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

Okay. Great. Welcome, everyone. Thanks for joining. My name is Vikram Purohit. I'm one of the biotech analysts with Morgan Stanley Research. Very happy to have with me Nello Mainolfi, CEO of Kymera Therapeutics. Nello, welcome.

Thanks, Vikram. Good to be here.

Yes, great to have you. So before we get started, I need to read a brief disclosure. So for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. One more housekeeping item before we go ahead and get started in the discussion here with Nello. If any of you have questions as the session progresses, feel free to send them over. I'm happy to incorporate questions from the audience in our dialogue with Nello here. So with that, Nello, thanks for joining.

And now I thought the best place to start would be, maybe if you could just kind of recap for us some of the key milestones that Kymera has had throughout the course of the year. And then following that, we can get into some specifics about the pipeline and some of the data you've seen recently.

Great. Thanks, Vikram, again, for the invite. So let's start with maybe just 20 seconds, a brief background to Kymera. So we -- the company was founded about 5 years ago actually with the goal of bringing this really transformative modality of protein degradation into the clinic, through the clinic into commercial stage. So building a fully integrated business. And so the past 5 years were spent on building a pipeline, which we'll talk about briefly and building a platform that will enable -- for us to become that fully integrated business. And so I would say our pipeline choices have been so far and hopefully, will continue to be focused on best-in-class or first-in-class opportunities to unlock new potential that can only really be done, thanks to the power of the technology. And then our platform investments have been driven by kind of moving both the understanding of protein degradation, but also the evolution of protein degradation into areas that will allow us to continue to evolve and innovate and go after new translational hypothesis. So coming to this year, this has been a pivotal year for Kymera given that we've transitioned from being a preclinical company to be a clinical stage company, and not only that, but we've been able to release our first clinical data, and we'll continue to release more data as we go through the years. So we actually filed our first IND last year -- at the end of last year, and we were clear to initiate our Phase I early in the year. So I would say maybe the biggest milestone that we've accomplished, I would say that it's not only a big milestone for Kymera, but I would say, a big milestone for the protein degradation space in general, given that we were able to demonstrate for the first time a proof of mechanism in a placebo-controlled randomized study. And what I mean by that, I'm sure we'll get to it at some point is the -- we'll be able to actually observe and detect and quantify what a protein degrader can do in a human body in a dose-responsive and in time-dependent fashion. So you can see the impact of protein degradation as you dose the more or less compound or you observe as the time goes by and degradation and resynthesis play -- interplay there. So very excited about the data set showing that we were able to degrade the target in a profound manner even after single dose, which was, to be honest, also kind of unexpected, at least in the extent that we saw and also prolonged degradation. So again, we'll talk about it probably. But clearly, big milestone was ability to demonstrate this proof of mechanism with the oral first-in-class IRAK4 degrader in healthy volunteer. We also have demonstrated that in our -- in both of these programs as well as in our oncology programs, parietal of activities in a wide variety of preclinical models pointing to indications -- an indication expansions across our pipeline. So in immunology, we've shown activity in a wide variety of preclinical models. They will inform our clinical selection and prioritization strategy in our oncology programs, which are about to also enter the clinic. We've demonstrated activity in a wide variety of both liquid and solid tumors that will allow us to continue to think about prioritizing, which indication at which point in our clinical development plans. What we're looking to achieve between now and the end of the year, as I mentioned, clearing of 2 INDS. One for 413, which is our IRAKIMiD program as well as for 333, which is our, again, first-in-class STAT3 degrader, again, for both liquid and solid tumor. And also going back to KT-474 is demonstrating the full proof of biology, meaning what is the biological and clinical impact of degradation in healthy volunteer in broaden scheme, and we'll talk about that. I would be remiss if I didn't also mention a very integral part of Kymera, which is our platform investment. And what we've shown so far in the year, which is we disclosed for the first time a novel -- our ability to identify and also drug a novel E3 ligase that is a differential expression profile. And now we've gone from identification of a small molecule ligand all the way to using that E3 ligase to degrade protein targets of interest. And so many of these -- as long as new information will be also discussed in an R&D Day that we're planning later in the year. So maybe I'll pause here and see if maybe go from this high-level information into more specific questions.

