Kymera Therapeutics, Inc. (NASDAQ:KYMR) Q4 2022 Earnings Call Transcript

Kymera Therapeutics, Inc. (NASDAQ:KYMR) Q4 2022 Earnings Call Transcript February 25, 2023

Operator: Hello, and welcome to the Kymera Therapeutics Fourth Quarter 2022 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Bruce Jacobs. Bruce, Please go ahead.

Bruce Jacobs : Good morning, everyone, and welcome to the Kymera Therapeutics quarterly conference call. I’m Bruce Jacobs, Chief Financial Officer at Kymera, and I’ll be joined today by Nello Mainolfi, Founder President and CEO; and Jared Gollob, our Chief Medical Officer. After our prepared remarks, we’ll open the call to your questions. Before we get started, I’d like to remind everyone that some of the comments that management may make on this call include forward-looking statements as outlined in the press release. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in Kymera’s most recent filings with the SEC and any other future filings that the company may make with the SEC.

You’re cautioned not to place any undue reliance on those forward-looking statements, and Kymera disclaims any obligation to update such statements, except as required by law. With that said, I’ll now hand the call to Nello.

Nello Mainolfi : Thanks, Bruce, and thank you, everyone, for joining us today. I thought I would spend a few minutes this morning, reflecting briefly on the importance of all the progress we’ve made in 2022 and what we believe it means for our ambitious objective to build a best-in-class fully integrated global medicines company. 2022 was exceptionally important year for Kymera’s evolution with those healthy volunteers, patients with HS and AD, which is the first time for a degrader in immune-inflammatory indications, patients with lymphomas, leukemias and solid tumors with our first 3 investigational drugs. We’ve seen now across three programs, strong translation of our preclinical PK/PD and safety into the clinic. This is a substantial accomplishment for a company that is pioneering a new modality.

In addition, we have seen, for the first time, clinical benefits of a heterobifunctional degrader in immune-inflammatory indications and the first proof-of-concept of clinical differential of a degrader versus a small molecule inhibitor with our KT-474 Phase I data. In fact, KT-474 clinical data that we shared late last year from the patient cohort of the Phase I study of IRAK4 degrader exceeded our expectations. We were able to replicate the PK/PD profile of the healthy volunteer portion of the trial in HS and AD patients. The molecule was generally well tolerated with no serious adverse events, including a resolution of the QT effect. We demonstrated an encouraging impact on disease-relevant inflammatory biomarkers in body and skin. And we were able to produce some early but really encouraging signs of clinical activity in HS and AD patients that we think represent strong reasons to believe in the clinical potential of effectively dragging the IRAK4 pathway and in our degrader molecule.

And of course, lastly, we reported that our partner, Sanofi, shares their enthusiasm and will initiate Phase II studies in 2023. Jared will share a little bit more on this call regarding the next steps for the program. But obviously, this was an important milestone for KT-474, a molecule that we believe can have a unique and broad role in raising the standard of care in a wide variety of inflammatory conditions. Assuming the molecule’s profile remained consistent as we tested in larger studies and additional patient populations, we believe a small molecule with the emerging efficacy and encouraging safety profile could be a best-in-class medicine across several diseases. And this year, we’re excited for our partner, Sanofi, to initiate KT-474 studies initially in HS, followed by AD and potentially other indications.

While perhaps somewhat overshadowed by the KT-474 results, we made encouraging progress in our first 2 clinical stage oncology programs, KT-413, the IRAKIMiD degrader and KT-333, our STAT3 degrader. Both programs are currently in the dose escalation phases of the Phase I clinical studies. In December, we disclosed pharmacodynamic activity in both blood and tumors and knock down of their targets without any dose-limiting toxicity. Importantly, we’ve seen fidelity of translation of PK/PD and safety from preclinical profiles into these clinical settings, further validating our work and highlighting our ability to replicate our approach to discovering and developing high-value molecules. The promising initial data from these Phase I trials position us to share data later this year that we hope will show clinical activity, particularly when we reach the expected active dose levels in our targeted patient populations.

Taken together, we believe that these results represent a validation of our R&D approach and strategy. Since we started the company over 6 years ago now, our funding principles have remained unchanged, harness the transformative potential of targeted protein degradation to address areas of significant therapeutic need and improve patients’ lives. With this goal in mind, we made very intentional choices, which we believe represent a differentiated approach to design in many key areas, including target selection strategies, disease area of focus, cutting-edge platform investments and corporate strategy. This strategy and approach in conjunction with a clear focus on disease target in areas of significant patient need that can’t be meaningfully addressed by traditional medicines has led us to targets in markets where protein degradation is the only or the best way to elucidate the desired biology or clinical outcome.

I hope that as you reflect on the totality of the data we presented in December and our progress in building the company, you share our belief that we have validated the work and investments we’ve made over the past 7 years — almost 7 years, resulting in the high-quality molecular design and platform capabilities and a proven ability to translate our understanding of disease biology, PK, PD and safety from preclinical models into patients, creating high-value programs that have the potential to become important new medicines. Before I hand the call over to Jared, I should mention that the 3 programs I just discussed are just the beginning for Kymera. At the end of last year, we also announced that the FDA had cleared the IND for our MDM2 degrader, KT-253.

