Kiniksa Pharmaceuticals International Q4 2024 Earnings Report

Kiniksa Pharmaceuticals International EPS Results

• Actual EPS: -$0.12
• Consensus EPS: -$0.06
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: $0.35

Kiniksa Pharmaceuticals International Revenue Results

• Actual Revenue: $122.50 million
• Expected Revenue: $123.42 million
• Beat/Miss: Missed by -$920.00 thousand
• YoY Revenue Growth: +46.90%

Kiniksa Pharmaceuticals International Announcement Details

• Quarter: Q4 2024
• Date: 2/25/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, February 25, 2025
• Conference Call Time: 8:30AM ET

Kiniksa Pharmaceuticals, Ltd., a biopharmaceutical company, focuses on discovering, acquiring, developing, and commercializing therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical needs worldwide. Its product candidates include ARCALYST, an interleukin-1alpha and interleukin-1beta, for the treatment of recurrent pericarditis, which is an inflammatory cardiovascular disease; Mavrilimumab, a monoclonal antibody inhibitor that completed Phase II clinical trials for the treatment of giant cell arteritis; Vixarelimab, a monoclonal antibody, that is in Phase 2b clinical trial for the treatment of prurigo nodularis, a chronic inflammatory skin condition; and KPL-404, a monoclonal antibody inhibitor of the CD40- CD154 interaction, a T-cell co-stimulatory signal critical for B-cell maturation, immunoglobulin class switching, and type 1 immune response. The company was incorporated in 2015 and is based in Hamilton, Bermuda.

Kiniksa Pharmaceuticals International Q4 2024 Earnings Call Transcript

Key Takeaways

• KPL-387 program targets monthly subcutaneous dosing in recurrent pericarditis, with a Phase II/III trial set to start mid-year and Phase II data expected in H2 2026, aiming for approval by 2028–29.
• Arclist net product revenue rose 72% in Q4 to $122.5 M and 79% for FY 2024 to $417 M, driving 2025 guidance of $560–580 M amid expanding prescriber adoption and awareness campaigns.
• Kinixa closed 2024 with approximately $244 M in cash and generated $37 M of net cash flow, and expects to remain cash flow positive on an annual basis.
• Despite robust revenue growth, the company incurred a $43.2 M net loss in FY 2024 due to higher cost of goods sold, tech transfer, R&D, and SG&A expenses.
• The company will discontinue avibruvar in Sjögren’s disease after Phase II, exploring strategic alternatives while prioritizing its IL-1 pathway and cardiovascular pipeline.

Presentation

[Operator]

Good day and thank you for standing by. Welcome to Coninsa Pharmaceuticals Fourth Quarter twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Also, please be advised that today's conference is being recorded.

[Operator]

I would now like to turn the conference over to your speaker for today, Jonathan Kirschenbaum, Investor Relations. Please go ahead.

[Jonathan Kirshenbaum, Senior Manager of Investor Relations at Kiniksa Pharmaceuticals International]

Thank you, operator. Good morning, everyone, and thank you for joining Kinixa's call to discuss our fourth quarter and full year twenty twenty four financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section. For the agenda today, our Chief Executive Officer, Sanj K. Patel, will start with an introduction Doctor.

[Jonathan Kirshenbaum, Senior Manager of Investor Relations at Kiniksa Pharmaceuticals International]

John Paolini, our Chief Medical Officer will review our recently announced KPL-three 87 development program. From there, Ross Mote, our Chief Commercial Officer will provide an update on our ongoing commercial execution with Arcolis. Then Mark Ragosa, our Chief Financial Officer, will review our fourth quarter and full year twenty twenty four financial results. And finally, Sanj will return for closing remarks and to kick off the Q and A session for which Evan Tasari, our Chief Operating Officer will also be on the line. Before getting started, please note that we will be making forward looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements.

