Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $32.2 million, consisting of product revenue of $22.2 million from ARCALYST net sales and collaboration revenue of $10 million from Huadong Medicine for mavrilimumab rights [30] - Net loss for Q1 2022 was $25.2 million, a significant improvement compared to a net loss of $49.5 million in Q1 2021 [33] - Cash reserves at the end of Q1 2022 were approximately $145 million, with expectations to fund operations into at least 2024 [34] Business Line Data and Key Metrics Changes - ARCALYST generated net revenue of $22.2 million in Q1 2022, reflecting close to 20% sequential growth compared to Q4 2021 [15] - Cumulative net sales of ARCALYST since launch reached $60.7 million [29] - The company anticipates full-year net revenue for ARCALYST to be between $115 million and $130 million, representing over 200% year-over-year growth [34][37] Market Data and Key Metrics Changes - The prescriber base for ARCALYST has grown to over 400, with 17% of prescribers being repeat prescribers [17][18] - A 95% approval rate for ARCALYST across all payer segments was reported, despite seasonal headwinds [19] - Approximately 60% of patients who started ARCALYST in the first launch quarter remained on therapy by the end of Q1 2022 [20] Company Strategy and Development Direction - The company is focused on maximizing the value of its clinical stage programs, including Vixarelimab, KPL-404, and mavrilimumab [10] - Kiniksa aims to augment its pipeline through business development activities, particularly looking for synergies with existing commercial infrastructure [72] - The company is positioning ARCALYST as the standard of care for recurrent pericarditis, supported by positive clinical data [25][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of ARCALYST and the overall commercial execution [36] - The company is optimistic about upcoming data from the Phase IIb trial of Vixarelimab and the Phase II study for KPL-404 in rheumatoid arthritis [37] - Management highlighted the importance of maintaining a strong cash position to support ongoing operations and potential pipeline expansions [72][74] Other Important Information - The company has been actively engaging in market research to enhance awareness and understanding of recurrent pericarditis and ARCALYST among healthcare professionals [22][24] - The company has successfully navigated the challenges posed by the COVID-19 pandemic, allowing for increased face-to-face interactions with healthcare professionals [22] Q&A Session Summary Question: What portion of your target prescribers have been penetrated? - Management indicated that most prescribing is coming from the targeted base, with ongoing efforts to reach non-target prescribers as well [44][45] Question: Can you remind us how long an initial script is written for? - The majority of prescribers write initial scripts for 12 months, with payer approvals also typically set for the same duration [46][47] Question: Can you elaborate on Q1 payer dynamics? - Management noted that Q1 dynamics were influenced by changes in insurance plans, but they expect a return to normality in Q2 and beyond [52] Question: What would be a competitive result for Vixarelimab? - The Phase IIb study aims to confirm the dual mechanism of action and practical monthly dosing, with expectations to replicate previous positive results [55][57] Question: Do you have a handle on patient turnover? - Management acknowledged some patients have stopped therapy, but many remain on treatment longer, with the option to restart if symptoms recur [61][62] Question: Will there be additional spend to market ARCALYST? - Management stated that they are always evaluating the most efficient ways to address the market and may increase non-personal promotion efforts [66][68] Question: Can you provide additional color on your BD strategy? - The company is keen to explore opportunities to augment its pipeline, particularly in the context of depressed valuations in the market [72][74]

[PART I — FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Kiniksa reported Q1 2022 total revenues of **$32.2 million**, narrowing net loss to **$25.2 million** from **$49.5 million** [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets were **$231.0 million**, with cash decreasing and liabilities increasing due to deferred collaboration revenue Consolidated Balance Sheets Data | Account | March 31, 2022 ($ thousands) | December 31, 2021 ($ thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 63,324 | 122,470 | | Accounts receivable, net | 29,440 | 3,985 | | Inventory | 13,223 | 3,675 | | Total current assets | 198,757 | 196,446 | | **Total assets** | **230,965** | **232,800** | | **Liabilities & Equity** | | | | Total current liabilities | 50,354 | 44,824 | | Deferred revenue | 12,000 | — | | **Total liabilities** | **64,721** | **47,763** | | Accumulated deficit | (700,607) | (675,397) | | **Total shareholders' equity** | **166,244** | **185,037** | [Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2022 total revenue was **$32.2 million**, leading to a net loss of **$25.2 million** or **$(0.36)** per share, a significant improvement Consolidated Statements of Operations and Comprehensive Loss Data | Metric | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Product revenue, net | 22,189 | — | | Collaboration revenue | 10,000 | — | | **Total revenue** | **32,189** | **—** | | Cost of goods sold | 4,219 | — | | Collaboration expenses | 8,254 | — | | Research and development | 20,817 | 28,683 | | Selling, general and administrative | 22,218 | 20,600 | | **Total operating expenses** | **55,508** | **49,283** | | **Loss from operations** | **(23,319)** | **(49,283)** | | **Net loss** | **(25,210)** | **(49,484)** | | **Net loss per share** | **(0.36)** | **(0.72)** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$36.8 million** in Q1 2022, leading to a **$59.1 million** net decrease in cash and equivalents Consolidated Statements of Cash Flows Data | Cash Flow Activity | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (36,846) | (40,122) | | Net cash provided by (used in) investing activities | (22,723) | 44,834 | | Net cash provided by financing activities | 423 | 1,106 | | **Net decrease in cash** | **(59,146)** | **5,818** | | **Cash at end of period** | **63,324** | **120,066** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail liquidity, revenue recognition, and agreements, notably a **$22 million** upfront payment from Huadong for Asia Pacific rights - The company believes its cash, cash equivalents, and short-term investments of **$145.6 million** as of March 31, 2022, are sufficient to fund operations for at least twelve months from the financial statement issuance date[40](index=40&type=chunk)[41](index=41&type=chunk) - In February 2022, the company entered into collaboration agreements with Huadong, granting exclusive rights to develop and commercialize rilonacept and mavrilimumab in the Asia Pacific region for a **$22 million** upfront payment[75](index=75&type=chunk)[76](index=76&type=chunk) - **$10 million** of the Huadong upfront payment was recognized as collaboration revenue for the mavrilimumab license, while **$12 million** related to the rilonacept license was recorded as deferred revenue[89](index=89&type=chunk)[97](index=97&type=chunk) - The company evenly splits profits on ARCALYST sales with Regeneron. For Q1 2022, Kiniksa recognized **$8.3 million** in collaboration expenses related to this profit-sharing agreement[111](index=111&type=chunk)[156](index=156&type=chunk) - As of March 31, 2022, the company had committed to minimum payments under manufacturing agreements totaling **$36.6 million**, with **$30.1 million** due within one year[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses portfolio, Q1 2022 results, and liquidity, highlighting **$22.2 million** ARCALYST revenue and **$145.6 million** cash [Overview](index=29&type=section&id=Overview) Kiniksa focuses on debilitating diseases with ARCALYST commercialization and pipeline development, expecting continued operating losses - ARCALYST received FDA approval for recurrent pericarditis in March 2021 and is being commercialized in the U.S., with profits evenly split with Regeneron[136](index=136&type=chunk) - The company is conducting a global Phase 2b dose-ranging clinical trial of vixarelimab in prurigo nodularis, with top-line data expected in the second half of 2022[139](index=139&type=chunk) - A Phase 2 proof-of-concept clinical trial of KPL-404 in rheumatoid arthritis was initiated in December 2021[140](index=140&type=chunk) - The company expects to continue incurring significant operating losses as it advances its product candidates and commercializes ARCALYST[142](index=142&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q1 2022 total revenue was **$32.2 million**, with R&D decreasing by **$7.9 million** and SG&A increasing by **$1.6 million** for ARCALYST Results of Operations Data | Expense