Business Overview and History
Kiromic BioPharma, Inc. is a clinical-stage, fully integrated biotherapeutics company focused on developing novel cell therapies to treat solid tumors. The company’s unique, proprietary end-to-end approach spans target discovery and validation, product development, and on-site current Good Manufacturing Practices (cGMP) manufacturing. This comprehensive framework positions Kiromic to leverage a new paradigm for the next generation of cell therapies.
Kiromic was formed in December 2012 under the Texas Business Organizations Code. The company’s headquarters are located in Houston, Texas. Since its inception, Kiromic has been dedicated to developing innovative, allogeneic Gamma Delta T-cell (GDT) therapies to address the unmet medical needs of patients with solid tumors.
Kiromic utilizes innovative non-engineered and engineered allogeneic Gamma Delta T (GDT) cell technologies and is developing proprietary, virus-free cell engineering methods to develop novel therapies for solid tumors that it believes will be effective and cost-efficient. The company’s lead product candidate, Deltacel, is a non-engineered, off-the-shelf GDT cell therapy currently in a Phase 1 clinical trial for the treatment of stage 4 metastatic non-small cell lung cancer (NSCLC). Kiromic has also developed two additional product candidates – Isocel and Procel – which consist of engineered GDTs targeting Mesothelin Isoform 2 and PD-L1, respectively. These candidates are currently in the preclinical development stage.
In March 2023, Kiromic submitted the Investigational New Drug (IND) application for the Deltacel-01 trial, which was subsequently authorized by the FDA in April 2023. The company commenced the clinical trial activation process during the second quarter of 2023 and enrolled the first patient in December 2023. As of September 2024, six patients have received the Deltacel treatment, with no dose-limiting toxicities reported.
The Deltacel-01 study is designed in two parts. Part 1 is focused on identifying the optimal dose of Deltacel, while Part 2 (the Expansion Phase) is intended to further assess the therapy’s effectiveness at the optimal dose. Based on the promising survival benefits and lack of limiting toxicities observed in the first part of the trial, Kiromic activated the Expansion Phase in September 2024, with the first patient in this phase starting treatment in October 2024.
In June 2024, Kiromic submitted a Fast-Track Designation (FTD) application to the FDA for Deltacel. The FTD status was granted in August 2024, which the company believes will significantly accelerate the approval process for this product candidate. FTD provides benefits such as Accelerated Approval, Rolling Review, and Priority Review.
Depending on the response rates observed in the Deltacel-01 Phase 1 trial, Kiromic may be able to initiate a registrational Phase 2 trial to support a Biologics License Application (BLA) and accelerate the clinical development of Deltacel in the second half of 2025.
Kiromic plans to continue the development of its Isocel and Procel product candidates once it has secured sufficient financial support. The company expects to submit the Isocel IND in the second half of 2025 and the Procel IND in the second quarter of 2026.
In August 2022, Kiromic faced challenges when Tony Tontat, who at the time was the Chief Financial Officer and a member of the Board of Directors, submitted complaints through the company’s complaint hotline alleging risks associated with Kiromic’s public disclosures. This led the Board to form a Special Committee to review the complaints and other related issues in an Internal Review. The Internal Review concluded in February 2022, and Kiromic voluntarily contacted the SEC to report certain information about the review. Since then, Kiromic has been cooperating with requests for information from the SEC and the U.S. Department of Justice regarding an ongoing investigation.
Financial Overview
Kiromic has not generated any revenue to date, as the company’s product candidates are still in the early stages of clinical development. The company has incurred significant losses and negative cash flows from operations since its inception, with an accumulated deficit of $143.30 million as of September 30, 2024.
As of September 30, 2024, Kiromic had $2.92 million in cash and cash equivalents, including $132,000 in restricted cash. The company’s net cash used in operating activities was $15.81 million for the nine months ended September 30, 2024, compared to $15.82 million for the same period in the prior year.
Kiromic’s research and development expenses for the nine months ended September 30, 2024, were $11.38 million, compared to $6.72 million for the same period in 2023. The increase was primarily driven by the company’s continued development of the Deltacel-01 program and an overall increase in headcount.
General and administrative expenses for the nine months ended September 30, 2024, were $6.68 million, compared to $7.90 million for the same period in 2023. The decrease was mainly due to a decline in legal and professional fees related to the settlement of a class action lawsuit.
Kiromic’s net loss for the nine months ended September 30, 2024, was $20.41 million, compared to a net loss of $16.26 million for the same period in 2023.
