Kadmon Holdings, Inc. (NYSE:KDMN) today provided a business
update and reported financial and operational results for the
second quarter of 2018.
“Kadmon continues to build momentum in 2018 toward additional
key milestones, including the planned initiation of our pivotal
trial in cGVHD in September 2018,” said Harlan W. Waksal, M.D.,
President and CEO at Kadmon. “Our recent financing, led by top-tier
institutional investors, supports our continued clinical
development of KD025 as well as the advancement of our ROCK
inhibitor platform to treat fibrotic and inflammatory
diseases.”
Clinical Updates
KD025 – Anticipated 2018 Milestones
- Initiate open-label, pivotal Phase 2
clinical trial in chronic graft-versus-host disease (cGVHD)
- Submit updated results from ongoing
open-label, dose-finding Phase 2 clinical trial in cGVHD for
presentation at upcoming medical conferences
- Initiate Phase 2 clinical trial in
scleroderma (systemic sclerosis)
Additional Clinical Updates
Enrollment continues in the Company’s Phase 2 clinical trials of
KD025 in idiopathic pulmonary fibrosis and of tesevatinib in
autosomal dominant polycystic kidney disease, and the Phase 1
clinical trial of tesevatinib in autosomal recessive polycystic
kidney disease. Kadmon is also continuing dialogue with the FDA
regarding its review and potential approval of KD034, the Company’s
generic trientine hydrochloride formulation for the treatment of
Wilson’s disease.
Financial Results
Second Quarter 2018 Results
Loss from operations for the three and six months ended
June 30, 2018 was $18.8 million and $36.8 million,
respectively, compared to $17.6 million and $31.6 million for the
respective periods in 2017.
Revenue was $0.4 million and $0.8 million for the three and six
months ended June 30, 2018, compared to $3.0 million and $8.5
million for the respective periods in 2017. The Company does not
rely on the revenue generated from its commercial operations;
however, the Company leverages its commercial infrastructure to
support the development of its clinical-stage product candidates by
providing quality assurance, compliance, regulatory and
pharmacovigilance capabilities, among others.
Research and development (R&D) expenses were $10.2 million
and $20.0 million for the three and six months ended
June 30, 2018, compared to $10.1 million and $18.5 million for
the respective periods in 2017.
Selling, general and administrative (SG&A) expenses were
$8.8 million and $17.1 million for the three and six months ended
June 30, 2018, compared to $9.9 million and $20.0 million
for the respective periods in 2017. The decrease in SG&A
expenses is primarily related to a decrease in share-based
compensation of $1.4 million and $2.8 million, respectively.
The Company recorded an unrealized gain of $40.5 million for the
three and six months ended June 30, 2018 related to the fair
value of the Company’s common stock ownership of MeiraGTx Holdings
plc (“MeiraGTx”). On June 12, 2018, MeiraGTx completed its initial
public offering (“IPO”) and upon completion of the IPO, the Company
maintained a 13.0% ownership in MeiraGTx common stock. As the
Company’s investment in MeiraGTx now has a readily determinable
market value, the investment is recorded at fair value.
Liquidity and Capital Resources
As of June 30, 2018, Kadmon’s cash and cash equivalents
totaled $131.5 million, compared to $67.5
million as of December 31, 2017.
About Kadmon Holdings, Inc.
Kadmon Holdings, Inc. is a fully integrated biopharmaceutical
company developing innovative product candidates for significant
unmet medical needs. Our product pipeline is focused on
inflammatory and fibrotic diseases.
