Kinarus have announced the discontinuation of the Phase 2 KINETIC study of its anti-inflammatory combination drug KIN001 in the treatment of hospitalised COVID-19 patients. While a disappointment, this was not a large part of our valuation since treating hospitalised COVID-19 patients is a high bar where much of the pathological and immunological damage has already been done. The bulk of our fair value of Kinarus remains the use of KIN001 in wet age-related macular degeneration (wAMD).
The discontinuation of the Phase 2 KINETIC study will result in some disappointment since it would have been a ‘quick win’. The bar was, however, very high and patients who have been admitted to hospital with COVID-19 have advanced disease where much of the inflammatory mediation that KIN001 was designed to reduce is already fulminant, requiring hospital support.
We are encouraged that the Phase 2 KINFAST study in ambulatory patients continues and have adjusted our valuation for this news: increasing the discount rate for KIN001 in the treatment of COVID-19 from 15% (which we apply to Kinarus’s other programs) to 30%, and modestly reducing FY2022 R&D spend.
These changes result in our fair valuation of Kinarus Therapeutics moving from CHF107.6m to CHF96.0m, equivalent to CHF 0.09 per share.
