Kiromic BioPharma, Inc. (NASDAQ: KRBP) (“Kiromic” or the
“Company”), a clinical-stage fully-integrated biotherapeutics
company using its proprietary DIAMOND® artificial intelligence and
data mining platform to develop cell therapies with a focus on
immuno-oncology, today issued the following letter to stockholders
from its CEO Pietro Bersani.
To My Fellow Stockholders,
On behalf of my hardworking colleagues at Kiromic BioPharma and
our dedicated Board of Directors, I’d like to thank our
stockholders for their continued support as we prepare for an
exciting future together.
Everyone at Kiromic remains laser-focused on achieving our
upcoming milestones, including our regulatory, preclinical, and
financial teams. I would like to take this opportunity to update
you on our recent progress and to review our near-term plans.
Special Meeting of Stockholders
Importantly, Kiromic will host a Special Meeting of Stockholders
on March 7th, 2023. I encourage all stockholders, as of the January
18, 2023 record date, to vote to approve the following three
proposals, each of which is critical to fund our operations and to
advance our first therapeutic candidate, Deltacel™, into the
clinic:
- To grant authority to our Board of Directors to execute a
reverse stock split at a ratio within a range of 1-for-2 to
1-for-30;
- To approve the issuance of common stock to Yorkville Advisors
in excess of the exchange cap of the Standby Equity Purchase
Agreement dated October 13, 2022; and
- To approve the issuance of common stock to the investor holding
the 25% Senior Secured Convertible Promissory Note in excess of the
share cap contained in an agreement dated December 12, 2022.
The passage of each of these items is critically important to
our ability to pursue the exciting business imperatives described
below. I strongly encourage you to vote “FOR” each proposal for the
reasons described in the proxy statement filed with the SEC on
January 26, 2023. Voting instructions are contained in the proxy
card; you can vote at any time via the internet, by mail, by phone,
or in person at the meeting.
More specifically, the resulting increase in share price from
the reverse stock split will not only keep us in compliance with
Nasdaq’s continued-listing requirements but will also potentially
improve the appeal of our common stock to a broader range of
investors, including higher-quality institutional investors.
We are proud to have secured funding during a challenging market
environment, and your vote is critical in financing our continued
progress. I will cover more details about our recent financing and
strategy later in this letter, but first I’ll provide regulatory
and preclinical updates that are a very encouraging start to the
year.
Focusing our Business, Streamlining our Pipeline
Today I am proud to announce that Kiromic remains on track to
submit an IND application for Deltacel™ by the end of the current
quarter. Deltacel™ is our most advanced therapeutic candidate, and
its use of allogeneic, non-viral, non-engineered off-the-shelf
Gamma Delta T-cells represents a potential next-generation solution
for patients.
Beginning last June, Kiromic took action to prioritize
Deltacel™. We announced and are executing the Deltacel™-aligned
development strategy, which includes streamlined operations and
aligned key resources to advance Deltacel™ while maintaining our
other product candidates, Procel™ and Isocel™. We are not currently
deploying resources against either Procel™ or Isocel™. This
prioritization also mitigates supply-chain challenges associated
with a manufacturing approach involving cell engineering.
Less than four months after announcing this pipeline
prioritization and with written feedback from an FDA Type B Pre-IND
meeting in hand, we streamlined our operations and made the
difficult yet necessary decision to eliminate nearly 30% of our
workforce. We successfully managed through subsequent changes to
our executive team and Board of Directors. These actions were part
of our aligned prioritization strategy and were made following a
thorough evaluation to maximize operational efficiencies.
The Company believes these critical actions and overall strategy
align with the financing options it is actively pursuing.
Promising Preclinical Study Results
Two recently completed preclinical studies demonstrated the
safety and efficacy of Deltacel™ in mice. We are highly encouraged
by these early findings and have concluded that these results are
sufficient for a robust IND submission package.
The first preclinical study was a toxicity evaluation of
Deltacel™ administered alone and confirmed that Deltacel™ exhibited
no toxicity. This study was conducted by Charles River
Laboratories, a large CRO (contract research organization).
The second preclinical study was a pharmacology and toxicity
evaluation of Deltacel™ administered in combination with a standard
antitumor modality, the same that we propose for the first-in-human
trial. This study, conducted by the research team led by James W.
Welsh, M.D., of The University of Texas MD Anderson Cancer Center,
found that Deltacel™ in combination with a standard antitumor
modality was more efficacious, without adding any toxicity,
compared to Deltacel™ given as a monotherapy.
The histopathology evaluation of this second study is underway,
and the final report, to be authored and certified by a qualified
pathologist, will be completed in the second half of February.
Kiromic plans to issue a press release announcing the final results
upon completion. This will conclude the pharmacological evaluation
of Deltacel™.
Presuming the acceptance of the Deltacel™ IND application by the
FDA, Kiromic plans to initiate the clinical trial in the first half
of this year. In addition to the preclinical work we are
concluding, we have also taken significant steps to ensure a smooth
transition into the clinic by preparing our clinical trial
partners.
