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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q KODIAK SCIENCES INC. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdiction of incorporation or organization) 1200 Page Mill Road (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _ ...

Tarcocimab Tedromer Clinical Development - Tarcocimab tedromer aims for 5-6 month dosing intervals for the majority of patients with retinal vascular diseases, offering dosing flexibility [30, 31, 37] - Phase 1b study showed that ≥66% of wet AMD, DME, and RVO patients achieved Q24W (every 24 weeks) dosing [45] - Phase 2b/3 study in wet AMD showed 59% of patients achieved Q20W (every 20 weeks) dosing with tarcocimab, with comparable vision and anatomical outcomes vs aflibercept per label [45] - BEACON Phase 3 study in RVO met the primary endpoint of non-inferiority vs aflibercept dosed per label, doubling the treatment interval for all patients [45] - BEACON Phase 3 study in RVO demonstrated comparable vision and anatomical outcomes in BRVO patients, showing non-inferiority to aflibercept Q4W (every 4 weeks) [59] - In the BEACON Phase 3 RVO study, Tarcocimab demonstrated non-inferiority to aflibercept Q4W in all RVO patients, achieving comparable vision and anatomical outcomes [69] ABC Platform and Pipeline - Kodiak's ABC (Antibody Biopolymer Conjugate) Platform is designed for increased durability and efficacy in retinal medicines [28, 31] - Tarcocimab tedromer (KSI-301) is an anti-VEGF ABC designed for durability [29, 30] - KSI-501, a bispecific ABC medicine inhibiting both IL-6 and VEGF, has an IND filed and a Phase 1 study planned for 1H2023 [30, 81, 83] Market and Financial Position - Kodiak had $537 million in cash and marketable securities as of 3Q22 [102]

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Overview](index=3&type=section&id=Forward-Looking%20Statements%20Overview) This section clarifies that the Annual Report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on current expectations and projections, not guarantees of future performance, and are subject to risks and uncertainties[11](index=11&type=chunk)[12](index=12&type=chunk)[14](index=14&type=chunk) - Key areas of forward-looking statements include: success, cost, and timing of development activities, preclinical studies, clinical trials, and regulatory filings; durability, efficacy, and safety of product candidates; manufacturing execution; timing and likelihood of regulatory approvals; ability to obtain funding; market acceptance; competition; sales, marketing, and distribution plans; intellectual property protection; and financial performance[13](index=13&type=chunk)[16](index=16&type=chunk) [Risk Factor Summary](index=5&type=section&id=RISK%20FACTOR%20SUMMARY) [Summary of Key Risks](index=5&type=section&id=Summary%20of%20Key%20Risks) This section summarizes key investment risks, including clinical development uncertainty, financial losses, tarcocimab dependence, manufacturing complexities, and intense competition - Kodiak Sciences is a clinical-stage company with a limited operating history and no commercial products, making future success and viability difficult to evaluate[18](index=18&type=chunk) - The company has incurred significant net losses since inception and expects this trend to continue, with no guarantee of future revenue or profitability[18](index=18&type=chunk) - Prospects are heavily dependent on tarcocimab, and its failure could impact other product candidates based on the ABC Platform[18](index=18&type=chunk) - Drug development is inherently risky, with no assurance of regulatory approval, and potential for substantial delays or failure in clinical trials[18](index=18&type=chunk) - The company faces significant competition and manufacturing complexities, including lack of commercial-scale manufacturing experience and rigorous regulatory standards[18](index=18&type=chunk) [PART I](index=7&type=section&id=PART%20I) [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Kodiak Sciences is a clinical-stage biopharmaceutical company developing next-generation retinal disease therapeutics using its ABC Platform™, with lead candidate tarcocimab in registrational studies [Overview](index=7&type=section&id=Overview) - Kodiak Sciences Inc. was founded in 2009 with the goal of preventing and treating major causes of blindness through next-generation retinal therapeutics[20](index=20&type=chunk) - Tarcocimab tedromer (KSI-301) is the lead product candidate, advanced into six registrational clinical studies targeting high-prevalence retinal diseases, with the aim of a broad product label and long dosing intervals[21](index=21&type=chunk) - The company is investing in its pipeline with bispecific conjugate KSI-501 for suboptimal anti-VEGF responders and new triplet medicines for dry AMD and glaucoma, all based on its ABC Platform™[22](index=22&type=chunk) - Kodiak has retained all global rights to its product candidates and had **$478.9 million** in cash, cash equivalents, and marketable securities as of December 31, 2022[23](index=23&type=chunk) [Tarcocimab Clinical Program Update](index=7&type=section&id=Tarcocimab%20Clinical%20Program%20Update) - The Phase 2b/3 DAZZLE study in wet AMD did not meet its primary efficacy endpoint in February 2022, leading to its discontinuation[26](index=26&type=chunk) - The Phase 3 BEACON study in RVO met its primary efficacy endpoint in August 2022, demonstrating non-inferior visual acuity change from baseline at week 24 for tarcocimab compared to aflibercept[27](index=27&type=chunk) - Four Phase 3 studies (GLEAM, GLIMMER in DME; DAYLIGHT in wet AMD; GLOW in NPDR without DME) are ongoing, fully enrolled, and expected to report topline data in Q3 2023[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Tarcocimab Manufacturing](index=8&type=section&id=Tarcocimab%20Manufacturing) - Kodiak entered a manufacturing agreement with Lonza Ltd in August 2020 for clinical and commercial supply of tarcocimab drug substance[32](index=32&type=chunk) - The custom-built Ursus facility achieved mechanical completion in March 2022, grand opening in May 2022, and was commissioned as a cGMP facility in January 2023[32](index=32&type=chunk) - Manufacturing of commercial-scale cGMP batches began in Q1 2023[32](index=32&type=chunk) [KSI-501 Program Update](index=9&type=section&id=KSI-501%20Program%20Update) - The Investigational New Drug (IND) application for KSI-501 was filed and cleared by the FDA in 2022[34](index=34&type=chunk) - KSI-501 is a first-in-class bispecific ABC designed to inhibit both VEGF and IL-6, showing superior normalization of cell morphology and junctional biology in preclinical studies[34](index=34&type=chunk) - A Phase 1 study in diabetic macular edema (DME) patients is currently screening[34](index=34&type=chunk) [Technology Platform Development](index=9&type=section&id=Technology%20Platform%20Development) - Kodiak is advancing its 'triplet' platform, which combines a phosphorylcholine-based biopolymer with small molecules and an antibody therapeutic, for multifactorial ophthalmic and systemic diseases[35](index=35&type=chunk) [Digital Health Platform