Kymera Therapeutics(US:KYMR)2021-03-11 12:19Part I Business Kymera Therapeutics develops small molecule therapeutics using its Pegasus™ platform, focusing on targeted protein degradation for immunology-inflammation and oncology Business Overview and Strategy Kymera Therapeutics develops novel small molecule therapeutics via its Pegasus™ platform, advancing lead programs and expanding its pipeline - The company's core focus is on discovering and developing small molecule therapeutics that utilize targeted protein degradation (TPD) to address disease-causing proteins, particularly in immunology-inflammation and oncology20 - Kymera's lead programs are IRAK4, IRAKIMiD, and STAT3, which target high-impact pathways in immune-inflammatory diseases and cancers20 - The lead drug candidate, KT-474 from the IRAK4 program, initiated the single ascending dose (SAD) portion of its Phase 1 clinical trial in healthy volunteers in February 2021, with plans to file INDs for its IRAKIMiD (KT-413) and STAT3 (KT-333) programs in the second half of 202122 - Strategic objectives include advancing its lead programs, expanding the Pegasus™ platform's capabilities to identify optimal E3 ligase pairings, building a broader pipeline, protecting intellectual property, and leveraging collaborations with partners like Vertex and Sanofi212225 Our Pegasus™ Platform The Pegasus™ platform is an integrated drug discovery engine for selective protein degraders, combining E3 ligase mapping, binders, and rational design - The E3 Ligase Whole-Body Atlas maps the expression profiles of approximately 600 unique E3 ligases across various tissues, enabling data-driven selection of E3 ligases for specific targets and diseases455152 - The platform includes a proprietary E3 Ligase Binders Toolbox, which contains ligands for an expanded library of E3 ligases beyond the commonly used cereblon and VHL, aiming for more selective and tissue-specific degradation4554 - Kymera utilizes Ternary Complex Modeling (TCM) and a Quantitative Systems Pharmacology (QSP) model to rationally design degraders and predict their pharmacokinetic/pharmacodynamic (PK/PD) relationships, aiming to optimize human dosing and increase the probability of clinical success455556 Our Therapeutic Pipeline Kymera's pipeline targets immunology and oncology, with lead candidate KT-474 in Phase 1 and INDs for KT-413 and KT-333 planned Kymera Therapeutics Development Pipeline Summary | Program | Development Candidate | Indication | Discovery | Preclinical | Phase 1 | Phase 2 | Phase 3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | IRAK4 | KT-474 | Immune-Inflammatory Diseases | ✔ | ✔ | ► | | | | IRAKIMiD | KT-413 | MYD88-mutant DLBCL | ✔ | ► | | | | | STAT3 | KT-333 | Hematologic Malignancies & Solid Tumors | ✔ | ► | | | | | Undisclosed | - | Multiple Diseases | ► | | | | | - The IRAK4 program's lead candidate, KT-474, is being developed for immune-inflammatory diseases like hidradenitis suppurativa (HS) and atopic dermatitis (AD), with a Phase 1 trial in healthy volunteers beginning in February 20214647 - The IRAKIMiD program's candidate, KT-413, combines IRAK4 degradation with immunomodulatory (IMiD) activity to treat MYD88-mutated diffuse large B-cell lymphoma (DLBCL), with an IND filing expected in the second half of 20214648 - The STAT3 program's candidate, KT-333, is being developed for hematological malignancies and solid tumors, with an IND filing expected in the fourth quarter of 20214649 Collaborations Kymera maintains strategic collaborations with Vertex, Sanofi, and GSK for developing protein degraders and expanding its platform - Vertex Pharmaceuticals (May 2019): A collaboration to develop degraders against multiple targets, with Kymera receiving $70 million upfront (including an equity investment) and eligibility for up to $170 million in milestones per program for up to six programs, plus royalties165166168 - Sanofi (Genzyme) (July 2020): A collaboration to co-develop drug candidates for IRAK4 and one other target, providing Kymera a $150 million upfront payment and eligibility for over $2 billion in potential development and commercial milestones, plus tiered royalties172176 - GlaxoSmithKline (October 2017): A collaboration to jointly identify and research compounds against specified targets and discover novel ligase binders, with GSK making an equity investment in Kymera's Series A preferred units160161163 Manufacturing and Competition Kymera outsources all manufacturing to CMOs and faces significant competition from other protein degradation and traditional therapy developers - The company does not own or operate manufacturing facilities and relies entirely on third-party CMOs for the production of drug substances and finished drug products for