Nkarta Reports Second Quarter 2024 Financial Results and Corporate Highlights

Rhea-AI Summary

Nkarta Inc. (Nasdaq: NKTX) reported its Q2 2024 financial results and corporate highlights. Key points include:

1. Enrollment in Ntrust-2, a second clinical trial of NKX019 for autoimmune diseases, is expected to start by year-end 2024.

2. Preliminary clinical data from Ntrust-1 and Ntrust-2 trials planned for 2025.

3. Cash balance of $426.7 million as of June 30, 2024, expected to fund operations into late 2027.

4. Q2 2024 net loss of $25.0 million, or $0.34 per share.

5. R&D expenses were $23.1 million, while G&A expenses were $7.6 million for Q2 2024.

6. Nkarta presented follow-up data from its Phase 1 NKX019 trial in NHL, showing promising results in retreated patients.

7. Leadership updates include new President and Chief Medical Officer appointments.

Positive

• Cash balance of $426.7 million expected to fund operations into late 2027
• Promising follow-up data from Phase 1 NKX019 trial in NHL, with 4/4 complete responses in retreated patients
• Expansion of NKX019 clinical trials into autoimmune diseases
• FDA clearance for second IND application for NKX019 in autoimmune diseases

Negative

• Net loss of $25.0 million in Q2 2024
• R&D expenses increased to $23.1 million in Q2 2024
• Future development of NKX019 in NHL contingent on outcomes from new cohort

Financial Analyst

Nkarta's Q2 2024 results reveal a strong financial position with $426.7 million in cash and investments, expected to fund operations into late 2027. This substantial runway provides significant flexibility for their clinical development programs. The company's net loss of $25 million ($0.34 per share) is manageable given their cash reserves. R&D expenses of $23.1 million reflect ongoing investment in their pipeline, particularly NKX019. While the lack of revenue is typical for a clinical-stage biotech, investors should monitor cash burn rate in relation to clinical progress.

Medical Research Analyst

Nkarta's progress with NKX019 in autoimmune diseases is promising. The FDA clearance for the Ntrust-2 trial in systemic sclerosis, myositis and vasculitis expands the potential applications of their NK cell therapy. The reduced toxicity lymphodepletion regimen could be a significant advantage, potentially improving patient experience and safety. The planned preliminary data readout in 2025 from both Ntrust-1 and Ntrust-2 will be important in assessing NKX019's efficacy across multiple autoimmune indications. The retreatment success (4/4 CR) in NHL patients is encouraging, suggesting potential for durable responses.

Market Research Analyst

Nkarta's focus on autoimmune diseases with NKX019 positions them in a large and growing market. The expansion into systemic sclerosis, myositis and vasculitis, along with the existing lupus trial, demonstrates a strategic approach to addressing unmet needs in autoimmunity. The potential for a less toxic treatment option could be a significant differentiator. In oncology, the NHL data, particularly in post-CAR T patients, addresses another critical market need. However, investors should note that future NHL development is contingent on outcomes from the new cohort, indicating a cautious approach to resource allocation.

• Enrollment expected to initiate by year-end 2024 in second clinical trial of NKX019 in autoimmune disease, Ntrust-2, for treatment of systemic sclerosis, myositis and vasculitis
• Preliminary clinical data from Ntrust-1 and Ntrust-2 clinical trials planned for 2025
• Cash balance of $426.7 million on June 30, 2024, including cash, cash equivalents and investments, expected to fund operations into late 2027
  

SOUTH SAN FRANCISCO, Calif., Aug. 13, 2024 (GLOBE NEWSWIRE) -- Nkarta, Inc. (Nasdaq: NKTX), a clinical-stage biopharmaceutical company developing engineered natural killer (NK) cell therapies, today reported financial results for the second quarter ended June 30, 2024.

“Patients remain our focus, and early execution on our clinical trials across disease areas is a testament to that commitment,” said Paul J. Hastings, CEO of Nkarta. “NKX019 has the potential to reach people living with a wide range of autoimmune diseases, and we will continue to evaluate ways to maximize our impact in this field. Our cellular engineering enables us to evaluate a reduced toxicity lymphodepletion regimen, to limit hospitalization and patient burden, and spare the complications of other agents.”

Continued execution in clinical development of NKX019 for autoimmune diseases

• Received clearance from FDA of second Investigational New Drug (IND) application for NKX019 in autoimmune disease, supporting the planned initiation of Ntrust-2, a clinical trial of NKX019 for the treatment of systemic sclerosis, myositis and vasculitis. Patients enrolled in Ntrust-2 will receive three doses of NKX019 on Days 0, 3, and 7 following lymphodepletion (LD) with single-agent cyclophosphamide (cy).
• Initiation of an investigator-sponsored trial (IST) of NKX019 in systemic lupus erythematosus (SLE) with or without LN by researchers at Columbia University Irving Medical Center. Patients enrolled in the IST will receive three doses of NKX019 on Days 0, 3, and 7 following LD with single-agent cy.

