Kyverna Therapeutics(KYTX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Kyverna Therapeutics' unaudited financial statements, management's analysis, market risk disclosures, and internal controls evaluation Item 1. Financial Statements (Unaudited) This section presents Kyverna Therapeutics, Inc.'s unaudited condensed financial statements, including the balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity (deficit), and statements of cash flows, along with their accompanying notes, for the periods ended June 30, 2025, and December 31, 2024 Condensed Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric (in thousands) | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $96,621 | $53,440 | $(43,181) | | Available-for-sale marketable securities | $189,358 | $158,237 | $(31,121) | | Total current assets | $290,601 | $214,327 | $(76,274) | | Total assets | $304,645 | $226,508 | $(78,137) | | Total current liabilities | $33,756 | $39,789 | $6,033 | | Total liabilities | $38,058 | $42,131 | $4,073 | | Total stockholders' equity | $266,587 | $184,377 | $(82,210) | Condensed Statements of Operations and Comprehensive Income (Loss) This section outlines the company's financial performance, detailing revenues, expenses, and net loss over specific reporting periods | Metric (in thousands) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | Change (%) | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Research and development | $35,816 | $27,321 | 31% | $73,249 | $49,797 | 47% | | General and administrative | $8,594 | $6,114 | 41% | $18,569 | $12,996 | 43% | | Total operating expenses | $44,410 | $33,435 | 33% | $91,818 | $62,793 | 46% | | Net loss | $(42,081) | $(28,803) | 46% | $(86,716) | $(55,496) | 56% | | Net loss per share (basic and diluted) | $(0.97) | $(0.67) | 45% | $(2.01) | $(1.66) | 21% | Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) This section details the changes in the company's equity, including additional paid-in capital and accumulated deficit, over time | Metric (in thousands) | Dec 31, 2024 | Mar 31, 2025 | Jun 30, 2025 | | :-------------------- | :----------- | :----------- | :----------- | | Additional paid-in capital | $530,002 | $532,162 | $534,633 | | Accumulated deficit | $(263,520) | $(308,155) | $(350,236) | | Total stockholders' equity | $266,587 | $224,010 | $184,377 | - Net loss for the three months ended June 30, 2025, was $(42,081) thousand, and for the six months ended June 30, 2025, was $(86,716) thousand, contributing to the accumulated deficit[13] Condensed Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity (in thousands) | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash used in operating activities | $(76,864) | $(49,700) | $(27,164) | | Net cash provided by (used in) investing activities | $34,745 | $(190,800) | $225,545 | | Net cash (used in) provided by financing activities | $(1,063) | $337,480 | $(338,543) | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(43,182) | $96,980 | $(140,162) | | Cash, cash equivalents and restricted cash, at end of period | $53,991 | $132,192 | $(78,201) | - The significant increase in cash provided by investing activities in 2025 was primarily due to $210.8 million in proceeds from maturities of available-for-sale marketable securities, offsetting $175.9 million in purchases[151] - The substantial decrease in cash provided by financing activities in 2025 compared to 2024 is mainly due to the absence of IPO proceeds, which provided $341.2 million in 2024[154] Notes to Unaudited Condensed Financial Statements This section provides detailed explanations and additional information supporting the unaudited condensed financial statements 1. Description of Business, Organization and Liquidity This section describes the company's biopharmaceutical business, organizational structure, and current liquidity position - Kyverna Therapeutics is a clinical-stage biopharmaceutical company developing cell therapies for autoimmune diseases, with KYV-101 as its lead product candidate[18] - The company has an accumulated deficit of $350.2 million as of June 30, 2025, and reported net losses of $86.7 million for the six months ended June 30, 2025[19] - As of June 30, 2025, the company had $211.7 million in cash, cash equivalents, and available-for-sale marketable securities, which management estimates will fund operations for at least the next 12 months[20] 2. Summary of Significant Accounting Policies This section outlines the key accounting principles and policies used in preparing the financial statements - Financial statements are prepared under U.S. GAAP for interim reporting, with management making estimates and assumptions[21][24][25] - No material changes to accounting policies since December 31, 2024, 10-K filing[26] - Evaluating impact of