Market Overview

Kadmon Provides Business Update and Reports Second Quarter 2018 Financial Results


Kadmon Holdings, Inc. (NYSE:KDMN) today provided a business update and
reported financial and operational results for the second quarter of

"Kadmon continues to build momentum in 2018 toward additional key
milestones, including the planned initiation of our pivotal trial in
cGVHD in September 2018," said Harlan W. Waksal, M.D., President and CEO
at Kadmon. "Our recent financing, led by top-tier institutional
investors, supports our continued clinical development of KD025 as well
as the advancement of our ROCK inhibitor platform to treat fibrotic and
inflammatory diseases."

Clinical Updates

KD025 – Anticipated 2018 Milestones

  • Initiate open-label, pivotal Phase 2 clinical trial in chronic
    graft-versus-host disease (cGVHD)
  • Submit updated results from ongoing open-label, dose-finding Phase 2
    clinical trial in cGVHD for presentation at upcoming medical
  • Initiate Phase 2 clinical trial in scleroderma (systemic sclerosis)

Additional Clinical Updates

Enrollment continues in the Company's Phase 2 clinical trials of KD025
in idiopathic pulmonary fibrosis and of tesevatinib in autosomal
dominant polycystic kidney disease, and the Phase 1 clinical trial of
tesevatinib in autosomal recessive polycystic kidney disease. Kadmon is
also continuing dialogue with the FDA regarding its review and potential
approval of KD034, the Company's generic trientine hydrochloride
formulation for the treatment of Wilson's disease.

Financial Results

Second Quarter 2018 Results

Loss from operations for the three and six months ended June 30, 2018
was $18.8 million and $36.8 million, respectively, compared to $17.6
million and $31.6 million for the respective periods in 2017.

Revenue was $0.4 million and $0.8 million for the three and six months
ended June 30, 2018, compared to $3.0 million and $8.5 million for the
respective periods in 2017. The Company does not rely on the revenue
generated from its commercial operations; however, the Company leverages
its commercial infrastructure to support the development of its
clinical-stage product candidates by providing quality assurance,
compliance, regulatory and pharmacovigilance capabilities, among others.

Research and development (R&D) expenses were $10.2 million and $20.0
million for the three and six months ended June 30, 2018, compared to
$10.1 million and $18.5 million for the respective periods in 2017.

Selling, general and administrative (SG&A) expenses were $8.8 million
and $17.1 million for the three and six months ended June 30, 2018,
compared to $9.9 million and $20.0 million for the respective periods in
2017. The decrease in SG&A expenses is primarily related to a decrease
in share-based compensation of $1.4 million and $2.8 million,

The Company recorded an unrealized gain of $40.5 million for the three
and six months ended June 30, 2018 related to the fair value of the
Company's common stock ownership of MeiraGTx Holdings plc ("MeiraGTx").
On June 12, 2018, MeiraGTx completed its initial public offering ("IPO")
and upon completion of the IPO, the Company maintained a 13.0% ownership
in MeiraGTx common stock. As the Company's investment in MeiraGTx now
has a readily determinable market value, the investment is recorded at
fair value.

Liquidity and Capital Resources

As of June 30, 2018, Kadmon's cash and cash equivalents totaled $131.5
million, compared to $67.5 million as of December 31, 2017.

About Kadmon Holdings, Inc.

Kadmon Holdings, Inc. is a fully integrated biopharmaceutical company
developing innovative product candidates for significant unmet medical
needs. Our product pipeline is focused on inflammatory and fibrotic

