KalVista Pharmaceuticals (KALV) 2025 Conference May 07, 2025 11:30 AM ET Speaker0 Well, good morning, everybody. We're still running on time. So, thanks for joining us for day one for the Citizens Life Science Conference. My name is John Wallabin, senior analyst here. And we're pleased to have Brian Palaiko from Clavista Pharmaceuticals joining us. This is a company that we initiated coverage on earlier this year. We've been covering the hereditary angioedema space for quite some time, and I think this is o ...

Group 1 - KalVista (NASDAQ: KALV) is nearing commercialization of its lead asset, sebetralstat, which targets the hereditary angioedema treatment market [1] - A significant FDA decision date is approaching, indicating potential regulatory approval for sebetralstat [1] - Successful de-risking events in the pediatric program and the development of strategic partnerships are underway, enhancing the company's growth prospects [1] Group 2 - The company operates in a sector that is expected to experience exponential expansion, aligning with high-growth investment strategies [1] - The focus on disruptive technologies and innovative enterprises is central to the company's investment approach [1]

Financial Performance - KalVista Pharmaceuticals reported no revenue for the three months ended January 31, 2025, and January 31, 2024[7]. - The net loss for the three months ended January 31, 2025, was $44.3 million, compared to a net loss of $29.0 million for the same period in 2024[15]. Expenses - Research and development expenses decreased to $12.6 million for the three months ended January 31, 2025, from $22.5 million in the same period last year, primarily due to reduced clinical trial expenses[7]. - General and administrative expenses increased to $30.3 million for the three months ended January 31, 2025, compared to $10.6 million for the same period in the prior fiscal year, mainly due to pre-commercial planning activities[7]. Cash Position - The company had cash, cash equivalents, and marketable securities of approximately $253.2 million as of January 31, 2025, up from $210.4 million as of April 30, 2024[13]. Regulatory and Product Development - KalVista has submitted seven regulatory applications globally for sebetralstat, with the first regulatory approval expected in June 2025[3]. - Data from the KONFIDENT-S study indicated that patients on long-term prophylaxis averaged 1.7 HAE attacks per month, with symptom relief achieved in a median of 1.3 hours using sebetralstat[7]. Financing Activities - The company raised a total of $160 million in aggregate gross proceeds through synthetic royalty financing and equity offerings in November 2024[7]. Shareholder Information - The weighted average common shares outstanding increased to 52,638,888 for the three months ended January 31, 2025, compared to 34,723,379 for the same period in the prior year[15]. Investor Relations - KalVista plans to host a virtual investor day on March 25, 2025, to discuss the commercialization strategy for sebetralstat[7].

Drug Development and Regulatory Approvals - The company has filed a New Drug Application (NDA) for sebetralstat, seeking approval as the first oral, on-demand therapy for hereditary angioedema (HAE) with a PDUFA notification date of June 17, 2025[79]. - A Marketing Authorization Application (MAA) for sebetralstat has been submitted to the European Medicines Agency (EMA) and is currently under review, with submissions also made to regulatory authorities in the UK, Switzerland, Australia, and Singapore[80]. - The company has received Fast Track and Orphan Drug designations from the FDA for sebetralstat, indicating regulatory support for its development[84]. - The company initiated a pediatric clinical trial for sebetralstat in June 2024, with plans to submit a supplemental NDA for pediatric use in 2026[81]. - The company is conducting a strategic review of its preclinical oral Factor XIIa inhibitor program to evaluate future development potential[85]. Financial Performance and Expenses - The company recorded an income tax expense of $4.1 million for the three months ended January 31, 2025, due to an increase in the valuation allowance against deferred tax assets[99]. - Research and development expenses decreased by $9.9 million to $12.6 million for the three months ended January 31, 2025, compared to $22.5 million in the same period in 2024[101]. - General and administrative expenses increased by $19.7 million to $30.3 million