Great! We will start a little bit earlier. Thanks for attending the Guggenheim Conference here. My name is Brad Canino, Senior Analyst. Very happy to share the stage for next fireside with Nello Mainolfi from Kymera Therapeutics. Thank you so much, Nello, for being here.
Thanks, Brad. Thanks for having us.
I've got a ton of burning questions I wanna jump into, but maybe first, just how do you like to pitch Kymera today? We've been through a pretty transformational period. What's the intro?
Well, Kymera is a company that was founded on the promise of targeted protein degradation, the ability to go after targets that have not been drugged before, with a technology that we believe can transform treatment paradigms in any diseases. We've decided to focus in immunology and demonstrate it now that, if you go after the right target in the right pathway, you can deliver biologics-like activity with oral drug, with once-a-day oral drug. And that's what we're building Kymera around as a concept and as a development strategy.
Okay. Can we start with valuation? It's something that I'm getting as a question. I'm sure you're getting it as a question. I think the, maybe the common and maybe somewhat lazy refrain is, you've got phase I data, you're into phase II now for atopic dermatitis, $10 billion market, massively increasing competition in that space. How do you justify the market cap? How do you like to respond to that?
I actually never got that question myself.
Okay.
So maybe they just ask you. So actually, I think, I think the, the maybe there is two points that if for people that ask these questions might be missing, and I'm actually not talking about the valuation of Kymera. I'm just talking about the opportunity that we're building.
Right.
I let others decide what the right valuation is. Obviously, as the CEO, it's always too low for me. So what are we doing? There is the AD market, which... And actually, you need to take a step back, and you need to think about our drug, which is a Type 2 drug. So you have to take a further step back and think about patients with Type 2 diseases. And we've shown in many of our slides, we're talking about, you know, more than 100 million patients. If you think about just moderate to severe patients, which, to be fair, is the population that we're developing our drugs for, at least initially, we're probably talking about 40 million-50 million patients.
So 40 million-50 million patients, Type 2 diseases, very novel, markets, very immature markets. In many of these markets, there is really only one or two drugs. In most cases, no oral drug, or at least no effective oral drug. And so the penetration of advanced systemic therapy is in the 1 million-2 million patients, versus 40 million-50 million patients. So almost, and actually even less than if you look at the psoriasis market 10, 12 years ago, versus today, you know, it's, it's increased. It's probably grown by 10x, roughly. And so this is where we are with, with these Type 2 diseases now. So, the current market of drugs in these spaces, at least the, the yearly sales, is around $20 billion-$25 billion a year.
So this is a market that I believe will be expanded dramatically, let's say 5x-10x. I think the opportunity is there. If you think about AD, asthma, COPD, EoE, and others. And how do you expand markets? You expand markets with multiple drugs, and if you have an oral drug that has biologics- like efficacy, you have the opportunity to have the biggest market expansion. So when KT-621 is approved, as is launched, I think Kymera should be a large biotech in terms of market cap, right? Into the, into the double digit, into the high double digits, let's say. I don't wanna quote numbers on a fireside chat.
And so I think if you, if you take a step back where we are today, we have, you know, 10x plus value that we can create from here, and the probability- and so that's one part. The second part is our target, while novel, and actually we're proud of that, is in a pathway that has been the most validated pathway in Type 2 diseases. So this is not some novel target, some novel biology you never heard of, that has some intriguing early data, and you're trying to figure out if it's gonna work. This is a target that has-- that is in a pathway that is the most validated, both in terms of efficacy and safety, in the whole landscape. So when you put the two and two together, I would argue that...
If you think about adjust the probability of success to the market size, there is a lot of room to go from here.
Okay.
I think we should look back, we should look forward.
Mm-hmm. Now, what do AD and other Th2 patients want from a new drug that will lead to more uptake in that market expansion beyond Dupi and IL-13? And what work have you done to base that view in?
Yeah. I mean, look, we talked to investigators, we talked to KOLs. We just had a big investigators meeting for our BROADEN2 study, and the constant feedback we get is, all of our patients- most of our patients, I'm gonna say most of our patients, 'cause if I say all of our patients, people will not believe me, so I'm gonna say most of our patients want an oral drug. And not because they're afraid of needles, not because... I mean, some might be, not because, you know, the oral drugs are, you know, are considered to be, easy, more easy to access. It's just that everybody has grown up, you know, during their life with the concept of: I have something, I take a pill.
