Kymera Therapeutics, Inc. Q3 FY2023 Earnings Call

Good day, and welcome to the Kymera Therapeutics Third Quarter 2023 Results Call. Please note that this event is being recorded. I'd like to turn the conference over to Ms. Justine Koenigsberg, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Kymera's Quarterly Update. Joining me on this morning's call are Nello Mainolfi, Founder, President, and CEO; Jared Gollob, our Chief Medical Officer; and Bruce Jacobs, Chief Financial Officer. Following our remarks and presentation, we will open the call to questions. During the Q&A portion of the call, please limit your question to one and a related follow-up so that we will have enough time to address everyone's questions. Please note that we will be referencing slides in our corporate presentation during Jared's remarks. The slides can be accessed in the Investors section of our website under Events and Presentations, and will be shown during the call for those on the webcast. Before we begin, today's discussion will include forward-looking statements about our future expectations, plans, and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A description of these risks can be found in our most recent 10-Q filed with the SEC. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call. With that, I would now like to turn the call over to Nello.

Thank you, Justine, and thanks, everybody, for joining us today. We're excited to review our recent progress and several critical milestones that the company has achieved. As we are near the end of 2023, I'm extremely proud of the strong execution by our team that has led to continued progress in our clinical studies across multiple programs along with innovative pipeline advancements to support our future growth. Before we detail that progress, I want to share a few thoughts on where Kymera is in our mission to build a best-in-class, fully integrated global degrader medicine company. In doing so, I hope to provide you with an important lens through which you can view our achievements and our strategic decisions regarding the portfolio. Our unique approach to developing a new generation of medicines using TPD has resulted in a robust pipeline, both in the clinic and underway to the clinic, highlighted by multiple programs that are guided by and consistent with our goal of creating groundbreaking medicines. I hope there is broad appreciation for all that Kymera has accomplished since our founding only seven years ago. We have taken four programs in the clinic, demonstrating fidelity of translation of PK/PD and safety across each of those programs. We have shown early clinical proof of concept for three of them as you will hear soon. Our unique strategy has allowed us to achieve multiple TPD firsts, including conducting the first I&I study in healthy volunteers and patients with KT-474, targeting IRAK4. In addition, we've been the first to degrade an elusive transcription factor like STAT3. More strategically, for KT-474, we formed a critical collaboration with Sanofi, one of the leaders in the I&I space. And that program is now advancing in Phase II development, with the first patient in the first trial just recently dosed. We have built industry-leading knowledge and capabilities that we're leveraging each and every day. And we have developed a best-in-class pipeline of innovative and highly valuable programs, some of which we are excited to share with you over the coming months. An important cornerstone of Kymera's success has been our unique approach to target selection, which has several key tenets that guide our strategy and, of course, our research and development efforts. Our focus is and has always been on genetically validated targets that are either undrugged or inadequately drugged within pathways with clear validation and where TPD is the best or only solution. Importantly, we target large market opportunities where the unmet needs are significant and where we believe that there is a greater probability and opportunity for significant commercial success. With regards to therapeutic areas, our programs have progressed over the last several years. And as you can see from the pipeline slide on our website and in our corporate presentation, Slide 6, our portfolio is increasingly leaning towards immunology. This is a purposeful strategic orientation guided by several factors that have influenced our strategic and investment decisions. You will hear a more complete overview of this focus at our R&D Day on January 4. But today, I'd like to highlight a few. First, it is clear that I&I is an area where the understanding of the underlying biology has increased dramatically. Second, the large commercial opportunities within I&I are mostly dominated by biologics that have helped validate key pathways and targets, but also create an opportunity for other more convenient modalities. Lastly, we believe that TPD can provide a unique solution with strong efficacy and biologics-like specificity, but with the flexibility of all our small molecules. Importantly, we hope you all appreciate that we have demonstrated early but convincing evidence of our potential in I&I with KT-474. In fact, we believe strongly that the success we've had with our IRAK4 program will help shape how we approach these new opportunities. We have countless learnings from that program, starting with the development of the molecule itself, including our extensive preclinical work, and the key insights we've gained from running what we believe is the largest healthy volunteer subsequent patient study in the TPD space. And now, KT-474 is undergoing Phase II studies with our partner, Sanofi. This wealth of experience and knowledge gives us a high degree of confidence in our ability to execute on many new opportunities, some of which we will be sharing with all of you in the coming months. We've also made important progress in the clinic with KT-333, which targets STAT3, and KT-253, our MDM2 degrader. Jared will provide updates on both programs later during the call. At a high level, we're very excited that KT-333 will appear in an ASH abstract later this morning and would be featured in a poster presentation, with updated clinical data at the ASH meeting in December. It's important to note that we're seeing early signs of clinical activity, even at those levels that were not predicted to be clinically active, but where we are, nonetheless, seeing robust STAT3 degradation. Jared will share a few highlights on this call. And we will be able to say more once the accepted abstract is publicly released, which should be shortly after our call concludes this morning. We're also excited about early data emerging from KT-253's Phase I dose escalation study. We've demonstrated both proof of mechanism and early signs of clinical activity in initial dose levels, even earlier than we expected. The early clinical activity, lack of thrombocytopenia, and neutropenia in the presence of antitumor activity makes us optimistic about the translation of the anti-grading rationale of increased therapeutic index and full realization of the p53 pathway's potential. With regards to KT-413, a degrader, we've decided to discontinue the program. Let me first say that this decision is not driven by any clinical data or safety concerns that we have with the program. We are degrading the targets in blood as we had expected, and we have not experienced those limiting toxicities. Rather, our decision to discontinue KT-413 reflects our commitment to the programs that more closely fit the previously mentioned strategic focus of the company. More specifically, when we evaluate the evolving healthcare landscape, especially in oncology and the market opportunity, and the competitive landscape in diffuse large B-cell lymphoma, and juxtapose that with the enormous opportunities we have in our emerging pipeline, we have decided the right strategic decision is to focus our resources on those high-value programs. It should also be noted that we did not take this decision lightly nor did we make it without thinking about the potential impact on patients. But as many of you already know, the DLBCL market is well-served today with numerous active agents. And we believe promising therapies will continue to emerge in the relapsed/refractory and frontline settings. Ultimately, we believe that Kymera can have the greatest impact by focusing on areas of significant unmet patient need where TPD can have the greatest impact. We've built a team with leading expertise in drug discovery and development capabilities, which we believe provides Kymera with a strong competitive advantage. And perhaps, most importantly, as I've already highlighted, we have shown our ability to execute with the development of KT-474, which has achieved another significant milestone with the dosing of the first patient in the Phase II study. At our immunology R&D Day in January, we will provide an even clearer picture of the strategic focus that we're outlining today, highlighted by what we believe are both important and exciting pipeline disclosures. We're confident then, when we share the details around our next program and our strategies for building Kymera into an industry-leading, fully integrated biotech company, you will appreciate our enthusiasm for the enormous opportunities those programs represent. I can tell you, and I would likely repeat these when we gather in January, I've never been more encouraged and excited by the pipeline opportunities on which Kymera is poised to capitalize. Finally, Kymera remains very well capitalized, which puts us in a strong position to execute on the opportunities our pipeline presents. As we noted in today's press release, we have extended our runway into the first half of 2026. This takes us well beyond several key catalysts and data readouts that we expect to be important de-risking events for our clinical and preclinical pipeline, including Phase II data on KT-474, further POC readouts for our oncology programs, and important updates on our pipeline. More details about which will be shared at an upcoming Immunology R&D Day. Let me pause here and turn the discussion to Jared.

