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Presentation

Kymera Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.25, expectations were $-0.44. KYMR isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to the Kymera Therapeutics Fourth Quarter 2023 Results Call. All participant lines will be in the listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I’ll now turn the conference over to Justine Koenigsberg. Thank you. Please go ahead.

Justine Koenigsberg: Good morning, and welcome to Kymera’s investor update. Joining me this morning are Nello Mainolfi, President and CEO; Jared Gollob, our Chief Medical Officer and Bruce Jacobs, our Chief Financial Officer. Following our prepared remarks, we will open the call to questions. We ask that you limit your questions to one and a relevant follow-up to allow enough time to address everyone’s questions. Before we begin, 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: Thank you, Justine. As always, we appreciate everyone joining us for our quarterly call today. This is a particularly exciting call for us, in that we’re reporting from our new corporate headquarters in Watertown, Massachusetts, just down the road from our previous office. Our new building provides added space for our growing team, enabling us to maintain a strong on-site presence as we enhance and scale critical capabilities for our R&D organization, especially in areas like CMC, as well as other development functions. We look forward to the opportunity to welcome those of you who like to visit us at our offices in the future. As many of you know, we’re on-site five days a week. During our prepared remarks, we’ll cover three main topics today.

First, I’ll provide an update on our strategy to build the best-in-industry oral immunology pipeline. Next, Jared will provide an update on our clinical and newly disclosed immunology programs, as well as our two clinical oncology programs. And before we open the call for questions, Bruce will review our financial results. At our Immunology R&D Day in early January, you heard us discuss our strategy for building a best-in-industry oral immunology pipeline of first-in-class highly valuable programs. We believe we’re uniquely positioned to change existing treatment paradigms for immune-mediated diseases with our innovative and differentiated oral degrader medicines. As we reported this morning, with $745 million in cash and a runway into the first half of 2027, we’re well capitalized to continue to support these very ambitious goals.

I thought I’d start with a few comments reflecting on what has led Kymera to our current strategic positioning with an innovative immunology pipeline of oral degraders with biologic-like activity potential. As those of you that have been following us for a long time know, we have been driven by our unique target selection strategy. We’re focused on first or best-in-class opportunities, and in particular, undrugged or poorly drugged targets for which protein degradation is either the best or the only solution. We’re also dedicated to pathways that have strong clinical and genetic validation where there is a clear path to early clinical differentiation. And of course, our focus is on those indications that represent large clinical and commercial opportunities that create significant value for patients and shareholders.

As you all know, we pioneered the first protein degrader program in immunology with our IRAK4 program, which in addition to STAT3 were the initial targets at Kymera when it was founded in 2016. And it was the early clinical results with the IRAK4 program with KT-474, the deep and well-tolerated degradation, the early signs of clinical efficacy which helped us inspire to increase our focus in immunology. Additionally, we believe the activity and fidelity of translation of our TPD platform in the KT-474 Phase 1 trial serves as an important read-through and informs the probability of success of our new STAT6 and TYK2 oral immunology programs. One aspect of the current landscape in immunology that is particularly notable and creates a significant opportunity for Kymera is the dominance in the market of injectable biologics.

These antibody-based therapies have transformed and revolutionized the treatment of immune-inflammatory diseases with what in many cases have been great clinical outcomes for patients. At the same time, monoclonal antibodies, as you know, are injected. They can be costly to manufacture and can be inconvenient for patients. To put this in context, in a recent industry survey, 75% of patients taking biologics said that they would switch to orals with an equivalent profile. We believe this creates a significant opportunities for effective and well-tolerated oral medicines, and in particular, for protein degraders. In fact, while traditional small molecules offer convenience benefits, they frequently cannot match the powerful pharmacology of biologics as they don’t have the ability to block these pathways at the same level.

We believe and have shown with preclinical and early clinical data that protein degraders have the potential to provide a unique solution with biologics-like specificity and activity, but with the flexibility of oral small molecules. Importantly, because of this profile, we believe that they can potentially reach much broader patient populations, creating significant opportunities for the modalities broadly and for Kymera specifically. So as you think about our immunology pipeline, if we can build a portfolio of molecules that provide comparable pathway inhibition to biologics as we believe we can, but one with the convenience in oral dosing, we believe the potential is enormous. We have a lot happening across our pipeline, including plenty of activities in an early pipeline that we haven’t yet disclosed.

We’re really at the cutting-edge of protein degradation and using this technology to address fundamental clinical commercial needs and opportunities. I believe our unique approach has resulted in one of the most robust, high-value pipeline in the industry. I’m very proud of the continued execution and innovation by our team to support our future growth. I will now pass it to Jared to walk you through in more detail, our clinical and soon to be clinical pipeline. Jared?