ASU No. 2023-09 (Income Taxes) effective after December 15, 2024, and ASU No. 2024-03 (Expense Disaggregation) effective after December 15, 2026[27][28] 3. Fair Value Measurements and Fair Value of Financial Instruments This section details the methodology and categorization of fair value measurements for financial instruments - Fair value measurements are categorized into a three-tier hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs)[29][30] | Financial Instrument (in thousands) | Total Fair Value (Jun 30, 2025) | Level 1 | Level 2 | Level 3 | | :-------------------------------- | :------------------------------ | :------ | :------ | :------ | | Money market funds | $28,274 | $28,274 | $— | $— | | Corporate debt obligations | $14,194 | $— | $14,194 | $— | | U.S. Treasury bills (Cash equivalents) | $9,598 | $— | $9,598 | $— | | U.S. Treasury bills (Available-for-sale) | $158,236 | $— | $158,236 | $— | | Total fair value of assets | $210,302 | $28,274 | $182,028 | $— | 4. Available-for-Sale Marketable Securities This section provides details on the company's available-for-sale marketable securities, including their cost and fair value | Security Type (in thousands) | Amortized Cost (Jun 30, 2025) | Unrealized Gains | Unrealized Losses | Estimated Fair Value (Jun 30, 2025) | | :--------------------------- | :---------------------------- | :--------------- | :---------------- | :---------------------------------- | | Money market funds | $28,274 | $— | $— | $28,274 | | U.S. Treasury bills | $167,852 | $4 | $(22) | $167,834 | | Corporate debt obligations | $14,195 | $— | $(1) | $14,194 | | Total | $210,321 | $4 | $(23) | $210,302 | - No significant creditworthiness deterioration or impairment losses were recognized for marketable securities during the three and six months ended June 30, 2025 and 2024[34] 5. Balance Sheet Components This section provides a detailed breakdown of specific components within the balance sheet, such as property and accrued expenses | Property and Equipment (in thousands) | Dec 31, 2024 | Jun 30, 2025 | | :------------------------------------ | :----------- | :----------- | | Property and equipment, gross | $7,019 | $6,374 | | Less accumulated depreciation | $(3,672) | $(4,212) | | Property and equipment, net | $3,347 | $2,162 | - The company recognized $0.6 million in impairment charges related to capitalized software during the six months ended June 30, 2025[36] | Other Accrued Expenses (in thousands) | Dec 31, 2024 | Jun 30, 2025 | | :------------------------------------ | :----------- | :----------- | | Accrued R&D expenses - Contract Research Organizations | $5,669 | $9,534 | | Accrued R&D expenses - Contract Manufacturing Organizations | $5,487 | $4,309 | | Other accrued expenses | $2,903 | $1,232 | | Total | $14,059 | $15,075 | 6. License and Collaboration Agreements This section outlines the company's significant licensing and collaboration agreements and their associated financial terms - Kyverna has exclusive, worldwide licenses from NIH for anti-CD19 CAR technology for autoimmune disease, requiring minimum annual royalty payments of $0.2 million and cumulative benchmark royalties up to $7.4 million for FDA approval[39][40] - The Intellia Agreement grants an exclusive license for an allogeneic CD19-directed CAR cell therapy, with potential aggregate milestone payments up to $64.5 million and low to mid-single-digit royalties on sales[43][44][45] - The Kite Agreement (related party) provides a co-exclusive license for SynNotch technology, with a $6.3 million sublicensing fee recorded as current accrued license expense as of June 30, 2025, and December 31, 2024[51][54][57] 7. Commitments and Contingent Liabilities This section details the company's contractual commitments and potential financial obligations from legal proceedings | Lease Type (in thousands) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease cost | $850 | $854 | $1,700 | $1,543 | | Finance lease cost | $250 | $275 | $507 | $557 | | Total lease expense | $1,385 | $1,391 | $2,864 | $2,653 | - Total undiscounted lease obligations as of June 30, 2025, were $6.0 million for operating leases and $0.3 million for finance leases[59] - The company is a defendant in a shareholder class action and derivative lawsuits alleging material misstatements in its IPO registration statement, but believes it has good defenses and has not accrued any loss[63][64][65] 8. Stockholders' Equity This section details changes in stockholders' equity, including shares reserved for future issuance and IPO proceeds | Shares Reserved for Future Issuance | Jun 30, 2025 | Dec 31, 2024 | | :---------------------------------- | :----------- | :----------- | | Outstanding stock option awards | 9,938,939 | 7,595,922 | | Unvested restricted stock units awards | 