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 September 30, 2023

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 October 31, 2023, the registrant had 52,472,291 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 Quarterly 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);

•the scope, progress, results and costs of developing any product candidates we have or may develop, and conducting preclinical studies and clinical trials;

•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 retinal vein occlusion, or RVO, non-proliferative diabetic retinopathy, or NPDR, and wet age-related macular degeneration, or wet AMD, or any of our current or future product candidates, including the sufficiency of a single additional pivotal study of tarcocimab tedromer and a single BLA for wet AMD, RVO and NPDR together;

•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 any BLA submission and potential commercial launch;

•our expectations regarding enhancements and benefits of new formulations of tarcocimab, KSI-501 or other ABC Platform derived molecules;

•the timing or likelihood of regulatory filings and approvals, including the potential to achieve FDA approval of any product candidates;

•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;

i

•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;

•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;

•the impact of the unfavorable U.S. and global economic conditions 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 Quarterly Report are the property of their respective holders. Unless the context requires otherwise, references in this Quarterly 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 and KSI-501 product candidates, which are currently in clinical development for multiple indications.

•The failure of pivotal studies of tarcocimab to meet their primary efficacy endpoints may lead us to pause or 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.

•Due to the significant resources required for the development of our product candidates, and depending on our ability to access capital, we must prioritize development of certain product candidates. Moreover, we may expend our limited resources on product candidates that do not yield a successful product and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

•Our plan for the development of tarcocimab may be unsuccessful.

•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.

•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.

•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 regulatory approval processes of the FDA, EMA 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 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.

•We contract with third parties for the manufacture of materials for our product candidates and preclinical studies and clinical trials and for commercialization of any product candidates that we may develop. This reliance on third parties carries and may increase the risk that we will not have sufficient quantities of such materials, product candidates or any medicines that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

•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.

•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.

•If we fail to obtain additional financing, we may be unable to complete the development and, if approved, commercialization of our product candidates.

iii

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, Use of Proceeds, and Issuer Purchases of Equity Securities	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
	Signatures	62

iv

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)

	September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	345,668		$	190,433
Marketable securities		—			288,500
Prepaid expenses and other current assets		5,259			7,072
Total current assets		350,927			486,005
Restricted cash		6,324			6,324
Property and equipment, net		125,190			56,384
Operating lease right-of-use asset		56,479			59,369
Other assets		8,732			58,546
Total assets	$	547,652		$	666,628
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	38,589		$	9,130
Accrued and other current liabilities		23,170			33,440
Operating lease liability		9,015			9,926
Total current liabilities		70,774			52,496
Operating lease liability, net of current portion		74,461			77,807
Liability related to sale of future royalties		100,000			99,996
Other liabilities		—			162
Total liabilities		245,235			230,461
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;    0 shares issued and outstanding at September 30, 2023 and    December 31, 2022, respectively		—			—
Common stock, $0.0001 par value, 490,000,000 shares authorized    at September 30, 2023 and December 31, 2022; 52,467,291 and    52,333,850 shares issued and outstanding at September 30, 2023 and    December 31, 2022, respectively		5			5
Additional paid-in capital		1,395,427			1,329,509
Accumulated other comprehensive income (loss)		—			(1,307	)
Accumulated deficit		(1,093,015	)		(892,040	)
Total stockholders’ equity		302,417			436,167
Total liabilities and stockholders’ equity	$	547,652		$	666,628

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   September 30,						Nine Months Ended   September 30,
	2023			2022			2023			2022
Operating expenses
Research and development	$	36,188		$	61,676		$	159,669		$	211,597
General and administrative		18,312			17,802			54,278			55,716
Total operating expenses		54,500			79,478			213,947			267,313
Loss from operations		(54,500	)		(79,478	)		(213,947	)		(267,313	)
Interest income		4,536			2,484			12,836			4,054
Interest expense		(5	)		(4	)		(13	)		(14	)
Other income (expense), net		(38	)		(40	)		149			(102	)
Net loss	$	(50,007	)	$	(77,038	)	$	(200,975	)	$	(263,375	)
Net loss per common share, basic and diluted	$	(0.95	)	$	(1.47	)	$	(3.84	)	$	(5.04	)
Weighted-average shares of common stock outstanding used    in computing net loss per common share, basic and diluted		52,455,620			52,288,257			52,391,083			52,227,072
Other comprehensive income (loss)
Change in unrealized gains (losses) related to available-for-sale    debt securities, net of tax		—			(636	)		1,307			(2,505	)
Total other comprehensive income (loss)		—			(636	)		1,307			(2,505	)
Comprehensive loss	$	(50,007	)	$	(77,674	)	$	(199,668	)	$	(265,880	)

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, 2022		52,333,850	$	5	$	1,329,509	$	(1,307	)	$	(892,040	)	$	436,167
Issuance of common stock upon    exercise of stock options		1,098		—		9		—			—			9
Issuance of common stock upon    vesting of restricted stock units		9,793		—		—		—			—			—
Stock-based compensation    expense		—		—		25,980		—			—			25,980
Other comprehensive income		—		—		—		1,211			—			1,211
Net loss		—		—		—		—			(70,780	)		(70,780	)
Balances at March 31, 2023		52,344,741		5		1,355,498		(96	)		(962,820	)		392,587
Issuance of common stock upon    exercise of stock options		6,430		—		51		—			—			51
Issuance of common stock upon    vesting of restricted stock units		76,152		—		—		—			—			—
Issuance of common stock    pursuant to employee stock    purchase plan		25,840		—		131		—			—			131
Stock-based compensation    expense		—		—		25,801		—			—			25,801
Other comprehensive income		—		—		—		96			—			96
Net loss		—		—		—		—			(80,188	)		(80,188	)
Balances at June 30, 2023		52,453,163		5		1,381,481		—			(1,043,008	)		338,478
Issuance of common stock upon    vesting of restricted stock units		14,128		—		—		—			—			—
Stock-based compensation    expense		—		—		13,946		—			—			13,946
Net loss		—		—		—		—			(50,007	)		(50,007	)
Balances at September 30, 2023		52,467,291	$	5	$	1,395,427	$	—		$	(1,093,015	)	$	302,417
	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 plan		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
Issuance of common stock upon    exercise of stock options		16,636		—		90		—			—			90
Issuance of common stock upon    vesting of restricted stock units		13,198		—		—		—			—			—
Issuance of common stock upon    exercise of common stock warrants		249,699		—		—		—			—			—
Stock-based compensation    expense		—		—		26,182		—			—			26,182
Other comprehensive loss		—				—		(636	)					(636	)
Net loss		—		—		—		—			(77,038	)		(77,038	)
Balances at September 30, 2022		52,304,154	$	5	$	1,303,621	$	(2,505	)	$	(821,592	)	$	479,529

