Kadmon Provides Business Update and Reports First Quarter 2017 Financial Results

NEW YORK–(BUSINESS WIRE)– Kadmon Holdings, Inc. (NYSE:KDMN) (“Kadmon” or the “Company”) today
provided a business update and reported financial and operational
results for the three months ended March 31, 2017.

“We have further streamlined our operations and reduced costs, allowing
us to focus our resources towards rapidly advancing our clinical
pipeline,” said Harlan W. Waksal, M.D., President and Chief Executive
Officer at Kadmon. “We look forward to executing on our multiple
clinical milestones in the second half of 2017, which include data
readouts from our ongoing Phase 2 studies evaluating our ROCK2
inhibitor, KD025.”

Clinical and Research Update

KD025

The Company expects to report data from its three ongoing Phase 2
clinical trials as follows:

• Open-label, dose-finding clinical trial in chronic graft-versus-host
  disease – initial data expected Q3 2017
• Randomized, open-label clinical trial in idiopathic pulmonary fibrosis
  – initial data expected Q4 2017
• Randomized, placebo-controlled clinical trial in moderate to severe
  psoriasis – full data expected Q4 2017

Tesevatinib

• Dose-finding Phase 1 clinical trial in autosomal recessive polycystic
  kidney disease – expected to initiate Q2 2017
• Randomized, double-blind, placebo-controlled Phase 2 clinical trial in
  autosomal dominant polycystic kidney disease – expected to initiate Q3
  2017
• Enrollment continues in the Company’s ongoing Phase 2 clinical trials
  in glioblastoma and in non-small cell lung cancer with brain or
  leptomeningeal metastases.

KD034

• In March 2017, the Company submitted its second Abbreviated New Drug
  Application (ANDA) to the U.S. Food and Drug Administration for its
  generic trientine hydrochloride formulation for the treatment of
  Wilson’s disease. The Company submitted its first ANDA for its
  trientine hydrochloride formulation in December 2016.

Operations Update

Kadmon continues to implement operational changes to increase efficiency
and to prioritize the development of its clinical pipeline and drug
discovery efforts:

• Kadmon has streamlined its operations to reduce overall selling,
  general and administrative (SG&A) expenses:
  • Since January 2017, the Company has reduced its workforce by 14
    percent, to 102 employees.
  • As a result of these and other actions, Kadmon expects to reduce
    its cash burn by approximately $5 million over the next 12 months.
• Together with its lending syndicate, Kadmon has amended its 2015
  Credit Agreement, which allows the Company to, among other things,
  defer the capital raise requirement of $17.0 million to the end of Q4
  2017, and defer mandatory monthly principal payments until January 31,
  2018, enabling the Company to direct all of its financial resources to
  research and clinical development. In addition, the Company is able to
  include non-dilutive funding from, or arising out of, one or more
  strategic transactions in satisfaction of the future capital raising
  covenant.

Financial Results

First Quarter 2017 Results

Loss from operations was $13.9 million for the three months ended
March 31, 2017, compared to $20.5 million for the same period in 2016.

Revenue was $5.6 million for the three months ended March 31, 2017,
compared to $9.7 million for the same period in 2016. The Company
expects sales of its ribavirin portfolio of products to contribute
insignificantly in 2017 and beyond.

Research and development expenses were $8.4 million for the three months
ended March 31, 2017, compared to $9.1 million for the same period in
2016.

SG&A expenses were $10.1 million for the three months ended March 31,
2017, compared to $23.7 million for the same period in 2016. The
decrease in SG&A expenses for the first quarter of 2017 is primarily
related to a decrease in salary and salary-related expense of $3.4
million, consulting expense related to an advisory agreement of $2.3
million and amortization of intangible assets of $5.6 million.

Liquidity and Capital Resources

As of March 31, 2017, Kadmon’s cash and cash equivalents totaled $43.0
million, compared to $36.1 million as of December 31, 2016. In March
2017, Kadmon completed a private placement equity financing pursuant to
which Kadmon received gross proceeds of approximately $23 million from
the issuance of 6,767,855 shares of Kadmon’s common stock, at a price of
$3.36 per share, and warrants to purchase 2,707,138 shares of Kadmon’s
common stock at an initial exercise price of $4.50 per share for a term
of 13 months from the date of issuance. If these warrants are exercised,
the Company would receive approximately $12.2 million.

