Kymera Therapeutics - Q3 2024

Transcript

Operator (participant)

Good day and welcome to the Kymera Therapeutics third quarter 2024 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would like now to turn the conference over to Justine Koenigsberg, Head of Investor Relations. Please go ahead.

Justine Koenigsberg (Head of Investor Relations)

Thank you. Good morning and welcome to Kymera's quarterly update call. Joining me this morning are Nello Mainolfi, Founder, President, and CEO. Jared Gollob, our Chief Medical Officer. And Bruce Jacobs, our Chief Financial Officer. Please note that during Jared's remarks, we intend to reference data from slides in our corporate presentation, which is available within the IR section of our website at kymeratx.com. Following our prepared remarks, we will open the call to questions. We ask that you please limit your questions to one and a relevant follow-up to assure we have enough time to address everyone's questions. Before we begin, I would like to remind you that today's discussion will include forward-looking statements about our future expectations, plans, and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

A description of these risks can be found in our most recent 10-Q filed with the SEC. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call. With that, I will now turn the call over to Nello.

Nello Mainolfi (CEO)

Thank you, Justine, and good morning, everybody. We have a lot of important updates today, so let's jump right in. First and foremost, we're extremely excited that we have started the phase I study of KT-621, a first-in-class oral STAT6 degrader, and the first STAT6 medicine to ever enter clinical development. It's important to highlight that we were able to accelerate the path to the clinic given our recent increased focus of resources and capital that we're directing towards our growing immunology pipeline. I believe this is also an important moment for the whole industry. We have shown in preclinical species that a STAT6 degrader like KT-621 can block IL-4 and IL-13 similarly, or even more potently than an upstream biologic like dupilumab in both cellular and in vivo models.

We've also shown that KT-621 was well tolerated in all safety studies that we have run in a wide variety of preclinical species. In summary, we have an investigational drug that has the potential to have a dupilumab-like profile in a daily oral pill. Many of you know there are more than 150 million patients just in the U.S., Europe, and Japan who suffer from diseases associated with Th2 inflammation. And according to market data, less than a million of those patients receive dupilumab. While one could focus on the roughly million patients currently on dupilumab, Kymera is focused on expanding access across the tens of millions of patients that are waiting for a convenient, safe, and effective oral pill. One that doesn't require needles, refrigeration, syringes, and frequent trips to the doctor's office.

We believe KT-621 is a medicine that has the potential to transform treatment paradigms in many diseases that affect millions of patients, such as atopic dermatitis, asthma, COPD, EOE, just to name a few. In addition, given that Th2 diseases are highly prevalent in children, we believe this has the potential to be a drug that will change the quality of life for many families in the future. Our next STAT6 update is expected to be upon completion of the Healthy Volunteer study in the first half of 2025, at which point we will share the full results. Following the completion of the phase I study, our plan is to move quickly into patients. We have those plans well established, and we expect to provide guidance on the next stage of KT-621 clinical development next year.

Jared will share more details around the ongoing phase I study later in the call. I also want to briefly highlight another important update on KT-474, our first-in-class IRAK4 degrader. This is another program where Kymera was first to clinic, and a success has influenced the industry with several companies following our lead with other IRAK4-directed assets. We're finally able to share more information on the expanded phase II studies that are being run by our partner, Sanofi. As I'm sure you have read in our press release earlier today, the program is transitioning from proof of concept-like phase II studies to fully powered phase II-B studies, with dose ranging, as a means of accelerating our path to registration of phase III studies right at the conclusion of the ongoing studies.

In terms of the specific trial changes, we have basically added one dose group to each study to have enough information to be able to select a dose for the subsequent registration of phase III studies. We're thankful to our partner, Sanofi, for the increased confidence in and commitment to this important program. Turning to TYK2, we have exciting progress to report as well. At our R&D day in January of this year, we introduced our TYK2 program and our lead molecule, KT-294. Similar to all of our programs, as KT-294 was being advanced through preclinical development, we had parallel work ongoing on other promising compounds. One of the compounds we were evaluating demonstrated an even more compelling profile than KT-294, highlighted by greater in vivo activity and with a similar selectivity and safety profile.

As a result, we have decided to advance the new compound, KT-295, as our lead clinical candidate. Importantly, we believe we can do that without impacting our previously stated TYK2 development timelines, which assume the phase I trial start in the first half of 2025. Finally, I just wanted to provide everyone with a broader strategic update, and specifically as it pertains to our oncology programs. As many of you recall, it was around this time last year we first shared that we had increased our focus in immunology. The rationale was driven by the profoundly impactful profiles we believe we could generate in immunology with oral degraders that could compete with injectable biologics in terms of efficacy and safety.

