Kymera Therapeutics - Q2 2023

Transcript

Operator (participant)

Hello, welcome to the Kymera Therapeutics Q2 2023 quarterly results call. I'd now like to turn the call over to Bruce Jacobs. Mr. Jacobs, please go ahead.

Bruce Jacobs (CFO)

Good morning, everyone, and welcome to the Kymera Therapeutics quarterly conference call. I'm Bruce Jacobs, Head of Investor Relations at Kymera, and I'll be joined today by Nello Mainolfi, Founder, President, and CEO, Jared Gollob, our Chief Medical Officer, and I'm also excited to welcome Justine Konigsberg, Kymera's new Head of Investor Relations, to her first Kymera quarterly call. After our prepared remarks, we'll open the call to your questions, as we always do. Before we get started, I'd like to remind everyone that some of the comments that management may make on this call include forward-looking statements as outlined in the press release.

Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those set forth in Kymera's most recent filings with the SEC and any other future filings that the company may make with the SEC. You're cautioned not to place any undue reliance on those forward-looking statements, and Kymera disclaims any obligations to update such statements except as required by law. With that said, I'll now hand the call over to Nello.

Nello Mainolfi (CEO)

Thanks, Bruce, and thank you everyone for joining us today. We're excited to review the progress we made over the last quarter and discuss how it contributes to achieving our mission of building a best-in-class, fully integrated global degrader medicines company. Over the past few months, we've shared updates on our clinical oncology pipeline and preclinical work, including multiple presentations at scientific meetings across the world relating to KT-253, KT-413, and KT-333. I will provide an overview of this progress, and Jared will share more details during his remarks. Starting with the most recent addition to our clinical pipeline, we dosed the first patient in the Phase I study of our MDM2 degrader, KT-253, which addresses a critical undrugged mechanism in cancer biology that has been pursued in the biopharma industry for many years.

The data we presented at EHA in June showed that 253 has the potential to overcome the inherent limitations of small molecule MDM2 inhibitors against this well-validated target. In preclinical models of ALL and AML, a single dose of KT-253 drove durable tumor regressions and demonstrated differentiated pharmacology compared to a small molecule inhibitor. In June, 253 was also granted orphan drug designation by the FDA for the treatment of AML. This program exemplifies our unique approach of selecting targets with strong genetic validation in pathways where we believe targeted protein degradation offers the best or only option for an effective treatment. We look forward to investigating it in a variety of cancers and sharing more on this program, including clinical proof of mechanism in patients later this year.

With respect to KT-413, which targets IRAK4 and the IMiD substrates, IKAROS and AIOLOS, and KT-333, which targets STAT3, both are continuing in the dose escalation stages of their Phase II studies. As a reminder, our focus this year for these programs is to evaluate the degradation and the safety profile of these first-in-class mechanisms and their biological and clinical impact in the appropriate patient populations. We recently shared encouraging data from the trials showing fidelity of PK/PD translation from preclinical models to patients. At the ICML meeting in June, we shared data demonstrating that both molecules were approaching or were already at the target degradation levels we believe, based on preclinical models, are sufficient to achieve antitumor activity without any dose-limiting toxicities observed.

Later this year, we intend to provide additional data evaluating antitumor activity in the target patient populations for these two programs. Our first-in-class IRAK4 degrader, KT-474, is in development with our partner, Sanofi, for the treatment of TLR-IL1R driven immune inflammatory diseases with high medical needs, such as hidradenitis suppurativa, atopic dermatitis, and potentially others. We're very excited about the potential of KT-474 for patients with inflammatory diseases who currently lack an effective oral medicines with a good safety profile, and we expect the Phase II studies in both HS and AD to initiate in 4Q23. This degrader is designed to block TLR-IL1R-mediated inflammation more broadly compared to monoclonal antibodies targeting single cytokines and to enable pathway inhibition that is superior to IRAK4 kinase inhibitors by eliminating both the kinase and scaffolding functions of IRAK4.

Jared recently presented the Phase I data from this program at the EADV symposium in Seville, which demonstrated that 474 administered to HS and AD patients at tolerability, PK, and PD, similar to healthy volunteers, achieved robust IRAK4 degradation in blood and skin associated with the systemic anti-inflammatory effect and showed promising clinical activity in both HS and AD. In parallel to our clinical programs, we continue to drive the science of targeted protein degradation and identify first and best-in-class opportunities to transform the treatment of disease. We have several exciting programs in our preclinical pipeline that are designed to address well-validated pathways in areas of significant patient need with multibillion-dollar revenue potential. We look forward to sharing more details on these programs later this year, early next, in an R&D day.

Along with our clinical and scientific progress, we've worked to ensure that we have the people and resources to build a sustainable, fully integrated company. To that end, we recently appointed Dr. Jeremy Chadwick as Chief Operating Officer, who will serve as a key member of our leadership team, help guide the development of our first-in-class programs, and scale our capabilities to support our growth. Jeremy joins us from Takeda, where he held leadership roles in global regulatory affairs, drug safety, global clinical supply chain, and development operations. As Bruce mentioned, we're also very happy to welcome Justine Konigsberg as Vice President and Head of Investor Relations. Justine has spent more than 25 years in the industry, and she'll be engaging with many of you on the call in the upcoming weeks.

Let me pause here and turn the call over to Jared, who will now cover in more details the recent progress from our clinical oncology programs before turning the call over to Bruce for a financial update.

