"We are running a comprehensive development program for tarcocimab tedromer with topline data from four Phase 3 studies planned for 2023: two for the long-interval treatment of diabetic macular edema (GLEAM and GLIMMER studies), one for the long-interval treatment and prevention of worsening of non-proliferative diabetic retinopathy (GLOW study) and one for the short-interval treatment of wet age-related macular degeneration (DAYLIGHT study). We are on track to announce topline primary endpoint data from all four studies in the third quarter of this year. Durability clearly matters to the community of retina patients, physicians and payors, and our Phase 3 program is testing the longest treatment intervals of any intravitreal biologic while preserving dosing flexibility for high-need patients," said Victor Perlroth, MD, Chief Executive Officer of Kodiak Sciences. "We are also pleased to be screening patients in the Phase 1 clinical study of our second ABC platform product candidate to enter the clinic, KSI-501. KSI-501 is our bispecific antibody biopolymer conjugate which inhibits both VEGF and IL-6 and thus targets two important biological mechanisms in retinal diseases - angiogenesis and inflammation - and which represents an exciting new category of retinal medicine. As we enter 2023, we are strongly positioned to execute on our vision for tarcocimab, to become a true platform company as we bring KSI-501 with its bispecific mechanism of action into the clinic and to continue our unique franchise build in retinal science and medicines development."

Recent Business Highlights

• Tarcocimab pivotal program: The tarcocimab pivotal program continues to make steady operational progress. In 2022, we completed enrollment in all four of our ongoing Phase 3 pivotal studies, namely our paired Phase 3 studies GLEAM/GLIMMER in DME, our Phase 3 GLOW study in NPDR and our Phase 3 study DAYLIGHT in wAMD. We were encouraged by the positive outcome of our Phase 3 BEACON study in RVO and by the promising safety profile tarcocimab demonstrated in BEACON. We are currently on track to release topline data from the four ongoing Phase 3 studies in the third quarter of 2023.
  
  
• Commercial Manufacturing: We continue to make substantial progress in our commercial manufacturing capabilities in collaboration with our partner Lonza. Our custom-built commercial scale manufacturing facility, Ursus, achieved mechanical completion in the first half of 2022, was commissioned as a cGMP facility in January 2023, and we began the manufacturing of commercial scale cGMP batches in the first quarter of 2023.
  
  
• Pipeline Progression: In 2022, we broadened our development pipeline of product candidates built on our ABC Platform with the filing of the Investigational New Drug (IND) application with the US FDA for KSI-501. KSI-501 is an investigational, first-in-class bispecific ABC that is designed to inhibit two mechanisms implicated in retinal diseases: vascular endothelial growth factor (VEGF) and interleukin-6 (IL-6). IL-6 is a pro-inflammatory cytokine and growth factor implicated in the pathophysiology of multiple retinal diseases and, in conditions for which anti-VEGF treatment is used, elevated levels of ocular IL-6 have been associated with poor anti-VEGF treatment response. KSI-501 is a trap-antibody fusion biopolymer conjugate designed to provide potent inhibition of (i) VEGF-mediated angiogenesis and vascular permeability through a soluble decoy receptor inhibiting the binding of VEGF-A and PLGF to their cognate receptors and (ii) IL-6 mediated inflammation through an antibody that binds soluble interleukin-6, inhibiting its binding to both soluble and membrane-bound IL-6 receptors. In preclinical studies KSI-501 was found to inhibit angiogenesis and also normalize inner and outer blood retinal barriers in primary-cell assays. Dual inhibition of VEGF and IL-6 by KSI-501 confers superior normalization of cell morphology and junctional biology compared to either anti-VEGF or anti-IL-6 monotherapy in cell-based assays. We believe KSI-501 has the potential to become a new category of retinal medicines with greater therapeutic efficacy than existing therapies while also benefiting from the promising long-interval durability of Kodiak's ABC Platform. The IND for KSI-501 has been cleared by the FDA, and the Phase 1 study in diabetic macular edema (DME) patients is now screening patients.
  
