Solasia Pharma K.K.

Business Details

Solasia Pharma is a specialty pharma company focused on the oncology field, targeting Japan and other Asian countries. Its business model involves in-licensing promising new drug candidates from overseas, advancing them through clinical development, and generating revenue through out-licensing to sales partners or through product sales revenue, milestones, and royalties. Three products—Sancuso® (nausea and vomiting), Darvias® (peripheral T-cell lymphoma), and Episil® (oral pain)—have already commenced sales. Product sales remain at an early stage, and the company continues in a phase of upfront investment where research and development expenses and selling, general and administrative expenses substantially exceed gross profit. The reporting segment is the single segment of the Pharmaceutical Business.

Recent Overview

Revenue declined 75.1% year on year to ¥6 million; ¥260 million was raised through the exercise of share subscription rights, increasing the cash balance.

In the first quarter of FY2026 (ending December 2026) (January to March 2026), revenue was ¥6 million (versus ¥25 million in the same period of the prior year), driven mainly by Episil® product sales revenue, with gross profit of ¥4 million. R&D expenses of ¥112 million and SG&A expenses of ¥198 million, totaling ¥310 million, exceeded revenue, resulting in an operating loss of ¥306 million and a quarterly loss of ¥307 million. On the other hand, proceeds of ¥260 million from the issuance of shares through the exercise of share subscription rights led to positive financing cash flow of ¥251 million, increasing the period-end cash balance to ¥1,569 million. A key change on the expense side was personnel costs, which increased by ¥52 million year on year to ¥156 million. The full-year earnings forecast for FY2026 (ending December 2026) remains undisclosed. The policy of estimated product sales revenue of ¥420 million, R&D expenses of ¥700 million, and SG&A expenses of ¥650 million remains unchanged from the announcement made on February 13.

Key Products

Growth Drivers

• Recognition of installment contract payment income upon completion of the transfer of manufacturing and sales rights for Sancuso® to the new Chinese partner MAAB (to be announced as revenue is confirmed)
• Expansion of product sales revenue following the commencement of sales by Episil®'s Chinese sales partner Gensci from March 2025
• Tumor shrinkage confirmed in all patients evaluated in the SP-05 Phase Ib/II clinical trial, raising the possibility of milestone income upon transition to a Phase II trial
• New revenue source from the exclusive sales license agreement (with INTEGRIS PHARMA S.A.) for Darvias® in 13 Eastern European countries, premised on the MAP scheme
• New revenue source from the exclusive sales license agreement for Episil® in Brazil (with Daiichi Sankyo Brasil)
• Future licensing revenue from out-licensing activities for Darvias® (SP-02) China rights and SP-04 China rights
• Fundraising through the exercise of share subscription rights (¥260 million in the first quarter) secured a period-end cash balance of ¥1,569 million, maintaining the financial foundation for continued development investment

Risks

• Product sales remain at an early stage, with upfront R&D investment continuing to exceed product sales profit; a quarterly loss of ¥307 million was recorded in the current first quarter
• Because revenue is heavily dependent on license contract revenue (milestones and royalties), revenue is affected by the timing of contract negotiations and conclusions as well as partners' development policies
• The license agreement with Lee's, the Chinese sales partner for Sancuso®, is scheduled to expire at the end of 2026, and there is a risk of delay or failure in the transition to MAAB
• SP-05 failed to meet its primary endpoint in the AGENT trial, and there is no guarantee of development success even in the current Phase Ib/II clinical trial
• SP-04 is in an exploratory stage targeting peripheral neuropathy caused by taxane agents following the suspension of development after the POLAR trials, with an uncertain outlook for transition to clinical trials
• The full-year earnings forecast for FY2026 (ending December 2026) remains undisclosed as reasonable estimation is deemed difficult; the timing and amount of license contract revenue recognition remain uncertain
• R&D expenses for FY2026 (ending December 2026) are projected to increase substantially to ¥700 million (versus ¥430 million actual in FY2025), raising the risk of expanded losses due to upfront costs
• Investment risk associated with the equity investment in Isofol (the licensor of SP-05) (¥77 million in July 2025 and ¥34 million in March 2026)