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

All right. Afternoon, everyone. My name is Geoff Meacham, I'm the Senior of Biopharma Analyst here at BofA, and welcome to the first day of our SMID Biotech Virtual Conference, and we're thrilled today to have Nello Mainolfi, who is CEO of Kymera Therapeutics. Nello, good to see you.

Thanks, Geoff. Thanks for the invite.

Yes, of course, yes. So before getting to questions, maybe you just want to give like a high-level overview and we can -- and go from there.

Yes. So welcome everybody. So the -- Kymera was founded about 6 years ago with the goal of taking a really powerful potentially transformative modality called targeted protein degradation into a commercial stage reality. Obviously we're still early on our path to do so. But we've in the past 5.5 years built a pipeline of products. We have 3 programs in the clinic and 1 hopefully going in the clinic soon. We have an investment in our platform that is actually quite differentiated. We have a really unique target selection strategy. And we have a team that is really focused on how to discover, develop and then where it makes sense, commercialize degraded drugs. We're in oncology and inflammation. We have partnerships with Vertex and Sanofi. We've done a few things first in this space. We've done first healthy volunteer study with a degrader. We've done a first Phase I study in HS and AD patients that I'm sure we'll talk about. We've taken a first degrader against the transcription factor STAT3 in the clinic earlier in the year. And so it's an exciting time to be in protein degradation. And for sure, it's an exciting time to be at Kymera and look forward to kind of maybe sharing more in the next few minutes.

Yes. So at a high level, Nello, when -- there's a lot -– there's a number of companies in the targeted protein degradation space. What would you think would be -- what Kymera's point of differentiation be in your view among the different platforms? Should we think about it as a base technology and the molecules and the pipeline ultimately or is there another level of, kind of selection and from the pure research side of things that would ultimately yield better compounds and more effective therapies?

Yes, Geoff, I mean, it's a great question. And I'll be honest, I don't spend a lot of time thinking about how we differentiate from other companies. But what I will say is what we do at Kymera that I believe is quite unique in the space. I think -- so the technology that we're talking about, so let me start with that. So we have started this company with the concept of designing heterobifunctional degraders that specifically bind to and degrade protein of interest using E3 ligase, the UPS system. And I would say that that concept has been obviously validated in the past 20 years in academia and eventually lots of other -- lots of other companies. And so that concept, I think is shared across many companies, both large and small, that are in the space. Now what you do with that concept and how you both use it and how you evolve it and grow it is, I think, what makes companies unique. In our case, we've always thought, and we've been very, very focused on it, on applying protein degradation to targets that have not been drugged or drugged well with any other modality. So you will find at Kymera, all of our programs are against targets that have not been drugged with existing modalities, where protein degradation is the solution to the technology in pathways that have been validated. So obviously we manage the risk by going in path which have been validated. And I think I would argue that if you look at other companies in the space, at least last time that I looked, I think we're doing it quite differently. Another aspect is, and we'll talk about this, I'm sure, later and more next week. Another aspect is how we think about the technology. So we've started with -- when we started the company, we asked ourselves, how do we make these drugs to be predictable, rational design and easy to develop. So we've done a large investment in not only understanding how the technology works, but also how it can be evolved. So we've done a lot of work on novel E3 ligases. We've done a huge amount of work on understanding the translation from preclinical to clinical. And I think it's fair to say that our first data with 474 is a testament to how well we kind of worked that translation. But we also worked on other areas that are tangential to this heterobifunctional degraders, and we've announced last year in our R&D Day that we're also working in molecular glues, which is another way of degrading protein. We use that concept only to go after unligandable and undruggable protein, so only proteins that cannot be addressed by heterobifunctional degraders. I'm sure we'll talk about this at some point in the near future, but we already have programs with good traction in that space. So we have taken a broad approach to the technology to deploy it against targets that are undrugged or undruggable. And that's, I think, what's really unique about the company.

Okay. Perfect. Yes, that's a really helpful background. So let's focus on your lead assets. So 474 set the stage for kind of next week with regard to data or any sort of benchmark expectations. I know obviously, there's a lot of new things, new data to come, but I wanted to maybe just kind of remind everyone…

Yes.

Where you were and kind of what we -- a flavor of what we may get.