MDM2 is a crucial regulator of the most common tumor suppressor p53, which remains intact in close to 50% of cancers. Jared will share more on our plans for KT-253 shortly. We also hinted at several other programs in our early stage pipeline in both oncology and immunology indications earlier in the year, further evidence of the productivity of our drug discovery engine. These advances have been fueled in part by innovative computational research tools that have enhanced our understanding of disease biology and allowed us to develop new ways to harness TPD. In addition to leadership in the discovery of heterobifunctional degraders, we are also identifying novel molecular groups that expand the therapeutic applicability of our platform, and we hope to share more on this later in the year as well.

Along with our clinical and scientific progress, we work to ensure that we have the people and resources to build our company sustainably. We recently appointed Ellen Chiniara, as Chief Legal Officer and Corporate Secretary, where she will serve as a key member of our leadership team. Ellen joins us from Alexion Pharmaceuticals with extensive experience overseeing legal activities at biopharmaceutical companies ranging from discovery phase through commercialization. This month, Rebecca Mosher joined us as our Senior Vice President of Translational Medicine from Mersana Therapeutics. She previously held positions of increasing responsibilities in translational medicine, translational research and molecular pathology at Novartis, Vertex and Millennium.

We also recently appointed Juliet Williams as Kymera’s new Head of Research. Juliet was previously our Head of Biology and contributed profoundly to our target selection strategy and drug discovery efforts. She has more than 20 years of drug development experience, including leadership roles at Novartis, Sanofi, Millennium and Curis. These important roles will help Kymera navigate our next stage of development as we work to bring revolutionary degrader therapies to patients. Finally, we ended the year in a very solid financial position with approximately $560 million in cash, an expected runway into the second half of 2025, which will allow us to continue to invest in our clinical programs, discovery pipeline and platform and importantly, allow us to read out our IRAK4 Phase II proof-of-concept study, an initial proof-of-concept for the 3 oncology clinical programs.

Jared will now cover in more details our recent progress for each of our disclosed programs before returning the call over to Bruce for a financial update. I will then finish with some concluding remarks, including covering our key goals for 2023 before handing the call to the operator for a Q&A session in which Jared, Bruce and myself will be available. Jared?

Jared Gollob : Thanks, Nello. I’ll provide a brief recap of where we stand with our clinical programs and what to expect in 2023. I’ll begin with our IRAK4 program. As you all know, in October, we announced the completion of dosing of the patient cohort portion, Part C, of the KT-474 Phase I clinical trial, and we shared the full data set in December. I won’t go over all of the data here today. But if you are interested, you can find the replay of our December meeting on our website. The data are also included in our updated corporate presentation. That said, I did want to share our expectations for the progress of the program in 2023. As you know, Sanofi will be taking KT-474 into Phase II. Thus, as they were closely involved in the Phase I trial that Kymera ran, we jointly discussed the plans for the Phase II program.

As we shared in December, Sanofi is committed to Phase II trials in at least 2 initial indications, beginning with HS and followed by AD. As for timing, it is too early to guide to the expected Phase II start dates. But as we have said in the past, at least the first Phase II is planned to start in 2023. Turning to our oncology pipeline, I want to update everyone on our disclosed programs, which include our STAT3, IRAKIMiD and MDM2 degraders. Focusing first on our new trial activity, KT-253, our MDM2 degrader received IND clearance from the FDA in December. MDM2 is the crucial regulator of the most common tumor suppressor p53, which remains intact and close to 50% of cancers. Kymera is developing a highly potent MDM2 degrader that, unlike small molecule inhibitors, has been showing preclinically to have the ability to overcome the MDM2 feedback loop and rapidly induce apoptosis even with brief exposures.

KT-253 has the potential to be effective in a wide range of hematological malignancies and solid tumors with functioning or wild-type p53. We plan to initiate dosing patients soon in the Phase I trial of KT-253. The Phase I study will evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics and clinical activity of KT-253 in adult patients with relapsed or refractory high-grade myeloid malignancies, acute lymphocytic leukemia, lymphoma and solid tumors. The open-label dose escalation study is intended to identify the recommended Phase II dose. It will be comprised of 2 arms with ascending doses of KT-253 in each arm. The first arm will consist of patients with lymphomas and advanced solid tumors and the second arm will consist of patients with high-grade myeloid malignancies and ALL.

Now turning to our two ongoing oncology trials, STAT3 is a transcriptional regulator that has been linked to numerous cancers and other inflammatory and autoimmune diseases. Our Phase I clinical trial is evaluating KT-333’s potential in hematological malignancies and solid tumors. Specifically, the trial is evaluating the safety, tolerability, PK, PD and clinical activity of KT-333 in adult patients with relapsed and/or refractory lymphomas in solid tumors. We reported on the first dose level in December showing initial proof of mechanism for STAT3 degradation in PBMC and no dose-limiting toxicities with good translation of PK/PD from preclinical models to patients. Based on the PK/PD we have shown to date with robust target knockdown for 72 hours followed by recovery, we expect to be at efficacious doses by dose level 3 or dose level 4.

This year, we expect to show clinical impact of STAT3 degradation on tumor burden in the target patient populations such as peripheral T cell lymphoma, cutaneous T cell lymphoma and LGL leukemia. The trial’s second stage will consist of Phase Ib expansion cohorts to further characterize the safety, tolerability, PK/PD and antitumor activity of KT-333 in relapsed and/or refractory STAT3 dependent T cell malignancies as well as in solid tumors. And finally, our IRAKIMiD program, KT-413, is a novel heterobifunctional degrader that targets degradation of both IRAK4 and the IMiD substrates, Ikaros and Aiolos with a single small molecule. KT-413 was designed to address both the IL-1R/TLR and Type 1 interferon pathways synergistically to broaden activity against MYD88-mutant B cell malignancies.