for the three months ended January 31, 2025, primarily due to increases in personnel costs and commercial expenses[104]. - For the nine months ended January 31, 2025, research and development expenses totaled $55.8 million, a decrease of $5.1 million from $60.9 million in the same period in 2024[106]. - General and administrative expenses for the nine months ended January 31, 2025, increased by $46.1 million to $77.1 million, driven by higher personnel and commercial strategy expenses[109]. Cash Flow and Funding - Net cash used in operating activities was $112.5 million for the nine months ended January 31, 2025, compared to $74.1 million for the same period in 2024[118]. - Net cash provided by investing activities was $94.4 million for the nine months ended January 31, 2025, compared to $41.5 million in the prior year[119]. - Net cash provided by financing activities was $155.1 million for the nine months ended January 31, 2025, significantly higher than $0.6 million in the same period in 2024[120]. - The company anticipates sufficient funding to operate for at least the next twelve months based on current capital resources[122]. Revenue and Losses - The company has not generated any revenue from product sales and expects to continue incurring losses as it develops and seeks regulatory approvals for product candidates[122]. Accounting Policies - The company prepares its financial statements in accordance with U.S. GAAP, requiring estimates and assumptions that impact reported amounts of assets and liabilities[125]. - There have been no material changes to critical accounting policies and significant estimates in the nine months ended January 31, 2025, except for the deferred royalty obligation and its embedded derivative liability[125]. - The company is classified as a smaller reporting company and is not required to provide specific market risk information[127]. Sales and Payment Structure - The company received an upfront payment of $100.0 million from a Purchase and Sale Agreement (PSA) related to future worldwide net sales of sebetralstat, with tiered payments based on sales performance[87]. - The tiered payment structure includes 5.00% on annual net sales up to $500.0 million, 1.10% on sales between $500.0 million and $750.0 million, and 0.25% on sales above $750.0 million[87]. Future Expectations - The company expects general and administrative expenses to increase as it builds infrastructure to support the commercialization of sebetralstat[96]. - The company anticipates continued significant spending on research and development activities as it conducts clinical development and manufacturing studies[93]. Other Income - Other income decreased by $5.4 million, primarily due to an increase in net interest expense and a decrease in foreign currency exchange rate gains[105].

Financial Performance - KalVista reported no revenue for the three months ended October 31, 2024, and the same period in 2023[9]. - The net loss for the three months ended October 31, 2024, was $42.3 million, compared to a net loss of $27.7 million for the same period in 2023[21]. - The weighted average common shares outstanding for the three months ended October 31, 2024, was approximately 46.7 million[21]. Expenses - Research and development expenses decreased to $16.6 million for the three months ended October 31, 2024, from $19.1 million in the prior year, a reduction of approximately 13.1%[9]. - General and administrative expenses increased significantly to $29.2 million for the three months ended October 31, 2024, compared to $10.7 million in the same period last year, an increase of approximately 172.0%[10]. Cash Position - As of October 31, 2024, KalVista had cash, cash equivalents, and marketable securities of approximately $135.8 million, with a pro forma balance of $292.2 million expected to provide runway into the second half of 2027[10]. - The company raised a total of $160 million through synthetic royalty financing and equity offerings in November 2024[8]. Regulatory and Market Developments - The FDA has set a Prescription Drug User Fee Act (PDUFA) goal date of June 17, 2025, for the New Drug Application (NDA) of sebetralstat[3]. - KalVista has filed six marketing authorization applications for sebetralstat in various countries, with the first potential approval expected in June 2025[3]. - KalVista presented new data at multiple conferences, highlighting the effectiveness of sebetralstat in reducing anxiety during HAE attacks[7].