Yes, great. No, thanks for the overview. So before we get into any program specifics just to, again, kind of level set for everyone in the audience. Maybe you could walk us through the rationale for your 3 initial targets you decided to go after. IRAK4, IRAKIMiD, STAT3. What did you see that really gave you conviction that these are the best 3 initial programs to target?

Yes. No, thanks for the question. So generally, our philosophy, as I mentioned earlier, has always been -- we want to be able to use protein degradation to answer biological questions that really only protein degradation can answer. So we're looking at kind of not incremental improvements, but hopefully, transformative therapies for diseases and patients that are not served well currently. And so in order to do that in a more derisked manner, our target selection strategy has been working in pathways where there is a high degree of clinical and also human genetics validation. But within those pathways, going after key nodes that have not been drived or drugged well by other modalities where protein degradation will be that key unlocking technology. So if you then take a step back and you think about where are some of the key most well-validated pathways in areas of interest. So our internal pipeline is focused in oncology and immunology. Although, thanks to our collaborations, we work on 5 to 6 different diseases. So if we think about oncology and immunology, key validated pathways, JAK/STAT pathway, IL-1R/TLR pathways. As we know, multiple franchises within those pathways going into impacting oncology in both liquid and solid tumor as well as all the immune diseases. But key nodes really have not been drugged well. So if we think about the IL-1R/TLR pathway, lots of drugs going after the IL-1 family cytokines. There are only single cytokine blockers of a wide variety of IL-1 family cytokines. So our closest to us is the IRAK4 kinase inhibitor, which, again, partially block this pathway. So we obviously thought if we degrade IRAK4 and we remove completely the ability of the myddosome complex, the signal, we can be biologically superior to all the IL-1 family cytokine and the IRAK4 selective inhibitor and also have the convenience of an oral small molecule. So again, the derisking comes from the human genetics of IRAK4 from the pathway, validation of all these agents, but the novelties degrading IRAK4 is the only way to fully blockade that pathway. The IRAKIMiD came from, to be honest, us reacting to a lot of work that we did in the biology of MYD88 lymphoma. We thought that these pathways, we know, drives proliferation in a subset of lymphoma patients where an activating mutation or MYD88 drives, again, the differentiation there. We also learned really early on in the life of the program IRAK4 degradation alone is actually insufficient to drive single-agent activity in the MYD88 mutant population. And so we learned that actually there are compensatory pathway, one of which is the interferon pathway driven by Ikaros and Aiolos. Another one could be, for example, the BTK pathway. But we thought that actually combining the [ MYD ] biology with IRAK4 biology would be able to give us the synergistic intervention in this pathway that will lead to single-agent activity. And we've seen that preclinically, we hope to see that clinically. And then briefly on STAT3, again, the pathway is well characterized, and STAT3 is probably the central node in the many biological investigation in the past 20, 30 years, but it's never really been drugged specifically with an oral small -- with a small molecule agent. And so in this case, we devised the selected STAT3 degrader that has a very differentiated biology versus upstream inhibitors, you can imagine JAK inhibitors. And so it allows us to go into areas that are actually completely untapped, whether it's some subset of liquid tumors that we might talk about, whether it's exploring solid tumor, especially in kind of modulation of the tumor microenvironment or whether it's areas of immunology and fibrosis where the upstream biology is not sufficient to drive anti-inflammatory effects. So again, high validation of the pathway, but key nodes unlocked by protein degradation.

Great. And I think that's a good segue to go into discussing some of your recent clinical data with IRAK4. So maybe you could just touch on some of the highlights from the single-ascending dose data you presented earlier this year. And I know you've also guided to more Phase I data later this year and early next year. If you could kind of touch on what are we going to expect to learn there? And kind of what you're internally thinking of as a successful readout for those data sets?

