Kyverna Therapeutics(KYTX) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Kyverna Therapeutics reported a net loss for Q1 2025, significantly increased by higher operating expenses, while maintaining sufficient cash reserves post-IPO Condensed Balance Sheets Total assets decreased to $260.7 million as of March 31, 2025, primarily due to reduced cash, reflecting the quarter's net loss Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $56,865 | $96,621 | | Available-for-sale marketable securities | $185,784 | $189,358 | | Total Assets | $260,655 | $304,645 | | Total Current Liabilities | $33,292 | $33,756 | | Total Liabilities | $36,645 | $38,058 | | Total Stockholders' Equity | $224,010 | $266,587 | Condensed Statements of Operations and Comprehensive Income (Loss) The net loss for Q1 2025 increased to $44.6 million, primarily driven by significant increases in research and development and general and administrative expenses Condensed Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $37,433 | $22,476 | | General and administrative | $9,975 | $6,882 | | Total operating expenses | $47,408 | $29,358 | | Loss from operations | ($47,408) | ($29,358) | | Net loss | ($44,635) | ($26,693) | | Net loss per share, basic and diluted | ($1.03) | ($1.12) | Condensed Statements of Cash Flows Net cash used in operating activities significantly increased to $44.9 million in Q1 2025, contrasting with a substantial IPO-driven cash inflow in Q1 2024 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($44,915) | ($25,525) | | Net cash provided by (used in) investing activities | $5,578 | ($122,879) | | Net cash provided by (used in) financing activities | ($414) | $338,049 | Notes to Unaudited Condensed Financial Statements Notes detail the company's focus on cell therapies, its $336.2 million IPO proceeds, sufficient cash for 12 months, and an ongoing shareholder class action lawsuit - The company is a clinical-stage biopharmaceutical company focused on developing cell therapies for patients with autoimmune diseases, with its lead product candidate being KYV-101[19] - On February 12, 2024, the company closed its IPO, issuing 16,675,000 shares of common stock and receiving net proceeds of $336.2 million after deducting underwriting commissions and other costs[20] - As of March 31, 2025, the company had cash, cash equivalents, and available-for-sale marketable securities of $242.6 million, which management believes is sufficient to fund operations for at least the next 12 months[22] - A shareholder class action complaint was filed in December 2024, alleging that the registration statement for the IPO contained material misstatements or omissions. The company intends to defend the lawsuit vigorously[64] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses KYV-101's clinical progress, a 67% increase in Q1 2025 net loss due to R&D, strong liquidity of $242.6 million into 2027, and a $250 million shelf registration for future flexibility Overview Kyverna, a clinical-stage biopharmaceutical company, is advancing its lead cell therapy candidate, KYV-101, through pivotal trials for autoimmune diseases like SPS and MG, targeting a BLA filing in 2026 - The company's lead program, KYV-101, is an autologous, fully human CD19 CAR T-cell product candidate for autoimmune diseases[96] - Key clinical trials include a pivotal Phase 2 in stiff person syndrome (SPS), a Phase 2 in myasthenia gravis (MG), and two Phase 1/2 trials in lupus nephritis (LN)[97] - Enrollment is complete for the KYSA-8 pivotal Phase 2 trial in SPS, with an anticipated Biologics License Application (BLA) filing with the FDA in 2026[98] Results of Operations Total operating expenses increased 61% to $47.4 million in Q1 2025, driven by a 67% rise in R&D for KYV-101 and a 45% increase in G&A expenses Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $37,433 | $22,476 | $14,957 | 67% | | General and administrative | $9,975 | $6,882 | $3,093 | 45% | | Total operating expenses | $47,408 | $29,358 | $18,050 | 61% | - The increase in KYV-101 program expenses was driven by an $8.0 million strategic investment in CMC readiness and a $4.4 million increase in CRO costs from accelerated trial enrollment[123] Liquidity and Capital Resources The company holds $242.6 million in cash and marketable securities, sufficient to fund operations into 2027, supplemented by a $250.0 million shelf registration for future flexibility - As of March 31, 2025, the company had $242.6 million in cash, cash equivalents, and available-for-sale marketable securities[129] - Management anticipates that current cash reserves will be sufficient to fund operations into 2027, covering key milestones like the BLA filing for KYV-101 in SPS[103] - In March 2025, the company filed a $250.0 million shelf registration statement on Form S-3, which includes a sales agreement for an at-the-market (ATM) offering of up to $50.0 million[130] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Kyverna Therapeutics is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide the information required under this item[155] Controls and Procedures Management concluded that disclosure controls were ineffective as of March 31, 2025, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting[157] - The identified material weaknesses relate to an insufficient number of qualified resources, ineffective risk assessment, and inadequate design of controls across substantially all financial statement areas[159][160] - Remediation efforts are underway, including hiring a VP of Accounting/Corporate Controller and a Head of Information Technology, and engaging a third-party consulting firm to assist in designing and implementing internal controls[162][165] PART II. OTHER INFORMATION Legal Proceedings The company faces a shareholder class action lawsuit, filed in December 2024 and amended in May 2025, alleging material misstatements in its IPO registration statement - A shareholder class action complaint was filed in December 2024 against the company, certain officers and directors, and IPO underwriters[167] - The complaint alleges that the Form S-1 registration statement for the IPO contained material misstatements or omissions in violation of federal securities laws[167] Risk Factors Significant risks include limited operating history, substantial net losses, dependence on KYV-101's success, need for capital, material weaknesses in internal controls, and FDA investigation into CAR T-cell malignancies - The company has a limited operating history, has incurred substantial net losses ($308.2 million accumulated deficit as of March 31, 2025), and may never achieve profitability[169][172] - The business is entirely dependent on the success of its product candidates, which require significant additional development and regulatory approval, and may never be commercialized[169][181] - Material weaknesses in internal control over financial reporting have been identified, which could prevent accurate and timely financial reporting[169][190] - The FDA is investigating the risk of T-cell malignancy following treatment with CD19-directed CAR T-cell immunotherapies like KYV-101, which could lead to additional regulatory scrutiny, approval delays, or stricter labeling requirements[170][346] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales occurred; $336.2 million net IPO proceeds were invested consistent with the prospectus, with no material change in planned use - The company's IPO in February 2024 generated net proceeds of $336.2 million after deducting underwriting discounts and offering costs[490] - There has been no material change in the planned use of IPO proceeds from what was described in the final prospectus[491] Defaults Upon Senior Securities This section is not applicable to the company's current reporting requirements Mine Safety Disclosures This section is not applicable to the company's operations Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans for company securities during the quarter ended March 31, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plan during the fiscal quarter[495] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including certifications from key officers