The Diagnostics & Life Sciences Domain provides global support for accurate and rapid diagnostics on the frontlines of medical care and life sciences research. This domain is comprised of three businesses: 1) Epredia (our pathology business providing anatomical pathology testing equipment, reagents, and consumables used for cancer diagnosis), 2) PHCbi (our biomedical business offering storage and culture equipment for research laboratories with broad support for the life sciences), and 3) PHC IVD (our in vitro diagnostics business providing in vitro diagnostics and equipment for medical institutions). This domain engages in development, manufacturing, and sales across each of these three businesses.

Fiscal Year 2024 Results

Operating Profit

*2 Adjusted for impairment loss

Operating profit increased YoY due to improved profitability in the Pathology business, coupled with the absence of impairment losses and declined restructuring costs recorded in fiscal year 2023.

• Absence of impairment loss^*1 (JPY 3.4 bn) recorded in fiscal year 2023
• Margin improvement in Pathology business
• Decrease in one-time restructuring costs
• One-time income in IVD business

• Profit on sales of affiliates recorded in fiscal year 2023
• Impact of adjusting production in line with reduced sales of flagship equipment

Operating profit margin: 5.5%

Domain Strategy

Nobuaki Nakamura

Executive Corporate Officer,
Head of Diagnostics & Life Science Domain,
PHC Holding Corporation/
President, Representative Director,
PHC Corporation

Concentration of Management Resources on Growth and New Business Development

Operating profit margin improvement: 7.1% (Fiscal Years 2024-2027)

Leveraging the Strengths of Each Business to Drive Integration and Expand Into New Fields

The Diagnostics & Life Sciences domain seeks to improve the accuracy and efficiency of medical and life sciences research, and improve quality of life for patients, through its pathology, biomedical, and in vitro diagnostics businesses. Each of our businesses has specific expertise that we connect through the shared goal of pursuing outstanding quality. Leveraging the ability of our pathology business to make comprehensive proposals in the pathology field, with the cryopreservation and culture control technologies of our biomedical business and the precision micro-design capabilities, sensing technologies, and reagent development experience and know-how of our In Vitro Diagnostics Division, we are committed to growth and transformation in our quest to become a solutions provider focused on the field of oncology.

Fiscal year 2024 was a memorable year for this domain. We launched a key digital pathology product and effected a full-scale entry into the field of cell and gene therapy (CGT), and acquired our first U.S. Food and Drug Administration (FDA) 510(k) clearance in the field of digital pathology.

In fiscal year 2025, we will continue to strengthen our manufacturing, sales, and R&D pillars to drive even greater growth. We will also leverage the strengths of our manufacturing bases in Europe, the U.S., and Asia while optimizing manufacturing through high-level standardization of precision manufacturing excellence. In terms of sales, we are working initially to integrate the sales and service organizations of our three divisions in Japan to create unity across the divisions. In R&D, in addition to collaborating with U.S. research institutes in the pathology field, we are looking for new business opportunities by collaborating and cooperating with CCRM and other research institutes driving practical application of regenerative medicine and cell and gene therapy in particular. From this fiscal year as well, we will launch our Domain R&D organization to create core technologies for our medium- to long-term strategy centered on the field of oncology.

We aim for the Diagnostics & Life Sciences domain to become an innovator in cancer diagnostics solutions, enabling more accurate and timely diagnoses, and an accelerator and enabler for the early adoption of advanced cancer treatments. Healthcare costs are growing around the world, but cancer-related medical costs in particular are increasing rapidly, which is placing a serious burden on healthcare systems. Addressing this issue presents an important challenge directly linked to advances in treatment.

The main challenges facing the cancer treatment market include delays in diagnosis, limits to the accuracy of treatments, increases in side effects, high costs of treatment, and unequal access to healthcare. Essential to addressing these challenges are early diagnosis, personalized medicine, and new modalities such as cell and gene therapy with the potential to achieve radical cures. Going forward, we will aim to contribute to the global expansion of PHC Group diagnostics solutions and support for new treatments.

Pathology Business

Market Environment ＆ Outlook

Consumables and Pathology Testing Equipment Market Trends

Source: In-house research

Market Environment

• The market for pathology testing solutions is expanding due to the increasing number of cancer patients.
• The rising demand for digital pathology is driving the integration of pathology testing equipment with digital technology.

Outlook

• The market is expected to continue expanding due to the increasing number of cancer patients and the growing demand for complex pathology testing.
• In addition, due to the demand for workflow efficiency improvements associated with the above, an overall pre-analytical market growth of 4% is expected for equipment and reagents.
• Price competition is intensifying due to the rise of low-cost manufacturers.

Products & Services

Strategy & Target

Business Strategy

Steven Lynum

Corporate Officer, PHC Holdings Corporation President, Epredia Holdings Ltd.

