New Investor Slide Deck — At SEC This Morning…

The biggest change in this latest SEC Form 8-K exhibit, is the added detail of a projected PRV value, and more complete, nuanced forecast of the Latin American roll-out, once FDA has approved benznidazole, as a Chagas medication — which we all know it will.

KaloBios now projects something like $125 to $250 million from a PRV sale, possibly in late 2018.

And the licensing in Latin America looks to be $50 to $100 million, over a decade.

There is added detail on the other programs, but this first part is what will drive (or reduce — if it falls apart, or is materially delayed) near term share pricing. Now you know. Onward.

 

Oh Well — I Didn’t Make It Into The Room, Today…

So this press summary will have to suffice, since I was remaining nearby, in Silver Spring — and available, for that main client project — in the DC area, this day (it didn’t wrap up on time, or as expected, more precisely):

“…We continue to execute on our internal deadlines and remain on track for the advancement of benznidazole for the significant unmet need of Chagas disease here in the U.S.,” said Cameron Durrant, MD, chairman and CEO, who today is also taking part in the International Society for Neglected Tropical Diseases (ISNTD) Chagas conference in Washington, D.C. Visit ISNTD Chagas for more information.

The company has made significant progress advancing its development plan for benznidazole as a potential U.S. treatment for Chagas disease, including:

  • Regulatory: The company is on track to submit its IND with the Food and Drug Administration (FDA) in May 2017. Future meetings with the FDA are expected to provide further refinement of the development plan.
  • Manufacturing: Batches of the drug are complete and prototype tablets have been made. The company is on schedule for the delivery of final tablets. Work is also underway to develop efficiencies and begin scale-up for manufacturing processes.
  • Clinical Data: The company has secured safety and efficacy databases necessary for its regulatory dossier. In January 2017, the FDA confirmed the acceptability of a 505(b)(2) development pathway using data drawn from previously conducted studies.

Overall, these activities are expected to support the filing of an NDA with the FDA for benznidazole in the first quarter of 2018….

Now you know. G’night.

I Am Highly Likely To Be In The Audience, Live — On The 6th…

In a sweet bit of entirely-unexpected synchronicity, I am in DC mid-next week — meeting a few freelance FDA consultants (for a West Coast life-sciences client)… Tuesday on.

I finish up on the evening of the fifth, and may then head down from Georgetown — to DuPont Circle, on the sixth.

And that will allow me to “pop in”, live on this confab (Dr. Durrant apparently speaks at 1:30 PM EDT — In Session 3: “Policy – R&D, Funding and the Path to Public Health Policy):

…Dr. Durrant will join Jeffrey Moe, PhD, of the Duke Global Health Institute, Anne Marie Finley of the Biotech Policy Group, and Cecilia Inés Centurión of the Chagas Disease Alliance in a session to discuss how public policy can support the development of medicines for neglected tropical diseases.

“Chagas is a neglected tropical disease in the U.S. affecting approximately 300,000 underserved people, and the inaugural ISNTD Chagas conference will bring together experts and stakeholders from across the spectrum in a groundbreaking gathering in our nation’s capital,” said Dr. Durrant. “Chagas needs more attention, and with the necessary ingredients of dedicated stakeholders, enlightened public policy and patient care including approved medicines, we can hopefully make a difference. We look forward to building collaborative dialogue and understanding to improve the foundation from which to help these neglected patients….”

I will report. Trust that. Onward — but another “green shoots” sign, in my estimation.

KaloBios Wins Turnaround Award (In Small Company Category)

The new management team ought to be quite proud of this award. [And before Billy says something snarky, yes I think this is good publicity. In short, this is not a Barnum moment.]

However, while in truth, it vindicates all the hard work over the past 18 months — it is no guarantee that the “forward looking” plan will ultimately succeed.

But for over two years, and up until just about a year ago, it was unclear whether the company would exist at all, any longer.

Now it is flourishing — though it plainly, and sorely needs to win that PRV from FDA…. Here’s a bit from the news item:

….KaloBios has been named an M&A Advisor Turnaround Award winner for Chapter 11 Reorganization of the Year.

KaloBios received the award in the $10 million to $25 million company size category for its work to successfully emerge from Chapter 11 bankruptcy on June 30, 2016.

“This award highlights our ability to execute in challenging circumstances to reach our goals and ultimately transform KaloBios,” said Cameron Durrant, MD, KaloBios chairman and CEO. “We are grateful for the recognition of our very talented team’s efforts….”

And here is the next-level of granular detail — on the award ceremony.

Onward!

UPDATE: New $5.5 Million Lending, From Existing Financiers…

Thanks go to our commenters, for mentioning this one.

And this is pretty much exactly what I suggested earlier this week, would likely transpire.

So, here it is — as filed with the SEC this morning:

KaloBios announced that it has received additional proceeds of approximately $5.5 million from existing investors through an amendment to its term loan facility. Aside from the increase in the amount extended, the term loan facility remains unchanged.

