RaQualia Pharma Inc. (4579) AI Stock Analysis

• Market Cap: ¥24.21B
• Dividend Yield: N/A
• Average Volume (3M): 352.93K
• Price to Earnings (P/E): 87.3
• Beta (1Y): 0.86
• Revenue Growth: 9.87%
• EPS Growth: -24.41%
• Country: JP
• Employees: 64
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 35.82
• Shares Outstanding: 24,458,673
• 10 Day Avg. Volume: 795,170
• 30 Day Avg. Volume: 352,926
• PEG Ratio: -0.58
• Price to Book (P/B): 3.47
• Price to Sales (P/S): 6.01
• P/FCF Ratio: -56.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 48.4
• Revenue Forecast (FY): ¥4.59B

• Rating: 54 Neutral
• Price Target: ¥1,124.00 ▲(11.29% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily constrained by fundamentals—most notably negative operating/free cash flow in 2025 and historically volatile earnings—despite a return to profitability and strong revenue growth. Technicals are supportive with an upward trend and positive momentum, but valuation is a meaningful headwind given the very high P/E and no dividend yield provided.

Positive Factors

Return to Profitability

RaQualia’s 2025 return to positive EBIT and net income demonstrates the company can translate R&D and collaboration revenue into accounting profits. This durability in reaching profitability signals improved operating discipline and the potential to fund operations or attract partners without relying solely on new capital raises.

High Gross Margins

Sustained gross margins near 80–92% indicate a structurally high-margin business, typical for proprietary drug assets and licensing income. Those margins provide long-term operating leverage as revenue scales, supporting durable profitability and better ability to absorb R&D spend or reinvest in pipeline advancement.

Licensing/Partnership Business Model with Revenue Growth

The combination of steady licensing/collaboration revenue and ~31% revenue growth in 2025 reflects a scalable, asset-light model that monetizes R&D through partners. Structurally, out-licensing reduces late-stage development cost burden and can generate upfront, milestone and royalty streams that support sustained cash inflows as programs advance.

Negative Factors

Weak Cash Generation

Despite accounting profits in 2025, negative operating and free cash flow underscore poor cash conversion and dependence on external funding or milestone receipts. Over months this raises risk that the company must frequently access capital, which can dilute shareholders or constrain investment pacing for clinical programs.

Rising Leverage and Low ROE

Leverage rising from near-zero to a meaningful debt-to-equity ratio increases financial risk and interest exposure for a small biotech. Combined with low ROE (~4%), this suggests the balance sheet is not yet generating robust returns, limiting flexibility to fund R&D internally and heightening vulnerability to funding-cost changes.

Earnings Volatility

A pattern of intermittent large losses implies revenue and expense swings tied to milestone timing and R&D cycles. This structural volatility complicates long-term planning, makes recurring cash flow less predictable, and can deter partners or increase cost of capital when funding is needed to sustain clinical development.

RaQualia Pharma Inc. Business Overview & Revenue Model

Company Description

RaQualia Pharma Inc. engages in the research and development of pharmaceutical compounds worldwide. Its human products portfolio includes tegoprazan for gastroesophageal reflux disease, which is in phase 1 clinical trial in the United States; and grapiprant for pain management, which is in phase II clinical trial in the United States and phase I clinical trial in China, as well as in phase I clinical trial in China and the United States to treat cancer. The company also provides veterinary products such as, grapiprant for osteoarthritis in dogs; ghrelin receptor agonist to treat cancer-related anorexia/cachexia syndrome, and constipation resulting from spinal cord injury; and ELURA, a drug for the management of weight loss in cats with chronic kidney disease. In addition, it provides TRPM8 blocker for the target indication of neuropathic pain; motilin receptor agonist to treat gastrointestinal dysmotility, including gastroparesis, functional dyspepsia, and post-operative ileus; potassium-competitive acid blocker to treat gastro-esophageal reflux disease that has completed phase 1 clinical trial; 5-HT4 partial agonist to treat gastroparesis, functional dyspepsia, and chronic constipation; 5-HT2B antagonist to treat irritable bowel syndrome with diarrhea; EP4 antagonist, a pain management drugs for dogs; serotonin 5-HT2A and dopamine D2 receptor blocker to treat schizophrenia; EP4 antagonist to treat cancer that is in phase I clinical trial, as well as in phase 1 clinical trial for the indication of pain; Cyclooxygenase-2 inhibitor, Phase I clinical trials for the indication of pain; CB2 agonist; selective sodium channel blocker; P2X7 receptor antagonist, which is in Phase I clinical trials for the target indication of neuropathic pain; and retinoic acid receptor alpha agonist. It has a collaborative agreement with Interprotein Corporation, ASKA Pharmaceutical. Co., Ltd., and Epigeneron, Inc. The company was incorporated in 2008 and is headquartered in Nagoya, Japan.

How the Company Makes Money

RaQualia Pharma Inc. generates revenue through a combination of product sales, licensing agreements, and partnerships with larger pharmaceutical companies. The company markets its proprietary drugs directly or through collaborations, receiving royalties on sales from licensed products. Additionally, strategic partnerships and collaborations with research institutions and other biotech firms provide funding and resources for drug development, contributing to revenue through milestone payments and profit-sharing arrangements. The company's ability to innovate and bring new therapies to market is crucial for sustaining its earnings.

