Kura Oncology(KURA) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, investments, fair value measurements, balance sheet details, leases, collaboration agreements, stockholders' equity, share-based compensation, and segment reporting for the periods ended June 30, 2025, and December 31, 2024 Condensed Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Condensed Balance Sheet Highlights | (In thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | Change (2025 vs 2024) | % Change | |---|---|---|---|---| | Assets | | | | | | Cash and cash equivalents | $81,948 | $224,462 | $(142,514) | -63.49% | | Short-term investments | $548,780 | $502,933 | $45,847 | 9.12% | | Total current assets | $660,075 | $744,829 | $(84,754) | -11.38% | | Total assets | $682,425 | $760,159 | $(77,734) | -10.22% | | Liabilities and Stockholders' Equity | | | | | | Total current liabilities | $107,174 | $78,712 | $28,462 | 36.16% | | Total liabilities | $376,939 | $346,519 | $30,420 | 8.78% | | Total stockholders' equity | $305,486 | $413,640 | $(108,154) | -26.15% | Condensed Statements of Operations and Comprehensive Loss This section outlines the company's financial performance, presenting revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 Condensed Statements of Operations and Comprehensive Loss Highlights | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Collaboration revenue | $15,288 | $— | $29,396 | $— | | Research and development expenses | $62,785 | $39,727 | $118,758 | $75,995 | | General and administrative expenses | $25,169 | $16,677 | $48,004 | $34,861 | | Total operating expenses | $87,954 | $56,404 | $166,762 | $110,856 | | Net Loss | $(66,122) | $(50,837) | $(123,551) | $(100,362) | | Net loss per share, basic and diluted | $(0.75) | $(0.59) | $(1.41) | $(1.18) | Condensed Statements of Stockholders' Equity This section details changes in the company's equity accounts, including common stock, additional paid-in capital, accumulated other comprehensive income, and accumulated deficit, from December 31, 2024, to June 30, 2025 Stockholders' Equity Changes (December 31, 2024 to June 30, 2025) | (In thousands) | Balance as of December 31, 2024 | Balance as of June 30, 2025 | Change | |---|---|---|---| | Common Stock Par Value | $8 | $9 | $1 | | Additional Paid-In Capital | $1,308,290 | $1,323,739 | $15,449 | | Accumulated Other Comprehensive Income (Loss) | $764 | $711 | $(53) | | Accumulated Deficit | $(895,422) | $(1,018,973) | $(123,551) | | Total Stockholders' Equity | $413,640 | $305,486 | $(108,154) | - The company reported a net loss of $57.4 million for the quarter ended March 31, 2025, and $66.1 million for the quarter ended June 30, 2025, contributing to the accumulated deficit[14] - Share-based compensation expense totaled $7.8 million for the quarter ended March 31, 2025, and $6.9 million for the quarter ended June 30, 2025[14] Condensed Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Statements of Cash Flows Highlights | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | |---|---|---|---| | Net cash used in operating activities | $(100,704) | $(91,374) | $(9,330) | | Net cash used in investing activities | $(42,468) | $(52,170) | $9,702 | | Net cash provided by financing activities | $658 | $151,409 | $(150,751) | | Net increase (decrease) in cash and cash equivalents | $(142,514) | $7,865 | $(150,379) | | Cash and cash equivalents at end of period | $81,948 | $45,183 | $36,765 | Notes to Unaudited Condensed Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed financial statements, covering accounting policies, investments, fair value measurements, and other key financial information 1. Organization and Basis of Presentation This note describes the company's business, its focus on precision medicines for cancer, and the basis for preparing the unaudited interim financial statements - Kura Oncology, Inc. is a clinical-stage biopharmaceutical company focused on precision medicines for cancer, with product candidates ziftomenib, KO-2806, and tipifarnib in clinical trials, and additional discovery-stage programs[23] - The unaudited condensed financial statements are prepared in accordance with U.S. GAAP for interim financial information and reflect normal recurring adjustments, with results not necessarily indicative of a full year[25] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition, investments, and segment reporting - The company assesses available-for-sale securities for credit losses, excluding accrued interest from impairment measurement, and maintains guidelines to limit credit risk in cash, cash equivalents, and short-term investments[27][28][29] - Revenue from collaborations and licenses is recognized when control of goods or services is transferred to customers, following a five-step model, with variable consideration estimated using the most likely amount method[35][37] - The company operates in a single industry segment focused on cancer precision medicine, with the CEO reviewing operating results on