For the fiscal year 2023, Kiromic reported no revenue, a net loss of $20.95 million, operating cash flow of -$21.23 million, and free cash flow of -$21.43 million. In the most recent quarter (Q3 2024), the company reported no revenue, a net loss of $7.44 million, operating cash flow of -$1.93 million, and free cash flow of -$2.15 million. There was a year-over-year decrease in operating cash flow and free cash flow due to increased spending on research and development, as well as an overall increase in headcount.
Liquidity and Going Concern
As of September 30, 2024, Kiromic did not have sufficient cash on hand and available liquidity to meet its obligations through the next twelve months. This condition raises substantial doubt about the company’s ability to continue as a going concern.
Management is currently in discussions with financing sources to secure short-term funding to continue operations and meet other liquidity needs through the end of 2024. In the absence of such financing, the company’s existing cash resources are not expected to be sufficient to support its operations beyond December 2024.
Kiromic is also evaluating various cost reduction actions, including potential workforce reductions and suspension of research and development expenditures on certain product candidates, in order to preserve cash. However, the company’s ability to successfully implement these measures is uncertain.
Additionally, Kiromic is seeking to relist on a major stock exchange, such as the NASDAQ, to increase the liquidity of its stock. The company’s efforts to obtain financing and uplist its shares are critical to its ability to continue as a going concern.
As of September 30, 2024, Kiromic’s debt-to-equity ratio was -1.58, with cash and cash equivalents of $2.92 million. The company does not have any available credit lines or facilities. Its current ratio and quick ratio are both 0.225, indicating potential liquidity challenges.
Product Pipeline and Clinical Progress
Kiromic’s product pipeline consists of three main candidates:
Isocel: Isocel consists of allogeneic, engineered GDTs that target Mesothelin Isoform 2 (Iso-Meso), a target discovered and prioritized by Kiromic using its proprietary Diamond AI bio-informatic platform. Isocel is currently in the preclinical development stage, and Kiromic expects to be able to submit an Investigational New Drug (IND) application for Isocel in the second half of 2025.
Procel: Procel consists of allogeneic, engineered GDTs that target PD-L1. Procel is also in the preclinical development stage, and Kiromic expects to submit an IND for Procel in the second quarter of 2026.
Risks and Challenges
Kiromic faces several risks and challenges that could impact its long-term success:
Slow or delayed IND and clinical trial enrollment: Delays in the submission and approval of Kiromic’s IND applications or slow patient enrollment in its clinical trials could significantly impact the company’s development timeline.
Intellectual property protection: Kiromic’s ability to protect its proprietary technologies and intellectual property is crucial to maintaining its competitive advantage.
Regulatory environment changes: Unfavorable changes in laws or the regulatory landscape could adversely affect Kiromic’s ability to develop and commercialize its product candidates.
Reliance on third-party service providers: The company’s dependence on contract research organizations, contract manufacturing organizations, and other vendors for key aspects of its operations introduces risks of delays and performance failures.
Liquidity and financing challenges: Kiromic’s current liquidity constraints and the need to secure additional financing pose significant risks to the company’s long-term viability.
Legal and regulatory issues: In August 2022, two class action lawsuits were filed against the company and certain current and former officers and directors, alleging violations of securities laws. The company entered into a $2.3 million settlement to resolve the lawsuits in September 2023. Additionally, in November 2022, the company received a Grand Jury Subpoena from the U.S. Department of Justice requesting certain information, though the company is not a target of the investigation.
Outlook and Conclusion
Kiromic BioPharma is at a critical juncture as it navigates the challenges of its current liquidity constraints and the need to secure additional financing to continue its operations and clinical development programs. The company’s lead product candidate, Deltacel, has shown promising safety and efficacy results in the ongoing Phase 1 Deltacel-01 trial, which could potentially accelerate its path to regulatory approval if the positive trends continue.
However, Kiromic’s ability to advance its pipeline and achieve long-term success will depend on its successful efforts to raise capital, either through financing or strategic partnerships. The company’s pursuit of a NASDAQ uplisting and its application for Fast-Track Designation from the FDA for Deltacel are positive steps, but the ultimate outcome remains uncertain.
Investors should closely monitor Kiromic’s progress in securing the necessary funding to sustain its operations and execute on its clinical development plans. The company’s ability to navigate its current liquidity challenges and execute on its strategic initiatives will be critical in determining its future trajectory.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.