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

Good morning, everybody. Welcome. I'm Eric Joseph, senior biotech analyst with JPMorgan. And our next presenting company is Kymera Therapeutics. Presenting on behalf of the company is Founder and CEO, Nello Mainolfi. After his presentation, there will be a Q&A session. So if you want to ask a question, we'll bring a mic around to you. And for folks tuning in via the webcast, feel free to submit questions via the portal. All right. Nello, thank you.

All right. Thanks, Eric, for the invitation another year. I think we're in the same room last year, too. Thanks, everybody, for joining us today. First, probably happy New Year, everybody. So it's exciting for me today to focus on a couple of important points. One, I was -- I want to share with you all an update on where we are with Kymera, where we are with our strategy, our focus, our vision. And then spend some time on what we're planning to do in 2025. As hopefully many of you have seen our press release this morning, it's a very busy 2025. So it's an opportunity to provide a bit more color, a bit more context and then answer. I'm sure, great questions that Eric is thinking about right now. So Kymera is a science-first clinical stage company. What I believe it to be really a best-in-industry oral immunology pipeline. And how are we doing this? We believe that combining the disrupted potential of targeted protein degradation with the right target. We can deliver oral therapies with biologics-like profile that we believe will disrupt health care. And given that right now, we're focused in immunology, we believe we have an opportunity to completely disrupt immunology treatment paradigms. How do we do this? I think we stand on key pillars that I'll touch upon on the next slide, but some key areas that Kymera, I believe it's really unique on. Obviously, we're a leader in the protein degradation space. We have built, as you've seen in a few slides, some really excellent capabilities to identify small molecule ligands to difficult-to-drug targets. And with that, a really unique target selection strategy. And many of you know our targets, we'll disclose some new targets as well. I think we continue to be at the forefront of that space. So as I mentioned, I believe Kymera stands in 3 key pillars. One is, I would say, a clear vision, strong execution and continued impact. On our vision, if you've known us for a while or for a little, hopefully, it's clear that the whole company, and this is not just me or a few executives in this room, the whole company is energized by the desire and the ambition to change lives of patients around the world with our innovative medicines. And as we do that, continue to build eventually a global commercial-stage company. Right now, we're focused on building a lot of development capabilities on the existing ones to prosecute some of the Phase II and Phase III studies that we've started to discuss that are actually coming up as early as this year. We've been always well capitalized, so fortunate to have investors that have continued to believe in our vision. We've raised $1.7 billion to date. Likely, we still have about $850 million as of December 31, which will allow us to get through the middle of 2027, but more importantly, through actually several Phase II data readouts across our pipeline. So lots of value inflection points in '25, in '26, in '27. Execution, this is something I'm extremely proud of. We have delivered 5 new molecules into the clinic in the past 4 years since 2020. And we are on path to deliver a total of 10 by 2026. I think this is the level of execution that is -- I expect it to be really up there. Impact, we've dosed more than, I think, much more than 300 between healthy volunteer and patients, something I'm proud of. We've helped patients with many diseases from HS to AD to lymphomas and other oncology indications over the years. More importantly, for each one of our programs, we've been able to show -- demonstrate the desired profile. So always show that we can saturate target degradation more than 90% with the desired safety and efficacy profile. And that is -- I think it's quite a compelling statement when you think this is still a relatively new modality, and we a relatively early company. So I'm going to do a crash course on targeted protein degradation in one slide. I know many of you know, I'm sure Eric can actually walk people through this slide. So the key opportunity with TPD is the ability to actually complement many of the technologies that have been developed over the years and provide a really differentiated product. So -- and hope to deliver on the promise of the so-called genomic revolution. So all the technologies that we've been developing in the past 10, 15, 20 years, have advanced our ability to deliver innovative medicines at scale. But the reality is that the undrugged or poorly drugged proteom is still there. And it still need solutions for. And actually, the main reason is, even with highly impactful technologies