KIN - Earnings call transcript Q4 2020 | Kindred Biosciences Inc

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Operator

Welcome to the Fourth Quarter and Full Year 2020 Financial Results Conference Call and Webcast for Kindred Biosciences. At this time, all participants have been placed on a listen-only mode. At the end of the prepared statements, participants will have the opportunity to ask questions. [Operator Instructions] Please note that remarks made today will include forward-looking statements and that actual results could differ materially from those projected or implied in our forward-looking statements.

For a description of important factors that could cause actual results to differ, we refer you to the forward-looking statements in today’s press release and a note on forward-looking statements in the company’s SEC filings. pleasure Chin. the my KindredBio's over now Richard CEO, is to call turn to It Dr. proceed. please Chin,

Richard Chin

Thank you, call. afternoon, full operator. Good year quarter our XXXX and fourth financial results and welcome to

of Joining from CFO; Katja Investor our me Buhrer, and Wendy of Development the team and Corporate today VP Relations. Wee, KindredBio management our are

and in including thrilled excellent tirnovetmab headway made with the results the We study We of positive progress are pivotal fourth quarter inflammatory program. our pipeline, our general. in our and initiation the in bowel XXXX on across for disease

be our We antibody with KindredBio. partnership also XXXX well this signed agreement a a successes to and The expanded with have agreement better Elanco manufacturing year XXXX for us up expect for parvovirus for our set in and we Vaxart. year

on how with year. XX canine to enroll of it one product December our franchise. that start tirnovetmab would study tell We a tirnovetmab of we last given and pivotal take expectation me changed. successful. candidates. the an extremely grown to initiated quickly for soon dermatitis study And to the our the This Let will is that in year, our complete will It's months market nearly too $X flagship has expect to billion XX be dermatitis hasn't to update

antibody. we addition, receptor nicely, are IL-X In advancing our our dermatitis other for including candidates

symptoms. antibody IL-X reminder, our the just targets underlying instead the a As itself disease of

not over significant including disclosed. pipelines potentially industry, of could it in therapies. been dermatitis have advantages broadest had molecules have available advanced the we that several We most So one certain believe and have the

molecules and the pipeline, Extension leaders. Life possibly potential and Half to our think into technology incorporated best-in-class already our have market be dermatitis have long-acting We

this of and expect for that the incumbent, with With field, be our of are we competition the a to next molecule we in indication. market this estimate to ahead we exception current

promising very we're pipeline. excited So, dermatitis about our highly

outside The study. prophylaxis of near We the has puppies delayed compelling with future. and of have has the within about of we we There's devastating treatment as totaling longer results believe lot which best been terrible one from condition. previously is but announced. antibody with Turning care milestones a program, than the the and currently in company pivotal parvovirus reported We're excited this partnership for the about untreatable we offers very program, are in the of the this with both million, the a favorable, partnership hope expected, dogs has pivotal revolutionize disease. which Elanco, our that commercial to The $XXX excitement the study and very results terms this industry. organizations to potential over expect what

related and modern could before in owners it think achieved similarities of same treated life. on notable has size. market all disease many X% none affecting quality The disease to placebo treated placebo impressive. out the the was placebo group seven, the whereas of We atopic XX% day in atopic the of impact the dose greater over score only first score At post treatments group. also maintain including dogs XXX% are XX% of IBD dose group. dogs. in the at remission and achieved posts the reduction baseline from visits, XX% the the dogs antibody TNF the end approved, of year, in result showed Complete inflammatory throughout disease of program to last the the XX% than and Furthermore, common, the are reduction compared XX% of dermatitis results visits results for were compared in achieved group, of dermatitis the very market, rival read bowel XX% market to We the disorders

multiple including us as of our program, have potential of exciting approval ahead We and year continue advance major an readouts we parvovirus. to

financials, work the company. with pleased of is the partnered with our the to the revenue, royalty is it doing. will partner discuss right which market. great which And we reflects job we're a Turning that growing terrific clear detail, more Dechra in Wendy has done

we're realize we're Vaxart our addition, also and In contract well along expansion is the million partnership, The with with pleased $XX.X of we that work the business. on generating expect revenue from coming our revenue. manufacturing partnership, of to about