Forward Looking Statements

This press release contains forward-looking statements. Such statements
may be preceded by the words "may," "will," "should," "expects,"
"plans," "anticipates," "could," "intends," "targets," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these terms or other similar expressions.
Forward-looking statements involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. We believe that these factors include, but
are not limited to, (i) the initiation, timing, progress and results of
our preclinical studies and clinical trials, and our research and
development programs; (ii) our ability to advance product candidates
into, and successfully complete, clinical trials; (iii) our reliance on
the success of our product candidates; (iv) the timing or likelihood of
regulatory filings and approvals; (v) our ability to expand our sales
and marketing capabilities; (vi) the commercialization of our product
candidates, if approved; (vii) the pricing and reimbursement of our
product candidates, if approved; (viii) the implementation of our
business model, strategic plans for our business, product candidates and
technology; (ix) the scope of protection we are able to establish and
maintain for intellectual property rights covering our product
candidates and technology; (x) our ability to operate our business
without infringing the intellectual property rights and proprietary
technology of third parties; (xi) costs associated with defending
intellectual property infringement, product liability and other claims;
(xii) regulatory developments in the United States, Europe and other
jurisdictions; (xiii) estimates of our expenses, future revenues,
capital requirements and our needs for additional financing; (xiv) the
potential benefits of strategic collaboration agreements and our ability
to enter into strategic arrangements; (xv) our ability to maintain and
establish collaborations or obtain additional grant funding; (xvi) the
rate and degree of market acceptance of our product candidates; (xvii)
developments relating to our competitors and our industry, including
competing therapies; (xviii) our ability to effectively manage our
anticipated growth; (xix) our ability to attract and retain qualified
employees and key personnel; (xx) our ability to achieve cost savings
and other benefits from our efforts to streamline our operations and to
not harm our business with such efforts; (xxi) the use of proceeds from
our recent public offerings; (xxii) the potential benefits of any of our
product candidates being granted orphan drug designation; (xxiii) the
future trading price of the shares of our common stock and impact of
securities analysts' reports on these prices; and/or (xxiv) other risks
and uncertainties. More detailed information about Kadmon and the risk
factors that may affect the realization of forward-looking statements is
set forth in the Company's filings with the U.S. Securities and Exchange
Commission (the "SEC"), including the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2017 and the Company's
Quarterly Report on Form 10-Q filed pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, with the SEC on the date
hereof. Investors and security holders are urged to read these documents
free of charge on the SEC's website at
The Company assumes no obligation to publicly update or revise its
forward-looking statements as a result of new information, future events
or otherwise.

Kadmon Holdings, Inc.
Condensed Consolidated Statements of Operations - Unaudited
(in thousands, except per share data)
Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Net sales $ 161 $ 1,698 $ 435 $ 4,034
License and other revenue   198     1,259     357   4,489  
Total revenue 359 2,957 792 8,523
Cost of sales 103 266 302 833
Write-down of inventory   98     373     245     743  
Gross profit   158     2,318     245     6,947  
Operating expenses:
Research and development 10,178 10,056 19,958 18,503
Selling, general and administrative   8,812     9,902     17,062     20,020  
Total operating expenses   18,990     19,958     37,020     38,523  
Loss from operations   (18,832 )   (17,640 )   (36,775 )   (31,576 )
Total other expense (income) (39,775 ) 4,674 (37,277 ) 7,989
Income tax expense (benefit)   (562 )       (562 )   316  
Net income (loss) $ 21,505   $ (22,314 ) $ 1,064   $ (39,881 )
Deemed dividend on convertible preferred stock   491     469     981     938  
Net income (loss) attributable to common stockholders $ 21,014   $ (22,783 ) $ 83   $ (40,819 )
Basic net income (loss) per share of common stock $ 0.25   $ (0.44 ) $ 0.00   $ (0.83 )
Diluted net income (loss) per share of common stock $ 0.24   $ (0.44 ) $ 0.00   $ (0.83 )
Weighted average basic shares of common stock outstanding   85,004,107     51,846,521     81,844,677     49,191,727  
Weighted average diluted shares of common stock outstanding   90,164,248     51,846,521     82,216,399     49,191,727  
Kadmon Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30,   December 31,



Cash and cash equivalents $ 131,470 $ 67,517
Other current assets 2,812 2,496
Investment, equity securities 40,508
Other noncurrent assets       12,233     13,539  
Total assets $     187,023   $ 83,552  
Current liabilities 43,386 56,644
Other long term liabilities       4,789     25,150  
Total liabilities       48,175     81,794  
Total stockholders' equity       138,848     1,758  
Total liabilities and stockholders' equity $     187,023   $ 83,552  

View Comments and Join the Discussion!