Category | Q1 2022 ($M) | Q1 2021 ($M) | Change ($M) | Key Driver of Change | | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | 20.8 | 28.7 | (7.9) | Decrease in mavrilimumab program costs after wind-down of COVID-19 trial. | | SG&A Expenses | 22.2 | 20.6 | 1.6 | Increased sales and marketing for ARCALYST commercial operations. | | Collaboration Expenses | 8.3 | 0.0 | 8.3 | Regeneron's share of ARCALYST profit, including from the Huadong deal. | - Direct costs for the mavrilimumab program decreased by **$5.4 million** YoY due to the wind-down of the Phase 3 clinical trial in COVID-19 related ARDS[176](index=176&type=chunk) - Direct costs for the KPL-404 program increased by **$1.7 million** YoY due to the continuation of the Phase 2 trial in rheumatoid arthritis[178](index=178&type=chunk)[179](index=179&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2022, Kiniksa had **$145.6 million** in cash, sufficient for 12 months, but future capital is required - As of March 31, 2022, the company had cash, cash equivalents and short-term investments of **$145.6 million**[184](index=184&type=chunk) - The company believes its existing cash will fund operating expenses and capital expenditure requirements for at least the next 12 months[147](index=147&type=chunk)[195](index=195&type=chunk) - The company has committed to minimum payments to Regeneron of **$36.4 million** for supply agreements, with **$29.9 million** due within one year[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity on short-term investments, with a **10%** change not materially impacting results - The company's primary market risk is interest rate sensitivity on its cash and short-term investments[203](index=203&type=chunk) - Due to the short-term nature of its investment portfolio, an immediate **10%** change in interest rates is not expected to have a material impact on the company's financial position or results[203](index=203&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[207](index=207&type=chunk) - No material changes were made to the company's internal control over financial reporting during the first quarter of 2022[208](index=208&type=chunk) [PART II — OTHER INFORMATION](index=41&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material legal proceedings - The company is not currently involved in any material legal proceedings[211](index=211&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks including operating losses, ARCALYST dependence, third-party reliance, and global event impacts - The company has a history of significant operating losses (**$700.6 million** accumulated deficit as of March 31, 2022) and expects to incur losses for the foreseeable future[214](index=214&type=chunk) - The business depends heavily on the commercial success of ARCALYST and the development of its pipeline candidates, but the company has limited experience in commercializing therapeutics[232](index=232&type=chunk) - The company relies on single-source or limited-source third-party manufacturers (like Regeneron for ARCALYST) for its products, increasing risks of supply shortages and quality issues[376](index=376&type=chunk)[402](index=402&type=chunk) - The ongoing war in Ukraine and the COVID-19 pandemic pose significant risks to clinical trial operations, global supply chains, and financial markets[315](index=315&type=chunk)[508](index=508&type=chunk)[513](index=513&type=chunk) - Concentration of voting power among executive officers and affiliated directors may influence corporate decisions and affect the stock price[581](index=581&type=chunk)[582](index=582&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=118&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[635](index=635&type=chunk) [Item 3. Defaults Upon Senior Securities](index=118&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[636](index=636&type=chunk) [Item 4. Mine Safety Disclosures](index=118&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[637](index=637&type=chunk) [Item 5. Other Information](index=118&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this period - None[638](index=638&type=chunk) [Item 6. Exhibits](index=119&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including collaboration agreements with Huadong and standard certifications - Filed the Collaboration and License Agreement with Huadong for Rilonacept[641](index=641&type=chunk) - Filed the Collaboration and License Agreement with Huadong for Mavrilimumab[641](index=641&type=chunk)

[Business Overview](index=10&type=section&id=Item%201.%20Business) Kiniksa Pharmaceuticals is a global biopharmaceutical company focused on developing and commercializing therapeutic medicines for debilitating diseases with significant unmet medical needs [Company Overview](index=10&type=section&id=Overview) Kiniksa Pharmaceuticals is a global biopharmaceutical company focused on developing and commercializing therapeutic medicines for debilitating diseases with significant unmet medical needs, with a portfolio including ARCALYST, mavrilimumab, vixarelimab, and KPL-404 - **Kiniksa Pharmaceuticals** is a global biopharmaceutical company focused on discovering, acquiring, developing, and commercializing therapeutic medicines for debilitating diseases with significant unmet medical need[27](index=27&type=chunk) - The company's portfolio includes **ARCALYST (rilonacept), mavrilimumab, vixarelimab, and KPL-404**, designed to modulate immunological pathways for underserved conditions[27](index=27&type=chunk) - **ARCALYST** received **U.S. FDA approval in March 2021** for recurrent pericarditis, CAPS, and DIRA in adults and children 12 years and older[30](index=30&type=chunk)[31](index=31&type=chunk) - The **ARCALYST franchise achieved profitability in Q4 2021** after three quarters of commercial availability for recurrent pericarditis[31](index=31&type=chunk) - Kiniksa granted Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. exclusive rights to develop and commercialize **ARCALYST and mavrilimumab in the Asia Pacific region** (excluding Japan) in February 2022[32](index=32&type=chunk)[36](index=36&type=chunk) - **Mavrilimumab** development will focus on **cardiovascular diseases**, following discontinuation in COVID-19-related ARDS and Giant Cell Arteritis Phase 3 trials[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - **Vixarelimab** is being evaluated for prurigo nodularis, with **Phase 2b top-line data expected in H2 2022** and **FDA Breakthrough Therapy designation** received in November 2020[37](index=37&type=chunk) - **KPL-404**, a **CD40-CD154 interaction inhibitor**, showed positive Phase 1 data and initiated a **Phase 2 trial in rheumatoid arthritis in December 2021**[41](index=41&type=chunk)[42](index=42&type=chunk) [Company Strategy](index=16&type=section&id=Our%20Strategy) Kiniksa's strategy centers on commercializing ARCALYST and other approved product candidates, advancing its pipeline through efficient, data-driven development, exploring additional indications and strategic collaborations, and identifying new therapies to expand its portfolio - Commercialize **ARCALYST** and other approved product candidates using a specialty cardiology sales team and existing commercial infrastructure[51](index=51&type=chunk) - Advance product candidates efficiently and data-driven to deliver differentiated therapies for significant unmet medical needs[51](index=51&type=chunk) - Maximize value from the existing portfolio by exploring additional indications and strategic collaborations or out-licensing[51](index=51&type=chunk) - Identify, discover, acquire, and develop new therapies through internal efforts and business development, evaluating biologic rationale, regulatory potential, commercial viability, intellectual property, and pricing/reimbursement prospects[51](index=51&type=chunk) [Product Portfolio](index=16&type=section&id=Our%20Products) Kiniksa's product portfolio includes ARCALYST, an FDA-approved IL-1α/β cytokine trap for recurrent pericarditis and other autoinflammatory syndromes, and investigational candidates mavrilimumab, vixarelimab, and KPL-404 [ARCALYST (rilonacept)](index=16&type=section&id=ARCALYST) ARCALYST is an IL-1α and IL-1β cytokine trap, FDA-approved in March 2021 for recurrent pericarditis in adults and children 12+, and also for CAPS and DIRA, targeting a U.S. prevalent population of ~40,000 recurrent pericarditis patients - **ARCALYST** is an **interleukin-1alpha (IL-1α) and interleukin-1beta (IL-1β) cytokine trap**, licensed from Regeneron in 2017[28](index=28&type=chunk)[49](index=49&type=chunk) - **FDA approval** for recurrent pericarditis in adults and children 12 years and older was granted in **March 2021**[30](index=30&type=chunk)[50](index=50&type=chunk) - The estimated **U.S. prevalent population for recurrent pericarditis** seeking medical treatment is approximately **40,000 patients**, with about **14,000 having high unmet medical needs**[31](index=31&type=chunk)[53](index=53&type=chunk)[62](index=62&type=chunk) - The