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

Hi, everyone. Good afternoon. Thanks so much for joining us. I'm Andrea Newkirk, one of the biotech analyst here at GS. And I'm really pleased to be joined by Nello Mainolfi, Founder, President and CEO of Kymera. Thanks so much.

Thanks for having us.

Yes. Of course. Maybe before we dig into the data that you just presented last week for your [ SAP6 ] program, I thought maybe we could start with [indiscernible] view of your small molecule oral protein degrader program. Talk to us about why you believe in this opportunity and why you believe this approach is so particularly well suited in INI?

Yes. So again, thanks for inviting us. So I will start with the concept of oral degraders in immunology and the opportunity to have orals with biologics like efficacy. So at Kymera we've always been focused from the early days on marrying the power of protein degradation with the right target. I always am a big believer that old platform or kind of technology-based companies, liver die by their target selection. So we really have to be thoughtful about what type of target we can apply the technology against, what is the application and the end-use. So for us, what we've learned along the way is the ability, when you use a degrader against the right target to block, that target and that pathway with the same level of saturation that an injectable biologics can have. And so, we started to learn this concept early on, especially when we were working on the IRAK4 program in immunology. And so it was a bit of a high moment for us, where we thought if this really -- these drugs are really so potent, and they can completely remove these proteins, then we should expand the concept and go after these pathways that have been validated by upstream biologics, but do not have an intracellular oral solution to the same biology. And so, the concept of this, again, orals with biologics like [ efficacy ] is coming from the ability of using these catalytic degraders to remove proteins and block pathways with the same efficiency at biologics. So when we think about [indiscernible] so when we stop and say, let's look at all the pathways that have be validated by like a real like best-in-class small molecule [indiscernible] jumped out, right? It's one of the most well-validated piece of biology out there. Have tremendously impacted patients with [ Th2 ] diseases going from asthma to atopic dermatitis, COPD and EoE, and other indications. So there is -- based on our calculation, more than 100 patients in the -- even just the same major market with these diseases. But there is really no small molecule solution to this. And clearly, the small molecule not only is there to provide a convenient option, but it's also there to actually provide an option to patients that are not now on biologics. And so the [indiscernible] there sets right downstream of DL4 receptor, and it's a specific selective transcription factor for these for the receptor upstream and is able, by [indiscernible], we're able to block as effectively IL-4/13 as you can with an upstream biologics. So that's kind of the fundamental thesis behind the program.

So obviously, the target is important. [ STAT6 ] is important. But when you think about degradation of that versus inhibition, what are the pros and cons of both approaches?

Yes. I think this concept applies to our targets. So maybe I'll take a step back and say, we're a big believer that, again, we need to go after targets that have not been [indiscernible] the drug fully before. When we've taken this approach and looked at these pathways, what surfaces out of this Venn diagram is transcription factors that have been historically difficult to drug, multifunctional proteins, some people call them scaffolding protein, which have been dragged but poorly. An example is IRAK4, I would say another example is TYK2 and others. From the transcription factor [ STAT6 IRF 5 ] and others that were feel working on in the preclinical space. So when you think about what small molecules can do versus degraders, you have to think about what target class you're going after. If you're thinking about multifunctional proteins, you know that a small molecule inhibitor of a catalytic function of a protein is only going to block that catalytic function. If the protein is also another function, let's call it scaffolding function, that's the receptor interaction function, like [indiscernible] or [ IRAK4 ], you need to remove the protein completely to elicit the full biology. For a transcription factor, it's a bit more nuanced. You can -- it's extremely difficult to inhibit a transcription factor because these classic proteins have evolved to do two things. Bind to another protein and then bind to DNA. So they don't have a conservative binding site, that one can target. Sometimes, what seems to be a conservative binding site is similar across the whole family of proteins. For example, the [ SH2 ] domain for the [ stat ] protein class. And so with regards to STAT6, we discovered at Kymera and obviously others in the space, you can actually inhibit this protein. The case that we make for degraders against that [indiscernible] is really the type of target product profile that we're after. Our target for the profile is to have an oral [indiscernible], right? The path we blockade that dupilumab has is basically almost complete blockade of IL-4 and [ IL-13 ], for sure, 90% plus. And we can do it. I would also say if you look at our clinical data quite easily with a once-a-day oral drug that has, again, a catalytic effect with low nanomolar concentrations we're able to block this pathway completely by degrading the target at steady state, 90% plus. We show we can get to complete degradation. With a small molecule inhibitor because of the concentration of STAT6 in [indiscernible] compartments, and because it's a [ stocometric ] inhibition, so you need to have as much drug as you have of target, you need to have high -- in our hands, high micromotor concentration to cover the target 90% plus all the time. And that is, we believe, extremely difficult to do with a once-a-day oral drug. So that -- maybe it's more in details that I've ever gone into, but that's where the rationale is coming from.