Thanks, Nello. The focus of my comments today will be primarily on KT-333 and KT-253 and new clinical data we are announcing this morning. As Nello mentioned, we're very happy that our clinical abstract relating to KT-333, our first-in-class small molecule degrader of STAT3 was accepted for a poster presentation at ASH. The full abstract will be available online shortly, but I will share a few highlights shown on Slide 29. And we will be available for follow-up once the full abstract is released. For context, July 10 was our abstract data cutoff date. As of that date, 21 patients have been treated across five dose levels, of which 12 were evaluable for disease response. The patients included a variety of liquid and solid tumors. All our comments today are based on that July 10 cutoff date. The data in the abstract show continued evidence in blood of robust STAT3 protein degradation in humans, with associated STAT3 pathway inhibition with dose levels three and beyond expected to be clinically active, along with potential early signs of antitumor activity. As mentioned, there were 12 evaluable patients in dose levels one through four, of which just two were liquid tumors at dose level two. Of those two liquid tumor patients treated at dose level two, we saw one partial response after two cycles in a patient with CTCL, a T-cell lymphoma, where we saw substantial activity with the STAT3 degrader in a preclinical STAT3-dependent mouse model. Among the 10 solid tumor patients available for disease assessment, which is a group where we do not expect to see monotherapy clinical activity based on our preclinical studies, we saw a stable disease in three patients after two cycles at dose levels three and four. Importantly, from a safety perspective, no DLTs were observed, and no drug-related SAEs were reported. Safety and PD were consistent with previous updates. These early findings are encouraging and support the potential of heterobifunctional degraders for targeting previously undruggable transcription factors implicated in diseases. Accrual is ongoing, and therefore, we expect to present additional data in patients with hematological malignancies, including T-cell lymphomas and leukemias, and solid tumors beyond what is in the abstract. We look forward to providing more details, both after the publication of the abstract today, as well as next month at the ASH meeting at the time of the poster presentation. Additionally, in September, we announced that the FDA granted Fast Track designation for KT-333 for the treatment of relapsed/refractory cutaneous T-cell lymphoma and relapsed/refractory peripheral T-cell lymphoma. We're happy that the FDA gave this designation to the program as it further highlights the promise of degrading STAT3, a protein that has historically been undruggable for the treatment of patients with CTCL and PTCL. Turning now to KT-253, our MDM2 degrader. We are disclosing clinical data from Arm A of the ongoing Phase Ia trial for the first time this morning. We are pleased to report that we have demonstrated KT-253 clinical proof of mechanism and initial signs of clinical activity in just the first two dose levels in patients. We have slides that highlight some of our results in the corporate presentation posted in the IR section of our website, but I will briefly summarize and we can take questions in Q&A. As shown on Slide 32, KT-253 degrades MDM2, the crucial regulator of the most common tumor suppressor p53. p53 remains intact in close to 50% of cancers, meaning that it retains its ability to modulate cancer cell growth. While small molecule inhibitors have been developed to stabilize and upregulate p53 expression, they have been found to induce a feedback loop that increases MDM2 protein levels, which can repress p53, and therefore limit their efficacy. In preclinical studies, KT-253 has shown the ability to overcome the MDM2 feedback loop, and thereby robustly activate the p53 pathway, even with brief exposures. As shown on Slide 33, KT-253 is greater than 200-fold more potent than MDM2 small molecule inhibitors in upregulating p53 and killing p53 wild-type cancer cells. Slide 34 shows that KT-253 more effectively upregulates and activates p53 in tumors in vivo, compared to small molecule MDM2 inhibitors. And this translates into antitumor responses in AML and ALL models with just single doses of KT-253. These results support an intermittent dosing strategy for KT-253 that enables maximum p53 pathway activation for a limited period of time in tumor cells, leading to rapid apoptosis, while mitigating the impact of target engagement in normal cells to improve the therapeutic index relative to MDM2 small molecule inhibitors. As shown on Slide 35, the KT-253 Phase Ia trial is an open-label dose escalation study, where adult patients with relapsed or refractory high-grade myeloid malignancies, ALL, lymphomas, and solid tumors receive IV doses of KT-253 once every three weeks. The study is intended to evaluate safety, tolerability, PK/PD, and initial clinical activity, and allow us to identify the recommended Phase II dose. It is comprised of two arms, with ascending doses of KT-253 in each arm. Arm A is in patients with advanced solid tumors and lymphomas and Arm B is in patients with relapsed/refractory high-grade myeloid malignancies including AML and ALL. We dosed our first patient in Arm A and have fully enrolled the first two dose levels in Arm A, with enrollment to dose