pivotal **Phase 3 RHAPSODY trial** met all primary and major secondary efficacy endpoints, showing a **96% reduction in risk of recurrent pericarditis events** for ARCALYST recipients compared to placebo[54](index=54&type=chunk)[64](index=64&type=chunk) - **ARCALYST** is the **first and only FDA-approved therapy for recurrent pericarditis**, offering an alternative to off-label NSAIDs, colchicine, and systemic corticosteroids[63](index=63&type=chunk) - The commercial strategy for **ARCALYST** focuses on establishing unmet need, positioning it as the product of choice, ensuring broad patient access and favorable reimbursement, and building robust patient support programs[67](index=67&type=chunk) [Investigational Product Candidates](index=22&type=section&id=Our%20Product%20Candidates) Kiniksa's investigational pipeline includes mavrilimumab, vixarelimab, and KPL-404, with mavrilimumab refocused on cardiovascular diseases, vixarelimab in Phase 2b for prurigo nodularis, and KPL-404 in Phase 2 for rheumatoid arthritis [Mavrilimumab](index=22&type=section&id=Mavrilimumab) Mavrilimumab is an investigational monoclonal antibody targeting GM-CSFRα, with Kiniksa refocusing its development on cardiovascular diseases after discontinuing its use in COVID-19-related ARDS and Giant Cell Arteritis - **Mavrilimumab** is an investigational monoclonal antibody inhibitor targeting **granulocyte-macrophage colony stimulating factor receptor alpha (GM-CSFRα)**[32](index=32&type=chunk)[68](index=68&type=chunk) - Development focus is shifting to **cardiovascular diseases** where the GM-CSF mechanism is implicated, with synergies to existing commercial infrastructure[33](index=33&type=chunk)[68](index=68&type=chunk) - The **Phase 3 trial for COVID-19-related ARDS** did not meet its primary efficacy endpoint, leading to discontinuation in this indication[34](index=34&type=chunk)[69](index=69&type=chunk) - Despite positive Phase 2 results and Orphan Drug designation for **Giant Cell Arteritis (GCA)**, Kiniksa does not plan to initiate a Phase 3 trial for this indication[35](index=35&type=chunk)[70](index=70&type=chunk) [Vixarelimab](index=24&type=section&id=Vixarelimab) Vixarelimab is an investigational monoclonal antibody inhibiting OSMRβ, being evaluated for prurigo nodularis, a chronic inflammatory skin condition with no FDA-approved therapies, and has received FDA Breakthrough Therapy designation - **Vixarelimab** is an investigational monoclonal antibody inhibitor of signaling through **oncostatin M receptor beta (OSMRβ)**, mediating IL-31 and OSM, key cytokines in inflammation, pruritus, and fibrosis[36](index=36&type=chunk)[76](index=76&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk) - It is being evaluated for **prurigo nodularis**, a chronic inflammatory skin condition with an estimated **U.S. prevalence of approximately 300,000 patients**, for which there are no FDA-approved therapies[37](index=37&type=chunk)[77](index=77&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - The **Phase 2a trial in prurigo nodularis** achieved primary and secondary efficacy endpoints with statistical significance, showing a **50.6% reduction in weekly-average WI-NRS at Week 8** for vixarelimab recipients[37](index=37&type=chunk)[78](index=78&type=chunk)[90](index=90&type=chunk)[93](index=93&type=chunk) - **Vixarelimab received FDA Breakthrough Therapy designation in November 2020** for the treatment of pruritus associated with prurigo nodularis[37](index=37&type=chunk)[77](index=77&type=chunk) - A global, randomized, double-blind, placebo-controlled **Phase 2b dose-ranging clinical trial** is currently enrolling patients, with **top-line data expected in the second half of 2022**[37](index=37&type=chunk)[92](index=92&type=chunk) [KPL-404](index=28&type=section&id=KPL-404) KPL-404 is an investigational monoclonal antibody inhibiting CD40-CD154 interaction, which showed positive Phase 1 data and initiated a Phase 2 proof-of-concept trial in rheumatoid arthritis in December 2021 - **KPL-404** is an investigational monoclonal antibody inhibitor of **CD40-CD154 interaction**, critical for B-cell maturation, immunoglobulin class switching, and Type 1 immune response[38](index=38&type=chunk)[40](index=40&type=chunk)[94](index=94&type=chunk)[97](index=97&type=chunk) - Positive final data from the **Phase 1 clinical trial** in healthy volunteers showed dose-dependent increases in concentration, **full receptor occupancy** through at least Day 71 (10 mg/kg IV), and **complete suppression of T-cell dependent antibody response (TDAR)**[41](index=41&type=chunk)[95](index=95&type=chunk)[103](index=103&type=chunk) - A **Phase 2 proof-of-concept clinical trial in rheumatoid arthritis** was initiated in **December 2021** to evaluate pharmacokinetics, safety, and efficacy with subcutaneous administration, enabling potential development in other autoimmune diseases[42](index=42&type=chunk)[96](index=96&type=chunk)[104](index=104&type=chunk) - **KPL-404** was provided for an experimental immunosuppressive regimen in a genetically-modified pig heart transplant in January 2022[43](index=43&type=chunk)[96](index=96&type=chunk) [Discovery Activities](index=33&type=section&id=Discovery%20Activities) Kiniksa conducts internal discovery activities to identify wholly-owned molecules for debilitating diseases, focusing on strong mechanistic rationale and potential for differentiation from existing or developing agents - Internal discovery efforts are directed towards wholly-owned molecules for debilitating diseases with strong mechanistic rationale and potential for differentiation[105](index=105&type=chunk) [License and Acquisition Agreements](index=33&type=section&id=License%20and%20Acquisition%20Agreements) Kiniksa has established its product portfolio through various license and acquisition agreements, including exclusive worldwide rights for ARCALYST (from Regeneron), mavrilimumab (from MedImmune), vixarelimab (from Biogen), and KPL-404 (via Primatope acquisition and BIDMC license) [Regeneron License Agreement (ARCALYST)](index=33&type=section&id=License%20Agreement%20with%20Regeneron) Kiniksa holds exclusive worldwide rights to ARCALYST from Regeneron, involving an upfront payment, regulatory milestone payments totaling $27.5 million, and a 50/50 profit split on sales after deducting manufacturing and commercialization costs - Kiniksa has an exclusive license from Regeneron for **ARCALYST worldwide**, excluding the Middle East and North Africa, and certain oncology/local administration applications[28](index=28&type=chunk)[106](index=106&type=chunk) - Payments to Regeneron included a **$5.0 million upfront payment**, a **$7.5 million regulatory milestone in Q4 2020**, and a **$20.0 million regulatory milestone in Q1 2021**[107](index=107&type=chunk) - Kiniksa and Regeneron evenly split profits on **ARCALYST sales** after deducting manufacturing and commercialization costs[31](index=31&type=chunk)[107](index=107&type=chunk) - Regeneron has the exclusive right to manufacture and supply all **ARCALYST** requirements for development and commercialization activities[112](index=112&type=chunk)[126](index=126&type=chunk) [MedImmune License Agreement (Mavrilimumab)](index=35&type=section&id=License%20Agreement%20with%20MedImmune) Kiniksa licensed exclusive worldwide rights to mavrilimumab from MedImmune in 2017, including an $8.0 million upfront payment, $15 million in clinical milestone payments, and potential future clinical, regulatory, and sales-based milestone payments up to $1.2 billion, plus tiered royalties on net sales - Kiniksa licensed exclusive worldwide rights to **mavrilimumab** from MedImmune in December 2017[32](index=32&type=chunk)[113](index=113&type=chunk) - An **$8.0 million upfront payment** was made, along with **$15 million in clinical milestone payments in 2019**[114](index=114&type=chunk) - Future obligations include up to **$57.5 million in clinical/regulatory/initial sales milestones** for the first two indications, **$15.0 million for each subsequent indication**, and up to **$1.185 billion in sales-based milestones**, plus tiered royalties (low double-digit to 20%) on annual net sales[114](index=114&type=chunk) - An amendment in July 2020 established a new coronavirus field and deferred certain milestone payments for that field[114](index=114&type=chunk) [Biogen Asset Purchase Agreement (Vixarelimab)](index=35&type=section&id=Biogen%20Asset%20Purchase%20Agreement) Kiniksa acquired worldwide rights to vixarelimab from Biogen in 2016, involving an $11.5 million upfront payment, a $0.5 million technology transfer payment, and $14.3 million in clinical milestone payments, with future obligations including up to $315.0 million in milestones and tiered royalties on net sales - Kiniksa acquired worldwide rights to **vixarelimab** from Biogen in September 2016, including patents, intellectual property, clinical data, and inventory[36](index=36&type=chunk)[116](index=116&type=chunk) - Payments included an **$11.5 