Kiniksa Pharmaceuticals International, plc
FORM 10-Q
FOR THE THREE MONTHS ENDED JUNE 30, 2025
TABLE OF CONTENTS
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| PART I — FINANCIAL INFORMATION | 7 |
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| Item 1. Financial Statements (unaudited) | 7 |
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| Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 | 7 |
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| Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2025 and 2024 | 8 |
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| Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2025 and 2024 | 9 |
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| Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 | 10 |
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| Notes to Consolidated Financial Statements | 11 |
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| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30 |
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| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 43 |
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| Item 4. Controls and Procedures | 43 |
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| PART II — OTHER INFORMATION | 44 |
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| Item 1. Legal Proceedings | 44 |
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| Item 1A. Risk Factors | 44 |
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| Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 107 |
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| Item 3. Defaults Upon Senior Securities | 107 |
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| Item 4. Mine Safety Disclosures | 107 |
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| Item 5. Other Information | 107 |
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| Item 6. Exhibits | 108 |
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| SIGNATURES | 110 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”), contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report including statements regarding our commercial strategy; potential value drivers; potential indications; potential market opportunities and competitive position; ongoing, planned and potential clinical trials and other studies; timing and potential impact of clinical data; future results of operations and financial position; expected timeline for our cash, cash equivalents and short-term investments; product development; prospective products and product candidates; supply of drug products at acceptable cost and quality; collaborators, license and other strategic arrangements; the expected timeline for achievement of our clinical milestones; potential marketing authorizations from the United States Food and Drug Administration (the “FDA”) or regulatory authorities in other jurisdictions; potential and ongoing coverage and reimbursement for our products and product candidates, if approved; clinical and commercial activities; research and development costs; timing of regulatory filings and feedback; timing and likelihood of success; and plans and objectives of management for future operations and funding requirements, are forward-looking statements.
These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “goal,” “design,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these identifying words. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described under the sections in this Quarterly Report entitled “Summary Risk Factors,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report. These forward-looking statements are subject to numerous risks and uncertainties, including, without limitation, the following:
| ● | our continued ability to commercialize ARCALYST® (rilonacept) and to develop and commercialize our current and future product candidates, if approved; |
| ● | competitive and potentially competitive products and technologies; |
| ● | our ability to source sufficient quantities of our products and product candidates to meet patient and partner demand at acceptable cost and quality specifications; |
| ● | our ability to successfully complete the technology transfer of the manufacturing process for ARCALYST drug substance; |
| ● | prescriber awareness and adoption of our products and product candidates, if approved; |
| ● | the size of the market for our products and product candidates, if approved; |
| ● | the decision of third party payors not to cover or maintain coverage of or to establish burdensome requirements prior to covering or maintaining coverage of ARCALYST or any of our current or future product candidates, if approved; |
| ● | the lengthy and expensive clinical development process with its uncertain outcomes and potential for clinical failure or delay; |
| ● | the decision by any applicable regulatory authority to permit clinical development of, to grant regulatory exclusivity for and to approve marketing and sale of our current and future product candidates; |
| ● | our ability to anticipate and prevent adverse events caused by our products and product candidates; |
| ● | our ability to identify, in-license, acquire, discover or develop additional product candidates; |
| ● | our ability to undertake and execute on business combinations, out-licensing activities, collaborations or other strategic transactions and our ability to realize value therefrom; |
| ● | potential product liability claims; |
| ● | changes to federal, state and foreign regulatory requirements applicable to our products and product candidates; |
| ● | the impact of current and future healthcare reforms, including those affecting the delivery of or payment for healthcare products and services; |
| ● | our ability to obtain, maintain, protect and enforce our intellectual property rights related to our products and product candidates; |
| ● | incurring losses in the future, potentially requiring us to raise additional funds; |
| ● | general economic, industry and market uncertainty, including due to tariff policy and geopolitical tensions; and |
| ● | our ability to attract and retain skilled personnel. |
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not place undue reliance on our forward-looking statements. Except as required by applicable law, we do not assume and specifically disclaim any obligation to update any forward-looking statements, whether as a result of any new information, future events, changed circumstances or otherwise.
