Kiniksa Pharmaceuticals International, plc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report, and our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K (our “Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements. As a result of many factors, including those factors set forth in the risks identified in Part II-Item 1A “Risk Factors” section of this Quarterly Report and our other filings with the Securities and Exchange Commission (the “SEC”) our actual results could differ materially from the results, performance or achievements expressed in or implied by these forward-looking statements.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report, and our audited consolidated financial statements and related notes for the year ended December 31, 2024 included in our Annual Report on Form 10-K (our “Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the risks identified in Part II-Item 1A “Risk Factors” section of this Quarterly Report and our other filings with the Securities and Exchange Commission (the “SEC”) our actual results could differ materially from the results, performance or achievements expressed in or implied by these forward-looking statements.

Previous wording

We are a commercial-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need. Our portfolio of immune-modulating assets, ARCALYST, abiprubart and mavrilimumab, is based on strong biologic rationale or validated mechanisms, targets a spectrum of underserved cardiovascular and autoimmune conditions and offers the potential for differentiation.

Current wording

We are a biopharmaceutical company developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications. Our portfolio of assets is based onstrong biologic rationale or validated mechanisms and offers the potential for differentiation.

Previous wording

ARCALYST is an interleukin-1α and interleukin-1β cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. We received FDA approval of ARCALYST for thetreatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021. Recurrent pericarditis is a painful inflammatory cardiovascular disease with an estimated United States prevalent population of approximately 40,000 patients seeking and receiving medical treatment. ARCALYST is commercially available across the United States through a select network of specialty pharmacies. ARCALYST is also approved in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome (“FCAS”) and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children weighing 10 kg or more. We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales, as well as third party proceeds, with Regeneron. In 2022, we granted exclusive rights to Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (“Huadong”) to develop and commercialize ARCALYST in the Huadong Territory (as defined below).

Current wording

ARCALYST is an interleukin-1α (“IL-1α”) and interleukin-1β (“IL-1β”) cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. We received FDA approval of ARCALYST for thetreatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021. Recurrent pericarditis is a painful inflammatory cardiovascular disease with an estimated United States prevalent population of approximately 40,000 patients seeking and receiving medical treatment. ARCALYST is also approved in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome (“FCAS”) and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children weighing 10 kg or more. ARCALYST is commercially available across the United States through a select network of specialty pharmacies. We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales, as well as third party proceeds, with Regeneron. In 2022, we granted Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (“Huadong”) exclusive rights to develop and commercialize ARCALYST in the Huadong Territory (as defined below). In 2023, Regeneron initiated a technology transfer of the manufacturing process for ARCALYST drug substance, and we are working to qualify Samsung as our replacement CDMO.

Previous wording

Abiprubart is an investigational monoclonal antibody inhibitor of CD40-CD154 costimulatory interaction. We hold an exclusive world-wide license to abiprubart from Beth Israel Deaconess Medical Center, Inc. (“BIDMC”). The CD40-CD154 interaction is a key T-cell co-stimulatory signal critical for B-cell maturation, immunoglobulin class switching and Type 1 immune response. We believe disrupting the CD40-CD154 costimulatory interaction is an attractive approach to address multiple autoimmune disease pathologies. In December 2021, we initiated a Phase 2 clinical trial of abiprubart inrheumatoid arthritis (“RA”), which is designed to evaluate pharmacokinetics, safety and efficacy with subcutaneous administration. In January 2024, we announced topline clinical data from Cohorts 1, 2 and 3 of the trial and that the trial met its primary efficacy endpoint in Cohort 3 at the weekly dose level. In April 2024, we announced topline clinical data from Cohort 4 of the RA trial. We are currently enrolling and dosing a Phase 2b clinical trial of abiprubart in Sjögren’s Disease.

Current wording

Abiprubart is an investigational monoclonal antibody inhibitor of CD40-CD154 costimulatory interaction, which we believe to be an attractive approach to address multiple autoimmune disease pathologies. We hold an exclusive worldwide license to abiprubart from Beth Israel Deaconess Medical Center, Inc. (“BIDMC”). We previously announced a Phase 2b clinical trial of abiprubart in Sjögren’s Disease. In February 2025, we announced our plans to discontinue development of abiprubart in the indication and explore strategic alternatives for the asset.