Development](index=9&type=section&id=Digital%20Health%20Platform%20Development) - The company is developing a visual engagement technology and imager (VETi) for ophthalmic examination, diagnosis, and monitoring, with a long-term goal of a wearable device for health engagement[36](index=36&type=chunk) - VETi is expected to begin pilot clinical testing in mid-2023 to gather user input for continued innovation[38](index=38&type=chunk) [Competition](index=9&type=section&id=Competition) - The current standard of care for wet AMD, DR, and RVO involves intravitreal anti-VEGF monotherapies like Avastin, Lucentis, and Eylea[39](index=39&type=chunk) - Newer competitors include Roche's Vabysmo (faricimab), approved in January 2022 for wet AMD and DME, offering extended dosing up to 16 weeks for some patients[40](index=40&type=chunk) - Regeneron reported positive Phase 3 results for a higher dose aflibercept formulation, achieving non-inferiority in wet AMD and DME with 3-4 month dosing intervals[41](index=41&type=chunk) - The retinal disease therapeutic space is expected to become increasingly competitive with other companies developing treatments targeting various molecular targets, gene therapies, stem cell transplants, and medical devices[42](index=42&type=chunk) [Funding Agreement](index=10&type=section&id=Funding%20Agreement) - In December 2019, Kodiak entered a funding agreement with Baker Bros. Advisors, LP (BBA) to sell a capped 4.5% royalty right on global net sales of tarcocimab for **$225.0 million** in committed development funding[43](index=43&type=chunk) - The agreement was amended in July 2021, at Kodiak's request, such that the remaining **$125.0 million** of the funding amount would not be paid, with **$100.0 million** having been paid at closing[43](index=43&type=chunk)[582](index=582&type=chunk) - Kodiak has an option to repurchase 100% of the royalties, and BBA also holds royalty rights on future net sales of other anti-VEGF-A products or related products with additional biologies[44](index=44&type=chunk) [Government Regulation](index=10&type=section&id=Government%20Regulation) - Drug and biological products are subject to extensive regulation by government authorities in the U.S. (FDA) and other countries, covering research, development, testing, manufacturing, approval, labeling, marketing, and post-approval monitoring[45](index=45&type=chunk)[46](index=46&type=chunk) - The U.S. drug development process involves preclinical studies (GLP), IND submission, clinical trials (Phase 1, 2, 3), NDA/BLA submission, FDA review, pre-approval inspections (cGMP), and potential advisory committee review[47](index=47&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk)[58](index=58&type=chunk) - Expedited programs like Fast Track, Priority Review, Accelerated Approval, and Breakthrough Therapy Designation exist to accelerate development and review for serious conditions with unmet medical needs[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The Biologics Price Competition and Innovation Act (BPCIA) established an abbreviated pathway for biosimilar and interchangeable biological products, granting reference products 12 years of data exclusivity[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - Post-approval, products are subject to ongoing regulatory requirements including cGMP compliance, adverse event reporting, restrictions on off-label promotion, and potential Risk Evaluation and Mitigation Strategies (REMS)[71](index=71&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk) - U.S. operations must comply with federal and state fraud and abuse laws (Anti-Kickback Statute, False Claims Act, HIPAA), data privacy laws (CCPA, CPRA), and transparency laws (Physician Payments Sunshine Act)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) - EU data protection laws, including GDPR, impose stringent requirements for processing personal data and restrict cross-border data transfers, with significant penalties for non-compliance[85](index=85&type=chunk)[86](index=86&type=chunk) [U.S. Health Care Reform](index=19&type=section&id=U.S.%20Health%20Care%20Reform) - The Affordable Care Act (ACA) has significantly impacted the healthcare industry, including provisions for biosimilars, Medicaid rebates, and annual fees for drug manufacturers[89](index=89&type=chunk) - The Inflation Reduction Act of 2022 (IRA) directs HHS to negotiate Medicare drug prices, imposes rebates for price increases exceeding inflation, and eliminates the Medicare Part D 'donut hole' by 2025[89](index=89&type=chunk)[90](index=90&type=chunk) - Heightened governmental scrutiny over pharmaceutical pricing practices has led to legislative proposals aimed at increasing transparency and reforming reimbursement methodologies[90](index=90&type=chunk) [U.S. Patent-Term Restoration and Marketing Exclusivity](index=19&type=section&id=U.S.%20Patent-Term%20Restoration%20and%20Marketing%20Exclusivity) - The Hatch-Waxman Act allows for patent term restoration of up to five years to compensate for time lost during FDA regulatory review, not exceeding 14 years from product approval[91](index=91&type=chunk) - The FDCA provides five years of non-patent marketing exclusivity for new chemical entities (NCEs) and three years for new clinical investigations of existing drugs[92](index=92&type=chunk) - Reference biological products are granted twelve years of data exclusivity from first licensure, delaying biosimilar applications[93](index=93&type=chunk) [European Union Drug Development](index=20&type=section&id=European%20Union%20Drug%20Development) - Medicinal products in the EU are subject to significant regulatory controls for preclinical and clinical research, with ongoing efforts to harmonize and streamline clinical trial authorization through the Clinical Trials Regulation EU No 536/2014[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [European Union Drug Review and Approval](index=21&type=section&id=European%20Union%20Drug%20Review%20and%20Approval) - In the EEA, marketing authorization (MA) can be obtained via the Centralized Procedure (mandatory for certain products, valid across EEA) or National MAs (recognized through Mutual Recognition or Decentralized Procedure)[98](index=98&type=chunk)[102](index=102&type=chunk) [Coverage and Reimbursement](index=21&type=section&id=Coverage%20and%20Reimbursement) - Sales of products depend on coverage and reimbursement by third-party payors (government, commercial insurance), with no uniform policy in the U.S., leading to a time-consuming and costly process[100](index=100&type=chunk) - Cost containment programs, including the ACA's increased Medicaid rebates and mandatory discounts, and the MMA's Medicare Part D program, can limit profitability and demand for drug products[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - The 340B drug pricing program requires manufacturers to extend discounts for federal reimbursement, and foreign countries often have price controls and reimbursement limitations[105](index=105&type=chunk)[107](index=107&type=chunk) [Intellectual Property](index=23&type=section&id=Intellectual%20Property) - Kodiak protects its proprietary technology, inventions, and product candidates through patents, trade