an aggregate basis[44] - New accounting pronouncements, ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures), are being evaluated for their impact on financial statements, with planned adoption in December 2025 and fiscal years beginning after December 2026, respectively[45][46] 3. Investments This note details the composition and fair value of the company's short-term investments, including money market funds, U.S. Treasury securities, and U.S. Agency bonds Short-term Investments by Type and Fair Value | (In thousands) | June 30, 2025 | December 31, 2024 | |---|---|---| | Money market funds | $23,872 | $200,024 | | U.S. Treasury securities | $503,770 | $497,938 | | U.S. Agency bonds | $45,010 | $4,995 | | Total short-term investments | $548,780 | $502,933 | - As of June 30, 2025, 40 available-for-sale securities with a fair value of $247.5 million were in a gross unrealized loss position, none for more than 12 months, and the company does not intend to sell them before cost recovery[49] 4. Fair Value Measurements This note explains the fair value hierarchy applied to the company's financial assets and liabilities, categorizing them into Level 1, Level 2, and Level 3 inputs Fair Value Hierarchy of Cash Equivalents and Short-term Investments (June 30, 2025) | (In thousands) | June 30, 2025 Total | Level 1 | Level 2 | Level 3 | |---|---|---|---|---| | Money market funds | $23,872 | $23,872 | $— | $— | | U.S. Treasury securities | $503,770 | $503,770 | $— | $— | | U.S. Agency bonds | $45,010 | $— | $45,010 | $— | | Total | $572,652 | $527,642 | $45,010 | $— | - The company's term loan facility's carrying value approximates fair value, determined using Level 2 inputs[53] 5. Balance Sheet Detail This note provides a breakdown of specific balance sheet accounts, including property and equipment, net, and accounts payable and accrued expenses Property and Equipment, Net | (In thousands) | June 30, 2025 | December 31, 2024 | |---|---|---| | Leasehold improvements | $4,099 | $1,743 | | Laboratory and computer equipment | $2,009 | $2,004 | | Furniture and fixtures | $1,544 | $1,210 | | Property and equipment, gross | $7,652 | $4,957 | | Less: accumulated depreciation | $(3,740) | $(3,275) | | Property and equipment, net | $3,912 | $1,682 | Accounts Payable and Accrued Expenses | (In thousands) | June 30, 2025 | December 31, 2024 | |---|---|---| | Accrued clinical trial research and development expenses | $20,897 | $14,267 | | Accrued other research and development expenses | $15,781 | $11,938 | | Accrued compensation and benefits | $10,029 | $17,508 | | Total accounts payable and accrued expenses | $52,931 | $49,953 | 6. Leases This note describes the company's operating lease arrangements for office and lab spaces, including lease maturities and key lease terms - The company has four operating leases for administrative and R&D office/lab space in San Diego and Boston, expiring between October 2025 and May 2033[56] - A new San Diego R&D lease, entered in January 2025 and amended in June 2025, provides $2.4 million in rent credits and a $6.2 million tenant improvement allowance[56] Maturities of Lease Liabilities as of June 30, 2025 | Year Ending December 31, | Total Lease Payments (in thousands) | |---|---| | 2025 (remaining) | $1,101 | | 2026 | $1,533 | | 2027 | $3,658 | | 2028 | $3,754 | | 2029 | $3,853 | | Thereafter | $11,169 | | Total operating lease liabilities | $9,852 | - The weighted-average discount rate for leases increased from 11.4% (Dec 31, 2024) to 12.2% (June 30, 2025), and the weighted-average remaining lease term increased from 5.9 years to 6.4 years[57] 7. Kyowa Kirin Collaboration and License Agreement This note details the strategic collaboration with Kyowa Kirin for ziftomenib, including upfront payments, potential milestones, and revenue recognition - In November 2024, Kura Oncology entered a Collaboration and License Agreement with Kyowa Kirin to develop and commercialize ziftomenib globally for AML and other hematologic malignancies, with Kura leading U.S. activities and Kyowa Kirin leading ex-U.S. activities[58][59][60] - Kura received an upfront payment of $330.0 million and is eligible for up to $1.161 billion in development, regulatory, commercial milestone, and additional upfront payments, totaling up to $1.491 billion[63] - The transaction price was determined to be $375.0 million, including the upfront payment and a $45.0 million milestone for FDA NDA receipt for ziftomenib in NPM1-mutant AML[67] Revenue Recognized from Kyowa Kirin Collaboration | (In thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | |---|---|---| | Development Services (monotherapy) | $6,100 | $12,700 | | Development Services (combination therapies) | $3,100 | $5,400 | | Commercialization Services | $1,600 | $3,100 | | Cost-share reimbursements | $4,500 | $8,200 | - As of June 30, 2025, contract liabilities related to the Kyowa License Agreement totaled $301.9 million, with $49.4 million classified as current and $252.5 million as