Previous wording

Mavrilimumab is an investigational monoclonal antibody inhibitor targeting granulocyte-macrophage colony stimulating factor receptor alpha (“GM-CSFRα”). In 2017, we licensed exclusive worldwide rights in all indications to mavrilimumab from MedImmune, Limited (“MedImmune”). We evaluated mavrilimumab in giant cell arteritis (“GCA”), a chronic inflammatory disease of the medium-to-large arteries, and COVID-19-related acute respiratory distress syndrome (“ARDS”). In 2022, we granted exclusive rights to Huadong to develop and commercialize mavrilimumab in the Huadong Territory. We are currently evaluating potential partnership opportunities to advance mavrilimumab’s development.

Current wording

Mavrilimumab is an investigational monoclonal antibody inhibitor targeting granulocyte-macrophage colony stimulating factor receptor alpha (“GM-CSFRα”). In 2017, we licensed exclusive worldwide rights in all indications to mavrilimumab from MedImmune, Limited, which has since been acquired by AstraZeneca PLC (“MedImmune”). In

Previous wording

In June 2024, we announced the completion of the change of place of incorporation of our principal holding company from Bermuda to the United Kingdom (the “Redomiciliation”), pursuant to a scheme of arrangement approved by both the Bermuda Supreme Court and our shareholders. As used herein, and unless the context otherwise requires, references to “we”, “us”, “our” and similar words or phrases prior to the Redomiciliation shall refer to Kiniksa Pharmaceuticals, Ltd. and from and after the Redomiciliation, to Kiniksa Pharmaceuticals International, plc.

Current wording

We were initially incorporated under the laws of Bermuda in July 2015 and, in April 2024, subsequently announced the completion of the change of place of incorporation of our principal holding company from Bermuda to the United Kingdom (the “UK”), pursuant to a scheme of arrangement approved by both the Bermuda Supreme Court and our shareholders (the “Redomiciliation”), which caused the shareholders of our former parent company, Kiniksa Pharmaceuticals, Ltd. (“Kiniksa Bermuda”), to become the shareholders of our current parent company, Kiniksa Pharmaceuticals International, plc (the “Company” or “Kiniksa International”). As used herein, and unless the context otherwise requires, references to “we,” “us,” “our” and similar words or phrases prior to the Redomiciliation shall refer to Kiniksa Bermuda and from and after the Redomiciliation, to Kiniksa International. In addition, references to “ordinary shares” prior to the Redomiciliation are to Kiniksa Bermuda’s common shares and from and after the Redomiciliation are to Kiniksa International’s ordinary shares.

Previous wording

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan. For the three and nine months ended September 30, 2024, our net loss was $12.7 million and $34.3 million, respectively. As of September 30, 2024, we had an accumulated deficit of $512.3 million.

Current wording

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan. For the three months ended March 31, 2025, our net income was $8.5 million. As of March 31, 2025, we had an accumulated deficit of $512.6 million.

Previous wording

As of September 30, 2024, we had cash, cash equivalents and short-term investments of $223.8 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theunaudited consolidated financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed.

Current wording

As of March 31, 2025, we had cash, cash equivalents and short-term investments of $268.3 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theunaudited consolidated financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Previous wording

In February 2022, we entered into two collaboration and license agreements (the “Huadong Collaboration Agreements”), with Huadong, pursuant to which we granted Huadong exclusive rights to develop and commercialize rilonacept and mavrilimumab (the “Huadong Licensed Products”), in the Asia Pacific region excluding Japan (the “Huadong Territory”). We otherwise retained our current rights to the Licensed Products outside the Territory.

Current wording

In February 2022, we entered into two collaboration and license agreements (the “Huadong Collaboration Agreements”), with Huadong, pursuant to which we granted Huadong exclusive rights to develop and commercialize ARCALYST and mavrilimumab, in the Asia Pacific region excluding Japan (the “Huadong Territory”). In April 2025, we entered into a mutual termination agreement with Huadong pursuant to which we agreed to terminate the mavrilimumab Huadong Collaboration Agreement and release all claims related thereto.

