Kiniksa Pharmaceuticals International, plc 10-Q for FY2020 Q2

Kiniksa Pharmaceuticals International, plc (KNSA)

10-Q 2020-08-04 For: 2020-06-30

Added on April 04, 2026

About this 10-Q

Kiniksa Pharmaceuticals International, plc filed this 10-Q on August 4, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $37.47M; compared with a net loss of $37.19M a year earlier

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Bermuda		98-1327726
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Shares	KNSA	The Nasdaq Global Select Market



Large Accelerated Filer	◻	Accelerated Filer	☒

Non-accelerated Filer	◻	Smaller Reporting Company	☒

		Emerging Growth Company	☒

	Page
PART I — FINANCIAL INFORMATION	6
Item 1. Financial Statements (unaudited)	6
Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	6
Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2020 and 2019	7
Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2020 and 2019	8
Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	9
Notes to Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3. Quantitative and Qualitative Disclosures About Market Risk	47
Item 4. Controls and Procedures	47

PART II — OTHER INFORMATION	49
Item 1. Legal Proceedings	49
Item 1A. Risk Factors	49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	122
Item 3. Defaults Upon Senior Securities	122
Item 4. Mine Safety Disclosures	122
Item 5. Other Information	122
Item 6. Exhibits	123

SIGNATURES	125


	June 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	123,456	$	46,928
Short-term investments		128,942		186,452
Prepaid expenses and other current assets		12,095		8,247
Total current assets		264,493		241,627
Property and equipment, net		5,210		6,398
Operating lease right-of-use assets		1,323		1,927
Restricted cash		210		210
Deferred offering costs		205		—
Deferred tax assets		—		4,372
Total assets	$	271,441	$	254,534

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	2,373	$	5,693
Accrued expenses		16,499		20,415
Operating lease liabilities		1,680		1,697
Other current liabilities		—		25
Total current liabilities		20,552		27,830
Non-current liabilities:
Non-current operating lease liabilities		139		955
Other long-term liabilities		334		326
Total liabilities		21,025		29,111
Commitments and contingencies (Note 12)
Shareholders’ equity:
Class A common shares, par value of $0.000273235 per share; 25,369,973 shares and 19,245,201 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		7		6
Class B common shares, par value of $0.000273235 per share; 2,463,011 shares and 4,638,855 shares issued and outstanding as of June 30, 2020 and December 31, 2019		1		1
Class A1 common shares, $0.000273235 par value; 16,595,954 shares and 14,995,954 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		4		4
Class B1 common shares, $0.000273235 par value; 16,057,618 shares issued and outstanding as of June 30, 2020 and December 31, 2019		4		4
Additional paid-in capital		670,371		581,467
Accumulated other comprehensive income		9		33
Accumulated deficit		(419,980)		(356,092)
Total shareholders’ equity		250,416		225,423
Total liabilities and shareholders’ equity	$	271,441	$	254,534


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating expenses:
Research and development	$	22,324	$	30,848	$	43,225	$	90,101
General and administrative		9,536		8,441		18,022		16,835
Total operating expenses		31,860		39,289		61,247		106,936
Loss from operations		(31,860)		(39,289)		(61,247)		(106,936)
Interest income		266		1,724		1,055		3,533
Loss before (provision) benefit for income taxes		(31,594)		(37,565)		(60,192)		(103,403)
(Provision) benefit for income taxes		(5,875)		374		(3,696)		391
Net loss	$	(37,469)	$	(37,191)	$	(63,888)	$	(103,012)
Net loss per share attributable to common shareholders—basic and diluted	$	(0.65)	$	(0.68)	$	(1.13)	$	(1.94)
Weighted average common shares outstanding—basic and diluted		57,914,105		54,475,476		56,618,397		53,225,710
Comprehensive loss:
Net loss	$	(37,469)	$	(37,191)	$	(63,888)	$	(103,012)
Other comprehensive income:
Unrealized gain (loss) on short-term investments and currency translation adjustments, net of tax		(231)		93		(24)		105
Total other comprehensive income		(231)		93		(24)		105
Total comprehensive loss	$	(37,700)	$	(37,098)	$	(63,912)	$	(102,907)


	Common Shares			Additional		Accumulated				Total
	(Class A, B, A1 and B1)			Paid-In		Other Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income		Deficit		Equity
Balances at December 31, 2019	54,937,628	$	15	$	581,467	$	33	$	(356,092)	$	225,423
Exercise of options	643,867		—		2,414		—		—		2,414
Share-based compensation expense	—		—		4,209		—		—		4,209
Unrealized gain on short-term investments and currency translation adjustments	—		—		—		207		—		207
Net loss	—		—		—		—		(26,419)		(26,419)
Balances at March 31, 2020	55,581,495	$	15	$	588,090	$	240	$	(382,511)	$	205,834
Issuance of Class A common shares upon completion of follow-on offering, inclusive of the over-allotment option exercise, net of underwriting discounts and commissions and other offering costs	2,760,000		1		46,900		—		—		46,901
Issuance of Class A1 common shares upon completion of private placement, net of placement agent fees	1,600,000		—		27,594		—		—		27,594
Issuance of Class A common shares in connection with the release of escrow from the acquisition of all issued and outstanding equity securities of Primatope Therapeutics, Inc.	59,469		—		—		—		—		—
Exercise of options and issuance of shares under the employee share purchase plan	485,592		—		2,936		—		—		2,936
Share-based compensation expense	—		—		4,851		—		—		4,851
Unrealized loss on short-term investments and currency translation adjustments	—		—		—		(231)		—		(231)
Net loss	—		—		—		—		(37,469)		(37,469)
Balances at June 30, 2020	60,486,556	$	16	$	670,371	$	9	$	(419,980)	$	250,416

