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South San Francisco-based KaloBios Pharmaceuticals, Inc. (NASDAQ:KBIO) is a $138M market cap biopharmaceutical company that develops monoclonal antibody (mAb) therapeutics for the treatment of respiratory diseases and cancer. All of the KaloBios's antibodies were generated using the company's proprietary Humaneered technology, a method that converts non-human antibodies, usually mouse antibodies, into recombinant antibodies that have a high binding affinity to their target and are designed for chronic therapeutic use.

KaloBios believes that antibodies produced using this technology offer important clinical and economic advantages over antibodies generated by other methods in terms of high binding affinity, high manufacturing yields, and minimal to no immunogenicity (inappropriate immune response) when used repeatedly. The company's pipeline is comprised of investigational drugs incorporating Humaneered antibodies. These antibodies are being tested in clinical development programs:

  • KB001-A, an anti-PcrV mAb fragment, is being developed for the prevention and treatment of Pseudomonas aeruginosa infection. KaloBios has retained rights for the cystic fibrosis (CF) indication and has initiated a 180-patient Phase II study in CF subjects with chronic Pa lung infection. KaloBios has partnered with Sanofi (NYSE:SNY) to develop the investigational drug for ventilator associated pneumonia prevention in the intensive care setting, an indication that received a US Food and Drug Administration (FDA) Fast Track designation;
  • KB003, an anti-GM-CSF mAb with potential to treat inflammatory diseases, is being developed for the treatment of severe asthma. The enrollment of 160 patients has been completed in a planned 150 patient Phase II study in the United States, Europe and Australia; and
  • KB004, an anti-EphA3 mAb, has shown potential in treating hematologic malignancies and solid tumors. KaloBios is testing this drug in a Phase I clinical trial in subjects with hematologic malignancies.

KaloBios uses a "patient-targeted approach" which utilizes a screen or diagnostic method to identify those patients most likely to benefit from its treatments. The company believes that this approach could result in better treatments than current therapies.

Humaneered Technology

Humaneering technology is KaloBios's method for transforming non-human antibodies into engineered human antibodies for therapeutic drug applications. KaloBios believes this technology maintains epitope specificity and increases affinity. The company claims that Humaneered antibodies are as similar as, if not closer to, human germline sequences than the products of fully human antibody generation techniques.

On May 31, 2006, KaloBios announced the successful completion of a project for the Genomics Institute of the Novartis Research Foundation (GNF) and Novartis (NYSE:NVS) to Humaneer an antibody against an undisclosed target. In exchange for creating this engineered human antibody therapeutic, KaloBios received research and success fees, and became eligible to receive additional milestones and royalties upon successful completion of clinical trials. The companies also announced the commencement of a second broader agreement. Exact terms of either agreement were not disclosed. Under the first agreement, GNF's high affinity and high potency non-human antibody drug candidate was Humaneered by KaloBios. The Humaneered antibody that KaloBios delivered met or exceeded all of the GNF- and Novartis-defined success criteria, triggering a success payment.

On April 23, 2007, KaloBios announced that it signed a non-exclusive licensing agreement with Novartis to non-exclusively license KaloBios's proprietary Humaneering technology for use at Novartis's research sites to develop human antibodies for therapeutic indications.. As part of the transition plan, KaloBios has agreed to Humaneer three additional antibodies for Novartis in addition to the three that have been successfully completed as part of a pilot research and development relationship.

KB001-A

KaloBios is developing KB001-A to prevent or treat Pseudomonas aeruginosa (Pa), a common opportunistic gram negative bacterium. Pa can cause pneumonia in mechanically ventilated patients and chronic respiratory infections in individuals with CF. Both indications represent a significant market opportunity for KB001-A.

KB001-A is a Humaneered, high-affinity, PEGylated Fab' antibody designed to block Pa from harming host cells, which should preserve immune and lung epithelial cell function. KB001-A blocks an extracellular component of the type III secretion system (TTSS), which enables bacteria to kill immune cells by direct puncture (oncosis) or by the injection of protein toxins. Blocking the TTSS is intended to prevent immune cells from being killed and reduce inflammatory cytokine release.

