Kymera Therapeutics(US:KYMR)2021-05-06 11:15PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) 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, 20213132 - 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 months33 - 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 agreement535867 - 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 agreement707179 - Total equity-based compensation expense was $3.2 million for Q1 2021, a significant increase from $0.4 million in Q1 2020118 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 platform126 - 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) portion126 - 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 2025133167 - 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 materials133134293 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 costs154 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 million157 - Cash used in operating activities was $22.8 million in Q1 2021, compared to $12.1 million in Q1 2020158159 - 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 commercialization167168 Quantitative and Qualitative Disclosures About Market Risk 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 securities176 - Management believes the company does not have material exposure to interest rate risk, foreign currency risk, or inflation176177178 Controls and Procedures 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 level180 - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2021181 PART II. OTHER INFORMATION Legal Proceedings 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 proceedings184 Risk Factors 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, 2021186188 - 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 Europe199 - 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) portion204 - 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 indications279 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None390 Exhibits 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 files394