Jared Gollob: Thanks Nello. Starting with our IRAK4 program, in the fourth quarter, our partner Sanofi initiated two KT-474 Phase 2 trials, one in hidradenitis suppurativa and one in atopic dermatitis. Enrollment in both trials is ongoing, with top line data expected to be reported in the first half of 2025. Importantly, with the start of these trials and the dosing of the first HS and AD patients that we disclosed late last year, we collectively earned $55 million in development milestones from Sanofi, which we have already received. We and Sanofi are enthusiastic about the potential for this program. In addition to the two initial indications, we continue to discuss and explore additional potential indications, and we will plan to share more details as we are able in the future.

Moving now to our two recently announced preclinical immunology programs. KT-621, our once daily oral STAT6 degrader is slated to enter the clinic later this year. What makes this program particularly exciting is that the IL-4/IL-13 pathway has been exceptionally well validated. KT-621 targets STAT6, which is an essential transcription factor to the IL-4/IL-13 signaling pathway and the central driver of type 2 inflammation in allergic diseases. By degrading STAT6, we believe we can selectively block this pathway fully and importantly, this pathway only potentially phenocopying upstream biologics such as dupilumab. At our R&D Day, we shared what we believe is a very compelling set of preclinical data that supports the high level of enthusiasm and confidence we have in this program.

Specifically, in our preclinical studies, we have demonstrated full inhibition of the IL-4/IL-13 pathway in all relevant human cell contexts, with picomolar potency superior to dupilumab and exquisite selectivity. We also demonstrated very high levels of activity in multiple well-established preclinical models that gives us confidence in the potential of KT-621 to deliver biologic like activity as we advance this program into clinical trials later this year. If we are able to replicate our strong preclinical data in the clinical setting, which is something we have accomplished with our clinical stage programs, we believe KT-621 would be poised to be a best-in-class therapeutic option for multiple indications, representing a multibillion dollar opportunity.

We are currently in the midst of IND-enabling studies and expect to advance KT-621 into Phase 1 testing in the second half of 2024 with data from that study in 2025. We also recently unveiled KT-294, our potential first-in-class oral TYK2 degrader. We believe KT-294 also has a potential biologics like profile, creating an opportunity to treat a range of autoimmune and inflammatory diseases. We believe degradation of TYK2 has the potential to overcome the challenges of small molecule TYK2 inhibitors, which have limitations due to lack of selectivity, limited target engagement and/or lack of potent activity against type 1 interferon. Importantly, we believe TYK2 degradation could allow us to recapitulate the human loss of function biology of near full pathway inhibition of type 1 interferon, IL-12 and IL-23, while also sparing IL-10, representing a best-in-class TYK2 agent.

Our plan is to move this program into first-in-human studies in 2025. Across our immunology portfolio, we intend to present preclinical data from the STAT6 and TYK2 programs at multiple scientific and medical meetings this year, starting with the American Academy of Dermatology Annual Meeting next month. We also expect multiple clinical data readouts from these programs next year. To summarize, in the first half of 2025, we plan to share top line data from the KT-474 Phase 2 trials as well as data from the KT-621 Phase 1 study which, as mentioned, is planned to start later in 2024. So switching gears to our oncology portfolio, we expect additional proof of concept data readouts for both KT-333 and KT-253 this year. Both programs have demonstrated initial encouraging anti-tumor activity in liquid and solid tumors and are progressing through dose escalation in line with our expectations.

For KT-333, our STAT3 degrader, we shared data at ASH in December demonstrating early signs of anti-tumor activity at doses that were generally well tolerated and associated with substantial STAT3 knockdown in blood and tumor. Our preclinical to clinical translation showed strong objective responses in both CTCL and in Hodgkin’s lymphoma, as well as induction of an interferon gamma response in tumor and blood that pre-clinically was shown to enhance the response of solid tumors to anti-PD-1 drugs. We believe this supports KT-333’s potential to address both hematological malignancies as a single agent and solid tumors as a potential novel combination therapy with anti-PD-1 or other targeted therapies. Our intent is to complete dose escalation in the Phase 1a study in 2024, at which point we will share the trial results and disclose our plans for the next phase of development for the program.

And lastly, KT-253, our MDM2 degrader. This is another really exciting program. Arm A of the Phase 1a in solid tumors and lymphomas is ongoing, and in November we reported clinical data demonstrating evidence of target engagement in p53 pathway activation, as well as initial anti-tumor activity and a lack of the traditional hematological toxicity seen with small molecule inhibitors. We also announced that we commenced enrollment in Arm B for patients with high grade myeloid malignancies, including AML. For both arms of the study, enrollment is progressing in line with our expectations. Like with STAT3, we expect to complete dose escalation in 2024, at which point we will disclose our plans for the next phase of development for the program. As part of our development plans later this year, we also expect to present comprehensive preclinical and clinical translational data across liquid and solid tumors that will inform a patient selection strategy for KT-253 in ongoing and future clinical studies.

