This week we are looking into KemPharm (NASDAQ: KMPH) very closely since its lead product candidate KP415 for the treatment of ADHD is under review with the FDA and tomorrow March 2, is expecting a Prescription Drug User Fee Act (PDUFA).
Other news has KemPharm announcing that the FDA has completed the investigational new drug application for KP879 on January 27. In addition to that the company reported, it has completed its process to regain its Nasdaq listing and to restructure its balance sheet.
“We are pleased that the FDA has accepted the KP879 IND, enabling us to initiate the clinical program for KP879 currently planned to begin mid-year 2021,” said Travis C. Mickle, Ph.D., President and Chief Executive Officer of KemPharm. “KP879 showcases the potential of SDX as a platform technology. In addition to KP879, SDX is the primary API for KP415, our lead product candidate for the treatment of ADHD, which is currently under review with the FDA with an expected PDUFA date of March 2, 2021.”
KP879 is being developed as replacement therapy for the treatment of Stimulant Use Disorder (SUD), a condition that does not have any FDA-approved medication.
KemPharm is a Florida-based pharmaceutical company that has been around since 2006. Its strategy is to employ its Ligand Activated Therapy (LAT) platform technology based on applying medicinal chemistry with drug discovery on FDA-approved drugs in order to improve their safety and efficacy. By taking the already approved drug and combining it with a ligand it creates the prodrug which is the new molecule.
The prodrug is activated when a patient takes it and therefore the robust metabolic processes separate the parent drug from the ligand allowing the original drug to be released and produce its intended biologic therapeutic effect with the intended improvement. The ligand is then released naturally from the body or acts as a natural component since it contains things already found in the human body.
The LAT technology is used in any therapeutic area in need of improvements such as schizophrenia, major depressive disorders, bipolar disorder and hyperactive disorders. This technology has been proven effective for over a decade in clinical and preclinical trials. It has also been given the Generally Recognized as Safe (GRAS) by the FDA.
KemPharm’s prodrug candidate pipeline is focused on ADHD (attention deficit hyperactivity disorder). The clinical development candidates are KP415 and KP484 and both prodrugs are based on d-methylphenidate however their durations and effects differ.
As of March 31, 2018, the company had a debt of $93.1 million net of discounts and began a long-term process to address its debt managing to reduce it. The company is now trying to completely eliminate any outstanding debt and has regained its listing on The Nasdaq on January 8.
On December 20, the company entered into the December 2020 Exchange Agreement with Deerfield Lenders that will provide the completion of an equity offering of at least $40 million.
On December 23, the Company’s Board of Directors approved a 1-for-16 reverse stock split of its shares of common stock in order to potentially regain its listing on the Nasdaq exchange. By doing so the company has reduced its number of outstanding shares from 72.5 million to only 4.5 million.
On January 8, KemPharm announced the pricing of a follow-on equity offering of $50 million at a price of $6.50 per share with an issuance of a combination of common shares and pre-funded warrants to purchase 7,692,307 common shares, as well as the issuance of warrants to purchase an additional 7,692,307 at an exercise price of $6.50 per share (the Offering Warrants). This transaction closed on January 12 with net proceeds of $46.4 million.
On January 26, 2021, the Company announced a warrant exchange and inducement transaction with certain of holders of the Offering Warrants, whereby such holders agreed to exercise for cash the Offering Warrants to purchase 6,620,358 shares of the Company’s common stock in exchange for the Company’s agreement to issue new warrants (the Inducement Warrants) to purchase up to 7,944,430 shares of the company’s common stock, which is equal to 120% of the number of shares of the company’s common stock issued upon exercise of the Offering Warrants. As a result of this transaction, the company will receive gross proceeds of approximately $44.0 million.
“The successful completion of this series of transactions, culminating in aggregate gross proceeds of approximately $94 million, has allowed the Company to regain its listing on The Nasdaq Capital Market, created the opportunity to eliminate all of the Company’s debt, and has provided a substantial amount of new capital to propel the Company’s efforts to create shareholder value,” said LaDuane Clifton, KemPharm’s Chief Financial Officer. “We are now positioned with a solid balance sheet and a significantly extended cash runway that provides greater operating flexibility as we look forward to the KP415 PDUFA date on March 2, 2021,” Mr. Clifton concluded.
The stock price is up almost 30% in the last month since it has regained its listing on Nasdaq and also managed to get development approval from FDA for its KP879 that will act as replacement therapy for patients with SUD. To sum up, the company is showing a clear determination of accomplishing great things in order to restore investors’ value and faith.
Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.
I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.
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