Previous wording

annual net sales of each Huadong Licensed Product in the Huadong Territory, subject to certain reductions tied to rilonacept manufacturing costs and certain other customary reductions, with an aggregate minimum floor. Royalties will be payable on a Huadong Licensed Product-by-Huadong Licensed Product and country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of the applicable Huadong Licensed Product in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers the applicable Huadong Licensed Product in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for the applicable Huadong Licensed Product in such country or region in the Huadong Territory. We recognized the $10.0 million related to the mavrilimumab license during the year ended December 31, 2022. We have recognized $0.2 million of revenue of the $12.0 million transaction price under the rilonacept license agreement as of September 30, 2024, and will recognize the remaining revenue as materials are shipped.

Current wording

Under the Huadong Collaboration Agreements, we received a total upfront cash payment of $22.0 million, which included $12.0 million for the Huadong Territory license of ARCALYST and $10.0 million for the Huadong Territory license of mavrilimumab. In the fourth quarter of 2024, following the achievement of a regulatory milestone under the ARCALYST Huadong Collaboration Agreement, Huadong became obligated to make an additional cash payment of $20.0 million, which was received in the first quarter of 2025. In addition, we will be eligible to receive additional contingent sales-based milestones payments related to ARCALYST. Huadong will also be obligated to pay us tiered percentage royalties ranging from the low-to-mid teens on annual net sales of ARCALYST in the Huadong Territory, subject to certain reductions tied to ARCALYST manufacturing costs and certain other customary reductions, with an aggregate minimum floor. Royalties will be payable on a country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of ARCALYST in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers ARCALYST in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for ARCALYST in such country or region in the Huadong Territory. We recognized the $10.0 million related to the mavrilimumab license during the year ended December 31, 2022 and do not expect to recognize any additional license and collaboration revenue following the termination of the mavrilimumab Huadong Collaboration Agreement. We have recognized $0.2 million of revenue of the $32.0 million transaction price under the ARCALYST license agreement as of March 31, 2025, and will recognize the remaining revenue as materials are shipped.

Previous wording

Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license. Additionally, in 2023, we received a total of $35.0 million in additional payments from Genentech related to delivery of certain drug material to Genentech and Genentech’s achievement of a development milestone. In the fourth quarter of 2023, following the achievement of a development milestone related to a second indication under the Genentech License Agreement, Genentech became obligated to make an additional cash payment of $10.0 million, which was received in the first quarter of 2024. In the second quarter of 2024, we received $5.0 million following the achievement of a development milestone related to a third indication under the Genentech License Agreement. We will be eligible to receive up to a total of approximately $600.0 million in contingent payments, including specified development, regulatory and sales-based milestones, of which approximately $570.0 million remains as of September 30, 2024. We will also be eligible to receive tiered percentage royalties on a Genentech Licensed Product-by-Genentech Licensed Product basis ranging from low-double digits to mid-teens on annual net sales of each Genentech Licensed Product, subject to certain customary reductions, with an aggregate minimum floor, before fulfilling our upstream financial obligations. Royalties will be payable on a Genentech Licensed Product-by-Genentech Licensed Product and country-by-country basis until the latest to occur of the expiration of certain patents that cover a Genentech Licensed Product, the expiration of regulatory exclusivity for such Genentech Licensed Product, or the tenth anniversary of first commercial sale of such Genentech Licensed Product in such country. As of September 30, 2024, we have recognized the $130.0 million received from Genentech under the Genentech License Agreement as revenue.