Autoimmune milestones 2024-2025

• Initiation of patient enrollment in Ntrust-2 clinical trial expected by year-end 2024.
• Preliminary clinical data from Ntrust-1 and Ntrust-2 clinical trials planned for 2025.

Mid-year update for NKX019 in non-Hodgkin lymphoma (NHL)

• Nkarta presented follow-up data from its Phase 1 clinical trial of NKX019 in relapsed/refractory NHL at the Pan Pacific Lymphoma Conference in July 2024, including follow-up on 4 patients who were retreated and re-entered complete response (CR), demonstrating the safety and encouraging effectiveness (4/4 CR) of retreatment.
• Nkarta previously opened a cohort with a compressed (7-day) dosing schedule, where patients with large B-cell lymphoma (LBCL) who have progressed following CAR T therapy receive NKX019 on Days 0, 3, and 7 following LD with fludarabine (flu) and cy.
• Nkarta has completed enrollment of patients into the 7-day dosing cohort in LBCL following CAR T and expects to announce data from this cohort in late-2024.
• Future development of NKX019 in NHL will be contingent on favorable outcomes from the seven patients that have been treated in the new cohort.

Leadership Updates

• In July 2024, Nadir Mahmood, Ph.D., joined Nkarta as President, and David R. Shook, M.D., was promoted to Chief Medical Officer, Head of Research & Development, with both executives reporting to Paul J. Hastings, Chief Executive Officer.
• In June 2024, George Vratsanos, M.D., FACR, an accomplished biopharmaceutical executive with scientific and clinical expertise in immunology and autoimmunity, joined Nkarta’s Board of Directors.

Second Quarter 2024 and Recent Financial Highlights

• Nkarta had cash, cash equivalents, restricted cash, and investments in marketable securities of $426.7 million as of June 30, 2024.
• Research and development (R&D) expenses were $23.1 million for the second quarter of 2024. Non-cash stock-based compensation expense included in R&D expense was $2.2 million for the second quarter of 2024.
• General and administrative (G&A) expenses were $7.6 million for the second quarter of 2024. Non-cash stock-based compensation expense included in G&A expense was $2.2 million for the second quarter of 2024.
• Net loss was $25.0 million, or $0.34 per basic and diluted share, for the second quarter of 2024. This net loss includes non-cash charges of $6.7 million that consisted primarily of share-based compensation and depreciation expenses.

Financial Guidance

• Nkarta expects its current cash and cash equivalents will be sufficient to fund its current operating plan into late 2027.
  

About NKX019
NKX019 is an allogeneic, cryopreserved, off-the-shelf immunotherapy candidate that uses natural killer (NK) cells derived from the peripheral blood of healthy adult donors. It is engineered with a humanized CD19-directed CAR for enhanced cell targeting and a proprietary, membrane-bound form of interleukin-15 (IL-15) for greater persistence and activity without exogenous cytokine support. CD19 is a biomarker for normal B cells as well as those implicated in autoimmune disease and B cell-derived malignancies.

About Ntrust Clinical Trials in Autoimmune Disease
Ntrust-1 and Ntrust-2 are multi-center, open label, dose escalation clinical trials that build on academic studies of durable, drug-free remissions in patients with autoimmune disease after CD19-targeted cell therapy. Both trials will assess the safety of NKX019 in people living with autoimmune diseases as well as its ability to enable long-term remissions via a “reset” of the immune system through the elimination of pathogenic B cells. Per the trial protocols, patients receive three-dose cycles of NKX019 at 1 billion or 1.5 billion cells per dose following single-agent lymphodepletion with cyclophosphamide, an agent with an established safety profile across autoimmune diseases. Leveraging the engineering of NKX019, no patients in either trial will receive supplemental cytokines or antibody-based therapeutics. This approach is designed to evaluate the single-agent activity of NKX019 and facilitate a more rapid path to regulatory approval.

In the Ntrust-1 study, patients with refractory lupus nephritis receive NKX019 on Days 0, 7 and 14. Patients in Ntrust-1 may also receive additional cycles to restore response.

Once initiated, Ntrust-2 will enroll patients with systemic sclerosis (scleroderma), idiopathic inflammatory myopathy (myositis), and ANCA-associated vasculitis into parallel cohorts, and NKX019 will be dosed on Days 0, 3, and 7, a regimen that may be advantageous across all Nkarta clinical trials. Each trial is designed to initially enroll up to 12 patients.

