Doing it all next time.
All right. Hi, everyone. Good afternoon. Thanks so much for joining us. I'm Andrea Newkirk, one of the biotech analysts here at GS. I'm really pleased to be joined by Nello Mainolfi, founder, President, and CEO of Kymera. Thanks so much.
Thanks for having us.
Yeah, of course. Maybe before we dig into the data that you just presented last week for your KT-621 program, I thought maybe we could start with a view of your small Molecule Oral Protein Degrader Program. Talk to us about why you believe in this opportunity and why you believe this approach is so particularly well suited in INI.
Yeah. So again, thanks for inviting us. I will start with the concept of Oral Degraders in immunology and the opportunity to have orals with biologics-like efficacy. At Kymera, we've always been focused from the early days on marrying the power of protein degradation with the right target. I always am a big believer that all platform or all kind of technology-based companies live or die by their target selection. We really have to be thoughtful about what type of target we can apply the technology against, what is the application, and the end use. For us, what we've learned along the way is the ability, when you use a degrader against the right target, to block that target and that pathway with the same level of saturation that an injectable biologics can have.
We started to learn this concept early on, especially when we were working on the IRAK4 rogram in immunology. It was a bit of an aha moment for us where we thought, if these drugs are really so potent and they can completely remove these proteins, then we should expand the concept and go after these pathways that have been validated by upstream biologics but do not have an intracellular oral solution to the same biology. The concept of these, again, orals with biologics-like efficacy is coming from the ability of using these catalytic degraders to remove proteins and block pathways with the same efficiency as biologics. When we think about STAT6, when we stopped and said, let's look at all the pathways that have been validated but lack a real best-in-class small molecule, IL-4 and 13 jumped out, right?
It's one of the most well-validated pieces of biology out there, have tremendously impacted patients with TH2 diseases going from asthma to atopic dermatitis, COPD, and other Eo E and other indications. There is, based on our calculation, more than 100 patients in even just the same major market with these diseases. There is really no small molecule solution to this. Clearly, the small molecule not only is there to provide a convenient option, but it's also there to actually provide an option to patients that are not now on biologics. So, the beauty of STAT6 sits right downstream of a STAT6 receptor. It's a specific selective transcription factor for the receptor upstream. By blocking STAT6, we're able to block as effectively IL-4 and IL-13 as you can with an upstream biologic. That's kind of the fundamental thesis behind the program.
Obviously, the target is important. STAT6 is important. But when you think about degradation of that versus inhibition, what are the pros and cons of both approaches?
Yes. I think this concept applies to all targets. Maybe I'll take a step back and say we're a big believer that, again, we need to go after targets that have not been drugged or drugged fully before. When we've taken this approach and looked at these pathways, what surfaces out of this Venn diagram is transcription factors that have been historically difficult to drug, multifunctional proteins, some people call them scaffolding proteins, which have been drugged but poorly. An example is IRAK4. I would say another example is TYK2 and others. From the transcription factors, STAT6, IRF5, and others that we're still working on in the preclinical space. When you think about what small molecules can do versus degraders, you have to think about what target class you're going after.
If you're thinking about multifunctional proteins, you know that a small molecule inhibitor of a catalytic function of a protein is only going to block that catalytic function. If the protein has also another function, let's call it scaffolding function, let's say receptor interaction function like TYK2 or IRF5, you need to remove the protein completely to elicit the full biology. For a transcription factor, it's a bit more nuanced. It's extremely difficult to inhibit a transcription factor because these classic proteins have evolved to do two things: bind to another protein and then bind to DNA. So they don't have a conserved binding site that one can target. Sometimes what seems to be a conserved binding site is similar across the whole family of proteins, for example, the SH2 domain for the STAT protein class.
With regards to STAT6, we discovered at Kymera and obviously others in the space, you can actually inhibit this protein. The case that we make for degraders against STAT6 is really the type of target product profile that we're after. Our target product profile is to have an oral DUPI, right? The pathway blockade that Dupilumab has is basically almost complete blockade of IL-4 and 13, for sure 90% plus. We can do it. I would also say, if you look at our clinical data, quite easily with a once-a-day oral drug that has, again, a catalytic effect. With low nanomolar concentrations, we're able to block this pathway completely by degrading the target at steady state, 90% plus. We show we can get to complete degradation.