In April 2004, KaloBios exclusively licensed the KB001 program from the Medical College of Wisconsin in Milwaukee and the University of California, San Francisco (UCSF). The company was granted the rights to develop antibodies to treat Pa. Under the agreement, KaloBios agreed to pay a $25,000 upfront license fee, a $10,000 annual license fee, aggregate contingent milestone payments of less than $2 million, royalties on net sales of 3% and a percentage of certain considerations received from sub-licensees. Aggregate payments made by KaloBios under this license through Sept. 30, 2012, totaled to $1.2 million.

In January 2010, KaloBios and Sanofi Pasteur, the vaccines division of Sanofi-Aventis, entered into a partnership agreement for the development and commercialization of KB001 for the treatment or prevention of Pa infections. Under the agreement, Sanofi will be responsible for the development and commercialization of KB001 and initially focus on hospital indications, including the prevention of Pa pneumonias in mechanically ventilated patients. KaloBios would focus on developing and commercializing KB001 for use in treating patients with CF and bronchiectasis, an obstructive lung disease aggravated by bacterial infections.

Cystic Fibrosis

Cystic Fibrosis is a life-long, inherited, chronic disease that affects the lungs and digestive system. CF causes thick mucus to develop in the lungs, pancreas, and other organs. This mucus blocks the airways in the lungs making it not only difficult for CF patients to breathe, but can also cause life threatening lung damage. Approximately 30,000 people in the United States and about 70,000 worldwide have CF. About 1,000 new cases of CF are diagnosed each year. The airways are affected in about 90% of CF cases. According to the Cystic Fibrosis Foundation, the median life expectancy for people with CF in the United States was only 38.3 years in 2010.

The most common causes of death for CF patients are related to lung deterioration, which is usually caused by chronic infection with Pa, the most prevalent pathogen found in the lungs of people with CF. The prevalence of chronic Pa infection in the CF population increases with age, with positive respiratory tract cultures in 20% to 30% of infants, 30% to 40% of children aged two to 10 years, 60% of adolescents, and approximately 80% of adults. People with CF typically become chronically infected with Pa as teenagers. Their lung function slowly deteriorates over time at a rate of 2% to 4% per year, with a gradual loss of lung function leading to death.

"Cystic fibrosis patients are subject to chronic lung infections with Pa, a gram negative bacteria which is a leading contributor to the deterioration of pulmonary function leading to respiratory failure," Néstor A. Molfino, MD, KaloBios's chief medical officer stated. "The only currently approved treatments for Pa infections are antibiotics, but despite their therapeutic benefit, mortality and morbidity remain high due to Pa antibiotic resistance. KB001-A is designed to neutralize Pa pathogenicity which reduces inflammation and allows the body's natural immune system to kill and clear the bacteria. As a result, we believe KB001-A may offer a novel approach to preventing and treating Pa infections when added to antibiotics, and may not be subject to the typical drug resistance mechanisms." KaloBios has completed three clinical trials with an earlier functionally comparable molecule, KB001, in healthy volunteers, CF patients infected with Pa, and Pa-colonized, mechanically ventilated patients hospitalized in the intensive care unit (ICU). The results of these studies supported further development in both indications.

On Jan. 10, 2013, KaloBios announced the company had initiated a Phase II multi-dose, randomized, double-blind, placebo-controlled clinical trial with KB001-A in CF patients infected with Pa. This 180-patient study will evaluate the efficacy and safety of repeat doses of intravenously administered KB001-A. The primary endpoint will be time to need for antibiotics to treat worsening of respiratory tract signs and symptoms over 16 weeks, with secondary endpoints to include changes in inflammatory markers (including neutrophil elastase), respiratory symptoms, subject-reported outcomes, changes in forced expiratory volume (FEV) 1, pharmacokinetics, safety, and tolerability. The trial will be conducted primarily in North America, in conjunction with the Cystic Fibrosis Foundation Therapeutic Development Network.

