Kintor Shifts Focus to Cosmetic Market with KX-826 After Drug Trial Setbacks

Suzhou biotech startup Kintor Pharmaceutical Ltd. (9939.HK) pitched investors on Proxalutamide, a medication for treating breast and prostate cancer, and Pyrilutamide, a medication for treating acne and male pattern baldness, when it secured $240 million for its 2020 Hong Kong IPO. It appears that the corporation is now betting on the latter medication as it looks to promote the medicine through a number of over-the-counter medications using a less stringent, low-regulation approach.This is the main lesson to be learned from Kintor's revelation last week about its strategy for bringing one of its two flagship Pyrilutamide medications, KX-826, to market in an effort to bring in its first money. The drug's approval was granted despite Kintor's disclosure in November of last year that KX-826 had underperformed a placebo group.

This prompted the business to forgo its previous strategy of obtaining clearance for the therapy as a licenced medicine and instead pursue cosmetic treatment.Many over-the-counter medications, such as a variety of health supplements, frequently follow this path since their efficacy is subject to significantly less regulatory scrutiny.The Personal Care Products Council, situated in the United States, is in charge of overseeing KX-826's approval as an International Nomenclature Cosmetic Ingredient (INCI), according to Kintor's most recent release. At first, investors greeted the news with great enthusiasm, driving up shares of Kintor by as much as 11% in early trading the next day. However, the fervour soon subsided, and the stock ended the day up a rather modest 1.9%.

Kintor's shares have plummeted to almost nothing after its initial public offering (IPO). The company has suffered significant losses when their Proxalatumide medication failed to meet clinical trials for prostate cancer and anti-Covid-19. The company's market worth has decreased over that period from over $1 billion to barely $60 million. It has survived entirely on funds raised from its IPO and three prior investment rounds in 2021 and 2022 during this entire time, failing to produce any income.According to Kintor, it has just introduced its over-the-counter KX-826 hair loss medication to the global market." It said that the product will "provide a solid stream of revenue and cash," yet it did not include any possible revenue and cash” flow for the company.

It's hardly surprise that Kintor placed a strong focus on cost containment in its most recent annual report, given its cash-burning, revenue-negative status. Apart from reducing its research and development expenditures by two-thirds in the previous year, the company also announced that it will carry out another round of workforce reductions. Salaries and other administrative costs decreased by 34.6% to 86.4 million yuan ($12 million). At the end of 2023, the firm reported a loss of 1 billion yuan, but still had 110.5 million yuan in unutilized bank facilities and 456.3 million yuan in cash.

Kintor is focused on cosmetic uses, which often don't need permission from most medication regulators. This is in line with other businesses that have launched products on the market that make claims to address male-pattern baldness.