1,248,529 | 549,001 | | Shares available for future grants (2024 Equity Incentive Plan and 2024 Inducement Equity Incentive Plan) | 3,000,428 | 3,562,709 | | Shares available for future grants (Employee Stock Purchase Plan) | 844,000 | 422,000 | | Total shares reserved | 15,031,896 | 12,129,632 | - The company completed its IPO on February 12, 2024, issuing 16,675,000 shares of common stock at $22.00 per share, resulting in net proceeds of $336.2 million[71] - A shelf registration statement (Form S-3) for up to $250.0 million in securities, including a $50.0 million ATM Prospectus, was declared effective on April 15, 2025[70] 9. Equity Incentive Plans This section describes the company's equity incentive plans and the associated stock-based compensation expenses - The company's 2024 Equity Incentive Plan superseded the 2019 Plan, with 3,571,058 awards granted and 2,804,687 shares reserved for future issuance as of June 30, 2025[72][73] | Stock-Based Compensation Expense (in thousands) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $898 | $695 | $1,704 | $1,277 | | General and administrative | $1,620 | $589 | $2,975 | $2,285 | | Total stock-based compensation expense | $2,518 | $1,284 | $4,679 | $3,562 | - As of June 30, 2025, total unrecognized stock-based compensation expense was $30.4 million (expected over 3.1 years) and for RSUs was $3.9 million (expected over 3.2 years)[77][79] 10. Net Loss Per Share Attributable to Common Stockholders This section details the calculation of net loss per share for common stockholders, including potential dilutive shares | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss attributable to common stockholders (in thousands) | $(42,081) | $(28,803) | $(86,716) | $(55,496) | | Weighted average shares outstanding (basic and diluted) | 43,225,365 | 43,125,709 | 43,220,498 | 33,439,886 | | Net loss per share (basic and diluted) | $(0.97) | $(0.67) | $(2.01) | $(1.66) | | Potential Common Shares Excluded from Diluted EPS | As of Jun 30, 2025 | As of Jun 30, 2024 | | :------------------------------------------------ | :----------------- | :----------------- | | Options issued and outstanding | 9,938,939 | 4,169,964 | | Restricted stock units | 1,248,529 | 5,000 | | Total | 11,187,468 | 4,174,964 | 11. Income Taxes This section discusses the company's income tax position and the impact of recent tax legislation - The company is assessing the impact of the One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, on its financial statements, particularly regarding R&D expense capitalization and accelerated fixed asset depreciation[85] 12. Related Party Transactions This section discloses transactions and arrangements involving the company and its related parties - A $1.1 million promissory note and accrued interest from the former CEO, related to early exercised options, was forgiven on January 12, 2024[86] - $0.4 million in severance payments to the former CEO was recorded as accrued expenses as of June 30, 2025, and December 31, 2024[87] 13. Segment Reporting This section provides financial information about the company's operating segments, which is a single reportable segment - The company operates as a single reportable segment focused on developing therapies for autoimmune and inflammatory diseases[88] | Segment Expense (in thousands) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | KYV-101 program | $22,541 | $13,326 | $44,661 | $24,323 | | Other programs | $986 | $512 | $1,498 | $3,140 | | Other R&D expenses | $12,289 | $13,483 | $27,090 | $22,334 | | General and administrative expenses | $8,594 | $6,114 | $18,569 | $12,996 | | Segment Loss and Net loss | $42,081 | $28,803 | $86,716 | $55,496 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Kyverna Therapeutics' financial condition and results of operations for the periods presented, highlighting key financial trends, operational activities, and future outlook. It includes an overview of the company's business, a breakdown of operating expenses, a comparison of financial results, and a discussion of liquidity and capital resources SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This section cautions readers that the report contains forward-looking statements subject to significant risks and uncertainties - The report contains forward-looking statements regarding future operations, financial position, business strategy, and product candidates, subject to substantial risks and uncertainties[92][94] - Actual results and timing of events could differ materially from forward-looking statements due to factors outlined in the "Risk Factors" section[90][94][96] Overview This section provides a high-level summary of Kyverna's biopharmaceutical business, lead product candidate, and financial position - Kyverna is a clinical-stage