California-based Kodiak Sciences Inc (KOD) develops treatments for retinal diseases. Its lead product candidate KSI-301 is undergoing clinical trials.
Let’s take a look at the company’s latest financial performance, corporate developments, and risk factors.
Kodiak’s Q2 Financial Results
The company did not report any sales for the second quarter. Instead, it reported a loss per share of $1.08, compared to the consensus estimates of $1.06. The loss per share in the same quarter last year was $0.58. Kodiak ended Q2 with $880.9 million in cash. (See Kodiak Sciences stock charts on TipRanks).
Kodiak’s Corporate Update
The company is advancing with the development of its lead drug candidate KSI-301. It has begun enrolling patients for the various advanced clinical studies. Kodiak has secured the approval of Chinese authorities to conduct KSI-301 studies in the country.
In another notable development, Kodiak said it will not take any more money from Baker Bros. Advisors (BBA) under their funding agreement, reached in December 2019.
Kodiak was eligible to receive $225 million from BBA upon meeting certain targets related to the development of KSI-301. In exchange, BBA secured rights to 4.5% royalties on future KSI-301 sales. and certain other products.
BBA has already released $100 million to Kodiak, with $125 million remaining, but Kodiak has decided not to take the remaining amount. This is despite being in a position to meet the conditions set out in the BBA funding agreement, and reduce the royalty cap.
Kodiak’s Risk Factors
The new TipRanks Risk Factors tool shows 66 risk factors for Kodiak. Since December 2020, the company has updated its risk profile to add one new risk factor under the Tech and Innovation category.
Kodiak tells investors that it handles sensitive information in the course of its business. It cautions that it could face significant fines, and its drug development programs may be interrupted should its security measures, or those of third-party service providers, fail.
The company says that the transition to remote work for some of its staff has heightened the risk of sensitive information being compromised.
Tech and Innovation is Kodiak’s top risk category, accounting for 42% of the total risks. That is above the sector average of 25%. Kodiak’s shares have declined about 33% since the beginning of 2021.
Analysts’ Take
Following Kodiak’s Q2 earnings report and corporate updates, Roth Capital analyst Zegbeh Jallah reiterated a Buy rating on Kodiak stock, with a price target of $149. Jallah’s price target suggests 51.64% upside potential.
Consensus among analysts is a Moderate Buy, based on three Buys and one Sell. The average Kodiak Sciences price target of $120.75 implies 22.89% upside potential to current levels.
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