KOD = 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.
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.
Kodiak Sciences Inc. (Nasdaq: KOD), also announced that management will present at the Evercore ISI HealthCONx Conference in Boston, MA on Tuesday, December 3 at 1:15 p.m. Eastern Time.
A live webcast of the presentation will be available on the “Investors & Media” section of Kodiak’s website at http://ir.kodiak.com/ and will remain available for replay for a limited time following the event.
BRN = Attracting buyers interest still, after October 31, 2019, press release about their AI processor. BrainChip Holdings Ltd. (ASX: BRN), a leading provider of ultra-low power, high performance edge AI technology, announced that The Linley Group has completed an analysis of the company’s Akida™ processor platform.
The report examines the intersection of a growing conglomeration of technology challenges with the development of Akida, a low-power, high-capability inferencing engine with the ability to learn new spiking patterns in edge applications, even when there is no connectivity available to centralized cloud servers.
Linley’s analysts outlined Akida’s core capabilities, architecture, and throughput potential, and pointed out Akida’s biologically inspired design that mimics the spiking behavior of biological neurons. The report also describes BrainChip’s two business models related to Akida. Available as a complete Neural Processing SoC or as embeddable IP, Akida’s deployment flexibility can enable myriad use cases.
“The 28nm chip’s AXI-based mesh network connects 80 event-based neural processor units (NPUs). The NPUs implement a spiking neural network,” the report outlines, “but Akida also integrates spike converters that allow it to run convolutional neural networks.”
You can read the report here: https://www.brainchipinc.com/news-media/blog/detail/1705/the-linley-group-microprocessor-report-highlights
BIMI = NF Energy Saving Corporation (NASDAQ: BIMI) today announced that it had entered into a legally binding Memorandum of Understanding (“MOU”) to acquire Chongqing Guanzan Technology Co., Ltd. (“Chongqing Guanzan”), a Chinese medical device distributor, serving more than 200 full-service specialty hospitals in Southwest China, through its wholly-owned subsidiary Beijing Xin Rong Xin Industrial Development Co., Ltd.
Pursuant to the MOU, Chongqing Guanzan will, through an internal restructuring, acquire an 80% controlling interest in its current affiliate under common control, Chongqing Shude Pharmaceutical Co., Ltd (“Shude Pharmaceutical”), within 15 days of the signing of the MOU. Chongqing Shude is a Chinese medical device distributor with distribution channels covering 3,000 pharmacies, over 3,000 clinics and 50 private and public hospitals nationwide. The closing of the Chongqing Guanzan acquisition will be conditioned upon, among other things, the successful closing of the Shude Pharmaceutical acquisition. Upon completion of the Chongqing Guanzan acquisition for which no assurance can be provided, Chongqing Guanzan and Shude Pharmaceutical are expected to share their distribution channels with BIMI and assist BIMI’s subsidiary Boqi Zhengji Pharmacy Chain Co., Ltd. with its retail store expansion and membership development in Southwest China. BIMI intends that Chongqing Guanzan will operate as a wholly-owned subsidiary led by its existing management team.
NVAX = Still attracting buyers after November 27, 2019, news that B. Riley FBR resumed coverage of Novavax with a Buy rating and $12 price target.
SAVA = Still attracting buyers after October 29, 2019, earnings report when the company stated: “Cassava Sciences had a productive quarter with our clinical research program in Alzheimer’s,” said Remi Barbier, President & CEO. “We are encouraged by the robust biomarker data from a Phase 2a study in Alzheimer’s with lead drug candidate, PTI-125. PTI-125 is a twice-daily oral drug that targets both the neurodegeneration and the inflammatory components of Alzheimer’s. We’re seeing the research community shift from an amyloid-centric view, with all its noise and confusion, to one that targets neurodegeneration and neuroinflammation. PTI-125’s mechanism of action supports this evolution in Alzheimer’s drug development. That gets us excited.”
ASLN = ASLAN Pharmaceuticals announced positive preliminary data from the lowest dose cohort of its ongoing multiple ascending dose, or MAD, study of ASLAN004 for the treatment of moderate-to-severe atopic dermatitis, or AD. ASLAN004 is a first-in-class fully human monoclonal antibody that binds to the IL-13 receptor alpha1 subunit (IL-13Ralpha1), blocking signalling of two pro-inflammatory cytokines, IL-4 and IL-13, which are central to triggering symptoms of AD, such as redness and itching of the skin. The first patient was enrolled into the double blind study at Changi General Hospital in Singapore on 22 October 2019. As of November 29, 6 patients had been treated in the lowest dose cohort and 3 have completed at least one month of dosing. In a review of unclean blinded data, the Eczema Area and Severity Index, or EASI, scores of the 3 patients were reduced by 85%, 70% and 59% from baseline and the EASI score continued to fall at 4 weeks with maximal efficacy expected at 6 to 8 weeks. ASLAN004 was well-tolerated and, to date, there have been no serious adverse events or treatment discontinuations. Corresponding changes were seen in other measures of efficacy. The data monitoring committee, or DMC, will meet in late December, after which the second dose cohort is expected to open. The randomised, double-blind, placebo-controlled MAD study will evaluate 3 doses of ASLAN004 delivered subcutaneously and will be followed by an expansion cohort at the most efficacious dose. Each dose cohort will contain up to 6 patients on ASLAN004 and 2 patients on placebo, and the expansion cohort will contain 12 patients on ASLAN004 and 6 patients on placebo. Patients are dosed weekly for 8 weeks to determine safety and the maximal efficacy of ASLAN004. The study will recruit up to 50 moderate-to-severe atopic dermatitis patients and study completion is expected in the second half of 2020, with interim results expected in early 2020.
