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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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82-4566526 |
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(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
103 Montgomery Street, Suite 150
The Presidio of San Francisco
San Francisco, CA |
94129
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.0001 par value per share
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KNTE
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The Nasdaq Stock Market LLC
(The Nasdaq Global Select Market)
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Page
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PART I
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Item 1.
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3 | |
Item 1A.
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50 | |
Item 1B.
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Item 2.
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111 |
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Item 3.
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111 |
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Item 4.
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PART II
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Item 5.
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112 | |
Item 6.
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112 | |
Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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144 |
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Item 9C.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16
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148 |
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the ability of our ongoing and planned future preclinical studies and ongoing and planned future clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;
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the timing, progress and results of ongoing and planned future preclinical studies and clinical trials for our current product candidates and other product candidates we may develop, including statements
regarding the timing of initiation and completion of preclinical studies or clinical trials and related preparatory work, the period during which the results of the preclinical studies or clinical trials will become available, and our
research and development programs;
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the timing, scope and likelihood of regulatory filings and approvals, including timing of INDs and final approval by the U.S Food and Drug Administration (FDA) of our current product candidates and any
other future product candidates;
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the timing, scope or likelihood of foreign regulatory filings and approvals;
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our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical trials;
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our manufacturing, commercialization, and marketing capabilities and strategy;
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our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy;
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the need to hire additional personnel and our ability to attract and retain such personnel;
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the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting;
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our expectations regarding the approval and use of our product candidates in combination with other drugs;
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our competitive position and the success of competing therapies that are or may become available;
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our estimates of the number of patients that we will enroll in our clinical trials;
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the beneficial characteristics, and the potential safety, efficacy and therapeutic effects of our product candidates;
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our ability to obtain and maintain regulatory approval of our product candidates;
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our plans relating to the further development of our product candidates, including additional indications we may pursue;
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existing regulations and regulatory developments in the United States, Europe and other jurisdictions;
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our expectations regarding the impact of COVID-19, supply chain disruptions, inflation and other drivers of macroeconomic volatility on our business;
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our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering our current product candidates and other product
candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any
third-party intellectual property rights;
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our continued reliance on third parties to conduct additional preclinical studies and planned clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical
studies and clinical trials;
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our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product
candidates;
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the pricing and reimbursement of our current product candidates and other product candidates we may develop, if approved;
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the rate and degree of market acceptance and clinical utility of our current product candidates and other product candidates we may develop;
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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
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our financial performance;
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the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;
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the impact of laws and regulations;
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our expectations regarding the period during which we will remain an emerging growth company under the JOBS Act; and
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our anticipated use of our existing resources.
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Item 1. |
Business
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1
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Identifying Unmet Need in Validated Oncogenic Drivers. Our relationships with prominent academic centers provide insight into the drug targets that are validated
oncogenic drivers, along with innate or acquired resistance and new patient populations that represent the unmet need.
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2
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Deep Medicinal Chemistry Expertise. Through our internal expertise in structure based small molecule drug discovery, deep understanding of binding modes and biology, we
identify compounds that have the potential to achieve a best-in-class product profile spanning alteration coverage including resistance mutations, selectivity, and pharmaceutical properties. For example, the proprietary co-crystal
structure of exarafenib in the BRAF protein developed by our team has demonstrated what we believe is a unique and highly selective BRAF inhibitor.
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3
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Leveraging Tailored Ecosystem of Partners. We leverage an ecosystem of commercial and academic partners to provide scale to our discovery efforts. For example, we have a
range of 35-70 medicinal chemists at contract research organizations (CROs) working on our pipeline and sponsored research agreements (SRAs) with prominent academic centers to advance the development of our targeted therapies. Further,
we leverage a range of relevant technologies such as bioinformatics, crystallography, organoid and xenograft models for discovery and translational research.
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Rapidly advance the development of our lead targeted therapy RAF and FGFR candidates, exarafenib and KIN-3248, respectively. Our lead product candidates are designed to address clinically validated cancer targets in patient populations with limited treatment options.
Exarafenib is designed to address either BRAF Class II and Class III or NRAS alterations. KIN-3248 is designed to address FGFR2 and FGFR3 genomic alterations. We believe that these small molecule candidates offer the potential for
substantial clinical benefit when administered as monotherapies. Additionally, because of their enhanced pharmacological properties, we believe there may be future opportunities for combination therapy development. If we are
successful in achieving clinically meaningful anti-cancer activity in specific solid tumor types, we expect to engage with regulatory authorities to discuss whether we may qualify for any of the FDA’s existing expedited regulatory
approval pathways. Ultimately, the procedures and length of time that will be required to satisfy the FDA’s review and approval are outside of our control
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Develop a pipeline of product candidates focused on overcoming the limitations of current targeted oncology therapeutics.
Currently, it is estimated that only 10% of all patients with advanced or metastatic cancer today are eligible for commercially available small molecule kinase inhibitors. Additionally, up to half of these patients may not respond to
these treatments and up to half of those who do initially respond may develop resistance. Ultimately, it is estimated that only 2% to 3% of patients with advanced or metastatic cancer will have durable responses to currently available
targeted therapeutics. We are therefore focused on developing drugs that can:
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Target known oncogenic drivers (e.g., BRAF Class II or Class III alterations) in selected cancer types that are not currently addressed by
approved therapies. Our BRAF-targeting small molecule kinase inhibitors exemplify this strategy. The successful development and FDA approval of three BRAF-targeted kinase inhibitor drugs for use in BRAF Class I alterations establish
BRAF as a validated cancer drug target.
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Overcome acquired resistance mutations to existing targeted therapies, potentially improving the durability of response. For example, in our FGFR
program we seek to develop targeted therapies that cover initial genomic alterations and preemptively address acquired resistance mutations that arise with current targeted therapies.
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Treat non-responders to currently-approved therapies where advancements in next generation sequencing have identified, and will continue to
reveal, genomic drivers of intrinsic resistance. We expect to develop our CDK12 inhibitor and future programs that will target mechanisms of intrinsic resistance.
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Increase our probability of clinical success by prioritizing known oncogenic drivers for development, incorporating biomarkers into preclinical and clinical
development and exploring continual translational research. Typically, drug development carries high attrition rates from the preclinical stage through FDA approval, with some studies showing that
only approximately 10% of the candidates entering Phase 1 trials are ultimately approved. We aim to improve the probability of clinical success through several approaches:
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Targeting known oncogenic drivers. We attempt to select targets for drug development that behave as oncogenic drivers, which increases the
likelihood of seeing objective measures of tumor responses early in clinical development. If we are successful in inhibiting these targets with our product candidates, we may increase the likelihood of achieving tumor responses. This
approach has been successful for kinase inhibitors designed to treat patients with oncogenic alterations in lung cancer, melanoma, leukemia and other types of cancer.
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Developing small molecule kinase inhibitors. Small molecule kinase inhibitors are a proven modality that have demonstrated success in the past
with multiple currently-approved drugs across many solid tumor and hematologic malignancy indications. By testing our molecules against in vitro and in vivo models utilized by previously approved drugs, we believe we can efficiently benchmark and optimize our compounds.
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Incorporating biomarkers into our preclinical and clinical development. By evaluating a wide range of biomarkers in our preclinical studies and
our clinical trials, we can more rapidly determine patient populations that may or may not respond to our candidates. Continuing to use biomarkers in clinical trials potentially allows us to select defined patient populations that may
demonstrate a stronger benefit and thereby ultimately increase our probability of success.
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Continual translational research. Through extensive translational research starting from preclinical studies through clinical development, we can
potentially identify new patient populations, responsive subsets and resistance mechanisms to our candidates. This also provides input into combination strategies we may explore with our candidates. Further, investment in molecular
landscape collaborations can also help us refine the unmet need for our candidates and outcomes of existing therapies.
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Leverage our existing relationships, collaborations and experience to efficiently develop and expand our product portfolio. Our
team has extensive experience in identifying, discovering, developing and commercializing innovative cancer therapeutics. We are combining this broad oncology expertise with a network of collaborators to further develop our existing
pipeline as well as to identify new research and development opportunities. We have established deep collaborations with leaders, with whom we have advisory agreements, at experienced precision medicine cancer centers and research
institutions, including Massachusetts General Hospital Cancer Center and University of California, San Francisco, with whom we have sponsored research agreements, Memorial Sloan Kettering
Cancer Center and Moores Cancer Center at UCSD. These collaborations allow us to explore the mechanistic understanding of the biology of our targets and sensitivity and resistance to our molecules. We also leverage our relationships
of global external partners to advance our pipeline. For example, we have service agreements with academic and industrial partners who contribute highly enabling technologies and services that include: (1) approximately 35-70
medicinal chemists at leading CROs with whom we can modulate utilization based on our needs, (2) bioinformatics support for our translational research efforts, (3) crystallography and biophysical assay platforms to enable
structure-based drug discovery, (4) biochemical and cell-based assays to guide lead generation and optimization, and (5) patient-derived organoid and xenograft models to translate our findings to the clinical setting. We use this
external network of collaborations and partnerships in many aspects of preclinical development for our pipeline of candidates and anticipate further utilizing them in our clinical development efforts. Additionally, these
collaborations and partnerships may allow us to accelerate identification of new opportunities, including new patient populations we may target to understand emerging mechanisms of resistance.
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Maximize the clinical impact and value of our portfolio. We retain global development and commercialization rights to our
pipeline of candidates. We intend to build an integrated precision oncology company that will manage all aspects of product development and commercialization globally. We may seek to develop rational combination therapy strategies
among products within our own portfolio, while also maximizing portfolio value through selective co-development and/or commercialization collaborations. Further, we are focused on expanding globally early in clinical development to
accelerate enrollment in geographies with high unmet need. Through Kinnjiu, we have the potential to accelerate enrollment of our programs through global clinical trial recruitment as well as retain commercial rights to our programs
in People’s Republic of China, Hong Kong, Taiwan and Macau.
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Class I: BRAF alterations where BRAF monomers activate the MAPK signaling pathway.
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Class II: BRAF alterations that generate BRAF homodimers, where two BRAF molecules combine, which are RAS-independent and activate the MAPK pathway. These are frequently the result of point mutations, indels or gene fusions, in which
the kinase domain of BRAF is aberrantly joined to a partner gene.
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Class III: BRAF alterations with minimal kinase activity that induce BRAF’s dimerization to other RAF kinase family members (e.g., ARAF or CRAF), creating a RAF heterodimer with enhanced affinity to activated RAS and increased
enzymatic activity and downstream signaling.
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inhibit RAF across both sides of the RAF dimer, which enables populations beyond BRAF Class I alterations to be targeted;
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enable large drug exposures in vivo for BRAF mutant target coverage while avoiding paradoxical activation; and
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target BRAF Class II and Class III alterations, which has been enabled by technological advances and increased access to genomic profiling.
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Part A1: Dose Escalation (Monotherapy): Patients with advanced or metastatic solid tumors bearing any BRAF
Class I, Class II or Class III alteration (including NSCLC, melanoma, and other solid tumors) or NRAS-mutant melanoma will be enrolled in cohorts of 1 to 3 patients (modified 3+3 design) each to receive oral exarafenib monotherapy for
up to 40 patients.
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Part A2: Dose Escalation (Combination with Binimetinib): Patients, including those with advanced or metastatic NRAS-mutant melanoma will be
enrolled in cohorts of 3 patients (3+3 design) each to receive oral exarafenib in combination with binimetinib for up to approximately 36 patients.
