Kymera Therapeutics, Inc. (KYMR) Q2 2022 Earnings Report, Transcript and Summary

Welcome to the Kymera Therapeutics Quarterly Conference Call. Leading the call from management are Nello Mainolfi, Founder and CEO; Jared Gollob, Chief Medical Officer; and Bruce Jacobs, Chief Financial Officer. After management's prepared remarks, we will open the call to your questions. [Operator Instructions] And please note this event is being recorded. Before we get started, I would like to remind everyone that some of the comments that management may make on this call may 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 are cautioned not to place any undue reliance on these forward-looking statements and Kymera disclaims any obligation to update such statements. I will now hand the call to Nello Mainolfi, Founder and CEO. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us on our second quarter results conference call. We're excited to share with you today the continued progress we're making towards building Kymera into a best-in-class fully integrated, degrader medicine company. As we reach our two year anniversary as a publicly listed company later this month, we can be really proud of a period of brilliant outstanding growth and achievement at Kymera. I want to start by saying that the second quarter has been significant for us, particularly in terms of substantial clinical progress we've made by advancing our three lead programs into important stages of their development. Specifically, with dosed the first patients in our three first-in-class clinical programs, including commencing patient dosing in our Part-C of our Phase I trial of KT-474. This achievement ushers in a new phase for the company as we look forward to demonstrating how targeted protein degradation and these molecules in particular can impact disease and patient lives. This is just the start of our journey towards treating patients in many disease areas such as hidradenitis suppurativa or atopic dermatitis through degradation of IRAK4 with KT-474, hematological malignancies and solid tumors with KT-333 or STAT -- our selective STAT3 degraders, MYD88-mutant B cell lymphomas with our IRAKIMiD degrader KT-413, which has the potential to be the first precision medicine for this condition. At Kymera, as evidenced by our initial programs, we have the ambitions and capabilities to really broadly apply our platform by expanding the druggable proteome to address inadequately drug or undrugged targets, creating the potential for us to transform the lives of patients, which is really what the company was founded upon and is going towards. We ended the second quarter in a very solid financial position with approximately $482 million in cash. Three first-in-class TPD assets in clinical studies. One program, KT-253, our MDM2 degrader close to IND filing, and multiple preclinical candidates expected to drive us to our goal of at least one new IND per year and productive collaboration with our partners Sanofi and Vertex. We have multiple patients data sets expected by year end, including the Part C data for KT-474, our patient cohort. Our plan is to share this data later this year with the medical and investor communities as well as with our partner Sanofi to enable their decision around advanced KT-474 into Phase II studies. Now Jared will walk you through our recent progress and goals for 2022 for each of our disclosed programs. Before turning the call over to Bruce for then a financial update. I will then finish with some concluding remarks before handing the call back to the operator for a Q&A session in which Jared, Bruce and myself would be available. Jared?

