Investment Bridge Announces Investment Opinion: Bridge Report on R-Tech Ueno Issued: Mixed FY3/13 Earnings, Sales and Profits Expected to Grow in FY3/14

TOKYO

Investment Bridge, one of Japan’s leading independent IR services companies, has released a “Bridge Report” on R-Tech Ueno, Ltd. (JASDAQ:4573) reviewing the fiscal year March 2013 earnings results and its estimates for fiscal year March 2014.

Report Highlights

• During FY3/13, sales rose by 12.3% year-over-year while operating income fell by 26.2% year-over-year.
• R-Tech Ueno’s estimates call for sales and operating income to rise by 9.6% and 23.8% year-over-year during FY3/14.
• The Bridge Report calls attention to R-Tech Ueno’s medium term business plan and its ROE target of over 10% by fiscal year March 2016, in addition to its efforts to strike a balance between profitability and R&D. The report also highlights the bountiful research and development pipeline with promising treatment candidates.

R-Tech Ueno, Ltd. is a drug discovery venture company that specializes in research and development and sales of pharmaceutical products in the fields of ophthalmology and dermatology. The Company’s business is divided into three main segments of new pharmaceutical research and development, pharmaceutical manufacture and sales, and pharmaceutical development support and consigned manufacturing business segments.

During FY3/13, sales rose by 12.3% year-over-year while operating income fell by 26.2% year-over-year to JPY4.5 and JPY0.78 billion respectively. Sales of Rescula® Eye Drops within Japan continued to decline, but the launch of Rescula® shipments in North America and favorable trends in AMITIZA® Capsules in both Japan and North America contributed growth in sales. However a drop in royalty income led to deterioration in operating margin and the decline in operating income.

During FY3/14, R-Tech Ueno estimates sales and operating income to rise by 9.6% and 23.8% year-over-year to JPY4.9 and JPY0.9 billion respectively. Expansion in consigned manufacture of constipation treatments in North America, and the full year contribution of AMITIZA® Capsules sales within Japan are expected to contribute to higher sales. An improvement in operating profitability despite a slight rise in research and development expense of 0.2% year-over-year to JPY1.282 billion is expected to contribute to the strong rise in operating income. A dividend of \20 per share is expected to be paid.

The Bridge Report calls attention to R-Tech Ueno’s medium term business plan and its strategy of achieving ROE of over 10% by fiscal year March 2016 by striking a balance between profitability and R&D. The report also highlights the bountiful research and development pipeline with promising treatment candidates including treatments for retinitis pigmentosa, severe dry eye, diabetic cataracts, male pattern alopecia, atopic dermatitis, and diabetic neurological disorders amongst others. Another feature highlighted in the report is the selection of R-Tech Ueno’s development work on retinitis pigmentosa treatment Unoprostone eye drops as the recipient of a JPY2.0 billion Government research and development subsidy.

To view the full report, please go to the website at the URL listed below.
http://www.bridge-salon.jp/report_bridge/archives/eng/4573/20130618.html

About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate and objective information about the earnings, business strategies, and other information of publicly traded Japanese companies.