million upfront payment**, a **$0.5 million technology transfer payment**, and **$14.3 million in clinical milestone payments** (in 2017 and 2019)[118](index=118&type=chunk) - Future obligations include up to **$315.0 million in aggregate milestones** (clinical, regulatory, and sales-based) and tiered royalties (high single-digit to below teens) on annual net sales[118](index=118&type=chunk) - Biogen holds a time-limited right of first negotiation to purchase or license the acquired assets if Kiniksa decides to sell or out-license them[119](index=119&type=chunk) [Primatope Stock Purchase Option Agreement (KPL-404)](index=37&type=section&id=Primatope%20Stock%20Purchase%20Option%20Agreement) Kiniksa acquired Primatope Therapeutics in March 2019, gaining exclusive worldwide rights to KPL-404, involving $18.0 million in upfront and contingent payments, and an exclusive license from BIDMC with obligations for annual maintenance fees and potential clinical/regulatory milestone payments up to $1.2 million, plus low single-digit royalties on net sales - Kiniksa acquired all outstanding securities of **Primatope Therapeutics in March 2019**, gaining rights to **KPL-404**[38](index=38&type=chunk)[122](index=122&type=chunk) - The acquisition involved aggregate **upfront and contingent payments of $18.0 million** to former Primatope shareholders[122](index=122&type=chunk) - As a result, Kiniksa acquired an exclusive worldwide license to **KPL-404** from Beth Israel Deaconess Medical Center (BIDMC)[39](index=39&type=chunk)[123](index=123&type=chunk) - Under the BIDMC agreement, Kiniksa is obligated to pay an insignificant annual maintenance fee and clinical/regulatory milestone payments up to **$1.2 million**, plus low single-digit royalties on annual net sales[124](index=124&type=chunk)[125](index=125&type=chunk) [Manufacturing Operations](index=39&type=section&id=Manufacturing) Kiniksa relies heavily on third-party contract manufacturing organizations (CMOs) for late-stage and commercial production, including an exclusive supply agreement with Regeneron for ARCALYST, requiring compliance with cGMP requirements and ongoing oversight - Kiniksa relies on third parties for the manufacture of late-stage and commercial supply of **ARCALYST** and product candidates, as it does not own or operate late-stage manufacturing facilities[126](index=126&type=chunk) - A supply agreement with Regeneron grants them exclusive rights to manufacture and supply all **ARCALYST** requirements[112](index=112&type=chunk)[126](index=126&type=chunk) - Kiniksa has an internal facility for early-stage drug substance production but intends to use **CMOs** for development, scale-up, and commercialization of **mavrilimumab, vixarelimab, and KPL-404**[126](index=126&type=chunk)[127](index=127&type=chunk) - All **CMOs** must comply with current good manufacturing practice (cGMP) requirements, with Kiniksa providing technical, quality, and regulatory oversight[128](index=128&type=chunk) [Commercial Operations](index=39&type=section&id=Commercial%20Operations) Following FDA approval of ARCALYST in March 2021, Kiniksa established a specialized cardiology salesforce and supporting teams to market the product in the U.S., with a data-driven commercial strategy focused on unmet need, product positioning, patient access, and support programs - Kiniksa markets **ARCALYST** in the United States for recurrent pericarditis through its own specialty cardiology salesforce, complemented by medical affairs, payor, and patient services teams, and digital marketing[129](index=129&type=chunk) - The commercial strategy for **ARCALYST** focuses on establishing unmet need, positioning it as the product of choice, ensuring broad patient access and favorable pricing, and building robust patient support programs[67](index=67&type=chunk) - The company expects to leverage its commercial infrastructure for the launch and commercialization of other current and future product candidates, if approved[51](index=51&type=chunk)[129](index=129&type=chunk) [Competitive Landscape](index=39&type=section&id=Competition) Kiniksa operates in a highly competitive biopharmaceutical industry, facing competition from major pharmaceutical and biotechnology companies, academic institutions, and government agencies, with key competitive factors including efficacy, safety, convenience, price, and reimbursement - The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products[130](index=130&type=chunk) - Competitors include major pharmaceutical and biotechnology companies, academic institutions, and governmental agencies with greater financial resources and expertise[133](index=133&type=chunk) - Key competitive factors for product success include efficacy, safety, convenience, price, generic competition, and reimbursement availability[134](index=134&type=chunk) - For recurrent pericarditis, **ARCALYST** is the only FDA-approved therapy, but R-Pharm International has RPH-104 in Phase 2; other IL-1 inhibitors like anakinra (KINERET) and canakinumab (ILARIS) are approved for other autoinflammatory conditions[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - **Mavrilimumab** faces competition from **five other GM-CSF antagonists** in clinical development, all targeting the GM-CSF ligand itself, unlike mavrilimumab which targets the receptor[139](index=139&type=chunk) - For prurigo nodularis, there are no FDA-approved therapies, but several are in development, including **nalbuphine ER (Phase 2/3), nemolizumab (Phase 3), INCB054707 (Phase 2), and dupilumab (Phase 3)**[141](index=141&type=chunk)[142](index=142&type=chunk) - **KPL-404** competes with various **CD40-CD154 costimulatory pathway antagonists** in clinical development, distinguished by administration route (intravenous vs. potential subcutaneous for KPL-404)[143](index=143&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) [Intellectual Property](index=43&type=section&id=Intellectual%20Property) Kiniksa's success relies on protecting its intellectual property through patents, trade secrets, and know-how, including in-licensed patents for ARCALYST, mavrilimumab, and KPL-404, and owned patents for vixarelimab, with varying expiration dates and potential for extensions - Kiniksa protects its proprietary position through U.S. and foreign patent applications (composition of matter, methods of use, formulations, manufacturing), trade secrets, know-how, and technological innovation[145](index=145&type=chunk)[519](index=519&type=chunk) - **ARCALYST** has a U.S. patent covering methods of use in recurrent pericarditis that expires in **2038** (excluding adjustments) and received **seven years of U.S. marketing exclusivity in March 2021**[146](index=146&type=chunk)[147](index=147&type=chunk) - Composition of matter patents for **ARCALYST** expired in the U.S. in **2020** and are expected to expire by **2023** in other jurisdictions[146](index=146&type=chunk) - **Mavrilimumab's** composition of matter patents generally expire in **2027**, with potential for patent term adjustments or extensions[148](index=148&type=chunk) - **Vixarelimab's** issued composition of matter patents have statutory expiration dates in **2034**, with potential for patent term extension[149](index=149&type=chunk) - **KPL-404's** owned composition of matter patents expire in **2036**, and licensed patents from BIDMC expire in **2032**, both with potential for extensions or adjustments[150](index=150&type=chunk) [Government Regulation](index=47&type=section&id=Government%20Regulation) The biopharmaceutical industry is extensively regulated by government authorities in the U.S. (FDA) and internationally, covering all stages from R&D to commercialization, with rigorous testing, regulatory approvals, manufacturing compliance, and post-approval requirements, and non-compliance carrying significant penalties - Drug products are extensively regulated by government authorities in the U.S. (**FDA**) and other countries (e.g., EU, UK) across research, development, testing, manufacturing, approval, labeling, marketing, and post-approval monitoring[154](index=154&type=chunk)[155](index=155&type=chunk)[199](index=199&type=chunk) - The U.S. regulatory process for biologics involves extensive preclinical studies (GLP), IND submission, human clinical trials (GCP, IRB approval), BLA submission, FDA review, manufacturing facility inspections (cGMP), and potential advisory committee review[156](index=156&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[167](index=167&type=chunk)[172](index=172&type=chunk) - **Orphan Drug designation** provides financial incentives and **7-10 years of market exclusivity** if the product is the first approved for a rare disease, but does not shorten the approval process[179](index=179&type=chunk)[180](index=180&type=chunk)[219](index=219&type=chunk) - Expedited programs like **Fast Track and Breakthrough Therapy designations** can accelerate development and review for serious conditions with unmet medical needs, but do not guarantee