biopharmaceutical company developing cell therapies for autoimmune diseases, with KYV-101 as its lead product candidate[98] - Enrollment for the pivotal Phase 2 trial in Stiff Person Syndrome (SPS) (KYSA-8) was completed in Q2 2025, with data expected in H1 2026[101] - Enrollment for the Phase 2 trial in Generalized Myasthenia Gravis (MG) (KYSA-6) was completed, with interim data expected in Q4 2025, and a Phase 3 portion to begin by end of 2025[102] - The company had an accumulated deficit of $350.2 million as of June 30, 2025, and expects current cash and marketable securities ($211.7 million) to fund operations into 2027[106][107] Components of Operating Results This section breaks down the primary elements contributing to the company's operating expenses and other income/expense - Operating expenses are primarily composed of research and development (R&D) and general and administrative (G&A) expenses[115] - R&D expenses, which include costs for clinical studies, manufacturing, and licensing, are expected to increase substantially as product candidates advance[116][118] - Interest income is derived from available-for-sale marketable securities and cash equivalents, while interest expense relates to laboratory equipment finance leases[120][121] Results of Operations This section analyzes the company's financial performance by comparing key metrics across different reporting periods Comparison of the Three Months Ended June 30, 2025 and 2024 This section compares the company's financial performance for the three-month periods ended June 30, 2025, and 2024 | Metric (in thousands) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Research and development | $35,816 | $27,321 | $8,495 | 31% | | General and administrative | $8,594 | $6,114 | $2,480 | 41% | | Total operating expenses | $44,410 | $33,435 | $10,975 | 33% | | Interest income | $2,364 | $4,694 | $(2,330) | (50)% | | Net loss | $(42,081) | $(28,803) | $(13,278) | 46% | - KYV-101 program R&D expenses increased by $9.2 million (69%) due to a $8.9 million increase in CMO costs for CMC investment and a $2.0 million increase in CRO costs for accelerated trial enrollment[125] - General and administrative expenses increased by $2.5 million (41%) primarily due to a $3.1 million increase in personnel-related costs, including stock-based compensation[129] Comparison of the Six Months Ended June 30, 2025 and 2024 This section compares the company's financial performance for the six-month periods ended June 30, 2025, and 2024 | Metric (in thousands) | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Research and development | $73,249 | $49,797 | $23,452 | 47% | | General and administrative | $18,569 | $12,996 | $5,573 | 43% | | Total operating expenses | $91,818 | $62,793 | $29,025 | 46% | | Interest income | $5,189 | $7,429 | $(2,240) | (30)% | | Net loss | $(86,716) | $(55,496) | $(31,220) | 56% | - KYV-101 program R&D expenses increased by $20.3 million (84%) due to a $16.6 million increase in CMO costs and a $6.4 million increase in CRO costs[133] - General and administrative expenses increased by $5.6 million (43%), primarily due to a $5.5 million increase in personnel-related costs, including stock-based compensation[137] Liquidity and Capital Resources This section discusses the company's cash position, funding sources, and future capital requirements for operations - As of June 30, 2025, Kyverna had $211.7 million in cash, cash equivalents, and available-for-sale marketable securities, estimated to fund operations for at least one year[139][142] - The company filed a shelf registration statement (Form S-3) for up to $250.0 million in securities, including a $50.0 million ATM Prospectus, declared effective on April 15, 2025[140] - Future funding requirements are substantial and depend on the progress of preclinical and clinical trials, regulatory approvals, manufacturing costs, and commercialization efforts[141][144] Recently Issued Accounting Pronouncements This section addresses the impact of new accounting standards on the company's financial reporting - Refer to Note 2 for details on recently issued accounting pronouncements and their potential impact on financial statements[158] Critical Accounting Estimates This section highlights the significant accounting estimates and judgments made in preparing the financial statements - No material changes to significant accounting policies or critical accounting estimates during the six months ended June 30, 2025[159] Emerging Growth Company and Smaller Reporting Company Status This section explains the company's regulatory status and the associated disclosure and compliance implications - Kyverna is an "emerging growth company" and "smaller reporting company," enabling it to use extended transition periods for new accounting standards and