SOUTH SAN FRANCISCO, Calif., Nov. 5, 2015 /PRNewswire/ -- KaloBios Pharmaceuticals, Inc. (KBIO) today announced that it will reduce its workforce as part of a plan to reduce operating costs. This action will reduce the company's workforce by approximately 17 employees (or 61%), and will focus the company's resources on the ongoing development of lenzilumab, also known as KB003, in chronic monomyelocytic leukemia (CMML), while it continues to pursue strategic alternatives for the company.
"While this decision was extremely difficult, aligning and managing our limited resources to maximize the opportunity for continued development of lenzilumab is our most important priority," said Herb Cross, Chief Financial Officer and Interim Chief Executive Officer of KaloBios. "I would like to sincerely thank all of our departing employees and recognize their important and valued contributions to KaloBios."
As a part of its restructuring, the company also announced that it will pause enrollment in the Phase 2 cohort expansion phase of its ongoing clinical study of KB004 in certain hematologic malignancies. The company has also announced its intent to repay in full its outstanding secured loan obligation to MidCap Financial, secured lender to the company, in the approximate amount of $6.6 million, which will generate significant cash savings when compared to repayment of the debt in the ordinary course of business.
The company is currently evaluating strategic alternatives for the organization, including potentially the sale of the company or its assets, or a corporate acquisition, and may retain an investment bank to assist in those efforts. Since these efforts may not be successful, in light of its limited cash reserves the company is considering all possible alternatives, including further restructuring activities, wind-down of operations and bankruptcy proceedings.
As a result of these developments, the company will likely not be able to file its Form 10-Q for the third quarter on a timely basis. KaloBios will make that filing as soon as practicable, and intends to file a Form 12b-25 to that effect.
KaloBios Pharmaceuticals, Inc. is seeking to improve the lives of patients by developing innovative therapies to treat diseases of high unmet medical need, with a focus on oncology. KaloBios has focused on advancing the following immuno-oncology and oncology programs in clinical development:
- KB004 is a non-fucosylated mAb targeting EphA3 with the potential to treat hematologic malignancies and solid tumors. KB004 is designed to kill tumor cells through multiple mechanisms, including antibody-directed cellular cytotoxicity (ADCC), direct apoptosis or disruption of the tumor stem cell environment and the vasculature that feeds it. KaloBios is conducting an ongoing Phase 1/2 study evaluating KB004 in hematologic malignancies. The Phase 1 dose escalation portion of the study is fully enrolled, and KaloBios will pause enrollment in the Phase 2 expansion portion of the study. The Phase 2 portion of the study, which requires screening patient tumors for EphA3 expression, is currently focused on patients with myelofibrosis (MF) or myelodysplastic syndrome (MDS). KaloBios has evaluated other potential oncology indications, including solid tumors, for KB004.
- KB003, or lenzilumab, is an anti-GM-CSF mAb that KaloBios is evaluating in oncology indications where GM-CSF may play a key role, such as chronic myelomonocytic leukemia (CMML). The IND for KB003 in CMML, an orphan oncology indication, has been cleared by the FDA, and KaloBios is currently undertaking site initiation activities for a Phase 1 study of KB003 in previously treated CMML patients. KaloBios intends to commence dosing patients in this study during the fourth quarter of 2015.
All of the company's antibodies were generated using its proprietary Humaneered® technology, a method that converts non-human antibodies (typically mouse) into recombinant antibodies that have a high binding affinity to their target and are designed for chronic therapeutic use.
For more information on KaloBios Pharmaceuticals, please visit our web site athttp://www.kalobios.com.
This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and statements regarding the company's clinical development of KB004 and KB003. Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the company's limited cash reserves and its ability to obtain additional capital on acceptable terms, or at all, including the additional capital which will be necessary to complete the clinical trials that the company has initiated or plans to initiate; the ability of the company to enter into one or more strategic transactions on any terms; the potential timing and outcomes of clinical studies of KB004 and KB003 undertaken now or in the future; the ability of the company to timely source adequate supply of its development products from third party manufacturers on whom the company depends; the potential, if any, for future development of our product candidates; the company's ability to successfully progress, partner or complete further development of its programs; the uncertainties inherent in clinical testing; the timing, cost and uncertainty of obtaining regulatory approvals; the company's ability to protect the company's intellectual property; competition; changes in the regulatory landscape or the imposition of regulations that affect the company's products; and other factors listed under "Risk Factors" in the company's most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 10, 2015, the Annual Report on Form 10-K filed on March 16, 2015, and the company's other filings with the Securities and Exchange Commission.
All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release. The company has no obligation, and expressly disclaims any obligation to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, visit http://www.kalobios.com.
Chief Financial Officer
KaloBios Pharmaceuticals, Inc.
Joan E. Kureczka
Tel: (415) 821-2413
Mobile: (415) 690-0210