long-term[70] 8. Stockholders' Equity This note provides information on changes in stockholders' equity, including proceeds from private placements and outstanding pre-funded warrants - In January 2024, the company completed a private placement, raising approximately $145.8 million net proceeds from selling common stock and pre-funded warrants[71] - As of June 30, 2025, 6,478,301 pre-funded warrants from the private placement had been exercised, with 840,585 remaining outstanding[71] - The company has an ATM Facility established in November 2023, allowing for the sale of up to $150.0 million in common stock, but no shares have been sold under this facility to date[72] 9. Share-Based Compensation This note outlines the share-based compensation expense recognized by the company and details unrecognized compensation for stock options and restricted stock units Share-Based Compensation Expense | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Research and development | $2,714 | $3,763 | $6,041 | $7,648 | | General and administrative | $4,235 | $4,667 | $8,750 | $9,294 | | Total share-based compensation expense | $6,949 | $8,430 | $14,791 | $16,942 | - As of June 30, 2025, unrecognized compensation expense was approximately $43.7 million for stock options (2.8 years weighted average period) and $14.1 million for restricted stock units (2.9 years weighted average period)[73] - 1,163,300 performance-based restricted stock units (PSUs) were outstanding as of June 30, 2025, but their vesting was not deemed probable, so they were not included in compensation expense[73] 10. Segment Reporting This note confirms the company operates as a single segment focused on cancer precision medicine and provides a breakdown of segment-related revenues and expenses - The company operates as a single operating segment focused on the discovery and development of precision medicines for cancer, with the CEO reviewing aggregated operating results[74] Segment Profit or Loss and Significant Expenses | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Collaboration revenue | $15,288 | $— | $29,396 | $— | | Ziftomenib-related costs | $37,584 | $18,847 | $67,531 | $33,342 | | KO-2806-related costs | $6,141 | $3,900 | $11,376 | $7,848 | | Tipifarnib-related costs | $1,166 | $1,673 | $2,136 | $2,839 | | Total operating expenses | $87,954 | $56,404 | $166,762 | $110,856 | | Segment and net loss | $(66,122) | $(50,837) | $(123,551) | $(100,362) | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides an overview of the company's business, clinical programs, and financial performance, detailing lead product candidates, liquidity, and analysis of revenues, operating expenses, and cash flows for the three and six months ended June 30, 2025, compared to the same periods in 2024, also outlining future capital requirements and critical accounting policies Overview This section introduces Kura Oncology as a clinical-stage biopharmaceutical company focused on precision medicines for cancer, highlighting its lead product candidates and strategic collaborations - Kura Oncology is a clinical-stage biopharmaceutical company focused on precision medicines for cancer, developing small molecule product candidates targeting cancer signaling pathways[80] - The lead product candidate, ziftomenib, is an investigational menin-KMT2A inhibitor for acute leukemias, with a global collaboration and license agreement with Kyowa Kirin for development and commercialization[81] - Other product candidates include KO-2806, a farnesyl transferase inhibitor (FTI) for solid tumors, and tipifarnib, another FTI being evaluated in combination with alpelisib for HNSCC[82][83] Clinical Programs and Pipeline This section details the progress of the company's lead product candidates, ziftomenib, KO-2806, and tipifarnib, including regulatory designations, clinical trial results, and future development plans - Ziftomenib received Orphan Drug Designation in July 2019 and Breakthrough Therapy Designation in April 2024 for relapsed or refractory NPM1-mutant AML[85] - An NDA for ziftomenib in relapsed or refractory NPM1-mutant AML was submitted on March 31, 2025, and accepted by the FDA on June 1, 2025, with a PDUFA target action date of November 30, 2025[86] - KOMET-001 Phase 2 data showed a 23% CR/CRh rate in relapsed or refractory NPM1-mutant AML patients, with comparable rates across subgroups and manageable safety profile[87] - KOMET-007 Phase 1b expansion cohort data for ziftomenib + 7+3 in newly diagnosed AML showed 93% CRc in NPM1-mutant AML and 89% in KMT2A-rearranged AML, with high rates of CR-MRD negativity[91] - Two global, randomized, double-blind, placebo-controlled Phase 3 trials (KOMET-017-IC and KOMET-017-NIC) are planned for ziftomenib in newly diagnosed AML, expected to initiate in H2 2025[94][95][96] - KO-2806 is in a Phase 1 first-in-human trial (FIT-001) as monotherapy and in combination with cabozantinib (RCC) and adagrasib (KRAS G12C-mutated NSCLC), with preliminary data accepted for ESMO Congress