-- Continuing to Streamline Operations While
Advancing Clinical Pipeline --
Kadmon Holdings, Inc. (NYSE:KDMN) (“Kadmon” or the “Company”)
today provided a business update and reported financial and
operational results for the three months ended March 31,
2017.
“We have further streamlined our operations and reduced costs,
allowing us to focus our resources towards rapidly advancing our
clinical pipeline,” said Harlan W. Waksal, M.D., President and
Chief Executive Officer at Kadmon. “We look forward to executing on
our multiple clinical milestones in the second half of 2017, which
include data readouts from our ongoing Phase 2 studies evaluating
our ROCK2 inhibitor, KD025.”
Clinical and Research Update
KD025
The Company expects to report data from its three ongoing Phase
2 clinical trials as follows:
- Open-label, dose-finding clinical trial
in chronic graft-versus-host disease – initial data expected Q3
2017
- Randomized, open-label clinical trial
in idiopathic pulmonary fibrosis – initial data expected Q4
2017
- Randomized, placebo-controlled clinical
trial in moderate to severe psoriasis – full data expected Q4
2017
Tesevatinib
- Dose-finding Phase 1 clinical trial in
autosomal recessive polycystic kidney disease – expected to
initiate Q2 2017
- Randomized, double-blind,
placebo-controlled Phase 2 clinical trial in autosomal dominant
polycystic kidney disease – expected to initiate Q3 2017
- Enrollment continues in the Company’s
ongoing Phase 2 clinical trials in glioblastoma and in non-small
cell lung cancer with brain or leptomeningeal metastases.
KD034
- In March 2017, the Company submitted
its second Abbreviated New Drug Application (ANDA) to the U.S. Food
and Drug Administration for its generic trientine hydrochloride
formulation for the treatment of Wilson’s disease. The Company
submitted its first ANDA for its trientine hydrochloride
formulation in December 2016.
Operations Update
Kadmon continues to implement operational changes to increase
efficiency and to prioritize the development of its clinical
pipeline and drug discovery efforts:
- Kadmon has streamlined its operations
to reduce overall selling, general and administrative (SG&A)
expenses:
- Since January 2017, the Company has
reduced its workforce by 14 percent, to 102 employees.
- As a result of these and other actions,
Kadmon expects to reduce its cash burn by approximately $5 million
over the next 12 months.
- Together with its lending syndicate,
Kadmon has amended its 2015 Credit Agreement, which allows the
Company to, among other things, defer the capital raise requirement
of $17.0 million to the end of Q4 2017, and defer mandatory monthly
principal payments until January 31, 2018, enabling the Company to
direct all of its financial resources to research and clinical
development. In addition, the Company is able to include
non-dilutive funding from, or arising out of, one or more strategic
transactions in satisfaction of the future capital raising
covenant.
Financial Results
First Quarter 2017 Results
Loss from operations was $13.9 million for the three months
ended March 31, 2017, compared to $20.5 million for the same
period in 2016.
Revenue was $5.6 million for the three months ended
March 31, 2017, compared to $9.7 million for the same period
in 2016. The Company expects sales of its ribavirin portfolio of
products to contribute insignificantly in 2017 and beyond.
Research and development expenses were $8.4 million for the
three months ended March 31, 2017, compared to $9.1
million for the same period in 2016.
SG&A expenses were $10.1 million for the three months ended
March 31, 2017, compared to $23.7 million for
the same period in 2016. The decrease in SG&A expenses for the
first quarter of 2017 is primarily related to a decrease in salary
and salary-related expense of $3.4 million, consulting expense
related to an advisory agreement of $2.3 million and amortization
of intangible assets of $5.6 million.
Liquidity and Capital Resources
As of March 31, 2017, Kadmon’s cash and cash equivalents
totaled $43.0 million, compared to $36.1
million as of December 31, 2016. In March 2017, Kadmon
completed a private placement equity financing pursuant to which
Kadmon received gross proceeds of approximately $23 million from
the issuance of 6,767,855 shares of Kadmon’s common stock, at a
price of $3.36 per share, and warrants to purchase 2,707,138 shares
of Kadmon’s common stock at an initial exercise price of $4.50 per
share for a term of 13 months from the date of issuance. If these
warrants are exercised, the Company would receive approximately
$12.2 million.
