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

Good afternoon, ladies and gentlemen, and welcome to the 45th Annual Goldman Sachs Healthcare Conference here in Miami. Pleased to present to you, Kymera Therapeutics. On stage with me is Nello Mainolfi, President and CEO.

Thank you. Thanks for the invite.

Absolutely. Glad to have you here. I think to kind of level set and start the conversation, if we could start by understanding the targeted protein degradation space a little bit more. Could you give us an overview of your technology and approach and how protein degraders differ from more perhaps conventional approaches?

Yes. So great question. So first, just to also level set. So Kymera, obviously is a company that has been working in protein degradation for the past 8 years. Their focus is really use this novel potentially transformative technology to change treatment paradigms across different disease types. And what does protein degradation do, how can this technology unlock value, it's really the coming together of two unique opportunities. One, the power of genetic-like knockdown, with the simplicity and ease of development of small molecules. So the technology is at the high level, quite simple, you use heterobifunctional molecule or bispecific molecules. They're able to bind a protein that you want to degrade, that you want to remove a disease-causing protein. And at the same time, an E3 ligase, which is a protein part of the cellular machinery that is responsible for eliminating bad protein, the ubiquitin proteasome system. So by binding at the same time to a target product and this E3 ligase, we're able to bring disease-causing protein to proteasomal degradation and elimination. So for the first time, actually ever, you can now target remove a disease-causing protein from its site of action with a small molecule.

Yes. That was great. And could you speak a little bit more to how your approach to target selection works, especially given the fact that you've had kind of a shift in terms of the focus strategically for the company, moving from oncology versus now the new prioritization of INI more broadly?

Well, our strategy has actually been consistent with identifying targets that have not been drugged or drugged well before within pathways that have been highly validated ideally with the human genetic data for that particular target where protein degradation is the only our best solution to target that particular both disease pathway and target. And I think what our focus has been and will continue to be even more in targets that can unlock the large patient populations. And with that, obviously, access large commercial opportunities. I mean what we've discussed in January, our enhanced focus in immunology, but I will also remind everybody our first program was a program in immunology with IRAK4, a program we brought to the clinic in 2020 and a program from which we've learned a tremendous amount of knowledge with regards to how to best design a degrader for immunology, how to develop it, how to make sure that we have predictable PK/PD safety and activity. And from that program, we were inspired by the fact that you can now, if you select the right path and the right target, build degraders that can match biologics activity. And that's really our enhanced focus in immunology being driven by the concept of biologics like with a simple oral drug. I would say that as part of our strategy, we've been also in pathways that have relevance in oncology, and that is still an area that we're generating exciting data. We had data at ASCO a couple of weeks ago, we had data at EHA this weekend and continues to be an area where we believe we can demonstrate the power of the technology and also the impact on patients.

Digging a little bit more into specific assets. Let's shift gears a little bit towards KT-474, your IRAK4. Great segue there. First, if you could kind of walk us through your clinical proof-of-concept data that you saw in the Phase I, help put the data in context relative to the standard of care?

Yes. So I will just go back quickly. So why is IRAK4 degradation both an interesting targets and the right technology. So IRAK4 interesting target and degradation the right technology. So the L1 TLR pathway in which IRAK4 is a central node has been extensively validated in across a variety of immunoinflammatory diseases, meaning that drugs that target upstream cytokines like IL-1, alpha beta 183336. So monoclonal antibodies that target those cytokines have shown activity in this disease is HS, AD, RA, asthma, et cetera. So the Holy Grail in that pathway has always been the intracellular node that would allow not only to have an oral drug, but also a drug that will have the theoretical combined activity of the upstream biologics. And that's really what an RF4 degrader can do that by removing the protein altogether, both the kinase scaffolding function, we are able to block the pathway fully and actually technically being able to develop an asset that has a depth of clinical activity that is expected to be superior at the upstream biologic -- individual biologics. So the data we've shown, sorry for the long preamble, the data that we've shown in close to 200 patients worth of data between healthy volunteers and HS/AD patients that KT-474 is a very active degrader. It degrades the protein all the way through to complete the removal of IRAK4 in blood of healthy volunteers as well as patients with HS/AD. We also have robust degradation in the skin. We can impact cytokines and chemokines that are downstream of IRAK4 in both healthy volunteers and patients in blood and skin and all this characterization has also led to -- after a short study, 28-day study has led to patient impact in both HS/AD patients in both symptoms and scores of HS/AD. We have data after only 28 days of dosing that we believe are compelling although early and not dissimilar from approved agents in those diseases. Now I think the goal of our ongoing Phase II studies is obviously to dose longer and characterize clearly the clinical activity of this drug.

