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

• Market Cap: ¥6.29B
• Dividend Yield: N/A
• Average Volume (3M): 2.57M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.49
• Revenue Growth: -52.41%
• EPS Growth: -80.31%
• Country: JP
• Employees: 22
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -2.60
• Shares Outstanding: 59,365,100
• 10 Day Avg. Volume: 1,116,360
• 30 Day Avg. Volume: 2,574,156
• PEG Ratio: 1.04
• Price to Book (P/B): 2.83
• Price to Sales (P/S): 45.31
• P/FCF Ratio: -5.98
• 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: 45 Neutral
• Price Target: ¥98.00 ▼(-13.27% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily constrained by persistent large losses and ongoing negative operating/free cash flow despite strong gross margins and a 2025 revenue rebound. Technicals also weigh on the score due to a clear downtrend and negative MACD, with oversold readings only mildly supportive. Valuation is unattractive/unclear because earnings are negative and no dividend yield is provided.

Positive Factors

Conservative balance sheet (no debt)

A debt-free balance sheet materially reduces solvency and refinancing risk over the medium term, giving management flexibility to fund R&D or partner deals without immediate debt servicing. This structural strength lengthens runway versus leveraged peers, easing downside risk while losses persist.

High gross margins and 2025 revenue rebound

Very high gross margins imply a scalable, high-value product or licensing economics where incremental revenue largely drops to contribution. Coupled with a substantial 2025 revenue rebound, this suggests the core transdermal offerings can generate strong cash conversion if operating expenses are controlled, supporting long-term profitability potential.

Asset-light, diversified monetization model

A business model blending product sales, licensing/royalties and contract development/manufacturing spreads commercialization risk and enables multiple monetization paths. Proprietary transdermal technology creates a durable niche advantage that partners can leverage, helping scale revenue without proportionate fixed-cost expansion.

Negative Factors

Consistent negative operating and free cash flow

Persistent annual cash burn means the company cannot self-fund growth or absorb shocks; ongoing negative operating and free cash flow force reliance on external financing or asset sales. Over months, this raises dilution and execution risk if revenue does not scale to cover fixed R&D and SG&A spending.

Deep and worsening net losses

Severe negative net margins indicate expenses far outstrip revenue; worsening losses erode equity and reduce strategic optionality. Unless structural cost reductions or sizable recurring revenue gains occur, sustained deep losses threaten long-term viability and make it difficult to attract non-dilutive financing or favourable partnership terms.

Revenue volatility and milestone dependence

Reliance on milestone payments, licensing events and partner commercial performance creates lumpy, unpredictable cash flows. This structural volatility complicates planning, increases working-capital strain, and heightens execution risk since absent steady recurring revenues the firm remains exposed to timing of third-party approvals and partner commercialization.

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

Strong gross margins and a sharp revenue rebound in 2025 are positives, and the balance sheet has no reported debt, reducing solvency risk. However, the company remains deeply unprofitable with worsening net margin in 2025 and consistently negative operating and free cash flow, making ongoing cash burn the dominant financial concern.

Income Statement

Revenue is highly volatile but shows a sharp rebound in 2025 (annual revenue up ~186% vs. 2024), and gross margin is strong in recent years (about 85–90% in 2023–2025). However, the company remains deeply unprofitable with consistently large operating and net losses; profitability worsened in 2025 versus 2024 with net margin falling to about -732% (from about -314%), indicating expenses are far outpacing the revenue base despite strong gross profit.

Balance Sheet

The balance sheet is conservatively levered with zero debt reported from 2021–2025 and a low debt load even in 2020, which reduces solvency risk and financial fragility. That said, ongoing losses are pressuring shareholder value, with returns on equity consistently negative (roughly -37% to -92% across the period), signaling the equity base is not generating profits and could erode if losses persist.

Cash Flow

Cash generation is a key weakness: operating cash flow is negative every year (roughly -0.8B to -1.1B), and free cash flow is also consistently negative, including a deterioration in 2025. While free cash flow tracks net losses closely (free cash flow roughly in line with net income in magnitude), the business is not self-funding, implying continued reliance on external financing or balance-sheet resources to sustain operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	44.81M	128.08M	257.00M	29.00M	59.48M	8.35M
Gross Profit	16.45M	113.01M	219.19M	26.00M	10.45M	6.09M
EBITDA	-1.32B	-928.13M	-764.31M	-884.52M	-1.05B	-996.66M
Net Income	-1.37B	-937.37M	-806.00M	-932.00M	-1.11B	-1.06B
Balance Sheet
Total Assets	1.93B	2.16B	2.27B	2.05B	1.40B	2.11B
Cash, Cash Equivalents and Short-Term Investments	1.67B	1.75B	1.98B	1.72B	994.02M	1.70B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	62.52M	108.54M	107.00M	127.52M	185.56M	153.10M
Stockholders Equity	1.87B	2.05B	2.17B	1.92B	1.21B	1.96B
Cash Flow
Free Cash Flow	0.00	-970.86M	-803.00M	-913.76M	-1.08B	-926.23M
Operating Cash Flow	0.00	-888.11M	-803.00M	-913.00M	-1.07B	-923.69M
Investing Cash Flow	0.00	-82.75M	-3.15M	-759.00K	-1.96M	-2.54M
Financing Cash Flow	0.00	745.09M	1.07B	1.64B	356.31M	815.91M

Medrx Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 113.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4586, the sentiment is Negative. The current price of 113 is above the 20-day moving average (MA) of 108.55, above the 50-day MA of 112.28, and above the 200-day MA of 102.59, indicating a bearish trend. The MACD of -4.33 indicates Positive momentum. The RSI at 35.50 is Neutral, neither overbought nor oversold. The STOCH value of 16.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥6.42B	11.77	―	3.21%	4.25%	―
4582	52 Neutral	¥9.64B	-1.70	―	―	-50.27%	-3.33%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4597	51 Neutral	¥10.10B	-9.94	-90.96%	―	243.16%	-23.00%
4892	48 Neutral	¥6.66B	-7.70	―	―	56.17%	-11.63%
4586	45 Neutral	¥6.29B	-5.96	―	―	-52.41%	-80.31%
4883	41 Neutral	¥5.16B	-2.12	―	―	―	47.43%