[Jonathan Kirshenbaum, Senior Manager of Investor Relations at Kiniksa Pharmaceuticals International]

A review of such statements and risk factors can be found on this slide as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as of the date of this presentation and we undertake no obligation to update such statements except as required by law. With that, I will turn it over to Sanj.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Thanks, Jonathan, and good morning, everyone. Thank you for joining our fourth quarter and full year twenty twenty four earnings call. As you know, we reported our preliminary Barclays revenue and cash balance earlier this year. Strong execution drove continued growth in 2024, and we're incredibly excited about the opportunities ahead of us. Today, I'm going to focus on the exciting program announcement we made early this morning.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

We are advancing our newly announced KPL-three eighty seven program, which is an independently developed monoclonal antibody IL-one receptor antagonist with the potential to enable monthly sub Q dosing in recurrent pericarditis. We are incredibly excited about this program and the opportunity to extend our leadership of the recurrent pericarditis market and to potentially expand the treatment options available to patients. KPL-three eighty seven is an IL-one pathway inhibitor, which we understand very well from our work and experience with Arcolist, the first and only FDA approved therapy for recurrent pericarditis. Doctor. John Paolini, our Chief Medical Officer, will share additional details about the mechanism of action and data we've generated to date.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

But our deep familiarity with this pathway provides us with added confidence as we advance KPL-three eighty seven through clinical development. In addition to the ongoing Phase I study, we've interacted with the FDA and plan to start a Phase IIPhase III trial in recurrent pericarditis patients in the middle of this year, with data from the Phase II portion expected in the second half of twenty twenty six. We plan to move as fast as humanly possible, and our goal is to have this treatment option available to patients by the 2829 time frame. Moving to our Q4 and full year 2024 performance and future growth. On the commercial front, we continue to grow Atlas revenue and collaboration profitability with fourth quarter net product revenue of $122,500,000 and full year 2024 net revenue of $417,000,000 Ross will review the commercial highlights in a moment, but overall, we believe there is substantial opportunity for us to continue to grow the recurrent pericarditis market with ARCLIST in the years ahead.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Our full year 2025 ARCLIST net revenue guidance is between $560,000,000 and $580,000,000 As you can see on our pipeline slide, we remain focused on developing novel therapies for diseases with unmet need, prioritizing cardiovascular indications. In addition to KPL-three eighty seven, we're advancing KPL-eleven sixty one, which is an Fc modified IL-one receptor antagonist with a target profile of quarterly subcu dosing. We are currently conducting IND enabling activities with this molecule. Based on these opportunities, we plan to discontinue development of avibruvar in Sjogren's disease. Through Phase II studies, Avibruvat has been well tolerated, and we look forward to evaluating strategic alternatives for this asset.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

I want to extend our sincere gratitude to the patients, caregivers and investigators who contributed to our Sjogren's disease study. Moving forward, in addition to prioritizing our portfolio development strategy, we have a robust balance sheet, and we are cash flow positive on an annual basis. Together, we expect these to provide additional capacity to continue investing in value creating opportunities across our business. The bottom line is that we've made tremendous progress with ARCLIST, and we think there is substantial opportunity still ahead with our first product. As the market leader, we are committed to exploring additional treatment options for patients.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

And with that, I'll turn it over to John to review KPL-three eighty seven and our development program in recurrent pericarditis.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

Thank you, Sanj. As Sanj mentioned and as outlined in our press release this morning, Tanixa has announced the development program for KPL-three eighty seven, an independently developed fully human IgG2 monoclonal antibody antagonist of the IL-one receptor. Extending our leadership in recurrent pericarditis and IL-one pathway inhibition, we are developing KPL-three eighty seven as a potential additional therapeutic option for patients with a target profile of a monthly subcutaneous single injection in a liquid formulation. The mechanism of action of KPL-three eighty seven is that it binds to the IL-one receptor subunit called IL-1R1. And in this way, it directly inhibits the signaling activity of the cytokines IL-one alpha and IL-one beta.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

This was demonstrated first in preclinical in vitro studies in which KPL-three eighty seven was shown to be a potent inhibitor of IL-one receptor activation, as well as IL-six production induced by IL-one alpha or IL-one beta. Subsequently, KPL-three eighty seven was shown in in vivo pharmacokinetics studies in non human primates to have favorable pharmacokinetics that supported advancement into the Phase one first in human study. On this slide, you can see some of the top line data from the single dose subcutaneous administration portion of the Phase one FIRST in human study. This is a randomized double blind placebo controlled study in approximately 112 healthy subjects evaluating the safety, tolerability, pharmacokinetics, pharmacodynamics and immunogenicity of KPL-three eighty seven administered subcutaneously or intravenously as single ascending doses and as multiple ascending doses administered subcutaneously. These data show that the single dose pharmacokinetics of KPL-three eighty seven at the dose level shown in red demonstrated sustained serum concentrations above the target concentration, supporting the profile for a monthly dosing paradigm.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

Data from this study were utilized to support the design of the upcoming Phase IIPhase III trial. As Sanj mentioned, we have had interactions with the FDA regarding the next steps for the KPL-three 87 program and we expect to initiate a streamlined Phase twothree trial in recurrent pericarditis in the middle of this year that we believe may support approval. Details of that trial will be forthcoming at a future date. I will now turn it over to our Chief Commercial Officer, Ross.