faster approval or change approval standards[183](index=183&type=chunk)[184](index=184&type=chunk)[186](index=186&type=chunk)[189](index=189&type=chunk) - Post-approval requirements include ongoing monitoring, adverse event reporting, **cGMP compliance**, and restrictions on promotion (e.g., off-label use); non-compliance can lead to product withdrawal, fines, and other penalties[190](index=190&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - The **Biologics Price Competition and Innovation Act (BPCIA)** provides an abbreviated pathway for biosimilars and grants **12 years of data exclusivity** to reference biological products in the U.S[194](index=194&type=chunk)[198](index=198&type=chunk) - EU regulations for medicinal products involve non-clinical studies (GLP), clinical trials (GCP, CTR), and marketing authorization (Centralized or National procedures)[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk)[209](index=209&type=chunk) - EU market exclusivity provides **8 years of data exclusivity and 2 years of market exclusivity** for new products, extendable to **11 years** for new therapeutic indications with significant clinical benefit[215](index=215&type=chunk)[217](index=217&type=chunk) - **Brexit** has led to a distinct UK regulatory regime, with the **MHRA** as the standalone regulator, and potential divergences from EU law, increasing complexity and costs for businesses operating in both regions[229](index=229&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - Kiniksa is subject to U.S. federal and state healthcare regulatory laws, including **anti-kickback statutes, false claims acts, and transparency laws** (Physician Payments Sunshine Act), as well as similar foreign laws; violations can lead to criminal sanctions, civil penalties, and exclusion from government programs[238](index=238&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[246](index=246&type=chunk)[249](index=249&type=chunk) [Coverage, Pricing and Reimbursement](index=75&type=section&id=Coverage%2C%20Pricing%20and%20Reimbursement) Obtaining favorable coverage and adequate reimbursement from third-party payors is crucial for commercial success, as payors often limit coverage, impose strict criteria, and challenge pricing, while increasing global cost containment measures create pressure on pharmaceutical pricing and reimbursement levels - Commercial success depends on obtaining favorable coverage and adequate reimbursement from third-party payors (government, managed care plans, private health insurers)[250](index=250&type=chunk)[252](index=252&type=chunk) - Third-party payors may limit coverage to specific products on formularies, impose burdensome coverage criteria, or set inadequate reimbursement rates, impairing product utilization and revenue generation[253](index=253&type=chunk) - Increasing cost containment measures globally, including price controls, restrictions on reimbursement, and generic substitution requirements, exert significant pressure on pharmaceutical pricing[250](index=250&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - In many countries, drug pricing must be approved before marketing, and price negotiations can be lengthy, delaying commercial launch and impacting revenue[255](index=255&type=chunk) [Government Price Reporting](index=79&type=section&id=Government%20Price%20Reporting) Kiniksa must comply with extensive drug price reporting and payment obligations under U.S. governmental programs like Medicaid Drug Rebate Program (MDRP), 340B program, and VA Federal Supply Schedule (FSS), with non-compliance or inaccurate reporting leading to civil monetary penalties and other sanctions - Kiniksa participates in the **Medicaid Drug Rebate Program (MDRP)**, requiring rebates to state Medicaid programs based on reported pricing data (**AMP, Best Price**)[257](index=257&type=chunk) - Participation in MDRP also mandates participation in the **340B drug pricing program**, requiring charging covered entities no more than the 340B 'ceiling price'[258](index=258&type=chunk) - The company must also participate in the **VA Federal Supply Schedule (FSS) program**, reporting Non-Federal Average Manufacturer Price (Non-FAMP) and charging federal agencies no more than the Federal Ceiling Price[259](index=259&type=chunk) - Failure to provide timely or accurate information, or knowingly submitting false information, can result in civil monetary penalties, program termination, and other sanctions[257](index=257&type=chunk)[259](index=259&type=chunk) - Individual states are enacting drug price transparency legislation, which may limit price increases and require reporting, potentially leading to penalties for non-compliance[260](index=260&type=chunk)[261](index=261&type=chunk) [Healthcare Reform and Potential Changes to Healthcare Laws](index=81&type=section&id=Healthcare%20Reform%20and%20Potential%20Changes%20to%20Healthcare%20Laws) The U.S. healthcare industry is subject to ongoing legislative and regulatory changes, including the Affordable Care Act (ACA) and proposed measures like the Build Back Better Act, which aim to control costs and impact drug pricing and reimbursement, creating uncertainty and potentially affecting Kiniksa's business and profitability - The **Affordable Care Act (ACA)** significantly changed healthcare financing, increasing Medicaid rebates, introducing new rebate methodologies, imposing mandatory discounts for Medicare Part D beneficiaries, and establishing annual fees on manufacturers[263](index=263&type=chunk) - Ongoing judicial, executive, and Congressional challenges to the **ACA** and other legislative changes (e.g., Budget Control Act of 2011, American Taxpayer Relief Act of 2012) continue to impact Medicare payments and healthcare expenditures[264](index=264&type=chunk)[265](index=265&type=chunk) - Heightened governmental scrutiny over drug pricing has led to Congressional inquiries and proposed legislation (e.g., **Build Back Better Act**) aiming for drug price negotiation programs and rebate requirements, which could substantially impact revenue[265](index=265&type=chunk)[267](index=267&type=chunk) - Individual states are increasingly active in implementing legislation to control pharmaceutical pricing, including price/reimbursement constraints, discounts, and transparency measures[268](index=268&type=chunk) - Unpredictable changes in government regulation, whether in the U.S. or abroad, could limit payments for healthcare products and services, adversely affecting Kiniksa's business and profitability[269](index=269&type=chunk) [Data Privacy and Security Laws](index=83&type=section&id=Data%20Privacy%20and%20Security%20Laws) Kiniksa is subject to evolving and complex global data privacy and security laws, including GDPR, UK GDPR, and CCPA, requiring significant investment for compliance and carrying risks of substantial fines, government investigations, and reputational harm for non-compliance or data breaches - Kiniksa is subject to numerous state, federal, and foreign laws governing the collection, use, access, confidentiality, and security of health-related and other personal information[270](index=270&type=chunk) - Key regulations include the **European Union General Data Protection Regulation (GDPR)** and **UK GDPR**, imposing strict requirements and potential fines up to **€20 million (or £17.5 million) or 4% of annual global revenues**[270](index=270&type=chunk) - U.S. laws like the **California Consumer Privacy Act (CCPA)** and **California Privacy Rights Act (CPRA)** grant expanded consumer rights and impose additional data protection obligations, increasing compliance complexity[270](index=270&type=chunk) - Non-compliance or perceived failures can lead to negative publicity, government investigations, enforcement actions, claims by third parties, and significant civil or criminal penalties[270](index=270&type=chunk) [Human Capital](index=83&type=section&id=Human%20Capital) Kiniksa's success depends on attracting, retaining, and motivating a highly-skilled and diverse team through competitive compensation, an ethical culture valuing diversity and inclusion, and prioritizing employee health and safety, including COVID-19 workplace protocols - As of December 31, 2021, Kiniksa had approximately **215 full-time employees**, with **208 in the U.S.** and **7 internationally**[272](index=272&type=chunk) - The company's human capital management framework includes competitive pay and benefits (salaries, bonuses, equity, health insurance, 401(k) match, PTO)[273](index=273&type=chunk) - Kiniksa values diversity and inclusion, with a formal DEI statement, monthly DEI dashboard, mandatory annual trainings, and signed the MassBio Pledge[274](index=274&type=chunk) - In response to **COVID-19**, Kiniksa implemented workplace protocols, including mandatory vaccination for U.S. employees entering offices, hybrid work schedules, and enhanced safety measures (PPE, testing, contact tracing)[275](index=275&type=chunk) [Corporate Information](index=85&type=section&id=Our%20Corporate%20Information) Kiniksa Pharmaceuticals, Ltd. is a Bermuda exempted company incorporated in July 2015, with its registered office in Hamilton, Bermuda, and its website at www.kiniksa.com - **Kiniksa Pharmaceuticals, Ltd.