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Part B: Dose Expansion: Patients with BRAF-altered cancers including lung cancer, melanoma and other solid tumors will be enrolled in one of a
number of cohorts defined by cancer type or BRAF alteration of up to 20-30 patients per cohort to receive oral exarafenib as a single anti-cancer agent.
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Part A: Dose Escalation: Patients with advanced or metastatic solid tumors in both FGFR inhibitor naïve and pre-treated patient populations with molecularly-defined FGFR2- and/or
FGFR3-alteration driven cancers, including a limited number of patients with FGFR2 or FGFR3 amplification-driven cancers. Patients will be enrolled in cohorts of 3 patients each to receive oral KIN-3248 as a single agent for up to 45
patients.
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Part B: Dose Expansion: Patients with advanced or metastatic solid tumors bearing with molecularly-defined FGFR2- and/or FGFR3-alteration driven cancers will be enrolled in one of a number of
cohorts defined by disease or biomarker of up to 20 to 30 patients per cohort to receive oral KIN-3248 as a single agent. This would include both FGFR inhibitor naïve and pre-treated patient populations.
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significantly augment the clinical benefits of PARP inhibitors, chemotherapeutic agents and ICIs in the subset of these cancer patients who are currently eligible to be treated with these drugs; and
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therapeutically sensitize cancers from expanded populations of OC, mCRPC and TNBC patients who are not currently eligible to receive PARP inhibitors or ICIs, and who yet may gain substantial benefit from combination therapy with
either PARP inhibitors, conventional chemotherapies, or an ICI agent.
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define emerging patient populations;
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demonstrate selective in vitro and in vivo activity and define dose-exposure pharmacodynamic relationships in clinically relevant models;
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test prioritized compounds against specific mutations and fusions;
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investigate mechanism of action-the specific biochemical interaction through which a drug substance produces its pharmacological effect-to support the refinement of strategies for patient selection and patient stratification for both
monotherapy and rationale combinations; and
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develop biomarker-based development strategies that will drive patient selection in our clinical programs.
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completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP;
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submission to the FDA of an IND, which must become effective before human clinical trials may begin;
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approval by an independent IRB, or ethics committee at each clinical trial site before each clinical trial may be initiated;
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performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (GCP) requirements and other clinical trial-related regulations to establish substantial evidence
of the safety and efficacy of the investigational product for each proposed indication;
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submission to the FDA of an NDA after completion of all pivotal clinical trials;
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determination by the FDA within 60 days of its receipt of an NDA to accept the filing for substantive review;
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satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements assuring that the facilities, methods and controls are
adequate to preserve the drug’s identity, strength, quality and purity;
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potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA filing;
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FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the United States; and
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compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (REMS), and the potential requirement to conduct post-approval studies.
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Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these
clinical trials is to assess the metabolism, pharmacologic action, tolerability and safety of the drug.
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Phase 2 clinical trials involve studies in disease-affected patients to determine the dose and dosing schedule required to produce the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic
information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy is conducted.
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Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use and its safety in use, and to
establish the overall benefit/risk relationship of the product and provide an adequate basis for product approval. These clinical trials may include comparisons with placebo and/or other comparator treatments. The duration of treatment
is often extended to mimic the actual use of a product during marketing.
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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market, or product recalls;
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fines, warning letters, or holds on post-approval clinical studies;
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refusal of the FDA to approve pending applications or supplements to approved applications;
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suspension or revocation of product approvals;
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product seizure or detention;
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refusal to permit the import or export of products; and
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injunctions or the imposition of civil or criminal penalties.
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The federal Anti-Kickback Statute, which makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that
is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. Moreover, the
ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act.
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The federal false claims, including the civil False Claims Act that can be enforced by private citizens through civil whistleblower or qui tam actions, and civil monetary penalties prohibit individuals or entities from, among other
things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal
government, and/or impose exclusions from federal health care programs and/or penalties for parties who engage in such prohibited conduct.
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The Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating
to healthcare matters.
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations also impose obligations on covered entities such as health insurance plans, healthcare clearinghouses,
and certain health care providers and their respective business associates, including mandatory contractual terms as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of
individually identifiable health information.
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The federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance
Program, with specific exceptions, to annually report to Centers for Medicare & Medicaid Services (CMS), an agency within the U.S. Department of Health and Human Services (HHS), information regarding certain payments and other
transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others),
and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members;
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Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental
third-party payors, including private insurers, state laws that require biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal
government; state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and require the registration
of their sales representatives, state laws that require biotechnology companies to report information on the pricing of certain drug products, and state and foreign laws that govern the privacy and security of health information in some
circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
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The Community MA is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use (CHMP), of the EMA, and is valid throughout the entire territory of
the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, advanced-therapy medicines such as gene-therapy, somatic cell-therapy or
tissue-engineered medicines and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions and viral diseases.
The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the
interest of public health in the EU.
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National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure.
Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member States through the Mutual Recognition Procedure. If the product has not received a National MA
in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure. Under the Decentralized Procedure an identical dossier is submitted to the competent
authorities of each of the Member States in which the MA is sought, one of which is selected by the applicant as the Reference Member State (RMS). The competent authority of the RMS prepares a draft assessment report, a draft summary of
the product characteristics (SmPC), and a draft of the labeling and package leaflet, which are sent to the other Member States (referred to as the Member States Concerned) for their approval. If the Member States Concerned raise no
objections, based on a potential serious risk to public health, to the assessment, SmPC, labeling or packaging proposed by the RMS, the product is subsequently granted a national MA in all the Member States (i.e., in the RMS and the
Member States Concerned).
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Before entering clinical trials, our product candidates are subjected to preclinical testing to evaluate their potential for therapeutic benefit in humans. Preclinical tests include laboratory
evaluations of product chemistry, stability, and formulation, as well as animal studies to assess the potential toxicity and biological activity. We are committed to the ethical use of animals in preclinical testing. Animal studies
are carefully reviewed by an Institutional Animal Care and Use Committee (IACUC), which is charged with ensuring that a proposed preclinical study is essential. IACUC review is required by U.S. federal and state laws. Additionally, we
adhere to the principles of the "Three Rs"—Replacement, Reduction and Refinement—the ethical principles that are embedded in the conduct of animal-based science. Replacement refers to technologies or approaches that directly replace
or avoid the use of animals in studies where they would otherwise have been used. Reduction refers to methods that minimize the number of animals used per study consistent with scientific aims. Refinement refers to methods that
minimize the pain, suffering, distress or lasting harm that may be experienced by research animals, and which improve their welfare.
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Potential safety concerns are communicated to researchers, participants and regulators in compliance with FDA, EU and other global regulations and global industry Good Vigilance Practice (GVP). All
pharmacovigilance activities are conducted under internal standard operating procedures or those of our contracted partners. All relevant staff undertake training on pharmacovigilance processes. We also monitor the quality of the
safety work done by our partners and confirm adherence to regulations and guidelines. We do not own or operate manufacturing facilities for any of our product candidates. Instead, we rely on third-party CMOs to supply the required raw
materials and finished products for our preclinical studies and clinical trials. These CMOs are required to comply with applicable FDA manufacturing requirements contained in the FDA’s Current Good Manufacturing Practices (cGMP)
regulations. The cGMP regulations require, among other things, quality control and quality assurance, as well as corresponding maintenance of records and documentation.
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We comply with Good Clinical Practice (GCP) for designing, conducting, recording and reporting clinical trials. GCP is an international ethical and scientific quality standard that is provided by the
International Council on Harmonization. Compliance with this standard provides public assurance that the rights, safety and well-being of clinical trial patients are protected and that the clinical trial data are credible. For each of
our clinical trials, an Informed Consent Form (ICF) template is developed and submitted to an Institutional Review Board/Ethics Committee for approval before adoption. The ICF provides information regarding the rights of clinical
trial patients and includes relevant contact information in the event of a concern or complaint.
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We are currently conducting Phase 1 clinical trials for two of our programs. Patients may participate in these clinical trials if they meet certain enrollment criteria.
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Our competitive compensation and comprehensive benefits package is available to full-time employees and includes:
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Potential equity grants, such as stock options and restricted stock units (RSUs);
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Cash-incentive plans, such as performance-based bonuses;
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Employee Stock Purchase Plan, a benefit we believe will help to further incentivize employees to contribute to the company’s success;
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Retirement savings plan, with company contributions;
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Medical, dental and vision plans with no to low-cost options for employees;
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Employee referral program for certain employees;
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Employee assistance program, which offers no-cost counseling and other resources;
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Flexible spending for healthcare and dependent care;
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Company paid life, short and long-term disability insurance;
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Voluntary insurance for life-illness-accident, auto, pet, home, identity theft protection, personal excess liability, legal service;
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Work/life balance benefits, including unlimited paid time off (vacation and sick leave), annual paid “refresher” days, annual massage days, healthy lifestyle reimbursement programs, home office reimbursement programs, gym
access/reimbursement;
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Commuter benefits; and
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Company-wide events to support and encourage relationship development, teamwork and collaboration.
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Our employees are encouraged to voice their opinions and stretch themselves professionally. We offer the opportunity to learn and grow professionally alongside talented colleagues who are
committed to helping those battling cancer and to perform to the best of their abilities to achieve our objectives. This includes:
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Performance reviews: all employees are eligible for annual performance reviews and mid-year check-ins with their managers;
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Individual development plans: All employees participate in creating their individual development plans designed to support long-term skill and professional development;
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360 assessments: Certain employees participate in assessments that provide feedback for their future development and growth; and
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Engagement survey: we conduct an annual employee-wide, anonymous survey to assess our performance on metrics including innovation, teamwork, ownership, work-life balance, collaboration and leadership.
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In 2022, we proudly promoted ten employees, of whom 60% were women and 80% were people of color. In addition, in 2022, we created a new leadership band level, Executive Director, as an opportunity for advancement for qualified
employees; 50% of our Executive Directors are people of color.
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We are in the early days of our growth and are committed to improving our DEI&B strategies and performance. We are proud of the gender and ethnic diversity we have cultivated throughout the company thus far. We intend to continue
to develop and improve our DEI&B practices, including nurturing a culture where all employees feel empowered to be their authentic selves. We believe that diversity of viewpoints, backgrounds, professional experiences, education and
personal characteristics, including gender, race, ethnicity, national origin, age, sexual orientation, gender identity and other similar demographics cultivate a cohesive and productive work environment.
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We currently have 89 full-time employees and are proud to employ a diverse workforce that is 51% people of color and 60% women. In addition, women comprise 29% of our leadership team and 40% of our board
of directors.
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Substantially all our employees are based in San Diego, California and San Francisco, California. None of our employees are represented by labor unions or covered by collective bargaining agreements. We
consider our relationship with our employees to be good.
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We are committed to providing a healthy and safe work environment for our employees, partners and consultants.
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In 2022, following the peak of the COVID-19 pandemic and subsequent surges, we moved toward having more of our workforce onsite, and implemented a two-day in-office policy. To ensure the health, safety and well-being of our employees
while onsite, we enforced a vaccine mandate for all employees and others visiting our offices (subject to applicable law), in addition to adopting state-mandated protocols in the event an employee was exposed to or tested positive for
the COVID-19 virus.
