Cash reserves running low at KemPharm

Money is getting tight at KemPharm, with its liquid cash reserves—currently around $48.5 million—not expected to last through the first quarter of 2019.

The Iowa-based company, which has just reported a net loss of $43.5 million for calendar 2017, is searching for a commercial partnership for its first approved product. Opioid painkiller Apadaz (hydrocodone and acetaminophen) was approved by the FDA last month for the short-term management of acute pain.

That gives it an opportunity to start making revenues and reduce its reliance on fundraising, but the jury is out on the prospects for that product. KemPharm was unable to secure an abuse-deterrent claim for the drug—which was turned down by the FDA in 2015—and it will have to find some way to compete with low-cost generics.

As it stands, KemPharm is partway through an at-the-market (ATM) offering, which involves the incremental sale of newly-issued shares and are typically used by companies to provide working capital. The biotech has raised $2.9 million from the ATM so far and could raise another $47 million or so via this this ‘dribble out’ facility—depending on uptake and prevailing market prices.

The company’s CEO Travis Mickle, Ph.D., said that the ATM money would also allow it to prepare for “a number of significant milestones for the organization, which could provide additional financing options.”

KemPharm is looking into a couple of commercial partnership models for Apadaz. One could take the form of an agreement with a pharmacy-benefit manager (PBM) to replace their current generic prescribing prescriptions for hydrocodone/acetaminophen products, with the product provided at or bear generic acquisition cost. The other would involve partnering with a generic partner with the scale to achieve higher margins for the product at a competitive price.

Mickle also suggested that Apadaz is not so critical to the company’s future growth now that its attention-deficit hyperactivity disorder pipeline is gathering momentum. It’s currently led by KP415, a prodrug of the widely-used ADHD drug d-methylphenidate, which is next in line for regulatory filing as a registration trial is expected to read out in mid-2018.

According to Mickle KP415 is KemPharm’s “most significant growth driver” as it gears up to compete with big-selling ADHD brands such as Shire’s $2.2 billion Vyvanse (lisdexamfetamine dimesylate) brand.

He said the drug combines a rapid onset with a long duration of action, greater consistency in relieving ADHD symptoms and reduced abuse potential compared to current drugs for the condition, and is hoping for an FDA filing in the first quarter of 2019.