And if you are confronted with, "I have something, and I need an injection," it's a psychological barrier that lots of patients are not willing, and including some prescribers, are not willing to to kind of settle with. And so the concept of, if you can deliver an oral drug that delivers the type of efficacy and safety that patients still want.... I think that's the transformative aspect of our drug. In addition, if you look at patients on biologics, I think after a couple of years, a bit, 40%-50% of patients are off their biologics. And the reason is, they just cannot deal with, you know, the constant injections, the pressure that it, that it brings to the planning, just even the process that they have to go through.
And then there is a whole big population that, for us, is not only something that we want to do because it's an untapped opportunity, but I think it's also I feel that a social responsibility, which is all the young children, the pediatric population, which are totally not served by any therapy right now, which is, I think will transform the disease, not only the patient's life, but actually the disease itself. I think if you look at even Type 2 drugs that are dosed to patients early in life, you can actually attempt to stop this atopic march and potentially even cure disease if you go early enough. And only an oral drug can go early enough for kids of young age.
Okay. Is there a good analog of a drug with the KT-621 target product profile entering a market and expanding it to the degree that you're thinking about?
Well, I mean, so there is two aspects. In the history of drug development, for sure in immunology, but I would expand it beyond that, there's never been an oral drug that delivered—Again, we still have to show it in larger studies, so I don't wanna get ahead of myself. But let's say if we maintain the profile that we've shown so far, there hasn't been a drug with a biologics-like activity that has entered the market. I think there are some recent drug. I mean, I look at the IL-23 peptide from J&J, that I think gets pretty close, so that will be a kind of an interesting experiment, although in a much more mature market like psoriasis.
So, the long story short, is there hasn't been an analog, and this is why we're so excited about Kymera, and what we're doing, is because we have the opportunity to deliver something that has never been done before, thanks to the protein degradation technology. So there are examples of oral drug. I mean, if you look at Otezla in psoriasis, a drug that I think I can say hopefully does not work really well compared to biologics, but has been tremendously successful. And why? And why? Actually, you know, I had a lot of discussions with people that were involved in the commercialization of that drug.
The reason was very simple: Lots of patients didn't want to be injected, not even every four months, like eventually Stelara delivered, because they didn't feel like they had to go through that both psychological and physical process. They were fine having a less efficacious drug that was convenient and generally well-tolerated. So we don't wanna deliver that profile. We actually wanna deliver biologics-like profile. So think about that. If that drug became a multi-billion dollar success, think about what a drug can do if it can not only deliver the convenience and the good tolerability, but actually a competitive efficacy profile.
Okay.
So I think we're gonna be writing history here.
Okay. Now, in the data update you provided, the KT-621 safety profile was stated to be clean. The granular data weren't presented. I guess, decision behind that disclosure approach, and then maybe talk, too, about the status of the chronic tox studies.
Yeah. I mean, great question, and maybe it's an opportunity to clarify. So our disclosure has been consistent for the past few years. If you look at the healthy volunteer study, we share the table of treatment-related adverse events. And that was what we showed. In this particular study, we did not have any treatment-related adverse events, so we didn't show that table. We are in the process of, you know, writing a publication, that hopefully will be accepted in a great, in a great journal, and I think that we might provide, you know, more details that we believe are irrelevant to the development of the drug, but still, you know, what are the non-related adverse events, and you guys would see are all benign stuff.
Um, uh, w- the, the other-
The chronic tox.
The chronic tox.
Yes.
I think we'll update on the chronic tox soon. I think we've said even recently that we were in the process or in the completion part of the process, so I think we'll be able to give an update soon, actually quite soon, on where we are with that.
Okay. Then when it comes to the profile of efficacy, how did you measure and define success in AD patients, and how would you describe the weight you can apply from that learning to the potential success in phase II, phase III?
You mean in the Ib?
Yes.
Yeah. So look, I think, you know, we try to be very data-first in the company, and we spent the past year, as you recall, stressing the importance of relationships of outcomes. So degradation leading to biomarker changes, leading to impact on clinical endpoints that would be coherent with each other. And I think the most important take-home message from the phase Ib study was that we had, I think, the richest, broadest dataset of a phase 1, I would say even a phase IIa study, probably in the history of AD, where we were able to show that deep degradation of the target led to an impact on all biomarkers that can be measured in AD patients.
So we looked at TARC, we looked at eotaxin, we looked at IgE, we looked at IL-31 in blood, we looked at FeNO in lungs to look at type 2 inflammation in the lungs. And that led to impact on itch, on EASI, on SCORAD, on sleeplessness, on other patient-reported outcomes, on FeNO in asthma patients, on ACQ-5 questionnaire, so clinical measures in asthma patients. So I always hate to talk about numbers because numbers in as most studies are just you know are gonna be impacted by the small ends and the so short duration of the study. I like to talk about two things. One, that all those numbers were in the ballpark that we had, that we had initially guided to, which will be in the dupilumab range at day 28.
