PALO ALTO, Calif., Dec. 2, 2019 /PRNewswire/ -- Kodiak Sciences
Inc. (Nasdaq: KOD) today announced that the Company has entered
into a funding agreement to sell a capped royalty right on global
net sales of KSI-301 to Baker Bros. Advisors for $225 million. KSI-301 is Kodiak's investigational
therapy being developed for the treatment of retinal vascular
diseases including age-related macular degeneration and diabetic
eye diseases.
Under the terms of the agreement, Baker Bros. Advisors (BBA)
purchased a capped 4.5% royalty on net sales of the Company's
anti-VEGF antibody biopolymer conjugate therapy known as KSI-301 to
be paid upon marketing approval in exchange for $225,000,000 in committed development funding
payable to the Company (the "funding amount"). Unless earlier
terminated or re-purchased by the Company, the royalty "caps" or
terminates upon the date that BBA has received an aggregate amount
equal to 4.5 times the funding amount paid to the Company. In an
instance where Kodiak develops anti-VEGF containing follow-on
products to KSI-301, there may be royalties of 1.5% to 2.25% owed
on these products, but total payments under the funding agreement
will never exceed the cap of 4.5 times the funding amount paid to
the Company.
BBA is required to pay to the Company the first $100,000,000 of the funding amount at the closing
of the funding transaction (expected to occur on January 10, 2020) and the remaining $125,000,000 of the funding amount upon Kodiak
achieving, among other things, 50% enrollment in its two
planned pivotal clinical studies of KSI-301 in patients with
retinal vein occlusion (estimated to occur in late 2020).
The Company has the option, exercisable at any point during the
term of the funding agreement, to repurchase from BBA 100% of the
royalties due to BBA under the funding agreement for a purchase
price equal to the funding amount paid to the Company as of such
time times 4.5 less amounts paid by the Company to BBA.
"In thinking through how best to finance our accelerating
clinical, manufacturing and commercial plans for KSI-301 and our
ABC platform, royalty funding is meaningfully less dilutive than
equity and preserves both our future financing and strategic
flexibility," said Victor Perlroth,
MD, Chairman and Chief Executive Officer of Kodiak Sciences. "This
royalty financing provides the foundation to fund the KSI-301
development program through our 2022 Vision of pivotal read-outs in
retinal vein occlusion, wet age-related macular degeneration and
diabetic macular edema and our anticipated Biologics License
Application (BLA) and supplemental BLA submissions."
The parties also agreed that, subject in all cases to compliance
with applicable securities laws and regulations, in the event the
Company issues shares of common stock in an underwritten public
offering on or prior to June 30,
2020, the Company will use its best efforts to cause the
managing underwriters of such offering to allow Baker Bros.
Advisors to participate in an amount up to 25% of the shares
offered in the offering plus additional shares equal to
$25 million, all at the public
offering price.
The royalty financing was the result of a competitive process
overseen by independent and disinterested directors of Kodiak with
the assistance of outside counsel.
J.P. Morgan and Goldman Sachs & Co. LLC acted as financial
advisors to Kodiak on the transaction. Cooley LLP and Lenz &
Staehelin served as legal advisors to Kodiak.
About KSI-301
KSI-301 is an investigational anti-VEGF therapy built on the
Company's Antibody Biopolymer Conjugate, or ABC, Platform and is
designed to maintain potent and effective drug levels in ocular
tissues for longer than existing agents. Kodiak's objective with
KSI-301 is to develop a new first-line agent to improve outcomes
for patients with retinal vascular diseases and to enable earlier
treatment and prevention of vision loss for patients with diabetic
eye disease. The Company's DAZZLE pivotal study in patients with
treatment-naïve wet AMD was initiated in October 2019. Kodiak plans to initiate additional
pivotal studies of KSI-301 in 2020 in retinal vein occlusion,
diabetic macular edema and diabetic retinopathy. These studies are
anticipated to form the basis of the Company's initial and
supplemental BLAs to support potential approval and
commercialization. KSI-301 is being developed and is fully owned
globally by Kodiak Sciences Inc. In December
2019, Kodiak entered into an agreement to sell a 4.5% capped
royalty right on global net sales of KSI-301 to Baker Bros.
Advisors for $225 million.
About Kodiak Sciences Inc.
Kodiak™ is a clinical stage biopharmaceutical company
specializing in novel therapeutics to treat chronic,
high-prevalence retinal diseases. We are focused on bringing new
science to the design and manufacture of next generation retinal
medicines to prevent and treat the leading causes of blindness
globally. Our ABC Platform™ merges the fields of antibody-based and
chemistry-based therapies and is at the core of Kodiak's discovery
engine. Kodiak's lead product candidate, KSI-301, is a novel
anti-VEGF antibody biopolymer conjugate being developed for the
treatment of retinal vascular diseases including age-related
macular degeneration and diabetic eye diseases. Kodiak has
leveraged its ABC Platform to build a pipeline of product
candidates in various stages of development including KSI-501, our
bispecific anti-IL-6/VEGF biopolymer conjugate for the treatment of
neovascular retinal diseases with an inflammatory component, and we
are expanding our early research pipeline to include ABC Platform
based triplet inhibitors for multifactorial retinal diseases such
as dry AMD and the neurodegenerative aspects of glaucoma. Kodiak is
based in Palo Alto, CA. For more
information, visit www.kodiak.com.
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
not based on historical fact and include statements regarding our
ability to advance our product candidates, including KSI-301, the
timing of, and our ability to receive, development funding under
our funding agreement with Baker Bros. Advisors, the sufficiency of
the development funding to advance KSI-301, our 2022 Vision and
participation by Baker Bros. Advisors in any future equity
financing. Forward-looking statements generally include statements
that are predictive in nature and depend upon or refer to future
events or conditions, and include words such as "may," "will,"
"should," "would," "expect," "plan," "believe," "intend," "pursue,"
and other similar expressions among others. Any forward-looking
statements are based on management's current expectations of future
events and are subject to a number of risks and uncertainties that
could cause actual results to differ materially and adversely from
those set forth in or implied by such forward-looking statements.
These risks and uncertainties include, but are not limited to, the
preliminary safety, efficacy and durability data for our KSI-301
product candidate from the Phase 1 study will not continue or
persist; cessation or delay of any of the ongoing clinical studies
and/or our development of KSI-301 may occur; future potential
regulatory milestones of KSI-301, including those related to
current and planned clinical studies may be insufficient to support
regulatory submissions or approval; anticipated presentation of
data at upcoming conferences may not occur; our research and
development efforts and our ability to advance our product
candidates into later stages of development may fail; any one or
more of our product candidates may not be successfully developed,
approved or commercialized; adverse conditions in the general
domestic and global economic markets; as well as the other risks
identified in our filings with the Securities and Exchange
Commission. For a discussion of other risks and uncertainties, and
other important factors, any of which could cause our actual
results to differ from those contained in the forward-looking
statements, see the section entitled "Risk Factors" in our most
recent Form 10-Q, as well as discussions of potential risks,
uncertainties, and other important factors in our subsequent
filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date hereof and
Kodiak undertakes no obligation to update forward-looking
statements, and readers are cautioned not to place undue reliance
on such forward-looking statements.
"Kodiak," "ABC Platform" and the Kodiak logo are registered
trademarks or trademarks of Kodiak Sciences Inc. in various
jurisdictions.
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SOURCE Kodiak Sciences Inc.