like oligo-based therapeutics, you actually have a huge limitation with delivery, especially and being tissue agnostic. The potential of TPD is that you can use a small molecule. And then a small molecule binding event to a disease causing protein, and then you can deliver a genetic-like knockdown with the flexibility and convenience of an oral small molecule. So that's really the value proposition. As with any technology out there, only as good as the targets that you choose, and we have taken the approach of target selection being front and center. So on the previous slide, I talked a lot about our mission to change immunology with oral small molecules that would have biologics-like efficacy. And why? So why immunology? So immunology as everybody knows, at least everybody in health care is a very large market. I think what probably is can be missed. It's a largely underserved market. So our team put together numbers for the top 10 indications in immunology. They're written very little in the bottom. But the ones that you would expect, AD asthma, COPD, HS, psoriasis, all the common or relatively common immune inflammatory diseases. So if you look at all diagnosed patients in the major 7 markets, these are 160 million patients. The patients that access advanced systemic therapy are about 5 million. So it's about 3% of total patient number access highly effective advanced systemic therapy. That is a $100 billion market. So 2/3 of those therapies are injectable biologics. So while obviously, I think everybody is trying to fight over the 3%. I think the biggest opportunity here is to develop drugs that will increase dramatically access to systemic advanced therapy. And we believe that the best way to do it is to advance degraders, oral degraders that have biologics-like efficacy. I apologize if something of lucid my computer with slides, but at least you look -- they look good on that screen. So no apologies needed. I guess to myself. So again, the bottom line is if you have an oral drug that can really replicate the profile of biologics. You should be able to provide advanced systemic therapies to many more patients. And so not only you can displace or fight or compete with biologics in the 3%, but it's really to expand access to also the 97% that are receiving either suboptimal therapies or no therapies. And just to be clear, these are both mild, moderate and severe patients. So the number that we put there is just a question mark, $500 billion market. I'm 100% sure the number is wrong, but it gives you an idea of really a huge untapped market. So let's go more into the technical part of this. Why do we believe that when you look at the overall profile, an oral degrader can be superior to both established injectable biologics and traditional small molecules. So injectable biologics have transformed immunology. Actually, they've transformed many other disease areas. They validated targets and they've helped patients. If you think about psoriasis 15 years ago was treated with almost chemotherapy, right? Now it's treated with highly effective therapies. That's thanks to a lot of the work that has been done in that space. But there's obvious drawbacks, expensive, challenging to prescribe and reimbursed in many areas of the U.S. and the rest of the world. They have, obviously, issues with immunogenicity. They have challenges with storage. And importantly, patient quality of life is critical, right? So inconvenient and painful route of administration for many patients, especially children. So surveys have been done in this space. I don't want to keep repeating the same things. But survey that actually some of our colleagues in J&J did a couple of years ago, you asked hundreds of patients on biologics, would you switch to an oral with the same profile. 75% of them said yes. So clearly, there is a huge unmet need in that space. Why small molecules have failed to deliver? There is lots of small molecules in pathways that have been validated by biologics that have come short on efficacy. That's a fact. There is a picture on our slide that really speaks loudly to -- if you look at PASI 90 psoriasis and you look at TYK2 versus IL-23, there is a big delta. I think there is -- part of the reason is some targets do not have the biological power. But I think a lot of the reasons comes down to the fact that small molecule occupancy-based pharmacology rely on PK/PD relationship. When you have a peak to trough difference in a small molecule inhibitor, you're not going to be able to complete saturate that pathway. The degrader we've shown extensively they can reach full degradation in steady state and completely block the pathway. So that's where the technical opportunity is to have degraders that have the ability through pathway inhibition through a catalytic mechanism to decouple PK/PD and have complete pathway blockade and reach biologics-like saturation of pathway, again, with an oral profile.

Can you reference the slide when you moved to new one because it doesn't change on the web automatically.

