Core Viewpoint - Kodiak Sciences Inc. has experienced a significant decline in share price, losing approximately 26.2% over the past month, underperforming the S&P 500 [1] Financial Performance - For Q1 2024, Kodiak reported a loss per share of 82 cents, which was narrower than the Zacks Consensus Estimate of a loss of $1.09, and an improvement from a loss of $1.35 per share in the same quarter last year [10] - Research and development expenses were reported at $29.9 million, reflecting a 47% decrease year over year, primarily due to the conclusion of some clinical studies on its lead pipeline candidate, tarcocimab [3] - General and administrative expenses amounted to $16.1 million, down 11% year over year, mainly due to lower non-cash stock-based compensation expenses [11] Cash Position - As of March 31, 2024, Kodiak had cash, cash equivalents, and marketable securities totaling $245.9 million, a decrease from $285.5 million as of December 31, 2023. The company believes this cash balance is sufficient to support its operations into 2026 [4] Market Outlook - Estimates for Kodiak Sciences have trended upward over the past month, with a consensus estimate shift of 15.48% [5][12] - The company holds a Zacks Rank 3 (Hold), indicating an expectation of an in-line return in the coming months [17] Industry Comparison - Kodiak Sciences operates within the Zacks Medical - Biomedical and Genetics industry, where another player, Halozyme Therapeutics, has seen a 9.3% gain over the past month [7] - Halozyme Therapeutics reported revenues of $195.88 million for the last quarter, representing a year-over-year increase of 20.8% [18]

Core Insights - Kodiak Sciences Inc. is focused on developing transformative therapeutics for retinal diseases and will present at several upcoming investor conferences [1][2][7] - The company is advancing a clinical pipeline that includes three product candidates, with two in late-stage development [3][4][5][6] Company Overview - Kodiak Sciences is a biopharmaceutical company dedicated to treating retinal diseases using its proprietary ABC Platform™, which integrates protein-based and chemistry-based therapies [3] - The company aims to address leading causes of blindness globally through innovative drug design and development [3] Clinical Pipeline - Kodiak's lead product, tarcocimab, is an anti-VEGF antibody biopolymer conjugate targeting diabetic retinopathy and wet age-related macular degeneration [4] - KSI-501, a bispecific antibody biopolymer conjugate, is designed to treat retinal vascular diseases by inhibiting IL-6 and VEGF pathways, with Phase 3 studies expected to begin mid-2024 [5] - KSI-101, an unconjugated protein candidate, is being developed for retinal inflammatory diseases, filling a gap in current treatment options [6] Upcoming Events - Kodiak will participate in the Clinical Trials at the Summit 2024 on June 8, where presentations on its clinical pipeline will be made [2] - The company will also present at the Jefferies Healthcare Conference on June 6 and the Goldman Sachs Global Healthcare Conference on June 13 [7][8]

Kodiak Sciences Inc. (KOD) reported first-quarter 2024 loss per share of 82 cents, narrower than the Zacks Consensus Estimate of a loss of $1.09. The company had incurred a loss of $1.35 per share in the year-ago quarter. Currently, KOD does not have any approved products in its portfolio. As a result, it is yet to generate revenues. Quarter in Detail Research and development expenses were $29.9 million in the reported quarter, down 47% year over year. The decrease was mainly due to the reduction in expense ...

Financial Performance - Kodiak Sciences reported a net loss of $43.0 million for the three months ended March 31, 2024, a decrease of $27.7 million compared to a net loss of $70.8 million in the same period of 2023[83]. - Net cash used in operating activities was $39.6 million for the three months ended March 31, 2024, compared to $47.2 million for the same period in 2023[97]. - The company experienced a net decrease in cash, cash equivalents, and restricted cash of $39.7 million for the three months ended March 31, 2024, following a net increase of $126.2 million in the same period of the previous year[96]. - The company has an accumulated deficit of $1,195.6 million as of March 31, 2024[90]. Research and Development - Research and development expenses totaled $29.9 million for the three months ended March 31, 2024, down $26.6 million from $56.5 million in the same period of 2023[84]. - Tarcocimab program expenses decreased by $20.2 million to $5.9 million in Q1 2024, primarily due to reduced clinical activities[84]. - KSI-501 program expenses increased by $1.4 million to $2.2 million in Q1 2024, attributed to increased manufacturing activities[85]. - Kodiak intends to conduct two additional Phase 3 clinical studies with tarcocimab, with the first patients treated in the GLOW2 study[71][73]. - The Phase 3 DAYBREAK study for KSI-501 is scheduled to begin patient screening in mid-2024, evaluating its efficacy and durability in wet AMD[67][76]. - KSI-101 is being developed for retinal inflammatory diseases, with plans to initiate a Phase 1b APEX study in June 2024[78]. - Kodiak has not generated any product revenue to date and does not expect to until regulatory approval is obtained for its product candidates[92]. Operational Challenges - The company continues to face significant uncertainties due to public health crises, geopolitical conflicts, inflation, and supply chain disruptions, which may adversely affect operations and capital resources[94]. - Adequate additional funding may not be available on acceptable terms, potentially impacting the company's financial condition and business strategies[95]. - The company may need to delay, reduce, or terminate some or all of its development programs and clinical trials if unable to raise additional funds when needed[95]. - Future debt financing may impose additional covenants that could restrict operations, including limitations on incurring additional debt and engaging in certain transactions[95]. Financial Reporting and Compliance - The company has not experienced material changes in its contractual obligations and commitments since December 31, 2023[98]. - There were no material changes to critical accounting policies during the three months ended March 31, 2024, as reported in the Annual Report for the year ended December 31, 2023[100]. - The company continues to monitor the impact of external events on the development and commercialization of its product candidates[94].

Exhibit 99.1 Kodiak Sciences Announces Recent Business Highlights and First Quarter 2024 Financial Results Palo Alto, CA — May 15, 2024 – Kodiak Sciences Inc. (Nasdaq: KOD), today reported business highlights and financial results for the quarter ended March 31, 2024. "We continue to make excellent operational progress with our three clinical programs of tarcocimab, KSI-501 and KSI-101, as well as on our duet and triplet research programs," said Victor Perlroth, M.D., Chief Executive Officer of Kodiak Scien ...