About Nkarta
Nkarta is a clinical-stage biotechnology company advancing the development of allogeneic, off-the-shelf natural killer (NK) cell therapies. By combining its cell expansion and cryopreservation platform with proprietary cell engineering technologies and CRISPR-based genome engineering capabilities, Nkarta is building a pipeline of future cell therapies engineered for deep therapeutic activity and intended for broad access in the outpatient treatment setting. For more information, please visit the company’s website at www.nkartatx.com.

Cautionary Note on Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Words such as "anticipates," "believes," "expects," "intends," “plans,” “potential,” "projects,” “would” and "future" or similar expressions are intended to identify forward-looking statements. Examples of these forward-looking statements include, but are not limited to, statements concerning Nkarta’s expectations regarding any or all of the following: Nkarta’s position, plans, strategies, and timelines (including initiation of further clinical trials) for the continued and future clinical development and commercial potential of its product candidates, including NKX019 for the treatment of autoimmune disease, including lupus, systemic sclerosis, myositis, and vasculitis; the therapeutic potential, accessibility, tolerability, advantages, and safety profile of NK cell therapies, including NKX019 for the treatment of autoimmune diseases, including lupus, systemic sclerosis, myositis, and vasculitis, and NHL; Nkarta’s plans and timelines for the future availability and disclosure of clinical data from Ntrust-1 and Ntrust-2 or other updates regarding Nkarta’s clinical trials; and Nkarta’s expected cash runway. Interim clinical data for NKX019 included in this press release are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more data on existing patients become available.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among others: Nkarta’s limited operating history and historical losses; Nkarta’s lack of any products approved for sale and its ability to achieve profitability; the risk that the results of preclinical studies and early-stage clinical trials may not be predictive of future results; Nkarta’s ability to raise additional funding to complete the development and any commercialization of its product candidates; Nkarta’s dependence on the clinical success of NKX019; that Nkarta may be delayed in initiating, enrolling or completing its clinical trials; competition from third parties that are developing products for similar uses; Nkarta’s ability to obtain, maintain and protect its intellectual property; Nkarta’s dependence on third parties in connection with manufacturing, clinical trials and pre-clinical studies; and the complexity of the manufacturing process for CAR NK cell therapies.

These and other risks and uncertainties are described more fully in Nkarta’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section of Nkarta’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 9, 2024, and Nkarta’s other documents subsequently filed with or furnished to the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. Except to the extent required by law, Nkarta undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Nkarta, Inc. Condensed Statements of Operations (in thousands, except share and per share data) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
Operating expenses
Research and development		$	23,130			$	25,122			$	48,367			$	51,257
General and administrative			7,585				11,736				15,110				19,914
Total operating expenses			30,715				36,858				63,477				71,171
Loss from operations			(30,715	)			(36,858	)			(63,477	)			(71,171	)
Other income, net:
Interest income			5,724				3,570				8,970				7,035
Other (expense) income, net			(2	)			1				(4	)			34
Total other income, net			5,722				3,571				8,966				7,069
Net loss		$	(24,993	)		$	(33,287	)		$	(54,511	)		$	(64,102	)
Net loss per share, basic and diluted		$	(0.34	)		$	(0.68	)		$	(0.88	)		$	(1.31	)
Weighted average shares used to compute net loss per share, basic and diluted			73,494,523				48,970,391				62,088,495				48,946,018

Nkarta, Inc. Condensed Balance Sheets (in thousands) (Unaudited)
			June 30, 2024				December 31, 2023
Assets
Cash, cash equivalents, restricted cash and investments			$	426,650			$	250,932
Property and equipment, net				77,551				79,326
Operating lease right-of-use assets				39,374				39,949
Other assets				10,511				8,678
Total assets			$	554,086			$	378,885
Liabilities and stockholders' equity
Accounts payable, accrued and other liabilities			$	15,329			$	17,261
Operating lease liabilities				85,573				88,339
Total liabilities				100,902				105,600
Stockholders’ equity				453,184				273,285
Total liabilities and stockholders’ equity			$	554,086			$	378,885

Nkarta Media/Investor Contact:
Greg Mann
Nkarta, Inc.
gmann@nkartatx.com

FAQ

When will Nkarta (NKTX) start enrollment for the Ntrust-2 clinical trial?

Nkarta expects to initiate patient enrollment in the Ntrust-2 clinical trial by year-end 2024.

What was Nkarta's (NKTX) cash balance as of June 30, 2024?

Nkarta reported a cash balance of $426.7 million as of June 30, 2024, including cash, cash equivalents, and investments.

What was Nkarta's (NKTX) net loss for Q2 2024?

Nkarta reported a net loss of $25.0 million, or $0.34 per basic and diluted share, for the second quarter of 2024.

When does Nkarta (NKTX) expect to release preliminary clinical data from Ntrust-1 and Ntrust-2 trials?

Nkarta plans to release preliminary clinical data from Ntrust-1 and Ntrust-2 trials in 2025.