refers to a report (including electronic records) prepared for each participant to record all the information specified in the clinical trial protocol.
(Note 3) A clinical trial protocol, also known simply as a protocol, is a comprehensive document prepared by the sponsor (the pharmaceutical company) that sets out the requirements to be observed by the medical institution conducting the trial, the pharmaceutical company requesting the trial, and other parties involved in the trial.
(Note 4) A CRA (Clinical Research Associate) is known as a clinical development monitor. This term refers to a person responsible for monitoring whether clinical trials conducted during the drug development phase are being carried out in compliance with the Pharmaceutical and Medical Devices Act, other applicable laws and regulations, and the clinical trial protocol.
(Note 5) An investigator's brochure is a document prepared to provide the knowledge necessary for the management of trial subjects during the course of a clinical trial; its content comprises a compilation of the results of non-clinical studies and clinical trials relating to the investigational drug.

[Services]

Strategy for drug development

Clinical trials

[Therapeutic Expertise]

[Global expansion]

The company is a global CRO based in Japan, with a focus on Japan, it is operating its offices around the world, including Asia, Europe and the U.S. The company currently has employees in about 20 countries/regions. The company is providing services in about 30 countries including affiliated partners. Experts in each function, who are familiar with local regulations and customs, work together globally to provide detailed services customized to each and every project.

(Source: Linical)

(Source: Linical)

In the fiscal year ended March 2026, the overseas ratio was 59% for sales and 53% for the number of employees.

[Order backlog by region]

*Produced by Investment Bridge Co., Ltd. with reference to disclosed material.

The total price of clinical trials and studies after the release of new medicines undertaken by the CRO Business division of the Linical Group is determined by their difficulty levels, which depend on the number of cases and target diseases in the clinical trial period spanning 1 to 3 years. In the trial period, they conclude an outsourcing contract with a client and earn sales in accordance with the contract. Order backlog refers to the balance of the amount of orders received for undertaking of tasks for which contracts have been already concluded. It shows sales that will be earned in the next one to five years and is an indicator that serves as the basis for the corporate group's future earnings forecasts.

As of May 22, 2026, order backlog was 13 billion yen, up 10.9% from the end of the fiscal year ended March 2025.
In Japan and other Asian countries, the order backlog in Japan decreased from the end of the fiscal year ended March 2025, while that in other Asian countries increased due to the acquisition of several new orders. There has been an increasing trend in securing international collaborative clinical trial projects from European and North American biotech companies, covering Japan and Asia, as well as pharmaceutical and biotech projects from Japan and Asia aiming to enter the North American market either via Australia or directly.
In the U.S., order backlog increased from the end of the fiscal year ended March 2025, driven by the informal acceptance of orders for several large-scale international collaborative clinical trials involving the U.S., Europe and Australia; alongside the finalization of contracts for some of these projects and the completion of contract amendments involving increased man-hours; and the finalization of contracts for new projects to be conducted primarily in the U.S.
They receive many inquiries for new projects, including global projects, and the company will continue to strengthen its sales and proposal activities to secure new orders.
In Europe, sales increased from the end of the fiscal year ended March 2025, mainly due to the completion of contracts for several new projects to be carried out primarily in Europe, in addition to an increase resulting from contract amendments to existing projects and the recognition of the portion of the large-scale international collaborative clinical trial secured by the U.S. mentioned above for which the European contract has been finalized. The company will expand the acquisition of projects, including those in Europe, from U.S. companies through collaboration with them, while strengthening its sales activities in Europe.

2. Management Strategy

[Global Pharmaceutical Market Size in 2028 (Forecast)]

(Source: Linical)

By 2028, the global pharmaceutical market is expected to grow at an average annual rate of 6–9 percent, with the global market size projected to exceed 2.2 trillion US dollars.
Against this backdrop, expanding business operations in the United States, the largest market, is essential.

[Strategy for Biopharmaceutical Companies]

[Advances in Biopharmaceutical Modalities]

[What are gene therapy vectors?]

Nucleic acid (primarily DNA) molecules used to transport foreign genetic material into other cells.