level 3 ongoing. Enrollment onto Arm B has also been recently initiated following demonstration of on-target pharmacology and the first two dose levels of Arm A. As of the October 20 data cutoff date, a total of nine patients with solid tumors have been enrolled on to dose levels one through three of Arm A, and have received a mean of 2.3 cycles with a range of one to six cycles. As shown in Slide 36, proof of mechanism has already been demonstrated in the first two dose levels, with exposure-dependent upregulation of plasma GDF15 levels. GDF15 is a transcriptional target of p53, and as such, it serves as a downstream biomarker of p53 upregulation following MDM2 degradation. In addition to the dose proportional increase in plasma KT-253 levels between dose levels one and dose levels two in cycle one, the GDF15 maximum fold increase over baseline during cycle one was 10 in dose level one, and 30 in dose level two. The kinetics of GDF15 change following the cycle one dose is shown on Slide 36 for a subject on dose level one, where brisk upregulation over the first 24 hours after dosing was followed by a recovery towards baseline over the subsequent six days. This was consistent with the pattern of p53 activation in preclinical models associated with KT-253 antitumor activity. Clinical response results for all patients within a dose cohort were available for dose level one, and are shown on Slide 37. Even though based on exposures, we did not expect this dose level to be clinically active, we were encouraged to see that among the three solid tumor patients treated on dose level one, there was one confirmed partial response after four cycles, with treatment continuing after six cycles, one confirmed stable disease after four cycles with the patient subsequently discontinued from the study after six cycles for lack of response, and one patient with disease progression after cycle one. The patient with a partial response had Merkel cell carcinoma, metastatic to abdominal lymph nodes and skin who had previously been treated with chemotherapy as well as multiple different immune checkpoint inhibitors. As shown on Slide 37, the lymph node metastases were responding after the first two cycles of treatment, as was the skin metastasis. And after four cycles, there was an approximately 60% reduction in nodal tumor burden and resolution of the skin metastasis. There were no dose-limiting toxicities. As shown on Slide 38, the most common drug-related AEs occurring in two or more patients included grade 1, 2 nausea, and grade 1 diarrhea. One patient at dose level one had an SAE of grade 3 hypotension during cycle four that was due to diminished oral intake deemed related to the study drug. Treatment included IV fluids, and the patient remains on study without dose reduction or recurrence of hypotension. There were no neutropenia or thrombocytopenia AEs even in patients who had received up to six cycles of therapy. In summary, on Slide 39, these promising interim clinical data show evidence of target engagement and p53 pathway activation, along with initial signs of antitumor activity without DLTs, including typical hematological toxicity, are supportive of our therapeutic hypothesis for MDM2 degraders, and the potential to improve the therapeutic index compared to MDM2 small molecule inhibitors. As we continue to explore the safety and clinical activity of KT-253 in both solid and liquid tumors in Phase Ia, we are also putting together a comprehensive preclinical and clinical data set examining the factors impacting in vivo response to intermittent dosing with KT-253 across multiple different solid and liquid tumor types in order to derive patient selection biomarkers for the next stage of development after Phase Ia. Disclosure of additional clinical data as well as preclinical data, informing a biomarker-based patient selection strategy, is planned for 2024. Finally, a quick update on KT-474, our IRAK4 degrader, which is now in Phase II development under the direction of our partner, Sanofi. As we recently disclosed, the first patient in the HS trial has been dosed, and we are excited about this significant milestone for Kymera. In addition, the AD trial recently commenced, and we will report news of the first patient dosed in that trial after it occurs. The details around the study designs for both trials are available on clinicaltrials.gov, and we have a summary on Slide 20. At a high level, the trials are powered to show a treatment effect relative to placebo and will also provide a comprehensive assessment of safety and on-target PD. Dose escalation was informed by the safety, PD, and clinical efficacy data from the patient cohort in our Phase I study, and both trials will evaluate KT-474 versus placebo for 16 weeks. The HS study will enroll up to approximately 100 patients, and the AD study up to 115 patients. Both studies include standard endpoints measuring skin lesion burden and symptoms. In the HS study, these include AN count, HiSCR, IHS4, and pain measures. While in the AD trial, these include EASI score, along with vIGA-AD and Pruritus measures. Both HS and AD represent important indications with significant unmet patient needs, and we're excited to see our partner, Sanofi, advance the program into Phase II. As noted in the clinicaltrials.gov posting, both trials have primary completion dates in Q1 2025, anticipating completion of enrollment in 2024, and top line data in the first half of 2025.