	Common Shares			Additional		Accumulated				Total
	(Class A, B, A1 and B1)			Paid-In		Other Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2018	49,489,647	$	13	$	473,483	$	(4)	$	(194,225)	$	279,267
Issuance of Class A common shares upon completion of follow-on offering, inclusive of the over-allotment option exercise, net of underwriting discounts and commissions and other offering costs	2,816,110		2		48,474		—		—		48,476
Issuance of Class A1 common shares upon completion of private placement, net of placement agent fees	2,000,000		—		34,511		—		—		34,511
Class A common shares issued or to be issued in connection with the acquisition of all issued and outstanding equity securities of Primatope Therapeutics, Inc.	337,008		—		7,000		—		—		7,000
Exercise of options	50,070				181		—		—		181
Share-based compensation expense	—		—		2,893		—		—		2,893
Unrealized gain on short-term investments	—		—		—		12		—		12
Net loss	—		—		—		—		(65,821)		(65,821)
Balances at March 31, 2019	54,692,835	$	15	$	566,542	$	8	$	(260,046)	$	306,519
Class A common shares issued or to be issued in connection with a milestone payment due to Primatope Therapeutics, Inc.	94,284		—		1,800		—		—		1,800
Exercise of options and issuance of shares under the employee share purchase plan	70,573		—		512		—		—		512
Share-based compensation expense	—		—		3,464		—		—		3,464
Unrealized gain on short-term investments	—		—		—		93		—		93
Net loss	—		—		—		—		(37,191)		(37,191)
Balances at June 30, 2019	54,857,692	$	15	$	572,318	$	101	$	(297,237)	$	275,197


	Fair Value Measurements
	as of June 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		44,473		—		—		44,473
Cash equivalents — U.S. Treasury notes		—		32,896		—		32,896
Short-term investments — U.S. Treasury notes		—		128,942		—		128,942
	$	44,683	$	161,838	$	—	$	206,521


	Fair Value Measurements
	as of December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		25,207		—		—		25,207
Cash equivalents — U.S. Treasury notes		—		10,192		—		10,192
Short-term investments — U.S. Treasury notes		—		186,452		—		186,452
	$	25,417	$	196,644	$	—	$	222,061


	June 30,
	2020
Weighted-average remaining lease term (years)		0.98
Weighted-average discount rate		7.16%


As of June 30,
2020	$	911
2021		972
2022 and thereafter		—
Total future minimum lease payments	$	1,883
Less imputed interest		(64)
Present value of lease liabilities	$	1,819


		Weighted
	Number of	Average
	Shares	Fair Value
Outstanding as of December 31, 2019	8,491,734	$	7.68
Granted	1,956,670	$	11.66
Exercised	(1,080,425)	$	3.01
Forfeited	(684,599)	$	11.30
Outstanding as of June 30, 2020	8,683,380	$	8.88
Options exercisable as of June 30, 2020	3,068,290	$	8.56
Options unvested as of June 30, 2020	5,615,090	$	10.02


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith

3.1	Memorandum of Association of Kiniksa Pharmaceuticals, Ltd.	S-1	333-224488	3.1	4/27/2018

3.2	Amended and Restated Bye-Laws of Kiniksa Pharmaceuticals, Ltd.	8-K	001-38492	3.1	5/29/2018

4.1	Specimen Share Certificate evidencing the Class A common shares	S-1/A	333-224488	4.1	5/14/2018

4.2	Second Amended and Restated Investors’ Rights Agreement, dated as of February 9, 2018	S-1	333-224488	3.1	4/27/2018

10.1	Amendment No. 1 to the License Agreement, effective as of July 9, 2020, by and between Kiniksa Pharmaceuticals, Ltd. and MedImmune Limited	8-K	001-38492	10.1	7/15/2020

31.1	Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer					*

31.2	Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer					*

32.1	Section 1350 Certification of Principal Executive Officer					**

32.2	Section 1350 Certification of Principal Financial Officer					**

101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document					***

101.SCH	Inline XBRL Taxonomy Extension Schema Document					***

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					***

101.DEF	Inline XBRL Extension Definition Linkbase Document					***

101.LAB	Inline XBRL Taxonomy Label Linkbase Document					***

	KINIKSA PHARMACEUTICALS, LTD.

Date: August 4, 2020	By:	/s/ Sanj K. Patel
		Sanj K. Patel
		Chief Executive Officer and Chairman of the Board of Directors


	June 30,		December 31,
	2020		2019
Furniture, fixtures and vehicles	$	47	$	47
Computer hardware and software		344		344
Leasehold improvements		3,627		3,627
Lab equipment		4,706		4,685
Construction in progress		—		20
Total property and equipment		8,724		8,723
Less: Accumulated depreciation		(3,514)		(2,325)
Total property and equipment, net	$	5,210	$	6,398