(Source: Linical)

Case 1. Cancer Vaccines Using Plasmids
<Technology: Personalized immunotherapy against cancer using DNA>

(Source: Linical)

Case 2. Potential custome Gene delivery drugs
<Design and manufacture HSV-based vectors* using a viral vector system as the gene delivery platform>

(Source: Linical)

3. Fiscal Year ended March 2026 Earnings Results

(1) Consolidated results

*Unit: million yen
*The figures include figures calculated by Investment Bridge Co., Ltd., and may differ from actual figures. (Abbreviated hereafter)

17.0% year-on-year decline in sales and an operating loss of 2,073 million yen
For the fiscal year ended March 2026, sales decreased 17.0% year on year to 8,665 million yen, with an operating loss of 2,073 million yen (an operating loss of 583 million yen in the previous fiscal year). In terms of sales, there was a significant decline due to factors such as delays in the commencement of major projects in the U.S. and Europe. In terms of profit, the impact of the decline in sales in the U.S. and Europe was significant, resulting in an operating loss.
In Japan, sales increased and operating loss decreased. Sales increased as a result of securing multiple contracts from domestic and international pharmaceutical companies. Despite the challenging market environment characterized by persistent unavailability of some medicines in Japan, sales were secured through collaborative sales activities with subsidiaries in Europe, the U.S. and Asia, which contributed to sales for the current period. In the U.S., sales declined and the company recorded an operating loss. Although the company was awarded a large-scale international collaborative clinical trial, its commencement was delayed due to factors such as the U.S. government shutdown, and it therefore made no contribution to sales. Furthermore, despite cost reductions achieved through expense management, the impact of the decline in sales was significant, resulting in an operating loss. In Europe, sales declined and operating loss increased. Sales decreased due to delays in the international collaborative clinical trial secured in the U.S.; in addition to the decline in sales, an increase in outsourcing costs to other sites led to a larger operating loss.
Gross profit margin decreased 9.8 points year on year to 13.0%. Selling, general and administrative expenses increased 8.0% year on year. Furthermore, although a foreign exchange loss of 42 million yen was incurred, ordinary loss amounted to 2,023 million yen—a smaller loss than the operating loss—primarily due to the recognition of a 69 million yen gain on the valuation of investment securities. Furthermore, following the recognition of impairment losses on goodwill relating to the European operations and on fixed assets relating to the Japanese operations, as well as the write-down of deferred tax assets, the net loss attributable to owners of the parent amounted to 3,329 million yen (a net loss of 539 million yen in the previous fiscal year).

Changes in Segments to be Reported
The corporate group had previously reported two segments: CRO and Contract Medical Affairs Business. However, in the first quarter of this year, they switched to a single-segment reporting structure with the CRO Business. This change was made following an organizational restructuring implemented in April 2025 and the results of a review of the segments from the perspectives of management resource allocation by the Board of Directors and performance evaluation. It was determined that adopting a single CRO segment would more appropriately reflect the corporate group's decision-making process.

(2) Performance trend in each region

*Unit: million yen
*Amortization of goodwill is recorded as an adjustment. “Sales” means the value before exclusion of internal transactions.

[Japan]
In Japan, sales decreased significantly in the previous fiscal year due to the impact on the cancellation and contract revisions involving shortened durations of several large-scale existing projects. In this fiscal year, the company has received orders for multiple large-scale projects from domestic and international pharmaceutical companies in Japan, resulting in a year-on-year sales growth, while operating loss has narrowed. Although Japan continues to face a challenging market environment due to the serious social issue of unavailability of some medicines in Japan, the company is securing orders by maintaining domestic and international sales activities in collaboration with its European, American, and Asian business sections. It will continue striving to improve performance by implementing measures to enhance employee utilization rates and strictly managing expenses.

[Korea]
In South Korea, several projects were suspended for reasons attributable to clients, so sales declined from the previous fiscal year. However, operating loss was reduced by controlling incurred costs. The company will continue working with other bases, including those in Japan and Asia, to advance sales activities aimed at securing orders from domestic and international companies.

[China]
In China, sales increased year on year, resulting in an operating profit. Recently, inquiries from local pharmaceutical and biotech companies have increased, partly as a result of efforts to strengthen their local sales organization. In addition to developing the demand among Japanese companies for clinical trials in China, the company will continue its sales activities to further cultivate the global development needs of local companies, including those in Japan.

[Taiwan]
In Taiwan, sales increased year on year due to the acquisition of orders for new projects, and the business achieved an operating profit. They have received inquiries about several new projects from Taiwan Biotech Co., Ltd., which proceeds with development inside and outside Japan, and continue active marketing activities.

