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KalVista Pharmaceuticals Provides Operational Update and Fiscal Year Financial Results

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– KVD900 Selected to Advance to Phase 2 as Potential On-Demand
Treatment of Acute Attacks in Patients with Hereditary Angioedema (HAE) –

– KVD001 Phase 2 Clinical Trial for Patients with Diabetic Macular
Edema (DME) Enrollment Remains on Track with Data Expected in H2 2019 –

– $14.6 Million Financing Funds into H1 2020, Past Anticipated Key
Milestones for Both Programs –

KalVista Pharmaceuticals, Inc. (NASDAQ:KALV), a clinical stage
pharmaceutical company focused on the discovery, development, and
commercialization of small molecule protease inhibitors, today provided
an operational update and released financial results for the fiscal
fourth quarter and full year ended April 30, 2018. KalVista also
announced the sale of approximately $14.6 million in common stock to
Venrock Healthcare Capital Partners (Venrock) and BVF Partners L.P.
(BVF) in a registered direct transaction.

"We are pleased to announce that based upon results observed in our
Phase 1 trial of KVD900, we will be moving the compound forward as a
potential on-demand therapy for acute HAE attacks, and anticipate
beginning a Phase 2 clinical trial before the end of 2018," said Andrew
Crockett, Chief Executive Officer of KalVista. "We believe that a
conveniently administered oral, on-demand product for acute HAE attacks
could capture a significant portion of a currently all injectable acute
market, as well as offer a better option for many patients who may
currently use prophylactic therapies because of the lack of suitable
options. In DME, our Phase 2 clinical trial of KVD001 continues to
enroll patients and, based on recruitment rates seen to date, we remain
on track to have data from this trial available in the second half of
2019. Finally, the sale of common stock to Venrock and BVF provides us
with sufficient capital to advance our programs beyond the anticipated
dates of key data points, funding the Company into the first half of
2020."

Fiscal 2018 Business Highlights:

  • Announced collaboration with Merck for investigational plasma
    kallikrein inhibitors for treatment of diabetic macular edema (DME).
    Under the terms of the agreement, KalVista granted to Merck certain
    rights including an option to acquire KVD001 through a period
    following completion of the Phase 2 proof-of-concept trial that
    KalVista commenced in December 2017. KalVista also granted to Merck a
    similar option to acquire investigational orally delivered molecules
    for DME that KalVista continues to develop as part of its ongoing
    research and development activities. Merck paid KalVista a $37 million
    upfront fee and KalVista is further eligible to receive payments
    associated with the exercise of the options by Merck and the
    achievement of milestones for each program that potentially total up
    to $715 million. KalVista also will receive tiered royalties on net
    sales for therapeutic candidates commercialized under this agreement.
    In addition to the collaboration, KalVista entered into a separate
    $9.1 million private placement transaction with Merck under which
    Merck acquired a 9.9% ownership stake in KalVista concurrent with the
    execution of the Option Agreement.
  • Initiated two clinical trials: A Phase 2 proof-of-concept clinical
    trial evaluating the safety, tolerability, and efficacy of KVD001 as a
    potential treatment for DME, as well as a Phase 1 trial for KVD900, a
    clinical candidate in the HAE portfolio.
  • Presented data at The Association for Research in Vision and
    Ophthalmology (ARVO) 2018 Annual Meeting, showing that oral plasma
    kallikrein inhibitor KV123833 blocks VEGF-induced retinal vascular
    hyperpermeability in mice.
  • Presented data at the European Academy of Allergy and Clinical
    Immunology (EAACI) Congress 2018, from an immunoassay KalVista
    developed that demonstrates that KVD900 protects high molecular weight
    kininogen from plasma kallikrein mediated cleavage in HAE and control
    plasma.
  • On July 30, KalVista sold 1,778,320 shares of common stock priced at
    $8.21 per share, representing the five-day volume-weighted average
    price, to Venrock and BVF in a registered direct transaction executed
    under the Company's existing shelf registration. In conjunction with
    this sale, the Company terminated its At-the-Market (ATM) share sale
    agreement. This financing is expected to provide KalVista with
    sufficient capital beyond the anticipated dates of key data points for
    both KVD001 and KVD900, and into the first half of 2020.

