Kadmon Holdings, Inc. (NYSE:KDMN) today provided a business update, including a review of near-term clinical milestones, and reported financial and operational results for the three and nine months ended September 30, 2016.
“Since the completion of our IPO, we have advanced our clinical pipeline in tandem with streamlining our operations to drive overall efficiency and ultimately increase shareholder value,” said Harlan W. Waksal, M.D., President and Chief Executive Officer of Kadmon.
“With the initiation of three new clinical trials in the third quarter of 2016, we continue to make progress towards developing innovative therapies for unmet medical needs, including in oncology, autoimmunity, fibrosis and genetic diseases,” continued Dr. Waksal. “In the next six weeks, we expect to present data from our ongoing trial of tesevatinib in metastatic lung cancer at the IASLC 17th World Conference on Lung Cancer as well as file for regulatory approvals of KD034, our Wilson’s disease portfolio of product candidates.”
Clinical and Research Update
Kadmon continues to advance its clinical and research pipelines across all therapeutic areas as it approaches key near-term data readouts and regulatory milestones:
Tesevatinib
| · | Kadmon continues to enroll patients in its ongoing Phase 2 trial of tesevatinib in EGFR-mutant non-small cell lung cancer (NSCLC) that has metastasized to the brain or leptomeninges. The Company continues to enroll patients across all three study cohorts, including in treatment-naïve patients with measurable brain metastases. Due to the high frequency of EGFR mutations in Asian populations, Kadmon is opening additional study sites in South Korea and Taiwan. |
| · | Kadmon expects to present data on the first 13 patients in its ongoing NSCLC trial at the IASLC 17th World Conference on Lung Cancer in December 2016 and to announce additional top-line data from the trial in the first quarter of 2017. |
| · | Kadmon continues to develop tesevatinib for polycystic kidney disease (PKD). Enrollment continues in its ongoing Phase 2a trial in autosomal dominant PKD and the Company plans to initiate a dose-finding clinical trial in the pediatric form of the disease in early 2017. | |||
| · | In August 2016, Kadmon initiated an exploratory study of tesevatinib in recurrent glioblastoma and has begun enrolling patients. | |||
KD025
| · | Kadmon continues to develop KD025, its ROCK2 inhibitor, for the treatment of autoimmune diseases. In September 2016, Kadmon initiated a randomized, placebo-controlled Phase 2 clinical trial of KD025 in moderate to severe psoriasis. The trial builds on results from Kadmon’s recently completed open-label Phase 2 trial, in which 85% of patients completing the study achieved Psoriasis Area and Severity Index (PASI) score reductions with minimal side effects. Patient enrollment is progressing as Kadmon continues to open sites and is expected to be completed in the first half of 2017. In addition, Kadmon initiated a Phase 2 trial of KD025 in chronic graft-versus-host disease in September 2016 and continues to enroll patients. |
| · | Kadmon is also exploring the role of KD025 for the treatment of fibrotic diseases. The Company continues to enroll patients in its ongoing Phase 2 trial of KD025 in patients with idiopathic pulmonary fibrosis, initiated in June 2016. |
KD034
| · | In December 2016, Kadmon expects to file Abbreviated New Drug Applications (ANDAs) with the U.S. Food and Drug Administration for its trientine hydrochloride formulations, including a room-temperature stable product, for the treatment of Wilson’s disease. If approved, these generic formulations could potentially be on the market in 2017, generating meaningful revenue for the Company. |
Research
| · | Kadmon has focused its research and development efforts on programs that have demonstrated encouraging data in preclinical studies: biologics, including KD033, its anti-PD-L1/IL-15 fusion protein, and KD035, its anti-VEGFR2 antibody; glucose transporter (GLU-T) inhibitors; and ROCK inhibitors, including blood-brain barrier penetrant compounds. |
Operations Update
Kadmon has implemented a number of strategic and operational changes to increase efficiency and to prioritize the continued rapid development of its clinical pipeline and drug discovery efforts:
| · | Kadmon has streamlined its corporate overhead, reducing headcount as well as fixed costs related to its New York facilities. Since July 2016, the Company has reduced its workforce by 15 percent, to 119 employees. |
| · | Together with its lending syndicate, Kadmon has amended its 2015 Credit Agreement, which allows the Company to, among other things, defer mandatory monthly principal payments until August 2017. This deferment will allow the Company to direct all of its financial resources to research and clinical development. | |||
| · | Kadmon has implemented several cost-saving measures in its commercial operation to reduce overall selling, general and administrative (SG&A) expenses. The Company has streamlined its product inventory, distribution efforts and marketing expenses for its chronic hepatitis C (HCV) portfolio to align with the evolving treatment landscape. In addition, Kadmon has focused its field operations on prescribers, specialty pharmacies and payer landscapes while growing its capabilities to coincide with the Company’s expanded product portfolio and therapeutic area focus. | |||
| · | As a result of these actions, Kadmon expects to reduce its cash burn by approximately $9.1 million over the next 12 months. |
Financial Results
Third Quarter 2016 Results
Loss from operations for the three and nine months ended September 30, 2016, was $52.9 million and $94.9 million, compared to $70.3 million and $114.5 million for the same periods in 2015.
Research and development expenses for the three and nine months ended September 30, 2016, were $9.6 million and $27.1 million, compared to $8.4 million and $23.3 million for the same periods in 2015.
Revenue was $5.7 million and $21.8 million for the three and nine months ended September 30, 2016, compared to $11.3 million and $27.8 million for the same periods in 2015. Sales from the Company’s ribavirin portfolio continued to decline in 2016 as the treatment landscape for chronic HCV infection has rapidly evolved, with multiple ribavirin-free treatment regimens, including novel second-generation direct‑acting antivirals, having entered the market and becoming the new standard of care. As a result, the Company expects sales of its ribavirin portfolio of products to continue to decline in 2016, 2017 and beyond.
Selling, general and administrative expenses were $48.3 million and $90.6 million for the three and nine months ended September 30, 2016, compared to $39.4 million and $82.4 million for the same periods in 2015. The increase in selling, general and administrative expenses for the third quarter of 2016 is primarily related to an increase in share-based compensation of $33.4 million, partially offset by a decrease in legal expense of $18.0 million related to legal settlements entered into during the third quarter of 2015 and amortization of intangible assets of $3.9 million, all of which is non-cash.
Liquidity and Capital Resources
As of September 30, 2016, Kadmon’s cash and cash equivalents totaled $55.0 million compared to $21.5 million as of December 31, 2015.
About Kadmon Holdings, Inc.
Kadmon Holdings, Inc. is a fully integrated biopharmaceutical company focused on developing innovative products for significant unmet medical needs. We have a diversified product pipeline in autoimmune and fibrotic diseases, oncology and genetic diseases.
