Shares of Kodiak Sciences KOD have skyrocketed 270.7% in the past six months fueled by updates from the developmental program of its lead investigational candidate, tarcocimab. It is a novel anti-VEGF antibody biopolymer conjugate, which is being evaluated for treating retinal vascular diseases.

In late 2023, Kodiak rebooted the development program of tarcocimab following positive phase III results from the GLOW1 study, which evaluated the treatment in patients with moderately severe to severe non-proliferative diabetic retinopathy. Leveraging the GLOW1 study's success, Kodiak initiated the GLOW2 study in late 2023 to further investigate tarcocimab for diabetic retinopathy (DR) and began dosing patients in May 2024, with enrollment expected to be completed soon. The success of the GLOW2 study is expected to serve as the basis for a single biologics license application submission for tarcocimab, seeking its approval for DR. 

The revival of tarcocimab in Kodiak's pipeline, after a major setback earlier in 2023, has restored stakeholder confidence in the candidate’s potential for treating retinal diseases.

Last month, an eminent financial services company, Jefferies, upgraded KOD to a “BUY” rating stating that the company has a major “turnaround story” in place for 2025. In its report, Jefferies stated that at $7 per share ($400 million market cap), the stock price is greatly undervalued and set a target price of $20, translating to a market cap of more than $1 billion in 2025, ahead of phase III data readouts. By 2026, Jefferies projects the stock price to approach $30-$50 or $1.5-$3 billion in market cap. This has also likely contributed to the stock price rally.

In the past year, Kodiak shares have surged 201% against the industry’s 15.7% decline.

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KOD’s Other Pipeline Programs Progressing Well

Kodiak is also developing KSI-501, a dual inhibitor bioconjugate molecule, to address inflammation and abnormal blood vessel growth in retinal vascular diseases.

Following a successful phase I study, Kodiak is preparing to advance KSI-501 into phase III through the DAYBREAK study, which will assess its efficacy, durability and safety for wet AMD. The company also plans to study tarcocimab as a second investigational arm in the DAYBREAK study for wet AMD, with KSI-501 being the first investigational arm. The study is designed to be a non-inferiority study evaluating KSI-501 dosed every four to 24 weeks compared with Regeneron’s Eylea dosed per label. The phase III DAYBREAK study on tarcocimab and KSI-501 is also currently enrolling patients. By initiating a second phase III study, Kodiak is positioning itself with two late-stage candidates, providing a potential fallback if one program encounters challenges.

Additionally, Kodiak is developing the unconjugated protein component of KSI-501, known as KSI-101 (formerly known as KSI-501P), for patients with diabetic macular edema (DME) and macular edema secondary to inflammation (MESI). It is a novel, potent and high-strength bispecific protein targeting IL-6 and VEGF.  At present, there are no available intravitreal biologic therapies addressing the spectrum of inflammatory conditions of the retina, which represents a huge new market opportunity separate from the established anti-VEGF market. 

Kodiak is enrolling patients in the phase Ib APEX study, evaluating KSI-101 in two new cohorts — cohort 1 in patients with DME and cohort 2 in patients with MESI. The APEX study will evaluate the safety and tolerability, and identify two dose levels of KSI-101 to progress into late-stage development. The pivotal phase IIb/III studies (PEAK and PINNACLE) will investigate KSI-101 in MESI.

KOD Gains Potential Investor Interest

The Jefferies article also stated that Kodiak is gaining significant interest from healthcare funds given its current attractive valuation. KOD has also hinted that it might seek financing in 2025, providing it with an influx of cash and making it eligible to draw more funds from imminent healthcare investors to support operations.

Kodiak ended the third quarter with cash, cash equivalents and marketable securities worth $197.9 million compared with $219.2 million as of June 30, 2024. The company believes that its current cash balance is enough to support its present and planned operations into 2026.

Kodiak Sciences Inc. Price and Consensus

Kodiak Sciences Inc. price-consensus-chart | Kodiak Sciences Inc. Quote

KOD’s Zacks Rank & Stocks to Consider

Kodiak currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the sector are Castle Biosciences CSTL, CytomX Therapeutics CTMX and Vanda Pharmaceuticals VNDA. While CSTL and VNDA sport a Zacks Rank #1 (Strong Buy) each, CTMX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, 2024 estimates for Castle Biosciences’ earnings per share have remained constant at 34 cents. During the same timeframe, loss per share estimates for 2025 have remained constant at $1.84. In six months, shares of Castle Biosciences have gained 59.4%.

CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.

In the past 30 days, estimates for Vanda Pharmaceuticals’ 2024 loss per share have remained constant at 32 cents. Estimates for 2025 loss per share have remained constant at 35 cents during the same timeframe. In six months, Vanda’s shares have lost 8%.

VNDA has delivered a negative earnings surprise of 45.79% in the past four quarters.

In the past 30 days, estimates for CytomX Therapeutics’ 2024 loss per share have remained constant at 5 cents. Estimates for 2025 loss per share have remained constant at 35 cents during the same timeframe. In six months, CTMX stock has lost 13.1%.

CytomX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 115.70%.

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