If results from this trial are positive, the data will be used to support pivotal trials of a subcutaneous formulation of KB001-A. KaloBios anticipates that two Phase III trials, as well as a subcutaneous bridging study, will be required for FDA approval of KB001-A in Pa -infected CF patients. The company believes that a subcutaneous formulation of KB001-A will be commercially more attractive and convenient for patient use. KaloBios has commenced development efforts for such a formulation.

KB001-A was designed to have a novel mechanism of action not only as an anti-infective, but also with anti-inflammatory characteristics. KaloBios believes KB001-A may have the potential of being disease-modifying because it may act as an anti- inflammatory agent to reduce the overall rate of lung function deterioration. The company plans to only seek approval on the basis of short-term clinical benefits (such as reduction in exacerbations) and has no plans to conduct clinical trials for a disease-modifying indication.

According to the Cystic Fibrosis Foundation, the mechanism by which KB001A is predicted to provide clinical benefit for people with CF is by reducing local inflammation in the lung associated with this virulence factor. Although KB001-A has been shown to reduce bacterial load in some animal model systems, it is not predicted to kill or suppress the growth of Pa in vivo. For these reasons, KB001-A will be developed as an anti-inflammatory therapy for people with CF who are chronically infected with Pa.

KaloBios plans to seek orphan drug designation for KB001-A for the treatment of Pa-infected CF patients in the United States. The FDA's Orphan Drug Designation program provides orphan status to drugs and biologics which are defined as those intended for the safe and effective treatment, diagnosis or prevention of rare diseases or disorders that affect fewer than 200,000 people in the United States or that affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug. Orphan drug status provides tax reductions and the exclusive rights to the cure for a specific condition for a period of seven years after approval.

On July 3, 2013, KaloBios announced that enrollment in the trial was slower than planned. "We believe that this delay may be due to reasons including other CF trials underway in the U.S.. Based on our revised projections, we are now targeting release of top line data from this KB001-A study in the fourth quarter of 2014," Molfino stated. According to research firm GlobalData, the global CF market was valued at $1.1 billion in 2010. Global Data forecasts that this market will reach $2.5 billion by 2018, at a combined annual growth rate (OTCPK:CAGR) of 10.7%.

Drugs to treat CF include mucolytics, inhaled medications that break up mucus, antibiotics to fight infections, and saline solutions that make it easier to cough up mucus. These products provide only symptomatic relief. There is a large unmet need for disease-modifying therapies to address the underlying genetic cause of CF.

On December 30, 1993, the FDA approved Genentech's/Roche's (OTCQX:RHHBY) Pulmozyme (dornase alfa), the first new product in 30 years specifically developed to treat CF. The FDA has approved two inhaled antibiotics as treatments to improve respiratory symptoms in CF patients with Pa infection. On Feb. 23, 2010, the agency approved Gilead Sciences' (NASDAQ:GILD) Cayston (aztreonam inhalation), and Novartis's TOBI (tobramycin inhalation solution) on March 22, 2013.

On Jan. 31, 2012, the FDA approved Vertex Pharmaceuticals' (NASDAQ:VRTX) Kalydeco (ivacaftor) for the treatment of a rare form of CF in patients ages six years and older who have the specific G551D mutation in the Cystic Fibrosis Transmembrane Regulator (CFTR) gene. Kalydeco is the first available treatment that targets the defective CFTR protein, which is the underlying cause of CF. Janet Woodcock, M.D., director of the FDA's Center for Drug Evaluation and Research stated, "This is a breakthrough therapy for the cystic fibrosis community because current therapies only treat the symptoms of this genetic disease."

According to Global Industry Analysts (GIA), Pulmozyme and TOBI dominate the US market for CF drugs. Pulmozyme works by breaking up the thickened airway secretions, while TOBI is an inhaled antibiotic indicated for the treatment of lung infections caused by Pa in CF patients. GIA found that Pulmozyme was facing stiff competition from hypertonic saline, which represents a cost-effective option of clearing sputum from the lungs of CF patients. GIA expects the CF drug market to expand significantly over the coming years.