Super helpful. Let's dig into the data you had last week, Phase I healthy volunteer. What were you most surprised to see from this data set?

Yes. Great question. So when we started the study in -- I believe it was October of last year, it feels like a lifetime ago. But when we started the study, the goal based on our preclinical studies, we knew that if we degrade [indiscernible], 90% plus, in quite high-bar preclinical studies like the HTM mouse asthma model, we could replicate the level of pathway impact and clinical end point that dupilumab had. So with our target was 90% plus degradation in blood and skin with a good safety profile. Obviously, what we saw is that all doses above 1.5 milligrams per day achieved 90% or more degradation. What we also saw that we were able to see complete degradation at doses of 50 milligrams and above in both blood and skin. We were able to see that we had undifferentiated safety, whether you were at 1.5 milligrams, or you were at 200 milligrams. And this safety was undifferentiated from each other from placebo. So placebo like safety. And so I think the -- I was surprised is that we actually had to go back and dose the 1.5 milligram smart cohort because to that point we have not seen any dose cohorts that had more than -- less -- that had less than 90% degradation. And actually, the 1.5 milligram cohort was one of the last cohorts that we run, again, to establish the lower end of the dose response curve. Another, I would call them maybe upside scenario was what we saw with the [ Th2 ] biomarkers in healthy volunteers. We spent the past 9 to 12 months explaining that these were going to be noisy biomarkers to read in healthy volunteers where the baseline level were very low as well as the dynamic range was small, and the pathway was not activated. And all of that was actually true. But I think what we were pleasantly surprised with is that, for example, if we use [indiscernible] as a biomarker of reference, all our dose cohorts were able to reduce [indiscernible] at different levels, but consistently, which was not seen with all the dose cohorts for example, with dupilumab. Actually, the nice thing we were able to see that was not seen, again, with the biologics that at day 7, we had a more robust inhibition at day 4, day 14 with more robust inhibition day 7, telling us that we had a really nice dose and time-dependent blockade that didn't seem to have plateaued even in just 2 weeks. And then what we did, and I give credit only to my team, I would like to, but I cannot take any credit for it was going in and looking for [indiscernible] as a biomarker. This is something that was only seen -- was only measured by the developer of dupilumab in asthma and chronic [indiscernible] and they saw a reduction of about 40% to 50% at week 52 in the Phase III study. We knew that this is a highly sensitive biomarker [indiscernible] and 13, much more than TARC way more than GE. And in fact, if you look at the data, we had really tight error bars. Reduction up to 60-plus percent. And it's actually [indiscernible] responsiveness to it. That just speaks to the fact that it's a highly sensitive biomarker. So sorry, I went too long here. But the bottom line, why -- what was really exciting was probably more potent than we anticipated in vivo in humans, an exceptionally pristine safety profile as expected, I would say. And then really a biomarker profile that I would say was clearer in terms of output than we had anticipated.

