ProKidney approaches pivotal research, funding crossroads for drug therapy

Out of time vs. right on time.

ProKidney Corp., a Winston-Salem biopharmaceutical manufacturer, is fast approaching a crossroads in its decades-long pursuit of breakthrough drug therapies for patients experiencing advanced chronic kidney disease.

After the headquarters departures of BB&T Corp., Krispy Kreme Inc. and Wachovia Corp., as well as the sale to foreign owners of HanesBrands Inc. and Reynolds American Inc., ProKidney is the lone mainstream publicly traded company based in Winston-Salem.

The Food and Drug Administration authorized in July an accelerated approval process with the company's rilparencel drug.

The company has expanded from 80 to more than 250 employees over the past four years. The company is hiring in the areas of clinical development, quality control, manufacturing and biostatics "to support our ongoing clinical trials."

ProKidney's drug therapy - based on research dating back to the 1990s and the ill-fated Tengion Corp. initiative - is being designed "to demonstrate the potential to preserve kidney function in patients with advanced chronic kidney disease and diabetes."

Specifically, the FDA said ProKidney's late-stage Phase 3 PROACT 1 study - with a planned enrollment of up to 360 patients - can serve as the surrogate endpoint and primary basis for a biologics license application under the accelerated approval pathway.

In layman's terms, the goal is for rilparencel to delay for as long as possible - weeks, months, years - the need for patients to go on dialysis, if at all.

"What we're hoping to offer is not a cure," said Dr. Bruce Culleton, a nephrologist who took over as ProKidney's president and chief executive in November 2023.

"It's just slowing the process and giving people potentially more time, more better quality of life.

"Because time gives people hope that dialysis might be a year or two away or 6 months away, that they actually may stay off dialysis, or maybe find a kidney donor as their progression slows."

There's an estimated 2 million patients with chronic kidney disease in the U.S. alone, most with Type 2 diabetes.

"Those patients are those who have lost 70% to 80% of their kidney function," Culleton said.

"They are seeing kidney specialists who are having conversations about 'what type of dialysis do you want? or 'do you have a family friend or relative who can give you a transplant?' "

Seeking Alpha analyst Edmund Ingham said in a July 2025 investor note that if rilparencel gains FDA approval as an effective treatment, it could produce up to $900 million in annual revenue for ProKidney.

"FDA accelerated approval is possible, but pivotal Phase 3 data seemingly won't arrive until 2027," Ingham said.

"Despite the breakthrough, I remain cautious about ProKidney stock due to likely (stock) dilution, a long wait for data, and lingering doubts about Phase 3 success."

'In the red zone'

Culleton grins as he uses football symbolism - coming from being a New England Patriots fan - to describe ProKidney's progress.

During a tour last week of ProKidney's manufacturing and headquarters operations in Westpoint Business Park, Culleton described the company as being "in the red zone at the 5- to 10-yard line" toward gaining FDA approval of rilparencel.

That's compared with being at the 50-yard line when ProKidney acquired the research and assets of a bankrupt Tengion in March 2015.

Tengion was best known for licensing some of the research of Dr. Anthony Atala, its founder, who runs the Wake Forest Institute for Regenerative Medicine. Its presence in Winston-Salem was in large part to be close to Atala.

Culleton said entering the end zone signifies "finishing the study in 2027 and having an agreement with the FDA."

"We also need to put all the data from the study and all the data from our manufacturing into a biological license application to the FDA. Our goal right now is to submit at the end of 2027 and hear back from the FDA in the latter part of 2028.

"If all goes well, it's possible that we could be treating patients in late 2028 or early 2029."

While waiting nearly three years to achieve full fruition of rilparencel seems long, Culleton said that "if you look at the overall context, it takes 10, 15, 20 years to bring a new drug to market; we're actually really close."

"Our drug is first in class, there's nothing even close to it from a development perspective and cell therapy in terms of preserving remaining kidney function and keeping them off dialysis."

Culleton said patients who could benefit from rilparencel typically are down to 20% to 30% kidney function.

"When patients get to a loss of 90% kidney function, that's when most start on dialysis," Culleton said. "Some people receive a kidney transplant where they are 20% to 25% kidney function.

"So we're in that space where transplant and dialysis is definitely a discussion item, and to the 600,000 to 700,000 who have kidney failure."

Tengion background

Tengion was founded in 2003 when Scheer and Co. Inc., a life science venture-capital company in Connecticut, licensed some of Atala's research.

At its peak, Tengion had 52 employees, most in what is now downtown Winston-Salem's Innovation Quarter.

However, after gaining $30 million its initial public offering in April 2010, Tengion had been in a race for getting its kidney and bladder research into clinical trials before running out of financial resources.

Up until its December 2014 bankruptcy filing, Tengion had enrolled patients in its Phase I clinical trial for a neo-kidney augment, with a goal of 15 in Sweden and 12 in the United States by the first half of 2015. Tengion also had completed in 2014 the enrollment of patients for Phase I of its neo-urinary clinical trial.