KT-413 is on a similar time line as STAT3 and is currently in the dose escalation stage of the Phase I trial, evaluating the safety, tolerability, PK/PD and clinical activity of KT-413 in patients with relapsed and/or refractory B-cell non-Hodgkin’s lymphomas. We reported in December that the first 2 dose levels have been completed showing initial proof of mechanism with IRAK4, Ikaros and Aiolos degradation in PBMC and tumor and no safety signals with good translation of PK/PD from preclinical models to patients. We are continuing enrollment and expect to be at efficacious doses by dose level 3 or dose level 4. And as with KT-333, later this year, we expect to show clinical effect of IRAKIMiD degradation on tumor burden in MYD88-mutant patients.

The trial’s second stage will consist of Phase Ib expansion cohorts in DLBCL to further characterize the safety, tolerability, PK/PD and antitumor activity of KT-413 in relapsed/refractory MYD88-mutant and MYD88 wild-type DLBCL. We look forward to sharing more progress on these programs throughout the year. I will now hand the call to Bruce, who will share some brief comments on our financial results for the fourth quarter.

Bruce Jacobs : Thanks, Jared. I will quickly cover the financials before turning the call back to Nello for concluding remarks. For the quarter, we recognized $16.1 million of revenue. This total reflects revenue recognized pursuant to our Sanofi and Vertex collaboration. At the end of the quarter, our deferred revenue total on the balance sheet was approximately $63 million. That reflects partnership revenue we expect to recognize over the next several years, excluding the receipt of any potential future milestones. With respect to operating expenses, R&D for the quarter was $43.1 million, of which $4.5 million represented noncash stock-based compensation. The adjusted cash R&D spend of $38.6 million, excluding stock-based comp, is essentially unchanged from the comparable amount in the September quarter.

Our G&A spending for the quarter was $11.6 million, of which $4.4 million represented noncash stock-based compensation. The adjusted cash G&A spend of $7.2 million, excluding stock-based compensation, reflects a 13% increase from the comparable amount in the September quarter. Finally, on cash, we exited the fourth quarter with a cash and equivalents balance of approximately $560 million. As we shared earlier in the year, we believe that our cash runway extends into the second half of 2025, a projection that now includes milestones related to the Phase II start. I’ll now turn the call back to Nello.

Nello Mainolfi : Thanks, Bruce. With our accomplishments last year, it’s clear that Kymera has made considerable progress in its evolution and begun to demonstrate the incredible potential of this modality in our company to make a meaningful difference in patients’ lives. We’re excited to have the opportunity this year to assess the impact that our 4 programs may have for patients with cancer and immunological conditions and to further demonstrate the potential advantages of our technology and platform have over traditional medicines. We feel that we’re just getting started and energized by the opportunity we have in front of us. As I said earlier, 2023 will be a busy year. We have a lot that we expect to achieve, much of which was discussed earlier in the call.

But just to quickly state our key 2023 goals, we will collaborate with Sanofi to initiate the first KT-474 Phase II study. We’re also working to publish the results of the Phase I trial in a top-tier journal. We intend to evaluate the effects of our IRAKIMiD and STAT3 programs on tumor burden in patients in our Phase I studies. We plan to initiate the KT-253 Phase I trial in solid and hematological tumors in order to demonstrate proof of mechanism in patients. And with respect to our pipeline, our objective is to deliver at least 2 new DCs/INDs from the preclinical pipeline and also continue to — our expansions of our novel molecular glue franchise. At this point, I’d like to thank the Kymera team as well as our partners and the patients participating in our clinical trials and for sharing this journey with us.

Finally, thank you all for your — for participating in our call, and I look forward to your questions. I will now hand the microphone to the operator so that we can take your questions.

Q&A Session

Operator: Today’s first question comes from Eric Joseph with JPMorgan.

Eric Joseph : Just a couple of questions on the MDM2 program, if we could. I guess, first, what is — maybe can you lay out what proof of mechanism looks like with KT-253 later this year? And does it look similarly in liquid tumors as it does in solid tumors? And then secondly, with respect to the anticipated AE profile with the drug, do you anticipate any differences, I guess, relative to competitor MDM2 inhibitors, particularly on the aspect of myelosuppression, any potential to sort of reduce rates of Grade 3 neutropenia with this content?

Nello Mainolfi : So I’ll start and then I’ll let Jared comment more on the proof of mechanism. Maybe I’ll take the second question first just because it actually points to the core thesis for our investment in the MDM2 program, which is creating or allowing us to create a larger therapeutic index that will allow us to finally interrogate this mechanism in the clinic fully. And as you heard us say in the past, the rationale really based on cancer genetics, if you look at data that’s been published over the years and that has fueled all the drug development programs in this pathway, we know that p53 is wild type in more than 50% of cancers in those types of cancers, both lipid and solid tumors, if you delete MDM2, if you genetically delete MDM2 with genetic tools that we have preclinically, you see a high dependency of these tumors on those pathway or in the presence or absence of MDM2.

And that basically genetic removal of MDM2 leads to rapid apoptotic response in those tumors that have p53 wild type. And if you look on one of those plots that have been generated, it’s probably one of the most impressive sensitivity plus that we’ve seen in cancer genetics. Now I think the field has made the assumption, and that has been true for many programs in oncology in the past 20 years since we started to understand the human genome and the relationship with the human proteome, we made the assumption that inhibiting MDM2 will lead to that kind of response. And what we’ve learned is actually that’s not true. We’ve learned that if you inhibit MDM2 p53 interaction, you are able to actually stabilize p53, but not fully and mostly because the inhibition of that interaction leads to upregulation of MDM2.