Yes. Excellent, Vikram. So before I do that, I just want to contextualize why we designed the study in this particular way? And also maybe a bit of the history on how we're planning to -- how we've disclosed some data, and how we're planning to disclose data later in the year. So we -- for a -- again, first in class, we believe that IRAK4 is a differentiated pathway again, as I mentioned, probably one of the best well-characterized pathway in immunology. The opportunity here is to have profound anti-inflammatory effect given the plethora of cytokine that this pathway is responsible for either producing or for signaling through the receptor. So a broad anti-inflammatory agent potentially with a unique safety profile, meaning human genetics point to really benign phenotype of people that don't have IRAK4. And I would make the argument that is quite differentiated from some of the challenges that the JAK inhibitors are facing in terms of safety and will continue to probably face in the next few years. So that's -- so when you try and develop a drug that is kind of innovative, but also brought in the development plan, we thought we needed to use our Phase I study to derisk and also approve as much of the biology as possible. So we designed this 3-portion Phase I study. The first 2 are traditional an SAD and MAD, but we also decided to add to the SAD, MAD healthy volunteer patient cohort. And so what we're trying to answer from these 3 portions. From the SAD study, the goal was, can we demonstrate that the molecules behave like a well-behaved oral small molecule. PK -- those responsive PK tolerability and ability to impact protein target to some extent. In the MAD, the goal is and continues to be upon repeat dosing, can we now not only impact protein levels, but also demonstrate that the protein level reduction or protein degradation leads to impact on biological and clinically relevant biomarkers. And in the patient cohort that comes after the MAD, we are looking to confirm that the dose that we select from the MAD is able to have comparable pharmacodynamic effect in patients. Why are we asking this question? Because one can imagine that protein levels or signaling pathway might be differentiated in patients, in this case, AD and HS. So we want to confirm that the dose that gives us the impact on biomarkers in healthy volunteer will translate in patients. So we'll basically look at similar downstream biomarkers in patients. So that when we pick our Phase II dose, it's dramatically derisked. So when we go into a randomized Phase II study, we go there with the degree of confidence that the molecule is going to be doing what it needs to do, and now we're only asking a biological question. So what we've shared in June, is, again, as I mentioned, the first time that a degrader has been tested in a placebo-controlled randomized study. And why did we do that? Because we wanted to be able to again go with confidence that everything that we read is not only an effect that we see in the particular dose subject, but is actually differentiated from someone that receives placebo. What we've seen is that the PK of the molecule is really well behaved, good oral bioavailability, predictable and dose-dependent plasma exposures and the half-life of anywhere between 25 and 30 hours that is suitable for once a day oral dosing. We also, at the time that we reported the study, were able to say that we did not see any treatment-related adverse events and no serious adverse event. So very well tolerated molecule. I think what we saw that was actually very dramatic for me, to be honest, I was pleasantly surprised about was not only we were able to see the dose responsive manner IRAK4 degradation upon single dose, but we were able to get to levels of degradation that in preclinical species were only attainable upon repeat dosing. As you know, on repeat dosing, we're able to reach steady-state level of compound exposure and that leads to a steady state level of degradation that is more controlled, given that the molecule is -- the drug is present on board constantly. And so we were able to see up to 94% in the 4 cohorts that we shared, and that the profound level of degradation were sustained for multiple days. So we saw degradation up to actually 6 days, and then there was recovery at day 14. Again, pointing to the fact that this molecule is very potent, the PK is very predictable and actually the half-life is actually quite long that allows us to have this really profound PD. So again, as I mentioned, what we're looking to really show in our MAD cohort is that this degradation leads to biomarker changes. And these biomarker changes are predictive of clinical end points changes. And these biomarkers are ones that other therapies have that impact in the past, you can imagine IL-1, TNF, IL-6. These are all actually cytokines that have been drugged and shown to be disease relevant. So if our drug is able to impact those and actually many of those, you can imagine that the anti-inflammatory effect can be actually quite broad and may be more active than some of the agents that are already at their approved.