[Ross Moat, Senior VP & Chief Commercial Officer at Kiniksa Pharmaceuticals International]

Thanks, John. As you heard from Sanj, we are incredibly excited about KPL-three eighty seven and the opportunity to further expand the treatment options for patients with recurrent pericarditis. We also remain very excited about the substantial growth potential still ahead with ARCLIS. Having launched ARCLIS nearly four years ago and delivered continuous revenue growth, we have built a deep understanding of the market and we plan to continue our ACHALYST growth by serving many more patients in the years ahead. After driving our net revenue in 2024 to $417,000,000 our 2025 guidance is between $560,000,000 and $580,000,000 And there are a number of key initiatives that we are taking to continue to build the marketplace for Arclist.

[Ross Moat, Senior VP & Chief Commercial Officer at Kiniksa Pharmaceuticals International]

Firstly, disease education and awareness continue to be fundamental to our strategy. Initiatives such as our Life Disrupted campaign and our sponsorship of the American Heart Association's addressing recurrent pericarditis initiative are raising disease awareness, helping doctors to identify more patients and promoting a proactive approach to earlier diagnosis and treatments. Secondly, we continue to be focused on increasing the breadth and depth of prescribing as evidenced by an increasing number of total and repeat prescribers every single quarter since launch. We believe the utilization of ARCHALYST is growing as a result of the experience physicians and patients are having in terms of prescribing, gaining access and witnessing the high efficacy of the drug. We are focused on promoting to the full scope of the ARCLIS label and we're seeing an increase in ARCLIS prescriptions being written across all recurrences, including for patients on their first recurrence, which highlights doctors are becoming increasingly confident in moving ARCLIST earlier in the disease course given its targeted mechanism and robust efficacy.

[Ross Moat, Senior VP & Chief Commercial Officer at Kiniksa Pharmaceuticals International]

Additionally, as the leader with the only FDA approved therapy for recurrent pericarditis, we remain committed to supporting the development of a more efficient network of care through supporting the establishment of regional centers of excellence. We believe this approach has the ability to streamline referral pathways, reduce the barriers to care and in turn enhance patient outcomes. Importantly, while we've made great progress since our launch, we believe there is a significant opportunity ahead for ARCLIST as we continue to build the market and transform the treatment paradigm. With that, I'll turn it over to our CFO, Mark.

[Mark Ragosa, Senior VP & CFO at Kiniksa Pharmaceuticals International]

Thanks, Ross. It is certainly an exciting time at Kinixa.

[Mark Ragosa, Senior VP & CFO at Kiniksa Pharmaceuticals International]

We are well positioned from a financial standpoint and through continued commercial execution and financial discipline, we expect to continue to create value across our business. This morning, I will cover our fourth quarter and full year 2024 financial performance. You can find our detailed financial information in today's press release. There are a few items of note. First, starting on the left hand side of the slide with our income statement.

[Mark Ragosa, Senior VP & CFO at Kiniksa Pharmaceuticals International]

As you've heard from Sanj and Ross, strong commercial execution throughout 2024 drove continued ARCLIS product revenue growth. On a year over year basis, ARCLIS product revenue grew 72% to $122,500,000 in the fourth quarter and 79% to $417,000,000 for the full year 2024. Second, operating expenses grew year over year in both the fourth quarter and full year 2024, primarily driven by cost of goods sold due to ARCLIS revenue growth and tech transfer related expenses, collaboration expenses with continued ARCLIS collaboration profit growth, which I'll detail shortly, as well as R and D to support Abi Prouvar and KPL three eighty seven development and SG and A to support Arcless commercialization. Third, net loss was $8,900,000 in the fourth quarter and $43,200,000 for the full year 2024. Fourth, on the right hand side of the slide, you'll see a calculation for ARCLIF's collaboration profit, which largely drives collaboration expenses.