vaccine, have which National capabilities. and pass order for evaluation been like rigorous Cancer contracts our manufacture manufacturing a a human also the a contract Institute, from In to further must the awarded very We qualify for of process. undergo validates this, companies papillomavirus

world-class know, manufacturing. competitive we attractive contract At non-dilutive advantage our opportunity time, executing This and to same pipeline. on focus an very presents major and gives in personnel. plants capital one for the manufacturing have our you As number us remains a bring

steady We we in that are to continue OpEx a XXXX. $XX resilient takeaways and our to net our and we able spending, fairly approximately remain The be operate expect to growing in judicious were maintain to this level with industry. in million QX

review are board. We And call excited capitalized. potential progress to managing future. With our turn about we're We're our high products. financials. I making very We're quarter value over on well will burn. executing that, strong carefully We're for amply of the blockbuster Wendy our across fourth a the

Wendy Wee

investment our streamline actions us and for position prioritize biologics our runway took in and the cash operations stages success. highest see to the in begin strategic footprint, late to The programs stage operational value Richard. reduce model right Thanks, with extended XXXX business operating our development. promising final future expenditures through we XXXX We of

XXXX. of share, reported to $XX.X million per loss net for of a fourth $X.XX in a the compared share or Turning $X.XX per the same $XX.X period to our financials, net loss we for or million quarter,

loss year, period. For million $X the were variance $X.XX as per XX. to sale $XX.X revenues Full $X.XX to $X.X relates in the $X.X revenues proceeds or the million $XX.X million compared of completed million XXXX. million compared in full loss year million Total for were Mirataz $XX.X of ago quarter on was the versus which XXXX. - share year to net the net share, Dechra, was to April a from per or The in

component biggest of XXXX the the of for quarter fourth year the $XXX,XXX the all $XX.X Substantially in million revenue was result full for year the Mirataz. revenues due to in in $XXX,XXX sale for We recorded again, variance the the of Mirataz. from were $XXX,XXX Here product the of royalty and year.

COVID-XX candidate agreement revenue. periods. Elanco and completion agreement for Our oral were broadly consistent as development million of the same $XXX,XXX expenses upfront a of million of Research and for in provided for the fourth of percentage non-refundable was partnership with milestones KindredBio, licensing in million manufacturing Vaxart payment contract recorded their totaling $X.X XXXX. on in $X.X The and $XXX,XXX, manufacture based the $X.X the quarter, period XX-month specific vaccine three the resulted for which partner versus

$XX.X the For in to expenses XXXX. full compared year, million, million were $XX.X R&D

Stock-based increase manufacture favor by noted the quarters, reflects clinical of consistent to year-over-year biologics of partially facility related in for million molecule XXXX trial fourth the small period to for expenditures prior $X.X compensation commissioning programs. have development material, in inclusion $X.X discontinue versus categorized general administrative we prior been was Kansas versus lower decision million with R&D, expense quarter million in payroll XXXX, the R&D in As and as in $X.X Prior associated and offset SG&A began in costs the the year. have XXXX. construction primarily expenditures expenses. Kansas the it facility to and same million $X.X as the expenses with and totaled

was reduction, the late as million year-over-year force. animal’s in million in prior connection $X.X decrease prior is $X.X and maintain with expense KindredBio’s, $X.X and expenses the recorded million For compensation we $XX.X runway of programs. key XXXX. companion Stock-based charge to associated restructuring year. of and The million our stage balance, in research to sales result of with And reach expenses us were related $XX.X year. milestones a plant of of expenses. result XXXX the million of elimination in SG&A expenditures workforce XXXX, lower the as $XX a the a healthy stage development re-categorization on In We million, the Kansas late programs compared cash providing the prioritization versus KindredBio’s payroll the

cash As December XXXX. sale. was in approximately compared the XX, investments Mirataz in $X.X XXXX, XXXX of in X received million reflecting and asset activities December $XX cash, used operating XX, $XX.X at we million million cash for Net to had equivalents payment