in October 2025[100][101] - Tipifarnib's KURRENT-HN trial (Phase 1/2 with alpelisib in HNSCC) has completed enrollment and dose escalation, with data accepted for ESMO Congress in October 2025[102] Liquidity Overview This section summarizes the company's current cash position, significant funding sources like the Kyowa License Agreement and private placement, and the availability of its ATM Facility - As of June 30, 2025, the company had $630.7 million in cash, cash equivalents, and short-term investments[103] - The Kyowa License Agreement provided an upfront payment of $330.0 million and a $45.0 million milestone payment in Q2 2025 for FDA NDA receipt[104] - A private placement in January 2024 generated approximately $145.8 million in net proceeds, with most pre-funded warrants exercised by June 30, 2025[105] - The company has an ATM Facility for up to $150.0 million in common stock sales, but no shares have been sold to date[106] Financial Operations Overview This section explains the company's revenue recognition policies for collaboration and license agreements, and outlines the components of research and development and general and administrative expenses - Revenue is primarily generated from collaboration and license agreements, recognized when control of promised goods/services is transferred, following a five-step model under ASC Topic 606[107][110] - Variable consideration, such as milestone payments, is included in the transaction price if a significant revenue reversal is not probable, and estimates are re-evaluated each reporting period[112] - Transaction price is allocated to distinct performance obligations based on relative stand-alone selling prices, with revenue recognized over time using a cost-to-cost measure of progress for R&D services[113][114] - Research and development expenses include personnel costs, clinical trial costs, manufacturing, and fees to external service providers, all expensed as incurred[116] - General and administrative expenses primarily cover executive, finance, business development, and support personnel costs, patent portfolio maintenance, and professional services[118] Results of Operations This section analyzes the company's financial performance for the three and six months ended June 30, 2025, compared to 2024, focusing on changes in collaboration revenue, operating expenses, and net loss Results of Operations - Three Months Ended June 30 | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | |---|---|---|---| | Collaboration revenue | $15,288 | $— | $15,288 | | Research and development expenses | $62,785 | $39,727 | $23,058 | | General and administrative expenses | $25,169 | $16,677 | $8,492 | | Other income, net | $6,544 | $5,567 | $977 | - Collaboration revenue of $15.3 million was recognized in Q2 2025 due to the Kyowa License Agreement, compared to none in Q2 2024[122] - R&D expenses increased by $23.1 million in Q2 2025, driven by higher costs for ziftomenib registration-directed and combination trials, and KO-2806 Phase 1 trials[122] - G&A expenses increased by $8.5 million in Q2 2025, primarily due to pre-commercial planning and personnel costs[123] Results of Operations - Six Months Ended June 30 | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | |---|---|---|---| | Collaboration revenue | $29,396 | $— | $29,396 | | Research and development expenses | $118,758 | $75,995 | $42,763 | | General and administrative expenses | $48,004 | $34,861 | $13,143 | | Other income, net | $14,041 | $10,494 | $3,547 | - Collaboration revenue of $29.4 million was recognized in H1 2025 due to the Kyowa License Agreement, compared to none in H1 2024[125] - R&D expenses increased by $42.8 million in H1 2025, primarily due to increased costs for ziftomenib registration-directed and combination trials, and KO-2806 Phase 1 trials[125] - G&A expenses increased by $13.1 million in H1 2025, mainly due to pre-commercial planning and personnel costs[126] Liquidity and Capital Resources This section discusses the company's funding sources, current cash position, projected operational runway, and future capital requirements, along with an analysis of cash flow activities - The company has funded operations through equity, debt, and the Kyowa License Agreement, incurring an accumulated deficit of $1.0 billion as of June 30, 2025[127][133] - Cash, cash equivalents, and short-term investments totaled $630.7 million as of June 30, 2025, projected to fund operations into 2027 and support the ziftomenib AML program through commercialization[134] - Future capital requirements depend on clinical trial progress, regulatory review, commercialization costs, manufacturing, and intellectual property protection[134] Net Cash Flow Activities | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | |---|---|---|---| | Net cash used in operating activities | $(100,704) | $(91,374) | $(9,330) | | Net cash used in investing activities | $(42,468) | $(52,170) | $9,702 | | Net cash provided by financing activities | $658 | $151,409 | $(150,751) | - The increase in net cash used in operating activities by $9.3 million was primarily due to a $23.2 million increase in net loss, partially offset by changes in operating assets and liabilities[137] - Net cash provided by financing activities decreased significantly due to the $145.8 million private placement in H1 2024, which did not recur in H1 2025[139] Contractual Obligations and Commitments This section outlines the company's financial obligations, including term loans, operating lease liabilities, potential milestone payments under in-license agreements, and cost-sharing commitments under the Kyowa License Agreement - The company has $10.0 million in Term Loans with variable interest rates and an end-of-term fee of approximately $1.5 million, due by November 2, 2027[140] - Operating lease obligations for office and lab space are subject to additional variable charges for maintenance, taxes, and insurance[141] - The company has potential milestone payment obligations of up to $78.8 million, plus royalties and sublicense fees, under in-license agreements[143] - Under the Kyowa License Agreement, the company funds specified development activities until end of 2028 and shares 50/50 all other U.S. development and commercialization costs and profits/losses[144] Critical Accounting Policies and Management Estimates This section identifies the key accounting policies and estimates that require significant management judgment, such as revenue recognition from collaborations and clinical trial accruals - Key accounting estimates include revenue from collaborations and licenses, and clinical trial costs and accruals, which are based on historical experience, trends, and management judgment[145] - There have been no material changes to the critical accounting policies and estimates since the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[146] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section discusses the company's exposure to market risks, primarily interest rate risk on its investments and term loans, and inflation risk on clinical trial costs, concluding that a 10% change in interest rates would not materially affect the fair value of investments or interest expense, and inflation has not had a material effect on the business - The company's investment activities prioritize liquidity and principal preservation, with excess cash invested in U.S. Treasury securities, money market funds, and U.S. Agency bonds[147] - A 10% change in interest rates is not expected to have a material impact on the fair value of the investment portfolio or interest expense on term loans as of June 30, 2025[147][148] - Inflation generally affects clinical trial costs, but has not had a material effect on the company's business, financial condition, or results of operations during the presented periods[149] ITEM 4. CONTROLS AND PROCEDURES This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, at a reasonable assurance level, and reports no material changes in internal control over financial reporting during the quarter - The company's disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2025[151] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[152] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The company is not currently a party to any legal proceedings that, in management's opinion, would have a material adverse effect on its results of operations or financial position - The company is not involved in any legal proceedings that would individually or in aggregate have a material adverse effect on its financial position or results of operations[154] ITEM 1A. RISK FACTORS This section outlines significant risks and uncertainties facing the company, categorized into risks related to product development, financial position, dependence on third parties, regulatory approval, intellectual property, commercialization, employee matters, and ownership of common stock, with key risks including dependence on ziftomenib, the lengthy and uncertain clinical development process, the need for additional capital, reliance on collaborations and third-party manufacturers, and potential challenges in regulatory approval and market acceptance Risk Factor Summary This section provides a concise overview of the primary risks and uncertainties that could materially affect the company's business, financial condition, and future prospects - High dependence on ziftomenib, which is still in clinical development and may not receive regulatory approval or generate anticipated revenue[155][156] - Clinical drug development is lengthy, expensive, and uncertain; preclinical/early clinical results may not predict final outcomes[155][156] - Anticipated use of product candidates in combination with third-party drugs over which the company has limited control[155][156] - Product candidates may cause serious adverse events or unacceptable side effects, delaying or preventing development[155][156] - Failure to develop, validate, and obtain regulatory