HAE Portfolio Update:

  • KalVista has created a structurally diverse portfolio of oral plasma
    kallikrein inhibitors and advanced chosen candidates into Phase 1
    clinical trials for HAE in order to create what we believe will be one
    or more best-in-class oral therapies. We also evaluate these molecules
    for different market segments, such as acute or prophylactic therapy.
    Molecules are only selected for preclinical or clinical advancement if
    they meet a stringent set of criteria, and we routinely terminate
    programs that do not meet our requirements.
  • KVD900 data supports development as an oral, on-demand therapy for
    acute HAE attacks. Our Phase 1 study for KVD900 suggests that the
    compound displays a profile well-suited for use as an on-demand
    therapy for acute attacks, with a combination of rapid uptake into the
    plasma and high plasma concentrations. The compound was tested in
    healthy volunteers at single ascending doses up to 600 mg, showing
    exposures that increased in a dose proportional manner, to
    concentrations well above 100 times those we believe are required to
    demonstrate efficacy. Importantly for acute treatment, concentrations
    increased rapidly following dosing with effective concentrations
    typically reached within 30 minutes or less. This combination of rapid
    uptake to very high drug levels compares favorably to the existing
    injected therapies. Our pharmacodynamic analysis of plasma samples
    collected following dosing of KVD900 revealed a strong PK/PD
    correlation with inhibition of plasma kallikrein for up to 10 hours
    following a single dose, which we believe to be sufficient to
    effectively treat HAE attacks. The plasma concentrations reached in
    the healthy volunteers are also well above those needed to protect
    kininogen from cleavage in activated HAE patient plasma. To date,
    KVD900 has been generally well tolerated. The safety data remains
    blinded but there was a total of twelve adverse events reported across
    the eight dosing cohorts. All but one, lightheadedness seen in the
    first cohort, were judged unrelated or unlikely related to KVD900 and
    no adverse events were reported at the two highest dose levels. The
    most commonly seen adverse events were back pain, common cold/flu
    symptoms, and pyrexia. There were no gastrointestinal adverse events
    reported at any dose.
  • KVD900 development will accelerate as we plan to initiate a Phase 2
    clinical trial in late 2018 that is anticipated to be completed in
    mid-2019. This trial will be designed as a proof-of-concept study in
    HAE patients, intended to determine the safety and efficacy of KVD900
    as an on-demand treatment for acute HAE attacks. Following this trial,
    we intend to interact with regulators to determine the requirements
    for future clinical trials to support filing of a New Drug Approval
    (NDA) and also discuss Fast Track and Orphan Designation. We believe
    there is a well-defined regulatory pathway for potential treatments of
    acute HAE attacks.
  • We will continue to both discover and develop additional oral
    candidates, as well as explore different formulations of KVD900, to
    potentially address the prophylactic segment of the HAE market. A
    structurally diverse portfolio containing multiple additional oral
    candidates is under development and will continue to be advanced as
    progression criteria are met. We anticipate that one additional
    candidate will enter the clinic this year and potentially more
    molecules in 2019.

DME Programs:

  • KVD001 Phase 2 clinical trial enrollment remains on track. In December
    2017, we commenced a Phase 2 clinical trial of KVD001 that we expect
    will complete in mid-2019, with data in the second half of 2019. This
    study is anticipated to enroll 123 patients to evaluate the safety and
    efficacy of KVD001 in patients with DME who have received previous
    anti-VEGF therapy but continue to experience reduced visual acuity and
    significant edema. The double-masked study consists of two active arms
    receiving low or high dose injections, and a sham control arm.
    Patients will receive a total of four injections over a three-month
    period, with evaluation at the end of the dosing period and for three
    months following. The endpoints include safety and tolerability, best
    corrected visual acuity, central subfield thickness, and the
    diabetic retinopathy severity scale.
  • In parallel with the clinical development of intravitreal product
    candidate KVD001, we continue our activities on discovery and
    development of plasma kallikrein inhibitors as oral therapies for DME.
    We believe that a safe and orally delivered therapeutic could provide
    a major advance in treatment for DME patients compared to the current
    approved DME drugs, which are all delivered via injection.