with We to approximately the purchase a expenses for range in for invested remain the Kansas facility. and expenditures expenditures judicious between spending to broadly quarterly spend in million also million on expect to We our manufacturing $XX $X.X to and anticipate million. operating continue $XX basis. capital stable be sequential of to equipment respect XXXX, we operating With lab

biologics our programs. contract catalyst existing to and will closing, late pipeline forward one until in fund equivalents expenditures remaining the of $X be and approximately believe invest plan to partner proceeds lab equipment to plan current We billion operating sale, also investments manufacturing in and on form cash, capital for will manufacturing from royalties the revenue sufficient in licensing Mirataz our year expertise of have call XXXX. cash the and look I next updating early important ahead from cash XXXX. revenues We progress stage to necessary Richard. forward R&D way in over attractive in the back look on We to the and In turn now we to value our the realize and you our the quarter. programs

Richard Chin

Wendy. Thank we for Q&A. ready Operator, you, are

Operator

of line from the Jon from comes question first Stifel. Block Our Instructions] [Operator

Your question, please.

Jon Block

Great, early funded prior. two better three with guidance or guidance, thanks, of guys. than the afternoon, start sort a from me, XXXX is fully I’ll Wendy Good maybe but the until

it's Wendy change the like But had with additional Vaxart. a you you Richard, given funded? months several in was but of provide mid contract looks could not you have over Elanco would the maybe you three the maybe on think detail some helpful? very can And few language the that million I company number you've there, past OpEx seemingly manufacturing? positive I XX nine, if nine might clearly what parvo, know assumption dollar that did announcement from details, XXXX, fully be maybe quarters being months thought or additional the odd

Wendy Wee

Elanco. the Vaxart down with Sure, it's have a that ATM on revenue, naturally out partnership extended runway. so portion from we small our drawn our also And of cash and

Jon Block

Okay, that that and just some for months XX is figure trying to timeframe something or that be provide clear, XX beyond you to revenue XXXX? know board next come well, did figure was Vaxart? I'm on XX Vaxart you million could will just to the attributed get to to odd I'm that trying you extend in the for the that that

Wendy Wee

is Yes, the year That contract our Vaxart. to recognized $XX.X million with be XXXX. is in really the

Jon Block

you thoughts the it just we could look, furnish some And XX IL-XX, started Biosciences And of from the on Okay, as great, if the should What updates from timeline to for that's its for terms provide IL-XX? then we months. business great that attribute it clear with the to enrolling, you about we’re you XXXX. how changed plan company the and a us to to perspective, very know But hear. think you with street? call along Kindred pivot, XX were way, maybe that hasn't handle to we going you're hear in

Richard Chin

sure. Yes,

we'll I we could quarter or think - in that guidance. enough so find information we probably have that another enrollment

under months So the belt, enrollment as of which we way clear should is get it enrollment become two, three going. more our

Jon Block

blockbuster? that the stories success could IBD about, derm. bigger And one obviously as could that market. And conviction be talk atopic in offline. follow-up led you were that? big companion even atopic maybe you Can you would, Richard, of talking that increased is the down size why then that last I and you derm, - what, had Thank from increase I'll mentioned, one IBD, such if mentioned mean when I conviction, be me, Okay. path animal we've and as to you the material believe you. the a the market

Richard Chin

as Absolutely, to data how we've is. and the been impressive talking data veterinarians analyzed the so additional we've realized, And obviously, customers. we've been

parallels the similar are XX% impact look the X% affects dog the the So Right basically because to but at which more lot is of think the or market now, mainstay is they side significant if has the category bowel pee IBD. were at probably become that the before And the X% exact veterinarians steroids, of least cheap, and were the the side like same disease, the actually diseases inflammatory of is effective atopic case dermatitis to current with a - so on you are the had in about and of a therapies life than for sort carpet. make disease, of just there And launched, a including inflammatory situation the of owners has a that affects the or mess effects, the dogs, is effects, We in not lot therapies quality market. either on of making atopic dog. dermatitis do that in and atopic market, more lot on making dermatitis dog is carpet, about bowel incontinent.

well, of So, to few if be it's from of millions and And a that market has we that that very rapidly. works this drug bring works we of well. quickly similar another million example out a XXs think could dollars very that goes that hundreds dollars of safe

