Kineta, Inc. Reports Significant Financial Challenges, Doubt About Its Ability to Continue as a Going Concern

Kineta, Inc., a clinical-stage biotechnology company based in Mercer Island, Washington, reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company has not generated any revenue from product sales, with total revenues for the nine months ended September 30, 2024, reported at $0, a stark decline from $5.4 million in the same period of the previous year. This drop is attributed to the absence of licensing and collaboration revenues, which were previously bolstered by a $5 million milestone payment from the Merck Neuromuscular License Agreement in 2023.

Kineta's financial position has deteriorated, with current assets decreasing from $5.98 million at the end of 2023 to $2.22 million as of September 30, 2024. Cash reserves also fell sharply from $5.78 million to $1.95 million over the same period. The company reported a net loss of $14.64 million for the nine months ended September 30, 2024, compared to a net loss of $11.42 million for the same period in 2023. The net loss for the third quarter alone was $1.78 million, a significant improvement from $5.31 million in Q3 2023, indicating a reduction in operating expenses.

Total operating expenses for the nine months ended September 30, 2024, were $11.05 million, down from $16.89 million in the prior year, reflecting cost-cutting measures. Research and development expenses decreased by 38%, while general and administrative expenses fell by 32%. The company has implemented a corporate restructuring, resulting in a workforce reduction of approximately 64% in February 2024.

Kineta is facing substantial doubt about its ability to continue as a going concern, primarily due to insufficient cash to fund operations for the next 12 months. The company is exploring strategic alternatives, including asset sales, mergers, or potential liquidation. A private placement expected to raise $22.5 million in April 2024 did not materialize due to investors failing to fulfill their obligations, leading to ongoing litigation against them.

In July 2024, Kineta entered into an agreement with TuHURA Biosciences, granting exclusive rights to acquire its patents related to KVA12123, receiving an initial payment of $5 million. However, the company has paused or significantly scaled back the development of future product candidates due to funding constraints. As of September 30, 2024, Kineta's accumulated deficit stood at $180.4 million, and its common stock was delisted from Nasdaq, now trading on the OTC Pink Market under the symbol "KANT."