PALO ALTO, Calif., May 13, 2024 /PRNewswire/ -- Kodiak Sciences Inc. (Nasdaq: KOD), a biopharmaceutical company committed to researching, developing and commercializing transformative therapeutics to treat a broad spectrum of retinal diseases, announced today that the first patients with diabetic retinopathy (DR) have been treated in the randomized double masked Phase 3 GLOW2 study of tarcocimab tedromer. GLOW2 is the second Phase 3 study of tarcocimab in diabetic retinopathy in which all patients on invest ...

Drug Development and Clinical Trials - The company is in the clinical stage of drug development with no products approved for commercial sale and has not generated any revenue since its inception in June 2009[140]. - Development of the product candidate tarcocimab was paused in July 2023 after pivotal Phase 3 trials did not meet primary efficacy endpoints, but development has since resumed following positive results from other ongoing trials[147][148]. - The company has conducted clinical trials for tarcocimab in patients with wet AMD, DME, NPDR, and RVO, but certain trials did not meet their primary efficacy endpoints[144]. - The company has not yet obtained marketing approval for any product candidates, including tarcocimab and KSI-501, which targets both IL-6 and VEGF[141]. - The company’s future success is heavily dependent on the outcomes of planned or pending clinical studies for tarcocimab and KSI-501[142]. - The company may face significant delays in clinical trials due to various factors, including regulatory requirements and patient recruitment challenges[156][158]. - The company has never submitted an application seeking regulatory approval to market any product candidate in any jurisdiction, which poses a risk to its viability[153]. - Investment in biopharmaceutical product development involves significant risks, including the potential failure to demonstrate adequate efficacy or safety profiles[155]. - The company may need to conduct additional studies if manufacturing or formulation changes are made to its product candidates, which could lead to further delays[157]. - The company’s most advanced product candidate, tarcocimab, is an anti-VEGF biologic studied in multiple retinal diseases including wet AMD and DME[163]. - Tarcocimab and KSI-501 are first-in-class bispecific antibody conjugates designed to inhibit interleukin-6 and VEGF, with potential side effects including intraocular hemorrhage and retinal detachment[163]. - In completed clinical trials, an unexpected increase in cataracts was observed in the tarcocimab arms, contributing to the failure to meet primary efficacy endpoints[162]. - Regulatory authorities may suspend or terminate clinical trials due to various factors, including safety issues and failure to comply with protocols[160]. - Delays in clinical trials could increase costs and jeopardize the ability to commence product sales and generate revenue[160]. - The company may encounter difficulties in patient enrollment for clinical trials, which could lead to significant delays or abandonment of trials[169]. - The development and commercialization of new drug products is highly competitive, with risks of competitors achieving regulatory approval before the company[176]. Competition and Market Dynamics - The company faces significant competition from established therapies such as Lucentis and Eylea, with competitors like Roche and Regeneron having commercially approved products[177]. - Two Lucentis biosimilars were approved in the U.S. in 2022, which may negatively impact market dynamics for the company’s product candidates[178]. - The company faces significant competition from larger firms with greater financial resources and expertise in R&D, manufacturing, and regulatory approvals, which could impact its market opportunities[179]. - The company’s ABC Platform may not produce viable product candidates, and competitors may develop technologies that render it less attractive[175]. Manufacturing and Supply Chain Risks - Manufacturing biologics is complex and costly, with production costs generally higher than traditional small molecule compounds, and the company may face supply chain challenges that could disrupt commercialization[181]. - The company relies on third-party suppliers for raw materials, which are sourced from single suppliers in multiple countries, increasing the risk of shortages and contamination[185]. - The company has limited experience in commercial-scale manufacturing, and any difficulties in production could delay clinical trials and regulatory approvals, adversely affecting business operations[186]. - Changes in manufacturing methods during product development may lead to additional costs or delays, potentially impacting clinical trial results and regulatory approvals[189]. - The company relies exclusively on a third-party manufacturer, Lonza AG, for the production of materials for preclinical studies and clinical trials, which poses risks related to supply availability and compliance with regulations[250]. - The company faces risks related to reliance on third-party suppliers for key raw materials, which could harm its ability to manufacture product candidates if supply is interrupted[256]. Regulatory and Compliance Challenges - Compliance with extensive regulatory requirements is mandatory, and failure to do so could adversely affect commercialization efforts[215]. - The company has invested in clinical trials outside the U.S., but acceptance of this data by the FDA is uncertain[212]. - The company may need to conduct costly post-marketing studies to verify safety and efficacy, which could affect product approval status[217]. - Regulatory approval processes are lengthy and unpredictable, potentially delaying product revenue generation[208]. - The company may face significant costs and delays in obtaining foreign regulatory approvals, impacting market potential[214]. - The FDA and other regulatory authorities may impose restrictions on products if unknown problems are discovered post-approval[218]. Financial and Economic Risks - The company has incurred net losses of $260.5 million, $333.8 million, and $267.0 million for the years ended December 31, 2023, 2022, and 2021, respectively, with an accumulated deficit of $1,152.5 million as of December 31, 2023[338]. - Unfavorable U.S. and global economic conditions, including increasing inflation rates and geopolitical conflicts, could adversely affect the company's business and financial performance[332]. - The company faces risks from potential changes in tax laws, including the impact of the Tax Act and subsequent legislation, which could materially affect its financial condition and results of operations[331]. - A severe or prolonged global economic downturn could increase operating costs and limit access to credit, particularly affecting the company's liquidity[334]. - The ongoing conflict between Ukraine and Russia may adversely affect the company's operations and financial results due to economic sanctions and market volatility[336]. - Economic uncertainty in Europe and other key markets could lead to adverse effects on the company's business and financial condition[337]. Intellectual Property and Legal Risks - Patent protection is critical for the company's success; failure to obtain or maintain patents could allow competitors to commercialize similar products[261]. - The patent prosecution process is complex and costly, and the company may not be able to secure necessary patent protections in a timely manner[264]. - The scope of patent protection may be narrowed during prosecution, potentially