Jared Gollob (Chief Medical Officer)

Thanks, Nello. I'll provide a brief recap of where we stand with our clinical programs and what to expect in the coming months. As Nello mentioned, we have begun dosing patients in the Phase I multi-center, open label, dose escalation clinical trial, evaluating our investigational MDM2 degrader, KT-253. Recruitment in the trial is going well. MDM2 is the crucial regulator of the most common tumor suppressor, P53. P53 remains intact or wild type in close to 50% of cancers, meaning that it retains its ability to modulate cancer cell growth. We believe 253 has the potential to be a highly potent degrader, that, unlike small molecule inhibitors, has been shown preclinically to have the ability to overcome the MDM2 feedback loop and rapidly induce apoptosis, even with brief exposures.

KT-253 has the potential to be effective in a wide range of hematological malignancies and solid tumors with functioning P53. We've shown preclinically that KT-253 has superior activity compared to MDM2 small molecule inhibitors and demonstrated greater than 200-fold improvements in both in vitro cell growth, inhibition, and apoptosis. Additionally, we presented data at EHA in June, demonstrating that a single high dose of KT-253, administered intravenously in preclinical models of AML and ALL, led to greater than 90% MDM2 degradation in tumors within 1 hour of dosing, strong P53 upregulation, and induction of apoptosis within the first 8-24 hours, and sustained tumor regressions.

In contrast, lower doses of 253 administered more frequently or repeat dosing with an oral MDM2 small molecule inhibitor, led only to relatively weak p53 activation and apoptosis induction and modest tumor growth inhibition. These preclinical results suggest that a pulse IV dosing regimen of 253 has the potential for an improved efficacy and safety profile over MDM2 small molecule inhibitors currently in the clinic. The Phase I trial is evaluating the safety, tolerability, PK/PD, and clinical activity in patients with relapsed or refractory high-grade myeloid malignancies, ALL, lymphomas, and solid tumors. Patients in the Phase Ia dose-escalation study are receiving IV doses of 253 administered once every 3 weeks. The open label study is intended to identify the recommended Phase II dose and is comprised of 2 arms, with ascending doses of 253 in each arm.

Arm A consists of patients with lymphomas and advanced solid tumors, arm B consists of patients with high-grade myeloid malignancies and ALL. Dosing in arm B will start once a pharmacologically active dose has been reached in arm A, at which time dose escalation will proceed in parallel across both arms and continue until the maximum tolerated dose is established for each arm. We plan to share initial safety and proof of mechanism data from the Phase I clinical trial later this year. Turning to our other two ongoing oncology trials. STAT3 is a transcriptional regulator that has been linked to numerous cancers as well as to inflammatory and autoimmune diseases. KT-333 is being developed for the treatment of STAT3-dependent hematological malignancies and solid tumors.

The Phase I clinical trial of KT-333 is designed to evaluate the safety, tolerability, PK/PD, and clinical activity of KT-333, dosed weekly in adult patients with relapsed and/or refractory lymphomas, leukemias, and solid tumors. In June, at ICML, with a data cutoff date of May 1st, 2023, Kymera shared that 13 patients received a mean of five doses across the first four dose levels of the trial, including patients with solid tumors as well as CTCL and PTCL.

While the fourth dose level was still open for accrual at that time, data reported from DL 1 through 3 found plasma exposure increased with dose, reaching levels close to those predicted to be efficacious and demonstrated dose-dependent STAT3 degradation with up to 88% mean maximum reduction in peripheral blood mononuclear cells, with evidence of STAT3 pathway inhibition and downregulation of inflammatory biomarkers in peripheral blood. Degradation profiles at DL 3 were near levels of knockdown that led to antitumor activity in preclinical models. We shared at ICML that there were no dose-limiting toxicities observed in the study. The Phase I dose escalation stage is ongoing, recruiting broadly across solid and liquid tumors. KT-413 is a novel heterobifunctional degrader that targets degradation of both IRAK4 and the IMiD substrates, IKAROS and AIOLOS.

KT-413 was designed to address both the IL-1R/TLR and the type 1 interferon pathway synergistically to broaden activity against MYD88 mutant B-cell malignancies. The Phase I clinical trial is designed to evaluate the safety, tolerability, PK/PD, and clinical activity of KT-413, administered as an IV infusion once every three weeks to adult patients with relapsed and/or refractory B-cell non-Hodgkin lymphomas. In conjunction with the ICML meeting, we shared that as of June 1st, the first three dose levels had been completed, and the fourth was accruing patients.

At that point, five patients were treated across DL one through four and received a mean of 2.2 doses, including patients with transformed, activated B-cell-like diffuse large B-cell lymphoma, follicular lymphoma, marginal zone lymphoma, and plasmablastic lymphoma, all of whom were MYD88 wild type, except for one who had a MYD88 gain-of-function mutation.

Data reported across DL 1 through 4 showed plasma exposure increased with dose, reaching levels close to those predicted to be efficacious. KT-413 achieved dose-dependent degradation of up to 70% IRAK4 and 96%-100% IKAROS and AIOLOS in peripheral blood mononuclear cells after a single dose. Degradation profiles at DL 3 to 4 were consistent with knockdown levels associated with antitumor activity in preclinical models of MYD88 mutant lymphomas. We showed at ICML that there were no dose-limiting toxicities or drug-related neutropenia observed in the study. The Phase I dose escalation portion of the trial is ongoing, recruiting a broad population of B-cell lymphoma patients. We look forward to sharing data evaluating the antitumor activity of KT-333 and KT-413 in their respective target patient populations later this year.

Finally, the KT-474 Phase II studies in both HS and AD, which are being advanced by Sanofi, are expected to commence in 4Q23, first in HS and followed shortly thereafter in AD. We will share more details around the trials as we approach the dosing of the first patients. I will now hand the call to Bruce, who will share some brief comments on our financial results for the Q2.