preclinical and clinical studies178 - Kymera faces competition from other companies in the targeted protein degradation space, including Arvinas, Inc. (clinical stage), C4 Therapeutics, Inc., Nurix Therapeutics, Inc., and others (preclinical stage)181 - Competition also comes from companies developing traditional therapies (small molecules, antibodies) for the same indications targeted by Kymera's IRAK4, IRAKIMiD, and STAT3 programs180181 Intellectual Property Kymera's IP strategy relies on patents and trade secrets, with a portfolio of 1 granted U.S. patent and 105 applications, expiring 2038-2042 - As of February 28, 2021, the company's patent portfolio included one granted U.S. patent, 52 U.S. patent applications, and 53 foreign patent applications185 - The patent portfolio covers platform E3 ligase ligand technology, novel bifunctional degrader compounds, and target-specific degraders for proteins like IRAK and STAT185186188 - Patents granted from the current applications are expected to expire between 2038 and 2042, absent any patent term adjustments or extensions186187189 Government Regulation Kymera's operations are subject to extensive FDA and international regulations covering drug development, manufacturing, marketing, and healthcare laws - Drug development is regulated by the FDA and involves extensive preclinical studies (GLP), an Investigational New Drug (IND) application, and multi-phase clinical trials (GCP) to establish safety and efficacy before an NDA can be submitted198199206 - The company may seek expedited development pathways such as Fast Track Designation, Breakthrough Therapy Designation, Priority Review, and Accelerated Approval to potentially speed up the review process for serious conditions218 - Operations are also subject to other healthcare laws, including the federal Anti-Kickback Statute, the False Claims Act, HIPAA, and the Physician Payments Sunshine Act, which regulate interactions with healthcare providers and payors237364 - International operations, particularly in the EEA, are governed by regulations from the EMA, including centralized or national authorization procedures for marketing, and are subject to strict data privacy laws like the GDPR260269 Employees and Human Capital As of December 31, 2020, Kymera had 75 full-time employees, with 54 in R&D, and implemented COVID-19 safety protocols - As of December 31, 2020, the company had 75 full-time employees, with 54 engaged in R&D and 21 in G&A functions274 - The company has implemented a multi-faceted response to the COVID-19 pandemic, including decreased density in workspaces, increased cleaning, providing PPE, and implementing weekly testing to ensure employee safety276 Risk Factors Kymera faces substantial financial, development, operational, and IP risks due to its early-stage pipeline and reliance on third parties - Financial Risks: The company has a limited operating history, has never generated revenue from drug sales, and has incurred significant losses, requiring substantial additional funding to continue operations279281283 - Development Risks: The targeted protein degradation approach is novel and unproven, making development time and costs difficult to predict, and positive preclinical results may not translate to successful clinical trials289292318 - Operational Risks: The company relies heavily on third parties for conducting clinical trials and manufacturing, and any failure by these partners could substantially harm the business, with the COVID-19 pandemic posing a risk of disruption309386392 - Intellectual Property Risks: The ability to obtain and maintain broad patent protection is uncertain and critical for commercial success, and the company may face infringement claims or challenges to its own patents401435440 Properties Kymera leases 34,522 square feet of office and laboratory space in Watertown, Massachusetts, under a lease expiring in March 2030 - Kymera leases approximately 34,522 square feet of office and laboratory space in Watertown, Massachusetts487 - The current lease term expires in March 2030, with an option to extend for an additional five years487 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Kymera's common stock began trading on Nasdaq under "KYMR" on August 21, 2020, with 69 holders of record as of February 28, 2021 - The company's common stock trades on the Nasdaq Global Select Market under the ticker symbol "KYMR" since August 21, 2020492 - As of February 28, 2021, there were approximately 69 holders of record of the company's common stock493 Management's Discussion and Analysis of Financial Condition and Results of Operations Kymera reported significantly increased collaboration revenue in 2020, alongside higher operating expenses and a net loss, with