Q4 2024 Kiniksa Pharmaceuticals International PLC Earnings Call
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Good day and thank you for standing by welcome to you can infer pharmaceuticals fourth quarter 2024 earnings conference call. At this time all participants are in listen only mode. After the speaker's presentation there'll be a question and answer session.
To ask a question during the session you will need to press Star one wanted your telephone.
Speaker Change: Sure an automated message advising your hand is raised to withdraw your question. Please press star. One again also please be advised that today's conference is being recorded I would now like to turn the conference over to your speaker for today, Jonathan Christian bomb Investor Relations. Please go ahead.
Speaker Change: Thank you operator, good morning, everyone and thank you for joining <unk> call to discuss our fourth quarter and full year 2024 financial results and recent portfolio execution.
Speaker Change: A press release highlighting these results can be found on our website under the investors section.
Speaker Change: For the agenda today are chief Executive Officer, <unk>, <unk> will start with an introduction Dr.
Speaker Change: Dr. John <unk>, our Chief Medical Officer will review, our recently announced a P. L 387 development program.
Speaker Change: From there Ross <unk>, our chief.
Ross: Commercial officer, who will provide an update on our ongoing commercial execution with oculus.
Mark: Mark <unk>, our Chief Financial Officer will review, our fourth quarter and full year 2024 financial results and finally, SUNS will return for closing remarks and to kick off the Q&A session for which <unk> sorry, our chief operating officer will also be on the line.
Mark: Before getting started please note that we will be making forward looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements.
Mark: A review of such statements and risk factors can be found on this slide as well as under the caption risk factors contained in our SEC filings.
Mark: Statements speak only as of the date of this presentation and we undertake no obligation to update such statements except as required by law.
Stan: With that I will turn it over to Stan.
Stan: Thanks, Jonathan and good morning, everyone. Thank you for joining our fourth quarter and full year 2024 earnings call.
Stan: We reported our preliminary office revenue and cash balance early this year.
Stan: Strong execution drove continued growth in 2024, and we're incredibly excited about the opportunities ahead of us.
Stan: Today, I'm going to focus on the exciting drug or announcement, we made earlier this morning.
We are advancing our newly announced KPN 387 program, which is an independently developed monoclonal antibody IL one receptor antagonist with the potential to enable monthly subcutaneous <unk> in recurrent.
Stan: Pericarditis.
Stan: We are incredibly excited about this program and the opportunity to extend our leadership of the recurrent pericarditis market.
Stan: Potentially expand the treatment options available to patients.
Stan: <unk> seven is an <unk> pathway inhibitor, which we understand very well from our work and experience with Oculus.
Stan: First and only FDA approved therapy for recurrent pericarditis.
Dr. John: Dr. John <unk>, our Chief Medical Officer will share additional details about the mechanism of action and data we've generated to date.
Dr. John: But our deep familiarity with this pathway provides us with added confidence as we advance <unk> through clinical development.
Dr. John: In addition to the ongoing phase one study we have interacted with the FDA and plan to start a phase II phase III trial in recurrent pericarditis patients in the middle of this year with data from the phase II portion expected in the second half of 2026.
Dr. John: We plan to move as fast as humanly possible and our goal is to have this treatment option available to patients by the 28 2009 timeframe.
Dr. John: Moving to our Q4 and full year 2020 for performance and future growth.
Dr. John: On the commercial front, we continue to grow <unk> revenue and collaboration profitability with fourth quarter net product revenue about $122 $5 million.
Dr. John: And full year 2024, net revenue of $417 million.
Dr. John: Ross will review the commercial highlights in a moment, but overall, we believe there is substantial opportunity for us to continue to grow the recurrent pericarditis market with our Polish in the years ahead.
Dr. John: Our full year 2025, <unk> net revenue guidance is between 560 and $580 million.
Dr. John: Okay.
Dr. John: As you can see on our pipeline slide we remain focused on developing novel therapies for diseases with unmet need.
Dr. John: Advertising cardiovascular indications.
Dr. John: In addition to Kps, we had seven we're advancing KPN 1161, which is an FC modified IL one receptor antagonist with a target profile, our quarterly sub Q dosing.
Dr. John: We are currently conducting IND, enabling activities with this molecule.
Dr. John: Based on these opportunities we plan to discontinue development of <unk> <unk> disease.
Dr. John: Through phase II studies, <unk> has been well tolerated and we look forward to evaluating strategic alternatives for this asset.
Dr. John: I want to extend.
Speaker Change: CA gratitude to the patients caregivers and investigators who contributed to our Shoguns disease study.
Speaker Change: Moving forward in addition to prioritizing our portfolio development strategy, we have a robust balance sheet and we are cash flow positive on an annual basis.