Bruce Jacobs (CFO)

Thanks, Jared. I will quickly cover the financials before turning the call back to Nello for some concluding remarks. For the quarter, we recognized $16.5 million of collaboration revenue, and at the end of the quarter, our deferred revenue total on the balance sheet was approximately $45 million. That reflects partnership revenue we expect to recognize over the next several years, excluding the receipt of any potential future milestones. With respect to operating expenses, R&D for the quarter was $45.8 million. Of that, approximately $5.7 million represented non-cash stock-based compensation. The adjusted cash R&D spend of $40.1 million, which excludes that stock-based comp, reflects a 7% increase from the comparable amount in the Q1 of 2023.

On the G&A side, our spending for the quarter was $14.1 million, of which $5.5 million represented non-cash stock-based comp. The adjusted cash G&A spend of $8.6 million, again excluding stock-based compensation, reflects a 9% increase from the comparable amount in the Q1 of 2023. We exited the Q1 with a cash and equivalence balance of approximately $472 million. As we shared earlier in the year, we believe that our cash runway extends into the second half of 2025, a projection that includes milestones only related to the start of the first two Phase II trials for KT-474, both of which we stated today are expected to occur in 2023. I'll now turn the call back to Nello.

Nello Mainolfi (CEO)

Thanks, Bruce. As said, we're very excited to be soon in Phase II with KT-474 in two indications, as well as by the progress we've made on our oncology clinical program. Our rapid progress in building our pipeline, generating clinical momentum, and advancing the science of TPD gives us confidence that Kymera will be able to capitalize on the untapped potential of this powerful modality to enhance the treatment of disease and improving patients' lives. We look forward to sharing exciting updates on our clinical programs, platform, and company in the second half of the year. I will now hand the microphone to the operator so we can take your questions.

Operator (participant)

Thank you. At this point, we will open the call for questions. As a reminder, to ask a question, please press star one on your telephone keypad. If any time you would like to withdraw from the queue, please press star one. Please also be reminded that you may only ask one question and one follow-up question. That being said, we will now take a moment to review your queue. Thank you for waiting. Your first question comes from the line of Marc Frahm from TD Cowen. Sir, your line is open.

Marc Frahm (Managing Director and Senior Equity Analyst)

Thanks for taking my questions. Maybe start off with KT-333. You know, monotherapy clinical responses are kind of expected to be only relevant for maybe a fraction of the opportunity, and, that segment is a bit of a different hypothesis than the rest of the population. Can you walk through kind of how you plan to approach dose selection, as you get this larger data set later this year?

Nello Mainolfi (CEO)

Thanks, Mark. Nello here. Maybe I'll just take the first part of the question, and then I'll pass it to Jared. Just to remind everybody, our STAT3 program, which encompasses a liquid tumor opportunity, a solid tumor opportunity, and opportunities outside of oncology, started with our first clinical endeavor with KT-333. Obviously, it's a broader opportunity across several potential indications. We have clear hypotheses that we're pursuing in the clinic. The first one, which is, in our mind, the earliest one that could lead to proof of concept, is single agent activity in a subset of T-cell lymphoma leukemias that we've discussed in the past, PTCL, CTCL, LGL leukemias, which obviously also have subsets.

The reason why we have focused on those indications as a single agent opportunities is because we've seen preclinically that when we dose our degrader, KT-333, once a week or even once every 2 weeks, we're able to achieve profound antitumor effects as single agent. We can actually rationalize it translationally by the fact that many patients in those particular subsets have either STAT3 mutation or pathway activation. We have a biomarker activity as well as biomarker sensitivity in those in those opportunities. The Phase I dose escalation includes those particular subtypes as well as solid tumors. As I've said in the past, in solid tumors, the opportunity are based on our preclinical data in combination. We've talked about combination with immune therapy.

We've mentioned combination with targeted agents that we haven't discussed externally yet. Now circling back to your question, just so that it's all clear, so in terms of single agent activity, in terms of responses, antitumor activity that we expect to be able to talk about later in the year, will come from a subset of patients, from this Phase I dose escalation. We've said in the past, a handful of patients that might include CTCL, PTCL, LGL. With regards to how we think about selecting, I assume you meant the Phase II, the Phase II dose. Maybe I'll let Jared comment on that.

Jared Gollob (Chief Medical Officer)

Sure. So Mark, we've, we've always sort of stated that our, our dose selection will be based on a combination of PD and, and safety. You know, we've looked at our preclinical data, especially in these STAT3-dependent T-cell malignancies, where we found that 90% or greater, knockdown of STAT3 for 48 to 72 hours was associated with antitumor activity. So our aim is to be able to, get to a dose that gives us at least that sort of a profile, 90% or greater knockdown, in peripheral blood and/or in tumor, where we can get tumor biopsies that's lasting 48 to, to 72 hours, and that, associated with favorable safety profile. That's the sort of, a PD profile that we want to be able to then take into the Phase Ib expansion.

Our recommended Phase II dose will likely be a combination of being able to see that level of PD along with safety, if possible. You know, as Melo mentioned, if in a handful of patients, in the target patient population with these STAT3-dependent T-cell malignancies, we can see a few responses at those doses that are giving us that sort of PD and safety, that would give us even more confidence in bringing that dose into the next Phase, which are these Phase Ib expansions, which right now are slated to be in these T-cell malignancies like CTCL, PTCL, and LGL, as well as in solid tumors.

Marc Frahm (Managing Director and Senior Equity Analyst)

Okay, that's very helpful. Then maybe a similar type of question, but for MDM2, just you kind of walk through the depth of degradation you want to get and with that pulse dosing. How long do you think you need to be at 90, 90%? Kind of what's the minimum there?

Nello Mainolfi (CEO)

I mean, so I'll start this, and then if needed, Jared can add. So the nice thing about the MDM2 program and how we're developing it is really trying to replicate what we've seen in cancer genetics, which is ablation of the gene, in this case, MDM2, leads to a rapid and complete reliance on this gene from a wide variety of cancer cells that have p53 wild type. What we've then observed experimentally, obviously, gene deletion is irreversible. Protein degradation, as we all know, is reversible. Then the question that you're asking is: how long do you need to deplete the target to see activity?

