Victor Perlroth, Kodiak Sciences CEO

Ko­di­ak turns down $125M pay­ment from Bak­er Bros. deal, slash­es roy­al­ty cap by 55%

Fol­low­ing a mas­sive pub­lic raise last No­vem­ber, Ko­di­ak Sci­ences has re-worked a roy­al­ty sale agree­ment with an old part­ner — and de­clined new funds in the process.

Ko­di­ak is turn­ing down a planned $125 mil­lion pay­ment from Bak­er Bros. Ad­vi­sors, ac­cord­ing to an SEC fil­ing, cut­ting short an agree­ment that saw the biotech hand over a 4.5% stream of roy­al­ty sales on its ex­per­i­men­tal an­ti-VEGF ther­a­py KSI-301 for reti­nal vas­cu­lar dis­eases. In con­junc­tion with the move, Ko­di­ak is shrink­ing the roy­al­ty cap from just over $1 bil­lion to $450 mil­lion.

End­points News has reached out for com­ment and will up­date ac­cord­ing­ly.

The deal called for Bak­er Bros. to pay $225 mil­lion to Ko­di­ak in two in­stall­ments, the first of which came as a pay­ment of $100 mil­lion back in ear­ly 2020. The re­main­ing $125 mil­lion, which Ko­di­ak de­clined Thurs­day, was orig­i­nal­ly ex­pect­ed to come some­time in late 2020 once Ko­di­ak had reached at least 50% en­roll­ment in two piv­otal clin­i­cal stud­ies for KSI-301.

Ko­di­ak reached the ex­pect­ed mile­stones but turned down the pay­ments any­way, per the 8-K re­port. The biotech claims its “strong bal­ance sheet” fol­low­ing a No­vem­ber pub­lic of­fer­ing that raised $612 mil­lion pro­vid­ed the mo­ti­va­tion for turn­ing down the ex­tra $125 mil­lion, in ad­di­tion to “clin­i­cal tri­al progress and cap­i­tal re­sources.”

At the time, the move rep­re­sent­ed a hefty wa­ger for Bak­er Bros., putting down the cash just a cou­ple months af­ter Ko­di­ak launched its first clin­i­cal tri­al for wet AMD. It’s a strat­e­gy the firm had em­ployed in oth­er in­vest­ments as well, chip­ping in ear­ly to Amarin and a biotech de­vel­op­ing a ri­val for its Vas­cepa drug, Mati­nas Bio­Phar­ma.

Since then, how­ev­er, Ko­di­ak has vast­ly ex­pand­ed their clin­i­cal pro­gram for KSI-301. In the sum­mer of 2020, the biotech launched two Phase III tri­als for the can­di­date in di­a­bet­ic mac­u­lar ede­ma, as well as a third study in reti­nal vein oc­clu­sion. Da­ta are ex­pect­ed for each study by the end of 2021.

Ko­di­ak is al­so plan­ning to start re­cruit­ing for an­oth­er Phase III study in non-pro­lif­er­a­tive di­a­bet­ic retinopa­thy this sum­mer. And ex­ecs are ex­pect­ing to build out fur­ther da­ta for the wet AMD in­di­ca­tion, plot­ting a sep­a­rate study here for treat­ment-naïve pa­tients. Re­cruit­ment here will al­so start this sum­mer and Ko­di­ak has said it will in­clude these da­ta in its ini­tial FDA fil­ing.

Should the can­di­date even­tu­al­ly be ap­proved, Ko­di­ak would aim to chase down a mar­ket led by the Re­gen­eron block­buster Eylea. Ko­di­ak will be com­pet­ing with some big names in phar­ma to carve up that pie, how­ev­er, as No­var­tis and Roche are each wad­ing in­to the scene with their own drugs.

As the Pa­lo Al­to, CA-based biotech sets the scene for these da­ta to drop in suc­ces­sion, it’s sim­i­lar to the time in which the roy­al­ty deal was orig­i­nal­ly signed. Just one day af­ter nail­ing down that deal, Ko­di­ak be­gan of­fer­ing $250 mil­lion worth of shares on the pub­lic mar­ket.

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The coro­n­avirus vac­cine that the world for­got could still help save it

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Licensing is one of the most common ways big drugmakers leverage biotech innovation to drive gains across their pipelines — and the structure of those deals is pretty well established. But one biotech with home bases in China and the US thinks it may have a better way.

On Tuesday, Cambridge-based biotech Anji Pharma closed a $70 million Series B with two late-stage molecules in the fold and a mission to rewrite the rules of drug licensing through what it calls “dynamic equity” deals and a joint venture-heavy game plan. The round was funded in whole by Chinese hedge fund CR Capital.

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Albert Bourla, Pfizer CEO (John Thys, Pool via AP Images)

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From left to right: Mark Springel, Kristina Wang, Lin Ao, Soufiane Aboulhouda

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Paul Hudson, Sanofi CEO (Cyril Marcilhacy/Bloomberg via Getty Images)

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The French drugmaker will halt development on its unmodified mRNA Covid-19 shot despite what it said were positive Phase I/II results, a spokesperson told Endpoints News on Tuesday morning. Sanofi said the reason it’s stopping the Covid-19 mRNA program, developed in partnership with its new $3.2 billion acquisition Translate Bio, is because the market is too crowded.