In addition to KaloBios, Abbott Laboratories (NYSE:ABT), Gilead Sciences, Nektar Therapeutics (NASDAQ:NKTR), Vertex Pharmaceuticals, Novartis AG, and other pharmaceutical companies are developing CF drugs.

Pa Infection in Mechanically Ventilated Patients

In January 2010, KaloBios and Sanofi Pasteur, the vaccines division of Sanofi-Aventis, entered into a partnership agreement for the development and commercialization of KB001 for the treatment or prevention of Pa infections. Under the agreement, Sanofi will be responsible for the development and commercialization of KB001 and initially focus on hospital indications, including the prevention of Pa pneumonias in mechanically ventilated patients. KaloBios would focus on developing and commercializing KB001 for use in treating patients with CF and bronchiectasis, an obstructive lung disease aggravated by bacterial infections.

Under the terms of the agreement, KaloBios received an upfront payment of $35 million from Sanofi, and would be eligible for potential development, regulatory and commercial milestones worth $255 million, as well as royalties on eventual product sales. Sanofi also has the option to acquire commercial rights to KaloBios's indications for KB001 outside the United States and co-promotion rights in the United States.

On June 25, 2012, KaloBios and Sanofi announced the results from a Phase IIa trial that suggested that KB001 offers potential as an alternative to antibiotics for preventing or reducing pneumonias in mechanically ventilated intensive care unit (ICU) patients heavily colonized with Pa.

The study was sponsored in its entirety by KaloBios and conducted at 10 ICUs across France, from April 2008 to July 2009 found no clinically significant differences in safety between the KB001 treated patients and those treated with only standard of care. Researchers also found that KB001 was well tolerated and non-immunogenic, and had favorable pharmacokinetics and predictable dose-dependent penetration into the lungs of ICU patients heavily colonized with Pa.

Although the 39-patient randomized, placebo-controlled, double-blind study was insufficiently powered to show statistical significance related to efficacy, patients receiving intravenous infusions of KB001 tended to have better clinical outcomes. Investigators reported that 33.3% of the 3 mg/kg (n=12) group and 46.2% of the 10 mg/kg (n=13) group were alive at day 28 and Pa infection free, versus only 20% of the placebo (n = 10) group.

"Based on these results, KB001 shows promising potential for reducing Pa pneumonia incidence in mechanically ventilated ICU patients colonized with Pa bacterium," said Néstor Molfino, Chief Medical Officer of KaloBios. "Our partner Sanofi Pasteur is planning to pursue this approach in larger clinical trials, while we will continue development in treating cystic fibrosis patients with chronic Pa."

"Despite the availability of antibiotics against Pa, the morbidity and mortality of ventilator associated pneumonia remains high and antibiotic resistance is rising. KB001 specifically targets Pa virulence factors of the type III secretion system (TTSS) that are required for the bacterium to cause host damage and death. The mechanism of action of the drug avoids the multiple efflux pumps of Pa that the bacterium uses to create antibiotic resistance. Thus, KB001 may offer a new approach to preventing or treating serious infections in ICU patients with pulmonary Pa colonization without contributing to the growing problem of multi-drug resistance," said Geoff Yarranton, Chief Scientific Officer of KaloBios.

As demonstrated in preclinical studies, the TTSS of Pa is a major determinant of that bacterium's virulence and is required for systemic Pa spread. In human Pa infections, functional TTSS expression corresponds to poor prognoses. TTSS consists of a complex, needle-like apparatus that is able to inject up to four different exotoxins directly into cells. Furthermore, in the absence of exotoxins, the TTSS can directly mediate macrophage and neutrophil cytotoxicity leading to bacterial swarming and direct cell-membrane perforation. The needle-tip protein, PcrV, is an essential component of all these TTSS functions. KB001 works by specifically binding to Pa-PcrV and inhibiting its function, rendering the bacterium non-virulent. Preclinical studies with KB001 have demonstrated its ability to prevent death, restore normal body temperature, and enhance bacterial clearance from the lungs in in vivo models of acute pulmonary infection.