Okay. Thank you. So we're on Slide 7 for people on the webcast. I was asked to reference slides, by the way. Going to Slide 8. So I'm going to spend the next 2 slides to talk about key areas that we believe Kymera is really unique in. And I think when I say unique, I'm not referring to just protein degradation space, but I'm talking to biopharma in general. I think we have a very unique target selection strategy. Soon, we'll disclose another program that will fit nicely in this slide. So our key philosophies really undrugged or poorly drug targets in pathways that have strong genetic validation. Ideally, the target of human genetics data with pathway to impact millions of patients. So if you look at IRAK4, TYK2, these are 2 targets that have been drugged in small molecules, we believe not fully, where a degrader can provide a biological and, we believe, a clinical superiority. STAT6 is an undrugged transcription factor that has not been drugged. And our company, Kymera is the first company to go after this target with an oral degrader. I think one other thing that we're very proud of at Kymera, although we might have some mixed feelings is the fact that our target selection has also inspired many companies to follow our footsteps. So you see targets that we put on the map first and now we have several companies pursuing. So it shows you the leadership in the space as well. Another point that I actually don't make enough is the capabilities that we built at Kymera. If I had to put this slide up 5 years ago, I wouldn't be able to stand behind it with the same level of credibility. This is something that we've grown over the years. And I believe having been in small and large companies in my career, we really have industry-leading capabilities. And I would probably point to 3 key without hopefully upsetting the rest of the team that is working on many other things. But one is our ability to identify small molecule ligands to targets that have not been drugged before. Now, we've shown it over and over and over again with all these transcription factors and undrugged proteins that we're going after. And this has led to more than 8 development candidates in the past few years, more than 4 targeting undrugged transcription factors. You've seen some of them, you haven't seen all of them yet. I think capabilities to understand the ternary complex through Cryo-EM, this is actually a very expensive capabilities that allows us to do exceptional -- actually allows us to have exceptional understanding of how these molecules interact in 3D and how to optimize and refine their properties. And then we have a world-class team of which I'm an honoree member of being a chemist by training that has been able to deliver molecules with picomolar potency, good bioavailability, even distribution across all relevant tissues. And this has translated in really amazing translation in all the programs so far in terms of PK/PD, safety and efficacy. So again, in the first few slides, really to tell you a bit more about Kymera, our strategy, our vision, our capabilities. Now we're going to talk about our pipeline and programs. Starting from our pipeline. So we've divided in the wholly owned programs versus the partner program. So starting from top. So obviously, STAT6 is I said the last year that this was going to be one of the most exciting programs in the industry. And I think everything that has happened in the past 12 months continues to substantiate that statement. We are, as you know, in Phase I, we'll talk all about where that program is going. The really opportunity there is dupilumab-like profile in an oral pill. TYK2 is a program, KT-295, this is on Slide 10. 295, we will start Phase I in the second quarter of the year. And this is really, for the first time, replicating the loss of function profile of TYK2, and we believe that will lead to biologics like efficacy. We're very excited about the new program that we're going to be disclosing in a company-sponsored event in the first half of '25. This is yet another undrugged transcription factor that is genetically validated for which we believe we have the first oral drug that is moving into the clinic. We're around 12 months within a year away from being in the clinic. And then just to remind you, with IRAK4, this is a program, again, that we started at Kymera. We took it through Phase I. Our partner Sanofi is doing a great job advancing the program in 2 parallel Phase IIb studies in HS and in AD. Again, great opportunity to do better than the upstream biologics that have already shown exciting data in many indications. So this speaks to each individual pathway, a bit about the point that I made before. So I'm not going to go necessarily through Slide 11, each individual market opportunities. But I think oral degraders in immunology have the opportunity to disrupt commercially that market. And we can use STAT6 again, an example, if you look at -- so Th2 diseases in the 7 major markets, we're talking about more than 100 million patients. And right now, only 1% have access to systemic advanced therapy, again, mostly biologics, that's more than a $10 billion market. So again, if you think about mild, moderate to severe, split 50-50, there is tens, if not hundreds of billions of dollars of potential commercial value for a program that can expand access dramatically. TYK2 is a much more mature market. If you look at indications on the slide, psoriasis, SLE, UC, et cetera, still 11% penetration, if you, again, think about diagnosed patients in the 7 major markets. In IRAK4, we have an ambitious