reduced disclosure requirements[160][161] - This status may make the common stock less attractive to investors, potentially leading to a less active trading market and more volatile share price[160] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Kyverna Therapeutics is not required to provide 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[162] Item 4. Controls and Procedures This section details management's evaluation of Kyverna's disclosure controls and procedures, identifying material weaknesses in internal control over financial reporting. It outlines the remediation efforts undertaken and acknowledges the inherent limitations of control systems Evaluation of Disclosure Controls and Procedures This section assesses the effectiveness of the company's disclosure controls and procedures, noting identified material weaknesses - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting[164] - Material weaknesses include insufficient qualified resources, ineffective risk identification, and insufficient evaluation of internal control components across financial statement areas[166][167] - Despite the material weaknesses, management believes the financial statements fairly present the company's financial position, results of operations, and cash flows[169] Remediation Plans This section outlines the company's strategies and actions to address and resolve identified material weaknesses in internal controls - Management has taken substantial measures to remediate material weaknesses, including hiring additional accounting and IT personnel and completing annual risk assessments[170][175] - Entity-level controls and general controls over information systems have been designed and implemented, along with necessary management review controls[175] - As of June 30, 2025, controls have not operated for a sufficient period to fully conclude that material weaknesses have been remediated[172] Changes in Internal Control Over Financial Reporting This section reports on any material changes in the company's internal control over financial reporting during the quarter - No other material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, beyond the ongoing remediation efforts[173] Limitations on the Effectiveness of Controls This section acknowledges the inherent limitations of internal control systems, which prevent absolute assurance against all risks - Inherent limitations in control systems mean absolute assurance against all control issues or fraud cannot be provided[174] - Controls can be circumvented by individual acts, collusion, or management override, and their effectiveness may deteriorate over time[174] PART II. OTHER INFORMATION This section provides additional information including legal proceedings, comprehensive risk factors, equity sales, and required exhibits Item 1. Legal Proceedings Kyverna is involved in a shareholder class action and consolidated derivative lawsuits alleging material misstatements in its IPO registration statement. Motions to dismiss have been filed, and derivative actions are stayed pending the class action's disposition. The company believes it has strong defenses and has not accrued any loss, but litigation could adversely impact the business - A shareholder class action and consolidated derivative lawsuits were filed in December 2024 and May 2025, respectively, alleging material misstatements in the IPO registration statement[177][178] - Defendants filed a motion to dismiss the amended class action complaint on June 26, 2025, and derivative actions are stayed pending its disposition[177][178] - Kyverna believes it has good defenses and has not accrued any loss, but acknowledges litigation can have an adverse impact due to costs, diversion of resources, and reputational harm[179] Item 1A. Risk Factors Investing in Kyverna's common stock involves a high degree of risk, including the company's limited operating history, substantial net losses, need for additional capital, dependence on product candidate success, material weaknesses in internal controls, and intense competition. The section details risks related to business operations, R&D, intellectual property, government regulation, data privacy, and reliance on third parties - Investing in Kyverna's common stock involves a high degree of risk due to its limited operating history, substantial net losses, and need for additional capital[181][183][188] - Key risks include dependence on product candidate success, material weaknesses in internal control over financial reporting, and intense competition from established pharmaceutical and biotechnology companies[181][193][200][256] - The company faces risks related to lengthy and expensive preclinical/clinical development, potential side effects, intellectual property protection, evolving government