Peptide Dream Q2 FY2026: Revenue Up 8%, Operating Loss Narrows

Peptide Dream's consolidated revenue for the second quarter (first half) of FY2026 rose 8.0% year-on-year to ¥9,226 million. Operating loss improved to ¥2,534 million from ¥2,625 million a year earlier. Core operating loss, excluding amortization of acquisition-related assets, was ¥2,463 million compared with ¥2,607 million. Net loss attributable to shareholders narrowed to ¥1,999 million, or ¥15.51 per share, from ¥2,122 million, or ¥16.40 per share. Research and development expenses increased 23.7% to ¥2,642 million, reflecting continued proactive investment for future growth.

The radiopharmaceuticals segment posted revenue of ¥8,025 million, a 3.1% increase, driven by solid sales of Alzheimer's diagnostic Amyvid and PET tracer Fludeoxyglucose (18F), as well as the launch of Tauvid. Segment profit fell 44.4% to ¥242 million due to costs for a new factory and higher R&D. The drug discovery segment saw revenue surge 57.8% to ¥1,201 million on upfront fees, milestone payments, and research support funding, but its segment loss was ¥2,731 million, slightly narrowing from ¥3,016 million, as R&D spending weighed.

Total assets at the end of the period stood at ¥72,225 million, down ¥4,807 million from the previous fiscal year-end, primarily due to a ¥5,080 million decrease in cash and equivalents. Liabilities decreased ¥1,834 million to ¥23,670 million, reflecting repayment of long-term debt, while the company refinanced a syndicated loan to maintain liquidity. Operating cash flow was an outflow of ¥1,820 million (improving from an outflow of ¥10,952 million a year earlier), investing cash flow used ¥613 million mainly for capital expenditure, and financing cash flow used ¥2,709 million for loan repayments and share buybacks. The company kept its dividend at zero and repurchased ¥997 million of its own shares, signaling a focus on growth investment and financial stability over shareholder returns.

Peptide Dream's earnings are directly tied to the progress of its drug development pipelines in both discovery and radiopharmaceuticals. Key risks include: clinical trial delays or failures that could miss milestones; growing competition in the radiopharmaceutical field from global players; the financial burden of planned large-scale investments (¥10-12 billion for a new factory and ¥12-15 billion for a new research building) amid rising interest rates; regulatory and drug pricing changes; and foreign exchange swings affecting overseas income and costs. Despite the interim operating loss, the company says it has sufficient cash on hand and sees no material going-concern uncertainty.

For the full year ending December 2026, Peptide Dream forecasts revenue of ¥32,000 million, up 72.8% from an estimated ¥18,517 million in FY2025, with an operating profit of ¥4,600 million (versus a loss of ¥3,006 million) and net profit of ¥3,000 million. The company expects large upfront and milestone payments in the drug discovery segment in the second half to drive the turnaround. Planned R&D spending is ¥6,445 million and capital expenditure ¥5,449 million, as it accelerates investment in growth infrastructure, including a new manufacturing facility at Kazusa Academia Park (targeting operation in 2027-2028) and a new research building in Tonan (2027-2029).

The radiopharmaceutical pipeline continues to advance, raising expectations for future revenue. Key developments: 64Cu-ATSM for malignant glioma is in an investigator-initiated phase 3 trial, with Linkmed building a factory in Chiba; a clinical trial for diagnostic 64Cu-PSMA I&T in prostate cancer was completed in June 2026, and therapeutic 177Lu-PSMA I&T is progressing; a phase 1 trial of 225Ac/64Cu-CA9 for renal cell carcinoma began in the US in June 2026; and Novartis's phase 1 start for 177Lu/68Ga-HER2 triggered a milestone payment. In non-radioisotope areas, growth hormone receptor antagonist ALXN2420 entered phase 2, and the company is continuing partnership negotiations for its proprietary oral peptides, including a myostatin inhibitor and an IL-17 inhibitor.