IPOs

Circled by rival pharma giants and a biotech powerhouse, Kodiak asks for a $100M-plus IPO for new eye drug

Kodiak Sciences was never one of those biotechs that liked to tout every financing round or talk up its drug prospects. Helmed by biotech vet and former MPM venture partner Victor Perlroth, it turns out the biotech has been steadily jockeying a new ophthalmology drug right to the threshold of a soon-to-launch Phase II trial. And he’s aiming straight at cutting the legs out from under a blockbuster fiercely defended by one of the toughest players in drug R&D — once he completes a $100 million-plus IPO.

And he has a another pair of major league rivals looking to beat him to the punch.

Kodiak — not to be confused with Doug Williams’ Codiak — got started in 2009; a few years after Perlroth sold off Avidia to Amgen for $290 million in cash, plus another $90 million in milestones.

Victor Perlroth

The company has burned through $85.7 million so far, according to the S-1, which is close to the $93 million in revenue it’s noted raising since launch, including a $33 million mezzanine round that came in last April, with Perceptive Advisors and ArrowMark Partners leading the round.

So far, those are the only investors that Kodiak has publicly acknowledged. As a result, Perlroth is the biggest investor highlighted in the IPO, with 24% of the shares, while co-founder Stephen Charles has 10%. That’s an unusually high founder figure, if you compare it to the average venture-backed biotech going public.

Stephen Charles

The investment cash has pushed a lead drug through a small, 9-patient Phase I dosing and safety study, which Kodiak says came through with flying colors. Now, though, the next step will cost considerably more than anything they’ve done so far.

The Palo Alto, CA-based biotech is laying the groundwork for two Phase II studies of its lead drug — KSI-301. The first will be an upcoming 400-patient head-to-study pitching its drug directly against Eylea for wet age-related macular degeneration, Regeneron’s cash cow. They’re going after a 16-week dosing schedule for eye injections, compared to an 8-week dose that Regeneron has in the label, hoping to show that its less frequent injection is noninferior to the blockbuster standard. Another Phase II will explore its efficacy in diabetic retinopathy.

Regeneron recently scored an approval for a once-every-12 week dosing schedule, but Kodiak’s S-1 notes that can only start in the second year of treatment.

The current anti-VEGF drugs, Lucentis, Avastin and Eylea, have some limitations that Kodiak hopes to exploit. 

For example, Lucentis was tested and failed to successfully extend the treatment interval to 12-week dosing, with patients going back to pre-treatment baseline or even losing vision at the end of the first year of treatment, on average. The Lucentis U.S. product labeling refers to this regimen as an option which is “not as effective” as monthly dosing. Recently, the FDA allowed an update to EYLEA’s labeling to allow 12-week dosing, but only in the second year of treatment (after one full year of intensive treatment). The labeling refers to it as “not as effective as the recommended every 8-week dosing.” Even a small deviation from per label dosing can be devastating for vision. Missing as few as one or two injections in a year from EYLEA’s recommended dosing, results in almost one line of vision lost.

Kodiak’s S-1 also notes that Novartis has a late-stage (the highly touted rival brolucizumab), while Allergan is also a potential competitor in the field with abicipar. There’s more, with Roche in hot pursuit of RG7716 after its first Phase II wrap earlier this year.

Kodiak couldn’t have chosen a more aggressive group of major league players to take on. But they appear ready to make a game try at beating the lot.


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