[United States]
Their business in the United States has secured preliminary agreements for multiple large-scale international collaborative clinical trials, including those in the U.S., Europe, and Australia, and is proceeding with contract finalization procedures. While some completed contracts have been reflected in order backlog and contributed to sales, the company was unable to compensate for the decline in sales following the completion of a major project due to factors such as delays in the start of clinical trials caused by the U.S. government shutdown and other factors, resulting in a significant year-on-year decline in sales and an operating loss. Progress is being made toward the full-scale launch of several projects that had delayed commencement. The company will continue to focus on expanding business with existing customers and securing new projects from promising biotech firms in the promising U.S. market, aiming for sustainable growth.

[Europe]
In Europe, sales decreased year on year, and the operating loss expanded due to higher outsourcing costs to other bases. In cooperation with other bases in the U.S. and other regions, they will continuously concentrate on marketing activities for making transactions in Europe and strive to improve revenues by raising utilization rate.

[Goodwill balance and remaining amortization period (at the end of FY 3/26)]

*Unit: million yen
*1 Goodwill generated by the acquisition of Linical Accelovance America, Inc., has been apportioned pro rata to its European subsidiary.
*2 An impairment loss of 829 million yen was recorded for Europe in the fiscal year ended March 2026, and the closing balance shown in the table above represents the carrying amount after the impairment.
*3 Intangible assets other than goodwill recognized by purchase price allocation.
*4 Figures have been converted at the exchange rate as of the end of the fiscal year ended March 2026.

(3) Change in order backlog

*Unit: million yen

As of May 15, 2026, order backlog was 11,298 million yen, down 3.7% from the end of the fiscal year ended March 2025.
In Japan, although the company secured several new projects and secured contract amendments, the business environment remained challenging due to factors such as unavailability of some medicines in Japan, resulting in a decrease in the order backlog from the end of the fiscal year ended March 2025. The establishment of the base in Australia is beginning to show results, such as securing orders from Japanese pharmaceutical companies for trials in Australia and Asia managed by the company's base in Japan, so the company will continue active marketing activities.
In Asia, order backlog increased significantly from the end of the fiscal year ended March 2025, as the Taiwanese subsidiary secured multiple new projects, including global trials conducted in Taiwan and the United States. Taiwanese biotech companies have shown strong interest in the U.S. market from the beginning, leveraging the strengths of their U.S.-based operations to pursue new projects. In South Korea, order backlog increased from the end of the fiscal year ended March 2025 due to the acquisition of new domestic orders and the signing of multiple new contracts for data management and statistical analysis services conducted through group companies. The sales teams in Asia and Japan and those in Europe and the U.S. will collaborate to attract Western biotech companies to Japan and Asia and to secure orders by also addressing the development needs of Japanese and Asian biotech companies by initiating clinical trials via Australia or directly in North America, targeting the world's largest market in the United States.
In the United States, the company received approval for multiple large-scale international collaborative clinical trials across the U.S., Europe, and Australia, and contracts for some of these trials were completed, but the order backlog has decreased since the end of the fiscal year ended March 2025, partly due to the fact that contracts required for full-scale operations have not yet been finalized, impacted by factors such as the U.S. government shutdown. Please note that, as mentioned above, multiple projects among the received orders that are still pending contract conclusion are not included in the above order backlog. These will be added to the order backlog once the contracts are completed. Additionally, the company has received numerous inquiries for projects, including global ones centered on biotech, and is focusing its sales efforts on building up its order backlog.
In Europe, although there were contract amendments involving extensions to existing projects and additional man-hours, as well as the acquisition of new projects to be carried out mainly in Europe, order backlog decreased from the end of the fiscal year ended March 2025 due to factors such as the fact that contracts for the large-scale international collaborative clinical trials secured in the U.S., as mentioned above, had not yet been finalized prior to full-scale operations owing to delays in the start of the trials, and the fact that projects for which contracts had recently been tentatively secured and were on the verge of being finalized had not yet been formalized at the time of compilation. By further strengthening global synergies, primarily in the U.S. business, the company aims to expand the acquisition of orders for new projects, including those in Europe.
It should be noted that the order backlog as of May 22, 2026 was 13,015 million yen, up 10.9% from the end of the fiscal year ended March 2025.

(4) Variation in performance in the fourth quarter (January to March)

Unfortunately, the trend of decrease in revenue and profit continued in the fourth quarter (January to March) of the fiscal year ended March 2026.