When you think about the level of [ STAT 6 ] degradation, the goal going in was 90%. You clearly saw above that. I think potentially even higher than the 95% of that was probably a limit based off of the assays you were using to measure degradation. But is more always better here?

Yes. So it's a great question. It's really hard actually to know -- and this is why we're going to run more studies to really know what 90% versus 95%, versus 99% will mean. And actually, I think the goal of our Phase [indiscernible] study, where it's going to be a large and dose-ranging study versus placebo. I think that's really the goal of the study. Establishing a correlation between [ vector ] degradation, safety and efficacy. I think if you speak to people that have worked in this pathway for a long time, and we're fortunate to being able to do that here and there, they would tell us that you are required to have really deep pathway blockade. And I think what I will say to that is that we're fortunate if you look at the doses that we've explored, that we have all the doses. We have all the learnings to being able to ask that question. I would also say that the data that we reported, we said it from 50 milligrams and above, we have complete degradation. The way we've reported it probably underestimates what the actual levels of [indiscernible] In reality, if you look at the 50 milligrams dose, more than 50% of subjects were below the lower limit of quantitation. At the 100 mg dose, 100% of subjects were below the lower [indiscernible]. So probably others would say, 100% or 99% degradation. We have a very conservative estimate on how we make this calculation, which I can bore you with, but I thought I'd share that message.

And if you think about the biomarkers, you've touched upon them a little in your previous remarks. What is specifically the relevance that you see there as you see the response here in healthy volunteers?

Yes. So again, I've been seeing this for many, many months. We have to be really careful what we do with the biomarker data. To us, and to me, what biomarker data are telling us is that we're blocking [indiscernible] optimally. And blocking optimally even in healthy volunteer is giving you a response with all the noise and the caveats we talked about that is in line with another drug that turns out to block [indiscernible] optimally, which is dupilumab. And that's all we can say. I think the relevance of biomarkers in patients will be important. So we're, as you know, in a Ib study in atopic dermatitis patients, there, we need to see a very robust biomarker impact in blood and skin because here is what it really matters. We know that [indiscernible], for example, in blood and [ transcriptomic ] profiles in the skin are highly correlated for drugs in this pathway to clinical endpoints. And so we want to establish that.

Okay. You just touched on this that Phase Ib that you've initiated for atopic derm. Maybe just remind us the setup of this trial, what can our -- what expectations should we have as the data readout later this year?

Yes. So as I've said in the past, our main goal for the development plan of [ KT 621 ] is to get to market ASAP and have a development plan that can address as many indications in parallel as possible. And so what that means is we want to get into these Phase III studies as quickly as possible. And what's on critical path to go into Phase III is to have dose ranging studies where you establish safety efficacy versus placebo. And so these are the Phase IIb studies that were starting end of this year, early next. So we had a window of opportunity between the end of the Phase I healthy volunteers and the beginning of this Phase [indiscernible] studies to establish what we call an early proof of concept. We decided to power, tailor, this early proof of concept to a biomarker signature. We know really well what the biomarker signature of [ IL-4/13 ] blockades in both blood and skin with the extensive elegant work that [ Sanofi ] and [ Regeneron ] did with dupilumab. So we know what we need to look like for a successful drug, even in a handful of patients with AD, with moderate to severe atopic dermatitis. And so we decided to select roughly 20 patients in a [ NOVA-label ] study. We know that biomarkers are not affected by any meaningful placebo effect. And so we can hopefully replicate, or reproduce, what has been seen with upstream biologics with an oral once-a-day drug in terms of pathway blockade and biomarker impact. Then obviously, 28 days other drugs in this space have shown initial clinical benefits. So we will measure also [indiscernible] IGA, but really focused on the correlating nature of degradation to biomarker to early signs of [indiscernible] versus trying to compare efficacy with -- in other studies that are placebo-controlled. So really focus on biomarker and then showing that the biomarkers have a clinical benefit, I think, will be important. But it's clearly not powered to show clinical benefit and compare it to dupilumab study given the short duration, the lack of placebo and the small lines.

