Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with the company's forward-looking statements regarding its future financial condition, operations, and product development - This Annual Report on Form 10-K contains forward-looking statements regarding the company's strategy, future financial condition, operations, R&D, clinical trials, regulatory approvals, commercialization, collaborations, costs, and market growth. These statements are based on current expectations and projections but involve substantial risks and uncertainties1415 - Investors are cautioned not to unduly rely on these statements due to significant uncertainties, competitive and rapidly changing environments, and the emergence of new risk factors that could cause actual results to differ materially from expectations161718 Risk Factor Summary This summary highlights key financial, operational, and intellectual property risks that could significantly impact the company's business and future prospects - Key risks include significant net losses since inception and expected future losses, the need for substantial additional funding, a limited operating history, challenges in product candidate development and regulatory approval for novel cancer therapeutics, potential delays in patient enrollment for clinical trials, and the unproven nature of the company's discovery and development approach2122 - Other material risks involve the potential for smaller market opportunities than estimated, dependence on intellectual property protection, and reliance on third parties for preclinical studies and clinical trials, as well as the ability to attract and retain highly skilled personnel2122 Trademarks and Service Marks This section clarifies the ownership and usage of trademarks and service marks related to Kronos Bio and other entities mentioned in the report - The report clarifies that 'Kronos Bio,' 'Kronos,' the Kronos logo, and other related marks are the property of Kronos Bio, Inc., while other trademarks belong to their respective owners. The use of symbols (® and ™) is for convenience and does not waive ownership rights2324 Part I This part provides a comprehensive overview of the company's business, including its product pipeline, strategy, competition, intellectual property, and regulatory environment Item 1. Business Kronos Bio is a biopharmaceutical company focused on developing therapeutics for cancer and other serious diseases by targeting deregulated transcription. The company leverages a proprietary product engine to identify and modulate oncogenic transcription factors and their regulatory networks. Key pipeline candidates include KB-0742 (CDK9 inhibitor for solid tumors) in Phase 1/2 clinical trials and KB-9558 (p300 KAT inhibitor for multiple myeloma) in IND-enabling studies. The company also engages in strategic collaborations, such as with Genentech, and has recently undergone corporate restructuring to optimize resource allocation - Kronos Bio is an integrated discovery through clinical development biopharmaceutical company, focusing on therapeutics that target deregulated transcription in cancer and other serious diseases26 - The company's product engine identifies 'critical nodes' within transcription regulatory networks (TRNs) to develop small molecule drug candidates, utilizing a Small Molecule Microarray (SMM) platform2631 Key Product Candidates and Status | Product Candidate | Target | Indication | Status | | :---------------- | :----- | :--------- | :----- | | KB-0742 | CDK9 | MYC-amplified and other transcriptionally addicted solid tumors | Phase 2 portion of Phase 1/2 clinical trial | | KB-9558 | p300 KAT | Multiple myeloma | IND-enabling studies (expected Q4 2024 completion) | | Lanraplenib | SYK | Relapsed or refractory FLT3-mutated AML | Development discontinued (Dec 2023) | | Entospletinib | SYK | AML (NPM1 mutations) | Phase 3 trial enrollment closed (Nov 2022) | - In January 2023, Kronos Bio entered a research collaboration with Genentech to discover and develop small-molecule drugs modulating transcription factor targets, leveraging Kronos Bio's proprietary drug discovery platform329495 - The company implemented corporate restructuring plans in late 2023 and early 2024, including an approximate 40% workforce reduction and elimination of three executive officer roles, to optimize resource allocation and extend cash runway38175 Overview Kronos Bio is a biopharmaceutical company developing cancer therapeutics by targeting deregulated transcription using its proprietary product engine and clinical pipeline - Kronos Bio is a biopharmaceutical company focused on developing therapeutics for cancer and other serious diseases by targeting deregulated transcription26 - The company's product engine identifies 'critical nodes' within transcription regulatory networks (TRNs) using computational and network-guided learning approaches, then uses its Small Molecule Microarray (SMM) platform to generate small molecule drug candidates26 - Current clinical pipeline includes KB-0742 (oral CDK9 inhibitor for MYC-amplified solid tumors) in Phase 1/2 and KB-9558 (p300 KAT inhibitor for multiple myeloma) in IND-enabling studies2728 - Development of lanraplenib was discontinued in December 2023 after the Phase 1b/2 clinical trial showed insufficient response29 - A research collaboration with Genentech was initiated in January 2023 to discover and develop small-molecule drugs modulating transcription factor targets32 KB-0742 KB-0742 is an oral CDK9 inhibitor for MYC-amplified solid tumors, currently in Phase 1/2 clinical trials with positive preliminary efficacy and safety data - KB-0742 is an internally discovered oral CDK9 inhibitor for MYC-amplified and other transcriptionally addicted solid tumors2733 - The Phase 1 portion of the Phase 1/2 clinical trial for KB-0742 began in February 2021, with the recommended Phase 2 dose of 60 mg selected in December 20223334 - Positive preliminary efficacy and safety data from the Phase 1 dose escalation were shared in October and November 2023, demonstrating on-mechanism, single-agent anti-tumor activity in heavily pre-treated patients with a manageable safety profile34 - The company plans to present preliminary results from the ongoing Phase 1 dose escalation (beyond 60 mg) and Phase 2 expansion portions at two medical conferences in the second half of 202435 KB-9558 KB-9558 is a p300 KAT inhibitor targeting the IRF4 transcription regulatory network in multiple myeloma, currently in IND-enabling studies - KB-9558 is a p300 KAT inhibitor targeting the IRF4 transcription regulatory