Kindred Biosciences Announces Fourth Quarter and Full Year 2017 Financial Results
SAN FRANCISCO, March 1, 2018 /PRNewswire/ -- Kindred Biosciences, Inc. (NASDAQ: KIN), a biopharmaceutical company focused on saving and improving the lives of pets, today announced financial results for the fourth quarter and full year ended December 31, 2017 and provided updates on its programs.
"We continue to look forward to the upcoming approval of our lead product candidates, Mirataz and Zimeta, as we build an exceptional commercial organization," stated Richard Chin, M.D., President and CEO of KindredBio. "2017 was marked by our third consecutive positive pivotal study, highlighting the strength of our team and our business model. We are also pleased with the continued progress of our biologics portfolio and of our biologics manufacturing capabilities."
Development and Corporate Updates
-- Based on regulatory feedback to date, KindredBio continues to expect
approval of Mirataz(TM) (mirtazapine transdermal ointment). The Company
has received the technical section complete letter for effectiveness
from the FDA and the agency does not have any additional safety-related
questions, indicating that the section is effectively complete.
KindredBio has responded to the one remaining question from the FDA
regarding Chemistry, Manufacturing and Controls (CMC) and continues to
expect approval in the first or possibly second quarter of 2018.
Regulatory approval is subject to the typical risks inherent in such a
process. Preparations for the commercial launch remain on track.In
December 2017, the Company submitted the European Marketing
Authorization application for Mirataz to the European Medicines Agency
(EMA). The EMA officially accepted the submission for review on December
21, 2017.Mirataz is expected to be the first FDA-approved product for
the management of weight loss in cats, a serious and potentially fatal
condition that is the leading cause of visits to the veterinarian for
cats.
-- KindredBio continues to expect approval of Zimeta(TM) (dipyrone
injection) for the control of pyrexia (fever) in horses in the first or
second quarter of 2018. KindredBio has received the technical section
complete letters for effectiveness and safety from the FDA and responded
to additional comments regarding the CMC technical section. Regulatory
approval is subject to the typical risks inherent in such a process.
Preparations for the commercial launch remain on track.The Company has
executed a commercial manufacturing agreement with Corden Pharma SPA for
the manufacture of Zimeta, that provides for production to supply
initial launch and future commercial campaigns with capabilities to meet
excess demand.Zimeta is expected to be the first FDA-approved product
for the control of fever in horses, a significant unmet medical
condition that affects millions of horses each year.
-- The pivotal field effectiveness study for Zimeta Oral is completed and
KindredBio announced positive topline results in December
2017.KindredBio has completed the in-life portion of the Target Animal
Safety Study and is analyzing the data. The Company anticipates
submitting the effectiveness and safety technical sections of the NADA
in the first half of 2018, and the CMC technical section by the end of
2018, assuming the data are supportive of approval.Zimeta Oral, which is
an oral gel, is expected to expand use of the drug and build upon the
success of Zimeta IV.
-- The pilot field effectiveness study of KIND-011, an anti-TNF monoclonal
antibody targeting sick or septic foals, has been completed, with
positive results. The Company plans to discuss the development plan with
the FDA and pursue additional development of the indication.Sepsis in
foals can cause up to 50% mortality and is an important unmet medical
need. There is currently no FDA-approved therapy.
-- The pilot field effectiveness study of the enhanced version of
epoCat(TM) (long-acting feline recombinant erythropoietin) for the
control of non-regenerative anemia in cats has been initiated and
enrollment is ongoing. epoCat is a recombinant protein that has been
specially engineered by KindredBio with a prolonged half-life compared
to endogenous feline erythropoietin. The PK data suggest that the
molecule may have a sufficiently long half-life to allow for
once-monthly dosing.Anemia is a common condition in older cats which is
often associated with chronic kidney disease, resulting in decreased
levels of endogenous erythropoietin. Chronic kidney disease can affect
approximately half of older cats.