About Kadmon Holdings, Inc.

Kadmon Holdings, Inc. is a fully integrated biopharmaceutical company
developing innovative products for significant unmet medical needs. We
have a diversified product pipeline in autoimmune and fibrotic diseases,
oncology and genetic diseases.

Forward Looking Statements

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange Act of
1934, as amended. All statements, other than statements of historical
fact, included or incorporated in this press release, including
statements regarding the Company’s strategy, future operations,
collaborations, intellectual property, cash resources, financial
position, future revenues, projected costs, prospects, clinical trials,
plans, and objectives of management, are forward-looking statements. The
words “believes,” “anticipates,” “estimates,” “plans,” “expects,”
“intends,” “may,” “could,” “should,” “potential,” “likely,” “projects,”
“continue,” “will,” and “would” and similar expressions are intended to
identify forward-looking statements, although not all forward-looking
statements contain these identifying words. Kadmon cannot guarantee that
it will actually achieve the plans, intentions or expectations disclosed
in its forward-looking statements and you should not place undue
reliance on the Company’s forward-looking statements. There are a number
of important factors that could cause Kadmon’s actual results to differ
materially from those indicated or implied by its forward-looking
statements. We believe that these factors include, but are not limited
to, (i) the initiation, timing, progress and results of our preclinical
studies and clinical trials, and our research and development programs;
(ii) our ability to advance product candidates into, and successfully
complete, clinical trials; (iii) our reliance on the success of our
product candidates; (iv) the timing or likelihood of regulatory filings
and approvals; (v) our ability to expand our sales and marketing
capabilities; (vi) the commercialization of our product candidates, if
approved; (vii) the pricing and reimbursement of our product candidates,
if approved; (viii) the implementation of our business model, strategic
plans for our business, product candidates and technology; (ix) the
scope of protection we are able to establish and maintain for
intellectual property rights covering our product candidates and
technology; (x) our ability to operate our business without infringing
the intellectual property rights and proprietary technology of third
parties; (xi) costs associated with defending intellectual property
infringement, product liability and other claims; (xii) regulatory
developments in the United States, Europe and other jurisdictions;
(xiii) estimates of our expenses, future revenues, capital requirements
and our needs for additional financing; (xiv) the potential benefits of
strategic collaboration agreements and our ability to enter into
strategic arrangements; (xv) our ability to maintain and establish
collaborations or obtain additional grant funding; (xvi) the rate and
degree of market acceptance of our product candidates; (xvii)
developments relating to our competitors and our industry, including
competing therapies; (xviii) our ability to effectively manage our
anticipated growth; (xix) our ability to attract and retain qualified
employees and key personnel; (xx) our ability to achieve anticipated
cost savings and other benefits from our efforts to streamline our
operations and to not harm our business with such efforts; (xxi) our
expectations regarding the period during which we qualify as an emerging
growth company under the JOBS Act; (xxii) statements regarding future
revenue, hiring plans, expenses, capital expenditures, capital
requirements and share performance; (xxiii) litigation, including costs
associated with prosecuting or defending pending or threatened claims
and any adverse outcomes or settlements, whether or not covered by
insurance; (xxiv) our expected use of proceeds from our initial public
offering, March 2017 private placement and other sources of liquidity;
(xxv) the future trading price of the shares of our common stock and
impact of securities analysts’ reports on these prices; and/or (xxvi)
other risks and uncertainties. More detailed information about Kadmon
and the risk factors that may affect the realization of forward-looking
statements is set forth in the Company’s filings with the U.S.
Securities and Exchange Commission (the “SEC”), including, without
limitation, the Company’s prospectus filed pursuant to Rule 424(b) under
the Securities Act with the SEC on July 27, 2016 and the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2016.
Investors and security holders are urged to read these documents free of
charge on the SEC’s website at www.sec.gov.
The Company assumes no obligation to publicly update or revise its
forward-looking statements as a result of new information, future events
or otherwise.

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