UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to _________

Commission File Number: 001-38682

KODIAK SCIENCES INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	27-0476525
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1200 Page Mill Road Palo Alto, CA	94304
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 281-0850

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001	KOD	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 29, 2022, the registrant had 52,040,246 shares of common stock, $0.0001 par value per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith beliefs as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “anticipate,” “project,” “target,” “design,” “estimate,” “predict,” “potential,” “plan”, “hope” or the negative of these terms, or similar expressions and comparable terminology intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including those set forth under the section of this Quarterly Report on Form 10-Q titled “Part II, Item 1A — Risk Factors” and elsewhere in this report. Forward-looking statements include, but are not limited to, statements about:

•the success, cost and timing of our development activities, preclinical studies, clinical trials and regulatory filings;

•the translation of our preclinical results and data and early clinical trial results in particular relating to safety, efficacy and durability into future clinical trials in humans;

•the continued durability, efficacy and safety of our product candidates;

•the portfolio of clinical trials planned for submission in our Biologics License Application, or BLA, of tarcocimab tedromer (formerly KSI-301, also known as tarcocimab);

•our ability to present clinical data across our pivotal trials for the remainder of 2022 and 2023;

•our and Lonza’s ability to successfully execute on our manufacturing development plan;

•the number, size and design of clinical trials that regulatory authorities may require to obtain marketing approval, including the order and number of clinical studies required to support a BLA in wet age-related macular degeneration, or wet AMD, diabetic macular edema, or DME, retinal vein occlusion, or RVO, and diabetic retinopathy, or DR;

•our expectations regarding chemistry manufacturing and controls, or CMC, requirements of the United States Food and Drug Administration, or FDA, and other regulatory bodies to support our BLA submission and potential commercial launch;

•the timing or likelihood of regulatory filings and approvals, including the potential to achieve FDA approval of tarcocimab in wet AMD, DME, RVO and DR;

•our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate;

•our ability to obtain funding for our operations, including funding necessary to develop, manufacture and commercialize our product candidates;

•the rate and degree of market acceptance of our product candidates;

•the success of competing products or platform technologies that are or may become available;

•our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain approval;

•our expectation as to the concentration of retinal specialists in the United States and its impact on our sales and marketing plans;

•our expectations regarding our ability to enter into manufacturing-related commitments, and the timing thereof;

•future agreements with third parties in connection with the commercialization of our product candidates;

•the size and growth potential of the markets for our product candidates, if approved for commercial use, and our ability to serve those markets;

•existing regulations and regulatory developments in the United States and foreign countries;

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•the expected potential benefits of strategic collaboration agreements and our ability to attract collaborators with development, regulatory and commercialization expertise;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

•potential claims relating to our intellectual property and third-party intellectual property;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•the pricing and reimbursement of our product candidates, if approved;

•our estimates regarding the impact of the novel coronavirus, or COVID-19, pandemic on our business and operations, the business and operations of our collaborators, and on the global economy;

•our aspirational goals and objectives related to our human capital resources and workforce objectives;

•our ability to attract and retain key managerial, scientific and medical personnel;

•the accuracy of our estimates regarding the sufficiency of our cash resources, expenses, future revenue, capital requirements and needs for additional financing; and

•our financial performance.

All forward-looking statements are based on information available to us on the date of this Quarterly Report on Form 10-Q and we will not update any of the forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law. Our actual results could differ materially from those discussed in this Quarterly Report on Form 10-Q. The forward-looking statements contained in this Quarterly Report on Form 10-Q, and other written and oral forward-looking statements made by us from time to time, are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements, and you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Factors that might cause such a difference include, but are not limited to, those discussed in the following discussion and within the section of this Quarterly Report on Form 10-Q titled “Part II, Item 1A — Risk Factors”.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

All brand names or trademarks appearing in this report are the property of their respective holders. Unless the context requires otherwise, references in this report to “Kodiak” the “Company,” “we,” “us,” and “our” refer to Kodiak Sciences Inc. and its subsidiaries.

ii

SELECTED RISKS AFFECTING OUR BUSINESS

Investing in our common stock involves numerous risks, including the risks described in “Part II—Other Information, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. These risks include, among others, the following:

•We are in the clinical stage of drug development and have a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.

•We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur significant and increasing net losses for the foreseeable future.

•Drug development is a highly uncertain undertaking and involves a substantial degree of risk. We have never generated any revenue from product sales, and we may never generate revenue or be profitable.

•Our prospects are heavily dependent on our tarcocimab product candidate, which is currently in clinical development for multiple indications.

•A failure of tarcocimab in clinical development may require us to discontinue development of other product candidates based on our ABC Platform.

