Kezar Life Sciences Reports Second Quarter 2024 Financial Results and Provides Business Update

Rhea-AI Summary

Kezar Life Sciences (Nasdaq: KZR) reported Q2 2024 financial results and provided a business update. Key highlights include:

1. Completed enrollment in PORTOLA Phase 2a trial of zetomipzomib for autoimmune hepatitis; topline data expected in H1 2025.

2. PALIZADE Phase 2b trial of zetomipzomib for lupus nephritis ongoing; topline data expected mid-2026.

3. Stopped enrollment in KZR-261 Phase 1 study for solid tumors; focusing resources on zetomipzomib programs.

4. Cash, cash equivalents, and marketable securities totaled $164.2 million as of June 30, 2024.

5. Q2 2024 net loss of $21.5 million ($0.30 per share) compared to $24.3 million ($0.34 per share) in Q2 2023.

6. R&D expenses decreased to $16.3 million from $21.0 million in Q2 2023.

Positive

• Completed enrollment in PORTOLA Phase 2a trial of zetomipzomib for autoimmune hepatitis
• Cash position remains strong at $164.2 million as of June 30, 2024
• Reduced R&D expenses by $4.7 million compared to Q2 2023
• Narrowed net loss to $21.5 million from $24.3 million in Q2 2023

Negative

• Stopped enrollment in KZR-261 Phase 1 study for solid tumors
• Cash position decreased from $201.4 million at end of 2023 to $164.2 million
• Incurred $1.5 million in restructuring and impairment charges in Q2 2024
• No objective responses observed to date in the KZR-261 Phase 1 study

Insights

Financial Analyst

Kezar Life Sciences' Q2 2024 results reveal a mixed financial picture. The company's cash position remains strong at $164.2 million, but this represents a significant decrease from $201.4 million at the end of 2023. This burn rate is concerning, especially given the extended timeline for their key clinical trials. However, the reduction in R&D expenses by $4.7 million shows effective cost management. The decision to halt the KZR-261 trial and focus resources on zetomipzomib development is a strategic move that could potentially extend their cash runway. The lack of objective responses in the KZR-261 trial is disappointing, but the stable disease observed in some patients might warrant further investigation. Overall, while Kezar is making progress in its clinical programs, the financial outlook remains challenging and the company will need to carefully manage its resources to reach key milestones.

Medical Research Analyst

The completion of enrollment in the PORTOLA Phase 2a trial for zetomipzomib in autoimmune hepatitis (AIH) is a significant milestone. The revised guidance for topline data to the first half of 2025 suggests faster-than-expected progress. This is particularly important given the unmet medical need in AIH. The ongoing PALIZADE Phase 2b trial in lupus nephritis (LN) with expected topline data in mid-2026 demonstrates Kezar's commitment to addressing multiple autoimmune conditions. The design of both trials, including the focus on steroid tapering, aligns with current clinical needs. However, the decision to stop enrollment in the KZR-261 Phase 1 study for solid tumors is a setback for the company's oncology program. While the stable disease observed in some patients is noteworthy, the lack of objective responses raises questions about the drug's efficacy. This strategic pivot to focus on autoimmune diseases could be beneficial if zetomipzomib shows promising results in AIH and LN.

Market Research Analyst

Kezar's focus on zetomipzomib for autoimmune diseases positions them in a growing market with significant unmet needs. The autoimmune disease therapeutics market is expected to expand rapidly, driven by increasing prevalence and demand for more effective treatments. The company's decision to prioritize AIH and LN is strategic, as these conditions lack satisfactory treatment options. The partnership with Everest Medicines for development in Asian markets could provide additional revenue streams and market expansion opportunities. However, the competitive landscape in autoimmune diseases is intensifying, with several large pharmaceutical companies investing heavily in this area. Kezar's success will depend on zetomipzomib's efficacy and safety profile compared to existing and emerging therapies. The discontinuation of the KZR-261 program narrows Kezar's pipeline, increasing the pressure on zetomipzomib to succeed. Investors should closely monitor the upcoming clinical readouts, as they will be critical in determining Kezar's future market position and potential.

• Enrollment completed in PORTOLA Phase 2a clinical trial of zetomipzomib in patients with autoimmune hepatitis; revising guidance of topline data to first half 2025
• PALIZADE Phase 2b clinical trial of zetomipzomib in patients with active lupus nephritis currently enrolling; reiterating guidance of topline data in mid-2026
• Enrollment stopped in the KZR-261 Phase 1 study in refractory solid tumors; focusing resources on zetomipzomib development programs
• Cash, cash equivalents and marketable securities totaled $164 million as of June 30, 2024

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Kezar Life Sciences, Inc. (Nasdaq: KZR), a clinical-stage biotechnology company developing novel small molecule therapeutics to treat unmet needs in immune-mediated diseases and cancer, today reported financial results for the second quarter ended June 30, 2024, and provided a business update.

