Oncolys BioPharma Inc. Q4 FY2024 earnings call

• OBP-301 (Telomelysin) Core Development (Japan):

  • Completed Phase 2 trial for unresectable Stage 2/3 esophageal cancer in elderly/inoperable patients, with positive results: 41.7% local complete response (L-CR) at 24 weeks, rising to 58% including near-complete responses, and 64% local overall response (L-RR). 1-year survival was 71% and 1.5-year survival was 53%, both higher than historical registry data. 100% of L-CR patients were alive at 1.5 years, and 90% of L-RR patients were alive. All side effects were transient, with no permanent organ damage reported.
  • The approval application process is in the final pre-submission phase: PMDA (Japanese regulator) has required submission of a post-marketing trial plan (an atypical request following recent failures of other breakthrough-designated products to replicate Phase results post-approval), which the company has already finalized. The company expects to enter the breakthrough comprehensive evaluation consultation phase by April 2025, with full approval submission by the end of 2025, and approval expected 6 months after submission, leading to launch and pricing inclusion in 2026.
  • Commercial manufacturing progress: One full commercial batch of active pharmaceutical ingredient (API) has been completed successfully. The company has developed a new formulation that resolved the issue of virus aggregation after vial filling, with 6 months of stable storage confirmed, and expects to clear 12-month stability testing by end-2025.
  • Supply chain and commercial infrastructure: Henogen (acquired by Thermo Fisher, the contract manufacturing organization) has obtained foreign manufacturing site approval, Mitsui Warehouse has obtained the required manufacturing license for final packaging, the company has appointed all three required leadership roles for manufacturing/safety/quality, and a full end-to-end supply chain from manufacturing in Belgium to clinical sites in Japan has been established. Remaining 2025 priorities include finalizing quality/supply agreements with Fujifilm Toyama Chemical and Mitsui, and completing end-to-end transport testing.
  • Business development: The company licensed Taiwanese sales rights to Medigen, and plans to expand regional licensing after Japanese approval.

• OBP-301 Global Clinical Progress:

  • A US Phase 1 trial combining OBP-301 with standard chemoradiotherapy for esophageal cancer reported 100% complete clinical response in 13 evaluable patients, with only mild side effects. Results were presented at ASCO-GI 2025, and the company is planning an End of Phase 1 meeting with the FDA to discuss next steps.
  • A US Phase 2 trial combining OBP-301 with pembrolizumab for 2nd-line gastric cancer is ongoing, is on track to enroll 27 total patients, and is enrolling ahead of schedule.

• OBP-601 Development (licensed to Transposon Therapeutics for neurodegenerative diseases):

  • OBP-601 is a repurposed oral small molecule with confirmed blood-brain barrier penetration and a well-established safety profile from prior HIV development. It received US FDA Fast Track designation for progressive supranuclear palsy (PSP). Phase 2 results showed it reduces key neurodegeneration biomarkers (NfL and IL-6), and FDA strongly recommended advancing to Phase 3 after the End of Phase 2 meeting.
  • For C9orf72-mutant ALS (33% of all ALS cases), Phase 2 results showed OBP-601 reduced the rate of decline in vital capacity by 50% after 1 year of treatment, a clinically meaningful effect. The End of Phase 2 meeting with FDA confirmed the path to a pivotal Phase 3 trial.
  • FTD Phase 2 data had high variability, and final analysis is still ongoing by Transposon.
  • A new Phase 2 trial for Alzheimer's disease is planned for 2025.

• 2024 Achievements:

  • Completed one full commercial batch of OBP-301 API, completed internal manufacturing/sales infrastructure setup, established full supply chain, initiated the US gastric cancer Phase 2 trial, completed all OBP-601 Phase 2 trials and data analysis. The only 2024 goal not met was OBP-301 approval submission, delayed by extended pre-consultation with PMDA.

Oncolys BioPharma is a clinical-stage biotech company focused on two core product candidates, with no product revenue yet from commercial sales. The only reported revenue comes from milestone and license income: 2024 full-year revenue totaled 31 million yen, a 32 million yen decrease from 63 million yen in 2023. Total operating loss for 2024 was 1.681 billion yen, a 248 million yen reduction from 1.929 billion yen in 2023. Net loss for 2024 was 1.684 billion yen, a 254 million yen narrowing from 2023. As of end-December 2024, cash and deposits totaled 2.411 billion yen, an 879 million yen increase from end-December 2023, driven by 3 billion yen in new capital raised via share issuance in 2024. Total assets are concentrated in cash/prepaid assets, which account for 93% of total assets, while net equity accounts for over 86% of total liabilities and equity.