plan here. This is just to showcase. I'm not saying that Sanofi is going to develop in all these indications around the slide, but these are indications that mechanistically could be accessed by an IRAK4 degrader. Again, you can see that 3% is worth $55 billion. So again, the point is the same as I made in the first slide. This is just with more accuracy for each program. The opportunities are huge if you're able to have a drug that will expand dramatically the number of patients that can be treated. So in the next few slides, I'm going to give some -- so Slide 12, vignettes on TYK2, vignette on IRAK4 and then we'll spend a bit more time on STAT6 and then we'll wrap up. We're doing great on time, I think. So TYK2, just a bit of history. This is one of the most well-validated target in terms of human genetics. There is obviously a validation of TYK2 small molecule inhibitors and upstream biologics. This is a scaffolding kinase that has not been drugged fully. If you look on the top right of that slide, you see that the loss of function profile is very different than what can be achieved, for example, with the kinase that profile. So clearly, the opportunity to disrupt IL-23 type 1 interferon IL-12 while sparing IL-10 is, we believe, highly differentiated. And how we're going to do this by having a highly specific degrader, the 295 that you see in the bottom of the slide, that is able to completely degrade TYK2 if needed. We believe this is going to be highly differentiated. So it's in IND-enabling studies with Phase I start in the second quarter of '25 and data towards year-end. IRAK4 obviously is a much more mature target. So it doesn't need a huge amount of introduction. But again, also here, pathway validated, we have exciting data actually on this path with the IL-1 alpha beta NHS, in Phase III now IL-33 in COPD and asthma, IL-1 and IL-36 is smaller indications. And think about it if you have an asset that is intracellular oral drug that should be able to block all of those cytokines with a single agent, you expect to see some really, really exciting efficacy. So we've shown that inhibitors have now been demonstrated to be insufficient, degrader can really -- it's the only modality to block the pathway fully. We've shown in Phase I that you can degrade the target, more than 95% in healthy volunteers, and this results in patients in some early but really exciting impact in both HS and AD as measured by either HiSCR, EASI score, as we've disclosed in the past. So this trial, again, as I've mentioned earlier, is in the Phase II study, Phase IIb studies in HS, hidradenitis suppurativa, in AD, atopic dermatitis with Sanofi being in charge of those studies with data in '26. So let's move on to STAT6. Again, as I mentioned earlier, this is, for us, clearly one of the most exciting programs in the industry. We have the first agent that has moved into Phase I in October of 2024. We'll do a really relatively quick recap of what we've generated so far for this program and then talk about the future. So this is one of the really rare examples of a transcription factor that has a one-to-one relationship with an upstream receptor, meaning that everything that signaled through the receptor has to signal through STAT6. And in fact, what happens once you activate IL-4 receptors, STAT6 is recruited to the receptor is phosphorylated and then translocated into the nucleus. So it's an opportunity to target an intracellular target with an oral drug and replicate, we believe what has been accomplished with, for example, an IL-4 receptor alpha biologics. Besides the pharmacology that obviously we've built preclinically. We are obviously benefiting from extremely strong human genetics data. We have humans that have gained a function of STAT6. This leads to severe allergic diseases as you'd expect. We also have human loss of function that have been identified relatively recently that are healthy and have also mechanistic -- that mechanistically fall in line with Th2 disease protection. Obviously, historically, this is a difficult-to-drug targets. We've done plenty of work on this target. We've demonstrated at some point, we published the data that if you want to replicate dupilumab-like pathway saturation with a once-a-day oral drug, you need a degrader. That is the only way to mimic dupi-like effect. No other modalities, including small -- traditional small molecules can reach the level of saturation that we can with the degrader with a single daily oral drug. So a few highlights of the data. 621 is one of the most selective and potent compounds we've made in the history of the company. As you see on Slide 16, we are highly selective for STAT6. We do not degrade any other target. I would say that we only bind to STAT6. We do not bind to any other targets. So we have extreme specificity. This is a picomolar degrader. We degrade old relevant cell lines and cell types, human cell types, extensively T-cell monocytes, B-cells, keratinocytes, all the ones that are relevant to Th2 inflammation. Importantly, when you look at IL-413 signaling, we can block the pathway in human cells, equally, if not more potently. In this slide, we're showing you a couple of examples where we're even more potent than monoclonal antibody. This actually translates well preclinically in models. This is a house that might asthma models. This is highly relevant to Th2 inflammation. We dose -- we actually -- mice are exposed to house dust mite. They actually generate Th2 inflammatory response. And with the dose that reaches about 90% plus degradation, we're able to