  
• Technology Platform Development: We continued progressing our technology development with our "triplet" platform. The triplet science is designed to bring our phosphorylcholine-based biopolymer, the central tenet of our ABC platform, together with many hundreds of copies of small molecules chemically embedded in that biopolymer, which is conjugated to an antibody therapeutic. We believe this new antibody conjugate drug format offers broad and important utility for multifactorial ophthalmic diseases and also has significant relevance for systemic diseases. We continue to advance our triplet platform towards its initial therapeutic concepts.
  
  
• Digital Health Platform Development: We are developing a visual engagement technology and imager ("VETi") designed by Kodiak engineers initially to be used by eye care professionals for vision and ophthalmic anatomical examination, diagnosis and monitoring. Our longer-term goal with VETi, built with semiconductor technologies, is to deliver a wearable device for long-term health engagement and monitoring. Importantly, we also believe the Kodiak VETi platform as a medical engagement and imaging platform has the potential to disrupt ophthalmology clinical trials by enabling new trial endpoints, thereby enabling faster and more cost-effective medicines development in ophthalmic disease, an area that historically requires lengthy and expensive trials. VETi may also aid in market build and shaping for undertreated or underdiagnosed diseases, such as diabetic eye diseases where Kodiak's product candidates tarcocimab and KSI-501 are being studied and where early treatment and prevention may allow patients to achieve better outcomes. The VETi platform is expected to begin pilot clinical testing mid-2023 to gather initial user input for continued innovation in the design and build of this new hardware and software platform.

Expected Upcoming Events/Milestones

• Treatment of first subjects in Phase 1 study of KSI-501 in DME, 2Q2023
  
  
• Announce topline data for ongoing Phase 3 pivotal studies of tarcocimab:
  
  
• GLEAM and GLIMMER, paired Phase 3 studies of tarcocimab in DME, 3Q2023 (expected July)
  
  
• DAYLIGHT, Phase 3 study of tarcocimab in wAMD, 3Q2023
  
  
• GLOW, Phase 3 study of tarcocimab in NPDR without DME, 3Q2023

Fourth Quarter and Full Year 2022 Financial Results

Cash Position

Kodiak ended the fourth quarter of 2022 with $478.9 million of cash, cash equivalents and marketable securities.

Net Loss

The net loss for the fourth quarter of 2022 was $70.4 million, or $1.35 per share on both a basic and diluted basis, as compared to a net loss of $93.2 million, or $1.79 per share on both a basic and diluted basis, for the fourth quarter of 2021. The net loss for the quarter ended December 31, 2022 included non-cash stock-based compensation of $25.8 million, as compared to $28 million for the quarter ended December 31, 2021.

R&D Expenses

Research and development (R&D) expenses were $56.0 million for the quarter ended December 31, 2022, as compared to $75.6 million for the quarter ended December 31, 2021. The R&D expenses for the fourth quarter of 2022 included non-cash stock-based compensation of $14.3 million, as compared to $15.6 million for the fourth quarter of 2021. The decrease in R&D expenses for the fourth quarter of 2022 was primarily driven by the maturation of the tarcocimab clinical program and the timing of manufacturing activities.

R&D expenses were $267.6 million for the year ended December 31, 2022, as compared to $217.3 million for the year ended December 31, 2021. The R&D expenses for the full year of 2022 included non-cash stock-based compensation of $59.3 million, as compared to $33.2 million for the full year of 2021. The increase in R&D expenses for the full year of 2022 was primarily driven by higher clinical trial costs to support ongoing trials, increased manufacturing activities, as well as higher non-cash stock-based compensation expense.

G&A Expenses

General and administrative (G&A) expenses were $18.1 million for the quarter ended December 31, 2022, as compared to $17.5 million for the quarter ended December 31, 2021. The G&A expenses for the fourth quarter of 2022 included non-cash stock-based compensation of $11.5 million, as compared to $12.4 million for the fourth quarter of 2021. 

G&A expenses were $73.8 million for the year ended December 31, 2022, as compared to $49.7 million for the year ended December 31, 2021. The G&A expenses for the full year of 2022 included non-cash stock-based compensation of $46.7 million, as compared to $28.1 million for the full year of 2021, which was the primary driver for the G&A expense increase in 2022.