June 9, 2020

Kindred Biosciences Restructures Investment Priorities

Kindred Biosciences, a biopharmaceutical company focused on saving and improving the lives of pets, today announced a plan to enhance its strategic position which includes the elimination of about two dozen positions. The company will prioritize its most attractive late stage programs and substantially reduce expenses to best position it for success with the previously announced business model.

KindredBio intends to reduce operating expenditures by prioritizing investment in its highest value, late stage programs, especially the interleukin-31 (IL-31) antibody, interleukin-4 receptor (IL-4R) antibody and parvovirus antibody programs. These actions, alongside a streamlining of the company’s operations, are expected to reduce quarterly operating expenses to approximately $10 million by the fourth quarter of 2020 and maintain expenditures at a similar level through 2021. The restructuring will reduce the company’s workforce by about 25 employees, including the departure of Denise Bevers, KindredBio’s President and Chief Operating Officer. Bevers will remain on the Board of Directors.

“With this streamlining, we put KindredBio in a very strong position to maximize the value of our assets. I would like to thank our talented employees for their contributions to the company’s achievements. We continue to execute well on advancing our promising pipeline and are excited about upcoming milestones,” said KindredBio’s CEO, Richard Chin, M.D.

“I would especially like to thank our co-founder, Denise, who has been instrumental in growing KindredBio from a startup, through our IPO and into one of the world’s leading veterinary biopharmaceutical companies. I know I speak on behalf of all our employees when I say that it has been an honor and pleasure to work together. I am very pleased that Denise will remain a key part of KindredBio’s future success as a member of our Board of Directors.”

Bevers said, “I co-founded KindredBio with a mission to transform veterinary medicine and am extremely proud of what we have accomplished. It has been a privilege to build and work with this remarkably talented and driven team. In my capacity as a board member, I remain dedicated to our vision of saving and improving the lives of pets with our innovative biologics pipeline.”

KindredBio will continue to advance its publicly disclosed biologics programs including IL-31 and IL-4R antibodies for canine atopic dermatitis, KIND-030 for parvovirus in dogs and KIND-510a for the control of non-regenerative anemia in cats, together with long-acting versions of certain molecules. The company’s anti-TNF antibody program for inflammatory bowel disease in dogs, alongside other undisclosed mid-stage biologics candidates, will be put on hold after the completion of the pilot efficacy study, pending additional funding or partnering capital.

Operating expenses for 2020, which represents a peak year given multiple pivotal studies planned, are projected to range between $53 and $55 million. This includes a restructuring charge of about $2.3 million related to severance and health care benefits, exclusive of stock compensation, pertaining to today’s announcement. Excluding first half expenditures, the annualized run rate for 2020 is expected to be between $43 million and $45 million. Eliminated positions relate primarily to the collapsing of functions and pausing of mid-stage programs. For 2021, operating expenses are predicted to range between $39 and $42 million. KindredBio believes its existing cash, cash equivalents and investments, the net reduction in the company’s workforce, proceeds from the Mirataz sale and revenues from anticipated partnerships will be sufficient to fund the current operating plan through mid-2022, excluding the drawdown of $30 million from its debt facility.

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