I’ll now turn the presentation over to Bruce for a review of the Q4 financials. Bruce?

Bruce Jacobs: Thanks, Jared. I’ll quickly review the fourth quarter financial results, and you can certainly reference the tables in the back of the press release today. As Nello mentioned, with the advancement of 474 into the Phase 2 trials in HS and AD we earned $55 million in milestones from Sanofi. We received $40 million of that in the fourth quarter, the other $15 million, which was recorded as receivable at year end, that payment was received in the early part of 2024. These milestones were added to the total consideration received under the Sanofi collaboration, with a portion recognized as revenue in the fourth quarter and the remaining in deferred revenue. At the end of the quarter our deferred revenue balance total on the balance sheet was approximately $54.7 million.

That reflects partnership revenue that we expect to receive over the next several years, excluding the receipt of any potential future milestones. And then quickly, with respect to operating expenses, R&D for the quarter totaled $53 million. Of that, about $5.3 million was non-cash stock-based compensation. The adjusted cash R&D spend of $47.7 million, excluding that stock-based comp was up 13% from the comparable quarter a year ago. On the G&A side, our spending for the quarter was $14.2 million, of which $5.6 million was non-cash stock-based comp. And that adjusted G&A spend of $8.6 million, again excluding stock-based comp, is a 5% increase year-over-year. And then finishing up with our cash balance. As stated earlier, at the end of 2023 it was $436 million, including the $300 million of net proceeds from our equity offering last month and the $15 million that I referenced from Sanofi that was received early this year.

That brought our unaudited cash and equivalent balance as of January 9 to approximately $745 million. That is expected to provide a runway into the first half of 2027, and it will enable us to deliver the next stage of growth and data readouts, including, as Jared mentioned, the KT-474 Phase 2 data, our oncology proof of concept results this year, and then several critical and clinical inflection points for our STAT6 and TYK2 programs. So that’s what we had for you today in terms of prepared remarks. And now we’d be happy to answer any questions. Operator?

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Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Vikram Purohit from Morgan Stanley. Please go ahead.

Vikram Purohit: Hi, good morning. Thanks for taking our questions. We had two, both on immunology. First, so you alluded to in your prepared remarks potential pipeline expansion for 474. To the extent possible, I was wondering if you could speak a bit about what’s going to feed into that decision and how the data sets we get in the first half of next year for HS and AD might be related to how you think about with Sanofi, where to go next with this molecule? And then a similar question for 621 and 294. What will you be assessing from the initial clinical data we’re going to be getting next year to help prioritize indications for subsequent development in I&I indications? Thank you.

Nello Mainolfi: Thanks, Vikram. So maybe I’ll start. So with 474 it’s just a bit more challenging because, as you know, this is in collaboration with Sanofi, so we’re not in the liberty to disclose several things around decision making and timing. But as we said in the past, the reason why we built this program several years ago, actually, we said today that IRAK4 and STAT3 were the first programs in 2016-2017. So the idea around IRAK4 degradation is the opportunity to generate and develop a broad anti-inflammatory drug with a good tolerability profile. So in our goal, there’s always been this possibility and high probability to move beyond skin indications. And we’ve disclosed some of the other potential indications that one could go after.

It could be respiratory, could be rheumatology, it could be GI. So I think when we’re ready with our partner Sanofi to disclose the path forward, we’ll be happy to do so. Obviously, personally, I don’t believe that if a skin indication will inform necessarily the probability of success of this drug in other type of diseases. But obviously, confirming the safety and activity in longer-term Phase 2 studies will bolster confidence to then move into other indication. Maybe that’s high level how I would characterize it today. For STAT6 and TYK2, I think it’s early for us to comment on decision making beyond early clinical studies. I mean, these are – we could spend hours talking about your question, maybe just high level. With STAT6, we’ve been saying now for a few months – it feels like a few months, but it’s actually two months.

The value proposition is an oral degrader that can match the biologics like activity of upstream monoclonal antibodies such as the dupilumab. We’ve shown with our preclinical data that we can match that type of phenotype. Some would argue we’re more potent than it in some context, but maybe we don’t have to go there. So we have a pretty exciting blueprint of development plans in front of us. I think we, as we’ve done with all the other programs, for us, it’s imperative that we go into humans and demonstrate this beautiful translation that we’ve seen with other programs of target knockdown, predictable safety, predictable PK/PD. And then we have this, I think, very elegant biomarker strategy that we’ll be talking about later in the year that I think will allow us to validate the ability to match the type of pathway inhibition that upstream biologics do.