So as you’re inhibiting the interaction, you see more MDM2 that gets produced and the small molecule has a hard time fighting that. And so you end up having to dose longer and that creates a very narrow window, if at all, between your antitumor effect and your impact on bone marrow derived cells, which are one of the most sensitive cell types to MDM2 absence. What we have been able to do with degrading MDM2 is to remove the protein quickly, and we’ve seen the first 2 to 4 hours a rapid commitment to apoptosis. And that leads cancer cells that are sensitive to this mechanism to die quickly while healthy cells, while they might have an initial impact, have time to recover between the first and the second dose. And so that creates, in tumors that are highly sensitive, I want to be sure that’s clear, a therapeutic index that no small molecule has seen before in our hands.

And so what we’re talking about and we — I think Jared commented on it before, and this is work that we’re still doing. Obviously, I think it’s not fair to assume that all p53 wild-type tumors will have this wider therapeutic index. I think that’s scientifically not true based on our experimentation. But we have found subsets of tumor types within the p53 wild-type larger set, there are highly sensitive. And the ones that are highly sensitive have this increased therapeutic index. So our hypothesis going into the clinic is that we’ll have a drug that is well tolerated while it’s being effective in the patient populations that are sensitive to it. The only indications that we have shared so far where we’ve seen this high sensitivity are AML, including the patients that are refractory to the existing line therapies.

So that’s an exciting area for us to explore lymphomas, and some solid tumors that we will be disclosing later in the year or as we go into the expansion cohorts. So maybe I’ll let Jared comment more on what is the proof of mechanism is going to look like and whether I think your question was also whether it’s going to be different between liquid and solid tumors.

Jared Gollob : Maybe if I can just quickly comment also on the question around myelosuppression, the fact that we have this unique mechanism of action that never laid out allows us to dose infrequently given the drug is an IV infusion once every 3 weeks. And that infrequent dosing, we think, is going to give us this unique therapeutic index that will allow us to mitigate myelosuppression by allowing plenty of time for normal cells and the marrow to recover in between doses. Coming back to proof of mechanism, our aim for showing proof of mechanism, at least this year is to focus on impacting the MDM2 p53 pathway in peripheral blood mononuclear cells, which we can do essentially in all of the patients on the study. We’ve done this with our prior programs, 413, 333 looking at impact on the targeted PBMC and were available in the tumor as well.

Here, I think in the MDM2 Phase I trial, the initial focus will be PBMC, and then I think when there is tumor available for biopsy or once we’re in arm B, where we’re treating high-grade myeloid malignancies, including AML, we may have more opportunities there to also show impact on the pathway in malignant cells, including leukemia.

Operator: The next question comes from Ellie Merle with UBS.

Unidentified Analyst: This is Jacqueline, on the line for Ellie. So you’ve been mentioning your work in molecular glue. So we just have a couple of questions there. First, what’s your perspective on the ability of molecular glues to be selective for a single target protein as you think about target collection? And then second, non-cereblon-based glues, is this something you think could be feasible over the next few years? Or is this more a longer-term focus for you?

Nello Mainolfi : It’s a great question because it allows us to talk about, I think one of the key differentiators for this company, which has always been to go after hard problems. So as you’ve heard this — and I know your team has paid a lot of attention to what we said in the past on this particular topic, we’ve said that we are using molecular glues to go after problems that heterobifunctional degraders, cannot solve. So maybe just to step back, where our heterobifunctional degrader is solving for, they’re solving for undrugged or poorly drugged targets where you have an ability to bind to that particular disease-causing proteins. And we’ve shown that you can go after transcription factors, scaffolding proteins, et cetera.

So again, there’s plenty of targets out there that, obviously, heterobifunctional degraders can solve meaningful clinical problems. But there are also many validated targets in oncology, in immunology, in rare disease, in cardiovascular and CNS where you don’t have an opportunity to find discrete binders to those proteins, mostly because those are, let’s say, disordered proteins or difficult to lead in proteins. And so you either choose not to go after them or you choose to build capabilities to go after them. And we chose, again, the harder part, which is developing technologies to go after them. And so we take an E3 ligase agnostic approach. So yes, the answer to your second question is, yes, there will be molecular glues that are new cereblon.

And in fact, I think there are already examples out there in the literature pointing to those possibilities. But we take, as I’ve always said in the past, the translational medicine approach. We think about what are the clinical problems we’re trying to solve for, and we’re at the molecular mechanism that will enable us to do that. And so I have to give, again, kudos to our team led by Juliet and others in our platform team that have uncovered actually all new series of proteins that we can go after using a completely new background motives that we can engage with an E3 ligase and with some molecular designs that we made. And it turns out that these proteins that we’ve already identified there are multiple are key undrugged, unligandable proteins, many of whom are in immunology and some are in oncology.

And I think it’s unlikely that we would be disclosing the molecular mechanism because we feel this could be the beginning of a completely new area of molecular glue, I would kind of look back at when the IMiD and cereblon were discovered and how many targets have been subsequently been drugged by that interaction. I suspect that what we’ve uncovered here could lead to that type of discoveries. And so we’re just at the beginning. We’re very excited. I think we have our first program that is already lead optimization, driving towards a development candidate. And we’ll continue to talk about this. And as the program moves into development, we’ll talk about what targeted is, but probably unlikely that we’ll be disclosing the molecular mechanism or even the E3 ligases.

