SAN FRANCISCO, Aug. 5, 2020 /PRNewswire/ -- Kindred
Biosciences, Inc. (NASDAQ: KIN), a biopharmaceutical company
focused on saving and improving the lives of pets, today
announced financial results for the second quarter ended
June 30, 2020 and provided updates on
its programs. For the second quarter of 2020, KindredBio reported
net revenues of $39.6 million and net
income of $24.0 million, or
$0.60 per share (diluted), which
includes a non-recurring charge of $2.3
million.
"We are pleased with the progress on our pipeline of late-stage
biologics," said KindredBio's Chief Executive Officer, Richard Chin, M.D. "The commencement of the
first parvovirus pivotal study is a key milestone for this program,
and we look forward to the upcoming initiation of the tirnovetmab
(IL-31 antibody) pivotal study."
Development and Corporate Updates
Biologics Candidates
- The first of the pivotal studies for KIND-030, a monoclonal
antibody targeting canine parvovirus, has commenced and remaining
studies will be initiated in the coming months. Pivotal efficacy
and safety studies remain on track to be completed by year-end
2020, with approval expected by early 2021. Regulatory approval and
review timeline are subject to the typical risks inherent in such a
process.
- The scale up process for tirnovetmab (KIND-016), a fully
caninized, high-affinity monoclonal antibody targeting interleukin
(IL)-31 for the treatment of atopic dermatitis in dogs, is
proceeding as planned and the pivotal study is on track to start in
the fourth quarter of 2020.
- On December 16, 2019, KindredBio
unveiled positive results from its randomized, placebo-controlled
laboratory pilot study of KIND-032, a fully caninized monoclonal
antibody targeting IL-4R for the treatment of atopic dermatitis in
dogs. A second pilot study to further assess efficacy and dosing is
planned for the third quarter of 2020.
- The pivotal efficacy study for KindredBio's feline recombinant
erythropoietin was initiated in the fourth quarter. Those
veterinary clinics that had suspended clinical trials due to
COVID-19 have since resumed operations. KindredBio continues to
implement practices consistent with guidance provided by the U.S.
Food and Drug Administration (FDA) on studies conducted during the
COVID-19 pandemic to minimize the impact on timelines.
- The pilot field effectiveness study for KindredBio's anti-TNF
antibody for canine inflammatory bowel disease is underway. Those
veterinary clinics that had suspended clinical trials due to
COVID-19 have since resumed operations. KindredBio continues to
implement practices consistent with guidance provided by the FDA on
studies conducted during the COVID-19 pandemic to minimize the
impact on timelines. Assuming enrollment continues as expected,
completion is now anticipated by year-end 2020.
Mirataz
- The sale of Mirataz to Dechra Pharmaceuticals PLC for an
upfront payment of $43 million and
royalties on worldwide sales was completed on April 15, 2020, resulting in a partial quarter.
Transfer of the asset went smoothly and Dechra recognized
significant growth in second quarter Mirataz sales in the US
market. Dechra plans to launch Mirataz in the UK and the European
Union, and intends to conduct the necessary regulatory activities
to achieve approvals in other key international markets. Royalties
on future global sales of Mirataz by Dechra will be recorded by
KindredBio as revenue.
KindredBio Equine
The strategic evaluation of the future direction of the equine
franchise remains ongoing.
- KindredBio recorded Zimeta net product revenues of $7,000 in the second quarter, reflecting a
downturn in equine events and transportation as a result of
COVID-19. The FDA approved Zimeta for the control of pyrexia in
horses in November 2019. The product
also received Canadian approval in June
2020.
Second Quarter 2020 Financial
Results
For the quarter ended June 30, 2020, KindredBio reported
net income of $24.0 million or $0.60 per share (diluted), as compared to a net
loss of $14.3 million or $0.37 per share for
the same period in 2019. For the six months ended June 30, 2020, net income was $1.3 million or $0.03 per share (diluted), as compared to a net
loss of $30.4 million or $0.79 per share for the same period in 2019.
The company recorded $39.6 million
and $40.2 million in net revenues in
the three and six months ended June 30,
2020, compared with $1.2
million and $1.8 million for
the same periods of 2019. The increase in revenue was primarily due
to $38.7 million from the sale of
Mirataz to Dechra Pharmaceuticals, which was completed on
April 15, 2020. Royalty revenue
totaled $158,000 in the second
quarter.
Substantially all of the product revenues recorded in the first
half of 2020 were for Mirataz with $138,000 and $734,000 earned in the three and six months ended
June 30, 2020, respectively. Product
revenues for Zimeta were $7,000 and
$14,000 for the same periods,
reflecting a downturn in equine events and transportation as a
result of COVID-19. In conjunction with Mirataz and Zimeta, the
company also recorded $18,000 in
revenue derived from the co-marketing of products for partners,
namely Butterfly Networks and Astaria Global.