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• |
We offer our employees free face masks, COVID-19 tests and an Employee Assistance Program that includes no-cost resources and confidential counseling for employees and their household members.
|
• |
Our employees are required to promptly report any known or suspected violations of environmental laws or any events that may result in a discharge or emission of hazardous materials.
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• |
We have recycling in our offices .
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• |
We minimize use of disposable bottles and printing of paper.
|
• |
Our facility in San Diego is LEED certified. LEED (Leadership in Energy and Environmental Design) is the most widely used green building rating system in the world.
|
• |
We have commuter benefits programs in place that encourage employees to walk, bike or utilize public transportation instead of cars for their commutes.
|
• |
We encourage video conferencing for non-essential meetings to reduce travel and commute emissions.
|
• |
Our board of directors is currently chaired by an independent Chair. As a general policy, our board of directors believes that separation of the positions of Chair of our board of directors and Chief
Executive Officer reinforces the independence of our board of directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of our board of directors
as a whole. As such, our Chief Executive Officer serves in that role (in addition to serving as our President) while the Chair of our board of directors serves in that role but is not an officer. We currently expect the positions of
Chair of our board of directors and Chief Executive Officer to continue to be held by two individuals in the future.
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• |
We review and, where relevant, enhance our policies to ensure we continue to adhere to the highest standards of ethics and compliance. Our principles regarding fair, ethical and honest business
dealings, compliance with applicable laws and the expected standard of behavior governing all our employees are outlined in our Code of Business Conduct and Ethics. The topics covered in our Code of Conduct and Ethics include
corporate ethics, bribery and corruption, whistleblower policies, political involvement and other dimensions of corporate ethics.
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• |
At the start of employment, each of our employees is required to review and acknowledge a variety of company policies, including our =Code of Business Conduct and Ethics and Insider Trading Policy, and
complete anti-harassment training.
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• |
In the event of an ethical concern, our personnel can approach their manager, approach our General Counsel or use our anonymous compliance hotline. Retaliation in any form against any employee who in
good faith complains of an issue, who reports a compliant or who cooperates in the investigation of a complaint is strictly prohibited and may itself be cause for appropriate disciplinary action.
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• |
We have adopted policies and procedures and conduct training to ensure appropriate management of data privacy and cybersecurity risks. We also have an information security incident response plan that
defines our process for investigating, reporting and managing cybersecurity incidents and/or data breaches. Our cybersecurity and privacy programs are overseen by our General Counsel.
|
Item 1A. |
Risk Factors
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• |
We are early in our development efforts and have a limited operating history and no products approved for commercial sale.
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• |
We have incurred significant net losses and expect to continue to incur significant net losses for the foreseeable future.
|
• |
Our ability to generate revenue and achieve profitability depends on our ability to achieve our objectives relating to discovery, development and commercialization of our product candidates.
|
•
|
Changing circumstances and market conditions, some of which may be beyond our control, could impair our ability to access our existing cash and cash equivalents and investments and to timely pay key vendors and others.
|
• |
We will require substantial additional capital to finance our operations.
|
• |
We are substantially dependent on our RAF and FGFR programs.
|
• |
Our preclinical studies and clinical trials may fail to demonstrate the safety and efficacy of our product candidates.
|
• |
Our discovery and development activities are focused on the development of therapeutics in an evolving area of science.
|
• |
The outcome of testing and early clinical trials may not be predictive of the success of later clinical trials.
|
• |
In addition to our RAF and FGFR programs, our prospects depend in part upon discovering, developing and commercializing product candidates from our CDK12 and other research programs.
|
• |
Our approach to the discovery and development of product candidates is unproven.
|
• |
The regulatory approval processes of regulatory authorities are lengthy, time consuming and unpredictable.
|
• |
We have limited experience as a company in conducting clinical trials.
|
• |
We may not be able to file INDs on the timelines we expect.
|
• |
Our product candidates may cause significant adverse events, toxicities or other undesirable side effects.
|
• |
Data from our preclinical studies and clinical trials may change as more data become available and are subject to verification.
|
• |
We could experience delays or difficulties in the enrollment or maintenance of patients in clinical trials.
|
• |
COVID-19 or other public health concerns could adversely impact our business.
|
• |
We face substantial competition which may result in others discovering, developing or commercializing products before us.
|
• |
The manufacture of drugs is complex, and third-party manufacturers may encounter production difficulties.
|
• |
Our product candidates may not achieve adequate market acceptance among the medical community.
|
• |
The market opportunities for our product candidates may be limited to certain smaller patient subsets.
|
• |
Our product candidates may become subject to unfavorable third-party coverage and reimbursement practices.
|
• |
Our business entails a significant risk of product liability.
|
• |
We may be unable to obtain regulatory approval and be unable to commercialize our product candidates.
|
• |
We may develop our product candidates with other therapies, which would expose us to additional risks.
|
• |
We have never commercialized a product candidate as a company and currently lack the resources to do so on our own or with others.
|
• |
Regulatory authorities may not accept data from clinical trials conducted in locations outside of their jurisdiction.
|
• |
Obtaining regulatory approval in one jurisdiction does not mean we will be successful in other jurisdictions.
|
• |
Any product candidates that receive regulatory approval will be subject to post-marketing regulations.
|
• |
Regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses.
|
• |
Failure to obtain approval of a required companion diagnostic test, will prevent commercialization of the product candidate.
|
• |
Where appropriate, we plan to secure approval from regulatory authorities through accelerated registration pathways. If we are unsuccessful, we may be required to conduct additional preclinical studies or clinical trials.
|
• |
We may seek, but not obtain, additional Fast Track designations from the FDA for our product candidates.
|
• |
A Breakthrough Therapy designation by the FDA may not lead to a faster review or approval process.
|
• |
We may not be able to obtain orphan drug designation or maintain orphan drug exclusivity for one or more of our product candidates.
|
• |
We may face difficulties from changes to current regulations and future legislation.
|
• |
Our relationships with healthcare professionals, clinical investigators, CROs and third-party payors may be subject to reporting requirements and various laws.
|
• |
We must comply with regulations governing the use, processing and cross-border transfer of personal information.
|
• |
Our employees, service providers, suppliers and vendors may engage in misconduct or other improper activities.
|
• |
Our business activities may be subject to the U.S. Foreign Corrupt Practices Act (FCPA) and similar foreign laws, as well as U.S. and foreign export controls, trade sanctions, and import laws and regulations.
|
• |
If we fail to comply with California laws or Nasdaq rules governing the diversity of our board of directors, we could be exposed to financial penalties and suffer reputational harm.
|
• |
Our success is highly dependent on our ability to attract, hire and retain highly skilled executive officers and employees.
|
• |
We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing growth.
|
• |
Our internal computer systems, or those of any of our service providers, may fail or suffer security or data privacy breaches or incidents.
|
• |
Many of our research and preclinical activities are conducted by third parties outside of the United States, including in China.
|
• |
Our operations are vulnerable to interruption by natural disasters, war, terrorist activity, pandemics and other events.
|
• |
If we are unable to establish sales or marketing capabilities or enter into agreements with third parties to sell or market our product candidates, we may not be able to successfully sell or market our product candidates that obtain
regulatory approval.
|
• |
A variety of risks associated with marketing our product candidates internationally could adversely affect our business.
|
• |
Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
|
• |
The stock-based compensation expense related to our RSUs and other outstanding equity awards will result in increases in our expenses in future periods.
|
• |
Changes in tax laws or in their implementation may adversely affect our business and financial condition.
|
• |
Inflation could negatively impact our business and results of operations.
|
• |
Our success depends on our ability to protect our intellectual property and our proprietary technologies.
|
• |
The scope of our patent protection may not be sufficiently broad, or we could lose patent protection.
|
• |
Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
|
• |
Our commercial success depends on our operating without infringing the patents and other proprietary rights of third parties.
|
• |
We may not be successful in obtaining or maintaining rights to our future product candidates.
|
• |
We may be involved in lawsuits to protect or enforce our patents or our future licensors’ patents.
|
• |
The outcome of derivation proceedings may require us to cease using or attempt to license the related technology.
|
• |
Patent reform legislation may increase uncertainties and costs of prosecuting patent applications and enforcing issued patents.
|
• |
Changes in patent law could increase uncertainties and costs of prosecuting patent applications and enforcing issued patents or diminish the value of patents in general.
|
• |
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
|
• |
Patent terms may be inadequate to protect our competitive position on our product candidates.
|
• |
If we do not obtain patent term extension for our product candidates, our business may be materially harmed.
|
• |
We may not be able to protect our intellectual property rights throughout the world.
|
• |
We rely on third parties to conduct our preclinical studies and clinical trials, and they may not perform satisfactorily.
|
• |
We contract with third parties for the manufacture of our product candidates for preclinical studies and clinical trials and expect to continue to do so for additional preclinical studies, clinical trials and ultimately for
commercialization.
|
• |
Our manufacturing process needs to comply with FDA regulations relating to the quality and reliability of such processes.
|
• |
If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
|
• |
If our manufacturers use hazardous materials in a manner that causes injury or violates law, we may be liable for damages.
|
• |
If we decide to establish collaborations, we may have to alter our development and commercialization plans.
|
• |
The market price of our common stock is volatile, which could result in substantial losses for investors.
|
• |
If securities analysts do not publish research or reports about our business, or if they publish adverse reports regarding us, our stock price and trading volume could decline.
|
• |
If we identify material weaknesses or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations.
|
• |
Delaware law and provisions in our charter documents might prevent a change in control of our company or changes in our management, depressing the market price of our common stock.
|
• |
Our charter documents provide exclusive forums for disputes between us and our stockholders, limiting their ability to obtain a favorable judicial forum.
|
• |
successful and timely completion of clinical development of product candidates from our RAF and FGFR programs and preclinical and clinical development of product candidates from our CDK12 and other
research programs, and any other future programs;
|
• |
establishing and maintaining relationships with CROs and clinical sites for the clinical development of product candidates from our RAF and FGFR programs, our CDK12 and other research programs, and any
other future programs;
|
• |
timely receipt of marketing approvals from applicable regulatory authorities for any product candidates for which we successfully complete clinical development;
|
• |
developing an efficient and scalable manufacturing process for our product candidates, including obtaining finished products that are appropriately packaged for sale;
|
• |
establishing and maintaining commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical
development and meet the market demand for our product candidates, if approved;
|
• |
successful commercial launch following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators;
|
• |
a continued acceptable safety profile following any marketing approval of our product candidates;
|
• |
commercial acceptance of our product candidates by patients, the medical community and third-party payors;
|
• |
satisfying any required post-marketing approval commitments to applicable regulatory authorities;
|
• |
identifying, assessing and developing new product candidates;
|
• |
obtaining, maintaining and expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;
|
• |
defending against third-party interference or infringement claims, if any;
|
• |
entering into, on favorable terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;
|
• |
obtaining coverage and adequate reimbursement by third-party payors for our product candidates;
|
• |
addressing any competing therapies and technological and market developments; and
|
• |
attracting, hiring and retaining qualified personnel.