Thanks, Nello. We've made substantial progress with our clinical programs this quarter, which I am excited to share. I'll start with our IRAK4 program and a lead candidate KT-474, an orally available potential first-in-class degrader of IRAK4, a key protein involves an inflammation mediated by the activation of toll-like receptors and IL-1 receptors. A barren activation of these pathways is the underlying cause of multiple immune inflammatory conditions. KT-474 is being developed for the treatment of TLR, IL-1R driven immune inflammatory diseases with high unmet medical need such as hidradenitis suppurativa, atopic dermatitis, rheumatoid arthritis, lupus, GI inflammation and potentially others. KT-474 is designed to block TLR/IL-1R mediated inflammation more broadly compared to monoclonal antibodies targeting single cytokines and to enable pathway inhibition that is superior to IRAK4 kinase inhibitors by abolishing both the kinase and scaffolding functions of IRAK4. We are collaborating with Sanofi on the development of degrader candidates targeting IRAK4 including KT-474, outside of the oncology and immuno oncology fields. Late last year, we completed dose escalation in over 100 healthy volunteers in the single ascending dose and multiple ascending dose portions of the KT-474 Phase I trial. The first randomized placebo controlled trial for a heterobifunctional degrader. The data demonstrated near complete IRAK4 degradation in peripheral blood mononuclear cells and skin robust inhibition of multiple ex vivo stimulated disease relevant cytokines, and a favorable safety profile. At the SID Annual Meeting in May, we disclosed that KT-474 degrades IRAK4 and inhibits cytokine production in different immune and skin cell types, highlighting the broad impact of KT-474 across multiple disease relevant cell types and supporting the continued development of IRAK4 degraders in patients with HS, AD and other IL-1R/TLR driven autoimmune diseases of the skin, the IRAK4 plays a central role in the pathogenesis of inflammation. You can find that poster along with all our other publications in the Scientific Resources section of our website. Most recently, as Nello just mentioned, we are excited to share that we commenced dosing patients in the patient cohort Part C of the Phase I clinical trial. Part C is an open label study of KT-474 that is expected to enroll up to a total of 20 patients with moderate to severe, hidradenitis suppurativa or atopic dermatitis to examine the safety, PK/PD and exploratory biomarker and clinical activity of this first-in-class degrader therapeutic. While we are in the early stages of the patient cohort, we expect enrollment to progress as planned for us to disclose the data before year end. KT-474 is being administered daily on an outpatient basis for 28 days, with patients followed through day 42. Patients will receive a daily dose of 75 milligrams of KT-474 with food. This dose is expected to provide a plasma exposure that is approximately equal to that achieved with the 100 milligram per day dose in the fastest state in healthy volunteers in the MAD portion of the trial, which showed maximal or close to maximal degradation in blood and skin and broad disease relevant cytokine inhibition ex vivo. The goal for this study is to confirm that our PD and safety profile in patients is in line with what we have seen in healthy volunteers. EPDM points include the impact of KT-474 on IRAK4 levels in PBMC and in active HS and AD skin lesions as well as on the expression of proinflammatory gene transcripts in skin lesions and on both whole blood ex vivo cytokine induction and plasma biomarkers of inflammation. We are also undertaking an exploratory assessment of early impact on clinical endpoints, including eczema area and severity index or EASI for AD, total assets and inflammatory nodule count for HS as well as symptom scores and global assessments of disease severity for both AD and HS. However, recall that this is an open label study without placebo in a small number of patients and we do not expect to reach steady state IRAK4 degradation in skin until the second half of the 4 week dosing period. The objective of Part C therefore is to confirm PK/PD and safety with the additional information on early signs of clinical activity. With regard to safety and tolerability, which so far has been quite favorable with no serious adverse events and with only few mild to moderate adverse events. We will continue to monitor the safety profile, including whether the modest non-adverse QTC prolongation that we observed with multi-dosing and healthy volunteers that plateaued after seven days continues to show evidence that it is self-limited, but in this case, out into 28 days. We look forward to sharing the data from the patient cohort before year end. With respect to Sanofi and their decision to advance KT-474 into Phase II, we plan to share these patient data with them as soon as they are available and expect a decision on their plans within the time frame set forth in our collaboration. Moving on to our oncology programs, we are pleased to report that the three disclosed oncology programs, STAT3, IRAKIMid and MDM2 are all progressing well. First, I will discuss our STAT3 program. A target long considered undruggable, STAT3 is a transcriptional regulator that has been linked to numerous cancers and other inflammatory and autoimmune diseases. Our focus here is on developing selective STAT3 degraders for the treatment of hematological malignancies in solid tumors, as well as autoimmune and fibrotic diseases. We believe our STAT3 degraders have the potential to provide a transformative solution to address multiple STAT3 dependent pathologies. KT-333 is a potent and selective heterobifunctional small molecule protein degrader of the STAT3 protein in development for the treatment of liquid and solid tumors. Patient enrollment and dosing are ongoing in our Phase I trial which 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. The first stage of the study is exploring escalating doses of KT-333. It is important to highlight that in order to expedite dose escalation, we have been recruiting broadly in Phase 1a across solid and liquid tumors in order to reach pharmacologically active doses as soon as possible, before then focusing on patient populations where we expect to see clinical activity, either the monotherapy or in combination with other agents. The second stage will consist of 4 Phase 1b expansion cohorts to further characterize the safety, tolerability PK/PD and anti-tumor activity of KT-333 in relapsed and/or refractory peripheral T-cell lymphoma, cutaneous T-cell lymphoma, large granular lymphocytic leukemia and solid tumors. This escalation is expected to proceed throughout 2022 and we look forward to sharing preliminary safety and proof of mechanism data before year end, with the goal based on the broad population of liquid and solid tumors in Phase 1a of showing that we can attain levels of target degradation associated with anti-tumor activity in the disease relevant animal models at doses that are safe and well tolerated. Recall that we are also exploring STAT3 degradation in immune inflammatory indications using other STAT3 degradation. To that end, at the EULAR Congress in June, we presented data showing that KTX-115, a tool STAT3 degraders selectively and potently degraded STAT3 and human peripheral blood mononuclear cells and whole blood aggregated STAT3 phosphorylation and MCP, CCL2 released by human modified more potently than JAK inhibition and inhibited CD4 positive Th17 development and related cytokine production in vitro and prevented collagen induced arthritis in mice. You can find those posters in the scientific resources section of our website. Moving now to 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 the Type 1 interferon pathways synergistically to broaden activity against MYD88 mutant B-cell malignancies. KT-413 is on a similar time line in STAT3 with patient enrollment and dosing ongoing in our Phase 1 trial evaluating the safety, tolerability and PK/PD and KT-413 in patients with relapse and/or refractory B-cell non-Hodgkin's lymphomas. The first stage is exploring escalating doses of single agent KT-413 using a similar strategy as I just described for the KT-333 Phase 1, we are expediting dose escalation of Phase 1a by enrolling a broad population a B-cell lymphoma patients before them focusing on patients and when we expect to see the most substantial clinical activity. Specifically, the second stage will consist of two Phase 1b expansion cohorts in DLBCL to further characterize safety tolerability, PK/PD and antitumor activity of KT-413 and relapsed refractory MYD88-mutant mutant and MYD88-mutant wild type DLBCL. Dose escalation is expected to proceed throughout 2022 and we look forward to sharing preliminary safety and proof of mechanism data before year end. With the goal based on the broad population of B-cell lymphoma patients in Phase 1a, I'm showing we can attain levels of target degradation associated with antitumor activity disease relevant animal models at doses that are safe and well tolerated. I want to touch briefly on MDM2, a program we announced for the first time at our R&D day late last year. As we have shared, we are very excited about potential of this program. MDM2 is the crucial regulator of the most common tumor suppressor p53, which remains intact or wild type in more than 50% of cancers. Our highly potent MDM2 degrader KT-253 unlike small molecule inhibitors is able to suppress the MDM2 feedback loop and thereby rapidly induce apoptosis and susceptible p53 wild type tumors with brief exposures. We believe KT-253 has the potential to be effective in a wide range of hematological malignancies and solid tumors with functioning p53. Specifically, our use of biomarkers for an acute episodic response to MDM2 degradation has enabled the identification of several indications where we expect to see robust activity and a favorable safety profile with intermittent IV dosing, such as AML, lymphomas and multiple different solid tumor types, including but not limited to uveal melanoma, mesothelioma, colorectal and breast cancer. These all represent potential development opportunities for KT-253 with patient selection to be further guided by ongoing work focused on mutation and/or gene expression profiles. As planned, KT-253 is currently in IND enabling activities to support an IND filing in the second half of 2022. Before Nello wraps up the call with some closing remarks, I will hand the call to Bruce Jacobs, our Chief Financial Officer, who will share some brief comments on our financial results for the first quarter. Bruce?