Thanks, Jared. As I review our Q3 financial highlights, please reference the financial tables found in today's press release. For the quarter, we recognized $4.7 million of collaboration revenue, all of which was related to our Sanofi collaboration. At the end of the quarter, our deferred revenue total on the balance sheet was approximately $43.8 million, reflecting Sanofi partnership revenue that we expect to recognize over the next several years, excluding the receipt of any potential future milestones. As announced last week, Kymera will receive a $40 million milestone payment triggered by the first patient dosed in the KT-474 HS trial. We include this milestone and the next milestone we expect for the first patient dosed in the AD study in our cash runway guidance, although it is not reflected in the cash balances at the end of the quarter. Given that both of these payments are anticipated to occur in the fourth quarter of '23, we expect both to initially be recorded as deferred revenue and to begin being recognized as revenue in the fourth quarter of 2023. With respect to operating expenses, R&D for the quarter was $48.1 million. Of that, approximately $5.8 million represented noncash stock-based compensation, making the adjusted cash R&D spend $42.3 million, which excludes that stock-based comp and reflects a 5% increase from the comparable amount in the prior quarter. On the G&A side, our spending for the quarter was $14.1 million, of which $5.9 million represented noncash stock-based compensation, the adjusted cash G&A spend of $8.2 million, again, excluding stock-based compensation, reflects a 5% decrease from the comparable amount in the prior quarter. We ended the third quarter of 2023 with $435 million in cash and equivalents under our current operating plan, which again includes the aforementioned portfolio actions. We expect our cash and cash equivalents to fund the company into the first half of 2026. This concludes our prepared remarks, and we'd be happy to now address any questions.