Operator

our next from from O'Neil And of the question line Street comes Brooks Capital. Lake

please. Your question,

Brooks O'Neil

Are partnerships product if in likely A) Richard, you for to little might line relates these these thinking terms work some move the of Elanco as it products work you a potential or your generations, continue bit think the would pursue just to would you talking sort curious of to products pipeline are of that of indications partners in it's you additional partnering? you mind make you it as with I'm that a thinking in those variety do you more next want with sense to next forward? about philosophy,

Richard Chin

Yes, far. them. with partner great well so We're really Elanco working has a so been

to we the of the for is So may plan longer. products, the on some economics certainly apparent, value partner get wait development We some partnering a envision or other early with we attractive other depending do ones, product, earlier I so we on in think may products. partnering our products of most little could that I need them. later, the those, And could on

to So be basis think as we will partner case-by-case on the it when get can we a best economics. to when on depend we

plan partnership with Now on I think what a you're having alluding companies. multiproduct we other to do is,

on on haven’t all We certainly partnerships depends are products, the but like approach Right about terms. that. we individual now, focused it

rule we that out. So, wouldn't

Brooks O'Neil

of I hoping quarterly Thank regard the spending give the might that you pattern of anticipate to very color Wendy spending great. that color. Okay, for much just any pattern she with was offer for would might you - XXXX?

Wendy Wee

pretty the to do to be consistent. Well, first spending quarters. expect higher consistent, we expect generally we other it is do be typically than pretty But, quarter

Brooks O'Neil

don't particular see, trials, you sit don't any any bumping spending see where these of least on now? at you you right spending up quarter, Right, from in

Wendy Wee

quarter you higher. parvovirus we're spending While expect why know, be I we do expecting be to trial to mentioned completed that's slightly first

Brooks O'Neil

Yes.

Wendy Wee

$XX general, guidances But the than other quarters, for but spending the in year. to $XX million million

Brooks O'Neil

financing, biggest cash And next last then do curious, year me, non-dilutive about you Okay Jon as about as about think just so? you and asked your developments from the the got the seen great. But financing, that, opportunities you think that's I'm the or guys obviously, sources as availability you've positive of you see what non-dilutive there. in

Richard Chin

Certainly, free the Maybe feel to I'll expect we start and and milestones, revenues add it. additional to answer partnerships, from both Wendy royalties.

in right business, to which is contract now of expect manufacturing lot But our line we're that work. there's a biologics. build to of as for primary fortunate our the demand not said, We continue I situation

two, that to funding we additional to add between that should be getting those Wendy? So, you some and want

Wendy Wee

identified, the basically you main Though areas.

Brooks O'Neil

your one capacity? some that you just you, and opportunities advantage would you or might what be opportunities to are manufacturing of Great anticipate contract sort pretty take pet-related and your follow-up be open that, the biologics about of minded to to do of

Richard Chin

biologics. opportunities expect pet we for have Yes, definitely to

of products. of refusal right have Elanco’s we as fact, In for two

Brooks O'Neil

Sure.

Richard Chin

manufacturing, at In monoclonal the addition, and are space. pursuing looking there's companies veterinary in the biologics other some start-ups

many us. course, years Of there are behind

positioned very manufacture are biologics companies. We to veterinary for well

different for up plants. expertise We have And for EMA. manufacturing or that's than manufacturing built We've FDA the USDA. in

the be for we partners one So, we think probably of choice of manufacturing. will

we side. have certainly, And customers one. either do can In the for human potential we addition,

of think So, we'll mix a both. see I

Operator

comes of from Our next Folkes question line Cantor the Brandon from Fitzgerald.

please. question, Your

Brandon Folkes

their completely you prophylactic me for of regulatory the when expansion but or thanks the Hi, successful, a you. being Thank the the altogether? during there, elaborate question pivotal different to this filing pursued progress If KIND-XXX on current an all therapeutic amendment they're taking approval is year. my therapeutic. and prophylactic post from Maybe on could is congratulations one the and the just indication efficacy label on strategy submission and