allowing competitors to develop similar technologies[266]. - The company may face challenges in enforcing its patent rights, which could lead to reduced exclusivity and increased competition[267]. - There is a risk that patents may expire before product commercialization, potentially allowing competitors to enter the market with similar products[268]. - The company may be compelled to grant licenses to third parties under compulsory licensing laws in certain countries, which could impair its competitive position[271]. - The company faces claims challenging the inventorship of its patents, which could result in loss of valuable intellectual property rights[280]. - There is a risk of third-party claims of intellectual property infringement that could delay the development and commercialization of product candidates[285]. - The company relies on trade secrets and confidentiality agreements to protect proprietary information, but breaches could harm its competitive position[281]. - The intellectual property landscape in the biotechnology and pharmaceutical industries is highly competitive and dynamic, leading to potential litigation[286]. Workforce and Management Risks - As of December 31, 2023, the company had 111 employees and plans to significantly increase its workforce to support future growth[302]. - The company is highly dependent on key personnel, and the loss of any executive or key employee could delay product development[299]. - The company faces intense competition for skilled personnel in the biotechnology sector, which may hinder its ability to attract and retain talent[300]. Healthcare and Reimbursement Challenges - Reimbursement from government and private payors is uncertain, and changes in pricing regulations could negatively impact the commercial viability of the company's products[198]. - The company must navigate complex reimbursement processes, which can vary significantly among payors, potentially impacting the demand and pricing of its products[200]. - The commercial success of the company's products will depend on their perceived advantages over alternative treatments and the ability to offer competitive pricing[197]. - The company anticipates that future healthcare reforms may result in lower reimbursement rates and more rigorous coverage criteria, affecting product pricing and revenue generation[227]. - Legislative measures aimed at reducing healthcare costs may adversely affect the company's ability to sell products profitably, particularly due to the ACA's introduction of lower-cost biosimilars and increased Medicaid rebates[220]. Data Privacy and Security Risks - The company is subject to stringent data privacy and security obligations, which include U.S. and foreign laws, regulations, and industry standards, potentially leading to regulatory investigations and significant fines[236]. - Numerous U.S. states have enacted comprehensive privacy laws, such as the California Consumer Privacy Act (CCPA), which imposes civil penalties of up to $7,500 per violation, increasing compliance costs and potential liabilities[237]. - The EU GDPR and UK GDPR impose strict requirements for processing personal data, with fines of up to €20 million or 4% of annual global revenue for violations, significantly impacting operational costs[238]. - The evolving nature of data privacy laws requires significant resources for compliance, potentially necessitating changes to the company's business model and practices[241]. - Failure to comply with data privacy and security obligations could lead to severe consequences, including regulatory fines, litigation, and damage to the company's reputation and financial condition[242]. - The company relies on third-party service providers for critical business systems, which may expose it to additional security risks[310]. - Cybersecurity threats, including ransomware attacks, pose significant risks to the company's operations and reputation[311].

Dr. Perlroth summarized, "We are one successful clinical trial away from filing for registration, and the trial (GLOW2) will be conducted in a patient population (diabetic retinopathy) where tarcocimab already showed a clear win (GLOW1)." Exhibit 99.1 Kodiak Sciences Announces Recent Business Highlights and Fourth Quarter and Full Year 2023 Financial Results Palo Alto, CA — March 28, 2024 – Kodiak Sciences Inc. (Nasdaq: KOD), today reported business highlights and financial results for the quarter and year ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) Basic filing information for **Kodiak Sciences Inc.'s Form 10-Q**, including **SEC** details and company classification [Registrant Information](index=1&type=section&id=Registrant%20Information) Basic filing information for **Kodiak Sciences Inc.'s Form 10-Q**, including **SEC** details and company classification as a **non-accelerated filer** and **smaller reporting company** - **Kodiak Sciences Inc.** filed its **Form 10-Q** for the quarterly period ended September 30, 2023[2](index=2&type=chunk) Company Classification | Classification | Status | | :------------- | :----- | | Non-accelerated filer | Yes | | Smaller reporting company | Yes | Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | **Common stock, par value $0.0001** | KOD | **The Nasdaq Stock Market LLC** | - As of October 31, 2023, the registrant had **52,472,291 shares** of **common stock** outstanding[4](index=4&type=chunk) [Special Note Regarding Forward-Looking Statements](index=2&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Clarifies that the report contains forward-looking statements, subject to risks and uncertainties, identified by specific terminology [Nature of Forward-Looking Statements](index=2&type=section&id=Nature%20of%20Forward-Looking%20Statements) Clarifies that the report contains forward-looking statements, subject to risks and uncertainties, identified by specific terminology - The report contains **forward-looking statements** based on current expectations and projections, subject to risks and uncertainties[6](index=6&type=chunk) - **Forward-looking statements** are identified by terms such as 'may,' 'will,' 'expect,' 'believe,' 'anticipate,' 'project,' 'estimate,' and similar expressions[7](index=7&type=chunk) - Key areas of **forward-looking statements** include the success, cost, and timing of development activities, clinical trials, regulatory filings, and the ability to obtain funding and market acceptance[8](index=8&type=chunk)[11](index=11&type=chunk) [Selected Risks Affecting Our Business](index=4&type=section&id=SELECTED%20RISKS%20AFFECTING%20OUR%20BUSINESS) Highlights critical risks: clinical stage development, **net losses**, dependence on lead product candidates, and drug development uncertainties [Overview of Key Risks](index=4&type=section&id=Overview%20of%20Key%20Risks) Highlights critical risks including clinical stage development, **net losses**, dependence on lead product candidates, and uncertainties in drug development and regulatory approval - The company is in the **clinical stage of drug development** with a **limited operating history** and no approved products, making future success difficult to evaluate[13](index=13&type=chunk) - **Kodiak Sciences Inc.