Kiora Pharmaceuticals, a clinical-stage specialty pharmaceutical company, has emerged as a trailblazer in the development of innovative treatments for rare and debilitating retinal diseases. With a robust pipeline and strategic partnerships, Kiora is poised to address the unmet medical needs of patients suffering from conditions like retinitis pigmentosa, choroideremia, and Stargardt disease.
Business Overview and Company History Kiora Pharmaceuticals was formed as a Delaware corporation on December 28, 2004, with a mission to develop and commercialize therapies for the treatment of ophthalmic diseases. Since its inception, the company has devoted substantially all of its efforts to business planning, research and development, and raising capital. In 2015, Kiora's Board of Directors adopted the 2014 Equity Incentive Plan and the Employee Stock Purchase Plan, which were approved by the company's stockholders. These plans provided a framework for granting stock options, restricted stock, and other stock-based awards to employees, officers, directors, consultants, and advisors.
Over the years, Kiora has faced several challenges. In 2019 and 2020, the company recorded significant impairment charges related to its intangible assets and goodwill, driven by changes in the company's development plans and strategic priorities. Additionally, Kiora has incurred losses and negative cash flows since inception, which is common for a clinical-stage pharmaceutical company.
Despite these challenges, Kiora has been successful in raising capital to fund its operations. In 2021, the company raised $17.75 million through the issuance of common stock. Further, in 2022, Kiora completed a public offering and a private placement, raising a combined $6 million in net proceeds. These capital raises have been crucial in allowing Kiora to continue the development of its product candidates.
In 2021, Kiora made a significant stride forward with the acquisition of Bayon Therapeutics and the addition of KIO-301, a small molecule photoswitch designed to restore vision in patients with inherited and age-related degenerative retinal diseases. This transformative acquisition positioned Kiora as a key player in the field of retinal disease treatments.
Kiora's financial performance has been marked by consistent investment in research and development. As of September 30, 2024, the company reported $31.3 million in cash, cash equivalents, and short-term investments, providing an expected runway of more than two years to advance its pipeline. The company's net income for the nine months ended September 30, 2024, was $7.82 million, a significant improvement from the net loss of $10.25 million reported for the same period in the previous year.
Retinal Disease Pipeline and Strategic Partnerships Kiora's lead asset, KIO-301, is a small molecule photoswitch that has the potential to restore vision in patients with various retinal diseases. In October 2024, the company received regulatory approval to initiate a Phase 2 clinical trial (ABACUS-2) investigating KIO-301 for the treatment of retinitis pigmentosa. This trial, which is expected to enroll 36 patients, will assess the safety and efficacy of KIO-301 using novel functional vision endpoints that may serve as approvable primary endpoints in future registration studies.
In January 2024, Kiora entered into a strategic development and commercialization agreement with Théa Open Innovation (TOI), a sister company of the global ophthalmic specialty company Laboratoires Théa. Under this agreement, Kiora granted TOI exclusive worldwide development and commercialization rights, excluding certain countries in Asia, to KIO-301 for the treatment of degenerative retinal diseases. In exchange, Kiora received an upfront payment of $16 million and is eligible to receive up to $285 million in milestone payments, as well as tiered royalties of up to the low 20% range on net sales and reimbursement of KIO-301 research and development expenses.
Alongside KIO-301, Kiora is also developing KIO-104, a small molecule inhibitor of dihydroorotate dehydrogenase (DHODH), for the treatment of retinal inflammatory diseases, including posterior non-infectious uveitis and diabetic macular edema. The company is currently designing a Phase 2 clinical trial (CLARITY) for KIO-104, expected to initiate in early 2025.
Financials and Liquidity Kiora's financial position has been strengthened by the recent $13.8 million private placement offering that closed in February 2024. This financing, combined with the $16 million upfront payment from the TOI agreement, has provided the company with a solid runway to advance its pipeline.
As of September 30, 2024, Kiora reported $31.3 million in cash, cash equivalents, and short-term investments, a significant increase from the $2.5 million reported as of December 31, 2023. The company's current ratio, a measure of liquidity, stood at 8.97, indicating a strong ability to meet its short-term obligations. The quick ratio also stood at 8.97, further emphasizing the company's strong liquidity position.
For the nine months ended September 30, 2024, Kiora reported revenue of $16.02 million, primarily driven by the collaboration revenue recognized from the TOI agreement. The company's net income for the same period was $7.82 million, a significant improvement from the net loss of $10.25 million reported for the nine months ended September 30, 2023.
