Performance trends of Chordia Therapeutics <190A>

1. Summary of Performance for the Fiscal Year ending August 2024

For the business revenue in the fiscal year ending August 2024, there is no revenue recorded (in the previous year, milestone income of 2500 million yen was recorded), with an operating loss of 1801 million yen (compared to a profit of 212 million yen the previous year), an ordinary loss of 1824 million yen (compared to a profit of 225 million yen), and a net loss for the period of 1827 million yen (compared to a profit of 223 million yen).

Research and development expenses decreased by 497 million yen compared to the previous period, totaling 1499 million yen. The breakdown showed that the expenses for CTX-712 increased by 331 million yen to 1018 million yen due to the initiation of Phase 1/2 clinical trials in the USA, while CTX-439, which completed safety testing and manufacturing of investigational raw materials, decreased by 483 million yen to 132 million yen, and other development expenses decreased by 342 million yen to 347 million yen. Additionally, outside the operating budget, grant income of 17 million yen and expenses related to public listing of 28 million yen were recorded.

Due to the increase in development costs for CTX-712, losses are expected to continue in the fiscal year ending August 2025.

2. Outlook for the Fiscal Year ending August 2025

For the fiscal year ending August 2025, no revenue is expected to be recorded, with an operating loss of 2434 million yen (compared to a loss of 1801 million yen the previous year), an ordinary loss of 2378 million yen (compared to a loss of 1842 million yen), and a net loss for the period of 2380 million yen (compared to a loss of 1827 million yen), indicating continued losses.

Research and development expenses are expected to increase by 525 million yen, primarily due to the Phase 1/2 clinical trial costs of CTX-712 (including investigational drug manufacturing costs), to a total of 2025 million yen. Regarding CTX-439, as previously mentioned, there is a policy to not develop it in-house but to license it out, which is expected to reduce expenses to 18 million yen (only accounting for activity costs from AMED grants). Other general administrative expenses are expected to increase by 107 million yen to 408 million yen, mainly due to patent acquisition-related costs. Additionally, outside operating income is anticipated to include a grant from AMED of 56 million yen (for five programs), and it is expected that the elimination of public listing-related expenses will improve by 80 million yen compared to the previous period. Furthermore, concerning research and development costs, as the focus will be on advancing the development of CTX-712, it is anticipated that the level will continue around 2 billion yen for the time being.

A total of 1.4 billion yen was raised through stock listing, with the policy to secure cash on hand aimed at covering one year's worth of operational funds.

3. Financial position

Looking at the financial situation at the end of August 2024, total assets decreased by 276 million yen compared to the end of the previous term, totaling 4632 million yen. Although there was revenue of 1464 million yen from new stock issuance associated with the stock listing, cash and deposits decreased by 469 million yen due to expenditures for operational funds.

Total liabilities increased by 62 million yen compared to the end of the previous term, totaling 471 million yen, primarily due to an increase in accounts payable by 133 million yen. Additionally, total net assets decreased by 339 million yen to 4161 million yen. Capital and capital surplus increased by 755 million yen each due to the new stock issuance, while retained earnings decreased by 1827 million yen due to the recording of the current net loss.

The equity ratio, an indicator of financial safety, decreased by 1.4 points from the end of the previous term to 89.8%. For a biotechnology venture without continuous revenue, borrowing from financial institutions is difficult, and although there is no interest-bearing debt, cash on hand will decrease as the development stage continues. As of the end of August 2024, there is 4329 million yen in cash, but a net loss of 2380 million yen is expected for the term ending in August 2025, so cash is expected to decrease to around 2000 million yen by the end of August 2025. The company intends to secure about one year's worth of operational funds and may resort to equity finance if it seems likely to fall below this level.

To maximize the value of CTX-712, resources will be focused to aim for early profitability.

4. Future Business Policy

The company aims to become a research and development-based pharmaceutical company originating in japan with the slogan, "A new anti-cancer drug that is 'Japan-originated' and 'world-first', delivered to patients as soon as possible." For the domestic market, the strategy is to expand self-manufactured sales through alliance strategies, while efficiently expanding the business in overseas markets by concluding license agreements with global pharmaceutical companies.

開発戦略としては、当面は早期収益化の実現を目標に、CTX-712に経営リソースを集中し、まずは再発・難治性AMLの米国および日本での販売承認を得ることを最優先に取り組み、その後はAMLの一次治療やその他のがん種への適応拡大を進めることでCTX-712の製品価値最大化を目指す。既述の通り潜在市場規模は大きく、ブロックバスターとして育つポテンシャルを持つことから、2025年末頃に発表が見込まれる第1相パートの中間成績結果の内容が注目される。良好な結果が得られれば、海外でのライセンス契約締結の可能性が一気に高まると弊社では見ている。その後の第2相パートの組み入れが順調に進み、主要評価項目となっているCR率で期待どおりの結果※を得ることができれば、2027年前半に承認申請を行い2028年8月期には販売収入を計上できるものと予想される。また、同時期に小野薬品工業に導出したMALT1阻害薬の開発進展に伴う2回目のマイルストン収入を得られる可能性もあり、これらが実現すれば単年度の黒字化達成も視野に入ってくることになる。

※ AML治療薬として米国での販売承認が有力視されているSyndax PharmaceuticalsのRevumenibはPivotal P2試験でCR率18%だった。このため、CR率が20%程度以上であれば承認される可能性が高いと同社では見ている（日本で実施されたP1試験ではCR率29%だった）。

(Written by FISCO guest analyst, Jo Sato)