Kymera Therapeutics, Inc. (KYMR) Earnings Call Transcript & Summary

Okay. Good afternoon. Welcome to the afternoon sessions of the BofA Healthcare Conference. My name is Geoff Meacham. I'm the Senior Biopharma Analyst here. And I have Alex Hammond from my team as well with me. And we're thrilled to have Kymera Therapeutics here and speaking on behalf of Kymera is CEO, Nello Mainolfi. Nello, are you there?

Yes, I'm here. Thanks for the invite. Great to be hear.

Okay. Perfect. Good to see you. Yes. So before we get into some questions, do you want to kind of give us a real quick -- a real quick background and then we can get right into some of the stuff you guys have going on in the pipeline.

Excellent. Yes. So thanks, Geoff. So just quickly, just to remind everyone, Kymera was funded in 2016, actually about 5 years ago, almost to the date. With the goal of building a fully integrated business that will take targeted protein degradation into kind of a commercial stage multi-disease platform company. And so everything that we've done, all our investments and partnerships are really pointing towards building that type of company. We're now a clinical stage company. We started our first clinical study in February of 2021 with our KT-474 program. We are in the Boston area, but internally about 100 full-time employees, and we got about 200 to 300 different CROs and CMOs across the world. We have about $455 million on our balance sheet, and we can go into that later. Just a couple of highlights about our philosophy. So we're focused internally in obviously, using targeted protein degradation to unlock biology that cannot be unlocked by other technologies. We're focused on oncology and immunology. But thanks to our partnerships, we're able to work in, at this point, 7 different diseases, again, 5 outside of oncology and immunology. We look at partnership as a way to really accelerate our growth, whether it's technology, discovery or development and commercialization partnerships as we have with GSK, Vertex and Sanofi. And this year is very exciting for us, as I'm sure we'll go into it. We've launched the first randomized placebo control study in targeted protein degradation with the 474 molecule, the first time degrader goes into healthy volunteer, we're going to present that data set towards the end of the year in 4Q, probably up to 70, 80 subject's data. So very rich data set. And then we also have 2 more programs that I'm sure we'll touch on, the IRAKIMiD and STAT3, those will be going into the clinic in the second half of the year, so making 3 in 2021. So that's probably the quick overview, we're happy to go into more specifics as we go along.

Perfect. Thanks, Nello. Yes. So I mean, if you think about the E3 ligase focus, you guys, protein degradation, you guys are in the inflammation space, and you're in oncology as a therapeutic category. Maybe just help us with -- from a science perspective, what -- have you looked at other potential indications for ligases and targeted protein degradations, maybe just help us with kind of the selection process of how you got to where you are today?

Yes. No, that's a great question, Geoff. So we -- our approach to target selection has always been working in pathways where there is high degree of validation where key nodes have not been tracked -- tracked well by any other modality where protein degradation can come in and provide the key unlocking solution. An example is STAT3 and drug transcription factor, IRAK4, really not well drugged at least to what we've shown -- to the extent that we've shown with small molecule inhibitors are actually the new way to target multiple targets to have combo in a single molecule. And we've decided to focus in oncology and immunology because we want to be able to be credibly owning the continuum of discovery development and where it makes sense commercialization. We -- our E3 ligase platform is obviously disease-agnostic. And thanks to our partner, especially with Vertex, as I mentioned, we work well outside of oncology and immunology. But we've decided that for now, the internal focus should remain in those areas, while we continue to actually be exposed that some of the partner programs in areas that maybe have different targeted biology risk. And with those learnings, at some point, not in the distant future pivot into expanding areas of development. But that, I think that will happen organically after we've demonstrated clinical proof-of-concept of the early programs in our pipeline.

Okay. That makes sense. We'll get in the 474 in just a second, but another kind of bigger picture question. When you think about the healthy volunteer study, given how foundational this mechanism is, has there been any extra kind of FDA insights into what they ask you to do from a mechanism standpoint? Or has it been a fairly plain vanilla process when you think about the setup for your Phase I?

Yes. So good question. So our Phase I study, which, again, is the first one that sees a hydro bifunctional degrader going into healthy volunteer and actually running a deeper mechanistic study. So as I mentioned, we're going to have safety, PK, we're going to have degradation in blood and skin. We're going to have impact on cytokines, all in a placebo-controlled manner. So this will be a very deep mechanistic proof-of-concept study. So our approach has been presented to the FDA, which we're going to run an SAD, so single ascending dose portion. Upon data generation of the SAD, we will then decide what is the first dose that we want to go into the multiple ascending dose study, which sees 14 days of continuous dosing and then obviously expand the MAD. So what actually the FDA feedback was that they're very constructive. There were in line with our plan, and they actually asked us as its public knowledge to kind of work with them in that transition. So we will share enough data from the SAD portion for us to communicate with FDA, how we think about transitioning to MAD. So I wouldn't say that there is any particular specific point, but there is definitely an interest for FDA to be involved in the process, given that, this is new modality as well as the first time that the term division of the FDA is seeing a degrader going into the clinic.