On April 23, 2013, Sanofi and KaloBios announced that the FDA granted Fast Track designation to Sanofi Pasteur for the investigation of KB001A. The Fast Track Drug Development Program is designed to expedite the review of new drugs that are intended to treat or prevent serious or life-threatening conditions and have the potential to address unmet medical needs. The research firm Decision Resources found that drugs that treat Pa infection represent an important area of unmet need and there is a significant opportunity for new agents with activity against multi-drug-resistant Pseudomonas spp.

Decision Resources found that the near-term pipeline for antipseudomonals is lean, but Cubist Pharmaceuticals' (NASDAQ:CBST) ceftolozane/tazobactam (CXA-201), AstraZeneca's/Forest Laboratories' (NYSE:FRX) ceftazidime/avibactam (CAZ-AVI, CAZ-104), and Achaogen's plazomicin (ACHN-490) are three agents in late-stage development that show promise. Each of these agents uses a distinct strategy to elicit high clinical cure rates in gram-negative infections, and have the potential become formidable competitors in the Pa infection market.

KB001-A is in a Phase II clinical trial conducted by KaloBios in CF patients with chronic Pa lung colonization. Clinical data are expected by mid-2014. Sanofi has an option to assume primary responsibility for developing and promoting KB001-A for Pa in CF or bronchiectasis patients after the completion of this Phase II clinical trial.

According to KaloBios, Sanofi is conducting a Phase I clinical study in healthy volunteers to evaluate higher doses than those that we previously tested as part of the company's clinical development plan for ventilator associated pneumonia (VAP) caused by Pa ((Pa VAP)). KaloBios understands that the Phase I study will be followed, after completion of manufacturing process development and scale-up, by a Phase IIb intravenous study in late 2014 to determine the safety and efficacy of KB001-A in preventing Pa VAP. Sanofi then plans a subsequent Phase III study. KaloBios also understands that these Phase IIb and Phase III trials are being designed as pivotal studies and are intended to serve as a basis for registration of KB001-A in the prevention of Pa VAP.

KB003

KB003 is a Humaneered, recombinant, anti-granulocyte macrophage colony-stimulating factor (anti-GM-CSF) monoclonal antibody. Granulocyte macrophage colony-stimulating factor (GM-CSF). is a cytokine that plays a central role in the inflammatory immune response. Although GM-CSF is important to the growth and survival of white blood cells, excessive GM-CSF can lead to tissue damage in asthma.

For KB003, KaloBios is targeting the severe asthma population, which represents approximately 5% to 10% of the total asthma population of approximately 300 million people worldwide. Severe asthma is associated with more frequent exacerbations than mild to moderate asthma and is responsible for approximately 50% of the economic costs associated with asthma. The company hopes to report data from this trial by early 2014.

KaloBios completed a Phase I study in rheumatoid arthritis and a Phase I/Phase II study in severe asthma with a chimeric molecule, KB002. Both studies supported further development of KB003. KB003 is a Humaneered version of the chimeric KB002 antibody, with the same epitope target and the same mechanism of action. KaloBios plans to use KB003 for all future clinical studies in this program.

In the KB002 Phase I/Phase II asthma study 24 subjects were randomized to receive either KB002 or placebo. The objectives of the study primarily were to evaluate safety and tolerability, effects on sputum inflammatory markers, and lung function after a single dose of KB002. KB002 was found to be generally safe and well tolerated. Mean FEV(1) value for the active treatment group increased 120ml from baseline to day 42 and decreased 40ml for the placebo group. Of the 24 subjects enrolled (17 on KB002 and seven on placebo), 59% on KB002 versus 29% on placebo had a >100ml FEV(1) increase at day 42.

When patients were segmented retrospectively by the criteria of "reversibility," with reversible patients defined as having a >12% improvement in FEV(1) from baseline after a beta agonist, reversible patients on KB002 experienced a greater increase in FEV(1) from baseline at day 42 versus those on placebo. A majority of responders showed an FEV(1) improvement of more than 10%, which is a level that is generally accepted as clinically meaningful. At day 42, 78% of KB002-treated reversible subjects had at least a 100-mL increase in FEV(1) compared with 38% of KB002-treated nonreversible subjects, 33% of placebo-treated reversible subjects and 25% of placebo-treated nonreversible subjects. A majority of KB002-treated patients who had an improvement in FEV(1) also had measurable antibody in the sputum in addition to a decrease in eosinophils or neutrophils at day 28.