Yes. I mean, obviously, we're not going to share anything that we will share next week. But what we will talk about is maybe let's take a step back, why do we have an IRAK4 degrader. I promise you, I wouldn't take 20 minutes here. But the opportunity here is to have a small molecule oral drug with a broad anti-inflammatory effect. And if you look at diseases with high burden, large clinical and commercial indications, there is a high need of small molecule oral drug with good safety. I can't name more than a couple of drugs that will be oral drugs, and I cannot name one that is a potential broad anti-inflammatory effect as an IRAK4 degrader does. So -- or should. And the potential here is to block the IL-1/TLR pathway in a way that cannot be done by upstream antibodies or by small molecule kinase inhibitor that only address part of the IRAK4 function and not the scaffolding function that we do with a degrader. So the expectation is if you degrade IRAK4, you should be able to have combined activity of all of these suboptimal agents with the safety that is driven by all the human genetics data that we know of, which tells us that adults with IRAK4 are healthy individuals. So that's kind of the premise to the program. So what we've shared so far in healthy volunteers that we can degrade the target really well, up to taking the levels of IRAK4 to close to lower limit of quantitation. So let's say more than 95%. That degradation leads to impact on ex vivo cytokines that are quite broad, going from IL-1 family cytokine to TNF to IL-17 to interferon gene. So a really broad anti-inflammatory effect. We've seen that effect to be well tolerated in healthy volunteers. And so what we decided to do was to design this patient cohort. So we've designed the study to be up to 20 patients with HS and AD with the goal of being able to demonstrate that the PK and PD relationship is conserved in patients. So we want to make sure that the molecule degrades in healthy volunteer as it does in patients so that we can derisk the selection for Phase II dose. We wanted to be able to show that this degradation leads to impact on disease-relevant cytokines, ideally in vivo, this -- in this case, instead of ex vivo as we've done in healthy volunteer because now patients will have ongoing inflammations. And the important part about being able to show that we have impact on cytokines, whether it's in the skin or in some cases, potentially in blood for patients that have increased cytokines level is that it would show not only that we can impact downstream cytokines, but also that the pathway is activated in those diseases. So that's an important, hopefully, validation. And then the safety profile is in line with what we've seen in healthy volunteers. That's really why Sanofi and Kymera have designed this study. Now because it's a 28-day study, we have added measuring clinical endpoints. And so we will share those clinical endpoints. Those would be AN counts and pain in HS, it would be ECG scores and pruritus in AD. What we have said is just that this is a small study without placebo, only 28 days. So it's difficult to set expectations of clinical efficacy just because the study has not been designed for that. But we would love to be able to see if there is correlation between degradation impact on biomarkers and any measures of any type of clinical activity. And what we have said is that we commit to share the totality of the meaningful data and then happy to have that discussion next week.

Perfect. That's helpful. Yes, when you think about the clinical endpoints, I mean, if in a larger, say, Phase IIb study, this would be what, a 6 or maybe a 12-month study? So you could see some trends at 1 month, but probably unlikely, right?

Well, I mean, I think what we can say, yes, this Phase II study is 12 to 16 weeks depending on the indications. Other drugs have shown initial level of activity of separation from placebo at 4 weeks. But those drugs have shown that within a 16-week study power to see what the curve of activity looks like at week 16. And so when you look back, you can actually see that trend. I think having a study of only 4 weeks is just challenging because we don't know what is the shape of that response curve looks like. There are drugs, for example, where they don't show actually much activity for weeks and then show it later, like the OX40 antibodies, if I remember correctly. So this is where we're just trying to set expectations and let's look at the data, degradation impact on cytokines. If we see anything that is correlated to that, I think it would be great for how we can then design better phased-in studies going forward.

Is there, in your view, a unique inflammatory signature when you look at the IRAK4 impact on degradation?

Yes. It's -- I think it's -- that's what's really exciting about what we're doing. I mean if you use small molecules, and I would argue, even if you use antibodies, you're not really able to know what's going on during the study. Like you dose the drug and you look for clinical endpoints. You have no idea how much target coverage you have for how long, a steady state, a Ctrough or Cmax. With protein degradation you can know that. You know what is the level of degradation. For example, in our case [indiscernible] where there's the degradation in skin at day 28 or day 42 or whatever time point you want to measure. And then you can tie those level of degradation to any, let's say, an anti-inflammatory signature. Now in reality, what is the anti-inflammatory signature of IRAK4 in HS and in AD, nobody knows that because nobody has run the study. So we're the first one to ask the question, assuming we degrade IRAK4 and assuming that the pathway is activated in these diseases, what does the degradation of IRAK4 do in terms of cytokine impact, especially in lesions of the skin in patients because that's where most of the inflammation is. And that's really a question. It's in a way an open-ended question. Obviously we expect to downregulate cytokines that signal through this pathway, the IL-1 family, we expect to see impact on cytokines that are secreted by this pathway. But how and to the extent of which we will have to -- and which of those will be measurable and impacted, that's really the excitement about running these studies and generating these fingerprints. And then eventually correlating those fingerprints with a clinical response. I think the beauty of the studies that were run with DUPIXENT, for example, is -- I think after seeing activity, the team at Regeneron and Sanofi generated skin signature of what happens to the gene of lesions of patients once they take dupilumab. And we'd love to obviously continue to do that because we probably have the better tool to actually even ask deeper questions like these.