Operator: The next question comes from Brad Canino with Stifel.

Bradley Canino : Two questions from me. First, no, I guess with the recent announcement for the departure of the Global Head of R&D at Sanofi, John Reed, and the company is searching for a new successor. I’d just like to hear your optimism that KT-474 has enough advocates or champions, so to speak, at Sanofi, so that the program will continue to be prioritized even with any future shakeup of portfolio strategies and initiatives from a new R&D head? And then for Jared, on KT-413, can you remind us the type of DLBCL patients that are being recruited in terms of likely prior therapies? Are these patients post Polivy, CAR-T bispecifics, et cetera? And if so, what is your confidence in the ability to recapitulate the preclinical model results in such a heavily pretreated population, particularly with the MYD88 mutation?

Nello Mainolfi : Brad, that was a perfect question for our colleagues at Sanofi. So I will try and answer it, obviously, understanding that I cannot speak for them. First, you give me the opportunity to thank John, that has been an amazing partner along the way from the beginning, which was when we started to talk about a partnership on KT-474, all the way through its last day. I will say that we’ve had the fortune to connect with several leaders in the company, without naming names at the executive levels, that have continued along the way to be excited, to be helpful, to be supportive of the partnership and understanding and appreciating the value of 474. So again, speaking for Kymera, I have no doubt that the molecule is in the right hand and there is the excitement, commitment and appreciation of what this molecule can do for, to be honest, millions of patients out there.

And I expect that there would be no change of priorities or commitments going forward. Regarding the second question, again, I’ll leave it to Jared to answer.

Jared Gollob : Yes. Brad, on the 413 study, we are recruiting B-cell malignancies, including DLBCL and including patients with MYD88 mutations. As you noted, many of the patients will have had prior therapies, and we anticipate that many of these patients will have had especially if they had DLBCL, perhaps prior CAR-T, if they were eligible, maybe prior Polivy or bispecifics or even Tafa. But I think what’s important you to note is our unique mechanism of action. The fact that with 413, we’re drugging IRAK4 and we’re also drugging the IRAK4 pathway with the IMiD activity. It makes us a unique mechanism of action. And so we don’t expect there to be cross resistance to these other therapeutics like cellular therapies or like bispecifics.

And so I think we’re confident that with the right patient population, especially those with the MYD88 mutation, sort of regardless of prior therapies or how many prior therapies, we still expect that the mechanism of action here should yield significant antitumor responses with 413.

Operator: The next question comes from Vikram Purohit with Morgan Stanley.

Vikram Purohit : So we had two, one on 474 and then one on your STAT3 program. So going back to your relationship with Sanofi, just wondering if you could provide some more color on what are some of the considerations that you’re thinking through with Sanofi when you explore indications beyond HS and AD Phase II development for this molecule? And then for STAT3, I was just curious to get an update on where efforts stand with evaluating a STAT3 degrader in autoimmune and fibrotic conditions and when we could expect to hear an update on that effort?

Nello Mainolfi : Vikram, so first question is — so what we generate — so if you actually look historically at how we’ve developed the molecule and this program, there is a slide that actually we haven’t changed in a couple of years in our deck, which are clinical opportunities that could be realized by targeting the IL-1/TLR pathway. And we’ve usually share this kind of Th1, Th17-driven diseases, like HS like Array, like lupus, IPD and others. And then we’ve shown the Th2-type diseases like AD, asthma, COPD and others. And we said that with validation which is mechanism in some of those diseases representing kind of these 2 slightly kind of differentiated way to thinking about immunology, then you can think about expanding further.

And so I believe that the high level, both Sanofi and Kymera are looking at the opportunity in that way. Now practically, what we have prioritized, as you know, is HS and AD and we’ve been fortunate, I have to say that even with small patient numbers in a study design, land and even study design generally, that was not set up to look for clinical activity, we’ve been fortunate to have seen really early validation of this mechanism in both HS, again, Th1, Th17 AD, Th2-type inflammation. Obviously, we look for further validation in a placebo-controlled randomized Phase II study. And we go into these — we do the study with a high degree of confidence and expectations based on the data we’ve seen so far. So I — the conversations that obviously are happening and will continue to happen is what are the next type of indications that we will go after.

What I would say that I can’t, again, speak for the collaboration in terms of particular indication. What I would say from our perspective and even from my perspective, there is such a high unmet need in many of those indications where there are really no small molecules with activity and safety profile that we can match with the IRAK4 degrader. Obviously, I’ll start with AD. I don’t think there is one. Going to HS. I don’t think there is one. I go to IBD large unmet need, I don’t believe there is a good molecule now that can really help patients go through a horrible experience. I look at Array, which is commercially quite crowded, but again, I think there is an opportunity for a well-tolerated active drug. I look at lupus, which is an unsolved disease.

And then I look on the other side on the Th2-type inflammation, again, there aren’t really no good small molecules in those indications that I mentioned earlier, like asthma, COPD, pruritus and others. So I think we have a large opportunity. I think we have to be rational with how we select the opportunities, and we have to be data-driven. I suspect we will be updating you all on as we make those determinations. And clearly, initial proof-of-concept in a randomized study in Phase II will be the drivers of those further selection downstream of these initial 2 diseases. But I think we have a unique opportunity here in the landscape to help millions of patients, as I said earlier. Let’s not forget and I don’t want to spend the whole 20 minutes on this, but let’s not forget that the unique value proposition of KT-474 is that this is a systemic anti-inflammatory molecule with broad anti-inflammatory effect with local anti-inflammatory also effect.