impact a plethora of Th2 biomarkers. In this slide, we're only showing TARC. But if you look on our website, you'll see probably 10 or 12 different biomarkers as well as impact on actually a disease score like goblet cell metaplasia. Importantly, this drug, 621 is able to degrade the target in a dose response fully and in all the relevant tissues in nonhuman primates and other species preclinically. And importantly, all the campaigns that we run in IND-enabling studies, we did not see any adverse events, which give us the confidence and the excitement to go into humans with an excellent safety and efficacy profile. So I don't want to rediscuss on Slide 20, the commercial opportunity, but I want to actually frame our strategy for the program. So again, for a disease that has 100 million-plus patients around the world, again, as you can see from the slide, really almost evenly split between mild and moderate to severe. Our overall action strategy is to develop a drug that will be able to serve all of these patients. So again, not only, let's say, compete with the existing biologics in the moderate-to-severe market. And actually, the most important thing there is to expand penetration into those moderate to severe patients. But actually, the opportunity is also to do it in mild patients. And we're prepared and ready to even use multiple molecules, if needed, to take over this market and more importantly, to continue to be the leader in STAT6 biology and drug development. And just to give you an example of why -- what we mean when we say disrupt treatment paradigms in Th2 diseases, for example. So what we did on this slide is really show with these arrows -- what is the series of medicines that patients with, for example, atopic derm or asthma have to go through. And in many cases, these are children. So children and adults need to take and asthma is probably the best case to use, needs to be exposed to a series of medicines that do not address the underlying inflammation. In many cases, corticosteroids that have severe adverse effects. They have to go through all of that to then be eligible to have advanced systemic therapy that actually treats the underlying disease, which in these cases are mostly biologics. So I think ethically, one would expect that if you have a drug that is as active and address the systemic underlying inflammation. That drug not only obviously should be able to treat the very severe patients, but should be able to actually being accessed by patients much earlier in the treatment paradigm, especially in a disease like Th2 where you have an atopic march that is underlying the disease, meaning your disease will get worse with time unless you treat it. So that's what we're talking about. And I think when we talk about children especially, this is the responsibility that we feel like Kymera to do. So cooling down. So let's talk about Slide 22, where we are with the program. So as we've disclosed in October of last year, or early November, we started our Phase I study on October 22. This is, let's call it, a typical SAD and MAD study. We're looking at multiple single ascending doses and then multiple ascending doses of 14 daily doses. What we're looking in this study is, importantly, obviously, PK safety and degradation. Based on the robust pharmacology that we built at Kymera and that is understood in the industry, if we're able to demonstrate that we can robustly degrade STAT6, we can do it safely. We believe this is going to be a paramount dataset that should come out of this Phase I study. As many of you know, some Th2 biomarkers that are still within the limit of normal have been modulated not robustly but modulated by other agents, including dupilumab, even in healthy volunteer by 10%, 20%, 30%. So we'll measure those too. But I want to -- and we expect to modulate them, too. But I want to stress that clearly, the key deliverable here is to show that a novel targets STAT6 that can be safely degraded because we believe from there we will have huge opportunity to change, as I said, the life of patients around the world. Just a quick update as it was in the press release. So we're -- recruitment is still ongoing. We've completed several SAD and MAD cohorts to date. So on the next slide, before going to the last slide, I wanted to tell you a little bit about our overall development plan. So we believe -- so first of all, I should say there is 8 indications in which DUPIXENT has either been approved or is a positive Phase III data. Actually 7 have been approved, the 1, I believe, not yet. And just as a general statement, we're committed to develop 621 in all of those indications. How we're planning to do it is we've divided these indications in 2 main buckets: dermatology and GI in one, respiratory in another one. We believe that by running parallel Phase IIb studies in individual AD and asthma, that represent the rest of the term GI and respiratory indication will be able to identify a dose that can be used not only to run Phase III studies in AD and asthma, but also in all the remaining indication. So we believe it will allow us to do accelerated late parallel development across all the indications. So we believe that, thanks to the work that's been done with other agents in this pathway, not only we've learned, but I think we hopefully have built an even more efficient way to develop this drug that will allow us to do parallel development in as many indications to be honest, as we can afford. The other important point that we're making today that -- so we're starting Phase IIb studies, AD in