-- Based on the positive results of previous pilot studies, KindredBio has
initiated or is in the process of initiating pilot field effectiveness
studies for several molecules for atopic dermatitis, including fully
caninized anti-IL31 antibody, fully-caninized anti-IL17 antibody and
canine anti-IL4/IL13 SINK molecule. KindredBio is pursuing a
multi-pronged approach toward atopic dermatitis, with a portfolio of
promising biologics.Atopic dermatitis is an immune-mediated inflammatory
skin condition in dogs. It is one of the most common skin diseases in
dogs and represents a significant unmet medical need, with the two lead
products in the market expected to reach combined sales of over $500
million per year.
-- The pilot field safety study of KIND-014 for the treatment of equine
gastric ulcers has been completed and KIND-014 was well-tolerated.
KindredBio has completed dose-range finding and palatability studies
and, based on the study results, the Company has advanced two
formulations into pilot field studies. The pilot studies have been
initiated and the Company expects to complete the review of data by the
end of the second quarter to determine which formulation will move into
a pivotal field study, assuming the data support further development.
-- A pilot field study assessing oral tolerability and palatability of
KIND-015 for the management of clinical signs associated with equine
metabolic syndrome has been completed. The Company has optimized the
formulation for KIND-015 and has initiated a pilot field effectiveness
study.
-- KindredBio's GMP manufacturing capabilities in Burlingame, California is
fully commissioned and has commenced GMP manufacturing of epoCat. The
Company has also completed the design and construction plans for
biologics manufacturing lines in the Elwood, Kansas facility it acquired
in August 2017. The facility includes approximately 180,000 square feet
with clean rooms, utility, equipment, and related quality documentation
suitable for small molecule and biologics manufacturing. Construction is
expected to start shortly.
Fourth Quarter and Full Year 2017 Financial Results
For the quarter ended December 31, 2017, KindredBio reported a net loss of $9.7 million, or $0.35 per share, compared to a net loss of $5.8 million, or $0.29 per share, for the same period in 2016. Research and development expenses for the fourth quarter of 2017 totaled $5.1 million, compared to $3.5 million for the same period in 2016. General and administrative expenses for the fourth quarter of 2017 were $4.8 million, compared to $2.4 million for the same period in 2016.
For the year ended December 31, 2017, KindredBio reported a net loss of $30.9 million, or $1.23 per share, versus a net loss of $22.5 million, or $1.13 per share, for the same period in 2016.
Research and development expenses for the year ended December 31, 2017 were $17.7 million, compared to $13.9 million in 2016. Stock-based compensation expense related to research and development was $1.7 million, versus $1.5 million in 2016. The $3.8 million year-over-year increase in research and development expenses was primarily due to higher headcount and related expenses as the Company advances its biologics programs. In addition, increased clinical trial costs related to the pivotal field effectiveness study of Zimeta Oral, and higher biologics manufacturing as well as lab supplies expenses (including other operations expenses) drove research and development expenses higher.
General and administrative expenses for the year ended December 31, 2017 were $14.0 million, compared to $8.3 million in 2016. General and administrative stock-based compensation expense was $3.6 million in 2017, versus $2.2 million in 2016. The $5.7 million increase in general and administrative expenses was related to increased headcount, including higher marketing and corporate expenses as KindredBio initiated pre-launch activities and the build-out of a small commercial team. In addition, higher stock-based compensation and corporate infrastructure costs also contributed to the increase in expenses.
As of December 31, 2017, KindredBio had $82.5 million in cash, cash equivalents and investments. Net cash used in operating activities for 2017 was approximately $21.9 million. The Company also invested approximately $5.9 million in capital expenditures for the purchase of its Elwood, Kansas facility and the build-out of its GMP biologics manufacturing facility in Burlingame, CA.
With respect to spending in 2018, the Company is preparing for the commercial launches of Mirataz and Zimeta including the scale up of a commercial team, and will continue to spend on its core pipeline and programs. For 2018 the Company expects operating expenses of between $44 million and $48 million, excluding the impact of stock-based compensation expense and the impact of acquisitions, if any. The revenues for Mirataz and Zimeta will have a substantial impact on cash utilization and expenses.