•Research and development of biopharmaceutical products is inherently risky. We cannot give any assurance that any of our product candidates will receive regulatory, including marketing, approval, which is necessary before they can be commercialized.

•We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

•We may encounter difficulties enrolling patients in our clinical trials, and our clinical development activities could thereby be delayed or otherwise adversely affected.

•Our clinical trials may fail to demonstrate substantial evidence of the durability, efficacy and safety of our product candidates, which would prevent, delay or limit the scope of regulatory approval and commercialization.

•The topline results from our Phase 2b/3 pivotal study of tarcocimab in wet AMD and from our Phase 3 pivotal study BEACON in RVO may lead to further study design modifications in our other ongoing pivotal studies and may impact the timeline of completion and likelihood of success of these pivotal studies.

•We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may retain their market share with existing drugs or achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

•The manufacture of our product candidates is highly complex and requires substantial lead time to produce.

•We have no experience manufacturing any of our product candidates at a commercial scale. If we or any of our third-party manufacturers encounter difficulties in production or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our product candidates for clinical trials or our ability to provide the information needed in the regulatory dossiers for our planned BLA filing, or our ability to supply our products for patients, if approved, could be delayed or stopped, or we may be unable to establish a commercially viable cost structure.

•The regulatory approval processes of the FDA, EMA, NMPA and comparable foreign regulatory authorities are lengthy, time consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.

•We plan to conduct clinical trials for our product candidates outside the United States, and the FDA, EMA, NMPA and applicable foreign regulatory authorities may not accept data from such trials.

•Our business is subject to complex and evolving U.S. and foreign laws and regulations relating to privacy and data protection. These laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, or monetary penalties, and otherwise may harm our business.

•If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

iii

•We expect to rely on third parties to conduct many aspects of our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.

•If we are unable to obtain and maintain patent protection for any product candidates we develop or for our ABC Platform, our competitors could develop and commercialize products or technology similar or identical to ours, and our ability to successfully commercialize any product candidates we may develop, and our technology may be adversely affected.

•If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected.

•Third-party claims of intellectual property infringement, misappropriation or other violation against us or our collaborators may prevent or delay the development and commercialization of our ABC Platform, product candidates and other technologies.

•We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming and unsuccessful.

•We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

•Our business is currently affected and could be materially and adversely affected in the future by the effects of disease outbreaks, epidemics and pandemics, including the ongoing effects of the COVID-19 pandemic. The COVID-19 pandemic continues to impact our business and could materially and adversely affect our operations, as well as the business or operations of our manufacturers, contract research organizations (“CROs”) or other third parties with whom we conduct business. Our manufacturers are also engaged in the manufacturing of COVID-19 vaccines and therapeutic treatments, and the success of and demand for these vaccines and therapeutic treatments means we and our programs are competing for scarce manufacturing resources.

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Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18
PART II.	OTHER INFORMATION	19
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	62
	Signatures	63

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

Kodiak Sciences Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)

	June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	172,692		$	731,510
Marketable securities		425,184			—
Prepaid expenses and other current assets		6,493			3,301
Total current assets		604,369			734,811
Restricted cash		6,324			6,324
Property and equipment, net		54,575			41,330
Operating lease right-of-use asset		63,076			66,744
Other assets		53,561			55,011
Total assets	$	781,905		$	904,220
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	20,631		$	12,431
Accrued and other current liabilities		43,158			48,319
Operating lease liability		6,044			3,933
Total current liabilities		69,833			64,683
Operating lease liability, net of current portion		80,985			76,063
Liability related to sale of future royalties		99,969			99,943
Other liabilities		187			211
Total liabilities		250,974			240,900
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;    0 shares issued and outstanding at June 30, 2022 and    December 31, 2021, respectively		—			—
Common stock, $0.0001 par value, 490,000,000 shares authorized    at June 30, 2022 and December 31, 2021; 52,024,621 and    51,826,257 shares issued and outstanding at June 30, 2022 and    December 31, 2021, respectively		5			5
Additional paid-in capital		1,277,349			1,221,532
Accumulated other comprehensive income		(1,869	)		—
Accumulated deficit		(744,554	)		(558,217	)
Total stockholders’ equity		530,931			663,320
Total liabilities and stockholders’ equity	$	781,905		$	904,220