And how are you and your partner, Sanofi, thinking about how and where this oral agent could perhaps fit in the treatment algorithm? And how is that influencing your later-stage trial design strategy?

Yes. So first, I should say that we have been obviously running this program from inception all the way through end of Phase I. We partnered with Sanofi just before we entered the clinic. And now the program is in their hands and they are responsible for execution of Phase II and beyond. So there is only so much I can speak because I cannot speak for Sanofi. But what I can say, the opportunity with RF4 is to provide active and well-tolerated oral daily drugs that could be potentially positioned as early line therapy for a broad set of patients before potentially patients have to then eventually move into a more expensive biologics. So I believe there is a unique opportunity. The RF4 mechanism in HS and AD but in many other diseases where this pathway is shown to be relevant, we can imagine given the data that is out there that this pathway could be relevant in asthma and COPD, in IBD and lupus. So the opportunities are vast. Obviously, we're taking this in a stepwise fashion and the first two diseases that we're going after as collaboration are HS and AD.

For dosing, you've talked about responses that could deepen over time with chronic dosing. What have you learned about the kinetics of your drug so far? What can you expect based on the Phase I experience? And how do these compare to the standard of care of the drugs in development?

Yes. So there is 2 aspects to the question. One, is the kinetics of degradation and then the other one is kinetics of response, and I just want to separate the two. Kinetics of degradation, it takes us about 7 days to reach steady state in terms of degradation in blood, which means that we reach maximal and then maintained level of degradation by day 7, which is obviously the nice thing about small molecule oral drugs that you can have sites time of action that could be quite fast. In terms of what is the kinetics of response is something that we yet don't know, right? We've only run a 28-day study where we've seen already, we believe, encouraging and robust activity. Now again, the study was small and without placebo. So I encourage everybody not to actually read the exact numbers. But I think the -- if you look at the trends and the totality of the data, you definitely see in effect that will be quite unlikely to be driven by placebo. So now what we're doing in this 6-week study is to establish what is the kinetic of disease impact. We know that at 28 day of doing a small study, we see an effect. And I think it would be exciting to see what we see after much more prolonged effect and what is the nadir of maximal effect. I think it would be interesting to see and we'll continue to monitor this. There will be a 16-week study. They're probably -- as we go later in development, there will be opportunity to follow patients well beyond 16 weeks. So I think time will tell us where is the maximal patient benefit.

Timing, I am going to slightly push my luck just a little bit here. But you have mentioned that data from both studies will be coming likely in H1 '25, atopic derm in January and HS estimated to complete in February of 2025. Could these data come potentially at the same time, help us perhaps understand what we'll learn about the results. Would you expect that you and Sanofi will be able to send out a press release with top line results with details at a specific medical meeting? What's kind of the goal here?

Yes. So there is a lot that I cannot say, especially because it's still early with regards to the end day of the completion of the program. But -- so first, what I would say is, in terms of timing, we've said publicly both Sanofi and Kymera independently that data are expected in the first half of '25 and obviously, that still continues to be the guidance. So we're still on track for that. With regards to how the data will be communicated, it's too early for me to comment on. I assume that there will be a combination of press releases and presentation and medical meetings, but it's early to say which meetings and when exactly.

Right. Makes sense. I guess, moving a little bit further into your pipeline. So you have KT-621, which is your STAT6 degrader. Could you give us an overview of this program, which is set to enter the clinic second half of this year, how does the preclinical data in mice and nonhuman primates look from a PK and safety perspective? What are perhaps the rate limiting steps to getting this into patients?