As a pre-analytical leader in pathology testing, Epredia provides products and solutions that support cancer diagnostics. With the increasing number of cancer diagnoses, the market for pathology testing instruments and consumables continues to expand. In particular, there is rapidly growing demand for digital pathology, which enables specimens to be scanned into digital images for review by pathologists. This technology plays a critical role in improving the efficiency of pathology workflows and contributes to operational efficiencies in pathology labs.

Product quality is of utmost importance in pathology diagnostics, and we are committed to continuously improving the quality of our offerings. We have identified tissue processing, digital pathology, and environmentally responsible laser printing equipment as key growth areas and are strengthening our investments in these fields. These products help promote the efficiency of pathology workflows in hospitals and laboratories while contributing to improved diagnostic accuracy and turnaround times.

Additionally, we aim to establish a stable revenue base by increasing the proportion of pathology laboratory consumables sales. Through these initiatives, we strive to solidify our position as a comprehensive solution provider in the field of pathology and achieve sustainable growth.

Biomedical Business

Market Environment ＆ Outlook

Life Sciences Equipment Market Trends

Source: In-house research

Market Environment

• Prolonged restraint in capital investment by customers, due to economic slowdowns and restrained investment in each region.
• In the pharmaceutical companies and CDMOs, demand for capital investment and replacement with energy-saving equipment is emerging, and recovery from the restrained investment is expected.

Outlook

• Continued focused investment in advanced therapy technology development and manufacturing processes, including CGT, with high market growth.
• Driven by the growth of life sciences research focused on cells, the markets for ultra-low temperature freezers and CO₂ incubators are projected to maintain steady growth.

Products & Services

Strategy & Target

Business Strategy

Chikara Takauo

Corporate Officer, PHC Holdings Corporation Director of Biomedical Division, PHC Corporation

As major pillars of the Biomedical Division, ultra-low temperature freezers, CO₂ incubators, and other equipment are fundamental products that support research and development in the life sciences market. As such, we expect continued growth in this field going forward. With a product lineup offering stable quality and the performance that customers need, we will seek to continue providing products that offer peace of mind to researchers.

Among cancer treatments, cell and gene therapy (CGT), is forecasted to grow significantly; however, there are QCD issues in the manufacturing process. To address these issues, PHC Group is making inroads into the markets for metabolic analyzers and cell expansion system that can utilize our core technologies. We will also collaborate with partner companies to accelerate the expansion of our product lineup and develop structures able to meet increasingly diverse needs.

Furthermore, through implementation of our Value Creation Plan 2027, we will seek to contribute toward the evolution of treatment modalities and create an environment where more people can access advanced treatments.

Supported by the stable growth of our existing businesses, and through expanding solutions in new fields, we will provide customers with new value by leveraging IoT technologies to lead further expansion in the life sciences market.

In Vitro Diagnostics Business

Market Environment ＆ Outlook

In Vitro Diagnostics (IVD) Market Trends

Source: In-house research

Market Environment

• IVD
  The market is expanding with the increasing prevalence and incidence of chronic diseases and infectious diseases.
• Injectors
  The market is growing due to the spread of biopharmaceuticals.

Outlook

• IVD
  Further market expansion is expected, especially in developing countries, as they contribute to early disease detection even in environments with limited medical resources.
• Injectors
  The market for injectors, especially electric injectors, is expected to grow due to the simplification of injections.

Products & Services

Diagnostic Reagents

Extensive development of in vitro drugs (diagnostic reagents) for measuring blood composition, including blood coagulation and fibrinolysis.

Diagnostic Equipment

The mobile immunoassay analyzer delivers highly accurate and rapid measurements. Additionally, systems like the fully automated blood coagulation testing system are designed to meet the needs of large medical institutions.

Strategy & Target

Business Strategy

Hiroyuki Tokunaga

Director and Member of Board, Director of In Vitro Diagnostics Division, PHC Corporation

The In Vitro Diagnostics Division is committed to enhancing the reagent business to accelerate growth. We are particularly focused on selling PATHFAST compact immunoassay analyzers in markets outside Japan, and we have also acquired special 510(k) clearance from the U.S. FDA in March 2024, for our high-sensitivity troponin reagents. We started shipping to the U.S. in May 2024 and, while maximizing sales in the U.S. market, we are working to expand sales to other countries and regions as well.

We will leverage our strengths in the coagulation and fibrinolysis areas to drive business in the cardiovascular field, which includes thromboembolisms, a high-risk complication in cancer and various other diseases. As part of these efforts, we launched sCLEC-2 measurement kits in March 2025 as research-oriented reagents designed to measure C-type lectin-like receptor-2 (sCLEC-2), a soluble receptor that shows an increase in blood concentration with platelet activation.

As a platelet activation marker, sCLEC-2 is expected to be used as a biomarker for cerebral infarctions, myocardial infarctions, and other arterial thrombotic events. We hope to gather more valuable information from clinical settings in the future to obtain approval as a drug for in vitro diagnostics.

Going forward, PHC Group will work to create new value based on our core products, including reagent development technology, biosensing technology, reagents, and point-of-care testing devices.