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

Good morning. I'm Eric Joseph, senior biotech analyst with JPMorgan. Our next presenting company is Kymera Therapeutics, and presenting on behalf of the company is CEO Nello Mainolfi. There will be a Q&A after the presentation. There will be mics going around the room. And for those tuning in via on the webcast online, feel free to submit a question via the digital conference book. So with that Nello.

Thanks, Eric. Thanks, everybody, for joining us today. Thanks for the invite Eric and the opportunity to present the story here. So let's start here. Just to provide a bit of context. So Kymera was founded in 2016 with the goal and mission actually to building a fully integrated biotech using targeted protein degradation to develop a new generation of medicines. Just for those that are not familiar with the technology, I will spend 10 seconds. So targeted protein degradation is the technology that allows you to degrade, remove, eliminate ideally disease-causing protein in the -- from the cellular localization with a small molecule-based modality. So it really combines the power of genomics medicine with the flexibility of small molecules. So huge potential, and it's actually our responsibility, not just the opportunity that we have to build a company that can deliver transformative drugs using protein degradation. We are focused, at least internally on oncology and immunology. Although the technology is clearly disease protein type, tissue type, organ type agnostic. And so any company in the space will have opportunities to expand beyond these indications as we will with time. So on our track to becoming a global commercial stage company, I would say we're still early towards that end go. But in the past few years, we've accomplished quite a few things. Of note and maybe I just want to highlight a few for you all today. We have now 4 clinical stage programs, actually one going into Phase II soon and 3 in Phase I. We have a discovery engine that allows us to deliver at least one new molecular entity into the clinic per year. We have demonstrated for the first time that degraders can be used safely and effectively also outside of oncology in complex diseases like HS and AD and also our data that we shared in December demonstrated for the first time, although early data demonstrated for the first time that you can degrade a protein and deliver not only a biological but also clinical differentiated and superior outcome than small molecule inhibitors. And I'm referring to KT-474 and IRAK4 degrader data that will go into in a few minutes. It's something that we're very proud of that now we've had 3 different drugs in 3 actually different contexts. I would say, actually 4 different contexts in healthy volunteers, in patients with immune diseases, in patients with liquid tumors, and patients with solid tumors, we've seen fidelity of translation of PK/PD and safety. And I think we're proud to say that we're the first company that was able to show and demonstrate that our molecular design and how we plan our studies continue to show fidelity of translation. We are focused, as you'll see in a minute, on deploying the technology against targets where protein degradation is really the only way to elucidate the biology or clinical outcome or the best way to do it. So our programs will be either first-in-class novel kind of target within validated pathways or best-in-class approaches. We're well capitalized. We have about $560 million as of the end of 2022 as we said today in our press release, that will get us into the second half of '25. But more importantly, that cash will allow us to get through clinical proof-of-concept of KT-474, in a randomized Phase II study and also through early proof-of-concept of our oncology pipeline. So our IRAKIMiD program 413, our STAT3 program, 333 as well as our MDM2 program 253. So lots of opportunity to generate value in the next few quarters. I've actually touched on most of what you see on the slides, but I maybe highlighting a few things that we believe make Kymera unique not only in the small companies, but I would say in the whole protein degradation space, including large and small companies. Again, I mentioned target selection. We go after undrugged or poorly drugged targets where protein degradation is the only our best way to do it. Our platform is continue to deliver really cutting-edge science In the space. We've talked about E3 ligase expression, differential expression driving different pharmacology, and this is something that we continue to invest. And hopefully, we'll be able to share more. We have announced in the R&D Day on December 2021 that we've started to invest heavily also in novel molecular glue approaches only to go after targets and proteins that are not accessible with heterobifunctional degrader. And also here, we're making progress, and you'll see just an example of a program that is moving into development relatively soon. We've talked about the fidelity of translation as well as what we call first in the space. Actually, we'll skip that and I'll let you read that off-line. On the -- what are the recent accomplishments, meaning for Kymera and I would say TPD space in general, which were one of the early -- and I would say, hopefully, you'll agree, leading companies. So we've talked about the fidelity of translation in many indications in oncology and immunology. And this allows us to move our pipeline with confidence across all of our programs. I think demonstrating that you can use TPD outside of oncology, again, safely and effectively showing that degrading scaffolding proteins can give you best-in-class profile in complex diseases like HS and AD was a big validation of our target selection and execution and only emboldens us to continue to use this technology in these areas of, again, complex by high risk, high reward. And then maybe the last one to connect it to the next slide, is really how we're thinking about building on. I would still call it early success with KT-474, but to continue to propel the company into large areas of clinical and commercial opportunities in immunology heavily as well as in oncology. So I wanted to share today a bit more on the broader strategy that Kymera is taking. I think it's relatively rare for a platform company to have the first program to not only elucidate the platform well but also show promise to potentially becoming a real drug with large commercial potential. Obviously, I'm referring to KT-474. And if you actually pay attention to the data that we've shared we have shown impact on biological pathway in IL-1 family cytokines, Th1, Th17, Th2 innate immunity. So it's not surprising to see that we expect to expand the development program with our partner, Sanofi, beyond the [ derm ] indications that you've seen in December. And so there are opportunities in GI, rheumatology, obviously with Array as well as respiratory. And having the opportunity to actually have that area of both development and commercialization, derisked with a partner like Sanofi that wants to be a leader in immunology allows us to then being able to build on that success and on that financial and operational derisking with investing in other programs, other pathways where we can synergize the capabilities that we're going to build along the way, again, with 474. So we're not going to disclose many targets today, but I just wanted to share the pathways or at least the franchises that we're going to be investing in. So we have a program that probably has more small molecule validation than IRAK4, but also there is scaffolding opportunity that we, with our technology can eliminate. And this is another potentially large opportunity in [ derm ] GI rheumatology. We -- at the back of 474 and I will say maybe more on the back of DUPIXENT antibody, we found a transcription factor within that pathway that we can degrade very effectively, and this is another large franchise following actually the path that DUPIXENT has taken, although in this case with an oral degrader molecule. Obviously, we've talked about STAT3 in the past and the opportunities in many of these indications. And here, I just mentioned that we've also able -- we've been able to identify novel degron interaction, a novel molecular glue in immunology, in indications of interest, as you see there, with -- against a target that really has neither been drugged before. In oncology, you're familiar with that pipeline, IRAKIMiD Is really the first targeted therapy in lymphoma. Hopefully, you were aware of STAT3 opportunities in T-cell lymphoma, leukemias and potentially in solid tumors. With MDM2, we haven't shared a lot about the clinical development plans, but clearly, this is going to be a both liquid and solid tumor opportunity. And then again, on the same theme of scaffolding complexes, we believe we have probably the best approach to go after this particular node in solid tumor, again, large opportunity. Going to the next slide, just to keep the theme of the type of targets that we're going after. You can see building on success of IRAK4 scaffolding proteins, you see we have roughly 5 programs within oncology and immunology that we can build at the back of that demonstration of success. And then the other area that we're very invested in is transcription factors. And again, these are both categories of programs that only a degrader can really be successful in. And here, you see opportunities in both oncology and immunology. So this is a snapshot of our pipeline. The top part is a pipeline that hopefully many of you know well, I won't spend too much time on this. We have 474 moving into Phase II with Sanofi and 413, 333, hopefully, we'll be able to share impact on patients or clinical activity this year and with 253 initiate Phase I and also demonstrate proof-of-mechanism. And if you see below the programs that I've talked to you about. I'm not going to go into the details, but rest assured that in those 4, 5 programs, we expect to have DCs and INDs in the next couple of years. So I've told you high-level objectives. We've talked about 474, the oncology programs, the novel programs that we want to advance as well as our platform investments. So I thought in the next -- maybe beyond the 8 minutes remaining, I'll take a few more minutes just tell you about -- just highlights of the programs and may be an opportunity to add some commentary from our most recent disclosure. So IRAK4 doesn't need a lot of introduction. It's a key note in a pathway that I said extensive validation mostly through upstream targeting of cytokines, receptors. And more recently with a small molecule kinase inhibitor sort of blocker of the kinase function. We know that IRAK4 has a dual function of both scaffolding and kinase, and we demonstrated for the first time that by removing the protein, you can address both the scaffolding kinase function demonstrating superior biology and also early clinical outcomes. The commercial opportunities are vast in both Th1, Th17, and Th2 diseases. The most relevant data set that I think we should all take from the presentation in December was