As shown with KT-474 in the clinic and with our STAT6 and TYK2 efforts preclinically, we think we're positioned to develop a potential best-in-industry portfolio of oral immunology assets with opportunities to impact millions of patients. Even more today, with KT-474 in multiple phase II-B trials, KT-621 in the clinic, and KT-295 close to the clinic, and other exciting immunology programs that we will be unveiling starting from next year, we believe that now is the time to focus even more of our resources into this space where we believe we can create outsized value.

As a result, while we've made some encouraging progress with our clinical oncology pipeline demonstrating promising clinical activity in a variety of tumor types, as we have completed phase I enrollment, we have made the decision that we will only advance KT-333, our STAT3 degrader, and KT-253, our MDM2 degrader, beyond phase I with a partner. You can expect that we'll share more on this if and when it makes sense to do so. While there are many considerations that contributed to this decision, ultimately, we believe our internal resources, both capital and people, are best focused on our expanding immunology pipeline. It should be noted that we did not take this decision lightly or made it without thinking about the potential impact on patients. We're, in fact, grateful to patients, families, and investigators, and the Kymera team who supported our studies and these programs.

In conclusion, as we approach year-end, it is quite exciting to see the trajectory that Kymera has had in 2024, especially within our immunology pipeline. We've advanced in the clinic KT-621 with what could become one of the biggest programs in our industry. We have supported Sanofi to advance KT-474 in expanding the phase II studies. We've developed a TYK2 degrader with a compelling profile and are closer to the clinic. And we have raised a total of approximately $600 million in just 2024 that has enabled us to have cash into mid-2027 and through several inflection points across our pipeline. I will pause here and let Jared share more details on our programs, and Bruce will walk you through the third quarter financial results. I'm looking forward to the Q&A session at the end of our prepared remarks. Jared?

Jared Gollob (CMO)

Thanks, Nello. As it relates to immunology, I'd like to first recognize our KT-621 team for the rapid progression to advance this first-in-class program through IND-enabling studies, culminating in the IND clearance and the initiation of the phase I healthy volunteer study earlier this month. As we have not shared many details on the trial design, I wanted to take the opportunity now to provide a quick overview of the phase I design. The SAD/MAD healthy volunteer trial includes single and multiple ascending dose cohorts evaluating KT-621 as compared to placebo. In the SAD component, each subject receives a single dose of either KT-621 or placebo. In the MAD component, each subject receives a daily dose of either KT-621 or placebo over 14 days.

In terms of data we plan to share, the main objective of the trial is to demonstrate that we can robustly degrade STAT6 in blood and skin at doses that are safe and well tolerated. Based on our preclinical work, we are targeting STAT6 degradation of 90% or more, which is the level at which we saw strong biologics-like activity in our preclinical models. In fact, levels of pathway blockade, in this case measured by STAT6 levels, are the data that we have shown to be translatable to patient efficacy. As we have said, STAT6 degradation and safety and tolerability are the key readouts from this study. Additionally, as many of you know, we plan to measure certain Th2 biomarkers, specifically IgE and TARC, in the healthy volunteers on our study. We fully expect KT-621 to have an impact on these biomarkers.

However, we believe the impact is likely to be much more robust and relevant in patients, as was also true for dupilumab. With enrollment underway, we continue to expect to report the full SAD and MAD phase I results for KT-621 in the first half of 2025. At or before that time, we will also share our plans for the next stage of KT-621's development. I'll now turn to our TYK2 program. As Nello mentioned, we made the decision to advance a new development candidate, KT-295, into the clinic, which we believe we can do without impacting our stated timelines of the first half of 2025 for the start of the phase I study. I thought I would take a few minutes to share some details around KT-295, particularly a comparison to KT-294 that influenced our decision.

You can also reference the TYK2 program slides in our corporate presentation, which is available on our website. On slides 48 and 49 of our corporate deck, you can see that in preclinical testing, KT-295 demonstrated picomolar degradation potency and potent inhibition of the IL-23, IL-12, and type I interferon pathways, showing its potential to recapitulate the biology of human TYK2 loss of function mutations. Like KT-294, on slide 50, KT-295 did not impact any of the other JAK proteins and spared IL-10 signaling, a feature important in the treatment of inflammatory bowel disease. Importantly, KT-295 had greater in vivo activity compared to KT-294, as shown back on slide 48. With this profile, KT-295 has the potential to replicate the TYK2 loss of function profile and achieve biologics-like activity at lower doses than what was predicted for KT-294. To round out our I&I franchise, I will cover IRAK4.