network, a key driver in multiple myeloma2836 - This molecule emerged from Kronos Bio's product engine and is currently in IND-enabling studies, expected to be completed in the fourth quarter of 20242836 Our Team and History Kronos Bio is led by an experienced executive team, recently restructured to focus on pipeline advancement, and was founded in 2017 based on innovative research - Kronos Bio is led by President & CEO Norbert Bischofberger, Ph.D., who previously served as Executive Vice President, Research and Development and Chief Scientific Officer at Gilead Sciences37 - The executive leadership team was restructured in February 2024 to focus on pipeline advancement, resulting in the elimination of three executive officer roles (CMO, CSO, COO/General Counsel) and the appointment of new Senior VPs for Research and Development, Drug Discovery, Clinical Development, Corporate Strategy, and Corporate Operations38 - The company was founded in 2017 by Arie Belldegrun, M.D., FACS, Joshua Kazam, David Tanen, and Christopher Wilfong from Two River, LLC, building on research from MIT Associate Professor Angela Koehler, Ph.D3940 Our Pipeline Kronos Bio's clinical pipeline includes internally discovered candidates KB-0742 and KB-9558, alongside robust discovery programs targeting additional oncogenic transcription regulatory networks - Kronos Bio's clinical pipeline is developed through internal discovery efforts using its proprietary product engine, including KB-0742 and KB-955842 - The company is also pursuing robust discovery programs targeting additional oncogenic TRNs, including MYC, beta-catenin, and Genentech-partnered targets43 KB-0742: our CDK9 Inhibitor KB-0742 is a selective oral CDK9 inhibitor for MYC-amplified solid tumors, demonstrating on-mechanism anti-tumor activity and a manageable safety profile in Phase 1/2 trials - KB-0742 is a highly selective oral CDK9 inhibitor, generated from the SMM screening platform, designed to treat MYC-amplified solid tumors and other transcriptionally addicted tumors4448 - The Phase 1/2 clinical trial for KB-0742 began in February 2021, with a recommended Phase 2 dose (RP2D) of 60mg (3 days on/4 days off) selected in December 2022, demonstrating targeted reduction in pSER2 levels consistent with anti-tumor activity45 - Preliminary Phase 1 data (October/November 2023) showed on-mechanism, single-agent anti-tumor activity in heavily pre-treated patients with transcriptionally addicted solid tumors, a manageable safety profile (no grade 3/4 neutropenia), dose-proportional exposure, and a 24-hour plasma half-life enabling intermittent dosing45 - MYC overexpression is associated with increased tumor sensitivity to KB-0742, supporting a tissue-agnostic development strategy48 KB-0742 CDK Selectivity (Biochemical IC50) | Compound | Target | Potency | Fold Selectivity vs. CDK9 | | :------- | :----- | :------ | :------------------------ | | KB-0742 | CDK9 | 6 nM | - | | | CDK8 | | >1000x | | | CDK7 | | 252x | | | CDK6 | | 658x | | | CDK5 | | 303x | | | CDK4 | | 522x | | | CDK3 | | 237x | | | CDK2 | | 66x | | | CDK1 | | 497x | KB-9558: our p300 KAT inhibitor KB-9558 is an internally developed p300 KAT inhibitor targeting IRF4 dependency in multiple myeloma, showing preclinical efficacy and progressing through IND-enabling studies - KB-9558 is an internally developed p300 KAT inhibitor, targeting IRF4 dependency in multiple myeloma, a key transcription factor deregulated in the disease4950 - Preclinical studies showed p300 KAT inhibition selectively downregulates IRF4 levels and activity, leading to apoptosis and tumor growth inhibition in multiple myeloma cells, including drug-resistant lines, while sparing normal bone marrow stromal cells5051 - KB-9558 is a potent, selective, orally bioavailable small molecule with appropriate drug-like properties, and IND-enabling studies are projected to complete in 202451 SYK Inhibitors Kronos Bio acquired SYK inhibitors from Gilead, but discontinued lanraplenib development and closed entospletinib's Phase 3 trial due to insufficient response and strategic reasons - Kronos Bio acquired a portfolio of SYK inhibitors from Gilead in July 2020, including clinical-stage candidates lanraplenib and entospletinib, recognizing SYK as a critical dependency in specific AML patient subsets52 - Development of lanraplenib was discontinued in December 2023 due to insufficient patient response in the Phase 1b portion of the trial, despite observed target engagement54 - Enrollment for the registrational Phase 3 clinical trial of entospletinib was closed in November 2022 for strategic reasons, including operational challenges in enrolling genetically defined patients and impacts from the COVID-19 pandemic and geopolitical conflicts54 Discovery Programs Kronos Bio invests in early discovery efforts using its product engine to expand the pipeline, focusing on tumor types with clear transcription factor deregulation and high unmet medical need - Kronos Bio continuously invests in early discovery efforts using its proprietary product engine to expand its pipeline, focusing on tumor types with clear evidence of transcription factor deregulation, such as MYC-driven cancers and beta-catenin-driven cancers53 - Discovery targets are selected based on scientific, translational, and competitive considerations, prioritizing those with demonstrated dependency in defined patient populations with high unmet medical need53 Our Strategy Kronos Bio aims to be a leading biopharmaceutical company by developing transformational small molecule modulators for cancer, focusing on clinical proof of concept for KB-0742 and advancing KB-9558 - Kronos Bio aims to become a leading biopharmaceutical company by discovering and developing transformational small molecule modulators for challenging cancer targets, using a precision medicine approach54 - Key near-term strategic elements include establishing clinical proof of concept for KB-0742 (CDK9 program), advancing KB-9558 through IND-enabling studies, leveraging the product engine to grow the pipeline, and selectively entering strategic collaborations545556 - The company plans to present preliminary results from the ongoing Phase 1 dose escalation and Phase 2 expansion portions of the KB-0742 study at two medical conferences in the second half of 202455 - IND-enabling activities for KB-9558, including GLP toxicology studies, are expected to be completed in the second half of 2024, with the goal of satisfying all requirements for IND filing by year-end56 Kronos Bio Differentiated Opportunity Kronos Bio believes KB-0742 offers a