Kinarus Therapeutics — KINETIC study discontinued

Kinarus Therapeutics (SIX: KNRS)

Currency in CHF

Last close As at 02/02/2023

CHF0.02

0.00 (0.00%)

Market capitalisation

CHF19m

Research: Healthcare

Kinarus Therapeutics — KINETIC study discontinued

Kinarus recently reported H122 financial results and reiterated its key objectives and guidance for lead candidate KIN001 in the three targeted indications, wet age-related macular degeneration (wet AMD), COVID-19 and idiopathic pulmonary fibrosis (IPF). With an H122 operating cash burn rate of CHF1.1m and a gross cash position of CHF4.6m at 30 June 2022, the company expects its current resources to fund its operations through Q123. We believe this runway can be extended by the company’s recent agreement to issue up to CHF20m in convertible notes to an entity manged by Yorkville Advisors Global.

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Written by

Pooya Hemami

Healthcare

Kinarus Therapeutics

KINETIC study discontinued

Clinical trial update

Pharma and biotech

3 October 2022

Price

CHF0.02

Market cap

CHF22m

Net cash at 30 June 2022

CHF1.1m

Shares in issue

1,113m

Free float

64.4%

Code

KNRS

Primary exchange

SIX Stock Exchange

Secondary exchange

N/A

Share price performance

Business description

Based in Switzerland, Kinarus Therapeutics is a clinical-stage pharmaceutical company focused on advancing lead candidate KIN001 in inflammatory, fibrotic and/or viral infection-related conditions. KIN001 is in Phase II studies for COVID-19 and the company plans to start Phase II studies in the coming months for wet age-related macular degeneration and idiopathic pulmonary fibrosis.

Analysts

Pooya Hemami OD MBA CFA

+44 (0)20 3077 5700

Soo Romanoff

+44 (0)20 3077 5700

Kinarus Therapeutics is a research client of Edison Investment Research Limited

Kinarus reported on 30 September that it has discontinued the Phase II KINETIC study of lead candidate KIN001 in hospitalised COVID-19 patients following the recommendation of the study’s Data and Safety Monitoring Board (DSMB) at a pre-specified interim analysis. The company is continuing the KINFAST Phase II study, which started in August, because management believes that KIN001’s multi-faceted mechanism of action (anti-inflammatory, anti-fibrotic and anti-viral against COVID-19) may still provide benefit in patients with earlier stages of COVID-19, which ultimately reflects a much larger target population (than the hospitalized group studied in KINETIC). Importantly, the company reiterates that the KINETIC result will not alter its development strategy to advance KIN001 for lead indication wet age-related macular degeneration (wet AMD) and for idiopathic pulmonary fibrosis (IPF), as discussed in our initiation report.

Year end

Revenue (CHFm)

PBT

(CHFm)

EPS
(CHF)

DPS
(CHF)

P/E
(x)

Yield
(%)

12/20

0.0

(1.5)

(0.31)

0.00

N/A

N/A

12/21

0.0

(4.9)

(0.00)

0.00

N/A

N/A

Note: 2020 accounts reflect statements of privately held Kinarus AG and 2021 statements represent pro forma financials of Kinarus Therapeutics AG following the reverse merger transaction with Perfect Holding.

KIN001 maintained a favourable safety profile throughout the KINETIC study. However, given the complex pathophysiology involving hospitalised COVID-19 patients (where multiple well-entrenched inflammatory and fibrotic factors affect outcomes in addition to viral replication) and evolution in the current treatment landscape, the DSMB determined that there was a low probability that KIN001 could show a statistically significant effect on efficacy parameters. The rationale for continuing the KINFAST study in ambulatory COVID-19 patients is supported by in vitro data that is indicative of robust antiviral efficacy of equal potency against the original SARS-CoV-2 strain and variants of concern, including Delta and Omicron. Kinarus attributes this effectiveness across multiple variants to KIN001’s ability to target the human host cell pathways required for SARS-CoV-2 viral replication, rather than targeting the virus itself (which helps distinguish KIN001 from antiviral or monoclonal antibody therapies), as discussed in a recent webinar.

The majority of COVID-19 patients do not progress to hospitalisation and the purpose of KINFAST is to demonstrate a reduced time to recovery and a reduction in disease severity progression in mild to moderate symptomatic COVID-19 patients.

With an H122 operating cash burn rate of CHF1.1m and a gross cash position of CHF4.6m at 30 June 2022, Kinarus expects its current resources to fund its operations through Q123. We believe this runway can be extended by the company’s recent agreement to issue up to CHF20m in convertible notes to an entity manged by Yorkville Advisors Global. Kinarus continues to explore additional financing options to support its development objectives, particularly the planned Phase II clinical trials in wet AMD and IPF.

General disclaimer and copyright

This report has been commissioned by Kinarus Therapeutics and prepared and issued by Edison, in consideration of a fee payable by Kinarus Therapeutics. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Kinarus Therapeutics and prepared and issued by Edison, in consideration of a fee payable by Kinarus Therapeutics. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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