May 25-27, 2021 Ligase Targeting DrugDevelopment Seize the Therapeutic Value of Ubiquitin Ligases Drugging Tissue-Restricted E3 Ligases | --- | --- | --- | --- | --- | |-------|-------|-------|-------|---------------------------------------------------------------| | | | | | | | | | | | Chris De Savi, PhD | | | | | | VP, Head of Drug Discovery | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | INVENTING NEW MEDICINES | | | | | | W I T H T A R G E T E D P R O T E I N D E G R ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Collaboration revenue significantly increased due to the Sanofi agreement, but rising R&D expenses led to a **$13.1 million** net loss, despite a strong **$435.2 million** cash position Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $53,098 | $31,004 | | Marketable securities | $382,078 | $427,729 | | Total current assets | $340,791 | $302,339 | | Total assets | $464,552 | $487,175 | | **Liabilities & Stockholders' Equity** | | | | Deferred revenue (current & non-current) | $152,566 | $170,390 | | Total liabilities | $189,305 | $203,287 | | Total stockholders' equity | $275,247 | $283,888 | Q1 2021 vs Q1 2020 Statement of Operations (in thousands, except per share data) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Collaboration Revenue | $18,702 | $3,428 | | Research and development | $25,962 | $12,116 | | General and administrative | $5,909 | $2,559 | | Total operating expenses | $31,871 | $14,675 | | Loss from operations | ($13,169) | ($11,247) | | Net loss | ($13,075) | ($10,932) | | Net loss per share | ($0.29) | ($10.23) | Q1 2021 vs Q1 2020 Cash Flows (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($22,823) | ($12,057) | | Net cash provided by (used in) investing activities | $44,323 | ($37,403) | | Net cash provided by financing activities | $595 | $93,120 | - The company is a biopharmaceutical firm focused on targeted protein degradation, has not yet generated product revenue, and has a history of net losses, with an accumulated deficit of **$141.8 million** as of March 31, 2021[31](index=31&type=chunk)[32](index=32&type=chunk) - Management believes its cash, cash equivalents, and marketable securities of **$435.2 million** as of March 31, 2021, are **sufficient** to fund operations and capital expenditures for at least the next twelve months[33](index=33&type=chunk) - The Sanofi collaboration, initiated in July 2020, included a **$150.0 million** upfront payment. The company is eligible for up to **$1.48 billion** in development milestones and **$700.0 million** in commercial milestones. In Q1 2021, **$11.6 million** in revenue was recognized from this agreement[53](index=53&type=chunk)[58](index=58&type=chunk)[67](index=67&type=chunk) - The Vertex collaboration, initiated in May 2019, included a **$50.0 million** upfront payment and a **$5.9 million** premium on a stock purchase. The company is eligible for up to **$170.0 million** in payments per target. In Q1 2021, **$7.1 million** in revenue was recognized from this agreement[70](index=70&type=chunk)[71](index=71&type=chunk)[79](index=79&type=chunk) - Total equity-based compensation expense was **$3.2 million** for Q1 2021, a significant increase from **$0.4 million** in Q1 2020[118](index=118&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the clinical-stage Pegasus™ platform, key programs, a partial clinical hold on KT-474, and **sufficient** cash of **$435.2 million** to fund operations into 2025 - The company is a clinical-stage biopharmaceutical company with key programs in IRAK4, IRAKIMiD, and STAT3, utilizing its proprietary Pegasus™ targeted protein degradation platform[126](index=126&type=chunk) - The company initiated a Phase 1 trial for its IRAK4 degrader, KT-474, in February 2021. However, the multiple ascending dose (MAD) portion of the trial is on a partial clinical hold by the FDA pending review of data from the single ascending dose (SAD) portion[126](index=126&type=chunk) - As of March 31, 2021, the company had **$435.2 million** in cash, cash equivalents, and marketable securities, which is expected to fund operating expenses and capital expenditure requirements into 2025[133](index=133&type=chunk)[167](index=167&type=chunk) - The COVID-19 pandemic is noted as a risk, potentially impacting clinical trial timelines and business operations, though specific significant