So continuing on for KT-474. What does positive data look like from that initial readout later this year?

Yes. So I just want to recap a bit. So as I mentioned, we have actually, a 3-part Phase I study, which is also quite unique. Part A, as I mentioned, it's the single ascending dose study, Part B will be the multiple ascending dose study in healthy volunteer. And then Part C will be a patient cohort where we select one dose from the MAD study to confirm kind of the PK/PD profile. So what good is going to look like is actually almost following the stepwise manner. For us, the goal of the SAD portion is to, first of all, demonstrate that we have oral bioavailability that we have the PK that will enable us to dose this compound once a day. So to have the half-life that will allow us to develop this drug as a once-a-day oral drug. We believe that this program and this target has an opportunity to be best-in-class oral immune inflammatory agent. And so we want to make sure that we develop the best drug as possible. So again, from the SAD PK once-a-day oral drug safety and then demonstrate initially that even upon single dose, we're able to demonstrate target degradation. Then from there, in the MAD in healthy volunteer, the goal is to demonstrate that we can do that upon repeat dosing, and we confirm that this is a once-a-day oral drug. That we confirm that this is well tolerated. And then importantly, that we're able to reach levels of degradation that we believe are going to be therapeutically relevant. And in order to establish that, we actually have 2 ways. One way is to reach 85% degradation, which is the point that preclinically has demonstrated profound disease impact in preclinical models. And also we're going to correlate the level of degradation, both in blood and in skin to disease-relevant biomarkers impact. So we're going to be doing the ex vivo. So taking blood and skin samples and demonstrating that upon activation ex vivo, we are impacting the disease-relevant biomarkers. And what I mean by that is there are IL-1 family cytokines that have been shown to be impacting disease in other clinical trials with other drugs, especially antibodies. And blocking of these IL-1 family cytokines is able to impact disease. So we're going to show that by administering this compound to healthy volunteer upon repeat dosing, when we take the blood that has been now in which the IRAK4 is being depleted, response to activation of this pathway is going to be dampened down by the IRAK4 degradation and impact on the cytokines would be relevant with the arm that has the drug being dosed. And so also the beauty of this that we will be able to compare all this data set against placebo. So we'll have statistical significance and placebo-controlled. The other thing that we're going to do in the MAD phase, we're also going to look at C-reactive protein, which is actually sometimes elevated also in the healthy population, and we'll be looking at reducing, again, in vivo, a marker of inflammation. The third -- so we plan to present SAD and MAD in the fourth quarter in a meeting -- a medical meeting or conference. What we also will be able to do is, as I mentioned earlier, take a dose that gives us the level of degradation that we need and then go into patients. We believe we're going to have up to 20 atopic dermatitis or HS patients. And the goal there is going to be 2 weeks dosing, and the goal will be to demonstrate that also in patients where there is -- there might be different levels of IRAK4 or different levels of target, we are still able to knock it down at the level that we believe is going to be therapeutically relevant. So all this data set we'll be able to derisk fully the clinical development. We'll be able to derisk the compound, the biology, the mechanism, and we believe also the selection of dose. And we believe this would be a large amount of derisking. I would argue more than 50%, given that downstream signaling from IRAK4 has already been associated with disease in other clinical trials.

Well, thank you for that answer. Definitely provided a lot of color there and answered some of my subsequent questions. So I guess we can move on now to the KT-413 program. So you mentioned it a little bit for KT-474 that you're expecting about 85% degradation. So what level of target engagement in this program are you expecting to see clinical benefit? Is it similar?