regulations, data privacy and security, and reliance on third-party manufacturers and CROs[181][239][263][286][353][420][443] Risk Factor Summary This section provides a concise overview of the most significant risks associated with investing in the company's common stock - Kyverna has a limited operating history, substantial net losses, and requires significant additional capital, with no products approved for commercial sale[181] - The business depends entirely on the successful development, regulatory approval, and commercialization of its product candidates, which is a lengthy, expensive, and uncertain process[181] - Material weaknesses in internal control over financial reporting, intense competition, potential side effects, reliance on third-party manufacturers and CROs, and intellectual property challenges are significant risks[181] Risks Related to Our Business, Limited Operating History and Financial Position This section details risks stemming from the company's nascent operations, historical financial losses, and capital requirements - Kyverna has a limited operating history, no approved products, and an accumulated deficit of $350.2 million as of June 30, 2025, with expected continued losses[183] - Substantial additional capital is required to finance operations, and failure to raise it could delay or eliminate R&D programs or commercialization efforts[188][192] - Material weaknesses in internal control over financial reporting persist as of June 30, 2025, potentially affecting accurate financial reporting and investor confidence[200][203][207] - The company is subject to securities litigation, including a class action and derivative lawsuits, which are expensive and divert management attention[229][230] Risks Related to Research, Development and Commercialization This section outlines risks inherent in the lengthy, expensive, and uncertain process of developing and commercializing product candidates - The company has not completed large-scale clinical trials, and product candidates face a high risk of failure due to the lengthy, expensive, and uncertain development process[231][239] - Results from investigator-initiated trials or named patient activities are not representative of controlled clinical trials and cannot be used for regulatory approval, potentially identifying concerns that impact clinical development[233][235][236] - Reliance on third-party CROs and CMOs for clinical trials and manufacturing exposes the company to risks of delays, increased costs, and non-compliance with regulatory requirements (e.g., cGMPs)[241][281][285] - Undesirable side effects or unexpected characteristics of product candidates could lead to trial suspensions, abandonment, or restrictive labeling, severely harming business[263][265][266] Risks Related to Intellectual Property This section addresses risks concerning the company's ability to obtain, maintain, and defend its intellectual property rights - Kyverna is dependent on intellectual property licensed from third parties (e.g., NIH for KYV-101), and termination of these licenses could result in loss of significant rights[286][290] - Obtaining and maintaining sufficient patent protection is expensive, time-consuming, and uncertain, with risks of patents being challenged, invalidated, or infringed by competitors[291][292][295][298] - The company faces risks of infringing third-party patents, leading to costly lawsuits, injunctions, or royalty payments, which could prevent or delay commercialization[319][324][325] - Changes in patent law (e.g., Leahy-Smith Act, UPC in Europe) and the difficulty of protecting trade secrets could diminish the value of intellectual property and competitive position[338][341][342] Risks Related to Government Regulation This section details risks associated with regulatory approvals, compliance, and evolving healthcare laws and policies - The company is subject to numerous environmental, health, and safety laws, and non-compliance could lead to fines, penalties, or operational disruptions[348][349] - Regulatory approval processes (FDA, foreign authorities) are lengthy, unpredictable, and costly, with no assurance of success or broad indications[353][354][358] - The FDA's investigation into T-cell malignancy risk with CAR T-cell therapies (like KYV-101) could delay approval, require boxed warnings, or lead to a different risk-benefit assessment for autoimmune indications[360] - Commercialization faces challenges from unfavorable pricing regulations, limited third-party reimbursement, and increasing healthcare cost-containment initiatives (e.g., IRA, state drug pricing laws)[363][365][368][370] - Relationships with healthcare providers are subject to anti-kickback, fraud, and abuse laws, with potential for criminal sanctions, civil penalties, and reputational