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

All right. Great. Good morning. I'm Eric Joseph, senior biotech analyst with JPMorgan. And our next presenting company is Kymera Therapeutics. Presenting on behalf of the company is CEO, Nello Mainolfi. There is a Q&A session after the presentation. So just raise your hand, we'll bring a mic over to you. And for folks joining via webcast, you can also submit questions via the portal. So with that, Nello, thanks for joining us.

Thank you, Eric. Thanks for the invite. Thanks, everybody, for joining. I actually like this room, very unique in the hotel. So we'll spend the next 20, 25 minutes to just go over Kymera's story, where we are, where we're going, our data, our ambition and our strategy. So it started -- I think it makes sense to start really with what we're trying to build here. We believe that we have a once-in-a-generation opportunity to build a company that can change how we think about treatment paradigm using novel modality. In this case, using targeted protein degradation. I think it's fair to say that we've taken a unique approach to building a company on a novel modality. I think our strategy, our target selection choices, how we built our capabilities have been quite unique. And I think it resulted in a company that is doing things that are really at the cutting edge of both protein degradation in general, but I would say R&D. And we'll go through some of those as we go through the presentation. One thing that I'm most proud of is our ability to execute. Since we actually became a public company, which was in 2020, we put 4 programs in the clinic. We've demonstrated, as you see high fidelity of translation across these programs from preclinical into the clinical studies. We've shown early proof of concept in both immunology and oncology. We validated our target selection and our molecular design, how we design and characterize our molecules. And we continue to being on track to continue with this high level of execution. We expect to have up to 10 novel INDs in the first 10 years of the company. Something that we announced today, so we were fortunate to close the financing actually early this morning, in the middle of the night, actually, on the West Coast time. And so we have roughly $750 million that will allow us to extend our runway now into the first half of 2027. So we have 3-year plus of runway that will allow us to really create lots of value creation opportunities to execute on a lot of value creation opportunities across our pipeline as you see. So we're firm believers that every platform company, if we want to define Kymera as that, is only going to be as good as the program, the products, the medicines that it generates. And it all starts with how we think about target selection. And again, here, I think Kymera has taken a very unique approach. We work only on targets that have not been drugged or drugged poorly where protein degradation is the only or best way to tackle that particular problem. In pathways that have been validated clinically, ideally where there is human genetics data on that particular target, where we have a path to differentiation early in clinical development, in large clinical and commercial opportunities. And you'll see this theme over and over again in the presentation today. So we have been -- where we've been early on building capabilities, striking several partnerships that allowed us to forward integrate the company. I think in the past 2 to 3 years, we've done what I think is really, really difficult to do, which is translating a novel modality into the clinic, and we've done it, I think, better than most. As you'll see, we've shown a high degree of fidelity of this preclinical data into impactful clinical data. We've initiated 2 Phase II studies with our partner, Sanofi, in large immunology indications, as you see. And now we're really focused on forward integrating the company. I always say you need to earn the right to build the next phase of development. I believe we have earned that right. And so now we're focused on large clinical and commercial opportunities. We are increasing our investment in I&I. That does not mean we're only going to do I&I, but you will see that it's going to be a major theme of Kymera in the near future. And we'll complete several proof-of-concept studies and finally initiate registrational studies in the next few years. So exciting time ahead for the company. So this is a slide that represents 4 vignettes of our 4 clinical programs. Without going into every detail, maybe starting from the top left, we've shown that we can go after a target like IRAK4 a scaffolding kinase, degrade the target full in humans and demonstrate early proof of concept in HS and AD patients. We've shown with STAT3, we can degrade for the first time ever this target in humans and impact patients with heme malignancies. We've shown with MDM2 where we can differentiate the pharmacology if we use a degrader versus an inhibitor and demonstrate degradation impact on the pathway. And in this case, impact in particular solid tumors without the typical MDM2 Heme tox. And then with IRAKIMiD, which is a program that we actually decided to discontinue for business reason. Also there, we showed exceptionally well, the translation of degradation and safety from preclinical into the clinical. So a snapshot of our pipeline, I will actually close on a slightly different view of our pipeline. So I won't spend too much time. But just to remind you, we have a pipeline of oral small molecule degraders for immunology. We have an IRAK4 degrader in HS and AD in Phase II, as I mentioned, with Sanofi. We have a STAT6 degrader we disclosed at our R&D Day last week, that is about to enter Phase I. We have a TYK2 degrader that we also announced last week, which is entering the clinic in the first half of next year. And then we have our oncology pipeline with exciting data that we've shared at ASH early November of last year. This year, we'll have more robust data set together with our plan for late-stage development. So lots of upcoming data readouts in both '24 and '25. So I want to take a few minutes to talk about our immunology pipeline as I mentioned -- and our strategy. As I mentioned, this is an area that we're increasing our investments. We think we're uniquely positioned to change how immunology is treated with oral small molecules. I don't need to make the case, but I will, which is the market potential for immunology are vast. It's probably the largest area. The drugs that are sold for immune inflammatory disease are marketed in immune inflammatory diseases, they cover not only traditional immunology, but also other areas like CNS, oncology and others. These have a large, again, market impact of roughly $250 billion. 