RaQualia Pharma Inc. Financial Statement Overview

Summary

Profitability improved in 2025 with positive EBIT and net income plus strong gross margins and ~31% revenue growth, but financial quality is held back by weak cash conversion (negative operating cash flow and free cash flow in 2025) and a history of volatile earnings. Balance sheet remains generally sound, though leverage has risen versus prior years and ROE is still low.

Income Statement

Profitability rebounded in 2025 with positive EBIT and net income after losses in 2023–2024, supported by very strong gross margins (roughly 80–92% across the period). Revenue growth accelerated sharply in 2025 (about 31% year over year), improving scale. Offsetting this, earnings have been volatile over time (large losses in 2020, 2023, and 2024), and current net margin in 2025 remains modest (~7%) versus the much stronger profitability seen in 2021–2022.

Balance Sheet

The company maintains a solid equity base, with equity rising in 2025 and debt-to-equity still moderate (~0.42). However, leverage has increased materially versus 2021–2023 (near-zero debt levels earlier), and return on equity in 2025 is low (~4%) after negative returns in 2023–2024—suggesting the balance sheet is sound but not currently generating strong returns and has taken on higher financial risk.

Cash Flow

Cash generation is the weakest area: 2025 shows negative operating cash flow and negative free cash flow, a notable reversal from positive cash generation in 2024 and especially 2021–2022. The pattern is also uneven over the cycle (negative in 2020 and 2023), indicating cash conversion is inconsistent and may require continued funding flexibility despite the return to accounting profitability in 2025.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.98B	3.11B	1.90B	2.92B	2.78B
Gross Profit	3.27B	2.48B	1.66B	2.69B	2.46B
EBITDA	971.88M	188.27M	-111.80M	1.00B	1.02B
Net Income	273.12M	-495.03M	-323.66M	723.39M	755.79M
Balance Sheet
Total Assets	10.51B	9.66B	6.87B	6.26B	5.23B
Cash, Cash Equivalents and Short-Term Investments	3.24B	3.34B	3.76B	3.93B	2.66B
Total Debt	2.90B	3.45B	367.72M	222.34M	39.07M
Total Liabilities	3.62B	4.08B	752.00M	760.67M	446.19M
Stockholders Equity	6.90B	5.57B	6.12B	5.50B	4.79B
Cash Flow
Free Cash Flow	-423.98M	84.24M	-940.80M	1.45B	260.61M
Operating Cash Flow	-356.63M	180.94M	-718.60M	1.48B	366.03M
Investing Cash Flow	124.32M	-3.67B	-135.37M	-47.65M	-279.25M
Financing Cash Flow	380.26M	2.98B	793.45M	-29.56M	-16.44M

RaQualia Pharma Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1010.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4579, the sentiment is Positive. The current price of 1010 is below the 20-day moving average (MA) of 1017.60, below the 50-day MA of 1031.48, and above the 200-day MA of 725.67, indicating a neutral trend. The MACD of -7.31 indicates Positive momentum. The RSI at 47.76 is Neutral, neither overbought nor oversold. The STOCH value of 26.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4579.

RaQualia Pharma Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4579	54 Neutral	¥24.21B	87.31	―	―	9.87%	-24.41%
4565	52 Neutral	¥82.26B	-6.76	-9.05%	―	-1.96%	-64.18%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4588	50 Neutral	¥67.52B	-33.85	―	―	-9.04%	13.09%
4563	47 Neutral	¥24.53B	-4.07	-184.71%	―	56.75%	-97.56%
4587	46 Neutral	¥174.10B	-48.22	-10.16%	―	-62.47%	-134.06%
4571	40 Underperform	¥13.87B	-14.53	-26.70%	―	172.39%	8.27%

RaQualia Pharma Inc. Corporate Events

RaQualia Pharma Swings to Profit in 2025 but Flags Earnings Drop for 2026

RaQualia Pharma reported a sharp turnaround to profitability for the fiscal year ended December 31, 2025, with net sales rising 28.1% to ¥3.98 billion and profit attributable to owners of parent reaching ¥273 million, compared with a loss a year earlier. The company’s operating margin improved to 12.2%, equity ratio climbed to 65.1%, and cash and cash equivalents increased slightly to ¥3.24 billion despite negative operating cash flow.

Management has maintained a no-dividend policy for 2025 and continues to forecast zero dividends for 2026, underscoring a focus on reinvestment and capital preservation. For 2026, RaQualia expects flat sales of about ¥3.98 billion but a steep drop in earnings, guiding to an ordinary profit of ¥86 million and a net loss of ¥63 million, which signals anticipated higher costs or investment that may pressure short-term profitability while potentially supporting longer-term growth.

The most recent analyst rating on (JP:4579) stock is a Hold with a Yen1162.00 price target. To see the full list of analyst forecasts on RaQualia Pharma Inc. stock, see the JP:4579 Stock Forecast page.