Kronos Bio, a biotechnology company, recently decided to streamline its executive leadership team by eliminating three C-suite roles - Chief Medical Officer, Chief Scientific Officer, and Chief Operating Officer plus General Counsel, according to H.C. Wainwright & Co. analysts Robert Burns and Dr. Raghuram Selvaraju in a January 26 research note.
This was presented by management as a cost-cutting measure rather than being related to pending clinical trial results or changes in research strategy.
Specifically, they stated that the pending mid-2024 results from expansion cohorts of the KB-0742 trial did not factor into the terminations, as that data has not been collected yet. Additionally, they asserted that this does not represent a major shift in Kronos' overall R&D approach and programs.
Due to severance payments for the terminated executives, Kronos expects around $2 million in additional 1Q2024 operating expenses. However, management maintains confidence that the company's current finances can fund operations into 2026.
"We look forward to KB-0742 expansion cohort data in mid-2024," the analysts wrote.
Kronos Bio recently presented interim Phase 1 data on its oral CDK9 inhibitor drug, KB-0742. The trial has enrolled 28 patients who have received a median of 3.5 prior cancer therapies so far.
Last year, Kronos selected a 60mg dose of KB-0742 as the recommended Phase 2 dose. At this dose level, KB-0742 reduced levels of f phosphorylated Ser2 on RNA polymerase II (pSer2), a direct target of CDK9, by around 50% in patients' immune cells.
This degree of target engagement matched anti-tumor activity seen in preclinical models. KB-0742 also showed a 24-hour half-life in the body and accumulated 2- to 2.5-fold after 10 days of dosing.
In the dose escalation portion of the trial, one patient with myxoid liposarcoma experienced a partial response to KB-0742 treatment. However, the analysts said, "In our opinion, it is premature to view the low response rate as indicative of KB-0742's potential since the dose-escalation portion of this trial did not select patients for MYC amplification, as will be the case in dose expansion." The analysts also stated that dose escalation is still ongoing at 80mg, and this higher dose could also be explored further.
Overall, "we value Kronos Bio using a discounted cash flow (DCF)-driven methodology, ascribing a 10% probability of approval to KB-0742 in MYC-amplified solid tumors," the analysts said.
They reiterated their Buy rating on Kronos Bio and gave the company a 2.50 target price.
| Want to be the first to know about interesting Biotechnology / Pharmaceuticals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