The KB002 Phase I/II asthma study randomized 24 subjects to receive either KB002 or placebo. The objectives of the study primarily were to evaluate safety and tolerability, effects on sputum inflammatory markers, and lung function after a single dose of KB002. KB002 was found to be generally safe and well tolerated. Mean FEV(1) value for the active treatment group increased 120ml from baseline to day 42 and decreased 40ml for the placebo group. Of the 24 subjects enrolled (17 on KB002 and seven on placebo), 59% on KB002 versus 29% on placebo had a >100ml FEV(1) increase at day 42.

In addition, when patients were segmented retrospectively by the criteria of "reversibility," with reversible patients defined as having a >12% improvement in FEV(1) from baseline after a beta agonist, reversible patients on KB002 experienced a greater increase in FEV(1) from baseline at day 42 versus those on placebo. A majority of responders showed an FEV(1) improvement of more than 10%, which is a level that is generally accepted as clinically meaningful. At day 42, 78% of KB002-treated reversible subjects had at least a 100-mL increase in FEV(1) compared with 38% of KB002-treated nonreversible subjects, 33% of placebo-treated reversible subjects and 25% of placebo-treated nonreversible subjects. A majority of KB002-treated patients who had an improvement in FEV(1) also had measureable antibody in the sputum in addition to a decrease in eosinophils or neutrophils at day 28.

On Sept. 11, 2012, KaloBios announced that dosing had begun in the Phase II clinical trial studying the effect of KB003 on severe asthma patients inadequately controlled by corticosteroids. This 150-patient study will evaluate the efficacy and safety of repeat doses of KB003 against standard of care in patients with asthma inadequately controlled by corticosteroids. The primary endpoint in the study is the change in FEV1 baseline, a marker of airway obstruction. Secondary endpoints include exacerbation, effect on asthma control, asthma symptoms, use of rescue therapy, and safety. The company hopes to report data from this trial by early 2014.

The company plans to conduct a bridging study to switch from an intravenous formulation to a subcutaneous formulation in 2014, because KaloBios believes that a subcutaneous formulation will be commercially more attractive and convenient for the patient. After successful completion of these studies, KaloBios plans to conduct two Phase II/III trials with the subcutaneous formulation of KB003 that will be designed to support regulatory approval for the treatment of severe asthma inadequately controlled by corticosteroids. KaloBios expect these studies to be dose-ranging in design. The company anticipates that exacerbation will be the primary endpoint for these studies, but the design of these studies is dependent upon future discussions with the FDA and other regulatory authorities.

Anti-GM-CSF antibodies, including KB003, may contribute to the development of pulmonary alveolar proteinosis (PAP), which could cause KaloBios to delay, redesign or terminate its clinical trials of KB003. KaloBios believes this risk is low. PAP is a rare respiratory disease in which a type of protein and phospholipid builds up in the alveoli (air sacs) of the lungs, making breathing difficult.

According to the research firm, GlobalData, the global asthma therapeutics market was valued at $14.4 billion in 2010, and is forecast to grow at a compound annual growth rate (OTCPK:CAGR) of 4.6% to reach $20.6 billion by 2018. Global Data researchers found that the unmet need in asthma therapeutics market is low (13%), which indicates that the market is well served with the current treatment options and has a large number of marketed products. Product differentiation and addressing the need for different patient pools (pediatric population, severe asthma population, eosinophilic asthma population) suffering from asthma has gained importance and will have a significant impact on this market.

KB004

KB004 is a Humaneered antibody targeting the receptor tyrosine kinase EphA3. EphA3 is expressed on hematologic and solid tumor cells, but not normal cells. EphA3 is also expressed on tumor stem cells and thus KB004 has the potential to attack tumors at their source by attacking tumor stem cells that are responsible for continued tumor growth. KaloBios is conducting a Phase I dose escalation clinical trial to evaluate the safety and maximum tolerated dose of KB004 in patients with hematologic malignancies, including acute myelogenous leukemia, chronic myelogenous leukemia, myelodysplastic syndrome, myeloproliferative neoplasms, and multiple myeloma, who are unsuitable for standard of care treatment.