Piper Jaffray analyst Edward Tenthoff upgraded Aslan Pharmaceuticals to Overweight from Neutral and raised his price target to $8, from the previous $1. The company reported preliminary Phase I multiple-ascending dose data on subcutaneous ASLAN004 to treat moderate-to-severe atopic dermatitis, and in the lowest dose cohort, three evaluable patients experienced at least 60% reduction in the Eczema Area Severity Index score at one month, Tenthoff tells investors in a research note. Further, ASLAN004 was safe with no discontinuations or serious adverse events reported, the analyst adds. He also notes that Aslan is also conducting a Phase II study of ASLAN003 in acute myeloid leukemia. Both or either drug could represent partnering opportunities, says Tenthoff.
ISR = Still attracting buyers after November 12, 2019, earnings report.
On November 12, 2019, Isoray, Inc. (NYSE AMERICAN: ISR), a medical technology company and innovator in seed brachytherapy powering expanding treatment options throughout the body, announced its financial results for the first quarter fiscal 2020 ended September 30, 2019.
Revenue for the first quarter of fiscal 2020 grew 48% to a record $2.32 million versus $1.56 million in the prior year comparable period. The revenue increase was driven by 51% growth in the company’s core prostate brachytherapy business. Prostate brachytherapy represented 90% of total revenue for the first quarter of fiscal 2020 compared to 88% in the prior year comparable period. Non-prostate brachytherapy revenue in the first quarter of fiscal 2020 was comprised primarily of sales to treat brain, gynecological, colorectal, and other cancers.
Gross profit as a percentage of revenues increased to 53.4% for the three months ended September 30, 2019 versus 33.5% in the prior year comparable period. First quarter gross profit increased 136% to $1.24 million versus $0.52 million in the first quarter of fiscal 2019, largely attributed to increased sales and significantly lower isotope unit costs compared to the prior year comparable period, continued leverage of the fixed cost components within costs of sales, and more efficient isotope usage. The lower isotope unit costs are related to the previously discussed supply chain change made at the end of calendar year 2018.
Isoray CEO Lori Woods said, “These are exciting times for Isoray. We are very pleased by the continued progress we have made and the accelerated growth we have achieved. These results speak to the momentum we are realizing from the strategic direction and changes we have implemented to chart a new course for Isoray. Clearly, the strategies we’ve employed and the steps we have taken to establish Isoray’s leadership role in the prostate brachytherapy industry over the past year are resulting in accelerated organic growth and market share gains. A clear example can be seen in the trailing twelve months where our net new physician customer count increased 26% versus the previous twelve month period. We still have work to do and we will remain focused on our goals for growth and profitability.”
THS = William Blair analyst Jon Andersen upgraded TreeHouse Foods to Outperform from Market Perform without a price target. Private brands puts TreeHouse into a “large industry with ample runway for growth,” Andersen tells investors in a research note. Further, the company has “focused and simplified” its portfolio while making “good strides” with its enterprise strategy, which should bring more consistent financial results in 2020, adds the analyst. As such, he believes the stock’s risk/reward looks attractive at current levels.
AQST = Aquestive Therapeutics announced the completion, as planned, of the rolling submission of a New Drug Application to the U.S. Food and Drug Administration for its therapeutic candidate Libervant Buccal Film for the management of seizure clusters. Libervant has received orphan drug designation from the FDA.
“We are very pleased to have completed our NDA filing for Libervant as we had committed. We look forward to sharing the results from the single dose crossover study at the upcoming American Epilepsy Society 2019 Annual Meeting. We believe these results confirm our dosing algorithm and satisfy the final clinical requirement requested by the FDA,” remarked Keith J. Kendall, Chief Executive Officer of Aquestive Therapeutics. “We believe that Libervant has the potential to be the first oral therapy approved by the FDA for the management of seizure clusters in the population of 1.2 million refractory epilepsy patients and the first diazepam based treatment usable by and delivering a consistent predictable dose to virtually all patients to whom it will be prescribed.”
H.C. Wainwright analyst Raghuram Selvaraju raised his price target for Aquestive Therapeutics to $14 from $12 and reiterates a Buy rating on the shares. Earlier this month, Aquestive’s licensee Sunovion announced the resubmission of its New Drug Application to the FDA for apomorphine sublingual film to treat motor fluctuations experienced by people living with Parkinson’s disease in response to the Complete Response Letter received in late January 2019, Selvaraju tells investors in a research note. The resubmitted application included information about intended packaging as well as additional analyses of clinical data, which is an indication of Sunovion’s continued commitment to the product and ought to pave the way for potential approval of the drug next year, says the analyst.
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