** has incurred **significant net losses** since inception and expects this trend to continue[13](index=13&type=chunk) - The company's prospects are heavily dependent on the success of its **tarcocimab** and **KSI-501** product candidates, which are currently in clinical development[13](index=13&type=chunk) - Drug development is highly uncertain, with risks including clinical trial failures, regulatory approval delays, intense competition, and challenges in manufacturing and intellectual property protection[13](index=13&type=chunk) [Table of Contents](index=5&type=section&id=Table%20of%20Contents) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents unaudited condensed consolidated financial statements: balance sheets, statements of operations, stockholders' equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric | September 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------------- | :------------------ | | **Assets** | | | | **Cash and cash equivalents** | **$345,668** | **$190,433** | | **Marketable securities** | — | **$288,500** | | **Total current assets** | **$350,927** | **$486,005** | | **Total assets** | **$547,652** | **$666,628** | | **Liabilities and Stockholders' Equity** | | | | **Accounts payable** | **$38,589** | **$9,130** | | **Accrued and other current liabilities** | **$23,170** | **$33,440** | | **Total current liabilities** | **$70,774** | **$52,496** | | **Total liabilities** | **$245,235** | **$230,461** | | **Total stockholders' equity** | **$302,417** | **$436,167** | | **Accumulated deficit** | **$(1,093,015)** | **$(892,040)** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details company revenues, expenses, and **net loss** over specific periods, reflecting operational performance Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------------------------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | **Research and development expenses** | **$36,188** | **$61,676** | **$159,669** | **$211,597** | | **General and administrative expenses** | **$18,312** | **$17,802** | **$54,278** | **$55,716** | | **Total operating expenses** | **$54,500** | **$79,478** | **$213,947** | **$267,313** | | **Loss from operations** | **$(54,500)** | **$(79,478)** | **$(213,947)** | **$(267,313)** | | **Interest income** | **$4,536** | **$2,484** | **$12,836** | **$4,054** | | **Net loss** | **$(50,007)** | **$(77,038)** | **$(200,975)** | **$(263,375)** | | **Net loss per common share**, basic and diluted | **$(0.95)** | **$(1.47)** | **$(3.84)** | **$(5.04)** | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in equity accounts: common stock, additional paid-in capital, and **accumulated deficit** - **Total stockholders' equity** decreased from **$436,167 thousand** at December 31, 2022, to **$302,417 thousand** at September 30, 2023, primarily due to **net losses**[22](index=22&type=chunk) - **Additional paid-in capital** increased by **$65,918 thousand** from December 31, 2022, to September 30, 2023, driven by **stock-based compensation expense** and **common stock issuances**[22](index=22&type=chunk) - The **accumulated deficit** grew from **$(892,040) thousand** at December 31, 2022, to **$(1,093,015) thousand** at September 30, 2023, reflecting ongoing **net losses**[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from **operating**, **investing**, and **financing activities** over specific periods Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | **Net cash provided by (used in) operating activities** | **$(121,944)** | **$(151,384)** | | **Net cash provided by (used in) investing activities** | **$277,024** | **$(403,511)** | | **Net cash provided by (used in) financing activities** | **$155** | **$1,798** | | **Net increase (decrease) in cash, cash equivalents and restricted cash** | **$155,235** | **$(553,097)** | | **Cash, cash equivalents and restricted cash, at end of period** | **$351,992** | **$184,737** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations and additional information supporting the unaudited condensed consolidated financial statements [Note 1. The Company](index=10&type=section&id=Note%201.%20The%20Company) Describes **Kodiak Sciences Inc.** as a **clinical-stage biopharmaceutical company** focused on **retinal diseases** and its liquidity - **Kodiak Sciences Inc.** is a **clinical-stage biopharmaceutical company** focused on researching, developing, and commercializing transformative therapeutics for high-prevalence **retinal diseases**[26](index=26&type=chunk) - As of September 30, 2023, the Company had **$345.7 million** in **cash and cash equivalents**, which is believed to be sufficient for **anticipated operating and capital expenditure requirements** for the next 12 months[27](index=27&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles, estimates, and assumptions used in preparing the financial statements - The financial statements are unaudited and prepared in accordance with **GAAP** for interim periods, consistent with the **2022 Annual Report on Form 10-K**[28](index=28&type=chunk)[29](index=29&type=chunk) - Management's estimates and assumptions, such as for **accrued R&D** and **stock-based compensation**, are critical to financial reporting[32](index=32&type=chunk) - No **impairment loss** was recognized for **long-lived assets** despite the wind-down decision for the **tarcocimab** program, as estimated **undiscounted net cash flows** exceeded **carrying amounts**[33](index=33&type=chunk) - The company monitors **macroeconomic uncertainties** (e.g., **health epidemics**, **inflation**, **geopolitical conflicts**) and acknowledges inherent risks common to **clinical-stage biotech companies**[35](index=35&type=chunk)[36](index=36&type=chunk) - No new **significant accounting pronouncements** were issued or adopted during the three and nine months ended September 30, 2023[40](index=40&type=chunk) [Note 3. Accrued and Other Current Liabilities](index=11&type=section&id=Note%203.%20Accrued%20and%20Other%20Current%20Liabilities) Details the composition of **accrued and other current liabilities**, including clinical trial costs and salaries Accrued and Other Current Liabilities (in thousands) | Category | September 30, 2023 | December 31, 2022 | | :------------------------------------ | :------------------- | :------------------ | | **Accrued clinical trial and related costs** | **$9,791** | **$18,334** | | **Accrued manufacturing and R&D costs** | **$6,306** | **$5,978** | | **Accrued salaries and benefits** | **$5,405** | **$6,033** | | **Accrued legal fees and professional fees** | **$176** | **$283** | | **Accrued property and equipment** | — | **$1,893** | | **Accrued other liabilities** | **$1,492** | **$919** | | **Total accrued and other current liabilities** | **$23,170** | **$33,440** | [Note 4. Fair Value Measurements](index=12&type=section&id=Note%204.%20Fair%20Value%20Measurements) Presents the fair value hierarchy and measurements for financial assets and liabilities, primarily **money market funds** Fair Value Measurements at September 30, 2023 (in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :--------------- | :------ | :------ | :------ | :------ | | **Money market funds** | **$331,478** | — | — | **$331,478** | | Total | **$331,478** | — | — | **$331,478** | Fair Value Measurements at December 31, 2022 (in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :--------------- | :------ | :------ | :------ | :------ | | **Money market funds** | **$173,617** | — | — | **$173,617** | | **U.S. treasury securities** | — | **$288,500** | — | **$288,500** | | Total | **$173,617** | **$288,500** | — | **$462,117** | - The **fair value of the liability related to the sale of future royalties** is based on **Level 3** inputs, reflecting current estimates of future royalty payments[43](index=43&type=chunk) [Note 5. Marketable Securities](index=12&type=section&id=Note%205.