** was incorporated in Bermuda in **July 2015**[276](index=276&type=chunk) - The registered office is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda[276](index=276&type=chunk) [Additional Information Sources](index=85&type=section&id=Where%20You%20Can%20Find%20More%20Information) Kiniksa Pharmaceuticals, Ltd. is subject to SEC reporting requirements and makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments available free of charge on its website and through the SEC's internet site - Kiniksa is subject to the information requirements of the Securities Exchange Act of 1934, as amended[277](index=277&type=chunk) - Reports (**10-K, 10-Q, 8-K**) are available on the company's website (www.kiniksa.com) and the SEC's website (http://www.sec.gov)[278](index=278&type=chunk)[279](index=279&type=chunk) [Risk Factors](index=87&type=section&id=Item%201A.%20Risk%20Factors) Kiniksa faces significant risks related to its financial position, commercialization efforts, product development, regulatory approvals, manufacturing, competition, intellectual property, general business operations, and common share ownership [Financial Position and Capital Needs Risks](index=87&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) Kiniksa is an early-commercial stage biopharmaceutical company that has incurred significant operating losses since inception and expects to continue doing so, requiring substantial additional funding, and failure to secure it on acceptable terms could force delays, reductions, or cessation of development and commercialization efforts - Kiniksa has incurred significant operating losses since its inception in 2015, with an **accumulated deficit of $675.4 million as of December 31, 2021**, and expects to incur continued losses[281](index=281&type=chunk)[282](index=282&type=chunk) - Future success is dependent on the ability to develop, obtain regulatory approval for, and successfully commercialize **ARCALYST** and other product candidates[281](index=281&type=chunk) - The company will require substantial additional funding for ongoing operations, product development, commercialization, milestone payments, and public company costs[286](index=286&type=chunk)[287](index=287&type=chunk) - Failure to obtain necessary capital on acceptable terms could force delays, reductions, or cessation of product development plans, research and development programs, or commercialization efforts[289](index=289&type=chunk)[294](index=294&type=chunk) - Raising additional capital through equity or debt financings may cause dilution to shareholders, result in increased fixed payment obligations, or impose restrictive covenants[295](index=295&type=chunk) [Commercialization Risks](index=95&type=section&id=Risks%20Related%20to%20Commercialization) Kiniksa faces significant risks in commercializing its products, including limited experience in sales, marketing, and distribution, uncertain market acceptance, inadequate reimbursement, inaccurate market estimates for rare diseases, evolving health policies, drug pricing legislation, and product liability lawsuits - Kiniksa has limited experience commercializing therapeutic products and supporting sales, marketing, and distribution, which may impair the commercial potential of **ARCALYST** and future approved candidates[300](index=300&type=chunk)[301](index=301&type=chunk) - Market acceptance by prescribers, patients, and third-party payors is not guaranteed and depends on factors like timing of introduction, disease awareness, competitive profile, safety/efficacy evidence, side effects, administration convenience, pricing, and reimbursement[306](index=306&type=chunk)[308](index=308&type=chunk) - Failure to obtain or maintain favorable coverage and adequate reimbursement from third-party payors could limit market access and revenue generation, especially for orphan or rare disease indications[311](index=311&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - Estimates of target patient populations for rare diseases may be inaccurate, leading to smaller market opportunities and adversely affecting revenue and profitability[319](index=319&type=chunk)[320](index=320&type=chunk) - Evolving health policies, legislative changes, and governmental price controls in the U.S. and internationally could reduce net prices and delay commercial launches[322](index=322&type=chunk)[323](index=323&type=chunk) - Product liability lawsuits, even if successfully defended, could result in substantial liabilities, decreased demand, reputational harm, and significant costs, potentially exceeding insurance coverage[326](index=326&type=chunk)[329](index=329&type=chunk) - Maintaining or establishing effective sales, marketing, and distribution capabilities, either internally or through third parties, is costly, time-consuming, and critical for commercial success[330](index=330&type=chunk)[331](index=331&type=chunk) - Expanding into international markets introduces additional regulatory burdens, compliance complexities, foreign currency risks, and challenges in obtaining reimbursement and intellectual property protection[332](index=332&type=chunk)[335](index=335&type=chunk) - Ongoing regulatory obligations and review, including post-marketing requirements, **cGMP compliance**, and potential REMS, can lead to significant additional expenses, restrictions, or market withdrawal if not met[339](index=339&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk)[347](index=347&type=chunk)[349](index=349&type=chunk) - Business relationships with healthcare professionals and third-party payors are subject to anti-kickback, fraud and abuse, and transparency laws, with potential for criminal sanctions, civil penalties, and exclusion from government programs for non-compliance[352](index=352&type=chunk)[353](index=353&type=chunk)[354](index=354&type=chunk)[358](index=358&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) [Product Development Risks](index=115&type=section&id=Risks%20Related%20to%20Product%20Development) Clinical drug development is a lengthy, expensive, and unpredictable process, with Kiniksa heavily relying on the success of its product candidates, and delays or failures in clinical trials, inability to demonstrate safety and efficacy, or issues with patient enrollment could significantly harm the business - Kiniksa depends heavily on the success of its product candidates, which are in various stages of clinical development, and may not be able to demonstrate their safety or efficacy[364](index=364&type=chunk)[365](index=365&type=chunk) - Clinical drug development is a lengthy, expensive, and uncertain process, with potential for substantial delays or failures to demonstrate safety and efficacy to regulatory authorities[370](index=370&type=chunk) - Delays in clinical trials can arise from regulatory feedback, difficulties in site activation or patient enrollment, protocol amendments, CRO performance issues, adverse events, or changes in regulatory requirements[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[378](index=378&type=chunk) - The **COVID-19 pandemic** has caused and could continue to cause significant disruptions to preclinical studies and clinical trials, including impacting manufacturing, patient enrollment, site monitoring, and regulatory reviews[389](index=389&type=chunk)[390](index=390&type=chunk)[392](index=392&type=chunk) - Enrolling patients in clinical trials can be difficult due to limited patient populations for rare diseases, specific enrollment criteria, and competition from other studies, potentially leading to delays and increased costs[393](index=393&type=chunk)[394](index=394&type=chunk)[396](index=396&type=chunk)[397](index=397&type=chunk) - Products and product candidates may cause undesirable side effects or safety risks, which could delay or prevent regulatory approval, limit commercial labels, or lead to withdrawal of approval[398](index=398&type=chunk)[399](index=399&type=chunk)[401](index=401&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - Interim, preliminary, and 'top-line' data from clinical trials are subject to change as more data become available or after audit and verification, potentially differing materially from final results and impacting business prospects[407](index=407&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk)[411](index=411&type=chunk) [Marketing Approval and Regulatory Risks](index=136&type=section&id=Risks%20Related%20to%20Marketing%20Approval%20and%20Regulatory%20Matters) Obtaining marketing approval for product candidates is a lengthy, expensive, and unpredictable process with no guarantee of success, as regulatory authorities have broad discretion and biosimilar competition for biologics like ARCALYST is a risk, while expedited designations do not