Our thoughts are with everyone who has contracted the novel coronavirus disease (COVID-19) and everyone in this difficult living environment because of the spread of infection.
Furthermore, we would like to give our heartfelt thanks to the medical professionals who are working to treat patients with COVID-19 and the many medical professionals and other concerned parties who continue to give effort in the medical system during this difficult situation.
To promote the greater wellbeing of all our stakeholders
— pharmaceutical companies, medical institutions and patients as well as our shareholders and employees —
we strive constantly to offer professional, high-quality services to support all aspects of new drug development.
Points during this period
- Acceleration of contribute to sales at our American bases
- Strengthening of Chinese bases to enhance our service infrastructure
Q & A
Could you provide a summary of the business performance for the 15th fiscal year ended March 31, 2020?
In the fiscal year ended March 31, 2020, we acquired a number of contracts and carried out global joint clinical trials in Japan/Asia, the United States and Europe due to the development of our global service structure, but both sales and income decreased as a result of the net sales of foreign subsidiaries decreasing due to conversion into Japanese yen, which was caused by impact of the global spread of COVID-19 in the fourth quarter and the shift of foreign exchange rates caused by strong yen at a higher level than expected. However, in this environment, anticipation is growing. Operating income except amortization of goodwill and legal fees moved into the black due to factors such as, in the United States, the realization of the strengthening of the sales ability and administrative systems as well as cost reductions at the subsidiaries we have acquired. Moreover, outstanding orders, which will contribute to sales from next fiscal year onward, significantly increased year on year. In Europe, LINICAL Europe was in the black for the sixth fiscal year in a row after acquisition, and continued to grow. Furthermore, by integrating the European subsidiaries of the American subsidiaries we acquired, we increased the acceleration of growth, the effectiveness of management, and the speed of decision making of the European Division. In Korea, in addition to favorable business performance, our ability to acquire orders significantly improved due to factors such as receiving clinical trial contracts with Korean pharmaceutical company for treatments for COVID-19.
Could you tell us about the impact of the spread of COVID-19?
It is necessary to think of the impact of the spread of COVID-19 on our business in the short term and in the medium to long term. In the short term, there was an extremely significant impact in various countries around the world as a result of not being able to carry out some clinical trials due to the suspension of visiting medical institutions and the delays in the commencement period of new clinical trials. However, as there was a strong desire to accept the challenge of developing medication against the threat to humanity known as COVID-19, we also began to receive contracts in March 2020 for clinical trials for treatments for COVID-19 entrusted to our Korean subsidiary and contracts for agreements being processed in the United States, etc. In the medium to long term, similar to after the prior novel influenza epidemic, we anticipate that the development of vaccines and treatments for COVID-19 will accelerate, and that opportunities to contribute to society through our services will increase.
Could you tell us about your support of the COVID-19 mutual aid fund?
Our thoughts are with everyone who has contracted COVID-19 and everyone in this difficult living environment because of the spread of infection. Furthermore, we would like to give our heartfelt thanks to the medical professionals who are working to treat patients with COVID-19 and the many medical professionals and other concerned parties who continue to give effort in the medical system during this difficult situation.
Since our establishment in June 2005 in Osaka, drug development has grown as our occupation. As we have stated that we pursue the greater wellbeing of the people who work at medical institutions, our stakeholders, in our management philosophy, we agree with the purpose of the "COVID-19 mutual aid fund," which was established by the Osaka Prefecture Government in order to support the activities of the doctors working on COVID-19 and the medical professionals taking part in medical treatment, and contributed to it. We sincerely hope that this helps the medical professionals who are working to treat patients with COVID-19.
What are the initiatives and targets for the 16th fiscal year ending March 31, 2021?
We expect that the aftermath of suspension of economic activity due to the global spread of COVID-19 will affect our business performance in the 16th fiscal year to an extremely significant degree. Currently, it will be difficult for outstanding orders to salvage sales as expected in the first half of the 16th fiscal year as it is difficult to carry out some clinical trials due to regulations on visiting medical institutions globally and because of delays in the commencement period of new clinical trials. However in the second half, where we expect COVID-19 to be under control, it will be possible to draft a recovery plan for outstanding orders, and we expect that business will begin to stabilize.
Furthermore, we further strengthened our global service structure in Japan/Asia, the United States and Europe by reorganizing the United States business that was worked on in the 15th fiscal year, strengthening the organization management structure by restructuring the Europe business, and advancing into the Chinese market. We believe that this will significantly contribute not only to product development at pharmaceutical companies, but to patients who are battling illnesses as well. We will actively work to receive contracts for a wide scope of global joint clinical trials by accelerating to contribute to sales in the United States business and leveraging the synergies among our three operating regions of Japan/Asia, the United States and Europe.
What is the business forecast for the 16th fiscal year ending March 31, 2021?
The business forecast for the 16th fiscal year is currently undecided. This is because it is extremely difficult to reasonably judge the impact of factors such as delays in the commencement period of new clinical trials, the temporary suspension of existing contracts and not being able to carry out some clinical trials due to the suspension of visiting medical institutions on business performance in this situation where there are measures restricting movement in various countries, such as restrictions on going out, economic activity is stagnant and it is difficult to formulate a forecast for when economic activity will resume.
Going forward, we will specify the scope of the impact, and promptly disclose the business forecast when it becomes possible to reasonably calculate business performance for the current fiscal year.
Could you offer a message to your shareholders?
At this stage, we are solidifying our foothold as "Linical: a global CRO" originating in Japan, and have set our eyes on the rest of the world. We are still a young company on the path to growth.
In the future, we will continue to proactively invest and achieve further growth. We ask our shareholders to give us their support for our group from a long-term perspective. We will also continue to pay stable dividends to respond to shareholders. We sincerely ask for your continued support and encouragement for our group in the future.
Forecast for Next Fiscal Year
|Net sales||Operating income||Ordinary income||Profit attributable to owners of parent|
The consolidated business forecast for the fiscal year ending March 31, 2021 is undecided as it is currently difficult to reasonably calculate the impact of the spread of COVID-19.
Going forward, when it becomes possible to disclose the business forecast, we will promptly announce it.
Operating income and operating margin
Ordinary income and profit attributable to owners of parent
Earings per share
The Group's main businesses