|
• |
approval of INDs for our planned clinical trials and future clinical trials;
|
• |
addressing any potential delays resulting from factors related to COVID-19 or other public health concerns;
|
• |
successful initiation and completion of clinical trials;
|
• |
successful and timely patient selection and enrollment in and completion of clinical trials;
|
• |
maintaining and establishing relationships with CROs and clinical sites for the clinical development of our product candidates both in the United States and internationally;
|
• |
the frequency and severity of adverse events in clinical trials;
|
• |
demonstrating efficacy, safety and tolerability profiles that are satisfactory to the FDA, EMA or any other comparable foreign regulatory authority for marketing approval;
|
• |
the timely receipt of marketing approvals from applicable regulatory authorities;
|
• |
the timely identification, development and approval of companion diagnostic tests, if required;
|
• |
the extent of any required post-marketing approval commitments to applicable regulatory authorities;
|
• |
the maintenance of existing or the establishment of new supply arrangements with third-party drug product suppliers and manufacturers for clinical development and, if approved, commercialization of our
product candidates;
|
• |
obtaining and maintaining patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;
|
• |
the protection of our rights in our intellectual property portfolio;
|
• |
the successful launch of commercial sales following any marketing approval;
|
• |
a continued acceptable safety profile following any marketing approval;
|
• |
commercial acceptance by patients, the medical community and third-party payors; and
|
• |
our ability to compete with other therapies.
|
• |
failure of our product candidates in preclinical studies or clinical trials to demonstrate safety and efficacy;
|
• |
receipt of feedback from regulatory authorities that requires us to modify the design of our clinical trials;
|
• |
negative or inconclusive clinical trial results that may require us to conduct additional clinical trials or abandon certain research and/or drug development programs;
|
• |
the number of patients required for clinical trials being larger than anticipated, enrollment in these clinical trials being slower than anticipated or participants dropping out of these clinical trials
at a higher rate than anticipated;
|
• |
third-party contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
|
• |
the suspension or termination of our clinical trials for various reasons, including non-compliance with regulatory requirements or a finding that our product candidates have undesirable side effects or
other unexpected characteristics or risks;
|
• |
the cost of clinical trials of our product candidates being greater than anticipated;
|
• |
the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates being insufficient or inadequate; and
|
• |
regulators revising the requirements for approving our product candidates.
|
• |
generating sufficient data to support the initiation or continuation of preclinical studies and clinical trials;
|
• |
addressing any potential delays resulting from factors related to COVID-19 or other public health concerns;
|
• |
obtaining regulatory permission to initiate clinical trials;
|
• |
contracting with the necessary parties to conduct clinical trials;
|
• |
successful enrollment of patients in, and the completion of, clinical trials on a timely basis;
|
• |
the timely manufacture of sufficient quantities of a product candidate for use in clinical trials; and
|
• |
adverse events in clinical trials.
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials;
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may determine that we have not demonstrated the safety and efficacy of our product candidates, or that they have undesirable or unintended
side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
|
• |
the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
|
• |
we may be unable to demonstrate to the FDA, EMA or other comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we
contract for clinical and commercial supplies;
|
• |
the FDA, EMA or other comparable regulatory authorities may fail to approve companion diagnostic tests required for our product candidates; and
|
• |
the approval policies or regulations of the FDA, EMA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
|
• |
size and nature of the patient population;
|
• |
severity of the disease under investigation;
|
• |
availability and efficacy of approved drugs for the disease under investigation;
|
• |
patient eligibility criteria for the clinical trial in question as defined in the protocol, including biomarker-driven identification and/or certain
highly-specific criteria related to stage of disease progression, which may limit the patient populations eligible for our clinical trials to a greater extent than competing clinical trials for the same indication that do not have
biomarker-driven patient eligibility criteria;
|
• |
perceived risks and benefits of the product candidate under study;
|
• |
clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved or
other product candidates being investigated for the indications we are investigating;
|
• |
clinicians’ willingness to screen their patients for biomarkers to indicate which patients may be eligible for enrollment in our clinical trials;
|
• |
patient referral practices of physicians;
|
• |
the ability to monitor patients adequately during and after treatment;
|
• |
proximity and availability of clinical trial sites for prospective patients; and
|
• |
the risk that patients enrolled in clinical trials will drop out of the clinical trials before completion or, because they may be late-stage cancer patients,
will not survive the full terms of the clinical trials.
|
• |
delays or difficulties in clinical site initiation, such as our experience with our KN-8701 clinical trial, including difficulties in recruiting clinical site investigators and clinical site staff;
|
• |
delays or difficulties in enrolling and retaining patients in any clinical trials, particularly elderly subjects, who are at a higher risk of severe illness or death from COVID-19;
|
• |
difficulties interpreting data from our clinical trials due to the possible effects of COVID-19 on patients;
|
• |
diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical
trials;
|
• |
interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;
|
• |
interruption or delays in the operations of the FDA, EMA or other regulatory authorities, which may impact review and approval timelines;
|
• |
limitations in resources that would otherwise be focused on the conduct of our business, our preclinical studies or our clinical trials, including because of sickness or the desire to avoid contact with
large groups of people or as a result of government-imposed “shelter in place” or similar working restrictions;
|
• |
interruptions, difficulties or delays arising in our existing operations and company culture as a result of our employees including those hired during the COVID-19 pandemic, working from home or
in a hybrid model;
|
• |
delays in receiving approval from regulatory authorities to initiate our clinical trials;
|
• |
delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; interruptions in preclinical studies due to restricted or limited operations at the CROs conducting
such studies;
|
• |
interruption in global freight and shipping that may affect the transport of clinical trial materials, such as investigational drug product to be used in our clinical trials;
|
• |
changes in regulations as part of a response to COVID-19 which may require us to change the ways in which our clinical trials are to be conducted, or to discontinue the clinical trials altogether, or
which may result in unexpected costs;
|
• |
delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government or contractor
personnel; and
|
• |
refusal of the FDA, EMA or other regulatory authorities to accept data from clinical trials in affected geographies outside of their respective jurisdictions.
|
• |
the efficacy and safety profile as demonstrated in clinical trials compared to alternative treatments;
|
• |
the timing of market introduction of the product candidate as well as competitive products;
|
• |
the clinical indications for which a product candidate is approved;
|
• |
restrictions on the use of product candidates in the labeling approved by regulatory authorities, such as boxed warnings or contraindications in labeling, or a risk evaluation and mitigation strategy, if
any, which may not be required of alternative treatments and competitor products;
|
• |
the potential and perceived advantages of our product candidates over alternative treatments;
|
• |
the cost of treatment in relation to alternative treatments;
|
• |
the availability of coverage and adequate reimbursement by third-party payors, including government authorities;
|
• |
the availability of an approved product candidate for use as a combination therapy;
|
• |
relative convenience and ease of administration;
|
• |
the willingness of the target patient population to try new therapies and undergo required diagnostic screening to determine treatment eligibility and of physicians to prescribe these therapies and
diagnostic tests;
|
• |
the effectiveness of sales and marketing efforts;
|
• |
unfavorable publicity relating to our product candidates; and
|
• |
the approval of other new therapies for the same indications.
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials;
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may determine that we have not demonstrated the safety and efficacy of our product candidates, or that they have undesirable or unintended
side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
|
• |
the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
|
• |
we may be unable to demonstrate to the FDA, EMA or other comparable foreign regulatory authorities that our product candidate’s risk-benefit ratio for its proposed indication is acceptable;
|
• |
the FDA, EMA or other comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we
contract for clinical and commercial supplies; and
|
• |
the approval policies or regulations of the FDA, EMA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
|
• |
delays in or the rejection of product approvals;
|
• |
restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned clinical trials;
|
• |
restrictions on the products, manufacturers or manufacturing process;
|
• |
warning or untitled letters;
|
• |
civil and criminal penalties;
|
• |
injunctions;
|
• |
suspension or withdrawal of regulatory approvals;
|
• |
product seizures, detentions or import bans;
|
• |
voluntary or mandatory product recalls and publicity requirements;
|
• |
total or partial suspension of production;
|
• |
imposition of restrictions on operations, including costly new manufacturing requirements;
|
• |
revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including boxed warnings;
|
• |
imposition of a REMS, which may include distribution or use restrictions; and
|
• |
requirements to conduct additional post-market clinical trials to assess the safety of products.
|
• |
the demand for our product candidates if we obtain regulatory approval;
|
• |
our ability to set a price that we believe is fair for our products;
|
• |
our ability to obtain coverage and reimbursement approval for a product;
|
• |
our ability to generate revenue and achieve or maintain profitability;
|
• |
the level of taxes that we are required to pay; and
|
• |
the availability of capital.
|
• |
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for
which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in
order to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs.
In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act (FCA). There
are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection;
|
• |
federal civil and criminal false claims laws, including the FCA, which can be enforced through civil “qui tam” or “whistleblower” actions, and civil monetary penalty laws, impose criminal and civil
penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal health care programs that are false or
fraudulent; knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay money to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing such
an obligation. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private
individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery. When an entity is determined to have violated the federal civil FCA, the
government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;
|
• |
HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means
of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly
and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to
healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;
|
• |
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, which impose requirements on certain covered
healthcare providers, health plans, and healthcare clearinghouses and their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information as well as
their covered subcontractors, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization. HITECH also created new tiers of civil monetary penalties, amended HIPAA
to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and
seek attorneys’ fees and costs associated with pursuing federal civil actions;
|
• |
the federal Physician Payments Sunshine Act, created under the ACA and its implementing regulations, which require applicable manufacturers of covered drugs, devices, biologicals or medical supplies for which payment is available
under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made in the previous year to covered recipients,
including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others) and teaching
hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and
|
• |
analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business
practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;
state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments
that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of
gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws
governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
|
• |
identifying, recruiting, integrating, maintaining, retaining and motivating our current and additional employees;
|
• |
managing our internal development efforts effectively, including the preclinical, clinical, FDA, EMA and other comparable foreign regulatory authorities’ review process for our RAF and FGFR programs and
our other product candidates, while complying with any contractual obligations to contractors and other third parties;
|
• |
managing increasing operational and managerial complexity; and
|
• |
improving our operational, financial and management controls, reporting systems and procedures.
|
• |
differing regulatory requirements and reimbursement regimes in foreign countries, such as the lack of pathways for accelerated drug approval, may result in foreign regulatory approvals taking longer and
being more costly than obtaining approval in the United States;
|
• |
foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials or our interpretation of data from preclinical studies or clinical trials;
|
• |
approval policies or regulations of foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval;
|
• |
unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;
|
• |
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
• |
compliance with legal requirements applicable to privacy, data protection, information security and other matters;
|
• |
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
|
• |
foreign taxes, including withholding of payroll taxes;
|
• |
foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;
|
• |
difficulties staffing and managing foreign operations;
|
• |
complexities associated with managing multiple payor reimbursement regimes and government payors in foreign countries;
|
• |
workforce uncertainty in countries where labor unrest is more common than in the United States;
|
• |
potential liability under the FCPA or comparable foreign regulations;
|
• |
challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United
States;
|
• |
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad (such as the ongoing conflict between Ukraine and Russia, including the sanctions imposed
by the United States, the European Union and others on Russia and other related parties); and
|
• |
business interruptions resulting from geo-political actions, including war and terrorism, trade policies, treaties and tariffs.
|
• |
the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with
which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;
|
• |
patent applications may not result in any patents being issued;
|
• |
patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;
|
• |
our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents
that will limit, interfere with or eliminate our ability to make, use and sell our potential product candidates;
|
• |
there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that
prove successful, as a matter of public policy regarding worldwide health concerns; and
|
• |
countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market
competing product candidates.
