Kymera Therapeutics(US:KYMR)2022-02-24 12:16Part I Business Kymera Therapeutics is a clinical-stage biopharmaceutical company focused on targeted protein degradation for immunology-inflammation and oncology Our Strategy and Pipeline The company's strategy involves advancing core programs, expanding its Pegasus™ TPD platform, and pursuing collaborations - Kymera's strategy is to advance its core programs (IRAK4, IRAKIMiD, STAT3, MDM2), expand the capabilities of its Pegasus™ TPD platform, build a diverse pipeline of protein degraders, and pursue synergistic collaborations192024 Clinical Pipeline Status (as of Feb 2022) | Program | Candidate | Indication(s) | Development Stage | | :--- | :--- | :--- | :--- | | IRAK4 | KT-474 | Immune-Inflammatory Diseases (HS, AD) | Phase 1 (Patient Cohort Pending) | | IRAKIMiD | KT-413 | Relapsed/Refractory B-cell Lymphomas | Phase 1 Initiated (Feb 2022) | | STAT3 | KT-333 | Relapsed/Refractory Tumors/Lymphomas | Phase 1 Initiated (Jan 2022) | | MDM2 | KT-253 | Liquid and Solid Tumors | IND-Enabling Activities | - The company's target selection approach focuses on three categories: Inadequately Drugged (ID) targets like IRAK4 and MDM2, Undrugged (UD) targets like STAT3, and Tissue Restricted (TR) targets identified via its proprietary E3 ligase Atlas495051 Pegasus™ Platform The Pegasus™ platform is a proprietary drug discovery engine for targeted protein degraders, featuring an expanded E3 Ligase toolbox and AI-enabled chemistry - The Pegasus™ platform is a proprietary drug discovery engine for designing targeted protein degraders. Its key components include an expanded E3 Ligase toolbox with a Whole-Body Atlas of ~600 E3 ligases, a Quantitative System Pharmacology Model to predict PK/PD, proprietary chemistry with AI-enabled insights, and a Center for Molecular Glue Discovery404144 - The platform enables a data-driven, disease-selective protein degradation strategy by matching target proteins with appropriate E3 ligases based on expression, distribution, and biology, aiming to overcome limitations of relying only on well-known ligases like cereblon and VHL5657 Key Development Programs This section details the clinical and preclinical progress of key programs including KT-474, KT-413, KT-333, and KT-253 - KT-474 (IRAK4 Degrader): In a Phase 1 trial in healthy volunteers, KT-474 was well-tolerated and demonstrated robust, dose-dependent IRAK4 degradation in both blood (up to 98%) and skin (up to 90%), leading to broad inhibition of disease-relevant cytokines. A patient cohort in HS and AD is planned97106107 - KT-413 (IRAKIMiD Degrader): This candidate combines IRAK4 degradation with IMiD activity to synergistically target MYD88-mutant DLBCL. Preclinical models showed rapid, complete, and sustained tumor regressions with intermittent dosing. A Phase 1 trial in relapsed/refractory B-cell lymphomas was initiated in February 2022112128134 - KT-333 (STAT3 Degrader): Designed to target STAT3-dependent hematological malignancies and solid tumors. Preclinically, KT-333 showed high selectivity and led to durable, complete tumor regressions in T-cell lymphoma models. A Phase 1 trial in relapsed/refractory liquid and solid tumors was initiated in January 2022136147150 - KT-253 (MDM2 Degrader): A potent, first-in-class MDM2 degrader designed to stabilize the p53 tumor suppressor. It is intended to overcome the feedback loop that limits small molecule inhibitors, inducing a strong apoptotic response. An IND filing is expected in the second half of 2022164165 Collaborations Kymera has strategic collaborations with Vertex and Sanofi for developing targeted protein degradation therapies Key Strategic Collaborations | Partner | Agreement Date | Upfront Payment | Potential Milestones | Focus | | :--- | :--- | :--- | :--- | :--- | | Vertex | May 2019 | $70M (incl. equity) | Up to $170M per program (up to 6) | TPD for diseases outside Kymera's core focus | | Sanofi | July 2020 | $150M | Up to $2.18B (development & commercial) | Co-development of IRAK4 and one other target for immune-inflammatory diseases | Intellectual Property and Competition The company's intellectual property portfolio covers its platform and product candidates, facing competition from TPD and traditional therapies - The company's intellectual property portfolio includes wholly owned patent families covering its platform E3 ligase ligand technology and novel bifunctional degrader product candidates, with patents expected to expire between 2038 and 2043212215 - Kymera faces competition from other companies developing TPD therapies, including Arvinas, Inc., C4 Therapeutics, Inc., Nurix Therapeutics, Inc., and Foghorn Therapeutics, Inc., as well as from companies developing traditional modalities for the same indications207208 Government Regulation The company's products are subject to extensive FDA and foreign regulatory