disruptions to date were limited to a minor delay in API starting materials[133](index=133&type=chunk)[134](index=134&type=chunk)[293](index=293&type=chunk) Results of Operations Q1 2021 collaboration revenue increased by **$15.3 million** to **$18.7 million**, while R&D and G&A expenses also significantly rose due to program advancement and public company operations Comparison of Operating Results (in thousands) | Item | Q1 2021 | Q1 2020 | Change | | :--- | :--- | :--- | :--- | | Collaboration Revenue | $18,702 | $3,428 | $15,274 | | Research & Development | $25,962 | $12,116 | $13,846 | | General & Administrative | $5,909 | $2,559 | $3,350 | | Loss from Operations | ($13,169) | ($11,247) | ($1,922) | - The increase in R&D expenses was primarily due to a **$3.9 million** increase in direct expenses for IRAK4, IRAKIMiD, and STAT3 programs, a **$5.3 million** increase in platform and exploratory program investment, and a **$4.7 million** increase in personnel and related costs[154](index=154&type=chunk) Liquidity and Capital Resources The company has **$435.2 million** in cash, **sufficient** to fund operations into 2025, but anticipates needing additional capital for future clinical development - As of March 31, 2021, the company had cash, cash equivalents, and marketable securities of **$435.2 million**[157](index=157&type=chunk) - Cash used in operating activities was **$22.8 million** in Q1 2021, compared to **$12.1 million** in Q1 2020[158](index=158&type=chunk)[159](index=159&type=chunk) - The company expects its existing cash to fund operations and capital expenditures into 2025, but anticipates needing substantial additional funds to complete clinical development and commercialization[167](index=167&type=chunk)[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate changes on its **$435.2 million** portfolio, but management deems exposure to interest rate, foreign currency, and inflation risks minimal - The company's primary market risk is interest rate changes on its **$435.2 million** portfolio of cash and marketable securities[176](index=176&type=chunk) - Management believes the company does not have material exposure to interest rate risk, foreign currency risk, or inflation[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were **effective** as of March 31, 2021, with **no material changes** to internal control over financial reporting - Management concluded that as of March 31, 2021, the company's disclosure controls and procedures were **effective** at the reasonable assurance level[180](index=180&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the first quarter of 2021[181](index=181&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - As of the report date, the company is not a party to any material legal proceedings[184](index=184&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces extensive risks including historical losses, need for future funding, unproven platform, potential clinical trial failures like the KT-474 partial hold, and intense competition - The company has a limited operating history, has never generated revenue from drug sales, and has incurred significant operating losses, with an accumulated deficit of **$141.8 million** as of March 31, 2021[186](index=186&type=chunk)[188](index=188&type=chunk) - The company's targeted protein degradation (TPD) approach is novel and unproven, making it difficult to predict development time, cost, and likelihood of success. No TPD product candidates have been approved in the US or Europe[199](index=199&type=chunk) - The company's IRAK4 program (KT-474) is on partial clinical hold for the multiple ascending dose (MAD) portion of its Phase 1 trial, pending FDA review of data from the single ascending dose (SAD) portion[204](index=204&type=chunk) - The company faces substantial competition from other companies developing protein degraders, such as Arvinas, Inc. and C4 Therapeutics, Inc., as well as from companies developing traditional therapies for the same indications[279](index=279&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported **no unregistered sales** of equity securities during the period - **None**[390](index=390&type=chunk) [Exhibits](index=78&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including officer certifications and XBRL data files - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and XBRL interactive data files[394](index=394&type=chunk)