Richard Chin

for If clinical is that because positive Elanco there's indication whenever obviously, this with a certainly reason either study, means advantage we its molecule the use prophylaxis which some approval. be Sure. treatment. you're is would veterinarians follow if, And that would with Because or We for bio, works reason, that it study studies. would it's doing is the not even to molecule free treatment the with we risk repeat for for trouble would We and would. up of some the launch drug one know indication. some the the presentation, second the same always same

I for the be would an So sales be use we not anticipate most would the would drug because for veterinarian’s indications likely obviously, both attractive, still quite use. promoting unapproved

scenario, under So might not on be be think great impact the - revenues. some you not that would as otherwise impact. think as would I But may there be

Brandon Folkes

maybe successful to you've therapeutic the just Thanks. altogether is filings timing or able two we in - initiated strategy promote separate being the given of sort therapy, And Richard you just, indication what you’re so about prophylactic indication? of filing? if how the Are the think filing that are therapeutic should they

Richard Chin

would now is filing be clinical the factor. limiting manufacturing the But Yes, between filing rate And would be manufacturing, the two. the separate. of part shared the right

them. approval regular with is that delay be at to part speed be the we test is is the Because think even we the we the limiting will factor in manufacturing which able the the pivotal, date send treatment USDA anticipate the So samples don't affected. to going

them they own heard, likely those they're because what COVID. short a the samples. from we've there's taking does, run, from most takes than their it due to staffed, run tests and on delay, your normally it's And longer bios USDA So manufacturing

Operator

H.C. Instructions] next comes RK [Operator in Our question of line a Wainwright. from

question, please. Your

Swayampakula Ramakanth

Wendy. Thank you and and good afternoon Richard

Wendy Wee

afternoon. Good

Swayampakula Ramakanth

you bit just And see - run run about little prevent the revenue any the the program to to for rate a just contact understand we this explained Yes, the NCI? Like long revenue that Vaxart. color like for? IDIQ. is How - how contact would under from as from the as

Richard Chin

of vendors announced so NCI qualified three were that we program. that that previously program has, is the large one of this we part this Sure, for overarching

couple task So, were the awarded components. of that has we different contract order the

under be could first million over it portion. So, million this a for $X to $X

haven't it's variable awarded exact option we put are under to the have second is numbers why They the program. likely be overarching this of part to of have. the that out first We because that's that this the an we multiple contracts for So believe contract.

now, right which obviously, So awarded. it predict additional get we we can't on because contracts depends

Swayampakula Ramakanth

understand Thank you. Dechra, you just And to that your is then regarding regarding the can what commercialized, we what of do being product? that Mirataz and flow from - or think of how also, feeling under it's the royalties revenue so

Richard Chin

start Sure, the to handling our to it's feedback, she's very, how a charge I'll off. able portfolio very add saying, product, like and rest been them. in then They're really really the to of is with Katja their managing start good And it Dechra leverage partnerships. of happy get high because saying, adoption. for we've to the by getting I'll They what I'll have priority product. they're I'm

out. little a Katja, steady, to But the to trend So in speak want seeing move you bit? we're do that upward a

Katja Buhrer

the the clinics. they in near product of in in and increase XXXX, sales April monthly achieved U.S. launch realized a sales U.S. so have - Sure, to Mirataz XX% strong growth

quarter-over-quarter, also clinics and They've quarter, fourth were in EU the launched So distributors veterinary sales quarter. the versus sales in on since to distributors the lower increased U.K. but to from the third

sales going see And so, the of acceleration an trajectory we'll forward. we think

and We've see we'll with positive So strong the that we record date news think currently track seen that we're to very a there. pleased to we have results. and more come

Swayampakula Ramakanth

all for questions. Thank Thank you you. taking my

Richard Chin

Sure.

Operator

to to conclude hand This I'd Richard today's does session the you. Chin’s of program Dr. question-and-answer further back Thank program. for like remarks. any the

Richard Chin

year. thank like I'd and exciting our as for to forward an you, listeners support, catalyst look operator. rich to we continued Thank

Operator

conclude and Thank your the for you, This in ladies today's participation does program. gentlemen, conference.

may disconnect. You Good now day.

Kindred Biosciences (KIN) 17 Mar 212020 Q4 Earnings call transcript