With a small molecule inhibitor, because of the concentration of STAT6 in different compartments and because it's a stoichiometric inhibition, you need to have as much drug as you have off target, you need to have high, in our hands, high micromolar concentration to cover the target 90% plus all the time. That is, we believe, extremely difficult to do with a once-a-day oral drug. Maybe it's more in details than I've ever gone into, but that's where the rationale is coming from.
Super helpful. Thank you. Let's dig into the data you had last week. Phase I healthy volunteer. What were you most surprised to see from this data set?
Yeah. You know, great question. When we started the study in, I believe it was October of last year, feels like a lifetime ago. When we started the study, the goal, based on our preclinical studies, we knew that if we degraded STAT6 90% plus in quite high bar preclinical studies like the HDM mouse asthma model, we could replicate the level of pathway impact and clinical endpoint that Dupilumab had. Our target was 90% plus degradation in blood and skin with a good safety profile. Obviously, what we saw is that all doses above 1.5 mg per day achieved 90% or more degradation. What we also saw was that we were able to see complete degradation at doses of 50 mg and above in both blood and skin.
We were able to see that we had undifferentiated safety, whether you were at 1.5 milligrams or you were at 200 milligrams. This safety was undifferentiated from each other and from placebo. Placebo-like safety. I think what I was surprised is that we actually had to go back and dose the 1.5 milligrams mAD cohort because to that point, we had not seen any dose cohorts that had less than 90% degradation. Actually, the 1.5 milligrams cohort was one of the last cohorts that we ran, again, to establish the lower end of the dose response curve. Another, I would call it maybe upside scenario, was what we saw with the TH2 biomarkers in healthy volunteers.
We spent the past 9-12 months explaining that these were going to be noisy biomarkers to read in healthy volunteers where the baseline level were very low, as well as the dynamic range was small and the pathway was not activated. All of that was actually true. I think what we were pleasantly surprised with is that, for example, if we use TARC as a biomarker of reference, all our dose cohorts were able to reduce TARC at different levels, but consistently, which was not seen with all the dose cohorts, for example, with Dupilumab. Actually, the nice thing we were able to see that was not seen, again, with the biologics, that day 7, we had more robust inhibition at day four.
Day 14, we had more robust inhibition at day seven, telling us that we had a really nice dose and time-dependent blockade that did not seem to have plateaued even in just two weeks. What we did, and I give credit only to my team, I would like to, but I cannot take any credit for it, was going and looking at the Eotaxin-3 as a biomarker. This is something that was only seen, was only measured by the developer of Dupilumab in asthma and chronic rhinosinusitis. They saw a reduction of about 40%-50% at week 52 in the phase III study. We knew that this is a highly sensitive biomarker to IL-4 and 13, much more than TARC, way more than IgE. In fact, if you look at the data, we had really tight error bars, reduction up to 60% plus percent.
It is actually a hint of dose responsiveness to it. That just speaks to the fact that it is a highly sensitive biomarker. Sorry, I went too long here. The bottom line, what was really exciting was probably more potent than we anticipated in vivo in humans, an exceptionally pristine safety profile, as expected, I will say. Really a biomarker profile that I would say was clearer in terms of output than we had anticipated.
When you think about the level of STAT6 degradation, the goal going in was 90%. You clearly saw above that, I think potentially even higher than the 95%, though that was probably a limit based off of the assays you were using to measure degradation. Is more always better here?
Yeah. It's a great question. It's really hard, actually, to know, and this is why we're going to run more studies, to really know what 90% versus 95% versus 99% will mean. Actually, I think that the goal of our phase III study, where it's going to be a large and dose-ranging study versus placebo, I think that's really the goal of this study, establishing a correlation between depth of degradation, safety, and efficacy. I think if you speak to people that have worked in this pathway for a long time and were fortunate to be able to do that here and there, they will tell us that you are required to have really deep pathway blockade.
I think what I will say to that is that we're fortunate, if you look at the doses that we've explored, that we have all the doses, we have all the learnings to being able to ask that question. I would also say that the data that we reported, we said from 50 milligrams and above, we have complete degradation. The way we reported it probably underestimates what the actual levels of STAT6. In reality, if you look at the 50 milligrams dose, more than 50% of subjects were below the lower limit of quantitation. At the 100 mg dose, 100% of subjects were below the lower limit of quantitation. Probably others would say 100% or 99% degradation. We have a very conservative estimate on how we make this calculation, which I can bore you with. I thought I'll share that message.
As you think about the biomarkers, you've touched upon them a little in your previous remarks. What is specifically the relevance that you see there as you see the response here in healthy volunteers?