And for TYK2 briefly, again, this is a well characterized mechanism. We know what other TYK2 inhibitors are missing, which I would say are several things. Some are selectivities, all are target engagement depth, and some are ability to block all the other scaffolding functions. And so what good looks like for us is a loss of function like phenotype. And we know what that looks like based on human genetics. And that’s what we want to confirm in Phase 1. And then once we’re there, Jared and his team will be happy, I’m sure, to share more details about the late development plan.

Vikram Purohit: Got it. Thank you.

Operator: Thank you. The next question is from the line of Michael Schmidt from Guggenheim. Please go ahead.

Unidentified Analyst: This is Paul on for Michael. Thanks for taking our questions. Mine are on KT-333. So the first one is on your bar for pursuing a development in solid tumors. I believe that the ASH data had about a third of the patients with stable disease. So would higher rates of stable disease and biomarker data be sufficient to advance the program into combinations? Or would you really need to see some objective responses to sort of commit to evaluation in solid tumors? And then second is just how does your thinking now for STAT3 and autoimmune fit into your current pipeline? And are you waiting for 333 data to evolve further before making further commitments? Thank you.

Nello Mainolfi: So maybe, Jared, do you want to take the first one and then I’ll make comments on the second one?

Jared Gollob: Sure. I think with regarding your question on the bar for solid tumors, as you noted, we have had some patients who have had prolonged stable disease. And that of course is of interest to us. And we continue as we enroll patients onto the study and continue to dose escalate, look for opportunities for bringing on solid tumor patients that can give us a better idea as to what our activity will be as a monotherapy in solid tumors. I think all along we’ve been guiding that we expect that ultimately, if we move this into solid tumors, it would be as a combination approach, especially anti-PD-1 combination is something we’re very interested in based on our promising preclinical data and based on what we’ve shown with our biomarkers, that we can induce this interferon gamma response in tumor and blood, which can actually facilitate responses to anti-PD-1.

We’re also looking at additional targeted agent combinations pre-clinically. So I think what will inform moving forward with solid tumors will be a combination of what we continue to learn pre-clinically with combination studies and whether we do see continued signals of some sort of activity as a monotherapy, either stable disease or even preferably major responses. With regard to major responses, we are seeing those in hematological malignancies, including Hodgkin’s lymphoma and cutaneous T cell lymphoma. And that continues to be of interest to us. And we’ll continue to bring on patients onto the ongoing Phase 1a study to further explore activity there as well.

Nello Mainolfi: Yes. Thanks, Jared. That’s great. And on the STAT3 I&I, maybe I just want to go back to our strategy, which is something that we’ve talked about at the R&D Day. We believe we exist to bring together the power of the technology and unmet needs that are both clinical, commercial, and I would say also the opportunity to do with this technology things that cannot be done with other technology, so I guess another type of unmet need, the technological one. And only I think when we marry those three together, we’re going to go all in. And as you’ve seen with IRAK4 with STAT6 and TYK2, I think we have a very, very easy to articulate value proposition. I hope you guys also feel that way. And these are complete degradation of targets that lead to exceptional anti-inflammatory profiles that are well tolerated, at least in our hands so far.

And so with STAT3, it’s obviously a program that we know, I would argue, better than anybody at this point. We’ve been working on this target for several years. And the reason why you haven’t seen us disclosing more details on STAT3 I&I is because we feel that at this point, we don’t have all the information in hand to being able to say that will fit the profile of the type of programs that we’ve articulated so far. When we do, when it does and would be able to do so, we’ll disclose more.

Unidentified Analyst: Thank you.

Operator: Thank you. The next question comes from Eli Merle from UBS. Please go ahead.

Unidentified Analyst: Hi. This is Jasmine on for Eli. Thanks so much for taking our question. Hi, this is Jasmine on for Eli. Thanks so much for taking our question. What’s your latest thinking on whether you would take both STAT3 and MDM2 into Phase 2? Or is the thinking that you’ll prioritize one over the other, given your focus on immunology? And what would your threshold for success be for each program in thinking about the go and no go decisions?