Clinical Development - The Phase 3 KONFIDENT clinical trial for sebetralstat enrolled 136 patients across 66 sites in 20 countries, meeting all primary and key secondary endpoints with a safety profile similar to placebo [70]. - A New Drug Application (NDA) for sebetralstat was filed with the FDA in June 2024, with a PDUFA notification date set for June 17, 2025 [71]. - The European Medicines Agency (EMA) is currently reviewing the Marketing Authorization Application (MAA) for sebetralstat, which aims for broad availability across 27 EU member states [72]. - The company initiated a pediatric clinical trial for an orally disintegrating tablet formulation of sebetralstat, targeting patients aged 2 to 11 years [76]. Financial Performance - General and administrative expenses increased by $18.5 million to $29.2 million for the three months ended October 31, 2024, primarily due to increases in personnel costs and commercial expenses [98]. - General and administrative expenses increased by $26.4 million to $46.8 million for the six months ended October 31, 2024, primarily due to increases in commercial strategy expenses and personnel costs [104]. - Research and development expenses decreased by $2.5 million to $16.6 million for the three months ended October 31, 2024, compared to $19.1 million in the same period in 2023 [94]. - Research and development expenses increased by $4.8 million to $43.2 million for the six months ended October 31, 2024, compared to $38.4 million in the same period in 2023 [101]. - Net cash used in operating activities was $79.9 million for the six months ended October 31, 2024, compared to $46.6 million in the same period in 2023 [112]. - Net cash provided by investing activities was $85.8 million for the six months ended October 31, 2024, compared to $48.2 million in the same period in 2023 [113]. Funding and Capital Structure - The subsidiary received an upfront payment of $100 million from DRI Healthcare Acquisitions LP in exchange for tiered payments on future worldwide net sales of sebetralstat [80]. - The tiered payment structure includes 5% on annual net sales up to $500 million, 1.1% on sales between $500 million and $750 million, and 0.25% on sales above $750 million [80]. - In November 2024, the company entered into a royalty purchase agreement for $100.0 million in exchange for tiered royalty payments on worldwide net sales of sebetralstat [111]. - The company anticipates sufficient funding to operate for at least the next twelve months based on current capital resources [119]. - The company expects to finance cash needs through equity and debt financings, collaborations, strategic partnerships, and licensing arrangements [120]. - Existing stockholders may face dilution if additional capital is raised through stock or convertible debt securities [120]. - Debt financing may involve increased fixed payment obligations and covenants that could restrict business operations [120]. - The company entered into an underwriting agreement to issue 5,500,000 shares at $10.00 per share, netting approximately $51.3 million [82]. Tax and Regulatory Considerations - The company has incurred net losses historically and has no corporation tax liabilities, benefiting from research and development tax credits in the UK [91]. - Financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that may affect reported amounts [122]. - Actual results may differ from estimates based on various factors, impacting the carrying value of assets and liabilities [122]. - Recent accounting pronouncements and their expected effects on operations and financial condition are detailed in the Interim Financial Statements [124]. - The company qualifies as a smaller reporting company and is not required to provide certain market risk disclosures [125]. Operational Considerations - The company expects to continue significant investment in research and development activities, particularly for clinical development and manufacturing [87]. - The company is party to several operating leases for office and laboratory space as of October 31, 2024 [121]. - Other income increased by $1.5 million, primarily due to an increase in foreign currency exchange rate gains of $1.4 million [99].