Yes. Again, I've been saying this for many, many months. We have to be really careful what we do with the biomarker data. To us and to me, what the biomarker data are telling us is that we're blocking IL-4 and 13 optimally. Blocking optimally, even in healthy volunteers, is giving you a response with all the noise and the caveats we talked about that is in line with another drug that turns out to block IL-4 and 13 optimally, which is Dupilumab. That's all we can say. I think the relevance of biomarkers in patients will be important. As you know, we're in a 1B study in atopic dermatitis patients. There, we need to see a very robust biomarker impact in blood and skin because here is where it really matters.
We know that TARC, for example, in blood and transcriptomic profiles in the skin are highly correlated for drugs in this pathway to clinical endpoints. We want to establish that.
Great. You just touched on this, but phase IB that you've initiated for atopic derm, maybe just remind us the setup of this trial. What expectations should we have as the data readout later this year?
Yeah. As I've said in the past, our main goal for the development plan of KT-621 is to get to market ASAP and have a development plan that can address as many indications in parallel as possible. What that means is we want to get into these phase III studies as quickly as possible. What's on critical path to go into phase III is to have dose-ranging studies where you establish safety, efficacy versus placebo. These are these phase IIB studies that we're starting end of this year, early next. We had a window of opportunity between the end of the phase I healthy volunteers and the beginning of these phase IIB studies to establish what we call an early proof of concept. We decided to power tailor this early proof of concept to a biomarker signature.
We know really well what the biomarker signature of IL-4 and 13 blockade is in both blood and skin with the extensive elegant work that Sanofi and Regeneron did with Dupilumab. We know what it needs to look like for a successful drug, even in a handful of patients with AD, with moderate to severe atopic dermatitis. We decided to select roughly 20 patients in a novel label study. We know that biomarkers are not affected by any meaningful placebo effect. We can hopefully replicate or reproduce what has been seen with upstream biologics with an oral once-a-day drug in terms of pathway blockade and biomarker impact. Obviously, 28 days, other drugs in this phase have shown initial clinical benefits.
We will measure also EZH, IgA, but really focused on the correlating nature of degradation to biomarker to early signs of efficacy versus trying to compare efficacy in other studies that are placebo-controlled. Really focus on biomarker and then showing that the biomarkers have a clinical benefit, I think, will be important. It is really not powered to show clinical benefit and compare it to Dupilumab study given the short duration, the lack of placebo, and the small n.
Got it. Given the profile that emerged from the healthy volunteer data, how de-risked or how much read-through do you see to this phase IB study?
I always go back to when we started the program. I don't want to revisit what I said 20 minutes or 15 minutes ago. Our investment thesis has always been, if you degrade STAT6, you should be able to replicate an upstream biologics effect. We spent many years, I won't say exactly how many, working on the program preclinically. We identified KT-621. We characterized, and we showed that what we thought was going to happen, happened. We went into the clinic, and our goal was to show that STAT6 degradation can be achieved and is safe and has a very strong pathway impact. We've shown that. I mean, our expectation is that this translation will continue to happen. I think we've completely de-risked the fact that we can degrade the target safely, at least in a short duration study.
We've also de-risked, I think, to a large extent that degradation of STAT6 has meaningful impact in the pathway. I think it's not a great leap of faith to expect that we should be seeing impact in patients.
As you think about being able to establish this correlation that you mentioned, STAT6 degradation to the biomarkers, to the EC score, why do you not need to run a similar 1B study for asthma? Why can you just kind of skip over that and go to the phase II?
Yeah. I mean, the important thing for us was choosing an indication that is representative of TH2 diseases. I think experts will tell me that atopic dermatitis is the most TH2 skewed disease. Showing that we have a positive biomarker impact, we have good degradation and good safety, I think telling you that the drug is operating under the paradigm that we understand and I think provides an amazing opportunity with patients that have other diseases outside of AD to explore clinically. We do not believe we had to repeat the same study in asthma to build that confidence. We believe AD, while it is obviously a different disease, speaks to the TH2 component of it. That is why the biomarkers are so important, because those will be shared across all the TH2 diseases.
Got it. So you see it once, and then you have confidence as you think about the other potential indications. How are you thinking about your planned phase IIB studies here?
Yeah. I mean, we've, in a way, selected the phase IIB doses. The phase IB, it's actually a good kind of sanity check, right? Are we, everything is translating the way that we anticipate? The team is already working on, of course, if we say we're going to start a large global phase IIB studies in 4Q, we're actively operating to being able to do that later this year. We'll have multiple doses. We'll share more about the clinical trial design later in the year. You can imagine for AD to be a, let's call it, traditional placebo-controlled randomized study, 16-week readout with multiple, probably 200 patients plus or minus. We're excited about being very close to that.