Got you. Okay. And let's talk a little bit about the QT. So have you guys -- now that you've fully vetted that, is there any follow-on thoughts that you have on that? And how should we think about the data and patients next week on QT? Have you changed at all your -- the development plan or had to modify that to take further analysis of it?

Yes. No, it's a great question. So just to recap what is it that we saw in healthy volunteer? So we saw this nonclinical non-dose responsive self-limiting QT prolongation, the mean of which was the same at 25 mg and 200 mg. So showing that this self-limiting effect was consistent regardless of the exposure, which is actually a big deal. It's a unique finding. It's not an adverse event. It's a finding, and it's unique in a good way because, again, it doesn't have this exposure dependency. And the extent of which, again, the 10 to 20 milliseconds, nobody went above 450, so beyond the normal range is important because it tells us that this is, again, something that we measure, but we never expect that it would have an impact on how we think about clinical development or also commercial adoption of this drug, assuming that it stays within that range. So part of running the study, the patient study for 28 days was also to continue to monitor this finding. As we've said in the past, we saw it first appeared day 7 in the 2-week study and then at day 14 it seemed to be in the same range. So that told us that the signal had -- the finding had plateaued at day 7. So being able to run it for the study of 28 days will allow us to confirm that the self-limiting effect continues to stay within the range and does not get worse. That's really what we hope to being able to see in a study that prolong the duration of dosing. And again, as we said, if it stays within this range, we don't believe will have an impact on how we think about this drug.

Got you. Okay. And then the last question on that is as you have time to evaluate it, is there any tie that you can make to TPD or E3 ligase? Is there anything like that or was it just sort of a more random finding?

Yes, no, it's a great question. Actually I forgot -- you probably asked in the previous question regarding the mechanism. What we've been able to show is that we have actually a quite weak affinity for an ion channel, for the [ HER ] channel. And in a preclinical study running cardiomyocytes, we've demonstrated that if you take another IRAK4 degree, that it doesn't have affinity for the ion channel, we don't see any change of current. So we believe that this is a molecule specific off target effect. And we didn't expect it to have a phenotype in the clinic because the concentration in which we inhibit the ion channel are very, very high, and this is something we're still working to understand the mechanism. We have some hypothesis that I've shared in the past. And so we don't believe, obviously, there is something to do with degradation or E3 ligases or the technology in general.

Okay. Perfect. And then last question. So next week, obviously we'll get data. Walk us through kind of today how you're thinking about different indications across the derm space. Is there any nuances for kind of the [indiscernible] or the speed that you could complete a Phase II on the indications or is it just let's pick the ones that look commercially viable together with your partner?

Yes. So we look at IRAK4 degrader as a mechanism that can go really broad. We have prioritized HS and AD for this study, IRAK is also a prioritized indication because they represent areas, especially HS and AD with large clinical and commercial opportunity and huge unmet needs. As I mentioned, in both HS and AD, there are no small molecule oral drugs with good safety profiles. And so if you can imagine that AD, for example, even HS, I mean, the conservative numbers is 1% of the population. If you talk to any KOL, they will tell you that it's at least in the 3%, if not 4% of the population. So this is a huge disease that has only 1 approved drug. AD a larger indication with few approved drugs, DUPIXENT, which is clearly the main drug in that space, only penetrate 7%, 8% of the population and sales for billions of dollars a year. So being able to develop drugs in those indications will be highly impactful. But beyond that, as I mentioned IRAK, but there is IBD, which I think is a perfect indication for a mechanism like this. I believe lupus is a great indication. I believe if we validate in more Th2 type dependent disease like AD, you can imagine COPD or asthma could be other interesting indication. So I think the -- I don't want to say that sky is the limit, but we have a broad opportunity set. And I think early validation will allow us to continue to expand. And that's kind of the strategy that we want to have with Sanofi assuming, obviously, the molecule moves forward.

And derm indications to me seem the most efficient, right, to derisk from a clinical proof of concept to a full-on registration?

Yes. And we have the added benefit that we have a drug that distributes extremely well in the skin. And so that's also something not to -- something to keep in mind.

Okay. Yes, let's switch gears to 413, 333, talk a little bit about how we should think about those. Again, I know next week, you're going to have an update, but just the timelines for kind of '23 and beyond?