Now, it turns out that all of the numbers were numerically superior to the dupilumab data, but that doesn't mean that the drug is superior. It's just a very early study. And then the other important data point, that all the measures that we took, and we actually took all the measures and reported all the measures. That's what we do at Kymera. And so with all of those, they were all going in the same direction. So I think when you put it all together, so all the numbers were very robust, they were all going in the same direction, all the biomarkers had really robust effect, again, in many cases, superior to biologics in the space.
I mean, it sets up that if the drug doesn't work in a phase IIb study, with very strong effect, it would be a completely shocking outcome. And so that's, I think, what I would take from, from the phase Ib study.
What is your hypothesis as to whether the AD treatment effect was maximized at the four weeks that you showed us?
Well, I hope I'm not wrong, but I'm completely convinced that it wasn't maximum at four weeks. If you look at the shape of the curve, you look at starting from, you know, the first measures of day seven, day 14, day 21, day 28, or, you know, 29, you know, we, we measure the day after, you see a constant reduction of, of kind of clinical presentation of disease, whether it's again, EASI, so it's, it's lesion size and shapes, or it's itch. And the, the slopes seem very steep to me. So again, it would be extremely shocking, surprising, that you go beyond day 28, and day 28 is the plateau. But obviously, I, I unfortunately, I can't foresee the future yet, so we still have to wait for the data.
It will feel very, very strange that day 28 reaches the plateau. And if you look at drugs in this pathway that target IL-4, IL-13, I believe none of them hit a plateau at the early in the study at day 28.
Right. I guess the question is, how much better could it be?
Oh.
If it's already achieved Dupi-like efficacy at 28?
Well, I mean, it's gonna be better than that. I guess that's the expectations I have.
Okay. That would be great. Now you're running the phase II.
Yeah.
Right? Yeah, I'm gonna jump ahead a bit and think about how to interpret that data set. I wanna ask you, like, what is the best way to interpret the phase II results that you'll have, to put them in a competitive context when we get them?
Mm.
And really, it's the factor of different baselines across-
Mm,
The trials, maybe different response rates. You know, we're early to that. You're just kicking off that study, right?
Yeah, yeah.
But I wanna get ahead of this. And how do you think about that?
Yeah, I know we're gonna spend the next year doing this, so-
Yeah.
We're starting early. No, I think, I mean, this is an important question. So we spent, as you can imagine, as I'm sure other companies do, a ton of time analyzing a response, responses of drugs in AD based on time that the study was run, based on patient baseline characteristics, and I think we understand a lot about the impact of all of those to the outcome. I think what I'm gonna say is that it's in a global study like ours and like others that have been run, it's extremely difficult to have patient baseline characteristics that can match the dupilumab studies of, let's say, 10 years ago. And in fact, even if companies that have run those studies, in recent studies have different patients' baseline characteristics.
So if we look at EASI, which is just an easy, pun intended, way to like compare baselines, I mean, if you look at the Dupi study, baseline EASI, again, for patients, mean or median was around 30. Now, most studies are between 24, 25, 26. So what does that mean in terms of measuring these clinical endpoints? I think the important thing is, there are... If you decrease the baseline EASI severity, you do seem to see an increased placebo effect.
Mm.
And that is somewhat intuitive, because, let's say, less severe patients might have more fluctuation of disease. I don't think that's the only reason. I think we're seeing more placebo effect because study conduct has been severely impacted in the past few years because high competition and all sorts of other reasons that I don't wanna get into. So I think you can still manage placebo rates in a reasonable range with this study. And then, I think, you know, I think the impact, the treatment effect is critical, and I think you can still look at treatment effect, regardless of placebo, to understand how well the drug works, because at the end of the day, patients that go to the doctor are gonna look at that as the treatment effect.
And then, if you wanna do comparisons, because we love to do it and everybody does it, although they're all wrong, because you can only compare if you run a head-to-head study. But I think you can look at the more, let's say, categorical endpoints, like vIGA 0/1 or EASI-75, where the placebo rates are naturally lower. And I think there, it should be a bit easier to do cross-trial. Again, I shouldn't say comparison, but, but, you know, looking at data across multiple trials. So look, I think we're all going through that, and we just have to be very careful with trial conduct to make sure that we hit the important endpoints of our study.