“We are thrilled to announce completion of enrollment to our PORTOLA trial and look forward to sharing topline results earlier than expected in the first half of 2025. This important milestone brings us one step closer to delivering zetomipzomib as a new treatment option for patients suffering from autoimmune hepatitis, a disease of significant unmet medical need,” said Chris Kirk, PhD, Kezar’s Co-founder and Chief Executive Officer. “In addition, we are continuing to see strong enrollment activity in our global PALIZADE trial and look to continue this momentum by focusing our clinical resources on zetomipzomib development programs going forward. I want to thank our team for their hard work and commitment across all of our clinical trials and share our gratitude to the patients, their families and the study investigators, for their participation in these studies.”

Zetomipzomib: Selective Immunoproteasome Inhibitor

PALIZADE – Phase 2b clinical trial of zetomipzomib in patients with active lupus nephritis (LN) (ClinicalTrials.gov: NCT05781750)

• PALIZADE is a global, placebo-controlled, randomized, double-blind Phase 2b clinical trial evaluating the efficacy and safety of two dose-levels of zetomipzomib in patients with active LN. Target enrollment will be 279 patients, randomly assigned (1:1:1) to receive 30 mg of zetomipzomib, 60 mg of zetomipzomib or placebo subcutaneously once weekly for 52 weeks, in addition to standard background therapy. Background therapy can, but will not be mandated to, include standard induction therapy. Over the initial 16 weeks, there will be a mandatory corticosteroid taper to 5 mg per day or less. End-of-treatment assessments will occur at Week 53. The primary efficacy endpoint is the proportion of patients who achieve a complete renal response (CRR) at Week 37, including a urine protein-to-creatine ratio (UPCR) of 0.5 or less without receiving rescue or prohibited medications.
• Our partner, Everest Medicines, announced that the first patient in China was dosed with zetomipzomib as part of our global PALIZADE trial. Kezar entered into a collaboration and license agreement with Everest Medicines in September 2023 to develop and commercialize zetomipzomib in Greater China, South Korea and Southeast Asia.
• Kezar expects to report topline data from PALIZADE in mid-2026.

PORTOLA – Phase 2a clinical trial of zetomipzomib in patients with autoimmune hepatitis (AIH) (ClinicalTrials.gov: NCT05569759)

• PORTOLA is a placebo-controlled, randomized, double-blind Phase 2a clinical trial evaluating the efficacy and safety of zetomipzomib in patients with AIH that are insufficiently responding to standard of care or have relapsed. The study has completed enrollment of 24 patients, randomized (2:1) to receive 60 mg of zetomipzomib or placebo in addition to background therapy for 24 weeks, with a protocol-suggested steroid taper. The primary efficacy endpoint will measure the proportion of patients who achieve a complete biochemical response by Week 24 measured as normalization of alanine aminotransferase (ALT), aspartate aminotransferase (AST) and Immunoglobulin G (IgG) values (if elevated at baseline), with steroid dose levels not higher than baseline.
• Kezar expects to report topline data from PORTOLA in the first half of 2025.

KZR-261: Broad-Spectrum Sec61 Translocon Inhibitor

KZR-261-101 – Phase 1 clinical trial of KZR-261 in patients with locally advanced or metastatic solid malignancies (ClinicalTrials.gov: NCT05047536)

• The Phase 1 clinical trial of KZR-261 is being conducted in two parts: dose escalation and dose expansion in tumor-specific solid tumors. The study is designed to evaluate safety and tolerability, pharmacokinetics and pharmacodynamics, identify a recommended Phase 2 dose and explore the preliminary anti-tumor activity of KZR-261 in patients with locally advanced or metastatic disease.
• Enrollment has been stopped in the KZR-261 Phase 1 study, and clinical resources are being reallocated toward development of zetomipzomib in AIH and LN. Patients already enrolled in the study will continue to have access to KZR-261.
• A total of 61 patients enrolled across the dose-escalation and dose expansion portions of the study, which included seven patients enrolled in the melanoma cohort of the dose-expansion portion at a dose level of 60 mg/m².
• No objective responses have been observed to date in the study. Five patients (two with melanoma) within the dose escalation portion of the study experienced stable disease for four months or longer, of which two patients (melanoma; head and neck) experienced stable disease for twelve months or longer.
• KZR-261 has demonstrated consistent pharmacokinetics across all dose levels to date, and evidence of dose-dependent inhibition of Sec61 has been observed in patient blood samples.
• Kezar plans to report full data at a medical conference following completion of the study.

Financial Results

• Cash, cash equivalents and marketable securities totaled $164.2 million as of June 30, 2024, compared to $201.4 million as of December 31, 2023. The decrease was primarily attributable to cash used in operations to advance clinical-stage programs.
• Research and development (R&D) expenses for the second quarter of 2024 decreased by $4.7 million to $16.3 million, compared to $21.0 million in the second quarter of 2023. This decrease was primarily due to the Company’s strategic restructuring in October 2023 to prioritize its clinical-stage programs, reducing personnel-related costs and spending in its early-stage research activities. The decrease was partially offset by the increased clinical trial costs related to the PALIZADE and PORTOLA trials.
• General and administrative (G&A) expenses for the second quarter of 2024 decreased by $0.2 million to $5.6 million compared to $5.8 million in the second quarter of 2023. The decrease was primarily due to a decrease in legal and professional service expenses.
• Restructuring and impairment charges for the second quarter of 2024 were $1.5 million. The charges were primarily related to an impairment loss of the right-of-use asset related to vacated space in the company’s leased office facilities.
• Net loss for the second quarter of 2024 was $21.5 million, or $0.30 per basic and diluted common share, compared to a net loss of $24.3 million, or $0.34 per basic and diluted common share, for the second quarter of 2023.
• Total shares of common stock outstanding were 72.9 million shares as of June 30, 2024. Additionally, there were options to purchase 15.3 million shares of common stock at a weighted-average exercise price of $2.18 per share and 0.2 million restricted stock units outstanding as of June 30, 2024.

