Delta-Fly Pharma,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥-831M
• Net Income: ¥-841M
• EPS: ¥-77.04

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Delta-Fly Pharma (single-entity, JGAAP) remains a pre-commercial, R&D-stage biopharma with no reported revenue in FY2026 Q2 and a continued heavy operating loss profile. Reported operating loss was ¥831 million, ordinary loss ¥840 million, and net loss ¥841 million for the period, indicating sustained cash burn consistent with clinical development activities. Depreciation and amortization were modest at ¥0.789 million, underscoring that losses are driven overwhelmingly by operating expenses (likely R&D and SG&A), not non-cash charges. Operating cash flow was a sizable outflow of ¥1,066.826 million, which exceeded the accounting net loss, signaling cash burn outpacing accrual losses. Financing cash inflow of ¥909.242 million bridged most of the operating cash shortfall and appears necessary to support operations. The balance sheet shows total assets of ¥508 million, current assets of ¥394.676 million, total liabilities of ¥156.538 million (all current), and total equity of ¥355 million. Despite a stated current ratio of 252.1%, the scale of cash burn versus current assets implies a short runway without continued external financing. The debt-to-equity ratio of 0.44x suggests limited financial leverage and that liabilities are not the primary risk—rather, recurring losses and funding needs are. DuPont-style metrics provided (e.g., net margin, asset turnover, ROE) show zeros due to unreported items; they are not meaningful for this pre-revenue period. Instead, loss magnitude relative to the balance sheet is more informative: the half-year net loss (¥841 million) exceeds period-end equity (¥355 million), highlighting dependence on capital raising, as evidenced by financing inflows. With investing cash flows reported as zero, free cash flow is effectively in line with operating cash outflows, approximately ¥-1.07 billion for the period. No dividends were paid (DPS ¥0) and none are foreseeable while the company is pre-revenue and loss-making. Interest expense was unreported/zero and tax expense was ¥1.251 million, consistent with a company without taxable income. Reported cash and equivalents were unreported (shown as zero), limiting precision on liquidity runway, though current assets provide a proxy. Overall, the company’s near-term trajectory hinges on clinical progress and uninterrupted access to equity financing to fund operations. Data limitations due to unreported line items constrain certain ratio analyses; conclusions focus on the available non-zero disclosures.

Profitability Analysis

Traditional profitability ratios are not meaningful in a pre-revenue period. ROE via DuPont cannot be decomposed reliably because revenue and gross profit are unreported (reported as zero placeholders). A directional view can be inferred: net loss of ¥841 million against period-end equity of ¥355 million implies a very high negative ROE for the half-year, driven almost entirely by negative operating margin and zero asset turnover. Operating leverage is high: depreciation is only ¥0.789 million, so losses are mainly cash operating costs (likely R&D/SG&A). With ordinary loss of ¥840 million close to operating loss of ¥831 million and minimal financing costs, core operations dominate results. No cost of sales or gross margin data are disclosed; margin quality cannot be assessed. EBITDA is provided as ¥-830.211 million, aligning with the operating loss magnitude and confirming minimal non-cash burden. In sum, profitability is constrained by the absence of product revenue and ongoing R&D expense intensity.

Growth Assessment

Revenue sustainability cannot be assessed, as revenue is unreported this period, consistent with pre-commercial status. Profit growth is negative, with net loss of ¥841 million and operating loss of ¥831 million; year-on-year comparisons are not available for the key cost drivers within the provided data. Profit quality is consistent with R&D-stage dynamics—losses are predominantly operating in nature with minimal depreciation, suggesting that improvements would require either cost discipline or successful transition to revenue post-approval/partnering. Outlook depends on clinical and regulatory milestones and potential out-licensing or collaboration income; none are captured in the provided figures. Without disclosed backlog, pipeline timelines, or milestone expectations, top-line inflection timing remains uncertain. Near-term financial “growth” will likely stem from financing activity rather than operating performance until commercialization or milestone receipts occur.

