2014

KaloBios Reports Second Quarter 2013 Financial Results

SOUTH SAN FRANCISCO, Calif., Aug. 19, 2013 /PRNewswire/ -- KaloBios Pharmaceuticals, Inc. (Nasdaq: KBIO) a biopharmaceutical company with a portfolio of patient-targeted, first-in-class, monoclonal antibodies (mAbs) to treat serious medical conditions with a primary clinical focus on severe respiratory diseases and cancer, announced today its corporate highlights and financial results for the second quarter ended June 30, 2013.

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"During the second quarter, we announced several important milestones in the development of our clinical pipeline," said David Pritchard, KaloBios President and Chief Executive Officer. "We announced the early completion of enrollment in our Phase 2 study of KB003 in severe asthma.  As noted, we now expect to announce top line results of that study early in the first quarter of 2014, and to present detailed results later in 2014 at a major scientific meeting.

"For KB001-A," Mr. Pritchard continued, "we announced that the U.S. Food and Drug Administration has granted our partner Sanofi Pasteur Fast Track designation for use of KB001-A  in protection against bacterial pneumonia caused by Pseudomonas aeruginosa (Pa) in mechanically ventilated patients. However, we also noted that enrollment has been slower than planned in our ongoing Phase 2 study of KB001-A in patients with cystic fibrosis (CF) who are chronically infected with Pa. As a result, we now expect to complete enrollment of this study in mid-2014 and announce top-line data in the fourth quarter of that year.

"For our third product candidate, KB004, the subject of an ongoing Phase 1 dose escalation and safety study in hematologic malignancies (blood-based cancers), we announced testing of the sixth dose level (190 mg). KaloBios now plans to initiate the Phase 2 expansion phase of the study in acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS) when confirmatory safety and pharmacokinetic data is obtained from the Phase 1 study. We anticipate initiating this expansion Phase 2 study in the fourth quarter of 2013."

Mr. Pritchard also noted that KaloBios announced the appointment of Don Joseph as Chief Legal Officer of the company and, after the close of the quarter, the retirement plans in the late fourth quarter for Jeffrey Cooper as Chief Financial Officer.  In addition, KaloBios was added to the Russell 2000 Index, a subset of the Russell 3000 Index which measures the performance of the small-cap segment of the U.S. equity universe.

Mr. Pritchard also noted that after the close of the quarter, KaloBios received Orphan Drug Status from the European Commission regarding its applications for KB001-A for the treatment of Pa lung infection in CF.  The U.S. Food and Drug Administration has completed their review of a similar request and has asked for additional information. KaloBios is planning to provide the requested data following completion of the ongoing Phase 2 CF study.

Financial Results

The net loss for the second quarter of 2013 was $11.8 million, or $0.49 per basic and diluted share. This compared to a net loss of $2.1 million, or $1.01 per basic and diluted share, for the same period in 2012. Net loss for the six months ended June 30, 2013 was $20.4 million ($1.02 per share), compared to net loss of $3.2 million ($1.57 per share) for the six months ended June 30, 2012.  Increased spending for our clinical trial programs and general and administrative expenses associated with being a public company resulted in the increased loss during the second quarter and first half of 2013 compared to the same periods in 2012.  As of June 30, 2013, cash, cash equivalents and investments, excluding restricted cash, totaled $63.7 million.

Anticipated Upcoming Milestones for 2013-2014



4Q 2013:

  • Initial top line results for KB004 Phase 1 dose escalation study
  • Initiate KB004 Phase 2 study in MDS and AML

1Q 2014:

  • Top line KB003 Phase 2 asthma study results

Mid 2014:

  • Completion of enrollment in KB001-A CF study

4Q 2014:

  • Initiation of Sanofi Phase 2b study for prevention of ventilator-associated pneumonia (VAP)

4Q 2014:

  • Top line KB001-A Phase 2 CF study results

4Q 2014:

  • Completion of enrollment in at least one hematologic malignancy indication in the Phase 2 expansion phase of the KB004 study

About KaloBios

KaloBios Pharmaceuticals, Inc. is developing a portfolio of proprietary, patient-targeted, first-in-class monoclonal antibodies designed to treat severe life-threatening or debilitating diseases for which there is an unmet medical need, with a clinical focus on severe respiratory diseases and cancer.

Currently, KaloBios has three drug development programs:

  • KB003, an anti-GM-CSF mAb with potential to treat inflammatory diseases, is being developed for the treatment of severe asthma. Enrollment of 160-patients has been completed in a planned 150-patient Phase 2 study in the United States, Europe and Australia.
  • KB001-A, an anti-PcrV mAb fragment, is partnered exclusively with Sanofi and is being developed for the prevention and treatment of Pa infection. KaloBios has retained rights for the CF indication and has initiated a 180-patient Phase 2 study in CF subjects with chronic Pa lung infection in the United States. Sanofi is pursuing a ventilator associated pneumonia prevention indication in the intensive care setting, an indication which has received U.S. FDA Fast Track Designation.
  • KB004, an anti-EphA3 mAb, has potential in treating hematologic malignancies and solid tumors. KaloBios is currently testing this drug in a Phase 1 study in subjects with hematologic malignancies.

All of the company's antibodies were generated using its proprietary Humaneered® technology, a method that converts nonhuman antibodies (typically mouse) into recombinant antibodies that have a high binding affinity to their target and are designed for chronic therapeutic use. The company believes that antibodies produced using its Humaneered® technology offer important clinical and economic advantages over antibodies generated by other methods in terms of high binding affinity, high manufacturing yields, and minimal to no immunogenicity (inappropriate immune response) upon repeat administration in humans.