Current wording

Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license. Additionally, in 2023, we received a total of $35.0 million in additional payments from Genentech related to delivery of certain drug material to Genentech and Genentech’s achievement of a development milestone. In the fourth quarter of 2023, following the achievement of a development milestone related to a second indication under the Genentech License Agreement, Genentech became obligated to make an additional cash payment of $10.0 million, which was received in the first quarter of 2024. In the second quarter of 2024, we received $5.0 million following the achievement of a development milestone related to a third indication under the Genentech License Agreement. We will be eligible to receive up to a total of approximately $600.0 million in contingent payments, including specified development, regulatory and sales-based milestones, of which approximately $570.0 million remains as of March 31, 2025. We will also be eligible to receive tiered percentage royalties on a Genentech Licensed Product-by-Genentech Licensed Product basis ranging from low-double digits to mid-teens on annual net sales of each Genentech Licensed Product, subject to certain customary reductions, with an aggregate minimum floor, before fulfilling our upstream financial obligations. Royalties will be payable on a Genentech Licensed Product-by-Genentech Licensed Product and country-by-country basis until the latest to occur of the expiration of certain patents that cover a Genentech Licensed Product, the expiration of regulatory exclusivity for such Genentech Licensed Product, or the tenth anniversary of first commercial sale of such Genentech Licensed Product in such country. In 2024, we completed our remaining obligations under the Genentech License Agreement and we have recognized as revenue all of the considerations received

Previous wording

Cost of goods sold includes production and distribution costs of ARCALYST, amortization of the $20.0 million payment we made to Regeneron in the first quarter of 2021 upon achievement of a regulatory milestone and other miscellaneous product costs associated with ARCALYST. Cost of goods sold also includes labor and overhead costs associated with the production of ARCALYST associated with supply chain, quality and regulatory activities, and the technology transfer of the manufacturing process for the ARCALYST drug substance.

Current wording

Cost of goods sold includes production and distribution costs of ARCALYST, amortization of the $20.0 million payment we made to Regeneron in the first quarter of 2021 upon achievement of a regulatory milestone and other miscellaneous product costs associated with ARCALYST. Cost of goods sold also includes labor and overhead costs

Previous wording

Collaboration expenses consist of Regeneron’s share of the profit related to ARCALYST sales under the Regeneron Agreement and the cost of products sold under collaboration agreements. We evenly split profits on sales of ARCALYST with Regeneron, where profits are determined after deducting from net sales of ARCALYST certain costs related to the manufacturing and commercialization of ARCALYST. Such costs include but are not limited to (i) our cost of goods sold for product used, sold or otherwise distributed for patient use by us; (ii) customary commercialization expenses, including the cost of our field force, and (iii) our cost to market, advertise and otherwise promote ARCALYST, with such costs identified in subsection (iii) subject to specified limits. With respect to the technology transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung, to the extent permitted by the

Current wording

Collaboration expenses consist of Regeneron’s share of the profit related to ARCALYST sales under the Regeneron Agreement and the cost of products sold under collaboration agreements. We evenly split profits on sales of ARCALYST with Regeneron, where profits are determined after deducting from net sales of ARCALYST certain costs related to the manufacturing and commercialization of ARCALYST. Such costs include but are not limited to (i) our cost of goods sold for product used, sold or otherwise distributed for patient use by us; (ii) customary commercialization expenses, including the cost of our field force, and (iii) our cost to market, advertise and otherwise promote ARCALYST, with such costs identified in subsection (iii) subject to specified limits. With respect to the technology transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung, to the extent permitted by the Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology transfer shall also be deducted from net sales of ARCALYST to determine profit. We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties.

Previous wording

increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will be substantial over the next several years as we conduct our ongoing and/or planned clinical trials for our product candidates, as well as conduct other preclinical and clinical development, and make regulatory filings for our product candidates.

Current wording

Research and development activities are central to our business. Product candidates in later stages of clinical development generally have higher costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will be substantial over the next several years as we conduct our ongoing and/or planned clinical trials for our product candidates, as well as conduct other preclinical and clinical development, and make regulatory filings for our product candidates.

Previous wording

We expect that our selling, general and administrative expenses will continue to increase in the future.

Current wording

We expect that our selling, general and administrative expenses will continue to increase in the future as we continue to expand our infrastructure related to the commercialization of ARCALYST and our other product candidates, if approved.

Previous wording

Prior to the Redomiciliation, our principal holding company was incorporated and principally subject to taxation in Bermuda. Following the Redomiciliation, our principal holding company is incorporated and principally subject to taxation in the United Kingdom. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate. As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards are currently available to us for those losses. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope Therapeutics, Inc. are subject to federal and state income taxes in the United States. Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries.

