New Eye Treatment Boosts Kodiak Into Ranks of Resurgent Biotechs

Kodiak Sciences surged 177.96% yesterday after the biotech company reported upbeat results from a late-stage study for its newest eye-disease treatments. 

Kodiak is the latest success story in a resurgent US biotech industry. The firm’s study suggested its drugs Zenkuda and KSI-501 improved eyesight for patients with wet macular degeneration as much as the leading treatment Eylea made by rival Regeneron Pharmaceuticals. Zenkuda stood out by requiring fewer injections than Eylea — once every six months compared with every eight weeks. Regeneron’s shares slid about 5% yesterday. 

An Eye Treatment for an Eye Treatment

The latest study’s success could be the beginning of a turnaround for Kodiak. After a previous trial four years ago failed to prove Zenkuda could match Eylea’s effectiveness, Kodiak’s shares fell about 80%. The company faced another setback the following year when late-stage studies for a treatment didn’t yield the expected results, then refocused on medications for wet macular degeneration, which affects an estimated 10 million to 20 million adults worldwide. It  estimates retinal vascular disease drugs globally are worth about $15 billion. 

How much of that money Kodiak can capture depends on whether its drug can beat rivals, both old and new. Its study results come amid a flurry of biotech breakthroughs spurring investors to pour funds into the sector:

• ETFs representing biotech companies have surged by double digits this year, including the iShares Biotechnology ETF and the State Street SPDR S&P Biotech ETF, which are up about 24% and 28% respectively. 
• ADARx Pharmaceuticals, the developer of rare disease-focused gene-targeting therapeutics, jumped above its IPO price after going public Friday. Drug makers including Retension Pharmaceuticals and TRex Bio filed paperwork earlier this month for IPOs.

Pressure Test: Biotech companies in the US could be picking up the pace to bring new drugs to market in part because of China’s growing global market share. China last week laid out a goal of making at least a quarter of the world’s first-in-class drugs within the next five years. The country’s lower regulatory barriers and low costs give it an edge over western rivals.