PeptiDream Narrows Half-Year Operating Loss to ¥2,534 Million on 8% Revenue Growth, Keeps Full-Year Profit Guidance

Revenue grew 8%, gross profit 25% — and R&D absorbed most of the gain

PeptiDream Inc. (TSE: 4587), the Kawasaki-based drug-discovery company built around its PDPS cyclic-peptide platform, which also makes and sells radiopharmaceuticals in Japan through its wholly owned subsidiary PDR Pharma, published consolidated results for the first half, January 1 to June 30, 2026, on August 12, 2026, under IFRS. Revenue rose 8.0% to ¥9,226 million. The core operating loss narrowed to ¥2,463 million from ¥2,607 million, the operating loss to ¥2,534 million from ¥2,625 million, the pre-tax loss to ¥2,659 million from ¥2,862 million and the loss attributable to owners of the parent to ¥1,999 million from ¥2,122 million, or ¥15.51 per share against ¥16.40. The half-year report was not subject to review by an auditor. The company's shares are listed on the Tokyo Stock Exchange.

The improvement sat almost entirely at the gross line. Cost of sales fell 2.2% to ¥5,258 million while revenue grew, so gross profit rose 25.3% to ¥3,968 million — ¥802 million more than a year earlier — and the gross margin widened from 37.1% to 43.0%. Almost all of that was spent further down. Selling, general and administrative expenses rose 5.1% to ¥3,838 million, ¥187 million more, and research and development expenses 23.7% to ¥2,642 million, ¥507 million more; other expenses rose to ¥22 million from ¥5 million. The two main cost lines together came to ¥6,481 million, about 70% of revenue, and the operating loss improved by just ¥91 million.

Lower finance costs and a tax credit trimmed the bottom line further

Below the operating line the gap narrowed a little more. Finance income was ¥135 million against ¥162 million, but finance costs fell to ¥258 million from ¥367 million, and the loss from equity-method investments shrank to ¥1 million from ¥31 million, so the pre-tax loss improved by ¥202 million, to ¥2,659 million. Income taxes were a credit of ¥660 million, against a credit of ¥740 million a year earlier, leaving the net loss at ¥1,999 million. Core operating profit, the company's recurring-profitability measure, excludes the effects of acquisition accounting and acquisition-related costs, which came to ¥70 million against ¥18 million; that is why the core loss narrowed by ¥143 million while the reported operating loss narrowed by ¥91 million.

Drug-discovery revenue up 58%, radiopharmaceutical profit down 44%

The two reporting segments moved in opposite directions. Drug Discovery and Development — PDPS-based joint research, technology licensing and the company's own pipeline — grew revenue 57.9% to ¥1,201 million from ¥760 million, and its segment loss narrowed to ¥2,731 million from ¥3,016 million. The revenue note shows where the increase came from: upfront, milestone and royalty income of ¥200 million against nil, product sales of ¥299 million against ¥80 million and research support payments of ¥565 million against ¥507 million, partly offset by other income, including technology-update fees, of ¥135 million against ¥172 million. The filing does not attribute the ¥200 million to a particular partner.

Radiopharmaceuticals, the diagnostic and therapeutic isotope business run through PDR Pharma, is by far the larger segment: external revenue rose 3.1% to ¥8,025 million, or ¥8,537 million including ¥511 million of intersegment revenue. Its segment profit, however, fell 44.4% to ¥242 million from ¥435 million. On the sales side the filing says FDG, the PET diagnostic, sold steadily on wider use of PET and more flexible dosing options, and that Amyvid grew on rising demand for amyloid PET scans as amyloid-beta-targeting drugs spread; it gives no reason for the fall in segment profit. The two segments' combined loss of ¥2,489 million, plus ¥45 million of amortisation of intangibles acquired in a business combination, reconciles to the operating loss.

Cash fell ¥5,080 million; the syndicated loan was refinanced

Total assets fell 6.2% to ¥72,225 million from ¥77,033 million at December 31, 2025, mainly because cash and cash equivalents fell by ¥5,080 million to ¥23,602 million. Liabilities fell ¥1,834 million to ¥23,670 million, with borrowings down ¥1,352 million. The syndicated loan was refinanced on March 31, 2026, which moved most of the debt out of current liabilities: current borrowings fell to ¥2,612 million from ¥17,041 million, and non-current borrowings of ¥13,076 million appeared where there had been none. Equity fell 5.8% to ¥48,555 million, reduced by the half-year loss and by an ¥818 million increase in treasury stock, but because assets shrank faster, the equity ratio rose from 66.9% to 67.2%.

Operating cash outflow was ¥1,820 million against ¥10,952 million a year earlier, when the company paid ¥8,062 million of income taxes. Investing activities used ¥613 million, chiefly ¥516 million of property, plant and equipment. Financing used ¥2,709 million: new long-term borrowing of ¥16,440 million against repayments of ¥17,760 million, plus ¥997 million spent buying back shares, which lifted treasury stock to 1,442,676 shares from 796,435. Because the operating loss continued from the previous year, the filing addresses its going-concern position directly and concludes that, with the refinancing done and ample liquidity on hand, there is no material uncertainty.

Guidance kept: a full-year profit that depends on the second half

PeptiDream left its FY12/2026 forecast unchanged: revenue of ¥32,000 million (+72.8%), core operating profit and operating profit of ¥4,600 million each, pre-tax profit of ¥4,300 million and profit attributable to owners of ¥3,000 million. The first half delivered 28.8% of guided revenue, so the forecast implies second-half revenue of about ¥22,774 million and second-half operating profit of about ¥7,134 million, after a first-half loss. The filing says where that is expected to come from: upfront contract payments and research-and-development milestone income in the drug-discovery business in the second half. On August 12, 2026 the company also announced receipt of a milestone fee triggered by the start of a Phase 1 trial of its HER2-targeting radiopharmaceutical partnered with Novartis; the filing does not state the amount.

No dividend was paid for the half and none is forecast for the year, unchanged from FY12/2025. The company's own key indicators put full-year research and development spending at ¥6,445 million against ¥5,022 million in FY12/2025 and capital expenditure at ¥5,449 million, with headcount planned at 810 against 773 at the end of June. Among pipeline events reported in the filing, the first patient was dosed in June 2026 in a U.S. Phase 1 trial of PD-32766, the company's own CA9-targeting radiopharmaceutical for clear-cell renal cell carcinoma, and patient dosing was completed in a Japanese trial of the prostate-cancer PET diagnostic 64Cu-PSMA-I&T.

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