What we've seen in our models preclinically, that as little as 4 to 8 hours of exposure to a degrader that leads to robust degradation, is sufficient to drive profound commitment to apoptotic cell death. Actually, in a way, it's, we know, as we dose once every 3 weeks, and while for other programs, that degradation needs to be sustained either for 48 hours or 72 hours, in this particular program, we only need a few hours, single-digit hours, in order to drive the strong apoptotic response.

Operator (participant)

Thank you. The next question comes from the line of Bradley Canino from Stifel. Sir, your line is open.

Bradley Canino (Equity Research Analyst - Small/Mid Cap Biotechnology)

Good morning. For KT-333, now that you're getting a handle on the clinical PK/PD, should we expect you to open a healthy volunteer study to dial in the STAT3 degradation degree and kinetics that you need based on your I&I models, in order to prepare for a potential Phase I/II I&I study? Or is this gonna be pursued by a separate asset altogether?

Nello Mainolfi (CEO)

Brad, thanks. This is a great question, that I'm gonna answer high level now, and then hopefully, I think when we meet in an R&D day, that, as I said, most likely late this year, but most likely early next, I think we will cover, hopefully with more details, that question. I can say right now that, that we're evaluating opportunities both, for a potential KT-333 transition into immunology as well as other particular assets or other formulations. Maybe I'll leave it at that. This is where we're investigating.

I think what we take from this Phase I study, which is not to be underestimated, is the really good translation that we've seen, not only in PK and PD, which, to be honest, with this company has been a constant now for multiple programs, but more importantly, on safety. We feel now we're in a place where we can much more comfortably plan a outside of oncology clinical study for a first-in-class target that has, obviously, very broad biological application. Sorry if I can't answer with details, but hopefully, this gives you an idea about what we're thinking about.

Bradley Canino (Equity Research Analyst - Small/Mid Cap Biotechnology)

That's all right. I look forward to that update. Let me also ask on, on MDM2, when you think about the safety data from the prior small molecule inhibitors, and, and particularly knowing that your target population is AML, where the blood count recovery is going to be important for those patients, what are you looking to see in terms of platelet impact, thrombocytopenia rates in this first look to gain confidence in the profile for continued development? Thank you.

Nello Mainolfi (CEO)

Yeah, thanks, Brad. I'll actually let Jared comment specifically on your question, but I do want to take the opportunity to add something to your question, which is, so, our clinical development team has designed, I think, a, I would say elegant, some people don't like this, this word, but I still use it. An elegant plan to evaluate the PK/PD safety and activity in both solid tumors, liquid tumors, and, these myeloid malignancies. The idea was to split the AML, ALL type of dose escalation from the other indications, because and as you mentioned, the context is quite different.

The plan is right now, we're escalating in solid tumor and other liquid tumors until we feel we've reached a clinically active dose. Then enter the AML space only when we're clinically active already, so that the safety does not unnecessarily or, sometimes the, the more challenging safety assessment doesn't influence the readout on, on the clinical activity. One other thing I will say is that the way that this molecule works, which is, as we said, a rapid degradation with the recovery, within the first three weeks, should allow us to build a therapeutic index that should allow us to evaluate the clinical activity of MDM2 degradation in MDM2-P53 sensitive tumor types.

As with all the other programs in Kymera's pipeline, we believe we can answer this question in early clinical development, meaning in Phase I or late Phase I, clinical investigation. Our ability to build a therapeutic index is really the goal of our Phase I study. If we're able to show that and demonstrate that to ourselves, I think that will hugely de-risk this program and will allow us to be confident in investing, a lot of money to develop this program. If not, we obviously will be willing to, to make decisions, and that's what the philosophy is around all of our programs. Jared, maybe you can comment specifically on, how we're looking at thrombocytopenia and other possibly, related events that one might expect from P53 upregulation.

Jared Gollob (Chief Medical Officer)

Sure. Well, I think, as you just alluded to,with this hit-and-run approach of dosing once every three weeks, and based on our GLP tox data, our expectation is that, our sort of depth of myelosuppression and/or the duration of myelosuppression, will be less than what is seen with the small molecule MDM2 inhibitors, which, as, as Nello just said, should give us a superior therapeutic index. With that being said, in AML, of course, the tolerability of myelosuppression, is much higher. In fact, one does expect to see a certain degree of myelosuppression as you're clearing blasts and having an effect on the bone marrow that usually, would then lead to clinical responses, hopefully complete responses.

So that's why we've separated out these two arms, the high-grade myeloid malignancies and ALL, separate from the arm looking at solid tumors and lymphomas, because there is a different level of tolerability in terms of how clinicians view myelosuppression. We may see myelosuppression in the AML patients, which would be a good thing because that would be telling us that we're seeing a response to MDM2 inhibition. Again, we do expect the depth and duration of that myelosuppression to be less and to give us a better therapeutic index.

Likewise, in solid tumors, we do expect to see less myelosuppression, in that particular population, which could allow us, more attraction in developing the drug, in patients with lymphoma and solid tumors, compared to the small molecule inhibitors that have been limited in their dosing, by the dose-limiting toxicities of GI toxicity as well as myelosuppression.

Operator (participant)

Thank you. Your next question comes from the line of Chris Shibutani from Goldman Sachs. Sir, your line is open.

Chris Shibutani (Senior Analyst and Managing Director, Biotechnology Equity Research)

Great. Thank you very much. Good morning. On two questions. On KT-474, it certainly is sounding reassuring that Sanofi has formally committed, if I understand, the conversation that we've had in June with you guys. It seemed as if AD was a trial that was gonna start in 2023, perhaps a little bit less clarity and possibly to following in HS. Perhaps I've gotten that mixed, but to be clear, I think the update today is that both trials will commence by the end of this year. Is that the case? Then, Bruce, what kind of additional sort of timeline should we think about in terms of milestone payments as this program progresses?