KT-413 Activity and Selectivity - KT-413 selectively degrades both IRAK4 and IMiD substrates, while CC220 only degrades IMiD substrates and KTX-545 only degrades IRAK4[8] - KT-413 substrate degradation is hierarchical: IRAK4 degradation is slower than Ikaros and Aiolos[8] - KT-413 inhibits MYD88-dependent NF-kB transcription, unlike CC220[13] - KT-413 and CC220 activate Type1 IFN signaling in MYD88MT OCI-Ly10 cells, unlike KTX-545[13] Efficacy in MYD88MT Lymphoma - KT-413 is more active in MYD88MT cells than CC220 and KTX-545, both in potency and in the maximal level of CGI achieved[10] - In both OCI-Ly10 and SUDHL2 cell lines, KT-413 showed >98% maximal cell growth inhibition, whereas maximum cell growth inhibition by CC220 was <70% in both lines[10] - In the OCI-Ly10 MYD88MT xenograft model, KT-413 dosed at 9 mg/kg on D1,2 every 3 weeks induced strong regressions[12] Mechanism of Action - Global transcriptomics analysis showed preferential downregulation of NF-kB, DNA replication and cell cycle genes and activated apoptosis pathway signaling compared to the IMiD CC220 or IRAK4-selective degraders[19] - KT-413 preferentially downregulates NF-kB, cell cycle, and upregulates apoptosis pathways compared to IMiDs or IRAK4-selective degradation[15] - The pro-apoptotic regulator BNIP3L and the anti-proliferative regulator CDKN2A are exclusively activated by KT-413[17] Future Plans - IND filing and initiation of Phase 1 studies in MYD88MT lymphoma followed by other indications are planned in 2H 2021[19]

Kymera Therapeutics Overview - Kymera Therapeutics is building a fully integrated degrader medicines company focused on targeted protein degradation (TPD)[7] - The company's strategy focuses on undrugged targets and clinical indications with high unmet medical needs and franchise potential[7] - Kymera expects 3 INDs and clinical initiations by the end of 2021[8] - As of Q4 2020, Kymera had a cash balance of $459 million, which is expected to fund operational plans into 2025[8,98] IRAK4 Program (KT-474) - KT-474 is a potent, selective, and orally active IRAK4 degrader with potential across various immune-inflammatory diseases[50] - In preclinical studies, KT-474 demonstrated almost complete knockdown across multiple tissues at multiple doses and was well-tolerated up to 600 mg/kg in rodents and 100 mg/kg in non-rodents[43] - A non-interventional study in HS patients showed higher IRAK4 levels in lesional and peri-lesional skin compared to non-lesional skin[45] - Ex vivo incubation of HS blood with KT-474 reduced IRAK4 levels across all PBMC subsets, while an IRAK4 kinase inhibitor increased IRAK4 levels in T and NK cells[47] - Phase 1 SAD portion initiated in Q1 2021, with MAD enrollment expected in 2H 2021 and proof-of-biology data expected in Q4 2021[32,48] IRAKIMiD Program (KT-413) - KT-413 is an IRAKIMiD degrader targeting IRAK4, Ikaros, and Aiolos, with potential as a precision medicine in MYD88-mutant DLBCL[51,53] - Preclinical data shows degradation of IRAK4, Ikaros, and Aiolos correlates to cell killing, with IRAK4 DC50 = 8 nM and Ikaros/Aiolos DC50 = 2 nM[58,60] - KT-413 demonstrated strong tumor regressions in preclinical models with intermittent dosing, with >90% maximum degradation of IRAK4 and Ikaros observed at 3 mg/kg dosing[63,64] - IND submission and Phase 1 clinical trial initiation in r/r B cell lymphomas is expected in 2H 2021, with proof-of-biology data expected in 2022[52,71] STAT3 Program (KT-333) - Kymera is developing STAT3 degraders for liquid and solid tumors, as well as autoimmune/fibrotic diseases[74] - Preclinical data demonstrates highly specific degradation of STAT3, with STAT3 being the only protein to be degraded with statistical significance[78] - STAT3 degrader treatment led to >95% decrease of STAT3 levels with DC50 of 15nM and 86 nM in two STAT3-dependent cell lines[79] - Development candidate nomination expected in Q1 2021, with IND submission and Phase 1 clinical trial initiation expected in Q4 2021[74,95]

