Quick Take

Kodiak Sciences (KOD) intends to raise gross proceeds of $100 million from a U.S. IPO, according to an S-1 registration statement.

The clinical stage biopharmaceutical company is focused on developing retinal disease therapeutics.

KOD is tightly focused on Phase 1/2 clinical trials for its lead candidate KSI-301 on a global scale in 2019.

When we learn more details about the IPO from management, I’ll provide an update.

Company and Technology

Palo Alto, California,-based Kodiak Sciences was founded in 2009 to specialize in the design and development of therapeutics to treat chronic, high-prevalence retinal diseases.

Management is headed by Co-Founder, Chairman and CEO Victor Perlroth, who was previously Venture Partner at MPM Capital.

The company’s lead drug candidate, KSI-301, is a biologic therapy built with the company’s antibody biopolymer conjugate (ABC) platform, which is designed to maintain effective drug levels in ocular tissues.

If approved, KSI-301 has the potential to become an important anti-VEGF therapy in wet age-related macular degeneration (Wet AMD) and diabetic retinopathy. A Phase 1 clinical trial for this drug was initiated in July 2018 in the U.S.

The company’s second drug candidate, KSI-50, is a dual inhibitor biologic in development that blocks activation of both VEGF and IL-6 and is potentially suitable as a next-generation therapy for the treatment and prevention of neovascular retinal diseases such as wet AMD and DR.

Below is the current status of the company’s drug development pipeline:

Investors in Kodiak Sciences have included Baker Bros. Advisors, Perceptive Advisors, ArrowMark Partners. (Source: CrunchBase)

Market and Competition

According to a 2017 market research report by Global Data, the global Age-related Macular Degeneration (AMD) market was valued at $4.9 billion in 2016 and is projected to grow to $11.5 billion by 2026.

This represents a CAGR of 8.9% during the period between 2016 and 2026.

The main factors driving market growth are the development of new therapies for the treatment of geographic atrophy, AMD, dry AMD, and wet AMD.

Major competitors that provide or are developing therapies for AMD include:

  • Novartis (NVS)
  • Apellis Pharmaceuticals (APLS)
  • Ophthotech (OPHT)
  • Allergan (AGN)

Financial Performance

KOD’s recent financial results are typical of biopharma firms in development in that they feature no revenues and significant R&D and G&A expenses related to advancing its pipeline through the regulatory process.

Below are the company’s financial results for the past two and ½ years (Audited PCAOB for full years):

(Source: KOD S-1)

As of June 30, 2018, the company had $17.6 million in cash and $55.9 million in total liabilities.

IPO Details

KOD intends to raise $100 million in gross proceeds from an IPO of its common stock.

Management says it will use the net proceeds from the IPO as follows:

To advance KSI-301 through enrollment of the Phase 2 clinical trial in the U.S., EU and rest of the world in patients with wet AMD and to expand the scope of our Phase 1 clinical trial for KSI-301 through completion of a Phase 1b clinical trial;

To advance KSI-301 into Phase 2 clinical trials in China for wet AMD and DME/DR;

To advance KSI-301 into the Phase 2 clinical trial in the U.S., EU and rest of the world in patients with DME/DR;

Towards research and development of our pipeline including KSI-501, and to initiate additional clinical studies in ophthalmology; and

the remainder for working capital and other general corporate purposes.

Management’s presentation of the company roadshow isn’t currently available.

Listed bookrunners of the IPO are Morgan Stanley, BofA Merrill Lynch, Barclays, and Chardan.

Expected IPO Pricing Date: Not on the calendar.

An enhanced version of this article on my Seeking Alpha Marketplace research service IPO Edge includes my initial commentary on the IPO.

Members of IPO Edge get the latest IPO research, news, market trends and industry analysis. Get started with a free trial.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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