|
• |
others may be able to develop products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license;
|
• |
we or our future licensors or collaborators might not have been the first to make the inventions covered by the issued patents or patent application that we own or license;
|
• |
we or our future licensors or collaborators might not have been the first to file patent applications covering certain of our inventions;
|
• |
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
|
• |
it is possible that the pending patent applications we own or license will not lead to issued patents;
|
• |
issued patents that we own or license may be held invalid or unenforceable, as a result of legal challenges by our competitors;
|
• |
our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products
for sale in our major commercial markets;
|
• |
we may not develop additional proprietary technologies that are patentable;
|
• |
the patents of others may have an adverse effect on our business; and
|
• |
we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
|
• |
result in costly litigation that may cause negative publicity;
|
• |
divert the time and attention of our technical personnel and management;
|
• |
cause development delays;
|
• |
prevent us from commercializing any of our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law;
|
• |
require us to develop non-infringing technology, which may not be possible on a cost-effective basis;
|
• |
subject us to significant liability to third parties; or
|
• |
require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in our competitors
gaining access to the same technology.
|
• |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
• |
whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
• |
our right to sublicense patents and other rights to third parties;
|
• |
our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
|
• |
our right to transfer or assign the license;
|
• |
the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our future licensors and us and our partners; and
|
• |
the priority of invention of patented technology.
|
• |
the failure of the third party to manufacture our product candidates according to our schedule and specifications, or at all, including if our third-party contractors give greater priority to the supply
of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;
|
• |
the reduction or termination of production or deliveries by suppliers, or the raising or prices or renegotiation of terms;
|
• |
the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us;
|
• |
the breach by the third-party contractors of our agreements with them;
|
• |
the failure of third-party contractors to comply with applicable regulatory requirements, including cGMPs;
|
• |
the breach by the third-party contractors of our agreements with them;
|
• |
the failure of the third party to manufacture our product candidates according to our specifications;
|
• |
the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;
|
• |
clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in
lost sales; and
|
• |
the misappropriation of our proprietary information, including our trade secrets and know-how.
|
• |
increased operating expenses and cash requirements;
|
• |
the assumption of additional indebtedness or contingent liabilities;
|
• |
the issuance of our equity securities;
|
• |
assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel;
|
• |
the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;
|
• |
retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;
|
• |
risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products, product candidates and marketing approvals; and
|
• |
our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance
costs.
|
• |
collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations and may not perform their obligations as expected;
|
• |
collaborators may deemphasize or not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical
trial results, changes in the collaborators’ strategic focus, including as a result of a business combination or sale or disposition of a business unit or development function, or available funding or external factors such as an
acquisition that diverts resources or creates competing priorities;
|
• |
collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a
new formulation of a product candidate for clinical testing;
|
• |
collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products
are more likely;
|
• |
to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
|
• |
a collaborator with marketing and distribution rights to multiple products may not commit sufficient resources to the marketing and distribution of our product relative to other products;
|
• |
we may grant exclusive rights to our collaborators that would prevent us from collaborating with others;
|
• |
collaborators may not properly obtain, maintain, defend or enforce our intellectual property rights or may use our proprietary information and intellectual property in such a way as to invite litigation
or other intellectual property related proceedings that could jeopardize or invalidate our proprietary information and intellectual property or expose us to potential litigation or other intellectual property related proceedings;
|
• |
disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation
or arbitration that diverts management attention and resources;
|
• |
collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates;
|
• |
collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all;
|
• |
collaborators may not provide us with timely and accurate information regarding development progress and activities under the collaboration or may limit our ability to share such information, which could
adversely impact our ability to report progress to our investors and otherwise plan our own development of our product candidates;
|
• |
collaborators may own or co-own intellectual property covering our products or product candidates that result from our collaborating with them, and in such cases, we would not have the exclusive right to
develop or commercialize such intellectual property; and
|
• |
a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
|
• |
the timing and results of INDs, preclinical studies and clinical trials of our product candidates or those of our competitors;
|
• |
the success of competitive products or announcements by potential competitors of their product development efforts;
|
• |
regulatory actions with respect to our products or product candidates or our competitors’ products or product candidates;
|
• |
actual or anticipated changes in our growth rate relative to our competitors;
|
• |
regulatory or legal developments in the United States and other countries, including changes in leadership at various federal departments and agencies as well as new legislation, executive, and
administrative actions under the Biden administration;
|
• |
developments or disputes concerning patent applications, issued patents or other proprietary rights;
|
• |
the recruitment or departure of key personnel;
|
• |
announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capital commitments;
|
• |
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
|
• |
fluctuations in the valuation of companies perceived by investors to be comparable to us;
|
• |
market conditions in the pharmaceutical and biotechnology sector;
|
• |
changes in the structure of healthcare payment systems;
|
• |
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
|
• |
announcement or expectation of additional financing efforts;
|
• |
sales of our common stock by us, our insiders or our other stockholders;
|
• |
expiration of market stand-off or lock-up agreements;
|
• |
the impact of any natural disasters or public health emergencies, such as COVID-19; and
|
• |
general economic, political, industry and market conditions and instability (such as those created by the ongoing conflict between Ukraine and Russia, including, without limitation, sanctions against
Russia imposed by the United States, the European Union and others).
|
• |
the timing and cost of, and level of investment in, research and development activities relating to our programs, which will change from time to time;
|
• |
our ability to enroll patients in clinical trials and the timing of enrollment;
|
• |
our ability to timely initiate sites for clinical trials;
|
• |
the cost of manufacturing our current product candidates and any future product candidates, which may vary depending on FDA, EMA or other comparable foreign regulatory authority guidelines and
requirements, the quantity of production and the terms of our agreements with manufacturers;
|
• |
expenditures that we will or may incur to acquire or develop additional product candidates and technologies or other assets;
|
• |
the timing and outcomes of preclinical studies and clinical trials for product candidates from our RAF and FGFR programs, and any product candidates from our research programs, or competing product
candidates;
|
• |
the need to conduct unanticipated clinical trials or clinical trials that are larger or more complex than anticipated;
|
• |
competition from existing and potential future products that compete with our RAF or FGFR programs or any of our research programs, and changes in the competitive landscape of our industry, including
consolidation among our competitors or partners;
|
• |
any delays in regulatory review or approval of product candidates from our RAF or FGFR programs, or any of our research programs;
|
• |
the level of demand for any of our product candidates, if approved, which may fluctuate significantly and be difficult to predict;
|
• |
the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future products that compete with our RAF or FGFR programs, or any
of our research programs;
|
• |
our ability to commercialize product candidates from our RAF or FGFR programs, or any of our research programs, if approved, inside and outside of the United States, either independently or working with
third parties;
|
• |
our ability to establish and maintain collaborations, licensing or other arrangements;
|
• |
our ability to adequately support future growth;
|
• |
potential unforeseen business disruptions that increase our costs or expenses;
|
• |
future accounting pronouncements or changes in our accounting policies; and
|
• |
the changing and volatile global economic and political environment.
|
• |
being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” disclosure in our periodic reports;
|
• |
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
|
• |
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report
providing additional information about the audit and the financial statements;
|
• |
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
|
• |
exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
• |
establish a classified board of directors so that not all members of our board are elected at one time;
|
• |
permit only the board of directors to establish the number of directors and fill vacancies on the board;
|
• |
provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;
|
• |
authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan (also known as a “poison pill”);
|
• |
eliminate the ability of our stockholders to call special meetings of stockholders;
|
• |
prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
|
• |
prohibit cumulative voting;
|
• |
authorize our board of directors to amend the bylaws;
|
• |
establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; and
|
• |
require a super-majority vote of stockholders to amend some provisions described above.
|
• |
any derivative action or proceeding brought on our behalf;
|
• |
any action asserting a claim of breach of fiduciary duty;
|
• |
any action asserting a claim against us arising under the DGCL, our amended- and restated certificate of incorporation or our amended and restated bylaws; and
|
• |
any action asserting a claim against us that is governed by the internal-affairs doctrine.
|
Item 1B. |
Unresolved Staff Comments.
|
Item 2. |
Properties.
|
Item 3. |
Legal Proceedings.
|
Item 4. |
Mine Safety Disclosures.
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Item 6. |
[Reserved].
|
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
advance our RAF and FGFR programs through clinical development;
|
• |
advance the development of our other small molecule research programs, including our CDK12 inhibitor and next-generation programs for our product candidates;
|
• |
expand our pipeline of product candidates through our own product discovery and development efforts;
|
• |
seek to discover and develop additional product candidates;
|
• |
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates and related additional commercial manufacturing costs;
|
• |
implement operational, financial and management systems;
|
• |
attract, hire and retain additional clinical, scientific, management and administrative personnel;
|
• |
maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know how; and
|
• |
operate as a public company.
|
• |
expenses incurred in connection with the discovery, preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and CROs;
|
• |
the cost of manufacturing compounds for use in our preclinical and clinical studies, including under agreements with third parties, such as consultants and CMOs; and
|
• |
costs associated with consultants for chemistry, manufacturing and controls (CMC) development, regulatory, statistics and other services, including expenses for technology and facilities.
|
• |
the timing and progress of preclinical and clinical development activities;
|
• |
the number and scope of preclinical and clinical programs we decide to pursue;
|
• |
our ability to maintain our current research and development programs and to establish new ones;
|
• |
establishing an appropriate safety profile with IND-enabling toxicology studies;
|
• |
successful patient enrollment in, and the initiation and completion of, clinical trials;
|
• |
per-subject clinical trial costs;
|
• |
the number of clinical trials required for regulatory approval;
|
• |
the countries in which the clinical trials are conducted;
|
• |
the length of time required to enroll eligible subjects and initiate clinical trials;
|
• |
the number of subjects that participate in the clinical trials;
|
• |
the drop-out and discontinuation rate of subjects;
|
• |
potential additional safety monitoring requested by regulatory authorities;
|
• |
the duration of subject participation in the clinical trials and follow-up;
|
• |
the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to applicable regulatory authorities;
|
• |
the receipt of regulatory approvals from applicable regulatory authorities;
|
• |
the timing, receipt and terms of any marketing approvals and post-marketing approval commitments from applicable regulatory authorities;
|
• |
the extent to which we establish collaborations, strategic partnerships or other strategic arrangements with third parties, if any, and the performance of any such third party;
|
• |
obtaining and retaining research and development personnel;
|
• |
establishing commercial manufacturing capabilities or making arrangements with CMOs;
|
• |
development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercial launch; and
|
• |
obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights.