Thanks, Jared. I'll keep my comments brief. For the quarter, we recognized $11.5 million of revenue, this total reflects revenue recognized pursuant to our Sanofi and Vertex collaborations. And at the end of the quarter, our deferred revenue total on the balance sheet was approximately $84 million that reflects partnership revenue we expect to recognize over the next several years, excluding the receipt of any potential future milestones. On operating expenses, R&D for the quarter was $41.3 million of that $4.8 million represented non-cash stock-based compensation. The adjusted cash R&D spend of $36.5 million, which excludes this stock-based compensation reflects a 14% increase from the comparable amount in the March quarter. On the G&A side, our spending was $11 million of which $4.9 million was non-cash stock-based comp. There, the adjusted cash G&A spend was $6.1 million that reflects 8% decrease from the comparable amount in the March quarter. And then finally, we exited the second quarter with a cash and equivalents balance of approximately $482 million, that provides a runway based on our current anticipated spending levels into 2025 and recall that it's our policy not to include in our cash runway any payments from milestones that we have not yet received. With that, I'll turn it back to Nello for some concluding remarks.

Thanks, Bruce and Jared. So in conclusion, we're clearly very excited about all that we've accomplished this year at Kymera as well as by all that is in front of us. We're in a strong position with an exciting first-in-class pipeline that is progressing through the clinic, the best-in-class platform in discovery engine about which you will continue to hear as we disclose more programs and data, productive partnerships with Vertex and Sanofi that allow us to extend across multiple disease areas and a very strong position that you just heard from Bruce that enables us to continue to invest in high value programs and generate several important data sets in the next few years. We're poised to deliver a key clinical insights in the second half of this year and continue to demonstrate the potential of our approach to targeted protein degradation to improve the lives of patients. The second half of the year's impact as you've already heard, we look forward to generating for the first time key patients data in HS and AD from our KT-474 IRAK4 degrader program, as well as key proof of mechanism data in the two oncology clinical programs, KT-413 IRAKIMiD degrader and KT-333 as STAT3 degrader. We mentioned earlier our key goals for this data set that to just summarize briefly for KT-474, we're looking to confirm that healthy volunteer PD and safety profile in this patient cohort, which we believe could be a game changing profile in towards a small molecule or anti-inflammatory drug. In oncology, we want to demonstrate that these molecules are behaving as predicted based on our preclinical studies and the translation of degradation and safety is happening in a predictable way. If we can do this well, which we have confidence in, then we can set clear expectations of clinical activities starting from 2023 and beyond, once we would be focusing on our responders population. We're also very excited by the prospect of adding our fourth clinical program later in the year with our MDM2 degrader KT-253, which we believe will have significant clinical potential. We have also several earlier programs with clear degrader rationale and large commercial opportunities that we're advancing towards the clinic and we'll be disclosing as we approach clinical investigation. We did a tremendous progress that we've made in mind that I want to thank the Kymera team, our collaborators, our partners and the last, but not least all the healthy volunteers and patients, which allow us to advance development of our potentially transformative therapies. Finally, I would like to thank all of you who have taken time this morning for our call. I look forward to a great Q&A discussion. And for that, I will hand the microphone back to the operator so that we can take your questions. Thank you, again.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Brad Canino with Stifel. Please go ahead.

Good morning. On KT-474, can you share any additional findings from your preclinical investigations of the potential mechanism behind the QTC effect and why it becomes saturated as you've observed in Phase 1. I think you previously discussed the cardiomyocytes assay around the 1Q call, but is there anything else to add that you've done? And then on KT-413, the IRAKIMiD, some of your peers have had recent difficulty finding a therapeutic window for these given the on-target IKZF1 neutropenia. Can you talk about your confidence in achieving the required IRAK4 degradation within a feasible window? And then maybe discuss the likelihood of observing any anecdotal clinical activity in MYD88 mutated patients that might be enrolled within that all-comer group? Thank you.