Forward Looking Statements
This press release contains forward-looking statements. Such
statements may be preceded by the words “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “could,” “intends,” “targets,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of these terms or other
similar expressions. Forward-looking statements involve known and
unknown risks, uncertainties and other important factors that may
cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. We believe that these factors include, but are not
limited to, (i) the initiation, timing, progress and results of our
preclinical studies and clinical trials, and our research and
development programs; (ii) our ability to advance product
candidates into, and successfully complete, clinical trials; (iii)
our reliance on the success of our product candidates; (iv) the
timing or likelihood of regulatory filings and approvals; (v) our
ability to expand our sales and marketing capabilities; (vi) the
commercialization of our product candidates, if approved; (vii) the
pricing and reimbursement of our product candidates, if approved;
(viii) the implementation of our business model, strategic plans
for our business, product candidates and technology; (ix) the scope
of protection we are able to establish and maintain for
intellectual property rights covering our product candidates and
technology; (x) our ability to operate our business without
infringing the intellectual property rights and proprietary
technology of third parties; (xi) costs associated with defending
intellectual property infringement, product liability and other
claims; (xii) regulatory developments in the United States, Europe
and other jurisdictions; (xiii) estimates of our expenses, future
revenues, capital requirements and our needs for additional
financing; (xiv) the potential benefits of strategic collaboration
agreements and our ability to enter into strategic arrangements;
(xv) our ability to maintain and establish collaborations or obtain
additional grant funding; (xvi) the rate and degree of market
acceptance of our product candidates; (xvii) developments relating
to our competitors and our industry, including competing therapies;
(xviii) our ability to effectively manage our anticipated growth;
(xix) our ability to attract and retain qualified employees and key
personnel; (xx) our ability to achieve cost savings and other
benefits from our efforts to streamline our operations and to not
harm our business with such efforts; (xxi) the use of proceeds from
our recent public offerings; (xxii) the potential benefits of any
of our product candidates being granted orphan drug designation;
(xxiii) the future trading price of the shares of our common stock
and impact of securities analysts’ reports on these prices; and/or
(xxiv) other risks and uncertainties. More detailed information
about Kadmon and the risk factors that may affect the realization
of forward-looking statements is set forth in the Company’s filings
with the U.S. Securities and Exchange Commission (the “SEC”),
including the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2017 and the Company’s Quarterly Report on
Form 10-Q filed pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended, with the SEC on the date hereof. Investors
and security holders are urged to read these documents free of
charge on the SEC’s website at www.sec.gov. The Company assumes no
obligation to publicly update or revise its forward-looking
statements as a result of new information, future events or
otherwise.
Kadmon Holdings, Inc. Condensed Consolidated Statements
of Operations - Unaudited (in thousands, except per share
data) Three Months Ended Six Months
Ended June 30, June 30, 2018
2017 2018 2017 Revenues Net sales $ 161
$ 1,698 $ 435 $ 4,034 License and other revenue 198
1,259 357 4,489 Total revenue
359 2,957 792 8,523 Cost of sales 103 266 302 833 Write-down of
inventory 98 373 245
743 Gross profit 158 2,318
245 6,947 Operating expenses:
Research and development 10,178 10,056 19,958 18,503 Selling,
general and administrative 8,812 9,902
17,062 20,020 Total operating expenses
18,990 19,958 37,020
38,523 Loss from operations (18,832 )
(17,640 ) (36,775 ) (31,576 ) Total other expense
(income) (39,775 ) 4,674 (37,277 ) 7,989 Income tax expense
(benefit) (562 ) — (562 ) 316
Net income (loss) $ 21,505 $ (22,314 ) $ 1,064
$ (39,881 ) Deemed dividend on convertible preferred stock
491 469 981 938
Net income (loss) attributable to common stockholders $ 21,014
$ (22,783 ) $ 83 $ (40,819 ) Basic net
income (loss) per share of common stock $ 0.25 $ (0.44 ) $
0.00 $ (0.83 ) Diluted net income (loss) per share of common
stock $ 0.24 $ (0.44 ) $ 0.00 $ (0.83 )
Weighted average basic shares of common stock outstanding
85,004,107 51,846,521 81,844,677
49,191,727 Weighted average diluted shares of common
stock outstanding 90,164,248 51,846,521
82,216,399 49,191,727
Kadmon
Holdings, Inc. Condensed Consolidated Balance Sheets
(in thousands) June 30, December
31,
2018
2017
(unaudited) Cash and cash equivalents $
131,470 $ 67,517 Other current assets 2,812 2,496 Investment,
equity securities 40,508 — Other noncurrent assets
12,233 13,539 Total assets $
187,023 $ 83,552 Current liabilities
43,386 56,644 Other long term liabilities
4,789 25,150 Total liabilities
48,175 81,794 Total stockholders’
equity 138,848 1,758
Total liabilities and stockholders’ equity $ 187,023
$ 83,552
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Kadmon Holdings, Inc.Ellen Tremaine, 646-490-2989Investor
Relationsellen.tremaine@kadmon.com
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