Kyverna Therapeutics(KYTX) - 2024 Q4 - Annual Report

Part I Business Kyverna Therapeutics is a clinical-stage biopharmaceutical company developing cell therapies for autoimmune diseases, with lead product KYV-101 in pivotal Phase 2 trials for SPS and MG Overview and Pipeline - Kyverna is a clinical-stage biopharmaceutical company focused on developing cell therapies for autoimmune diseases, with the goal of achieving durable, treatment-free remission[23] - The lead product candidate, KYV-101, is an autologous, fully human CD19 CAR T-cell therapy licensed from the NIH, designed for an improved tolerability profile in autoimmune diseases[24] - The company has aligned with the FDA on a registrational Phase 2 trial for KYV-101 in Stiff Person Syndrome (SPS), with enrollment expected to complete in mid-2025 and a Biologics License Application (BLA) filing anticipated in 2026[26] Kyverna Therapeutics Clinical Pipeline | Indication | Candidate | Stage | Regulatory Milestone Achieved | | :--- | :--- | :--- | :--- | | 2025 Priorities | | | | | Stiff Person Syndrome | KYV-101 | Phase 2 (Pivotal) | RMAT, ODD | | Myasthenia Gravis | KYV-101 | Phase 2 | RMAT, ODD, FTD | | Lupus Nephritis | KYV-101 | Phase 1/2 | FTD | | Rapid Whole Blood Process | KYV-102 | Preclinical | | Our Solution and Clinical Development - KYV-101 is designed with a fully human CAR (Hu19-CD828Z) and potent CD28 costimulation, which aims to achieve deep B-cell depletion and immune reset with reduced cytokine release, potentially offering an improved therapeutic profile for autoimmune diseases[39][41] - The company's clinical development strategy prioritizes three indications: Stiff Person Syndrome (SPS), Myasthenia Gravis (MG), and Lupus Nephritis (LN), based on experience from company-sponsored trials, investigator-initiated trials, and compassionate use cases[47][49] - For Stiff Person Syndrome (SPS), a pivotal Phase 2 trial (KYSA-8) is underway with 70% of participants enrolled. The primary endpoint is the change in the Timed 25-Foot Walk (T25FW) test at 16 weeks. Top-line results are expected in H1 2026[56][57] - For Myasthenia Gravis (MG), the initial six-patient cohort in the Phase 2 KYSA-6 trial has completed enrollment, with interim data expected in H2 2025. The company plans to provide an update on the registrational path in H1 2025[27][69] - For Lupus Nephritis (LN), two Phase 1/2 trials (KYSA-1 and KYSA-3) are advancing, with 9 patients enrolled across both studies. Phase 1 data is expected in H2 2025[28][84] - In a compassionate use dataset of 35 patients with at least 28 days of follow-up, no high-grade Cytokine Release Syndrome (CRS) or Immune Effector Cell-Associated Neurotoxicity Syndrome (ICANS) was observed following KYV-101 treatment, suggesting a potentially differentiated safety profile[93] - The company is developing Ingenui-T, a whole blood, rapid manufacturing process for its next-generation candidate KYV-102, aiming to improve patient access and reduce costs. An IND filing for KYV-102 is expected in H2 2025[97][100] Collaboration and License Agreements - Kyverna has exclusive, worldwide licenses from the National Institutes of Health (NIH) for the fully human anti-CD19 CAR used in its product candidates. The agreements include upfront payments, annual royalties, and potential benchmark royalties totaling approximately $7.4 million for the first product approval across autologous and allogeneic licenses[102][103] - The company has a collaboration with Intellia Therapeutics to develop KYV-201, an allogeneic CD19 CAR T-cell product. The agreement involves up to $64.5 million in potential development and regulatory milestone payments and low to mid-single-digit royalties. Intellia also has an option to co-develop and co-commercialize the product in the U.S.[101][106][107] Manufacturing, Competition, and Intellectual Property - Kyverna does not own manufacturing facilities and relies on third-party CMOs, including ElevateBio and WuXi ATU, for the production of its product candidates for clinical trials[113][114] - The company faces competition from large pharmaceutical companies developing biologics (e.g., Roche) and other organizations providing stem cell transplant therapies[119][120] - The company's patent portfolio includes nine patent families. A key in-licensed family from the NIH, covering the CD19 CAR in KYV-101, KYV-102, and KYV-201, has a nominal expiration date of 2035[123][125] - Kyverna owns patent families directed to methods of treating autoimmune diseases like lupus nephritis, myasthenia gravis, and stiff person syndrome, with nominal expiration dates of 2043 and 2044[126][127] Government Regulation - Kyverna's cell therapy products are regulated as biologics by the FDA and will require an approved Biologics License Application (BLA) for marketing in the U.S. The process involves extensive preclinical studies and clinical trials to establish safety and efficacy[134][137] - The company has received several expedited program designations from the FDA, including Orphan Drug Designation for SPS, MG, and Systemic Sclerosis, and Regenerative Medicine Advanced Therapy (RMAT) designation for SPS and MG, which can facilitate development and expedite review[27][165] - Sales of approved products will depend on coverage and reimbursement from third-party payors like Medicare, Medicaid, and private insurers. The company's operations are also subject to healthcare laws such as the