We are pleased that Sanofi has taken steps to accelerate the overall KT-474 development program. And as a reminder, the goal of the previously announced decision to expand the phase II program was to structure the hidradenitis suppurativa and atopic dermatitis trials with the necessary regulatory perspective to enable dose selection and advancement directly to pivotal phase III studies, ultimately with a meaningfully shorter timeline. To support this strategy, the size of the studies has increased with additional doses being evaluated in both trials. There are no changes to study endpoints. Specifically, the HS phase II trial has been expanded from 99 to 156 patients and will evaluate two doses of KT-474 versus placebo versus just one active dose previously. The AD phase II trial has increased from 115 to 200 patients and will evaluate three doses of KT-474 compared to placebo versus just two active doses previously.

These changes drive the primary completion dates to the first half of 2026 and mid-2026 for HS and AD, respectively. While that obviously extends the time before the complete phase II data readout, we expect that it will meaningfully reduce overall development timelines for the KT-474 program by allowing a faster path to pivotal studies. We're energized by the progress and potential impact of our immunology programs, each representing pipeline and product opportunities, and we believe that our oral degraders are uniquely positioned to have both the efficacy and safety of biologics with multiple development opportunities and large high unmet need indications. Finishing up on oncology, I will not add too much more to what Nello said earlier, but I did want to remind everyone that we will be sharing the totality of the phase I data for our STAT3 degrader, KT-333, at ASH in December.

As a reminder, our latest enrollment was focused on Hodgkin's lymphoma patients given the promising responses we observed in that population, and those results will be included in the poster presentation. I'll stop here and ask Bruce to review the third quarter financial results. Bruce?

Bruce Jacobs (CFO)

Thanks, Jared. As we have a lot to cover on this call, and I'm sure you all have many questions, I'm going to provide a quicker than normal overview of our financials and then refer you to the financial statements and the press release in our 10-Q, which we filed this morning. In the quarter, we recognized $3.7 million of revenue. That was all attributable to Sanofi and the collaboration. Combined spending of R&D and SG&A, excluding cash-based, non-cash, stock-based compensation, was $61 million in the quarter, and that's down about 2% sequentially from the June quarter. Then finally, we ended the quarter with $911 million of cash on our balance sheet, providing a cash runway to mid-2027. I'll now turn the call back to Nello.

Nello Mainolfi (CEO)

Thanks, Bruce and Jared. Before we open the call to questions, I just want to reiterate that we're more enthusiastic than ever about the opportunities in front of us. Advancing KT-621 in the clinic is a significant milestone for Kymera and the industry, and we're doing so with a very exciting drug profile based on our preclinical finding. We're executing on the rest of our immunology pipeline, and we look forward to sharing updates on TYK2 and providing more visibility on other pipeline programs, which we have yet to disclose, likely next year. We're well resourced to advance our best-in-industry pipeline of degraded therapeutics and look forward to keeping you updated with our progress. The next six to 12 months will provide multiple value-creating catalysts, and we look forward to sharing these with you.

Finally, I wanted to thank the Kymera team and our collaborators for continuing to deliver on very ambitious goals and first-in-industry endeavors. I'll pause here and ask the operator to open the call to questions.

Operator (participant)

Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star, then 1 on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press Star, then 2. We ask that you limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question comes from Marc Frahm of TD Cowen.

Marc Frahm (Equity Research Analyst)

Hey, thanks for taking my questions. Thanks for taking my questions. Maybe thinking to the 61 healthy volunteer data, and thanks for the kind of clarity on exactly kind of where the target profile is. But maybe thinking through to the Th2 biomarkers, investors seem to be really trying to comp this to what was seen with DUPI, as you alluded to. How reliable do you think those changes, this percent changes in IgE and TARC from the healthy volunteer study almost a decade ago really are? How comparable and how tight of a range do you think you need to get to?

Nello Mainolfi (CEO)

Yeah, maybe I'll start, and Jared, please jump in. So first, I mean, Jared, I think, explained that the main goal of the phase I study for any program, but especially for us, is first to demonstrate that we have predictable PK, and the safety is translating from the amazingly well-tolerated profile that we've seen preclinically. Now, with the degrader, as we've done multiple times, we have this unique opportunity to access a direct biomarker. So don't forget, lots of other modalities and companies use downstream biomarkers because they're not able to have a proximal biomarker. So we have the most proximal biomarker, which is STAT6 protein levels. So we can look at STAT6 protein levels in blood and skin to show that we're able to block IL-4/IL-13 pathway fully. And that's the goal of the study. That is the only biomarker that has been correlated to disease impact.

Again, blocking the pathway has been correlated to disease impact. In fact, actually, there was a recent paper, sorry if I'm digressing a bit, where actually there were humans where they found partial loss of function variant of STAT6 that was protective against Th2 asthma. So that's actually now, for the first time, even correlating protein function, protein levels to protection in Th2. So now, many companies, including Regeneron back in the day, and you also saw other companies with these long-acting biologics, obviously look at downstream levels, again, because you can't really measure your direct biomarkers. As you know, people have looked at IgE and TARC. I feel like IgE has been mostly detected by the dupilumab data, and I think it's from recent publications from other companies. I actually haven't seen IgE data out there, but mostly TARC and phospho-STAT6 for other companies.

It's important to understand that they're modestly elevated in healthy volunteers, right? You're trying to measure something that is just around the baseline. There is inter-subject variability, so it makes it difficult to predict the degree of reduction. If you look at, for example, if you look at the published paper of dupilumab that you were referring to in healthy volunteers, you see IgE is impacted between 10%-30%. Actually, if you look at the sub-Q dose, actually up to 15%. And there is quite a bit of variability. And TARC between 15%-35%, which is actually in line with the data also from the long-acting IL-13 biologics that is being evaluated in phase I. I think that kind of sets the range.

I would just discourage people because from trying to understand the exposure to biomarker relationship because these data, at least in other endeavors, are very noisy. So that's why we say what we know is critical is obviously safety PK, but levels of STAT3 degradation because they tell us ability to suppress pathway signaling. Then, again, we have confidence it will change the biomarkers, and I'm sure they will be in the range of what has been seen for these agents that have been in the clinic. Sorry, long answer, Marc.

Marc Frahm (Equity Research Analyst)

Long but very helpful. Then maybe just more on the model with Bruce. Just talk through with the kind of continuing prioritization of the immunology side. Are there kind of any savings of that from the oncology, or it's all going to be redeployed into immunology?

Jared Gollob (CMO)

Yeah, thanks, Mark. It's a good question. So I mean, there are savings, yes, in aggregate because of the fact that obviously some of the clinical development plans that we contemplated, we won't be undertaking on our own. However, we do imagine that a meaningful part of that, if not all, would be invested in our immunology pipeline, both the clinical development of the programs you know about and the ones that we haven't yet disclosed but will in the future. So while there might be a modest change in the ultimate cash runway, not enough to change the guidance, I think most of it, you should assume, will be reinvested in our immunology programs.

Operator (participant)

Our next question comes from Kalpit Patel from B. Riley. Please go ahead.

Kalpit Patel (Senior Equity Research Analyst)

Yeah, hey, good morning, and thanks for taking the question. Maybe just one on the STAT6 program here. I'm curious if you've made comparisons to DUPI preclinically, if you've looked at the change in ear thickness in the atopic derm model, the MC903. And as a follow-up, I think the 32 mg/kg showed the most reductions in IgE. So I'm curious what that dose translates into humans. Thank you.

Nello Mainolfi (CEO)

Yeah, thanks, Kalpit. Great question. So let's start with the second. So if you look at the slides that have been out for now, close to 12 months, so in the mouse, to reach 90% degradation, because that's really what we're looking at, we use a 30 mg, basically, what you said, 30 mg, 32 mg/kg dose. In monkeys and in dogs, you actually need a much lower dose in the single-digit milligrams per kilogram. So the reason why in mouse you need a larger dose is because actually plasma protein binding in mouse, it's higher than it is in dogs, in monkeys, and in humans. So when you do dose projection, you should look at maybe more the dog and the monkey data. I would say the dog will show more data than using the mouse. So we don't talk about dose projection.

What we said in the past is that the doses that we've explored in the IRAK4 programs broadly are probably, again, broadly what we would be exploring in this program as well. So it's relatively low doses. With regards to your first question, so when we run these models, we focus on Th2 biomarkers and Th2-driven disease outcomes. And so that's why we looked at, again, in those models, IgE and other TARC and other measures of Th2 inflammation. And for disease outcome, we look more at the asthma model where we can look at both lung and infiltrative cells in the lungs, as well as other Th2 biomarkers. That model is not only Th2, so ear thickness is not something we kind of monitor either for DUPI or for our degrader, just because it's a more composite outcome that is non-Th2 as well.

Kalpit Patel (Senior Equity Research Analyst)

Okay, got it. Thanks for taking the question.

Nello Mainolfi (CEO)

Yeah. Operator, next question.

Operator (participant)

Our next question comes from Kripa Devarakonda from Truist Securities. Please go ahead.

Alex Siniakov (Equity Research Associate)

Hi, this is Alex Siniakov on for Kripa. A question on the TYK2 asset. They've had some conversations with investors about what they would describe as a slow launch for a certain TYK2, citing some efficacy, good efficacy, and indications like psoriasis and maybe some challenges in others like IBD. Do you think that a degrader could address these issues and provide additional benefit? And when you think about future enrollments for the studies, would you consider enrolling in TYK2 inhibitor experienced patients in the trial as an expanded opportunity? Thanks.