The promise held in Tengion's research persuaded investors to keep pouring money into the company, but at the steep cost of mortgaging its future through more than $33.4 million in debt financing.

The final blow came when the company failed to secure enough shareholder support for increasing the number of authorized shares from 10 billion to 20 billion.

"The story with Tengion is common in biotech," Culleton said.

"Great idea. An early drug product that that looks like it works, tested, a lot of people have confidence.

"For whatever reason, they're not able to fund it, and that might have been the external market at that time looking at investment opportunities beyond biotech."

Culleton recognizes that ProKidney is running a similar race to Tengion.

ProKidney's fiscal 2025 loss was just under $67 million, compared with a loss of $61.2 million in 2024 and a loss of $35.5 million in 2023 as operating and research expenses climbed.

ProKidney listed $893,000 in revenue during fiscal 2025, compared with $76,000 in 2024 revenue.

However, ProKidney reported having $270 million in cash, cash equivalents and marketable securities as of Dec. 31 - enough to fund operating and capital expenses into mid-2027.

Culleton said ProKidney has investors who are taking a long-term approach to their funding of the company.

ProKidney's 52-week share price range is 54 cents to $7.13, though it has been in the $1.60 to $2.50 range much of 2026.

JPMorgan analyst Anupam Rama said in April that "data from the ongoing mechanism of action studies for rilparencel expected this year could serve as a potential tailwind for ProKidney shares, though balanced by the need to address the financing overhang ahead of the second quarter PROACT 1 pivotal data update."

"Cash runway is expected into mid-2027. Reiterate neutral rating on shares, balanced by the long-term potential of rilparencel with extended timelines to pivotal data in the second quarter of 2027 and financing overhang."

Growth goals

The annual losses have not deterred ProKidney, and its investors, from moving forward with growth, both in terms of infrastructure and workforce.

In September 2023, ProKidney confirmed expanding its Winston-Salem laboratory, manufacturing and office operations by making a $21 million capital investment and creating 50 jobs by 2027.

The company will add combined about 53,000 square feet at its Empire and Westpoint drives locations with a breakdown of $15 million on building improvements, and $6 million in equipment.

Culleton said that if its drug therapy gains FDA authorization, "we're going to have to raise some more capital to expand our manufacturing because there's going to be a clear need for patients to get this product."

Another football analogy that has been applied to temper ProKidney's expectations is outkicking their punt coverage, meaning spending too much on capital investments that their revenue and investor resources can support.

Those concerns were a primary reason why ProKidney backed away from an ambitious manufacturing expansion in Greensboro.

In June 2023, ProKidney Acquisition Co. LLC paid $25.5 million for a 22-acre Greensboro site located within 73 Business Center, a Class A industrial park off Greenbourne Drive near Interstate 73.

The goal was opening a 330-job, $458 million manufacturing plant in the 210,551-square-foot speculative building. ProKidney had projected beginning production in the Greensboro plant by the end of 2027.

However, ProKidney sold the property in November to a Kansas City commercial and residential real-estate developer for $19.1 million.

A key price of ProKidney's plans for the Greensboro biomanufacturing plant was gaining the approval of the Greensboro City Council for $13 million in performance-based incentives for the company, and the Guilford County Board of Commissioners for more than $15 million in similar incentives.

None of those incentives were paid out.

Meanwhile, in November 2024, ProKidney spent $22.5 million in cash to purchase two industrial buildings in Winston-Salem's West Point Business Park, where it has been leasing space in a combined 180,000 square feet.

Culleton said the decision to expand at its current site came in part when Collins Aerospace, the previous occupant, chose to downsize its local operations out of the buildings.

"The scale of manufacturing is about the same as what we have here, and what we were able to buy here met our needs. We felt it would be so much easier, both from a regulatory perspective and a personnel perspective, for us to buy it next door."

"What we have now is manufacturing space is good enough for us to get through FDA approval and limited capacity for commercial launch of the drug," he said. "The additional space allows us to not disrupt what we're doing from a manufacturing perspective here."

Spreading local wings

Culleton said he and other ProKidney officials are going to be more intentional in reaching out collaboratively to the local life-science community, as well as Forsyth Technical Community College to establish a workforce training program.

"We are taking about six months of internal training for new employees," Culleton said.

"What we'd like to do is involve Forsyth Tech in training so that when a prospective new employee is through its training, we have cut our training time requirements in half, if not more."

Clean room work is not for everyone, Culleton acknowledges.

Some clinical trial processes require being in a high-tech sterile room with a head-to-toe biohazard safety suit on for a typical four-hour shift before they rotate out.

"As we expand, we're going to need Forsyth Tech's manufacturing-type programs better aligned with the training that we need here so that when they graduate, they're actually ready to go," Culleton said.

"It's on our radar to do, but we can't expand at the level that makes sense to fully involve Forsyth Tech until we get FDA approval."

In terms of what message ProKidney wants to send to the local community, Culleton said "we're in late state development in cell therapy development with a first-in-class drug therapy and 250 passionate employees who are aligned to one purpose - to give patients and their loved ones hope for the future."

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