Summary of Kiniksa Pharmaceuticals International (KNSA) Conference Call Company Overview - **Company**: Kiniksa Pharmaceuticals International (KNSA) - **Key Product**: ARCALYST, a treatment for recurrent pericarditis - **Upcoming Product**: KPL-387, a potential monthly liquid formulation subcutaneous injection Core Industry Insights - **Market Penetration**: Kiniksa has achieved approximately 15% penetration into the recurrent pericarditis patient population, which consists of around 14,000 patients suffering from two or more recurrences annually [3][7] - **Sales Performance**: In Q2, Kiniksa reported net revenue of $156.8 million, reflecting a 52% year-over-year growth. The revenue guidance for the full year 2025 was raised from $590-$605 million to $625-$640 million [6][11] - **Patient Population**: The total patient population for recurrent pericarditis is estimated at 40,000, including those with first recurrences [8] Key Product Insights ARCALYST - **Compliance and Approval Rates**: Compliance for ARCALYST is over 85%, and payer approval rates exceed 90% [3][15] - **Growth Strategy**: Kiniksa is focusing on expanding its sales force and enhancing disease education to drive growth [3][4] - **Challenges**: The company faces challenges in increasing penetration due to the dispersed nature of the patient population and historical reliance on corticosteroids for treatment [12][18] KPL-387 - **Development Status**: KPL-387 is in phase two/three studies, with data expected in the second half of 2026. The product aims to provide a longer-acting treatment option [20][28] - **Market Research**: Recent market research indicates that 75% of patients would prefer KPL-387 if it meets its target profile, and 92% of healthcare professionals are likely to prescribe it [25][26] - **Transition Strategy**: Kiniksa plans to provide data to guide physicians on transitioning patients from ARCALYST to KPL-387 if approved [39] Competitive Landscape - **Market Leadership**: Kiniksa aims to maintain its leadership position in the recurrent pericarditis market despite anticipated competition [4] - **Treatment Paradigm Shift**: There is a growing recognition of the need to prioritize interleukin-1 inhibitors over corticosteroids for treating recurrent pericarditis, which aligns with Kiniksa's product offerings [13][17] Financial Performance - **Profitability**: Kiniksa has achieved cash flow breakeven and is committed to remaining cash flow positive while exploring business development opportunities [49][52] - **Investment Strategy**: The company emphasizes value creation and is open to partnerships for commercialization in regions where building infrastructure may not be feasible [53] Additional Considerations - **Global Market Opportunities**: Kiniksa is exploring opportunities outside the U.S. and considering potential partnerships for global commercialization [44][53] - **Long-term Vision**: The company is focused on innovation and maintaining leadership in therapeutic areas related to IL-1 mediated diseases [47][52] This summary encapsulates the key points discussed during the conference call, highlighting Kiniksa Pharmaceuticals' strategic direction, product performance, and market opportunities.

Market Overview - The U.S. stock market is expected to remain volatile due to uncertainty following a federal appeals court ruling that a significant portion of President Trump's worldwide tariffs is unlawful [1][7] Investment Strategy - To mitigate risks in the uncertain market, investors are advised to consider low-beta stocks such as Post Holdings, Inc. (POST), Tencent Music Entertainment Group (TME), and Kiniksa Pharmaceuticals International, plc (KNSA) [1][7] Company Insights Post Holdings - Post Holdings is restructuring its portfolio, recently announcing the divestment of its 8th Avenue pasta business for $375 million in cash, while retaining its nut butter, granola, and fruit & nut businesses for better alignment with operations and potential cost synergies [6][7] Tencent Music Entertainment - Tencent Music is poised for growth through its expanding music subscription service, boasting over 124 million paying subscribers and 15 million Super VIP members, alongside a booming advertising business supported by new ad formats and key shopping events [7][8] Kiniksa Pharmaceuticals - Kiniksa Pharmaceuticals is a leading player in treating recurrent pericarditis with its drug ARCALYST, which is currently the only treatment option available for this condition [9][7]

Core Viewpoint - Kiniksa Pharmaceuticals International, plc (KNSA) has seen a 15% increase in share price over the past four weeks, closing at $33.38, with analysts suggesting a potential upside of 26.7% based on a mean price target of $42.29 [1][12]. Price Targets and Analyst Consensus - The average price target for KNSA is derived from seven short-term estimates, ranging from a low of $32.00 to a high of $55.00, with a standard deviation of $8.96, indicating variability in analyst predictions [2]. - The lowest estimate suggests a decline of 4.1%, while the highest indicates a potential upside of 64.8% [2]. - A low standard deviation signifies a strong agreement among analysts regarding the stock's price movement direction [9]. Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding KNSA's earnings prospects, as evidenced by a positive trend in earnings estimate revisions [11]. - The Zacks Consensus Estimate for the current year has increased by 39.2% over the past month, with three estimates revised upward and no negative revisions [12]. - KNSA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13]. Price Movement Implications - While consensus price targets may not reliably predict the extent of KNSA's gains, the implied direction of price movement appears to be a useful guide for investors [14].

Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming fundamental factors is essential to maintain momentum in stocks [1][2]. Group 1: Trend Analysis - Timing entries into a trend significantly impacts investment success, as trends can reverse unexpectedly, leading to potential losses [1][2]. - A predefined screening strategy, "Recent Price Strength," helps identify stocks with strong fundamentals that can sustain their upward trends [3]. Group 2: Company Spotlight - Kiniksa Pharmaceuticals International, plc (KNSA) - KNSA has shown a solid price increase of 24.1% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - The stock has also increased by 15% in the last four weeks, suggesting that the upward trend is still intact [5]. - KNSA is trading at 96.3% of its 52-week high-low range, indicating a potential breakout [5]. Group 3: Fundamental Strength - KNSA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, underscoring the effectiveness of this ranking system [7]. Group 4: Investment Opportunities - In addition to KNSA, there are other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities [8]. - The Zacks Premium Screens offer over 45 strategically created options to help investors find winning stock picks based on their personal investing styles [8].

Market Overview - U.S. stock markets have continued to rise in early August despite trade uncertainties and the Federal Reserve's indecision regarding interest rate cuts in 2025 [1][2] - The outcome of the Fed's annual Jackson Hole Symposium, scheduled for August 21-23, is anticipated to be significant [2] Stock Performance - Few stocks have demonstrated price strength, with a focus on those recently experiencing a bull run [3] - Five highlighted stocks include Modine Manufacturing Co. (MOD), Tutor Perini Corp. (TPC), Kiniksa Pharmaceuticals International plc (KNSA), Life360 Inc. (LIF), and Euroseas Ltd. (ESEA) [3] Stock Screening Criteria - Stocks must show a percentage change in price greater than zero over the last four weeks and greater than 10% over the last twelve weeks [5] - Zacks Rank 1 (Strong Buy) and an average broker rating of 1 are also key indicators of potential performance [6] - Stocks must be trading at a minimum price of $5 and be near their 52-week highs, with a current price/52-week high-low range greater than 85% [7] Individual Stock Highlights - **Modine Manufacturing (MOD)**: Stock price increased by 46.1% in four weeks, with an expected earnings growth rate of 14.3% for the current year [8][10] - **Tutor Perini (TPC)**: Stock price surged 14.3% in four weeks, with an expected earnings growth rate exceeding 100% for the current year [14] - **Kiniksa Pharmaceuticals (KNSA)**: Stock price climbed 13.7% in four weeks, with expected earnings growth over 100% for the current year [15] - **Life360 (LIF)**: Stock price advanced 8.3% in four weeks, with expected earnings growth over 100% for the current year [17] - **Euroseas (ESEA)**: Stock price gained 2.8% in four weeks, with an expected earnings growth rate of 4% for the current year [19]

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Kiniksa Pharmaceuticals International, plc currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period. You can see the current list of Zacks #1 Rank Stocks here >>> Set to Beat the Market? Moment ...

Core Viewpoint - Kiniksa Pharmaceuticals International, plc (KNSA) is experiencing solid improvements in earnings estimates, which may lead to continued short-term price momentum and a favorable investment opportunity [1][10]. Estimate Revisions - The rising trend in earnings estimate revisions reflects growing analyst optimism regarding Kiniksa's earnings prospects, which is expected to positively influence its stock price [2]. - The current-quarter earnings estimate of $0.29 per share indicates a significant increase of +261.1% compared to the previous year, with a 36.51% rise in the Zacks Consensus Estimate over the last 30 days due to two upward revisions [5][6]. - For the full year, Kiniksa is projected to earn $0.94 per share, representing a +256.7% change from the prior year, with a 26.58% increase in the consensus estimate over the past month [6][7]. Zacks Rank - Kiniksa currently holds a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance based on favorable estimate revisions [8]. - Historically, stocks with a Zacks Rank 1 have generated an average annual return of +25% since 2008, suggesting a robust track record of success [3][9]. Stock Performance - The stock has gained 8.5% over the past four weeks, driven by solid estimate revisions and positive earnings growth prospects, making it a candidate for portfolio consideration [10].