that we demonstrated that this pathway is activated in both Th1, Th17 disease like HS and Th2 disease like AD. And that is the first time that type of validation has been accomplished. We've run an extensive Phase I study. I personally don't remember another extensive Phase I study like this. We've done it for many reasons, but this is obviously a novel modality where there is a lot to learn in how you translate the preclinical understanding into the clinic. We've dosed more than 100 subjects, probably more than 120, I don't remember the exact numbers, 150, Jared is telling me from the front row there. So clearly, this drug has been dosed to a large number of subjects, both healthy volunteers and patients. And we've shown a really high level quickly a really strong degradation in blood and skin in active volunteers impact on ex vivo cytokines and good safety. We went into the HS and AD study with the goal of really demonstrating a fidelity of translation from healthy volunteers to patients. Can we degrade the target as well? Can we impact cytokines as well? Is the safety in line? And can we gather any early signs of clinical activity as measured by clinical scores of symptoms. And obviously, what we delivered went well beyond our expectations. We demonstrated a degradation in both blood and skin. We demonstrated a good safety profile with even an improved safety profile with regards to the mild subclinical QT effect. And we had some really promising clinical activity. I think the scores in both HS and AD, the impact on symptoms, both pain and pruritus for just a 28-day study was, in our mind, in our partner minds, quite, quite impressive. So I won't spend too much time going through the data. This presentation actually is also on our website, and you can actually listen to our presentation in December. This slide just to show that the PK and PD was consistent with our expectations. I would focus on the plot on the right of this slide, and this shows that we were able to impact inflammation in the circulating cytokines and acute phase reactants in both HS and AD. And the reason why, to me, this is the most important data is because if IRAK4 pathway was not activated in HS and AD, degradation of IRAK4 would lead to no impact on these biomarkers. So that's the most relevant piece of information from the study in my mind. The impact on these inflammatory biomarkers in patients in both HS and AD in both blood and here you see in skin, we have impact, as I mentioned, IL-1 family cytokines, Th1, Th17, Th2 innate immunity in the skin of patients with magnitude that go beyond 90%. Again, showing that this pathway is activated, not only in blood, but also in the skin of both HS and AD patients. So the take home from the clinical data is really as follows. The most impressive data in our mind was that the kinetics of response in both in this case, EASI scores and pruritus, follows the kinetics of degradation of the target in blood and skin. We have rapid degradation for 28 days and upon cessation of dosing at day 28, we actually are able to maintain -- although reduced degradation for another 2 weeks. In fact, at day 42, we still retain roughly 50% degradation. So -- and if you look at these charts, you see exactly that playing out, where you see maximum degradation roughly at day 28 when you stop dosing and you have cumulative effect. And then you actually are able to maintain, in some cases, even improve the outcome because the pharmacology continues to play out in the next 2 days -- in the next 2 weeks. I won't get into comparing numbers, but obviously, in a small study, in a short study, these are quite impressive numbers in both scores as well as -- or maybe even more impressively, I would say in the symptoms in both AD as you've seen in the previous slide and in this case, in HS. So just a summary of what we've seen. We were able to demonstrate that a degrader of IRAK4 is well tolerated, is impacting inflammation in HS and AD, is degrading the target well in blood and skin and that impact on inflammation results in clinically relevant, measurable outcomes in diseases of complex ideology like HS and AD and this type of data is really making us feel, as I said today, excited and confident that this drug could have broad impact, not only in HS and AD but beyond these diseases in Phase II and beyond. I thought I'd give in the next 5 minutes, just quick highlights of also our oncology pipeline. So IRAKIMiD, which is now in dose escalation, is a program that we've designed to target a specific population in diffuse large B-cell lymphoma called MYD88 mutant cell population. And the reason why we devise degradation of IRAK4 as well as Ikaros and Aiolos, that's why we call it IRAKIMiD, is because we found that these 2 pathways are in a weak complementary to each other. And there is almost a compensatory mechanism that if we eliminate both, we can have really profound single-agent activity. And so what we've seen preclinically that degradation of Ikaros and Aiolos around 90% and IRAK4 around 60% to 70% leads to the type of activity that you see on the left of your slide here in blue, basically single agent complete remissions. So where we are in the clinic -- obviously, where we were in the clinic, this is a data set from December, we're not going to update today that even only in the first 2 dose cohorts, we're able to already demonstrate full degradation of Ikaros and Aiolos and already about 40% degradation of IRAK4. More importantly, in these 2 dosing cohorts where we're maximizing both the depth of the degradation of Ikaros and Aiolos and also the need of the extent of degradation of Ikaros and Aiolos, we actually did not see any neutropenia, which is obviously one of the key safety potential that IMiDs obviously elicit in humans. And so this bodes well for -- as we continue to dose escalate and expect to see clinical activity as we're reaching the right level of degradation also IRAK4, which we expect it to be at the current cohort going forward. And so as I said earlier, we expect being able to share the impact of this degradation profile in the right patient population. So antitumor responses, hopefully this year. For STAT3, in a way, it's a similar opportunity in terms of going in indications where there is high sensitivity to this mechanism, and these are -- we divided them in 2 main categories: T-cell lymphoma leukemias, where we know are dependent on the level of actually phospho STAT3. So elimination of STAT3 will have single-agent activity and then potentials in combination with solid tumors. Also this program is in dose escalation, what we shared in December was that even with the our first cohort, we were able to reach meaningful levels of degradation. As you see preclinically in this program obviously, this is going after single targets, STAT3. We need to see 90% degradation for about 24 to 48 hours to lead to this profound apoptotic response and to see single-agent activity. And as I mentioned, in our first cohort, as a mean we're already seeing close to 70%. We already had a patient that we're able to see up to 86% degradation with a very pristine safety profile. Obviously, we're not there yet in terms of the degradation profile that we need to see clinical activity, but we believe we're going to be close. And so seeing also encouraging safety profile is critical. And also for this program, we expect to share data with regards to the impact of degradation on the tumor burden of patients in 2023. Just lastly, on MDM2, this is a program that we -- again, our fourth clinical program, we had an IND cleared at the end of last year. This is a program that we're very excited about because for the first time, following again, what we've done with IRAK4, small molecule inhibitors is insufficient to lead to a full biological effect. For MDM2, it's the same, although obviously, different biology. We have tried to follow the cancer genetics for this program for 10, 15 years. We know that if you delete MDM2 in p53 wild-type tumors, you see a profound antitumor effect. We assume that inhibition of MDM2 would replicate cancer genetics. In reality, that is actually hardly ever the case. But now we have an opportunity with a degrader to replicate the cancer genetics data. We can delete with a small molecule, MDM2 and hopefully lead to this profound antitumor effect. The reason why deletion is superior biologically than -- or I should say, degradation is superior than. I don't want to come up with another definition now. So degradation of MDM2 is superior to small molecule inhibitor is because the inhibition of the MDM2 p53 interface leads to an upregulation of MDM2 proteins, the so-called feedback loop. We can overcome that with a degrader because we completely eliminate the protein. And so instead of having cell cycle arrest type of phenotype that small molecules have that require continuous dosing, we actually have -- we have apoptotic response in cancer cells that will only require infrequent dosing. So that's really the rationale of the program. So we see much more potency than other small molecule inhibitors in both upregulating p53 and killing cancer cells. We see profound activity in preclinical models. This is an AML model that is driven by upregulation of these apoptotic biomarkers that you see on the right of your slide. So we are very interested about AML as one of the indication, not the only one, and especially venetoclax-resistant AML, which is really the main opportunities here. And you see both a single agent and in combination, we're able to solve for at least preclinically so far for the -- this is really a high unmet need. Our development strategy is focused on -- Phase I would be both in liquid and solid tumors. We're going to start dosing soon in Q1, hopefully. And will be based on all the preclinical work that we've done that allowed us to identify indications where there is this high sensitivity and this apoptotic response in both liquid and solid tumor. Right now, we're talking about AML and other heme indications. Next year, we'll be disclosing some of our solid tumors focus. And also here, we expect to share proof-of-mechanism data. It's a type of data like we've shared for the other programs in December. So I just want to conclude, I'm sorry if I took a bit longer. I just want to conclude that hopefully, what we shared with you today, and to be honest, what we shared with everybody in the past few years, is able to elucidate to you that Kymera has done a great job identifying the right way to develop this technology. So the right target to apply this technology against and then execute against these programs in a way that was on time and with the right type of data that supports continued development. We're excited about our clinical pipeline, but we're also excited about some of the other programs that we gave you maybe tease around that you've seen before. We're well capitalized. We have a committed team that wants to make this company a large commercial stage company and excited to engage with all of you to continue this journey. So I'll pause here and thank everybody, and happy to take questions.