secrets, and know-how in the U.S. and internationally[109](index=109&type=chunk) - As of December 31, 2022, the company held approximately **8 U.S. issued patents**, **15 U.S. pending applications**, **1 pending PCT application**, **40 foreign issued patents**, and **69 foreign pending applications**[110](index=110&type=chunk) - These patents and applications cover therapeutic proteins, biopolymer conjugates (ABC Platform), specific therapeutics like tarcocimab, and components, with anticipated U.S. expiration dates ranging from 2027 to 2042[111](index=111&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) [Human Capital Management](index=25&type=section&id=Human%20Capital%20Management) - As of December 31, 2022, Kodiak had **112 employees** worldwide, with **77** engaged in or supporting research, development, and clinical activities[116](index=116&type=chunk) - The company offers competitive compensation and benefits, and regularly assesses employee turnover, recruitment, and diversity[116](index=116&type=chunk) [Legal Proceedings](index=25&type=section&id=Legal%20Proceedings) - As of the report date, Kodiak is not a party to any material legal proceedings, though it may face various claims in the ordinary course of business[117](index=117&type=chunk) [Additional Information](index=25&type=section&id=Additional%20Information) - Kodiak maintains an internet website (https://kodiak.com) where it makes available SEC filings, including 10-K, 10-Q, and 8-K reports[118](index=118&type=chunk)[119](index=119&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks impacting Kodiak Sciences' business, including product development, regulatory compliance, third-party reliance, intellectual property, and financial condition [Risks Related to the Discovery, Development and Commercialization of Our Product Candidates](index=26&type=section&id=Risks%20Related%20to%20the%20Discovery,%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) - Kodiak's prospects are heavily dependent on tarcocimab, its first product candidate in clinical trials, and its success is uncertain[121](index=121&type=chunk) - Early clinical trial results for tarcocimab are not necessarily predictive of future outcomes, and the Phase 2b/3 DAZZLE study in wet AMD failed its primary efficacy endpoint[122](index=122&type=chunk)[123](index=123&type=chunk) - Failure of tarcocimab could lead to discontinuation of other ABC Platform product candidates[126](index=126&type=chunk) - Drug development is inherently risky, with no assurance of regulatory approval, and product candidates may fail at any stage due to lack of efficacy, safety concerns, or other factors[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Clinical trials may experience substantial delays due to various factors, including regulatory disagreements, patient enrollment difficulties, and adverse events[134](index=134&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - Product candidates may cause undesirable side effects, leading to clinical trial halts, restrictive labels, or denial of regulatory approval[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - Difficulties in enrolling patients in clinical trials can significantly delay or halt development activities[148](index=148&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk) - Clinical trials may fail to demonstrate substantial evidence of safety, efficacy, or durability, which is crucial for regulatory approval, especially for anti-VEGF agents with established competitors[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Topline results from the DAZZLE (wet AMD) and BEACON (RVO) studies may necessitate further modifications to ongoing pivotal studies, impacting timelines and success likelihood[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) [We may not be successful in our efforts to continue to create a pipeline of product candidates or to develop commercially successful products. If we fail to successfully identify and develop additional product candidates, our commercial opportunity may be limited.](index=33&type=section&id=We%20may%20not%20be%20successful%20in%20our%20efforts%20to%20continue%20to%20create%20a%20pipeline%20of%20product%20candidates%20or%20to%20develop%20commercially%20successful%20products.%20If%20we%20fail%20to%20successfully%20identify%20and%20develop%20additional%20product%20candidates,%20our%20commercial%20opportunity%20may%20be%20limited.) - The ABC Platform may not consistently produce viable product candidates, or competitors may develop superior platform technologies[159](index=159&type=chunk) - Identifying, developing, and commercializing additional product candidates requires substantial funding and carries inherent drug development risks[159](index=159&type=chunk) [We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may retain their market share with existing drugs, or achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.](index=33&type=section&id=We%20face%20significant%20competition%20in%20an%20environment%20of%20rapid%20technological%20and%20scientific%20change,%20and%20there%20is%20a%20possibility%20that%20our%20competitors%20may%20retain%20their%20market%20share%20with%20existing%20drugs,%20or%20achieve%20regulatory%20approval%20before%20us%20or%20develop%20therapies%20that%20are%20safer,%20more%20advanced%20or%20more%20effective%20than%20ours,%20which%20may%20negatively%20impact%20our%20ability%20to%20successfully%20market%20or%20commercialize%20any%20product%20candidates%20we%20may%20develop%20and%20ultimately%20harm%20our%20financial%20condition.) - The drug development market is highly competitive, with major pharmaceutical and biotechnology companies developing treatments for retinal diseases[160](index=160&type=chunk)[161](index=161&type=chunk) - Existing standard-of-care therapies (Roche, Regeneron, Novartis) are widely accepted, and newer FDA-approved competitors like Vabysmo and high-dose aflibercept offer extended dosing benefits[161](index=161&type=chunk)[162](index=162&type=chunk) - Competitors possess significantly greater financial resources, expertise, and may achieve regulatory approval faster or develop superior therapies, potentially impeding tarcocimab's market adoption through discounts or rebates[162](index=162&type=chunk)[163](index=163&type=chunk) - The company could face intellectual property infringement litigation from competitors[164](index=164&type=chunk) [The manufacture of our product candidates is highly complex and requires substantial lead time to produce.](index=34&type=section&id=The%20manufacture%20of%20our%20product%20candidates%20is%20highly%20complex%20and%20requires%20substantial%20lead%20time%20to%20produce.) - Manufacturing product candidates involves complex processes, specialized facilities, and specific raw materials, making it costly, less reliable, and difficult to reproduce compared to small molecule compounds[165](index=165&type=chunk) - The manufacturing process is susceptible to product loss due to contamination, equipment failure, operator error, and raw material shortages, especially given the international and single-source nature of the supply chain[167](index=167&type=chunk)[170](index=170&type=chunk) - Changes in manufacturing methods during development carry risks of affecting product performance and clinical trial results[169](index=169&type=chunk) [We have no experience manufacturing any of our product candidates at a commercial scale. If we or any of our third-party manufacturers encounter difficulties in production, or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our product candidates for clinical trials and regulatory applications or our products for patients, if approved, could be delayed or stopped, or we may be unable to establish a commercially viable cost structure.](index=35&type=section&id=We%20have%20no%20experience%20manufacturing%20any%20of%20our%20product%20candidates%20at%20a%20commercial%20scale.