Yes. No, that's a great question. So obviously, for oncology, so why did we come up with the IRAKIMiD, as we call it, and the reason it was very simple. We are very keen on the IRAK4 franchise in oncology. We actually, later in the year, we'll talk about IRAK4 selective degrader and potential thereof in a wide variety of diseases, including AML and MDS. But for this particular IRAKIMiD, which is the program that we've talked about more, and there is -- it's more publicly known. The goal was to develop the first targeted therapy in lymphoma going after MYD88 mutation and realizing that in order to do so, you have to block 2 pathways that develop synergistic biology and lead to really profound single-agent activity. In a way, we often refer to this as a combo in a molecule. So because of the fact that -- and sorry, if I took the long road here, but the reason for that is because we have a multi-targeted relation the degradation profile that leads to the level of anti-cancer activity that we want and need are obviously a bit more complex. So what I can say that what we've shown in both in cell systems and more importantly, in vivo, both in cell-derived xenograft or in patient-derived xenograft, we've shown that you need substantial degradation, I would say, above 80% of both Ikaros, Aiolos and IRAK4 for probably about 2 to 3 days. What that does is lead this really profound commitment to cell death of the cell population that is exposed to this drug. And then what you find that if you wash out the compound in vivo, in vitro or you let the compound be excreted in vivo. You don't really need another dose for multiple days. In fact, what we're planning to do is to go into the clinic. As you know, in the second half of the year with once every 3 weeks dose in paradigm. That allows us preclinically to see very profound and durable full regressions, and we hope that clinically, this will be replicated. So again, there is an overlap of degradation of these 2 targets that leads to profound effect on cancer cells, and then there is a slow increase of protein levels until you dose again after 3 weeks.

No, it sounds like from the Phase I data at the end of this year, you'll sort of share the derisking component from a platform perspective, right? So clean data for 474 probably bodes well for 413. Is that fair to say?

I think what I would do is demonstrate that actually, companies can actually go and take a hydro bifunctional degraders into indications outside of oncology in a very specific targeted and safe manner if that's doable. For us, it will mean that the translation of preclinical into clinical is de-risked and understood. And so any following program will have a higher level of derisking just because we're able to take back the information from the 474 studies, both in terms of PK, PD, safety and understanding of distribution of these molecules. And kind of apply to any forward translation that we're going to do across our pipeline. So I would call it a platform derisking that could be then apply to other programs.

Okay. And for both immunology and oncology, what do genetics tell you? Is there any mutations that sort of implicate the ubiquitous and proteosome or ligase pathways that you could point to that kind of further tie in the mechanism, for example, cancer resistance or hyperactivity and with respect to inflammation?

Yes. So maybe I'll divide the 2. So that hopefully, the answer is easier to articulate. So one, I would say, from the inflammation standpoint of view, from target point of view. So we know that there are IRAK4 in all individuals. And these have been identified and characterized by a close collaborators of Kymera, Professor Casanova and Rockfall. And he's shown that humans with IRAK4 nonmutations tend to be healthy adults. And actually, I would call the genetic characterization of human IRAK4 no individuals. It's probably one of the more benign in the whole inflammation, small molecule space, if you look at JAK and other categories of targets. And so that bodes really well for us for safety as well as obviously for pharmacology. And we don't expect from a ligase standpoint of view to have to deal with resistance mechanism because we're actually not leading to cell death, we're actually knocking down the target that provides an anti-inflammatory effect, so a blockade of the pathway in the cell but not leading to cell death. And so usually, when you don't lead to cell death, you're not going to select for particular kind of escape mechanism. In oncology, though, where, as you know, the pressure -- the mutational pressure is heightened because you're actually slowly selecting for resistant clones. Obviously, we understand that the E3 ligase proteasome system has demonstrated that there are cases where that happens. In fact, I think the most -- the largest data set that we've amassed is in multiple myeloma with the IMIDs that obviously work through these mechanisms of degrading proteins through engaging the E3 ligase system. And there, we've seen that there are mutations -- there are either down-regulation of E3 ligase, which I think is the more common, but also mutation to the substrate of that E3 ligase that leads to particular resistance. And I believe the resistance is still in the single-digit percentage. And in fact, Revlimid, is still the #1 slow market drug out there. So really lots of efficacy. But understanding mechanisms of resistance for companies that work in protein degradation in oncology has to be always front and center. And we've done plenty of studies to derisk it. And obviously, we will hopefully confirm that the resistance is minimal, if at all, once we were in the clinic.

I think Alex had a question on 413 too.

Yes. One more question. So what is the catalytic cycle number or efficiency you're trying to hit for degradation? Will that impact the dosing schedule?

Yes. So that's a great question. So the way that -- what we've been able to establish is that with our molecule, we're able to knock down, again, this -- both Ikaros and Aiolos and IRAK4 at doses that are obviously well below the concentration that is required to stoichiometrically engage these 3 targets. So we know that this is a catalytic mechanism. I don't think we've disclosed necessarily what is the catalytic cycle number. But the catalytic efficiency of our process and the fact that the degradation is tied to a profound anticancer effect allows us to not only use a small dose, in fact, we published where we probably dose most 3 to 9 mg per kg. But also the -- based on the biology, now we can also use less frequent dosing. And in fact, as I mentioned, we can go once a week, once every 2 weeks. And as I said, our clinical strategy is to go in with once every 3 weeks.

Now, let's switch gears to 333. For your STAT3 program, I know it's pretty early, but do you see this ultimately as -- is it a typical development path where you start off in sort of the later lines? Or do you see something the potential to move this one upstream? Just trying to think of the positioning down the road for -- in the study.