Nello Mainolfi (CEO)

Yeah, maybe I'll address the first one, and I'll let Jared address the recruitment one. So I mean, you obviously bring the point of the current commercial success of TYK2 inhibitors. I'm going to answer it a bit differently, but hopefully still addressing your point. So what we have right now in the industry, we have a genetically validated target, TYK2, that has been drugged by multiple molecules from different companies. One has been approved by BMS, and there are at least two or three other companies in different stages of development. We believe strongly at Kymera, and I think people that understand TYK2 biology would tend to agree with us that all these inhibitors are going to be difficult to be differentiated because they address only partial function of TYK2. TYK2 has a well-characterized scaffolding function that actually is important in receptor signaling, IL-23, IL-12, type I interferon.

By removing the protein, we are going to completely block TYK2 signaling, and we're able to near-complete block three of these pathways. So obviously, if the profile of our degrader looked like the inhibitor, we would obviously have failed. That's not the type of profile that we're looking for. We're looking for something that can compete with biologics in many of those indications. And I actually believe that if we're able to translate the preclinical profile, we have a more active molecule with KT-295 because, again, full target degradation is the name of the game in this particular program. I think that we're going to have a really transformative drug. And I think at this point, it's been missed right now because there is a bit of general maybe fatigue in the TYK2 space. But Jared, a comment about recruitment.

Jared Gollob (CMO)

Yeah, I think for the initial proof of concept study in patients, we would likely not put on patients who had been on prior TYK2 and had progressed, whereas we might include patients who had been on a prior TYK2 inhibitor but had come off due to tolerability issues. Further down the road, once we've gone through initial proof of concept, we might be interested in understanding the activity of our drug, even in those patients who have progressed after prior TYK2 inhibitors, but we probably wouldn't do that in the first study.

Nello Mainolfi (CEO)

Next question, operator.

Operator (participant)

Our next question comes from Brad Canino of Stifel. Please go ahead.

Brad Canino (Equity Research Analyst)

Hi, good morning. I know you stated in the prepared remarks that the next steps for STAT6 will be shared after the SAD/MAD results and hitting that 90% plus degradation safely. But dupilumab replication in Th2 patients is the major question. Is there a particular type of Th2 disease where this test is best to conduct? I guess, how much duration of testing is likely needed? And do you need hard clinical endpoints, or will biomarkers in patients be sufficient to accelerate mid to late-stage development? Thank you.

Nello Mainolfi (CEO)

Yeah, Brad, great question, so I would kind of say it this way. I think the goal of the phase I study is to demonstrate that you can reach STAT6 degradation levels that we believe are therapeutically relevant, which, as you said, actually anywhere between 70%-90% we've shown that is therapeutically relevant, but 90% is where we see maximal activity in a safe manner. I believe that Regeneron and Sanofi have done an excellent job actually doing studies of what does dupilumab do in the blood and skin, especially of AD patients with regards to biomarker signature, and I think there's a really well-established DUPI signature, especially in the skin of AD patients.

I think that one could actually very briefly get into that type of context and demonstrate that you're able to have relevant biomarker signature that shows that STAT6 degradation blocks the pathway at least as well as an IL-4 receptor antagonist. You could imagine a biomarker study in patients to be exceptionally telling of the profile of the drug. That will probably allow you to move into large studies in all the important relevant populations. I think that could be an interesting sequence of events. I think we're not quite ready to share what our plans are, but those are important opportunities to validate this mechanism.

Brad Canino (Equity Research Analyst)

Appreciate it.

Operator (participant)

Our next question comes from Vikram Purohit from Morgan Stanley. Please go ahead.

Gospel Enyindah-Asonye (Equity Research Analyst)

Good morning, everyone. This is Gospel on for Vikram. We have one question on KT-253 and KT-333. What would an ideal partnership look like? And are discussions with potential partners currently underway? And should a partnership be something we expect in the near term? Thank you.

Nello Mainolfi (CEO)

Yeah, great question, so we're not going to comment on the ongoing or hypothetical conversations that obviously happen at any time in the lifetime of companies, but what I will say is we've shown across our oncology pipeline that we've been able to demonstrate a really impeccable translation of our PK, PD, and safety into the clinic across the different programs, and we've shown some exciting early clinical activity across different indications, and Jared mentioned we have an ASH poster on KT-333, which I encourage people to look out for, and so the activity we've shown has been, in many cases, in heme indications, so in order to maximize value in those patient populations, I think a partner that has franchise, both clinical and commercial, in those areas, I think will be able to create most values.

For us, it's really how do we help patients in the most effective way. That's what's going to drive some of our decision-making, given that our focus will be, again, on our internal resources in immunology.

Operator (participant)

The next question comes from Kelly Shi of Jefferies. Please go ahead.

Kelly Shi (Senior Equity Research Analyst)

Congrats on the progress, and thank you for taking my questions. I would appreciate your insights on what are the major differentiations of targeting STAT6 compared to targeting interleukin-4/13 or OX40 from a biology perspective. For example, STAT6 is also now involved in innate immunity besides IL-4/IL-13 signaling. So what do you see the breadth of indications that the STAT6 program could pursue based on its MOA? Thank you.

