Kiniksa Pharmaceuticals International, plc Class A Ordinary Shares 2026 Q3 Earnings Call

Please go ahead, sir. Thank you, operator.

Good morning, everyone, and welcome to the Kiniksa Pharmaceuticals third quarter 2026 earnings call. A press release highlighting our financial results and recent portfolio execution can be found on our website under the Investors section. As for the agenda, our Chief Executive Officer, Sanj K. Patel, will start with an introduction. From there, Ross Moat, our Chief Operating Officer, will provide an update on ARCALYST commercial execution. After that, Mark Ragosa, our Chief Financial Officer, will review our third quarter 2026 financial results. Finally, Sanj will return at the end of the call to share closing remarks and kick off the Q&A session, for which John Paolini, Kiniksa's Chief Medical Officer, will also be on the line.

Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from such statements. A review of these statements and risk factors can be found on this slide, as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as of the date of this presentation, and we undertake no obligation to update such statements except as required by law. With that, I'll turn it over to Sanj.

Thanks, Jonathan, and good morning or good afternoon, everyone. Over the last 10, 11 years, we've built this company through multiple stages of growth, and today, I'm as excited as ever about what the team and I can accomplish together in the years ahead. Kiniksa continues to build a leading IL-1 alpha and beta inhibition franchise driven by the commercialization of ARCALYST in recurrent pericarditis, as well as our progress with KPL-387 and KPL-1161. This morning, we announced via a press release that we've raised our full-year revenue guidance to between $1.045 billion and $1.050 billion. We continue to see robust growth with ARCALYST in recurrent pericarditis, driven by strong execution and strategic investments across the business. On the clinical side, we're excited about the progress of KPL-387 and KPL-1161. The pivotal phase III study with KPL-387 continues to enroll and dose patients.

We announced today that we expect data from this trial in the second half of 2027. The team and I are really looking forward to potentially launching this drug in the 2028, 2029 timeframe. In addition to providing an important treatment option for patients with recurrent pericarditis, we believe KPL-387 could help grow the market by enabling a once-monthly subcu dosing. We are also on track to have KPL-1161, our quarterly IL-1 alpha and beta inhibitor, in a phase I clinical trial by the end of this year. Importantly, Kiniksa's robust financial profile allows us to continue to invest in penetrating the recurrent pericarditis market and growing the IL-1 alpha and beta inhibition franchise whilst also pursuing additional value-creating opportunities. In the third quarter, we saw a continuation of strong ARCALYST momentum with Q3 revenue of $286 million.

The penetration rate into the annual population of 14,000 multiple recurrence patients increased to 23% as of the end of Q3. As shown by the increased breadth and depth of prescribing over time, adoption of IL-1 alpha and beta inhibition continues to expand among the approximately 40,000 recurrent pericarditis patients each year. The underlying fundamentals that propelled our commercial success remain strong. Since launch, we have observed robust payer approval, strong patient compliance, and greater appreciation of the need to treat throughout the multi-year duration of the disease. Underpinning this growth is strong execution by our commercial organization and data-driven investments in ARCALYST. Our AI-supported patient identification initiatives and targeted direct consumer campaign, Heart's Home, have positively contributed to growing patient and physician awareness of recurrent pericarditis and the important role of IL-1 alpha and beta inhibition in controlling this debilitating disease.

As you have heard, we now expect ARCALYST to achieve over $1 billion in revenue in 2026 and we look forward to continuing to bring this blockbuster drug to more patients suffering from this debilitating disease. In order to grow the recurrent pericarditis market over the next several years, we plan to drive greater adoption in both the 14,000 multiple recurrence patients annually and the additional 26,000 patients annually that are experiencing their first recurrence. Kiniksa is executing against its strategy to help more patients drive more ARCALYST growth and advance KPL-387 and KPL-1161. This trajectory will help put the company on a path to having multiple commercial products, continued strong and profitable growth, and the flexibility to invest in future value creation. I can tell you that the team and I will not rest until we have helped many, many more patients. Now our President and COO, Ross Moat.