harm[375][376] - Disruptions at government agencies (FDA, SEC) due to funding changes or shutdowns could hinder timely review and approval of product candidates[416][417] Risks Related to Data and Privacy This section outlines risks related to cybersecurity threats, data breaches, and compliance with complex data privacy regulations - Internal IT systems and those of third-party partners are vulnerable to cyberattacks, malware, and other security incidents, risking operational disruption, data loss, and reputational harm[422][423][428][429] - Compliance with federal and state data privacy laws (e.g., HIPAA, CCPA, CPRA) is complex and costly, with potential for significant civil/criminal penalties and private litigation for non-compliance[432][435][436] - Foreign data protection laws, including GDPR and the UK GDPR, impose stringent requirements and substantial fines (up to €20 million or 4% of global revenue) for breaches[437] - The NIS 2 Directive in Europe imposes new cybersecurity obligations and potential fines for in-scope organizations, including those in R&D of medicinal products[439] - Artificial intelligence tools pose new security risks to confidential information and personal data, and their use by vendors may not meet evolving regulatory standards[442] Risks Related to Our Reliance on Third Parties This section details risks arising from the company's dependence on third parties for research, development, manufacturing, and supply - Kyverna relies on third-party CROs, clinical investigators, and data management organizations for preclinical studies and clinical trials, reducing control over timing and quality[443][444][447] - Reliance on third-party CMOs for manufacturing exposes the company to risks of supply limitations, quality issues, non-compliance with cGMPs, and potential delays or increased costs if manufacturers fail to perform or are replaced[452][453][454][457] - Dependence on limited source suppliers for critical materials poses risks of supply disruptions, increased costs, and delays in clinical trials if long-term contracts are not secured or suppliers fail[459][462][463] - Future collaborations are crucial but complex, with risks that partners may not commit sufficient resources, pursue competing products, or terminate agreements, impacting funding and development[465][468][469] Risks Related to Ownership of Our Common Stock This section addresses risks concerning the volatility of common stock, potential dilution, and corporate governance provisions - The market price of Kyverna's common stock is highly volatile, influenced by clinical trial results, competitor announcements, and general economic conditions[473][474] - Quarterly and annual operating results are expected to fluctuate, and failure to meet expectations could cause the stock price to decline[476][479] - Future issuances of equity or convertible debt, including shares from equity incentive plans and the shelf registration statement, would dilute existing stockholders' ownership[482][486][492][493] - Anti-takeover provisions in charter documents and Delaware law, along with exclusive forum provisions, could delay acquisitions and limit stockholders' ability to influence corporate actions or obtain favorable judicial forums[502][503][504] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Kyverna had no unregistered sales of equity securities. The company closed its IPO on February 12, 2024, issuing 16,675,000 common shares at $22.00 per share, generating $336.2 million in net proceeds. These proceeds have been invested in money market funds and fixed-income securities, with no material change in planned use - No unregistered sales of equity securities occurred[511] - The IPO closed on February 12, 2024, issuing 16,675,000 common shares at $22.00 per share, yielding $336.2 million in net proceeds[512] - IPO net proceeds are invested in money market funds and high-quality, fixed-income securities, with no material change in planned use[513] Item 3. Defaults Upon Senior Securities This item is not applicable to Kyverna Therapeutics - This item is not applicable[515] Item 4. Mine Safety Disclosures This item is not applicable to Kyverna Therapeutics - This item is not applicable[516] Item 5. Other Information During the fiscal quarter ended June 30, 2025, none of Kyverna's directors or officers adopted or terminated any Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[517] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Amended and Restated Certificate of Incorporation and Bylaws, employment offer letters, and certifications of principal executive and financial officers - Exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, employment offer letters for key personnel, and certifications of principal executive and financial officers[518]