Thanks, Brad. So technically those were two questions, but we'll let it go this time. So just to address some level, and then I'll let Jared also jump in. So maybe I'll start with the second one. So what is our approach with the IRAKIMiD degrader. As we said early on, the hypothesis there is to have a synergistic cell autonomous anticancer effect, meaning that the biology of IRAK4 degradation and the biology of Ikaros and Aiolos degradation intersect in MYD88 mutant lymphoma to provide a very substantial synergistic antitumor effect in both in vitro and in vivo. The way that we managed the combination in a single molecule has been to really understand fully the kinetics of degradation, the impact on the right set type and then the potential management of the well-known amid pharmacology, which, as we all know, is well characterized, both the wanted and unwanted. I think we have two major differences from what's been done in the past. One is that from IRAK4 degradation, we expect to see no contribution to unwanted pharmacology, meaning we know that IRAK4 degradation is well tolerated. So the only, let's say, pharmacology that we need to monitor is from the IMiD part. And as we know, our drugs actually behave quite differently from any other drug that has been tested in with this mechanism. We dose our drug once every three weeks and we have a PK/PD profile that allow us to have profound degradation for the first two to three days and then we see a recovery of targets as well as a recovery of some blood cell type, which we know can be impacted by IMiD biology. And so the combination of kind of PK/PD and our dose -- and our ability to dose infrequently given that we're able to drive really strong apoptosis in the early days and then we don't need to continue to dose allow us to have a safety profile that is, we think, very manageable. I mean, we started this extensively in non-human primates and we expect that profile to translate well in the clinic. I will only also add one more thing, which we said in meetings, maybe this is an opportunity to share broadly. We are -- I guess, a company that focuses on translation of PK/PD, which is the core of the technology. You're looking at protein levels. And so that's really what we're translating in the clinic. And so when we've selected our starting doses in all of our trials, we have been targeting a PK/PD profile or a degradation profile that we believe will allow us to both understand the translation and derisked the translation. So in all of our oncology trials, especially learning from KT-474, we've been able to translate in a degradation profile that we believe was quite conservative and derisked so that we will learn in human the kinetics in a safe and in a productive manner. On the 474, and then I'll pass it to Jared to comment on both, I don't know that we have any particular update. I think what we've said in the past very clearly is that this QT finding is first of all non-adverse. So obviously, we're talking about a non-adverse event which we brought it up, so we're happy to discuss it. But that's the context. It's non-dose responsive and is self-limiting, and we believe it's saturated based on the fact that we have a mild affinity for the herd channel that seems to be saturated by how the molecule distributes in tissues. And I think the fact that this finding is non-dose responsive and non-concentration responsive is the most important aspect that derisks the profile of the molecule going forward. Because really, what we are avoiding is the exclusion of QT that goes into areas where the risk of arrhythmia is higher, which in no cases we've seen so far. But Jared, maybe you want to contextualize a bit the mechanism based on the latest?

Yeah. In terms of the mechanism from the in vitro work with the iPSC cardiomyocytes, I think what's been encouraging to us is that what we've seen in vitro really does mirror what we've seen in vivo in healthy volunteers in that the effect we see on current in these cardiomyocytes as due to this mild effect on herd is delayed, which is consistent with the delayed effect that we see in vivo. Also importantly, it really does appear to be your compound specific, not due to any on-target effect. I think we've definitively shown that the effect we're seeing on herd is not due to degradation of IRAK4. We've been able to show that by using another IRAK4 degrader in this in vitro system that degrade IRAK4 quite well, but has no impact whatsoever on herd. Coming back, Brad, to your question on whether we're going to be able to see any activity of MYD88 mutant lymphoma during dose escalation. As I mentioned, we are enrolling a broad population of B-cell lymphoma in Phase 1a to really help to expedite moving through dose escalation. Our goal -- we know from our preclinical studies that 60% to 80% knockdown of IRAK4 in the IMiD substrate Ikaros and Aiolos is what is required for antitumor activity in MYD88 mutant lymphoma. So while we are enrolling a broad population of B-cell lymphoma in Phase 1a, once we get up to doses that are giving us that 60% to 80% knockdown, we probably will start to make an effort to bring on more DLBCL patients, and maybe even a few MYD88 mutant patients. So it's possible as we get through towards the end of Phase 1a, we may have some antitumor activity in MYD88 mutant population. But really, our primary goal is to really focus on antitumor activity in Phase 1b, where we then specifically enroll MYD88 mutant wild-type DLBCL, and that will really happen next year. So our goal for what we plan to report out later this year is really focused on, as Nello was saying before, that we can obtain the desired sort of knock down of these three targets that is associated with antitumor activity preclinically, and we can do it at doses that are safe and well tolerated.

Yeah. And then really derisking the molecule, right? As I said in the remarks earlier, it's about making sure that the molecule has the profile that is in line with what we seem to be really active preclinically. If we can show that, basically the degradation and safety, then we derisk the molecule, then the biological and clinical question will be asked once we focus more on MYD88 mutant patients, which will be as soon as we can most likely in 2023 and beyond. Thanks, Brad.

The next question is from Michael Schmidt with Guggenheim. Please go ahead.

Hey, guys. Thanks for taking my questions. I had a couple on KT-474 as well. And on the QT signal, assuming that this non-adverse level of QT prolongation is being confirmed in the patient study, I guess what is your expectation how that might potentially affect the longer term clinical potential of the drug? Is there any expectation, for example, that that would preclude certain patients down the road from potentially using the drug or certain combinations that might be affected by that? And the other question I had is just on Part C on the exploratory clinical endpoints. Obviously, understanding that it is non-placebo controlled and, as you said, that the steady state knockdown is only reached sort of in the second half of this sort of four week period. But I guess, is there a certain level of efficacy that based on these outcomes in AD & HS that one would expect or hoping to see based on the PK/PD of the drug? Thanks so much.