Fourth Quarter and Full Year Financial Results:

  • Revenue: Revenue was $4.8 million for the three months ended April 30,
    2018, compared to $0.1 million for the same period in the prior year.
    Revenue was $8.4 million for the fiscal year ended April 30, 2018,
    compared to $1.5 million in the prior year. Revenue in 2018 primarily
    reflected recognition of the upfront payment from Merck related to the
    agreement signed in October 2017.
  • R&D Expenses: Research and development expenses were $5.9 million for
    the three months ended April 30, 2018, compared to $3.0 million for
    the same period in the prior year. Research and development expenses
    were $18.2 million for the fiscal year ended April 30, 2018, compared
    to $12.7 million in the prior year. The increase in spending primarily
    reflects increased costs related to the commencement of clinical
    trials for both KVD001 and KVD900, as well as increased expenses on
    earlier stage programs.
  • G&A Expenses: General and administrative expenses were $2.0 million
    for the three months ended April 30, 2018, compared to $2.2 million
    for the same period in the prior year. General and administrative
    expenses were $8.9 million for the fiscal year ended April 30, 2018,
    compared to $11.2 million in the prior year. The decline in G&A
    expenses was primarily due to costs incurred in fiscal 2017 associated
    with the share purchase transaction completed in November 2016,
    partially offset by increased expenses related to our expansion of the
    company and costs related to operating as a public company.
  • Net Loss: Net loss was $0.7 million, or $(0.06) per weighted average
    basic and diluted share, for the three months ended April 30, 2018,
    compared to net loss of $4.2 million, or $(0.43) per share for the
    same period in the prior year. Net loss was $15.8 million, or $1.53
    per basic and diluted share for the fiscal year ended April 30, 2018,
    compared to a net loss of $18.6 million, or $4.47 per weighted average
    basic and diluted share in the prior year. This decrease in the net
    loss and net loss per share was primarily related to revenue
    recognized from the Merck agreement.
  • Cash Position: Cash and cash equivalents were $51.1 million as of
    April 30, 2018, compared to $31.0 million as of April 30, 2017. The
    increase in the net cash position is primarily the result of the $37
    million upfront payment made by Merck in October 2017, along with $9.1
    million paid by Merck for shares acquired in a private placement that
    closed concurrently.

About KalVista Pharmaceuticals, Inc.
KalVista
Pharmaceuticals, Inc. is a pharmaceutical company focused on the
discovery, development, and commercialization of small molecule protease
inhibitors for diseases with significant unmet need. The initial focus
is on inhibitors of plasma kallikrein, which is an important component
of the body's inflammatory response and which, in excess, can lead to
increased vascular permeability, edema and inflammation. KalVista has
developed a proprietary portfolio of novel, small molecule plasma
kallikrein inhibitors initially targeting hereditary angioedema (HAE)
and diabetic macular edema (DME). The Company has created a structurally
diverse portfolio of oral plasma kallikrein inhibitors and is advancing
multiple drug candidates into Phase 1 clinical trials for HAE. The
Company has selected KVD900 as its program to be advanced as an
on-demand therapy for acute HAE attacks, and anticipates commencing a
Phase 2 proof-of-concept study in HAE patients in late 2018. In DME,
KalVista's most advanced program, an intravitreally administered plasma
kallikrein inhibitor known as KVD001, began a Phase 2 clinical trial in
2017 that is anticipated to report data in the second half of 2019.

For more information, please visit www.kalvista.com.

Forward-Looking Statements
This press release contains
"forward-looking" statements within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as:
"anticipate," "intend," "plan," "goal," "seek," "believe," "project,"
"estimate," "expect," "strategy," "future," "likely," "may," "should,"
"will" and similar references to future periods. These statements are
subject to numerous risks and uncertainties that could cause actual
results to differ materially from what we expect. Examples of
forward-looking statements include, among others, available funding, our
cash runway and future clinical trial timing and results. Further
information on potential risk factors that could affect our business and
its financial results are detailed in the annual report on Form 10-K
filed on July 30, 2018 and other reports as filed from time to time with
the Securities and Exchange Commission. We undertake no obligation to
publicly update any forward-looking statement, whether written or oral,
that may be made from time to time, whether as a result of new
information, future developments or otherwise.