Current wording

net operating loss carryforwards are currently available to us for those losses. Following the Redomiciliation, our income is subject to the enacted UK statutory corporate tax rate and net operating losses incurred have an indefinite carryforward. Our wholly owned United States subsidiaries, Kiniksa Pharmaceuticals, Inc. (“Kiniksa US”), and Primatope Therapeutics, Inc. are subject to federal and state income taxes in the United States. Our wholly owned subsidiary Kiniksa Pharmaceuticals (UK), Ltd. (“Kiniksa UK”), its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries.

Previous wording

In the first quarter of 2024, Kiniksa Bermuda transferred to Kiniksa Switzerland all rights, title and interest in, among other things, certain contracts, intellectual property rights, product filings and approvals and other information, plans and materials owned insofar as they related exclusively or primarily to abiprubart, mavrilimumab and other preclinical assets, with such exceptions as necessary to allow the completion of Cohort 4 of the Company’s ongoing Phase 2 clinical trial of abiprubart in rheumatoid arthritis. In connection with the foregoing transfer, we recognized a step-up in basis and did not incur any material tax liabilities.

Current wording

In the first quarter of 2024, Kiniksa Bermuda transferred to Kiniksa Switzerland all rights, title and interest in, among other things, certain contracts, intellectual property rights, product filings and approvals and other information, plans and materials owned insofar as they related exclusively or primarily to abiprubart, mavrilimumab, KPL-387, KPL-1161 and other preclinical assets. In connection with the foregoing transfer, we recognized a step-up in basis and did not incur any material tax liabilities.

Previous wording

We recognized net revenue from the sale of ARCALYST of $112.2 million for the three months ended September 30, 2024, compared to $64.8 million for the three months ended September 30, 2023, an increase of $47.4 million. The increase in product revenue was primarily driven by an increase in patients.

Current wording

We recognized net revenue from the sale of ARCALYST of $137.8 million for the three months ended March 31, 2025, compared to $78.9 million for the three months ended March 31, 2024, an increase of $58.9 million. The increase in product revenue was primarily driven by an increase in patient enrollment.

Previous wording

We reported $6.2 million of license and collaboration revenue for the nine months ended September 30, 2024, primarily driven by the achievement of a $5.0 million development milestone related to a third indication under the Genentech License Agreement, $0.7 million of products sold under the Rilonacept Huadong Collaboration Agreements, and $0.2 million of deferred revenue recognized related to the delivery of such materials. We reported $24.9 million of

Current wording

We reported no license and collaboration revenue for the three months ended March 31, 2025. We reported $1.0 million of license and collaboration revenue for the three months ended March 31, 2024, related primarily to $0.7 million of products sold under the ARCALYST Huadong Collaboration Agreement, $0.2 million of deferred revenue recognized related to the delivery of such materials.* *

Previous wording

We recognized cost of goods sold of $20.1 million for the three months ended September 30, 2024, compared to $9.1 million for the three months ended September 30, 2023, an increase of $11.0 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and a $6.3 million increase related to the technology transfer of the manufacturing process.

Current wording

We recognized cost of goods sold of $17.9 million for the three months ended March 31, 2025, compared to $10.6 million for the three months ended March 31, 2024, an increase of $7.3 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST. Cost of goods sold related to the technology transfer of the manufacturing process were consistent at $2.2 million for the three months ended March 31, 2025, and 2024.

Previous wording

Collaboration expenses were $29.3 million for the three months ended September 30, 2024, compared to $17.3 million for the three months ended September 30, 2023, an increase of $12.0 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST.

Current wording

Collaboration expenses were $43.8 million for the three months ended March 31, 2025, compared to $20.8 million for the three months ended March 31, 2024, an increase of $23.0 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST.

Previous wording

The direct costs for our abiprubart program were $8.5 million during the three months ended September 30, 2024, compared to $5.5 million during the three months ended September 30, 2023, an increase of $3.0 million. The increase in expenses incurred primarily related to the initiation costs of our Phase 2b clinical trial in Sjögren’s Disease, manufacturing of clinical material and close-out of our Phase 2 trial in RA during the three months ended September 30, 2024, as compared to the manufacturing of clinical material, continuation of the first three cohorts and initiation of cohort four of our Phase 2 trial in RA incurred during the three months ended September 30, 2023.