approval for diagnostic testing platforms could harm drug development strategy[155][156] - Expectation to incur losses and potential inability to achieve or maintain profitability[155][156] - Need for substantial additional capital, which may cause dilution or restrict operations[155][156] - Reliance on the Kyowa Kirin collaboration; termination or non-fulfillment of obligations could adversely affect the business[155][156] - Dependence on third-party contractors for clinical trials and commercial supply, with risks of unsatisfactory performance or missed deadlines[155][156] - Challenges in obtaining and maintaining intellectual property protection, which could allow competitors to commercialize similar products[155][156] - Potential failure of approved products to achieve market acceptance by physicians, patients, and payors[155][156] - Substantial competition from major pharmaceutical and biotechnology companies[155][156] - High dependence on the CEO and ability to attract/retain qualified personnel[155][156] - Stock price volatility influenced by numerous factors beyond the company's control[155][156] Risks Related to the Discovery and Development of Our Product Candidates This section details the inherent risks in drug development, including dependence on ziftomenib's success, the lengthy and uncertain clinical trial process, potential adverse events, and challenges in patient enrollment and diagnostic development - The company is highly dependent on ziftomenib's success, but there's no assurance of regulatory approval or commercial viability, with potential for delays, additional studies, or insufficient data[158][160][162] - Developing targeted therapeutics for genetically defined cancers is a rapidly evolving and uncertain field, with challenges in patient identification, biomarker validation, and ensuring sufficient patient populations for commercial success[165][166] - Difficulty in enrolling patients in clinical trials due to small populations, strict eligibility criteria, and challenges in screening for specific genetic alterations could delay or prevent trial completion[167][168][171] - Clinical drug development is lengthy and expensive, with high failure risk; preclinical and early clinical results may not predict later outcomes, leading to potential delays, increased costs, or program abandonment[173][175][176] - Product candidates may cause serious adverse events or unacceptable side effects, such as differentiation syndrome with ziftomenib, neutropenia with KO-2806, or nausea with tipifarnib, which could halt or limit development[183][185][186][187] - Failure by the company or third-party collaborators to develop, validate, and obtain regulatory approval for companion diagnostic tests could harm the drug development strategy and operational results[190][192] Risks Related to Our Financial Position and Need for Additional Capital This section addresses the company's financial challenges, including expected operating losses, the need for substantial additional capital, potential dilution from equity offerings, and the impact of financial market developments - The company expects to incur significant operating losses and may never achieve or maintain profitability, having an accumulated deficit of $1.0 billion as of June 30, 2025[196][199] - Financial and operating results are expected to fluctuate significantly due to factors like clinical trial success, ability to secure collaborations, regulatory approvals, and competition[200][202] - The company's limited operating history makes it difficult to evaluate future success, especially as it transitions from R&D to commercial activities[204][205] - Substantial additional capital will be needed, which may lead to stockholder dilution through equity offerings, restrictive covenants from debt financing, or relinquishing rights through collaborations[206][210] - Adverse developments in the financial services industry could impact liquidity and financial performance, as the company maintains cash balances exceeding FDIC limits at a few institutions[211] Risks Related to Our Dependence on Third Parties This section highlights risks associated with relying on external partners, including the critical Kyowa Kirin collaboration, third-party contractors for clinical trials, and manufacturers for product supply - The collaboration with Kyowa Kirin is critical; failure to perform, disagreements, or termination could prevent future milestone/royalty payments and adversely affect ziftomenib's development and commercialization[213][214][215] - Reliance on third-party contractors (CROs, data managers, suppliers) for clinical trials and materials introduces risks of non-performance, delays, or failure to meet regulatory requirements, impacting product development and commercialization[216][217][218][219][221] - Dependence on third-party manufacturers for product candidates increases the risk of insufficient quantities, unacceptable cost/quality, or supply disruptions, potentially delaying or impairing