Anti-Kickback Statute and the False Claims Act[180][186] - The company is subject to international regulations, including the EU's General Data Protection Regulation (GDPR), due to its clinical trials and data processing activities involving individuals in the EU[216][217] Human Capital and Corporate Information - As of March 1, 2025, the company had 112 full-time employees, with 84 engaged in research and development activities[219] - The company strengthened its management team in 2024 and 2025 with key hires including a new CEO, Chief Medical and Development Officer, and Chief Business Officer[222] - The company's corporate headquarters are located in Emeryville, California, where it leases approximately 68,000 square feet of office, manufacturing, and R&D space[223] Risk Factors The company faces substantial risks including limited operating history, significant losses, capital needs, and dependence on product candidate success and regulatory approval - The company has a limited operating history, has incurred substantial net losses ($127.5 million in 2024), and expects to continue incurring losses for the foreseeable future. It has no products approved for sale and has never generated product revenue[229][231] - The business is entirely dependent on the success of its product candidates, which may never receive regulatory approval or be successfully commercialized. The development process is lengthy, expensive, and has an uncertain outcome[239] - Material weaknesses in internal control over financial reporting have been identified, relating to insufficient qualified resources, ineffective risk assessment, and inadequate design of controls. Failure to remediate these could adversely affect financial reporting and investor confidence[248][249][250] - The FDA is investigating a serious risk of T-cell malignancy following treatment with BCMA-directed or CD19-directed CAR T-cell therapies, which could result in additional regulatory scrutiny, approval delays, or boxed warnings for Kyverna's product candidates[230][402] - The company relies on third-party manufacturers (like WuXi and Elevate) and suppliers. The loss of these partners or their failure to comply with regulatory requirements could materially and adversely affect the business[228][488] - The company depends on intellectual property licensed from third parties, such as the NIH. Termination of these licenses could result in the loss of significant rights and harm the ability to commercialize product candidates[230][329] Unresolved Staff Comments The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[539] Cybersecurity Cybersecurity risks are managed through an enterprise risk process overseen by the Audit Committee, with no material impact to date - Cyber risk management is overseen by the Audit Committee and directed by the Head of IT, who reports to the CFO[540][542] - The company uses a managed security service provider and other third-party consultants to support its cyber risk management efforts, including periodic security testing[541] - The company states that risks from cybersecurity threats have not materially affected and are not reasonably likely to materially affect its business, results of operations, or financial condition[546] Properties The company's corporate headquarters in Emeryville, California, comprises approximately 68,000 square feet of leased office, manufacturing, and R&D space - Kyverna leases approximately 68,000 square feet for its headquarters in Emeryville, California. The leases expire in January and February 2027[547] Legal Proceedings A shareholder class action complaint was filed in December 2024 alleging material misstatements in the IPO registration statement - A shareholder class action complaint was filed in December 2024, alleging material misstatements or omissions in the company's IPO registration statement[548] Mine Safety Disclosures This item is not applicable to the company - Not applicable[549] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock began trading on Nasdaq in February 2024, raising $336.2 million net from its IPO, with no plans for future cash dividends - Common stock began trading on Nasdaq under the symbol "KYTX" on February 8, 2024[552] - The company closed its IPO on February 12, 2024, raising aggregate net proceeds of $336.2 million[557][559] - The company has never declared or paid cash dividends and does not intend to in the foreseeable future[555] Reserved This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a net loss of $127.5 million in 2024, driven by increased R&D and G&A expenses, with $286.0 million in cash to fund operations for at least one year Results of Operations Comparison of Operations for Years Ended Dec 31, 2024 and 2023 | | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | (in thousands) | | | | | | Research and development | $112,473 | $49,923 | $62,550 | 125% | | General and administrative | $30,131 | $12,483 | $17,648 | 141% | | Total operating expenses | $142,604 | $62,406 | $80,198 | 129% | | Loss from operations | ($142,604) | ($62,406) | ($80,198) | 129% | | Interest income | $15,359 | $2,282 | $13,077 | 573% | | Net loss | ($127,477) | ($60,366) | ($67,111) | 111% | - Research and development expenses increased by 125% to $112.5 million in 2024, primarily driven by a $46.2 million increase in CRO, CMO, and clinical trial costs as the company advanced its lead product candidate, KYV-101[603] - General