Part I [Business](index=6&type=section&id=Item%201.%20Business) Kymera Therapeutics develops small molecule therapeutics using its Pegasus™ platform, focusing on targeted protein degradation for immunology-inflammation and oncology [Business Overview and Strategy](index=6&type=section&id=Business_Overview_and_Strategy) Kymera Therapeutics develops novel small molecule therapeutics via its Pegasus™ platform, advancing lead programs and expanding its pipeline - The company's core focus is on discovering and developing small molecule therapeutics that utilize targeted protein degradation (TPD) to address disease-causing proteins, particularly in immunology-inflammation and oncology[20](index=20&type=chunk) - Kymera's lead programs are IRAK4, IRAKIMiD, and STAT3, which target high-impact pathways in immune-inflammatory diseases and cancers[20](index=20&type=chunk) - The lead drug candidate, **KT-474** from the IRAK4 program, initiated the single ascending dose (SAD) portion of its **Phase 1 clinical trial** in healthy volunteers in **February 2021**, with plans to file INDs for its **IRAKIMiD (KT-413)** and **STAT3 (KT-333)** programs in the **second half of 2021**[22](index=22&type=chunk) - Strategic objectives include advancing its lead programs, expanding the Pegasus™ platform's capabilities to identify optimal E3 ligase pairings, building a broader pipeline, protecting intellectual property, and leveraging collaborations with partners like Vertex and Sanofi[21](index=21&type=chunk)[22](index=22&type=chunk)[25](index=25&type=chunk) [Our Pegasus™ Platform](index=11&type=section&id=Our_Pegasus_Platform) The Pegasus™ platform is an integrated drug discovery engine for selective protein degraders, combining E3 ligase mapping, binders, and rational design - The E3 Ligase Whole-Body Atlas maps the expression profiles of approximately **600 unique E3 ligases** across various tissues, enabling data-driven selection of E3 ligases for specific targets and diseases[45](index=45&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - The platform includes a proprietary E3 Ligase Binders Toolbox, which contains ligands for an expanded library of E3 ligases beyond the commonly used cereblon and VHL, aiming for more selective and tissue-specific degradation[45](index=45&type=chunk)[54](index=54&type=chunk) - Kymera utilizes Ternary Complex Modeling (TCM) and a Quantitative Systems Pharmacology (QSP) model to rationally design degraders and predict their pharmacokinetic/pharmacodynamic (PK/PD) relationships, aiming to optimize human dosing and increase the probability of clinical success[45](index=45&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [Our Therapeutic Pipeline](index=12&type=section&id=Our_Therapeutic_Pipeline) Kymera's pipeline targets immunology and oncology, with lead candidate KT-474 in Phase 1 and INDs for KT-413 and KT-333 planned Kymera Therapeutics Development Pipeline Summary | Program | Development Candidate | Indication | Discovery | Preclinical | Phase 1 | Phase 2 | Phase 3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **IRAK4** | KT-474 | Immune-Inflammatory Diseases | ✔ | ✔ | **►** | | | | **IRAKIMiD** | KT-413 | MYD88-mutant DLBCL | ✔ | **►** | | | | | **STAT3** | KT-333 | Hematologic Malignancies & Solid Tumors | ✔ | **►** | | | | | **Undisclosed** | - | Multiple Diseases | **►** | | | | | - The IRAK4 program's lead candidate, **KT-474**, is being developed for immune-inflammatory diseases like hidradenitis suppurativa (HS) and atopic dermatitis (AD), with a **Phase 1 trial** in healthy volunteers beginning in **February 2021**[46](index=46&type=chunk)[47](index=47&type=chunk) - The IRAKIMiD program's candidate, **KT-413**, combines IRAK4 degradation with immunomodulatory (IMiD) activity to treat MYD88-mutated diffuse large B-cell lymphoma (DLBCL), with an IND filing expected in the **second half of 2021**[46](index=46&type=chunk)[48](index=48&type=chunk) - The STAT3 program's candidate, **KT-333**, is being developed for hematological malignancies and solid tumors, with an IND filing expected in the **fourth quarter of 2021**[46](index=46&type=chunk)[49](index=49&type=chunk) [Collaborations](index=36&type=section&id=Collaborations) Kymera maintains strategic collaborations with Vertex, Sanofi, and GSK for developing protein degraders and expanding its platform - **Vertex Pharmaceuticals (May 2019):** A collaboration to develop degraders against multiple targets, with Kymera receiving **$70 million upfront** (including an equity investment) and eligibility for up to **$170 million in milestones per program** for up to six programs, plus royalties[165](index=165&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk) - **Sanofi (Genzyme) (July 2020):** A collaboration to co-develop drug candidates for IRAK4 and one other target, providing Kymera a **$150 million upfront payment** and eligibility for over **$2 billion in potential development and commercial milestones**, plus tiered royalties[172](index=172&type=chunk)[176](index=176&type=chunk) - **GlaxoSmithKline (October 2017):** A collaboration to jointly identify and research compounds against specified targets and discover novel ligase binders, with GSK making an equity investment in Kymera's Series A preferred units[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) [Manufacturing and Competition](index=38&type=section&id=Manufacturing_and_Competition) Kymera outsources all manufacturing to CMOs and faces significant competition from other protein degradation and traditional therapy developers - The company does not own or operate manufacturing facilities and relies entirely on third-party CMOs for the production of drug substances and finished drug products for preclinical and clinical studies[178](index=178&type=chunk) - Kymera faces competition from other companies in the targeted protein degradation space, including Arvinas, Inc. (clinical stage), C4 Therapeutics, Inc., Nurix Therapeutics, Inc., and others (preclinical stage)[181](index=181&type=chunk) - Competition also comes from companies developing traditional therapies (small molecules, antibodies) for the same indications targeted by Kymera's IRAK4, IRAKIMiD, and STAT3 programs[180](index=180&type=chunk)[181](index=181&type=chunk) [Intellectual Property](index=38&type=section&id=Intellectual_Property) Kymera's IP strategy relies on patents and trade secrets, with a portfolio of 1 granted U.S. patent and 105 applications, expiring 2038-2042 - As of **February 28, 2021**, the company's patent portfolio included **one granted U.S. patent**, **52 U.S. patent applications**, and **53 foreign patent applications**[185](index=185&type=chunk) - The patent portfolio covers platform E3 ligase ligand technology, novel bifunctional degrader compounds, and target-specific degraders for proteins like IRAK and STAT[185](index=185&type=chunk)[186](index=186&type=chunk)[188](index=188&type=chunk) - Patents granted from the current applications are expected to expire between **2038 and 2042**, absent any patent term adjustments or extensions[186](index=186&type=chunk)[187](index=187&type=chunk)[189](index=189&type=chunk) [Government Regulation](index=40&type=section&id=Government_Regulation) Kymera's operations are subject to extensive FDA and international regulations covering drug development, manufacturing, marketing, and healthcare laws - Drug development is regulated by the FDA and involves extensive preclinical studies (GLP), an Investigational New Drug (IND) application, and multi-phase clinical trials (GCP) to establish safety and efficacy before an NDA can be submitted[198](index=198&type=chunk)[199](index=199&type=chunk)[206](index=206&type=chunk) - The company may seek expedited development pathways such as Fast Track Designation, Breakthrough Therapy Designation, Priority Review, and Accelerated Approval to potentially speed up the review process for serious conditions[218](index=218&type=chunk) - Operations are also subject to other healthcare laws, including the federal Anti-Kickback Statute, the False Claims Act, HIPAA, and the Physician Payments Sunshine Act, which regulate interactions with healthcare providers and payors[237](index=237&type=chunk)[364](index=364&type=chunk) - International operations, particularly in the EEA, are governed by regulations from the EMA, including centralized or national authorization procedures for marketing, and are subject to strict data privacy laws like the GDPR[260](index=260&type=chunk)[269](index=269&type=chunk) [Employees and Human Capital](index=56&type=section&id=Employees_and_Human_Capital) As of December 31, 2020, Kymera had 75 full-time employees, with 54 in R&D, and implemented COVID-19 safety protocols - As of **December 31, 2020**, the company had **75 full-time employees**, with **54** engaged in R&D and **21** in G&A functions[274](index=274&type=chunk) - The company has implemented a multi-faceted response to the COVID-19 pandemic, including decreased density in workspaces, increased cleaning, providing PPE, and