Kiniksa Pharmaceuticals, Ltd. (KNSA) Earnings

Management highlights

- Commercial side: End of first quarter marks fifth anniversary of ARCLIS FDA approval. ARCLIS sales grew to $214.3 million in Q1 2026. Saw acceleration in new prescribers with highest quarterly increase in new patient enrollments since launch. Raised full-year 2026 revenue guidance to $930 - $945 million from $900 - $920 million. Initiated targeted direct-to-consumer campaign 'Heart's Home' to target recurrent pericarditis patients. - Clinical portfolio: Advancing KPL 387 Phase II, Phase III study in recurrent pericarditis. Data from Phase II dose focusing portion on track for second half of 2026, expect to start Phase III by end of 2026. Advancing KPL1161 closer to clinic, plan to start phase one study by end of 2026. - Financial: Ended first quarter with $468.1 million cash balance, $54 million net cash generation for the period. Net income increased significantly to $22.6 million in Q1 2026 compared to $8.5 million in Q1 2025.

Guidance

- Raised full-year 2026 revenue guidance from $900 - $920 million to $930 - $945 million. - Expect data from Phase II dose focusing study of KPL 387 in the second half of 2026. - Expect to start Phase III portion of KPL 387 study by end of 2026. - Plan to start phase one study of KPL1161 by end of 2026.

Segment performance

In the first quarter of 2026, ARCLIS net revenue was $214.3 million, which is a 56% year-over-year growth. This revenue growth was driven by strong expansion in new prescribers and new patient enrollments. ARCLIS revenue contribution is a key part of the company's financial performance for this segment. Operating expenses increased due to factors like higher cost of goods sold, increased collaboration expenses, higher R&D for KPL387 development, and additional SG&A for ARCLIS commercialization. Arculus collaboration profit grew 73% year-over-year to $151.2 million in the first quarter of 2026.

Analyst Q&A

• Q: Can you discuss what you have seen in terms of increased demand from the early days of the DTC campaign and other plans to accelerate demand?

  A: Ross said it's early days for the DTC campaign. Only around 14% of recurrent pericarditis patients are unaided aware of Arclist. They have a multifaceted approach including digital marketing, peer-to-peer education.

• Q: For KPL387 and the second half dose focus update, how do you think about which endpoints are most important in dose selection moving to phase three?

  A: John said it's the integration of cadence and magnitude (time of onset of action and degree of suppression of pain and inflammation with C-reactive protein) and durability of response.

• Q: On the DTC ad, is it fair to model in the incremental spend year-over-year on marketing as the DTC component, or is there some additional sales guys or other expenses going in there? And on 387, on the transition study, why 16 weeks?

  A: Mark said SG&A went up due to personnel and sales/marketing expenses. John said the 16-week treatment duration for the posology portion of the study is appropriate as it's designed to look at well-controlled patients moving from prior therapies to KPL387 and transition to monotherapy within that time window.

• Q: What effect has reimbursement or referral patterns had into new patient starts?

  A: Ed was told reimbursement is strong across payer mixes. Referrals include 18 centers of excellence and peer-to-peer education.

• Q: Can you elaborate a little bit more on the co-payment commentary for the quarter. Is this going to be something just specific to this particular quarter, or could it be more potentially structurally favorable to growth to net over the long term? And on KPL 387, on the transition, the switch study, can you comment if the implication here is that you have a fairly confident view on the dose going forward for the phase three, or are you still testing multiple doses there?

  A: Mark said co-pay support will be favorable to gross net on an annual basis with majority impact in first quarter. John said the study design disclosure doesn't include specific dose levels studied and more to say later.

• Q: On the commercial side, is there a tipping point for adding more patients to the first recurrence segment? And with the positive cash flow, how do you think about maximizing value from here?

  A: Ross said about 20% of prescriptions are in the first recurrence group and the 2025 ACC concise clinical guidance helps. Dan said they balance creating value with internal efforts and business development.

• Q: Any meaningful difference in terms of formulation versus Archelix, and do you plan to use an autoinjector? And down the line, if 387 gets approved, how do you plan your commercial strategy around incorporating to potentially transition to 387?

  A: John said KPL387 is a liquid formulation allowing single syringe subcutaneous delivery and anticipates auto-injector development. No further details on commercial strategy for transition yet.

• Q: How should we be thinking about R&D expense for the rest of the year and into 2027 as 387 Phase 3 and 1161 Phase 1 are initiated? And are there any key steps or milestones you need to clear to initiate the study of 387?

  A: Mark said R&D has been fairly consistent on a percentage of sales basis. John said with Phase II data expected in second half of 2026, they're on track for dose level confirmation and phase three can begin independently of phase two execution.