Nello Mainolfi: Thank you. I think I felt like there were two people, but anyway, I think we got the question. I’m sure there were similar questions. So great question. So maybe I will start with saying that as everything that we’ve done at Kymera for the past almost eight years, all our decisions are going to be data driven. For example, decisions even that we’ve made for programs that we discontinued, for example, 413, even though the molecule was behaving well and was well tolerated was driven by plethora of data, obviously, clinical, commercial landscape to a large extent also MPV analysis that we did. So we’ll apply the same rigor to all programs on our pipeline, whether these are in immunology or in oncology. As we’ve said, in order for us to invest in, let’s say, in these two oncology programs, we need to be able to see in front of us opportunities to impact broad patient populations.

So I think our go criteria for both programs will be driven by opportunities that are both in heme and solid tumors generally at this level. And I think we should probably wait for when we disclose more data later in the year on what exactly the strategy will be. What I will say is that for STAT3, we’ve shown something that has not been shown before, which is this is an active target and we have an active drug. We’ve shown a small data set in December, at ASH will show more later in the year. And in MDM2 we also have an active drug. We’ve showed really few patients data, in November we’ll show much more later in the year. So I think only when we’re able together to look at the totality of the data, you’ll be much clearer what the decision making process is going to look like.

Unidentified Analyst: Great. Thanks so much.

Operator: Thank you. The next question is from the line of Geoff Meacham from Bank of America. Please go ahead.

Unidentified Analyst: Hi. Good morning. This is Susan on for Geoff. Thanks for taking our question. Can you walk us through what the strategy is for indication selection for the immunology programs, the STAT6 and the – sorry, the TYK2 and the IL-4? And just commenting specifically on maybe competitive landscape or maybe what kind of data you’re going to look at prior to initiating first in human studies.

Nello Mainolfi: Okay. So I’m going to take this really high level just because I want to be consistent with our message, which has been that as we get into the clinic in our healthy volunteer studies, at least towards STAT6 and for TYK2, I think at that point we will feel more comfortable talking about later development for several reasons. One, we don’t have to talk about it now, and two, the landscape, as you said, is competitive. And I don’t believe at this point it’s necessary to disclose information that are not needed. But at the high level, what I want to say is – high level for STAT6, I don’t believe that there are well tolerated oral drugs in indications in which dupilumab has been approved that have, as I say, they’re well tolerated, strong activity.

So we have a huge potential in a variety of indications. I don’t have to name them because they’re all well-established from AD, asthma, hopefully soon COPD, chronic rhinosinusitis and others COE. There is actually white space in that area for oral drugs with a good safety profile. So while obviously all of those indications are going to get more and more competitive, given large investments that biopharma is putting into immunology, we’re actually in a really unique position right now going forward. And once we disclose our development plans, you’ll see how actually we would be able – we believe to be really competitive in terms of timing of our trials as well as the design of our trials. With regards to TYK2, it’s obviously a different landscape.

But I would say that there, while there are several TYK2 small molecule inhibitors, we’ve seen also recently data from an IL-23 peptide from Protagonist/J&J. There is still room to match IL-23 type 1 interferon biologics, especially in a single oral molecule that is well tolerated and active. And so I think that is the gap that we’re going to fill with our programs. So just patience on the design, but they will come as we get into the Phase 1 study.

Operator: Thank you. The next question comes from Thomas Smith from Leerink. Please go ahead.

Unidentified Analyst: Hi. This is Will on for Thomas. Thanks for taking our questions. A couple on the ZEN and ADVANTA trials. If you could give us a sense of how enrollment is progressing thus far and any color on what the patient enthusiasm and willingness to enroll has looked like? And when enrollment is complete for those trials, are you planning to share that information or just wait until the data release. And then I have a follow-up.

Jared Gollob: Great. Thanks for the question. As you know, Sanofi is running both of those Phase 2 trials. If you look on clintrials.gov, you can see the publicly stated timelines for estimated primary completion for both of those studies, which is in the first half of next year. And to our knowledge, both studies are still on track to meet those timelines. That’s pretty much all we can really say right now with regard to how those are staying on track. Our understanding is that there is significant enthusiasm on behalf of the various sites who are being engaged. These are both sort of global studies. And so I think that’s been very encouraging in terms of what we’ve heard from Sanofi in terms of site engagement. And so I think, again, we’re still expecting that both of those studies would readout on the publicly stated timelines.

In terms of sharing data, I think that will be something that Sanofi and Kymera will need to sort of work out in terms of exactly how that will look next year – in the first half of next year when those readouts are expected to occur.

Unidentified Analyst: Okay, that’s helpful and that answers the follow-up as well.

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

Unidentified Analyst: Hi, good morning. This is Yun for Kelly. Thanks very much for taking the questions. Are you able to share the status of dose escalation in STAT3 and also the MDM2 program? And also are you able to disclose have you reached the targeted 90% degradation that you thought could be required for clinical efficacy. And also for I&I indications, is there a specific threshold like the 90% in oncology indication that you think you will have to achieve? And based on your experience with oncology indications, how confident are you that the preclinical degradation data will translate into human data? Thank you.