Yes. So first, I would say I think there's -- I can't think of a single program where you have an ability to develop an oral drug that can mimic biologically and hopefully, clinically, the effect of an upstream monoclonal antibody. I don't believe that there's been a case of a target that is such -- so well positioned to create value for patients and obviously for Kymera in the space in the past 20, 30 years. And the beauty is that STAT6 is the selective transcription factor for IL-4 receptor alpha, which means that when IL-4 receptor alpha is activated, actually STAT6 is recruited to the receptor is phosphorylated and goes into the nucleus. So there is a very linear relationship between the two, which means that if we can block STAT6 and degrade STAT6, we should be able to have a dupi-like effect. And that's really the premise and the excitement around the program. There is about 150 million patients suffering from Th2 inflammation. And a small fraction of those patients are served by existing biologics. What we want to do at Kymera is not so much just to have a neural molecule that has biologics like activity. But actually, our ambition is to change how patients are treated. If you're able to develop a drug that can be given orally to every patient without the complexity of an injectable biologics, you should be able to bring this drug at the forefront of treatment paradigm across a series of indications that Th2 inflammation is relevant in going from AD, atopic derm to asthma to COPD to chronic rhinosinusitis to EOE. So the opportunity is vast. What we've shown preclinically in both cell systems and preclinical studies is first, that this is one of the few ever characterized small molecule drug that is actually more potent than an upstream biologics. So we're able to block the pathway in sales with picomolar concentrations, of KT-621. We've shown in preclinical studies, for example, in an asthma model that we presented at ATS a few weeks ago that we're able to impact downstream Th2 biomarkers, equally sometimes either more potently than dupilumab. And also, we can have an impact on disease as we've seen in the lungs of this lineage of these mice. We've also shown that with oral low doses, we're able to degrade the target in a dose-responsive manner and completely at the higher doses in the 3 to 10 mg per kg in nonhuman primate or dogs, we're able to completely deplete STAT6. We've also run extensive preclinical safety studies. And we haven't seen any adverse events in those studies, even at very high concentrations. With regards to where we are with the program, we are in -- we've been saying from the beginning of the year that we are in IND-enabling studies, and we haven't updated on what's going on in the IND-enabling studies. We have a custom of just disclosing when the IND is being cleared and actually more likely when with those our first subjects in Phase I. And I think at that time, we can also look back and talk about qualitatively about the IND campaign.

KT-294, your TYK2 degrader, which is set to enter the clinic in the first half of 2025. Can we talk about this drug's profile versus approved duterated TYK2 inhibitor deucravacitinib or other TYK2 inhibitors in development, including from Takeda or other private companies like Aluma Therapeutics or Sudo Biosciences?

Sure. So TYK2 is another amazing target if we think about human genetics and what companies have been able to do. And obviously, lots of credit goes to BMS for being the first company to bring a molecule of genetics and drug development. So I actually mentioned genetics twice, I'm going to mention one more time. I think if you look at human genetics, you'll see that there are subjects that lack -- that have a complete loss of function of TYK2 that has a very unique phenotype. They basically have nonfunctioning IL-23 L12 and type 1 interferon. If you look at the kinase that genetics subject only have 1 of those 3 pathways, the -- which is only the IL-23. So the opportunity we have with the degrader of TYK2 is our TPP is really to deeply TYK2 from the immune system of our patients. And we believe that if we do that, we should be able to have a biologics-like effect. So our goal, to be honest, is not just to bring another TYK2 agent to the clinic or eventually to the market. I don't believe personally that we need another TYK2 agent. Our goal is to bring a TYK2 degrader that will have a biologic like stellar like activity. If we're not able to show that in clinical development, we have no interest in actually spending time and resources for a marginal improvement over the existing growing landscape.

No, makes complete sense. Shifting a little bit more to your oncology assets, KT-333, your STAT3 degrader. Where will you present data in a poster for your STAT3 degrader KT-333 and EHA this week. Can you characterize the clinical data that you've shown so far? And what we should expect at the EHA conference versus what was in the abstract?