Nello Mainolfi (CEO)

Yeah, Jared, I'll take a bit of this, but maybe you can help me. So yeah, great question. So what we've shown in our studies preclinically is that the activity that we see of STAT6 in immune cells is really almost all, if not all, driven from IL-4 receptor signaling, so IL-4 and IL-13. And we've shown that if you block IL-4/IL-13, as others have shown, you reduce phospho STAT6 levels. If you reduce STAT6, you reduce IL-4 receptor level. Again, I don't want to keep quoting this recent paper, but if you read this recent paper on the partial loss of function variant of STAT6, it actually shows the same, that there is reduction of IL-4 receptor signaling. If you look at gain of function in humans, again, I'm talking about human people, humans, sorry. Also there, the STAT6 gain of function has severe allergic diseases, Th2 biology.

So, we kind of expect to be Th2 biology that the mechanism we're eliciting. So, biologically, we feel like it's really on pathway to IL-4 receptor. Jared, anything you want to add or can?

Jared Gollob (CMO)

No, no. I think that covers it. I mean, we expect STAT6 degradation to phenocopy what's been seen with drugs like dupilumab that are resulting in full blockade of IL-4/IL-13, and we've seen that impact both in our in vivo models where we see efficacy that's comparable to DUPI in the asthma and AD models, and we've seen it in multiple cell types. Even in a recent EADV presentation where we looked at STAT6 degradation in human sensory neurons, we saw that it was able to block IL-13 and do some regulation of transcripts involved in itch and pain, which are key symptoms in AD.

So we think STAT6 targeting really has an advantage in addition to the unique pharmacology of being able to degrade STAT6 by over 90%, sort of 24/7, could give us pharmacology that may be unique and differentiated from what can be achieved with the upstream monoclonal antibody biologics.

Kelly Shi (Senior Equity Research Analyst)

Great. Thanks.

Operator (participant)

Our next question comes from Jeff Jones of Oppenheimer. Please go ahead.

Jeff Jones (Senior Equity Research Analyst)

Good morning, guys, and thanks for taking the question. I guess I'll stay on KT-621 and STAT6. Clearly, you guys aren't the only ones targeting STAT6, and your IRAK4 partner, Sanofi, is working with both Recludix and Nurix. Could you comment on the differentiation between a degrader approach here for STAT6 versus the small molecule approach, and maybe any differentiation between your degrader platform and Nurix's? Thank you.

Nello Mainolfi (CEO)

Yeah, so great question. So first, I would say that we're the only company that has actually generated a wealth of data comparing KT-621 and STAT6 degradation to approved medicines. And while all the data so far has been preclinical, so there's always the caveat of preclinical, we've shown that STAT6 degradation can phenocopy in a variety of models what dupilumab does, both in depth and breadth of activity. And some would argue that we've seen even more activity than dupilumab in some of these models. So that said, I think what we believe is that degrading STAT6 is the only pharmacological way to block this pathway as fully as the saturating dose of an IL-4 receptor alpha antibody. You can use a small molecule inhibitor to block STAT6.

But blocking the pathway, given that these are occupancy-based, that there is the challenge of PK and PD correlation, we believe that the degrader that is both highly potent and catalytic that doesn't require the correlation between PK and PD has a much more profound impact in terms of pathway blockade. I would also encourage you to be patient as well. You'll hear more from us on this particular topic in the near future. With regards to us and other companies, it's hard for me to have, again, I think no other company has shown any data. No other company has a compound, even from what we understand, that has made it to development candidates. So I mean, the two companies you cited are just two out of many that are doing preclinical work in STAT6.

I think since we shared our data, I've heard of many other companies that are attempting to do what we've done. Again, I'll encourage you to continue to follow us. You'll hear more about our effort in STAT6, even beyond KT-621, as we progress this program.

Jeff Jones (Senior Equity Research Analyst)

Appreciate the update, guys. Thank you.

Nello Mainolfi (CEO)

Thanks.

Operator (participant)

The next question comes from Eric Joseph of JPMorgan. Please go ahead.

Eric Joseph (Senior Equity Research Analyst)

Hi, good morning. Just picking up on the phase I trial with KT-621. I'm sorry if I missed it, but can you give us a sense of sort of the number of dose cohorts and patient numbers that you're evaluating in the SAD/MAD and whether the readout in the first half would include both SAD and MAD components or maybe a partial readout thereof? And yeah, and the extent to which sort of the prior phase I with the IRAK4 is a useful roadmap here.

Nello Mainolfi (CEO)

On the good side, you didn't miss anything, Eric. So Jared can tell you more about at least what we can at this point about your question.