Nello Mainolfi: I think three questions. I even lost back track of them. So let’s start with the oncology program. So we generally do not provide updates in these quarterly calls on how recruitment is going. We provide updates when we disclose data, obviously, and we try to target medical meetings. So you should just look out for meetings later in the year where a full update on each of those two programs will be provided. We love to share our plans, but because as you know, there is abstract emission and we need to hear from the conferences, we’re not able to now confidently say exactly where, but just know that there is a plan in place and we believe this will be both presented at high impact medical meetings within 2024.

If you look at what we’ve disclosed so far, obviously we have reached for STAT3 the targeted degradation. And really here, we continue dose escalation because we’re getting through – we’re targeting to reach an MTD, which as we’ve seen pre-clinically seems to be above our targeted degradation. And that’s really a testament to the design of the molecule, the design of the study that the translation has happened in a very predictable and positive manner. For MDM2, really I think it’s hard for us to comment based on three, four patients worth of data that we shared in November. So just stay tuned for our next update where it’ll be clearer where we are with regards to target engagement. I think if you look at all our programs, if you look at our R&D data or actually on our corporate deck today, you will see that each one of our programs, whether in oncology or immunology, we have reached targeted degradation in the clinic with a good safety profile.

With IRAK4, we reached complete degradation in blood. With STAT3, we’ve reached more than 90% – around 90% or more, depending on patients in both blood and tumors. With even 413, we reached that targeted degradation. So we know really well how to design our molecule and translate those profiles in the clinic. So we expect that for STAT6 and TYK2, that should happen just the same way. That is one thing that we’re not concerned about here at Kymera. With regards to what is the profile in immunology? The profile in immunology is what you’ve seen in our preclinical data. You’ve seen that if you degrade, for example, STAT6, anywhere between 80% and 90%, you can match dupilumab activity in those preclinical, for example, asthma models or even AD models.

So it doesn’t look like you need complete target removal. But we will, as we’ve done in the past, target complete STAT6 degradation, and then know that we can obviously do those exploration in the clinic, similarly with TYK2. So once we generate data, we can talk more about what is our late-stage design. But the Phase 1 design will look a lot like the IRAK4 program for immunology.

Unidentified Analyst: Thank you very much.

Operator: Thank you. The next question comes from Adam Vogel with Wells Fargo. Please go ahead.

Adam Vogel: Hey, thank you for taking my call today. I’m on for Derek. So maybe just a few quick questions from us on oncology pipeline. Can you walk us through further, what data you expect to share from KT-253? Will you be reading out data from both arms A and B? And then perhaps, given your deepening focus and efforts in I&I, will you be looking to partner either with 333 or 253 in the future? Thank you.

Nello Mainolfi: All right, so Jared, maybe you take the first one. I just want to take the second one first. So I think we need to think about for us, our decision to invest in programs is driven by a philosophy of your opportunities and return on investment and its patient impact. It turns out that based on our analysis, if you look at our current immunology pipeline, we believe that these are all extremely valuable programs at the outset. I think for our oncology pipeline, we believe that if the program translate in the way that we hope, based on preclinical data, those could be also really valuable programs. MDM2, if we can unlock it, that biology, that is going to be another really large program. For STAT3, if we’re able to also unlock the solid tumor opportunity, I think that will be the case, too.

So I think the partnering discussion comes with the conversation around what type of expertise we want to build in terms of late-stage clinical and commercial, given that we’re still an early company. I think at some point, hopefully we won’t be asked anymore. If you can only do one versus the other because we’re trying to build a large commercial stage company and as you’ve seen all the successful one can navigate multiple disease areas. But we also are not naïve. And so we understand that at this stage, in terms of late-stage capabilities, it probably makes much more sense to invest in one area. We’ve said already clearly that we’re committed heavily in immunology. And so I think with oncology, the question is what are the key value drivers that Kymera wants to drive this program through?

And then if we feel that these programs are best positioned in a collaboration for maximum value creation, we can do that. But we also reserve the right to being able to advance this program or one of these programs on our own. If we believe that the value proposition fits the philosophy of the company right now. Jared, maybe you can comment on the type of data on 253.

Jared Gollob: Sure. So our plan for this year is to complete dose escalation across both studies, the 333 and 253 Phase 1a trials into establish an MTD, and then to present those data at a medical meeting later in the year. That would include, of course, update on enrollment, the types of patients that we’re including and for 253, as you mentioned, yes. We’re enrolling in both the solid tumor, lymphoma Arm A, as well as in the high-grade myeloid malignancy, AML Arm B. So to show what types of patients have we enrolled, what does the safety profile look like and what is PD and what kind of clinical efficacy are we seeing, to start to give us insights into where we want to go in terms of the next stage of development for both of these programs?