Got it. And given the profile that emerged from the healthy volunteer data, how derisked, or how much read-through do you see to the Phase Ib study?

So I always go back to when we started the program, I don't want to revisit what I said 20 minutes, or 15 minutes ago. But we -- our investment thesis has always been, if you degrade [indiscernible] you should be able to replicate an upstream biologic effect. So we spent many years. I wouldn't say exactly how many, working on the program preclinically. We identified [indiscernible] we characterized, and we showed that what we thought was going to happen, happen. We went into the clinic, and our goal was to show the [indiscernible] degradation can be achieved and it's safe and has a very strong pathway impact. So we've shown that. So I mean our expectation is that this translation will continue to happen. I think we've completely derisked the fact that we can degrade the target safely, at least in a short duration study. We've also derisked, I think, to a large extent, that degradation [indiscernible] has meaningful impact in the pathway. And I think it's not a great leap of faith to expect that we should be seeing impact in patients.

As you think about being able to establish this correlation that you mentioned [indiscernible] degradation to the biomarkers to the EC score, why do you not need to run a similar Ib study for asthma? Why can you just kind of skip over that and go to the Phase II?

Yes. I mean -- so the important thing for us was choosing an indication that is representative of [ TH2 ] diseases. I think experts will tell me that atopic dermatitis is the most [ Th2 ] SKU disease. And showing that we have a positive biomarker impact, we have good degradation and good safety, I think telling you that the drug is operating under the paradigm that we understand, and I think provides an amazing opportunity with patients that have other diseases outside of AD to explore clinically. So we don't believe we had to repeat the same study in asthma to build that confidence. We believe [indiscernible], while it's obviously a different disease speaks to the [ Th2 ] component of it. And that's why the biomarkers are so important because those will be shared [indiscernible] all the [ TH2 ] diseases.

Got it. So that -- you see it once and then you have confidence as you think about the other potential indications. How are you thinking about your planned Phase IIb studies here?

Yes. I mean we've, in a way, selected the Phase IIb doses. The Phase Ib is actually a good kind of sanity check, right? Are we -- everything is translating the way that we anticipate. The team is already working on -- of course, if we say we're going to start as a large global Phase IIb studies in 4Q, we're actively operating to being able to do that later this year. We'll have multiple doses. We'll share more about the clinical trial design later in the year. But you can imagine for AD to be, let's call it, traditional placebo control, randomized study 16-week readout with multiple, probably 200 patients, plus or minus. And we're excited about being very close to that.

And do you think about the potential to expand, not just into asthma, but other indications, both in dermatology as well as respiratory? You've talked about this really interesting strategy to take the Phase III dose for both derm and respiratory and be able to expand that to additional indications. Talk to us about the -- what gives you the confidence that the regulatory agencies are on board with that approach? Clearly, there's been so much noise in the recent weeks and months around the regulatory flexibility and the agency. But what gives you confidence that, that's the strategy you can take?

Yes. I mean I think what I'm going to be able to speak to is the fact that some of the strategy was adopted by the companies that developed dupilumab, learning from asthma applying to COPD, or learning from other derm indication and applying to others. So this is a playbook that has been used already in the space. Obviously, we need to generate data to being able to support this point plan. I think this is -- as long as the efficacy safety relationship is supportive of this plan, I believe this is a patient-friendly and very, very kind of strategic plan to expand the development to as many indications, to as well as many patients as possible.

And [indiscernible] looks promising here in AD and asthma, other indications. Where does it fit into the treatment paradigm?