%20Marketable%20Securities) Details the company's **marketable securities** holdings, including changes over the reporting period - As of September 30, 2023, the Company had no **marketable securities**, a decrease from **$288.5 million** in **U.S. treasury securities** at December 31, 2022[44](index=44&type=chunk) Marketable Securities as of December 31, 2022 (in thousands) | Category | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | | :--------------- | :------------- | :--------------- | :---------------- | :--------- | | **U.S. treasury securities** | **$289,807** | — | **$(1,307)** | **$288,500** | | Total | **$289,807** | — | **$(1,307)** | **$288,500** | [Note 6. Derivatives](index=12&type=section&id=Note%206.%20Derivatives) Describes the company's use of **derivative instruments** to manage foreign currency risk - The Company uses **foreign currency forward contracts**, not designated as hedges, to manage **foreign currency cash flow risks**. As of September 30, 2023, no **outstanding derivative instruments** were held[45](index=45&type=chunk) [Note 7. Commitments and Contingencies](index=12&type=section&id=Note%207.%20Commitments%20and%20Contingencies) Outlines significant contractual obligations, manufacturing agreements, and potential legal contingencies - The Company has a **manufacturing agreement** with **Lonza Ltd** for **clinical and commercial supply of drug substance**, including a **custom-built Ursus facility** commissioned as a **cGMP facility** in January 2023[46](index=46&type=chunk)[47](index=47&type=chunk)[50](index=50&type=chunk) - **Fixed assets** of approximately **75.0 million Swiss Francs** (equivalent to **$81.7 million**) for **leasehold improvements and machinery** were capitalized as of January 31, 2023, with **$26.8 million** unpaid as of September 30, 2023[51](index=51&type=chunk) - **Manufacturing payments** totaling approximately **150.0 million Swiss Francs** may be incurred from 2022 through 2030 for potential clinical and commercial supply[49](index=49&type=chunk) - The Company is not aware of any **legal proceedings** that could have a **material adverse effect** on its **financial position**, **results of operations**, or **cash flows**[55](index=55&type=chunk) [Note 8. Stock-Based Compensation](index=14&type=section&id=Note%208.%20Stock-Based%20Compensation) Details the company's **stock-based compensation** plans, option activity, and related expenses - The number of shares available under the **2018 Equity Incentive Plan** increased by approximately **2.1 million shares** in both January 2023 and 2022 due to an **automatic increase provision**[58](index=58&type=chunk) Stock Option Activity (as of September 30, 2023) | Metric | Number of Options | Weighted Average Exercise Price | | :-------------------------- | :---------------- | :------------------------------ | | **Outstanding** at Dec 31, 2022 | **16,542,107** | **$51.48** | | **Granted** | **3,285,000** | **$7.12** | | **Forfeited or canceled** | **(1,190,462)** | **$54.95** | | **Outstanding** at Sep 30, 2023 | **18,629,117** | **$43.45** | Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | **Research and development** | **$2,733** | **$14,947** | **$32,093** | **$45,031** | | **General and administrative** | **$11,213** | **$11,235** | **$33,634** | **$35,224** | | **Total stock-based compensation** | **$13,946** | **$26,182** | **$65,727** | **$80,255** | [Note 9. Net Loss per Common Share](index=15&type=section&id=Note%209.%20Net%20Loss%20per%20Common%20Share) Provides **net loss per common share** calculation and lists common share equivalents excluded from diluted **EPS** Common Share Equivalents Excluded from Diluted Net Loss per Share | Category | As of September 30, 2023 | As of September 30, 2022 | | :---------------------- | :----------------------- | :----------------------- | | **Outstanding stock options** | **18,629,117** | **16,621,343** | | **Unvested restricted shares** | **186,267** | **283,877** | | Total | **18,815,384** | **16,905,220** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial condition and operational results, focusing on **retinal disease therapeutics**, clinical updates, and financial performance [Overview](index=16&type=section&id=Overview) Introduces **Kodiak Sciences** as a biopharmaceutical company focused on **retinal diseases** and its lead product candidates - **Kodiak Sciences** is a biopharmaceutical company dedicated to developing transformative therapeutics for high-prevalence **retinal diseases**, leveraging its **ABC Platform™**[65](index=65&type=chunk) - The **lead investigational medicine**, **tarcocimab**, is an **anti-VEGF antibody biopolymer conjugate** for **retinal vascular diseases**, including **diabetic eye disease** and **wet age-related macular degeneration**[65](index=65&type=chunk) - **KSI-501** is a **bispecific investigational medicine** targeting **IL-6** and **VEGF**, currently in a **Phase 1 clinical study** for **diabetic macular edema**[66](index=66&type=chunk) [Recent Updates](index=16&type=section&id=Recent%20Updates) Provides recent developments regarding clinical trials for **tarcocimab** and **KSI-501**, manufacturing, and technology platform advancements [Tarcocimab Clinical Program Update](index=16&type=section&id=Tarcocimab%20Clinical%20Program%20Update) Updates on **tarcocimab** clinical trial results across various **retinal diseases**, including successes and challenges - The **DAYLIGHT study for wet AMD** met its **primary endpoint of non-inferior visual acuity gains** for monthly **tarcocimab** versus aflibercept[68](index=68&type=chunk) - **GLEAM and GLIMMER studies for DME** did not meet **primary efficacy endpoints**, with **tarcocimab** showing **lower visual acuity gains** compared to aflibercept, partly due to an **unexpected increase in cataract adverse events** (**19% vs 9%**)[69](index=69&type=chunk)[70](index=70&type=chunk) - The **BEACON trial for RVO** demonstrated **matched efficacy and comparable safety with differentiated durability** for **tarcocimab** versus aflibercept, with **47%** of **tarcocimab** patients requiring no additional injections in the second 6 months after 4 initiating doses[73](index=73&type=chunk)[74](index=74&type=chunk) - The **GLOW study for diabetic retinopathy** met its primary endpoint, showing a **29-fold** increased response rate (**41.1% vs 1.4%** for sham) in **2-step DRSS improvement**, and an **89%** decreased risk of sight-threatening complications[75](index=75&type=chunk) - Based on **three successful Phase 3 trials** (**DAYLIGHT**, **BEACON**, **GLOW**), **Kodiak** plans an **additional pivotal study with a commercial formulation** of **tarcocimab** to support a single **BLA** for **RVO**, **wet AMD**, and **NPDR**[76](index=76&type=chunk) [Antibody Biopolymer Conjugate Drug Substance Manufacturing](index=17&type=section&id=Antibody%20Biopolymer%20Conjugate%20Drug%20Substance%20Manufacturing) Details the commissioning of the **Ursus manufacturing facility** and strategic alternatives for its future use - The **Ursus facility**, a **custom-built manufacturing site with Lonza**, was **commissioned as a cGMP facility** in January 2023 and began **manufacturing commercial-scale batches** of **tarcocimab** in Q1 2023[77](index=77&type=chunk) - Following recent **tarcocimab** clinical program updates, **Kodiak** is exploring **strategic and operational alternatives** for the **Ursus facility's** future use[77](index=77&type=chunk) [KSI-501 Program Update](index=17&type=section&id=KSI-501%20Program%20Update) Updates on **KSI-501** development, a bispecific investigational medicine, and its **Phase 1 clinical study** - **KSI-501**, a **bispecific anti-IL-6 antibody/anti-VEGF