Kaleido Halts Upcoming Phase 2 COPD Trial, Piper Sandler Cuts Price Target

Kaleido Biosciences Inc KLDO halted work on a planned phase 2 trial in chronic obstructive pulmonary disease (COPD) and terminated its agreement with the COPD Foundation to realign resources.

• The Company had announced the COPD agreement in August 2021.
• The Phase 2 asset, dubbed KB109, was slated to enter the mid-stage study in 1H 2022, the company said during its Q3 FY21 earnings release.
• The Company had also tested KB109 in patients with mild-to-moderate COVID-19.
• But Kaleido had not provided any update on the COVID-19 program since August when in the Q2 earnings release, it mentioned that additional data was expected by the end of Q3. 
• The FDA issued a warning letter to Kaleido after claiming it was testing KB109 in patients with COVID-19 for nutritional purposes, so Kaleido didn't file for an investigational new drug application. 
• Analyst Reaction: Piper Sandler has lowered the price target to $4 from $19 with an Overweight rating after the update.
• Analyst Edward Tenthoff's new $4 target is based on a projected enterprise value of $278 million, down from $792 million.
• He now values KB295 in ulcerative colitis at $228 million and adds $50M for Kaleido's Microbiome Metabolic Therapies (MMT) platform.
• But the analyst has removed $250 million in value for KB109 for COPD, $153 million for KB195 in urea cycle disorder, and $181 million for KB174 in hepatic encephalopathy.
• Recently, Kaleido expanded its research collaboration with Johnson & Johnson's JNJ Janssen Biotech Inc for MMT to prevent childhood-onset of atopic, immune, and metabolic conditions.
• Price Action: KLDO shares closed 0.57% higher at $1.75 on Friday.