%20If%20we%20or%20any%20of%20our%20third-party%20manufacturers%20encounter%20difficulties%20in%20production,%20or%20fail%20to%20meet%20rigorously%20enforced%20regulatory%20standards,%20our%20ability%20to%20provide%20supply%20of%20our%20product%20candidates%20for%20clinical%20trials%20and%20regulatory%20applications%20or%20our%20products%20for%20patients,%20if%20approved,%20could%20be%20delayed%20or%20stopped,%20or%20we%20may%20be%20unable%20to%20establish%20a%20commercially%20viable%20cost%20structure.) - Kodiak and its third-party manufacturers lack experience in commercial-scale manufacturing for product candidates, and process validation for tarcocimab has not yet been satisfied[171](index=171&type=chunk) - Risks include inability to increase manufacturing capacity, quality issues during scale-up, failure to comply with cGMP regulations, and competition for manufacturing resources (e.g., COVID-19 vaccines)[171](index=171&type=chunk)[172](index=172&type=chunk) - Challenges in developing a prefilled syringe for tarcocimab or securing sufficient glass vials could also cause delays[172](index=172&type=chunk) [If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved.](index=35&type=section&id=If,%20in%20the%20future,%20we%20are%20unable%20to%20establish%20sales%20and%20marketing%20capabilities%20or%20enter%20into%20agreements%20with%20third%20parties%20to%20sell%20and%20market%20any%20product%20candidates%20we%20may%20develop,%20we%20may%20not%20be%20successful%20in%20commercializing%20those%20product%20candidates%20if%20and%20when%20they%20are%20approved.) - Kodiak lacks a sales or marketing infrastructure and experience in commercializing pharmaceutical products[173](index=173&type=chunk) - Establishing internal commercial capabilities is expensive, time-consuming, and risky, with potential for lost investment if product launch is delayed or fails[174](index=174&type=chunk)[177](index=177&type=chunk) - Reliance on third-party commercialization partners may result in lower revenue or profitability, and the company may have limited control over their efforts[175](index=175&type=chunk) [Even if any product candidates we develop receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success.](index=36&type=section&id=Even%20if%20any%20product%20candidates%20we%20develop%20receive%20marketing%20approval,%20they%20may%20fail%20to%20achieve%20the%20degree%20of%20market%20acceptance%20by%20physicians,%20patients,%20healthcare%20payors%20and%20others%20in%20the%20medical%20community%20necessary%20for%20commercial%20success.) - Commercial success depends on market acceptance by physicians, patients, and third-party payors, which is not guaranteed even with marketing approval[176](index=176&type=chunk) - Factors influencing market acceptance include efficacy, safety, perceived advantages, competitive pricing, patient access programs, physician recommendations, dosing convenience, and regulatory labeling[178](index=178&type=chunk) [Even if we are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business.](index=37&type=section&id=Even%20if%20we%20are%20able%20to%20commercialize%20any%20product%20candidates,%20such%20products%20may%20become%20subject%20to%20unfavorable%20pricing%20regulations,%20third-party%20reimbursement%20practices%20or%20healthcare%20reform%20initiatives,%20which%20would%20harm%20our%20business.) - Drug pricing and access policies in the U.S. and internationally are subject to change, with potential for Medicare negotiation under the Inflation Reduction Act (IRA) to limit competitive pricing[180](index=180&type=chunk) - Reimbursement from government and private payors is critical, but cost containment efforts, mandatory discounts (Medicaid, Medicare Part D, 340B), and foreign price controls could limit payments[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) - Significant delays in obtaining reimbursement and inconsistent coverage policies among payors are expected, potentially hindering commercialization and profitability[182](index=182&type=chunk)[184](index=184&type=chunk) [Our product candidates may face competition from biological products that are biosimilar to or interchangeable with our product candidates sooner than anticipated.](index=38&type=section&id=Our%20product%20candidates%20may%20face%20competition%20from%20biological%20products%20that%20are%20biosimilar%20to%20or%20interchangeable%20with%20our%20product%20candidates%20sooner%20than%20anticipated.) - The Biologics Price Competition and Innovation Act (BPCIA) allows for abbreviated approval pathways for biosimilar products, potentially leading to earlier competition[185](index=185&type=chunk) - There is a risk that the 12-year exclusivity period for reference biological products could be shortened or that Kodiak's product candidates may not be considered reference products, accelerating generic competition[186](index=186&type=chunk) [If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.](index=38&type=section&id=If%20product%20liability%20lawsuits%20are%20brought%20against%20us,%20we%20may%20incur%20substantial%20liabilities%20and%20may%20be%20required%20to%20limit%20commercialization%20of%20our%20product%20candidates.) - The company faces inherent product liability risk from clinical testing and commercialization, with potential for lawsuits alleging defects, negligence, or failure to warn[187](index=187&type=chunk) - Successful product liability claims could result in substantial liabilities, decreased demand, reputational harm, and diversion of management resources[187](index=187&type=chunk)[188](index=188&type=chunk) - Insurance coverage may be inadequate or unavailable at reasonable costs, potentially leaving the company responsible for significant damages[189](index=189&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=39&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) - The regulatory approval processes of the FDA, EMA, and other foreign authorities are lengthy, unpredictable, and may not result in approval for any product candidates[190](index=190&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk) - Data from clinical trials conducted outside the United States may not be accepted by regulatory authorities, requiring additional costly and time-consuming trials[194](index=194&type=chunk) - Even with regulatory approval, products remain subject to extensive scrutiny, including ongoing manufacturing, labeling, promotion, and post-marketing study requirements, with non-compliance leading