Kadmon Holdings Inc (NYSE:KDMN) Just Scored Some Positive Psoriasis Data – Insider Financial

Weve come back to Kadmon Holdings Inc (NYSE:KDMN) on a couple of occasions over the couple of months. When we first looked at the company, mid March, it was trading in and around the $3.9 mark. It entered our radar because it looked as though a whos who of the biotech capital space was taking a positing in the company. Dan Loeb (through Third Point), Joseph Edelmen (through Perceptive), Steve Cohen (through Point72) and Edward Mule (through Silver Point) all have a stake, and we thought it was unusual that a company of this size, and at this end of the sector, with no approved asset, was garnering such big name attention.

Well, that, and the fact that despite these big names, wider markets and retail investors didnt seem to care about Kadmon.

Since our first highlighting of the company, its dipped to current levels at $2.70 a piece. Thats a 30% depreciation in no more than six weeks yet theres nothing notably attributable to the decline on the companys feed.

With this noted, then, we are looking at the decline as an opportunity to load up at a discount ahead of a shift towards the upside. A number of 2017 catalysts have the potential to catalyze this shift, and as weve noted in the past, its these catalysts that we think have driven the above mentioned bug names to take a position ahead of their release.

Were not going to go into the catalysts one by one here, as we did that last time. Readers looking to catch up can check out what were looking at here.

What we are going to do, however, is take a look at one of them (a psoriasis trial completion) and see how it plays into the future of the program.

So, the drug is called KD025, and its one of two assets that Kadmon is pushing through a host of development programs in various indications. As noted, this one is a psoriasis program, and the company has (or at least, had) two phase II studies set up to look at the drugs safety and efficacy. The first was a relatively small open label study, and this one wrapped up at the beginning of this month. On April 12, management put out a release detailing the outcome of the study, and things look promising. Specifically, the data showed a reduction in whats called IL-17, and a parallel upregulation in whats called IL-10, and was able to show that these up/down regulations respectively correlate with an improvement in clinical scores in psoriasis patients.

Thats a big deal it serves as proof of concept for the drug in a patient population that includes some 8 million Americans, many of which are unhappy or unsatisfied with their current standard of care treatments.

So what does this mean going forward?

Well, as weve said, there are two trials for this one. The second is a much larger placebo controlled trial, and if Kadmon is going to move the drug into a pivotal, its this study thats going to facilitate said move. This ones ongoing, and we should get a readout at some point during the fourth quarter of 2017. The importance of this one is that it will show a comparable clinical benefit (between placebo and active), as opposed to just a biomarker correlative type benefit (which is what the IL reduction/upregulation has demonstrated). This doesnt take away from the most recent results, but its an important disparity in these sorts of immune regulation type approaches.

With the programs fully funded through the end of this year and likely into early next, theres plenty of room for PPS appreciation before Kadmon has to raise, so near term dilution risk is essentially removed.

Keep in mind that weve focused on psoriasis here, but this is only one of the multiple shots on goal Kadmon has this year. As the other programs start to read out, well update our analysis.

We will be updating our subscribers as soon as we know more. For the latest updates on KDMN, sign up below!

Disclosure: We have no position in KDMN and have not been compensated for this article.

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Kadmon Holdings Inc (NYSE:KDMN) Just Scored Some Positive Psoriasis Data - Insider Financial