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Kindred Biosciences: Unique Veterinary Drug Company Trading At 1.2 Times Net Cash

Elevator Pitch

The share price of Kindred Biosciences (NASDAQ:KIN), an early stage veterinary drug company, has declined by more than 60% in the past 52 weeks. In particular, its share price dropped 24% during pre-market trading on December 4, 2014, following an announcement that it will 'discontinue its AtoKin study (its lead product candidate targeted at the atopic dermatitis market) in favor of directing resources toward other programs in its portfolio.' Trading at 1.2 times net cash, the market is pricing a very low probability of success for Kindred Biosciences and its drug development programs, suggesting that the stock will be likely to re-rate on any positive developments. More importantly, Kindred Biosciences' relatively low risk business model is underappreciated and provides significant downside protection in addition to the substantial net cash…