On May 20, 2020, KindredBio
entered into an agreement with Vaxart, Inc. for the manufacture of
Vaxart's oral vaccine candidate for COVID-19 and recorded contract
manufacturing revenue of $546,000
based on the percentage completion of specific milestones for the
quarter.
The cost of product sales totaled $27,000 in the second quarter and $3.6 million for the first six months of 2020,
compared to $169,000 and $261,000 for the same periods in 2019. Cost of
product sales in 2020 included a $3.5
million inventory write-off on Mirataz due to the transition
to Dechra brand labelling. Contract manufacturing costs of
$336,000 consisted primarily of the
cost of direct materials, direct labor, and overhead costs.
Research and development expenses for the three and six months
ended June 30, 2020 were $7.4 million and
$16.3 million, respectively, compared
to $6.7 million and $13.9
million for the same periods in 2019. Stock-based compensation
expense included in research and development expense was
$0.5 million and $1.1 million for the three and six months ended
June 30, 2020, as compared to
$0.5 million and $0.9 million for the same periods in
2019. The $2.4 million
year-over-year increase in research and development expenses was
primarily due to the inclusion of expenses from the Kansas facility as it began to manufacture
clinical trial material. Prior to 2020, construction and
commissioning expenditures associated with the Kansas facility had been categorized as
general and administrative expenses.
Selling, general and administrative expenses were $5.1 million and $14.0
million for the three and six months ended June 30, 2020, compared to $9.1 million and $19.0
million for the same periods in 2019. The $5.0
million year-over-year decrease is the result of the
re-categorization of Kansas plant
expenditures as research and development expenses, and lower
payroll and related expenses as a result of the elimination of
KindredBio's companion animal sales force. Stock based
compensation expense was $1.4 million and $2.9 million for the three and six months in
the first half of 2020, versus $1.4 million and $2.8 million in the year-ago period.
The company recorded restructuring charges of $2.3 million and $4.0
million for the three and six months ended June 30, 2020. Restructuring charges were the
result of a strategic realignment to a biologics-only company, the
prioritization of KindredBio's late stage programs and an
associated workforce reduction.
On April 15, 2020, KindredBio
completed the sale of Mirataz to Dechra Pharmaceuticals for an
upfront payment of $43 million, of
which 10% shall be held in escrow for up to 18 months post
closing.
As of June 30, 2020, KindredBio
had $77.6 million in cash, cash
equivalents and investments, compared with $73.5 million as of December 31, 2019. Net cash provided by operating
activities for the first six months of 2020 was approximately
$7.1 million, reflecting payment
received for the Mirataz asset sale. The Company also invested
approximately $2.9 million in capital
expenditures for the purchase of associated lab and manufacturing
equipment for the Kansas
facility.
With respect to spending in 2020, the Company remains focused on
advancing its core biologics pipeline and programs, including the
commencement of multiple pivotal studies. KindredBio anticipates
operating expenses of between $53
million and $55 million,
excluding the impact of stock-based compensation expense and the
impact of acquisitions, if any. The 2020 operating expense includes
the beforementioned restructuring charges, first quarter
expenditures that reflect a full organizational structure and
second quarter expenditures that reflect various mid-stage
development programs that have since been put on hold. Excluding
first half expenditures, the annualized run rate for 2020 is
expected to be between $41 million and $43 million. KindredBio also plans to invest
$3.0 million to $4.0 million in capital expenditures on lab and
manufacturing equipment for its biologics programs in 2020.
KindredBio believes its existing cash, cash equivalents and
investments, the net reduction in the company's workforce, proceeds
from the Mirataz sale, and royalties and other revenues from
anticipated partnerships will be sufficient to fund the current
operating plan through mid-2022, excluding the drawdown of $30
million from its debt facility.
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 (888) 771-4371 from the U.S. or (847) 585-4405
internationally, and using conference ID 49852246. The call will be
webcast live here, with a replay available at that
link for 30 days.
Important Safety Information
ZimetaTM (dipyrone injection) should
not be used more frequently than every 12 hours. For use in horses
only. Do not use in horses with a hypersensitivity to
dipyrone, horses intended for human consumption or any food
producing animals, including lactating dairy animals. Not for use
in humans, avoid contact with skin and keep out of reach of
children. Take care to avoid accidental self-injection and use
routine precautions when handling and using loaded syringes.