Group 1 - Kiniksa Pharmaceuticals International, plc (KNSA) closed at $30.26, with an 8.5% gain over the past four weeks, and a mean price target of $41.14 suggests a 36% upside potential [1] - The mean estimate includes seven short-term price targets with a standard deviation of $7.45, indicating variability among analysts; the lowest estimate is $32.00 (5.8% increase), while the highest is $54.00 (78.5% increase) [2] - Analysts show strong agreement in revising earnings estimates higher, with a 26.6% increase in the Zacks Consensus Estimate for the current year, indicating potential upside for KNSA [11][12] Group 2 - KNSA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential for near-term upside [13] - The clustering of price targets with a low standard deviation indicates a high degree of agreement among analysts regarding the stock's price movement direction [9] - While price targets should not be the sole basis for investment decisions, they can provide a useful starting point for further research into the stock's fundamental drivers [10][14]

Core Viewpoint - The sustainability of a stock trend is crucial for successful short-term investing, and various factors must be considered to maintain momentum in stock prices [1][2]. Group 1: Stock Performance - Kiniksa Pharmaceuticals International, plc (KNSA) has shown a solid price increase of 13.3% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - The stock has also increased by 8.5% in the last four weeks, suggesting that the upward trend is still intact [5]. - KNSA is currently trading at 88.2% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - KNSA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting strong optimism from the brokerage community regarding its near-term price performance [7]. - The Zacks Rank system has a proven track record, with Rank 1 stocks generating an average annual return of +25% since 1988 [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like KNSA that have the fundamental strength to maintain their upward trend [3]. - There are additional stocks that meet the criteria of the "Recent Price Strength" screen, providing further investment opportunities [8]. - The effectiveness of stock-picking strategies can be backtested using the Zacks Research Wizard, which includes successful stock-picking strategies [9].