I mean we're a strong believer that if we're able to deliver on the target product profile of oral drugs with biologics like profile. Some [indiscernible], you don't even have to be as effective as dupilumab. But anyway, if we continue to deliver on that -- our vision is that this is going to be the first-line drug for all indications, for all people with [ TH2 ] diseases. I think it's the right thing to do for patients, is the ethical thing to do for patients, and it gives patients the flexibility, the convenience and the efficacy that cannot be found with any other technology. So obviously, still early to talk about market access strategy. I'm talking more philosophically. I find it hard to imagine that, that profile will not be the profile that will expand finally this market that is still -- by the biologics, that still has little penetration.

Maybe to that point, when you think about the potential opportunity here. You've called this an oral [ DP ]. Is there the potential to exceed DUPIXENT's commercial opportunity?

So there are two things, right? There is one kind of the biological profile. One is going to be the clinical profile and one is the commercial profile. So on the, let's say, biological to clinical, all the data that we've gathered so far is the biology is coherent. So we should be able to see a similar profile. That's why we like to say the [indiscernible] or the oral [ dupi ]. With commercial, I think the -- if you look at [ AD and Asmar ], 85% of the revenues, I believe, we're talking about very -- still very small penetration into those markets. So I'd love to believe that [ DUPIXENT ] is going to be a $25 billion drug in a few years. I'd love to believe that if we expand this market [indiscernible] could surpass that, but we'll time will tell.

Goals for the future.

Yes.

Maybe switching over to the [ IRAK4 ] program here that's partnered with Sanofi. Just to level set, talk to us about IRAK4 as a target, what makes this so attractive?

Yes. So IRAK4 is the obligate -- so let's call it the [indiscernible] complex where there is [indiscernible] and other partners is the obligated complex through which IL-1, IL-18, IL-33, IL-36, TLR4, TLR7 TLR8 have to signal through. So it's a quite kind of broad inflammatory cascade. [ IRAK4 ] small molecule kinase inhibitors have really shown that by inhibiting the kinase function you're not really able to block this inflammatory cascade, especially when there are multiple stimuli. And you can imagine diseases like HS, you have local systemic inflammation. You have TLR and IL-1 and we've shown even in cell system that when you have multiple stimuli inhibitors are not able to accomplish pathway blockade. We have some exciting proof of concept in this pathway. We have an IL-1 beta biologics from [indiscernible] that has shown some quite impressive data in in HS. And we have other agents that have shown early data in other indications, including atopic dermatitis and others. So the opportunity is to have a broad anti-inflammatory agent that is really most focused on [ Th1, Th17 ], with some impact on [ TH2 ]. We've shown [ KT-474 ], can block this pathway effectively preclinically. In the clinic we had really exciting Phase I data complete degradation in the blood, robust degradation in skin. We went into a Phase I, let's call it, Ib study in [ HS NAD ] with some intriguing early efficacy data, as well as biomarker data. And then Sanofi was excited enough to want to take this program into two parallel Phase IIb studies. One in HS and one in AD that are ongoing. I think we reported in the last quarter that we had a milestone from -- a $20 million milestone from Sanofi and this was related to a second-generation molecule that achieved a preclinical development milestones. So obviously, there is continued investment and excitement about this program. And we're obviously waiting to see the next data readout.

Talk to us about how you're thinking about potentially bringing forth IRAK 4 because there is an often clause this year. But bringing forth the IRAK4 degrader in AD versus [ 621 ] and AD. How do you think about those two opportunities?

Yes. So maybe just to level set on the how the collaboration operates. So right now, Sanofi, from the Phase II are responsible for both financial as well as for the operations of the program. So they're running these studies where in the event of transitioning into the next, let's phase of development, we'll have milestones and we have royalties down the road. But we do have, as you're seeing an opportunity to opt in right before Phase III into the global development of IRAK4. So if Sanofi decides based on data that atopic dermatitis is the right indication to go into Phase III and beyond, we have an opportunity to obtain and share cost of profit, no operational responsibility. So I think, obviously, it's important to think about the also Sanofi has, as you know, investments into the [indiscernible] space, obviously, they're behind us. But I think the beauty about the opportunities here is that [indiscernible] is a pure a [ Th2 ] drug and serves patients with Th2 inflammation. IRAK-4, it's more, as I said, [indiscernible] drug. And so I believe that if it's successful in AD will be probably successful in a subset of patients that might be complementary to what that is going to be operating again. So obviously, time will tell and data will tell. But I could see them to be complementary drugs and not compete in drugs.