development and commercialization efforts[223][226] - Manufacturers' compliance with cGMP regulations and regulatory approvals is critical; failure could lead to sanctions, supply issues, and delays[227] Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters This section covers the extensive regulatory hurdles for drug approval, post-approval compliance, and the impact of healthcare fraud and abuse laws, privacy regulations, and evolving healthcare legislation on the company's operations - Failure or delays in obtaining regulatory approvals (FDA, EMA) for product candidates would materially impair revenue generation, as the approval process is expensive, lengthy, and uncertain[231][233] - Breakthrough Therapy Designation for ziftomenib and tipifarnib does not guarantee faster development, review, or approval, nor does it increase the likelihood of marketing approval[234][235] - Post-approval, products are subject to extensive regulatory requirements, including safety reporting, cGMP, and marketing restrictions; non-compliance or unanticipated problems could lead to penalties or market withdrawal[237][238][239] - The company's relationships and operations are subject to fraud and abuse laws (Anti-Kickback Statute, False Claims Act, HIPAA, Sunshine Act), privacy laws (GDPR, CCPA), and other healthcare regulations, with potential for significant penalties for non-compliance[246][248][249][251][252] - Recent and future healthcare legislation (ACA, OBBBA, IRA) and governmental scrutiny on drug pricing could increase development costs, restrict sales, and adversely affect reimbursement and profitability[258][259][262][263][266] Risks Related to Our Intellectual Property This section discusses the challenges in obtaining and maintaining robust intellectual property protection for product candidates, including patent limitations, reliance on licensors, and the risks of litigation and trade secret loss - Inability to obtain or maintain broad intellectual property protection for product candidates (patents, trade secrets) could allow competitors to commercialize similar products, impairing the company's ability to generate revenue[272][273] - Ziftomenib has issued composition of matter patents in key jurisdictions, but additional patents are being pursued with no guarantee of grant or protection against third parties[274][275] - Tipifarnib's composition of matter patents expired in 2016, relying on method of use and treatment patents, which offer more limited protection against competitors[279][280] - Dependence on licensors (e.g., University of Michigan, Janssen, Memorial Sloan Kettering) to prosecute and maintain material patents; any failure could adversely impact business operations[283] - Breaching license agreements could lead to loss of critical development and commercialization rights, materially harming the business[284] - Patent applications involve complex legal questions, and changes in patent laws or interpretations could diminish patent value or narrow protection, increasing litigation risks[287][291][295] - Inability to maintain confidentiality of trade secrets or other proprietary information could harm competitive position, as enforcement is difficult and unpredictable[302] Risks Related to the Commercialization of Our Product Candidates This section addresses the challenges of bringing products to market, including achieving market acceptance, building sales infrastructure, intense competition, reimbursement uncertainties, and product liability risks - Even with marketing approval, product candidates may fail to achieve sufficient market acceptance by physicians, patients, and payors due to competition from established treatments, pricing, or convenience[306][308] - Building a marketing, sales, and distribution infrastructure is costly and time-consuming; failure to fully develop these capabilities or secure third-party collaborations could limit commercialization and revenue generation[307][309] - The drug development and commercialization market is highly competitive, with major pharmaceutical and biotechnology companies developing competing products, potentially impacting the commercial opportunity for the company's candidates[310][311][312][313] - Uncertainty regarding insurance coverage and adequate reimbursement for newly approved products, including companion diagnostics, could limit market access and revenue potential[314][315][316][317][319] - Product liability lawsuits pose an inherent risk, potentially leading to substantial liabilities, decreased demand, reputational harm, and significant costs, which current insurance coverage may not adequately cover[320][321] Risks Related to Employee Matters, Managing Growth and Macroeconomic Conditions This section outlines risks related to human capital, including dependence on key personnel, challenges in managing organizational growth, and the potential adverse effects of global economic conditions, cybersecurity threats, and international trade policies - The company is