Medrx Co., Ltd. (4586) AI Stock Analysis

• Market Cap: ¥6.89B
• Dividend Yield: N/A
• Average Volume (3M): 2.57M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.48
• Revenue Growth: -52.41%
• EPS Growth: -80.31%
• Country: JP
• Employees: 22
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -2.02
• Shares Outstanding: 59,365,100
• 10 Day Avg. Volume: 1,116,360
• 30 Day Avg. Volume: 2,574,156
• PEG Ratio: 0.14
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 13.87
• P/FCF Ratio: -4.44
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: ¥118.00 ▲(4.42% Upside)

The score is primarily constrained by weak financial performance driven by sustained large losses and ongoing cash burn, even though the balance sheet has low leverage. Technical indicators also lean bearish with price below key moving averages and negative MACD. Valuation is difficult to support with a negative P/E and no dividend yield data.

Positive Factors

Proprietary transdermal platform

A focused, proprietary transdermal technology creates a durable competitive moat in patch-based drug delivery. Owning formulation and manufacturing know-how supports licensing, supply contracts and long-term R&D partnerships, enabling recurring revenues beyond single-product cycles.

Very high product gross margins

Exceptionally high gross margins indicate strong product-level economics for transdermal offerings. If SG&A and R&D are controlled or commercialized via partners, these margins can underpin durable profitability and attractive returns on incremental revenue over the medium term.

Conservative leverage / minimal debt

Effectively zero debt reduces financial risk and gives strategic flexibility to fund development, strike licensing deals, or weather commercialization delays. A strong equity cushion versus assets also provides runway for financing activities without immediate solvency pressure.

Negative Factors

Persistent operating and net losses

Sustained large operating and net losses undermine long-term shareholder value and signal that core operations are not yet profitable. Continued losses increase likelihood of dilution or external financing and constrain the firm's ability to reinvest internally for growth.

Consistent negative operating/free cash flow

Repeated negative operating and free cash flow demonstrates structural cash burn and reliance on financing to sustain R&D and operations. This limits the company's ability to self-fund launches or scale manufacturing and raises execution risk over the next several quarters.

Revenue volatility and extreme negative margins

Wide top-line swings coupled with extreme negative margins indicate a mismatch between revenue and fixed costs/R&D. Even strong revenue spikes have not translated to operating leverage, suggesting structural issues in cost base or commercialization scale that threaten long-term margin sustainability.

Medrx Co., Ltd. Business Overview & Revenue Model

Company Description

MedRx Co., Ltd, a pharmaceutical formulation development company, provides pharmaceutical drugs based on the transdermal absorption system in Japan. The company develops medicines based on Ionic liquid transdermal system (ILTS) and Nano-sized Colloid Transdermal System (NCTS); and researches and develops painless transdermal administration system for vaccines, nucleic acid medicines, protein medicines, etc. Its products pipeline includes MRX-4TZT, which is in phase I clinical trials for the treatment of spastic paralysis; MRX-9FLT that is in phase I clinical trials to treat chronic, cancer, and severe pain; and MRX-7MLL and MRX-6LDT that is in pre-clinical trials to treat Alzheimer's disease and chronic pain, as well as MRX-5LBT that has completed the clinical trials for the treatment of postherpetic nerve pain. MedRx Co., Ltd was incorporated in 2002 and is headquartered in Higashikagawa, Japan.

How the Company Makes Money

Medrx Co., Ltd. generates revenue through the development and commercialization of its proprietary transdermal drug delivery systems. The company's revenue streams include the sale of pharmaceutical products, licensing agreements with other pharmaceutical companies, and collaborative partnerships for research and development. Additionally, Medrx Co., Ltd. may earn income through milestone payments and royalties from the commercialization of products developed in collaboration with other entities. The company's focus on innovation and strategic partnerships plays a significant role in its earnings potential.

Medrx Co., Ltd. Financial Statement Overview

Summary

Despite a sharp 2024 revenue rebound and very high gross margins, results are dominated by very large, persistent operating/net losses and consistently negative operating/free cash flow. The balance sheet is a relative strength with minimal debt, but ongoing losses and cash burn materially weaken overall financial quality.

Income Statement

Revenue rebounded sharply in 2024 (up ~69% YoY) after a very weak 2023, and gross margin remains exceptionally high (~85–97%), suggesting strong product-level economics. However, operating losses are persistent and large relative to revenue (2024 EBIT margin about -312% and net margin about -314%), indicating the company is still far from breakeven and likely carrying a heavy fixed cost/R&D burden. Overall, the trajectory shows top-line volatility with no demonstrated profitability.

Balance Sheet

Leverage is very conservative with effectively no debt in recent years (debt-to-equity at 0.0 in 2021–2024), which lowers financial risk and provides flexibility. Equity has remained sizeable versus total assets (2024 equity ~2.17B vs assets ~2.28B), but repeated net losses translate into consistently negative returns on equity (roughly -37% in 2024 and worse in prior years), implying ongoing erosion of shareholder value if losses persist.

Cash Flow

Cash generation is weak: operating cash flow and free cash flow have been consistently negative across all shown periods (e.g., about -803M in 2024 and -913M in 2023), pointing to ongoing cash burn. While 2024 burn improved versus 2023, cash flow still does not support self-funding operations, and negative operating cash flow alongside net losses underscores that profitability and cash breakeven are not yet in sight.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	44.81M	257.00M	29.00M	59.48M	8.35M	115.09M
Gross Profit	16.45M	219.19M	26.00M	10.45M	6.09M	111.18M
EBITDA	-1.32B	-764.31M	-884.52M	-1.05B	-996.66M	-1.05B
Net Income	-1.37B	-806.00M	-932.00M	-1.11B	-1.06B	-1.11B
Balance Sheet
Total Assets	1.93B	2.27B	2.05B	1.40B	2.11B	2.30B
Cash, Cash Equivalents and Short-Term Investments	1.67B	1.98B	1.72B	994.02M	1.70B	1.81B
Total Debt	0.00	0.00	0.00	0.00	0.00	50.00M
Total Liabilities	62.52M	107.00M	127.52M	185.56M	153.10M	149.88M
Stockholders Equity	1.87B	2.17B	1.92B	1.21B	1.96B	2.15B
Cash Flow
Free Cash Flow	0.00	-803.00M	-913.76M	-1.08B	-926.23M	-1.02B
Operating Cash Flow	0.00	-803.00M	-913.00M	-1.07B	-923.69M	-985.35M
Investing Cash Flow	0.00	-3.15M	-759.00K	-1.96M	-2.54M	-5.10M
Financing Cash Flow	0.00	1.07B	1.64B	356.31M	815.91M	1.39B

Medrx Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 113.00
• 50DMA: Positive
• 100DMA: Negative
• 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:4586, the sentiment is Neutral. The current price of 113 is below the 20-day moving average (MA) of 117.45, below the 50-day MA of 115.64, and above the 200-day MA of 98.41, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 48.99 is Neutral, neither overbought nor oversold. The STOCH value of 23.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4586.

Medrx Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4539	64 Neutral	¥6.07B	11.12	―	3.21%	4.25%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4892	49 Neutral	¥6.40B	-6.40	―	―	56.17%	-11.63%
4586	44 Neutral	¥6.89B	-4.56	―	―	-52.41%	-80.31%
4597	43 Neutral	¥7.53B	-3.46	-90.96%	―	243.16%	-23.00%
4582	42 Neutral	¥5.12B	-0.90	―	―	-50.27%	-3.33%
4883	42 Neutral	¥5.20B	-2.17	―	―	―	47.43%