Delta-Fly Pharma,Inc. Q4 FY2025 earnings call

• Pipeline Development Progress

  • DFP-10917 (for acute myeloid leukemia): Single-agent Phase 3 trial intermediate analysis is slightly delayed due to extended follow-up for long-term surviving patients, with no material impact on overall development timelines. Data cutoff is planned for the first half of 2025, after which data will be submitted to the independent DSMB for superiority assessment. The combination trial of DFP-10917 + venetoclax (VEN) completed Phase 1 with confirmed tolerability in 6 patients, and has already advanced to Phase 2 with strong patient enrollment and promising early data. Nippon Shinyaku is conducting the domestic Japanese Phase 1 trial for DFP-10917 as part of the company's partnership.
  • DFP-14323 (for uncommon EGFR mutation positive non-small cell lung cancer): Phase 3 trial enrollment is ongoing across approximately 30 domestic Japanese facilities. The 2024 Japanese Lung Cancer Society Guidelines updated to recommend afatinib over osimertinib as first-line treatment for this patient population, which has accelerated trial enrollment significantly.
  • DFP-17729 (for refractory/recurrent pancreatic cancer): Following positive Phase 1/2 results that showed a median overall survival of 9.0 months for combination therapy with TS-1, versus 6.1 months for TS-1 monotherapy, PMDA (Japanese Pharmaceuticals and Medical Devices Agency) has approved initiation of Phase 2/3 trial. Approximately 15 trial facilities have received preliminary approval, and patient enrollment will start sequentially once IRB approval is obtained at each site. Results were presented at the 2024 ESMO GI conference to positive industry attention.
  • DFP-11207 (for pancreatic cancer): Phase 1 trial in the U.S. generated strong safety data with limited side effects and observed anti-tumor activity. Management is actively evaluating plans to initiate Phase 2 in either Japan or the U.S.
  • DFP-14927 (a DDS-formulated derivative of DFP-10917): Once-weekly dosing formulation for solid tumors, Phase 1 dose-finding is complete, and the company is now conducting expanded Phase 1 (Phase 2-equivalent) enrollment in patients with advanced colorectal cancer. Preclinical anti-tumor data was published in European Journal of Pharmacology.
  • DFP-10825 (for cancer-related ascites): Development was delayed by COVID-19-related difficulties sourcing non-human primates, but the situation has now resolved. The company is preparing to initiate Phase 1 in either Japan or the U.S. Preclinical data on the drug's RNA interference mechanism was featured in a review in Advanced Drug Delivery Reviews.

• Financing Update

  • In April 2025, the company approved issuance of the 10th new share purchase warrant with exercise price adjustment and the 2nd unsecured corporate bond, to fund ongoing pipeline development.
  • The new share purchase warrant is expected to raise just over 1.0 billion yen. Allocated uses are: 650 million yen for DFP-14323 domestic clinical development, 250 million yen for DFP-17729 Phase 2/3 development, and 100 million yen for final development and approval filing costs for single-agent DFP-10917.
  • The unsecured bond has a total maximum facility size of 500 million yen, split into two 250 million yen tranches. The first tranche was fully funded in late April 2025, and the second tranche will be issued after the first is fully repaid.
  • The financing was structured with an experienced existing partner, Macquarie Capital, to maintain flexibility, cap dilution at under 25% (avoiding the need for a third-party committee), and use a moving strike exercise price to ensure funding agility.

Delta-Fly Pharma is a clinical-stage biotech company focused exclusively on oncology drug development, with no commercial product revenue generated in the 2025 March fiscal year. Total operating expenses came in at just over 1.7 billion yen, slightly below the planned 1.8 billion yen. Research and development (R&D) expenses were 1.437 billion yen, in line with original plans despite a small underrun, accounting for 84.5% of total operating expenses. General and administrative expenses totaled 270 million yen, making up the remaining 15.5% of total operating expenses. The company reported operating, ordinary, and net losses all of just over 1.7 billion yen for the full fiscal year. On the balance sheet, total current assets fell from 1.4 billion yen in the prior 2024 March fiscal year to 434 million yen at the end of the 2025 March fiscal year, after heavy R&D investment across the company's pipeline.

• For the 2026 March fiscal year, the company expects to generate zero business revenue, as no out-licensing deals have been finalized and milestone payments from potential partnerships are not expected to occur within the period. Any future revenue from out-licensing of DFP-10917 or DFP-14323 will be disclosed immediately once agreements are finalized.
• Total operating expenses are projected to be 1.5 billion yen, a 12% decrease from the prior fiscal year. R&D expenses are projected at 1.212 billion yen, and SG&A expenses are projected at 288 million yen, with the estimate accounting for recent patent fee increases, particularly in Europe.
• Operating, ordinary, and net losses are all projected to be just over 1.5 billion yen for the 2026 March fiscal year.
• Key R&D spending priorities for the 2026 fiscal year are: 1) Completing the intermediate analysis for single-agent DFP-10917 Phase 3; 2) Solidifying the Phase 2 portion of the DFP-10917 + VEN combination trial; 3) Continuing the expanded Phase 1 trial for DFP-14927 in the U.S; 4) Maintaining on-schedule progress for DFP-14323 Phase 3 in Japan; 5) Initiating the Phase 2 portion of DFP-17729 Phase 2/3 trial in Japan.

• The company had only 434 million yen in total assets at the end of the 2025 March fiscal year, leaving it dependent on the newly announced financing to fully fund its 2026 fiscal year development pipeline.
• DFP-10917's intermediate analysis is slightly delayed due to longer follow-up for long-term surviving patients, creating uncertainty around the timing of the readout.
• Global patent fee increases, particularly in Europe, create upward risk for projected general and administrative expenses in the 2026 fiscal year.
• All of the company's assets are in clinical development, with no approved commercial products, so the company will remain dependent on external financing and future partnership deals to fund operations and generate revenue, with high inherent risk of clinical trial failure.

Q: What is the current partnership status for the DFP-10917 + venetoclax combination trial? / A: The combination trial is fully funded and run by Delta-Fly Pharma via its own U.S. subsidiary. The company notes it would welcome a future partnership if a suitable opportunity arises, but is advancing the trial independently with existing and newly raised capital in the interim. /

Q: What percentage of non-small cell lung cancer patients fall into the uncommon EGFR mutation subset that DFP-14323 targets? / A: Uncommon EGFR mutations account for roughly 10-15% of all EGFR mutation positive non-small cell lung cancer cases in Japan. This still represents a large enough patient population to support successful trial enrollment and future commercialization of the drug, which is reflected in the current accelerated enrollment trend. /

Q: When will the DSMB evaluation results for single-agent DFP-10917 be publicly disclosed? / A: The company plans to cut off data collection for the intermediate analysis in the first half of 2025, then submit the cleaned dataset to DSMB for evaluation. Results will be publicly disclosed immediately after the DSMB delivers its assessment of the trial's interim data.