(5) Financial Conditions and Cash Flow（CF）

Financial Conditions

* Unit: million yen
* Interest-bearing liabilities＝Borrowings + Lease Obligations

*Produced by Investment Bridge Co., Ltd. with reference to disclosed material.

Total assets as of the end of March 2026 stood at 11,999 million yen, down 4,775 million yen from the end of the previous fiscal year. Major factor increasing assets is prepaid expenses, while factors in decreasing assets include cash and deposits, accounts receivable, goodwill, and deferred tax assets. Major factors in increasing liabilities and net assets are liabilities for short-term debts, retirement benefits, and exchange conversion adjustment accounts, while factors in decreasing liabilities and net assets include advances paid, deposits payable, long-term debts, and retained earnings. The equity ratio as of the end of March 2026 was 33.1%, down 10.1 percentage points from the end of the previous fiscal year.

* Unit: million yen

Regarding cash flows, a cash outflow from operating activities was posted due to the augmentation of net loss before taxes and other adjustments, decreases in advances received and deposits received, etc. Although cash flow from investing activities turned positive, mainly due to a decrease in expenditure on the acquisition of long-term prepaid expenses and the payment of guarantee deposits, the free cash flow, too, turned negative. The cash outflow from financial activities shrank, due to an increase in the repayment of short-term debts. As a result, the cash position as of the end of March 2026 was down 26.1% year on year.

(6) Recording of impairment lossIn the fiscal year ended March 2026, the group recorded impairment losses on the following asset groups.
① Summary of assets for which impairment losses have been recorded.

② Circumstances leading to recognition of impairment lossWith regard to the asset group comprising the above assets, as the profit arising from operating activities has been consistently negative, the carrying amount has been reduced to the recoverable amount, and the resulting reduction has been recorded as an impairment loss.③ Method for grouping assetsThe corporate group carries out the asset grouping based on the management accounting classification used for the continuous monitoring of income and expenditure.④ Method for calculating recoverable amountThe recoverable amount of business assets in Japan is measured on the basis of value in use; however, as no future cash flows are anticipated, they are valued at a notional value. The recoverable amount of goodwill in Europe is measured on the basis of value in use and is calculated by discounting future cash flows at a discount rate of 13.0%.

4. Fiscal Year ending March 2027 Earnings Forecasts

(1) Consolidated results

*Unit: million yen

A 23.2% increase in revenue from the previous fiscal year, with an operating income of 256 million yen. (An operating loss of 2,073 million yen in the previous fiscal year)
Sales are expected to increase 23.2% year on year to 10,680 million yen, while operating income is projected to be 256 million yen (an operating loss of 2,073 million yen in the fiscal year ended March 2026).
The company anticipates an increase in sales and profitability, driven by the recovery in the U.S. and Europe and growth in Asia. Within the group, some of the several projects in the U.S. and Europe that had been delayed due to factors such as the U.S. government shutdown have resumed operations; furthermore, the remaining projects and recently secured projects are expected to commence operations one by one in the future. Furthermore, there are several large-scale projects currently under negotiation, mainly in the U.S.; if these orders are secured and progress smoothly, both sales and profit are expected to improve significantly in the second half of the fiscal year. On the other hand, as the first half of the fiscal year marks the start-up phase for several new projects, their contribution to order backlog and sales will be limited. Consequently, business performance is expected to remain challenging until contracts are concluded for the full-scale operational phase following these projects and they begin to make a substantial contribution to order backlog and sales. In particular, the first quarter is expected to see an operating loss like in the previous quarter. Although the company sought to lower its break-even point at the end of the previous fiscal year by implementing staff reductions in regions where there was no prospect of an improvement in utilization rate, it will continue to strive for improved performance by implementing measures to enhance staff utilization rate and strictly managing expenses.
The dividend is expected to be 8 yen/share, unchanged from the previous fiscal year.

(2) Dividend Policy

The company is also actively working to strengthen its financial base. In order to secure the financial resources necessary for investments to expand overseas operations, the company will ensure sustainable growth in earnings per share by increasing revenue through its growth strategy, maintaining high operating rates, and thoroughly managing costs. At the same time, the company aims to increase its current ratio and equity ratio, enable flexible financing, and strive to balance shareholder returns and securing funds for growth.