75% of those drugs are injectables. So only 25% or less are oral drugs. This is what Kymera is on path to change. So if we start the slide on the left, what biologics have done is validating that there are key signaling cytokines that have transformed how we treat patients with immuno-inflammatory diseases. If you look at IL-17, IL-23, IL-4/13, these are biologics that have changed the understanding of diseases and again, patients' lives. These are obviously injected, can be inconvenient for patients and also costly to manufacture. There was a survey run by our colleagues, our industry colleagues in J&J that they asked about 500 patients, if you had an oral that would have a similar profile to an existing biologic, would you switch. And 75% of them would say -- said yes. So clearly, there is an unmet need in immunology for oral agents. What traditional small molecules haven't been able to do is they've been able to offer the convenience, but not the pharmacology of biologics. So they always have come short on providing the level of efficacy that a biologics can. We'll show an example here of a TYK2 inhibitor versus an IL-23. I can give you other example, an IL-17 oral versus an IL-17 biologics. And this is not because small molecules are not potent enough. They just don't have an ability to block the pathway at the same level. This is where oral degraders come in. We've shown you already with IRAK4. We will show you again today that we can offer the same level of pathway blockade -- saturating pathway blockade of a biologics with the flexibility of an oral molecule. This is why we believe we're poised to change how we think about immunology. So these are the 3 pathways that we'll discuss today. These are our publicly disclosed programs. We believe this is potentially -- at least we like to believe that, potentially, 1 of the best, if not the best oral immunology pipeline out there. With IRAK4, what is the value proposition? So there is plenty of validation for upstream biologics, just recently [indiscernible] disclosed IL-1 biologics activity in HS in TNF refractory patients, we've seen activity with IL-18 biologics, IL-33 biologics, IL-36 biologics. If you go after IRAK4 node, we can actually recapitulate the biology of all those cytokines in a single oral drug. So in this case, actually, we should have superior pathway efficacy that upstream biologics. You need a degrader because only degrader can saturate the pathway signaling in this particular pathway than an upstream biologics can. So a master regulator of innate immunity will tell you where we are with these programs, as I said, Phase II. STAT6, this is 1 of the most probably elegant stories of validation of a pathway that Regeneron and Sanofi have done on the IL-413 receptor, dupilumab is going to be a mega blockbuster drug. STAT6 is the selective obligate transcription factor. So we can actually translate the biology of the receptor 1:1 to the transcription factor. So by degrading STAT6 with an oral degrader, as we will show you, we can achieve dupilumab-like activity with an oral molecule. TYK2, so this is IL-12, IL-23 interferon pathways. Human genetics have told us that if you remove TYK2, you're protecting humans from a variety of immune-inflammatory diseases. Small molecule inhibitors have come short of human genetics with a degrader, you can mimic human genetics and really challenge biologics-like activity, as you see. So this slide just summarizes where we are. As I said, IRAK4 is in Phase II, STAT6 will be in the clinic in the second half of the year. TYK2 in the clinic in the first half of '25. Indications are vast. So we are in HS and AD for IRAK4, but the biology is relevant in a wide variety of diseases like RA, asthma, COPD, IPD and others. So this is a huge pipeline in a product. For STAT6, they say that the R&D they were really standing on shoulders of giants, the work that Regeneron and Sanofi have done to expand indications, has been impressive. With an oral, not only we can go after the same indications, but we can actually move beyond. So AD, asthma, COPD, EoE, PN, and then as I said, we have opportunities to go beyond that. And with TYK2, again, with the biologics-like activity as an oral drug, many indication opportunities to compete with biologics, IPD, skin inflammation, lupus and others. So I'm not going to go through each of the block here, but this just tells you for each 1 of these diseases, this is the market share of biologics approved in these indications. And as you can see with our drug, we can go in several of these potential market opportunities. So it's not a huge leap of faith to build the confidence to believe that each of these drugs could be a multibillion-dollar opportunity. So I won't have the time to go. I love to have the time, but I've been told by Eric, I only have 20-25 minutes. So I'll just give you vignettes on IRAK4 and TYK2. I spend a bit of time on STAT6 and then a final closing on the oncology program. So I've touched on a lot of IRAK4, the premise, the pathway validation and biology, the huge market opportunities, we believe more than $50 billion in market opportunities. We have demonstrated, thanks to Jared, our CMO and his team, we've demonstrated some really impeccable clinical data, deep target degradation in humans, impacting of cytokines in blood and skin of active volunteers and patients, we've shown impact on signs and symptoms of HS and AD in a small study. And now we're, again, as I said, in the Phase II study with Sanofi that we expect to complete recruitment for this year and data in the first half of '25. So extremely exciting program. Next year will be a big year for the data readouts. TYK2, again, the pathway validation is there. The target validation is there. The human genetic validation is there. So it's 1 of the most probably coherent story in immunology out there. What we're offering here is a superior agent to small molecule inhibition that can match biologic profile, thanks to our ability to replicate the loss of function human genetics, that small molecule cannot achieve. This is also a large market, as you see, $20 billion plus drugs that are approved in these indications. Again, with an oral, they can compete with biologics, we believe we can have a huge impact in those areas. And again, we are in IND-enabling studies with the plan of initiating our Phase I early next year. So I wanted to spend a bit of time on STAT6. This is a program that we're extremely excited about. This is a program that fits perfectly what Kymera is about. It's going after undrugged targets in areas that have been validated that no other modalities can do and developing profiles that are extremely compelling that really make the case for an oral degrader in immunology. So as I said, the rationale is clear. This is the selective and only transcription factor downstream on IL-4/13 biology. So if you block the pathway with dupilumab, STAT6 will not signal. If you block STAT6, the receptor will not signal. So we have a coherent one-to-one relationship with the IL-4 receptor alpha, which is the target of dupilumab. We have strong human genetics. If you have gain on function against STAT3 -- STAT6 sorry, we -- you see severe allergic diseases, atopic diseases in humans. And then as we said, the pathway validation with many opportunities