substantial cash to fund operations into 2025 Results of Operations In 2020, collaboration revenue significantly increased to $34.0 million, while R&D and G&A expenses rose, leading to a net loss of $45.6 million Comparison of Years Ended December 31, 2020 and 2019 | | Year ended December 31, | Change | | :--- | :--- | :--- | | (in thousands) | 2020 | 2019 | ($) | | Revenue—from related parties | $34,034 | $2,934 | $31,100 | | Operating expenses: | | | | | Research and development | 62,105 | 37,158 | 24,947 | | General and administrative | 18,233 | 7,981 | 10,252 | | Total operating expenses | 80,338 | 45,139 | 35,199 | | Loss from operations | (46,304) | (42,205) | (4,099) | | Interest income, net | 711 | 959 | (248) | | Net loss | $(45,593) | $(41,246) | $(4,347) | - Collaboration revenue increased by $31.1 million to $34.0 million in 2020, with $18.8 million from the Sanofi agreement and $15.2 million from the Vertex agreement528 Research and Development Expenses Breakdown | (in thousands) | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | External R&D Costs: | | | | | IRAK4 and IRAKIMiD | $20,186 | $13,478 | $6,708 | | STAT3 | $6,674 | $2,474 | $4,200 | | Other | $12,579 | $8,822 | $3,757 | | Internal R&D Costs | $22,666 | $12,384 | $10,282 | | Total R&D Expenses | $62,105 | $37,158 | $24,947 | Liquidity and Capital Resources As of December 31, 2020, Kymera held $458.7 million in cash and equivalents, bolstered by $289.3 million in financing, expected to fund operations into 2025 - As of December 31, 2020, the company had cash, cash equivalents, and marketable securities of $458.7 million, which is expected to fund operations into 2025532506 Summary of Cash Flows | (in thousands) | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | Cash provided by operating activities | $88,130 | $17,905 | | Cash used in investing activities | $(422,588) | $(16,486) | | Cash provided by financing activities | $289,262 | $34,911 | | Net (decrease) increase in cash | $(45,196) | $36,330 | - Net cash from financing activities in 2020 was $289.3 million, primarily from the IPO ($183.1 million net), a concurrent private placement ($13.5 million), and Series C preferred stock issuance ($88.2 million)538 - Cash from operating activities in 2020 was $88.1 million, largely due to the $150.0 million upfront payment from the Sanofi collaboration534 Financial Statements and Supplementary Data Audited consolidated financial statements for 2020 present key figures including $487.2 million in total assets, $203.3 million in liabilities, and a $45.6 million net loss Consolidated Balance Sheet Data (as of December 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $31,004 | $76,015 | | Marketable securities | $427,729 | $15,942 | | Total Assets | $487,175 | $116,702 | | Liabilities & Equity | | | | Deferred revenue | $170,390 | $52,991 | | Total Liabilities | $203,287 | $82,028 | | Total Stockholders' Equity (Deficit) | $283,888 | $(74,406) | Consolidated Statement of Operations Data (for the year ended December 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Collaboration Revenue | $34,034 | $2,934 | | Research and development expense | $62,105 | $37,158 | | General and administrative expense | $18,233 | $7,981 | | Loss from operations | $(46,304) | $(42,205) | | Net loss | $(45,593) | $(41,246) | - As of December 31, 2020, the company had federal and state net operating loss (NOL) carryforwards of $74.4 million and $61.2 million, respectively, which are available to offset future taxable income but may be subject to limitations473711 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of December 31, 2020, with no internal control report required for the newly public company - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020721 - The annual report does not include a management assessment or auditor attestation on internal control over financial reporting, as permitted for newly public companies722 Part III Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accounting Fees Information for Items 10-14, covering directors, executive officers, corporate governance, compensation, and accounting fees, is incorporated by reference from the 2021 Proxy Statement - Information regarding Directors, Executive Officers, Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accounting Fees and Services (Item 14) is incorporated by reference from the company's 2021 Proxy Statement727728730 Part IV Exhibits, Financial Statement Schedules This section lists all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and required certifications - This section provides a list of all exhibits filed with the annual report, including corporate governance documents, material contracts, and required certifications731