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To Our Investors

Thank you for continuously supporting Japan Tissue Engineering (J-TEC). As we enter the new FY2017, I would like to review the company’s last year’s performance, and report this year’s management policy.

Review of FY2016

In March 22, 2017 we announced the revision of the full-year forecasts for FY2016; the company significantly revised the estimated value of operating profit to 280 million yen. Currently, we are in the process of setting up accounts, and therefore we are yet to obtain the final figures. However, I am glad and relieved to announce that we were able to achieve profitability (estimated profit).

In April last year, we experienced a tailwind from the revision of the functional classification and reimbursement price of the autologous cultured epidermis JACE. Moreover, the additional indication for the treatment of Giant Congenital Melanocyte Nevus by JACE contributed to the growth in the fourth quarter. Although sales of autologous culture cartilage JACC is still under our expectations, we have been able to greatly increase the number of orders. Last but not least, we secured a lump sum payment from the transfer of JACC's patent in China to Fujifilm.

I believe all of the above has led the way to “achieving profitability” (estimated profit), but I am also convinced that the greatest contribution towards this common goal came from a company-wide effort. I am proud to say that this has strengthened our management foundations and has led to concrete results.

Management policy for FY2017

If we compare J-TEC’s management to a triple jump - hop, step and jump - after the long approach period of 18 fiscal years, we accomplished the hop of turning operating income profitable (estimated profit) last year. In FY2017, we will take the step to expand our businesses and accelerate company growth. To that end, I have set “J-TEC, daring to leap ahead” as the slogan for the new fiscal year.

In addition to sustainably expand JACE and JACC’s regenerative medicine business, as well as LabCyte’s R&D support business, we will aim to develop and expand a new business as a Contract Development and Manufacturing Organization (CDMO), and as a Contract Research Organization (CRO). Approximately two and a half years have passed since the legislation governing regenerative medicine was revised, and the Act on the Safety of Regenerative Medicine and the Revised Pharmaceutical Affairs Act came into force. Thanks to that, we are witnessing more and more academic institutions and enterprises engaging in the development of regenerative medicine products. Our strength lies in the abundant experience and know-how accumulated from the product development, manufacturing, sales and post marketing surveillance processes behind the success of JACE and JACC. By offering our strength to academic institutions and enterprises aiming to launch such products, we will nurture our business as an outsourced service provider to the point that it will become a pillar second only to the regenerative medicine business.

Furthermore, in order to reinforce our management structure, we have newly established the Corporate Management Division, the Sales and Marketing Promotion Division, and the Production Control Division. With the establishment of the Corporate Management Division, we are strengthening the corporate planning and corporate management functions. With the establishment of the Custom Development and Manufacturing Department within the Sales and Marketing Promotion Division, we will build a sales system for the CDMO and the CRO businesses, and together with JACE, JACC and LabCyte, we will centrally manage the sales of all our products. Finally, by placing manufacturing, quality control, and production engineering functions under the umbrella of the the Production Control Division, we will promote efficient and innovative manufacturing of both new and existing products, as well as of contracted services.

Please look forward to updates as J-TEC puts all its efforts in taking the next leap ahead.

management policy presentation meeting

management policy presentation meeting

April 3, 2017
Aiichiro Hiruma
President & CEO
Japan Tissue Engineering Co., Ltd.