Kindred Biosciences, Inc. (KIN) Primed to Release Several Safe and Effective Pet Medicines, Directly Addressing Unserved/Underserved Demand

Kindred Biosciences, while still a development stage biopharma, has crafted an ingenious business strategy for cost-effectively ramping towards solid revenues through the formulation of therapies for dogs, cats, horses, and other pets, using compounds which are already validated in human populations to address unmet demand from their pets.

An indisputable global fact, which is noticeably heightened in all major developed economies, is that people love and often take great care of their pets. Taking better care of people’s pets via compounds that address massive unmet health needs in this thriving global market is a no-brainer model and the development pathway has exceptional expense/logistical characteristics as well, featuring lower entry requirements per drug and trial budgets that are typically less than 1% the cost of their human equivalent. Americans spent over $26B in 2012 on healthcare for pets and they are expected to spend over $28B in 2014, with total expenditures on pets expected to climb to over $57B. Needless to say, people are prepared to spend quite a bit on their beloved animal friends and with the global market for just pet food alone expected to exceed $74B by 2017 ($26B plus in the U.S.), the profitability of doing low-cost drug development for a variety of medical conditions can be grasped immediately.

The company is currently rocketing towards approval in 2015 across potentially all three lead candidates in their pipeline, with the New Animal Drug Applications (NADAs) for FDA expected this year as KIN goes into aggressive field trialing. In addition to their compelling front runners, KIN has identified more than 30 pre-INAD (Investigational New Animal Drug) stage targets, including small molecule and biologic therapeutics, via a rigorous screening process the company has developed. The screening process was designed to locate unpatented candidates that can be quickly developed and then directly applied to unmet demand categories in high-profile areas of veterinary medicine. CereKin™ (osteoarthritis) and AtoKin™ (atopic dermatitis, an allergic skin disease) are being developed as oral, beef-flavored chewables, while ​​SentiKin™ is being developed for both dogs and cats as a post surgery analgesic. The other noteworthy product (INAD back in March 2013) in the pipeline is KIND-005, which could be a life saver to many horses for whom Laminitis (chronic inflammation of tissues in the hoof) is otherwise a career ender.

CereKin (interleukin-1 beta inhibitor; diacerein formulation) for osteoarthritis in dogs is a prime example of using an active ingredient that is already utilized extensively in the global market for human osteoarthritis, as the basis for treating a massively unmet demand from pets. Around 20% of dogs over the age of one suffer from pain and inflammation associated with this chronic/degenerative, progressive disease and extant published data on CereKin provides strong indicators that not only is CereKin vastly superior to the only existing approved treatment, potentially dangerous NSAIDs (Non-Steroidal Anti-Inflammatory Drugs), but that CereKin may also provide key disease-modifying effects for dogs, even protecting against one of the typical NSAID side effects, gastrointestinal (GI) tract problems. NSAIDs have a pretty big impact on dogs and their use often results in renal (kidney), as well as hepatic (liver) damage due to toxicity, in addition to the quite often severe GI complications that can even lead to death. This means dogs on NSAIDs generally need baseline/periodic blood testing and that as many as half of all dogs with the disease simply go untreated in chronic cases, especially compelling data when one considers how CereKin’s active ingredient has proven so successful in humans when combined with NSAIDs. CereKin’s pivotal trial was engaged in August of 2013 (under Protocol Concurrence with FDA) and data from the trial should be available in Q2 this year, with the NADA slated for mid-2014 and then a possible release by 2015′s second half.

Founder and CEO of KIN, Richard Chin (MD), used to head up Clinical Research for Genetech in their Biotherapeutics Unit, overseeing every drug developed except for their oncology indications and he was involved in the development of some huge products like Lucentis® (Ranibizumab for age-related vision loss due to macular degeneration). CSO of KIN, Kevin Schultz (DVM, PhD), is known throughout the industry for his development of Frontline Plus®, the canine equivalent of Lipitor®, generating over a billion in annual sales.

With management this seasoned and a pipeline that could hit hard and fast (even among a fiercely competitive pet pharma field comprised of major industry players), as well as a successful IPO closing (Dec 17) last year, followed shortly thereafter by disclosure (Dec 30) that renowned investment management firm, The Baupost Group, LLC is calmly sitting on a 17.93% stake, it is no wonder KIN is drawing considerable attention lately from investors. Baupost is Seth Klarman’s operation, a man known throughout the investment community as one of the fastest guns in the hedge fund world and also an extremely shrewd player with the gains to prove it. This sizeable position and relaxed attitude from Baupost is a good forward indicator of KIN’s true potential.

​​AtoKin (high-dose second generation histamine blocker; fexofenadine formulation), for the allergic skin disease atopic dermatitis, which is relatively common and occurs in roughly 10% of dogs, has been granted an FDA Protocol Concurrence and KIN anticipates a pivotal trial kick off soon, with data from the trial emerging later this year. AtoKin could potentially be approved for marketing in late 2015 and addresses concerns over the current standard treatment using corticosteroids and oral cyclosporine, as these can lead to potentially severe infections due to their immunosuppressive effects. Corticosteroids can be particularly problematic, leading to osteoporosis and endocrine disruption. A clear market exists here for a safe, first-line and long-term maintenance therapeutic like AtoKin that can effectively alleviate the severe itching and hair loss, which is exacerbated by dermal damage from continued deep scratching.

SentiKin, or KIND-009 (fast-acting, non-NSAID, non-opioid analgesic; flupirtine formulation), is an interesting candidate as there is currently no standard of care for dogs in post-op surgery pain medications, with NSAIDs and fentanyl being the only treatments. Obvious NSAID risks and opioid addiction or possible abuse/diversion by pet owners with fentanyl makes a clear case for SentiKin as a comparable alternative to fentanyl that is much safer than NSAIDs (same relative timeline for SentiKin as AtoKin).

Pets are increasingly considered a member of the family and the exceptionally cheap development ramp for commercializing safe and effective medicines available with KIN makes the company one to keep your eye on. Given elements of KIN’s strategy like the potential to expand their pipeline to additional species, or generate revenue by commercializing via their own direct sales force in the U.S. (with regional distributors elsewhere), the upside could be well beyond even the more bullish current projections.

Take a closer look at Kindred Biosciences, Inc. online at www.KindredBio.com

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