Jared Gollob (CMO)

Yeah. I mean, we can't provide a whole lot of color around the actual number of dose cohorts, but I think your comparison to the IRAK4 phase I SAD/MAD probably is within the ballpark in terms of how we plan to interrogate both the SAD and MAD portions. And just as a reminder, these are placebo-controlled cohorts of healthy volunteers, with the MAD being 14 days of dosing and the SAD obviously being single doses. So I think we'll generate a very robust data set going across a full range of doses in both SAD and MAD, and we plan on doing that sufficiently with healthy volunteers. And as we mentioned, the data readout in the first half of next year will include both the SAD and MAD portions.

It will be the full data set from the healthy volunteer SAD/MAD that we reveal in the first half of next year.

Eric Joseph (Senior Equity Research Analyst)

Excellent.

Nello Mainolfi (CEO)

Yeah, maybe the only. Sorry, Eric, just to add, because it's going to show up on ClinicalTrials.gov in a few days, anytime, I think we said there that the total number of patients in SAD/MAD is roughly 120 or up to 120. So that's the additional piece of info we can share today. Go ahead. You had a follow-up?

Eric Joseph (Senior Equity Research Analyst)

Yes. Thanks for that detail. Yes, we were looking for the trial entry. Couldn't find it. But anyway, thank you. Follow-up. Just with kind of the focus going forward here in I&I, I guess we should be anticipating additional targets, programs here in that space over the next year or so.

Nello Mainolfi (CEO)

Yeah. I mean, for sure. So it's been 3+ years that we have focused our research and development effort in immunology. We're working on many, many programs. We have multiple development candidates that are being nominated in the next few months. So we'll be happy to share, again, as we've done in the past. When we're close to the clinic, we're happy to share next targets. I think we've also learned from our previous experiences that maybe we should wait a bit longer before sharing our target and data package for competitive reasons. So maybe we'll share when we're a bit closer to the clinic than in the past. But you should expect next year at least one disclosure.

Operator (participant)

The next question comes from Ellie Merle of UBS. Please go ahead.

Hey, it's Sam on for Ellie. I guess can you just touch on a little bit your level of confidence for IRAK4's efficacy in HS versus atopic derm heading into these two readouts in 2026? And then second on STAT6, how quickly do you expect to move into patients following the SAD/MAD portion and any expectations for timing on that? Thanks.

Nello Mainolfi (CEO)

So maybe I'll take the second, and I'll let Jared take the first one. So I think we've said it today that we expect to go into patients soon after the phase I. To be honest, mostly for competitive reasons, we're not sharing those plans yet. We have them. We've had them for months, if not for years. But we will be able to share as we're closer to those studies what the plans are, both in terms of near-term development and eventually long-term development. Jared on IRAK4?

Jared Gollob (CMO)

Yeah. I think in terms of your question around our level of confidence in being active in HS versus AD, I think we have, and Sanofi as well, have a high level of confidence in potentially being active in both of these indications. I mean, mechanistically, for example, HS, we know is driven by IL-36, IL-1, Toll-like receptor activation. AD, we know there's an important component of IL-1, IL-33, and Toll-like receptors. And so I think there's a mechanistic basis for believing that IRAK4 targeting should be effective there.

I think also, if you look at our phase I study where we did have experience with both HS and AD patients, we did see impact both on skin lesions and, importantly, on symptoms in both of those diseases impacting pain significantly in HS and pruritus in AD, these being the number one symptoms that affect quality of life in these patients. So I think in addition to that phase I study, we showed modulation of pro-inflammatory pathways and skin biopsies from both of those patients. I think we have confidence in both and look forward ultimately to the clinical readouts from the phase II-B trials, which will ultimately answer that question.

Operator (participant)

The next question comes from Michael Schmidt from Guggenheim. Please go ahead.

Michael Schmidt (Equity Research Analyst)

Hey, good morning. Thanks for taking my question. Another one on KT-621, Nello. So degraders as a modality have obviously been very safe so far. But based on the mechanism and perhaps preclinical data, what are potential on-target or perhaps off-target AEs that one might expect to see in a study at high KT-621 doses in the clinic? And what are learnings from STAT6 knockout animal models? Thanks so much.

Nello Mainolfi (CEO)

Yeah. Thanks, Mike. So in terms of what we know is that STAT6 degradation and even 40-fold above the exposure in which we reach the full STAT6 degradation, we have not seen in preclinical species any adverse events. Our molecule, as you've seen, KT-621, is an exceptionally selective molecule in both proteomics as well as any other biological testing that we've done. So we do not expect to have any off-target activity. So I don't have an answer for you. What we expect is in terms of safety flag. The reality is that so far we haven't seen anything. We hope not to see anything in the clinic also. In terms of what we know from genetics, so we know that knockout mice are normal and fertile. We know gain of function of STAT6.