Speaker Change: Together, we expect these to provide additional capacity to continue investing in value creating opportunities across our business.
Speaker Change: The bottom line is is that we've made tremendous progress with Atlas.
Speaker Change: We think there is substantial opportunity still ahead with access products.
Speaker Change: As the market leader, we are committed to exploring additional treatment options for patients.
Speaker Change: With that I'll turn it over to John to review <unk>, <unk>, seven and our development program in recurrent pericarditis.
John: Thank you Sam.
Speaker Change: As Sandy mentioned and as outlined in our press release. This morning, <unk> has announced the development program for <unk> 387, and independently developed fully human IGD, two monoclonal antibody antagonist of the IL one receptor.
Speaker Change: Extending our leadership in recurrent pericarditis and IL <unk> pathway inhibition, we are developing kpis free 87, as a potential additional therapeutic option for patients with a target profile of a monthly subcutaneous single injection and a liquid formulation.
Speaker Change: The mechanism of action of <unk> 387 is that it binds to the IL one receptor subunit called IL, one or one and in this way it directly inhibits the signaling activity of the cytokines IL, one alpha and IL one beta.
Speaker Change: This was demonstrated first in preclinical in vitro studies in which <unk> 387 was shown to be a potent inhibitor of IL, one receptor activation as well as IL six production induced by IL, one alpha or IL, one beta <unk>.
Speaker Change: Subsequently <unk> 387 was shown in in vivo pharmacokinetics studies in non human primates to have favorable pharmacokinetics that supported the advancement into the phase one first in human study.
Speaker Change: On this slide you can see some of the topline data from the single dose subcutaneous administration portion of the phase one first in human study.
Speaker Change: This is a randomized double blind placebo controlled study in approximately 112 health in subjects evaluating the safety Tolerability pharmacokinetics, pharmacodynamics and Immunogenicity of <unk> hundred 87.
Speaker Change: Administered subcutaneously or intravenously as single ascending doses and as multiple ascending doses administered subcutaneously.
Speaker Change: These data show that the single dose pharmacokinetics of KPN $3 87 at the dose level shown in red demonstrated sustained serum concentrations of both the target concentration supporting the profile for a monthly dosing paradigm.
Speaker Change: Data from this study were utilized to support the design of the upcoming phase III Slash phase III trial.
Speaker Change: As Sam mentioned, we have had interactions with the FDA regarding the next steps for the <unk> 387 program and we expect to initiate a streamlined phase III slash III trial in recurrent pericarditis in the middle of this year that we believe may support approval.
Speaker Change: Details of that trial will be forthcoming at a future date.
Speaker Change: I will now turn it over to our Chief commercial Officer Ross. Thanks, Chuck.
Speaker Change: As you heard from science, we are incredibly excited about <unk> 387, and the opportunity to further expand the treatment options for patients with recurrent pericarditis.
Speaker Change: Also remain very excited about the substantial growth potential still ahead with August.
Speaker Change: Having launched our close nearly four years ago and delivered continuous revenue growth. We have built a deep understanding of the markets and we plan to continue our outlet growth by serving many more patients in the years ahead.
Speaker Change: After driving on net revenue in 2000 $24 million to $478 million or 2025 guidance is between 560, <unk> $580 million and there were a number of key initiatives that we have taken to continue to build the marketplace for August.
Speaker Change: Firstly disease education, and awareness continued to be fundamental to our strategy and initiatives such as our lives disrupted campaign and our sponsorship of the American Heart Association's addressing recurrent pericarditis initiatives are raising disease awareness, helping doctors serve identify.
Speaker Change: Find more patients and promoting a proactive approach to earlier diagnosis and treatment.
Speaker Change: Secondly, we continue to be focused on increasing the breadth and depth of prescribing as evidenced by the increase in number of total and repeat prescribers as we single quarter since launch.
Speaker Change: We believe the utilization of <unk> is growing as a result of the experienced physicians and patients are having in terms of prescribing gain access and witness in the high efficacy of the drug.
Speaker Change: We're focused on promote into the full scope of the Oculus label and we're seeing that increase in office prescriptions being written across all of the currencies, including for patients on that first recurrence, which highlights doctors are becoming increasingly confident in moving off list earlier in the disease course given us.
Speaker Change: Targeted mechanism and robust efficacy.
Additionally, as the leader with the only FDA approved therapy for recurrent pericarditis, we remain committed to supporting the development of a more efficient network of care through supporting the establishment of regional centers of excellence. We believe this approach has the ability to streamline referral pathways.
Speaker Change: Reduce the barriers to care and in turn enhance patient outcomes.
Speaker Change: Potently, while we've made great progress since our launch we believe there is a significant opportunity ahead for August as we continue to build the markets and transform the treatment paradigm.