Financial Performance - KalVista Pharmaceuticals reported no revenue for the first fiscal quarter ended July 31, 2024, consistent with the same period in the prior fiscal year[5]. - The net loss for the quarter was $40.4 million, or $(0.87) per share, compared to a net loss of $25.3 million, or $(0.74) per share, in the prior year[6]. - Total operating expenses for the quarter were $44.2 million, compared to $29.1 million in the same period last year[11]. Research and Development - Research and development expenses increased to $26.6 million for the quarter, up from $19.3 million year-over-year, primarily due to the phase 3 KONFIDENT trial and increased personnel costs[5]. - The KONFIDENT-KID pediatric clinical trial has been initiated, enrolling approximately 24 children aged 2 to 11 years across seven countries[3]. Administrative Expenses - General and administrative expenses rose to $17.6 million, compared to $9.8 million in the same quarter last year, driven by higher commercial planning and employee-related expenses[5]. Cash Position - Cash, cash equivalents, and marketable securities decreased to $174.3 million as of July 31, 2024, down from $210.4 million on April 30, 2024, due to cash consumption from operating expenses[6]. Regulatory Developments - The FDA accepted the NDA for sebetralstat with a PDUFA goal date of June 17, 2025, and the EMA validated the MAA submission[2]. - KalVista plans to file for approval in the UK, Japan, and other countries later in 2024, aiming for the first commercial launch of sebetralstat in June 2025[2]. - The company expects to maximize regulatory collaboration across countries through engagement with the Access Consortium[3].

Revenue Generation - The company has not generated any revenue in the current fiscal year and does not expect to do so until regulatory approval and commercialization of its product candidates[55]. - The company has not generated any revenue from product sales and expects to continue incurring losses as it develops and seeks regulatory approvals for product candidates[77]. Research and Development Expenses - Research and development expenses increased by $7.3 million to $26.6 million for the three months ended July 31, 2024, compared to $19.3 million in the same period in the prior fiscal year[65]. - The increase in research and development expenses was driven by $3.3 million in spending on the sebetralstat program, $2.3 million in personnel costs, and $1.9 million in preclinical and other activities[65]. - Research and development expenses totaled $26.6 million for the three months ended July 31, 2024, an increase of $7.3 million compared to $19.3 million in the same period of 2023[66]. - Personnel expenses rose by $2.3 million to $9.1 million, driven by higher headcount in research and development and medical teams[67]. - The increase in research and development tax credit receivable was $1.3 million for the three months ended July 31, 2024[71]. General and Administrative Expenses - General and administrative expenses rose by $7.8 million to $17.6 million for the three months ended July 31, 2024, compared to $9.8 million in the same period in the prior fiscal year[65]. - General and administrative expenses increased by $7.8 million, primarily due to a $4.5 million rise in commercial expenses and a $2.5 million increase in employee-related expenses[68]. Clinical Trials and Regulatory Approvals - The company filed a New Drug Application (NDA) with the FDA in June 2024 for sebetralstat, with a PDUFA notification date of June 17, 2025[47]. - The KONFIDENT clinical trial for sebetralstat enrolled 136 patients across 66 clinical sites in 20 countries, meeting all primary and key secondary endpoints[46]. - The European Medicines Agency (EMA) is currently reviewing the Marketing Authorization Application (MAA) for sebetralstat, with plans to file for approval in the U.K., Japan, and other countries later in 2024[48]. - The company initiated a pediatric clinical trial (KONFIDENT-KID) for an orally disintegrating tablet formulation of sebetralstat, targeting patients aged 2 to 11 years old[51]. - The company has received Fast Track and Orphan Drug designations from the FDA for sebetralstat, indicating its potential significance in treating HAE[52]. Financial Activities - The company raised approximately $150.1 million from a stock offering in February 2024, selling 7,016,312 shares at $15.25 per share[53]. - Net cash used in operating activities was $40.2 million for the three months ended July 31, 2024, compared to $26.7 million for the same period in 2023[71]. - Net cash provided by investing activities was $37.2 million for the three months ended July 31, 2024, compared to $19.6 million in the prior year[72]. - The company anticipates sufficient funding to operate for at least the next twelve months based on current capital resources[69]. - In February 2024, the company raised approximately $150.1 million from the sale of 7,016,312 shares at $15.25 per share[70]. - The company filed a Registration Statement in July 2024 to offer securities with an aggregate public offering price of up to $300 million[70].