The amendment brings the total principal amount of the loan from the lenders to $9.2 million. The proceeds will provide additional working capital to the company and support the ongoing development of benznidazole for potential U.S. approval to treat Chagas disease, a neglected tropical disease, and lenzilumab for chronic myelomonocytic leukemia (CMML), a rare pediatric disease, as well as current partnering efforts with ifabotuzumab.
“We appreciate the continued support of our key investors as we remain on track in our development of benznidazole and lenzilumab,” said Cameron Durrant, MD, KaloBios chairman and CEO. “We will continue to execute on our strategic priorities to generate value for all of our stakeholders….”
Now you know — onward, on a warm, sunny Friday. Next up — getting the S-1 declared effective.

Truly A Minor Update — But One With Interesting Future Possibilities…

As expected, on St. Patrick’s (while I was stuck in LA on other clients’ biz), KaloBios filed its resale registration statement with the SEC. Thanks to our erstwhile commenter — for that tip!

Also previously discussed right here (and as contemplated by the terms of the exit filings), this was a part of the bankruptcy package won by these Black Horse (and other) financiers — as securities rights. In sum, each of the financiers of the exit package would receive registered shares, once all the baffles were cleared. That is well underway, with a little delay, for an SEC staff review now.

But because the company had (via task overload, mostly) fallen out of compliance with its timely SEC reporting obligations, during the bankruptcy proceedings, it was required to use the much longer SEC Form S-1, not the abbreviated S-3 Form, to register those securities.

What has gone unnoticed in the financial press, however (likely due to the imbibing of too much green beer, that evening!), is that because KaloBios used SEC Form S-1, it will now be a fairly trivial exercise — should it later decide to do so — to convert this offering, and add in a bolus of new equity, as a capital raising vehicle, by amending this otherwise “all purpose” filing.

Of course, there is no present indication that will happen, and the company may choose to use a form of debt financing instead, but we do know it will need new funding from some source, in under a year.

So — were I the general counsel of KaloBios, I might start scouting around for interest in an equity raise — on the demand side — and begin talking to the listed resale parties (about waivers), should they not want to help the company garner the additional (needed) funds.

Now you know. Namaste.

Company Notes It Will Need New Funding Of Some Sort, Within 12 Months…

That is the biggest — most material — risk that appears in tonight’s SEC filed Form 10-K. We were alerted to the SEC filing by regular commenter BioGuy, so a tip o’ the cap, there…

The more encouraging news seems to be the real progress on the Chagas program FDA filing packet, thus:

Based on our planned approach and documented discussions with FDA during a face-to-face meeting in December, 2016, we believe that benznidazole is eligible for approval under Section 505(b)(2) of the FDCAUnder that section, an applicant seeking approval of an NDA may rely in part or in whole on investigations not conducted by or for the applicant, and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted, to show that the applicant’s drug is safe and effective.  The second category of data described above, on which we anticipate relying to some extent in establishing benznidazole’s safety and efficacy, consists of data to which we do not and will not have a contractual right of access, reference, or use, but which we may legally reference by virtue of the FDCA.  Most of the data on which we intend to rely, however, are foreign clinical data to which we have obtained or plan to obtain a right of access and use, which we will analyze, organize, and present to FDA in an NDA, and that FDA will need to find acceptable together with the other data we present.  Because the clinical safety and efficacy data on which we intend to rely were derived from studies using a prior formulation of benznidazole, as noted above in the description of the third category of data on which we anticipate relying, FDA may require us to perform bridging studies to confirm the comparability of our current formulation to the prior formulations.  FDA may also require bridging studies to confirm the comparability of patient populations, medical practice, and other potential variables between the prior clinical trial conditions and the proposed conditions of use for the drug in the United States.

Although we believe our planned approach will provide FDA with sufficient clinical safety and efficacy data on which to base an approval, FDA may request additional information or data that we may not have and that we may not be able to obtain.

We also believe benznidazole would qualify as a new chemical entity, a designation that carries with it five years of exclusivity under the Hatch-Waxman Act upon approval. In addition, we may seek orphan drug designation for benznidazole and fast track designation.  FDA has previously granted orphan drug designation to sponsors of both benznidazole and nifurtimox for treatment of Chagas disease, and we are continuing to evaluate our eligibility to obtain orphan drug designation for benznidazole in treating Chagas disease, based on current facts.  Because an independent assessment is made by FDA each time that a sponsor requests orphan drug designation, there is no assurance that we will be granted that designation if we seek it….
We plan to ensure patients, irrespective of their ability to pay, will have access to benznidazole if and when we receive approval of benznidazole for the treatment of Chagas disease in the United States. The scope and availability of prescription drug insurance coverage, or other means to pay for pharmaceutical treatments, is uncertain for patients with Chagas disease in the United States. If we do not obtain approval for benznidazole in the United States, we may still make benznidazole available in developing countries. If we make benznidazole available in developing countries, we expect to make benznidazole available at or near cost in those countries and plan to work with partners to create access programs to ensure patients in need receive the medication….
Now you know. And thanks, BioGuy! Namaste….