and administrative expenses increased by 141% to $30.1 million in 2024, mainly due to a $10.7 million increase in salaries and benefits (including $4.5 million in stock-based compensation) and a $4.7 million increase in professional services costs[609] External R&D Costs by Program | | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | (in thousands) | | | | | | KYV-101 | $61,884 | $18,267 | $43,617 | 239% | | KYV-201 | $3,947 | $4,509 | ($562) | (12)% | | Other R&D | $5,077 | $4,228 | $849 | 20% | | Total | $70,908 | $27,004 | $43,904 | 163% | Liquidity and Capital Resources - As of December 31, 2024, the company had $286.0 million in cash, cash equivalents, and available-for-sale marketable securities. These funds are considered sufficient to fund planned operations for at least one year[611][613] - Primary funding sources have been sales of redeemable convertible preferred stock ($168.0 million), convertible notes ($2.0 million), an upfront payment from Gilead ($17.5 million), and net proceeds from the IPO ($336.2 million)[611] Summary of Cash Flows | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | (in thousands) | | | | Net cash used in operating activities | ($114,250) | ($52,410) | | Net cash used in investing activities | ($160,902) | ($8,785) | | Net cash provided by financing activities | $337,113 | $58,118 | - Net cash used in operating activities more than doubled to $114.3 million in 2024 from $52.4 million in 2023, primarily due to the increased net loss[620] - Net cash provided by financing activities was $337.1 million in 2024, driven by the IPO proceeds, compared to $58.1 million in 2023 from the issuance of Series B Preferred Stock[625][626] Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate and foreign currency risks, but does not anticipate a material effect from a 10% change in rates or current exchange rate fluctuations - The primary market risk is interest rate risk on cash equivalents and marketable securities, but the company does not believe a hypothetical 10% change in rates would have a material effect[642] - The company has foreign currency exchange risk from using R&D vendors outside the U.S., but to date, the impact has not been material[643] Financial Statements and Supplementary Data This section indicates the inclusion of the company's audited financial statements and supplementary data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[646] Controls and Procedures Management concluded disclosure controls were ineffective as of December 31, 2024, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024, due to material weaknesses in internal control over financial reporting[647] - Material weaknesses relate to an insufficient number of qualified resources, ineffective risk assessment, and inadequate design of controls over information systems and management reviews[650][652] - Ongoing remediation efforts include hiring a VP of Accounting/Corporate Controller and Head of IT, engaging a third-party consulting firm, and implementing enhanced entity-level and general IT controls[653][654] Other Information The company implemented a Restated Non-Employee Director Compensation Program effective March 25, 2025, modifying equity awards for directors - The company implemented a Restated Non-Employee Director Compensation Program effective March 25, 2025[659] - New directors will receive an initial equity grant valued at $350,000, split between options ($262,500) and RSUs ($87,500)[659] - Continuing directors will receive an annual equity grant valued at $175,000, split between options ($131,250) and RSUs ($43,750)[660] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - None[663] Part III Directors, Executive Officers and Corporate Governance The company's board comprises eight members across three staggered classes, with an executive team led by CEO Warner Biddle and an independent Audit Committee - The board of directors consists of eight members, divided into three staggered classes with three-year terms[666] - The executive officer team includes Warner Biddle (CEO), Ryan Jones (CFO), Karen Walker (CTO), and Naji H. Gehchan (Chief Medical and Development Officer)[686] - The company has an Audit Committee composed of independent directors Daniel K. Spiegelman (Chairperson), Mert Aktar, and Steve Liapis[695] Executive Compensation Fiscal year 2024 executive compensation included new CEO Warner Biddle's $15.0 million package and former CEO Peter Maag's $1.48 million, with a clawback policy in effect 2024 Summary Compensation Table (Selected NEOs) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Non-Equity Incentive Plan Comp ($) | All Other Comp ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Warner Biddle, CEO | 2024 | 182,292 | 650,000 | 13,760,605 | 375,000 | 25,000 | 14,992,896 | | Peter Maag, Ph.D., Former CEO | 2024 | 786,466 | - | - | - | 694,764 | 1,481,230 | | Karen Walker, CTO | 2024 | 440,000 | - | - | 151,360 | - | 591,360 | - Warner Biddle was appointed CEO in September 2024 with an annual base salary of $625,000, a target bonus of 60%, a one-time sign-on bonus of $650,000, and a stock option to purchase 2,579,259 shares[709][714][715] - Peter Maag resigned as CEO in September 2024 and entered into a separation agreement providing for severance, consulting fees, and continued vesting of equity awards for a specified period[704][724] - The company adopted a Clawback Policy effective February 