to severe penalties[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Healthcare legislative measures, such as the ACA and IRA, aimed at reducing costs, could adversely impact product pricing, reimbursement, and profitability[202](index=202&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - The company is exposed to risks of misconduct by employees and third parties, including non-compliance with healthcare fraud and abuse laws (Anti-Kickback Statute, False Claims Act, HIPAA, Physician Payments Sunshine Act), leading to significant penalties[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Stringent and evolving data privacy and security obligations (CCPA, CPRA, GDPR) pose risks of regulatory investigations, fines, litigation, and business disruptions, especially concerning cross-border data transfers[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Failure to comply with environmental, health, and safety laws and regulations could result in fines, penalties, and adverse effects on business success[223](index=223&type=chunk)[224](index=224&type=chunk) - Business activities may be subject to the Foreign Corrupt Practices Act (FCPA) and similar anti-bribery laws, with violations leading to fines, sanctions, and reputational damage[226](index=226&type=chunk) [Risks Related to Our Reliance on Third Parties](index=47&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) - Kodiak relies on third parties (CROs, medical institutions, investigators) for clinical trials and preclinical testing, reducing control and posing risks of unsatisfactory performance or delays[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - Exclusive reliance on third-party manufacturers (e.g., Lonza AG) for product candidate materials carries risks of insufficient quantities, unacceptable costs, and non-compliance with cGMP regulations[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - Sharing trade secrets with third parties increases the risk of misappropriation or disclosure, harming competitive position[237](index=237&type=chunk) - Reliance on third-party suppliers for key raw materials poses risks of supply interruption, limited control over pricing, and quality issues[238](index=238&type=chunk) - Dependence on collaborations for product candidate development and commercialization introduces risks such as shared control, intellectual property disputes, and potential termination of agreements[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk) [Risks Related to Our Intellectual Property](index=51&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - Inability to obtain and maintain broad patent protection for product candidates or the ABC Platform could allow competitors to commercialize similar products[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - The scope of patent protection may be insufficient, or patents may be challenged, narrowed, or invalidated by third parties, diminishing their commercial value[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&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[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Non-compliance with procedural requirements for patent agencies can lead to loss of patent rights[254](index=254&type=chunk) - Changes in U.S. patent law, including the first-inventor-to-file system and post-grant review procedures, have increased uncertainty and costs for patent prosecution and enforcement[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - Failure to obtain patent term extension and data exclusivity for product candidates could allow competitors to enter the market sooner[260](index=260&type=chunk) - Claims challenging inventorship or ownership of patents and other intellectual property could result in litigation, loss of rights, and diversion of resources[262](index=262&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - Inability to protect trade secret confidentiality could harm business and competitive position, as trade secrets are difficult to enforce[263](index=263&type=chunk)[264](index=264&type=chunk) - Third-party claims of intellectual property infringement could prevent or delay commercialization, lead to substantial litigation expenses, and require licensing or product redesign[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - Inadequate protection of trademarks and trade names could hinder brand recognition and competitive effectiveness[279](index=279&type=chunk) - Intellectual property rights have limitations and may not address all potential threats, such as competitors developing non-infringing similar products or operating in countries without patent protection[280](index=280&type=chunk)[281](index=281&type=chunk) [Risks Related to Our Operations](index=59&type=section&id=Risks%20Related%20to%20Our%20Operations) - Kodiak is highly dependent on key managerial, scientific, and medical personnel, and failure to attract or retain them could harm business strategy and product development[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - The company needs to grow its organization and may experience difficulties managing this growth, including recruiting, integrating, and retaining employees, and expanding operational controls[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) - Engaging in acquisitions or strategic partnerships could increase capital requirements, dilute stockholders, incur debt, and divert management attention[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - Compromised security measures or failures in information technology systems could lead to significant fines, interrupt development programs, and harm reputation[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk) - Business disruptions from natural disasters, epidemics (e.g., COVID-19), or geopolitical events (e.g., Russia-Ukraine conflict) could seriously harm revenue and financial condition[301](index=301&type=chunk)[302](index=302&type=chunk)[308](index=308&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - International operations are subject to economic, political, and regulatory risks, including those related to Brexit and the Russia-Ukraine conflict, which could adversely affect business[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) [Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.](index=65&type=section&id=Our%20ability%20to%20use%20our%20net%20operating%20loss%20carryforwards%20and%20certain%20other%20tax%20attributes%20may%20be%20limited.) - As of December 31, 2022, Kodiak had **$68.7 million** in federal and **$614.9 million** in state net operating losses (NOLs) that may be limited by 'ownership changes' under Sections 382 and 383 of the Code[315](index=315&type=chunk) - The Tax Act, as modified by the CARES Act, limits the deductibility of federal NOLs incurred after 2017 in taxable years beginning after 2020, potentially impacting future utilization[316](index=316&type=chunk) [Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.](index=65&type=section&id=Changes%20in%20tax%20laws%20or%20regulations%20that%20are%20applied%20adversely%20to%20us%20or%20our%20customers%20may%20have%20a%20material%20adverse%20effect%20on%20our%20business,%20cash%20flow,%20financial%20condition%20or%20results%20of%20operations.) - New or changed tax laws (e.g., Tax Act, IRA) or their interpretations could adversely affect business operations and financial performance, including corporate tax rates, foreign earnings, and expense deductibility[317](index=317&type=chunk) [Item 1B. Unresolved Staff Comments](index=75&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[358](index=358&type=chunk) [Item 2. Properties](index=75&type=section&id=Item%202.