KaloBios Gets Orphan Designation for Cystic Fibrosis Drug

KaloBios (KBIO) got a boost Wednesday when the U.S. FDA granted orphan drug designation to its cystic fibrosis compound (KB001-A), which is currently in phase 2 clinical trials. The designation qualifies KBIO for various development incentives as well as a seven-year period of U.S. marketing exclusivity.

Cystic fibrosis is an inherited chronic disease that affects the lungs and digestive system of about 30,000 children and adults in the United States (70,000 worldwide). In CF, a defective gene creates unusually thick mucus that clogs the lungs and often leads to dangerous lung infections. Many of these infections are caused by Pseudomonas aeruginosa (Pa), a gram-negative bacteria associated with a high level of respiratory failure.

KB001-A is an anti-PcrV monoclonal antibody fragment treatment for patients with cystic fibrosis (CF) with Pseudomonas aeruginosa (Pa) and is KBIO’s second compound in phase 2 clinical trials. Antibiotics are the only currently approved treatment for these lung infections; however, the Pa bacteria are often treatment-resistant leading to high levels of complications and mortality. KB001-A is designed to reduce inflammation associated with these lung infections, enabling the body to clear out the bacteria on its own, eliminating or delaying the need for antibiotics.

KBIO began enrolling patients for its phase 2 clinical trial in January 2013.  The study is designed to enroll 180 patients who will receive repeated doses of KB001-A over a sixteen-week period.  The primary endpoint is the amount of time before treatment with antibiotics. This study is designed to expand upon the positive Phase l/2 results in cystic fibrosis patients with its earlier compound, KB001. KaloBios expects to complete the study of KB001-A and announce results by mid-2014.

There are two other similar anti-inflammatory compounds in development: Grifols Therapeutics’ SA (GIFLF) Alpha 1 Anti-trypsin is an aerosolized protease inhibitor with anti-inflammatory properties, derived from human plasma and Sildenafil, a phosphodiesterase inhibitor. Sildenafil is already used for inflammation in patients with other types of lung disease; however, the CF trial is relatively small, covering only 20 patients.

KBIO’s balance sheet is solid. At the beginning of October, the company completed a public offering of 8,625,000 (including an overallotment of 1.125M shares) common stock at $4.00 per share, for net proceeds of $32.1M.  This is in addition to $19.5M in cash and equivalents at the end of the second quarter.