guarantee faster approval - Regulatory approval processes are lengthy, time-consuming, and inherently unpredictable, with no guarantee of approval for current or future product candidates[412](index=412&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk) - Regulatory authorities have substantial discretion and may disagree with trial designs, require additional preclinical or clinical trials, or approve products for fewer indications or limited patient populations[415](index=415&type=chunk)[416](index=416&type=chunk)[418](index=418&type=chunk) - **ARCALYST's 12-year biosimilar exclusivity period for CAPS has lapsed**, and while it received **7 years of Orphan Drug exclusivity for recurrent pericarditis**, this may not protect against different drugs for the same condition or if designation criteria are no longer met[422](index=422&type=chunk)[423](index=423&type=chunk)[429](index=429&type=chunk) - Seeking **Breakthrough Therapy, Fast Track, or PRIME designations** does not guarantee a faster development, review, or approval process, nor does it increase the likelihood of marketing approval[431](index=431&type=chunk)[432](index=432&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk) - Kiniksa has limited experience obtaining marketing approvals, which may lead to more time and expense than anticipated for future product candidates[439](index=439&type=chunk) - Disruptions at regulatory agencies (e.g., **FDA, EMA**) due to funding shortages, global health concerns (like **COVID-19**), or staff changes can hinder their ability to review and approve products in a timely manner[441](index=441&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) [Manufacturing and Third-Party Reliance Risks](index=148&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Our%20Reliance%20on%20Third%20Parties) Kiniksa relies heavily on third-party contract manufacturing organizations (CMOs) for commercial and clinical supply, increasing the risk of insufficient quantities, unacceptable costs, or quality issues, with Regeneron as the sole manufacturer for ARCALYST, posing supply chain risks - Kiniksa relies on **third-party CMOs** for manufacturing commercial supply of **ARCALYST** and clinical supply of product candidates, increasing risks of insufficient quantities, unacceptable costs, or quality issues[444](index=444&type=chunk)[445](index=445&type=chunk)[447](index=447&type=chunk) - Regeneron is the sole manufacturer of **ARCALYST**, and any manufacturing or supply chain issues (e.g., quality failures, capacity limitations) could prevent Kiniksa from meeting patient demand or require product recalls[448](index=448&type=chunk)[449](index=449&type=chunk) - Manufacturing is highly regulated and complex; minor deviations, contamination, equipment malfunctions, or raw material shortages can lead to product loss, supply disruptions, increased costs, and regulatory sanctions[461](index=461&type=chunk)[462](index=462&type=chunk)[464](index=464&type=chunk) - Kiniksa relies on **single-source suppliers** for drug substance and drug product for **ARCALYST, mavrilimumab, and vixarelimab**, and a limited number of sources for **KPL-404**, making it vulnerable to supply interruptions[471](index=471&type=chunk) - The company relies on third parties (**CROs**, investigators) to conduct preclinical studies and clinical trials, exposing it to risks of non-performance, non-compliance with GCPs, data integrity issues, and delays[479](index=479&type=chunk)[480](index=480&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk) - Sharing trade secrets with third-party collaborators and manufacturers increases the risk of competitors discovering them or misappropriation, harming Kiniksa's competitive position[486](index=486&type=chunk)[489](index=489&type=chunk) [Competition, Strategy, and Growth Management Risks](index=164&type=section&id=Risks%20Related%20to%20Competition%2C%20Executing%20our%20Strategy%20and%20Managing%20Growth) Kiniksa faces intense competition from well-resourced pharmaceutical and biotechnology companies, and its growth strategy, including identifying and acquiring new product candidates or businesses, may not be successful or yield anticipated benefits, potentially diverting resources and causing integration difficulties - Kiniksa faces substantial competition from major pharmaceutical and biotechnology companies with greater financial resources and expertise, potentially leading to others commercializing drugs before or more successfully[490](index=490&type=chunk)[498](index=498&type=chunk)[499](index=499&type=chunk) - The company's growth strategy, including identifying, discovering, in-licensing, or acquiring additional product candidates or technologies, may not be successful or deliver anticipated results[500](index=500&type=chunk)[501](index=501&type=chunk)[503](index=503&type=chunk)[504](index=504&type=chunk) - Acquisitions or business combinations may involve risks such as difficulties in integrating cultures and operations, increased costs, exposure to liabilities, and potential dilution of existing shareholders[506](index=506&type=chunk) - Collaborations, licensing, or other strategic transactions may not be successful, depend heavily on third-party efforts, and could lead to disputes over intellectual property or termination, requiring additional capital[507](index=507&type=chunk)[508](index=508&type=chunk)[511](index=511&type=chunk)[512](index=512&type=chunk) - Managing company development and expansion, including improving managerial/operational systems, expanding facilities, and recruiting qualified personnel, poses difficulties that could disrupt operations and divert management attention[513](index=513&type=chunk)[515](index=515&type=chunk)[516](index=516&type=chunk) [Intellectual Property Risks](index=172&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Kiniksa's commercial success depends on its ability to protect proprietary technology through patents, trade secrets, and licenses, but challenges include the uncertainty of patent issuance and scope, potential for third-party infringement claims, high litigation costs, limited patent terms, and changes in patent law - Inability to adequately protect proprietary technology or obtain/maintain broad patent protection could allow competitors to commercialize similar products, materially impairing Kiniksa's business[518](index=518&type=chunk)[519](index=519&type=chunk)[522](index=522&type=chunk)[524](index=524&type=chunk) - Patent terms are limited, and extensions are not guaranteed; delays in clinical trials could reduce the period of patent protection, allowing competitors to enter the market sooner[525](index=525&type=chunk)[526](index=526&type=chunk)[528](index=528&type=chunk)[539](index=539&type=chunk) - Breaching license agreements could result in losing rights to develop and commercialize related products, and existing agreements contain limitations that may affect future development[540](index=540&type=chunk)[541](index=541&type=chunk)[544](index=544&type=chunk)[546](index=546&type=chunk) - Third parties may initiate legal proceedings alleging infringement of their intellectual property rights, leading to uncertain outcomes, substantial costs, and potential cessation of development or commercialization[547](index=547&type=chunk)[548](index=548&type=chunk)[549](index=549&type=chunk)[550](index=550&type=chunk)[552](index=552&type=chunk)[553](index=553&type=chunk) - Intellectual property litigation is expensive, time-consuming, and diverts personnel, potentially harming the business even if successful[558](index=558&type=chunk) - Failure to comply with procedural requirements for obtaining and maintaining patents (e.g., fee payments, document submission) could lead to abandonment or lapse of patent rights[561](index=561&type=chunk) - Enforcing intellectual property rights globally is challenging and expensive, as patent laws vary by country, and some jurisdictions offer less protection, making it difficult to prevent infringement[562](index=562&type=chunk)[563](index=563&type=chunk) - Changes to patent law (e.g., **Leahy-Smith America Invents Act**) can diminish the value of patents, increase uncertainties, and make it easier for competitors to challenge validity[565](index=565&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk) - Inability to protect the confidentiality of trade secrets and know-how could lead to unauthorized disclosure, use, or independent discovery by competitors, harming Kiniksa's competitive position[569](index=569&type=chunk)[571](index=571&type=chunk)[572](index=572&type=chunk) - Failure to adequately protect trademarks and trade names could impede brand recognition and competitive effectiveness[574](index=574&type=chunk)[575](index=575&type=chunk) [General Business Risks](index=194&type=section&id=General%20Risk%20Factors) Kiniksa faces general business risks including the significant adverse impact of the COVID-19 pandemic on operations, supply chains, and commercialization efforts, global