Kronos Bio Reports First-Quarter 2024 Financial Results

Rhea-AI Summary

Kronos Bio, Inc. (Nasdaq: KRON) reported strong financial results for the first quarter of 2024 with $152.0 million in cash, providing a cash runway into the second half of 2026. The company made progress on its clinical programs, with an update on KB-0742-1001 expected at ASCO. IND-enabling studies for KB-9558 are on track, with the first-in-human study set to begin in the first half of 2025. Kronos Bio also presented new data at the AACR Annual Meeting in April 2024, showcasing advancements in its p300 program and CDK9 inhibitor studies. Despite a net loss of $30.0 million for the quarter, the company remains focused on advancing its collaborations and internal discovery programs.

Positive

• Kronos Bio reported $152.0 million in cash, cash equivalents, and investments as of March 31, 2024, ensuring sufficient resources to fund operations until the second half of 2026.

• The company's clinical programs, including the Phase 1/2 trial of KB-0742 and IND-enabling studies for KB-9558, are progressing as planned, with key milestones expected in 2025.

• Kronos Bio presented new data on its p300 program and CDK9 inhibitor studies at the AACR Annual Meeting in April 2024, demonstrating advancements in targeting oncogenic activities in various cancers.

Negative

• Despite progress in clinical programs, Kronos Bio reported a net loss of $30.0 million for the first quarter of 2024, translating to a loss of $0.50 per share, including significant non-cash stock-based compensation expenses.

• The company incurred impairment of long-lived assets expense of $6.6 million and restructuring expense of $6.2 million for the quarter, impacting its financial performance.

Insights

Financial Analyst

Kronos Bio's financial snapshot indicates a substantial cash position, with $152.0 million, indicating a buffer to sustain operations well into the second half of 2026. This is a significant timeframe for a biotech firm, as it suggests that immediate dilutive fundraising is not a concern, which is positive for existing shareholders. However, the reported net loss of $30.0 million, or $0.50 per share, alongside R&D expenses of $14.2 million and G&A expenses of $7.5 million, reflect the high costs inherent to pharmaceutical development. The impairment and restructuring expenses totaling $12.8 million may be a one-time expense but indicate a potential strategic shift or adjustment in asset valuation, which investors should monitor for indications on company strategy and asset productivity. These financial metrics are within the norms for companies at this development stage, suggesting a neutral outlook on financial stability.

Medical Research Analyst

From a pipeline perspective, the update on the KB-0742 and the progress of KB-9558 are key indicators of the company's future potential. The attention on the upcoming ASCO presentation underscores the importance of KB-0742's clinical data in solidifying the company's therapeutic claims. Clinical progress without significant delays is usually a positive sign for investors, given that developmental milestones often drive biotech valuations. However, the true value inflection point appears to be further down the line, with IND-enabling studies for KB-9558 expected to complete in 2024 and first-in-human studies for the same not commencing until 2025. Investors should weigh the interim scientific updates, like the one scheduled at ASCO, as incremental steps that fine-tune the investment thesis rather than as immediate catalysts for valuation changes. The therapeutic area of deregulated transcription in cancer treatment is highly specialized and the company's success hinges on demonstrating clear clinical advantages over existing treatments in this domain.

— $152.0 million cash runway into the second half of 2026 —

— A study update on KB-0742-1001 will be presented at the upcoming American Society of Clinical Oncology (ASCO); expansion cohorts at new dose schedule remain on track to open in Q3 2024 —

— KB-9558 remains on track with IND-enabling studies expected to complete in 2024 with first-in-human study anticipated to commence in the first half of 2025 —

SAN MATEO, Calif. and CAMBRIDGE, Mass., May 09, 2024 (GLOBE NEWSWIRE) -- Kronos Bio, Inc. (Nasdaq: KRON), a company dedicated to developing small molecule therapeutics that address cancers and other diseases driven by deregulated transcription, today reported recent business progress and financial results for the first-quarter of 2024.

“We have continued to make good progress towards our goals. We are looking forward to sharing a clinical update on the KB-0742 data to date at ASCO in June,” said Nobert Bischofberger, Ph.D., president and chief executive officer of Kronos Bio, Inc. “We expect to complete the IND-enabling studies for KB-9558 by the end of 2024 and expect to dose our first patients in the first half of 2025. Our collaboration with Genentech and our internal discovery programs continue to advance and we look forward to sharing our progress later this year.”

Recent Company News

• At the American Association for Cancer Research (AACR) Annual Meeting in April 2024, the Company presented three posters, including the first public presentation of data from its p300 program. The posters include:
  • p300 catalytic inhibition selectively targets IRF4 oncogenic activity in multiple myeloma (link to poster)
    
  • A dose escalation and cohort expansion study of the CDK9 inhibitor KB-0742 in relapsed, refractory and transcriptionally addicted solid tumors (link to poster)
  • KB-0742, an oral highly selective CDK9 inhibitor, demonstrates preclinical activity in transcription factor fusion driven adenoid cystic carcinoma patient-derived models (link to poster)
    
    
• The Company announced that they will be presenting updated study data from KB-0742-1001, the ongoing Phase 1/2 trial of KB-0742 at the upcoming American Society of Clinical Oncology (ASCO):
  
  Title: Study update of the oral CDK9 inhibitor KB-0742 in relapsed or refractory transcriptionally addicted advanced solid tumors
  Presenter: Brian A. Van Tine, M.D., Ph.D., Washington University in St. Louis
  Abstract ID#: 3102
  Poster Session: Developmental Therapeutics—Molecularly Targeted Agents and Tumor Biology
  Location: Hall A, McCormick Place, Chicago, Illinois
  Poster Board #: 247
  Date and Time: Saturday, June 1, 2024, from 9:00 a.m. to 12:00 p.m. CDT

First Quarter 2024 Financial Highlights

• Cash, Cash Equivalents and Investments: With its ongoing and currently planned clinical programs and $152.0 million in cash, cash equivalents and investments as of March 31, 2024, the Company anticipates sufficient resources to fund its planned operations into the second half of 2026.
  