Are you guys advancing, KT-474 or any of the other tool compounds, through Phase I type work, potentially, to look at additional indications? I know, Nelly, you've highlighted mechanistically, biologically rationales to go into other broader categories, RA, lupus, et cetera. Thank you.

Nello Mainolfi (CEO)

Yeah, thanks, Chris. I'll, I'll answer some of these, and I think you had, like, 3, 4 questions in there. That was very elegant. I'll let Bruce answer the milestone question. First one, yeah, just to clarify further, what we've said for the past 9 months, since December, 7 months, we've said that Sanofi was, was gonna take over clinical development of KT-474, and that there was commitment to initiate a, at least one Phase II study in 2023. That was named to be the HS Phase II study. They did commit also to initiate an AD Phase II study, but we were not, as a collaborators, as collaborations, we did not point to the exact time of Phase II start.

It was not clear that it would be, excuse me, in 2023. What we're updating today, was finally that also the Phase II start of AD will happen in 2023. HS will be 1st, and AD will be 2nd. Both of them will start in 4Q23. We wanna thank Sanofi for allowing us to share more details and, and also to accelerating the initiation of the 2nd Phase II study. With regards to other indications, before I let, let Bruce comment on the milestones, I mean, we as, as collaborators, continue to discuss other opportunities. We've, I think we both feel, I can probably speak for, speak for both.

We both feel that there are other opportunities that are both mechanistically and clinically, that fit the profile of an IRAK4 degrader. We're just not, at this moment, able to share more details, but rest assured that as things progress, we will be updating on those strategies.

Bruce Jacobs (CFO)

Thanks, Chris. This is Bruce. Just to clarify on the milestones. What we've said in the past is that the first Phase II patient dose generate milestones by indication up to a certain number, and we've said at least 2 and hadn't commented before that. Beyond that, I should say the first 2 milestones for HS and AD are included in our runway guidance, but no other milestones. I think I heard you ask about the additional program or the additional molecules that we might generate targeting IRAK4. That was contemplated in the initial collaboration agreement, the work that is ongoing there has the potential to generate milestones as well.

We just haven't said specifically what those, critical events are and the timing, but I think that's something you'll, you'll hear updates from us on over time as well.

Chris Shibutani (Senior Analyst and Managing Director, Biotechnology Equity Research)

Great. You said initial collaboration agreement. There was an update to that collaboration agreement in November of 2022, so that's still contemplated in this most recent active agreement, correct?

Bruce Jacobs (CFO)

Yeah, exactly. When, when we discussed the amendment, we made the comment at the time that there, you know, the aggregate milestones remain unchanged, and that includes with respect to the, the follow-on, you know, compounds, molecules that may be generated as well, so the, the aggregate total remains unchanged.

Chris Shibutani (Senior Analyst and Managing Director, Biotechnology Equity Research)

Thanks. Confirmation, reassuring progress. Appreciate it.

Operator (participant)

Thank you. Your next question comes from the line of Michael Schmidt from Guggenheim. The line is open.

Michael Schmidt (Senior Biotech Analyst and Senior Managing Director, Equity Research)

Hey, guys, good morning. Thanks for taking my questions. I had one on KT-413, where we've seen the updated Phase I data at ICML recently, where it looks like you're achieving target degradation already at dose level 3 or 4. Can you talk a bit about how the neutrophil recovery and neutropenia has tracked with your expectations based on the cyclic dosing? Also perhaps talk about the scope of the clinical update later this year and expectations for that. Thank you so much.

Nello Mainolfi (CEO)

Thanks, Michael. Maybe I'll start with the second part of your question, and then I'll let Jared address the first part of your question. With regards to expectations, for both programs, as we said, the goal is really to continue and evaluate PK/PD safety, and potentially, you know, complete the dose escalation portion of the Phase Ia study. And as you know, the goal of dose escalation is to establish safety, in this case, also PK/PD. As you know, in clinical development, especially in oncology, it is important to assess early signs of antitumor activity to solidify the hypothesis of, you know, these oncology programs providing benefits to patients.

As part of the dose escalation for both program, we expect that we'll, we'll have a handful of patients for KT-413 to be MYD88 mutant out of the old B-cell lymphoma that we're recruiting, and for KT-333, CTCL, LGL, and PTCL out of the whole liquid and solid tumor cohort, in order for us to, again, establish early signs of antitumor activity. Again, in terms of expectation, we hope to being able to report on a complete or close to complete data set on the PK, PD, and safety as part of the dose escalation study, and then hope to have, let's say, a handful of patients from each of the studies that fit the sensitive patient population, where we would be able to evaluate the antitumor activity of these first-in-class mechanisms.

What we're not going to be able to discuss is, obviously, extent of response rates and metrics just because we believe that those are more scientifically sound in a better designed study to evaluate the clinical activity, which we believe is expansion cohorts and beyond. But again, antitumor activity, validation of these mechanisms, ability to correlate degradation to a impact on tumors, is what we hope to being able to share later in the year. Maybe, Jared, you can talk about the neutropenia question.

Jared Gollob (Chief Medical Officer)

Sure, Mike. So in terms of your, your question about neutropenia, you know, when we provided our update back in June around the ICML meeting, you know, we indicated that we had not seen any dose-limiting toxicities or any drug-related neutropenia, which was very encouraging to us. You know, as you, as you mentioned, because we were seeing a strong IMiD activity with, you know, greater than 90% knockdown of IKAROS and AIOLOS, but we're not seeing neutropenia. You know, you know, yes, you know, we're expecting to see some decrease in neutrophil count.