Yes. No, that's a great question. So it's actually obviously never too early, especially once you're close to the clinic as we are clearly months away so with STAT3, it's -- because it's a broad franchise opportunity here, we're taking it very rational and in this way, also -- in this case, also a stepwise derisking approach. So we believe that there are a subset, and we have demonstrated this subset of liquid tumors, especially in T-cell lymphoma leukemias, but also outside of those where there is particular dependency on this mechanism. And there are, especially in indications where the standard of care is actually quite poor. And so in those indications, yes, we might not be able to go directly as first-line but because we have a molecular mechanism, we will be able to probably go pretty early in the line of therapies. And demonstrate quickly that we are able to impact disease, not only in terms of clinical end points, but also in terms of molecular remissions. And with that, we believe we will be able to follow a single-arm accelerated approval path. But the beauty about this mechanism is it's also very relevant in other tumor types with a different mechanism. So while for liquid tumor -- subset of liquid tumor, there is a direct dependency on the mechanism. For solid tumor, there is actually a higher dependency on the ability of STAT3 to modulate the tumor microenvironment from both the immune system and the cancer cells. In fact, we were able to down-regulate PDL-1 in cancer cells, but we're also able to increase immune biomarkers in the tumor microenvironment. And so we will report on this later in the year, but our plan there is to actually go into potentially a wide variety of solid tumors, especially in combination with checkpoint inhibitors. And this is, again, the data set that we'll share later in the year. And so just to go back to our first Phase I study will actually be a broad all-comers Phase I with different expansion cohorts that will go and develop in the different indications so that we accelerate the early development and then also accelerate the later developments in different indications that we feel this is mechanistically viable.

And so just pivoting a little bit, how differentiated do you think your program is based on the E3 ligase Atlas system compared to other companies? And do you think that, that competitive advantage is due to the specificity you found for tissue localization for the ligases?

Yes. So I think if I had to think about differentiation, I know this is a question that often were asked. I would look about kind of 2 points of view. I think we think about selection of targets with a very strong degraded rationale, which means not only we would like to work in pathways that have broad applicability across several indications and often pathways that are implicated in both oncology and immunology. So broad franchise potential, but where key nodes have not been dragged or dragged well. So we have a clear rationale that degrader is the only way to go, which I think is important. From the E3 ligase perspective, we decided 3 years ago to accept the notion that existing E3 ligases were not sufficient to drag all targets that are out there, and this has been proven by several groups, including us. And then the -- how we tackle that is, I would think it's quite different. We decided to take a translational biology approach and decided to see where all these E3 ligases are expressed. What is the biological meaning of their expression and then how we match that expression with the biology of the target. And in doing so, we hope that we're -- by matching the E3 ligase expression and biology, especially when that is restricted or selective with the biology of the target, we can go after a new generation of targets that the industry also hasn't been able to go for purely therapeutic index or therapeutic applicability reasons. So when you think about our progressing pipeline, you'll continue to see, let's call it, the more classical degrader rationale of going after targets that are technically undruggable. But you also see an emerging pipeline to go after targets that are actually well understood and validated, but where -- right in degradation. And actually, I would say tissue-restricted degradation will allow us to tackle them in a much more powerful way. And I think that will unlock also much more value as we continue to advance these programs in the clinic.

And Nello, just to wrap up, I want to -- you mentioned at very beginning, your cash position and your successful financing. What are some of the sources of nondilutive funding? Are you still looking to retain economics to some of the programs? Help us out with kind of sources of capital, you have enough -- more than enough cash to get through substantial derisking for all your programs, really?

Yes. So as I mentioned, we have about $435 million, I believe, and what this allows us to do is to, first of all, grow in a way that we believe is necessary to continue to be a leader in the space, which means expanding our discovery pipeline. We'll have an R&D Day later in the year to talk more about that. Expanding our impact, our investment in E3 ligase and also expanding indications of existing programs. And also have the flexibility to have the right opportunity for the next financing, which ideally would be data-driven. In terms of partnerships and other sources of financing, we always consider partnerships as a mean to grow the company and not as a meaning to finance the company because it's hugely diluted in terms of bandwidth and resources and also capital to some extent. So when there is a win-win that is about going into areas that right now Kymera wouldn't be able to go or develop in diseases where we don't want to take a huge financial risk, we would consider partnership. But for financial reasons at this point, it would make not a lot of sense.

Okay. Perfect. Well, with that, we're out of time. So thanks a lot for the time now. Really appreciate the dialogue and very, very helpful conversation.

Thank you for the invitation. It's been great. Have a good day.

All right. Yes. Thank you.