Company Overview
Kairos Pharma, Ltd. (NYSE American: KAPA) is a clinical-stage biopharmaceutical company at the forefront of developing innovative cancer therapies designed to overcome drug resistance and immune suppression. With a focus on structural biology and molecular insights, Kairos Pharma is pioneering a new class of therapeutics that aim to transform the treatment landscape for cancer patients.
History and Incorporation
Kairos Pharma was incorporated in June 2013 under the name NanoGB13, Inc., and later changed its name to Kairos Pharma, Ltd. in July 2016. The company subsequently converted into a Delaware corporation under the same name in May 2023. As an early-stage biotechnology company, Kairos Pharma has focused on the development of immunotherapy and cell therapy treatments for oncology.
Financial Challenges and Funding
Since its inception, the company has faced financial challenges, relying primarily on equity and debt financings to fund its operations. In 2022, Kairos Pharma entered into several convertible note payable agreements with investors totaling $675,000. These agreements included a provision that would increase the note principal balances if the company did not close an IPO transaction within 12 months.
Initial Public Offering
To address its financial position, Kairos Pharma successfully closed its initial public offering in September 2024, raising $5.52 million in net proceeds. This allowed the company to convert the convertible notes and certain accounts payable, significantly improving its balance sheet. As of September 30, 2024, Kairos Pharma reported shareholders' equity of $3.33 million.
Intellectual Property and Licensing
Throughout its history, Kairos Pharma has focused on building a strong intellectual property portfolio. The company has entered into several exclusive license agreements with Cedars-Sinai Medical Center, granting it licensing rights to certain patent technologies related to cancer and autoimmune disease treatments. These licensing agreements have been critical to the company's development of its product candidates.
2024 IPO Milestone
In 2024, Kairos Pharma achieved a significant milestone by completing its initial public offering (IPO), raising $6.2 million in gross proceeds. This infusion of capital has enabled the company to accelerate the development of its pipeline and further strengthen its core capabilities. The successful IPO also provided Kairos Pharma with enhanced visibility and access to a broader investor base, positioning the company for continued growth and success.
Financials
Kairos Pharma's financial performance has been characterized by consistent losses, as the company has dedicated substantial resources to its research and development efforts. For the year ended December 31, 2023, the company reported a net loss of $1.81 million, with no revenue generated during the period. Similarly, for the nine months ended September 30, 2024, Kairos Pharma reported a net loss of $1.62 million.
In the most recent quarter, the company reported a net loss of $1.05 million, with no revenue generated. This loss was primarily driven by increased operating expenses as the company continues to advance its clinical development programs. The company's research and development expenses for the nine months ended September 30, 2024, totaled $242,000, up significantly from $75,000 in the prior year period. This increase reflects the progression of clinical trials for ENV-105 and other pipeline candidates.
General and administrative expenses for the same period amounted to $655,000, which included costs related to the company's intellectual property portfolio and its exclusive license agreements with Cedars-Sinai. Notably, $93,000 of fees relating to license agreements were recorded in general and administrative expenses for the nine months ended September 30, 2024.
Liquidity
Despite these financial challenges, Kairos Pharma has maintained a strong balance sheet, with $3.22 million in cash and cash equivalents as of September 30, 2024. The company's cash runway is expected to extend into the fourth quarter of 2025, providing sufficient runway to advance its key programs. Additionally, the successful completion of the IPO has strengthened Kairos Pharma's financial position, allowing the company to focus on its core objectives of developing novel cancer therapies.
The company's debt-to-equity ratio stands at 0.04, indicating a relatively low level of debt compared to equity. Kairos Pharma's current ratio and quick ratio are both 2.84, suggesting a strong ability to meet short-term obligations. The company does not have any available credit lines, relying primarily on equity financing to fund its operations.
Product Development
One of the key focus areas for Kairos Pharma is the development of ENV105, its lead product candidate. ENV105 is a novel therapy designed to target and overcome drug resistance in cancer, a significant unmet need in the oncology landscape. The company is currently evaluating ENV105 in a Phase 1 clinical trial for lung cancer and a Phase 2 clinical trial for prostate cancer, with plans to expand its clinical trials to include additional cancer indications.
Research and Development Pipeline
Kairos Pharma's research and development efforts have also yielded other promising product candidates, such as KROS101 and KROS401, which have demonstrated encouraging preclinical results in the treatment of melanoma and glioblastoma. The company's pipeline diversification strategy ensures that it maintains a balanced and robust portfolio of investigational therapies, mitigating the risks associated with any individual program.