As I mentioned earlier in the presentation upfront, for 253, we’ve also been doing a lot of work on preclinical work and clinical work to really understand patient selection, both for the remainder of Phase 1a, but also for the next steps in development. And so I think we’re also looking for an opportunity, potentially at a medical meeting to present those data sometime this year as well, to give further insights into how we think about patient selection for either liquid and/or solid tumors with 253.

Adam Vogel: Great. Thank you.

Operator: The next question comes from Marc Frahm from TD Cowen. Please go ahead.

Marc Frahm: Thanks for taking my questions. Maybe Nello, with IRAK4, when we get the data next year, and Sanofi will make their own decision of going forward or not. But you guys will also have, well, if Sanofi chooses to move forward, you guys will have an opt-in decision. So how are you kind of approaching the opt-in? What do you want to see that you would commit Kymera’s resources early on, and how important is kind of the Phase 1 data from STAT6 and TYK2 and seeing kind of the exposures you want to making that decision for IRAK4?

Nello Mainolfi: That’s a great question, and probably requires a very nuanced answer. So I’ll try and do my best in the short time we have. So first, as I just said earlier, we are extremely bullish on IRAK4. Our value proposition has only grown with more data. This has the potential to be one of the largest drug in inflammatory diseases. We have early positive data, but I think we are all here recognizing that we just don’t know how active this drug is until we run a well powered randomized study, which is what we’re doing with Sanofi. Actually, we’re doing two of them. The value proposition for this drug, in our view is, as I said earlier, it’s an active oral drug with a good safety profile. In indications that, to be honest, go well beyond HS and AD.

I think these are obviously intriguing, exciting early indications, but by no means, our view is that this is where the drug should go only. I think if the drug fulfilled that profile, and we believe that the company is positioned to support the growth of the company, the way we see it today, for us, will be a no brainer to opt-in when the time is right. Again if the drug fulfill their profiles, and the reasons are vary not only the value that can be created downstream, but the way that our collaboration is built. We’ve done all sorts of analysis and all the analysis that we’ve done financially, even though it might be a bit more expensive early on in the opt-in phase while we’re doing co-development, the value creation at the back end is so vast.

That decision will be so easy. Yes, if we have successful programs with Phase 1, which we believe we will for STAT6 and TYK2, I mean I suppose that our cost of capital will be different, that we can continue to sustain the growth of this company to support the pipeline. So hopefully that answered the question, but that’s how we’re viewing it at this point.

Marc Frahm: Okay, thanks. Very helpful.

Operator: Thank you. The next question comes from Brad Canino from Stifel. Please go ahead.

Brad Canino: Good morning. This is Brad. Perhaps an expansion of the prior questions, really for MDM2 in the data this year, it’d be great to get just more of a scope of the disclosure that you expect to present in terms of patients disease types. And would you flag any key data elements to watch? And then just maybe to be clear on the decision making process at this disclosure, will you be in a position to outline the broader development thesis? Thank you.

Nello Mainolfi: So maybe just high level, and then I’ll let Jared comment on some more specifics if we’re willing to do so. But I think the totality of our data, of our disclosure plans, which hopefully was clear enough from our press release and from comments from Jared earlier. So what is the totality of the data? Totality of the data is large, hopefully close to complete data set from the dose escalation in both solids, lymphomas and leukemias married with the patient stratification work that we’re doing that should enable us to build a development program extremely differentiated from others in the space. I think if those things come together, and we believe we should be able for those things to come together in 2024, and if all of those are suggesting that we both have activity and also we have, let’s call it a smart way to develop this drug, I think that decision of continuing investment will be a no brainer.

Obviously, then depending on nuances there, the decisions could be different. But I think that high level, the expectation. I think this year, what I hear, obviously a lot of excitement around the immunology programs, and we share those, but those will be 2025 data sets, many data sets, impactful data sets. But I also want to make sure we’re also paying attention to 2024 data releases around these programs, because we believe there is an opportunity here to change how we think about this target. Jared, what about patients? I don’t know what we can say.

Jared Gollob: Yes, I mean I think maybe just to briefly elaborate, I mean, obviously, for this program, we do plan on providing a pretty comprehensive update later in the year. As I mentioned earlier, our hope is to be through dose escalation in both arms, the solid tumor, lymphoma arm and the heme malignancy arm, and to really provide a comprehensive update on safety, PD and efficacy. Keeping in mind, again, that one of the important premises here is that this is going to be very differentiated from MDM2 small molecule inhibitors. We want to show that we have a therapeutic index that is superior to MDM2 small molecule inhibitors. So that takes into account both superior safety as well as potentially superior efficacy. And so I think our aim is to be able to show a data set that will hopefully establish that we are well differentiated from MDM2 small molecule inhibitors, and show what the real potential is for this drug in both solid tumors and in liquid tumors.

