Kinnate Biopharma (KNTE) Falls 40% in a Month: Here's Why
Kinnate Biopharma KNTE, a clinical-stage company, is focused on developing innovative cancer treatments based on targeted therapies. The company’s lead clinical candidate, exarafenib, is currently being developed in two separate early-stage studies, as a monotherapy and in combination with Pfizer’s PFE Mektovi (binimetinib).
Kinnate’s phase IB study is evaluating exarafenib, a Pan-RAF inhibitor, as a monotherapy in adult patients with BRAF-driven advanced solid tumors. On the other hand, a phase IA study is evaluating exarafenib in combination with Mektovi, in treating advanced NRAS mutant melanoma.
KNTE has another clinical-stage candidate, KIN-3248, which is currently undergoing early-stage development. KIN-3248, an FGFR inhibitor, is being developed to treat FGFR2/3-driven advanced adult solid tumors.
In the past month, shares of KNTE have plummeted 40% compared with the industry’s 4.7% fall.
Image Source: Zacks Investment Research
Last month, Kinnate announced its pipeline reprioritization plan, post the strategic review of its business, which contributed primarily to the stock price drop. The company also announced plans to restructure its workforce.
As part of its reprioritization efforts, KNTE announced prioritizing the exarafenib combination therapy as its lead clinical development program. The phase IB KN-8701 study of the exarafenib/Mektovi combo is currently in the dose exploration stage.
However, the company decided not to proceed with the further clinical development of exarafenib as a monotherapy agent and will explore strategic alternatives for its continued development.
The decision was based on limited anti-tumor activity observed with exarafenib monotherapy across all patients in the early-stage study, with BRAF Class II alterations. Kinnate suspects the significant heterogeneity of Class II alterations and the presence of other co-occurring mutations, as the drivers for unsatisfactory anti-tumor activity.
The company further reported that it will also explore strategic alternatives for the KIN-3248 development program, as part of its reprioritization efforts.
Additionally, the company also reported postponing the initiation of a clinical study for KIN-7136, a brain-penetrant MEK inhibitor, which was recently cleared by the FDA for clinical development.
The revised clinical pipeline of Kinnate leaves the company with only one clinical-stage development program, the study of the combination therapy of exarafenib and Mektovi in treating advanced NRAS mutant melanoma. The study is also in an early stage which makes it highly prone to failures. Any developmental or regulatory setback will be detrimental to the stock in the absence of an ongoing second clinical development program.
Kinnate’s workforce restructuring decision included cutting the workforce by 70%, thereby reducing it to 28 full-time employees. It is also looking to reduce operating expenses to channel resources to its prioritized exarafenib combination development program.
Pfizer’s Mektovi, a MEK inhibitor, was approved by the FDA in combination with Braftovi (encorafenib), in June 2018, for the treatment of unresectable or metastatic melanoma with BRAF mutations. PFE acquired Array Biopharma in 2019, which added the Mektovi/Braftovi combo to the company’s oncology portfolio. Pfizer’s Mektovi/Braftovi combo is also approved in the EU for the same indication as in the United States.
Kinnate Biopharma Inc. Price and Consensus
Kinnate Biopharma Inc. price-consensus-chart | Kinnate Biopharma Inc. Quote
Zacks Rank and Other Stocks to Consider
Kinnate currently has a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the overall medical sector, worth mentioning, are Corcept Therapeutics CORT and Better Therapeutics BTTX, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, the Zacks Consensus Estimate for Corcept’s 2023 earnings per share has remained constant at 78 cents. The estimate for Corcept’s 2024 earnings per share has also remained constant at 83 cents. In the past month, shares of CORT have lost 20.6%.
CORT’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 6.99%.
In the past 30 days, the Zacks Consensus Estimate for Better Therapeutics’ 2023 loss per share has remained constant at 98 cents. During the same period, Better Therapeutics’ 2024 loss per share has also remained constant at 80 cents. In the past month, shares of BTTX have lost 42.9%.
BTTX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 24.22%.
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