We have seen some decrease in neutrophils, you know, followed by recovery, but it hasn't risen to the level of being neutropenia, which is in line with our preclinical, you know, data, our GLP tox data, you know, where we did see some decline in neutrophils, but then we saw recovery, you know, prior to the next dose, 3 weeks later.

You know, the use of this every 3-week dosing schedule, at least so far in the clinic, has been successful from a safety standpoint in helping us to mitigate any sort of dose-limiting neutropenia, which we think is important because we do have this, potent IMiD activity as part of KT-413, of course, along with the strong IRAK4 lowering activity, that our ability to dose escalate without being limited by myelosuppression, especially neutropenia or by G-ICAN, is something which we see as being very encouraging so far.

Operator (participant)

Thank you. Your next question comes from the line of Kuljit Batalia from B. Riley Securities. sir, your line is open.

Kaljit Batal (Analyst)

Yeah. Hey. Yeah, hey, good morning, and thanks for taking the question. For the planned Phase II study in HS, can you give us any color on the expected trial design and maybe what types of patients you're planning to include in that trial? Would you allow the use of prior use of Humira in that study? I have a follow-up.

Nello Mainolfi (CEO)

Kuljit, thanks for the question. It's a great question. Unfortunately, we're not in the position to comment on it, but, I think, soon enough, I believe, there'll be updates on ClinicalTrials.gov. At that point, we might be able to add some color around what's been disclosed. That's what we've agreed with, our partner at this point.

Kaljit Batal (Analyst)

Okay, got it. What are you looking in terms of expectations for that trial in HS? Are you looking to beat or match what Humira has performed historically, or do you think there's a slight, wiggle room here that you don't need as much efficacy because you have an oral option?

Nello Mainolfi (CEO)

Another great question. I'm glad we're, we're starting now, setting expectations. Let's start with,what we've seen so far. We've seen some really encouraging activity, I would say, in both HS and AD. Obviously, your question was focused on HS, which is okay, but I would say on both indications. The in both indications lack, at this point, a well-tolerated, potent oral option that can help patients manage these really difficult diseases, especially obviously the moderate to severe cases. Our goal is to have an oral option that is well tolerated and that works and helps patients, and that we believe can be competitive with other agents that have been approved in those patient populations.

I think once we complete the study and we have a dataset that is placebo control and, and, and solid, I mean, we can then start to discuss if that type of dataset is repeated in a Phase III study, where is the commercial strategic placement of this particular drug. I think right now it's premature to discuss, the commercial option. All I can say in terms of clinical and patient impact, we are planning to develop this drug, and to be honest, others that you'll hear about in the future to fill a need, which is an oral options for patients that don't have one, that is both well tolerated and active.

Our limited experience, I would say limited again, in both HS and AD, running studies in patients, has been that regardless of the activity of existing options, patients are looking for well-tolerated, easy to take oral drugs. That's what Kymera is gonna be focused on in the next few years.

Operator (participant)

Thank you. Your next question comes from the line of Vikram Purohit from Morgan Stanley. Sir, your line is open.

Vikram Purohit (Executive Director, Biotech Equity Research)

Hi, good morning. Thanks for taking our questions. One follow-up, and apologies if this was discussed, and we missed it. On the topic of additional potential indications for 474 beyond HS and AD, what is your and Sanofi's kind of cadence of decision making there? Is that going to be dependent on data from the planned Phase II studies in these two indications? Is that a separate decision-making process that you're going through with Sanofi at this time?

Then secondly, I'm not sure to the extent you can talk about this now, just given your recent remarks on, on the other question around HS, but has your and Sanofi's thinking around the design for the HS study and the patients you might enroll, been impacted at all by, recent competitive developments in that indication? Thanks.

Nello Mainolfi (CEO)

Yeah. Thanks, Vikram. Both great questions, I think I can address both. The first one, I can't speak for Sanofi, unfortunately. What I can say, though, that we are, as any responsible drug development organization, and in this case, partnership, are discussing what potential other opportunities are for an asset like this. As Kymera on our own have been doing this for now, a few years. Obviously we don't have to reinvent the wheel that many times. The conversations are around, what are the other potential opportunities beyond HS and AD?

I, I can't speak to the decision-making pro-process, but maybe from my perspective, what I can say is that obviously generating, exciting data in HS and AD, might influence, some other indications that are very close mechanistically and biologically to HS and AD. It will not, in my mind, again, influence, indications that are biologically, and, and, and pathologically differentiated from HS and AD. If you look at the list of potential indications that even we have on our website, you can imagine that there are, numerous opportunities that fit the first bucket and the second bucket. Maybe I'll leave it at that at this point. For the second question, which was around, have, other studies impacted our clinical tri-trial design? The, the short answer is no.

The way that we and Sanofi have designed the Phase II study is to evaluate the, obviously, safety, as safety and the clinical activity of an IRAK4 degrader in HS and in AD, and we believe that our design is gonna be able to answer that question. The question is whether the drug is superior or inferior clinically to other drugs, that's not the goal of our Phase II study. I, I put it out there already, so, as you can imagine. This goes back to, we believe there is a clear need in HS, in AD, I would add, I would argue in asthma and COPD and IBD, of well-tolerated, and this, again, these are my, my words, of oral, well-tolerated active drugs, and that's what we're trying to develop here.

Operator (participant)

Thank you. Your next question comes from the line of Eric Joseph from J.P. Morgan. Sir, your line is open.

Eric Joseph (Executive Director and Senior Equity Research Analyst – Biotechnology)

Thanks. Thanks for taking the questions, and just a couple from us on 253. And just this, this point of differentiation where you expect to be bypassing the feedback regulation of MDM2. Maybe can you just remind us the kinetics of that feedback? And is looking at sort of degradation after cycle 1 enough to support having a differentiated degradation profile? Or would you perhaps need to look at degradation with subsequent cycles to get a better understanding of the max degradation profile and, use that to optimize scheduling selection?