For more information on KaloBios Pharmaceuticals, please visit our web site at http://www.kalobios.com.

Forward Looking Statements
This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including:  the statements under the heading "Anticipated Upcoming Milestones for 2013-2014"; and statements regarding the company's clinical development of KB001-A, KB003 and KB004. Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the company's limited cash reserves and its ability to obtain additional capital on acceptable terms, or at all, including the additional capital which will be necessary to complete the clinical trials that the company has initiated or plans to initiate; the company's dependence on Sanofi Pasteur for the development and commercialization of KB001-A; the company's ability to successfully complete further development of its programs; the uncertainties inherent in clinical testing; the timing, cost and uncertainty of obtaining regulatory approvals; the company's ability to protect the company's intellectual property; competition; changes in the regulatory landscape or the imposition of regulations that affect the company's products; and other factors listed under "Risk Factors" in the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2013 and the company's other filings with the Securities and Exchange Commission.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice.  You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release.  The company has no obligation, and expressly disclaims any obligation to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:

Jeffrey H. Cooper
Chief Financial Officer
KaloBios Pharmaceuticals, Inc.
(650) 243-3146
ir@kalobios.com

Media Contact:

Ellen M. Martin
Kureczka/Martin Associates
Tel:  (510) 832-2044
Emm4@pacbell.net

---- Tables to Follow --

 

Consolidated Balance Sheets

June 30, 2013 and December 31, 2012

(in thousands, except share and per share information)










June 30,


December 31,


2013


2012


 (unaudited)



Assets




Current assets:




     Cash and cash equivalents 

$    19,474


$      10,947

     Marketable securities 

44,176


9,351

     Prepaid expenses and other current assets 

2,001


958

Total current assets 

65,651


21,256





Restricted cash 

205


205

Property and equipment, net 

168


230

Deferred offering costs

-


2,803

Other assets 

168


45

Total assets 

$    66,192


$      24,539





Liabilities, convertible preferred stock and stockholders' equity (deficit)




Current liabilities:




     Accounts payable 

$      3,772


$        2,448

     Accrued compensation 

481


628

     Deferred rent, short-term 

134


101

     Accrued research and clinical liabilities 

2,469


3,538

     Notes payable, short-term

1,587


-

     Other accrued liabilities 

332


502

Total current liabilities 

8,775


7,217





Deferred rent, long-term 

-


62

Notes payable, long-term

8,308


9,826

Other liabilities, long-term 

-


355

Total liabilities 

17,083


17,460





Commitments and contingencies








Convertible preferred stock, $0.001 par value: no shares and 60,152,555 shares authorized at June 30, 2013, and  December 31, 2012, respectively;  no shares and  12,329,330 shares issued and outstanding at June 30, 2013, and December 31, 2012, respectively; aggregate liquidation preference of $105,512 at December 31, 2012

-


102,023





Stockholders' equity (deficit): 




     Common stock, $0.001 par value: 80,000,000 shares authorized at June 30, 2013, and December 31, 2012, respectively; 24,219,456 and 2,186,695 shares issued and outstanding at June 30, 2013, and December 31, 2012, respectively

24


2

     Additional paid-in capital 

167,714


3,317

     Accumulated other comprehensive income

21


4

     Accumulated deficit 

(118,650)


(98,267)

Total stockholders' equity (deficit)

49,109


(94,944)

Total liabilities and stockholders' equity (deficit)

$    66,192


$      24,539

 

Consolidated Statements of Operations

Three and Six Months Ended June 30, 2013 and 2012

(in thousands, except share and per share information)

(Unaudited)













Three Months Ended June 30,



Six Months Ended June 30,



2013


2012



2013


2012



(unaudited)

Contract revenue


$ 15


$ 2,992



$ 31


$ 6,011











Operating expenses:










     Research and development


9,646


4,230



15,966


7,450

     General and administrative


1,940


875



3,959


1,820

Total operating expenses


11,586


5,105



19,925


9,270











Loss from operations


(11,571)


(2,113)



(19,894)


(3,259)











Other income (expense):










     Interest income (expense), net


(236)


12



(488)


19

     Other income (expense), net


(2)


21



(1)


30

Net loss


(11,809)


(2,080)



(20,383)


(3,210)

Other comprehensive income:










        Net unrealized gains on marketable securities


17


11



17


13











Comprehensive loss


$ (11,792)


$ (2,069)



$ (20,366)


$ (3,197)











Basic and diluted net loss per common share


$ (0.49)


$ (1.01)



$ (1.02)


$ (1.57)











Weighted average common shares outstanding used to calculate basic and diluted net loss per common share


24,189,819


2,062,926



19,922,307


2,043,106

 

Stock based Compensation Expense

Three and Six Months Ended June 30, 2013 and 2012

(in thousands)

(Unaudited)









Total stock-based compensation expense included in the consolidated statements of operations is as follows:










Three Months


Six Months


Ended June 30,


Ended June 30,

(In thousands)

2013


2012


2013


2012

General and administrative

$ 174


$ 60


$ 259


$ 69

Research and development

199


46


295


58

Total stock-based compensation expense

$ 373


$ 106


$ 554


$ 127

SOURCE KaloBios Pharmaceuticals, Inc.



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