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KI

KINETA, INC./DE (KA)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 reflected a return to normal operating cadence after Q2’s milestone-driven revenue, with total revenues at $0, net loss of $5.3M, and diluted EPS of $0.46; cash was $7.6M and working capital $0.2M as of September 30, 2023 .
  • Program execution advanced: positive KVA12123 monotherapy safety data, initiation of Part B (pembrolizumab combination), and SITC 2023 monotherapy data presentation set for November .
  • Financing and runway: completed ~$3M registered direct offering (October 2023) and reiterated expected cash runway into early 2025; management also referenced committed $22.5M proceeds tied to a second closing expected in 2024 .
  • The quarter’s swing versus Q2 stems largely from the absence of the $5.0M Merck milestone recognized in Q2; R&D declined sequentially with early trial ramp, while G&A remained elevated year-to-date due to public company costs and non-cash stock comp .
  • Wall Street consensus (S&P Global) was unavailable for Q3 2023; estimate comparisons are therefore not provided (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

  • Announced positive KVA12123 monotherapy safety data from VISTA-101; CEO emphasized execution “on time and on budget,” focusing on advancing a “promising new immunotherapy” .
  • Initiated Part B of VISTA-101, enrolling the first patient in combination with pembrolizumab (KEYTRUDA) for advanced solid tumors .
  • Strengthened translational biomarker strategy via Fred Hutch research agreement and SITC 2023 poster acceptance for monotherapy clinical data; multiple scientific disclosures reinforce the mechanistic rationale for VISTA blockade .

What Went Wrong

  • Revenues were $0 in Q3, down from $5.2M in Q2 (driven by the Merck milestone); quarterly net loss reverted to $(5.3)M after a Q2 net income of $0.4M, underscoring dependency on milestone timing .
  • Cash declined to $7.6M (from $7.8M in Q2 and $9.2M in Q1) and total stockholders’ equity fell to $2.9M, reflecting operating losses and limited revenue generation during early clinical stages .
  • Management noted that R&D expenses are expected to increase over time as additional patients are enrolled and dosed, which could pressure near-term losses until more clinical milestones/data are achieved .

Financial Results

Income Statement and Balance Sheet Snapshot (in thousands unless noted)

MetricQ3 2022Q1 2023Q2 2023Q3 2023
Total Revenues ($USD)200 281 5,161 —
Research & Development Expense ($USD)2,605 2,843 2,710 1,909
General & Administrative Expense ($USD)2,046 3,924 3,431 2,077
Loss from Operations ($USD)(4,451) (6,486) (980) (3,986)
Net Income (Loss) ($USD)(5,667) (6,480) 375 (5,311)
Diluted EPS ($USD)(1.14) (0.77) 0.04 (0.46)
Weighted Avg. Shares (000s)4,891 8,361 9,939 11,738
Cash ($USD)—9,238 7,770 7,562
Working Capital ($USD)—(2,391) 3,652 228
Total Assets ($USD)—13,050 17,503 10,705
Total Debt ($USD)—754 761 765
Total Stockholders’ Equity ($USD)—(56) 7,609 2,889

Notes:

  • Q2 revenue includes $5.0M milestone payment from Merck under the exclusive license and R&D collaboration; Q3 had no similar revenue recognition .
  • Year-to-date G&A increased vs prior year due to personnel-related costs, non-cash stock-based compensation, and public company expenses .

Estimate Comparison

  • S&P Global consensus estimates for Q3 2023 EPS and revenue were unavailable; no beat/miss assessment is provided (S&P Global consensus unavailable).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayThrough early 2025“Runway through early 2025” (Q1 & Q2) “Expected Cash Runway into early 2025” (Q3) Maintained
KVA12123 Monotherapy Data2H 2023“Initial clinical data by end of 2023” (Q2) “Initial monotherapy clinical safety/PK/RO/biomarker data at SITC Nov 2023” (Q3) Clarified timing/detail
Combination Arm (with pembrolizumab)Q3 2023“Dose first patient in combination arm in Q3 2023” (Q2) “Enrolled first patient in combination Part B” (Q3) Achieved milestone
Additional Monotherapy Safety/Efficacy DataQ2 2024Not previously specified“Additional monotherapy safety and efficacy data expected in Q2 2024” (Q3) New timing
Initial Combination Therapy DataQ2 2024Not previously specified“Initial pembrolizumab combination data expected in Q2 2024” (Q3) New timing

Earnings Call Themes & Trends

(Transcript was not available; themes reflect management’s prepared remarks in press releases.)