Yes. So this is another program where what's transpiring in the clinical investigation is exactly what we've seen preclinically. This is one of the things that personally I'm most proud of at Kymera. Every program that we've taken in the clinic, and it's been four so far, soon to be five, there has been a high fidelity of translation between what we've seen preclinically and what we see clinically, which obviously should bode well for the two immunology programs we just talked about. Obviously, if we translate what we've seen preclinically, these are going to be huge drugs. So going back to STAT3, what we've seen preclinically, really robust activity in some heme subsets, especially T-cell lymphoma leukemia, and what we've seen preclinically that in solid tumor, it really requires a combination approach. So then what we see now in the clinic, we've seen robust responses in CTCL and we've seen a very exciting emerging signal in Hodgkin's lymphoma. As of the abstract, we saw 2 out of 2 complete responses. Both patients actually ended up going to potentially curative stem cell transplant. So we are definitely -- and these are both patients that have gone through first line with ADCETRIS, ADC, second-line PD-1 refractory to both, Kymera STAT3 degrader and complete response. So this is a drug that is -- that has the potential to change treatment paradigm in that particular subset. And so this is an area that we will be focusing probably at EHA. I won't go into the numbers. What I will say is that we expect by the end of the year to give an update. There will be comprehensive of escalation as well as, let's call it, last cohort -- small expansion before we go into a Phase Ib study. And I think, again, having an exceptionally well-tolerated drug in oncology, where the most common adverse event is mucositis grade 1, too. So relatively benign, really bodes well for the opportunity that this drug will have in these potentially heme opportunities as well as combo in solid tumors if we end up exploring that clinically.

Looking broader to the competitive landscape, can you talk about the challenges the field has faced when targeting STAT3 transcription factor and why you believe degradation presents an advantage?

So the STAT3 -- it's a great question. STAT3 is a transcription factor. STAT3 is difficult to inhibit and also a non-asset to domain activity. And so we believe that it's critical to remove STAT3 to evaluate and ask the question of the full clinical activity on STAT3. So generally, it's been difficult to inhibit because it doesn't really have a catalytic site. And we also believe that in order to maximize the biology of the target, you have to degrade it. And so that's why we built this program. I would say that for every agent that we've seen targeting STAT3 in the past, I believe we have the most specific and also cell type agnostic degrader. And we had a great presentation. I encourage everybody to check it out. ASCR actually on STAT3 that talked about why we ended up choosing VHL as E3 ligase for STAT3 versus other E3 ligases. And that was driven purely by biology. We wanted to make sure that we had maximal degradation across all the type of tumor that we were interested in. And we saw that there was a discrepancy with cereblon but there was high fidelity with VHL. So it just speaks to the amount of work that has gone into building a degrader for STAT3. And we're excited about what we've shown so far in helping patients actually live longer.

Saving the best for last, MDM2 degrader KT-253, you recently presented initial proof-of-concept data at ASCO for this asset. Can you give us key takes from dose escalation data, where you saw clinical activity, including 2 partial responses and 1 complete response at dose levels 1 and 2, respectively.

Yes. So again, I don't want to repeat myself. This is another program that when we talked to our stakeholders in the past 2 years and our thesis was if you degrade MDM2, at least we had shown it preclinically, and you dose infrequently, you'll be able to maximize antitumor effect in highly sensitive tumor types, and you're able to mostly overcome the dose-limiting toxicity -- toxicities that have plagued the MDM2 space, namely thrombocytopenia, neutropenia, in many cases, diarrhea. And so our point has always been we believe that by degrading MDM2, we commit tumor cells, and we've shown it with data, tumor cells to an apoptotic response. This apoptotic response will not be present in healthy cells. The small molecules cannot do that because with the degrader we overcome the feedback loop, and that's the therapeutic index. And I think the most satisfying thing is when these thesis play out in the clinic. And I think the main take home for me at ASCO was actually this was the fact that we were able to show antitumor responses, as you mentioned in a few patients, even at the early doses, a complete absence of the typical neutropenia and thrombocytopenia. That has never been shown in the MDM2 space. I believe that this is still underappreciated for that program. And hopefully, there will be more attention to that program going forward. And I think what's ahead of us for that program is, okay, now that we've shown something that, to be honest, probably if you believe was possible. where are we going to develop this drug in? So it's clear that we have an early exciting signal in AML. So AML is a clear opportunity. We've shown preclinically actually even in combination with venetoclax, we see some amazing activity. So there is a clear path, both the single agent and combo in AML. And then in solid tumors, where the question is which tumor types are this highly sensitive where you can create this therapeutic index of activity in the absence of dose-limiting toxicity. And so we will give an update in the second half of the year on the work that we've done in terms of selecting the right patients for solid tumors. And that will be then followed by a clinical trial update later still later in the year.