           
KalVista Pharmaceuticals Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(Unaudited)
 
April 30, April 30,
2018 2017
Assets
Current assets:
Cash and cash equivalents $ 51,055 $ 30,950
Research and development tax credit receivable 6,834 2,250
Grants and other receivables - 297
Prepaid expenses and other current assets   1,491     701  
Total current assets 59,380 34,198
Other assets 173 50
Property and equipment, net   1,836     97  
Total assets $ 61,389   $ 34,345  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,433 $ 1,153
Accrued expenses 3,087 1,865
Deferred revenue - current portion 18,475 -
Capital lease liability - current portion   221     -  
Total current liabilities   23,216     3,018  
Long-term liabilities:
Deferred revenue - net of current portion 10,862 -
Capital lease liability - net of current portion   58     -  
Total long-term liabilities   10,920     -  
Stockholders' equity:
Common stock, $0.001 par value 11 10
Additional paid-in capital 100,011 89,815
Accumulated deficit (71,660 ) (55,855 )
Accumulated other comprehensive loss   (1,109 )   (2,643 )
Total stockholders' equity   27,253     31,327  
Total liabilities and stockholders' equity $ 61,389   $ 34,345  
                       
KalVista Pharmaceuticals Inc.
Condensed Consolidated Statement of Operations
(in thousands, except share and per share amounts)
(Unaudited)
 
 
Three Months Ended Years Ended
April 30, April 30,
2018     2017 2018     2017
 
 
Revenue $ 4,840 $ 114 $ 8,394 $ 1,504
Operating expenses:
Research and development 5,852 2,996 18,237 12,666
General and administrative   1,957     2,204     8,862     11,177  
Total operating expenses   7,809     5,200     27,099     23,843  
Operating loss   (2,969 )   (5,086 )   (18,705 )   (22,339 )
 
Other income:
Interest income 65 5 82 36
Foreign currency exchange rate gain (loss) 262 (140 ) (1,574 ) 1,371
Other income   1,985     1,019     4,392     2,329  
Total other income   2,312     884     2,900     3,736  
Net loss $ (657 ) $ (4,202 ) $ (15,805 ) $ (18,603 )
 
Net loss per share to common stockholders, basic and diluted $ (0.06 ) $ (0.43 ) $ (1.53 ) $ (4.47 )
 
Weighted average common shares outstanding, basic and diluted 10,797,055 9,713,042 10,321,780 4,646,764
           
KalVista Pharmaceuticals Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
 
Years Ended
April 30
2018 2017
 
Cash Flows from Operating Activities
Net loss $ (15,805 ) $ (18,603 )
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Depreciation and amortization 180 40
Stock-based compensation expense 1,060 394
Foreign currency remeasurement (gain) loss (651 ) (1,371 )
Changes in operating assets and liabilities:
Research and development tax credit receivable (4,256 ) (600 )
Grants and other receivables 319 29
Prepaid expenses and other current assets (746 ) (81 )
Other assets (123 ) -
Accounts payable 217 (1,599 )
Accrued expenses 1,132 (1,931 )
Deferred revenue   29,231     -  
Net cash provided by (used in) operating activities   10,558     (23,722 )
 
Cash Flows from Investing Activities
Cash acquired in transaction - 34,139
Acquisition of property and equipment   (1,427 )   (74 )
Net cash provided by (used in) investing activities   (1,427 )   34,065  
 
Cash Flows from Financing Activities
Capital lease principal payments (151 ) -
Proceeds from issuance of common stock   9,137     2  
Net cash provided by financing activities   8,986     2  
Effect of exchange rate changes on cash and cash equivalents   1,988     (1,159 )
Net increase in cash and cash equivalents 20,105 9,186
Cash and cash equivalents, beginning of year   30,950     21,764  
Cash and cash equivalents, end of year $ 51,055   $ 30,950  

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