highly dependent on its CEO and key executives; inability to retain or attract qualified scientific, clinical, manufacturing, sales, and market access personnel could impede business strategy and growth[323][324] - Significant growth in employees and operations, particularly in development and commercialization, may be difficult to manage effectively due to limited financial resources and management experience, potentially disrupting business plans[325] - Unfavorable global economic conditions, including pandemics, bank failures, interest rate changes, tariffs, and inflation, could adversely affect the business by impacting capital access, supply chains, and overall financial performance[326] - Compromised information technology systems or data, whether internal or from third parties, could lead to security incidents, regulatory actions, litigation, business disruptions, and reputational harm[327][334][336] - International trade policies, including tariffs and sanctions, particularly affecting suppliers in China, could increase R&D expenses, disrupt supply chains, delay development timelines, and negatively impact growth prospects[343][344][345][347] Risks Related to Ownership of our Common Stock This section details factors that could affect the company's stock price, including market volatility, potential dilution from future stock issuances, anti-takeover provisions, and the impact of tax law changes - The company's stock price may fluctuate significantly due to factors like clinical trial results, regulatory decisions, competition, and macroeconomic conditions, making it difficult for stockholders to sell shares[348][349][350] - Future sales and issuances of common stock or rights to purchase common stock, including under equity incentive plans and warrants, could dilute existing stockholders' ownership and cause the stock price to fall[358][359][363] - Anti-takeover provisions in charter documents and Delaware law could delay or prevent a change of control, limiting the market price of common stock and potentially frustrating stockholder attempts to replace management[364][365] - The company's charter documents designate the Delaware Court of Chancery as the exclusive forum for certain disputes, potentially limiting stockholders' ability to choose a favorable judicial forum[366][367][370] - Changes in tax laws or regulations, such as the OBBBA and IRA, could adversely affect the company's business, cash flow, and financial condition, including limitations on net operating loss carryforwards[371][372] General Risk Factors This section covers broad risks such as negative analyst research, activist stockholder actions, securities class action litigation, employee misconduct, and non-compliance with various international laws - Negative or inaccurate research from securities analysts could cause the stock price and trading volume to decline[375] - Actions by activist stockholders could divert management's attention, incur significant costs, and negatively impact the company's strategic direction and stock value[376] - Securities class action litigation, common in the biotechnology industry, could divert management's attention, harm the business, and result in significant liabilities[377] - Misconduct by employees, contractors, or other third parties, including non-compliance with regulatory standards or fraud and abuse laws, could lead to significant penalties and reputational harm[378] - Non-compliance with U.S. and foreign export/import controls, sanctions, embargoes, anti-corruption, and anti-money laundering laws could result in substantial civil/criminal fines, loss of privileges, and harm to business[379] ITEM 6. EXHIBITS This section lists all exhibits filed with the Form 10-Q, including amendments to the certificate of incorporation and bylaws, warrant agreements, the co-promotion and medical affairs agreement with Kyowa Kirin, and certifications - Exhibit 3.1: Amended and Restated Certificate of Incorporation, as amended[381] - Exhibit 3.2: Amended and Restated Bylaws[381] - Exhibit 4.6: Form of Pre-Funded Warrant[381] - Exhibit 10.1: First Amendment to Lease, dated May 6, 2025[381] - Exhibit 10.2: First Amendment to Lease, dated June 6, 2025[381] - Exhibit 10.3: Kura Oncology, Inc. Amended and Restated 2014 Equity Incentive Plan[381] - Exhibit 10.4: Co-Promotion and Medical Affairs Agreement, dated June 27, 2025, with Kyowa Kirin, Inc[381] - Exhibit 31.1: Certification of Principal Executive and Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act[381] - Exhibit 32.1: Certifications of Principal Executive and Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act[381] Signatures This section contains the required signatures for the Form 10-Q, certifying its submission on behalf of Kura Oncology, Inc. by its President and Chief Executive Officer - The report was signed on August 7, 2025, by Troy E. Wilson, Ph.D., J.D., President and Chief Executive Officer (Principal Executive and Financial Officer) of Kura Oncology, Inc[387]