Kringle Pharma,Inc. Q1 FY2026 earnings call

Company Overview and Core Strengths

• University-born biotech venture with a corporate mission to develop breakthrough treatments for intractable diseases, focused exclusively on pharmaceutical development of endogenous human HGF protein, which plays roles in tissue regeneration, repair, cell protection, fibrosis inhibition, angiogenesis and axon regeneration.
• Core strength: established commercial-grade mass production capability for the complex HGF protein, completed process validation for commercial manufacturing of acute spinal cord injury treatment, with an established supply chain already in place for post-approval distribution.
• Business model: develops recombinant human HGF biologic drugs for rare diseases, self-conducts development up to approval for its two lead late-stage candidates (unlike most biotech ventures), aims to become a fully integrated biopharmaceutical company, and partners with established pharma for sales while retaining ownership of approved products.

3-Pillar Growth Strategy

• Pillar 1: Launch two products domestically in Japan: Progress development of the two late-stage pipeline candidates (acute spinal cord injury and vocal fold scar) to secure approval, meet Tokyo Stock Exchange Growth market listing maintenance requirements, and drive corporate value growth.
• Pillar 2: Access the overseas market: The global patient population for the company's rare disease pipeline is ~10x larger than Japan's, so early global expansion is a key priority, with a current focus on acute spinal cord injury international development.
• Pillar 3: Indication expansion: HGF has broad applicability across multiple intractable diseases; cumulative global patient population across potential indications totals ~2 billion people, and efficient, accelerated indication expansion will maximize HGF's value and Kringle Pharma's corporate value.

First Quarter Key Operational Updates

• Established 100% owned U.S. subsidiary Kringle Pharma USA, led by former Eli Lilly and Eli Lilly Japan executive Matt Vogelhuber, to drive U.S. and European development of acute spinal cord injury and vocal fold scar (broadening to include all fibrotic diseases). The subsidiary is currently pursuing government/public grant funding, accelerating business development and partnering activities, and preparing for U.S. IND submission.
• Started a new joint research project with Kyoto University on development of sustained-release HGF wound healing treatments, supporting new indication expansion.
• Co-authored a published paper with Keio University on a new biomarker for predicting spontaneous recovery from spinal cord injury.
• Completed patient enrollment for the vocal fold scar Phase 3 trial (65 total patients enrolled, exceeding the 62-patient target) in January 2026.
• Renewed the research-grade HGF supply agreement with ReproCell, continuing to make Kringle Pharma-manufactured HGF available as a research reagent through ReproCell.
• Filed for orphan drug designation for acute spinal cord injury in Europe; orphan drug designation is already secured in Japan and the U.S., with designation expected in H1 2026.
• Filed a patent application for a new HGF-based treatment for psychiatric disorders as a result of joint research with Kyoto Prefectural University of Medicine, with applicability across multiple fibrotic diseases beyond vocal fold scar.
• Partner Clarus Therapeutic (ophthalmology-focused HGF development partner) announced successful Series B funding, having raised a total of $148 million across Series A and B (over 20 billion yen equivalent) to accelerate global development of their lead candidate for corneal epithelial stem cell deficiency.

Pipeline Development Progress

• Acute spinal cord injury (Japan): Completed Phase I/II and Phase 3 trials. The completed Phase 3 trial showed that over 50% of severe complete paralysis (severity A) cervical spinal cord injury patients achieved ≥1 grade of severity improvement (a statistically significant difference vs. historical control data), though no statistically significant difference was seen for ≥2 grade improvement. Internal analysis found the Phase 3 trial enrolled a higher proportion of more severe, high-energy trauma patients in younger age groups due to COVID-19 movement restrictions limiting enrollment of older low-trauma patients. After discussions with PMDA, an additional clinical trial is required. The basic trial concept (narrowing enrollment to exclude the most severe patients within severity A to better highlight HGF's efficacy) is already agreed with PMDA, and discussions on final enrollment eligibility criteria are nearing completion.
• Vocal fold scar (Japan): A rare fibrotic orphan disease with ~10,000 patients in Japan and no approved treatments. Completed Phase I/II trials showing safety and efficacy trends across three evaluation metrics (patient-reported VHI-10, expert-assessed GRBAS, and objective vocal fold vibration amplitude). The ongoing multi-center placebo-controlled double-blind Phase 3 trial completed enrollment in January 2026, with final patient follow-up expected in January 2027 and topline data readout expected in H1 2027. Kringle Pharma has already started trial manufacturing of commercial-scale drug product in preparation for future approval application.
• ALS (Japan): Completed Phase I and Phase II trials, ongoing additional biomarker analysis.
• Acute kidney injury: Completed Phase I trial in the U.S., currently searching for a partner to advance to Phase 2.

Clarus Therapeutics Collaboration Update

• Kringle Pharma is the only company globally capable of manufacturing pharmaceutical-grade HGF, entered into a license and supply agreement with Clarus in 2020 for exclusive ophthalmology indication rights, provides API supply and leverages existing clinical/safety data to accelerate Clarus' development. Clarus achieved IND clearance and initiated trials just 1 year after agreement signing, demonstrating the value of Kringle's existing data. Kringle retains priority negotiation rights for Japanese ophthalmology rights. The 2023 agreement amendment expanded collaboration to develop new high-expression cell lines for more efficient HGF manufacturing, and prototype manufacturing and scale-up are progressing well.

Kringle Pharma is a clinical-stage biotech focused on HGF (Oremepermin Alfa) regenerative drug development, with no commercial product sales in the quarter. The only revenue recognized was a 18 million yen technology access fee from Clarus Therapeutics. Operating expenses totaled 218 million yen, of which R&D expenses were 129 million yen (59.2% of total operating expenses, allocated to spinal cord injury acute phase approval preparation, U.S. development preparation, and vocal fold scar Phase 3 trial costs). The company reported an operating loss of 199 million yen, ordinary loss of 200 million yen, net loss of 201 million yen (including a 1 million yen valuation impairment loss for Kringle Pharma USA shares). As of the end of the quarter, total assets were 1.99 billion yen, with current assets of 1.965 billion yen (1.511 billion yen in cash and deposits), total liabilities of 769 million yen, total net assets of 1.22 billion yen, and a 59.7% equity-to-assets ratio.

• For vocal fold scar: Phase 3 trial will complete final patient follow-up in January 2027, with topline data readout expected in H1 2027, followed by submission of approval application.
• For acute spinal cord injury European orphan drug designation: Approval is expected in H1 2026, with timely disclosure once secured.
• For acute spinal cord injury domestic development: Final agreement on additional trial design with PMDA will be disclosed publicly once confirmed.
• The company maintains its long-term guidance of launching two domestic products, expanding to global markets, pursuing broad indication expansion, and transitioning from a discovery biotech venture to a fully integrated biopharmaceutical company.

• Additional clinical trial is required for acute spinal cord injury after completion of Phase 3, which adds development delay and additional cost, and there is no guarantee the additional trial will meet the efficacy endpoint required for approval.
• The company is in late-stage clinical development with no approved commercial products, so it continues to operate at a net loss and requires ongoing capital raising to fund additional trial costs and global expansion activities.
• HGF protein manufacturing is complex, and while development of new high-expression cell lines is progressing well, there is risk of delays or unexpected issues in scaling up production to meet future global demand.
• Global development activities through the new U.S. subsidiary require successful grant and partner funding, and there is no guarantee that funding will be secured on acceptable terms or that IND approval will be obtained as planned.

No question-and-answer section was included in the provided transcript.