Thanks. So maybe just to address a couple of questions here from Michael. So the first one and then I'll pass it to Jared maybe more for the second one. But -- so we've done, as you can imagine, extensive work on trying to contextualize these non-adverse event QT finding for moving forward this drug towards clinical and commercial success. And so our view is this, if the finding remain within the range that we observed -- we have observed so far, we expect that there would be no impact on clinical, regulatory or commercial success of this drug. And I'll explain a bit where we're coming from. So for a 10 to 20 milliseconds, especially in the absence of concentration dependency and large excursion, then what we're talking about is something that slightly modifies, let's say, the baseline of subjects that never really reaches an area of really high risk of arrhythmia. So from our early exploration both with our experts as well as with interaction with the FDA, we expect that we can advance this molecule in a broad variety of disease indications regardless of kind of the background. And then Jared will comment on which specific small number of patients may not be suited for this particular drug with this profile. So then going back to regulatory, so what we've seen based on FDA based databases as well as work that we've done ourselves is that for 10 to 20 milliseconds QT changes, usually what we've seen is maybe the most impactful kind of label impact. We've seen some warning and precaution statement. That said, usually, this drug can extend the QT, be aware in case you take other drugs that can extend QT. And in terms of commercial success, I mean, what we've seen is and also talking to prescribing doctors in this space is that with this type of profile, there is no expectations of having to have monitoring associated with prescription of the drug. And in the absence of monitoring, then I think the uptake should be just as any other drug that might not have this particular finding. And maybe, Jared, if you can comment on what are the subset of patients that we might be not selecting in our clinical development plan.

Yeah. I mean I think we feel as though this should affect very few patients in the target indications, patients who have a prolonged QT at baseline and there are patients with sort of hereditary syndromes resulting in a QT prolongation or patients who are on other drugs that they cannot come off of that are clearly shown to prolong the QT interval. Those would be the sort of patients that would not be able to go on to our study and might be excluded from use of the drug if approved and commercially available. But we expect that to be a very small fraction of the total patients who would be eligible for this sort of treatment.

And then going back to the Part C, again, maybe we'll double team here as well. Just at a high level, I just want to reiterate, the goal of the study, as we've been saying for now two years although, obviously, the focus has been more recently given that now the study is in progress. But we've always said that the desire here, the goal was to demonstrate that transitioning this technology from healthy volunteer to patients. And I just want to remind everyone -- everybody, we actually haven't said that, but I've said it on social media. This is the first drug that has gone in patients outside of oncology coming from heterobifunctional degrader machines. So the actual -- the reason for running the patient study is exactly for that reason; we wanted to see that going from healthy volunteer to patients where, again, there is a plethora of cell type that contribute to the pharmacology. We wanted to make sure that degradation profile was maintained. So this was the initial design reason for designing the study, and I'll remind everybody, the initial study design was 14 days. Now we've learned from the healthy volunteer study new things. And so we adopted the study to the new things that we've learned. So we moved from 14 days to 28 days. And the reason for moving from 14 days to 28 days has been because for two reasons. One, we've seen that a skin degradation in two weeks has not reached steady state. And so we wanted to make sure we reach steady state so that when we select Phase 2 dose, we do with that information in hand. The second one, we uncovered this QT finding in the healthy volunteer study. We saw that between day seven and day 14, we had reached steady state or plateau of this machines. We wanted to confirm by extending the study by two more weeks so that we would derisk running a 12 to 16 weeks Phase 2 study. So this is really the backdrop. So the goal is confirming PD and confirming safety. Now given that we've extended to 28 days and given other data with other molecules wherein 28 days, there has been some early sign of clinical efficacy, we have added this exploratory clinical endpoints. But again, our focus is on the PD and safety, and we'll be happy to collect and share any data on efficacy. But as Jared said earlier, given that we expect to reach maximum pharmacology only in the back two weeks of the study, it would be unfair to set expectations from that point of view. But again, we remain committed to sharing that data and we'll share with all of you.

The next question is from Chris Shibutani with Goldman Sachs. Please go ahead.

Hey, Chris. We can’t hear you, if you are on mute.

Can you hear me now?

Yeah.

Yeah. Okay. Apologies for that. With the Part C study for KT-474, on dosing and on patient selection, you made the modification to do the 75 milligrams in the fed state. Can you just make sure that we all understand the basis for that selection of the change? And then secondly, with the two types of patients, HS and AD, will -- should be it differential in terms of the kinds of exploratory responses that you might see from this Part C group based upon your understanding of the kinetics of degradation as well as kind of the kinetics of the pathophysiology of the different disease states. I realize that we're only going out to 28 days. But if there's any basis for thinking that there might be a difference between those two patient types that would be helpful to know and will you share that and break out that data based upon those patient types? Thanks.

Thanks, Chris. Maybe Jared, do you want to take this one?

