On March 26, 2019 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 fourth quarter and full year 2018 financial results and business highlights (Press release, Kezar Life Sciences, MAR 26, 2019, View Source [SID1234534625]).
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"This past year was pivotal for Kezar, and I’m proud of the tremendous progress our team has accomplished," said John Fowler, Chief Executive Officer. "We successfully completed our IPO, creating a strong capital base, and we are rapidly advancing KZR-616, our first-in-class selective immunoproteasome inhibitor for patients living with severe and underserved autoimmune diseases. We look forward to sharing results from the initial two cohorts from the Phase 1b portion of our trial in lupus patients and initiating our Phase 2 trial in lupus nephritis (LN) in the second quarter of 2019. We are also pleased to announce the planned expansion of our KZR-616 clinical program with additional Phase 2 trials commencing in up to four new indications later this year, including dermatomyositis and polymyositis. Lastly, our ongoing discovery efforts in protein secretion are progressing well, and we anticipate nominating our first oncology clinical candidate before the end of the year."
Fourth Quarter and Recent Clinical and Business Highlights
Our systemic lupus erythematosus (SLE) and LN program is advancing with enrollment continuing in the open-label dose escalation Phase 1b portion in SLE patients. We plan to initiate the Phase 2 portion of the trial in patients with active, proliferative LN and expect to report data from the first two cohorts of the Phase 1b portion in the second quarter of 2019.
We initiated a Phase 1, randomized, double-blind, placebo controlled, single and multiple ascending dose trial to assess the safety, tolerability, pharmacokinetics, pharmacodynamics, and immunomodulatory activity of a new lyophilized formulation of KZR-616. This formulation of KZR-616 has the potential to improve the ease of drug administration, transportation and storage, which we believe may result in increased patient adoption in a commercial setting. Additionally, data from this trial may support development and potential regulatory approval.
Clinical development efforts are underway to initiate trials in up to four additional autoimmune diseases of high unmet need beginning in the second half of 2019, with the first two diseases being dermatomyositis and polymyositis.
The protein secretion program (Sec61 translocon modulation) also advanced during the fourth quarter which will be showcased in two poster presentations at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) in Atlanta, GA on April 2, 2019. We remain on track to nominate a first clinical candidate in oncology this year.
Earlier this month, we announced the appointment of Celia Economides as Senior Vice President of Strategy and External Affairs. Ms. Economides will serve as a member of the management team and executive committee leading Kezar’s overall investor relations, communications, patient advocacy and strategic efforts.
Financial Results
Cash, cash equivalents and marketable securities totaled $107.4 million as of December 31, 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.
Research and development expenses for the fourth quarter of 2018 increased by $3.0 million to $4.6 million from $1.6 million in the fourth quarter of 2017. Full year R&D expenses increased by $11.7 million in 2018 compared to 2017. This increase was primarily related to advancing both the KZR-616 clinical program across indications and the protein secretion preclinical program in addition to personnel and facility-related expenses.
General and administrative expenses for the fourth quarter of 2018 increased by $1.0 million to $1.8 million from $0.8 million in the fourth quarter of 2017. Full year G&A expenses increased by $4.3 million in 2018 compared to 2017. The increase was primarily due to an increase in stock-based compensation, personnel expenses, consulting and professional fees related to operating as a public company, and facility-related expenses due to the move to our new corporate office.
Net loss for the fourth quarter of 2018 was $5.8 million, or $0.30 per basic and diluted common share, compared to a net loss of $2.3 million, or $3.34 per basic and diluted common share, for the fourth quarter of 2017. Net loss for 2018 was $23.2 million, or $2.26 per basic and diluted common share, compared to $8.5 million, or $14.21 per basic and diluted common share, in 2017.
Total shares outstanding were 19.1 million as of December 31, 2018. Additionally, there were 2.2 million outstanding options granted to purchase common stock at a $3.80 weighted average exercise price as of December 31, 2018.