Financial Health

Liquidity: Current assets ¥394.676 million vs. current liabilities ¥156.538 million yield a reported current ratio of 252.1%, and the same quick ratio given inventories are unreported. However, the scale of operating cash burn (¥1,066.826 million) significantly exceeds current assets, implying limited liquidity runway absent further funding. Solvency: Total liabilities ¥156.538 million and equity ¥355 million imply a debt-to-equity ratio of 0.44x; leverage is modest. The net loss (¥841 million) exceeds period-end equity, but financing inflows of ¥909.242 million appear to have supported equity capital and liquidity during the period. Capital structure: Liabilities are entirely current; long-term debt is not disclosed. Equity remains the primary funding buffer, but is thin relative to burn. Overall, balance sheet risk is centered on ongoing losses and refinancing needs rather than high indebtedness.

Cash Flow Quality

Earnings quality: Operating cash outflow (¥1,066.826 million) is larger in magnitude than the net loss (¥841 million), implying cash costs and working capital outflows exceeded accrual expenses (OCF/NI ≈ 1.27 on an absolute basis). Working capital: Details are not disclosed, but the larger OCF burn suggests either increased payables settlement, R&D payments timing, or other working capital uses. Free cash flow: With investing CF reported as zero, FCF approximates operating CF at about ¥-1.07 billion for the period. Non-cash charges are minimal (D&A ¥0.789 million), so reported losses are largely cash-consumptive. The company remains reliant on external financing (financing CF ¥909.242 million) to bridge FCF deficits. Cash and equivalents are unreported; thus, monthly burn and runway cannot be precisely computed, but current assets indicate that existing liquidity is insufficient to cover ongoing burn without additional funding.

Dividend Sustainability

No dividend was declared (DPS ¥0.00), and the payout ratio is effectively not meaningful given losses and lack of revenue. Free cash flow is deeply negative (~¥-1.07 billion), providing no coverage capacity for dividends. In a pre-revenue, loss-making context, capital allocation logically prioritizes R&D funding and liquidity preservation over distributions. Unless the company transitions to positive operating cash flow or realizes significant milestone/licensing inflows, dividends are not foreseeable. There is no disclosed formal dividend policy change, but the financial profile implies continued suspension of dividends.

Risk Assessment

Business Risks:

• Clinical development risk: trial setbacks, delays, or failures could prolong pre-revenue status.
• Regulatory approval risk across key markets.
• Concentration risk in a limited pipeline and therapeutic areas.
• Commercialization risk: market access, pricing, and competition upon launch.
• Partnering and milestone dependency for non-dilutive funding.
• Manufacturing and CMC readiness risk ahead of commercialization.

Financial Risks:

• High cash burn: OCF of ¥-1,066.826 million in the period versus current assets of ¥394.676 million.
• Refinancing/dilution risk: reliance on equity financing (¥909.242 million inflow) to fund operations.
• Potential going-concern pressure if funding windows narrow.
• Thin equity base (¥355 million) relative to loss magnitude (¥841 million).
• All liabilities are current, increasing short-term payment obligations.
• Limited visibility on cash balance due to unreported cash and equivalents.

Key Concerns:

• Sustainability of funding given continued negative FCF and pre-revenue status.
• Timing and probability of clinical/regulatory milestones to catalyze non-dilutive cash.
• Runway length is unclear without cash disclosure; burn rate suggests urgency.
• Potential shareholder dilution to maintain operations.
• Execution risk in advancing programs to value-inflection points.

Investment Implications

Key Takeaways:

• Pre-revenue period with substantial operating loss (OI ¥-831 million; NI ¥-841 million).
• Operating cash burn (¥-1,066.826 million) exceeds accounting loss, indicating high cash intensity.
• Liquidity appears adequate on paper (current ratio ~252%) but insufficient relative to burn without continued financing.
• Leverage is modest (D/E ~0.44x), but equity cushion is thin (equity ¥355 million).
• FCF ~¥-1.07 billion with no investing outflows reported; operations funded by ¥909 million financing inflow.
• Near-term outlook depends on clinical milestones and access to capital markets.

Metrics to Watch:

• Reported cash and equivalents and monthly burn rate.
• Subsequent financing transactions and terms (dilution, warrants).
• R&D expense trajectory and any cost control measures.
• Clinical/Regulatory milestones and partnering updates (upfronts/milestones).
• Changes in current liabilities (payables) and working capital usage.
• Equity balance and any indications of going-concern disclosures.

Relative Positioning: Delta-Fly Pharma is positioned as an early-stage, pre-commercial Japanese biopharma with limited leverage and high dependency on external equity financing, broadly in line with peer-stage biotech profiles on the TSE; near-term value drivers are clinical progress and funding continuity rather than operating performance.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis