What changed in this filing

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Item 9A. Controls and Procedures

2025-02-25 compared with 2024-02-28 · 487 added, 374 removed, 962 unchanged (47% of the section changed)

13 unchanged sentences

Trading Arrangements.

During the fiscal quarter ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “ non -Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

The following table shows the “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangements” (as each term is defined in Item 408(a) of Regulation S-K) adopted, amended or terminated by our directors and officers during the three months ended December 31, 2024:

Trading Arrangement

Effective Date

Non Rule 10b5-1

Scheduled Expiration Date of Trading Plan (1)

Maximum Shares Subject to Trading Plan

SVP, Chief Commercial Officer

November 13, 2024

April 17, 2026

(1) A trading arrangement may expire on an earlier date if all contemplated transactions are completed before such trading arrangement’s expiration date, upon termination by broker or the holder of the trading arrangement or as otherwise provided in the trading arrangement.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

24 unchanged sentences

Exhibit Description

Memorandum of Association of Kiniksa Pharmaceuticals, Ltd.

Amended and Restated Bye-Laws of Kiniksa Pharmaceuticals, Ltd.

Specimen Share Certificate evidencing the Class A common shares

Articles of Association of Kiniksa Pharmaceuticals International, plc

Specimen Share Certificate evidencing the Class A Ordinary Shares

Second Amended and Restated Investors’ Rights Agreement, dated as of February 9, 2018

Description of Kiniksa Pharmaceuticals, Ltd.

Description of Kiniksa Pharmaceuticals International, plc Securities

Asset Purchase Agreement, dated September 7, 2016, by and between the Registrant and Biogen MA Inc., as amended

19 unchanged sentences

Clinical Supply Agreement, dated as of September 27, 2017, by and between the Registrant and Regeneron Pharmaceuticals, Inc.

Master Services Agreement, dated June 25, 2024, by and between Kiniksa Pharmaceuticals (UK), Ltd.

and Samsung Biologics Co., Ltd.

Product Specific Agreement, dated June 25, 2024, by and between Kiniksa Pharmaceuticals (UK), Ltd.

and Samsung Biologics Co., Ltd.

Sublease Agreement, dated as of March 13, 2018, by and between Kiniksa Pharmaceuticals Corp.

11 unchanged sentences

Amended and Restated Employment Agreement, dated as of May 29, 2018, by and between Kiniksa Pharmaceuticals Corp.

Employment Agreement, effective as of April 1, 2021, by and between the Company and Mark Ragosa

Amended and Restated Employment Agreement, effective as of January 3, 2022, by and between Eben Tessari and Kiniksa Pharmaceuticals Corp.

Employment Agreement, effective as of January 1, 2025, by and between Kiniksa Pharmaceuticals Corp.

Employment Agreement, effective as of January 1, 2025, by and between the Company and Mark Ragosa

Employment Agreement, effective as of January 1, 2025, by and between Eben Tessari and Kiniksa Pharmaceuticals Corp.

Change in Control Agreement, effective as of January 1, 2025, by and between Michael Megna and Kiniksa Pharmaceuticals Corp.

Amended and Restated Employment Agreement, effective as of February 1, 2022, by and between Ross Moat and Kiniksa Pharmaceuticals (UK), Ltd.

Letter Agreement, dated as of February 1, 2022, by and between Ross Moat and Kiniksa Pharmaceuticals, Ltd.

Employment Agreement, effective as of April 1, 2021, by and between Arian Pano and Kiniksa Pharmaceuticals Corp.

Separation Agreement, effective as of February 3, 2022, by and between Arian Pano and Kiniksa Pharmaceuticals Corp.

Form of Indemnification Agreement for Non Fund Designated Directors

Form of Indemnification Agreement for Fund Designated Directors

Employment Agreement, effective as of January 1, 2025, by and between Kiniksa Pharmaceuticals Corp.

and Ross Moat

Consulting Agreement by and between Kiniksa Pharmaceuticals International, plc and Dr.

Form of Indemnification Agreement for Directors

Form of Indemnification Agreement for Officers

2015 Equity Incentive Plan, as amended, and form of share option grant notice and option agreement thereunder

2018 Incentive Award Plan, and the form of share option grant notice and option agreement, form of restricted share grant notice and restricted share agreement, and form of restricted share unit grant notice and restricted share unit agreement thereunder

2015 Equity Incentive Plan

2018 Incentive Award Plan and forms of award agreements thereunder

2018 Incentive Award Plan;

Sub Plan for UK Employees, and the form of share option grant notice for UK participants

Form of Restricted Share Unit Grant Notice and Restricted Share Unit Agreement Thereunder for UK Participants under the 2018 Incentive Award plan;

Sub-Plan for UK Employees

2018 Incentive Award Plan forms of share option grant notice and share option agreement for German participants, restricted share grant notice and restricted share agreement for German participants, and restricted share unit grant notice and restricted share unit agreement for German participants

2018 Incentive Award Plan forms of share option grant notice and share option agreement for Swiss participants, restricted share grant notice and restricted share agreement for Swiss participants, and restricted share unit grant notice and restricted share unit agreement for Swiss participants

Subplan for UK Employees and forms of award agreements thereunder

2018 Incentive Award Plan;

Forms of option grant notice and option agreement for German participants, restricted share grant notice and restricted share agreement for German participants, and restricted share unit grant notice and restricted share unit agreement for German participants

2018 Incentive Award Plan forms of option grant notice and option agreement for Swiss participants, restricted share grant notice and restricted share agreement for Swiss participants, and restricted share unit grant notice and restricted share unit agreement for Swiss participants

Form of 2024 Performance Share Unit Grant Notice and 2024 Performance Share Unit Award Agreement

2018 Employee Share Purchase Plan

Offering Document under the 2018 Employee Share Purchase Plan (effective July 1, 2019)

Offering Document under the 2018 Employee Share Purchase Plan (effective January 1, 2021)

Kiniksa Pharmaceuticals, Ltd.

Rilonacept Long-Term Incentive Plan

Performance Restricted Share Unit and Performance Cash Award Grant Notice and Agreement under the Rilonacept Long-Term Incentive Plan

Restricted Share Unit Grant Notice and Agreement under the Rilonacept Long-Term Incentive Plan

Forms of Performance Restricted Share Unit and Performance Cash Award Grant Notice and Performance Restricted Share Unit and Performance Cash Award Agreement thereunder and Restricted Share Unit Grant Notice and Restricted Share Unit Agreement thereunder for UK participants and German participants under the Rilonacept Long-Term Incentive Plan

Offering Document under the 2018 Employee Share Purchase Plan

Agreement for the Provision of Depositary Services and Custody Services, dated as of June 28, 2024, in respect of Kiniksa Pharmaceuticals International, plc A Depositary Receipts and A1 Depositary Receipts among Computershare Trust Company, N.A., Kiniksa Pharmaceuticals International, plc and Holders of A Depositary Receipts and A1 Depositary Receipts

Agreement for the Provision of Depositary Services and Custody Services, dated as of June 28, 2024, in respect of Kiniksa Pharmaceuticals International, plc B Depositary Receipts and B1 Depositary Receipts among Computershare Trust Company, N.A., Kiniksa Pharmaceuticals International, plc and Holders of B Depositary Receipts and B1 Depositary Receipts

Non-Employee Director Compensation Program

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Indicates management contract or compensatory plan

Confidential treatments of certain provisions has been granted by the SEC pursuant to Rule 406 under the Securities Act of 1933, as amended

Confidential treatment of certain provisions has been granted by the SEC pursuant to Rule 406 under the Securities Act of 1933, as amended

Portions of the exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv)

2 unchanged sentences

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KINIKSA PHARMACEUTICALS, LTD.

KINIKSA PHARMACEUTICALS INTERNATIONAL, PLC

February 25, 2025

14 unchanged sentences

February 25, 2025

/s/ Richard S.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Kiniksa Pharmaceuticals, Ltd.

To the Board of Directors and Shareholders of Kiniksa Pharmaceuticals International, plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Kiniksa Pharmaceuticals, Ltd.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income (loss), of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Kiniksa Pharmaceuticals International, plc and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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We have served as the Company’s auditor since 2016.

KINIKSA PHARMACEUTICALS, LTD.

KINIKSA PHARMACEUTICALS INTERNATIONAL, PLC

CONSOLIDATED BALANCE SHEETS

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Accounts receivable, net

Contract asset

Prepaid expenses and other current assets

8 unchanged sentences

Accounts payable

Accrued collaboration expenses

Accrued expenses

10 unchanged sentences

Shareholders’ equity:

Class A common shares, par value of $ 0.000273235 per share;

35,781,373 shares and 34,750,560 shares issued and outstanding as of December 31, 2023 and 2022, respectively

Class B common shares, par value of $ 0.000273235 per share;

Class A ordinary shares, par value of $ 0.000273235 per share;

41,881,319 shares and 35,781,373 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Class A1 common shares, $ 0.000273235 par value;

Class B ordinary shares, par value of $ 0.000273235 per share;

1,795,158 shares issued and outstanding as of December 31, 2024 and 2023

Class A1 ordinary shares, $ 0.000273235 par value;

12,781,964 shares and 16,826,468 issued and outstanding as of December 31, 2024 and 2023, respectively

Class B1 common shares, $ 0.000273235 par value;

Class B1 ordinary shares, $ 0.000273235 par value;

16,057,618 shares issued and outstanding as of December 31, 2024 and 2023

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Accumulated deficit

2 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

KINIKSA PHARMACEUTICALS, LTD.

KINIKSA PHARMACEUTICALS INTERNATIONAL, PLC

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

13 unchanged sentences

Net income (loss)

Net income (loss) per share attributable to common shareholders—basic

Net income (loss) per share attributable to common shareholders—diluted

Weighted average common shares outstanding—basic

Weighted average common shares outstanding—diluted

Net income (loss) per share attributable to ordinary shareholders—basic

Net income (loss) per share attributable to ordinary shareholders—diluted

Weighted average ordinary shares outstanding—basic

Weighted average ordinary shares outstanding—diluted

Comprehensive income (loss):

5 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

KINIKSA PHARMACEUTICALS, LTD.

KINIKSA PHARMACEUTICALS INTERNATIONAL, PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share amounts)

Common Shares

Ordinary Shares

(Class A, B, A1 and B1)

3 unchanged sentences

Balances at December 31, 2021

Issuance of Class A common shares under incentive award plans and employee share purchase plan

Issuance of Class A ordinary shares under incentive award plans and employee share purchase plan

Share-based compensation expense

Unrealized loss on short-term investments and currency translation adjustments

Unrealized gain on short-term investments and currency translation adjustments

Balances at December 31, 2022

Issuance of Class A common shares under incentive award plans and employee share purchase plan

Issuance of Class A ordinary shares under incentive award plans and employee share purchase plan

Share-based compensation expense

Unrealized gain on short-term investments and currency translation adjustments

Unrealized loss on short-term investments and currency translation adjustments

Balances at December 31, 2023

Issuance of Class A common shares under incentive award plans and employee share purchase plan

Issuance of Class A ordinary shares under incentive award plans and employee share purchase plan

Share-based compensation expense

2 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

KINIKSA PHARMACEUTICALS, LTD.

KINIKSA PHARMACEUTICALS INTERNATIONAL, PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

7 unchanged sentences

Amortization (accretion) of discounts on short-term investments

Gain on disposal of property and equipment

Loss on disposal of property and equipment

6 unchanged sentences

Accounts payable

Accrued expenses and other current liabilities

Accrued expenses, accrued collaboration expenses and other current liabilities

Operating lease liabilities

1 unchanged sentence

Other long-term liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

3 unchanged sentences

Proceeds from the maturities of short-term investments

Intangible assets acquired

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from issuance of Class A common shares under incentive award plans and employee share purchase plan

Payments in connection with Common Stock tendered for employee tax obligations

Proceeds from issuance of Class A ordinary shares under incentive award plans and employee share purchase plan

Payments in connection with ordinary stock tendered for employee tax obligations

Net cash provided by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental information:

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Nature of the Business and Basis of Presentation

Kiniksa Pharmaceuticals, Ltd.

(the “Company”) is a commercial-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need.

Kiniksa Pharmaceuticals International, plc (the “Company” or “Kiniksa International”) is a biopharmaceutical company developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications.

The Company’s portfolio of immune-modulating assets is based on strong biologic rationale or validated mechanisms, targets a spectrum of underserved cardiovascular and autoimmune conditions and offers the potential for differentiation.

The Company is subject to risks and uncertainties common to small commercial stage companies in the biopharmaceutical industry and global health, societal, economic and market conditions, including the Company’s dependence on third parties, including contract research organizations and contract manufacturing organizations, the Company’s limited experience obtaining regulatory approvals, the potential failure of the Company to successfully complete research and development of its current or future product candidates, the potential inability of the Company to adequately protect its technology, potential competition, the uncertainty that any current or future product candidates will obtain necessary government regulatory approval, that ARCALYST will continue to be commercially viable and whether any of the Company’s current or future product candidates, if approved, will be commercially viable.

Such risks and uncertainties may be subject to substantial and uncertain changes, which may cause significant disruption to the Company’s business and operations, preclinical studies and clinical trials, the business and operations of the third parties with whom the Company conducts business and the national and global economies, all of which may have material impacts on the Company’s business, financial condition and results of operations.

The Company is the successor issuer to Kiniksa Pharmaceuticals, Ltd.

(“Kiniksa Bermuda”).

On June 27, 2024, the Company and Kiniksa Bermuda completed a transaction pursuant to a Bermuda court-approved scheme of arrangement (the “Scheme”), which had been previously approved by Kiniksa Bermuda’s shareholders.

Pursuant to the Scheme, the shareholders of Kiniksa Bermuda became the shareholders of the Company and the Company became the ultimate parent and holding company of the Kiniksa organization, thereby effecting a change of incorporation from Bermuda to the United Kingdom (the “Redomiciliation”).

As used herein, and unless the context otherwise requires, references to the “Company” prior to the Redomiciliation shall refer to Kiniksa Bermuda and from and after the Redomiciliation, to Kiniksa International.

In addition, references to “ordinary shares” prior to the Redomiciliation are to Kiniksa Bermuda’s common shares and from and after the Redomiciliation are to Kiniksa International’s ordinary shares.

The Company is subject to risks common to companies in the biopharmaceuticals industry including, but not limited to, commercialization of existing and new products, conducting clinical research and development, its current and future products and product candidates, risks from existing or new competition, protection of proprietary intellectual and other technology and compliance with US and foreign regulations and approval requirements.

Principles of Consolidation

The Redomiciliation was accounted for as a change in the reporting entity between entities under common control and the historical basis of accounting was retained as if the entities had always been combined for financial reporting purposes.

The consolidated financial statements for periods prior to the Redomiciliation are the consolidated statements of Kiniksa Bermuda as the predecessor to the Company for accounting and reporting purposes and, upon completion of the Redomiciliation, such historical consolidated financial statements became Kiniksa International’s historical consolidated financial statements.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries, Kiniksa Pharmaceuticals Corp.

(“Kiniksa US”), Primatope Therapeutics, Inc.

(“Primatope”) and Kiniksa Pharmaceuticals (UK), Ltd.

(“Kiniksa UK”) as well as the subsidiaries of Kiniksa UK, Kiniksa Pharmaceuticals (Germany) GmbH (“Kiniksa Germany”), Kiniksa Pharmaceuticals (France) SARL (“Kiniksa France”), and Kiniksa Pharmaceuticals GmbH (“Kiniksa Switzerland”), after elimination of all significant intercompany accounts and transactions.

Where the Kiniksa Pharmaceuticals, Ltd.

entity is referred to in its single, unconsolidated form it is referred to as “Kiniksa Bermuda”.

(“Kiniksa US”), Kiniksa Bermuda and Kiniksa Pharmaceuticals (UK), Ltd.

(“Kiniksa UK”) as well as the subsidiary of Kiniksa US, Primatope Therapeutics, Inc.

(“Primatope”) and subsidiaries of Kiniksa UK, Kiniksa Pharmaceuticals (Germany) GmbH (“Kiniksa Germany”), Kiniksa Pharmaceuticals (France) SARL (“Kiniksa France”), and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”), after elimination of all significant intercompany accounts and transactions.

Where the Kiniksa Pharmaceuticals International, plc entity is referred to in its single, unconsolidated form, it is referred to as “Kiniksa International”.

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations and comprehensive loss or cash flows.

A reclassification has been made to the Consolidated Balance Sheet for fiscal year ended December 31, 2023, to reclassify the collaboration accrued expenses to be a separate line item.

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the recognition of revenue, the accrual for research and development expenses, and the valuation of our deferred tax assets.

Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

3 unchanged sentences

The financial results of the Company’s global activities are reported in U.S.

dollars (“USD”) and its foreign subsidiaries other than Kiniksa UK generally utilize their respective local currency to be their functional currency.

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

dollars (“USD”) and its foreign subsidiaries other than Kiniksa UK and Kiniksa Switzerland generally utilize their respective local currency to be their functional currency.

Transactions in other currencies are recorded in the functional currency at the rate of exchange prevailing when the transactions occur.

4 unchanged sentences

As of December 31, 2024, the Company had an accumulated deficit of $ 521,143 .

During the year ended December 31, 2023, the Company recorded net income of $ 14,084 and provided $ 13,301 of cash from operating activities.

During the year ended December 31, 2024, the Company recorded a net loss of $ 43,193 and provided $ 25,689 of cash from operating activities.

As of December 31, 2024, the Company had cash, cash equivalents and short-term investments of $ 243,627 .

4 unchanged sentences

If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its commercialization efforts, research and development programs for product candidates or product portfolio expansion, which could adversely affect its business prospects, or the Company may be unable to continue operations.

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies

8 unchanged sentences

Realized gains and losses, if any, on short-term investments are included in interest income.

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

If the AFS debt security’s fair value declines below its amortized cost the Company considers all available evidence to evaluate the extent to which the decline is due to credit-related factors or noncredit-related factors.

12 unchanged sentences

There were no material write-offs charged against the allowance for the year ended December 31, 2024.

Restricted Cash

In conjunction with the Company’s lease agreement entered into in March 2018, the Company maintained a letter of credit for the benefit of the landlord.

The lease expired in August 2021 and the restricted cash was released to operating cash in September 2021.

As of December 31, 2023, 2022 and 2021, there was no balance in restricted cash.

As of December 31, 2020, the underlying cash balance of $ 210 securing this letter of credit, was classified as current, in its consolidated balance sheet.

Fair Value Measurements

2 unchanged sentences

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the

KINIKSA PHARMACEUTICALS, LTD.

1 unchanged sentence

(Amounts in thousands, except share and per share amounts)

following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

19 unchanged sentences

The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the arrangement consideration to the lease component only.

The lease component results in an operating ROU asset being recorded on the balance sheet and amortized on a straight-line basis as lease expense.

Property and Equipment

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method.

Maintenance and repairs are charged to expense as incurred.

When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheet and any resulting gains or losses are included in the consolidated statement of operations

KINIKSA PHARMACEUTICALS, LTD.

1 unchanged sentence

(Amounts in thousands, except share and per share amounts)

and comprehensive income (loss) in the period of disposal.

component results in an operating ROU asset being recorded on the balance sheet and amortized on a straight-line basis as lease expense.

Property and Equipment

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method.

Maintenance and repairs are charged to expense as incurred.

The expected useful lives of the respective assets are as follows:

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Inventories are stated at the lower of cost or estimated net realizable value with cost based on the first-in first-out method.

Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified and labeled for use in clinical trials as the products are required to be re-labeled for alternative uses.

The Company classifies inventory as long-term when the inventory is expected to be utilized beyond the Company’s normal operating cycle and includes such amounts in other long-term assets in the Company’s consolidated balance sheets.

Prior to the regulatory approval of its drug candidates, the Company incurs expenses for the manufacture of product candidate supplies to support clinical development that could potentially be available to support the commercial launch of those therapeutics.

1 unchanged sentence

The Company performs an assessment of the recoverability of capitalized inventories during each reporting period and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified.

Such impairment charges, should they occur, are recorded as a component of cost of sales in the Company’s consolidated statements of operations and comprehensive income (loss).

Such impairment charges, should they occur, are recorded as a component of cost of sales in the Company’s consolidated statements of operations and comprehensive loss.

The determination of whether inventory costs will be realizable requires the use of estimates by management.

If actual market conditions are less favorable than projected by management, additional writedown of inventory may be required.

The vials that will ultimately be distributed free of charge under our patient assistance program are recognized as selling expense when they are labeled as free goods.

Finished goods that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified and labeled for use in clinical trials as the products are required to be re-labeled for alternative uses.

The finished goods inventory that will ultimately be distributed free of charge under the Company’s patient assistance program are recognized as selling expense when they are labeled as free goods.

The Company is conducting a technology transfer of ARCALYST drug substance manufacturing from Regeneron Pharmaceuticals, Inc.

(“Regeneron”) to a new contract development and manufacturing organization (“CDMO”).

Costs associated with the establishment of ARCALYST production at a new manufacturing site that do not meet the criteria for research and development or capitalization into inventory are included in cost of goods sold in the period incurred.

During the year ended December 31, 2023 the Company incurred $ 3,265 of expense related to the technology transfer of ARCALYST drug substance manufacturing in cost of goods sold.

No expenses were incurred in the years ending December 31, 2022 and 2021.

(“Regeneron”) to Samsung Biologics Co., Ltd.

Costs associated with the establishment of ARCALYST production at a new manufacturing site that do not meet the criteria for research and development or capitalization into inventory, including raw materials consumed, are included in cost of goods sold in the period incurred.

During the years ended December 31, 2024 and 2023 the Company incurred $ 15,849 and $ 3,265 , respectively, of expense related to the technology transfer of ARCALYST drug substance manufacturing in cost of goods sold.

No expenses were incurred in the year ending December 31, 2022.

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Revenue Recognition

5 unchanged sentences

Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery of the product to the customer.

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time.

14 unchanged sentences

These allowances are established by management as its best estimate based on historical experience and data points available and are adjusted to reflect known changes in the factors that impact such reserves.

Allowances for customer credits, chargebacks, rebates, data fees for services, returns, and discounts are established based on contractual terms with customers and analyses of historical usage of these items.

Allowances for customer credits, chargebacks, rebates, data fees for services, returns, and discounts are

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

established based on contractual terms with customers and analyses of historical usage of these items.

Actual amounts of consideration ultimately received may differ from the Company’s estimates.

4 unchanged sentences

Rebates and chargebacks are based on contractual arrangements or statutory requirements which may vary by product, payor and individual payor plans.

For qualified programs that can purchase products through wholesalers or other distributors at a lower contractual price, the

KINIKSA PHARMACEUTICALS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

wholesalers or distributors charge back to the Company the difference between their acquisition cost and the lower contractual price.

For qualified programs that can purchase products through wholesalers or other distributors at a lower contractual price, the wholesalers or distributors charge back to the Company the difference between their acquisition cost and the lower contractual price.

Rebates and chargebacks are estimated primarily based on product sales, and expected payor mix and discount rates, which require significant estimates and judgment.

22 unchanged sentences

Allowances are made for estimated sales returns by the customers and are recorded in the period the related revenue is recognized.

The Company typically permit returns if the product is out of date or damaged during transition to the common carrier.

The Company’s estimates of sales returns are based primarily on analysis of industry information reporting the return rates for similar products and contractual agreement terms.

The Company also takes into consideration known or expected changes in the marketplace specific to ARCALYST.

Shipping and Handling

Shipping and handling activities are considered to be fulfillment activities and not considered to be a separate performance obligation.

The Company typically permit returns if the product is out of date or damaged during transition to

KINIKSA PHARMACEUTICALS, LTD.

1 unchanged sentence

(Amounts in thousands, except share and per share amounts)

the common carrier.

The Company’s estimates of sales returns are based primarily on the Company’s historical return rate.

The Company also takes into consideration known or expected changes in the marketplace specific to ARCALYST.

Shipping and Handling

Shipping and handling activities are considered to be fulfillment activities and not considered to be a separate performance obligation.

Other Incentives

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For collaboration arrangements within the scope of Topic 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of Topic 808 and which elements of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of Topic 606.

For elements of collaboration arrangements that are accounted for pursuant to ASC 606, we identify the performance obligations and allocate the total consideration we expect to receive on a relative standalone selling price basis to each performance obligation.

Variable consideration such as performance-based milestones will be included in the total consideration if we expect to receive such consideration and if it is probable that the inclusion of the variable consideration will not result in a significant reversal in the cumulative amount of revenue recognized under the arrangement.

Our estimate of the total consideration we expect to receive under each collaboration arrangement is updated for each reporting period, and any adjustments to revenue are recorded on a cumulative catch-up basis.

We exclude sales-based royalty and milestone payments from the total consideration we expect to receive until the underlying sales occur because the license to our intellectual property is deemed to be the predominant item to which the royalties or milestones relate as it is the primary driver of value in our collaboration arrangements.

For elements of collaboration arrangements that are accounted for pursuant to ASC 606, the Company identifies the performance obligations and allocate the total consideration the Company expects to receive on a relative standalone selling price basis to each performance obligation.

Variable consideration such as performance-based milestones will be included in the total consideration if the Company expects to receive such consideration and if it is probable that the inclusion of the variable consideration will not result in a significant reversal in the cumulative amount of revenue recognized under the arrangement.

The Company’s estimate of the total consideration the Company expects to receive under each collaboration arrangement is updated for each reporting period, and any adjustments to revenue are recorded on a cumulative catch-up basis.

The Company excludes sales-based royalty and milestone payments from the total consideration the Company expects to receive until the underlying sales occur because the license to the Company’s intellectual property is deemed to be the predominant item to which the royalties or milestones relate as it is the primary driver of value in the Company’s collaboration arrangements.

Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

We recognize revenue associated with each performance obligation as the control over the promised goods or services transfer to our collaboration partner which occurs either at a point in time or over time.

If control transfers over time, revenue is recognized by using a method of measuring progress that best depicts the transfer of goods or services.

We evaluate the measure of progress and related inputs each reporting period and any resulting adjustments to revenue are recorded on a cumulative catch-up basis.

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(less than 12 months) or long-term (more than 12 months) deferred revenue based on our best estimate of when such revenue will be recognized.

The Company recognize revenue associated with each performance obligation as the control over the promised goods or services transfer to the Company’s collaboration partner which occurs either at a point in time or over time.

If control transfers over time, revenue is recognized by using a method of measuring progress that best depicts the transfer of goods or services.

The Company evaluates the measure of progress and related inputs each reporting period and any resulting adjustments to revenue are recorded on a cumulative catch-up basis.

Consideration received that does not meet the requirements to satisfy ASC 808 or ASC 606 revenue recognition criteria is recorded as deferred revenue in the accompanying consolidated balance sheets, classified as either short-term (less than 12 months) or long-term (more than 12 months) deferred revenue based on the Company’s best estimate of when such revenue will be recognized.

Intangible Assets

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The Company records accruals for estimated ongoing research and development costs.

When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations to those third parties as of the end of the reporting period.

Any accrual estimates are based on a number of factors, including the Company’s knowledge of the progress towards completion of the research and development activities, invoicing to date under the contracts, communication from the research institution or other companies of any actual costs incurred during the period that have not yet been invoiced, and the costs included in the contracts.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

Actual results could differ materially from the Company’s estimates.

When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of

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outstanding obligations to those third parties as of the end of the reporting period.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

Actual results could differ materially from the Company’s estimates.

The Company charges patent-related costs in connection with filing and prosecuting patent applications to operations as incurred as their realization is uncertain.

These costs are classified as selling, general and administrative expenses.

Segment Information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions.

The Company’s singular focus is on developing and delivering therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need.

Selling, General and Administrative Expense

Selling, general and administrative expenses consist primarily of salaries and benefits, including share based compensation expense for personnel in selling, marketing, medical, executive, business development, finance, human resources, legal and support personnel functions.

Selling, general and administrative expenses also include external commercialization, marketing, and professional fees for legal, patent, and accounting services.

Advertising costs are expensed as incurred.

For the years ended December 31, 2024, 2023 and 2022, advertising costs totaled $ 11,433 , $ 9,066 and $ 5,725 , respectively.

Share-Based Compensation

The Company measures all share-based awards granted to employees and directors based on their fair value on the date of grant.

The Company issues share-based awards with both service-based vesting conditions and performance-based vesting conditions.

The Company recognizes compensation expense for awards with service conditions on a straight-line basis over the requisite service period.

For awards with performance conditions, the Company recognizes compensation expense when the achievement of the performance milestone is probable and estimable through the vest date.

The Company issues share-based awards with both service-based, performance-based and market-based vesting conditions.

The Company recognizes compensation expense for awards with service and market conditions on a straight-line basis over the requisite service period.

For awards that contain performance conditions, the Company determines the appropriate amount to expense based on the anticipated achievement of performance targets, which requires judgment, including forecasting the achievement of future specified targets.

At the date performance conditions are determined to be probable of achievement, the Company records a cumulative expense catch-up, with remaining expense amortized over the remaining service period.

Throughout the performance period, the Company re-assesses the estimated performance and updates the number of performance-based awards that the Company believes will ultimately vest.

For share-based awards granted to consultants and non-employees, compensation expense is recognized over the vesting period of the awards, which is generally the period during which services are rendered by such consultants and non-employees until completed.

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The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the award, the risk-free interest rate, and expected dividends (see Note 11).

Prior to May 2018, the Company was a private company and, accordingly, lacks company-specific historical and implied volatility information for its shares.

Therefore, it estimates its expected share price volatility based on the historical volatility of the Company and historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

Prior to May 2018, the Company was a private company and, accordingly, lacked company-specific historical and implied volatility information for its shares.

Therefore, it estimated its expected share price volatility based on the historical volatility of the Company and historical volatility of publicly traded peer companies until such time as it had adequate historical data regarding the

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volatility of its own traded share price.

The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

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Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.

Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

The fair value of each restricted share unit award is based on the closing price of the Company’s Class A common shares on the date of grant.

Restricted share unit awards with an associated performance condition are evaluated on a regular basis for probability of achievement to determine the timing of recording share-based compensation expense in the Company’s consolidated statements of operations and comprehensive income (loss).

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Expected dividend yield is based on the fact that the Company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future.

The fair value of each restricted share unit award is based on the closing price of the Company’s Class A ordinary shares on the date of grant, with the exception of PSUs with market conditions, which are measured using the Monte Carlo valuation model.

The Monte-Carlo valuation model requires the use of assumptions, including but not limited to the expected volatility, correlation coefficients, risk free rate, expected dividend yield and expected term.

Comprehensive Income (Loss)

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Net Income (Loss) per Share

Basic net income (loss) per share attributable to common shareholders is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period.

Diluted net income (loss) attributable to common shareholders is computed by adjusting net income (loss) attributable to common shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Diluted net income (loss) per share attributable to common shareholders is computed based on the treasury method by dividing the diluted net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares.

For purpose of this calculation, outstanding share options and unvested restricted share units are considered potential dilutive common shares.

In periods in which the Company reports a net loss attributable to common shareholders, diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The Company reported a net loss attributable to common shareholders for the year ended December 31, 2021.

Basic net income (loss) per share attributable to ordinary shareholders is computed by dividing the net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period.

Diluted net income (loss) attributable to ordinary shareholders is computed by adjusting net income (loss) attributable to ordinary shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Diluted net income (loss) per share attributable to ordinary shareholders is computed based on the treasury method by dividing the diluted net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period, including potential dilutive ordinary shares.

For purpose of this calculation, outstanding share options and unvested restricted share units are considered potential dilutive ordinary shares.

In periods in which the Company reports a net loss attributable to ordinary shareholders, diluted net loss per share attributable to ordinary shareholders is the same as basic net loss per share attributable to ordinary shareholders, since dilutive ordinary shares are not assumed to have been issued if their effect is anti-dilutive.

The Company reported a net loss attributable to ordinary shareholders for the year ended December 31, 2024.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns.

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Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected, cumulative recent earnings and considering prudent and feasible tax planning strategies.

The Company is an exempted company incorporated under the laws of Bermuda.

Under the current laws of Bermuda, income tax is not charged or levied on an exempted company’s income.

As a result, the Company has not recorded any income tax benefits from losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards will be available to the Company for those losses.

In 2023, Bermuda passed legislation enacting a corporate income tax effective in 2025 on companies that meets certain requirements.

At the current time, the Company does not meet these requirements, but if the Company meets these requirements in the future, it could become subject to taxation in Bermuda.

The Company’s wholly owned U.S.

subsidiaries, Kiniksa US and Primatope, are subject to federal and state income taxes in the United States.

The Company’s wholly owned subsidiary Kiniksa UK, its Swiss branch office and its wholly owned subsidiaries:

Kiniksa Germany, Kiniksa France, and Kiniksa Switzerland, are subject to taxation in their respective countries.

Certain of the Company’s subsidiaries, primarily Kiniksa US, operate under cost-plus arrangements.

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Prior to the Redomiciliation, the Company was incorporated and principally subject to taxation in Bermuda.

Following the Redomiciliation, the Company is incorporated and principally subject to taxation in the United Kingdom.

Under the current laws of Bermuda, tax on a company’s income is assessed at a zero percent tax rate.

As a result, the Company has not recorded any income tax benefits from its losses incurred in Bermuda during the reporting periods in which it was incorporated there, and no net operating loss carryforwards will be available to the Company for those losses.

Following the Redomiciliation, the Company’s income is subject to the enacted United Kingdom statutory corporate tax rate and net operating losses incurred have an indefinite carryforward.

The Company’s wholly owned U.S.

subsidiaries, Kiniksa US and Primatope, are subject to federal and state income taxes in the United States.

The Company’s wholly owned subsidiary Kiniksa Bermuda remains subject to taxation, if any, in Bermuda.

The Company’s wholly owned subsidiary Kiniksa UK, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Germany, Kiniksa France, and Kiniksa Switzerland are subject to taxation in their respective countries.

Certain of the Company’s subsidiaries operate under cost plus arrangements.

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized.

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The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures.

The amendments require disclosure of incremental segment information on an annual and interim basis.

The amendments also require companies with a single reportable segment to provide all disclosures required by this amendment and all existing segment disclosures in Accounting Standards Codification 280, Segment Reporting.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

The Company does not expect the adoption of the amendments to have a material impact on its financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes - Improvements to Income Tax Disclosures.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments require (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction.

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The Company does not expect the adoption of the amendments to have a material impact on its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2024-03.

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 17 Segment Information in the accompanying notes to the consolidated financial statements for further detail.

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Fair Value of Financial Assets and Liabilities

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Cash equivalents — money market funds

Cash equivalents — U.S.

Treasury notes

Short-term investments — U.S.

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During the years ended December 31, 2024 and 2023 there were no transfers between Level 1, Level 2 and Level 3.

The money market funds were valued using quoted prices in active markets, which represent a Level 1

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measurement in the fair value hierarchy.

The money market funds were valued using quoted prices in active markets, which represent a Level 1 measurement in the fair value hierarchy.

The Company’s cash equivalents and short-term investments as of December 31, 2024 and 2023 included U.S.

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December 31, 2024

Cash equivalents — U.S.

Treasury notes

Short-term investments — U.S.

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Treasury notes

As of December 31, 2023, the Company held no securities in an unrealized loss position.

As of December 31, 2022 we consider the unrealized losses in our investment portfolio to be temporary in nature and not due to credit losses.

We have the ability to hold such investments until recovery of the fair value.

We utilize the specific identification method in computing realized gains and losses.

We had no realized gains and losses on our available-for-sale securities for the years ended December 31, 2023 or 2022.

Product Revenue, Net

Product revenue, net, from sales of ARCALYST was as follows:

Product Revenue, net

As of December 31, 2024 and 2023 the Company considers the unrealized losses in their investment portfolio to be temporary in nature and not due to credit losses.

The Company has the ability to hold such investments until

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recovery of the fair value.

The Company utilizes the specific identification method in computing realized gains and losses.

The Company had no realized gains and losses on their available-for-sale securities for the years ended December 31, 2024 or 2023.

Product Revenue, Net

Product revenue, net, from sales of ARCALYST was as follows:

Product Revenue, net

The following tables summarizes balances and activity in each of the product revenue allowance and reserve categories for the years ended December 31, 2024 and 2023:

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Balance at December 31, 2023

Total revenue-related reserves as of December 31, 2023 and 2022, included in our consolidated balance sheets, are summarized as follows:

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Total revenue-related reserves as of December 31, 2024 and 2023, included in the Company’s consolidated balance sheets, are summarized as follows:

Reduction of accounts receivable

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Raw materials

Work-in-process

Semi-finished goods

Finished goods

Total inventory

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Balance Sheet Classification:

Other long-term assets

Total inventory

Property and Equipment, Net

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Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was $ 448 , $ 1,109 and $ 1,179 , respectively.

As of December 31, 2023 and 2022, $ 122 and $ 226 , respectively, of our property and equipment, net was in the United Kingdom.

As of December 31, 2024 and 2023, $ 99 and $ 122 , respectively, of the Company’s property and equipment, net was in the United Kingdom.

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The Company leases office, laboratory space and vehicles under operating leases.

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Variable lease cost

Short-term lease cost

Total lease cost

Variable lease costs primarily related to operating expense, taxes and insurance associated with the Company’s operating leases.

As these costs are generally variable in nature, they are not included in the measurement of the operating lease asset and related lease liability.

Weighted-average remaining lease term (years)

Weighted-average discount rate

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Maturities of operating leases liabilities were as follows:

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Present value of lease liabilities

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Intangible Assets

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Accrued employee compensation and benefits

Accrued collaboration expenses

Accrued legal, commercial and professional fees

Total accrued expenses

During the year ended December 31, 2022, the Company recorded an out of period adjustment of $ 2,223 that primarily related to a decrease in accrued research and development expenses to correct immaterial errors that originated in prior periods.

The Company evaluated the materiality of the adjustments to prior-period annual and interim financial statements and the current period, and concluded the effect of the adjustments were immaterial to all periods.

Ordinary Shares

The rights of the holders of the Company’s Class A ordinary shares, Class B ordinary shares, Class A1 ordinary shares and Class B1 ordinary shares are identical, except with respect to voting, transferability and conversion, as described below.

The Company has authorized 200,000,000 shares, at a nominal value of $ 0.000273235 as of December 31, 2024 and 2023.

Each Class A ordinary share entitles the holder to one vote on all matters submitted to the shareholders for a vote.

Each Class B ordinary share entitles the holder to ten votes on all matters submitted to the shareholders for a vote.

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During the year ended December 31, 2022, the Company recorded out of period adjustments of $ 2,223 that primarily relates to a decrease in accrued research and development expenses to correct immaterial errors that originated in prior periods.

Common Shares

The rights of the holders of the Company’s Class A common shares, Class B common shares, Class A1 common shares and Class B1 common shares are identical, except with respect to voting, transferability and conversion, as described below.

The Company has authorized 200,000,000 shares, at a par value of $ 0.000273235 as of December 31, 2023 and 2022.

Each Class A common share entitles the holder to one vote on all matters submitted to the shareholders for a vote.

Each Class B common share entitles the holder to ten votes on all matters submitted to the shareholders for a vote.

The holders of Class A and Class B common shares, voting together as a single class, are entitled to elect the directors of the Company.

Holders of Class A1 common shares and Class B1 common shares have no voting rights.

The Company’s common shareholders are entitled to receive dividends, as may be declared by the Company’s board of directors.

The holders of Class A and Class B ordinary shares, voting together as a single class, are entitled to elect the directors of the Company.

Holders of Class A1 ordinary shares and Class B1 ordinary shares have no voting rights.

The Company’s ordinary shareholders are entitled to receive dividends, as may be declared by the Company’s board of directors.

Through December 31, 2024, no cash dividends have been declared or paid.

Each Class B common share automatically converts into one Class A common share upon certain transfers of such shares by the holder thereof (subject to certain exceptions).

Each Class B common share is convertible, at the holder’s election into one Class A common share or one Class B1 common share.

Each Class A1 common share is convertible into one Class A common share at the holder’s election (subject to certain exceptions).

Each Class B1 common share automatically converts into one Class A common share upon certain transfers of such shares by the holder thereof (subject to certain exceptions).

Each Class B1 common share is convertible into one Class A common share or one Class B common share at the holder’s election (subject to certain exceptions).

There are no conversion rights associated with the Class A common shares.

Each Class B ordinary share automatically converts into one Class A ordinary share upon certain transfers of such shares by the holder thereof (subject to certain exceptions).

Each Class B ordinary share is convertible, at the holder’s election into one Class A ordinary share or one Class B1 ordinary share.

Each Class A1 ordinary share is convertible into one Class A ordinary share at the holder’s election (subject to certain exceptions).

Each Class B1 ordinary share automatically converts into one Class A ordinary share upon certain transfers of such shares by the holder thereof (subject to certain exceptions).

Each Class B1 ordinary share is convertible into one Class A ordinary share or one Class B ordinary share at the holder’s election (subject to certain exceptions).

There are no conversion rights associated with the Class A ordinary shares.

Kiniksa Bermuda Shares

In connection with the Redomiciliation, Kiniksa Bermuda was issued with one ordinary share with a nominal value of £ 0.01 per share (the “KNSA Bermuda Ordinary Share”) and 50,000 redeemable preference shares with a nominal value of £ 1.00 per share (the “KNSA Bermuda Preference Shares”) in the capital of Kiniksa International in order to satisfy the initial authorized minimum capital requirements for an English public company which is currently prescribed as GBP£ 50,000 .

In the year ending December 31, 2025, it is expected that:

(i) the KNSA Bermuda Ordinary Share will be gifted to Kiniksa International for nil consideration;

and (ii) the KNSA Bermuda Preference Shares will be redeemed in order to remove Kiniksa Bermuda as a shareholder of Kiniksa International.

The KNSA Bermuda Preference Shares have no rights to vote at any general meeting of Kiniksa International and have no right to receive any dividend.

The rights and restrictions attaching to the Existing Preference Shares and KNSA Bermuda Ordinary Share are set out in the articles of association of Kiniksa International.

Share-Based Compensation

As part of the Redomiciliation, Kiniksa International assumed the sponsorship of, and all rights and obligations of Kiniksa Bermuda under Kiniksa Bermuda’s equity compensation plans, which include the 2018 Plan, the 2015 Plan, the 2018 ESPP and the RLTIP (each as defined below).

2018 Incentive Award Plan

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Upon the effectiveness of the 2018 Plan, the Company ceased granting awards under its 2015 Equity Incentive Plan (as amended, the “2015 Plan” together with the 2018 Plan, the “Plans”).

A total of 4,466,500 Class A common shares were initially reserved for issuance under the 2018 Plan.

The number of Class A common shares that may be issued under the 2018 Plan will automatically increase on each January 1, beginning in 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (1) 4 % of the Class A common shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (2) a smaller number of Class A common shares

A total of 4,466,500 Class A ordinary shares were initially reserved for issuance under the 2018 Plan.

The number of Class A ordinary shares that may be issued under the 2018 Plan will automatically increase on each January 1, beginning in 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (1) 4 % of the Class A ordinary shares outstanding (on an as-converted basis)

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determined by the Company’s board of directors.

on the final day of the immediately preceding calendar year and (2) a smaller number of Class A ordinary shares determined by the Company’s board of directors.

As of December 31, 2024, 5,205,357 shares remained available for future grant.

On January 1, 2024, the Class A common shares issuable pursuant to the 2018 Plan increased by 2,818,425 shares, equal to 4 % of the as-converted Class A common shares outstanding on December 31, 2023.

The Class A common shares underlying any awards issued under the 2018 Plan or the 2015 Plan that on or after the effective date of the 2018 Plan expire, lapse unexercised or are terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited under the 2018 Plan or the 2015 Plan will be added back to the Class A common shares available for issuance under the 2018 Plan.

On January 1, 2025, the Class A ordinary shares issuable pursuant to the 2018 Plan increased by 2,900,642 shares, equal to 4 % of the as-converted Class A ordinary shares outstanding on December 31, 2024.

The Class A ordinary shares underlying any awards issued under the 2018 Plan or the 2015 Plan that on or after the effective date of the 2018 Plan expire, lapse unexercised or are terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited under the 2018 Plan or the 2015 Plan will be added back to the Class A ordinary shares available for issuance under the 2018 Plan.

2015 Equity Incentive Plan

Until May 23, 2018 (the effective date of the 2018 Plan), the 2015 Plan provided for the Company to grant incentive share options, nonqualified share options, share grants and other share-based awards to employees and non-employees to purchase the Company’s Class A common shares.

On the effective date of the 2018 Plan, the Company ceased granting awards under the 2015 Plan.

At that time, the 4,691,213 Class A common shares subject to outstanding awards under the 2015 Plan remained reserved for issuance under the plan pursuant to such awards and the 92,170 Class A common shares that had been available for future grant under the 2015 Plan were no longer authorized and reserved for issuance or available for future grant under the 2015 Plan.

As of December 31, 2023, there were 1,856,506 Class A common shares subject to outstanding awards under the 2015 Plan and reserved for issuance thereunder pursuant to such awards.

At that time, the 4,691,213 Class A ordinary shares subject to outstanding awards under the 2015 Plan remained reserved for issuance under the plan pursuant to such awards and the 92,170 Class A ordinary shares that had been available for future grant under the 2015 Plan were no longer authorized and reserved for issuance or available for future grant under the 2015 Plan.

As of December 31, 2024, there were 1,433,203 Class A ordinary shares subject to outstanding awards under the 2015 Plan and reserved for issuance thereunder pursuant to such awards.

The 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it.

Class A common shares subject to awards granted under the 2015 Plan that expire, lapse unexercised or are terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited become available for issuance under the 2018 Plan.

Class A ordinary shares subject to awards granted under the 2015 Plan that expire, lapse unexercised or are terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited become available for issuance under the 2018 Plan.

The exercise price for share options granted under the 2015 Plan was determined by the Company’s board of directors.

All incentive share options granted to any person possessing 10 % or less of the total combined voting power of all classes of shares could not have an exercise price of less than 100 % of the fair market value of the Class A common shares on the grant date.

All incentive share options granted to any person possessing more than 10 % of the total combined voting power of all classes of shares could not have an exercise price of less than 110 % of the fair market value of the Class A common shares on the grant date.

The option term for incentive share options could not be greater than 10 years .

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In May 2018, the Company’s board of directors and shareholders approved the 2018 Employee Share Purchase Plan (the “2018 ESPP”), which became effective on May 23, 2018.

A total of 670,000 Class A common shares were initially reserved for issuance under the 2018 ESPP.

The number of Class A common shares that may be issued under the 2018 ESPP automatically increases on each January 1, beginning in 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (1) 1 % of the Class A common shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (2) a smaller number of Class A common shares determined by the Company’s board of directors, provided that no more than 6,420,000 Class A common shares may be issued under the 2018 ESPP.

In December 2023, the Company’s board of directors approved an increase as of January 1, 2024 of 215,000 Class A common shares.

As of December 31, 2023, 528,130 Class A common shares were available for future issuance under the 2018 ESPP.

A total of 670,000 Class A ordinary shares were initially reserved for issuance under the 2018 ESPP.

The number of Class A ordinary shares that may be issued under the 2018 ESPP automatically increases on each January 1, beginning in 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (1) 1 % of the Class A ordinary shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (2) a smaller number of Class A ordinary shares determined by the Company’s board of directors, provided that no more than 6,420,000 Class A ordinary shares may be issued under the 2018 ESPP.

In December 2024, the Company’s board of directors approved an increase as of January 1, 2025 of 90,000 Class A ordinary shares.

As of December 31, 2024, 671,515 Class A ordinary shares were available for future issuance under the 2018 ESPP.

KINIKSA PHARMACEUTICALS, LTD.

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Outstanding as of December 31, 2023

( 1,520,347 )

Outstanding as of December 31, 2024

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Share options vested and expected to vest as of December 31, 2024

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s common shares for those share options that had exercise prices lower than the fair value of the Company’s common shares.

During the year ended December 31, 2023, share option holders exercised 319,829 share options for Class A common shares with an intrinsic value of $ 2,595 for total cash proceeds to the Company of $ 2,876 .

During the year ended December 31, 2022, share option holders exercised 383,106 share options for Class A common shares with an intrinsic value of $ 2,196 for total cash proceeds to the Company of $ 2,606 .

During the year ended December 31, 2021, share option holders exercised 795,404 share options for Class A common shares with an intrinsic value of $ 6,392 for total cash proceeds to the Company of $ 5,311 .

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares.

During the year ended December 31, 2024, share option holders exercised 1,520,347 share options for Class A ordinary shares with an intrinsic value of $ 19,235 for total cash proceeds to the Company of $ 16,260 .

During the year ended December 31, 2023, share option holders exercised 319,829 share options for Class A ordinary shares with an intrinsic value of $ 2,595 for total cash proceeds to the Company of $ 2,876 .

During the year ended December 31, 2022, share option holders exercised 383,106 share options for Class A ordinary shares with an intrinsic value of $ 2,196 for total cash proceeds to the Company of $ 2,606 .

The weighted-average grant-date fair value per share of share options granted during the years ended December 31, 2024, 2023 and 2022 was $ 14.41 , $ 9.82 and $ 7.66 , respectively.

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Restricted Share Units

RSUs represent the right to receive shares of the Company’s Class A common shares upon vesting of the RSUs.

The fair value of each RSU award is based on the closing price of the Company’s Class A common shares on the date of grant.

RSUs represent the right to receive shares of the Company’s Class A ordinary shares upon vesting of the RSUs.

The fair value of each RSU award is based on the closing price of the Company’s Class A ordinary shares on the date of grant.

Starting March 2021, the Company granted RSUs with service conditions (“Time-Based RSUs”) to eligible employees.

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Rilonacept Long-Term Incentive Plan

In December 2019, the compensation committee of the Company’s board of directors approved the Company’s Rilonacept Long-Term Incentive Plan (“RLTIP”) under the Company’s 2018 Plan to incentivize eligible employees of the Company or any of its subsidiaries to achieve FDA approval for the commercial sale and marketing of rilonacept for the treatment of recurrent pericarditis in the United States (“RLTIP Milestone”).

The RLTIP provided for eligible employees to receive a cash award and two grants of RSU awards covering Class A common shares under the 2018 Plan.

In December 2019, the compensation committee of the Company’s board of directors approved the Company’s Rilonacept Long-Term Incentive Plan (“RLTIP”) under the Company’s 2018 Plan to incentivize eligible employees of the Company or any of its subsidiaries to achieve FDA approval for the commercial sale and marketing of ARCALYST for the treatment of recurrent pericarditis in the United States (“RLTIP Milestone”).

The RLTIP provided for eligible employees to receive a cash award and two grants of RSU awards covering Class A ordinary shares under the 2018 Plan.

The cash award was eligible to be earned and paid upon the date the RLTIP Milestone was achieved (the “Achievement Date”) with respect to an amount determined in accordance with the RLTIP based on the earnout percentage.

The number of Class A common shares issuable under the first RSU award (“First RSU Award”) as a result of the achievement of the RLTIP Milestone was determined in accordance with the RLTIP based on the earnout percentage, and such RSUs vested on the first anniversary of the Achievement Date, subject to continued employment on such date.

The number of Class A ordinary shares issuable under the first RSU award (“First RSU Award”) as a result of the achievement of the RLTIP Milestone was determined in accordance with the RLTIP based on the earnout percentage, and such RSUs vested on the first anniversary of the Achievement Date, subject to continued employment on such date.

The second RSU award was granted on the Achievement Date with respect to a number of shares determined in accordance with the RLTIP, based on both the earnout percentage and the upside earnout percentage, and vested on the second anniversary of the Achievement Date, subject to continued employment on such date.

During the years ended December 31, 2020 and 2019, the Company granted the First RSU Awards as part of the RLTIP to eligible employees.

During the year ended December 31, 2021, the RLTIP Milestone was achieved and 187,682 of Class A common shares were issued under the First RSU Awards in accordance with the RLTIP and vested in one installment in March 2022 (on the first anniversary of the Achievement Date).

During the year ended December 31, 2021, the RLTIP Milestone was achieved and 187,682 of Class A ordinary shares were issued under the First RSU Awards in accordance with the RLTIP and vested in one installment in March 2022 (on the first anniversary of the Achievement Date).

During the year ended December 31, 2021, the Second RSU Awards were granted to eligible employees on the Achievement Date with 142,283 shares granted in accordance with the RLTIP which vested in one installment in March 2023.

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As of December 31, 2024, total unrecognized compensation cost related to the RSU Awards and Time-Based RSUs was $ 32,544 which is expected to be recognized over a weighted average remaining period of 2.57 years.

Market and Performance-Based Shares Units

In the second quarter of 2024, the Company began periodically granting performance-based restricted share units to certain employees under the 2018 Plan.

The Company granted awards which are earned based upon the achievement of certain specified ARCALYST revenue targets (“Revenue PSUs”), and awards which are earned based upon the Company’s total shareholder return (“TSR”) relative to the performance of the members of the Nasdaq Biotechnology Index (“TSR PSUs” and, together with the Revenue PSUs, the “PSUs”).

The PSUs are subject to a three year service period.

The following table summarizes PSU activity for the year ended December 31, 2024:

Unvested PSUs as of December 31, 2023

Unvested PSUs as of December 31, 2024

As of December 31, 2024, total unrecognized compensation cost related to the PSU awards was $ 1,268 which is expected to be recognized over a weighted average remaining period of 2.00 years.

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Share-Based Compensation

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During the year ended December 31, 2023, the Company received cash payments of $ 20,000 following delivery of certain drug supplies to Genentech and $ 15,000 following Genentech’s achievement of a development milestone related to a new indication under the Genentech License Agreement.

In the fourth quarter of 2023, following the achievement of a development milestone related to a second indication under the Genentech License Agreement, Genentech became obligated to make an additional cash payment of $ 10,000 which the Company recorded in accounts receivable as of December 31, 2023.

Under the terms of the Genentech License Agreement, the Company is eligible to receive a total of

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approximately $ 600,000 in contingent payments, including specified development, regulatory and sales-based milestones, before fulfilling the Company’s upstream financial obligations, of which approximately $ 575,000 remain as of December 31, 2023.

In the second quarter of 2024, the Company received a cash payment of $ 5,000 following the achievement of a development milestone related to the third indication under the Genentech License Agreement.

Under the terms of the Genentech License Agreement, the Company is eligible to receive a total of approximately $ 600,000 in contingent payments, including specified development, regulatory and sales-based milestones, before fulfilling the Company’s upstream financial obligations, of which approximately $ 570,000 remain as of December 31, 2024.

The Company will also be eligible to receive tiered percentage royalties on a Genentech Licensed Product-by-Genentech Licensed Product basis ranging from low-double digits to mid-teens on annual net sales of each Genentech Licensed Product, subject to certain customary reductions, with an aggregate minimum floor, before fulfilling the Company’s upstream financial obligations.

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Pursuant and subject to the terms of the Genentech License Agreement, Genentech has the exclusive worldwide right to conduct development and commercialization activities for Genentech Licensed Products at its sole cost.

Notwithstanding the foregoing, the Company is responsible, at its sole cost, for continuing to conduct and finalize its Phase 2b clinical trial assessing the efficacy, safety and tolerability of vixarelimab in reducing pruritis in prurigo nodularis.

Both the Company and Genentech participate in a joint transition committee, which coordinates and oversees the technology and inventory transition activities relating to the development of the Genentech Licensed Products and the Company’s conduct and finalization of its Phase 2b clinical trial.

In 2024, the Company fulfilled its responsibility under the Genentech License Agreement with respect to completing its Phase 2b clinical trial assessing the efficacy, safety and tolerability of vixarelimab in reducing pruritis in prurigo nodularis.

Under the Genentech License Agreement, Genentech has the right to assume manufacturing responsibilities for Genentech Licensed Products.

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Absent early termination, the Genentech License Agreement will continue until there are no more royalty or other payment obligations owed to the Company.

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The initial drug supply and drug product resupply are considered distinct from the exclusive license for vixarelimab as Genentech can benefit from such supply together with the license transferred by the Company at the inception of the Genentech License Agreement.

The completion of the Phase 2b clinical trial is considered distinct from the exclusive license for vixarelimab as Genentech can benefit from the

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data generated by such trial together with such license.

The completion of the Phase 2b clinical trial is considered distinct from the exclusive license for vixarelimab as Genentech can benefit from the data generated by such trial together with such license.

Therefore, each represents a separate performance obligation within a contract with a customer at contract inception.

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The Company met the milestone obligation in the first quarter of 2023 and invoiced Genentech for the related $ 20,000 payment for the delivery of certain drug material.

In 2023, the Company added $ 25,000 to the transaction price following Genentech’s achievement of two development milestones under the Genentech License Agreement.

In 2023 and 2024, the Company added $ 25,000 and $ 5,000 , respectively, to the transaction price following Genentech’s achievement of development milestones under the Genentech License Agreement.

The Company determined that all other variable considerations related to the future development and regulatory milestones, are deemed fully constrained and therefore excluded from the transaction price due to the high degree of uncertainty and risk associated with these potential payments, as the Company also determined that it could not assert that it was not probable that a significant reversal in the amount of cumulative revenue recognized would occur.

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and (iv) completion of the Phase 2b clinical trial for vixarelimab.

The selling price of each performance obligation in the Genentech License Agreement was determined based on the Company’s standalone selling price (“SSP”) with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis.

The selling price of each performance

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obligation in the Genentech License Agreement was determined based on the Company’s standalone selling price (“SSP”) with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis.

The Company allocated the transaction price to each of the four performance obligations noted above.

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Completion of the phase 2b clinical trial for vixarelimab

using the cost-to-cost input method, which is believed to best depict the transfer of control to the customer.

Over time, using the cost-to-cost input method, which is believed to best depict the transfer of control to the customer.

Under the cost-to-cost input method, the percent of completion is based on the ratio of actual costs incurred as of the period end to the total estimated costs.

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As a result of the $ 5,000 in development milestones achieved by Genentech, the Company recognized revenue of $ 4,989 , during the year ended December 31, 2024, related to performance obligations satisfied in prior periods.

The remaining revenue was recognized as a result of further progress towards completion of the phase 2b clinical trial for vixarelimab and materials delivered.

The Company expects to recognize the remaining deferred revenue associated with the Genentech License Agreement over the remaining portion of the Phase 2b clinical trial for vixarelimab.

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(Amounts in thousands, except share and per share amounts)

The remaining revenue was recognized as a result of the completed portion of the Phase 2b clinical trial for vixarelimab.

As of December 31, 2024, the Company has recognized as revenue all of the transaction price associated with the Genentech License Agreement.

Huadong Collaboration Agreements

In February 2022 (the “Effective Date”), the Company entered into two collaboration and license agreements (each, a “Huadong Collaboration Agreement” and together, the “Huadong Collaboration Agreements”) with Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.

(“Huadong”), pursuant to which the Company granted Huadong exclusive rights to develop and commercialize rilonacept and develop, manufacture and commercialize mavrilimumab (each, a “Huadong Licensed Product” and together, the “Huadong Licensed Products”) in the following countries:

(“Huadong”), pursuant to which the Company granted Huadong exclusive rights to develop and commercialize ARCALYST and develop, manufacture and commercialize mavrilimumab (each, a “Huadong Licensed Product” and together, the “Huadong Licensed Products”) in the following countries:

People’s Republic of China, Hong Kong SAR, Macao SAR, Taiwan Region, South Korea, Indonesia, Singapore, The Philippines, Thailand, Australia, Bangladesh, Bhutan, Brunei, Burma, Cambodia, India, Laos, Malaysia, Maldives, Mongolia, Nepal, New Zealand, Sri Lanka, and Vietnam (collectively, the “Huadong Territory”).

The Company otherwise retained its current rights to the Huadong Licensed Products outside the Huadong Territory.

Under the Huadong Collaboration Agreements, the Company received a total upfront cash payment of $ 22,000 , which includes $ 12,000 for the Huadong Territory license of rilonacept and $ 10,000 for the Huadong Territory license of mavrilimumab.

The Company will be eligible to receive up to approximately $ 70,000 in payments for rilonacept, and up to approximately $ 576,000 in payments for mavrilimumab, including specified development, regulatory and sales-based milestones.

Huadong will also be obligated to pay the Company tiered percentage royalties on a Huadong Licensed Product-by-Huadong Licensed Product basis ranging from the low-teens to low-twenties on annual net sales of each Huadong Licensed Product in the Huadong Territory, subject to certain reductions tied to rilonacept manufacturing costs and certain other customary reductions, with an aggregate minimum floor.

Royalties will be payable on a Huadong Licensed Product-by-Huadong Licensed Product and country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of the applicable Huadong Licensed Product in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of the Company’s patent rights or any joint collaboration patent rights that covers the applicable Huadong Licensed Product in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for the applicable Huadong Licensed Product in such country or region in the Huadong Territory.

Pursuant and subject to the terms of the Huadong Collaboration Agreements, Huadong has the exclusive right to conduct Huadong Territory-specific development activities for the Huadong Licensed Products in the Huadong Territory, the first right to support global development of the Huadong Licensed Products by serving as the sponsor of the global clinical trials conducted in the Huadong Territory and the exclusive right to commercialize the Huadong Licensed Products in the Huadong Territory.

Huadong will be responsible for all costs of development activities and commercialization in the Huadong Territory.

Both the Company and Huadong participate in a joint steering committee, which coordinates and oversees the exploitation of the Huadong Licensed Products in the Huadong Territory.

The Company will supply certain materials to support development and commercialization activities for both mavrilimumab and rilonacept.

Under the Huadong Collaboration Agreement for mavrilimumab, Huadong has the right to assume manufacturing responsibilities for materials in the Huadong Territory.

Under the Huadong Collaboration Agreement for rilonacept, Huadong does not have rights to perform manufacturing activities in the Huadong Territory.

Absent early termination, each Huadong Collaboration Agreement will continue on a country-by-country or region-by-region basis until there are no more royalty payments owed to the Company in such country or region for the applicable Huadong Licensed Product.

Huadong has the right to terminate each Huadong Collaboration Agreement at its discretion upon 12 months ’ notice and either party may terminate the applicable Huadong Collaboration Agreement in the event of an uncured material breach of the other party or in the case of insolvency of the other party.

In addition, the Company may terminate the applicable Huadong Collaboration Agreement if Huadong or its affiliates or sublicensees challenges the scope, validity, or enforceability of the Company’s patent rights being licensed to Huadong.

If Huadong and its affiliates do not conduct any material development or commercialization activities with respect to a Huadong Licensed Product in the People’s Republic of China for a continuous period of longer than six months , then, subject to certain exceptions, the Company may terminate the Huadong Collaboration Agreement applicable to such Huadong

In February 2025, the Company provided written notice to Huadong that Huadong has not conducted material development activity with respect to mavrilimumab in the People’s Republic of China for a continuous period in excess of six months as required under the mavrilimumab Huadong Collaboration Agreement.

Unless Huadong conducts material development activity within a prescribed time period, the mavrilimumab Huadong Collaboration Agreement will terminate on April 25, 2025.

The Company does not expect to record any significant charges related to the termination of the mavrilimumab Huadong Collaboration Agreement.

Under the Huadong Collaboration Agreements, the Company received a total upfront cash payment of $ 22,000 , which included $ 12,000 for the Huadong Territory license of ARCALYST and $ 10,000 for the Huadong Territory license of mavrilimumab.

In 2024, following the achievement of a regulatory milestone under the ARCALYST Huadong Collaboration Agreement, Huadong became obligated to make an additional cash payment of $ 20,000 to the Company.

The Company will be eligible to receive up to approximately $ 50,000 in contingent sales-based milestone payments for ARCALYST, all of which remain as of December 31, 2024.

Due to its termination, the Company does not expect to

KINIKSA PHARMACEUTICALS, LTD.

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Licensed Product with 60 days ’ prior written notice.

In addition, Huadong’s rights under each Huadong Collaboration Agreement in certain regions within the Huadong Territory may be subject to termination upon failure by Huadong to perform certain clinical, development or commercialization activities, as applicable, with respect to the applicable Huadong Licensed Product in such regions.

receive any future payments under the mavrilimumab Huadong Collaboration Agreement.

The Company was eligible to receive up to approximately $ 576,000 in payments for mavrilimumab, including specified development, regulatory and sales-based milestones, all of which remained as of December 31, 2024.

Huadong was also obligated to pay the company tiered percentage royalties ranging from mid-teens to low twenties on annual net sales of mavrilimumab in the Huadong territory.

Huadong will also be obligated to pay the Company tiered percentage royalties ranging from the low-to-mid teens on annual net sales of ARCALYST in the Huadong Territory, subject to certain reductions tied to ARCALYST manufacturing costs and certain other customary reductions, with an aggregate minimum floor.

Royalties will be payable on ARCALYST on a country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of ARCALYST in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of the Company’s patent rights or any joint collaboration patent rights that covers ARCALYST in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for ARCALYST in such country or region in the Huadong Territory.

Pursuant and subject to the terms of the Huadong Collaboration Agreements, Huadong has the exclusive right to conduct Huadong Territory-specific development activities for ARCALYST in the Huadong Territory, the first right to support global development of ARCALYST by serving as the sponsor of the global clinical trials conducted in the Huadong Territory and the exclusive right to commercialize ARCALYST in the Huadong Territory.

Huadong will be responsible for all costs of development activities and commercialization in the Huadong Territory.

Both the Company and Huadong participate in a joint steering committee, which coordinates and oversees the exploitation of ARCALYST in the Huadong Territory.

The Company will supply certain materials to support development and commercialization activities for ARCALYST.

Absent early termination, the ARCALYST Huadong Collaboration Agreement will continue on a country-by-country or region-by-region basis until there are no more royalty payments owed to the Company in such country or region.

Huadong has the right to terminate the ARCALYST Huadong Collaboration Agreement at its discretion upon 12 months’ notice and either party may terminate the ARCALYST Huadong Collaboration Agreement in the event of an uncured material breach of the other party or in the case of insolvency of the other party.

In addition, the Company may terminate the ARCALYST Huadong Collaboration Agreement if Huadong or its affiliates or sublicensees challenges the scope, validity, or enforceability of the Company’s patent rights being licensed to Huadong.

If Huadong and its affiliates do not conduct any material development or commercialization activities with respect to ARCALYST in the People’s Republic of China for a continuous period of longer than six months , then, subject to certain exceptions, the Company may terminate the ARCALYST Huadong Collaboration Agreement with 60 days ’ prior written notice.

In addition, Huadong’s rights under the ARCALYST Huadong Collaboration Agreement in certain regions within the Huadong Territory may be subject to termination upon failure by Huadong to perform certain clinical, development or commercialization activities, as applicable, with respect to the applicable Huadong Licensed Product in such regions.

The Company concluded that Huadong is a customer in these Huadong Collaboration Agreements, and as such, each Huadong Collaboration Agreement falls within the scope of the revenue recognition guidance in ASC 606.

The Company concluded that the Huadong Collaboration Agreements should not be combined and treated as a single arrangement for accounting purposes as the Huadong Collaboration Agreements were negotiated separately with separate and distinct commercial objectives, the amount of consideration in one Huadong Collaboration Agreement is not dependent on the price or performance of the other Huadong Collaboration Agreement, and the goods and services promised in the Huadong Collaboration Agreements are not a single performance obligation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Accounting for Mavrilimumab Huadong Collaboration Agreement

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and (ii) the clinical manufacturing supply of certain materials for mavrilimumab products in the Huadong Territory.

The selling price of each performance obligation in the mavrilimumab Huadong Collaboration Agreement was determined based on the

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Company’s standalone selling price (“SSP”) with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis.

The selling price of each performance obligation in the mavrilimumab Huadong Collaboration Agreement was determined based on the Company’s standalone selling price (“SSP”) with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis.

The Company allocated the variable consideration related to the manufacturing obligations to the future clinical supply of mavrilimumab products in the Huadong Territory and the remaining fixed and variable consideration to the license obligation.

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The Company will recognize revenue for the clinical manufacturing supply obligations at a point in time, that is upon each delivery of the supply to Huadong.

The Company has not recognized any revenue under the mavrilimumab Huadong Collaboration Agreement for the year ended December 31, 2023 as there has been no delivery of clinical manufacturing supply of certain materials under the mavrilimumab Huadong Collaboration Agreement to date.

Accounting for Rilonacept Huadong Collaboration Agreement

As of the Effective Date, the Company identified the following material promises in the rilonacept Huadong Collaboration Agreement that were evaluated:

delivery of (i) exclusive license for rilonacept in the Huadong Territory;

(ii) clinical manufacturing supply of certain materials for rilonacept products in the Huadong Territory;

and (iii) commercial manufacturing supply of certain material for rilonacept products in the Huadong Territory.

The Company also evaluated whether certain options outlined within the rilonacept Huadong Collaboration Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options convey a material right to Huadong and therefore are not considered separate performance obligations within the rilonacept Huadong Collaboration Agreement.

The Company assessed the above promises and determined that there is one combined performance obligation for the exclusive license for rilonacept and clinical and commercial manufacturing obligations for rilonacept products in the Huadong Territory.

Huadong cannot exploit the value of the exclusive license for rilonacept products in the Huadong Territory without receipt of supply as the exclusive license for rilonacept products in the Huadong Territory does not convey to Huadong the right to manufacture and therefore the Company has combined the exclusive license for rilonacept products in the Huadong Territory and the manufacturing obligations into one performance obligation.

The Company determined the transaction price at the inception of the rilonacept Huadong Collaboration Agreement which includes $ 12,000 , consisting of the upfront payment.

The Company also includes an estimate of variable consideration associated with the clinical manufacturing supply of certain materials when those materials are shipped.

The Company has no t recognized any revenue under the mavrilimumab Huadong Collaboration Agreement for the years ended December 31, 2024 and 2023 as there has been no delivery of clinical manufacturing supply of certain materials under the mavrilimumab Huadong Collaboration Agreement to date.

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Accounting for ARCALYST Huadong Collaboration Agreement

As of the Effective Date, the Company identified the following material promises in the ARCALYST Huadong Collaboration Agreement that were evaluated:

delivery of (i) exclusive license for ARCALYST in the Huadong Territory;

(ii) clinical manufacturing supply of certain materials for ARCALYST products in the Huadong Territory;

and (iii) commercial manufacturing supply of certain material for ARCALYST products in the Huadong Territory.

The Company also evaluated whether certain options outlined within the ARCALYST Huadong Collaboration Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options convey a material right to Huadong and therefore are not considered separate performance obligations within the ARCALYST Huadong Collaboration Agreement.

The Company assessed the above promises and determined that there is one combined performance obligation for the exclusive license for ARCALYST and clinical and commercial manufacturing obligations for ARCALYST products in the Huadong Territory.

Huadong cannot exploit the value of the exclusive license for ARCALYST products in the Huadong Territory without receipt of supply as the exclusive license for ARCALYST products in the Huadong Territory does not convey to Huadong the right to manufacture and therefore the Company has combined the exclusive license for ARCALYST products in the Huadong Territory and the manufacturing obligations into one performance obligation.

The Company determined the transaction price at the inception of the ARCALYST Huadong Collaboration Agreement which includes $ 12,000 , consisting of the upfront payment.

In 2024 the Company added 20,000 to the transaction price following the achievement of a regulatory milestone.

The Company also includes an estimate of variable consideration associated with the clinical and commercial manufacturing supply of certain materials when those materials are shipped.

The Company determined that any variable consideration related to development and regulatory milestones, sales milestones and royalties are deemed fully constrained and therefore excluded from the transaction price due to the high degree of uncertainty and risk associated with these potential payments, as the Company determined that it could not assert that it was probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

1 unchanged sentence

Any changes in estimates may result in a cumulative catch-up based on the number of units of manufactured product delivered.

As noted above, the Company identified a single combined performance obligation in the rilonacept Huadong Collaboration Agreement consisting of the exclusive license for rilonacept and clinical and commercial manufacturing obligations for rilonacept products in the Huadong Territory.

The Company recognizes revenue for the combined performance obligation consisting of the exclusive license for rilonacept and clinical and commercial manufacturing obligations for rilonacept products in the Huadong Territory at a point in time, upon which control of materials are transferred to Huadong for each delivery of the associated materials.

As noted above, the Company identified a single combined performance obligation in the ARCALYST Huadong Collaboration Agreement consisting of the exclusive license for ARCALYST and clinical and commercial manufacturing obligations for ARCALYST products in the Huadong Territory.

The Company recognizes revenue for the combined performance obligation consisting of the exclusive license for ARCALYST and clinical and commercial manufacturing obligations for ARCALYST products in the Huadong Territory at a point in time, upon which control of materials are transferred to Huadong for each delivery of the associated materials.

The Company currently expects to recognize the revenue over the life of the agreement.

This estimate considers the timing of development and commercial activities

This estimate considers the timing of development and commercial activities under the ARCALYST Huadong Collaboration Agreement and may be reduced or increased based on changes in the various activities.

The Company recognized $ 189 of the transaction price in collaboration revenue during the year ended December 31, 2024, under the ARCALYST Huadong Collaboration Agreement related to materials delivered.

The Company has no t recognized any revenue under the ARCALYST Huadong Collaboration Agreement for the years ended December 31, 2023 and 2022 as there were no deliveries of materials under the ARCALYST Huadong Collaboration Agreement.

As of December 31, 2024, $ 31,811 is recorded in non-current deferred revenue, based upon timing of anticipated future shipments.

KINIKSA PHARMACEUTICALS, LTD.

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(Amounts in thousands, except share and per share amounts)

under the rilonacept Huadong Collaboration Agreement and may be reduced or increased based on changes in the various activities.

The Company has no t recognized any revenue under the rilonacept Huadong Collaboration Agreement for the years ended December 31, 2023 and 2022 as there has been no delivery of materials under the rilonacept Huadong Collaboration Agreement to date.

As of December 31, 2023, $ 46 is recorded in current deferred revenue and $ 11,954 is recorded in non-current deferred revenue, based upon timing of anticipated future shipments.

The following tables summarizes the Company’s contract assets and contract liabilities in connection with license and collaboration agreements for the years ended December 31, 2024 and 2023:

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Year ended December 31, 2024

Contract Assets:

Genentech vixarelimab

Contract Liabilities:

Genentech vixarelimab

Huadong rilonacept

Huadong ARCALYST

Total Contract Liabilities

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Genentech vixarelimab

Huadong rilonacept

Huadong ARCALYST

Total Contract Liabilities

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In exchange for these rights, the Company made an upfront payment to Biogen of $ 11,500 and a technology transfer payment of $ 500 .

The Company accounted for the acquisition of technology as an asset acquisition because it

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(Amounts in thousands, except share and per share amounts)

did not meet the definition of a business.

The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business.

The Company recorded the upfront payment and technology transfer payment as research and development expense in the consolidated statement of operations and comprehensive income (loss) because the acquired technology represented in-process research and development and had no alternative future use.

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Additionally, the Company could be obligated to make up to an aggregate of up to $ 150,000 of payments upon the achievement of specified annual net sales milestones and to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the high single-digit percentages and ending below the teens.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

The Company also agreed to pay certain obligations under third party contracts retained by Biogen that relate to the vixarelimab program.

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Upon the termination or expiration of the Genentech License Agreement, the amendments to the terms of the Biogen Agreement, as set forth in the Second Biogen Amendment, will terminate and all terms of the Biogen Agreement will revert to the version of such terms in effect as of immediately prior to the effective date of the Genentech License Agreement.

During the years ended December 31, 2023, 2022 and 2021, the Company recorded research and development expenses of $ 94 , $ 56 and $ 53 respectively, related to a milestone and the annual maintenance fee in connection with the retained contracts.

During the years ended December 31, 2024, 2023 and 2022, the Company recorded expenses of $ 144 , $ 94 and $ 56 respectively, related to a milestone and the annual maintenance fee in connection with the retained contracts.

Beth Israel Deaconess Medical Center License Agreement

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The Company is also obligated to pay a low single-digit royalty on annual net sales of products licensed under the agreement.

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(Amounts in thousands, except share and per share amounts)

During the years ended December 31, 2023, 2022 and 2021, the Company recorded research and development expense of $ 40 , $ 10 and $ 10 , respectively in connection with the BIDMC Agreement.

During the years ended December 31, 2024, 2023 and 2022, the Company recorded expenses of $ 10 , $ 40 and $ 10 , respectively in connection with the BIDMC Agreement.

Regeneron License Agreement

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Upon receiving positive data in RHAPSODY, the Company’s pivotal Phase 3 clinical trial of ARCALYST, Regeneron transferred the biologics license application (“BLA”) for ARCALYST to the Company.

In March 2021, when the FDA granted approval of ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older, the Company assumed the sales and distribution of ARCALYST for CAPS and DIRA in the United States.

In March 2021, when the FDA granted approval of ARCALYST for the

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(Amounts in thousands, except share and per share amounts)

treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older, the Company assumed the sales and distribution of ARCALYST for CAPS and DIRA in the United States.

The Company has made $ 32,500 in payments under the Regeneron Agreement in connection with upfront fees and achievement of regulatory milestones, including a $ 20,000 payment in the first quarter of 2021 in connection with the achievement of a regulatory milestone.

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Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment related breaches).

Regeneron has the right to terminate the agreement if the Company suspends its

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(Amounts in thousands, except share and per share amounts)

development or commercialization activities for a consecutive 12 month period or does not grant a sublicense to a third party to perform such activities, or if the Company challenges any of the licensed patent rights.

Regeneron has the right to terminate the agreement if the Company suspends its development or commercialization activities for a consecutive 12 month period or does not grant a sublicense to a third party to perform such activities, or if the Company challenges any of the licensed patent rights.

The Company may terminate the agreement at any time with one year ’s written notice.

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MedImmune License Agreement

In December 2017, the Company entered into a license agreement (as amended from time to time, the “MedImmune Agreement”) with MedImmune, Limited (“MedImmune”), pursuant to which MedImmune granted the Company an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab.

Under the MedImmune Agreement, the Company also acquired reference rights to relevant manufacturing and regulatory documents and MedImmune’s existing supply of mavrilimumab drug substance and product.

The Company is obligated to use commercially reasonable efforts to develop and commercialize the licensed products.

In December 2017, the Company entered into a license agreement (as amended from time to time, the “MedImmune Agreement”) with MedImmune, Limited (subsequently acquired by AstraZeneca PLC) (“MedImmune”), pursuant to which MedImmune granted the Company an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab.

Under the MedImmune Agreement,

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(Amounts in thousands, except share and per share amounts)

the Company also acquired reference rights to relevant manufacturing and regulatory documents and MedImmune’s existing supply of mavrilimumab drug substance and product.

The Company was obligated to use commercially reasonable efforts to develop and commercialize the licensed products.

In February 2025, the Company delivered a notice of termination to MedImmune, notifying them of its intent to terminate the MedImmune Agreement, for convenience, effective May 22, 2025.

Following such date, the exclusive worldwide sublicense rights to certain intellectual property rights to make, use, develop and commercialize mavrilimumab will be returned to MedImmune.

The Company does not expect to record any significant charges related to the termination of the MedImmune Agreement.

In exchange for these rights, the Company made an upfront payment of $ 8,000 .

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The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive income (loss) because the acquired technology represented in-process research and development and had no alternative future use.

In addition, the Company is obligated to make clinical, regulatory and initial sales milestone payments of up to $ 72,500 in aggregate for the first two indications, including, a $ 5,000 pass-through payment due upon the achievement of a specified clinical milestone event which was achieved in the fourth quarter of 2018.

Also included is a milestone payment of $ 10,000 due upon the earlier to occur of a specified regulatory milestone and December 31, 2018, unless the MedImmune Agreement is earlier terminated by either party.

Under the terms of the MedImmune Agreement, the Company was obligated to make clinical, regulatory and initial sales milestone payments of up to $ 72,500 in aggregate for the first two indications, including, a $ 5,000 pass-through payment due upon the achievement of a specified clinical milestone event which was achieved in the fourth quarter of 2018.

Also included was a milestone payment of $ 10,000 due upon the earlier to occur of a specified regulatory milestone and December 31, 2018.

During the year ended December 31, 2019, the Company made both the $ 5,000 and $ 10,000 previously accrued milestone payments in accordance with the MedImmune Agreement.

In addition, the Company is obligated to make clinical and regulatory milestone payments of up to $ 15,000 in the aggregate for each subsequent indication.

In addition, the Company was obligated to make clinical and regulatory milestone payments of up to $ 15,000 in the aggregate for each subsequent indication.

In July 2020, the Company entered into an amendment to the MedImmune Agreement to establish a new coronavirus field and defer the payment of certain development and regulatory milestones as applied to the new coronavirus field.

The Company is obligated to make milestone payments to MedImmune of up to $ 85,000 upon the achievement of annual net sales thresholds up to, but excluding, $ 1,000,000 in annual net sales as well as additional milestone payments aggregating up to $ 1,100,000 upon the achievement of additional specified annual net sales thresholds starting at $ 1,000,000 and higher.

The Company has also agreed to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the low double-digit percentages and ending at twenty percent.

Royalty rates are subject to reductions upon certain events.

The Company is solely responsible for all development, manufacturing, and commercial activities and costs of the licensed products, including clinical studies or other tests necessary to support the use of a licensed product.

The Company is also responsible for costs related to the filing, prosecution and maintenance of the licensed patent rights.

The MedImmune Agreement will expire upon the expiration of the royalty term in the last country for the last indication, as defined in the agreement.

Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days .

MedImmune has the right to terminate the agreement if the Company challenges any of the licensed patent rights.

The Company may terminate the agreement at any time upon 90 days ’ prior written notice.

During the years ended December 31, 2023, 2022 and 2021, the Company did no t record research and development expense in connection with milestone payments due under the MedImmune Agreement.

During the years ended December 31, 2024, 2023 and 2022, the Company did no t record expenses in connection with milestone payments due under the MedImmune Agreement.

Prior to the Redomiciliation, the Company was incorporated and principally subject to taxation in Bermuda.

Following the Redomiciliation, the Company is incorporated and principally subject to taxation in the United Kingdom.

Under the current laws of Bermuda, tax on a company’s income is assessed at a zero percent tax rate.

As a result, the Company has no t recorded any income tax benefits from its losses incurred in Bermuda during the reporting periods in which it was incorporated there, and no net operating loss carryforwards will be available to the Company for those losses.

Following the Redomiciliation, the Company’s income is subject to the enacted United Kingdom statutory corporate tax rate and net operating losses incurred have an indefinite carryforward.

The Company’s wholly owned U.S.

subsidiaries, Kiniksa US and Primatope, are subject to federal and state income taxes in the United States.

The Company’s wholly owned subsidiary Kiniksa Bermuda remains subject to taxation, if any, in Bermuda.

Certain of the Company’s subsidiaries operate under cost plus arrangements.

Since 2021, the Company has engaged in a series of intra-entity asset transfers and allocations to contribute assets to its wholly owned Switzerland subsidiary, UK subsidiary and its UK Swiss branch office.

KINIKSA PHARMACEUTICALS, LTD.

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(Amounts in thousands, except share and per share amounts)

As a company incorporated in Bermuda, the Company is principally subject to taxation in Bermuda.

Under the current laws of Bermuda, tax on a company’s income is assessed at a zero percent tax rate.

As a result, the Company has no t recorded any income tax benefits from its losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards will be available to the Company for those losses.

The Company and its wholly-owned subsidiaries have entered into agreements with Kiniksa US, under which Kiniksa US provides management, commercial, manufacturing and research and development services to those parties for which Kiniksa US receives costs plus a service fee.

In 2021, 2022 and 2023 the Company engaged in a series of intra-entity asset transfers and allocations to contribute assets to its wholly owned UK subsidiary and its UK Swiss branch office.

In January 2021, in connection with its launch readiness activities, Kiniksa Bermuda contributed all of its rights, title and interest in, among other things, certain contracts (including the Regeneron Agreement), intellectual property rights, product filings and approvals and other information, plans and materials owned or controlled by Kiniksa Bermuda insofar as they related exclusively or primarily to ARCALYST to Kiniksa UK.

property rights, product filings and approvals and other information, plans and materials owned or controlled by Kiniksa Bermuda insofar as they related exclusively or primarily to ARCALYST to Kiniksa UK.

In February 2022, Kiniksa Bermuda contributed its exclusive rights to develop and commercialize mavrilimumab in the Huadong Territory to Kiniksa UK.

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Kiniksa UK’s Swiss branch office received a step up in basis resulting in a Swiss deferred tax asset.

The fair value of the allocated ARCALYST intellectual property assets was determined utilizing forecasted cash flows attributable to commercial

The fair value of the allocated ARCALYST intellectual property assets was determined utilizing forecasted cash flows attributable to commercial operations and estimated probabilities of success of such cash flows, discounted to present value utilizing the discounted cash flow method.

