Business Overview

Kintara Therapeutics, Inc. (NASDAQ:KTRA) is a clinical-stage biopharmaceutical company focused on the development and commercialization of novel cancer therapies. The company's lead candidate is REM-001, a late-stage photodynamic therapy (PDT) for the treatment of cutaneous metastatic breast cancer (CMBC). Despite the promising potential of REM-001, Kintara faces significant funding challenges that have impacted its ability to advance its pipeline.

Kintara Therapeutics is dedicated to developing novel cancer therapies for patients with unmet medical needs. The company's primary focus is on the development of REM-001, a PDT treatment for CMBC. PDT is a treatment that uses light-sensitive compounds, or photosensitizers, that, when exposed to specific wavelengths of light, act as a catalyst to produce a form of reactive oxygen that induces local tumor cell death.

In four previous Phase 2 and/or Phase 3 clinical studies in CMBC patients, REM-001 Therapy was able to reduce or eliminate a substantial number of the treated CMBC tumors. Specifically, the company's analysis of the data collected from these studies indicates that in approximately 80% of evaluable tumor sites treated with REM-001 Therapy, there was a complete response, meaning that follow-up clinical assessments indicated no visible evidence of the tumor remaining.

Kintara believes REM-001 Therapy holds promise as a treatment to locally eliminate or slow the growth of treated cutaneous cancerous tumors in this difficult-to-treat patient population. The company's REM-001 Therapy product consists of three parts: the laser light source, the light delivery device, and the REM-001 drug product.

Regulatory Filings and Clinical Trials

On August 9, 2022, Kintara announced that it received a Study May Proceed letter from the FDA to begin its 15-patient study evaluating REM-001 PDT for the treatment of CMBC. The FDA has also granted the company Fast Track Designation for REM-001 in CMBC.

Effective July 1, 2023, Kintara was awarded a $2,000 Small Business Innovation Research grant from the National Institutes of Health to support the clinical development of REM-001 for the treatment of CMBC. The grant will be received in two tranches: approximately $1,250 for the period July 1, 2023, to June 30, 2024, and approximately $750 for the period July 1, 2024, to June 30, 2025. As a result of receiving the grant, Kintara re-initiated its REM-001 program and has opened enrollment at Memorial Sloan Kettering Cancer Center, where it has initiated treatment in a total of 2 patients as of May 14, 2024. The company expects to complete enrollment of patients in the REM-001 Study in the third calendar quarter of 2024.

Termination of VAL-083 Development

On October 31, 2023, Kintara announced preliminary topline results for VAL-083, a DNA-targeting agent intended to treat drug-resistant solid tumors such as glioblastoma (GBM), from the Glioblastoma Adaptive Global Innovative Learning Environment (GBM AGILE) study. VAL-083 did not perform better than the current standards of care in glioblastoma, and the preliminary safety data was similar to that of the current standards of care used to treat glioblastoma. As a result, Kintara terminated the development of VAL-083 and has turned its focus to its REM-001 program.

Nasdaq Compliance and Strategic Review

On December 13, 2023, Kintara received a notification from Nasdaq staff that the company did not comply with the Minimum Bid Price Requirement. Pursuant to the notice, Kintara has 180 calendar days, or until June 10, 2024, to regain compliance for a minimum of ten consecutive business days.

In December 2023, Kintara's Board of Directors initiated a process to explore and review a range of strategic alternatives focused on maximizing stockholder value. This strategic review is ongoing, and the company has not yet announced any definitive plans.

Financials

For the fiscal year ended June 30, 2023, Kintara reported an annual net loss of $14,649,000, with no revenue generated. The company's annual operating cash flow was -$11,865,000, and its annual free cash flow was -$12,097,000.

In the nine months ended March 31, 2024, Kintara reported a net loss of $5,996,000. Research and development expenses decreased to $2,562,000 for the nine-month period, down from $7,235,000 in the same period of the prior year, primarily due to lower clinical development costs and lower non-cash, share-based compensation expenses. General and administrative expenses were $3,504,000 for the nine-month period, compared to $4,212,000 in the same period of the prior year.

As of March 31, 2024, Kintara had cash and cash equivalents of $6,351,000, compared to $1,535,000 as of June 30, 2023. The increase in cash was primarily due to $10,471,000 in net proceeds from the company's at-the-market (ATM) facility and $105,000 in net proceeds from the sale of shares under its stock purchase agreement with Lincoln Park Capital.

Liquidity

Kintara's ability to continue as a going concern is dependent on its ability to raise additional capital. The company has reported significant losses and negative cash flows from operations, and as of March 31, 2024, had an accumulated deficit of $157,550,000.

Even with the proceeds from the grant funding, the stock purchase financing, and the ATM sales, Kintara will require significant additional funding to maintain its clinical trials, research and development projects, and for general operations. The company's management is pursuing various financing alternatives, including potential additional proceeds from grant funding, the issue of new equity, and the entering into of strategic partnership arrangements or additional strategic transactions.

Merger Agreement with TuHURA Biosciences

On April 2, 2024, Kintara announced that it had entered into a definitive merger agreement with TuHURA Biosciences, Inc. Under the terms of the agreement, TuHURA will merge with a wholly-owned subsidiary of Kintara, with TuHURA surviving the merger and becoming a direct, wholly-owned subsidiary of Kintara. The transaction is expected to close in the third calendar quarter of 2024 and remains subject to stockholder and regulatory approval.

Existing Kintara stockholders will receive contingent value rights (CVR), entitling them to receive shares of the combined company's common stock upon achievement of enrollment of a minimum of 10 patients in the REM-001 Study, with such patients each completing 8 weeks of follow-up on or before December 31, 2025. On a pro forma basis, Kintara's stockholders are expected to collectively own approximately 2.85%, or approximately 5.45% including the shares underlying the CVR, of the common stock of the post-merger combined company on a fully-diluted basis.

Risks and Challenges

Kintara faces several risks and challenges that could impact its ability to successfully develop and commercialize its product candidates. These include:

1. Funding Challenges: The company's ability to continue as a going concern is dependent on its ability to raise additional capital. Kintara will require significant additional funding to maintain its clinical trials, research and development projects, and for general operations.

2. Regulatory Approval: There is no assurance that Kintara will be able to obtain regulatory approval for REM-001 or any of its other product candidates. The regulatory approval process can be lengthy and costly, and there is no guarantee of success.

3. Clinical Trial Risks: The success of Kintara's product candidates is dependent on the outcome of clinical trials. There is a risk that the company's clinical trials may not demonstrate the desired efficacy or safety profile, which could delay or prevent regulatory approval.

4. Competition: Kintara operates in a highly competitive industry, and its product candidates may face competition from other therapies, both approved and in development.

5. Intellectual Property Risks: The company's success depends in part on its ability to protect its intellectual property and avoid infringing on the intellectual property of others.

Conclusion

Kintara Therapeutics is a clinical-stage biopharmaceutical company with a promising photodynamic therapy pipeline, led by its lead candidate REM-001 for the treatment of CMBC. However, the company faces significant funding challenges that have impacted its ability to advance its pipeline. Kintara's strategic review and proposed merger with TuHURA Biosciences may provide a path forward, but the company will need to secure additional capital to continue its clinical development efforts and navigate the regulatory landscape. Investors should closely monitor Kintara's progress as it works to address its funding needs and advance its pipeline of novel cancer therapies.