Got it. So one wouldn't cannibalize the opportunity or the other?

I think it's early to tell. I don't think -- it will have to depend on how it's developed [indiscernible] them to be a complementary drug.

Is there a path forward for Kymera to be involved in both?

Look, I think that's a resource allocation question. If you think from a kind of science and strategy and desire. Obviously, in the event that there is positive data, we would love to be part of the 50-50 co-development and [indiscernible]. In reality, the decision will be made based on resource allocation. I think if [indiscernible] continues to show the profile that we're seeing so far, it's going to be a very resource-intensive program. And given that it's a wholly owned program, I would imagine that we would prioritize that. But time will tell, we'll have to see how the rest of the pipeline evolves and those decisions fortunately don't have to be made in the near future.

Maybe on that point in the last couple of minutes we have here. I would love to hear about your newest asset that you just unveiled on your earnings call [indiscernible] what makes you so excited about this one?

Yes. So [indiscernible] degrader [ 579 ]. The beauty about this program is the ability to be sell specific. So [indiscernible] really mostly it's not only expressed in in macrophages, monocytes, B cells. And then it's also really activated by particular stimuli, mostly [ PLR 789 ] as well as B-cell receptor to some extent. And so we can be targeting [ RSV ]. I like to think it in kind of disease -- almost disease specific manner. What we've shown preclinically that when you look at, let's call it, more traditional immunology and if you're guided by human genetics, we know that [indiscernible] there is [ GWAS ] studies showing association with [indiscernible]. I think the stronger one are in [indiscernible]. If you're guided by that, you'll know that this drug could be really disruptive in [ lupus ] with an oral drug in a space that has really limited option now, there is some like other drugs in development but no really oral drug, I think, that has the opportunity that we have with [indiscernible]. So I think that's high level, the opportunity. And the molecule is extremely well behaved. Large safety window, no adverse events in preclinical studies and excited to start a Phase I early next year.

And as you think about potential indications, you mentioned evidence in [ lupus ], is that a fair assumption that, that would be an indication of interest for you?

I think I would say where we are all on the same page, atleast Kymera is, [ lupus ] and all these interferon-mediated pathologies like [indiscernible] disease and others. And then what we're trying to nail between now and the end of our Phase I healthy volunteer study is [ RA IBD ]. We want to generate a bit more preclinical data. Overlap with the genetic association and then decide which of the two, both, one, or neither we want to advance in parallel to a lupus study to again, create as much optionality as possible.

And as you think about your pipeline, I think you've also -- you've talked in the past about being still open for partnerships. How are you thinking strategically about which assets, which programs, maybe even which indications you'd like to keep in-house versus out-licensing or partnering?

Yes. I think one thing we've learned along the way is, obviously, partnerships can be highly value-creating when done in the right moment. And we obviously, the right partners. And we have examples that we've done at Kymera. We feel pretty strongly that partnering before a solid proof of concept, let's say, before Phase IIb studies. It's probably done only if you have probably no financial capabilities, or you don't want to invest in that particular disease area. But we're really well capitalized, and we have these studies in front of us funded already. So it's unlikely, if not impossible, that we will be partnering any program in our pipeline, in our immunology pipeline before a Phase II study. I think after that, it becomes, again, a resource allocation decision. We want to be a global commercial-stage company. But if all the programs in our pipeline are successful, it's going to be hard for us to do all of it on our own. And I think at that time, we can make resource allocation decisions and decide when we grow up, which program we want to continue to have wholly owned versus partner.

Perfect. Well, with that, thank you so much, [indiscernible]. Thanks, everyone.

Thank you.