%20Properties) Kodiak Sciences leases approximately 155,000 square feet of office and R&D space in Palo Alto, California, and 1,000 square meters in Visp, Switzerland - Kodiak's corporate offices and R&D facilities are located in Palo Alto, California, leasing approximately **155,000 square feet** under lease agreements commencing in June 2020[359](index=359&type=chunk)[360](index=360&type=chunk) - The company also leases about **1,000 square meters** of office and laboratory space in Visp, Switzerland, under an initial 5-year lease term that began in April 2020[361](index=361&type=chunk) [Item 3. Legal Proceedings](index=75&type=section&id=Item%203.%20Legal%20Proceedings) Kodiak Sciences is not currently a party to any material legal proceedings. While the company may face various legal claims in the ordinary course of business, management does not anticipate any outcomes that would have a material adverse effect on its financial position, results of operations, or cash flows - Kodiak Sciences is not a party to any material legal proceedings as of the date of this Annual Report on Form 10-K[362](index=362&type=chunk) - The company may be subject to ordinary course legal claims, but management does not expect a material adverse effect on financial position, results of operations, or cash flows[362](index=362&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there are no mine safety disclosures to report - There are no mine safety disclosures[363](index=363&type=chunk) [PART II](index=76&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities](index=76&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholders%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Kodiak Sciences' common stock trades on Nasdaq under 'KOD', with no cash dividends paid or anticipated, and no recent unregistered sales or issuer purchases - Kodiak Sciences' common stock trades on the Nasdaq Global Market under the trading symbol 'KOD'[366](index=366&type=chunk) - As of February 28, 2023, there were approximately **22 holders of record** of the company's common stock[367](index=367&type=chunk) - The company has never declared or paid any cash dividends on its common stock and does not anticipate paying cash dividends in the foreseeable future[368](index=368&type=chunk) - There have been no recent sales of unregistered securities or issuer purchases of equity securities[369](index=369&type=chunk)[370](index=370&type=chunk) [Item 6. Reserved](index=76&type=section&id=Item%206.%20Reserved) This item is reserved and not applicable for this Annual Report on Form 10-K - Item 6 is reserved and not applicable[371](index=371&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=77&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews Kodiak Sciences' financial condition and operations, noting significant operating losses, reliance on equity financing, and $478.9 million in cash as of December 31, 2022 - Kodiak Sciences is a biopharmaceutical company focused on researching, developing, and commercializing transformative therapeutics for high-prevalence retinal diseases, leveraging its ABC Platform™[374](index=374&type=chunk) - The company's lead product candidate, tarcocimab, has four Phase 3 studies (GLEAM, GLIMMER, DAYLIGHT, GLOW) fully enrolled, with topline data expected in Q3 2023[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) - Tarcocimab manufacturing at the custom-built Ursus facility, in partnership with Lonza, was commissioned as cGMP in January 2023, with commercial-scale batch manufacturing starting in Q1 2023[379](index=379&type=chunk) - The KSI-501 program, a bispecific ABC targeting VEGF and IL-6, has an IND cleared by the FDA, and a Phase 1 study in DME patients is currently screening[380](index=380&type=chunk) - Kodiak is also advancing its 'triplet' technology platform and developing a visual engagement technology and imager (VETi) digital health platform, with pilot clinical testing for VETi expected mid-2023[381](index=381&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk) - The company has incurred significant operating losses since inception, with a net loss of **$333.8 million** in 2022, and an accumulated deficit of **$892.0 million** as of December 31, 2022[389](index=389&type=chunk) - Operations are funded primarily through equity securities, and as of December 31, 2022, cash, cash equivalents, and marketable securities totaled **$478.9 million**, expected to be sufficient for at least 12 months[388](index=388&type=chunk)[391](index=391&type=chunk)[410](index=410&type=chunk) Operating Results Summary (in thousands) | Metric | 2022 | 2021 | 2020 | | :-------------------------- | :----- | :----- | :----- | | Research and development | $267,591 | $217,340 | $107,389 | | General and administrative | $73,788 | $49,711 | $28,618 | | Loss from operations | $(341,379) | $(267,051) | $(136,007) | | Net loss | $(333,823) | $(266,990) | $(133,096) | - Research and development expenses increased by **$50.3 million (23%)** in 2022 compared to 2021, driven by increased payroll and personnel expenses (including stock-based compensation) and ABC Platform development, despite a decrease in tarcocimab program expenses[400](index=400&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk)[403](index=403&type=chunk) - General and administrative expenses increased by **$24.1 million (48%)** in 2022 compared to 2021, primarily due to higher stock-based compensation expense[404](index=404&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=87&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Kodiak Sciences faces market risk primarily from interest rate changes affecting its $478.9 million in cash and marketable securities, with minimal foreign currency risk - As of December 31, 2022, Kodiak held **$478.9 million** in cash, cash equivalents, and marketable securities, primarily invested in money market funds and U.S. treasury securities[432](index=432&type=chunk) - A hypothetical **100 basis point increase** in market interest rates would result in an estimated **$0.6 million** decline in the net fair value of interest-sensitive marketable securities[432](index=432&type=chunk) - Foreign currency exchange rate risk did not have a significant impact on the company's results of operations for the periods presented[433](index=433&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=87&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Kodiak Sciences' audited consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, cash flows, and related notes [Report of Independent Registered Public Accounting Firm](index=88&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - PricewaterhouseCoopers LLP provided an unqualified opinion on the consolidated financial