  
• R&D Expenses: Research and development expenses were $14.2 million for the first quarter of 2024, which includes non-cash stock-based compensation expense of $1.2 million.
  
  
• G&A Expenses: General and administrative expenses were $7.5 million for the first quarter of 2024, which includes non-cash stock-based compensation expense of $2.2 million.
  
  
• Impairment of Long-lived Assets and Restructuring: The Company incurred impairment of long-lived assets expense of $6.6 million for the first quarter of 2024. The Company also incurred restructuring expense of $6.2 million for the first quarter of 2024, which includes non-cash stock-based compensation of $4.4 million.
  
  
• Net Loss: Net loss for the first quarter of 2024 was $30.0 million, or $0.50 per share, including non-cash stock-based compensation expense of $7.7 million.
  

About Kronos Bio, Inc.

Kronos Bio, Inc (Nasdaq: KRON) is a clinical-stage company dedicated to developing small molecule therapeutics that address deregulated transcription, a hallmark of cancer and other diseases. Our proprietary discovery engine decodes complex transcription factor (TF) regulatory networks to identify druggable cofactors. We screen for and optimize small molecules that target these cofactors in a tumor-specific context. These efforts have yielded a preclinical pipeline along with two internally developed drug candidates. KB-0742 targets CDK9 to address MYC deregulation in solid tumors and KB-9558 targets p300 to address IRF4 dependence in multiple myeloma.

Kronos Bio is based in San Mateo, Calif., and has a research facility in Cambridge, Mass. For more information, visit https://www.kronosbio.com/ or follow the Company on LinkedIn.

Forward-Looking Statements

Statements in this press release that are not statements of historical fact are forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The press release, in some cases, uses terms such as “anticipate,” “believe,” “could,” “expect,” “plan,” “will,” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements include statements regarding Kronos Bio’s intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, the next clinical update on KB-0742; our expected completion of IND-enabling studies and the timing thereof for KB-9558; our expected clinical trial for KB-9558 and the timeline for dosing the first patients; future pipeline development activities or outcomes; the potential of Kronos Bio’s product candidates; Kronos Bio’s expected cash runway; and other statements that are not historical fact. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, including, without limitation: risks associated with changes to the assumptions underlying estimated expenses and savings; changes in the macroeconomic environment or competitive landscape that impact Kronos Bio’s business; risks associated with completing necessary preclinical studies and receiving regulatory clearance for, and enrolling, clinical trials; whether Kronos Bio will be able to progress its clinical trials on the timelines anticipated, including due to risks inherent in the clinical development of novel therapeutics; risks related to Kronos Bio’s limited experience as a company in conducting clinical trials; the risk that results of preclinical studies and early clinical trials (including preliminary results) are not necessarily predictive of future results; and risks associated with the sufficiency of Kronos Bio’s cash resources and need for additional capital. These and other risks are described in greater detail in Kronos Bio’s filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024, and in its Quarterly Report on Form 10-Q for the quarter ended March 21, 2024, being filed with the SEC today. Any forward-looking statements that are made in this press release speak only as of the date of this press release and are based on management’s assumptions and estimates as of such date. Except as required by law, Kronos Bio assumes no obligation to update the forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.

Kronos Bio, Inc. Condensed Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) (Unaudited)
	Three months ended March 31,
		2024				2023
Revenue	$	2,520			$	1,221
Operating expenses:
Research and development	$	14,222			$	19,658
General and administrative		7,506				10,056
Impairment of long-lived assets and restructuring		12,786				—
Total operating expenses		34,514				29,714
Loss from operations		(31,994	)			(28,493	)
Other income (expense), net:
Interest and other expense, net		2,036				2255
Total other income (expense), net		2,036				2,255
Net loss	$	(29,958	)		$	(26,238	)
Other comprehensive loss:
Net unrealized loss on available-for-sale securities		(68	)			432
Net comprehensive loss	$	(30,026	)		$	(25,806	)
Net loss per share, basic and diluted	$	(0.50	)		$	(0.46	)
Weighted average shares of common stock, basic and diluted		59,521				57,147

Kronos Bio, Inc. Selected Balance Sheet Data (in thousands) (Unaudited)
	March 31, 2024			December 31, 2023
Cash, cash equivalents and investments	$	151,984		$	174,986
Total assets		182,979			213,279
Total liabilities		46,011			54,201
Total stockholders’ equity		136,968			159,078

Investor & Media Contact:
Margaux Bennett
Vice President, Corporate Development and Investor Relations, Kronos Bio
650-781-5026
mbennett@kronosbio.com

FAQ

What are Kronos Bio's cash reserves as of March 31, 2024?

Kronos Bio had $152.0 million in cash, cash equivalents, and investments as of March 31, 2024.

When is the first-in-human study for KB-9558 expected to commence?

The first-in-human study for KB-9558 is anticipated to begin in the first half of 2025.

Where will Kronos Bio present an update on KB-0742 at ASCO?

Kronos Bio will present an update on KB-0742 at the upcoming American Society of Clinical Oncology (ASCO) in Chicago, Illinois.

What was Kronos Bio's net loss for the first quarter of 2024?

Kronos Bio reported a net loss of $30.0 million, or $0.50 per share, for the first quarter of 2024.

What expenses impacted Kronos Bio's financial performance for the first quarter of 2024?

Kronos Bio incurred impairment of long-lived assets expense of $6.6 million and restructuring expense of $6.2 million for the first quarter of 2024.