5. Conclusions

The company’s financial results for the year ended March 2026 were extremely challenging, with sales declining 17.0% year on year to 8,665 million yen and an operating loss of 2,073 million yen (an operating loss of 583 million yen in the previous fiscal year). Regarding sales, the delays in the commencement of major projects in the U.S. and Europe had a significant impact. Regarding profit, smaller sales in the U.S. and Europe also had an impact. In the fourth quarter (January–March), both sales and profit declined year on year; regrettably, there were no signs confirming whether the company's performance had bottomed out. Meanwhile, for the fiscal year ending March 2027, the company forecasts sales to increase 23.2% year on year to 10,680 million yen, and an operating profit of 256 million yen (an operating loss of 2,073 million yen in the fiscal year ended March 2026). Within the company's group, some of the multiple projects in Europe and the U.S.—whose commencement had been delayed due to factors such as the U.S. government shutdown—have now resumed operations; furthermore, the remaining projects and recently secured projects are expected to commence operations one by one in the future. In addition, there are several large-scale projects currently under negotiation, mainly in the U.S.; if these contracts are secured and progress smoothly, both sales and profit are expected to improve significantly in the second half of the fiscal year. On the other hand, in the first half of the fiscal year, the contribution to order backlog and sales remains limited as several new projects are in their start-up phase. Consequently, the company anticipates that financial performance will remain challenging until contracts for the subsequent full-scale operational phase are concluded and begin to make a substantial contribution to order backlog and sales. In particular, the company expects to incur an operating loss in the first quarter like in the previous quarter. Attention is focused on the extent to which the company will be able to prevent the decline in first-quarter performance.
Despite these challenging results, order backlog, a leading indicator of future performance, is showing signs of a turnaround. As of 22 May 2026, order backlog stood at 13 billion yen, up 10.9% from the end of the fiscal year ended March 2025. In the U.S., the company secured informal agreements for several large-scale international collaborative clinical trials involving the U.S., Europe and Australia; this increase from the end of the fiscal year ended March 2025 was driven by the formalization of contracts for some of these projects, the completion of contract amendments resulting in increased man-hours, and the finalization of contracts for new projects to be conducted primarily in the U.S. The company has received numerous inquiries regarding new projects, including global ones, and is continuing to strengthen its sales and proposal activities with a view to securing orders. Furthermore, in Europe, order backlog increased from the end of the fiscal year ended March 2025, driven not only by contract amendments to existing projects and the recognition of the European portion of the large-scale international collaborative clinical trial secured in the U.S. (as mentioned above), for which the contract has now been finalized, but also by the finalization of contracts for several new projects to be conducted mainly in Europe. Going forward, the company plans to expand the acquisition of projects including those in Europe—from U.S. companies through collaboration with its U.S. operations, while strengthening its sales activities in Europe. Attention is now focused on the extent to which order backlog, a leading indicator of performance, can be expanded in the coming period, with a view to a full-scale recovery in performance during the second half of the fiscal year.

<Reference: Regarding Corporate Governance>

◎ Organization type, and the composition of directors and auditors

◎ Corporate Governance Report
Last updated on June 30, 2026
<Basic Policy>
(1) Management Philosophy
Our management philosophy is “To promote the greater wellbeing of all our stakeholders — patients, business partners, shareholders, and employees — we strive constantly to offer professional, high-quality services to support all aspects of new drug development.” We aim to contribute to the development, evolution and diffusion of new therapeutic technologies including new pharmaceuticals, and ultimately to the healthy lives of human beings, by continuously developing and maintaining the knowledge and experience of our executives and employees, as well as the know-how and systems of our organization.
(2) Basic Approach on Corporate Governance
Based on the above management philosophy, our company will contribute to the birth and growth of new disease prevention and therapeutic technologies, including new pharmaceuticals, with our know-how and technologies in pharmaceutical development. As a partner of healthcare companies and medical institutions, including domestic and foreign bio-venture firms, pharmaceutical companies, and medical device manufacturers, our company will contribute to the development of healthcare and meet the expectations of patients and the entire society.
Since our business activities impact people's lives, our executives and employees are required to have high ethical standards as well as expertise. Thus, we thoroughly comply with the Corporate Code of Conduct, including strict compliance with laws. In addition, we strive to improve corporate value and business development by enhancing internal control and ensuring the soundness and transparency of management.

Major principles for not implementing and the reasons

<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>