implementing weekly testing to ensure employee safety[276](index=276&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) Kymera faces substantial financial, development, operational, and IP risks due to its early-stage pipeline and reliance on third parties - **Financial Risks:** The company has a limited operating history, has never generated revenue from drug sales, and has incurred significant losses, requiring substantial additional funding to continue operations[279](index=279&type=chunk)[281](index=281&type=chunk)[283](index=283&type=chunk) - **Development Risks:** The targeted protein degradation approach is novel and unproven, making development time and costs difficult to predict, and positive preclinical results may not translate to successful clinical trials[289](index=289&type=chunk)[292](index=292&type=chunk)[318](index=318&type=chunk) - **Operational Risks:** The company relies heavily on third parties for conducting clinical trials and manufacturing, and any failure by these partners could substantially harm the business, with the COVID-19 pandemic posing a risk of disruption[309](index=309&type=chunk)[386](index=386&type=chunk)[392](index=392&type=chunk) - **Intellectual Property Risks:** The ability to obtain and maintain broad patent protection is uncertain and critical for commercial success, and the company may face infringement claims or challenges to its own patents[401](index=401&type=chunk)[435](index=435&type=chunk)[440](index=440&type=chunk) [Properties](index=102&type=section&id=Item%202.%20Properties) Kymera leases **34,522 square feet** of office and laboratory space in Watertown, Massachusetts, under a lease expiring in **March 2030** - Kymera leases approximately **34,522 square feet** of office and laboratory space in Watertown, Massachusetts[487](index=487&type=chunk) - The current lease term expires in **March 2030**, with an option to extend for an additional **five years**[487](index=487&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=103&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Kymera's common stock began trading on Nasdaq under "KYMR" on **August 21, 2020**, with **69 holders of record** as of **February 28, 2021** - The company's common stock trades on the Nasdaq Global Select Market under the ticker symbol "**KYMR**" since **August 21, 2020**[492](index=492&type=chunk) - As of **February 28, 2021**, there were approximately **69 holders of record** of the company's common stock[493](index=493&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=104&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Kymera reported significantly increased collaboration revenue in 2020, alongside higher operating expenses and a net loss, with substantial cash to fund operations into 2025 [Results of Operations](index=109&type=section&id=Results_of_Operations) In 2020, collaboration revenue significantly increased to **$34.0 million**, while R&D and G&A expenses rose, leading to a net loss of **$45.6 million** Comparison of Years Ended December 31, 2020 and 2019 | | Year ended December 31, | Change | | :--- | :--- | :--- | | (in thousands) | **2020** | **2019** | **($)** | | **Revenue—from related parties** | $34,034 | $2,934 | $31,100 | | **Operating expenses:** | | | | | Research and development | 62,105 | 37,158 | 24,947 | | General and administrative | 18,233 | 7,981 | 10,252 | | **Total operating expenses** | 80,338 | 45,139 | 35,199 | | **Loss from operations** | (46,304) | (42,205) | (4,099) | | **Interest income, net** | 711 | 959 | (248) | | **Net loss** | $(45,593) | $(41,246) | $(4,347) | - Collaboration revenue increased by **$31.1 million** to **$34.0 million** in 2020, with **$18.8 million** from the Sanofi agreement and **$15.2 million** from the Vertex agreement[528](index=528&type=chunk) Research and Development Expenses Breakdown | (in thousands) | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | **External R&D Costs:** | | | | | IRAK4 and IRAKIMiD | $20,186 | $13,478 | $6,708 | | STAT3 | $6,674 | $2,474 | $4,200 | | Other | $12,579 | $8,822 | $3,757 | | **Internal R&D Costs** | $22,666 | $12,384 | $10,282 | | **Total R&D Expenses** | **$62,105** | **$37,158** | **$24,947** | [Liquidity and Capital Resources](index=110&type=section&id=Liquidity_and_Capital_Resources) As of **December 31, 2020**, Kymera held **$458.7 million** in cash and