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Kodiak Sciences Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2022			2021			2022			2021
Operating expenses
Research and development	$	73,744		$	45,404		$	149,921		$	85,741
General and administrative		18,324			10,505			37,914			20,726
Total operating expenses		92,068			55,909			187,835			106,467
Loss from operations		(92,068	)		(55,909	)		(187,835	)		(106,467	)
Interest income		1,135			81			1,211			230
Interest expense		(5	)		(5	)		(10	)		(11	)
Other income (expense), net		310			(19	)		297			(51	)
Net loss	$	(90,628	)	$	(55,852	)	$	(186,337	)	$	(106,299	)
Net loss per common share, basic and diluted	$	(1.74	)	$	(1.08	)	$	(3.57	)	$	(2.06	)
Weighted-average shares of common stock outstanding used    in computing net loss per common share, basic and diluted		52,218,773			51,573,894			52,195,972			51,644,946
Other comprehensive income (loss)
Change in unrealized losses related to available-for-sale    debt securities, net of tax		(1,869	)		(18	)		(1,869	)		(53	)
Total other comprehensive income (loss)		(1,869	)		(18	)		(1,869	)		(53	)
Comprehensive loss	$	(92,497	)	$	(55,870	)	$	(188,206	)	$	(106,352	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Kodiak Sciences Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share and per share amounts)

(Unaudited)

	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balances at December 31 2021		51,826,257	$	5	$	1,221,532	$	—		$	(558,217	)	$	663,320
Issuance of common stock upon    exercise of stock options		110,043		—		1,678		—			—			1,678
Issuance of common stock upon    vesting of restricted stock units		3,581		—		—		—			—			—
Stock-based compensation    expense		—		—		28,095		—			—			28,095
Net loss		—		—		—		—			(95,709	)		(95,709	)
Balances at March 31, 2022		51,939,881		5		1,251,305		—			(653,926	)		597,384
Issuance of common stock upon    exercise of stock options		320		—		2		—			—			2
Issuance of common stock upon    vesting of restricted stock units		74,148		—		—		—			—			—
Issuance of common stock    pursuant to employee stock    purchase plans		10,272		—		64		—			—			64
Stock-based compensation    expense		—		—		25,978		—			—			25,978
Other comprehensive loss		—		—		—		(1,869	)		—			(1,869	)
Net loss		—		—		—		—			(90,628	)		(90,628	)
Balances at June 30, 2022		52,024,621	$	5	$	1,277,349	$	(1,869	)	$	(744,554	)	$	530,931
	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balances at December 31, 2020		51,112,302	$	5	$	1,151,920	$	53		$	(291,227	)	$	860,751
Issuance of common stock upon    exercise of stock options		113,559		—		1,483		—			—			1,483
Stock-based compensation    expense		—		—		9,925		—			—			9,925
Other comprehensive loss		—		—		—		(35	)		—			(35	)
Net loss		—		—		—		—			(50,447	)		(50,447	)
Balances at March 31, 2021		51,225,861		5		1,163,328		18			(341,674	)		821,677
Issuance of common stock upon    exercise of stock options		131,276		—		2,228		—			—			2,228
Issuance of common stock upon    vesting of restricted stock units		72,976		—		—		—			—			—
Issuance of common stock    pursuant to employee stock    purchase plans		4,295		—		305		—			—			305
Stock-based compensation    expense		—		—		11,087		—			—			11,087
Other comprehensive loss		—		—		—		(18	)		—			(18	)
Net loss		—		—		—		—			(55,852	)		(55,852	)
Balances at June 30, 2021		51,434,408	$	5	$	1,176,948	$	—		$	(397,526	)	$	779,427

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Kodiak Sciences Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(186,337	)	$	(106,299	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,075			466
Stock-based compensation		54,073			21,012
Amortization (accretion) of premium (discount) on marketable securities		(314	)		25
Amortization of operating lease right-of-use asset		3,742			3,897
Amortization of issuance costs		26			26
Changes in assets and liabilities:
Prepaid expenses and other current assets		(2,165	)		(431	)
Other assets		10,235			(35	)
Accounts payable		12,864			(5,753	)
Accrued and other current liabilities		1,545			15,459
Operating lease liability		6,959			347
Net cash used in operating activities		(98,297	)		(71,286	)
Cash flows from investing activities
Purchase of property and equipment		(25,690	)		(3,772	)
Deposits on property and equipment		(8,785	)		(16,962	)
Purchase of marketable securities		(427,766	)		—
Maturities of marketable securities		—			24,500
Net cash provided by (used in) investing activities		(462,241	)		3,766
Cash flows from financing activities
Proceeds from issuance of common stock upon options exercise		1,680			3,711
Proceeds from issuance of common stock pursuant to employee stock purchase plans		64			305
Principal payments of tenant improvement allowance payable		(24	)		(22	)
Net cash provided by financing activities		1,720			3,994
Net increase (decrease) in cash, cash equivalents and restricted cash		(558,818	)		(63,526	)
Cash, cash equivalents and restricted cash, at beginning of period		737,834			950,720
Cash, cash equivalents and restricted cash, at end of period	$	179,016		$	887,194
Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets
Cash and cash equivalents	$	172,692		$	880,870
Restricted cash		6,324			6,324
Cash, cash equivalents and restricted cash in consolidated balance sheets	$	179,016		$	887,194
Supplemental disclosures of non-cash investing and financing information:
Operating lease right-of-use asset obtained in exchange for operating lease liability	$	74		$	498
Purchase of property and equipment under accounts payable and accruals	$	9,718		$	1,821

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. The Company

Kodiak Sciences Inc. (the “Company”) is a clinical stage biopharmaceutical company committed to researching, developing and commercializing transformative therapeutics to treat high prevalence retinal diseases in the United States and additional international markets. The Company devotes substantially all of its resources to the research and development of its product platforms and product candidates including activities to conduct clinical studies of its product candidates, manufacture product candidates and provide general and administrative support for these operations.