Yeah. Hi, Chris. Maybe starting with your first question, why the 75 milligram dose, just to clarify which is that our aim all along has been to bring in what we call the sort of minimally efficacious dose into Part C, meaning the smallest dose that gives us maximum pharmacology that we think would be associated down the road with clinical activity. From the Part B MAD, we determined that the 100-milligram dose, which was administered in the fasting state was giving us maximum knockdown in the blood, near maximal knockdown in the skin, and also significantly impacting ex vivo cytokine induction. So we really saw that as our minimally effective dose. Now in the healthy volunteer study, these subjects were all treated on an inpatient basis. In Part C in patients, this is all going to be done on an outpatient basis to 28 days of dosing. So it's not practical to really to dose those subjects in the fasting state. So we wanted to make sure we could dose them in the fed state. We did observe a very modest food effect that led to a modest increase in plasma exposure in the presence of food. So we did an additional SAD food effect cohort to determine what is the dose in the fed state that would give us the same plasma exposure of the 100 milligrams in the fasting state. And we found out from that cohort that that dose is 75 milligrams, and that's the dose that we we're therefore bringing into Part C. With regard to your question around AD versus HS and the ability to detect a clinical signal, we note that in studies using active agents where these subjects are treated for a long period of time, 12 weeks to 16 weeks, you can see signs of clinical response as early as 28 days in either AD or HS. So we don't expect -- if we were to see any clinical signal for there to be any advantage of AD or HS, which is why we're planning on accruing approximate equal number of AD and HS patients to Part C, restricting the enrollment of patients with moderate dispute disease.

Maybe I just want to add a couple of things. Just to clarify, so we expect 75 mg dose who have the same activity in terms of PD of the 100 mg dose in the MAD cohort. That's the goal. It's pure math actually. It's nothing to do with that. The math of the exposure to 75 is the same as the exposure 100, whether you eat food or don't, depending on the two doses. The other part is obviously on the second part, the pathophysiology is very different. The kinetics of IRAK4 degradation impact on pathophysiology of those two diseases might be different. So we actually don't know, right? The question is that's why the 28-day study has to be focused on does the molecule do what it's supposed to do. This is degraded and it is well tolerated because we want to leave the real answer to your question in a 12 week to 16 week study to be fair.

And the other maybe key point here is that the one reason why we are not sort of fixing our focus so much on the clinical endpoint or on the PDM points is what's most important in either AD or HS and Part C is that we are able to observe with IRAK4 knockdown in the skin, which we want to achieve at least 85% or greater knockdown, we can see an impact on the expression of pro-inflammatory gene transcripts. And those gene transcripts that are elevated at baseline could be different in AD versus HS. But the key is that we want to see down regulation of those transcripts in conjunction with down regulation of IRAK4 protein expression. If we see that in AD as well as in HS, regardless of what we see in terms of clinical endpoints, they're four weeks, that will give us confidence moving forward that we should be able to impact the natural history of the disease for either of those diseases with studies of longer duration that we would be able to test in Phase 2.

The next question is from Richard Law with Credit Suisse. Please go ahead.

So hi, guys, good morning. Can you talk more about the type of patients that you're recruiting for the Phase I Part C study regarding the use of prior? And any final information on this type of patients that you're recruiting will be great. And also a follow-up question that would be, you mentioned earlier that the 10 millisecond to 20 millisecond with not need monitoring. Is there a threshold for QTC prolongation that you would be monitoring from the FDA? Thank you.

I think in terms of your first question in terms of the patient population for Part C, these will be HS and AD patients with moderate to severe disease. They could be treatment-naive patients or they could be patients who have had prior treatments, including prior biologic therapies. If patients are on biologic therapies, really any therapies at the time that they're screened for the study, they would need to come off of those treatments, and we have an appropriate washout period for different therapies that are written in the protocol. So they will not be able to come on to the study and be on concurrent medications. They'll have to come off of those before they can go on to KT-474.

The other question was about the QT.

Yeah. I'm sorry. In terms of the QT and what sort of QT excursions will be required for monitoring. As Nello said, we've had extensive discussions with our cardiology consultants, and they all, I think, unanimously believe that for a 10 millisecond to 20 millisecond change, there will be no need for cardiac monitoring. Probably an excursion that is routinely sort of going beyond, say, 40 milliseconds or greater is a level that might require some degree of cardiac monitoring. But again, it really all depends on what's happening to the QT interval itself, is it going beyond 500 milliseconds. What is the risk of a cardiac arrhythmia that would all have to be looked at in totality by FDA ultimately in order to determine what would be the label implications and whether any sort of cardiac monitoring would be necessary.

The next question is from Vikram Purohit with Morgan Stanley. Please go ahead.

Good morning. Thanks for taking my question. So maybe looking at your earlier-stage pipeline beyond 474, could you comment a bit on the intended development plan for 253 once the IND is filed later this year? And what you expect the news flow for the MDM2 program to look like in 2023? And then secondly, could you give us an update on your efforts with the molecular glue programs you've alluded to before and when you anticipate having a development candidate there to talk about? Thanks.