equivalents, bolstered by **$289.3 million** in financing, expected to fund operations into **2025** - As of **December 31, 2020**, the company had cash, cash equivalents, and marketable securities of **$458.7 million**, which is expected to fund operations into **2025**[532](index=532&type=chunk)[506](index=506&type=chunk) Summary of Cash Flows | (in thousands) | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | Cash provided by operating activities | $88,130 | $17,905 | | Cash used in investing activities | $(422,588) | $(16,486) | | Cash provided by financing activities | $289,262 | $34,911 | | **Net (decrease) increase in cash** | **$(45,196)** | **$36,330** | - Net cash from financing activities in 2020 was **$289.3 million**, primarily from the **IPO ($183.1 million net)**, a concurrent private placement (**$13.5 million**), and Series C preferred stock issuance (**$88.2 million**)[538](index=538&type=chunk) - Cash from operating activities in 2020 was **$88.1 million**, largely due to the **$150.0 million upfront payment** from the Sanofi collaboration[534](index=534&type=chunk) [Financial Statements and Supplementary Data](index=115&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited consolidated financial statements for 2020 present key figures including **$487.2 million** in total assets, **$203.3 million** in liabilities, and a **$45.6 million** net loss Consolidated Balance Sheet Data (as of December 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $31,004 | $76,015 | | Marketable securities | $427,729 | $15,942 | | **Total Assets** | **$487,175** | **$116,702** | | **Liabilities & Equity** | | | | Deferred revenue | $170,390 | $52,991 | | **Total Liabilities** | **$203,287** | **$82,028** | | **Total Stockholders' Equity (Deficit)** | **$283,888** | **$(74,406)** | Consolidated Statement of Operations Data (for the year ended December 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Collaboration Revenue | $34,034 | $2,934 | | Research and development expense | $62,105 | $37,158 | | General and administrative expense | $18,233 | $7,981 | | **Loss from operations** | **$(46,304)** | **$(42,205)** | | **Net loss** | **$(45,593)** | **$(41,246)** | - As of **December 31, 2020**, the company had federal and state net operating loss (NOL) carryforwards of **$74.4 million** and **$61.2 million**, respectively, which are available to offset future taxable income but may be subject to limitations[473](index=473&type=chunk)[711](index=711&type=chunk) [Controls and Procedures](index=147&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of **December 31, 2020**, with no internal control report required for the newly public company - Management concluded that the company's disclosure controls and procedures were effective as of **December 31, 2020**[721](index=721&type=chunk) - The annual report does not include a management assessment or auditor attestation on internal control over financial reporting, as permitted for newly public companies[722](index=722&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accounting Fees](index=148&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information for Items 10-14, covering directors, executive officers, corporate governance, compensation, and accounting fees, is incorporated by reference from the 2021 Proxy Statement - Information regarding Directors, Executive Officers, Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accounting Fees and Services (Item 14) is incorporated by reference from the company's **2021 Proxy Statement**[727](index=727&type=chunk)[728](index=728&type=chunk)[730](index=730&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=149&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and required certifications - This section provides a list of all exhibits filed with the annual report, including corporate governance documents, material contracts, and required certifications[731](index=731&type=chunk)

INVENTING NEW MEDICINES W I T H T A R G E T E D P R O T E I N D E G R A D A T I O N January 2021 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA) and other federal securities laws. These statements include information about our current and future prospects and our operations and financial results, which are based on currently available information. All statements other than statements of histor ...

