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

• Market Cap: ¥7.42B
• Dividend Yield: N/A
• Average Volume (3M): 2.57M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.41
• 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: 48 Neutral
• Price Target: ¥106.00 ▼(-6.19% Downside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is held down primarily by persistent and worsening profitability plus structurally negative cash flow, despite strong gross margins and a 2025 revenue rebound. Technicals are mixed but mildly supportive, while valuation is constrained by ongoing losses and no dividend support.

Positive Factors

Proprietary transdermal platform

Medrx’s core focus on proprietary transdermal (patch) formulations and technologies is a durable competitive asset. Specialized formulation and patch manufacturing create high technical barriers, support licensing and supply contracts, and enable recurring partner revenue streams that can persist as the company scales.

Very high gross margins

Sustained gross margins near 85–90% indicate attractive unit economics from the transdermal business. High gross profit per unit gives flexibility to cover R&D and SG&A, supports profitable licensing or contract-manufacturing models long-term, and improves upside when sales scale.

Conservative capital structure (no debt)

Zero reported debt through 2025 materially reduces solvency and interest-rate risk, preserving optionality for partnerships or equity raises. With no fixed interest burden, management can prioritize product development and strategic deals without near-term refinancing pressure.

Negative Factors

Deep and worsening net losses

Despite revenue rebound, net losses expanded sharply in 2025 and margins deteriorated dramatically, indicating operating expenses and non-operating items far exceed revenues. Persistently large losses erode equity and require sustained external funding, limiting long-term financial stability.

Persistent negative operating and free cash flow

Consistent negative OCF and FCF show the business does not self-fund its operations or investments. Reliance on outside financing or equity issuance to cover cash burn can dilute shareholders, constrain R&D and commercialization capacity, and limit the firm's ability to execute long-term plans.

Negative ROE and shareholder-value erosion risk

Persistently negative ROE across multiple years signals the equity base is not generating returns and will decline if losses continue. Structural negative profitability undermines shareholder value, weakens negotiating power with partners, and raises the probability of dilutive financing over time.

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 2025 revenue rebound and strong recent gross margins (~85–90%), results are dominated by very large and worsening losses (net margin about -732% in 2025) and consistently negative operating/free cash flow, indicating a business that is not yet self-funding. The lack of debt meaningfully reduces solvency risk but does not offset the ongoing cash burn and negative ROE.

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: Positive
• Last Price: 113.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• 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 Positive. The current price of 113 is above the 20-day moving average (MA) of 105.50, above the 50-day MA of 111.70, and above the 200-day MA of 103.91, indicating a neutral trend. The MACD of -1.74 indicates Negative momentum. The RSI at 49.61 is Neutral, neither overbought nor oversold. The STOCH value of 53.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	11.64	―	3.21%	4.25%	―
4582	52 Neutral	¥7.61B	-0.95	―	―	-50.27%	-3.33%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4597	51 Neutral	¥8.74B	-7.86	-90.96%	―	243.16%	-23.00%
4586	48 Neutral	¥7.42B	-6.19	―	―	-52.41%	-80.31%
4892	48 Neutral	¥6.32B	-6.80	―	―	56.17%	-11.63%
4883	41 Neutral	¥4.90B	-2.01	―	―	―	47.43%