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KI

KINETA, INC./DE (KA)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 delivered no revenue ($0.00m) and a wider net loss of $10.25m (-$0.89 EPS), driven primarily by a $(3.83)m non-cash fair value change related to private placement rights; R&D and G&A trended lower year over year .
  • Clinical updates were constructive: partial response in the pembrolizumab combo cohort and durable stable disease in monotherapy cohorts, with favorable safety (no DLTs or CRS) and biomarker induction; multiple dose cohorts cleared .
  • Liquidity is constrained: cash fell to $1.77m at quarter-end and management disclosed substantial doubt about going concern; company received a $0.50m April investment and is pursuing strategic alternatives and litigation against investors who failed to fund .
  • Wall Street consensus from S&P Global was unavailable; a third‑party aggregator indicated consensus EPS of -$0.21, implying a large miss versus reported -$0.89 EPS .

What Went Well and What Went Wrong

What Went Well

  • Early clinical signals: partial response in a PD‑L1 negative mucoepidermoid carcinoma patient (-54% target lesions; complete response in non‑target lesions) and stable disease with -24% target lesions in a CPI‑failure renal cell carcinoma patient .
  • Favorable safety and immunologic activity: no dose‑limiting toxicities or cytokine release syndrome at any dose; dose‑dependent induction of pro‑inflammatory cytokines/chemokines and increases in monocytes, CD4+/CD8+ T cells, and NK cells .
  • Management tone remains focused on data updates and optionality: “We continue to be pleased with these early clinical results… We look forward to sharing additional clinical updates in the second quarter and we will continue to explore strategic alternatives.” — Craig Philips, President .

What Went Wrong

  • Funding setback and liquidity stress: Q1 cash of $1.77m vs $5.78m at year‑end; going concern disclosure and suspension of new patient enrollment after certain investors did not fulfill April funding obligations .
  • Wider GAAP loss: net loss increased to $10.25m (from $6.48m YoY), largely due to $(3.83)m change in fair value of private placement rights; EPS widened to -$0.89 (from -$0.77) .
  • Operational constraints: workforce reduction (~64% referenced in March update) and exploration of strategic alternatives limit near‑term execution capacity; litigation ongoing against non‑funding investors .

Financial Results

Income Statement and EPS

Metric ($USD)Q1 2023Q3 2023Q1 2024
Revenue ($ Millions)$0.281 $0.000 $0.000
Total Operating Expenses ($ Millions)$6.77 $3.99 $6.41
Net Loss ($ Millions)$6.48 $5.31 $10.25
Diluted EPS ($)-$0.77 -$0.46 -$0.89

Notes:

  • Prior quarter Q4 2023 was reported on an annual press release without a separate Q4 breakout; comparisons use Q3 2023 for trend continuity .

Operating Expense Detail

Metric ($USD Millions)Q1 2023Q3 2023Q1 2024
R&D Expense$2.84 $1.91 $2.73
G&A Expense$3.92 $2.08 $3.68

Other Drivers

Metric ($USD Millions)Q1 2023Q3 2023Q1 2024
Change in Fair Value of Private Placement Rights$0.00 $(1.40) $(3.83)
Interest Income$0.05 $0.10 $0.05
Interest Expense$(0.02) $(0.02) $(0.04)

Balance Sheet and Liquidity KPIs

KPI ($USD Millions)Sep 30, 2023Dec 31, 2023Mar 31, 2024
Cash$7.56 $5.78 $1.77
Total Current Assets$7.84 $5.98 $2.16
Working Capital (Deficit)$0.23 $(1.10) $(6.37)
Total Assets$10.71 $10.28 $2.43
Total Debt$0.77 $0.77 $0.78
Stockholders’ Equity (Deficit)$2.89 $3.06 $(6.24)

Additional liquidity note: received $0.50m investment in April 2024 from an existing investor; management disclosed substantial doubt about ability to continue as a going concern .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayAs of Q3 2023Expected runway into early 2025 Insufficient to fund operating expenses and capex for ≥12 months from Q1 filing date; substantial doubt (going concern) Lowered
Clinical MilestonesQ2 2024Additional monotherapy safety/efficacy; initial combo data Additional monotherapy and combo data (timing reiterated) Maintained
Patient EnrollmentVISTA‑101Continued recruitment in monotherapy/combination Suspended enrollment of new patients; existing patients continue Lowered
Strategic PathOngoingN/AExploring strategic alternatives (sale, merger, assets) New Disclosure

No formal revenue, margin, OpEx, OI&E, or tax rate guidance provided in Q1 2024 materials .

Earnings Call Themes & Trends

No earnings call transcript identified; themes below reflect press releases across recent quarters.

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Clinical Efficacy (KVA12123)Initial monotherapy safety/PK/RO/biomarker data; combo enrollment started Monotherapy stable disease in 9/12; early combo signals outlined Partial response (combo) and durable SD (mono); additional data planned Q2 Improving clinical signal
Safety/TolerabilityPositive monotherapy safety; ongoing dose escalation No DLTs; no CRS No DLTs; no CRS across doses Consistently favorable
Biomarkers/Immune ActivationEarly biomarker readouts (monotherapy) Dose‑dependent cytokines/chemokines; T cell/NK increases Dose‑dependent biomarker induction confirmed Consistent
Funding/RunwayExpect runway into early 2025 (with planned funding) Going concern at year‑end Severe liquidity constraints; going concern; $0.50m April investment; litigation vs investors Deteriorating
Strategic AlternativesNot highlighted Announced in Feb 2024 restructuring Actively exploring strategic alternatives Escalating

Management Commentary

  • “We continue to be pleased with these early clinical results as well as the accompanying biomarkers and immune cell data sets. We look forward to sharing additional clinical updates in the second quarter and we will continue to explore strategic alternatives.” — Craig Philips, President .
  • Corporate restructuring rationale: suspension of new patient enrollment and workforce reduction following investor funding failure in April; pursuing strategic alternatives to maximize value .

Q&A Highlights

  • No earnings call transcript or Q&A session was found; analysis is based on the 8‑K press release and prior quarter updates .

Estimates Context

  • S&P Global analyst consensus was unavailable for KA due to missing mapping at the time of retrieval.
  • A third‑party aggregator indicated Q1 2024 consensus EPS of -$0.21 vs actual -$0.89, a significant miss; revenue had no consensus and reported $0.00m .

Key Takeaways for Investors

  • Clinical trajectory is improving (partial response in combo; durable SD in mono) with clean safety, offering optionality for strategic paths despite limited resources .
  • Liquidity is the central risk: cash of $1.77m, working capital deficit of $(6.37)m, and going concern disclosure; incremental $0.50m provides limited relief .
  • Near‑term stock moves may be driven by strategic alternatives progress, litigation outcomes, and forthcoming Q2 clinical data updates .
  • Non‑cash fair value adjustments can materially swing GAAP loss; investors should focus on operating expense trends and clinical milestones to gauge underlying burn and value creation .
  • Enrollment pause limits near‑term trial velocity; partnership or transaction could be necessary to sustain development .
  • Without formal financial guidance and with S&P consensus unavailable, market expectations are uncertain; the reported EPS significantly missed a third‑party consensus marker, which can pressure sentiment .
  • Maintain focus on validation events (additional efficacy readouts, biomarker durability) as potential catalysts for strategic interest or financing .