STELLA PHARMA CORPORATION

Business Details

Stella Pharma is a single-segment company engaged in the research, development, manufacturing, and sale of Steboronine® (SPM-011), a boron agent for Boron Neutron Capture Therapy (BNCT). In March 2020, the company obtained the world's first manufacturing and marketing approval for a BNCT drug, indicated for unresectable locally advanced or locally recurrent head and neck cancer. Revenue is composed of two channels, domestic and overseas (China, Hainan Island), and the company's medium- to long-term growth strategy is centered on expanding indications (recurrent meningioma, angiosarcoma) and overseas expansion.

Recent Overview

Significant revenue decline due to disappearance of overseas sales and bankruptcy of a manufacturing subcontractor; completed approval applications for recurrent meningioma and angiosarcoma

In FY2026 (ending March 2026), in addition to the fact that overseas sales recorded in the prior period were not recorded this period, the review of the manufacturing system due to the quasi-bankruptcy of the main manufacturing subcontractor in September 2025 compounded the situation, resulting in a significant revenue decline to ¥323 million (down 66.4% year on year). Operating loss expanded to ¥748 million. On the other hand, approval applications were completed in March 2026 for two conditions: recurrent meningioma (priority review applied) and angiosarcoma. The China Hainan Island BNCT center opened in February 2026, and the first treatment case was carried out in March. As a subsequent event, in April 2026 the company completed the payment for a third-party allotment to CVI Investments, Inc. (1,000,000 new shares, ¥696 million; and stock acquisition rights for 1,050,000 shares, up to ¥959 million), reinforcing its financial base.

Key Products

Growth Drivers

• Full-scale operation of the China Hainan Island BNCT center: following its opening in February 2026 and the first treatment case in March, full-scale recording of export sales to China is expected in FY2027 (ending March 2027)
• Completion of approval applications for recurrent meningioma and angiosarcoma: both conditions have already received orphan drug designation and priority review applies, with expansion of indications and increased sales expected upon approval
• Completion of technology transfer to a new manufacturing subcontractor: rebuilding a stable supply system through obtaining manufacturing site change approval and commencing full-scale manufacturing around January 2027, to meet domestic and overseas demand
• Expansion of domestic BNCT treatment facilities and increased case numbers through the partnership agreement with Sumitomo Heavy Industries, Ltd.
• Acquisition of new indications through progress of the Phase I/II basket trial for thoracic solid malignant tumors (started April 2025, selected for a subsidy of up to approximately ¥280 million from AMED)
• Securing of R&D and overseas expansion funding through the third-party allotment equity program (for CVI Investments, Inc.)

Risks

• Manufacturing system transfer risk: technology transfer to the new manufacturing subcontractor is expected to obtain manufacturing site change approval around January 2027, but there is a risk of product supply disruption and inability to record sales if delayed
• Uncertainty regarding sales to China: the FY2027 (ending March 2027) earnings forecast (revenue of ¥1,038 million) assumes full-scale recording of exports to China, but there is downside risk depending on the pace of accumulation of treatment cases and regulatory response
• Approval review risk: the timing of obtaining approval for the applications for recurrent meningioma and angiosarcoma will vary depending on the PMDA's review results, directly affecting performance
• Fundraising risk: continued operating losses (-¥748 million in FY2026 (ending March 2026)) and cash outflows mean continued reliance on external fundraising accompanied by dilution through equity programs
• Share dilution risk from the equity program: exercise of the stock acquisition rights (1,050,000 potential shares) allotted to CVI Investments, Inc. may dilute the holdings of existing shareholders
• Revenue concentration risk: overseas revenue is highly dependent on a single company, the China Hainan Island BNCT center (PENGBO), and performance is significantly affected by the operating status of that center
• Risk of change in development policy for recurrent malignant glioma: the shift to a policy of cooperating in a Phase III investigator-initiated clinical trial may significantly delay the timing of the approval application compared with the original plan