statements for the period ended December 31, 2022 and 2021[439](index=439&type=chunk) - The firm did not audit the effectiveness of internal control over financial reporting[441](index=441&type=chunk) - Accrued clinical trial and related costs were identified as a critical audit matter due to the judgment involved in management's estimates and the auditor's effort in evaluating supporting evidence[444](index=444&type=chunk)[445](index=445&type=chunk)[446](index=446&type=chunk) [Consolidated Balance Sheets](index=90&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet (in thousands) | Asset/Liability/Equity | Dec 31, 2022 | Dec 31, 2021 | | :-------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $190,433 | $731,510 | | Marketable securities | $288,500 | — | | Prepaid expenses and other current assets | $7,072 | $3,301 | | Total current assets | $486,005 | $734,811 | | Restricted cash | $6,324 | $6,324 | | Property and equipment, net | $56,384 | $41,330 | | Operating lease right-of-use asset | $59,369 | $66,744 | | Other assets | $58,546 | $55,011 | | **Total assets** | **$666,628** | **$904,220** | | Accounts payable | $9,130 | $12,431 | | Accrued and other current liabilities | $33,440 | $48,319 | | Operating lease liability (current) | $9,926 | $3,933 | | Total current liabilities | $52,496 | $64,683 | | Operating lease liability (non-current) | $77,807 | $76,063 | | Liability related to sale of future royalties | $99,996 | $99,943 | | Other liabilities | $162 | $211 | | **Total liabilities** | **$230,461** | **$240,900** | | Common stock | $5 | $5 | | Additional paid-in capital | $1,329,509 | $1,221,532 | | Accumulated other comprehensive income (loss) | $(1,307) | — | | Accumulated deficit | $(892,040) | $(558,217) | | **Total stockholders' equity** | **$436,167** | **$663,320** | | **Total liabilities and stockholders' equity** | **$666,628** | **$904,220** | [Consolidated Statements of Operations and Comprehensive Loss](index=91&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | Metric | 2022 | 2021 | 2020 | | :------------------------------------ | :----- | :----- | :----- | | Research and development | $267,591 | $217,340 | $107,389 | | General and administrative | $73,788 | $49,711 | $28,618 | | Total operating expenses | $341,379 | $267,051 | $136,007 | | Loss from operations | $(341,379) | $(267,051) | $(136,007) | | Interest income | $7,071 | $298 | $2,966 | | Interest expense | $(18) | $(47) | $(25) | | Other income (expense), net | $503 | $(190) | $(30) | | Net loss | $(333,823) | $(266,990) | $(133,096) | | Net loss per common share, basic and diluted | $(6.39) | $(5.16) | $(2.91) | | Weighted-average shares outstanding | 52,249,620 | 51,788,918 | 45,741,845 | | Other comprehensive income (loss) | $(1,307) | $(53) | $43 | | Comprehensive loss | $(335,130) | $(267,043) | $(133,053) | [Consolidated Statements of Stockholders' Equity](index=92&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) | Metric | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | | :-------------------------- | :----------- | :----------- | :----------- | | Common Stock (Shares) | 52,333,850 | 51,826,257 | 51,112,302 | | Common Stock (Amount) | $5 | $5 | $5 | | Additional Paid-In Capital | $1,329,509 | $1,221,532 | $1,151,920 | | Accumulated Other Comprehensive Income (Loss) | $(1,307) | — | $53 | | Accumulated Deficit | $(892,040) | $(558,217) | $(291,227) | | Total Stockholders' Equity | $436,167 | $663,320 | $860,751 | [Consolidated Statements of Cash Flows](index=93&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 2022 | 2021 | 2020 | | :-------------------------------------------------- | :--------- | :--------- | :--------- | | Net cash provided by (used in) operating activities | $(206,459) | $(182,270) | $(83,428) | | Net cash provided by (used in) investing activities | $(336,513) | $(38,798) | $104,834 | | Net cash provided by (used in) financing activities | $1,895 | $8,182 | $717,377 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(541,077) | $(212,886) | $738,783 | | Cash, cash equivalents and restricted cash, at end of period | $196,757 | $737,834 | $950,720 | - Net cash used in operating activities increased to **$206.5 million** in 2022 from **$182.3 million** in 2021, primarily due to increased net loss, payroll, personnel expenses, and manufacturing/clinical trial costs[417](index=417&type=chunk) - Net cash used in investing activities significantly increased to **$336.5 million** in 2022 from **$38.8 million** in 2021, mainly due to net purchases of marketable securities[418](index=418&type=chunk) - Net cash provided by financing activities decreased to **$1.9 million** in 2022 from **$8.2 million** in 2021, primarily from stock option exercises and employee stock purchase plans[419](index=419&type=chunk) [Notes to Consolidated Financial Statements](index=94&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - Kodiak Sciences is a clinical-stage biopharmaceutical company focused on retinal diseases, with **$478.9 million** in cash, cash equivalents, and marketable securities as of December 31, 2022, deemed sufficient for at least 12 months of operations[460](index=460&type=chunk)[461](index=461&type=chunk) - The company operates as one reportable segment and prepares financial statements in accordance with US GAAP, making estimates for accrued R&D and stock-based compensation[462](index=462&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk) - Global macroeconomic uncertainties, including health epidemics, labor shortages, bank failures, inflation, and the Russia-Ukraine conflict, pose risks to the company's financial condition and operations[469](index=469&type=chunk) - Property and equipment, net, increased to **$56.4 million** in 2022 from **$41.3 million** in 2021, with depreciation expense of **$3.8 million** in 2022[507](index=507&type=chunk)[508](index=508&type=chunk) Accrued and Other Current Liabilities (in thousands) | Category | Dec 31, 2022 | Dec 31, 2021 | | :------------------------------------ | :----------- | :----------- | | Accrued clinical trial and related costs | $18,334 | $21,776 | | Accrued salaries and benefits | $6,033 | $6,187 | | Accrued manufacturing and R&D costs | $5,978 | $6,041 | | Accrued leasehold improvements | $1,893 | $13,021 | | Total accrued and other current liabilities | $33,440 | $48,319 | - Marketable securities, classified as available-for-sale U.S. treasury securities, totaled **$288.5 million** in fair value as of December 31, 2022, with **$1.3 million** in unrealized losses[511](index=511&type=chunk)[512](index=512&type=chunk) - Operating lease liabilities totaled **$87.7 million** as of December 31, 2022, with a weighted-average remaining lease term of **8.4 years** and a weighted-average discount rate of **6.8%**[518](index=518&type=chunk) - An embedded lease for a custom-built manufacturing facility with Lonza was commissioned as cGMP on January 31, 2023, with estimated capital contributions of **75.0 million Swiss Francs** and potential manufacturing payments of **150.0 million Swiss Francs**[519](index=519&type=chunk)[520](index=520&type=chunk)[521](index=521&type=chunk) - Contractual obligations related to manufacturing