Kronos Bio(US:KRON)2024-11-13 21:10Financial Performance - The company reported net losses of $14.1 million for the three months ended September 30, 2024, compared to $31.4 million for the same period in 2023, indicating a reduction in losses [102]. - Revenue for the three months ended September 30, 2024, was $2.4 million, an increase of $1.5 million compared to $0.9 million for the same period in 2023 [125]. - For the nine months ended September 30, 2024, revenue was $7.6 million, an increase of $3.6 million from $4.0 million in the same period of 2023 [132]. - Total operating expenses for the nine months ended September 30, 2024, were $73.3 million, down from $98.5 million in 2023, a decrease of $25.2 million [131]. - Research and development expenses decreased to $12.3 million for the three months ended September 30, 2024, down from $25.3 million in 2023, a reduction of $13.1 million [128]. - General and administrative expenses were $5.8 million for the three months ended September 30, 2024, compared to $9.4 million in 2023, a decrease of $3.6 million [129]. - Research and development expenses for the nine months ended September 30, 2024, were $40.3 million, a decrease of $25.6 million from $65.8 million in 2023 [134]. - General and administrative expenses for the nine months ended September 30, 2024, were $19.7 million, down from $29.8 million in 2023, a decrease of $10.1 million [135]. - The company recognized a non-cash impairment charge of $7.1 million during the nine months ended September 30, 2024 [136]. - The company recorded total restructuring costs of $6.2 million during the nine months ended September 30, 2024, including non-cash stock-based compensation of $4.4 million [138]. Cash Flow and Capital Resources - As of September 30, 2024, the company had an accumulated deficit of $569.1 million and cash, cash equivalents, and investments totaling $124.9 million [102]. - Cash used in operating activities for the nine months ended September 30, 2024, was $52.6 million, with a net loss of $60.3 million adjusted for non-cash charges of $12.7 million [146]. - Cash provided by investing activities for the nine months ended September 30, 2024, was $63.1 million, primarily from purchases and maturities of marketable securities [148]. - The company incurred cash used in operating activities of $53.6 million for the nine months ended September 30, 2023, with a net loss of $87.4 million adjusted for non-cash charges of $22.6 million [147]. - Cash provided by financing activities for the nine months ended September 30, 2024, was $0.2 million, compared to $0.4 million for the same period in 2023 [150][151]. - The company intends to raise additional capital through equity securities or debt financing to continue operations, with potential dilution of existing stockholders' interests [143]. - The company’s future viability depends on its ability to generate cash from operations or raise additional capital, with significant risks if financing is not available [144]. - As of September 30, 2024, the company had cash, cash equivalents, and investments totaling $124.9 million, expected to fund operations for the next 12 months [140]. Strategic Initiatives - The company announced the discontinuation of its clinical trial for istisociclib due to safety concerns, with five out of seven patients experiencing neurological events [96]. - The company has initiated a formal process to evaluate potential strategic alternatives, including acquisitions or mergers, following the discontinuation of istisociclib [96]. - The company entered into a collaboration agreement with Genentech, receiving an upfront payment of $20.0 million and being eligible for up to $177.0 million in milestone payments [105]. - The term of the discovery research programs with Genentech is up to 24 months, with a possible six-month extension [106]. - The increase in revenue was primarily due to the Collaboration and License Agreement with Genentech, which began in January 2023 [125]. Research and Development - KB-9558 is in preclinical development for multiple myeloma and HPV-driven tumors, while KB-7898 is being developed for Sjogren's disease [98][99]. - The company’s primary use of cash has historically been for research and development expenditures related to therapeutic discovery and clinical development [141]. - The company has not yet commercialized any products and does not expect to generate revenue from product sales for several years [140]. Financial Obligations and Risks - The company has significant contractual obligations, including lease agreements with escalating payments, impacting future cash flows [152][154]. - Stock-based compensation is recognized over the requisite service period, generally the vesting period, using the straight-line method [169]. - The fair value of stock options is estimated using the Black-Scholes model, considering expected term, expected volatility, risk-free interest rate, and expected dividend yield [170][171][172]. - Impairment of long-lived assets is evaluated when events indicate that carrying amounts may not be recoverable, with losses recognized when future cash flows are less than carrying amounts [173]. - The company has never paid dividends on its common stock and has no plans to do so, resulting in an expected dividend yield of zero [172]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [176].