Yeah. Thanks, Vikram. Maybe I'll try and answer this question more broadly and then if we need to go into specifics, Jared can help me. So the reason why we started this the MDM2 program is because we felt it was an area of clinical investigation and commercial opportunities that have been -- that has been untapped by the space. I think the biology of p53 as a tumor -- as a key tumor suppressor gene and the ability to stabilize p53 in a variety of tumors has been the focus of many efforts, but I think it's been maybe from a not the appropriate -- not using the appropriate technology. So we discovered that in order to replicate the cancer genetics, really removal of MDM2 was needed. And so the applicability of this concept of removing MDM2 to stabilize p53 and impact the broad variety of tumor is large. What the team is focusing on at the moment is how we select and prioritize indications. So I think as Jared mentioned earlier, there is a very, very strong case for degrading MDM2 in AML, given existing data, given cancer genetics and given some preclinical data that we've generated that it very, very elegantly demonstrates that MDM2 degradation is up there in AML as the mechanism to go after, especially in refractory resistance to Venetoclax patients, which is an area that we're trying to expand. But obviously, we would not develop this asset if AML was the only place to go. And so we're expanding our investigation in many other tumors, both liquid and solid. And we'll disclose more data as we commit to those areas of investigation. So I would say our first kind of first-in-human study will start towards end of the year, early next year with probably both the solid and AML approach, and then there would be expansion cohorts in different indications. I expect that in terms of news flow, we will have, again, a molecule derisking early on. So as we've done, as we've been discussing for 413 and 333, is 253 degrading the target with kinetics and safety that we believe based on preclinical model is therapeutically relevant. So there would be the early proof of mechanism, which I don't want to start now setting up expectations, but I expect that that would be something that we'll focus on next year. And then soon after that, we'll be talking about in which indication we expect to see proof of concept. Going back to your broader question, so we have broad activity is novel E3 ligase discovery that is applied both to novel E3 ligase enabled heterobifunctional degradation as well as novel E3 ligase enabled molecular glue driven degradation. I think it is fair to say that these programs are still in the discovery stage. And I think once we're ready to disclose the program, I think it would be when we're close to the clinic. So we're going to choose to keep our cards close to the vest on the early discovery pipeline because it's a highly competitive space. And to be honest, I don't think we're giving any credit for anything that is early. So I think it's probably not a smart thing to share at this point.

The next question is from Marc Frahm with Cowen. Please go ahead.

Hi. Thanks for taking my questions. Maybe I wanted to start off on 474. Given the kind of degradation dynamics and that you're really not maybe going to get maximal degradation in the skin for two weeks, is it appropriate to compare the four-week data for all sorts of other programs that have happened in AD and HS or should we be thinking more like two to three week endpoints for those trusts? Thanks.

Hi, Marc. That's a great question. I'll only spend 10 seconds, and then I'll pass it to Jared. The reality is we just don't know, like, first of all, we're early in the trial, so we really don't know. And then second, I think it's a very good question. And I think only our ability to assess how the data evolve will tell us and teach us. I think what we're seeing here is to see maximal skin pharmacology, we need to wait for the second part of the 28-day study, so maybe week three, if not week four. And again, the study is small, there is no placebo. So I want to just be transparent. We're not trying to downplay the expectation. Like nothing has really changed from the last quarter. What we're only saying is we can't set the expectation on a study where there are so many variables which make the study based on expectation on efficacy completely unpowered. What we're seeing is let's focus on things that we put a lot of expectations on, critical go/no-go expectations on, which is PD and safety. And the other, let's keep it exploratory. I fully appreciate that the investor community would like to have clear targets for those exploratory endpoint. But we're just being very transparent in saying that it's really hard for us to do that.

The next question is from Zhiqiang Shu with Berenberg. Please go ahead.

Great. Good morning. Thanks for taking my questions. First, also on the QT prolongation. You mentioned this is probably related to -- specifically to the molecule. I was wondering if you have identified any liable structures within the molecule compound that is for those? And I guess the question is really to ask whether, other compounds in your pipeline have this liable structure. Follow up on the potential efficacy of this IRAK4 plan. Help us understand kind of frame the efficacy expectation for IRAK4 AD and HS. I'm not looking for guidance, but just kind of broadly speaking, in terms of different modalities. I think Sanofi talked about they're not looking for [Technical Difficulty] as a biologic, but they see a great potential for part of therapy. Thanks very much.

Thanks. So to the first question, we understand really well what drives this very weak affinity for the herd channel. And I want to reiterate in case, I haven't said it before, we do not degrade IM channels. We only degrade direct for also in cardiomyocyte. We understand really well, we have no concern about big impact of any other program, including the backup program. So we know exactly what we need to do and what we've done for other programs in our pipeline. With regards to efficacy, maybe just at the high level, I think that the IL-1/TLR pathway has shown impact in a wide variety of diseases by blocking either single cytokine, we have data with IL-1, IL-33, IL-36, in some cases, even IL-18. We have data with IRAK4 inhibitor in RA and to some extent, maybe some early days in HS. So this is one of the most validated innate immune pathways out there. What we're offering here is a molecule that can block the pathway, I would say, almost completely, if not completely, that should afford superior efficacy to all the other agents that I mentioned so far. So the question is not -- it's not whether, this is my opinion, I want to say. This is not whether this is going to be active or not. The question is where is it going to be active and how much and in which diseases. So is this going to be the best-in-class in HS and an active drug in AD, best-in-class in lupus and an active drug in GI inflammation. I'm just putting things out there. It's just -- I think clinical investigation will be needed to assess the level of activity needed. And I think the comments that were made by other companies, including our partner, has been -- there is different expectations if you have an oral drug with a good safety profile, where you're going to be driving your penetration on different expectations than a biologics where really the only case for biologics for high penetration has to be exceptional activity given the modality barrier that has with patients compliance. Jared, any thoughts on this?

No. I mean I think I agree with what you said. I mean, our aim ultimately is for this drug to have a transformative activity in patients with these diseases with high unmet need. But as Noelle is saying, having an oral drug with a very favorable safety profile, one can definitely see these drugs being taken up and commercialized and being successful, even if the activity is not necessarily superior to about towards out there right now. But our expectation is that for certain indications, we should have superior activities that should be, again, transformative for patients.