fourth quarter of the year and asthma early next. Between the healthy volunteer and to be -- we're running a Phase Ib in AD patients. Maybe it's best that I'll describe the sequence and the reasons for that in the next, which is the final slide. So this slide is really speaking to Slide 24. I apologize that here and there, I forgot to call out slide. Slide 24, last slide. So I'm done with that. So just going through the next inflection points in the next I would say, 18 months, right, through middle of '26. So starting with STAT6. So as I mentioned, healthy volunteer data 2Q, so very soon of '25. And the key data will be really safety, STAT6 degradation in blood and skin. I mentioned a biomarker, we'll measure it. That's really not the best place to measure it. That's one of the reasons why we built this Phase Ib AD study in a relatively short, small study, 28-day study, we'll be able to show, hopefully, that we can have really robust biomarker signature in both blood and skin that will be able to compare to dupilumab. The dupilumab profile, even in 28 days is very well established. So in 2025, we'll be able to have healthy volunteer safety degradation, then would be a biomarker in blood and skin in AD patients, including 20-day efficacy. So we'll be able to also look at some EASI score then. And then at the end of the year, start 2 Phase IIb studies in AD and asthma. So that's really what we're planning to do. So lots of work for the team and lots of exciting both data as well as big studies that are going to be initiated. I believe this is the busiest kind of program that we've built in the history of the company. For TYK2, as I mentioned, starting Phase I in the second quarter, and data towards the end of the year, where, again, their safety TYK2 degradation in blood and skin. Also there, we'll likely look at some ex vivo biomarkers that really demonstrating that we're able to deplete the target well is going to be critical, then we'll disclose a new program this year that would be in the clinic in early in '26. And then to remind you for IRAK4 data in '26. So I'll end here. I'm sure I took probably more time than I should have, but happy to take any questions.

I'll start -- just on the -- just how we should think about the translatability of the healthy volunteer data with KT-621 in second quarter and how that sort of how you expect that to derisk or relate to the patient setting, both in AD and in asthma? And specifically there, I guess, how should we be thinking about the relative level of STAT6 expression from healthy to disease context?

Okay. So I think two questions may be in there. So one, so I think -- so what we've shown preclinically and actually human genetics corroborate that. If you decrease the level of STAT6, you see IL-413 signaling that is impacted and reduced or blocked. So we believe if we are able to show that you degrade STAT6, 90%-plus the translatability of that concept into patient should be equal to what has been seen with upstream biologics. So why we believe the healthy volunteer data is so critical is because if we're able to show that we can get to 90%-plus and that's safe. I think that's telling us we have a drug in our hands. With regards to translatability of degradation in patients. So across our experience, across many programs, we've seen that degradation in healthy and degradation in patients is usually paralleled. We've shown that with IRAK4/2. Obviously, we'll have an opportunity to further demonstrate that in the Phase Ib in AD, but all our understanding of 621 and how it behaves and how potent and catalytic the mechanism is. We don't expect that to see anything different in terms of profile between healthy and patients.

And it seems like there's an increasing number of STAT6 competitors or compounds entering the field kind of probably riding in your way. Looking across the space there, I guess, how do you -- what -- other than being first in position having a leading position, how do you think about other ways of engaging the -- I guess, what is very important by way of engaging the target that is -- will contribute to activity here. I guess, other approaches that are non degraders. Do you see them being effective as well?

So yes. So there's 2 questions there, too. So I want to -- or at least I interpreted 2 questions. So one, the competitive intensity of the target. I like to quote our program lead of STAT6, Chad that hopefully is listening. I think this is a race in the finish line. What we're showing is we are years ahead of our existing, let's say, competitors or admirers. And I think our goal is to expand further the gap. And I think what you're seeing in terms of development plans are. I think aggressive is probably an understatement. So that's one. I really actually hate to be discussing other companies' programs because I cannot speak to that program. What I can speak to is our own efforts. So we have an extensive effort with small molecule inhibitors of STAT6. Nobody knows about it. We haven't disclosed it. We have not published it, but we will one day. And we know that if you want to have dupilumab-like pathway blockade, 621 pathway blockade with a single daily oral drug that is actually matching the blockade and the efficacy in these high bar models, not some in vitro system, you cannot use an oral -- small molecule inhibitor, you used to use -- you need to use a catalytic degrader. That's where we stand. And we're not stand on it because we're a degrader company, but because we have extensive experience in that space. And that will be disclosed at some point.