In the most recent quarter (Q3 2024), Kiora reported no revenue, with a net loss of $3.41 million. However, the company's operating cash flow (OCF) and free cash flow (FCF) for the quarter were positive at $920,057. This represents a significant improvement from the previous year, where the company reported no revenue and negative cash flows.
For the fiscal year 2023, Kiora reported no revenue and a net loss of $12.51 million. The company's OCF and FCF for 2023 were both negative at $9.56 million.
Kiora's strong financial position and liquidity, combined with its strategic partnerships and advancing pipeline, position the company well to continue its mission of developing innovative treatments for rare and debilitating retinal diseases. Based on its current cash position, Kiora anticipates having sufficient funds to support planned operations into 2027.
Regulatory Milestones and Ongoing Trials Kiora has achieved several important regulatory milestones in recent years. In March 2022, the company was granted Orphan Drug Designation by the U.S. Food and Drug Administration (FDA) for the active pharmaceutical ingredient in KIO-301. Furthermore, in July 2024, Kiora received Orphan Medicinal Product Designation from the European Medicines Agency (EMA) for KIO-301 for the treatment of non-syndromic, rod-dominant retinal dystrophies, which include diseases like retinitis pigmentosa, choroideremia, and Stargardt disease.
In addition to the regulatory achievements, Kiora has made significant progress in its clinical trials. The company recently announced the completion of the Phase 1b ABACUS-1 trial for KIO-301, which demonstrated that the drug is safe, tolerable, and improved visual function in patients with late-stage retinitis pigmentosa. Further analysis of the data showed a statistically significant increase in neural activity within the brain's visual processing center, providing additional evidence of the drug's potential to restore vision.
Looking ahead, Kiora is focused on advancing its pipeline. The company has received regulatory approval to initiate the Phase 2 ABACUS-2 trial for KIO-301 in patients with retinitis pigmentosa, with the first patient expected to be dosed in the first half of 2025. Additionally, Kiora is planning a Phase 2 clinical trial (CLARITY) for KIO-104 in retinal inflammatory diseases, with the trial expected to begin in early 2025.
Product Portfolio and Development Kiora's product portfolio includes three main candidates:
1. KIO-301: This is Kiora's lead product candidate, initially focused on treating patients with later stages of disease progression due to Retinitis Pigmentosa. KIO-301 is a potential vision-restoring small molecule that acts as a photoswitch specifically designed to restore vision in patients with inherited and age-related degenerative retinal diseases. The molecule is designed to selectively enter viable downstream retinal ganglion cells no longer receiving electrical input due to degenerated rods and cones, and turn them into light sensing cells capable of signaling the brain.
2. KIO-104: This is a novel and potent small molecule inhibitor of dihydroorotate dehydrogenase (DHODH) formulated for intravitreal delivery. It is being developed for the treatment of retinal inflammatory diseases including Posterior Non-Infectious Uveitis and diabetic macular edema. Data from a previous Phase 1/2a study in patients with Posterior Non-Infectious Uveitis showed promising results, with a single injection of KIO-104 decreasing intraocular inflammation and improving visual acuity significantly for the duration of the study.
3. KIO-101: This asset is based on the same molecule as KIO-104 but formulated for topical, eye drop delivery. Kiora is currently seeking to partner this product candidate.
Competitive Landscape and Risks Kiora operates in a highly competitive landscape, with several other companies developing treatments for rare retinal diseases. While Kiora's pipeline represents promising advancements, the company faces risks associated with the inherent challenges of drug development, including the potential for clinical trial failures, regulatory hurdles, and competition from other novel therapies.
Furthermore, Kiora's reliance on strategic partnerships, such as the agreement with TOI, introduces risks related to the successful execution of these collaborations and the potential for delays or changes in the development and commercialization timelines.
Conclusion Kiora Pharmaceuticals has emerged as a leading player in the field of retinal disease treatments, driven by its innovative pipeline and strategic partnerships. The company's focus on rare and debilitating conditions, such as retinitis pigmentosa, choroideremia, and Stargardt disease, represents a significant opportunity to address unmet medical needs and improve the lives of patients.
With a strong financial position, a diverse pipeline, and a commitment to advancing its research and development efforts, Kiora is well-positioned to continue its mission of developing transformative therapies for those suffering from rare retinal diseases. As the company navigates the regulatory landscape and progresses its clinical trials, investors will closely follow Kiora's ability to deliver on its promising pipeline and capitalize on the growing demand for effective treatments in this underserved therapeutic area.