Current wording

The direct costs for our abiprubart program were $4.4 million during the three months ended March 31, 2025, compared to $15.1 million during the three months ended March 31, 2024, a decrease of $10.7 million. The decrease in expenses incurred primarily related to the close-out of our Phase 2b clinical trial in Sjögren’s Disease during the three months ended March 31, 2025 and $2.5 million of termination expenses associated with cancelled manufacturing agreements, as compared to the manufacturing of clinical material, continuation of cohort four of our Phase 2 clinical

Previous wording

The direct costs for our abiprubart program were $35.9 million during the nine months ended September 30, 2024, compared to $20.6 million during the nine months ended September 30, 2023, an increase of $15.3 million. The increase in expenses incurred primarily related to the manufacturing of clinical material, continuation of cohort four and study wind-down activities of our Phase 2 trial in RA and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the nine months ended September 30, 2024, as compared to the manufacturing of clinical material, continuation of the first two cohorts and initiation of cohorts three and four of our Phase 2 trial in RA incurred during the nine months ended September 30, 2023.

Current wording

trial in rheumatoid arthritis (“RA”) and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the three months ended March 31, 2024.

Previous wording

Selling, general and administrative expenses were $46.4 million for the three months ended September 30, 2024, compared to $34.5 million for the three months ended September 30, 2023. In the second half of 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $11.9 million was primarily due to an increase in sales and marketing of $8.0 million largely attributable to the expansion of our salesforce and an increase of $3.6 million in personnel-related costs. Personnel-related costs for the three months ended September 30, 2024 and 2023 included share-based compensation of $5.8 million and $5.0 million, respectively.

Current wording

Selling, general and administrative expenses were $43.5 million for the three months ended March 31, 2025, compared to $38.7 million for the three months ended March 31, 2024. The increase of $4.8 million was primarily due to an increase in sales and marketing costs of $2.6 million largely attributable to promotional activities and an increase of $2.4 million in personnel-related costs largely attributable to an increase in headcount. Personnel-related costs for the three months ended March 31, 2025 and 2024 included share-based compensation of $5.8 million and $5.4 million, respectively.

Previous wording

For the three months ended September 30, 2024, we recorded an income tax provision of $5.5 million relating primarily to income earned in the United Kingdom (“UK”), Switzerland and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. For the three months ended September 30, 2023, we recorded an income tax provision of $5.4 million relating primarily to income earned in the UK and the U.S., net of the FDII deduction and U.S. federal and state R&D Credits utilized. We expect that our reported income tax expense for future periods will be higher due to the utilization of our deferred tax assets.

Current wording

For the three months ended March 31, 2025, we recorded an income tax provision of $7.0 million relating primarily to income earned in the UK, Switzerland and the United States, net of the Foreign Derived Intangible Income (“FDII”) deduction and United States federal and state research and development credits (“R&D Credits”). For the three months ended March 31, 2024, we recorded an income tax provision of $3.4 million relating primarily to income earned in the UK, Switzerland and the United States, net of the FDII deduction and R&D Credits.

Previous wording

As of September 30, 2024, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $223.8 million. Net loss was $34.3 million and $11.2 million for the nine months ended September 30, 2024 and 2023, respectively. We expect to incur operating losses for the foreseeable future.

Current wording

As of March 31, 2025, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $268.3 million. Net income (loss) was 8.5 million and ($17.7) million for the three months ended March 31, 2025 and 2024, respectively. We expect our cash balance and our expected cash inflows from operations to allow us to meet our current operating plan.

Previous wording

Under various agreements with third parties, we have agreed to make milestone payments, pay royalties, pay annual maintenance fees and to meet due diligence requirements, each based upon specified events. Pursuant to the Regeneron Agreement, we have entered into a supply agreement with Regeneron to purchase both clinical and commercial product. We have committed to minimum payments to Regeneron of $9.3 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $13.1 million, of which $3.7 million are due within one year. In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a Master Services Agreement and a Product Specific Agreement with Samsung. Our commitments under such agreements, which include the purchase of raw materials and related service fees, will obligate us to minimum payments of $139.6 million, $16.0 million of which are due within one year. We have additionally entered into agreements with several CDMOs to provide the Company with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $38.0 million, $35.5 million of which are due within one year.