As you think about the potential to expand, not just into asthma, but other indications, both in dermatology as well as respiratory, you've talked about this really interesting strategy to take the phase III dose for both derm and respiratory and be able to expand that to additional indications. Talk to us about what gives you the confidence that the regulatory agencies are on board with that approach. Clearly, there's been so much noise in the recent weeks and months around the regulatory flexibility and the agency. What gives you confidence that that's a strategy you can take?
Yeah. I mean, I think what I'm going to be able to speak to is the fact that some of this strategy was adopted by the companies that developed Dupilumab, learning from asthma, applying to COPD, or learning from other derm indication and applying to others. This is a playbook that has been used already in the space. Obviously, we need to generate data to being able to support this point plan. I think this is, as long as the efficacy-safety relationship is supportive of this plan, I believe this is a patient-friendly and very, very kind of strategic plan to expand the development to as many indications to as many patients as possible.
If 621 looks promising here in AD and in asthma, other indications, where does it fit into the treatment paradigm?
I mean, we're a strong believer that if we're able to deliver on the target product profile of oral drugs with biologics-like profile, some KOLs tell us, look, you don't even have to be as effective as Dupilumab. Anyway, if we continue to deliver on that, our vision is that this is going to be the first-line drug for all indications, for all people with TH2 diseases. I think it's the right thing to do for patients. It's the ethical thing to do for patients. It gives patients the flexibility, the convenience, and the efficacy that cannot be found with any other technology. Obviously, still early to talk about market access strategy. I'm talking more philosophically. I find it hard to imagine that that profile will not be the profile that will expand finally this market that is still, by the biologics, there still has little penetration.
Maybe to that point, when you think about the potential opportunity here, you've called this an oral Dupixent. Is there the potential to exceed Dupixent's commercial opportunity?
There are two things, right? There is one, kind of the biological profile. One is going to be the clinical profile, and one is the commercial profile. On the, let's say, biological to clinical, all the data that we've gathered so far is that the biology is coherent, so we should be able to see a similar profile. That's why we like to say Dupixent in a pill or the oral doobie. With commercial, I think if you look at AD and asthma, 85% of the revenues, I believe, we're talking about still very small penetration into those markets. I'd love to believe that Dupixent is going to be a $25 billion drug in a few years. I'd love to believe that if we expand this market, 621 could surpass that. Time will tell.
Goal for the future.
Yes.
Maybe switching over to the IRAK4 program here that's partnered with Sanofi. Just to level set, talk to us about IRAK4 as a target. What makes this so attractive?
Yeah. IRAC4 is the obligate—let's call it the myddosome complex, where there is MyD88, IRAC4, IRAC1, and other partners—is the obligate complex through which IL1, IL18, IL33, IL36, TLR4, TLR7, TLR8 have to signal through. It is a quite kind of broad inflammatory cascade. IRAC4 small molecule kinase inhibitors have really shown that by inhibiting the kinase function, you're not really able to block this inflammatory cascade, especially when there are multiple stimuli. You can imagine diseases like HS. You have locally systemic inflammation. You have TLR and IL1. We've shown even in cell system that when you have multiple stimuli, inhibitors are not able to accomplish pathway blockade. We have some exciting proof of concept in this pathway. We have an IL1 beta biologic from AbbVie that has shown some quite impressive data in HS.
We have other agents that have shown early data in other indications, including atopic dermatitis and others. The opportunities to have a broad anti-inflammatory agent, there is really most focus on TH1, TH17, with some impact on TH2. We've shown KT-474 can block this pathway effectively preclinically in the clinic. We had really exciting phase I data, complete degradation in the blood, robust degradation in skin. We went into a phase I, let's call it IB study in HS and AD with some intriguing early efficacy data as well as biomarker data. Sanofi was excited enough to want to take this program into two parallel phase IIB studies, one in HS and one in AD that are ongoing. I think we reported in the last quarter that we had a $20 million milestone from Sanofi.
This was related to a second-generation molecule that achieved a preclinical development milestone. Obviously, there is continued investment and excitement about this program. We are obviously waiting to see the next data readout.
Talk to us about how you're thinking about potentially bringing forth IRAK4, because there is an opt-in clause here.
There is.
Bringing forth the IRAK4 degrader in AD versus 621 in AD, how do you think about those two opportunities?