Great. So then let's fast forward and say that the Phase I data comes in line with your expectations, and you're ready to move into the Phase II program, where you've mentioned that there could be a couple of different indications that make sense, including HS, RA, AD and some others. So walk us through how many indications you think would be reasonable to evaluate upfront? And how you're thinking about prioritizing which indications make the most sense to go after?

Yes. So a great question. So how we'd be thinking about this is, for any indication selection, I think a reasonable company would try and combine preclinical data with available comparable clinical data with human genetics data and understanding of the disease in the patient population. And so we've approached this, I would say, a bit differently than other companies, especially in immunology. We've decided to actually gather data in patients before initiating our Phase II -- actually before initiating our Phase I. And so if you recall, we run a non-interventional study in HS and AD patients to understanding -- to understand the -- let's call it, a Phase 0 study to understand target expression biology of IRAK4 in those particular patients systemically and in the lesions and then understand if you modulate that target in those context, do you see anti-inflammatory effect? And so when we combine all this understanding, again, preclinical data, we run this molecule in a wide variety of models. We've run in rheumatological disease model, skin inflammation model, systemic inflammation model, and we've seen activity across the board. Again, as I mentioned, we've done work in patients directly. And so this is how we ended up prioritizing AD, HS and to some extent, also RA. RA mostly because, obviously, it's a key disease that is driven by this pathway and many inflammatory cytokines and where we've seen suboptimal intervention. The IRAK4 small molecule inhibitor show positive proof of concept, so it makes sense that we would consider that. But again, all of those information have come together to allow us to prioritize AD, RA and HS as we stand today. The reality is that based on some of our preclinical data and based on the activity that has been seen with agents in this pathway, it makes sense that we would be thinking about lupus, we would be thinking about asthma, we will be thinking about GI inflammation. It's just happens that obviously we have to prioritize, and we have to combine biology with unmet need, commercial opportunities and ability to run these trials in a rational manner. So I would expect that these trials that you've mentioned and that I mentioned will be the first. The orders hasn't been fully fleshed out, but they will be the first. But I would be surprised if we didn't expand in other indications, assuming early success.

Great. That's helpful. Maybe one more question on the IRAK4 franchise, and then I wanted to switch over to IRAKIMiD and STAT3. So there's a next-gen IRAK4 degrader in your pipeline at the relatively early stage of development. But could we just kind of touch on how that could be differentiated versus KT-474? And kind of what the rationale was for progressing another one into development?

Yes. No, great question. So I was trained in an environment where -- if you guys look at my background, where you claim success only when you have profound proof of concept in the clinic, which obviously means Phase II and beyond. And for a franchise that has such a huge opportunity we felt, and I strongly said that relying on a single molecule is the risk not worth taking, especially given the expertise and the understanding that we have of biology and chemistry in this pathway. So it really started as an insurance policy to KT-474. In reality, the more we learn about this molecule, I'll admit it's more difficult to figure out what we're trying to fix with this backup molecule. But I like to think it as an insurance policy for anything that can happen with the front runner. And more importantly, I think one can get pretty created these days that if the franchise is successful commercially by having more than one molecule with the same mechanism, that will be a real upshot scenario, but this is one that Sanofi and Kymera are planning for.

Great. Maybe let's move on then to IRAKIMiD and STAT3. So you've guided towards kind of initial clinical data there in 2022. Could you just kind of give us a sense of what we can expect to see and kind of what constitutes successful -- a successful outcome versus kind of a less than optimal one in your opinion?

