Typically, clinical stage pharmaceutical IPOs, with no real financials to speak of yet, are underwritten by second or third tier institutions. That is because these IPO are sometimes deemed lower quality, and/or higher risk, so the top firms may take a pass on underwriting them. So, the fact that Goldman and JP Morgan are behind this deal indicates that the Street is enthusiastic about this deal.
Apparently, so too are institutional investors. KNSA was able to increase its deal size to 8.5 mln shares from 7.0 mln due to healthy demand. Overall, with the deal pricing at $18 which is the mid-point of the expected $17-$19, KNSA generated $153 mln in gross proceeds, or $27 mln more than originally anticipated.
Shares are slated to open for trading later this morning on the Nasdaq.
KNSA is a clinical-stage biopharmaceutical company focused on therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need. The company has three clinical-stage product candidates, one of which, Rilonacept, is anticipated to commence a Phase 3 clinical trial in 2018.
Rilonacept is a protein for inhibiting interleukin-1a and interleukin-1b. Rilonacept is approved by the FDA for the treatment of cryopyrin-associated periodic syndromes and has been commercially available from Regeneron Pharmaceuticals (REGN) for this indication since 2008. Kiniksa is initially developing rilonacept for the treatment of recurrent pericarditis, a debilitating inflammatory cardiovascular disease. The company is currently conducting an open-label Phase 2 proof of concept clinical trial in this disease and expect to report preliminary data in 2018.
As of April 23, 2018, a total of four subjects were enrolled in the clinical trial. Three of the four subjects were experiencing symptomatic recurrent pericarditis at the time of enrollment. All three subjects showed a reduction in C-reactive protein measurements, as well as a reduction in scores of an 11-point Numerical Rating Scale instrument for assessing pericardial-associated chest pain, in the first week of treatment. The fourth subject, in a separate patient cohort, was on corticosteroids at the time of enrollment but not experiencing active symptoms and had a history of corticosteroid dependence. This subject was treated with rilonacept and as of April 23, 2018, had been free of pericarditis flares for three weeks.
Another key product candidate is Mavrilimumab, a monoclonal antibody that antagonizes the signaling of granulocyte macrophage colony stimulating factor. KNSA is focusing its initial development efforts for mavrilimumab on giant cell arteritis, an inflammatory disease of the blood vessels with unmet medical need that can lead to blindness if left untreated. They intend to develop mavrilimumab for the treatment of giant cell arteritis under a new IND in the United States and new Clinical Trial Application in Europe, and plan to initiate a Phase 2 clinical trial in 2018.
The last candidate, KPL-716, is a monoclonal antibody that simultaneously inhibits the signaling of the cytokines interleukin-31 and oncostatin M by targeting their common receptor subunit, oncostatin M receptor beta. The company plans to study KPL-716 in a variety of pruritic and fibrotic indications driven by these cytokines and they believe KPL-716 is the only monoclonal antibody in development that simultaneously targets both pathways. Kiniksa is currently enrolling subjects in a Phase 1a/1b clinical trial in healthy volunteers and in subjects with atopic dermatitis as a proof of concept for pruritic conditions.
As of March 31, the company had $221 mln in cash & cash equivalents. Kiniksa anticipates that following the offering, it will have sufficient cash to fund operating expenses and capital expenditure requirements into the second quarter of 2020.