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

All right. Good morning, everyone, and thanks for tuning in to our next fireside chat. I'm Kalpit Patel, a research analyst here at B. Riley. It's my pleasure to introduce the next company, Kymera Therapeutics. With us, we have CFO, Bruce Jacobs; and CMO, Jared Gollob. It's great to have both of you here. Bruce, Jared, there have been many exciting developments on your end, starting with the R&D update that you've had last month. Maybe give us a few key highlights from that update, and then we'll dive right into the question.

You want me to go ahead first?

Yes. Go ahead, Jared.

Yes. I mean I think the main aspects of those updates from December were around, of course, the KT-474 program and our completion of the Phase I study and the Part C data showing really, for the first time, clinical activity in HS and AD that was tied together with an impact on inflammatory biomarkers systemically and favorable safety, including the observed sort of resolution or spontaneous resolution of that modest non-adverse QT prologation that we saw initially in the MAD healthy volunteer portion. So it was very satisfying. And of course, Sanofi then agreeing to move forward with Phase II studies in both HS and AD with the plan being to sort of initiate the first Phase II study in HS by end of this year. That was certainly one of the most important. So I think that's sort of information that we presented last month. In addition to the progress on the oncology programs, the 413 IRAKIMiD program and the 333 STAT3 program, really showing pharmacodynamic activity in both blood and tumor and showing that we are achieving knockdown of the targets with acceptable safety. I think that was also very promising and sets us up for the next stage in those Phase I studies for being able to start to show clinical activity and target patient populations, I think, toward the end of this year.

Got it. And Jared, we saw protein degradation of IRAK4 at day 28 in those cohort 3 patient, and that was associated with clinical responses in the data set that you showed. I guess the question is, do you think we need more robust degradation to get even more profound clinical activity or are you sort of satisfied with the levels of IRAK4 that you're seeing in these patients?

Yes, it's a good question. I mean I think it's always unclear until you sort of start to go into patients and look at clinical activity, what degree of knockdown you need to see clinical activity. I think we were pleased that we were seeing the same levels of degradation in blood and skin, robust levels of degradation beyond 80%, 85% that we have seen in healthy volunteers. And the fact that, that degradation was now associated with an anti-inflammatory effect, both in the blood with knockdown of cytokines and acute phase reactants, and then in the skin, knocking down various disease-relevant pro-inflammatory cytokines. That told us that the degree of degradation that we're getting is certainly sufficient to have that sort of an anti-inflammatory effect. And then fast forward to that then translating into clinical activity that we saw against both skin lesion endpoints as well as symptom endpoints, both in HS and AD tells us that we are getting the sort of degradation that we need to see clinical activity. Now what's interesting to us is whether that clinical activity might evolve over time, even with the current level of degradation, it was interesting to us that even with 28 days of dosing, if we look at the 2 weeks following the completion of 28 days of dosing, we saw continued evolution of those clinical responses, and we know that degradation continues for several weeks, even after you stop drug, which tells us that continued degradation can continue to lead to evolution of those clinical responses. And so it will be interesting to see in Phase II studies that are 16 weeks duration with the sort of degradation that we're seeing, the further evolution of those responses. I mean we may see further impact on AN count in HS or on EASI score in AD with just more protracted degradation over time.

Got it. And maybe a question on the decreases in disease-relevant genes and plasma cytokines that you're seeing. Do you anticipate that we should expect maybe further decreases in those levels of inflammatory genes and cytokines with additional dosing? Or do you think you're sort of topping off at this point at day 28 to 42?

Yes, I think we definitely don't know if we've topped off or plateaued because 28 days of dosing, it's still a relatively short duration of dosing. It was nice for us to see, in many cases, more than 80% to 90% down regulation of these disease-relevant pro-inflammatory gene transcripts and the skin in both HS and AD. It's quite possible that, that will continue to evolve with more chronic dosing that you may see further down regulation of those genes, you may start to see even other genes being impacted with more prolonged dosing. So I think it will be interesting to sort of better understand with dosing beyond 28 days, just how those responses continue to evolve, not just the clinical responses, but also these biomarker responses.

Got it. And maybe if I look at the data correctly, I saw a better response in maybe AD patients, at least in terms of the transcription changes and cytokine levels than we saw in HS patients. Is there anything in the underlying maybe disease biology that might explain that different?

I mean I think -- I mean, Kalpit, when I sort of review the data, I don't recall there being really a big difference between HS and AD -- like if I look at the numbers, for example, and look at IL-6 inhibition in the blood, we saw about a 63% drop in the HS patients and about a 56% drop in IL-6. We saw about 50% drops in IL-1 beta and serum amyloid A protein in both patient populations. And on the gene transcript level, we looked at 8 different disease relevant genes in HS. And in all of those, we saw the majority of patients, meaning more than 50% of patients showing 80%, 90% down regulation just as we saw that in AD. So I think overall, the impact on pro-inflammatory biomarkers in blood and skin, I think seem to be pretty comparable across the 2 diseases.

Got it. And Jared, this might be a naive question, but will you expect transcription changes over time to just occur based on natural variation of the disease? For example, let's say, we had a placebo arm and you're measuring the same level. Would you see such changes? Or maybe it's not to the extent that you would see with KT-474.

