Kadmon Holdings, LLC


Kadmon is a fully integrated biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of significant unmet medical need. The Company is developing product candidates within autoimmune and fibrotic diseases, oncology and genetic diseases. The Company claims” We leverage our multi-disciplinary research and clinical development team members, who prior to joining Kadmon had brought more than 15 drugs to market, to identify and pursue a diverse portfolio of novel product candidates, both through in-licensing products and employing our small molecule and biologics platforms. We utilize our advanced understanding of the molecular mechanisms of disease to establish development paths for disease areas where significant unmet medical needs exist”.

Kadmon is publicly listed, with the ticker KDMN.

BDC Credit Reporter View

There is only BDC with exposure to the Company and that’s PennantPark Investment (PNNT), which has been invested since 2011. At that point Kadmon was a private company. A couple of other BDCs have come and gone as lenders and investors over the years. At one point – before the Company went public in 2016 – PNNT had a first lien loan outstanding but that’s been repaid. However since going public at $10.0 a share, Kadmon’s stock price has dropped to just $2.06 at time of writing. As a result, PNNT’s investment position – all in common stock – has been written down for several quarters in a row as Kadmon seeks to become profitable. As of June 2018, the Company – as is common with smaller pharmaceutical companies of this kind – was unprofitable. However a recent capital raise meant cash on the balance sheet had doubled, to $131mn, suggesting no immediate liquidity problems. The departure of the CFO on October 24, 2018 and the earlier resignation of several directors may or may not be a red flag. Given that this is not either a very large or income producing investment for PNNT and – at June 2018 – was written down to a fair value of $1.0mn means there will be little impact on the BDC either way. 

Updated: October 25, 2018