that DUPIXENT has been approved or is in development age. What personally I'm very passionate about is actually reaching hundreds of millions of patients. And this is a serious statement. The fact that a biologics is an exceptionally effective drug that has limitation in terms of market access. The opportunity here is to serve children and adults around the world that suffer from Th2 inflammation, which actually is a field that only now we're starting to learn and these are only a subset of indications that we can go after. So just quickly through some data. This is the most potent oral small molecule that I've ever seen in my career. It's a double-digit picomolar degrader of STAT6, which usually you would assume it's 100 to 1,000-fold more potent than your typical small molecule. Very comprehensively, we've gone through the degradation across all the relevant cell types. I won't go through it, but all the cell types that are relevant to Th2 inflammation, again all double-digit picomolar. This is an exceptionally selective compound. We have absolute selectivity across any other protein in the protein, including all the other STATs. Now when we look at pathway inhibition, we use biomarkers that have been used to develop DUPIXENT, TARC, periostin, CD23 in B cells, and so we're showing here that we're able to block the pathway fully. And not only that, we're able to block the pathway more potently than dupilumab. So an oral molecule that is more potent than a monoclonal antibody. You see the potency double-digit picomolar dupilumab is triple to nanomolar potency. You see the curves in the bottom, just to give you a visual sense of what the numbers show. Importantly, we're able to degrade STAT6 fully with low oral doses. This is dosed once a day we've shown it in every species from rodent to nonhuman primates with low oral doses, we're able to deplete the target fully. This is an exciting slide because I would argue this is probably 1 of the most relevant translational model of Th2 inflammation. This is a house mice DICE mice model that has been developed by Regeneron to characterize Th2 inflammation in rodents. And this is a humanized mice so that dupilumab could react and interact with the receptor. Here we dosed dupilumab twice a week for 4 weeks. This is the most aggressive dosing regimen that corresponds to 300 mg every other week in humans. And we dosed our compound once a day for 31 days and in a dose-response manner. And you'll see in our slides that in IgE TARC, periostin, eosinophilia infiltrates, this if you look at the development of dupilumab, these are biomarkers that have been followed along the development path of the drug. In each 1 of these were at least as active, if not more active than dupilumab. So the potency that we saw in preclinical human cells have translated into also efficacy models. And again, it's quite rare normally to see a small molecule oral drug to be more potent, more active in efficacy model than a monoclonal antibody. So just to wrap up on what I've shown you, obviously, the pathway has been exceptionally validated. This is going to be a $20 billion plus market that I think we're poised to be the best-in-class drug in. And we've shown you, hopefully you will agree, some impressive data, and we're excited to initiate our Phase I study soon. What I will add is we've extensively looked at safety of this drug and have dosed -- dosed in exposure that were more than 40 fold the efficacy that you've seen, and we've seen no adverse events, no changes in our studies. So this is not only a super active drug, but so far exceptionally safe drug. So I'll spend 2 minutes on our oncology pipeline and some data upcoming in '24. So in oncology, our strategy is going again after undrugged targets that have not been drugged or drugged well, where we have opportunities in both liquid and solid tumors, and that's really our value proposition. So with STAT3, which is a program that we shared exciting data at ASH, we've seen preclinical species, single-agent activity in heme malignancies, and that has translated into some strong major responses in both CTCL and in Hodgkin's lymphoma that we shared at ASH. In solid tumor, we've seen robust synergistic activity in combination with PD-1. But actually, recently, we've seen preclinically some single-agent antitumor activity also in solid tumors. And so we're working to bring those type of patients that we haven't disclosed to the study to hopefully build the case of STAT3, not only as a preferred partner for a PD-1, but also as a single or a combo agent in targeted therapy. So stay tuned. We will show that this year. We've shown in the clinic from that perspective, a really strong interferon response in tumor biopsies that is coherent with the biology of PD-1 synergy. So liquid tumor, single agent activity, solid tumor, both single agent and combo activity in a wide variety of tumor types. We've shown you on this slide, I won't go into the details. So on the left, we have really robust degradation of STAT3 in blood and tumors around 90%. We've shown that we can have an interferon signature in tumor biopsies. And then we've shown robust clinical activity. And so hopefully, in 2024, we're thinking about roughly middle of the year, we'll be able to update on the Phase Ia, including our path to further development. For 253, this is another really exciting program. We have demonstrated preclinical activity in both liquid and solid tumors. We've gone into the clinic, actually a first patient that was dosed, we see a robust major response. More importantly, our thesis here is by degrading the target, we create a therapeutic index that small molecule inhibitors don't have, because we commit to apoptosis, and we can actually let healthy cells recover. And this is played out already on our first patient. We saw multi -- I think it was 6 months plus maintained response without any signs of heme toxicity, which is unheard of in this space. And so hopefully, also in 2024, we will be able to update on a broader, more robust data set and also share what is our ambition in this space, which is really building ideally a tumor-agnostic selection biomarker that will allow us to develop this across a variety of indications, both in heme and solid tumors. This is some data that we've shown, it's on our website. So I'll close here today. So as I said, we have a cash runway into the -- at least first half of '27. We have really exciting data readouts in '24 on our oncology pipeline and '25 for Phase II data with 474, Phase I data on STAT6, which we will be able to demonstrate hopefully that we can match the dupilumab activity in humans. And also in '25, we had our TYK2 degrader, which we believe in Phase I, we should be able to demonstrate our superior profile over small molecule inhibitors. So I will leave you here with our 2024 priorities. We had a press release today. All of this is also in that press release. So please take a look at that all these slides and more will be on our corporate deck on our website. Happy to take any questions.