differentiated opportunity for targeting CDK9 in solid tumors due to its selectivity, oral bioavailability, and intermittent dosing strategy for an enhanced therapeutic index - Kronos Bio believes KB-0742 offers a differentiated opportunity for targeting CDK9 dependency in solid tumors due to its selectivity profile, oral bioavailability, and extended plasma half-life, aiming for an enhanced therapeutic index compared to other CDK9 inhibitors57 KB-0742 CDK Selectivity (Biochemical IC50) | Compound | Target | Potency | Fold Selectivity vs. CDK9 | | :------- | :----- | :------ | :------------------------ | | KB-0742 | CDK9 | 6 nM | - | | | CDK8 | | >1000x | | | CDK7 | | 252x | | | CDK6 | | 658x | | | CDK5 | | 303x | | | CDK4 | | 522x | | | CDK3 | | 237x | | | CDK2 | | 66x | | | CDK1 | | 497x | - KB-0742's oral bioavailability and 24-hour plasma half-life support an intermittent dosing strategy to achieve anti-tumor activity while allowing normal tissue recovery, differentiating it from other CDK9 inhibitors with shorter half-lives or IV administration57 - The clinical translation strategy for KB-0742 focuses on patient populations with clear genomic markers of transcriptional addiction, such as MYC amplification, to enhance therapeutic index58 KB-0742 Development Strategy The KB-0742 development strategy involves a Phase 1/2 clinical trial to evaluate safety, PK, and PD, identify optimal doses, and enroll biomarker-defined patient populations to inform future registration - The FDA cleared the IND for KB-0742 in December 2020, and the Phase 1/2 clinical trial began in February 2021 to evaluate safety, PK, and PD across multiple dose levels59 - Following the identification of a recommended Phase 2 dose, the study continues to assess maximum tolerated dose at higher doses or alternative schedules while enrolling expansion cohorts in biomarker-defined patient populations, including MYC-amplified solid tumors61 - Clinical results from these expansion cohorts will inform the future development and registration strategy for KB-074261 p300 KAT inhibition with KB-9558 selectively targets IRF4 dependency in multiple myeloma KB-9558, a p300 KAT inhibitor, selectively targets IRF4 dependency in multiple myeloma, demonstrating preclinical efficacy and progressing through IND-enabling studies - IRF4 is a high-value therapeutic target in multiple myeloma due to its universal deregulation in plasma cell tumors, lineage specificity, and sustained dependency regardless of prior treatment, offering potential for orally bioavailable outpatient therapies6263 - Kronos Bio's product engine mapped the IRF4 TRN, identifying p300 as a critical node, specifically its KAT domain, which mediates IRF4 function and dependency6667 - Experimental validation confirmed that p300 KAT inhibition selectively downregulates IRF4 levels and activity, leading to apoptosis and tumor growth inhibition in multiple myeloma cells, including drug-resistant lines, while sparing normal bone marrow stromal cells687071 - KB-9558, a highly potent and selective p300 KAT inhibitor, emerged from these insights and is currently in IND-enabling studies, projected to complete in 20245172 Discovery product engine to map TRNs and target oncogenic transcription factor activity Kronos Bio's proprietary product engine maps Transcription Regulatory Networks (TRNs) to identify critical nodes and develop small molecule modulators for oncogenic transcription factor activity - Kronos Bio's product engine addresses the challenge of targeting transcription factors by mapping and understanding their activity within the context of Transcription Regulatory Networks (TRNs)76 - The approach involves integrating diverse multiomic data and real-world evidence to map TRNs, identifying critical nodes (e.g., CDK9 for MYC, p300 for IRF4) that are essential for oncogenic transcription factor function7879818384 - The proprietary Small Molecule Microarray (SMM) screening platform is used to identify small molecule modulators of these critical nodes, capable of direct binding, protein-protein interaction modulation, or co-factor binding858687 - Lead optimization strategies are tailored to specific programs, using medicinal chemistry, computational chemistry, and assay development to refine pharmacological properties and achieve desired transcriptional signatures8990 Our Approach to Clinical Trial Design Kronos Bio designs early clinical studies using computational biology to identify predictive biomarkers and optimal dosing, aiming for efficient clinical proof of concept and streamlined late-stage development - Kronos Bio leverages computational biology to identify predictive biomarkers and pharmacodynamic markers within oncogenic TRNs, establishing the required extent and duration of target coverage for clinical efficacy91 - The company designs early clinical studies to efficiently identify optimal doses and dosing schedules in biomarker-defined patient populations, aiming for clinical proof of concept and a more efficient late-stage development and regulatory approval strategy92 Future Opportunities Beyond oncology, Kronos Bio sees future opportunities for its product engine in immunology, particularly targeting TRNs that influence the tumor microenvironment and anti-tumor immune response - Beyond oncology, Kronos Bio sees future opportunities for its product engine in immunology, particularly targeting TRNs that influence the tumor microenvironment and anti-tumor immune response93 - The company plans to regularly re-evaluate its discovery pipeline to identify additional opportunities to fully exploit its differentiated product engine as its discovery organization grows93 Strategic Agreements Kronos Bio has strategic agreements, including a collaboration with Genentech for oncology discovery and an R&D services agreement with Tempus AI for KB-0742 development Genentech Collaboration Agreement Kronos Bio entered a collaboration with Genentech in January 2023 for oncology discovery research, receiving an upfront payment and potential milestones and royalties - In January 2023, Kronos Bio entered a Collaboration and License Agreement with Genentech for two oncology discovery research programs, focusing on transcription factor targets selected by Genentech94 - Kronos Bio leads discovery and research, leveraging its proprietary drug discovery platform (including SMM) for hit finding. Genentech holds exclusive rights for further preclinical, clinical development, and commercialization of identified compounds95 Genentech Collaboration Agreement Financials | Payment Type | Amount | | :------------- | :----- | | Upfront Payment | $20.0 million | | Preclinical, Clinical, Regulatory Milestones | Up to $177 million (per first development candidate per hit program) | | Net Sales Milestones | Up to $100 million (per first licensed product per hit program) | | Royalties | Tiered, low- to high-single digits (on commercialized products) | - The discovery research programs have a term of up to 24 months, extendable by six months under certain conditions. Genentech can terminate the agreement at its discretion with 60 days' notice9798 Tempus R&D Services Agreement Kronos Bio has a four-year R&D services agreement with Tempus AI for analytical and data services to advance KB-0742 development, with annual minimum commitments and milestone payments - In October 2021, Kronos Bio entered a four-year R&D services agreement with Tempus AI, Inc. for analytical services, data licensing, and organoid services to advance KB-0742 development100 Tempus Agreement Annual Minimum Commitments | Year | Annual Minimum Commitment (in millions) | | :--- | :------------------------ | | Year 1 | $1.5 | | Year 2 | $2.5 | | Year 3 | $3.0 | | Year 4 | $2.5 | Tempus Agreement Payments Made | Year Ended December 31, | Payments Made (in millions) | | :---------------------- | :------------ | | 2023 | $3.6 | | 2022 | $1.1 | - Kronos Bio is eligible for up to $22.4 million in milestone payments for KB-0742 and other pipeline compounds, with the option to pay up to 50% in common stock102 Sales and Marketing Kronos Bio plans to build internal commercial infrastructure for sales, marketing, and distribution of approved products, potentially leveraging third-party collaborations - Kronos Bio plans to build a commercial infrastructure for sales, marketing, and distribution of any approved product candidates, utilizing internal resources and potentially third-party relationships103 - The company will consider collaborations with pharmaceutical companies to enhance commercial capabilities103 Manufacturing Kronos Bio relies on third-party contract manufacturing organizations for the production of its small molecule product candidates for preclinical, clinical, and future commercial needs - Kronos Bio does not own or operate manufacturing facilities and relies on third parties for the manufacture of product candidates for preclinical, clinical, and future commercial needs (KB-0742, KB-9558)104 - The company's product candidates are small molecules, amenable to cost-effective production at contract manufacturing facilities using readily available starting materials105 - Currently, supplies are obtained on a purchase order basis without long-term supply arrangements or redundant supply for APIs and drug product104 Competition Kronos Bio operates in a highly competitive pharmaceutical industry, facing numerous companies with greater resources and established therapies for its product candidates - Kronos Bio operates in a highly competitive pharmaceutical and biotechnology industry, facing competition from major pharmaceutical, specialty pharmaceutical, and biotechnology companies, as well as academic and research institutions106 - For KB-0742 (CDK9 inhibitor), potential competitors include AZD4573 (AstraZeneca), fadraciclib (Cyclacel), voruciclib (MEI Pharma), zotiraciclib (NCI), TP-1287 (Sumitomo Pharma Oncology), GFH009 (SELLAS), PRT2527 (Prelude Therapeutics), and VIP152 (Vincerx Pharma)107108 - For KB-9558 (p300 inhibitor), potential competitors include inobrodib (CellCentric), FT-7051 (Pathos), EP31670 (Epigenetix), and TT125-802 (Tolremo)109 - Many competitors have significantly greater financial resources and expertise across R&D, manufacturing, clinical trials, regulatory approvals, and marketing110 Intellectual Property Kronos Bio's success depends on protecting its intellectual property through patents, trademarks, and trade secrets, and operating without infringing on others' rights - Kronos Bio's success depends on obtaining and maintaining proprietary protection for its product candidates (KB-0742, KB-9558), future candidates, technologies, and know-how, and operating without infringing others' rights112 - The company relies on U.S. and foreign patents, patent applications, trademarks, trade secrets, and confidentiality agreements to protect its intellectual property112113 Patent Portfolio Summary (as of Feb 1, 2024) | Product Candidate | Issued U.S. Patents | Issued/Granted Foreign Patents | Pending U.S./Foreign Applications | Nominal Term Extension To | | :---------------- | :------------------ | :----------------------------- | :------------------------------ | :------------------------ | | KB-0742 | 1 | 2 | 42 | 2039-2042 | | KB-9558 | - | - | Provisional applications | - | | Lanraplenib | 6 | 107 | 24 | 2034-2043 | | Entospletinib | 12 | 49 | 1 | 2029-2038 | - Patent terms are generally 20 years from the earliest non-provisional filing date, with potential extensions (e.g., Hatch-Waxman Act in the U.S.) for FDA-approved drugs121 Government Regulation and Product Approval This section details the extensive U.S. and foreign government regulations governing drug development, clinical trials, product approval, and post-market requirements for pharmaceutical products U.S. Drug Development Process The U.S. drug development process involves extensive FDA regulation, requiring preclinical testing, IND submission, IRB approval, and multi-phase human clinical trials under GCP standards - The FDA extensively regulates drug development in the U.S. under the FDCA, requiring substantial time and financial resources for regulatory approvals and compliance122123 - The process involves preclinical testing (GLP), IND submission and effectiveness, IRB approval, human clinical trials (Phase 1, 2, 3) under GCP, NDA submission, FDA advisory committee review (if applicable), FDA inspection of manufacturing facilities (cGMP) and clinical sites (GCP), and final FDA approval124125127130 - Clinical trials are conducted in phases: Phase 1 (safety, dosage, PK/PD in healthy subjects/patients), Phase 2 (preliminary efficacy, optimal dosages, side effects in limited patient population), and Phase 3 (expanded patient population for efficacy, safety, risk/benefit ratio)130 U.S. Review and Approval Process The U.S. review and approval process involves submitting an NDA to the FDA for evaluation of safety, efficacy, and manufacturing compliance, with potential for post-market conditions or withdrawal of approval - Upon successful completion of testing, an NDA is submitted to the FDA, subject to substantial user fees (unless an orphan drug). The FDA reviews