Yes. So for the IRAKIMiD -- I would actually say for both of these programs, the oncology programs, we are trying to take an approach that is against -- I couldn't say like 474, but at least following the same principles. How much can we derisk? How much can we understand about the ability of the molecule to do the job that it needs to do? And how much can we decouple that from the biology so that when we have efficacy, clinical endpoint data, we know that whatever we see, it's not a binary event on the whole program. Or if it needs to be a binary event of the whole program, we know that the molecule that we're using is the molecule that is right to us, a biological question. And so if you give me a second, I'll explain. The way that we're both developing these programs, these 2 programs, we want to be able to demonstrate what we call it also their proof-of-mechanism and proof of biology. And we plan for both of those programs STAT3 and IRAKIMiD to generate their data in 2022. So what does that mean? It means that is the molecule in patients directly in this case engaging those targets and degrading those targets, both in the surrogate tissue that could be plot for both the IRAKIMiD. We can monitor IRAK4, Ikaros and Aiolos. And for STAT3, we can monitor STAT3 in a surrogate tissue. So it's the drug doing what it's supposed to do. And also, is that doing it at least in the same way or better in tumor through tumor biopsies. Obviously, we're not going to be able to have many tumor biopsies, but hopefully enough to create that correlation. So once you create that correlation, you know you're in a pharmacologically active dose. Based on preclinical data, you know what is the level of degradation needed, then we're going to start thinking about do we have now the right patients, are enough MYD88 mutant patients being dosed with the drug at the right dose? And are we now seeing the responses that we're looking for? So our data progression will be a derisking progression also there, starting from a proof of mechanism and then also sharing obviously, with the investor community where we are in that continuum of target engagement, and whether we feel we're at the right time where we should start to expect to see responses and then obviously start to observe and hopefully see responses. And so I would say that 2022 will be really heavy on, are we now at the right dose to start to see response? And towards the end, the second half going into 2023, are we seeing those responses in patients?

Understood. Maybe in the couple of minutes we have left, we can touch on some data you reported recently about your efforts to develop tissue-specific degraders. For those that may not be familiar with this data, maybe you could kind of give us a quick recap and talk about your efforts there?

So that's a great question, Vikram. And for those of you that don't know Kymera closely, we are committed to evolve protein degradation beyond the current status, meaning we want to be able to understand how to go after proteins that we can't go after with the existing technology. We'll talk about that maybe at the R&D Day. But also -- but this is something we talked about, we also love to push the technology to use E3 ligases that have an expression profile that might allow us to go after targets that are -- that have a particular safety profile. So what we've reported previously, early in the year is a novel -- so we have several programs against undrugged E3 leases that have expression profiles that are unique. For example, some that are present in the bone marrow -- are not present in the bone marrow, but are present in cancer cells, some that are present in a particular tissue, let's say, in the heme compartment and not in the rest of the body. You can imagine the pharmacological differentiation can lead to really unprecedented translational hypothesis. So we've shared 1 novel E3 that has a particular expression profile that we've been able to drug. And we've been able to show degradation of targets that are already known out there. We've shown STAT3. I think we also have shown that with IRAK4. But that particularly E3 is being pursued for programs that we haven't disclosed yet. So that data is the foundation. It's probably the first time that we shared that. We've been talking about this concept for a year plus. So we felt it was important to show that we actually do what we say we're going to do. In the R&D Day, the goal is to share a bit more about where that is going, when is the first development candidate coming from those efforts, when are we going to expect that first clinical proof of concept from those novel E3 ligases? And so it's building on the initial data that we disclosed and then maybe being a bit more accurate about where this is going to play out in terms of real value creation.

Great. And given we're almost out of time here, Nello, maybe one last question more on a housekeeping front. Could you just remind everyone kind of your current financing position and how much runway that gives you?

Yes. So we closed the financing actually, as many of you might know, towards the end of June, early July, before 4th of July, that's all I remember. And we were able to now take our cash position at that time to $647 million, let's say, $650 million. This financing was actually a strategic one to double down on a few things. I promise I won't spend too much time, but some was clinical indication, expansion and platform investments. So it will be able to allow us to accelerate some of those investments and still allow us to have cash until 2025.

Great. Great. And with that, we're actually out of time. So Nello, thank you for joining. Very much appreciate your time. And thank you to everyone in the audience. And yes, the next session starts in 15 minutes.

Thank you, everyone.

Thanks, bye now.