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Chinook (KDNY) Stock Rallies 24.2% in 3 Months: Here's Why

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Shares of Chinook Therapeutics have risen 24.2% in the past three months against the industry’s 5% decline.

Zacks Investment Research
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Berkley, CA-based Chinook is focused on developing precision medicines, targeting kidney diseases. With no marketable drugs in its portfolio, the company is entirely dependent on its pipeline development for growth.

The lead candidate in Chinook’s pipeline is atrasentan, a potent and selective endothelin A (ETA) receptor antagonist, which is being evaluated in a late-stage ALIGN study for IgA nephropathy (IgAN) as well as a mid-stage basket study (AFFINITY) for proteinuric glomerular diseases.

The second candidate in KDNY’s pipeline is BION-1301, a monoclonal antibody, which has been designed to block APRIL, a soluble factor believed to be responsible for causing IgA nephropathy (IgAN). The candidate is being evaluated in a phase I/II study in patients with IgAN.

One of the main reasons for this rise in stock price is management’s announcement of updated results from the phase I/II study evaluating BION-1301 in IgAN earlier this May. Data from one of the cohorts of the study showed that treatment with BION-1301 exhibited durable proteinuria reductions in IgAN patients within three months of treatment initiation.

All the eight study participants administered with BION-1301 showed a 48.8% proteinuria reduction after three to six months of treatment. In fact, a 70.9% proteinuria reduction was seen in six patients following one year of treatment, while the remaining two patients achieved a 69.1% proteinuria reduction after 1.5 years of treatment.

Treatment with BION-1301 also demonstrated durable and sustained reductions in Gd-IgA1, IgA, IgM and IgG levels. Data from another cohort of this study is expected later this year. Based on these results, Chinook plans to design a phase III study, which will evaluate BION-1301 in IgAN patients. This study is expected to start in 2023.

Currently, there are a few treatment options available for treating IgAN. Even the use of steroids is considered in treating high-risk IgAN patients. Successful development of BION-1301 in IgAN will cater to the unmet needs of this population. In fact, the above results from the phase I/II study prove the efficacy of treatment with BION-1301 in IgAN.

Earlier this week, KDNY announced that the European Commission granted orphan drug designation to BION-1301 for the treatment of primary IgAN.

With regard to atrasentan, KDNY plans to report top-line data from the ALIGN study next year. This data will be used by the company to seek approval for atrasentan in IgAN under the accelerated pathway.

Chinook Therapeutics believes that atrasentan, which is in phase III development for IgAN, has the potential to provide benefits in multiple chronic kidney diseases by reducing proteinuria and having direct anti-inflammatory and anti-fibrotic effects to preserve kidney function.

Atrasentan was originally developed by AbbVie (ABBV - Free Report) . The candidate was in-licensed by Chinook in December 2019 as part of a license agreement with ABBV. Per the terms of agreement, AbbVie is eligible to receive milestone payments of $135 million in aggregate. In addition, ABBV will also be eligible to receive royalty payments on worldwide sales if the drug is successfully developed and launched.

Apart from the above two candidates, Chinook also has a third candidate in its pipeline, CHK-336, which is an LDHA inhibitor for the treatment of primary hyperoxaluria (PH), secondary hyperoxaluria and idiopathic kidney stone formation. In April, KDNY initiated an early-stage study evaluating this candidate in healthy volunteers. Data from the same is expected in first-half 2023.

Zacks Rank & Stocks to Consider

Chinook Therapeutics currently carries a Zacks Rank #2 (Buy). A couple of other top-ranked stocks in the overall healthcare sector are Novo Nordisk (NVO - Free Report) and Sesen Bio . While Sesen Bio sports a Zacks Rank #1 (Strong Buy), Novo Nordisk carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Sesen Bio’s 2022 bottom line have declined from a loss of 46 cents to 44 cents in the past 60 days. The share price of Sesen Bio has risen 14.4% in the year-to-date period.

Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 69.9%. In the last reported quarter, Sesen Bio delivered an earnings surprise of 100%.

Estimates for Novo Nordisk’s 2022 bottom line have increased from $3.42 to $3.52 in the past 60 days. Estimates for 2023 have increased from $3.96 to $4.24 in the past 60 days. Share prices of Novo Nordisk have declined 1.8% in the year-to-date period.

Earnings of Novo Nordisk beat estimates in each of the last four quarters, the average surprise being 7.6%. In the last reported quarter, Novo Nordisk delivered an earnings surprise of 10.6%.


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