for safety, efficacy, and cGMP compliance132133 - The FDA aims to review standard NDAs for new molecular entities within ten months of 'filing' (typically 12 months from submission), following a 60-day preliminary review133 - Approval may be conditioned on REMS (Risk Evaluation and Mitigation Strategy), changes to labeling, or post-market studies. Failure to comply with requirements can lead to withdrawal of approval137138 Expedited Development and Review Programs The FDA offers expedited programs like Fast Track, Priority Review, Accelerated Approval, and Breakthrough Therapy designation to accelerate development and review for serious conditions with unmet medical needs - The FDA offers expedited programs: Fast Track (serious/life-threatening conditions, unmet medical need), Priority Review (significant improvement over existing therapies, 6-month review goal), and Accelerated Approval (serious/life-threatening conditions, surrogate/intermediate clinical endpoints)140141142 - Breakthrough Therapy designation (substantial improvement over existing therapies based on preliminary clinical evidence) includes Fast Track features and intensive FDA interaction143 - These programs expedite development/review but do not change approval standards, and qualification does not guarantee a shortened timeline or ultimate approval144 Post-approval Requirements Approved products are subject to extensive ongoing FDA regulation, including record-keeping, adverse event reporting, and marketing restrictions, with non-compliance leading to severe sanctions - Approved products are subject to extensive ongoing FDA regulation, including record-keeping, adverse event reporting, periodic reporting, product sampling, distribution, advertising, and promotion145 - Non-compliance or discovery of new problems can lead to withdrawal of approval, product recalls, labeling changes (e.g., 'black box' warnings), REMS requirements, marketing restrictions, fines, and civil/criminal penalties146147 - The FDA strictly regulates marketing and promotion, prohibiting off-label use promotion, with violations leading to significant liability, adverse publicity, and penalties148 Marketing Exclusivity The FDCA provides marketing exclusivity periods for new chemical entities, new clinical investigations, pediatric indications, and orphan drugs to protect approved products from generic competition - The FDCA provides marketing exclusivity periods: five years for new chemical entities (NCEs) and three years for new clinical investigations essential to approval (e.g., new indications, dosages)149150 - Pediatric exclusivity adds six months to existing exclusivity periods if pediatric trials are conducted in response to an FDA written request. Orphan drug exclusivity offers a seven-year period151 Other Healthcare Laws Pharmaceutical manufacturers are subject to federal and state healthcare fraud and abuse laws, including anti-kickback statutes and false claims acts, with violations leading to significant penalties - Pharmaceutical manufacturers are subject to federal and state healthcare fraud and abuse laws, including the Anti-Kickback Statute, False Claims Act, HIPAA, and the Physician Payments Sunshine Act152153 - State laws also impose restrictions on business practices, such as anti-kickback and false claims laws, payment restrictions to healthcare providers, pricing and marketing information reporting, and sales representative registration153154 - Violations can result in significant administrative, civil, and criminal penalties, fines, imprisonment, exclusion from government healthcare programs, and reputational damage155 Privacy Laws Kronos Bio is subject to global data privacy and security laws, including GDPR and CCPA, imposing strict obligations on data processing and transfers, with significant fines for non-compliance - Kronos Bio is subject to diverse data privacy and security laws globally, including state consumer privacy laws in the U.S. (e.g., CCPA) and international regulations like the EU GDPR and UK GDPR156157158 - These laws impose obligations on data processing, disclosures, data retention, breach notifications, and consent, with significant fines for non-compliance (e.g., up to €20 million or 4% of global annual turnover under GDPR)158 - Cross-border data transfer restrictions (e.g., from EU/EEA to U.S.) pose challenges, and legal mechanisms are subject to ongoing legal scrutiny, potentially impacting operations and increasing costs158 Coverage and Reimbursement Product sales depend on adequate coverage and reimbursement by third-party payors, a costly and uncertain process increasingly challenged by cost-containment programs and price controls - Sales of pharmaceutical products depend on coverage and adequate reimbursement by third-party payors (government, commercial insurance, managed healthcare organizations)159 - Obtaining coverage and reimbursement is a time-consuming and costly process, with no assurance of consistent application or adequate rates, especially for physician-administered drugs and companion diagnostics159160 - Third-party payors are increasingly reducing reimbursements, implementing cost-containment programs, and challenging prices, medical necessity, and cost-effectiveness, which could limit sales and profitability161 - International markets have varying reimbursement systems, often with price controls, which can result in lower product prices compared to the U.S162 Healthcare Reform Healthcare reform legislation, such as the ACA and Inflation Reduction Act, significantly impacts drug manufacturers through increased rebates, fees, and potential drug price negotiations, affecting profitability - The Patient Protection and Affordable Care Act (ACA) and subsequent legislation (e.g., Inflation Reduction Act of 2022) have significantly changed healthcare financing in the U.S., impacting drug manufacturers through increased Medicaid rebates, annual fees, and new reimbursement methodologies163165166 - Recent governmental scrutiny over drug pricing has led to executive orders and legislation (e.g., Inflation Reduction Act) directing HHS to negotiate Medicare drug prices and impose rebates for price increases exceeding inflation167 - New initiatives, such as the potential use of 'march-in rights' under the Bayh-Dole Act and state importation programs (e.g., Florida's SIP), aim to control prescription drug prices, which could result in lower drug prices for covered products167 FDA Approval and Regulation of Companion Diagnostics The FDA generally requires concurrent approval or clearance of companion diagnostics with therapeutic products, regulating them as medical devices subject to rigorous and costly Premarket Approval processes - If a therapeutic's safe and effective use depends on an in vitro diagnostic (companion diagnostic), the FDA generally requires its approval or clearance concurrently with the therapeutic product169 - Companion diagnostics are regulated as medical devices, requiring either 510(k) clearance or, more commonly for cancer therapies, Premarket Approval (PMA), which involves rigorous review of safety, effectiveness, design, manufacturing, and labeling170171 - The PMA process is lengthy and costly, requiring extensive preclinical and clinical data (analytical and clinical validation studies), and is subject to FDA inspections for Quality System Regulation (QSR) compliance171172 Human Capital Resources Kronos Bio prioritizes a diverse and inclusive work environment, offering competitive compensation and benefits, fostering open communication, and promoting employee health and safety Diversity, Equity and Inclusion Kronos Bio is committed to fostering a diverse, inclusive, and safe work environment, with a significant representation of women and underrepresented communities in its workforce - Kronos Bio is committed to creating a diverse, inclusive, and safe work environment, with over half of its employees identifying as women and over half in medical/scientific roles identifying as members of underrepresented communities177 Compensation and Benefits The company offers competitive compensation, including salary, bonuses, stock awards, healthcare, retirement benefits, unlimited paid time off, and an Employee Stock Purchase Program - The company offers competitive compensation, including market-competitive salary, bonuses, broad-based stock awards, healthcare and retirement benefits, and unlimited paid time off178 - An Employee Stock Purchase Program (ESPP) allows employees to purchase company stock at a discounted price178 Communication and Engagement Kronos Bio promotes open communication through regular business updates, town hall meetings, and employee surveys to ensure alignment with the company's mission and strategy - Kronos Bio fosters open communication through monthly business updates, town hall meetings, open forums, online platforms, and employee engagement surveys to ensure employees understand the company's mission and strategy179180 Health, Wellness and Safety The company prioritizes employee safety and well-being by providing productivity tools, flexible schedules, IT support, and promoting assistance programs for physical, financial, and mental health - The company prioritizes employee safety and well-being by providing productivity tools, flexible schedules, IT support, and promoting employee assistance programs for physical, financial, and mental health181 Corporate Information Kronos Bio, Inc. was incorporated in Delaware in 2017, with its principal executive offices in San Mateo, California, and makes its SEC filings publicly available online - Kronos Bio, Inc. was incorporated in Delaware on June 2, 2017, with principal executive offices in San Mateo, California182 - The company makes its SEC filings (10-K, 10-Q, 8-K) available free of charge on its corporate website (www.kronosbio.com) and the SEC's website (www.sec.gov)[182](index=182&type=chunk) Item 1A. Risk Factors This section details material factors that make an investment in Kronos Bio's common stock speculative or risky. These risks span financial condition, product development, commercialization, regulatory compliance, intellectual property, reliance on third parties, and general operational challenges. Investors are advised to carefully consider these risks, as any adverse event could significantly harm the business, financial condition, results of operations, and growth prospects, potentially leading to a decline in stock price - Investment in Kronos Bio's common stock is speculative due to material factors that could harm the business, financial condition, results of operations, and growth prospects184185 - Risks include significant net losses, need for substantial additional funding, limited operating history, challenges in novel cancer therapeutic development, and difficulties in patient enrollment for clinical trials186187193199220 - Other risks cover market opportunities being smaller than estimated, inability to protect intellectual property, reliance on third parties for preclinical and clinical studies, and challenges in attracting and retaining skilled personnel22240316369395 Risks Related to Our Financial Condition and Capital Requirements Kronos Bio faces significant financial risks, including substantial net losses, the need for additional funding, and the uncertainty of achieving profitability from product sales - Kronos Bio has incurred significant net losses since inception, totaling $508.9 million as of December 31, 2023, and expects to continue incurring substantial losses for the foreseeable future186187189 - The company has not generated revenue from product sales and profitability depends on successful clinical development, regulatory approval, and commercialization of product candidates, which is uncertain190192 - Substantial additional funding will be required to advance clinical programs and commercialization efforts. Failure to raise capital on acceptable terms could compel delays or elimination of product development193 Net Losses and Cash Position (in millions) | Metric | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :----- | :---------------------- | :---------------------- | | Net Loss | $112.7 | $133.2 | | Accumulated Deficit | $508.9 | - | | Cash, Cash Equivalents & Investments | $175.0 | - | - Recent corporate restructuring, including a 40% workforce reduction, aims to optimize resource allocation and contain costs, but may lead to unintended consequences like loss of expertise or decreased morale198 Risks Related to the Discovery and Development of our Product Candidates The company faces inherent risks in product development, including a limited operating history, challenges in developing novel cancer therapeutics, and uncertainties in clinical trial outcomes and regulatory approvals - Kronos Bio has a limited operating history since its incorporation in June 2017, facing inherent risks of an emerging company, including challenges in hiring, retaining personnel, and establishing operating controls199 - The company may not realize benefits from asset acquisitions, such as the SYK inhibitors from Gilead, as evidenced by the discontinuation of lanraplenib development