On August 9, 2018 Kezar Life Sciences, Inc. (Nasdaq: KZR), a clinical-stage biotechnology company discovering and developing novel small molecule therapeutics to treat unmet needs in autoimmunity and cancer, reported its second quarter 2018 business highlights and financial results (Press release, Kezar Life Sciences, AUG 9, 2018, View Source [SID1234528613]).
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"The second quarter of 2018 marked multiple milestones for Kezar as we continue to execute on our strategy of developing our first-in-class selective immunoproteasome inhibitor for patients with severe autoimmune diseases. Enrollment is underway in KZR-616-002, our Phase 1b/2 trial in lupus (SLE) and lupus nephritis (LN), with top-line results from the initial two cohorts of the Phase 1b expected in the first half of 2019," said John Fowler, CEO of Kezar. "We remain on track to initiate our first randomized trial in LN, an area of high unmet medical need, in 2019. Finally, during this quarter we added key members to our management team and completed our IPO, which strengthened our balance sheet and will enable us to initiate clinical trials in up to four additional autoimmune indications also beginning in 2019."
Business Highlights
Enrollment of patients with SLE with and without nephritis to the open-label dose escalation Phase 1b portion of the clinical trial KZR-616-002 (NCT03393013), continued in the second quarter. This trial is being conducted in the United States and includes a randomized, placebo-controlled Phase 2 portion in patients with active, proliferative LN.
In May, the Company announced the appointments of Niti Goel, MD, as Chief Medical Officer and Marc Belsky as Chief Financial Officer. Dr. Goel will be responsible for Kezar’s overall regulatory, clinical development and medical affairs activities, and Mr. Belsky will head the finance and administrative functions of the Company.
In June, the Company completed its initial public offering (IPO) of 5,750,000 shares of its common stock, including the exercise in full of the underwriters’ option to purchase 750,000 additional shares of common stock, at a public offering price of $15.00 per share. The gross proceeds to Kezar, before deducting underwriting discounts, commissions and offering expenses, were approximately $86.3 million.
Financial Results
Cash Position. Cash, cash equivalents and marketable securities totaled $118.4 million as of June 30, 2018, compared to $51.0 million as of December 31, 2017. The increase in cash, cash equivalents and marketable securities was primarily attributable to IPO proceeds, net of cash used by the Company in operations to advance its clinical stage programs as well as preclinical research and development.
R&D Expenses. Research and development expenses for the second quarter of 2018 increased by $3.8 million to $5.2 million from $1.4 million in the second quarter of 2017. This increase was primarily related to advancing the KZR-616 clinical program.
G&A Expenses. General and administrative expenses for the second quarter of 2018 increased by $1.3 million to $1.7 million from $0.4 million in the second quarter of 2017. This increase was primarily related to costs incurred to complete the IPO.
Net Loss. Net loss for the second quarter of 2018 was $6.8 million, or $3.31 per basic and diluted share, compared to a net loss of $1.9 million, or $3.30 per basic and diluted share, for the second quarter of 2017.
Shares Outstanding. Total shares outstanding were 19.1 million as of June 30, 2018. Additionally, there were 2.2 million options to purchase common stock at a $3.70 weighted average exercise price as of June 30, 2018.