7, 2024, allowing for the recovery of erroneously awarded incentive-based compensation in the event of a financial restatement[774] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of December 31, 2024, Vida Ventures, Westlake BioPartners, and Gilead Sciences were major beneficial owners, with executive officers and directors holding 21.9% of common stock Security Ownership of 5% and Greater Stockholders (as of Dec 31, 2024) | Name of Beneficial Owner | Percent of Shares Beneficially Owned | | :--- | :--- | | Entities affiliated with Vida Ventures, LLC | 11.1% | | Entities affiliated with Westlake BioPartners Fund I, L.P. | 10.5% | | Gilead Sciences, Inc. | 9.5% | | Entities affiliated with Northpond Ventures III, LP | 7.5% | | Bain Capital Life Sciences Opportunities III, LP | 7.3% | | JPMORGAN CHASE & CO. | 5.5% | - All executive officers and directors as a group beneficially owned 21.9% of the company's common stock as of December 31, 2024[785] - As of December 31, 2024, there were 3,562,709 shares remaining available for future issuance under the company's equity compensation plans[799] Certain Relationships and Related Transactions, and Director Independence The company engaged in related party transactions, including a 2023 Series B financing and a $1.1 million note forgiveness for the former CEO, with a majority of independent directors - In 2023, the company sold $60.0 million of Series B convertible preferred stock, with significant participation from major shareholders including Northpond Ventures, Westlake BioPartners, Vida Ventures, Gilead Sciences, and Bain Capital[803][805][806] - In January 2024, the company forgave a $1.1 million promissory note, including principal and interest, that was issued to its former CEO in connection with an early exercise of stock options[815] - The board of directors has determined that Ian Clark, Fred E. Cohen, Christi Shaw, Mert Aktar, Steve Liapis, Beth Seidenberg, and Daniel K. Spiegelman are independent directors under Nasdaq rules[821] Principal Accounting Fees and Services The company paid BDO USA, P.C. $909,285 in total fees for fiscal year 2024, primarily for audit services Fees Paid to Independent Registered Public Accounting Firm | | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Audit Fees | $909,285 | $883,385 | | Tax Fees | $0 | $70,232 | | Total Fees | $909,285 | $953,617 | Part IV Exhibits, Financial Statement Schedules This section indexes financial statements and lists all exhibits filed as part of the Annual Report on Form 10-K Form 10-K Summary The company has not provided a summary for its Form 10-K - None[832] Financial Statements Report of Independent Registered Public Accounting Firm BDO USA, P.C. issued an unqualified opinion on the company's 2024 and 2023 financial statements, without auditing internal control over financial reporting - The independent auditor, BDO USA, P.C., issued an unqualified opinion on the financial statements for the years ended December 31, 2024 and 2023[845] - The auditor was not engaged to perform, and did not express an opinion on, the effectiveness of the Company's internal control over financial reporting[847] Financial Statements Tables Financial statements show total assets increased to $304.6 million in 2024, net loss widened to $127.5 million, and operating cash outflow doubled Balance Sheets (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $96,621 | $34,647 | | Available-for-sale marketable securities | $189,358 | $22,896 | | Total current assets | $290,601 | $60,664 | | Total assets | $304,645 | $75,195 | | Liabilities and Stockholders' Equity (Deficit) | | | | Total current liabilities | $33,756 | $19,859 | | Total liabilities | $38,058 | $26,018 | | Redeemable convertible preferred stock | $0 | $180,574 | | Total stockholders' equity (deficit) | $266,587 | ($131,397) | | Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) | $304,645 | $75,195 | Statements of Operations and Comprehensive Loss (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Research and development | $112,473 | $49,923 | | General and administrative | $30,131 | $12,483 | | Total operating expenses | $142,604 | $62,406 | | Loss from operations | ($142,604) | ($62,406) | | Net loss | ($127,477) | ($60,366) | Notes to Financial Statements Notes detail accounting policies, IPO impact, key license agreements, a terminated Gilead collaboration with outstanding fees, lease liabilities, and a full valuation allowance on deferred tax assets - On February 12, 2024, the company closed its IPO, issuing 16,675,000 shares and raising net proceeds of $336.2 million. All redeemable convertible preferred stock converted to common stock[862] - Under the NIH agreements, the company recognized $0.6 million in benchmark royalties as R&D expense in 2024. Under the Intellia agreement, up to $64.5 million in future milestones are payable[915][918] - A collaboration with Gilead was terminated effective January 22, 2024. A related $6.3 million sublicensing fee payable to Kite (a Gilead affiliate) remains outstanding and its settlement has not yet been agreed upon[926][932][933] - As of December 31, 2024, the company had total future lease payments of $8.1 million for operating leases and $1.1 million for finance leases[942] - The company maintains a full valuation allowance against its net deferred tax assets of $65.6 million as of December 31, 2024, due to its history of cumulative losses[969]