Kringle Pharma,Inc. Q3 FY2025 earnings call

Corporate Mission and Core Technology

• University-originated biotech venture focused on developing therapies for intractable diseases, with a core focus on recombinant hepatocyte growth factor (HGF), a naturally occurring complex protein with multiple biological functions including cell proliferation promotion, cell death inhibition, angiogenesis, and anti-fibrotic activity
• HGF is targeted to treat severe unmet need conditions where its multi-functional mechanism addresses underlying disease pathophysiology

Pipeline Development Progress

• Acute Spinal Cord Injury (Lead Pipeline): Completed two clinical trials (Phase I/II and Phase III) in Japan, but did not reach regulatory agreement with PMDA for approval submission, so the company has initiated a new additional trial strategy. The Phase III trial showed a statistically significant improvement in 1-grade or higher severity improvement (56.0% vs 19.8% in historical control) but did not meet the primary endpoint of 2-grade or higher improvement (12% vs 8.6% in historical control, no statistical significance). Retrospective analysis found patient population differences between trials: Phase I/II enrolled more elderly patients with central cervical cord injury that has higher natural recovery potential, while Phase III enrolled more younger patients with severe high-energy trauma injury. The new additional trial will enroll a more enriched responder population to increase the probability of demonstrating efficacy, with PMDA consultations already underway. In June 2025, the candidate received Orphan Drug Designation from the U.S. FDA, accelerating U.S. development and partnership negotiation progress. Post-approval supply chain is already finalized: Kringle Pharma will be the manufacturer and marketing authorization holder, supplying to Maruishi Pharmaceutical for distribution via Toho Holdings to emergency hospitals nationwide.
• Vocal Fold Scar (Second Pipeline): Phase I/II trial completed, with positive efficacy trends across multiple endpoints. The Phase III placebo-controlled double-blind trial is in the final stretch of patient enrollment, targeting completion by the end of 2025, with last patient out expected by the end of 2026 and a final study report expected in the first half of 2027. Commercial-scale manufacturing preparation is already underway to prepare for approval submission.
• ALS (Amyotrophic Lateral Sclerosis): Investigator-initiated Phase II trial completed, which did not meet the primary endpoint of statistically significant improvement in ALSFRS-R score, but additional biomarker analysis (focused on Neurofilament Light Chain, a standard regulatory accepted biomarker for neurodegeneration) is ongoing and expected to be completed by September 2025 to identify potential treatment effects.
• Early Pipeline and Collaboration: A new joint research collaboration with Kobe University started in June 2025 focused on developing HGF for Peyronie's disease, a rare fibrotic indication. Additional academic collaborations continue to expand HGF indications into new disease areas.

Financial Position

• Total current assets of 2,084 million yen (2.084 billion yen), including 1,631 million yen (1.631 billion yen) in cash and cash equivalents. Total assets of 2,108 million yen (2.108 billion yen)
• Total liabilities of 719 million yen (0.719 billion yen), with the increase in long-term liabilities driven by required reserve deposits for AMED CiCLE government grant funding for the vocal fold scar Phase III trial
• Total net assets of 1,388 million yen (1.388 billion yen), equity ratio of 64.6%, maintaining a stable financial position

Corporate Growth Strategy

• Strategy 1: Launch two products in Japan: The company is currently raising new capital to fund development costs for both acute spinal cord injury and vocal fold scar therapies through approval and launch, which will be the company's first step to transition from a discovery venture to a commercial biopharma company. Vocal fold scar approval may now come before acute spinal cord injury approval, so commercial manufacturing preparation is proceeding on schedule.
• Strategy 2: Reach global markets: Given the small patient population for rare diseases in Japan, global expansion is critical for long-term growth, with approximately 10x more patients globally. The company prioritizes advancing acute spinal cord injury development in the U.S. first to establish global standards and capture worldwide market share.
• Strategy 3: Expand HGF indications: Maximize the value of HGF platform technology by expanding into additional indications, including acute to chronic spinal cord injury, additional fibrotic diseases starting from vocal fold scar, and new intractable diseases, via active academic collaborations in Japan.

Kringle Pharma is a clinical-stage biotech focused exclusively on recombinant HGF protein therapy development for rare intractable diseases, and does not have any commercialized products generating core product revenue as of this quarter. Reported revenue for the third quarter of the 2025 September fiscal year consists solely of technology access fee income from Clarus, which was nearly flat year-over-year, with any minor difference attributed to foreign exchange fluctuation. Total revenue for the nine-month period (first three quarters of the fiscal year) is on track to reach 710 million yen (0.71 billion yen) after full-year guidance revision, down from the initial forecast of 272 million yen (2.72 billion yen) due to delayed spinal cord injury approval-related milestone revenue. Research and development expense for the reporting quarter is 563 million yen (0.563 billion yen), which increased year-over-year driven by spinal cord injury domestic approval preparation, U.S. development preparation, and vocal fold scar clinical trial costs. Selling, general and administrative expense for the quarter is 792 million yen (0.792 billion yen), resulting in an operating loss of 738 million yen (0.738 billion yen), an increase from the year-ago quarter loss of 579 million yen (0.579 billion yen).

• Full-year 2025 September fiscal year revenue guidance revised downward from an initial 272 million yen (2.72 billion yen) to 710 million yen (0.71 billion yen), driven by the delay in acute spinal cord injury approval submission and the corresponding loss of planned milestone revenue
• Full-year research and development expenditure guidance revised downward from an initial 1,223 million yen (12.23 billion yen) to 702 million yen (7.02 billion yen), driven by slower-than-expected patient enrollment in the vocal fold scar Phase III trial and timing delays for new development trial costs
• Full-year operating loss guidance revised to 939 million yen (9.39 billion yen), net loss guidance revised to 946 million yen (9.46 billion yen) after the downward revision of revenue and R&D costs
• Additional acute spinal cord injury trial costs will be covered by ongoing current fundraising activities; U.S. development preparation costs for acute spinal cord injury are already covered by previous fundraising
• The acute spinal cord injury approval and launch timeline is pushed back to the right following the decision to conduct an additional trial
• Vocal fold scar Phase III patient enrollment is on track to complete by the end of 2025, with last patient out in late 2026 and final study report in the first half of 2027, putting it on track to potentially gain approval before acute spinal cord injury in Japan
• ALS additional biomarker analysis is expected to complete by September 2025, with results used to support global partner search efforts

• The lead pipeline, acute spinal cord injury therapy, failed to reach regulatory agreement with PMDA for approval submission after completing two clinical trials, requiring a new additional clinical trial that delays the approval timeline and adds development costs, creating execution and regulatory approval uncertainty
• The Phase III trial for acute spinal cord injury did not meet its pre-specified primary efficacy endpoint, and success of the new enriched-population additional trial is not guaranteed
• Patient enrollment for the vocal fold scar Phase III trial has been slower than initially planned, leading to delays in development and revenue potential
• The ALS Phase II trial failed to meet its primary clinical endpoint, and additional biomarker analysis may not identify a detectable treatment effect, putting the future of this pipeline at risk
• As a clinical-stage biotech with no approved commercial products, the company is dependent on successful development and approval of its pipeline to generate revenue and achieve profitability, and relies on external fundraising to fund ongoing development activities

The structured Q&A section of the earnings call is not included in the provided transcript text, so no key exchanges can be summarized.