trap fusion protein**, is designed to **inhibit both VEGF-mediated angiogenesis and IL-6 mediated inflammation**, potentially offering **greater therapeutic efficacy**[78](index=78&type=chunk) - The **Phase 1 trial for KSI-501 in DME patients** has completed enrollment and dosing across all dose levels[79](index=79&type=chunk) - Due to **late-onset cataracts** observed with **tarcocimab**, **Kodiak** intends to explore development of **KSI-501** in both its **unconjugated protein and bioconjugate forms**[79](index=79&type=chunk) [Technology Platform Development](index=18&type=section&id=Technology%20Platform%20Development) Describes the company's advancements in its 'triplet' platform for multi-targeting therapeutics - **Kodiak** is advancing its **'triplet' platform**, which combines **small molecules and a biologic** to create **multi-targeting therapeutics** with a **high drug-antibody ratio (DAR)** for **sustained inhibition in multifactorial ophthalmic and systemic diseases**[80](index=80&type=chunk) [Components of Operating Results](index=19&type=section&id=Components%20of%20Operating%20Results) Explains primary components of **operating expenses**, **interest income**, and other income/expense - **Research and development expenses** primarily consist of **payroll**, **laboratory supplies**, **consulting**, **contract manufacturing**, and **CRO fees** for product candidate and **ABC Platform** development[82](index=82&type=chunk) - **General and administrative expenses** include **payroll**, **professional fees (legal, accounting)**, **public company compliance costs**, and **allocated overhead**[84](index=84&type=chunk) - **Interest income** is mainly derived from **cash, cash equivalents, and marketable securities**[85](index=85&type=chunk) - Other income (expense), net, includes **changes in fair value and settlement of derivative contracts**, **tax expense**, and **amortized issuance costs from royalty sales**[86](index=86&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Analyzes financial performance for the three and nine months ended September 30, 2023, focusing on expense and **net loss** changes Summary of Operations (in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Change (3M) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change (9M) | | :-------------------------- | :------------------------------ | :------------------------------ | :---------- | :----------------------------- | :----------------------------- | :---------- | | **Research and development** | **$36,188** | **$61,676** | **$(25,488)** | **$159,669** | **$211,597** | **$(51,928)** | | **General and administrative** | **$18,312** | **$17,802** | **$510** | **$54,278** | **$55,716** | **$(1,438)** | | **Loss from operations** | **$(54,500)** | **$(79,478)** | **$24,978** | **$(213,947)** | **$(267,313)** | **$53,366** | | **Interest income** | **$4,536** | **$2,484** | **$2,052** | **$12,836** | **$4,054** | **$8,782** | | **Net loss** | **$(50,007)** | **$(77,038)** | **$27,031** | **$(200,975)** | **$(263,375)** | **$62,400** | - **Research and development expenses** decreased by **$25.5 million** for the three months and **$51.9 million** for the nine months ended September 30, 2023, primarily due to the **wind-down of the tarcocimab development program**[88](index=88&type=chunk) - **General and administrative expenses** slightly increased by **$0.5 million** for the three months but decreased by **$1.4 million** for the nine months, mainly due to **lower professional fees**[93](index=93&type=chunk) [Liquidity and Capital Resources; Plan of Operations](index=20&type=section&id=Liquidity%20and%20Capital%20Resources%3B%20Plan%20of%20Operations) Discusses cash position, funding sources, future capital requirements, and cash flow activities - As of September 30, 2023, **Kodiak** had **$345.7 million** in **cash and cash equivalents**, primarily funded through **equity sales**, **convertible notes**, and **royalty sales**[94](index=94&type=chunk) - The Company expects its current **cash and cash equivalents** to be sufficient for at least 12 months, despite ongoing **net losses** and **anticipated increases in expenses for product development and commercialization**[95](index=95&type=chunk)[97](index=97&type=chunk) - Future funding requirements are uncertain and depend on factors like clinical trial progress, manufacturing scale-up, regulatory approvals, and intellectual property costs[96](index=96&type=chunk)[101](index=101&type=chunk) - **Net cash used in operating activities** was **$121.9 million** for the nine months ended September 30, 2023, while **net cash provided by investing activities** was **$277.0 million**, largely from **marketable securities maturities**[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported since the **2022 Annual Report on Form 10-K** - No material changes to market risk disclosures were reported during the nine months ended September 30, 2023, compared to the **Annual Report on Form 10-K for 2022**[109](index=109&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded **disclosure controls and procedures** were effective, with no material changes in **internal control over financial reporting** - Management concluded that the Company's **disclosure controls and procedures** were effective at a **reasonable assurance level** as of September 30, 2023[111](index=111&type=chunk) - There were no **material changes in internal control over financial reporting** during the quarter ended September 30, 2023[112](index=112&type=chunk) [PART II. OTHER INFORMATION](index=24&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) Confirms no pending legal claims or actions that could materially adversely affect operations or financial condition - As of the report date, there are no pending claims or actions against **Kodiak Sciences Inc.** that could materially adversely affect its **results of operations** or **financial condition**[114](index=114&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) Details various risks materially affecting business, financial condition, and growth, covering drug development, regulatory, operational, and financial aspects [Risks Related to the Discovery, Development and Commercialization of Our Product Candidates](index=24&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) Highlights risks in drug discovery, development, and commercialization, including clinical trial failures, competition, and manufacturing - The company is a **clinical-stage biopharmaceutical company with no approved products** and a **limited operating history**, making **future success uncertain**[116](index=116&type=chunk)[117](index=117&type=chunk) - Prospects are heavily dependent on **tarcocimab** and **KSI-501**, with past **Phase 3 trials for tarcocimab (GLEAM and GLIMMER) failing primary efficacy endpoints** due to **lower visual acuity gains and increased cataracts**[118](index=118&type=chunk)[120](index=120&type=chunk)[125](index=125&type=chunk) - Despite previous setbacks, **Kodiak** plans an **additional pivotal study with a commercial formulation** of **tarcocimab** to support a single **BLA** for **RVO**, **wet AMD**, and **NPDR**, but success and **FDA acceptance are not assured**[124](index=124&type=chunk)[125](index=125&type=chunk) - Drug development is **inherently risky**, with potential for **clinical trial delays**, **failures to demonstrate efficacy/safety**, **undesirable side effects** (e.g., cataracts with **tarcocimab**), and **difficulties in patient enrollment**[126](index=126&type=chunk)[132](index=132&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) - The