There are already some questions submitted both in the portal and e-mailed to me, and so that must mean there must be questions in the room, but let me start off with some of these questions that have been submitted on your new oral inflamm programs. For STAT6, the question here reads, it seems like it's involved in PPAR gamma regulated gene expression. And so I guess really -- the question really speaks to your comfort with the safety profile of complete STAT6 down regulation. I guess, knockouts show some lipid accumulation or whatever, some impact on cholesterol regulation. So how do you mitigate the risk of such side effects in the clinic and yes, that's it.

Yes. So I mean, we need to look at the biology that has been understood for this target. Obviously, you'll always find some paper out there that is experimenting on the target. What we know about this biology. We know that it's the selective and obligated transcription factor for IL-4 and IL-13 biology. What we also know is that there is no biology that has been proven that targets STAT6 without going through the receptor. . So we believe based on the data we've generated and probably, it's okay for me to say that we've done more work on this target and pathway or at least in this target than anybody out there. And so we've been able to show that there is coherent biology between the receptor and the transcription factor. And if you block the receptor, you block the transcription factor. If you block the transcription factor, you block the receptor signaling. So this is what is known. What is also known that if the mass knockout are totally healthy and are fertile and viable. So this tells you if you don't have STAT6 from birth, you're protected from any kind of adverse event. What I will add is that we've done extensive safety studies. Obviously, they've been so far limited to 2 to 4 weeks, depending on the type of studies. And as I said, at doses as high as 300 mg per kg and at exposures that were well above 40-fold, the efficacious exposures, we have seen no changes, no adverse events, no clinical chemistry changes, no histopathological changes, including all the comments that you were making on any of those parameters. So we have full confidence in the data that we've generated. And obviously, we're excited to demonstrate that in the clinic soon.