Webcast and Conference Call
KindredBio will host a conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. Interested parties may access the call by dialing toll-free (855) 433-0927 from the US, or (484) 756-4262 internationally, and using conference ID 8962269. The call will be webcast live at https://edge.media-server.com/m6/p/w3hyojgg. A replay will also be available at that link for 30 days.
About Kindred Biosciences
Kindred Biosciences is a pre-commercialization stage biopharmaceutical company focused on saving and improving the lives of pets. Its mission is to bring to pets the same kinds of safe and effective medicines that human family members enjoy. The Company's strategy is to identify compounds and targets that have already demonstrated safety and effectiveness in humans and to develop therapeutics based on these validated compounds and targets for dogs, cats and horses. The Company has a deep pipeline of novel drugs and biologics in development across many therapeutic classes.
For more information or to download the corporate presentation, visit www.KindredBio.com/LearnMore. Stay connected with KindredBio on Facebook at www.Facebook.com/KindredBio.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding our expectations about the trials, regulatory approval, manufacturing, distribution and commercialization of our current and future product candidates, and statements regarding our anticipated revenues, expenses, margins, profits and use of cash.
These forward-looking statements are based on our current expectations. These statements are not promises or guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results to be materially different from any future results expressed or implied by the forward-looking statements. These risks include, but are not limited to, the following: our limited operating history and expectations of losses for the foreseeable future; the absence of significant revenue from our product candidates for the foreseeable future; our potential inability to obtain any necessary additional financing; our substantial dependence on the success of our lead product candidates, which may not be successfully commercialized even if they are approved for marketing; the effect of competition; our potential inability to obtain regulatory approval for our existing or future product candidates; our dependence on third parties to conduct some of our development activities; our dependence upon third-party manufacturers for supplies of our product candidates; uncertainties regarding the outcomes of trials regarding our product candidates; our potential failure to attract and retain senior management and key scientific personnel; uncertainty about our ability to develop a satisfactory sales organization; our significant costs of operating as a public company; our potential inability to obtain patent protection and other intellectual property protection for our product candidates; potential claims by third parties alleging our infringement of their patents and other intellectual property rights; our potential failure to comply with regulatory requirements, which are subject to change on an ongoing basis; the potential volatility of our stock price; and the significant control over our business by our principal stockholders and management.
For a further description of these risks and other risks that we face, please see the risk factors described in our filings with the U.S. Securities and Exchange Commission (the SEC), including the risk factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K and any subsequent updates that may be contained in our Quarterly Reports on Form 10-Q filed with the SEC. As a result of the risks described above and in our filings with the SEC, actual results may differ materially from those indicated by the forward-looking statements made in this press release. Forward-looking statements contained in this press release speak only as of the date of this press release and we undertake no obligation to update or revise these statements, except as may be required by law.
Contact
Russell Radefeld
KindredBio
russell.radefeld@kindredbio.com
(650) 701-7904
Kindred Biosciences, Inc.
Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited)
Operating costs and expenses:
Research and development 5,142 3,509 17,665 13,861
General and administrative 4,820 2,401 13,988 8,308
Restructuring costs - - - 655
-------------------
Total operating costs and expenses 9,962 5,910 31,653 22,824
Loss from operations (9,962) (5,910) (31,653) (22,824)
Interest and other income, net 232 101 774 325
Net loss $(9,730) $(5,809) $(30,879) $(22,499)
======= ======= ======== ========
Basic and diluted net loss per common share $(0.35) $(0.29) $(1.23) $(1.13)
====== ====== ====== ======
Shares used to calculate basic and diluted net loss
per common share
27,915 19,900 25,084 19,873
====== ====== ====== ======
Selected Balance Sheet Data
(In thousands)
(Unaudited)
December 31,
------------
2017 2016
---- ----
Cash, cash equivalents and
investments $82,519 $57,807
Total assets 90,822 61,576
Stockholders' equity 84,680 57,680
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SOURCE Kindred Biosciences, Inc.