About Kadmon Holdings, Inc.
Kadmon Holdings, Inc. is a fully integrated biopharmaceutical
company developing innovative products for significant unmet
medical needs. We have a diversified product pipeline in autoimmune
and fibrotic diseases, oncology and genetic diseases.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements, other than
statements of historical fact, included or incorporated in this
press release, including statements regarding the Company's
strategy, future operations, collaborations, intellectual property,
cash resources, financial position, future revenues, projected
costs, prospects, clinical trials, plans, and objectives of
management, are forward-looking statements. The words “believes,”
“anticipates,” “estimates,” “plans,” “expects,” “intends,” “may,”
“could,” “should,” “potential,” “likely,” “projects,” “continue,”
“will,” and “would” and similar expressions are intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Kadmon
cannot guarantee that it will actually achieve the plans,
intentions or expectations disclosed in its forward-looking
statements and you should not place undue reliance on the Company’s
forward-looking statements. There are a number of important factors
that could cause Kadmon’s actual results to differ materially from
those indicated or implied by its 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 anticipated cost savings and
other benefits from our efforts to streamline our operations and to
not harm our business with such efforts; (xxi) our expectations
regarding the period during which we qualify as an emerging growth
company under the JOBS Act; (xxii) statements regarding future
revenue, hiring plans, expenses, capital expenditures, capital
requirements and share performance; (xxiii) litigation, including
costs associated with prosecuting or defending pending or
threatened claims and any adverse outcomes or settlements, whether
or not covered by insurance; (xxiv) our expected use of proceeds
from our initial public offering, March 2017 private placement and
other sources of liquidity; (xxv) the future trading price of the
shares of our common stock and impact of securities analysts’
reports on these prices; and/or (xxvi) 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, without
limitation, the Company’s prospectus filed pursuant to Rule 424(b)
under the Securities Act with the SEC on July 27, 2016 and the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2016. 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.
Consolidated Statements of Operations - Unaudited (in
thousands, except per share data) Three Months
Ended March 31, 2017 2016 Revenues Net
sales $ 2,336 $ 6,192 License and other revenue 3,230
3,471 Total revenue 5,566 9,663 Cost of sales 567 1,085 Write-down
of inventory 370 135 Gross profit 4,629
8,443 Operating expenses: Research and development 8,447 9,083
Selling, general and administrative 10,118 23,686 Gain on
settlement of payable — (3,875) Total operating
expenses 18,565 28,894 Loss from operations
(13,936) (20,451) Total other expense 3,315 12,407 Income
tax expense 316 315 Net loss $ (17,567) $ (33,173)
Deemed dividend on convertible preferred stock 469 —
Net loss attributable to common stockholders $ (18,036) $ (33,173)
Basic and diluted net loss per share of common stock $
(0.39) $ (4.00) Weighted average basic and diluted shares of common
stock outstanding 46,507,435 8,302,635
Kadmon Holdings, Inc. Condensed
Consolidated Balance Sheets (in thousands)
March 31, December 31, 2017 2016
(unaudited) Cash and cash equivalents $ 43,049 $
36,093 Other current assets 5,516 4,194 Other noncurrent assets
19,383 22,269 Total assets $ 67,948 $ 62,556
Current liabilities $ 23,741 $ 24,746 Other long term liabilities
32,799 34,325 Secured term debt – non-current, net 31,023
28,677 Total liabilities 87,563 87,748 Total
stockholders’ deficit (19,615) (25,192) Total
liabilities and stockholders’ deficit $ 67,948 $ 62,556
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version on businesswire.com: http://www.businesswire.com/news/home/20170515005546/en/
Kadmon Holdings, Inc.Ellen Tremaine, 646-490-2989Investor
Relationsellen.tremaine@kadmon.comorMaeve Conneighton,
212-600-1902maeve@argotpartners.com
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