company faces **significant competition from major pharmaceutical and biotechnology companies** with **greater resources and established products**, including **new therapies like Vabysmo and high-dose aflibercept**[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Manufacturing product candidates is **highly complex**, **susceptible to contamination and supply disruptions**, and relies on **single-source third-party suppliers for key raw materials**, particularly for **tarcocimab** and **KSI-501**[156](index=156&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - **Commercialization success is uncertain** due to the **lack of sales/marketing infrastructure**, potential for **unfavorable pricing regulations**, **limited third-party reimbursement**, and **competition from biosimilar products**[164](index=164&type=chunk)[167](index=167&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[175](index=175&type=chunk) - The **development timeline of tarcocimab** may impact the **full utilization of the Ursus manufacturing facility**, potentially leading to **excess capital expenditures**[177](index=177&type=chunk) - **Product liability lawsuits** pose a **significant risk**, potentially leading to **substantial liabilities**, **commercialization limitations**, and **reputational harm**[179](index=179&type=chunk)[180](index=180&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=36&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) Addresses risks of lengthy regulatory approval, ongoing compliance, healthcare legislation, and potential misconduct - The **regulatory approval process is lengthy, unpredictable**, and may require **additional studies or result in limited approvals**, preventing product revenue generation[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) - **Data from clinical trials conducted outside the U.S. may not be accepted by the FDA**, requiring **costly and time-consuming additional trials**[185](index=185&type=chunk) - **Obtaining approval in one jurisdiction does not guarantee approval in others**, and **foreign regulatory requirements can cause significant delays and costs**[186](index=186&type=chunk)[187](index=187&type=chunk) - Approved products remain subject to **extensive ongoing regulatory scrutiny**, including manufacturing, labeling, promotion, and post-marketing studies, with **non-compliance leading to severe penalties**[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[192](index=192&type=chunk) - **Healthcare legislative measures**, such as the **ACA and the Inflation Reduction Act of 2022 (IRA)**, aim to **reduce costs and may negatively impact drug pricing, reimbursement, and the company's profitability**[194](index=194&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk) - The company is exposed to **risks of misconduct by employees or third parties**, including **non-compliance with regulatory standards, healthcare fraud and abuse laws, and insider trading**, which could lead to **significant fines and reputational harm**[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk)[204](index=204&type=chunk) - **Stringent and evolving data privacy and security obligations (e.g., GDPR, CCPA)** pose **risks of regulatory investigations, fines, litigation, and business disruptions** if compliance fails[205](index=205&type=chunk)[207](index=207&type=chunk)[210](index=210&type=chunk) - **Non-compliance with environmental, health, and safety laws**, or **accidental contamination from hazardous materials**, could result in **fines, penalties, and adverse effects on business success**[211](index=211&type=chunk)[212](index=212&type=chunk) - Business activities are subject to **anti-bribery and anti-corruption laws like the FCPA**, with **violations potentially leading to fines, criminal sanctions, and business prohibitions**[213](index=213&type=chunk)[214](index=214&type=chunk) [Risks Related to Our Reliance on Third Parties](index=43&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Discusses risks from dependence on third parties for clinical trials, manufacturing, raw materials, and collaborations - The company **relies heavily on third parties (CROs, medical institutions, clinical investigators)** for clinical trials and preclinical testing, and their **unsatisfactory performance or termination of engagements could delay product development**[215](index=215&type=chunk)[217](index=217&type=chunk) - **Exclusive reliance on third-party manufacturers for drug substance** carries **risks of non-compliance with cGMP, production difficulties, supply shortages, and increased costs**, potentially **delaying clinical trials or commercialization**[219](index=219&type=chunk)[221](index=221&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - **Sharing trade secrets with third parties increases the risk of misappropriation or unauthorized disclosure**, harming the company's **competitive position**[225](index=225&type=chunk) - **Dependence on third-party suppliers for raw materials** exposes the company to **risks of limited control over pricing, availability, and quality**, potentially **disrupting manufacturing**[226](index=226&type=chunk) - Future collaborations with third parties for product development and commercialization may involve **shared or limited control, potential disputes, and risks of collaborators not committing sufficient resources or pursuing competing products**[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[231](index=231&type=chunk) [Risks Related to Our Intellectual Property](index=46&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Covers risks concerning patent protection, **intellectual property** enforcement, infringement claims, and trade secret confidentiality - **Inability to obtain and maintain broad patent protection for the ABC Platform and product candidates** could allow **competitors to commercialize similar technologies**, **adversely affecting the business**[232](index=232&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - The **patent prosecution process is expensive and complex**, with **no assurance that patent applications will issue or provide sufficient protection**, and **issued patents may be challenged or invalidated**[234](index=234&type=chunk)[238](index=238&type=chunk)[245](index=245&type=chunk) - **Protecting intellectual property globally is expensive and challenging**, as **foreign laws may not offer the same level of protection as U.S. laws**, potentially **allowing competitors to use inventions in other jurisdictions**[240](index=240&type=chunk)[241](index=241&type=chunk) - **Changes in U.S. patent laws (e.g., first-inventor-to-file system, post-grant proceedings) and Supreme Court rulings** have **increased uncertainty and costs for patent prosecution and enforcement**[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - **Failure to obtain patent term extensions or data exclusivity for product candidates** could allow **competitors to enter the market sooner**, harming the business[250](index=250&type=chunk) - Claims challenging inventorship or ownership of **intellectual property**, or the **inability to protect trade secret confidentiality**, could lead to **loss of rights, litigation costs, and competitive harm**[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - **Third-party claims of intellectual property infringement are a significant risk** in the **competitive biotechnology industry**, potentially leading to **litigation, injunctions, substantial damages, or delays in commercialization**[257](index=257&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - **Inadequate