Great. Thanks Nello. Maybe I'll start out while the mics get circulated. You have the potential to go or KT-474, has the potential to go pretty broad and also deep within [ I& I ]. I guess, in thinking about the Phase II program that Sanofi is going to be leading, do you have a sense of sort of where in the treatment algorithm and the severity of patients with either HS or AD, they'll be looking to further evaluate 474 initially?

Yes. No, that's a great question, Eric. So what we've tried to focus in our Phase I and again, our Phase I was designed to really confirm PK/PD and safety. So as I've said for months. I thought I'd repeat today. But we also focused on mostly at least we try to focus on moderate to severe patients because that's really where we believe the most unmet needs are. We haven't -- we are not in the position to sharing the information that you're asking but I would be surprised if that wasn't -- that didn't continue to be at least a key focus of the further development. I mean, as we were discussing yesterday, these are complex diseases where the patient experience is very, very critical. And understanding how we're improving not only lesion, but also the patient experience, the symptoms and how they live with the disease is a critical aspect of how we're going to develop this drug and how we're going to engage with the regulators on the development of this drug.

I guess just generally speaking, how should we be thinking about the cadence of updates with 474 now that Its development is really in Sanofi's hands.

Yes. So I would say, I want to continue to recognize Sanofi's approach to this partnership. They've been extremely close when we were leading discovery and development, and they are very engaged and with us even when and now they're leading the program. So we have an opportunity to discuss influence and refine plans and timing. So I would expect that the -- while obviously, the communication of the data will be slightly different than what we've done in the past. I continue to expect that we'll be able to update as meaningful milestones are reached, and this is not going to disappear from our conversations. In terms of timing, we're refining with Sanofi. And so I would say the next disclosure will be initiation of Phase II study. And eventually, we'll be also potentially how we're thinking about the further expansions into other indications, but that's something that we're not ready to discuss today.

And with some of the other targets that you're pursuing thus far not disclosed within immunology, I guess, strategically, ultimately, how are you thinking about sort of advancing those? I guess, would you seek partnerships and at what time would be appropriate?

Yes, I mean, it's a great question. I think the partnership with Sanofi was something that we remember when we signed it in 2020, we debated extensively whether it was the right thing at the right time. And I actually don't like looking back too much. But I think given where we are today, the opportunity that this drug has, I think it's a great opportunity to have a company committed to being a leader in immunology, leading the charge with this program and also allowing us to grow and forward integrate the company in both clinical and commercial with them. And I think with this experience, assuming success -- hoping and assuming success, I think we have to be more aggressive as a company to develop on our own some of these programs all the way through the commercialization. There might be areas where there are unique synergies to be explored. But at this point, we're focused on building an integrated company. And those programs -- the learnings from IRAK4 allow us to do, hopefully, a great job with the earlier pipeline as a stand-alone company.