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

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Kodiak Sciences Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(200,975	)	$	(263,375	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		13,572			2,234
Stock-based compensation		65,727			80,255
Net amortization (accretion) of premium (discount) on marketable securities		(846	)		(748	)
Settlement of derivative contracts		(314	)		—
Amortization of operating lease right-of-use asset		5,711			5,458
Amortization of issuance costs		4			39
Changes in assets and liabilities:
Prepaid expenses and other current assets		6,994			(2,939	)
Other assets		410			7,198
Accounts payable		3,114			7,089
Accrued and other current liabilities		(8,263	)		5,401
Operating lease liability		(7,078	)		8,004
Net cash provided by (used in) operating activities		(121,944	)		(151,384	)
Cash flows from investing activities
Purchase of property and equipment		(13,866	)		(33,958	)
Deposits on property and equipment		(77	)		(7,787	)
Purchase of marketable securities		(49,347	)		(427,766	)
Maturities of marketable securities		340,000			66,000
Proceeds from derivative activity		314			—
Net cash provided by (used in) investing activities		277,024			(403,511	)
Cash flows from financing activities
Proceeds from issuance of common stock upon options exercise		60			1,770
Proceeds from issuance of common stock pursuant to employee stock purchase plan		131			64
Principal payments of tenant improvement allowance payable		(36	)		(36	)
Net cash provided by (used in) financing activities		155			1,798
Net increase (decrease) in cash, cash equivalents and restricted cash		155,235			(553,097	)
Cash, cash equivalents and restricted cash, at beginning of period		196,757			737,834
Cash, cash equivalents and restricted cash, at end of period	$	351,992		$	184,737
Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets
Cash and cash equivalents	$	345,668		$	178,413
Restricted cash		6,324			6,324
Total cash, cash equivalents and restricted cash in consolidated balance sheets	$	351,992		$	184,737
Supplemental disclosures of non-cash investing and financing information:
Operating lease right-of-use asset obtained in exchange for operating lease liability	$	2,668		$	(170	)
Purchase of property and equipment under accounts payable and accruals	$	27,465		$	4,320

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. 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 September 30, 2023, the Company had cash and cash equivalents of $345.7 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 and cash equivalents 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, 2022 and notes thereto, the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2023. 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, 2023, 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.

Reclassification

Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with 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. Such estimates include, but are not limited to, accrued research and development and stock-based compensation. Actual results could differ from those estimates.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Recoverability is measured by comparison of the carrying amount of the assets to the estimated undiscounted net cash flows which the assets are expected to generate. If such assets are deemed not recoverable, an impairment loss is recognized in the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. For the three months ended September 30, 2023, the Company assessed the recoverability of its long-lived assets based on the Company’s decision to wind-down the tarcocimab program following the topline results from the Phase 3 GLEAM and GLIMMER studies. The Company determined that the estimated undiscounted net cash flows which the assets are forecasted to generate exceeded the carrying amount of the assets. Therefore, no impairment loss was recognized in the period.

5

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Risks and Uncertainties

Global economic and business activities continue to face widespread macroeconomic uncertainties, including health epidemics, labor shortages, bank failures, inflation and monetary supply shifts, recession risks and potential disruptions from the geopolitical conflicts. The Company continues to actively monitor the impact of these macroeconomic factors on its financial condition, liquidity, operations, and workforce. The extent of the impact of these factors on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected timeframe, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact the Company’s business.

The Company’s future results of operations involve a number of risks and uncertainties common to clinical stage companies in the biotechnology industry. The Company’s product candidates are in development and the Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s potential drug candidates, uncertainty of market acceptance of any of the Company’s product candidates that receive regulatory approval, competition from new technological innovations, substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals, contract manufacturer and research organizations, and other suppliers.

Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that any of the Company’s product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approvals, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales.

The Company expects to incur substantial operating losses for the next several years and will need to obtain additional financing in order to complete clinical trials, launch and commercialize any product candidates for which it receives regulatory approval. There can be no assurance that such financing will be available or will be on terms acceptable by the Company.

Summary of Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2023, 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, 2022, except as noted below within the “Recent Accounting Pronouncements” section.

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 nine months ended September 30, 2023 that are of significance to the Company.

3. Accrued and Other Current Liabilities

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

	September 30, 2023		December 31, 2022
Accrued clinical trial and related costs	$	9,791	$	18,334
Accrued manufacturing and research & development costs		6,306		5,978
Accrued salaries and benefits		5,405		6,033
Accrued legal fees and professional fees		176		283
Accrued property and equipment		—		1,893
Accrued other liabilities		1,492		919
Total accrued and other current liabilities	$	23,170	$	33,440

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 September 30, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	331,478	$	—	$	—	$