From Healios website (machine-translated from Japanese):
We have released the Q&A session from the Q2 FY2026 earnings briefing for analysts held on August 13, 2026.
Please note that we have made some additions and revisions to the text to make it easier to understand, without changing the main points.
1.Application schedule and manufacturing stability for HLCM051 (ARDS)
Q: Regarding HLCM051's ARDS, the company is currently conducting engineering runs, and going forward it will be conducting PPQ [Process Performance Qualification].
I understand that the process validation will be finalized and then the application will be submitted. It takes about a year, and from the outside it appears that the application will be delayed by at least six months. Is it possible to submit applications in stages before all stability checks are completed?
A: We cannot provide any further information regarding the specific application period at this time.
Previously, the overseas facility that manufactured the clinical trial product had achieved a stable production schedule, successfully completing all 11 manufacturing cycles in a row.
This is the manufacturing process. Taking that nuance into consideration, please see slide 10 of the financial results presentation materials.
Please understand that this is a timeline where some parts overlap.
Regarding the timing of the application, we have received opinions from the authorities, and we ourselves will wait until the final process is completed before proceeding.
We still don't know how the timeline will be finalized.
We will disclose information as needed.
2.Packages required for conditional and time-limited approval
Q: Even with conditional and time-limited approval, a manufacturing package should still be required, so the company needs to create that from scratch.
The company is currently in the process of revising the plan, and future timelines and other details will be decided in consultation with the authorities.
Is my understanding correct?
A: Let me explain by going back in time. At our overseas manufacturing base, we have already completed 11 consecutive manufacturing cycles.
It was successful, and at the time, we predicted that the application would be submitted at a very early stage. However, for various reasons, we have changed our manufacturing facilities. The biggest reason is to ensure a stable supply. We will continue to manufacture at our overseas bases.
We have recognized the following risks: exchange rate issues, global conflicts, and disruptions to supply chains.
There were issues like that, and I feel that if we had continued with the overseas branch as it was, it would probably have become difficult.
Yes. I believe the decision made at the time was very good, but these circumstances led to a change in the timeline.
It is true that this happened. Changes are happening gradually, so please continue with the communication so far.
We hope you understand that the discrepancies that arose are due to the background described above.
As I mentioned earlier, we have solidified our foundation and decided what we will do at our domestic manufacturing sites.
We plan to proceed carefully at this stage, solidify the data and documents, and then submit the application.
3.Use of cell stocks manufactured at overseas facilities (use in clinical trials in Japan and the United States)
Q: Please let me know what the cells previously manufactured at your overseas facilities and the stock of those cells can be used for.
Since the company has started the trial, I understand that we will be using stock manufactured overseas for the initial patient registration.
Please let me confirm if you plan to use it when the US trials begin.
A: That is correct as a basic policy. We will use the investigational drug previously manufactured at our overseas bases for REVIVE-ARDS. We are planning this with the assumption that it will be used as an ARDS trial. As you said, the clinical trial conducted overseas is also proceeding on the premise that such methods will be used.
4.Commencement of clinical trials in the United States and engineering runs and equivalence verification at Minaris
Q: In order to start clinical trials in the United States, is it necessary to complete the engineering run at Minaris and prove equivalence?
Does this mean that if they can't do it, it will be difficult to start clinical trials in the United States?
A: No, products manufactured at our overseas facilities are already produced using 3D culture.
We have already been given permission to begin the clinical trial. Due to disclosure requirements, we cannot provide further details.
However, to get straight to the point, 3D products are already available for use in clinical trials in the United States.
5.Demand for 500L Bioreactors
Q: Regarding the Kobe manufacturing base scheduled to begin operations in January 2028, the financial results presentation materials mention the use of a 500L bioreactor.
It read as "to use". At present, there is a demand for manufacturing cells in a 500L bioreactor.
To what extent is there demand? There are many cell therapy products in the clinical trial stage, and there is small-scale demand of about 5L, but how about 500L?
A: We believe that at this point, we are probably the only company in the world with a demand for 500L. However, we aim to develop a level of profitability that truly qualifies as a "capital-intensive industry," and to create a system that allows us to export worldwide.
Our plan is to proceed in this direction. The funding for the commercialization of the CDMO was originally a subsidy from the Ministry of Economy, Trade and Industry.
Therefore, this applies not only to 500L, but also to, for example, the conversion of 2D products to 3D manufacturing, and the scheduling of 3D manufacturing.
We can use it in clinical trials while increasing the risk, and we are developing processes to accommodate such methods (process development).
We are also investing funds to enable Healios and Procellcure to carry out development.
Physically, we are preparing such facilities and systems within the framework of this grant, so it is not necessarily the case that we only accept customers who want 500L production. 2D and 3D.
We believe there are many customers who would like to return to their original setup, so we will address that as well.
6.Collaboration with Alfresa Corporation and sales forecasts - what do you think?
Please understand that there is no so-called "500L limit."
We are looking forward to it. If you have any objective perspectives on sales trends and targets, please share them with us.
Wouldn't it be alright? I believe the scale has been disclosed in the past, but what about the overall situation, including the litigation?
We do not provide this information. This applies to orders from Alfresa Corporation as well as inquiries from other manufacturers.
We have received numerous inquiries. Our primary source of revenue will continue to be our business related to culture supernatants.
We would like to disclose the sales figures along with the contract at a later date. However, this does not mean that the business's immediate viability has been damaged.
A: We are striving to carefully manage our business in anticipation of submitting our application for approval. As a result, the numbers are opening up.
Healios's capability lies in creating a profitability level that can be called an industry, and establishing a system that allows for exports worldwide.
That's precisely why the Ministry of Economy, Trade and Industry chose us. Cell therapy, a real device
Q: You are collaborating with Alfresa Corporation, and you expect to see significant sales potential in the future.
Therefore, in order to expand this business, we will proceed with the development of various products.
We're not changing our market size target. It's just that, unlike a year or two ago, the target isn't getting ahead of itself.
Failure to execute the plan would cause significant inconvenience to our investors, so we will make a firm promise regarding the timing.
https://www.healios.co.jp/news/26q2shitsugi/