• The company does not provide 2025 full-year or Q2 earnings guidance, as revenue is entirely dependent on unpredictable milestone payments from partnership and licensing deals, so reasonable forecasting is not possible.
  • Key 2025 operational goals: (1) Initiate breakthrough comprehensive evaluation consultation for OBP-301 within 3 months; (2) Submit Japanese approval and orphan drug designation applications for OBP-301 by end-2025; (3) Obtain the required regenerative medicine manufacturing and sales business license; (4) Clear 12-month stability testing for the new OBP-301 formulation by end-2025; (5) Secure the patent for endoscopic administration of oncolytic virus to protect OBP-301's market position; (6) Initiate pivotal Phase 3 trials for OBP-601 (for ALS or PSP) by end-2025 and receive the corresponding milestone payment; (7) Initiate OBP-601 Phase 2 trial for Alzheimer's disease by end-2025.
  • The company is transitioning from a license-centric business model to a fully integrated pharmaceutical company focused on commercializing OBP-301 in Japan, and has already expanded headcount to support this transition.

• Regulatory risk: PMDA has increased scrutiny of breakthrough-designated products after recent high-profile failures of other products, which has already delayed OBP-301's approval submission timeline, and additional regulatory requests could cause further delays.
  • Manufacturing risk: While the new formulation has resolved virus aggregation for 6 months, 12-month stability data is still pending, and regulatory requests for additional comparability testing between clinical and commercial formulations could add delay and cost.
  • Clinical risk: The US Phase 1 combination trial had an unprecedented 100% complete response rate, which may not be replicated in larger Phase 2/3 trials. Large-scale Phase 3 trials for OBP-301 in the US and OBP-601 for neurodegenerative diseases require substantial capital, which has not yet been fully secured.
  • Financial risk: The company has not generated any commercial revenue to date, so all operations are dependent on external financing and milestone payments. Additional unexpected regulatory or clinical requirements could require new capital raising.
  • OBP-601 development is entirely dependent on Transposon Therapeutics' ability to secure funding or a partnership for Phase 3 development, and any delay or failure by Transposon will delay OBP-601 progress.

Q: Can you confirm that the virus aggregation issue for OBP-301 CMC is resolved, and will the formulation change raise concerns about comparability between clinical and commercial product?

A: The new formulation uses a widely used common food-grade additive that strongly inhibits aggregation, with 6 months of stable storage confirmed. 12-month data is still pending, but the company expects it to be safe. The additive only changes formulation, not the active virus, and comparability testing is mostly complete, showing the product is equivalent to the clinical material. Any additional requests from PMDA will be addressed quickly.

Q: Is the post-marketing clinical trial requirement a major bottleneck for OBP-301 approval?

A: The requirement exists because the Phase 2 trial only enrolled 36 patients, so PMDA wants to confirm the results in a larger post-approval population. This is not an unexpected bottleneck, and the company has already finalized the trial plan. It will require significant additional capital and strict execution, but it does not block the approval pathway.

Q: When will the US OBP-301 chemoradiation combination Phase 2 start, and will it be an investigator- or company-sponsored trial?

A: The company will first hold an End of Phase 1 meeting with the FDA to finalize the trial design. A meaningful trial would need at least 200 patients, requiring several billion yen in funding. The company does not plan to use domestic Japanese capital for this trial, and is exploring grant funding (which would slow timelines) or independent funding through Oncolys USA, but funding has not been secured yet. The priority is to resolve funding before initiating the trial.

Q: What is the priority ranking for OBP-601's three indications (PSP, ALS, Alzheimer's), and what is Transposon's current planning?

A: Transposon has not finalized the formal priority ranking, but based on current interactions, ALS is the highest priority: it has a large patient population in the US, established clinical research infrastructure, and there is already interest from research groups to evaluate OBP-600. Whether this approach will be accepted as a pivotal trial by the FDA still needs to be confirmed in upcoming discussions, and this is the company's current working expectation.