Yes. So maybe just briefly on the context of those programs. So KT-413 is a -- we call it an IRAKIMiD degrader. It degrades IRAK4 Ikaros and Aiolos. This molecule was designed to do so because we found that in MYD88 mutant lymphoma, where we know IRAK4 is relevant, we saw that there was a compensatory mechanism through the IMiD biology that was in play and preclinically did not allow us with IRAK4 degradation alone to have single agent, strong antitumor activity. So we built this dual degrader, a triple degrader that shows preclinically one of the most exciting data set in MYD88 mutant lymphoma. So that drug is now in dose escalation. And I, at Kymera, we always think about, can we translate the preclinical profile into the clinic of the drug. And then is that profile clinically active? So we are focused in the dose escalation to answer the first question. So preclinically we saw that if we degrade IRAK4 in between 50% and 70% and Ikaros and Aiolos between 80% and 90% for 72 hours in a once every 3-week dose in paradigm, we would be able to see deep antitumor responses with good safety. So no neutropenia or no neutropenia that will cause us to change doses. So that's what we saw preclinically. So in the early clinical experience, can we demonstrate that the translation is working, that we can degrade these targets ideally close to what's clinically meaningful and that -- at this stage and that degradation profile is well tolerated and especially that we don't see those limiting neutropenia that we know is often a dose limiting toxicity for IMiD compound. So what we like to hope -- what we'd love to be able to show, again, in this early dose escalations in this first few cohorts that we're able to degrade the targets at levels that are approaching or at meaningful clinically with a good safety profile. For 333, that's a STAT3 degrader. So we're only degraded STAT3. This is, I believe, the only selective cell type agnostic agent against STAT3 that I've seen. And so we have, I think, the responsibility to really being able to exemplify and really explore the clinical benefits of degrading STAT3 in patients. So we're focusing T-cell lymphoma leukemia, where we know STAT3 has a key role, we will eventually also focus on solid tumor, especially in combination with other agents. So for this update, as for 413, we know we dose this drug once a week. And preclinically we know that if we degraded the target around 90% for 48 hours and then allow the target to recover, we see strong antitumor activity and good safety. So we love to be able to see that we're on path towards that type of profile and more importantly the kinetics of degradation and recovery and safety are in line in this early dose escalation. And then next year for both programs, we expect to be at clinically active doses. And so next year, we'd love to be talking about and reporting on clinical activity for both programs.

Okay. Yes, and to your point on STAT3 and IRAK4 as the substrates degraded, is there -- when you select the tumor types that you're looking at in these studies, is there -- are there any themes you could tie mechanistically to certain cancers that massively overexpress or cancers where there's mutations that tie into the E3 ligase and ubiquitin-proteasome system?

Well, so I think for IRAKIMiD, we know that the sensitive population are driven -- lymphoma or tumors where there is a mutation at MYD88 that really drives proliferation. So there we have a clear patient certification hypothesis and responder hypothesis. For STAT3, what we've seen, there are some liquid tumors where there is activation of this pathway, where there is production of high levels of Phospho-STAT3. And those usually are either a mutation of STAT3 or mutation or activation of genes upstream of STAT3. And we've seen that in those particular indications, we see really good responses of removal of STAT3. So those are the context where we expect to see strong single-agent activity.

Got you. Okay. And then IND on 253, still on track?

Yes. So as we said, we expect it to clear an IND by the end of the year. So obviously there is a few more weeks before now and the end of the year. So we expect that we'll be able to update on that as well.

Okay. Okay. Yes, I mean, bigger picture now though you guys have a lot of assets, still pretty healthy balance sheet. What's your attitude towards either in-licensing more assets? Is your -- is the intention here to be more organically developed assets or also out-licensing. I know you have a couple of partners, but would you look at that as a strategy going forward?

I mean we have -- I think our vision is to build a company that can go all the way and putting drugs in the market. I think we have the capabilities and the team to do that. Obviously we'll have to build the commercial group eventually. We have an extremely productive research team. We have more programs that we can work on. So it's unlikely that we would be in-licensing assets also because I think the understanding and the knowledge that we have in this space, it's probably best in the industry. It's difficult to go out and find things. Although we're always looking for potential technology or platform-related knowhow or assets that could accelerate our growth. With regards to out-licensing and partnership, I always look at BD both in and out as how are we going to accelerate the growth of the company, how are we going to derisk the growth of the company? I suspect that we will do BD in and out organically, but I don't think we have right now a mandate to do it. I think it's about what is the win-win opportunity and when it happens and do we have the right partner in place. And I think we'll see, time will tell.

Right. Yes, main value driver is just executing on the assets on the pipeline today.

Definitely.

Yes, got you. Okay. Awesome. Well, thank you, Nello, great to see you, and looking forward to next week.

Yes, definitely. So we'll see you then. Thanks again.

All right. Yes, take care. Thanks.