oversight, including preclinical, clinical, and post-approval requirements - The company's products are subject to extensive regulation by the FDA in the U.S. and comparable foreign authorities. The approval process involves comprehensive preclinical studies and multi-phase clinical trials (Phase 1, 2, 3) to establish safety and efficacy before an NDA can be submitted and approved226228236 - The FDA offers expedited programs like Fast Track and Breakthrough Therapy designations to facilitate development of drugs for serious conditions. Post-approval, the company will be subject to ongoing requirements for manufacturing (cGMP), labeling, advertising, and safety reporting248257 - Healthcare reform, such as the Affordable Care Act (ACA), and other legislative measures in the U.S. and abroad, create pricing pressures and reimbursement challenges through mechanisms like government negotiations, rebates, and cost-containment programs275399 Risk Factors Kymera faces significant financial, development, regulatory, and operational risks due to its novel TPD platform and early-stage pipeline - Financial Risks: The company has a history of significant operating losses ($100.2 million in 2021) and expects to incur continued losses. It will need to raise substantial additional capital to fund development and commercialization, and failure to do so could force delays or discontinuation of programs318319322 - Development & Regulatory Risks: The company's TPD approach is novel and unproven, making development time and costs difficult to predict. All product candidates are in early clinical or preclinical stages, and there is no guarantee of successful trial outcomes or regulatory approval329332 - Third-Party Reliance: Kymera depends on third-party CROs to conduct clinical trials and CMOs for manufacturing. Any failure by these parties to perform their duties, comply with regulations, or meet deadlines could substantially harm development programs432433 - Intellectual Property Risks: The company's success depends on obtaining and maintaining robust patent protection. Its patents may be challenged, invalidated, or circumvented by competitors, and it may face infringement claims from third parties448458 - Commercialization Risks: Even if approved, products may not achieve market acceptance due to competition, pricing, reimbursement policies, or unfavorable side effect profiles. The company currently lacks sales and marketing infrastructure420423428 Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None540 Properties The company leases approximately 34,522 square feet of office and laboratory space in Watertown, Massachusetts, under a lease expiring in March 2030 - The company's primary facility is a 34,522 sq. ft. leased space in Watertown, MA, with the lease term extending to March 2030541 Legal Proceedings The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business - The company is not currently a party to any material legal proceedings542 Mine Safety Disclosures This item is not applicable to the company - Not applicable543 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Kymera's common stock began trading on the Nasdaq Global Select Market under the symbol "KYMR" on August 21, 2020, with approximately 36 holders of record as of February 18, 2022 - The company's common stock trades on the Nasdaq Global Select Market under the symbol "KYMR" since August 21, 2020545 - As of February 18, 2022, there were approximately 36 holders of record of the company's common stock548 Reserved This item is not applicable - Not Applicable551 Management's Discussion and Analysis of Financial Condition and Results of Operations Collaboration revenue increased to $72.8 million in 2021, but rising R&D and G&A expenses led to a $100.2 million net loss Results of Operations This section details the year-over-year changes in collaboration revenue, operating expenses, and net loss for 2021 versus 2020 Comparison of Operations (2021 vs. 2020) | Financial Metric | 2021 (in thousands) | 2020 (in thousands) | Change (in thousands) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration Revenue | $72,832 | $34,034 | $38,798 | Increased revenue recognition from Sanofi and Vertex collaborations | | R&D Expenses | $137,017 | $62,105 | $74,912 | Higher costs for IND-enabling studies and clinical activities for IRAK4, IRAKIMiD, and STAT3 programs, and increased headcount | | G&A Expenses | $36,345 | $18,233 | $18,112 | Increased legal/professional fees and personnel costs to support growth as a public company | | Net Loss | ($100,217) | ($45,593) | ($54,624) | Driven by the significant increase in operating expenses | R&D Expense Breakdown (2021 vs. 2020) | Program Area | 2021 (in thousands) | 2020 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | IRAK4 | $27,368 | $14,016 | $13,352 | | IRAKIMiD | $10,847 | $6,170 | $4,677 | | STAT3 | $10,081 | $6,674 | $3,407 | | Other External R&D | $35,909 | $12,579 | $23,330 | | Internal R&D Costs | $52,812 | $22,666 | $30,146 | | Total R&D | $137,017 | $62,105 | $74,912 | Liquidity and Capital Resources The company's cash position and cash flow activities are analyzed, with projections for funding operations into 2025 - As of December 31, 2021, the company had $567.6 million in cash, cash equivalents, and marketable securities, which is expected to fund operations into 2025595608 Summary of Cash Flows (Year Ended Dec 31) | Cash Flow Activity | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | ($128,946) | $88,130 | | Net Cash Used in Investing Activities | ($99,835) | ($422,588) | | Net Cash Provided by Financing Activities | $250,280 | $289,262 | - Net cash used in operating activities in 2021 was $128.9 million, primarily due to the net loss and a decrease in deferred revenue. Net cash provided by financing activities was $250.3 million, mainly from the July 2021 follow-on offering and concurrent private placement598603 Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risk from changes in interest rates affecting its investment portfolio, though the impact is not expected to be material - The company's primary market risk is interest rate sensitivity on its portfolio of cash equivalents and marketable securities. However, due to the short-term and low-risk nature of these investments, a 10% change in interest rates is not expected to have a material impact627 - The company has exposure to foreign currency exchange rate fluctuations from contracts with vendors in Asia and Europe but does not currently engage in hedging activities628 Financial Statements and Supplementary Data This section presents the consolidated financial statements, including balance sheets and statements of operations, for the periods ended December 31, 2021 Consolidated Financial Statements This subsection provides detailed consolidated balance sheets and statements of operations for the specified fiscal years Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Assets | | | | Cash, cash equivalents & marketable securities | $567,605 | $458,733 | | Total Current Assets | $451,273 | $302,339 | | Total Assets | $605,905 | $487,175 | | Liabilities & Equity | | | | Deferred Revenue (Current & Non-current) | $101,034 | $170,390 | | Total Current Liabilities | $92,542 | $110,617 | | Total Liabilities | $146,267 | $203,287 | | Total Stockholders' Equity | $459,638 | $283,888 | Consolidated Statement of Operations Data (Year Ended Dec 31) | (in thousands) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Collaboration Revenue | $72,832 | $34,034 | $2,934 | | Research and development | $137,017 | $62,105 | $37,158 | | General and administrative | $36,345 | $18,233 | $7,981 | | Total operating expenses | $173,362 | $80,338 | $45,139 | | Loss from operations | ($100,530) | ($46,304) | ($42,205) | | Net loss | ($100,217) | ($45,593) | ($41,246) | 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 - None790 Controls and Procedures Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2021792 - Based on the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2021. The independent auditor also issued an unqualified opinion on its effectiveness795799 Other Information The company reports no other information - None807 Part III Directors, Executive Officers and Corporate Governance Information required by this item is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders - Incorporated by reference from the 2022 Proxy Statement811 Executive Compensation Information required by this item is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders - Incorporated by reference from the 2022 Proxy Statement812 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required by this item is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders - Incorporated by reference from the 2022 Proxy Statement813 Certain Relationships and Related Transactions, and Director Independence Information required by this item is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders - Incorporated by reference from the 2022 Proxy Statement814 Principal Accounting Fees and Services Information required by this item is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders - Incorporated by reference from the 2022 Proxy Statement815 Part IV Exhibits, Financial Statement Schedules This section lists the financial statements included in the report and the exhibits filed as part of the Annual Report on Form 10-K - This item lists the consolidated financial statements and all exhibits filed with the Form 10-K, including governance documents, material contracts, and certifications816 - No financial statement schedules were filed because they were not required or applicable819 Form 10-K Summary This item is not applicable - Not Applicable820