Liquidity

As of June 30, 2022, the Company had cash, cash equivalents and marketable securities of $597.9 million. Although the Company has incurred significant operating losses since inception and expects to continue to incur operating losses and negative operating cash flows for the foreseeable future, the Company believes that the cash, cash equivalents and marketable securities will be sufficient to meet the anticipated operating and capital expenditure requirements for the 12 months following the date of this Quarterly Report on Form 10-Q.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim periods. The condensed consolidated financial statements, in the opinion of management, include all normal and recurring adjustments necessary to state fairly the Company's financial position and results of operations for the reported periods.

These condensed consolidated financial statements have been prepared on a basis substantially consistent with, and should be read in conjunction with the audited financial statements for the year ended December 31, 2021 and notes thereto, the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted from this report. The results of operations for any interim period are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period.

The accompanying condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and expenses during the reporting period. The impact of the ongoing COVID-19 pandemic continues to evolve. As a result, certain estimates and assumptions required increased judgment and carried a higher degree of variability and volatility, including but not limited to, the fair value of marketable securities, performance-based equity awards, and research and development accruals. As events continue to unfold and additional information becomes available, these estimates may change materially in future periods. Actual results could differ from those estimates.

Risks and Uncertainties

In March 2020, the World Health Organization declared a pandemic due to the global COVID-19 outbreak. The significant uncertainties caused by the ongoing COVID-19 pandemic may negatively impact the Company’s operations, liquidity, and capital resources and will depend on certain evolving developments, including the duration and spread of the outbreak, regulatory and private sector responses and the impact on employees and vendors including supply chain and clinical partners, all of which are uncertain and cannot be predicted. During this pandemic, the Company continues to work closely with clinical sites towards maximal patient safety and the lowest number of missed visits and study discontinuations. The Company has taken and continues to take proactive measures to maintain the integrity of its ongoing clinical studies. Despite these efforts, the ongoing COVID-19 pandemic could significantly impact clinical trial enrollment and completion of its clinical studies. As global economic conditions recover from the COVID-19 pandemic, business activity may not recover as quickly as anticipated, and it is not possible at this time to estimate the long-term impact that COVID-19 could have on the Company's business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. The Company will continue to monitor the COVID-19 situation and its impact on the ability to continue the development of, and seek regulatory approvals for, the Company’s product candidates, and begin to commercialize any approved products.

5

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended June 30, 2022, respectively, are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, except as noted below with respect to the Company's property and equipment and as noted within the “Recent Accounting Pronouncements” section.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation for acquired assets. Construction in progress reflects amounts incurred for construction or improvements of property or equipment that have not been placed in service. Construction in progress is transferred to specific property and equipment and depreciation commences when these assets are ready for their intended use. Depreciation is computed using the straight-line method over the estimated useful lives of assets, which is generally four years for laboratory equipment, three years for computer equipment and office equipment, five years for computer software and five to seven years for furniture and fixtures. Leasehold improvements are stated at cost and amortized over the shorter of the useful life of the assets or the length of the lease. Upon sale or retirement of assets, the costs and related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB"), under its Accounting Standards Codification ("ASC") or other standard setting bodies, and adopted by the Company as of the specified effective date. There have been no new accounting pronouncements issued nor adopted during the three and six months ended June 30, 2022 that are of significance to the Company.

3. Accrued and Other Current Liabilities

Accrued and other current liabilities consist of the following (in thousands):

	June 30, 2022		December 31, 2021
Accrued clinical trial and related costs	$	18,175	$	21,776
Accrued manufacturing and research & development costs		12,185		6,041
Accrued leasehold improvements		5,271		13,021
Accrued salaries and benefits		3,906		6,187
Accrued legal fees		573		403
Accrued professional fees		87		176
Accrued other liabilities		2,961		715
Total accrued and other current liabilities	$	43,158	$	48,319

6

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

4. Fair Value Measurements

The following tables present the Company’s fair value hierarchy for assets measured at fair value on a recurring basis (in thousands):

Fair Value Measurements at June 30, 2022