[Mark Ragosa, Senior VP & CFO at Kiniksa Pharmaceuticals International]

On a year over year basis, ARCLIF's collaboration profit grew 125% to $76,300,000 in the fourth quarter and 108% to $234,700,000 for the full year 2024. Of note, fourth quarter and full year 2024 collaboration expenses included a $10,000,000 charge for Regeneron share of a $20,000,000 milestone from Wodong Medicine with the approval of ARCLIS in China. The cash from this milestone was received in January and will be captured in our first quarter twenty twenty five cash balance. Lastly, regarding our balance sheet at the bottom of this slide, we ended 2024 with an approximately $244,000,000 cash balance, representing approximately $37,000,000 of net cash flow for the year and we expect our current operating plan to remain cash flow positive on an annual basis. With that, I'll turn the call back to Sanj for closing remarks.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Thanks, Mark. I hope you can all sense the excitement that we have about the future here at Kinixa, and we certainly plan to continue to execute across our clinical and commercial business. As shared this morning, we are eager to drive additional growth in our fourth year post launch with Arclis, as well extending and maintaining our leadership in recurrent pericarditis with Arclis and with the development of KPL-three eighty seven. There's a lot to look forward to as we continue to advance novel therapies for patients suffering from debilitating diseases and unmet need. With that, I'll turn the call back to the operator for the questions. Thanks very much.

[Operator]

Thank you.

[Operator]

Our first question today will be coming from the line of Nanupam Rama of JMP. Your line is open.

[Anupam Rama, Analyst at JP Morgan]

Hey guys, thanks so much for taking the question and thanks for the update here. Two quick ones from me. First, maybe what is your market research suggest about what a monthly subcutaneous formulation such as KPL-three eighty seven could mean for patients in the market overall versus the weekly regimen that you have with ARKLYT subcu? And then just quickly on Slide 10, I just wanted to confirm that that dose F, the red line, that's referring to a monthly subcutaneous dose, not an IV dose? Thanks so much.

[Ross Moat, Senior VP & Chief Commercial Officer at Kiniksa Pharmaceuticals International]

Hi, Andy, Pat. This is Ross. I hope you're well. Thank you very much for the questions.

[Ross Moat, Senior VP & Chief Commercial Officer at Kiniksa Pharmaceuticals International]

Maybe I'll answer your first question and then hand over on to John for the second question. So yes, it's a good question regarding market research and kind of patient acceptability and desire and preference. We believe that the compliance rates and the acceptance rates of ARCLIST is really very good. And we see that through the adherence and duration to the therapy. Having said that, moving potentially from a weekly to a potentially monthly therapy could be advantageous for many patients in terms of preference.

[Ross Moat, Senior VP & Chief Commercial Officer at Kiniksa Pharmaceuticals International]

Additionally, along with the drug itself, from a light or flies powder to a liquid formulation, we think may also provide some advantages for patients. So just overall, we feel as the market leader within recurrent pericarditis, it's upon us to continue to look at the marketplace and really understand what patients need and require within this marketplace and support alternative treatment options for patients for the future.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

And good morning, Annabel. Thanks so much for your question. Your second one, and yes, I can confirm that the dose that was administered and characterized in the red line was indeed subcutaneously administered. And you can see that it lasts above the target concentration for the time denoted, thus supporting moving forward with a monthly dosing paradigm subcutaneous.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Thanks so much for the questions guys. Thanks, Edna.

[Operator]

Thank you. And one moment for the next question please. And the next question will be coming from the line of Eva Forte Vergheu of Wells Fargo. Your line is open.

[Eva Fortea-Verdejo, Equities Analyst at Wells Fargo]

Hi guys. Thanks for taking the question and congrats on the progress. A couple from us. So first, how is KPL three eighty seven differentiated from our policy? Is it only the dosing schedule or are you expecting changes in the efficacy and safety profile?