Nello Mainolfi (CEO)

Yeah, another great question. I guess, we're very fortunate here to have great, great questions today. The 253, what is the kinetics of the feedback loop, and where does the overcoming of the feedback loop impact the biology of p53? I, I might add a kind of a follow-up point to your first point. What we have, what we have experimentally demonstrated, that the feedback loop needs to be overcome, which means we need to retain high level of MDM2 degradation only for the first few hours. Actually, beyond the first few hours, it doesn't matter anymore whether you're, you're degrading MDM2 or not. Once you degrade it for the first few hours, cells have a, a irreversible commitment to that. That's the hypothesis here.

small molecules, it actually doesn't really depend on the dose, at a really hard time overcoming that, just because it's limited by how much compound you can give and the pace of that resynthesis of P53, of MDM2. We, being a catalytic, it doesn't really matter exactly what the dose is. We're able to degrade a large amount of MDM2 every minute, that the compound is on board. We should be able to evaluate mechanistically the our ability to suppress MDM2 and to lead to cell death on cycle one. Now, multiple cycles might be needed to have maximal antitumor effect, but that, as is just standard oncology drug development.

And importantly for us, the hypothesis is MDM2 degradation leads to apoptosis, leads to cancer cell death, leads to antitumor activity before we hit those limiting toxicity, which does not happen with small molecule inhibitors. That's why I said earlier, we should be able to show that in a Phase I study. Again, we're not gonna be able to talk about what is the response rate in population X, Y, and Z with big numbers, just because it's a dose-escalation studies. We should be able to demonstrate that in patients that, and tumor types that are sensitive to this mechanism, at, at the right dose, we should be able to see antitumor activity, before we hit those limiting toxicity.

That will be the definition of success, at least early success, for this program, that other MDM2 inhibitor programs haven't been able to demonstrate convincingly, at least in our eyes.

Operator (participant)

Thank you. Your next question comes from the line of Eli Merrill from UBS. Your line is open.

Speaker 17

Hey, guys, this is Jasmine on for Ellie. Thanks so much for taking our question. We saw from the update in June that the majority, just so far with KT-413, have been MYD88 wild type and not mutant. How should that, like, inform our expectations for, any potential antitumor effects you're expecting to see? Do you expect that proportion to change as enrollment continues? Then I have a follow-up.

Nello Mainolfi (CEO)

I didn't hear it very well, but I think you asked -- I think I'm gonna answer anyway, and you tell me if I understood your question? It's true that as of, as of the ICML update, which I, I, I want to remind everybody, the cutoff date, I believe, was June first. All the patients, but one, were MYD88 wild type, and actually the only patient that was MYD88 mutant was the first patient in dose level 4. Which, in a way, I think it was a bit of coincidence, but it was a fortunate coincidence, meaning that the only or the first patient with MYD88 mutant or mutation was at a, at a cohort that we believe should be or could be clinically active.

We do expect to see activity only MYD88 mutant patients. That's based on our preclinical data, where really strong activity was seen only in MYD88 mutant patients. Our ability to demonstrate antitumor activity, as I said earlier in this program, will be driven by our ability to have multiple MYD88 mutant patients, as I said, a handful, as part of the dose escalation to evaluate the clinical activity. While the rest of the patients, I assume, will be mostly generating PK, PD, and safety data, which is, again, really the official goal of the Phase I study. Hopefully that answers your question.

Speaker 17

Yeah. Thank you. On the KT-333 program, how should we think about the discontinuation rate you expect going forward? Of the adverse events classified as related to KT-333 that you showed in the ICML poster, do you see those as, like, related to the mechanism? Do you expect to see any of those going forward?

Nello Mainolfi (CEO)

Well, I might ask you, Jared, answer this one. Jared, hopefully, you, you heard it well.

Jared Gollob (Chief Medical Officer)

Yeah, I sort of heard part of it. A little bit of it wasn't entirely clear.

Nello Mainolfi (CEO)

Maybe, Jared, I'll summarize. Potential discontinuation rates in KT-333, and what did we see in terms of relatedness of adverse events in the KT-333 study up to the ICML disclosure? That's my addition.

Jared Gollob (Chief Medical Officer)

Yeah. Yeah, I, I mean, we really haven't seen much in the way of discontinuation due to, due to adverse events. We have had people, who eventually have come off the study, but, but not, not due to, to adverse events. In terms of what do we expect in terms of future discontinuation rate, hopefully, it will be low in terms of adverse events. Patients may come off for other reasons, like disease progression, for example, but hopefully not for adverse events. If we look preclinically at what we saw in terms of safety as we push in higher doses in, in preclinical studies, we did see, GI side effects there, and relatively modest, effect on platelets.

So far, we've seen, relatively little of that, as we've been dose escalating. We have had adverse events, many of which have been related to disease, as opposed to being related to the drug itself. As we continue to dose escalate, we'll be, watching carefully for, any adverse events that are thought to be related to treatment and see how those line up with what we saw preclinically. I think that's the whole point, really, of Phase I, really, is as we dose escalate, to really see how well, the level of STAT3 knockdown that we're seeing, is tolerated by these patients. It does.

It is difficult sometimes, in these early Phase I studies, when you have very heavily pretreated patients.

Speaker 16

To be able to sort out, events that you're seeing that are related to the disease itself versus those that are related to the drug, and the investigators at the sites ultimately have to make the call there. So far, the safety profile has been encouraging, and we'll just continue to watch as we enroll patients onto the trial.