Drug Development and Regulatory Submissions - KalVista submitted a New Drug Application (NDA) for sebetralstat to the FDA in June 2024, aiming for approval and launch in the US in the first half of 2025[1]. - The KONFIDENT phase 3 trial results for sebetralstat were published in the New England Journal of Medicine, supporting its potential as a therapy for hereditary angioedema (HAE) attacks[1]. - The company is on track for Market Authorization Application submissions to the European Medicines Agency and UK Medicines and Healthcare Products Regulatory Agency in Q3 2024[7]. - A pediatric clinical trial (KONFIDENT-KID) for sebetralstat is underway, enrolling approximately 24 children aged 2 to 11 years across seven countries[1]. - KalVista plans to submit a JNDA to the Japanese Pharmaceuticals and Medical Devices Agency in Q4 2024[8]. - The company is evaluating the potential for further development of its preclinical Factor XIIa inhibitor program[9]. Financial Performance - Net loss for the fiscal year ended April 30, 2024, was $126.6 million, or $(3.44) per share, compared to a net loss of $92.9 million, or $(3.33) per share in the prior fiscal year[5]. - The net loss for the three months ended April 2024 was $(44,650,000), compared to a net loss of $(26,305,000) in the same period last year, indicating a deterioration of 70%[25]. - The net loss per share, basic and diluted, was $(1.02) for April 2024, compared to $(0.77) for April 2023, representing a decline of 32.5%[25]. - The company reported a total operating loss of $48,455,000 for the three months ended April 2024, compared to $31,728,000 for the same period last year, an increase of 52.7%[25]. Expenses - Research and development expenses increased to $86.2 million for the fiscal year ended April 30, 2024, up from $80.3 million in the prior fiscal year, primarily due to the KONFIDENT trial[5]. - General and administrative expenses rose to $54.3 million for the fiscal year ended April 30, 2024, compared to $30.6 million in the prior fiscal year, driven by employee-related and commercial planning expenses[5]. - Research and development expenses for the three months ended April 2024 were $25,248,000, up from $23,951,000 in the same period last year, an increase of 5.4%[25]. - General and administrative expenses surged to $23,207,000 in April 2024, compared to $7,777,000 in April 2023, reflecting a significant increase of 198%[25]. Assets and Liabilities - Cash, cash equivalents, and marketable securities totaled $210.4 million on April 30, 2024, compared to $149.4 million on April 30, 2023, reflecting proceeds from a February 2024 stock offering[5]. - Total current assets increased to $225,690,000 in April 2024 from $172,326,000 in April 2023, representing a growth of 31%[23]. - Total liabilities increased to $28,822,000 in April 2024 from $22,177,000 in April 2023, marking a rise of 30%[23]. - Stockholders' equity rose to $206,582,000 in April 2024, up from $161,025,000 in April 2023, an increase of 28.2%[23]. Other Income and Shares - Total other income decreased to $3,805,000 in April 2024 from $5,423,000 in April 2023, a decline of 30%[25]. - Weighted average common shares outstanding increased to 43,590,657 in April 2024 from 34,342,664 in April 2023, an increase of 27%[25].