About Kezar Life Sciences

Kezar Life Sciences is a clinical-stage biopharmaceutical company developing novel small molecule therapeutics to treat unmet needs in immune-mediated diseases and cancer. Zetomipzomib, a selective immunoproteasome inhibitor, is currently being evaluated in a Phase 2b clinical trial for lupus nephritis and a Phase 2a clinical trial for autoimmune hepatitis. This product candidate also has the potential to address multiple chronic immune-mediated diseases. Kezar’s oncology product candidate, KZR-261, targeting the Sec61 translocon and protein secretion pathway, is being evaluated in an open-label Phase 1 clinical trial to assess safety, tolerability and preliminary tumor activity in solid tumors. For more information, visit www.kezarlifesciences.com, and follow us on LinkedIn, Facebook, Twitter and Instagram.

Cautionary Note on Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “can,” “should,” “expect,” “believe,” “potential,” “anticipate” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on Kezar’s expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties that could cause Kezar’s clinical development programs, future results or performance to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to, statements about the design, initiation, progress, timing, scope and results of clinical trials, the enrollment and expected timing of reporting topline data from our clinical trials, the development of zetomipzomib in additional indications, the likelihood that data will support future development and therapeutic potential, the association of data with treatment outcomes and the likelihood of obtaining regulatory approval of Kezar’s product candidates. Many factors may cause differences between current expectations and actual results, including clinical trial site activation or enrollment rates that are lower than expected, unexpected safety or efficacy data observed during clinical studies, difficulties enrolling and conducting our clinical trials, changes in expected or existing competition, changes in the regulatory environment, the uncertainties and timing of the regulatory approval process, and unexpected litigation or other disputes. Other factors that may cause actual results to differ from those expressed or implied in the forward-looking statements in this press release are discussed in Kezar’s filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” contained therein. Except as required by law, Kezar assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available.

KEZAR LIFE SCIENCES, INC.
Selected Balance Sheets Data
(In thousands)
		June 30, 2024			December 31, 2023
		(unaudited)
Cash, cash equivalents and marketable securities		$	164,182		$	201,372
Total assets			179,921			221,235
Total current liabilities			17,495			17,744
Total noncurrent liabilities			11,741			15,921
Total stockholders' equity			150,685			187,570

Summary of Operations Data
(In thousands except share and per share data)
	Three Months Ended								Six Months Ended
	June 30								June 30
	2024				2023				2024				2023
	(unaudited)								(unaudited)
Operating expenses:
Research and development	$	16,298			$	20,999			$	33,470			$	39,317
General and administrative		5,603				5,785				12,142				11,991
Restructuring and impairment charges		1,482				-				1,482				-
Total operating expenses		23,383				26,784				47,094				51,308
Loss from operations		(23,383	)			(26,784	)			(47,094	)			(51,308	)
Interest income		2,237				2,861				4,690				5,556
Interest expense		(401	)			(385	)			(801	)			(755	)
Net loss	$	(21,547	)		$	(24,308	)		$	(43,205	)		$	(46,507	)
Net loss per common share, basic and diluted	$	(0.30	)		$	(0.34	)		$	(0.59	)		$	(0.64	)
Weighted-average shares used to compute net loss per common share, basic and diluted		72,845,869				72,461,850				72,822,890				72,395,410

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240813917196/en/

Investor and Media Contact:

Gitanjali Jain

Senior Vice President, Investor Relations and External Affairs

Kezar Life Sciences, Inc.

gjain@kezarbio.com

Source: Kezar Life Sciences, Inc.

FAQ

When does Kezar expect to report topline data from the PORTOLA trial for zetomipzomib in autoimmune hepatitis?

Kezar expects to report topline data from the PORTOLA trial in the first half of 2025.

What is the primary efficacy endpoint for the PALIZADE Phase 2b trial of zetomipzomib in lupus nephritis?

The primary efficacy endpoint is the proportion of patients who achieve a complete renal response (CRR) at Week 37, including a urine protein-to-creatine ratio (UPCR) of 0.5 or less without receiving rescue or prohibited medications.

How much cash, cash equivalents, and marketable securities did Kezar (KZR) have as of June 30, 2024?

Kezar reported $164.2 million in cash, cash equivalents, and marketable securities as of June 30, 2024.

What was Kezar's (KZR) net loss per share for Q2 2024?

Kezar reported a net loss of $0.30 per basic and diluted common share for Q2 2024.