agreements subject to cancellation fees totaled **$56.8 million** as of December 31, 2022[524](index=524&type=chunk) - The company had a total loss before income taxes of **$333.8 million** in 2022 and recorded a full valuation allowance against its net deferred tax assets, which include **$68.7 million** federal and **$614.9 million** state NOLs[532](index=532&type=chunk)[537](index=537&type=chunk) - As of December 31, 2022, **52,333,850 shares** of common stock were issued and outstanding, with **19,182,414 shares** reserved for future issuances[550](index=550&type=chunk) - Stock-based compensation expense was **$106.0 million** in 2022, including **$65.1 million** from the 2021 Long-Term Performance Incentive Plan (LTPIP) and **$6.3 million** from performance-based awards[555](index=555&type=chunk)[571](index=571&type=chunk)[574](index=574&type=chunk) - Net loss per common share (basic and diluted) was **$(6.39)** in 2022, with **16.8 million** common share equivalents excluded from diluted EPS calculation due to antidilution[578](index=578&type=chunk) - The 401(k) plan included employer matching contributions of **$0.9 million** in 2022[579](index=579&type=chunk) - The liability related to the sale of future royalties to BBA, initially **$100.0 million**, remains on the balance sheet, with royalty payments not yet probable and estimable as of December 31, 2022[581](index=581&type=chunk)[582](index=582&type=chunk)[583](index=583&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=114&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) This section confirms that there have been no changes in or disagreements with the company's accountants regarding accounting and financial disclosures - There have been no changes in or disagreements with accountants on accounting and financial disclosures[586](index=586&type=chunk) [Item 9A. Controls and Procedures](index=114&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes - Management, with the participation of the principal executive and financial officers, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2022[588](index=588&type=chunk) - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2022, based on the COSO framework, and concluded it was effective[589](index=589&type=chunk) - The company is a non-accelerated filer and is not required to comply with auditor attestation requirements for internal control over financial reporting[590](index=590&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2022[592](index=592&type=chunk) [Item 9B. Other Information](index=114&type=section&id=Item%209B.%20Other%20Information) This section states that there is no other information required to be disclosed - There is no other information to report[593](index=593&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=114&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section states that the disclosure regarding foreign jurisdictions that prevent inspections is not applicable to Kodiak Sciences Inc - This item is not applicable[594](index=594&type=chunk) [PART III](index=115&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=115&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance, including the Code of Business Conduct and Ethics, is incorporated by reference from the company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information on directors, executive officers, and corporate governance is incorporated by reference from the definitive Proxy Statement[596](index=596&type=chunk) - The company's Code of Business Conduct and Ethics applies to all employees, officers, and directors, and is available on its website[597](index=597&type=chunk) [Item 11. Executive Compensation](index=115&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the company's definitive Proxy Statement - Information regarding executive compensation is incorporated by reference from the definitive Proxy Statement[598](index=598&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters](index=115&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholders%20Matters) Information on security ownership of certain beneficial owners and management, as well as related stockholder matters, is incorporated by reference from the company's definitive Proxy Statement - Information on security ownership of certain beneficial owners and management is incorporated by reference from the definitive Proxy Statement[599](index=599&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=115&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information concerning certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the definitive Proxy Statement[600](index=600&type=chunk) [Item 14. Principal Accountant Fees and Services](index=115&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement - Information on principal accountant fees and services is incorporated by reference from the definitive Proxy Statement[601](index=601&type=chunk) [PART IV](index=116&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=116&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report, including consolidated financial statements and a comprehensive exhibit index - The consolidated financial statements are filed as part of this Annual Report on Form 10-K under Item 8[604](index=604&type=chunk) - All schedules to the consolidated financial statements are omitted as the required information is either inapplicable or presented within the consolidated financial statements[605](index=605&type=chunk) - A detailed exhibit index is provided, listing various documents incorporated by reference or filed herewith, including corporate governance documents, employment agreements, and certifications[606](index=606&type=chunk)[607](index=607&type=chunk)[608](index=608&type=chunk)[609](index=609&type=chunk) [Item 16. Form 10-K Summary](index=118&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section indicates that no Form 10-K summary is provided in this report - No Form 10-K Summary is included[610](index=610&type=chunk) [Signatures](index=119&type=section&id=Signatures) This section contains the required signatures for the Annual Report on Form 10-K, affirming compliance with the Securities Exchange Act of 1934 - The Annual Report on Form 10-K is duly signed by authorized representatives, including the Chairman and Chief Executive Officer (Victor Perlroth, M.D.) and Chief Financial Officer (John Borgeson), and members of the Board of Directors[613](index=613&type=chunk)[615](index=615&type=chunk)[618](index=618&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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, 2022 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) Delaware 27-0476525 (S ...

| --- | --- | |---------------------------------------------------------------------------------------------------------|-------| | | | | | | | KSI-301 Anti-VEGF Antibody Biopolymer Conjugate for Retinal Vein Occlusion: | | | Primary 24-Week Efficacy and Safety Outcomes of the BEACON Phase 3 Pivotal Study | | | Arshad M. Khanani, M.D., M.A., FASRS Director of Clinical Research, Sierra Eye Associates, Reno, NV USA | | | on behalf of the BEACON Study Group | | 2 September 2022 Disclosures | --- | --- | |----- ...