Equity Research

Kinnate Biopharma Inc.: Initiation of Research Coverage

William Blair initiated research coverage of Kinnate Biopharma Inc. (KNTE $22.64), a development-stage biopharmaceutical company focused on discovering and developing small molecule kinase inhibitors for genetically defined cancers.

Analyst Tim Lugo estimated the company’s lead program KIN-2787, a RAF inhibitor developed to specifically affect tumors driven by Class II and Class III BRAF mutations, could see peak sales of $1.6 billion in melanoma and non–small-cell lung cancer, with potential for further upside with use in Class I BRAF mutations and colorectal cancer. Kinnate’s next compound in development, KIN-3248, is a therapy targeting alterations in FGFR2 and FGFR3 that drive resistance to chemotherapy in many tumor types. Kinnate is also evaluating a number of CDK12 inhibitors that could have use in ovarian cancer, triple-negative breast cancer, and metastatic castration-resistant prostate cancer.

“Kinnate is developing an exciting pipeline of targeted small molecule therapies across multiple solid tumor types and we expect a number of value-creating events beginning in 2022,” Lugo said. “The company leverages its deep expertise in structure-based drug discovery, translational research, and patient-driven precision medicine—collectively referred to as its Kinnate Discovery Engine—to develop targeted therapies for patients with cancers that harbor known oncogenic drivers and no currently available therapies, those with genomically well-characterized tumors with intrinsic resistance to currently available therapies, and those with tumors that have acquired resistance to currently available therapies over the course of treatment.”

Lugo continued, “While RAF inhibitors are a competitive area, an estimated 6% of all human cancer is driven by BRAF mutations, and the currently available BRAF inhibitors only target Class I mutations. Following IND clearance and human studies of lead compound KIN-2787 starting in the near term, we could see proof of concept in the dose escalating trial by the first half of 2022. For KIN-3248, the next program in development, the company plans to file its IND and start Phase I studies in the first half of 2022 with a potential first-in-human readout in 2023. Beyond its two lead assets, we expect Kinnate will continue to generate new product candidates from its discovery engine that will generate value and optionality, with its third product candidate likely to come from its KIN004 program of CDK12 inhibitors.”

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Current Ratings Distribution (as of 7/12/21)

Coverage Universe
Outperform (Buy): 77%
Market Perform (Hold): 23%
Underperform (Sell): 1%

Inv. Banking Relationships*
Outperform (Buy): 29%
Market Perform (Hold): 11%
Underperform (Sell): 0%

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