And to marry that sort of presentation, potentially with a separate presentation on our patient selection strategy, which is also going to be a very important part of what we do moving forward after Phase 1.

Operator: Thank you. The next question comes from Kalpit Patel with B. Riley Securities. Please go ahead.

Kalpit Patel: Yes. Hey, good morning and thanks for taking the question. One for the STAT6 and TYK2 program, you’ve shown data from the proteome study to confirm the selectivity and maybe rule out the off-target effects. Can you share how many proteins were identified in those studies and what the coverage rate was in those proteome studies? Thank you.

Nello Mainolfi: So we’re not going to share any more data today on that program, and we’re going to be, to be honest, quite sensitive about what else we’re going to share just based on, we want to maintain our competitive advantage here. But that doesn’t mean. I’m not going to answer your question. So we have high proteome coverage in these studies. We usually can detect north of 11,000 proteins in every proteomic study. And what we do at Kymera, we actually look across several cell types. So what we’ve shown, I believe, were PBMCs because we believe are one of the more relevant for the diseases we’re going after. But in order for us to actually cover the whole proteome, which as you know, it’s in the 20,000 proteins roughly, hopefully I didn’t get a wrong number here.

So we actually go across many cell types so that we actually cover 100% of the proteome. And the picture that you’ve seen in our slides is consistent. We only really degrade STAT6 and I would say, we only really bind to STAT6. And that’s true also for the TYK2 program and for the IRAK4 program and for the STAT3 program.

Kalpit Patel: Okay. Thank you.

Nello Mainolfi: Sorry, I can keep going. Yes, thanks, Kalpit.

Operator: Thank you. The next question comes from Andy Chen with Wolfe Research. Please go ahead.

Unidentified Analyst: Hi, this is Emma on for Andy. Thanks for taking our question. I guess just focusing on TYK2, we’re curious where you see weaknesses with current TYK2 inhibitors on the market and just how much headroom there is for improvement with a potential degrader entrant like KT-294 into the market. Thank you.

Nello Mainolfi: The weakness, sorry, I didn’t hear it well. I mean, as we said before, there are several layers of differentiation. So there is first that small molecule inhibitors, these are allosteric inhibitors that actually block also the kinase function and some of the scaffold function but not the full scaffolding function. And so the actual phenotype of small molecule, even allosteric inhibitor is closer to kinase inhibitor than to the loss of function profile. We have a slide in our deck that shows you with the pluses and shows where is the kinase versus loss of function versus wild-type and only a degrader matches – sorry, the loss of function profile, which basically means we block IL-23 as well Type 1 interferon and spare IL-10.

So the compounder is approved. The drug that is approved right now, which is an allosteric inhibitor that actually is not as selective. It actually impacts also JAK1 and so also impacts IL-10, which is a big detriment for GI indications. It’s also not very selective so they have to play around with the doses in order to hit the target at a reasonable target engagement. Other molecules in the clinic have more, I would say, maybe a higher selectivity profile, but they’re not able to block all the scaffolding function and match the loss of function profile. And we believe that by blocking the pathway fully, we should be able, again, as we’ve shown with STAT6, we’ve shown with IRAK4, once you find the mode of full pathway blockade, you should be able to match the upstream biologics so the IL-23 biologics, the Type 1 interferon biologics in a single oral molecule.

So what is that going to translate in the clinic? We don’t have a number, right. So if you look at biologics in psoriasis, they reach close to 90% of PASI 75, for example. Small molecules don’t get there. They get into the 60, 70s, maybe pushing into the mid-70s. So maybe that is a gap that we can fill. But I think that the actual extent of gap that we’re going to be filling with our degrader. We have a goal of biologics, but we actually don’t know. It might be even superior or maybe slightly inferior. I think that is a clinical experiment that we have to run. All we’re saying here is that biologically we have a differentiated profile, and we have confidence that that will clinically result in a meaningfully differentiated drug.

Unidentified Analyst: Thank you.

Operator: Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Justine Koenigsberg for any closing remarks.

Justine Koenigsberg: Thank you. And on behalf of the Kymera team, we’d like to thank everyone for joining us this morning and look forward to keeping you updated on our progress. In the meantime, please don’t hesitate to reach out if there are any additional questions following today’s call. Thank you.

Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.