Prior to use, horses should undergo a thorough history and physical
examination by a veterinarian. Monitor for signs of abnormal
bleeding and use caution in horses at risk for
hemorrhage. Concurrent use with other NSAIDs, corticosteroids
and drugs associated with kidney toxicity, should be
avoided. As a class, NSAIDs may be associated with
gastrointestinal, kidney, and liver toxicity. The most common
adverse reactions observed during clinical trials were elevated
glucose conversion enzymes, decreased blood protein, and gastric
ulcers. Please see the full Prescribing Information.
About Kindred Biosciences
Kindred Biosciences is a biopharmaceutical company developing
innovative biologics 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 targets that have already demonstrated
safety and efficacy in humans and to develop therapeutics based on
these validated targets for dogs and cats. KindredBio has a deep
pipeline of novel biologics in development across many therapeutic
classes, alongside state-of-the-art biologics manufacturing
capabilities and a broad intellectual property portfolio.
For more information, visit: www.kindredbio.com
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 products and our product candidates
for the foreseeable future; the likelihood that our revenue will
vary from quarter to quarter; our potential inability to obtain any
necessary additional financing; our substantial dependence on the
success of our products and 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 products and our product
candidates and the potential inability of these manufacturers to
deliver a sufficient amount of supplies on a timely basis;
the uncertain effect of the COVID-19 pandemic on our business,
results of operations and financial condition; 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 enter
into satisfactory agreements with third-party licensees of our
biologic products or to develop a satisfactory sales organization
for our equine small molecule products; our significant costs of
operating as a public company; potential cyber-attacks on our
information technology systems or on our third-party providers'
information technology systems, which could disrupt our operations;
our potential inability to repay the secured indebtedness that we
have incurred from third-party lenders, and the restrictions on our
business activities that are contained in our loan agreement with
these lenders; the risk that our 2020 strategic realignment and
restructuring plans will result in unanticipated costs or revenue
shortfalls; uncertainty about the amount of royalties that we will
receive from the sale of Mirataz® to Dechra Pharmaceuticals PLC;
our potential inability to obtain and maintain patent protection
and other intellectual property protection for our products and 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.
The results stated in this press release have not been reviewed
by the Food and Drug Administration or the United States Department
of Agriculture Center for Veterinary Biologics, as applicable.
Contacts
For investor inquiries:
Katja Buhrer
Katja.buhrer@kindredbio.com
(917) 969-3438
Kindred
Biosciences, Inc.
Condensed
Consolidated Statements of Operations
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
Net product
revenues
|
$
|
163
|
|
$
|
1,236
|
|
$
|
766
|
|
$
|
1,751
|
|
Revenue from asset
sale
|
38,700
|
|
-
|
|
38,700
|
|
-
|
|
Royalty
revenue
|
158
|
|
-
|
|
158
|
|
-
|
|
Contract
manufacturing
|
546
|
|
-
|
|
546
|
|
-
|
|
|
Total
revenues
|
39,567
|
|
1,236
|
|
40,170
|
|
1,751
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of product
revenues
|
27
|
|
169
|
|
3,604
|
|
261
|
|
Contract
manufacturing costs
|
336
|
|
-
|
|
336
|
|
-
|
|
Research and
development
|
7,398
|
|
6,734
|
|
16,265
|
|
13,886
|
|
Selling, general and
administrative
|
5,105
|
|
9,065
|
|
13,978
|
|
18,966
|
|
Restructuring
costs
|
2,288
|
|
-
|
|
3,964
|
|
-
|
|
|
Total operating costs
and expenses
|
15,154
|
|
15,968
|
|
38,147
|
|
33,113
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
24,413
|
|
(14,732)
|
|
2,023
|
|
(31,362)
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense), net
|
(367)
|
|
425
|
|
(738)
|
|
1,000
|
Net income
(loss)
|
$
|
24,046
|
|
$
|
(14,307)
|
|
$
|
1,285
|
|
$
|
(30,362)
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
$
|
0.61
|
|
$
|
(0.37)
|
|
$
|
0.03
|
|
$
|
(0.79)
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
$
|
0.60
|
|
$
|
(0.37)
|
|
$
|
0.03
|
|
$
|
(0.79)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate basic
|
|
|
|
|
|
|
|
|
net income (loss) per
share
|
39,240
|
|
38,887
|
|
39,213
|
|
38,340
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to calculate diluted
|
|
|
|
|
|
|
|
|
net income (loss) per
share
|
40,086
|
|
38,887
|
|
40,267
|
|
38,340
|
Selected
Consolidated Balance Sheet Data
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Cash, cash
equivalents and investments
|
$
77,573
|
|
$
73,546
|
|
|
|
|
|
|
Total
assets
|
115,942
|
|
114,024
|
|
|
|
|
|
|
Stockholders'
equity
|
86,816
|
|
81,921
|
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SOURCE Kindred Biosciences, Inc.