On November 9, 2022 KemPharm, Inc. (NasdaqGS: KMPH) (KemPharm, or the Company), a biotechnology company focused on the discovery, development and commercialization of novel treatments for rare central nervous system (CNS) and neurodegenerative diseases, lysosomal storage disorders and related treatment areas, reported its financial results for the quarter ended September 30, 2022 (Press release, KemPharm, NOV 9, 2022, View Source [SID1234623757]).
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"During Q3, we made substantial progress with our two lead programs, arimoclomol, our NDA-stage product candidate for Niemann-Pick Type C (NPC), an ultra-rare lysosomal disease, and KP1077, our product candidate based on our prodrug of d-methylphenidate, serdexmethylphenidate (SDX), which is intended for the treatment of two rare sleep disorders, idiopathic hypersomnia (IH) and narcolepsy," stated Travis Mickle, Ph.D., President and Chief Executive Officer of KemPharm. "For arimoclomol, our team has made considerable progress characterizing the substantial data repository and generating a host of summary reports designed to present meaningful evidence of safety and efficacy as part of the NDA resubmission. Based on the recent completion of the 4-year open-label safety trial, the ongoing and constructive dialogue with the FDA and the new wealth of data generated since the CRL, we now anticipate resubmitting the updated NDA as early as Q3 2023. And, while no new or unanticipated issues related to resubmission have arisen, we believe the added time will be well-spent in preparation of an NDA filing with the highest likelihood of approval."
Dr. Mickle continued, "For KP1077, the initial results we reported in October 2022 from the Phase 1 cardiovascular safety trial of SDX demonstrated the potential for ‘higher dose’ SDX to be safe and well-tolerated. We believe this could position KP1077 as an advancement in the treatment of IH, and we remain on track to initiate the Phase 2 clinical trial by the end of 2022."
Dr. Mickle concluded, "We believe KemPharm is well-positioned with a strong investment thesis that we expect to be validated as the Company executes on a deep and differentiated development pipeline supported by a strong operational and financial foundation. This includes a cash runway that is forecasted to extend into 2026, which could be further bolstered by the potential to realize sales milestone and royalty revenue from AZSTARYS as Corium executes its commercialization strategy. Altogether, we believe there are multiple catalysts for KemPharm during the remainder of 2022 and throughout 2023."
Recent Business and Corporate Highlights:
Continuing activities to bolster the arimoclomol New Drug Application (NDA) for resubmission to the U.S. Food and Drug Administration (FDA):
Working to amass and characterize a substantial data repository from a 4-year arimoclomol safety study, and pinpointing key elements to include in the NDA resubmission for arimoclomol based on new data generated since June 2021;
Ongoing collaborative dialogue and periodic meetings with the FDA intended to ensure an optimal NDA data package that demonstrates arimoclomol to be a safe and effective therapy for NPC, if approved; and
Currently anticipating resubmission of the updated NDA as early as Q3 2023, with plans to provide updated guidance if needed based on ongoing dialogue with the FDA as we seek to compile an optimal data package for resubmission.
Progress in advancing investigational candidate KP1077, an SDX-based product being developed as a treatment for IH and narcolepsy:
Completed Phase 1 cardiovascular safety clinical trial of SDX which confirmed the initial dosing strengths for the Phase 2 clinical trial of KP1077 in IH;
Data suggest that SDX can be safely dosed at levels higher than currently available methylphenidate-based products, which is expected to result in improved efficacy while avoiding the potential for greater cardiovascular safety risk; and
Preparing to initiate a Phase 2 clinical trial of KP1077 in patients with IH prior to year-end 2022 and a second trial in patients with narcolepsy in 2023.
Strong operational and financial foundation, including $107.4 million in cash, cash equivalents and investments as of September 30, 2022:
Based on current operating forecast, cash runway is expected to continue into 2026; and
The potential to realize milestone and royalty revenue from AZSTARYS as Corium executes its commercialization strategy could provide further capital flexibility and extend the operating cash runway.
Overview of Third Quarter 2022 Financial Results:
Net revenue for Q3 2022 was $2.9 million, as compared to Q3 2021 net revenue of $2.0 million. The period-over-period increase was primarily attributed to revenue from the arimoclomol Early Access Program (EAP) in France, partially offset by a decrease in revenue from consulting arrangements period over period.
Research and development expenses were $5.4 million for Q3 2022, as compared to $2.2 million in Q3 2021. The period-over-period increase was primarily driven by the KP1077 clinical development program, the arimoclomol program, increased depreciation/amortization related to the arimoclomol asset acquisition in the second quarter of 2022, and increased compensation costs, including non-cash stock-based compensation expense.
General and administrative expenses were $4.0 million for Q3 2022, as compared to $1.9 million in Q3 2021. The period-over-period increase was primarily driven by increased compensation costs, including non-cash stock-based compensation expense, as well as increased professional fees and depreciation/amortization related to the arimoclomol asset acquisition in the second quarter of 2022.
Net loss attributable to common stockholders for Q3 2022 was ($6.6) million, or ($0.19) per basic and diluted share, compared to a net loss attributable to common stockholders of ($1.8) million, or ($0.05) per basic and diluted share for the same period in 2021. Net loss for Q3 2022 was driven primarily by research and development expense of $5.4 million, and general and administrative expense of $4.0 million, partially offset by net revenues of $2.9 million.
As of September 30, 2022, total cash, cash equivalents and investments were $107.4 million, which was a decrease of $7.1 million compared to $114.5 million as of June 30, 2022, driven in part by increased third-party research and development costs related to the KP1077 clinical trial program, the arimoclomol program, other expenses, as well as investment of working capital related to the collection of accounts receivable due from French EAP reimbursements. Based on the Company’s current operating forecast, existing cash, cash equivalents and investments are expected to be sufficient to continue operations into 2026.
As of September 30, 2022, total shares of common stock outstanding was 34,501,144 shares, and fully diluted common shares outstanding was 47,076,872 shares, which included 4,252,600 shares issuable upon exercise of warrants.
Conference Call Information:
KemPharm will host a conference call and live audio webcast with a slide presentation today at 5:00 p.m. ET, to discuss its corporate and financial results for the third quarter of 2022.
The audio webcast with slide presentation will be accessible via the Investor Relations section of the Company’s website, View Source An archive of the webcast and presentation will be available for 90 days beginning at approximately 6:00 p.m. ET, on November 9, 2022.