Bruce Jacobs (CFO)

Operator, in the interest of time, can we ask the questioners just to keep to one question so we can try to get through the rest of the queue?

Operator (participant)

Understood. Thank you. Your next question comes from the line of Kripa Devarakota from Truist Securities. Your line is open.

Kripa Devarakonda (VP, Biotechnology Equity Research)

Good morning. Thank you so much for taking my question. I know a lot of them have been answered with respect to Sanofi initiating programs in HS and AD, but given Sanofi's footprint in that space and also the evolution of the competitive landscape in HS as well as in AD, would be great to get your thoughts on potential for combos that could be synergistic. For instance, would an antibody targeting a downstream cytokine in the pathway be a potential combo partner? Thank you.

Nello Mainolfi (CEO)

Yeah, no, great question. I mean, I would start with, again, saying what I said earlier, which is, in both indications and others, patients, still need effective therapies. If you look at even Dupixent, which is, one of the most successful drugs in immune inflammatory diseases, has a really limited penetration. I think there is still a need for effective therapy that are simple to use and that are well tolerated. If I wanna indulge, your question on the scientific merit, yeah, sure, there are opportunities to synergize across these multiple immune mechanisms. I can't speak to those plans because, to be honest, have not been discussed.

One would say, let's say, an observer of how the understanding of immune inflammatory diseases is evolving with time, that, yes, there could be potential synergies across more than one mechanism, that's just a scientific observation at this point, from my standpoint.

Operator (participant)

Thank you. Your next question comes from the line of Derek Archila from Wells Fargo. Your line is open.

Derek Archila (Managing Director, Co-Head of Therapeutics Research | Senior Biotechnology Analyst)

Hey, good morning, and thanks for taking my questions. Just to follow up to an earlier question on KT-333 or potentially another STAT3 degrader you might develop for I&I indications. Is this something that you would explore yourself, or is this, purely for something that you would look to partner KT-474? Thanks.

Nello Mainolfi (CEO)

No, I mean, our, our strategy is not to partner immunology programs. We did partner KT, though, I should say, IRAK4 in 2020. That, at the time, was the right thing to do for the company, but that is not what our base case strategy is. You should not expect that the next immunology program is gonna be partnered. I think it will depend on many factors, but I, I think you should not expect that our base case is to partner these programs before they reach key inflection points, in general.

Operator (participant)

Thank you. Your next question comes from the line of Kelly Shi from Jefferies. Your line is open.

Sean Pan (Analyst)

Hi, this is Sean Pan on for Kelly. Thanks for taking our question. One of your 103 objectives is to deliver 2 new INDs. Can you provide more color in terms of the indication and, and targets, and how the learnings from the current clinical programs have instructed your, your plans? Thank you.

Nello Mainolfi (CEO)

Yeah, no, it's a great question. I'm not gonna go into the specifics of the numbers there, but just generally, what I said earlier is that, we've, we've learned a lot from the first seven years of this company. We, I think it's fair to say we're pioneering protein degradation, and for sure, we're pioneering its protein degradation in immune inflammatory diseases. Lots of learnings on how to develop, at least early, to discover an early development of immune inflammatory degraders that have the potential to be best-in-class oral options. I think the expectation to have is that, there'll be a lot of focus on those particular type of programs. Large, large opportunities, unmet needs, oral immune inflammatory drugs and, and, and, and other indications.

I would say that the expectation is a lot of focus in that particular area.

Operator (participant)

Thank you. Your next question comes from the line of Richard Law from Credit Suisse. Your line is open.

Speaker 16

Morning. This is Grace on for Rich. Thank you for taking our question. Sorry. Just wondering, for the program KT- , how are you thinking about positioning that in lines of therapy in the Phase II study? Are you still trying to stay broad, or will you narrow to a more specific patient population in this study? Thank you.

Nello Mainolfi (CEO)

Thanks. I, I kind of addressed this earlier. At this point, we're developing a drug that we believe has the potential to be safe, active, and access a broader population of patients that right now are not served by existing therapies. Again, when, when we talk about labels and commercial positioning, that, well, that will happen further in clinical development. Right now, we don't have any reasons to believe that we will be limited by any factors at this point.

Operator (participant)

Thank you. The last question on the queue comes from the line of Geoff Meacham from Bank of America. The line is open.

Hao Shen (Equity Research Analyst covering Biotechnology)

Good morning, this is Hao Shen calling in for Geoff Meacham. Thank you for the question. Just to follow up on BD, other than immunology, are you looking for BDs, for the assets in your other therapeutic areas? If so, what are maybe some of the things top of your mind when you're making these type of decisions?

Nello Mainolfi (CEO)

Question was a BD? Did you say BD, like business development or AD?

Hao Shen (Equity Research Analyst covering Biotechnology)

Yes. Yes, BD, like, KT-474 type of collaboration.

Nello Mainolfi (CEO)

Yeah. Yeah. I mean, we've commented on this particular topic at length in the past, so I'll try and keep this short. I mean, a company with a broad pipeline that has an enabling platform that can deliver sustained innovation will continue to entertain potential synergistic partnerships. I would say that's a broad concept. I don't think right now we're in the position to discuss specifics about indications, area programs, but I think that statement apply, probably will apply always for a company like Kymera that has this such an effective engine to deliver potentially innovative therapies.

Operator (participant)

Thank you. Showing no further questions in the queue, I'll now hand the call over to Justine for closing remarks.

Justine Koenigsberg (VP, Head of Corporate Communications and Investor Relations)

Thank you, Justin. Thank you everyone for participating on today's call. I am very excited to join the Kymera team and look forward to working with many of you going forward. Excuse me. In the meantime, please don't hesitate to reach out to me or Bruce if you have any follow-up questions. Thank you. This concludes today's call. Goodbye.

Operator (participant)

This concludes the conference. You may now disconnect.