[Eva Fortea-Verdejo, Equities Analyst at Wells Fargo]

And then a quick follow-up, just do you own the full rights to KPL-three eighty seven and eleven sixty one? Thanks.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

Good morning, Ava. I will take the first part of your question and then turn it over to Sanj. So yes, regarding the mechanism of action of KPL-three eighty seven, it is mechanistically distinct by binding to the receptor subunit. But in that sense, it does block the signaling of both IL-one alpha and IL-one beta and thus it shares a certain amount of, shall we say, mechanistic similarity. From there in terms of how the drug is delivered because of the fact that it's a monoclonal antibody, it's able to be stable in liquid formulation And thus a combination of that plus the fact that we can deliver enough drug to last for at least a month as shown by the curve in red, that is what would enable us to support dosing in a liquid formulation at a monthly interval. Sam?

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Thanks, David. Second part of your question, yes, this is an independently developed holol molecule. We do own the rights full rights to both March and one month.

[Operator]

And the next question will come from the line of Paul Choi of Goldman Sachs. Your line is open.

[Paul Choi, Analyst at Goldman Sachs]

Hi, good morning, everyone. Thanks for taking the questions and congrats on the progress. My first question is for John. And I was hoping maybe you could paint some broad strokes for how you're thinking about the March clinical development plan. Are you envisioning perhaps a switch study or non inferiority study?

[Paul Choi, Analyst at Goldman Sachs]

Any sort of broad color there would be helpful. And then second, down the road post approval and launch, can you maybe just remind us of the terms with the Regeneron arrangement, if you were to sort of focus on promoting three eighty seven and just sort of what the terms of your arrangement sort of specify in terms of unwinding future promotion of Archolus? Any comments there would be helpful? Thank you very much.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

Sure. Paula, good morning. Thanks for your question. So today, the announcement today is that we're pleased to talk about our Phase one profile and talking about the subcutaneous at least subcutaneously administered KCL387 supporting dosing for that monthly dosing interval. And that is supporting the design of the Phase twothree study.

[John Paolini, Senior VP & Chief Medical Officer at Kiniksa Pharmaceuticals International]

At this point in time, what we can say about that design is that we have engaged with the FDA, we've had interactions with the FDA regarding the design of that trial and with regard to the specific development that we anticipate starting in the middle of this year. However, regarding the specifics of that trial, we'll have more to say about that at a later date. And of course, clinicaltrials.gov is also a great place to follow those updates. And over to Sam.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Yes. Thank you, Paul. And appreciate the second part of the question. So first and foremost, Regeneron has been a great partner, and we're really pleased with their commitment to patients as have we. We are fully committed to Arclis, and we believe there's an awful lot of opportunity ahead of us with Arclis.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

So we continue, as you've seen, to execute right since launch, and we believe there's substantial growth. We are only 13% penetrated into the target population, as you're aware. So we'll continue that. That said, of course, we're very excited about $3.87, the potential for monthly liquid formulation, subcutaneous dosing, and we do believe there's also need for that. And it's a very exciting potential treatment option for patients.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

We do not have a non compete with our contract with Regeneron, for Arcolis. That said, we are committed to continuing the growth of the opportunity there. And obviously, we're committed to getting three eighty seven available to patients as a very important treatment option for them as well. So very exciting times ahead. Looking forward to continuing to work with Regeneron, helping patients, continuing to get KRW7 on the market as fast as humanly possible. And that's what we're going to do.

[Paul Choi, Analyst at Goldman Sachs]

Great. Thank you.

[Operator]

Thank you. And that does conclude today's Q and A session. I would like to go ahead and turn the call back over to Sanj Patel, Chief Executive Officer, for closing remarks. Please go ahead.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

Thank you, operator. Thank you, everybody, for the questions. Thanks for joining the call today. Clearly got a very exciting few years ahead. We're just going to keep on it, cracking away.

[Sanj Patel, CEO & Chairman of Board at Kiniksa Pharmaceuticals International]

And I look forward to talking to you again. Cheers.

[Operator]

This concludes today's program. Thank you all for joining today's conference call. You may now disconnect.

Participants

Executives

• Jonathan Kirshenbaum, Senior Manager of Investor Relations
• Sanj Patel, CEO & Chairman of Board
• John Paolini, Senior VP & Chief Medical Officer
• Ross Moat, Senior VP & Chief Commercial Officer
• Mark Ragosa, Senior VP & CFO

Analysts

• Anupam Rama, Analyst at JP Morgan
• Eva Fortea-Verdejo, Equities Analyst at Wells Fargo
• Paul Choi, Analyst at Goldman Sachs