protection of trademarks and trade names** could **hinder brand recognition and competitive effectiveness**[269](index=269&type=chunk) [Risks Related to Our Operations](index=52&type=section&id=Risks%20Related%20to%20Our%20Operations) Examines operational risks: dependence on key personnel, managing growth, cybersecurity, business disruptions, and international operations - The company is **highly dependent on key managerial, scientific, and medical personnel**, and the **inability to attract and retain qualified individuals** could **hinder business strategy implementation**[271](index=271&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk) - **Managing organizational growth**, including **hiring new employees and expanding consultant networks**, presents challenges that could **divert management attention and impact development goals**[275](index=275&type=chunk)[277](index=277&type=chunk) - **Engaging in acquisitions, in-licensing, or strategic partnerships** carries risks such as **increased expenses, dilution to stockholders, assumption of liabilities, and integration difficulties**[278](index=278&type=chunk)[279](index=279&type=chunk) - **Compromised security measures or data breaches, including cyberattacks and ransomware**, could result in **significant fines, litigation, business interruptions, and reputational harm**, especially with **reliance on third-party service providers**[281](index=281&type=chunk)[282](index=282&type=chunk)[284](index=284&type=chunk)[287](index=287&type=chunk) - **Business disruptions from natural disasters, power shortages, or health epidemics** could **seriously harm revenue and financial condition**, **increasing costs and delaying product development**[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[298](index=298&type=chunk)[301](index=301&type=chunk) - **International operations are subject to economic, political, and regulatory risks**, including **currency fluctuations, differing regulatory requirements, trade barriers, and geopolitical events like Brexit and the Russia-Ukraine conflict**[292](index=292&type=chunk)[293](index=293&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - The **ability to use net operating loss carryforwards (NOLs) may be limited by ownership changes** (**Sections 382 and 383 of the Code**) and changes in tax laws (e.g., **Tax Act**, **CARES Act**, **IRA**)[302](index=302&type=chunk)[303](index=303&type=chunk) - **Changes in tax laws or regulations, including new federal legislation like the IRA**, could **adversely affect business operations, cash flow, and financial performance**[304](index=304&type=chunk) [Risks Related to Our Business, Financial Condition and Capital Requirements](index=57&type=section&id=Risks%20Related%20to%20Our%20Business%2C%20Financial%20Condition%20and%20Capital%20Requirements) Focuses on financial risks: economic conditions, **net losses**, funding uncertainty, and need for additional capital - **Unfavorable U.S. and global economic conditions, including inflation, rising interest rates, bank failures, and geopolitical conflicts**, could **adversely affect the business, financial condition, and access to capital**[305](index=305&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk) - The company has **incurred significant net losses since inception** (**$1,093.0 million accumulated deficit** as of Sep 30, 2023) and **anticipates continued and increasing losses**, impacting **stockholders' equity** and **working capital**[311](index=311&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - **Generating revenue and achieving profitability is highly uncertain**, dependent on **successful clinical development, regulatory approvals, scalable manufacturing, market acceptance, and effective commercialization**[315](index=315&type=chunk)[316](index=316&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) - **Failure to obtain additional financing when needed** could **force delays, scaling back, or discontinuation of research and development programs**, **severely impacting the business**[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) - Due to **limited resources**, the company must **prioritize product candidates**, **risking allocation to less profitable or successful opportunities and potentially foregoing valuable rights**[323](index=323&type=chunk)[324](index=324&type=chunk) - **Foreign currency exchange rate fluctuations may impact financial position and results**, despite **hedging activities**[325](index=325&type=chunk) [Risks Related to Ownership of Our Common Stock](index=61&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Addresses risks for common stock owners: stock price volatility, dilution, corporate governance, and limitations on stockholder influence - The **market price of common stock is highly volatile**, influenced by **clinical trial results, regulatory developments, competition, and broader economic conditions**, potentially leading to **substantial losses for investors**[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) - **Raising additional capital through equity offerings will dilute existing stockholders**, while **debt financing could impose restrictive covenants**[329](index=329&type=chunk) - **Significant ownership by principal stockholders** could **limit other stockholders' ability to influence key transactions**, including a **change of control**[330](index=330&type=chunk) - **Delaware law and provisions in the company's charter documents may discourage, delay, or prevent a change in control or management**, potentially **depressing the stock price**[331](index=331&type=chunk)[332](index=332&type=chunk)[334](index=334&type=chunk) - **Bylaw provisions designating Delaware courts and U.S. federal district courts as exclusive forums for disputes** may **limit stockholders' ability to choose a favorable judicial forum**[335](index=335&type=chunk)[336](index=336&type=chunk) - **Negative research or cessation of coverage by securities analysts** could **cause the stock price to decline**[337](index=337&type=chunk) - **Future sales of a substantial number of common shares in the public market**, or the **perception of such sales, could depress the market price**[338](index=338&type=chunk) - **Failure to maintain an effective system of internal control over financial reporting** could result in **material misstatements and adversely affect business, financial position, and results of operations**[339](index=339&type=chunk)[342](index=342&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Reports no unregistered sales of equity securities, use of proceeds, or issuer purchases during the reporting period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities occurred during the period[344](index=344&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults upon senior securities occurred during the reporting period - No defaults upon senior securities were reported[345](index=345&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Confirms no mine safety disclosures are required for the reporting period - No mine safety disclosures were reported[346](index=346&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) States that no other information is required to be reported in this section - No other information was reported[347](index=347&type=chunk) [

UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 WASHINGTON, DC 20549 FORM 10-Q For the quarterly period ended June 30, 2023 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: 001-38682 KODIAK SCIENCES INC. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdictio ...