Pet-focused biopharmaceutical company Kindred Bio (NASDAQ:KIN) announced second quarter 2020 financial results after the market close on August 5th. For the period ended June 30th, revenues came in at $39.6 million compared to $1.2 million in the same period of last year.
The revenue increase was primarily attributed to the sale of topical cat drug Mirataz to U.K. veterinary product company Dechra Pharmaceuticals. It received a $43 million upfront payment of which 10% was to be held in escrow for as long as 18 months after the April 15th closing. Kindred will also receive royalties on future sales of Mirataz by Dechra which the company noted grew during the quarter.
After incurring a $14.3 million net loss in the prior year, net income was $24.0 million, or $0.60 per diluted share. The healthy bottom line result included a $2.3 million non-recurring charge.
Kindred received additional revenue from co-marketing products for partners Butterfly Networks and Astaria Global. Zimeta, a medication for the control of pyrexia in horses, posted weaker sales due to a downturn in equine-related events and transportation during the COVID-19 crisis.
In May 2020 Kindred reached an agreement with neighboring San Francisco biotechnology company Vaxart to manufacture Vaxart’s oral COVID-19 vaccine candidate. It recorded $546,000 of contract manufacturing revenue from this arrangement based on the completion of certain milestones.
Kindred develops medications designed to save and improve the lives of pets. It targets medications that have already been proven to be safe and effective in humans to develop novel therapeutics for dogs, cats, and other animals.
Strategic realignment puts biologics business in focus
Kindred is transitioning to a biologics-only business model. Its sale of Mirataz to Dechra was a step in this direction. It incurred $2.3 million in restructuring charges during the second quarter related to the strategic realignment, prioritization of its late stage programs, and a related workforce reduction.
The company’s biologics candidates include KIND-030, a monoclonal antibody targeting canine parvovirus. The first in a series of pivotal studies is underway and the remaining studies are expected to be initiated in the coming months.
Meanwhile, the scale up process for KIND-016 for the treatment of atopic dermatitis in dogs is also proceeding as planned with the pivotal study of the therapy expected to start in the fourth quarter.
Kindred’s study of feline recombinant erythropoietin has resumed after participating veterinary clinics suspended the clinical trials due to COVID-19.
CEO Dr. Richard Chin said, “We are pleased with the progress on our pipeline of late-stage biologics. The commencement of the first parvovirus pivotal study is a key milestone for this program, and we look forward to the upcoming initiation of the tirnovetmab (IL-31 antibody) pivotal study.”
Kindred delivered solid quarterly performance which included a robust 60% net profit margin. It exited the quarter with an increased cash position of $77.6 million and assets of $115.9 million.
Moreover, its development pipeline made solid progress during the quarter. For the remainder of 2020 Kindred will be focused on advancing its core biologics pipeline with several pivotal studies expected to commence.
The market liked what they heard from management as Kindred shares jumped 10% in August 6th trading in response to the positive report.