Current wording

Under various agreements with third parties, we have agreed to make milestone payments, pay royalties, pay annual maintenance fees and to meet due diligence requirements, each based upon specified events. Pursuant to the Regeneron Agreement, we have entered into a supply agreement with Regeneron to purchase both clinical and commercial product. We have committed to minimum payments to Regeneron of $35.4 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $12.2 million, of which $3.9 million are due within one year. In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a Master Services Agreement and a Product Specific Agreement with Samsung. Our commitments under such agreements, which include the purchase of raw materials and related service fees, will obligate us to minimum payments of $151.1 million, $15.1 million of which are due within one year. We have additionally entered into agreements with several CDMOs to provide us with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $6.6 million all of which are due within one year.

Previous wording

Under various agreements with third parties, we are entitled to receive upfront payments, milestone payments, and royalties, each based upon specified milestones. In the first quarter of 2024, following Genentech’s achievement of a development milestone in the fourth quarter of 2023 related to a second indication under the Genentech License Agreement, we received $10.0 million. In the second quarter of 2024, following Genentech’s achievement of a development milestone related to a third indication under the Genentech License Agreement, we received $5.0 million.

Current wording

Under various agreements with third parties, we are entitled to receive upfront payments, milestone payments, and royalties, each based upon specified milestones. In the first quarter of 2024, following Genentech’s achievement of a development milestone in the fourth quarter of 2023 related to a second indication under the Genentech License Agreement, we received $10.0 million. In the second quarter of 2024, following Genentech’s achievement of a development milestone related to a third indication under the Genentech License Agreement, we received $5.0 million. In the fourth quarter of 2024, following Huadong’s achievement of a regulatory milestone under the ARCALYST Huadong Collaboration Agreement, Huadong became obligated to pay a $20.0 million milestone, which was received in the first quarter of 2025.

Previous wording

Net cash provided by operations was $6.9 million and $9.0 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease in cash provided by operating activities is primarily due to a decrease in cash received from licensing agreements of $20.0 million, offset by an increase in net contribution from higher ARCALYST sales.

Current wording

Net cash provided by operations was $22.3 million and $4.0 million for the three months ended March 31, 2025 and 2024, respectively. The increase in cash provided by operating activities is primarily due to an increase in cash received from licensing agreements of $10.0 million and an increase in net contribution from higher ARCALYST sales.

Previous wording

Net cash used in investing activities was $27.6 million for the nine months ended September 30, 2024, compared to net cash used in investing activities of $14.7 million for the nine months ended September 30, 2023. The increase in net cash used in investing activities was driven by managing our cash and short-term investments portfolio mix.

Current wording

Net cash used in investing activities was $51.5 million for the three months ended March 31, 2025, compared to net cash provided by investing activities of $25.5 million for the three months ended March 31, 2024. The increase in net cash used in investing activities was driven by managing our cash and short-term investment portfolio mix.

Previous wording

During the nine months ended September 30, 2024 and 2023, net cash provided by financing activities was $10.1 million and $0.8 million, respectively, consisting of proceeds from the exercise of share options offset by payments in connection with Common Stock tendered for employee tax obligations.

Current wording

During the three months ended March 31, 2025 and 2024, net cash provided by financing activities was $2.8 million and $3.6 million, respectively, consisting of proceeds from the exercise of share options offset by payments in connection with ordinary shares tendered for employee tax obligations.

Previous wording

●conduct new and ongoing research and pre-clinical and clinical development of our product candidates, including our Phase 2 clinical trial of abiprubart in RA and our Phase 2b clinical trial of abiprubart in Sjögren’s Disease;

Current wording

●conduct new and ongoing research and pre-clinical and clinical development of our product candidates, including our planned Phase 2/3 clinical trial of KPL-387 in recurrent pericarditis, our ongoing Phase 1 clinical trial of KPL-387 in normal healthy volunteers and our pre-clinical investigations of KPL-1161;

Previous wording

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily