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KindredBio sees strong 2020 boosted by contract manufacturing, Mirataz deal

Mar 17, 2021 - IHS Markit

KindredBio recorded a substantial hike in 2020 revenues, despite a weak end to the year.

In the fourth quarter, net turnover amounted to $951,000, representing a year-on-year decline of 32%.

KindredBio recorded product sales of $96,000 in Q4 (-93%). It said all revenues in this category during 2020 were solely from its Mirataz product for weight loss management in cats. The firm <master-viewer-anchor href="" ng-version="11.2.13">sold Mirataz to Dechra Pharmaceuticals</master-viewer-anchor> in April last year.

KindredBio posted royalty revenues of $122,000, contracting manufacturing turnover of $233,000 and partner licensing revenues of $500,000 for the quarter. These three categories were not recorded in previous years.

Zimeta (dipyrone injection for the control of pyrexia in horses) generated $8,000 in the fourth quarter. Dechra has been granted exclusive marketing, sales and distribution rights to <master-viewer-anchor href="" ng-version="11.2.13">Zimeta</master-viewer-anchor> in the US and Canada, in return for a royalty on sales and a milestone payment upon achievement of a certain sales milestone. KindredBio noted sales of the product reflected decreased equine events and transportation due to COVID-19.

The company’s net loss dropped during Q4 2020 to $10.9 million, compared to a net loss of $15.7 million for the same period in 2019. R&D expenses were up 7% to $7.6m. Meanwhile, selling, general and administrative expenses decreased 65.5% to $3.3m.

Contract manufacturing, asset sale boost

Despite a dip in the last quarter, KindredBio’s full year was heavily bolstered by its contract manufacturing and the sale of Mirataz to Dechra.

Net turnover for the year climbed to $42.2m, compared to total revenues of $4.3m in 2019. This was led by $38.7m from the sale of Mirataz.

Product sales saw a decline of 79% to $878,000. As previously mentioned, all sales in this category were from Mirataz.

Contract manufacturing turnover amounted to $1.55m in 2020 – attributable to the firm’s agreement with <master-viewer-anchor href="" ng-version="11.2.13">Vaxart</master-viewer-anchor> for the manufacture of the latter’s oral COVID-19 vaccine candidate.

Meanwhile, royalties and partner licensing yielded $535,000 and $500,000, respectively. Zimeta generated $27,000 across the year, again reflecting impacts on equine events and transportation due to the pandemic. Finance from partner licensing was entirely due to a non-refundable upfront payment from Elanco for the <master-viewer-anchor href="" ng-version="11.2.13">exclusive global rights</master-viewer-anchor> to KindredBio's <master-viewer-anchor href="" ng-version="11.2.13">KIND-030</master-viewer-anchor> canine parvovirus monoclonal antibody candidate.

KindredBio also recorded $12,000 and $29,000 in revenues derived from the co-marketing of products for partners, namely <master-viewer-anchor href="" ng-version="11.2.13">Butterfly Networks</master-viewer-anchor> and <master-viewer-anchor href="" ng-version="11.2.13">Astaria Global</master-viewer-anchor>.

Net loss across 2020 was $21.8m, compared to $61.4m in 2019. R&D expenses were up 10.5% to $31.3m, largely due to costs from the firm's <master-viewer-anchor href="" ng-version="11.2.13">Kansas facility</master-viewer-anchor> as it began to manufacture clinical trial material, partially offset by lower costs aligned with the decision to discontinue small molecule development in favor of biologics programs. 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 during the full year dropped 42% to approximately $22m. The decrease was mainly the result of the re-categorization of the Kansas plant's expenditures, as well as lower payroll and related expenses due to "the elimination of KindredBio's companion animal sales force".

As of December 31, 2020, KindredBio had cash and cash equivalents of $11.6m, compared to roughly $16m at the same point of 2019.

KindredBio said regarding spending in 2021, it remains focused on advancing its core biologics programs. The firm also plans to invest around $3m in capital expenditures on lab and manufacturing equipment for these projects. The company believes its existing cash, cash equivalents and investments, remaining proceeds from the Mirataz sale, revenue from contract manufacturing and revenues in the form of royalties and partner licensing will be sufficient to fund its current operating plan through early 2023, excluding the drawdown of $30m from its debt facility.

Development update

KindredBio revealed a pivotal efficacy study of its tirnovetmab KIND-016 candidate – a fully caninized, high-affinity monoclonal antibody targeting interleukin (IL)-31 for the treatment of atopic dermatitis in dogs – was initiated in December.

In the same month, KindredBio unveiled positive results from a randomized, placebo-controlled laboratory pilot study of its KIND-032 fully caninized monoclonal antibody targeting IL-4R candidate against atopic dermatitis in dogs.

The firm also said completion of the upcoming pivotal efficacy study for the prophylactic use of KIND-030 is expected in the second quarter of 2021, with approval potentially expected by the end of the year. KIND-030 is being developed for two indications in dogs – as a prophylactic therapy to prevent clinical signs of canine parvovirus infection and as a treatment of established parvovirus infection.

Additionally, in Q4 last year the company was chosen by the National Cancer Institute in the US to produce an experimental human papillomavirus vaccine for clinical testing. Such work in the contract manufacturing space is significantly helping to fuel the firm's animal health R&D.

KindredBio chief executive Dr Richard Chin said: "We had a strong finish to 2020, reporting positive results from our pilot study for <master-viewer-anchor href="" ng-version="11.2.13">canine inflammatory bowel disease</master-viewer-anchor> and initiating the tirnovetmab (IL-31 antibody) pivotal study for canine atopic dermatitis. Together with the recent award of a manufacturing contract by the National Cancer Institute, this positive momentum positions KindredBio strongly for the year ahead.

"We look forward to a number of important developments across our late-stage pipeline in 2021, including potential approval of our monoclonal antibody for canine parvovirus, updates on the tirnovetmab pivotal efficacy study, and pilot study results for our IL-4R program for canine atopic dermatitis."

Reprinted with permission of IHS Markit




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