Just remember that the main goal of the study is to select a dose that goes into phase III. Obviously, we wanna see efficacy, we wanna establish safety, but the important part, assuming we'll see efficacy and the right safety, is that we have selected the right ranges of doses that will allow us to select the best dose to go into phase III.
Okay. And then in the AD phase Ib data, you emphasized the FeNO biomarker data. I guess, just describe how that should be a read-through to asthma.
Well, you know, I think FeNO has been established as a biomarker of type two inflammation. In fact, it's used actually in some as a point of care biomarker to actually determine also what kind of therapy you're gonna be given to a particular patient. So it's definitely been associated with disease and treatment responses. So, you know, obviously, if you reduce FeNO, you're reducing type two inflammation in the lung. So our interpretation from the study, maybe you know, you can be very bullish and think, like, if we have a big reduction in FeNO like we saw in the asthma patients, you're gonna be active in asthma.
Maybe I would be a bit more cautious and take a step back and say, "If you've seen FeNO changes, you're definitely getting in the lungs, and you're definitely degrading STAT6 in the lungs, and that leads to an impact on this pathway that is very robust." Now, I think for us, because we combine FeNO with ACQ-5, which is a clinical measure of disease, I think that gives us the confidence that we should be active in asthma. And, you know, again, it goes back to how we like to think about drug development: degradation, local biomarker, like we did in skin for AD, impact on a measure of clinical manifestation that de-risks the next study.
So we're going into the asthma study with the same level of confidence that we're going with in the AD study, even though the asthma, you know, comorbid patients were very few, because we know this drug really well, we know it distributes really well in lungs. In preclinical studies, it works exceptionally well in those asthma studies, I would argue, better than biologics. And so, I think we feel just as confident in asthma as we do for AD.
Okay. I wanna ask about one of the pipeline programs, the IRF5 as well, and maybe to frame the question, maybe it's perceived as not having the same pathway validation as STAT6, where you had dupilumab to guide you. So some might say there's less to be learned from the healthy volunteer data because the biology risk of the target requires it being in patients to have that context. So how do you think about the healthy volunteer data as a value creation step, even beyond just showing that you've got a safe molecule for the next stage?
Yeah. Look, there are two questions for IRF5. So first, I think what we have for IRF5, that actually is very rare in drug development, is you have genetic validation of the functional variants in disease patients, and that's actually quite rare. There are older programs that have genetic associations usually, if not always, end up being clinically successful. I think of a few, TYK2, very strong genetic association, PCSK9, I think about complement. So there are some that have this very historical, strong genetic association that leads to high level of de-risking. So that is quite unique, IRF5 in immunology, having that. So then the what is the question you're gonna be asking is, do you have a drug that degrades the target well?
And is the biology that you've developed preclinically translating in the clinic so that you can ask the question in patients? And so I think in the healthy volunteer, we can answer both questions. We can say, hopefully, that, KT-579 degrades IRF5 to the levels that we need, which is about 85% or more, will always end up, you know, targeting more than 90, but based on preclinical study, 85% is enough. And then does that lead to this impact on biology the way we understand? So I talked about the genetics. The genetics, I didn't say about the biology. So what is the biology of IRF5? It's really discrete on particular cell type. It's not expressed everywhere in the body. It's really only in some cell types: NK cells, macrophages, monocytes, and B cells.
In those cell types, impacts traditional, let's say, cytokines like IL-6 and TNF and IL-12, IL-23, type 1 interferon, and B cell-produced IgG. So if in healthy volunteer, mostly through ex vivo stimulation, we can show that we can impact the cytokines, type 1 interferon and IgG, so then we've kind of de-risked the biological translation of IRF5 in humans. Then when we go into patients, it's really the validation of human genetics, but that has been done in the past 20 years, quite strongly for so many targets that we again would go into a study with a high degree of confidence. So I think the difference, I don't disagree with the initial statement of STAT6 versus IRF5. I don't know that STAT6 had more validation.
STAT6 had easier validation because you had one target, STAT6, to one other target, which is IL-4 receptor alpha, one drug, KT-621, to one drug, dupilumab. With IRF5, you have one drug, KT-579, that is across several pathways that have been validated by multiple drugs, but those are all context-independent pathway blockade. With 579, we block all of those in specific diseases. So it's a bit different, but I wouldn't say it's more or less validated.
Great. No, it's helpful framing. With that, it looks like we're out of time as well, so a good way to end. Nello, thank you so much.
Thank you, Brad.
Thank you for listening in. Thank you.