Strategic Partnerships
In addition to its internal R&D initiatives, Kairos Pharma has forged strategic partnerships with renowned institutions like Cedars-Sinai Medical Center and PreCheck Health Services. These collaborations have allowed the company to leverage cutting-edge technologies and expertise, further strengthening its capabilities in the development of companion diagnostics and biomarkers to support its clinical trials.
Industry Challenges and Risks
The biopharmaceutical industry is known for its inherent risks and challenges, and Kairos Pharma is no exception. The company faces the typical hurdles associated with drug development, including regulatory uncertainties, competition from established players, and the need to continuously secure funding to sustain its operations. Additionally, the COVID-19 pandemic has introduced new complexities, potentially impacting patient enrollment and clinical trial timelines.
Management and Resilience
Despite these obstacles, Kairos Pharma has demonstrated resilience and a steadfast commitment to its mission. The company's experienced management team, led by Chief Executive Officer John S. Yu, M.D., has navigated the company through these challenges, maintaining a focus on advancing its pipeline and creating value for shareholders.
Future Outlook
Looking ahead, Kairos Pharma's outlook remains promising. The company's recent progress in its clinical trials, coupled with its robust pipeline and strategic partnerships, positions it well to continue making strides in the oncology space. As Kairos Pharma advances its programs and expands its reach, investors will closely monitor the company's ability to achieve key milestones and deliver on its long-term objectives.
Product Segments
Kairos Pharma operates in two main product segments: oncology therapeutics and cell therapy treatments.
Oncology Therapeutics Segment The company's lead oncology therapeutic candidate is ENV-105, a novel small molecule that binds to RelA of NF-kB, a key transcription factor involved in tumor growth and immune evasion. Kairos is currently conducting a Phase 2 clinical trial of ENV-105 for the treatment of castrate-resistant prostate cancer and a Phase 1 trial for the treatment of non-small cell lung cancer. Research and development expenses for this segment were $242,000 for the nine months ended September 30, 2024, reflecting the advancement of these clinical trials.
Cell Therapy Segment Kairos' wholly-owned subsidiary, Enviro Therapeutics, is developing cell therapy treatments focused on depletion of mitochondrial DNA from circulation and sensitization of tumors through endoglin antagonism. Enviro has exclusive licenses from Cedars-Sinai for the underlying patent rights and technical information for these cell therapy approaches.
Licensing Agreements and Milestones
Kairos Pharma has entered into several exclusive license agreements with Cedars-Sinai Medical Center for various oncology therapeutic candidates targeting fibrosis, cancer, and autoimmune diseases. These agreements require the company to pay various upfront license fees, annual maintenance fees, milestone payments, and royalties on net sales for the licensed technologies.
For the cell therapy segment, Enviro Therapeutics is required to meet certain development milestones under its license agreements with Cedars-Sinai. These milestones include completing preclinical studies, obtaining an IND, and commencing clinical trials. Failure to meet these milestones could result in the licenses being converted to non-exclusive or terminated by Cedars-Sinai. In 2021, Enviro paid Cedars-Sinai a total of $950,000 in upfront license fees and reimbursement of prior patent costs upon signing the license agreements.
Business Overview A Clinical-Stage Biopharmaceutical Company
Kairos Pharma is committed to advancing therapeutics for cancer patients that are designed to overcome key hurdles in immune suppression and drug resistance. The company's mission is to reverse key mechanisms of therapeutic resistance and immune suppression, ultimately transforming cancer treatment.
Since its inception, Kairos has focused on organizing and staffing the company, business planning, raising capital, acquiring and developing technology, establishing its intellectual property portfolio, identifying potential product candidates, and undertaking preclinical and clinical studies and manufacturing. As of the latest report, the company's product candidates have not yet been approved as safe or effective by the FDA or any other comparable foreign regulator.
The company has incurred significant operating losses since inception, with net losses of $1.62 million for the nine months ended September 30, 2024, and $1.81 million for the year ended December 31, 2023. As of September 30, 2024, Kairos had an accumulated deficit of $7.83 million. The company expects to continue incurring significant and increasing expenses and operating losses as it advances its current and future product candidates through preclinical and clinical development, manufactures drug products and supplies, seeks regulatory approval, maintains and expands its intellectual property portfolio, hires additional personnel, and operates as a public company.
Conclusion
In conclusion, Kairos Pharma is a clinical-stage biopharmaceutical company that is pushing the boundaries of cancer treatment through its innovative approach to overcoming drug resistance and immune suppression. Despite the inherent challenges of the industry, the company has demonstrated resilience and a steadfast commitment to its mission, laying the foundation for potential long-term success. As Kairos Pharma continues to navigate the road ahead, investors will undoubtedly keep a close eye on the company's progress and its ability to transform the oncology landscape.