|
|
Year Ended December 31,
|
|||||||||||
|
2022
|
2021
|
Change
|
|||||||||
|
(in thousands)
|
|||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
88,150
|
$
|
67,166
|
$
|
20,984
|
||||||
General and administrative
|
30,371
|
22,945
|
7,426
|
|||||||||
Total operating expenses
|
118,521
|
90,111
|
28,410
|
|||||||||
Loss from operations
|
(118,521
|
)
|
(90,111
|
)
|
(28,410
|
)
|
||||||
Other income, net
|
2,250
|
348
|
1,902
|
|||||||||
Net loss
|
(116,271
|
)
|
(89,763
|
)
|
(26,508
|
)
|
||||||
Net loss attributable to redeemable convertible noncontrolling interests
|
-
|
-
|
-
|
|||||||||
Net loss attributable to Kinnate
|
$
|
(116,271
|
)
|
$
|
(89,763
|
)
|
$
|
(26,508
|
)
|
|
Year Ended December 31,
|
Increase
|
||||||||||
|
2022
|
2021
|
(Decrease)
|
|||||||||
|
(in thousands)
|
|||||||||||
External expenses:
|
||||||||||||
RAF
|
$
|
23,713
|
$
|
23,436
|
$
|
277
|
||||||
FGFR
|
13,588
|
11,085
|
2,503
|
|||||||||
Other programs and other unallocated costs
|
16,924
|
10,859
|
6,065
|
|||||||||
Total external expenses
|
54,225
|
45,380
|
8,845
|
|||||||||
Internal expenses
|
33,925
|
21,786
|
12,139
|
|||||||||
Total research and development expenses
|
$
|
88,150
|
$
|
67,166
|
$
|
20,984
|
• |
advance our RAF and FGFR programs through clinical development;
|
• |
advance the development of our other small molecule research programs, including our CDK12 inhibitor;
|
• |
expand our pipeline of product candidates through our own product discovery and development efforts;
|
• |
seek to discover and develop additional product candidates;
|
• |
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates and related additional commercial manufacturing costs;
|
• |
implement operational, financial and management systems;
|
• |
attract, hire and retain additional clinical, scientific, management and administrative personnel;
|
• |
maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know how; and
|
• |
operate as a public company.
|
• |
the scope, timing, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;
|
• |
the scope, timing, progress, results and costs of researching and developing other product candidates that we may pursue;
|
• |
the costs, timing and outcome of regulatory review of our product candidates;
|
• |
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
|
• |
the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch;
|
• |
the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;
|
• |
the cost and timing of attracting, hiring and retaining skilled personnel to support our operations and continued growth;
|
• |
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
|
• |
our ability to establish and maintain collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties on favorable terms, if at all;
|
• |
the extent to which we acquire or in-license other product candidates and technologies, if any;
|
• |
the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any; and
|
• |
the costs associated with operating as a public company.
|
|
Year Ended December 31,
|
|||||||
|
2022
|
2021
|
||||||
|
(in thousands)
|
|||||||
Net cash used in operating activities
|
$
|
(89,034
|
)
|
$
|
(71,065
|
)
|
||
Net cash used in investing activities
|
(6,830
|
)
|
(180,574
|
)
|
||||
Net cash provided by financing activities
|
1,160
|
36,237
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
-
|
||||||
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(94,703
|
)
|
$
|
(215,402
|
)
|
• |
Fair Value of Common Stock: Since the completion of our initial public offering, the fair value of each share of common stock underlying stock option grants is based on the closing price of our
common stock on the Nasdaq Global Select Market as reported on the date of grant.
|
• |
Expected Term: We have opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option,
which is generally 10 years.
|
• |
Expected Volatility: Due to the limited trading history of our common stock, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical
volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. We will continue to apply this process until a
sufficient amount of historical information regarding the volatility of our own stock price becomes available.
|
• |
Risk-Free Interest Rate: The risk-free interest rates used are based on the U.S. Treasury yield in effect at the time of grant for zero-coupon U.S. treasury notes with maturities approximately equal to the expected term of the stock
options.
|
• |
Expected Dividend: To date, we have not issued any dividends and do not expect to issue dividends over the life of the options and therefore have estimated the dividend yield to be zero.
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk.
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
29,261
|
$
|
116,096
|
||||
Cash at consolidated joint venture
|
25,725 | 33,593 | ||||||
Short-term investments
|
172,214
|
103,362
|
||||||
Prepaid expenses and other current assets
|
3,637
|
5,639
|
||||||
Total current assets
|
230,837
|
258,690
|
||||||
Property and equipment, net
|
3,071
|
956
|
||||||
Right-of-use lease assets | 3,377 | - | ||||||
Long-term investments
|
39,139 | 105,449 | ||||||
Restricted cash
|
371 | 371 | ||||||
Deferred offering costs
|
- | 641 | ||||||
Other non-current assets
|
2,031 | 757 | ||||||
Total assets
|
$
|
278,826
|
$
|
366,864
|
||||
Liabilities, Redeemable Convertible Noncontrolling Interests and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
2,970
|
$
|
3,148
|
||||
Accrued expenses
|
13,206
|
9,239
|
||||||
Current portion of operating lease liabilities | 991 | - | ||||||
Total current liabilities
|
17,167
|
12,387
|
||||||
Operating lease liabilities, long-term | 3,191 | - | ||||||
Total liabilities | 20,358 | 12,387 | ||||||
Commitments and contingencies (See Note 13)
|
||||||||
Redeemable convertible noncontrolling interests
|
35,000 | 35,000 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.0001 par value; 200,000,000 shares authorized at
December 31, 2022 and 2021; 0
shares outstanding at December 31, 2022
and 2021
|
-
|
-
|
||||||
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at
December 31, 2022 and 2021; 44,342,292
and 43,855,944 shares issued
and outstanding at December 31, 2022 and 2021, respectively
|
4
|
4
|
||||||
Additional paid-in capital
|
484,237
|
463,089
|
||||||
Accumulated other comprehensive loss
|
(1,410
|
)
|
(524
|
)
|
||||
Accumulated deficit
|
(259,363
|
)
|
(143,092
|
)
|
||||
Total stockholders’ equity
|
223,468
|
319,477
|
||||||
Total liabilities, redeemable convertible noncontrolling interests and stockholders’ equity
|
$
|
278,826
|
$
|
366,864
|
Years Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Operating expenses:
|
||||||||
Research and development
|
$
|
88,150
|
$
|
67,166
|
||||
General and administrative
|
30,371
|
22,945
|
||||||
Total operating expenses
|
118,521
|
90,111
|
||||||
Loss from operations
|
(118,521
|
)
|
(90,111
|
)
|
||||
Other income, net
|
2,250
|
348
|
||||||
Net loss
|
(116,271
|
)
|
(89,763
|
)
|
||||
Net loss attributable to redeemable convertible noncontrolling interests
|
-
|
-
|
||||||
Net loss attributable to Kinnate
|
$
|
(116,271
|
)
|
$
|
(89,763
|
)
|
||
Weighted-average shares outstanding, basic and diluted
|
44,065,749
|
43,601,162
|
||||||
Net loss per share, basic and diluted
|
$
|
(2.64
|
)
|
$
|
(2.06
|
)
|
||
Comprehensive loss: |
||||||||
Net loss |
$ | (116,271 | ) | $ | (89,763 | ) | ||
Other comprehensive loss: |
||||||||
Currency translation adjustments | 1 | - | ||||||
Unrealized loss on investments
|
(887 | ) | (515 | ) | ||||
Total comprehensive loss |
(117,157 | ) | (90,278 | ) | ||||
Comprehensive loss attributable to redeemable convertible noncontrolling interests |
- | - | ||||||
Comprehensive loss attributable to Kinnate |
$ | (117,157 | ) | $ | (90,278 | ) |
|
Common Stock
|
Additional
Paid-in |
Accumulated Other Comprehensive
|
Accumulated
|
Total
Stockholders’ |
Redeemable Convertible Noncontrolling
|
||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Loss
|
Deficit
|
Equity
|
Interests
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance at December 31, 2020
|
43,477,439
|
$
|
4
|
$
|
446,601
|
$
|
(9
|
)
|
$
|
(53,329
|
)
|
$
|
393,267
|
$
|
-
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
15,016
|
-
|
-
|
15,016
|
-
|
|||||||||||||||||||||
Shares issued under equity
incentive plans
|
328,238
|
-
|
730
|
-
|
-
|
730
|
-
|
|||||||||||||||||||||
Shares issued under employee
stock purchase plan
|
50,267
|
-
|
889
|
-
|
-
|
889
|
-
|
|||||||||||||||||||||
Contributions from redeemable convertible
noncontrolling interest owners |
-
|
-
|
-
|
-
|
-
|
-
|
35,000
|
|||||||||||||||||||||
Issuance costs for Series A preferred stock
to redeemable convertible NCI
|
-
|
-
|
(147
|
)
|
-
|
-
|
(147
|
)
|
-
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(89,763
|
)
|
(89,763
|
)
|
-
|
|||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(515
|
)
|
-
|
(515
|
)
|
-
|
|||||||||||||||||||
Balance at December 31, 2021
|
43,855,944
|
$
|
4
|
$
|
463,089
|
$
|
(524
|
)
|
$
|
(143,092
|
)
|
$
|
319,477
|
$
|
35,000
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
19,582
|
-
|
-
|
19,582
|
-
|
|||||||||||||||||||||
Shares issued under equity incentive plans
|
414,051
|
-
|
945
|
-
|
-
|
945
|
-
|
|||||||||||||||||||||
Shares issued under employee
stock purchase plan
|
72,297
|
-
|
621
|
-
|
-
|
621
|
-
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(116,271
|
)
|
(116,271
|
)
|
-
|
|||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(886
|
)
|
-
|
(886
|
)
|
-
|
|||||||||||||||||||
Balance at December 31, 2022
|
44,342,292
|
$
|
4
|
$
|
484,237
|
$
|
(1,410
|
)
|
$
|
(259,363
|
)
|
$
|
223,468
|
$
|
35,000
|
Years Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(116,271
|
)
|
$
|
(89,763