Thank you, Sanj. As you have heard, we are pleased with the continued strength of our commercial performance with ARCALYST, and we are even more excited by the substantial growth opportunity ahead. We continue to be highly focused on further increasing the penetration rate into the many thousands of recurrent pericarditis patients and continuing to evolve the treatment paradigm towards interleukin-1 alpha and beta inhibition. As illustrated on the left side of this slide, physicians continue to report an increasing consideration of ARCALYST earlier in the disease course, including at the first recurrence. Additionally, we also see a growing appreciation for ARCALYST to be utilized earlier in the line of therapy, meaning after NSAIDs and colchicine, and importantly, prior to corticosteroids, as ratified in the 2025 American College of Cardiology Concise Clinical Guidance for Recurrent Pericarditis.

In fact, approximately 50% of physicians surveyed now support this treatment approach, representing a doubling from levels over the last three years prior to the publication of this independent guidance. As we continue to build and lead this market, our team are laser-focused on value-driven investments that aim to increase market penetration and help many more patients. Increasing education and awareness on recurrent pericarditis, ARCALYST, and the new treatment paradigm remain critical components of our strategy, and we've enhanced our capabilities through the use of AI and machine learning to reach a larger audience. On the healthcare professional side, we've done this through improving our data sources to inform us not only which healthcare professionals we should be seeing, but importantly, when we should be seeing them. On the patient side, we've seen encouraging early indicators from our Heart's Home direct-to-consumer campaign.

Based on this initial traction, we plan to expand the campaign with additional content and outreach initiatives aimed at empowering more patients to engage with their healthcare professionals about ARCALYST. As a reminder, Heart's Home is a highly targeted DTC campaign where we've innovated from traditional DTC by using AI to produce and deliver a campaign that's effective for a rare disease audience. This campaign is aimed at educating an enriched population of likely recurrent pericarditis patients who are currently not taking ARCALYST and empowering them to discuss ARCALYST with their healthcare provider. As an early indicator of the impact of this campaign, we've seen a twelvefold increase in the traffic to our ARCALYST website compared to baseline levels prior to the campaign. Additionally, there's been an eightfold increase with engaged sessions, meaning visits where the individual spends meaningful time on the website or interacts with the content.

More importantly, approximately 55% of patients who saw the ad strongly agreed that they are motivated to speak with their healthcare provider about ARCALYST. All of these indicators are strong signals that our digital strategy is reaching the right audience and is empowering action. As this disease has a very high annual incident rate of patients coming into the labeled indication, this DTC initiative is nicely supplementing our robust execution in the field and helps us to address the substantial opportunity that we have ahead to help many more patients. As previously mentioned, our interleukin-1 alpha and beta inhibition franchise is growing, is profitable, and has significant opportunity in the months and years ahead. With that, I'll turn the call over to Mark to review our financial results.

Thanks, Ross. Our third quarter delivered continued ARCALYST sales growth, advancement of KPL-387 and KPL-1161 development, and a solid financial position. This morning, I'll review our financial results and key performance drivers.

Detailed financial information is available in today's press release. Starting with the income statement, ARCALYST revenue grew 58% year-over-year to $286 million in the third quarter, driven by continued gains in patient and physician adoption. Operating expenses increased year-over-year, driven by higher ARCALYST revenue, which resulted in additional cost of goods sold and collaboration expenses, advancement of KPL-387 development, which drove additional R&D investment, and support of ARCALYST commercialization to reach more patients, which led to additional SG&A investment. Operating income rose to $54.2 million and net income to $47.3 million, both up significantly year-over-year. Turning to the calculation of ARCALYST collaboration profit, which drives total collaboration expenses on our income statement. ARCALYST collaboration profit increased 67% year-over-year to $211.6 million, outpacing sales growth and reflecting disciplined commercial investment.