FunPep Company Limited

Business Details

The company's core business is the research and development of functional peptides originating from research results of the Graduate School of Medicine, Osaka University. Leveraging its antibody-inducing peptide drug discovery platform technology

Recent Overview

Observation period for the FPP004X Phase I trial concluded; cash balance increased due to capital raising, and losses narrowed substantially

In April 2026, the observation period for all subjects in the FPP004X Phase I clinical trial was completed, with preliminary results scheduled for disclosure in Q3 FY2026 (July to September). On March 9, 2026, the issuance of 352,900 new shares via third-party allotment and 3,930,000 new shares via exercise of the 13th series of stock acquisition rights (with exercise price revision clauses) increased capital stock and capital surplus by ¥207 million each. As a result, cash and deposits increased by ¥98 million from the end of the previous period to ¥1,867 million. Research and development expenses decreased by ¥306 million year-on-year to ¥196 million due to a decline in FPP004X development costs, and the operating loss narrowed substantially to ¥294 million (compared to -¥603 million in the same quarter of the previous year). The full-year FY2026 (ending December 2026) forecast for research and development expenses remains unchanged at ¥800 million, with other selling, general and administrative expenses also unchanged at ¥300 million from the previous announcement.

Key Products

Growth Drivers

• Potential for license revenue generation should Shionogi & Co., Ltd. exercise its option rights following the disclosure of preliminary Phase I clinical trial results for FPP004X (scheduled for Q3 FY2026)
• Potential to receive development milestone payments based on progress of the additional Phase III clinical trial (Study 02) for SR-0379 (trial results expected in first half of 2027)
• Expansion of new development pipeline utilizing the antibody-inducing peptide platform "STEP UP" (migraine, Alzheimer's disease, hypertension, antithrombotic agents, dyslipidemia, heart failure, etc.)
• Strengthening of the technology foundation through joint research on a new vaccine adjuvant with Shionogi & Co., Ltd. (commenced October 2024)
• Potential to secure alliance revenue through activities aimed at securing a new development partner for FPP003
• Expansion into next-generation modalities through drug discovery research on specialty peptides (cyclic peptides containing non-natural amino acids)

Risks

• Risk of clinical trial failure or delay: If the results of the SR-0379 Study 02 or the preliminary Phase I trial results for FPP004X do not meet expectations, development may be discontinued or significantly revised
• Risk of capital depletion: With a cash balance of ¥1,867 million as of the end of March 2026, against projected R&D expenses of ¥800 million and other SG&A expenses of ¥300 million for FY2026 (ending December 2026), continued capital increases are necessary given the uncertainty of business revenue
• Risk regarding securing partnership agreements: If new licensing or option agreements with pharmaceutical companies cannot be concluded, business revenue will remain at zero, leading to rapid deterioration of the financial position
• Dilution risk: The number of shares issued increased from 40,563,800 to 44,846,700 following the third-party allotment and exercise of stock acquisition rights in March 2026, and continued fundraising may lead to further dilution of shareholder value
• Risk of option non-exercise: If Shionogi & Co., Ltd. does not exercise its option rights for FPP004X, a major source of partnership revenue will be lost
• Impairment risk: Additional impairment of contract-related intangible assets and other items may occur depending on development progress