Delta-Fly Pharma,Inc.

Business Details

The company develops novel anticancer drugs with improved balance of efficacy and safety through its proprietary "module drug discovery" method, which combines existing anticancer active substances as "modules." It currently holds six development pipelines (DFP-10917, DFP-14323, DFP-11207, DFP-14927, DFP-17729, DFP-10825) and is advancing clinical trials primarily in the United States and Japan. Revenue is expected to come from upfront license payments, milestones, and royalties, but at present business revenue is zero, with the company at a stage where R&D expenses are incurred ahead of revenue generation.

Recent Overview

The DFP-10917 U.S. Phase 3 monotherapy trial was discontinued, but the venetoclax combination trial achieved the target response rate

In FY2026 (ending March 2026), business revenue remained zero. Business expenses totaled ¥1,605 million (down 6.0% year on year), and both operating loss and net loss for the period improved compared to the previous period. The DFP-10917 monotherapy Phase 3 trial in the United States was discontinued after the DSMB's interim analysis failed to verify superiority, but the Phase 1/2 combination trial with venetoclax achieved the target overall response rate, with the DMC recommending that future trials proceed. DFP-11207 newly initiated a physician-initiated clinical trial targeting biliary tract cancer. Although the company secured ¥1,360 million in share issuance proceeds through the exercise of stock acquisition rights, the period-end cash balance fell to ¥145 million, and the equity ratio dropped sharply to 12.6%. As a subsequent event, 8,200 units of the 11th series stock acquisition rights were exercised between April 1 and May 14, 2026, resulting in the issuance of 820,000 shares. In addition, the company resolved to submit to the general shareholders' meeting a proposal for a reduction without consideration of capital stock and capital reserves (totaling approximately ¥11,557 million) to offset accumulated losses, with an effective date of August 3, 2026.

Key Products

Growth Drivers

• The DFP-10917 plus venetoclax combination Phase 1/2 trial achieved the target overall response rate, and the DMC's recommendation to proceed with future trials raises the possibility of advancing to the next phase and accelerating license negotiations
• Progress toward obtaining approval and milestone income through the continuation of DFP-14323's domestic Phase 3 trial (approximately 30 institutions)
• Pipeline expansion through the new initiation of a physician-initiated Phase 1/2 clinical trial for DFP-11207 targeting biliary tract cancer
• Advancement of development stage through completion of preclinical trials for DFP-10825 and the start of preparations for Phase 1 clinical trials
• Securing R&D funding through continued exercise of the 11th series stock acquisition rights (with exercise price revision provisions)
• Development activities to secure new partnership partners in the U.S., Europe, and Asia, in addition to existing license agreements with Nippon Shinyaku Co., Ltd. and Nippon Chemiphar Co., Ltd.
• Improved capital efficiency through the plan to reduce next-period business expenses to ¥1,330 million (down ¥275 million year on year)

Risks

• Business revenue has remained at zero, and with R&D expenses incurred ahead of revenue generation, substantial operating losses and cash outflows are continuing (operating loss of ¥1,330 million forecast for the next period)
• Period-end cash balance fell to ¥145 million, leaving extremely low liquidity on hand; continuous fundraising through exercise of stock acquisition rights is essential, and there is a high risk of cash depletion if exercises do not proceed as expected
• The equity ratio dropped sharply from 63.5% to 12.6%, significantly weakening the financial base
• Risk of share dilution from the continued issuance and exercise of stock acquisition rights with exercise price revision provisions (shares issued at period-end totaled 13,175,000, an increase of approximately 35% from the prior period-end)
• The U.S. Phase 3 trial of DFP-10917 monotherapy was discontinued, necessitating a review of the development strategy for the core pipeline
• Risk of clinical trial discontinuation or failure: if any pipeline fails to obtain approval, license income and royalty income will not be realized
• Many pipelines have yet to secure global licensing partners, posing risks of prolonged or unsuccessful partnership negotiations
• Foreign exchange risk: since clinical trial costs in the United States are denominated in foreign currency, a weaker yen would increase expenses