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Kodiak (KOD) Down More Than 80% in Past 3 Months: Here's Why

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Shares of Kodiak Sciences Inc. (KOD - Free Report) have plunged 89.4% in the past three months compared with the industry’s decrease of 14.9%.

Zacks Investment Research
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In February 2022, Kodiak Sciences announced top-line data from the phase IIb/III study evaluating the safety, efficacy and durability of its lead pipeline candidate, KSI-301, for treating wet-age-related macular degeneration (wet AMD). The study did not meet the primary efficacy end point of showing non-inferior visual acuity gains in subjects dosed on extended regimens versus Eylea (aflibercept) administered every eight weeks.

Kodiak Sciences’ stock took a sharp fall as a result of this news, which can also cause the stock price to remain weak in this three-month time frame.

Notably, Eylea is an anti-VEGF treatment developed by Regeneron (REGN - Free Report) in collaboration with Bayer’s (BAYRY - Free Report) HealthCare unit.

Regeneron/Bayer’s Eylea has been approved by the FDA for multiple retinal indications. Eylea is one of the leading medicines currently available to treat wet AMD.

While Regeneron records net product sales of Eylea in the United States, Bayer records net product sales of the drug outside the country.

Kodiak Sciences is also enrolling participants in a phase III DAYLIGHT study, a short-interval study evaluating the safety and efficacy of high-frequency KSI-301 in patients with treatment-naïve wet AMD. Enrollment in the same is expected to be completed in the first half of 2022.

This apart, the company is also evaluating KSI-301 in different studies for treating various other retinal diseases.

In February 2022, Kodiak Sciences completed enrollment in two phase III studies — GLEAM and GLIMMER — evaluating the durability, efficacy and safety of KSI-301 in treatment-naïve patients with diabetic macular edema ("DME").

The phase III BEACON study is also evaluating KSI-301 to treat macular edema due to retinal vein occlusion. Top-line data from the same is expected in the third quarter of 2022.

Kodiak Sciences is also evaluating KSI-301 in the pivotal phase III GLOW study for treating patients with non-proliferative diabetic retinopathy without DME.

Kodiak Sciences’ portfolio is devoid of collaboration contracts for product development/commercialization, which is a concern. In the absence of future collaboration partners in the United States and other countries, it might not be able to realize the full value of its products. Stiff competition from several big companies in the target market remains a headwind.

Also, with no approved product in its commercial portfolio, Kodiak Sciences lacks a source for generating regular income. Hence, failure in ongoing studies will hurt the stock.

Zacks Rank & Stock to Consider

Kodiak Sciences currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , which has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vertex’s earnings estimates have been revised 9% upward for 2022 over the past 60 days. The VRTX stock has gained 12.6% in the past year.

Vertex’s earnings have surpassed estimates in each of the trailing four quarters.

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