The molecule has demonstrated systemic anti-inflammatory efficacy as measured by also biomarkers across a wide variety of downstream cytokines and chemokines has also shown, as you know, a preferred distribution in tissues, especially as you’ve seen in skin as well as, as we know, an anti-TLR activation anti-inflammatory effect. So has this really unique combination of both molecular properties as well as pathway engagement properties that makes a very unique molecule in the landscape. So we’re excited to continue to develop the molecule to explore further how many other diseases we can potentially develop it in. The other question, STAT3, yes. So STAT3, as I said, relatively recently that there is an area that we are continuing to do work.

We plan to be able to update further later in the year. I can’t maybe share more than what we said recently.

Operator: The next question comes from Michael Schmidt with Guggenheim.

Paul Jeng : This is Paul on for Michael. We just have 2 on the MDM2 program. I guess, first on the dosing strategy. Is there a potential in the study to evaluate alternative dosing intervals that could potentially optimize the clinical profile of 253 between solid versus liquid tumors given possible differences in PK/PD in those settings? Are you fairly comfortable with the every 3 weeks dosing across all tumor types? And then secondly, obviously, you’re just starting the monotherapy dose escalation, but how are you currently thinking about the strategy for 253 in combination? It seems like coming out of ASH, been at a class combination might be on the table for AML. I just want to get your thoughts there.

Nello Mainolfi : It’s a great question. Maybe, Jared, do you want to take them?

Jared Gollob : Sure. Yes. Maybe starting with the dosing schedule. As we stated upfront, we are going in with a once every 3-week IV infusion, which we think has the potential to be highly active based on our preclinical models, but also has the ability to mitigate myelosuppression. We do have flexibility based on our preclinical tox studies to dose less frequently even every 2 weeks, if we thought that was necessary. Your question is an interesting one. Could we ever envision a situation where you might have on schedule for liquid tumors and one for solid tumors? That’s always a possibility, and I think we do have that flexibility. Our plan though right now is our expectation rather is that every 3-week dosing will be active in both liquid and solid tumors.

But at least we do have that flexibility to dose less frequently, if we think it’s necessary from macro-dynamics standpoint and if we think that it would be tolerated from a safety standpoint. In terms of combinations, that’s obviously a very good question as well. And you mentioned venetoclax, we’ve been doing some, I think, very interesting preclinical work looking at our drug in both venetoclax-resistant and sensitive AML models. And we can see activity of our MDM2-degrader as a monotherapy, even in venetoclax-resistant models, which is very encouraging for the possibility of our seeing activity with our drug in AML patients who are previously seen venetoclax. And as you know, more and more patients are getting venetoclax either in the upfront setting or in the relapsed/refractory setting.

But I think we’ve also seen some very encouraging data with our drug combined with venetoclax either in venetoclax-resistant or venetoclax-sensitive AML. So I think we will have the opportunity to look at that combination. I think that will be probably one of the combinations that we do prioritize once we’re through with monotherapy dose escalation have a good sense for the safety profile and then start to look at combinations that we can use for development in the future. But I think I want to be clear that — I think we do feel that the activity we’re seeing preclinically is such that we believe that there’s a substantial opportunity for MDM2 to greater as a monotherapy in both liquid tumors and solid tumors. But I think these combination approaches always give us even additional development opportunities that we want to take advantage of.

Operator: The next question comes from Marc Frahm with Cowen.

Marc Frahm : Maybe just following up on MDM2, some of the dosing questions. Just what is the kind of target degradation profile you’re aiming for in terms of kind of percent reduction, but I think given all you’re saying about kind of this therapeutic window, just at least as important is the duration of that degradation?

Nello Mainolfi : Yes, Marc. So what we’ve seen preclinically is that the degradation above 80%, 80%, 90% for really a short period of time, even 2 to 4 hours is enough to lead to this really profound apoptotic response. And that’s why actually we designed this type of drug with this type of dosing paradigm where we dose it IV, where we are able to reach this really high quick IV marks initially that leads to quick down regulation and then clearance of the drug relatively quickly so that we can optimize on degradation of the target in tissues that are highly sensitive so that we can capture maximum antitumor effect and then we can kind of take the time for healthy cells to recover before we dose again. Actually, monitoring the MDM2 degradation and pathway engagement is a large piece of work that the team here has done given actually the complexity of the pathway and also how to measure MDM2 levels, which are initially already relatively low.

So it’s actually also some really innovative signs that we’ve done here at Kymera to monitor and to understand how target engagement in terms of MDM2 degradation, but also downstream biomarker readout, which for us are just as critical, right, seeing the right biomarker, either increase or decrease downstream is what really drives that kind of antitumor effect. So I think as a part of that proof of mechanism data that Jared was mentioning that we’ll share, hopefully this year, at least obviously, that’s the goal and plan, we’ll obviously have that type of information, that target engagement, time of target engagement and also safety that will go with that.

Operator: The next question is from Mike Kratky with SVB Securities.

Michael Kratky : For KT-413, can you talk a little bit about the potential next steps from a clinical development standpoint and how you could aim to pursue a potential accelerated regular path forward here? And just beyond that, I mean, how should investors think about the potential sequencing of indications you’re going to be pursuing?

Nello Mainolfi : Jared, do you want to take that one?

Jared Gollob : Yes, sure. I mean, clearly for us, with 413, the MYD88 mutated B-cell malignancies are front and center in terms of development. And there, I think we see 3 — at least 3 potential opportunities. DLBCL, of course, where the mutation is seen in about 25% to 30% of patients, which represents a substantial opportunity. We’re talking about prevalence numbers that are in the thousands. We think also Waldenstrom’s macroglobulinemia is another very interesting opportunity since about 90%, 95% of those patients have this mutation. And is there a high unmet need, both in the relapsed/refractory setting after BTK inhibitors. But even upfront, to find novel therapies that can achieve complete responses rather than just partial responses.

And then finally, primary CNS lymphoma, where this mutation is seen in about 80% of patients, also a very, very high unmet need for that population, albeit a smaller population than DLBCL. I think when we think about this drug, we have to think about the unique positioning here, especially within DLBCL. In DLBCL, there really is no therapeutic that is aimed at a genetically defined subset of DLBCL. And as one knows, in this disease, the genetics of the disease now is really more important than the histology. And more and more, the trend is really defining genetic populations based on their outcome to survival to frontline R-CHOP or the frontline therapies and really trying to hone in on genetic subtypes, what the prognosis of those subtypes are then finding new drugs that can take advantage of vulnerabilities in patients with those different genetic abnormalities.

And I think FORWARD III has the potential to be the first drug for MYD88 mutated lymphoma. This mutation confers actually a worse survival outcome after frontline R-CHOP. So there really is a high unmet need for these patients and having a drug that really for the first time would be going after a genetically defined subset of DLBCL, we think positions us uniquely, not just therapeutically, but also from a regulatory standpoint. We know there are precedents from FDA for granting accelerated approval for drugs that are active, especially in genetically defined subsets within oncology. And so we do think that there is a real accelerated approval opportunity here in relapsed/refractory MYD88-mutated DLBCL with a potential rapid development path following Phase Ib that could even just consist of an open-label Phase II study that could lead to accelerated approval.

So that is a possibility, we think, for DLBCL. So that, I think, is really the first near-term opportunity for developing this drug in MYD88-mutated malignancies. But with that being said, we think there could be also a rapid accelerated approval opportunities in second-line Waldenstrom’s if we have transformative activity in patients who have progressed after prior BTK inhibitors, that could also lead to a rapid development path. And certainly, in primary seamless lymphoma, where there’s a very high unmet need and very few drugs at all being developed in that space. I think there too, we see another potential rapid development opportunity.

Operator: The next question comes from Derek Archila with Wells Fargo.

Unidentified Analyst: This is Sarah, on for Derek. Two quick ones from us. First, on the STAT3 program. What kind of data update can we expect this year? And the second question, from a TPV perspective, given you are developing glues for heterobifunctional degrader and tissue-specific ligases, is there any plan to look at extracellular protein?

Nello Mainolfi : Great question. So maybe I’ll start with the second one. We always look at what is the unmet need and the problem that we’re trying to solve. And I personally feel that 80% of the proteome roughly, hopefully, I don’t have the number wrong, is intracellular. We have really great tools today to drug extracellular proteins. So the real opportunity for extracellular proteins is if you have — if you’re able to compete with biologics by developing molecules that you can be kind of as infrequently dosing as the antibodies do or more or if you have an oral degrader or extracellular protein. So I think there are clearly opportunities there. At this stage of the company, I don’t think that’s an area where there is the highest opportunity and risk reward scenario at this stage.

But as we continue to grow the company, there might be opportunities also to go into that space. We actually looked at that a couple of years ago and decided not to go into that particular space. With regards to your first question on STAT3, as we said in the press release and also in the remarks that we made earlier, the goal this year is to dose patients at exposures and degradation profiles that we expect to be therapeutically relevant. And we also hope and expect and are driving towards recruiting patients at those doses where we expect to see clinical activity, meaning these are tumor types that we’ve seen preclinically to be sensitive to STAT3 degradation. And so what we expect to hopefully share this year is, are we seeing antitumor response in patients that are, again, theoretically sensitive to STAT3 degradation at the right dose and at the right, again, length of dosing.

And so it will be what we call an initial proof-of-concept. It will be STAT3 degradation in the right patients will visit an antitumor response.

Operator: The next question comes from Kalpit Patel with B. Riley.

Andrew Fleszar : This is Andy, on for Kalpit. Some from us on KT-413. First, I understand that you’re looking for meaningful clinical activity in dose levels 3 and 4. But have you observed any evidence of antitumor activity so far, even if it’s just stable disease? And then second, you noted needing to maintain target knockdown for 72 hours, and we’re seeing robust target knockdown in plasma of the target proteins, Ikaros and Aiolos, but they’re rebounding to or above the baseline levels near the end of the dosing interval. Do you anticipate tweaking the dosing frequency perhaps from every 3 weeks to every 2 weeks to ensure adequate depletion of target proteins at all times? And is sustained depletion actually needed based on your preclinical models for meaningful antitumor activity?

Nello Mainolfi : Great. I think these were three questions, but okay, let’s do. The first one was if we got already the tumor activity thus far. Yes. So obviously, we — what we said, we expect to share data at a scientific meeting or in an event in which we decided to share data, and we decided not to give a kind of update in — along the way. So I guess, I’m not going to answer that question. On the second one, which is — second and third, are good questions. So first, I want to remind everybody that — and there are slides on our website that actually the degradation profile that we believe, at least we know preclinically and we believe will translate clinically into antitumor effect and good safety is the one where we degrade these proteins for about 72 hours.