The fair value of the ARCALYST inventory was determined utilizing the average net selling price less estimated costs to sell.

In January 2024, Kiniksa Bermuda transferred to Kiniksa Switzerland all rights, title and interest in, among other things, certain contracts, intellectual property rights, product filings and approvals and other information, plans and materials owned insofar as they related exclusively or primarily to abiprubart, mavrilimumab, KPL-387 and certain preclinical assets, excluding certain rights necessary for the completion of Cohort 4 of the Company’s ongoing Phase 2 clinical trial of abiprubart in rheumatoid arthritis .

In June 2024, Kiniksa UK terminated its exclusive rights to develop and commercialize mavrilimumab in the Huadong Territory, with such rights reverting to Kiniksa Switzerland.

Thereafter Kiniksa Switzerland held worldwide rights to develop and commercialize mavrilimumab.

In October 2024, Kiniksa UK contributed all of its rights, title and interest in, among other things, certain contracts (including the Biogen Agreement), intellectual property rights, product filings and approvals and other information, plans and materials owned or controlled by Kiniksa UK insofar as they related exclusively or primarily to vixarelimab to Kiniksa Switzerland.

KINIKSA PHARMACEUTICALS, LTD.

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operations and estimated probabilities of success of such cash flows, discounted to present value utilizing the discounted cash flow method.

The fair value of the ARCALYST inventory was determined utilizing the average net selling price less estimated costs to sell.

The consolidated Company did not incur tax liabilities on any of the January 2024 intra-entity transfers since the transferor, Kiniksa Bermuda, is exempt from income tax in Bermuda.

Kiniksa Switzerland accounted for the intra-entity transfers as transfers of assets between related parties and received stepped up tax bases in the contributed intellectual property assets, equal to the fair value of the assets at the time of transfer.

In relation to the June 2024 transaction, Kiniksa UK received consideration in exchange for the termination of exclusive rights.

Neither Kiniksa UK nor Kiniksa Switzerland incurred any tax liabilities as a result of the transaction.

The consolidated Company did not incur tax liabilities on any of the October 2024 intra-entity transfers since the transferor, Kiniksa UK, is the sole direct shareholder of Kiniksa Switzerland.

The fair values of the transferred assets were determined utilizing future cash flows of projected operations and estimated probabilities of success of such cash flows, discounted to present value utilizing the discounted cash flow method.

The Company recorded deferred tax assets as a result of these contributions, which represent the difference between the stepped-up tax bases and the book bases for financial statement purposes.

Subsequent to the contribution there was a triggering event resulting in decreases to the tax asset balance related to mavrilimumab intangible assets.

The Company maintains a valuation allowance on the full amount of the Kiniksa Switzerland deferred tax assets.

There are no material deferred tax assets in the jurisdictions outside the United States, UK and Switzerland.

Income (loss) before benefit (provision) for income taxes consisted of the following:

Foreign (U.S., U.K., Germany, France, Switzerland)

(1) As a result of the redomiciliation the Company’s year ended December 31, 2024 domestic operations refer to the UK and years ended December 31, 2023 and 2022 domestic operations refer to Bermuda

(2) As a result of the redomiciliation the Company’s year ended December 31, 2024 foreign operations include U.S., Germany, France, Switzerland and Bermuda, and years ended December 31, 2023 and 2022 foreign operations include U.S., UK, Germany, France, and Switzerland.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

The components of the Company’s income tax benefit (provision) were as follows:

Current income tax benefit (provision):

Foreign (U.K., Germany, France, Switzerland)

Total current income tax benefit (provision)

Deferred income tax benefit (provision):

Foreign (U.K., Germany, France, Switzerland)

Total deferred income tax benefit (provision)

Total benefit (provision) for income taxes

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

A reconciliation of the Bermuda statutory income tax rate of 0 % to the Company’s effective income tax rate is as follows:

Bermuda statutory income tax rate

(1) As a result of the redomiciliation the Company’s year ended December 31, 2024 domestic operations refer to the UK and years ended December 31, 2023 and 2022 domestic operations refer to Bermuda

A reconciliation of the statutory income tax rate of the Company’s effective income tax rate is as follows:

Statutory income tax rate (1)

and Europe tax rate differential

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Effective income tax rate

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

(1) Prior to the Redomiciliation in 2024, the Company was incorporated and principally subject to taxation in Bermuda.

Following the Redomiciliation, the Company is incorporated and principally subject to taxation in the United Kingdom.

Net deferred tax assets consisted of the following:

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Intangible assets

Capitalized research and development

Depreciation and amortization

Net operating losses

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Deferred tax liabilities:

Depreciation and amortization

Right of use asset

Depreciation and amortization

Accrued expenses and other liabilities

Net deferred tax assets

As of December 31, 2023 and 2022, the Company had no federal research and development tax credit carryforwards available to reduce future tax liabilities.

As of December 31, 2024, the Company had federal research and development tax credit carryforwards of approximately $ 808 available to reduce future tax liabilities, which begin to expire in 2045.

As of December 31 2023, the Company had no federal research and development tax credit carryforwards available to reduce future tax liabilities.

As of December 31, 2024 and 2023, the Company had state research and development tax credit carryforwards of approximately $ 184 and $ 337 respectively, available to reduce future tax liabilities, which can be carried forward indefinitely.

As of December 31, 2024 and 2023 the Company had foreign net operating loss (NOLs) carryforwards of $ 66,990 and $ 1,128 respectively, available to reduce future tax liabilities.

As of December 31, 2024 the Company had domestic NOLs of $ 18,382 .

The Company had no domestic NOLs as of December 31, 2023.

The NOLs maybe carried forward and utilized, subject to local limitations.

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Valuation allowances require an assessment of both positive and negative evidence when determining whether it is more likely than not that the Company will be able to recover its deferred tax assets.

Such assessment is

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(Amounts in thousands, except share and per share amounts)

required on a jurisdiction-by-jurisdiction basis.

Such assessment is required on a jurisdiction-by-jurisdiction basis.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

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deferred tax assets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

In the second quarter of 2023, the Company assessed the valuation allowance on its U.S.

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Valuation allowance at end of year

The valuation allowance increased by $ 610,452 in 2024 primarily as a result of the establishment of the valuation allowance for the Kiniksa Switzerland deferred tax assets which primarily consisted of the tax basis in intellectual property transferred from Bermuda and net operating losses.

The valuation allowance increased by $ 26,676 in 2023 primarily as a result of the establishment of the valuation allowance for the UK deferred tax assets which primarily consisted of the tax basis in intellectual property transferred from Bermuda and net operating losses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

The Company recognizes the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position.

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The amount of unrecognized tax benefits is $ 13,390 , $ 1,794 and $ 1,794 as of December 31, 2024, 2023 and 2022, respectively.

The net change in 2023, 2022 and 2021 relate to tax positions on our intellectual property transfers and positions on research and development credits.

The net change in 2024, 2023 and 2022 relate to tax positions on the Company’s intellectual property transfers and positions on research and development credits.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

A roll forward of the Company’s uncertainties in its income tax provision liability is presented below:

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No additional provision has been made for withholding taxes related to undistributed foreign earnings of the Company’s wholly owned foreign subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries.

As such, earnings are expected to be permanently reinvested, the investments are permanent in duration, or the Company has estimated that no additional tax liability will arise as a result of the distribution of such earnings.

Unremitted earnings are $ 50,466 as of December 31, 2023 and a liability could arise if amounts are distributed by the subsidiaries or if subsidiaries are ultimately disposed, which could result in up to $ 15,140 withholding taxes related to permanently reinvested earnings.

The Company has determined that unremitted foreign earnings are not considered indefinitely reinvested to the extent foreign earnings can be distributed without a significant tax cost.

As such, the Company has estimated that no additional tax liability will arise as a result of the distribution of such earnings.

Net Income (Loss) per Share

The rights, including the liquidation and dividend rights, of the holders of Class A, Class B, Class A1 and Class B1 common shares are identical, except with respect to voting, transferability and conversion (see Note 10).

As the liquidation and dividend rights are identical, losses are allocated on a proportionate basis and the resulting net income (loss) per share attributed to common shareholders will, therefore, be the same for both Class A and Class B common shares on an individual or combined basis.

The rights, including the liquidation and dividend rights, of the holders of Class A, Class B, Class A1 and Class B1 ordinary shares are identical, except with respect to voting, transferability and conversion (see Note 10).

As the liquidation and dividend rights are identical, losses are allocated on a proportionate basis and the resulting net income (loss) per share attributed to ordinary shareholders will, therefore, be the same for both Class A and Class B ordinary shares on an individual or combined basis.

KINIKSA PHARMACEUTICALS, LTD.

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(Amounts in thousands, except share and per share amounts)

Basic and diluted Net income (loss) attributable to common shareholders was calculated as follows:

Net income (loss) attributable to common shareholders

Basic and diluted Net income (loss) attributable to ordinary shareholders was calculated as follows:

Net income (loss) attributable to ordinary shareholders

Weighted-average basic shares outstanding

Effect of dilutive securities

Options to purchase common shares

Options to purchase ordinary shares

Unvested RSUs

Unvested PSUs

Weighted-average diluted shares

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Diluted net income (loss) per share

The Company’s unvested RSUs have been excluded from the computation of basic net loss per share attributable to common shareholders.

The Company’s unvested RSUs and PSUs have been excluded from the computation of basic net income (loss) per share attributable to ordinary shareholders.

Diluted earnings per share includes the assumed exercise of dilutive options and the assumed issuance of unvested RSUs and performance-based awards for which the performance condition has been met as of the date of determination, using the treasury stock method unless the effect is anti-dilutive.

The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options and the average unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase the Company’s common stock at the average market price during the period.

For year ended December 31, 2021 the Company’s potentially dilutive securities, which include options and unvested RSUs, have been excluded from the computation of diluted net loss per share attributable to common shareholders for the periods indicated as the effect would be to reduce the net loss per share attributable to common shareholders.

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options and the average unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase the Company’s ordinary stock at the average market price during the period.

For year ended December 31, 2024 the Company’s potentially dilutive securities, which include options, unvested RSUs and unvested PSUs, have been excluded from the computation of diluted net loss per share attributable to ordinary shareholders for the periods indicated as the effect would be to reduce the net loss per share attributable to ordinary shareholders.

Therefore, the weighted average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share attributable to ordinary shareholders is the same.

The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share attributable to ordinary shareholders for the periods indicated because including them would have had an anti-dilutive effect:

Years ended December 31,

Share options to purchase common shares

Share options to purchase ordinary shares

Unvested RSUs

Unvested PSUs

Total anti-dilutive shares

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Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

The Company is not a party to any material litigation and does not have contingency reserves established for any litigation liabilities.

Segment Information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions.

The Company’s singular focus is on developing and commercializing novel therapies that target cardiovascular diseases with significant unmet medical need.

The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer.

The Company’s CODM reviews consolidated operating results and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The CODM utilizes net income to make key decisions about how to allocate resources across the Company’s commercial product and development programs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2024, 2023 and 2022:

Product revenue, net

License and collaboration revenue

Total revenue

Operating expenses:

Cost of goods sold

Collaboration expenses

Direct research and development expenses by program:

Unallocated research and development expenses

Selling, general and administrative

Total operating expenses

Other income (1)

Income (loss) before income taxes

Benefit (provision) for income taxes

Net income (loss)

Other significant noncash items:

Share-based compensation expense

Non-cash lease expense

Deferred income taxes

(1) Includes interest income of $ 9,036 , $ 8,227 and $ 1,230 for the years ended December 31, 2024, 2023 and 2022 respectively.

Benefit Plans

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During the years ended December 31, 2024, 2023 and 2022, the Company contributed $ 2,923 , $ 2,305 and $ 1,683 respectively, to the plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Subsequent Events

The Company issued termination notices to CDMOs in February 2025 to terminate the clinical supply agreements for the production of abiprubart.

The terminations will be effective in March 2025, and the Company is currently performing its analysis of the financial impact of the terminations.

As of the date of this report, the Company expects to record between $ 14,000 and $ 17,000 in research and development expense because of these terminations during the year ended December 31, 2025.

These estimated costs are subject to ongoing negotiations, the terms and conditions of the agreements and actual cost may differ.

The Company will record these amounts as research and development expenses.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures