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

I'm Ellie Merle, one of the biotech analyst here at UBS. Thank you for joining us in a very sunny Miami for the UBS Biopharma Conference. Very happy to have Kymera Therapeutics here with us today for a fireside chat. Joining us from Kymera is Nello Mainolfi, President and Chief Executive Officer. With that, Nello, thank you so much for joining us.

Thanks, Ellie, for having us.

Of course. And listen, there's a lot of talk around targeted protein degradation. What this could mean as a modality? I think investor feedback recently has been come back in terms of excitement, so relative to 2 years ago. In your view, what do you think people are missing? What have we learned about this modality in the last couple of years from all the clinical data? And what do you see as the value of this modality relative to, say, traditional modalities like to the small molecule inhibitors and antibodies?

Yes. So first, thanks for having us. You have comfortable chairs, I would say. So to your question, what's the promise, what's the opportunity with targeted protein degradation. So the opportunity is to have a small molecule-based modality that can remove disease-causing protein, and -- so you can have a knockdown like phenotype with the flexibility of an oral or a small molecule oral or otherwise. And in a nutshell, there is no other technology out there that can be disease agnostic, tissues agnostic, organ agnostic, target agnostic in the way that protein degradation can be. So the promise is to us, more exciting than it was 7 years ago when we founded the company. And the reason why I say that is because the premise is the same, but we've learned a huge amount in the past few years, at least we at Kymera has. And we feel we're in a position now to fully realize that value. I mean, I fully appreciate that and I agree that the fully realized value of a novel modality you have to have an impact on patients. And I think where maybe -- I think that the sentiment versus the reality is being a bit cut in the middle is we are -- many of the companies in this space are still relatively early in the clinical development stage. So data sets have been extremely exciting, at least our data I can speak for, but still early in clinical development. And so I think the next 2 to 3 to 5 years will generate a series of medicines that will change treatment paradigms across many disease areas. And I think the full appreciation of the space will happen. The only one other comment I will make on protein degradation and in general on any modality that your platform, your technology, your discovery engine, whatever you want to call it, is always as good as your product. And I think if we all focused on the products that we're generating and less so on the degradation modality that we're using, we would advance the conversation much more productively. We are a company that loves our platform, but we're focused on making drugs. So we want to talk about the drugs, what we're doing in the clinic and the opportunities in front of us.

Great. Let's talk about 474. You recently moved into Phase II in atopic derm and HS. Can you tell us a little bit about the value of IRAK4? There's a lot going on in the I&I space. What's so promising about IRAK4 relative to the many other targets and walk us through some of the early data we've seen so far.

Yes. So I go back to target selection that I believe, we believe it's been quite unique at Kymera. We've been focused on what can the technology do, what can protein degradation do to provide a very meaningful differential solution to patients. And the approach that we've taken has been to focus on pathways that have been validated going after targets that have been undrugged or poorly drugged and where protein degradation is a unique unlocking solution. And then importantly, in areas where there is a meaningful clinical and commercial opportunity. And so if you apply the concept to immunology, and I know we'll talk more about this either later, but for sure in January in our R&D Day, we've learned that biologics have helped us validate novel pathways. If you think about TNF, you think about the IL-1 family, you think about IL-17, you think about IL-4/13, these biologics have showed us that these key fundamental pathways a driver of many of these immune inflammatory diseases. What we believe we can do at Kymera is go into those pathways and provide a solution that is a competitive with the biologics in many ways superior and have the convenience of small molecules. So for IRAK4, we know there are 2 drugs of biologics that block cytokines, upstream of IRAK4, IL-1, IL-18, 33, 36, some have approved, some have shown clinical activity. But only by degrading IRAK4, you can actually capitalize on the full clinical potential of all those single cytokine blockers with a single oral small molecule. And that's the promise of protein degradation. Pathway blockade that is superior to small molecules because we're removing the protein, and it's competitive with biologics because we can fully block a pathway that is activated by several cytokines and has the convenience of an oral small molecules. We've shown -- and in all of our pipeline, we've shown exciting early data. For IRAK4, we've shown that we can degrade the target fully in blood. We can degrade the target extensively in skin. We can demonstrate that the signature in [ HS ] volunteers and in patients is of a broad anti-inflammatory signaling. And we've also shown benefits to patients of both HS and AD by degrading IRAK4. And we've shown, although not in the head-to-head that our profile is meaningfully differentiated from an IRAK4 small molecule inhibitor that others have developed. So we're going now where we've initiated 2 phase studies, our partner Sanofi has, but we're following the studies very closely. And we're excited to being able to fully demonstrate the clinical activity of this mechanism in a couple of really meaningful indications and then continue to develop this drug.

Absolutely. And it seems like you have Phase II data coming from both of those programs in the first half of '25. That's a very important catalyst for you guys, and thinking about the proof of concept for degraders, as you mentioned. How should we think about what's clinically meaningful in these indications? And tell us a little bit more about the designs here?

Yes. So both studies have been powered to evaluate clinical benefits. So I think the goal is to -- hopefully, the goal is to execute a flawless study. The ambition is to demonstrate through the study that the drug has impact on patients. And that's really what we hope to get out of this study. They're powered for the HS study as a placebo and 1 dose, the AD study as placebo in 2 doses, they're both recruiting between 100 and 115, 120 patients. And their power to demonstrate different -- hopefully, differential activity from placebo. We have all the end points that people have used in this type of indications, HS, all the end counts and all the different high scores and pain measures and in AD EASI scores and pruritus, and all the categorical scores that we look at. And I think we have a unique opportunity to have a profile that shows meaningful clinical activity that is statistically significant from placebo, and a profile that would be competitive by being an oral small molecule with hopefully a good safety profile.

Absolutely. And a common question I get from investors is how to think about the safety, both because we're using a novel modality. But also because of some of the QT prolongation effects that we're seeing in some of the very early data, maybe walk us through what was seen there? And what gives you confidence in the safety of your IRAK4 degrader?

Yes. I mean so far, the safety profile has been quite benign. I think the most common adverse events, if I remember correctly, was headache and some nausea. We had a transient subclinical QT prolongation in the study that actually resolved on its own while the patients were still continue to be dosed and never reached levels that were considered adverse. So it's obviously something that we've uncovered. We believe that we demonstrated the signal results spontaneously while patients are on therapy. So it's a transient again, subclinical effect. And we'll continue to monitor and make sure that, that profile stays the same. And otherwise, with it and outside of that, we believe the safety profile is consistent with a potential meaningful drug in immunology given what the adverse event profile looks like so far.

Certainly very excited to see the data in the first half of 2025. Turning to oncology. You recently had a pretty meaningful update where you showed initial clinical efficacy data from your STAT3 and MDM2 degrader. Maybe starting with STAT3, can you tell us a little bit about the mechanism behind this target in oncology and where you see the potential role for this in future development?

Yes. I mean I'd like to maybe take a step back, hopefully, not too far. One of the reasons that keeps us extremely excited and motivated at Kymera is we built these degraders and we built a very, let's call it, simple translational hypothesis. For example, for IRAK4, we believe we can block the pathway fully better than a small molecule inhibitor, and we believe we've shown that already, and now we want to show further clinical activity. For STAT3, we believe there is no other way that you can block fully, let's say, activate STAT3 then with a degrader. And we believe we have the first agent that selectively and specifically acts on that particular target. And we've shown already in the first few patients that we're able to impact tumor size of patients with -- in this case, we've shown a partial response in the CTCL patients. The rapid dose level 2, we believe the clinically active doses will be dose level 3 and 4. So the thesis going into these programs in terms of clinical activity, preclinically, we've seen strong antitumor activity in T-cell lymphoma leukemia as a single agent, and we've seen some exciting activity in solid tumors, especially in combination with PD-1 and other agents that we haven't disclosed yet. And so in this dose escalation study, we went into the study with expecting antitumor activity in heme and to be honest, not much in solid tumor. We're seeing some intriguing stable diseases, even as you'll see from the poster for a relatively prolonged amount of time. So we're trying to tease out what's happening also in solid tumor. Hopefully, we'll have some biopsies, and we'll look at the signature in tumors as it relates to the potential impact on the tumor micro environment. So I think the ASH will be an exciting update later in the year.

Yes, certainly looking at the number of patients that you've dosed, but we haven't yet seen efficacy for. It's too early. Maybe what should we expect at this update at ASH?

I mean the cutoff date of the abstract that I believe was July 10 had patients on study, 12 of which were evaluable for disease assessment. So all I can say is that we will have more than 12 patients worth of data in December. Unfortunately, I think we want to wait for the poster to talk about what we'll see in the poster. But we'll see, all I can say, we see both more patients in the, let's say, targeted heme population and also more patients in the solid tumor population.

Okay. And help us think about the potential opportunity in these T-cell lymphomas, the unmet need. And then also from a biology perspective, why do we think we're seeing efficacy in these particular lymphomas?

Yes. I mean many of these lymphoma, CTCL, PTCL have either STAT3 mutation, STAT3 activation, pathway activation. In fact, if you take a biopsy of some of these tumor types, you see there is extremely high level positive STAT3, which is telling us the pathway is highly activated. And so we expect, again, based on also preclinical data that many of these patients could respond to a STAT3 degrader. And many of these have -- the treatment paradigm is, I guess, it's not optimal for patient outcome. There are some active therapies, especially in CTCL with CD3 -- CD30 positive -- in CD30 positive patients with an ADC. But otherwise, I think there's still an unmet need for many of these subpopulations. I would say that as we continue to evaluate opportunities for us to be excited about this program, we'd love to see opportunities in heme as well as opportunities in solid tumors to be really excited about advancing this program into Phase Ib and beyond.

Absolutely. And as you do cohort expansion and continue to dose escalate, how should we think about the degree of data in terms of -- that we could get next year and the time line from here?

Yes. So I would say, at ASH, we will have a robust data set across several dose levels. I believe that based on our understanding of trial execution, we should be able to complete the Phase Ia in the first half of next year. And I think at that point, we'll be able to provide an update on the totality of the data as well as on next steps.

That will be interesting. Turning to the MDM2 degrader. Walk us through the rationale there, particularly relative to inhibitors and what we've seen from the early data?

Yes. So for MDM2, again, I think high fidelity, what our target philosophy has been and will continue to be is this is -- you know, p53 is one of the most well-characterized tumor suppressor, has been the target of many programs in the whole industry, both small and large companies. The challenge has been that stabilize in p53, which will lead to cancer cell type, it's -- p53 is wild side has been met with challenges because as you stabilize and increase p53 by, let's say, inhibiting MDM2, p53 interface, you create a feedback loop that increases the expression of MDM2. So small molecules, they've had a hard time to [ serve geometrically ] and effectively block this feedback loop. And I think what's happened is that the line between efficacy and on-target toxicity has been crossed several times. And it's not surprising based on the biologists just was trying to explain. If you use a degrader, what we see is that we overcome the feedback loop because, as you know, this is a catalytic mechanism. And in the first 4 hours, we see commitment to cell that of this cancer cells. And basically, there is a commitment to that, that is now independent of our compound being on board. So we can actually dosing frequently allow cancer cells to die while normal cells do not have this prolonged exposure to p53 elevation. And we believe that, that creates this therapeutic index that allows us to maximize efficacy and safety. And what we're excited about for this very small data set that we shared last week is that what we're seeing -- what we expected to happen, probably better than we ever expected. But even on the first couple of patients, I would say the first patient on study has been on study for now 6, 7 months, I believe, with continued response without the typical heme tox that you see with MDM2 inhibitors, which are thrombocytopenia or neutropenia, and again continue to see to do well on therapy. And so that shows at least based on the early patients that our hypothesis about degradation versus inhibition and the separation of the therapeutic index is playing out. So that's very exciting, but it's still early. We plan to have an update next year. As you know, we just started dosing in the Arm B as called which is the AML ALL study, which is a parallel staggered dose escalation study, so we don't confuse the profile between solid tumors and AML. And so we hope to be able to provide a meaningful update next year, ideally, together with patient stratification sensitivity profile that we're developing internally, which I believe will be the last piece of the puzzle to allow this program to really take off in terms of thinking about late development.