And then we need to see a full rebound of those proteins before we dose again. So actually, the fact that by week 3, we see full recovery of these proteins not only is good, but it’s necessary at least based on preclinical data to avoid seeing neutropenia and other safety events that come with IMiD. We do have flexibility to change those in paradigm if we need to. But right now, we’re really asking the biological question of is the degradation profile that we’ve seen preclinically to be the most active in MYD88-mutant tumors out of all the other agents that we tested, does that translate in similar levels of antitumor activities in the clinic? I think only after we kind of answered this question, we can start talking about, is there an opportunity to tweak the dosing one way or the other.

Operator: The next question is from Zhi Shu with Berenberg.

Zhiqiang Shu : I have a quick one. On your updated corporate deck, you disclosed some of the discovery programs will be around IL-4 IL-13 pathway. I thought that’s interesting. Can you talk about the sort of the potential advantage for using a protein degradation approach versus biologic approach and also talk about the unmet medical need associated in those diseases?

Nello Mainolfi : Yes. So Zhi, that’s a great question. We only have a couple of minutes. I could spend a couple of hours on this. But just very quickly, we’ve always — we built a company, we’re working in pathways where there is high validation, where we believe protein degradation cannot lock the biology better fully or for sure, with a better technology. And so I think it’s — I’m not going to reveal anything new that an antibody for that particular pathway is probably going to be the largest drug in the market in the next few years and has been approved in AD and in other, I believe, for other indications. And we believe that there is both an opportunity to develop an oral drug in that pathway. And actually, we believe there is an opportunity to develop a better drug in that pathway, meaning a drug with a better efficacy profile.

And so I don’t have to do the math on the opportunities. But obviously, if you look at the pics in AD and the penetration and how much money that drug makes a year, you can imagine an oral small molecule that can serve that patient population in a better way, what are the opportunities there. So that’s really what we’re trying to solve for, help patients be treated with a better drug, which, we believe, is what we’re working on.

Operator: The next question comes from Timur Ivannikov with Raymond James.

Timur Ivannikov : So just for KT-474, just trying to understand the strategy for the studies a little better. I think HS study starting first. So do you think there will be an overlap in time between those 2 studies? I just want to make sure that there is no gatekeeping factors in HS study like safety or efficacy data that Sanofi may want to see before starting the AD study?

Nello Mainolfi : That’s a great question. I mean I’ll answer short because we’re kind of out of time. From our understanding, there will be a high likelihood that there would be an overlap between the studies. I don’t believe there are data expectations that will inform necessarily when and how the second study will start. But again, this is — we will talk more about the specifics as the studies initiate. And that’s — those are questions that Sanofi will have a better answer for.

Operator: The next question comes from Geoff Meacham Bank of America.

Unidentified Analyst: This is Joe, on for Geoff. So we’ve talked a bit about the collaboration with Sanofi so far. I was wondering how are you thinking about additional partnerships and collaborations in the near term? Because you called them out in your press release as a strategic objective for the year. Can you provide like a little bit of color on like what types of partnerships you may be pursuing?

Nello Mainolfi : Yes, it’s a great question. So again, I’ll try to be brief. There is 2 ways to think about strategic partnerships. One is what are technologies, even assets or early tools that will enable Kymera to grow better, faster and then are there — is that companies that we can partner some of our programs or our technology to create more value together versus independently developing or commercialize drugs. And I will say that those — both areas, there are areas that we always think about. And I don’t have any specifics to update right now. But obviously, a company like Kymera with the expertise that we built, there is way more that we could do than what we’re doing. And then the question is, how do you get that — how you saw that right. And I think at this point, I don’t have a specific update on it.

Operator: The last question today comes from Kelly Shi with Jefferies.

Xiangtian Tan : This is Shawn Tan on for Kelly. So I have a question on KT-474. Can you provide more color on how you will work with Sanofi going forward? Do you anticipate continuing to engage with them over the course of Phase II and initiation and maybe expanding the collaboration to other of your immunology programs that’s coming up?

Nello Mainolfi : So I mean, we had the fortune to have a really good partner with Sanofi along the way. I will continue to say that because it’s true. And we’ve worked very closely with them when we were running our program — the program and we already are working very closely as now they’re operationally and financially responsible for the program. I will also remind everybody, we have an active mechanism before Phase III. So we’re fully vested in the success of the programs, not only we have committees in place to obviously follow progress, but we actually have almost weekly or biweekly interactions with them to make sure that we both give our best for the success of this drug. So I have no doubt that, that will continue to be the case.

I think there was a second question about other collaborations. Maybe I can’t really comment on that. For now, the rest of our pipeline that we’ve talked about is our own, and that’s for now what we’re doing and continuing to generate value. We’re well financed, as you see, to continue to advance these programs and create values, and that’s our goal at this point.

Operator: This concludes the Question-and-Answer Session. I would like to turn the conference back over to Nello for any closing remarks.

Nello Mainolfi : First, I would like to thank everybody for listening to our call for the engaging Q&A. You all had great questions. Hopefully, we did our best to answer them in the most comprehensive way possible. We’re excited about what we’ve done, but we’ve always said aspire to do better year by year. So we hope and expect that 2023 would be even more exciting than 2022. And according to everybody who follow us and reach out to us if you have further questions, and we always wait for amazing data to speak for us. So we’re excited to see how all these programs unfold and have patients in a wide variety of indications. So thanks again for the time. Apologies for being a bit late and have a good rest of the day.

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