Kiniksa(US:KNSA)2025-07-29 20:16PART I — FINANCIAL INFORMATION Financial Statements (unaudited) Unaudited financials show total assets grew to $661.2 million, with H1 2025 net income of $26.4 million from ARCALYST revenue Consolidated Balance Sheets Total assets increased to $661.2 million by June 30, 2025, with shareholders' equity at $495.0 million, driven by cash and inventory Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $192,037 | $183,581 | | Inventory | $48,181 | $26,364 | | Total current assets | $420,311 | $331,799 | | Total assets | $661,150 | $580,553 | | Liabilities & Equity | | | | Total current liabilities | $117,827 | $100,621 | | Total liabilities | $166,143 | $142,117 | | Total shareholders' equity | $495,007 | $438,436 | Consolidated Statements of Operations and Comprehensive Income (Loss) H1 2025 saw net income of $26.4 million, a turnaround from loss, with total revenue at $294.6 million from ARCALYST sales Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $156,797 | $108,631 | $294,582 | $188,489 | | Income (Loss) from Operations | $20,160 | $(117) | $33,432 | $(16,659) | | Net Income (Loss) | $17,832 | $(3,908) | $26,371 | $(21,612) | | Diluted EPS | $0.23 | $(0.06) | $0.34 | $(0.31) | - The shift from a net loss to net income was primarily driven by a 52% YoY increase in net product revenue for Q2 and a 61% YoY increase for H1 202522 Consolidated Statements of Cash Flows Operating cash flow improved to $50.4 million for H1 2025, increasing cash and cash equivalents by $8.5 million overall Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,414 | $9,155 | | Net cash used in investing activities | $(55,424) | $(21,273) | | Net cash provided by financing activities | $13,466 | $3,435 | | Net increase (decrease) in cash | $8,456 | $(8,683) | Notes to Consolidated Financial Statements Notes detail accounting policies, UK redomiciliation, ARCALYST growth, mavrilimumab termination, and manufacturing commitments - The company completed its redomiciliation from Bermuda to the United Kingdom in June 2024, becoming Kiniksa Pharmaceuticals International, plc29 - As of June 30, 2025, the company had cash, cash equivalents, and short-term investments of $307.8 million and believes these funds are sufficient for at least the next twelve months of operations35 - The company has total manufacturing purchase commitments of $161.6 million, with $136.7 million related to the ARCALYST technology transfer and supply agreement with Samsung126202 - In April 2025, the company and Huadong mutually terminated their collaboration agreement for mavrilimumab70 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong H1 2025 performance to ARCALYST success, with net product revenue up 61% to $294.6 million, yielding $26.4 million net income - The company's primary commercial product is ARCALYST®, an IL-1α and IL-1β cytokine trap approved for recurrent pericarditis and other rare diseases. The pipeline is focused on cardiovascular indications, including KPL-387 for recurrent pericarditis137138 - Development of abiprubart was discontinued in February 2025, and the company is exploring strategic alternatives for the asset. The license agreement for mavrilimumab was also terminated140142 Financial Results Comparison (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Product revenue, net | $294.6 | $182.3 | +$112.3 | | Total revenue | $294.6 | $188.5 | +$106.1 | | R&D Expenses | $38.1 | $50.4 | -$12.3 | | SG&A Expenses | $90.4 | $81.1 | +$9.3 | | Net Income (Loss) | $26.4 | $(21.6) | +$48.0 | - The company believes its cash, cash equivalents, and short-term investments of $307.8 million as of June 30, 2025, are sufficient to fund operations and capital expenditures for at least the next 12 months145201 Quantitative and Qualitative Disclosures About Market Risk Market risk exposure primarily relates to interest rate sensitivities on short-term investments, with no material changes reported - The company's primary market risk exposure is interest rate sensitivity on its short-term investments. No material changes were reported for the quarter218 Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025220 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls221 PART II — OTHER INFORMATION Legal Proceedings The company is not a party to any material legal proceedings and has no litigation contingency reserves - The company is not currently a party to any material legal proceedings224 Risk Factors Key risks include ARCALYST commercialization, pricing, clinical development, third-party manufacturing, and IP protection Risks Related to Commercialization ARCALYST commercial success faces risks in revenue growth, specialty pharmacy reliance, and favorable third-party payor reimbursement - Continued commercialization of ARCALYST is subject to risks including manufacturing sufficiency, prescriber adoption, and competition, which could impair revenue generation227228 - Successful commercialization depends on third-party payors providing favorable coverage and reimbursement, which is subject to cost-control efforts and potential restrictions234235 - The market opportunity for ARCALYST and other product candidates may be smaller than estimated, which could adversely affect revenue and profitability if the addressable patient population is lower than projected249250 Risks Related to Product Development Product development faces risks: lengthy, expensive clinical trials, uncertain outcomes, enrollment challenges, and potential undesirable side effects - Clinical drug development is a long, costly process with uncertain outcomes. The company may face substantial delays or fail to demonstrate the required safety and efficacy for its product candidates288 - Enrolling a sufficient number of patients in clinical trials is challenging, particularly for rare diseases, and difficulties in enrollment could delay or prevent trial completion303 - Undesirable side effects or safety risks from product candidates could delay or prevent regulatory approval, lead to a more restrictive label, or result in market withdrawal after approval306 Risks Related to Manufacturing and Our Reliance on Third Parties Reliance on third-party CDMOs creates supply, cost, and quality risks, especially with the complex ARCALYST technology transfer to Samsung - The company relies on third-party CDMOs for manufacturing, which increases the risk of insufficient quantities, unacceptable costs or quality, and potential delays to development and commercialization347 - A technology transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung is underway and is subject to significant risks, including potential delays, comparability issues, and the need for FDA approval367368369 - The company depends on single-source suppliers for critical components of ARCALYST and its pipeline candidates. The loss of any of these suppliers could significantly harm the business375 Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities No unregistered sales of equity, use of proceeds, or issuer purchases of equity securities were reported - None reported575 Defaults Upon Senior Securities No defaults upon senior securities were reported - None reported576 Mine Safety Disclosures This item is not applicable to the company - None reported577 Other Information The company disclosed the adoption of Rule 10b5-1 trading arrangements by two officers during Q2 2025 Adoption of Trading Arrangements by Officers | Name | Title | Action | Effective Date | Maximum Shares in Plan | | :--- | :--- | :--- | :--- | :--- | | Sanj K. Patel | CEO and Chairman | Adoption | May 7, 2025 | 355,590 | | Michael R. Megna | SVP, Finance and CAO | Adoption | May 24, 2025 | 36,145 | Exhibits Exhibits filed with Form 10-Q include incentive plan documents, a consulting agreement, and officer certifications - The report includes exhibits such as the KPL-387 Long-Term Incentive Plan, related award agreements, a consulting agreement, and certifications by the CEO and CFO580