Financial Performance - The company has incurred net losses of $21.5 million and $41.2 million for the years ended December 31, 2018 and 2019, respectively, and $32.9 million and $29.7 million for the nine months ended September 30, 2020 and 2019, respectively [151]. - The company has an accumulated deficit of $116.1 million as of September 30, 2020 [151]. - The net loss for the three months ended September 30, 2020, was $8.0 million, an improvement from a net loss of $11.4 million in the same period of 2019, reflecting a change of $3.4 million [179]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future [162]. Cash and Financing Activities - As of September 30, 2020, the company had cash, cash equivalents, and marketable securities of $481.3 million, which is expected to fund operations into 2025 [157]. - The company has received gross proceeds of $617.8 million from various financing activities, including its initial public offering and collaborations with Vertex and Sanofi [150]. - Cash provided by operating activities during the nine months ended September 30, 2020, was $108.2 million, primarily due to $150.0 million received from a collaboration agreement with Sanofi [192]. - Net cash provided by financing activities during the nine months ended September 30, 2020, was $289.0 million, mainly from the initial public offering and private placements [196]. - The existing cash, cash equivalents, and marketable securities are expected to fund operating expenses and capital expenditures into 2025, but additional funding will be required for clinical development and commercialization efforts [201]. - The company may need to finance cash needs through equity offerings, debt financings, collaborations, and strategic alliances, which could dilute existing stockholders' ownership [203]. Expenses - Total operating expenses for the three months ended September 30, 2020, were $22.6 million, up from $12.8 million in 2019, reflecting an increase of $9.8 million [179]. - Research and development expenses for the nine months ended September 30, 2020, were $41.7 million, compared to $26.1 million for the same period in 2019, marking an increase of $15.6 million [186]. - General and administrative expenses for the nine months ended September 30, 2020, were $13.1 million, up from $5.5 million in 2019, indicating an increase of $7.6 million [187]. - The company expects significant commercialization expenses if marketing approval is obtained for any lead product candidates [154]. - The company anticipates incurring significant commercialization expenses related to product manufacturing, sales, marketing, and distribution if regulatory approval is received for its product candidates [201]. Collaborations and Agreements - The collaboration agreement with Vertex includes a non-refundable upfront payment of $50 million and potential milestone payments of up to $170 million per target [164]. - Under the Sanofi Agreement, the company will receive an upfront payment of $150 million and is eligible for up to $1.48 billion in development milestone payments related to the IRAK4 program [168]. - Collaboration revenues for the nine months ended September 30, 2020, were $21.2 million, with contributions of $10.9 million from Vertex and $10.3 million from Sanofi [185]. Market and Economic Conditions - Market volatility from the COVID-19 pandemic could adversely impact the company's ability to access capital when needed [204]. - Inflation has not had a material effect on the company's business, financial condition, or results of operations during the periods presented [214]. - The company has no off-balance sheet arrangements during the periods presented [210]. Investment Strategy - The company has not entered into investments for trading or speculative purposes, focusing instead on capital preservation with short-term maturities [212]. - The company has cash and cash equivalents and marketable securities of $481.3 million as of September 30, 2020, with minimal exposure to foreign currency risk [212]. Product Development - The Pegasus platform has been utilized to design novel protein degraders focused on immunology-inflammation and oncology [149]. - The company plans to submit an Investigational New Drug Application for KT-474 in the first half of 2021 [149].