On August 12, 2021 Chinook Therapeutics, Inc. (Nasdaq: KDNY), a biopharmaceutical company focused on the discovery, development and commercialization of precision medicines for kidney diseases, reported financial results for the second quarter ended June 30, 2021 (Press release, Aduro Biotech, AUG 12, 2021, View Source [SID1234586440]).

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"During the second quarter of 2021, we made strong progress across our pipeline of programs for kidney diseases, including driving enrollment in the phase 3 ALIGN and phase 2 AFFINITY trials of atrasentan, presenting interim clinical data for BION-1301 demonstrating initial proof-of-concept in patients with IgA nephropathy and advancing key IND-enabling studies for CHK-336," said Eric Dobmeier, president and chief executive officer of Chinook Therapeutics. "Our solid cash position and resourcing enable us to continue executing on key priorities to advance our pipeline and build Chinook into a leading kidney disease company."

Recent Highlights

Enrolled the first patient in the phase 2 AFFINITY basket trial of atrasentan, a highly potent and selective endothelin A receptor (ETA) antagonist (see www.clinicaltrials.gov, identifier NCT04573920).

Presented interim data from the first several patients with IgA nephropathy (IgAN) enrolled in Cohort 1 of Part 3 of the ongoing phase 1/2 study of BION-1301 at the 58th ERA-EDTA conference, demonstrating durable reductions in Gd-IgA1, IgA, IgM, and to a lesser extent, IgG levels, as well as clinically meaningful reductions in 24-hour proteinuria (UPCR), providing initial proof-of-concept for BION-1301 in IgAN.

Presented Gd-IgA1 biomarker data in healthy volunteers from Part 1 (single ascending dose) and Part 2 (multiple ascending dose) of the ongoing phase 1/2 study of BION-1301 at the ISN World Congress of Nephrology 2021, showing dose-dependent and durable reductions in Gd-IgA1 levels following administration of BION-1301.

Presented data from the BION-1301 phase 1 intravenous to subcutaneous bioavailability study in healthy volunteers at the ISN World Congress of Nephrology 2021.

Entered into an agreement for Sairopa B.V., or Sairopa, to acquire certain of Chinook’s non-renal assets in exchange for a 44 percent preferred equity position in Sairopa. Any future proceeds resulting from this transaction will be shared equally between the CVR holders and Chinook until October 4, 2030, after which 100 percent of the value will accrue to Chinook.

Announced promotions of Tom Frohlich to Chief Operating Officer and Andrew King, D.V.M., Ph.D., to Chief Scientific Officer.
Anticipated Upcoming Catalysts

Chinook expects to complete enrollment in Cohort 1 of Part 3 of the ongoing phase 1/2 study of BION-1301 in the third quarter of 2021 and to present additional patient data from this cohort at the ASN Kidney Week 2021 in November.

Chinook expects to initiate enrollment in Cohort 2 of Part 3 of the ongoing phase 1/2 study of BION-1301 in the third quarter of 2021. Patients in Cohort 2 will receive a subcutaneous dose of 600 mg of BION-1301 every two weeks for up to 52 weeks. Chinook expects to present patient data from Cohort 2 and provide an update on planned later-stage clinical trials of BION-1301 in the first half of 2022.

Chinook expects to present interim data from one or more patient cohorts of the ongoing phase 2 AFFINITY basket trial of atrasentan in the first half of 2022.

CHK-336 is currently in IND-enabling studies and is advancing towards expected initiation of a phase 1 clinical study in healthy volunteers in the first quarter of 2022 for the treatment of primary hyperoxaluria.
Second Quarter 2021 Financial Results

Cash Position – Cash, cash equivalents and marketable securities totaled $229.8 million at June 30, 2021, compared to $250.4 million at December 31, 2020.

Revenue – Total revenue increased by less than $0.1 million for the second quarter of 2021 and increased by $0.4 million for the six months ended June 30, 2021, compared to the same periods in 2020 due to revenue recognized related to research and development services provided under the collaboration agreement with Lilly, which was acquired under the merger with Aduro.

Expenses –

Research and development expenses were $22.8 million for the second quarter of 2021 and $48.5 million for the six months ended June 30, 2021, compared to $3.9 million and $6.7 million, respectively, for the same periods in 2020. The increase was primarily due to external clinical and manufacturing expenses related to the atrasentan and BION-1301 clinical programs; higher employee-related costs, including salaries, benefits and stock-based compensation expense associated with hiring staff to build out Chinook’s clinical and development capabilities; increased spending for consulting and outside services; and an increase in facilities and other costs. The six months ended June 30, 2021 also includes an upfront fee of $3.3 million due to Evotech International GmbH under a research collaboration and license agreement entered into in February 2021.

General and administrative expenses were $7.8 million for the second quarter of 2021 and $17.3 million for the six months ended June 30, 2021, compared to $3.9 million and $5.2 million, respectively, for the same periods in 2020. The increase was primarily due to higher employee-related costs, including salaries, benefits and stock-based compensation expense associated with the addition of administrative staff to buildout Chinook’s public-company infrastructure; higher legal, consulting and outside services costs; and an increase in facilities and other costs.

Expenses due to the change in fair value of contingent consideration and contingent value rights liabilities were $19.6 million for the second quarter of 2021 and $21.4 million for the six months ended June 30, 2021, compared to nil for the same periods in 2020. These non-cash expenses are due to the quarterly revaluation of assets and liabilities related to the Sairopa transaction and an updated valuation of Chinook’s CVR liability under the Merck collaboration, as a result of the merger with Aduro. In the second quarter of 2021, Merck informed Chinook that it intends to explore the potential benefit of the product candidate MK-5890, previously out-licensed to Merck by Aduro, in a phase 2 clinical study for a new indication. This may result in potential milestone and royalty payments for the benefit of CVR holders.

Other –

The sale of certain of Chinook’s non-renal assets to Sairopa in the second quarter of 2021 resulted in a $7.2 million gain.
Net Loss – Net loss for the second quarter of 2021 was $42.6 million or $0.97 per share and $79.8 million or $1.86 per share for the six months ended June 30, 2021, compared to net loss of $7.7 million or $1.87 per share and $12.9 million or $3.12 per share, respectively, for the same periods in 2020.
Cash Used in Operations – For the six months ended June 30, 2021, cash used in operations totaled $55.5 million.
(Press release, Aduro Biotech, AUG 12, 2021, View Source [SID1234586440])