Just given the central role that STAT6 has on both the IL-4 and IL-13 axis, is your expectation that perhaps there's some clinical efficacy kind of left on the table that might be addressable with near-complete STAT6 degradation?

So when we started this -- so dupilumab is an amazing drug. If you talk to physicians and patients, which we've been fortunate to being able to do. They will tell you that it's an amazingly effective drug and it's a really well-tolerated drug. When we set out to start this program, our goal was not to have to match dupilumab activity because we recognize that usually for biologics, you have a different bar. We found ourselves with data that you've seen that tells us that with 90% -- first of all, we're more potent at the molecular level, which is very unique. But also, when you go in vivo at 90% degradation, we're able to deliver the saturating pathway blockade of a monoclonal antibody. So we're going now -- we have raised our own expectations that we can match that type of activity. I think going beyond dupilumab, if you're looking at their saturating those. I mean, if you look at how it's dosed in patients, as you know, there is different paradigms depending on indications, age, et cetera, I think we will be fortunate enough to set the bar at a biologics stage for a molecule that is going to be a $20 billion drug in the next 3 years.

Yes. And just given the access constraints with biologics, right, and the preference for orals, which makes a lot of sense. I mean, -- perhaps the bar is a little bit relaxed compared to biologics. I guess, where do you think you sort of -- what kind of efficacy profile do you think needs to be achieved to be commercially competitive in this space?

I think -- I mean there's been surveys out there saying that if you have 50% the efficacy of dupilumab, you're going to have a successful drug. So I don't want to go into percentages, just putting things out there. I think we have the high bar of aligned patients to actually be treated with a safe and effective drug. I think I'm serious when I say that we have an opportunity to help children and adults that don't have access to that drug. There are children that have asthma and you have to have a number of asthma -- acute asthma episodes per year to access dupilumab. So that's what we're trying to do. We're trying to help people with a drug that is effective and safe and will change how we're thinking about Th2 inflammation.

Okay. Can you -- are you able to make the contrast between your degrader and the activity profile of Recludix's STAT6 program? And interestingly, that program is now partnered with Sanofi. I wonder whether it's also a partner of yours on 474, whether they were [indiscernible] privy to what you were doing on the STAT6 program here?

I'm not going to comment on your second question. But on the first one, and I'm actually not even going to comment on the actual company, which I don't know enough to have an opinion. I usually keep it for myself. What I will say is that we've done a tremendous amount of work on this pathway. And we will not share everything that we've done in this pathway. And we understand that if you want to have a profile of a biologics, the only way to do is by using a degrader that is being recapitulated in our own hands. And this is the reason why we have a degrader that is moving in the clinic. The bar to block this pathway fully at steady state is hard. And I think the degrader with a catalytic mechanism allows us to do that in a way that other modalities are not able to do.

Just wait for the microphone actually, 1 second.

And I was wondering because I saw you have a projection of doing like multiple sclerosis and some other tumors. So I was wondering like how to brain-blood barrier penetration for the oral degrader system and how is that affecting the treatment?

So I mean I won't comment on the actual numbers of brain penetration. I think what I would say is that as others have shown, degraders can be active in CNS indications.