Yeah. Maybe just to level set on how the collaboration operates. Right now, Sanofi, from the phase II on, are responsible for both financial as well as for the operations of the program. They're running phase II studies where, in the event of transitioning into the next phase of development, we'll have milestones, and we have royalties down the road. We do have, as you're saying, an opportunity to opt in right before phase III into the global development of IRAK4. If Sanofi decides, based on data, that atopic dermatitis is the right indication to go into phase III and beyond, we have an opportunity to opt in and share cost of profits. No operational responsibility. I think, obviously, it's important to think about the also Sanofi has, as you know, investments into the STAT6 space. Obviously, they're behind us.
I think the beauty about the opportunities here is that STAT6 is a pure TH2 drug and serves patients with TH2 inflammation. IRAK4, it's more, as I said, a TH1, TH17 drug. I believe that if it's successful in AD, it will be probably successful in a subset of patients that might be complementary to what STAT6 is going to be operating against. Obviously, time will tell. Data will tell. I could see them to be complementary drugs and not competing drugs.
Got it. One wouldn't cannibalize the opportunity of the other.
I think it's early to tell. I don't think it will have to depend on how it's developed, but I can see them to be complementary drugs.
Is there a path forward for Kymera to be involved in both?
Look, I think that's a resource allocation question. If you think from a kind of science and strategy and desire, obviously, in the event that there is positive data, we would love to be part of the 50/50 co-development and co-co. In reality, the decision will be made based on resource allocation. I think if 621 continues to show the profile that we're seeing so far, it's going to be a very resource-intensive program. Given that it's a wholly owned program, I would imagine that we would prioritize that. Time will tell. We'll have to see how the rest of the pipeline evolves. Those decisions, fortunately, don't have to be made in the near future.
Maybe on that point, in the last couple of minutes we have here, would love to hear about your newest asset that you just unveiled on your earnings call, 578. What makes you so excited about this one?
Yeah. Our IRF5 degrader, 579, the beauty about this program is the ability to be cell-specific. If IRF5 is really mostly, if not only, expressed in macrophages, monocytes, B cells. It is also really activated by particular stimuli, mostly TLR7, 8, 9, as well as B cell receptor to some extent. We can be targeting IRF5. I like to think of it as in a kind of disease, almost disease-specific manner. What we have shown preclinically, where you look at, let's call it more traditional immunology, and if you are guided by human genetics, we know that IRF5, there are GWAS studies showing association in lupus, in IBD, in RA. I think the stronger ones are in lupus.
If you're guided by that, you'll know that this drug could be really disruptive in lupus with an oral drug in a space that has really limited option now. There are some other drugs in development, but no really oral drug, I think, that has the opportunity that we have with IRF5. I think that's high-level the opportunity. And the molecule is extremely well-behaved, large safety window, no adverse events in preclinical studies, and excited to start our phase I early next year.
As you think about potential indications, you mentioned evidence in lupus. Is that a fair assumption that that would be an indication of interest for you?
Yeah. I think I would say where we are all on the same page, at least at Kymera, is lupus and all these interferon-mediated pathologies like Sjogren's disease and others. What we're trying to nail between now and the end of our phase I healthy volunteer study is RA, IBD. We want to generate a bit more preclinical data, overlap it with the genetic association, and then decide which of the two, both, one, or neither we want to advance in parallel to a lupus study to, again, create as much optionality as possible.
As you think about your pipeline, I think you've talked in the past about being still open for partnerships. How are you thinking strategically about which assets, which programs, maybe even which indications you'd like to keep in-house versus outlicensing or partnering?
Yeah. I think one thing we've learned along the way is, obviously, partnerships can be highly value-creating when done at the right moment and with, obviously, the right partners. We have examples that we've done at Kymera. We feel pretty strongly that partnering before a solid proof of concept, let's say before phase IIB studies, is probably done only if you have probably no financial capabilities or you don't want to invest in that particular disease area. We're really well capitalized, and we have these studies in front of us funded already. It is unlikely, if not impossible, that we will be partnering any program in our pipeline, in our immunology pipeline, before a phase II study. I think after that, it becomes, again, a resource allocation decision. We want to be a global commercial stage company.
If all the programs in our pipeline are successful, it's going to be hard for us to do all of it on our own. I think at that time, we can make resource allocation decisions and decide when we grow up which program we want to continue to have wholly owned versus partnered.
Perfect. With that, thank you so much, Nello.
Thank you.
Thanks everyone.