And the update for MDM2, would that include both from Arm A and Arm B?

I think it's early to say, but that's our feeling right now that it should be a comprehensive update, but we'll see how things evolve. And as data come in, we'll decide what's the best way to do it.

Okay. And in terms of indication collection, both particularly in solid tumors where you're exploring that as well as in the heme, can you talk about the rationale, particularly in the cohort B for the indication selection, but then also in solid tumors where you think the biology might make the most sense?

Yes. So I mean, as I was trying to say earlier, so you have to have p53 wild type to be sensitive to an MDM2 p53 agent. But that is clearly not sufficient. I think we can say that clearly. Now several companies in this space using small molecule inhibitors have chased or pursued different hypotheses, whether it's upregulation, amplification of MDM2 and others. What we have seen preclinically, a very different sensitivity signature. And we haven't disclosed that. As I said, we probably will disclose it next year together with the clinical data. But -- so we know that there are some subset of heme, especially in the AML ALL space that share this signature as probably the majority of patients which will have this signature or a large -- let's say, a large number of patients will share this signature, maybe not the majority, but are large. So we don't believe we need to have a signature-select patients in AML ALL. And then in solid tumors, where, as you know, it's obviously the different context, we know that there are some subset of tumor types that are sensitive, but we've -- we're also learning that actually the sensitivity signature that is evolving and still evolving, might actually be across several tumor types. And not specific to just some tumor types. And that's really what we're trying to tease out from the work that we're doing both preclinically and clinically. So it's an exciting time, and hopefully, we'll be able to assuming that we can pursue and to accelerate development, which that will allow us to do instead of going one by one in all the different tumor types.

It will be interesting to get more data next year on that at a midyear update?

Would see -- I think that looks like that might be a good time, but we'll update you on that maybe early next year on what the expect -- more refined expectations.

Understood. Well, heading into your R&D Day in early January, what can we expect there?

So as we said on the call the other day, we've learned a lot about what it takes to make meaningful drugs. Obviously, as I said, we're still early, but we've had some exciting times at Kymera demonstrating what a degrader can do for patients with complex or the inflammatory diseases. And we've also learned a lot about what type of targets are best suited for protein degradation. And then we also said we're committed to go after large opportunities. And you'll see once you think about all of those, you see that our focus in immunology is fitting all these pillars that we want to focus on. And I think in January, what we love to be able to share with all of you is new programs that will be approaching the clinic. Again, target types that we're very familiar with, the transcription factors, scaffolding proteins in pathways that had validations by either biologics or small molecules where we believe we would have an extremely competitive profile in markets that are $10 billion, $20 billion plus. And so that's without giving away too much, that hopefully will be enough for the teaser to tuning on January 4, and then we'll have time to follow up during the following weeks with everybody.

Absolutely. You started out at the beginning by saying that the most important part will be ultimately seeing the clinical impact specific drugs. How do you prioritize indication selection and therapeutic areas? Oncology, you seem very excited about the emerging immunology portfolio. What's your priority in terms of the strategic focus?

Well, I would say that we've set a very clear bar from the start. I would say maybe we've refined that bar, maybe for everybody a bit -- we've communicated more refined bar last year about what are the things that we really care about. And as I mentioned, and part of that decision was discontinuation of one of our programs that didn't quite fit the criteria that I just talked about. So we're excited about all the programs that clear their bar, meaning meaningful drug, best-in-class mechanisms, broadening clinical and commercial opportunities. And whether they're in immunology and oncology, they have to clear that bar. We believe right now that there is higher probability of having more programs that fit that profile in immunology than oncology, just if you look at how the space is evolving. But as I said, we're very excited about the existing oncology programs. And as long as they continue to fulfill this criteria, we'll be continuing to be excited about advancing them. I mean we will be going in large areas. So at some point, there will be discussions about what Kymera does alone and what Kymera does in partnerships. But I think now it's not the time to have to define those conversations.

Okay. Absolutely. Well, with that, Nello, thank you so much for joining us, and we look forward to all the updates.

Thank you. Thanks for having us.