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation expense
|
19,582
|
15,016
|
||||||
Depreciation
|
604
|
123
|
||||||
Amortization/accretion of investments
|
682
|
1,877
|
||||||
Loss on disposal of property and equipment
|
- | 58 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
1,369
|
(3,053
|
)
|
|||||
Operating lease right-of-use assets and liabilities, net | 805 | - | ||||||
Accounts payable and accrued expenses
|
4,195
|
4,677
|
||||||
Net cash used in operating activities
|
(89,034
|
)
|
(71,065
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchases of short-term and long-term investments
|
(176,528
|
)
|
(247,142
|
)
|
||||
Sales and maturities of short-term and long-term investments
|
172,417 | 67,337 | ||||||
Purchases of property and equipment
|
(2,719
|
)
|
(769
|
)
|
||||
Net cash used in investing activities
|
(6,830
|
)
|
(180,574
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Contributions from redeemable noncontrolling interest owners, net | - | 34,853 | ||||||
Proceeds from issuance of common stock under equity incentive plans | 945 | 730 | ||||||
Proceeds from issuance of common stock under employee stock purchase plan | 621 | 889 | ||||||
Payment of deferred offering costs
|
(406 | ) |
(235
|
)
|
||||
Net cash provided by financing activities
|
1,160
|
36,237
|
||||||
Effect of exchange rate changes on cash and cash equivalents | 1 | - | ||||||
Net decrease in cash, cash equivalents and restricted cash
|
(94,703
|
)
|
(215,402
|
)
|
||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
150,060
|
365,462
|
||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
55,357
|
$
|
150,060
|
||||
Supplemental non-cash investing and financing activity:
|
||||||||
Capitalized value of tenant improvement allowance | $ | 606 | $ | - | ||||
Operating lease liabilities arising from obtaining right-of-use assets | $ | 4,569 | $ | - | ||||
Write-off of deferred offering costs | $ | 641 | $ | - | ||||
Deferred offering costs included in accounts payable and accrued expenses
|
$
|
-
|
$
|
406
|
1) |
Organization and Basis of Presentation
|
a) |
Organization and Nature of Operations
|
b) |
Basis of Presentation
|
2) |
Summary of Significant Accounting Policies
|
a) |
Use of Estimates
|
b) |
Concentration of Credit Risk
|
c) |
Fair Value of Financials Instruments
|
d) |
Cash and Cash Equivalents
|
e) |
Investments
|
f) |
Property and Equipment, Net
|
g) |
Impairment of Property and Equipment
|
h) |
Leases
|
i) |
Deferred
Offering Costs
|
j) |
Research and Development
|
k) |
Redeemable Convertible Noncontrolling Interests
|
l) |
Commitments and Contingencies
|
m) |
Income Taxes
|
n) |
Stock-Based Compensation
|
o) |
Comprehensive Loss
|
p) |
Net Loss Per Share
|
Years Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Numerator
|
||||||||
Net loss attributable to Kinnate
|
$
|
(116,271
|
)
|
$
|
(89,763
|
)
|
||
Denominator
|
||||||||
Weighted-average shares outstanding used in computing net loss per share, basic and diluted
|
44,065,749
|
43,601,162
|
||||||
Net loss per share, basic and diluted
|
$
|
(2.64
|
)
|
$
|
(2.06
|
)
|
As of December 31,
|
||||||||
2022
|
2021
|
|||||||
Options to purchase common stock
|
9,107,467
|
7,477,568
|
||||||
Non-vested restricted stock units | 287,916 | - | ||||||
Total | 9,395,383 | 7,477,568 |
p) |
Recently Issued Accounting Standards
|
3)
|
Cash, Cash Equivalents and Restricted Cash
|
|
As of December 31,
|
|||||||
|
2022
|
2021
|
||||||
Cash and cash equivalents
|
$
|
29,261
|
$
|
116,096
|
||||
Cash at consolidated joint venture
|
25,725
|
33,593
|
||||||
Restricted cash, non-current
|
371
|
371
|
||||||
Total cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows
|
$
|
55,357
|
$
|
150,060
|
4) |
Property and Equipment, Net
|
As of December 31,
|
||||||||
2022
|
2021
|
|||||||
Furniture and fixtures
|
$
|
760
|
$
|
5
|
||||
Computers and equipment
|
442
|
381
|
||||||
Computer software
|
99
|
69
|
||||||
Leasehold improvements
|
2,511 | 638 | ||||||
Property and equipment
|
3,812
|
1,093
|
||||||
Less accumulated depreciation
|
(741
|
)
|
(137
|
)
|
||||
Property and equipment, net
|
$
|
3,071
|
$
|
956
|
6) |
Investments
|
|
December 31, 2022
|
|||||||||||||||||
Maturity | Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
in Years
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||||
Corporate debt securities
|
less than 1
|
$
|
9,604
|
$
|
2
|
$
|
(72
|
)
|
$
|
9,534
|
||||||||
Commercial paper
|
less than 1 | 41,243 | - | - | 41,243 | |||||||||||||
U.S. Treasury securities
|
less than 1
|
119,810
|
-
|
(1,254
|
)
|
118,556
|
||||||||||||
U.S. Agency bonds
|
less than 1
|
2,877
|
4
|
-
|
2,881
|
|||||||||||||
Short-term investments
|
$
|
173,534
|
$
|
6
|
$
|
(1,326
|
)
|
$
|
172,214
|
|||||||||
|
||||||||||||||||||
Corporate debt securities
|
1 - 2
|
$ |
15,426 | $ |
- | $ |
(60 | ) | $ |
15,366 | ||||||||
U.S. Agency bonds
|
1 - 2 | 5,907 | - | (9 | ) | 5,898 | ||||||||||||
Asset-backed securities
|
1 - 2
|
17,897
|
20
|
(42
|
)
|
17,875
|
||||||||||||
Long-term investments
|
$
|
39,230
|
$
|
20
|
$
|
(111
|
)
|
$
|
39,139
|
December 31, 2021
|
||||||||||||||||||
Maturity | Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
in Years
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||||
Corporate debt securities
|
less than 1 |
$
|
27,450
|
$
|
-
|
$
|
(25
|
)
|
$
|
27,425
|
||||||||
U.S. Treasury securities
|
less than 1 | 60,226 | - | (67 | ) | 60,159 | ||||||||||||
Asset-backed securities
|
less than 1 |
15,798
|
-
|
(20
|
)
|
15,778
|
||||||||||||
Short-term investments
|
$
|
103,474
|
$
|
-
|
$
|
(112
|
)
|
$
|
103,362
|
|||||||||
U.S. Treasury securities
|
1 - 2 | 105,861 | - | (412 | ) | 105,449 | ||||||||||||
Long-term investments
|
$ |
105,861 | $ |
- | $ |
(412 | ) | $ |
105,449 |
December 31, 2022
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||||||||||||||
Count
|
Fair Value
|
Losses
|
Count
|
Fair Value
|
Losses
|
Count
|
Fair Value
|
Losses
|
||||||||||||||||||||||||||||
Corporate debt securities
|
7
|
$
|
22,806
|
$
|
(132
|
)
|
-
|
$
|
-
|
$
|
-
|
7
|
$
|
22,806
|
$
|
(132
|
)
|
|||||||||||||||||||
Commercial paper
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
U.S. Treasury securities
|
3
|
14,625
|
(57
|
)
|
7
|
103,931
|
(1,197
|
)
|
10
|
118,556
|
(1,254
|
)
|
||||||||||||||||||||||||
U.S. Agency bonds
|
2
|
5,898
|
(9
|
)
|
-
|
-
|
-
|
2
|
5,898
|
(9
|
)
|
|||||||||||||||||||||||||
Asset-backed securities
|
6
|
7,843
|
(42
|
)
|
-
|
-
|
-
|
6
|
7,843
|
(42
|
)
|
|||||||||||||||||||||||||
18
|
$
|
51,172
|
$
|
(240
|
)
|
7
|
$
|
103,931
|
$
|
(1,197
|
)
|
25
|
$
|
155,103
|
$
|
(1,437
|
)
|
December 31, 2021
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||||||||||||||
Count
|
Fair Value
|
Losses
|
Count
|
Fair Value
|
Losses
|
Count
|
Fair Value
|
Losses
|
||||||||||||||||||||||||||||
Corporate debt securities
|
6
|
$
|
27,425
|
$
|
(25
|
)
|
-
|
$
|
-
|
$
|
-
|
6
|
$
|
27,425
|
$
|
(25
|
)
|
|||||||||||||||||||
U.S. Treasury securities
|
11
|
165,608
|
(479
|
)
|
-
|
-
|
-
|
11
|
165,608
|
(479
|
)
|
|||||||||||||||||||||||||
Asset-backed securities
|
4
|
15,778
|
(20
|
)
|
-
|
-
|
-
|
4
|
15,778
|
(20
|
)
|
|||||||||||||||||||||||||
21
|
$
|
208,811
|
$
|
(524
|
)
|
-
|
$
|
-
|
$
|
-
|
21
|
$
|
208,811
|
$
|
(524
|
)
|
7) |
Fair Value Measurements
|
Level 1: |
Observable inputs such as quoted prices in active markets;
|
Level 2: |
Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
Level 3: |
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
Fair Value Measurements at December 31, 2022
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Money market funds
|
$
|
28,261
|
$
|
-
|
$
|
-
|
$
|
28,261
|
||||||||
Corporate debt securities
|
-
|
24,900
|
-
|
24,900
|
||||||||||||
Commercial paper
|
- | 41,243 | - | 41,243 | ||||||||||||
U.S. Treasury securities
|
-
|
118,556
|
-
|
118,556
|
||||||||||||
U.S. Agency bonds
|
- | 8,779 | - | 8,779 | ||||||||||||
Asset-backed securities
|
- | 17,875 | - | 17,875 | ||||||||||||
Total cash equivalents and investments
|
$
|
28,261
|
$
|
211,353
|
$
|
-
|
$
|
239,614
|
Fair Value Measurements at December 31, 2021
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Money market funds
|
$
|
115,049
|
$
|
-
|
$
|
-
|
$
|
115,049
|
||||||||
Corporate debt securities
|
-
|
27,425
|
-
|
27,425
|
||||||||||||
U.S. Treasury securities
|
-
|
165,608
|
-
|
165,608
|
||||||||||||
Asset-backed securities
|
- | 15,778 | - | 15,778 | ||||||||||||
Total cash equivalents and investments
|
$
|
115,049
|
$
|
208,811
|
$
|
-
|
$
|
323,860
|
8) |
Stockholders’ Equity
|
As of December 31,
|
||||||||
2022
|
2021
|
|||||||
Common stock options outstanding
|
9,107,467
|
7,477,568
|
||||||
RSUs outstanding
|
287,916 | - | ||||||
Common stock reserved for future equity grants
|
1,700,947
|
4,079,339
|
||||||
Total common stock reserved for future issuance
|
11,096,330
|
11,556,907
|
9) |
Equity Incentive Plans and Stock-Based Compensation
|
a) |
Equity Incentive Plans
|
Weighted- | ||||||||||||||||
Average | Aggregate | |||||||||||||||
Weighted- | Remaining | Intrinsic | ||||||||||||||
Average | Contractual | Value | ||||||||||||||
Options
|
Exercise Price
|
Term (in years)
|
(in thousands)
|
|||||||||||||
Outstanding at January 1, 2022
|
7,477,568
|
$
|
11.11
|
8.3
|
$ | 74,268 | ||||||||||
Granted
|
2,904,414
|
9.92
|
||||||||||||||
Exercised | (400,906 | ) | 2.36 | |||||||||||||
Forfeited
|
(873,609
|
)
|
14.26
|
|||||||||||||
Outstanding at December 31, 2022
|
9,107,467
|
$
|
10.81
|
7.8
|
$
|
11,521
|
||||||||||
Exercisable at December 31, 2022
|
4,428,265
|
$
|
9.39
|
7.0
|
$
|
8,220
|
|
Weighted-
|
Aggregate
|
||||||||||
|
Restricted
|
Average
|
Intrinsic
|
|||||||||
|
Stock Units
|
Grant Date
|
Value
|
|||||||||
|
Outstanding
|
Fair Value
|
(in thousands)
|
|||||||||
Outstanding at January 1, 2022