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2023)Trend
R&D execution and trial enrollmentFirst patient dosed (Apr 2023); recruitment in monotherapy cohorts; seven U.S. trial sites engaged Positive monotherapy safety data; Part B (combo) initiated; continued recruitment Advancing per plan
Partnership/milestones$5M Merck milestone recognized in Q2; collaboration highlighted No new milestone revenue; continued focus on clinical readouts Transition from milestone to data
Biomarker strategyPresented VISTA biomarker data at AACR; SAB expansion Fred Hutch research agreement for VISTA expression; SITC poster acceptance Strengthened translational focus
Financing/runway$6M financing (Apr 2023); runway into early 2025 ~$3M registered direct (Oct 2023); runway into early 2025 reiterated; reference to committed $22.5M for second closing in 2024 Sufficient near-term liquidity per plan
Clinical data disclosuresInitial clinical data anticipated by end-2023 SITC Nov 2023 monotherapy data; Q2 2024 monotherapy and combo data timing Near-term catalysts defined

Management Commentary

  • “We continue to execute the VISTA-101 trial on time and on budget as we remain laser focused on advancing this promising new immunotherapy for cancer patients.” — Shawn Iadonato, Ph.D., CEO .
  • “Steady progress towards achieving key scientific and business milestones continued during the second quarter, highlighted by our VISTA-targeting KVA12123 clinical program.” — Shawn Iadonato, Ph.D., CEO .
  • “Our team is laser focused on working with clinical partners to enroll patients in this study and report initial clinical data by the end of the year… we strengthened our balance sheet… runway through early 2025.” — Shawn Iadonato, Ph.D., CEO .

Q&A Highlights

  • No earnings call transcript was available; management disclosures and clarifications are sourced from the Q3 2023 8-K press release and financing 8-K .

Estimates Context

  • S&P Global consensus estimates for Q3 2023 (EPS and revenue) were unavailable; comparisons to Street expectations cannot be provided (S&P Global consensus unavailable).

Key Takeaways for Investors

  • The quarter’s loss and zero revenue were expected for a clinical-stage company and reflect the lack of milestone revenue in Q3 versus Q2’s $5.0M Merck payment; monitoring future collaboration milestones remains essential to smoothing quarterly P&L volatility .
  • Execution is on track: positive monotherapy safety data, initiation of pembrolizumab combination arm, and near-term clinical disclosure at SITC in November provide catalysts that can reframe the narrative around KVA12123’s clinical profile .
  • Liquidity steps (Oct ~$3M offering) and reiterated runway into early 2025 reduce near-term financing overhang; investors should watch for the referenced second closing proceeds in 2024 to further de-risk funding of planned readouts .
  • R&D opex will rise as enrollment expands; however, sequential R&D decline in Q3 reflects early ramp timing, with future increases tied to dosing and cohort progression; this dynamic will influence cash burn and required capital .
  • G&A remains structurally higher year-to-date due to public company requirements and non-cash stock comp; leverage on G&A will likely depend on scale and milestone inflows .
  • Near-term trading implications: SITC 2023 monotherapy data and clarity on Q2 2024 combo/monotherapy readouts are likely stock catalysts; absence or presence of efficacy signals and tolerability profiles will shape sentiment .
  • Medium-term thesis: KVA12123’s potential differentiation via VISTA blockade, biomarker-enabled development, and combination strategy could unlock multi-indication optionality; execution against stated timelines remains the primary driver of value creation .