Perfect. Zooming out a little bit more to the strategy and overall business development aspects of Kymera, what are your current partnering plans your non-partnered assets in INI, STAT6, TYK2, et cetera. Any color here?

No partnering plan. Easy.

Short and sweet. So for particularly oncology, where you've shown initial clinical data and partnerships are key to perhaps further developments, how do you think about priorities moving forward in terms of investment between your money programs?

Yes. I mean what I said I meant maybe I'll add a bit more color on the immunology. So we believe we have a very unique view on target selection in protein degradation. If I had to say something, I believe our targets have been some of the probably more sophisticatedly chosen targets in the space. And I think it's nice to see there are other companies -- large companies have followed us. If you look at other programs against Direct4, you looked at other programs against STAT6, there are other companies who are clearly following what we've been doing in the space. And I think when you -- especially when you identify these unique opportunities of matching the power of the technology with the biology and the potential clinical impact of the target, this is how big companies are built. And given that we hope and plan to be a global commercial stage biopharma company, we believe these are programs that will enable us to grow into that type of company. It's also true that it's difficult to -- given that we have an exceptionally productive discovery engine, and you'll hear more about our new program probably next year, it's going to be difficult for us to execute all the way through in each 1 of our assets. So I would say that for now, immunology, it's something that we're not even considering partnering. We want to create value. And in some cases, we may never partner if I had my choice. And I think there are other areas where it would be synergistic, whether there is a company that has a combo agent for maybe 1 of our oncology assets where you see like you're really creating synergistic relationships or whether it's an area where there is a synergy with a commercial footprint in that area that can maximize value and make NPV much more positive. Those are things that we would be exploring. Again -- but from the point of view of what's best for the company, what's best for patients.

You are well capitalized with $745 million approximately.

That's what I hear. Yes.

Last time I checked. With runway into the first half, what does that runway entail? How can we think about bringing new candidates into your pipeline, including potentially a molecular glue asset?

Yes. So the -- so we're very well capitalized. We -- all the programs and plans that we've talked about on our pipeline are funded through the time horizons that we discussed. We will have so many inflection points between now and then. That will be even difficult for me to call them out individually, but obviously, Phase I, Phase II and beyond for many of our programs. And including in that, there is also supporting the emerging clinical pipeline. So I think probably next -- by next -- this time next year, we'll probably talking about a new transcription factor degrader that we're building at Kymera in immunology. This is another program we're very excited about. We have molecular glue efforts within the company. Actually, there is a quite substantial effort in the space. And the answer -- the reason is very simple. I don't divide molecular glues and degraders by different properties. I think if you've been in this space long enough and you know what you're doing, you should be able to make heterobifunctional degraders, as well-behaved oral molecule. For me, it's more about what is the technology need, what is the target need, what is the technology bring into the table. So we've learned we're not the only ones that some targets are not ligandable by -- in a specific binding event by small molecules. And so for those targets, we believe that protein-protein interaction driven pharmacology as molecular glues, is the answer to that question. So that's where we're spending quite a bit of time. And hopefully, again, it might be that next year, we'll talk about also molecular glue program.

I'm going to squeeze 1 last question in here. Any color for the balance of the year on what your capital allocation priorities will be?

Well, I think capital allocation is really our job and it has to be based on the priorities of the company. And the probability of creating value. So I think it is -- given that actually 474 is a program where we're not actually investing money given that Sanofi is running the program and spending the money. Actually, we have milestones that have come in late last year. Clearly, advancing STAT6 and TYK2 into clinical development is a high priority, continuing to support the oncology pipeline in the clinic to, again, build value there is another important priority, and then making sure that any program that we bring into the clinic as a large clinical and commercial opportunities that make the investment thesis very simple. And we don't want to have to spend a lot of time making a decision on a program. Usually, that means that there are too many questions on that program and not enough answers.

Well, on that note, thank you so much. My name is [ Kris ] [indiscernible], I'm here with the Goldman team. Welcome to Miami. Have a wonderful rest of your day, everyone.

Now we just need the rain to stop.

I know. He would hope.

Thank you.

Thank you.