due to insufficient responses and the closure of entospletinib's Phase 3 trial enrollment due to delays201 - Developing novel cancer therapeutics targeting genetically-defined cancers is an unproven approach, with uncertainties in predicting development time/cost and obtaining regulatory approval, especially for biomarker-driven strategies204205206 - Clinical trials are expensive, lengthy, and uncertain; delays or failures can occur at any stage due to factors like patient enrollment difficulties, unexpected side effects, or regulatory requirements (e.g., FDA's Project Optimus for dose optimization)207208209214220225 - Interim or preliminary clinical data may change with more patient data, and regulatory agencies may interpret data differently, potentially delaying or preventing approval230231 - Successful development of companion diagnostic tests is crucial for product candidates requiring them (e.g., KB-0742 for MYC-amplified patients); delays or failure to obtain FDA approval for these tests could hinder therapeutic approval and commercialization232233 - The company's product engine approach is unproven, and there's no guarantee it will successfully expand the pipeline with commercially valuable product candidates or that identified candidates will be safe and effective235236 - Small sample sizes in early-stage clinical trials (e.g., KB-0742 Phase 1/2) may yield less reliable results, limiting generalizability and potentially impacting future larger trials239 Risks Related to the Commercialization of Our Product Candidates Commercialization risks include smaller-than-estimated market opportunities, inadequate market acceptance, lack of sales infrastructure, product liability, unfavorable reimbursement policies, and intense competition - Market opportunities for product candidates may be smaller than estimated, or regulatory approval may be based on a narrower patient definition, adversely affecting revenue potential and profitability240 - Even if approved, product candidates may not achieve adequate market acceptance among physicians, patients, and payors due to factors like efficacy/safety profile, competition, pricing, reimbursement, and marketing effectiveness243244 - Kronos Bio currently lacks a marketing and sales organization and must build or partner for commercial capabilities. Failure to establish effective sales and distribution could prevent product revenue generation245246247 - Product liability lawsuits pose significant risks, potentially leading to regulatory investigations, product recalls, limitations on use, decreased demand, reputational harm, and substantial monetary awards, which may not be fully covered by insurance248 - Unfavorable third-party coverage and reimbursement policies, or healthcare reform initiatives, could harm the business by limiting patient access and reducing sales revenue250251253254256 - The pharmaceutical market is highly competitive, with many companies having greater resources. Kronos Bio's product candidates will compete against existing and new products, including multi-CDK and p300 inhibitors, and more established therapies257258259260261262263264 - International marketing carries additional risks, including differing regulatory requirements, intellectual property laws, economic instability, currency fluctuations, and pricing/reimbursement regimes, which could adversely affect profitability265266 Risks Related to Regulatory Approval and Other Legal Compliance Matters Regulatory risks include potential failure to obtain approvals, limitations on approved uses, post-marketing compliance burdens, enforcement of off-label promotion, and impacts from healthcare reform and data privacy laws - Kronos Bio may be unable to obtain U.S. or foreign regulatory approvals for its product candidates, as the process is costly, time-consuming, unpredictable, and subject to changing standards and policies267268 - Regulatory approvals may come with significant limitations on uses, labeling restrictions, or post-approval requirements (e.g., REMS), which could limit market size and affect reimbursement269 - Data from clinical trials conducted outside the U.S. may not be accepted by the FDA or foreign regulatory authorities, potentially requiring additional costly and time-consuming trials271 - Post-marketing, approved products are subject to extensive governmental regulations and oversight. Non-compliance or unforeseen problems can lead to severe sanctions, including withdrawal of approval, fines, and criminal penalties275276 - The FDA and other agencies strictly enforce laws against promoting off-label uses, which could lead to significant liability, fines, and reputational harm if violated280 - Disruptions at government agencies (FDA, SEC) due to funding shortages or global health concerns could delay product development, approval, or commercialization281282 - Pursuing accelerated approval pathways carries risks; if confirmatory trials fail or post-marketing requirements are not met, approval could be withdrawn283 - Changes in healthcare reform legislation (e.g., ACA, Inflation Reduction Act) and increased scrutiny over drug pricing could lead to more rigorous coverage criteria and downward pressure on product prices286288289291 - Relationships with healthcare professionals and third-party payors are subject to federal and state healthcare fraud and abuse laws, false claims laws, and transparency laws, with potential for criminal sanctions and civil penalties for non-compliance293294295 - The company is subject to stringent and changing data privacy and information security laws (e.g., GDPR, CCPA), with non-compliance potentially leading to regulatory actions, litigation, fines, and business disruptions296297298299306 - Misconduct by employees or third parties (CROs, consultants) could lead to non-compliance with regulatory standards, fraud, or abuse, resulting in sanctions and reputational harm308 - Failure to comply with environmental, health, and safety laws, or restrictions on animal testing, could result in fines, penalties, increased costs, or delays in R&D activities309311312 - International operations expose the company to U.S. and foreign anti-bribery, anti-corruption, export controls, trade sanctions, and import laws, with non-compliance risking criminal/civil liability and business harm313314 Risks Related to Our Intellectual Property Intellectual property risks involve challenges in obtaining and maintaining patent protection, potential infringement claims, costly litigation, and the impact of changes in patent law or failure to protect trade secrets - Commercial success depends on protecting intellectual property (patents, trade secrets) and operating without infringing others' rights. Patent applications may not issue, or issued patents may be challenged, invalidated, or circumvented316317318 - Reliance on licensors and third parties for patent prosecution and maintenance carries risks, as their actions or inactions could compromise patent rights or lead to loss of critical licensed technology319321322331332 - The scope of patent protection may be insufficient, or patents may be challenged in courts or patent offices, potentially allowing competitors to commercialize similar products326327328330 - Claims by third parties of patent infringement could result in costly litigation, development delays, significant liability, or the need for licenses on unfavorable terms338339341342 - Lawsuits to protect or enforce intellectual property are expensive, time-consuming, and may be unsuccessful, potentially leading to invalidation of patents or loss of competitive advantage344345348349350 - Patent reform legislation (e.g., Leahy-Smith America Invents Act) and changes in patent law interpretations could increase uncertainties and costs, diminishing the value of patents352353354355356 - Failure to protect trade secrets or maintain confidentiality of proprietary information could harm the business and competitive position, as unauthorized disclosure or independent discovery is possible366367 - Inadequate protection of trademarks and trade names could hinder brand recognition and adversely affect business368 Risks Related to Our Reliance on Third Parties Kronos Bio heavily relies on third parties for preclinical and clinical development, manufacturing, and collaborations, facing risks of non-performance, delays, quality issues, and potential disputes - Kronos Bio relies heavily on third parties (clinical investigators, companion diagnostic developers, CROs) for preclinical studies and clinical trials. Failure of these parties to perform duties, comply with regulations, or meet deadlines could delay or prevent regulatory approval and commercialization369370371372 - The collaboration with Genentech involves risks, including Genentech's discretion in resource allocation, potential for delays or termination, and the possibility that identified compounds may not be successfully developed or commercialized, impacting Kronos Bio's revenue376379380 - Future collaborations or strategic alliances may involve risks such as non-recurring charges, increased expenditures, dilution of stock, management disruption, and potential disputes or termination, which could adversely affect development and commercialization381382383385 - Reliance on third-party manufacturers for clinical and commercial product supplies (APIs, drug product) entails risks, including single-source dependency, lack of redundant supply, potential for manufacturing difficulties, quality issues, and non-compliance with cGMP regulations386387388389390393 - If third-party manufacturers use hazardous materials improperly, Kronos Bio could be liable for damages, and compliance with environmental laws is costly394 Risks Related to Managing Our Growth, Employee Matters and Other Risks Risks include challenges in attracting and retaining talent, managing organizational growth, cybersecurity vulnerabilities, business disruptions from external events, and limitations on tax attribute utilization - Kronos Bio's success depends on attracting and retaining highly skilled executive officers and employees, facing intense competition for talent. Recent workforce reductions may exacerbate difficulties in retention and recruitment395396397 - The company needs to grow its organization and capabilities, which may lead to difficulties in managing expansion, recruiting/training personnel, and effectively managing outsourced activities398399400401 - Information technology systems, both internal and those of third parties, are vulnerable to failures, disruptions, or security breaches (e.g., cyberattacks, ransomware), which could disrupt R&D programs, lead to data loss, regulatory actions, litigation, and reputational harm402403404405407409411 - Business disruptions from natural disasters, geopolitical conflicts (e.g., Russia-Ukraine war, Israel-Hamas conflict), or economic instability could seriously harm revenue and financial condition, increase costs, and disrupt supply chains414438439 - The ability to utilize net operating loss carryforwards and other tax attributes may be limited due to 'ownership changes' under tax laws, potentially increasing future tax liabilities415 Risks Related to Our Common Stock Risks related to common stock include potential volatility, charter provisions hindering corporate transactions, the absence of cash dividends, and exposure to securities class action litigation - Provisions in the corporate charter documents and Delaware law could make mergers, tender offers, or proxy contests difficult, potentially depressing the trading price of common stock416417419420 - Exclusive forum provisions in the certificate of incorporation designate Delaware courts and federal district courts as exclusive forums for certain disputes, potentially limiting stockholders' ability to choose a favorable judicial forum421422423 - The price of common stock is likely to be volatile, influenced by factors such as clinical trial results, regulatory developments, competition, and general market conditions, potentially leading to substantial losses for investors424426 - Sales of a substantial number of shares in the public market could cause the stock price to fall427 - Disclosure controls and procedures may not prevent or detect all errors or fraud due to inherent limitations, and undetected material weaknesses could lead to financial statement restatements428429430431 - The company does not anticipate paying cash dividends, making capital appreciation the sole source of gain for stockholders in the foreseeable future432 - The company could be subject to securities class action litigation, which is common for pharmaceutical companies and could result in substantial costs and diversion of management's attention433 - If securities or industry analysts do not publish research or publish inaccurate/unfavorable research, the stock price and/or trading volume could decline434 - An active trading market for common stock may not be sustained, making it difficult for stockholders to sell shares or for the company to raise capital435 [General Risk Factors](index=92&type=section&id=Genera
Kronos Bio(KRON) - 2023 Q4 - Annual Report