Yes, it's a good question. I mean, we didn't have a placebo here for comparison. But I think the fact that we saw these changes not sort of randomly or even across the board, but we saw these changes largely restricted to genes that we know are relevant to the pathophysiology of HS and AD suggests that this was not sort of a random sort of change over time, but a more sort of direct to change based on hitting IRAK4 and the linkage we know between IRAK4 and the expression of these different genes. So I think it makes it quite unlikely that this -- that what we observed here was sort of a spontaneous impact that might have even been seen in placebo. I think it really speaks to it being something which is driven by the mechanism of action of the drug.

Got it. And maybe zooming in specifically for the clinical activity in HS, most of those metrics like the nodule count or the Pain NRS responder rates, they were higher, meaningfully higher than what you would expect relative to historical placebo benchmark. So then the gap with the HiSCR50 responder rate, that was a little bit narrower. So just to hear your perspective on that and why it may look less impressive than some of the other efficacy metrics.

Yes, it's a good question. I think it's always important to put in perspective when we're trying to compare sort of numbers we're seeing in our study with a relatively small number of patients in an open-label study compared to larger same placebo-controlled studies. But with that being said, I think if we look at the HiSCR50, for example, on our study, if we look at all the patients, all 12 patients with moderate to severe disease, which included 2 patients with very severe disease, the HiSCR50 rate was 42%. And if you looked at just the 10 patients with moderate to severe disease, which was the population that we intended to treat, it was 50%. And so HiSCR50 rates of 42% to 50% are very comparable to the rates of 29% to 51% that we're seeing in the adalimumab Phase II and Phase III studies at week 4. So I think they're very comparable. Also interesting to us was the HiSCR75. That's an even higher bar where there tends to be a very low placebo rate for HiSCR75. I think the placebo rate is only 5% or so historically. We saw HiSCR75 of 25% to 30% on our study. And in the adalimumab Phase II and Phase III studies, they saw a rate of about 20%. So I think we're very competitive, I think, and very comparable, albeit with a smaller data set to what was seen with HUMIRA in their studies.

Okay. And maybe a similar type of question for atopic derm, you're seeing high levels of itch reduction based on plasma pruritus -- or sorry, peak pruritus metric, but then the decrease in EASI scores were sort of lower than what Dupi would show historically, right? So, are there certain aspects of the EASI composite score where that's sort of impacting this response that you're seeing at day 28?

Yes, it's an interesting question. We didn't -- we haven't broken it down that way, although it might be interesting for us to analyze it that way. We saw a 37% mean drop in EASI with the maximum change we saw, I think the highest was around 76%. And as you pointed out with Dupi, it was around 52% at week 4. And then we saw this very strong effect on pruritus, which is really a critical symptom in these patients where we saw impacts that were actually greater than what we're seeing with dupilumab at week 4, we saw 50% to 60% average change in peak pruritus and 50 -- I think 60% to 70% peak pruritus responder rates compared to 34% peak pruritus change and 20% to 40% responder rates in the dupilumab Phase III. And what's interesting when you talk to clinicians who treat AD, they often say that you see an impact on pruritus before you see full impact on skin lesions. And so I think what we're seeing, the fact that we saw such a robust effect on pruritus as well as an impact on EASI, although maybe the EASI impact wasn't as great as it Dupi suggests that the EASI score delta might continue to evolve with longer periods of dosing going beyond 4 weeks. And so we're really looking really for the first time with the kinetics of response for these endpoints, both in HS and AD and it wouldn't surprise us if -- when we dose beyond 4 weeks, we start to see further improvements in the EASI score as well as perhaps continued improvements in the pruritus endpoint.

Okay. And maybe one quick question on safety. Obviously, a QTc prolongation was something on investors' mind previously, but it appears to be generally resolved by day 28, it's just a sort of a transient increase. I guess were there any outliers in the data set where the QTc prolongation was maybe sticky in a couple of patients? Is that really not a case here and most of the investigators are shrugging it off now?

Yes. It wasn't really the case. I mean, it was very interesting, but it's a very sort of consistent effect across all the patients. When you see this modest change at day 7, you see it sort of fairly consistently. I mean there's some variation between patients, but it's a fairly consistent sort of group change that you see. And then likewise, this spontaneous resolution between day 14 and day 28 was also really something that was shared by the group. So there really weren't any real outliers where you can say, "Oh, boy, here's a couple of patients who are just not improving at all. I mean, there is sort of noise in the system, but I think when you look overall, what's happening to all of these patients and you look at what's happening at day 28. And even beyond 28, we took it out actually to day 42, you really see the sort of group sort of resolution back towards baseline, which was very encouraging for us to see.

Got it. That's helpful. And maybe talk to us about the next steps for KT-474. Obviously, your partner has committed to advancing this drug. What are some key milestones that we should be looking for from this program in the next 12 to 18 months?

Well, I think there are only so many things that we can really say about exactly about the timing of milestones since the Phase II development will be largely now in Sanofi's hands. I think what we can say is that the plan is to move forward with 2 Phase II studies, at least to begin with 1 in HS and 1 in AD these being likely to be placebo-controlled studies and that we do anticipate starting the first of those studies, which will likely be HS by end of this year. I think in terms of the timing of other milestones in terms of accrual milestones and readout milestones, I think those remain to be determined, but we do know that Sanofi is very determined to try to move expeditiously into these studies and through these studies and we'll, of course, be following along closely with them. I don't know, Bruce, if you want to say, add anything else to that.