economic downturns, political instability, evolving health policies, cyber-attacks, data breaches, dependence on key personnel, and potential employee misconduct - The **COVID-19 pandemic** has caused and could continue to cause significant disruptions to Kiniksa's business, operations, manufacturers, CROs, and regulatory authorities, impacting commercialization, preclinical studies, and clinical trials[577](index=577&type=chunk)[578](index=578&type=chunk)[582](index=582&type=chunk)[584](index=584&type=chunk)[585](index=585&type=chunk) - A severe or prolonged economic downturn due to **COVID-19** or other factors could disrupt financial markets and adversely impact the ability to raise additional capital[587](index=587&type=chunk) - **Brexit** has created political and economic uncertainty, leading to a distinct UK regulatory regime and potential divergences from EU law, increasing costs and complexity for clinical trials and marketing authorizations[588](index=588&type=chunk)[589](index=589&type=chunk)[590](index=590&type=chunk)[593](index=593&type=chunk)[595](index=595&type=chunk) - Failure to comply with government pricing programs (**Medicaid Drug Rebate Program, 340B, VA/FSS**) can result in penalties, sanctions, and fines, materially affecting business and financial condition[596](index=596&type=chunk)[597](index=597&type=chunk)[599](index=599&type=chunk)[600](index=600&type=chunk)[601](index=601&type=chunk)[602](index=602&type=chunk) - Enacted and future healthcare legislation (e.g., **ACA, Build Back Better Act** proposals) could significantly change drug pricing, reimbursement, and market access, adversely impacting business and results of operations[603](index=603&type=chunk)[604](index=604&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk)[608](index=608&type=chunk)[609](index=609&type=chunk)[610](index=610&type=chunk)[613](index=613&type=chunk) - Unfavorable global economic or operational conditions, including conflicting laws, trade restrictions, and foreign currency fluctuations, could adversely affect business and financial results[614](index=614&type=chunk)[615](index=615&type=chunk)[617](index=617&type=chunk) - Internal technology systems and those of third parties are vulnerable to cyber-attacks and security breaches, risking material disruption, data loss, and financial impact, potentially not fully covered by insurance[618](index=618&type=chunk)[619](index=619&type=chunk) - Actual or perceived failures to comply with evolving data protection, privacy, and security laws (e.g., **GDPR, CCPA**) could lead to negative publicity, government investigations, substantial fines, and damage to reputation[620](index=620&type=chunk)[623](index=623&type=chunk)[624](index=624&type=chunk)[625](index=625

Financial Data and Key Metrics Changes - Kiniksa Pharmaceuticals reported net revenue of $18.7 million for Q4 2021, representing a 55% growth compared to Q3 2021, with total net revenue for 2021 at $38.5 million [8][11] - The overall net loss for the company was approximately $36.3 million for Q4 and $157.9 million for the full year 2021 [39] - The company expects 2022 Arcalyst net revenue to be between $115 million and $130 million [12][40] Business Line Data and Key Metrics Changes - The primary driver of revenue growth was the demand for Arcalyst for recurrent pericarditis, with over 300 prescribers by the end of Q4 2021 [11][14] - The collaboration for Arcalyst generated a profit of approximately $1.7 million in Q4 2021 [39] Market Data and Key Metrics Changes - The approval rates for payer cases grew to 95% in Q4 2021, indicating strong market access [15][63] - The demographics of patients receiving Arcalyst treatments show a significant portion are not actively in flare, with 60% of patients prescribed Arcalyst being in between flares [20][61] Company Strategy and Development Direction - Kiniksa announced a strategic collaboration with Huadong Medicine to develop and commercialize Arcalyst and mavrilimumab in the Asia-Pacific region, receiving $22 million upfront and potential milestone payments of up to $640 million [26][27] - The company is focused on building value across its clinical stage product candidates, including vixarelimab, KPL-404, and mavrilimumab, with plans to leverage existing commercial infrastructure for future developments [10][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory of Arcalyst and the potential of their clinical pipeline, emphasizing the importance of the recent collaboration in accelerating development [42][43] - The company is well-capitalized with cash reserves expected to fund operations into 2024, allowing for continued investment in growth initiatives [40][44] Other Important Information - The company highlighted the importance of disease education and awareness initiatives to support the adoption of Arcalyst among patients and healthcare professionals [21][23] - Kiniksa is exploring the potential of KPL-404 in xenotransplantation, indicating interest in expanding its therapeutic applications [58] Q&A Session Summary Question: Is there any seasonality with payer or gross to net dynamics for Q1 2022? - Management acknowledged typical dynamics in Q1, including insurance plan changes and copay resets, which may present headwinds [46] Question: Can you discuss the positioning of KPL-404 in rheumatoid arthritis? - The Phase 2 program is designed to establish the ability of KPL-404 to be administered subcutaneously and demonstrate early efficacy signals [49] Question: What is the profile of the 60% of patients not in flares when prescribed Arcalyst? - Management indicated that these patients are likely within the target population, with many having two or more recurrences [61][62] Question: Why was a Phase 3 trial of mavrilimumab for GCA not initiated? - The company is focusing on cardiovascular diseases where GM-CSF mechanisms are implicated, leveraging existing commercial infrastructure [70][72] Question: Can you break out sales between RP and CAPS for rilonacept? - Sales for CAPS and DIRA remain stable, historically around $2.5 million to $3 million per quarter [75] Question: What are the expectations for the next data readout for vixarelimab? - The Phase 2b program aims to define a minimum efficacious dose, with expectations for consistent outcomes compared to previous trials [78] Question: Will there be readouts from different dose cohorts for KPL-404 this year? - The company has not disclosed specific timelines for data from the ongoing studies [81]

| --- | --- | --- | --- | --- | |------------------|-------|-------|----------------------------|------------------------------| | | | | | | | | | | | Fourth Quarter and Full-Year | | | | | 2021 Financial Results and | | | | | | | | | Corporate Update | | | | | FEBRUARY 22, 2022 Agenda | --- | --- | |---------------------------------------------------------------------------|--------------------------------------| | Introduction \| Sanj K. Patel, Chief Executive Officer | | | ARCALYST® Commercial Execution ...

JP Morgan Conference Presentation JANUARY 2022 Forward Looking Statements 2 This presentation (together with any other statements or information that we may make in connection herewith) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Kiniksa Pharmaceuticals, Ltd. (and its consolidated subsidiaries, collectively, unless context otherwise requires, "Kiniksa," "we," "us" or "our"). In some cases, you can identify forward looking sta ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38492 Kiniksa Pharmaceuticals, Ltd. (Exact Name of Registrant as Specified in Its Charter) (State or Othe ...

Corporate Presentation NOVEMBER 2021 Forward Looking Statements 2 This presentation (together with any other statements or information that we may make in connection herewith) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Kiniksa Pharmaceuticals, Ltd. (and its consolidated subsidiaries, collectively, unless context otherwise requires, "Kiniksa," "we," "us" or "our"). In some cases, you can identify forward looking statements by ...

Kiniksa Pharmaceuticals Ltd. (NASDAQ:KNSA) Q3 2021 Earnings Conference Call November 1, 2021 8:30 AM ET Company Participants Sanj Patel - Chairman, Chief Executive Officer Ross Moat - Group Vice President, General Manager Eben Tessari - Chief Business Officer Mark Ragosa - Chief Financial Officer John Paolini - Chief Medical Officer Rachel Frank - Associate Director, Investor Relations Conference Call Participants Anupam Rama - JP Morgan Paul Choi - Goldman Sachs Jason - Bank of America David Nierengarten - ...

Cantor Conference Presentation SEPTEMBER 2021 Forward Looking Statements 2 This presentation (together with any other statements or information that we may make in connection herewith) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Kiniksa Pharmaceuticals, Ltd. (and its consolidated subsidiaries, collectively, unless context otherwise requires, "Kiniksa," "we," "us" or "our"). In some cases, you can identify forward looking stat ...