Speaker Change: With that I'll turn it over to our CFO Mark.
Mark: Thanks, Ross It is certainly an exciting time at <unk>, we are well positioned from a financial standpoint, and through continued commercial execution and financial discipline, we expect to continue to create value across our business.
Mark: This morning, I will cover our fourth quarter and full year 2024 financial performance you can find our detailed financial information in today's press release, there are a few items of note first.
Mark: On the left hand side of the slide with our income statement.
Mark: As you've heard from sand and Ross strong commercial execution throughout 2024 drove continued arcalis product revenue growth on.
Mark: On a year over year basis, <unk> product revenue grew 72% to $122 5 million in the fourth quarter and 79% to $417 million for the full year 2024.
Mark: Second operating expenses grew year over year in both the fourth quarter and full year 2024, primarily driven by cost of goods sold due to <unk> revenue growth in tech transfer related expenses collaboration expenses with continued ARCUS collaboration profit growth, which I'll detail shortly as well as R&D.
Mark: To support <unk> and <unk> III seven development in SG&A to support <unk> commercialization.
Mark: Third net loss was $8 9 million in the fourth quarter and $43 2 million for the full year 2024.
Mark: Fourth on the right hand side of the slide you'll see a calculation for ARCUS collaboration profit, which largely drives collaboration expenses on a year over year basis ARCUS collaboration profit grew 125% to $76 3 million in the fourth quarter and 108% to $234 7 million.
Mark: For the full year 2024.
Mark: Of note fourth quarter and full year 2024 collaboration expenses included a $10 million charge for regeneron share of a $20 million milestone from what Dong medicine with the approval of <unk> in China.
Mark: The cash from this milestone was received in January and will be captured in our first quarter 2025 cash balance.
Mark: Lastly, regarding our balance sheet at the bottom of the slide we ended 2024 with an approximately $244 million cash balance representing approximately $37 million of net cash flow for the year.
Mark: And we expect our current operating plan to remain cash flow positive on an annual basis.
Speaker Change: With that I'll turn the call back to <unk> for closing remarks.
Speaker Change: Thanks, Mark I Hope you can all sense the excitement we have about the future here at <unk>.
Speaker Change: And we certainly plan to continue to execute across our clinical and commercial business.
Speaker Change: This morning, we are eager to drive additional growth and our fourth year post launch with Atlas is on extending and maintaining our leadership in recurrent pericarditis with oculus and with the development of KPN create seven.
There's a lot to look forward to as we continue to advance novel therapies for patients suffering from debilitating diseases and unmet need with that I'll turn the call back to the operator for questions. Thanks very much.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone you will then hear that automated message revising your hand is raised to withdraw your question Press Star. One again, we also ask that you. Please wait for your name and company should be announced before you proceed with your question one moment, while we compile the Q&A roster.
Speaker Change: Our first question today will be coming from the line of Manny Pan Rama of JMP. Your line is open.
Speaker Change: Hey, guys. Thanks, so much for taking my question.
Speaker Change: Thanks for the update here two quick ones for me.
Speaker Change: First what is your market research suggest about what a monthly <unk>.
Speaker Change: Subcutaneous formulations, such as KPN, all create seven could mean for patients and the market overall versus the weekly regimen.
Speaker Change: That you have with Arclight sub Q and then just quickly on slide 10.
Speaker Change: Slide 10, I, just wanted to confirm that that dose as the red line.
Speaker Change: That's referring to a monthly subcutaneous.
Speaker Change: Dose not an IV dose thanks, so much.
Speaker Change: Hi, Adam This is Ross hope you well and thank you very much for the questions. Maybe I'll answer. Your first question and then hand over to John for the second question.
Speaker Change: So yes, a good question regarding market research and kind of patient acceptability and desire and preference.
Speaker Change: We believe that.
Speaker Change: The compliance rates and the acceptance rates of all classes is really very good.
Speaker Change: And we see that as really the adherence and duration.
Speaker Change: The therapy, having said that yes, moving potentially from a weekly to potentially monthly therapy could be advantageous for many patients in terms of preference.
Speaker Change: Additionally, along with the drug itself from a loyal slides powder to liquid formulation, we think might also.
Speaker Change: Provide some advantages for patients. So just overall, we fail as the market leader within recurrent pericarditis.
Upon us to continue to look at the marketplace and really understand what patients need and require within this marketplace and support alternative treatment options for patients for the future.
Speaker Change: And good morning, Annabel. Thanks, so much for your question your second one and yes, I can confirm that the dose that was administered in carrier and characterized in the Red line was indeed subcutaneously administered and you can see that it lasts above the target concentration for the time to noted thus supporting moving forward with a monthly.