SUMMARY RISK FACTORS
Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report. You should carefully consider these risks and uncertainties when investing in our Class A ordinary shares. The principal risks and uncertainties affecting our business include the following:
| ● | we may not be able to continue to commercialize ARCALYST or be successful in commercializing any future products, potentially impacting the commercial potential for our current and future products and our ability to generate revenue; |
| ● | successful commercialization of our products and product candidates, if approved, will depend in part on the extent to which third party payors, including governmental authorities and private health insurers, provide funding, establish and maintain favorable coverage and pricing policies and set adequate reimbursement levels; |
| ● | current and future healthcare legislation or executive or administrative action may have a material adverse effect on our business and results of operations; |
| ● | if we are unable to advance our product candidates in clinical development, obtain regulatory approval and pursue commercialization, or experience significant delays in doing so, our business may be significantly harmed; |
| ● | the incidence and prevalence for target patient populations of our products and product candidates have not been established with precision; if the market opportunities for our products and product candidates are smaller than we estimate, or any approval that we obtain is based on a narrower definition of our targeted patient population, our revenue and ability to sustain profitability may be materially adversely affected; |
| ● | clinical development of our product candidates is a lengthy and expensive process with uncertain timelines, costs and outcomes; |
| ● | we may encounter substantial delays in our preclinical studies and/or clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities; we may therefore be unable to obtain required regulatory approvals and be unable to successfully commercialize our product candidates on a timely basis, if at all; |
| ● | we contract with third parties, including independent contract development and manufacturing organizations (“CDMOs”) to manufacture our commercial supply of ARCALYST and clinical supply of our product candidates and for certain research and development, which is highly regulated and complex, and we expect that we will continue to do so in the future; this reliance on third parties increases the risk that we may not have sufficient quantities of ARCALYST or our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our research and development or commercialization efforts; |
| ● | we are conducting a technology transfer of the manufacturing process for ARCALYST drug substance from Regeneron Pharmaceuticals, Inc. (“Regeneron”) to Samsung Biologics Co., Ltd. (“Samsung”), and the analytical testing methods of ARCALYST drug substance and drug product to new contract testing labs (“CTLs”), which will be subject to significant risks and uncertainties; |
| ● | we rely, and expect to continue to rely, on third parties, including independent investigators and contract research organizations (“CROs”) to activate sites, conduct and otherwise support our research activities, preclinical studies, clinical trials and other trials for our product candidates; if these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval or commercialize our product candidates, and our business could be substantially harmed; |
| ● | if we are unable to adequately protect our proprietary technology or obtain and maintain patent protection for our technology and patents, if the scope of the patent protection obtained is not sufficiently broad, or if the terms of our patents are insufficient to protect product candidates for an adequate amount of time, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be materially impaired; |
| ● | we have a history of operating losses and may require substantial additional financing in the future, which we may be unable to obtain when needed or on acceptable terms; |
| ● | we face significant competition, which may result in others discovering, developing or commercializing drugs before or more successfully than us; |
| ● | we may not successfully execute our growth strategy to identify, discover, develop, in-license or acquire additional product candidates or technologies, our strategy may not deliver anticipated results or we may refine or otherwise alter our growth strategy; |
| ● | we may seek to acquire businesses or undertake business combinations, collaborations or other strategic transactions that may not be successful or on favorable terms, if at all, and we may not realize the intended benefits of such transactions; |
| ● | we have entered into and may seek to enter into collaboration, licensing or other strategic transactions or arrangements to further develop, commercialize or otherwise attempt to realize value from one or more of our products and product candidates; such arrangements or transactions may not be successful or on favorable terms, which could adversely affect our ability to develop, commercialize or attempt to realize value from our products and product candidates; |
| ● | we may be adversely affected by continuing geopolitical tensions, including the introduction of tariffs or reciprocal tariffs that may be imposed by the United States and its global trading partners that could collectively cause economic uncertainty and increased costs to product development and manufacturing; |
| ● | the concentration of ownership of the voting power of our ordinary shares, including our Class B ordinary shares, and conversion rights of the holders of our Class A1 and Class B1 ordinary shares, which are held primarily by entities affiliated with certain of our directors, may prevent new investors from influencing significant corporate decisions and may have an adverse effect on the price of our Class A ordinary shares; and |
| ● | the rights afforded to our shareholders are governed by English law; not all rights available to shareholders under United States law will be available to holders of our ordinary shares. |
Industry and other data
Unless otherwise indicated, certain industry data and market data included in this Quarterly Report were obtained from independent third party surveys, market research, publicly available information, reports of governmental agencies and industry publications and surveys. All of the market data used in this Quarterly Report involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We believe that the information from these industry publications and surveys included in this Quarterly Report is reliable.
ARCALYST is a registered trademark of Regeneron. Solely for convenience, trademarks, service marks, and trade names referred to in this Quarterly Report may be listed without identifying symbols.