Financial Performance and Losses - The company has incurred significant operating losses since inception and expects to continue incurring losses for the foreseeable future[112]. - Additional funding will be necessary to support ongoing operations and product development, which may lead to dilution of stockholder ownership[117]. - The company has not yet commercialized any product candidates and does not expect to generate product revenues for many years[118]. - The company anticipates that approximately $76.7 million of its net operating losses (NOLs) will go unutilized due to past ownership changes, limiting future tax benefits[234]. - The company’s ability to utilize NOLs is contingent upon achieving profitability and generating taxable income, which remains uncertain[234]. - The company has incurred significant costs due to operating as a public entity, including legal, accounting, and compliance expenses, which may affect financial performance[223]. Regulatory and Approval Challenges - An NDA for sebetralstat as an on-demand HAE therapy was submitted to the FDA in June 2024, targeting adults and adolescents over age 12[113]. - The company has not yet demonstrated the ability to obtain marketing approvals[121]. - The regulatory approval process is expensive and can take many years, with no guarantee of approval, which could materially harm the company's financial condition[130]. - The FDA has granted orphan drug designation for sebetralstat, which may not effectively protect it from competition as it does not preclude different drugs from being approved for the same condition[139]. - The company must obtain separate marketing approvals in jurisdictions outside the U.S., which may involve additional testing and regulatory requirements[141]. - The approval of a product candidate in one jurisdiction does not guarantee approval in other jurisdictions, which could limit the company's market opportunities[141]. - The FDA's fast track designation for sebetralstat does not guarantee a faster development or approval process[140]. - The company may face significant penalties if found in violation of healthcare laws and regulations, which could adversely affect its financial results[136]. Clinical Development and Trials - The company anticipates substantial increases in expenses related to clinical development, marketing approvals, and commercialization efforts[116]. - Delays in clinical trials could lead to increased development costs and negatively impact the company's ability to secure additional financing[127]. - The company may face challenges in patient enrollment for clinical trials, particularly due to the rarity of HAE[126]. - The company expects to conduct ongoing clinical trials, including the KONFIDENT-KID trial for sebetralstat, but is dependent on third parties for timely execution[190]. - There are risks associated with investigator-sponsored trials, including lack of control over design and execution, which could lead to delays in clinical development[192]. Market and Competitive Landscape - The company faces substantial competition from larger pharmaceutical and biotechnology firms, which may have greater resources and expertise[164]. - Market acceptance of product candidates is uncertain and depends on factors such as efficacy, safety, and competitive pricing[160]. - The uncertainty surrounding insurance coverage and reimbursement for newly approved products could limit the company's ability to market these products and generate revenue[165]. - The company may face significant pricing pressures due to governmental and third-party payors' efforts to cap healthcare costs, impacting reimbursement levels for new products[167]. Intellectual Property and Legal Risks - The company faces challenges in obtaining and maintaining intellectual property protection, which is essential for preventing competitors from commercializing similar technologies[195]. - The patent prosecution process is expensive and time-consuming, and the company may not be able to file all necessary patent applications in a timely manner[196]. - The company may be subject to challenges regarding its patent rights, which could reduce the scope of protection or invalidate patents[198]. - There is a risk of third-party legal proceedings alleging infringement of intellectual property rights, which could materially affect the company's business success[204]. - If found infringing on third-party intellectual property, the company may need to obtain licenses that could be costly or non-exclusive, impacting its competitive position[205]. Operational and Management Challenges - The company will need to transition from a research-focused entity to one capable of supporting commercial activities upon regulatory approval[115]. - Retaining key executives and qualified personnel is critical for the company's success, and losing them could delay product development[207]. - The company anticipates significant growth in operations, particularly in drug development and regulatory affairs, which may lead to management challenges[210]. - Strategic transactions, such as collaborations or acquisitions, may not yield expected synergies and could pose operational and financial risks[184]. External Factors and Risks - Changes in trade relations, particularly with Chinese biotechnology companies, could disrupt the supply of materials necessary for product development[179]. - The ongoing conflicts in Ukraine and the Middle East could potentially affect the company's clinical trial operations in Eastern Europe[236]. - Legislative initiatives at the state level are increasingly controlling pharmaceutical pricing, which could limit government payments for pharmaceuticals and reduce demand for future product candidates[150]. - Future healthcare reforms may impose more rigorous coverage criteria and downward pressure on prices, potentially affecting revenue generation and profitability[151]. Financial and Market Conditions - The company is exposed to foreign exchange rate risk, primarily incurring expenses in GBP, but does not engage in hedging activities[315]. - The company does not currently intend to pay dividends on its common stock, which means stockholders' returns will depend on future appreciation in stock price[240]. - The company’s financial results could be adversely affected by unstable global market conditions, including inflation and supply chain disruptions[235]. - Changes in tax laws, such as the TCJA and IRA, could materially affect the company's financial position and results of operations[237].