So we're told we got to move quickly. So let's do some quick Q&A from now on. We have two minutes left.

The next question is from Eli Merle with UBS. Please go ahead.

Hey, guys. Thanks so much for taking the question. Moving just to STAT3, I guess what are you expecting to see from a PD perspective and proof of mechanism perspective, such as the percent degradation at the update later this year just based on the doses you're studying, I understand that it's still in dose escalation. And then just in terms of STAT3, I guess what have we learned from kind of some other STAT3 clinical programs, whether it's inhibitors or anti-sense programs targeting STAT3, just from a clinical perspective in terms of any efficacy seen in the oncology setting and lessons learned there? And I guess, kind of what we've learned about why it's so important to degrade versus inhibit STAT3? Thanks.

Thanks, Eli. So we'll do this really quickly. So preclinically, we've seen that if we get around 90% degradation of STAT3 in a patient population that is dependent on that target for a couple of days, we can then dose again, either a week after, two weeks after. So having a profile that is approaching that or around that or that level of degradation with a good safety profile for us would be a huge derisking event for this program. In terms of external landscape, to be honest, I haven't seen any real good agent out there. So if you go to compare, I don't think there are real STAT3 agents that engage the targets specifically. And so it's hard to compare apples to oranges there.

The next question is Kalpit Patel. Please go ahead.

Hey. Good morning. Thanks for squeezing me in here. Question on the STAT3 program, another drug developer recently demonstrated clinical activity in late line liver cancer with their inhibitor-based approach as a monotherapy. I guess based on these recent learnings, should we expect you to enrich that solid tumor arm with liver cancer patients or are there other solid tumors that you're eyeing or prioritizing in this -- for this program?

Jared, do you want to take that quickly?

Yeah, Kalpit. I mean we've been exploring multiple different sort of solid tumor types preclinically, and we use those data to then drive ultimately whether we decide to enrich for those populations. So I think that will be based on really in our preclinical data. And also, again, there -- within solid tumors, our data source suggests that a combination of our drug with anti-PD-1 agents, maybe the most effective way to use the drug in solid tumors, whereas in liquid tumors like T and NK cell malignancies that is STAT3 dependent, we're expecting significant activity with our degraders the monotherapy.

Yeah. The lever date is intriguing. So obviously, we'll follow up on that. Yes, let's do two quick questions, and then we'll wrap.

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

Hi. Good morning, guys. Just a follow-up on STAT3, can you talk a little bit about anticipated therapeutic index? Any expectations around myelosuppression or neutropenia based on either mechanism or what you're seeing in the preclinical tox package? And then from a PD perspective, particularly in solid tumors, can you just clarify if you're taking serial biopsies where you'd be able to look at not only target degradation in the proper but also in distribution or activity and impact in tumor samples as well. Thanks.

Yeah. So we have options for biopsies in the dose escalation. This is not mandated given that it's an early dose escalation. So we're relying on really patient to help us there. And we -- so we can't commit that we'll have the data, but we're trying to collect the tumor data. And as you know, we are very keen on, as I've said, on translation, also the correlation between PK and PD in blood and in tumor is important. So we'll try and get there, hopefully. I think the first question was on safety. I mean, a pharmacologically active doses, these compounds are quite well tolerated preclinically. So we expect to see a similar profile in the clinic, but we will continue to monitor things and obviously report if there are things to be concerned about. It sounds like last question.

Yes. The next question is from Mike Kratky with SVB. Please go ahead.

Hi, everyone. Really appreciate you filling me in here. In terms of the previously disclosed QT funding, is there any plan to run a thorough QTC study? And then I have a follow-up on efficacy. Can you just clarify whether you'll be reporting the mean reductions in EZ at day 28 and if you may be reporting any other metrics such as EZ-50 or 75 or 90 in those atopic dermatitis patients? Thank you.

Jared why don't you take that one?

Yeah. In terms of the endpoints themselves, we'll be analyzing those end points in a number of different ways. We haven't finalized exactly how we'll be looking at those at points such as the EZ and AD, so really, we'll provide more color on that once the data emerge. The first question was...

The through QT study.

The fact that within our Phase I, we've had extensive ECG monitoring in the healthy volunteer portion of clinical monitoring. And we detected this subclinical modest QT finding. I think that's where it precludes the need for any thorough QT study in the future. We essentially knows sort of what we're dealing with, and we'll be able to sort of do routine sort of ECG monitoring to sort of follow that finding.

Great. Thanks, Jared. Maybe to wrap up, we're out of time. So no more questions. I know we're past our time. So I'll be very brief. I just wanted to thank everybody to -- for joining in on our call and for all the really good questions. We are excited beyond our expectation to be here in 2022 dosing patients with HS, AD lymphoma, solid tumors, leukemias with programs that were all de novo first-in-class programs developed by Kymera within our team. So this is an amazing accomplishment. Obviously, we haven't accomplished anything until we impact the lives of patients. So we're focused on how to do that in the most responsible data driven and thoughtful way and to continue to engage with you to make sure that there is continued communication with the external community so that we can advance this hopefully game changing therapies and all the new generation programs that we haven't disclosed yet and make Kymera this fully integrated commercial stage company in the next few years. So thanks again, and have a good day.

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