[PART I — FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited financials show total assets grew to **$661.2 million**, with H1 2025 net income of **$26.4 million** from ARCALYST revenue [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$661.2 million** by June 30, 2025, with shareholders' equity at **$495.0 million**, driven by cash and inventory Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $192,037 | $183,581 | | Inventory | $48,181 | $26,364 | | Total current assets | $420,311 | $331,799 | | Total assets | $661,150 | $580,553 | | **Liabilities & Equity** | | | | Total current liabilities | $117,827 | $100,621 | | Total liabilities | $166,143 | $142,117 | | Total shareholders' equity | $495,007 | $438,436 | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) H1 2025 saw net income of **$26.4 million**, a turnaround from loss, with total revenue at **$294.6 million** from ARCALYST sales Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $156,797 | $108,631 | $294,582 | $188,489 | | Income (Loss) from Operations | $20,160 | $(117) | $33,432 | $(16,659) | | Net Income (Loss) | $17,832 | $(3,908) | $26,371 | $(21,612) | | Diluted EPS | $0.23 | $(0.06) | $0.34 | $(0.31) | - The shift from a net loss to net income was primarily driven by a **52% YoY increase** in net product revenue for Q2 and a **61% YoY increase** for H1 2025[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow improved to **$50.4 million** for H1 2025, increasing cash and cash equivalents by **$8.5 million** overall Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,414 | $9,155 | | Net cash used in investing activities | $(55,424) | $(21,273) | | Net cash provided by financing activities | $13,466 | $3,435 | | **Net increase (decrease) in cash** | **$8,456** | **$(8,683)** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, UK redomiciliation, ARCALYST growth, mavrilimumab termination, and manufacturing commitments - The company completed its redomiciliation from Bermuda to the United Kingdom in June 2024, becoming Kiniksa Pharmaceuticals International, plc[29](index=29&type=chunk) - As of June 30, 2025, the company had cash, cash equivalents, and short-term investments of **$307.8 million** and believes these funds are sufficient for at least the next twelve months of operations[35](index=35&type=chunk) - The company has total manufacturing purchase commitments of **$161.6 million**, with **$136.7 million** related to the ARCALYST technology transfer and supply agreement with Samsung[126](index=126&type=chunk)[202](index=202&type=chunk) - In April 2025, the company and Huadong mutually terminated their collaboration agreement for mavrilimumab[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong H1 2025 performance to ARCALYST success, with net product revenue up **61%** to **$294.6 million**, yielding **$26.4 million** net income - The company's primary commercial product is ARCALYST®, an IL-1α and IL-1β cytokine trap approved for recurrent pericarditis and other rare diseases. The pipeline is focused on cardiovascular indications, including KPL-387 for recurrent pericarditis[137](index=137&type=chunk)[138](index=138&type=chunk) - Development of abiprubart was discontinued in February 2025, and the company is exploring strategic alternatives for the asset. The license agreement for mavrilimumab was also terminated[140](index=140&type=chunk)[142](index=142&type=chunk) Financial Results Comparison (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Product revenue, net | $294.6 | $182.3 | +$112.3 | | Total revenue | $294.6 | $188.5 | +$106.1 | | R&D Expenses | $38.1 | $50.4 | -$12.3 | | SG&A Expenses | $90.4 | $81.1 | +$9.3 | | Net Income (Loss) | $26.4 | $(21.6) | +$48.0 | - The company believes its cash, cash equivalents, and short-term investments of **$307.8 million** as of June 30, 2025, are sufficient to fund operations and capital expenditures for at least the next 12 months[145](index=145&type=chunk)[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposure primarily relates to interest rate sensitivities on short-term investments, with no material changes reported - The company's primary market risk exposure is interest rate sensitivity on its short-term investments. No material changes were reported for the quarter[218](index=218&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[220](index=220&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[221](index=221&type=chunk) [PART II — OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material legal proceedings and has no litigation contingency reserves - The company is not currently a party to any material legal proceedings[224](index=224&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Key risks include ARCALYST commercialization, pricing, clinical development, third-party manufacturing, and IP protection [Risks Related to Commercialization](index=44&type=section&id=Risks%20Related%20to%20Commercialization) ARCALYST commercial success faces risks in revenue growth, specialty pharmacy reliance, and favorable third-party payor reimbursement - Continued commercialization of ARCALYST is subject to risks including manufacturing sufficiency, prescriber adoption, and competition, which could impair revenue generation[227](index=227&type=chunk)[228](index=228&type=chunk) - Successful commercialization depends on third-party payors providing favorable coverage and reimbursement, which is subject to cost-control efforts and potential restrictions[234](index=234&type=chunk)[235](index=235&type=chunk) - The market opportunity for ARCALYST and other product candidates may be smaller than estimated, which could adversely affect revenue and profitability if the addressable patient population is lower than projected[249](index=249&type=chunk)[250](index=250&type=chunk) [Risks Related to Product Development](index=58&type=section&id=Risks%20Related%20to%20Product%20Development) Product development faces risks: lengthy, expensive clinical trials, uncertain outcomes, enrollment challenges, and potential undesirable side effects - Clinical drug development is a long, costly process with uncertain outcomes. The company may face substantial delays or fail to demonstrate the required safety and efficacy for its product candidates[288](index=288&type=chunk) - Enrolling a sufficient number of patients in clinical trials is challenging, particularly for rare diseases, and difficulties in enrollment could delay or prevent trial completion[303](index=303&type=chunk) - Undesirable side effects or safety risks from product candidates could delay or prevent regulatory approval, lead to a more restrictive label, or result in market withdrawal after approval[306](index=306&type=chunk) [Risks Related to Manufacturing and Our Reliance on Third Parties](index=68&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Our%20Reliance%20on%20Third%20Parties) Reliance on third-party CDMOs creates supply, cost, and quality risks, especially with the complex ARCALYST technology transfer to Samsung - The company relies on third-party CDMOs for manufacturing, which increases the risk of insufficient quantities, unacceptable costs or quality, and potential delays to development and commercialization[347](index=347&type=chunk) - A technology transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung is underway and is subject to significant risks, including potential delays, comparability issues, and the need for FDA approval[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk) - The company depends on single-source suppliers for critical components of ARCALYST and its pipeline candidates. The loss of any of these suppliers could significantly harm the business[375](index=375&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=107&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered sales of equity, use of proceeds, or issuer purchases of equity securities were reported - None reported[575](index=575&type=chunk) [Defaults Upon Senior Securities](index=107&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None reported[576](index=576&type=chunk) [Mine Safety Disclosures](index=107&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None reported[577](index=577&type=chunk) [Other Information](index=107&type=section&id=Item%205.%20Other%20Information) The company disclosed the adoption of Rule 10b5-1 trading arrangements by two officers during Q2 2025 Adoption of Trading Arrangements by Officers | Name | Title | Action | Effective Date | Maximum Shares in Plan | | :--- | :--- | :--- | :--- | :--- | | Sanj K. Patel | CEO and Chairman | Adoption | May 7, 2025 | 355,590 | | Michael R. Megna | SVP, Finance and CAO | Adoption | May 24, 2025 | 36,145 | [Exhibits](index=108&type=section&id=Item%206.%20Exhibits) Exhibits filed with Form 10-Q include incentive plan documents, a consulting agreement, and officer certifications - The report includes exhibits such as the KPL-387 Long-Term Incentive Plan, related award agreements, a consulting agreement, and certifications by the CEO and CFO[580](index=580&type=chunk)