People have severe atopic diseases, which, again, tells you that STAT6 is really only signaling through the IL-4 receptor alpha pathway. Again, I mentioned already twice this is also this partial loss of function. Humans, which also are protected, they don't have any phenotype. So I would say that if we look at the totality of our data, this is the perfect target, and we hope we're right.

Michael Schmidt (Equity Research Analyst)

Great. And just a quick follow-up. So in terms of subsequent studies, how do you think about prioritizing potential indications? Would you move into AD first, perhaps? I know there's a lot of work on STAT6 out there in lung inflammation. So asthma is at the top of the list. How do you plan on prioritizing potential opportunities?

Nello Mainolfi (CEO)

Yeah. I mean, look, again, as I mentioned earlier, we're not going to disclose our clinical development plan, not because we don't have it. It's premature at this point. But I can say that we believe this is a Th2 drug. This is not an AD drug or an asthma drug. This is a Th2 drug. So this drug has the opportunity to work in all these indications that dupilumab has worked in. So we're talking now seven, eight indications with also the most recent data. Our approach would be to prioritize the larger indications for obvious reasons. So AD, asthma, COPD would likely be the primary indications. But we are committed to helping all patients of all ages, of all severity of diseases. That's our mission and vision for this program, for this franchise, I should say.

We are going to do as much as possible to help as many people as possible, unlike the biologics that are now on the market or soon to be on the market.

Operator (participant)

The next question comes from Faisal Khurshid from Leerink Partners. Please go ahead.

Faisal Khurshid (Equity Research Analyst)

Hey, guys. Thanks for taking the question. I realize this might be premature, but wanted to ask anyways. So how are you thinking about partnership opportunities on KT-621? And when do you think the best time for that would be?

Nello Mainolfi (CEO)

One answer would be we're not thinking about that. But to answer, it is a good question. It's not premature, actually. Not because we're planning to do so, but it's good to discuss. So we believe we're best positioned to develop KT-621 and our franchise through the next inflection point. We believe it will be, except, I believe, personally, it will be exceptionally premature to have these discussions in the near future. I think we have a great development plan that will take us through some compelling, hopefully, phase II-B studies. I think as we're nearing commercialization and phase III and commercialization, the questions will be based on our cost of capital, our pipeline, what is the best way to create value and impact patients. One path will be to go all in and become these amazing companies that commercialize this product everywhere.

Another path will be to find a partner that helps us commercialize this drug in particular regions. But it's going to be an extremely high bar for us to partner STAT6. And we've been asked multiple times. It's probably an understatement.

Faisal Khurshid (Equity Research Analyst)

Great. Thank you.

Operator (participant)

The next question comes from Andy Chen from Wolfe Research. Please go ahead.

Hey, guys. It's Chuka here for Andy. Thanks for the clarification on IRAK4 trial design changes. So Sanofi is deciding to add an additional dose to both HS and AD. Are they adding a dose because they think the previous doses are too safe or too unsafe? Our guess is that the previous doses are very safe. So is it safer to assume that these new doses or these new higher doses in both trials? Can you guys hear me?

Nello Mainolfi (CEO)

Yeah, yeah. I think we got to yeah. Did you have anything else? I think you stopped at some point.

Oh, okay. Thanks. Yeah. It sounded like it cut off for a second. So is it safer to assume that the new doses are higher in both trials because the efficacy can go higher, or are we thinking of this wrong?

It's a great question, actually. Let's take a step back because actually, maybe because we've talked about this for so many times, we didn't today. I want to remind everybody that how we got to this point, that Sanofi elected to do a safety efficacy IA early in the year to look at the profile of the drug to that point and decided to use that dataset to make an investment decision or not, actually. The data, and again, early data in both safety and efficacy, was supportive of an increased investment to accelerate the overall development timeline. What we haven't said publicly, whether it's a lower or higher dose, I think you can speculate a thousand things.

I think what we've said, though, publicly is that the need or the desire to add another dose was driven from regulatory needs to conduct those ranging studies before selecting a dose for phase III, and so it's probably neither of your hypotheses is more they wanted to add another dose so that you've checked that box in order to move into late development into phase III studies and maybe less about was it not safe or too safe. I think the data that we both saw was compelling enough that it was about accelerating the studies.

Gotcha. Gotcha. Makes sense. Thank you.

So I think this was the last question. I wanted to thank everybody for joining our call. As you all know, we're easily reachable if there are any follow-up questions from our stakeholders externally. I want to thank our team again because they continue to do some amazing work, and looking forward to an exciting year-end and early next year. We've probably never been busier at Kymera, and so I think everybody says busy is good. So looking forward to the next update.

Operator (participant)

This concludes today's presentation. You may now disconnect.