|
-
|
$
|
-
|
$
|
-
|
|||||||
Granted
|
347,587
|
14.71
|
||||||||||
Vested
|
(19,952
|
)
|
14.71
|
|||||||||
Forfeited
|
(39,719
|
)
|
14.71
|
|||||||||
Outstanding at December 31, 2022
|
287,916
|
$
|
14.71
|
$
|
1,756
|
b) |
Kinnjiu Equity Incentive Plan
|
Stock Options |
Weighted- | |||||||
Average | ||||||||
|
Shares
|
Exercise Price
|
||||||
Outstanding at January 1, 2022
|
2,837,500
|
$ |
0.34
|
|||||
Granted
|
-
|
|
-
|
|||||
Exercised
|
-
|
-
|
||||||
Forfeited
|
(500,000
|
)
|
0.34
|
|||||
Outstanding at December 31, 2022
|
2,337,500
|
$
|
0.34
|
|||||
Exercisable at December 31, 2022
|
726,825
|
$ |
0.34
|
SARs | Weighted- | |||||||
Average | ||||||||
|
Shares
|
Exercise Price
|
||||||
Outstanding at January 1, 2022
|
300,000
|
$ |
0.34
|
|||||
Granted
|
4,130,000
|
0.34
|
||||||
Exercised
|
-
|
-
|
||||||
Forfeited
|
(200,000
|
)
|
0.34
|
|||||
Outstanding at December 31, 2022
|
4,230,000
|
$
|
0.34
|
|||||
Exercisable at December 31, 2022
|
-
|
-
|
c) |
Employee Stock Purchase Plan
|
D) |
Stock-Based Compensation Expense
|
Years Ended December 31,
|
||||||
2022
|
2021
|
|||||
Expected term (in years)
|
5 - 6
|
5 - 6
|
||||
Expected volatility
|
79% - 86%
|
|
85% - 89%
|
|
||
Risk-free interest rate
|
1.62% - 4.35%
|
|
0.68% - 1.21%
|
|
||
Expected dividend
|
0%
|
|
0%
|
|
Years Ended December 31, | ||||||
2022 |
2021
|
|||||
Expected term (in years)
|
0.50 |
0.50
|
||||
Expected volatility
|
50% - 86% |
50% - 68%
|
|
|||
Risk-free interest rate
|
0.07% - 4.54% |
0.03% - 0.07%
|
|
|||
Expected dividend
|
0% |
0%
|
|
Years Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Research and development
|
$
|
8,604
|
$
|
6,778
|
||||
General and administrative
|
10,978
|
8,238
|
||||||
Total stock-based compensation
|
$
|
19,582
|
$
|
15,016
|
10) |
Related Party Transactions
|
11) |
Variable Interest Entity
|
|
As of December 31,
|
|||||||||||
|
2022
|
2021
|
May 13, 2021
|
|||||||||
Cash at consolidated joint venture
|
$
|
25,725
|
$
|
33,593
|
$
|
35,011
|
||||||
Prepaid expenses and other current assets
|
20
|
215
|
-
|
|||||||||
Right-of-use lease assets
|
223
|
-
|
-
|
|||||||||
Other non-current assets
|
48
|
-
|
-
|
|||||||||
Accounts payable and accrued expenses
|
491
|
286
|
-
|
|||||||||
Operating lease liabilities
|
206
|
-
|
-
|
12) |
Income Taxes
|
Years Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Income taxes computed at the statutory rate
|
$
|
(24,417
|
)
|
$
|
(18,850
|
)
|
||
State income taxes, net of federal benefit
|
(21
|
)
|
(4
|
)
|
||||
Permanent items
|
1,419
|
922
|
||||||
Stock-based compensation
|
331
|
(280
|
)
|
|||||
Research credits |
(4,233 | ) | (1,306 | ) | ||||
Other
|
2,140
|
548 | ||||||
Change in valuation allowance
|
24,781
|
18,970
|
||||||
Provision for income taxes
|
$
|
-
|
$
|
-
|
As of December 31,
|
||||||||
2022
|
2021
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforward
|
$
|
34,119
|
$
|
28,054
|
||||
Research and development credit carryforwards |
5,524 | 1,295 | ||||||
Stock-based compensation
|
3,213
|
1,774
|
||||||
Accrued compensation
|
858
|
635
|
||||||
Capitalized research and development expenditures
|
13,311 | - | ||||||
Other, net
|
1,151
|
144
|
||||||
Gross deferred tax assets:
|
58,176
|
31,902
|
||||||
Less valuation allowance
|
(56,928
|
)
|
(31,741
|
)
|
||||
Total deferred tax assets
|
1,248
|
161
|
||||||
Deferred tax liabilities:
|
||||||||
Right-of-use lease assets
|
(663 | ) | - | |||||
Property and equipment
|
(585 | ) | (51 | ) | ||||
Other
|
-
|
(110
|
)
|
|||||
Total deferred tax liabilities
|
(1,248 | ) | (161 | ) | ||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
13) |
Commitments and Contingencies
|
|
Operating Leases
|
|||
2023
|
1,230
|
|||
2024
|
1,113
|
|||
2025
|
1,112
|
|||
2026
|
927
|
|||
Thereafter
|
428
|
|||
Total minimum lease payments
|
4,810
|
|||
Less: imputed interest
|
(628
|
)
|
||
Total operating lease liabilities
|
4,182
|
|||
Less: current portion
|
(991
|
)
|
||
Lease liability, net of current portion
|
$
|
3,191
|
Year Ending December 31,
|
Operating Leases
|
|||
2022
|
$
|
638
|
||
2023
|
1,045
|
|||
2024
|
1,076
|
|||
2025
|
1,108
|
|||
2026
|
924
|
|||
Thereafter
|
365
|
|||
Total mimium lease payments
|
$
|
5,156
|
14) |
Employee Benefit Plan
|
15) |
Subsequent Events
|
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A. |
Controls and Procedures.
|
Item 9B. |
Other Information.
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
|
Item 10. |
Directors, Executive Officers and Corporate Governance.
|
Item 11. |
Executive Compensation.
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14. |
Principal Accounting Fees and Services.
|
Item 15. |
Exhibits, Financial Statement Schedules.
|
Item 16. |
Form 10-K Summary.
|
|
|
Incorporated by Reference
|
|||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
|
|
|
|
|
|
Amended and Restated Certificate of Incorporation of the Registrant.
|
8-K
|
001-39743
|
3.1
|
December 8, 2020
|
|
|
|
|
|
|
|
Amended and Restated Bylaws of the Registrant.
|
8-K
|
001-39743
|
3.2
|
December 8, 2020
|
|
|
|
|
|
|
|
Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain of its stockholders, dated August 24, 2020.
|
S-1
|
333-250086
|
4.1
|
November 13, 2020
|
|
|
|
|
|
|
|
Specimen common stock certificate of the Registrant.
|
S-1/A
|
333-250086
|
4.2
|
November 30, 2020
|
|
|
|
|
|
|
|
Description of Securities.
|
10-K |
001-39743 |
4.3 |
March 28, 2022 |
|
|
|
|
|
|
|
Form of Indemnification Agreement between the Registrant and each of its directors and executive officers.
|
S-1
|
333-250086
|
10.1
|
November 13, 2020
|
|
|
|
|
|
|
|
2018 Equity Incentive Plan, as amended, and forms of agreement thereunder.
|
S-1
|
333-250086
|
10.2
|
November 13, 2020
|
|
|
|
|
|
|
|
2020 Equity Incentive Plan and forms of agreements thereunder.
|
S-1/A
|
333-250086
|
10.3
|
November 30, 2020
|
|
|
|
|
|
|
|
2020 Employee Stock Purchase Plan and forms of agreements thereunder.
|
S-1/A
|
333-250086
|
10.4
|
November 30, 2020
|
|
|
|
|
|
|
|
Employment Letter between the Registrant and Nima Farzan.
|
S-1
|
333-250086
|
10.5
|
November 13, 2020
|
|
|
|
|
|
|
|
Employment Letter between the Registrant and Mark Meltz.
|
S-1
|
333-250086
|
10.6
|
November 13, 2020
|
|
|
|
|
|
|
|
Employment Letter between the Registrant and Richard Williams, MBBS, Ph.D.
|
S-1
|
333-250086
|
10.8
|
November 13, 2020
|
|
Employment Letter between the Registrant and Neha Krishnamohan.
|
8-K
|
001-39743
|
10.1
|
June 7, 2021
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan.
|
S-1
|
333-250086
|
10.9
|
November 13, 2020
|
|
|
|
|
|
|
|
Change in Control and Severance Agreement between the Registrant and Nima Farzan.
|
S-1
|
333-250086
|
10.10
|
November 13, 2020
|
|
|
|
|
|
|
|
Change in Control and Severance Agreement between the Registrant and Mark Meltz.
|
S-1
|
333-250086
|
10.11
|
November 13, 2020
|
|
|
|
|
|
|
|
Change in Control and Severance Agreement between the Registrant and Richard Williams, MBBS, Ph.D.
|
S-1
|
333-250086
|
10.13
|
November 13, 2020
|
|
Change in Control and Severance Agreement between the Registrant and Neha Krishnamohan.
|
8-K
|
001-39743
|
10.2
|
June 7, 2021
|
|
|
|
|
|
|
|
Amended and Restated Outside Director Compensation Policy.
|
|||||
|
|
|
|
|
|
Sales agreement, between the Company and SVB Leerink LLC, dated as of January 3, 2022.
|
S-3ASR
|
333-261970
|
1.2
|
January 3, 2022
|
|
|
|
|
|
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm.
|
|
|
|
|
Kinnate Biopharma Inc.
|
||
Date: March 15, 2023
|
By:
|
/s/ Nima Farzan
|
Nima Farzan
|
||
President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
||
/s/ Nima Farzan
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
March 15, 2023
|
||
Nima Farzan
|
||||
/s/ Neha Krishnamohan
|
Chief Financial Officer and Executive Vice President, Corporate Development (Principal Financial Officer)
|
March 15, 2023
|
||
Neha Krishnamohan
|
||||
/s/ Dean Mitchell
|
Chair of the Board of Directors
|
March 15, 2023
|
||
Dean Mitchell
|
||||
/s/ Jill DeSimone
|
Director
|
March 15, 2023
|
||
Jill DeSimone
|
||||
/s/ Melissa Epperly
|
Director
|
March 15, 2023
|
||
Melissa Epperly
|
||||
/s/ Keith Flaherty
|
Director
|
March 15, 2023
|
||
Keith Flaherty, M.D.
|
||||
/s/ Carl Gordon
|
Director
|
March 15, 2023
|
||
Carl Gordon, Ph.D.
|
||||
/s/ Michael Rome
|
Director
|
March 15, 2023
|
||
Michael Rome, Ph.D.
|
||||
/s/ Helen Sabzevari
|
Director
|
March 15, 2023
|
||
Helen Sabzevari, Ph.D.
|
||||
/s/ Laurie Smaldone Alsup
|
Director
|
March 15, 2023
|
||
Laurie Smaldone Alsup, M.D.
|
||||
/s/ Jim Tananbaum
|
Director
|
March 15, 2023
|
||
Jim Tananbaum, M.D.
|
Chair of the Board:
|
$
|
30,000
|
||
Audit Committee Chair:
|
$
|
15,000
|
||
Audit Committee Member:
|
$
|
7,500
|
||
Compensation Committee Chair:
|
$
|
10,000
|
||
Compensation Committee Member:
|
$
|
5,000
|
||
Nominating and Corporate Governance Committee Chair:
|
$
|
8,000
|
||
Nominating and Corporate Governance Committee Member:
|
$
|
4,000
|
1. |
I have reviewed this Annual Report on Form 10-K of Kinnate Biopharma Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 15, 2023
|
By:
|
/s/ Nima Farzan
|
Nima Farzan
|
||
President and Chief Executive Officer
|
1. |
I have reviewed this Annual Report on Form 10-K of Kinnate Biopharma Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 15, 2023
|
By:
|
/s/ Neha Krishnamohan
|
|
Neha Krishnamohan
|
|||
Chief Financial Officer and Executive Vice President, Corporate Development
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 15, 2023
|
By:
|
/s/ Nima Farzan
|
|
Nima Farzan
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 15, 2023
|
By:
|
/s/ Neha Krishnamohan
|
|
|
Neha Krishnamohan
|
||
|
Chief Financial Officer and Executive Vice President, Corporate Development
|
||
|
(Principal Financial Officer)
|