Speaker Change: <unk> dosing paradigm subcutaneous.
Speaker Change: Okay.
Speaker Change: Thanks, so much for the question questions guys.
Speaker Change: Thanks, Matt.
Speaker Change: Thank you and we'll all Miss for the next question. Please.
Speaker Change: And the next question will be coming from the line of Eva Forte for Jan.
Wells Fargo. Your line is open.
Hi, guys. Thanks for taking my question and congrats on the progress.
Speaker Change: Couple from Basso first palace Kpfa, Kevin differentiate it from our partners is it only the dosing schedule or are you expecting tranches and the efficacy and safety profile and then a quick follow up just on the full rights to PPL suite 711 61.
Speaker Change: Yes, good morning, Eva I'll take the first part of your question and then turn it over to Sarah So yes regarding the mechanism of action of <unk> hundred 87. It is mechanistically distinct by binding to the receptor sub yet but in that sense. It does block the signaling of both IL, one alpha and IL one.
Speaker Change: Ada and thus it shares a certain amount of shall we say.
Speaker Change: Mechanistic similarity.
Speaker Change: From there in terms of how the drug is delivered because of the fact that it's a monoclonal antibody, it's able to be stable in a liquid formulation and thus a combination of that plus the fact that we can deliver enough drug to last for at least a month as shown by the curve.
Speaker Change: And read is that is what would enable us to support.
Speaker Change: <unk> are in a liquid formulation at monthly intervals.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Thanks, David the second part of your question. Yes. This is a independently developed wholly owned molecules, we do own the rights for rights to both create seminal moments.
Speaker Change: Okay.
Speaker Change: Thank you one moment for the next question.
Speaker Change: And the next question will come from the line of Paul Choi of Goldman Sachs. Your line is open.
Paul Choi: Hi, good morning, everyone. Thanks for taking the questions and congrats on the progress.
Speaker Change: My first question is for John I was hoping maybe you could take some broad strokes for how youre thinking about.
Speaker Change: Three seven clinical development plan are you envisioning, perhaps a switch study or a non inferiority study any sort of broad color there would be helpful.
Speaker Change: And then second.
Speaker Change: Down the road post approval and launch can you, maybe just remind us of the terms with the regeneron arrangements.
Speaker Change: Can you walk us sort of.
Speaker Change: Focus on promoting <unk> in gist.
Speaker Change: What the terms are.
Speaker Change: Of your arrangement sort of specify in terms of unwinding future promotion of Argos any any comments there would be helpful. Thank you very much.
Speaker Change: Sure Paul Good morning, Thanks for thanks for your question. So today. The announcement today is that we're pleased to talk about our phase one profile and talking about the subcutaneous <unk> subcutaneously administered <unk> hundred 87, supporting dosing for that monthly dosing interval and that is.
Speaker Change: Putting the design of the phase II III study at this point in time, what we can say about that design is that we have engaged with the FDA. We've had interactions with the FDA regarding the design of that trial, but with regard to the specific <unk> that we anticipate starting in the middle of this year, however regarding the specifics of that.
Speaker Change: Trial, we'll have more to say about that.
Speaker Change: At a later date and of course clinical trials start kind of there is also a great place to follow those updates and over Sir.
Speaker Change: Yes. Thank you Paul I appreciate the second part of the question. So first and foremost regeneron has been a great partner and we're really pleased with that commitment to patients.
Speaker Change: <unk>.
Speaker Change: We are fully committed to our clicks and we believe there is an awful lot of opportunity ahead of us with Arkalyk. So we continue as you've seen to execute right since launch and we believe that the substantial growth. We are only 30% penetrated into the target population as you're aware. So we will continue that.
Speaker Change: That said of course, we're very excited about 387, the potential for monthly liquid formulation.
Speaker Change: Continuous dosing and we do believe there is also need for that and it's a very exciting potential treatment option for patients. We do not have a noncompete with our contract with the general floor.
Speaker Change: That said, we are committed to continuing the growth of the opportunity there and obviously, we're committed to getting 387 available to patients is a very important treatment option for them as well. So very exciting times ahead looking forward to continuing to work with regeneron, helping patients continuing to get three to seven on the market.
Speaker Change: As fast as humanly possible and that's what we're going to.
Speaker Change: Yeah.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Patel: And that does conclude today's Q&A session I would like to go ahead and turn the call back over to <unk> Patel, Chief Executive Officer for closing remarks. Please go ahead.
Speaker Change: Thank you operator, and thank you everybody through the questions. Thanks for joining the call today.
Speaker Change: Three exciting few years ahead, we're just going to keep cranking away and I look forward to talking to you again.
Speaker Change: This concludes today's program. Thank you all for joining today's conference call you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].