We recently engaged Stiris Research to manage this clinical
trial. Stiris will provide cell therapy specific CRO services, and
it is best equipped to manage the clinical trial logistics for an
allogeneic cell therapy product like Deltacel™. We have also
enlisted Labcorp to handle all testing necessary to support our
exploratory endpoints.
Financing Update
We are proud to have secured funding that has led us to the
point of an IND submission. We are now working to secure additional
capital that enables Deltacel™ to enter the clinic in line with our
previously communicated timelines. However, stockholder approval of
the proposals at our special meeting on March 7th is critical to
continuing this work. We are thankful to have such a strong and
supportive investor base including, in particular, a few key
investors who strongly embrace the work with our oncology
candidates and the potential benefit they may bring patients.
Recapping actions we recently took to raise capital, in the
fourth quarter of 2022 Kiromic received two investments of $2
million each from a single investor who is funding the Company
through a 25% Senior Secured Convertible Promissory Note (the
“Note”). We recently entered into a subsequent Note purchase
agreement with this investor pursuant to which we sold an
additional $2 million Note to the investor and may sell an
additional $2 million of Notes in each of February and March 2023.
The Notes are convertible into common stock, subject to a
beneficial ownership limitation of 9.99% and a share cap of
slightly more than 4 million shares, representing 19.9% of our
issued and outstanding shares.
Following the closing of the two financings in last year’s
fourth quarter, we announced the settlement of prior litigation
with two institutional shareholders and certain affiliates, thereby
clearing a legal overhang.
A Robust Set of Near-Term Milestones
As we build upon our recent momentum, investors have much to
look forward to in the first half of the year and beyond. To recap
our near-term milestones, Kiromic plans to:
- Announce results from the Deltacel histopathology study in the
second half of February;
- Hold the Special Meeting of Stockholders on March 7, 2023;
- Submit the IND for Deltacel™ in combination with standard
antitumor modality by the end of the first quarter of 2023;
and
- Begin the activation process for the Deltacel™ clinical trial
in the second quarter of 2023.
All these milestones and more will only be possible should we
secure your vote “FOR” the three proposals on the proxy for our
upcoming Special Meeting of Stockholders. Please vote today to
minimize the additional expense Kiromic will need to incur related
to this meeting.
On behalf of the Kiromic team as well as our Board of Directors,
I want to thank our stockholders for their continued support. I
look forward to keeping you updated on our progress as we advance
Deltacel™ into the clinic.
Sincerely,
Pietro Bersani Chief Executive Officer
February 16, 2023
About Kiromic BioPharma
Kiromic BioPharma, Inc. is a clinical-stage, fully integrated
biotherapeutics company using its proprietary DIAMOND® artificial
intelligence (AI) 2.0 target discovery engine to detect, develop,
and commercialize cell therapies with a therapeutic focus on
immuno-oncology. Kiromic is developing a multi-indication
allogeneic cell therapy platform that exploits the natural potency
of Gamma Delta T-cells to target solid cancers. Kiromic’s DIAMOND®
AI is where data science meets target identification to
dramatically compress the years and hundreds of millions of dollars
required to develop a live drug. The Company maintains offices in
Houston, Texas. To learn more, visit www.kiromic.com and connect
with us on Twitter and LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements that
involve substantial risks and uncertainties. Kiromic makes such
forward-looking statements pursuant to the safe harbor provisions
of the United States Private Securities Litigation Reform Act,
Section 21E of the Securities Exchange Act of 1934, as amended, and
other federal securities laws. All statements other than statements
of historical facts are forward-looking statements. In some cases,
you can identify forward-looking statements by terms such as:
“will,” “potential,” “could,” “can,” “believe,” “intends,”
“continue,” “plans,” “expects,” “anticipates,” “estimates,” “may,”
or the negative of these terms or other comparable terminology.
These forward-looking statements include, but are not limited to,
statements regarding: Kiromic’s ability to achieve its objectives;
Kiromic’s financing strategy and availability of funds; and the
ability to issue shares under the SEPA. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results, levels of activity,
performance, or achievements to be materially different from the
information expressed or implied expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, the risks and uncertainties discussed in
our Annual Report on Form 10-K for the year ended December 31,
2021, and as detailed from time to time in our other SEC filings,
and the terms and conditions of the SEPA, including the
requirements to have an effective registration statements, share
caps in the SEPA and the terms and conditions of the SEPA,
including with respect to volume and pricing requirements. You
should not rely upon forward-looking statements as predictions of
future events. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot
guarantee that the future results, levels of activity, performance,
or events and circumstances reflected in the forward-looking
statements will be achieved or occur. Moreover, neither we nor any
other person assumes responsibility for the accuracy and
completeness of the forward-looking statements. Such
forward-looking statements relate only to events as of the date of
this press release. We undertake no obligation to update any
forward-looking statements except to the extent required by law.
There can be no assurance that any sales will occur under the
SEPA.
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version on businesswire.com: https://www.businesswire.com/news/home/20230216005334/en/
Kiromic BioPharma Linda Phelan Dyson, MPH Global Head,
Corporate Communications ldyson@kiromic.com M: 281-468-7683 LHA
Investor Relations Tirth T. Patel tpatel@lhai.com
212-201-6614
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