After completing the dose escalation part of the study, KaloBios plans to initiate the expansion phase of this study, in which patients will be pre-screened for EphA3 expression on their tumors, and to assess the activity of KB004.

Finances

On Feb. 7, 2013, KaloBios announced the completion of its initial public offering of 8,750,000 shares of common stock at $8.00 per share. Gross proceeds from the offering were $70 million, and net proceeds were approximately $62 million, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by the company.

On March 27, 2013, KaloBios reported that the net loss for the year ended Dec. 31, 2012, was $23.5 million ($11.22 per share) compared to GAAP net loss of $2.2 million ($1.15 per share) for the year ended Dec. 31, 2011.

On May 14, 2013, KaloBios announced its financial results for the first quarter ended March 31, 2013.

The net loss for the first quarter of 2013 was $8.6 million, or $0.55 per basic and diluted share. This compared to a net loss of $1.1 million, or $.56 per basic and diluted share, for the same period in 2012. Increased spending for clinical trial programs and general and administrative expenses associated with being a public company resulted in the reported loss during the first quarter of 2013.

As of March 31, 2013, KaloBios had cash, cash equivalents and investments, excluding restricted cash, totaling $76.9 million.

Conclusion

As of June 31, 2013, Zacks gave KaloBios a 3 or Hold rating.

On March 5, 2013, Needham and Company initiated coverage of KaloBios with a Buy rating and an $11 price target.

On Feb. 26, 2013, Leerink Swann began coverage of KaloBios with an Outperform rating and a $15 price target. Leerink Swann served as KaloBios's lead underwriter for its IPO.

On Feb. 26, 2013, William Blair also gave KaloBios with an Outperform rating.

KaloBios's initial public offering was on Jan. 31, 2013. On that day, the stock hit an all time high of $8.25. On June 11, 2013, the stock hit a low of $4.81.

Institutions and mutual funds own 35% of all KaloBios stock. Top institutional holders are Sofinnovas Venture Partners, Primecap Management Company, MPM Management LLC, and FMR LLC.

KaloBios is advancing the clinical development of its lead product candidates, KB001-A for the treatment of Pa- infected patients with CF, KB003 for the treatment of severe asthma, and KB004 for the treatment of cancer.

The only FDA-approved treatments for Pa infections are antibiotics. Although antibiotics provide significant therapeutic benefit, mortality and morbidity remain high due to Pa antibiotic resistance. KB001-A is designed to neutralize Pa pathogenicity which reduces inflammation and allows the body's natural immune system to kill this potentially lethal bacteria, which is particularly important due to increasing antibiotic and multi-drug resistance.

KaloBios's second product candidate, KB003, is a Humaneered, recombinant, anti-granulocyte macrophage colony-stimulating factor (anti-GM-CSF) monoclonal antibody. Although KaloBios has initially focused on asthma, preclinical studies have found that the neutralization of GM-CSF was effective in a variety of disease models, including severe asthma, chronic obstructive pulmonary disease, rheumatoid arthritis, multiple sclerosis, psoriasis, cancer bone destruction, and other diseases.

Current research suggest KB004, KaloBios's leukemia drug candidate, may only target leukemic cells, and not healthy white blood cells, a property that differentiates it from many other oncology drugs. This antibody could provide significant benefit to patients with other cancer types, due to its potential to affect tumor growth through several distinct mechanisms.

Although KaloBios's IPO was on Jan. 31, 2013, the company was founded in 2000. The company has spent the past 13 years developing next generation, customized antibodies designed to overcome challenges limiting currently available marketed antibody products.

For the high risk investor, this innovative biopharmaceutical company could be a long-term, lucrative buy.

Source: Innovative KaloBios Pharmacuticals Could Be A Lucrative Buy