The first question will be from Brad Canino of Stifel. Please go ahead.

Now, as I read the explanation for the strategic shift away from the IRAK med, I couldn't help but think the same logic could be applied to STAT3 on the cancer side, at least as we think about the monotherapy potential in T-cell lymphomas. So, while I get that these STAT3 studies are also very useful as a proof of concept for your immunology developments, should we still think of STAT3 as having legs for you in oncology? And if so, what form? Thank you.

That's a great question. So first, I just want to reiterate that the decision regarding 413 was a clear strategic decision based on how we prioritize our pipeline, especially in the landscape of diffuse large B-cell lymphoma. As you know, STAT3 is a broad development program that spans both liquid tumors and solid tumors, as well as areas outside of oncology. We have a high bar on how we make decisions on investing in the next phase of development. Right now, we view STAT3 as a multipronged development plan, which includes activities in liquid tumors, where we know there are limitations. But I think we are working both in the clinic and preclinically to flesh out the opportunities in solid tumors. As you know, we've shown preclinically the activity that we've seen with other agents, including PD-1. During our Phase I studies, we are collecting tumor biopsies to look at the signature in the tumor microenvironment with respect to how we modulate that. And we're doing other studies that we haven't disclosed yet preclinically to look at combinations with this agent in solid tumors. So, I wouldn't say that the STAT3 program is in the same situation as the 413 program. I believe there is a broad opportunity that we are evaluating, again, in oncology and, as we said in the past, outside of oncology. However, we will always continue to evaluate at every stage of development whether our thesis is playing out the way that we planned. And so, for now, we have full confidence in what this program can do. The data that we're sharing today, along with data that we haven't shared, continue to support our thesis.

Okay. That's helpful. And maybe to Jared, a follow-up on MDM2. It's nice to see no trigger heme events. But could you discuss a bit more about the kinetics of the platelet changes you're seeing? Because for DL1, at least you've gotten up to six cycles. So, are you seeing a return to baseline for those accounts by the start of the subsequent dose? I'm just trying to get a sense of the potential of any compound impact over cycles on counts as you move to those more potent dose levels. Thank you.

Yes, Brad. I mean so far, within these first two dose levels, we have not seen any thrombocytopenia or neutropenia. So, we have not seen any reduction in platelets or neutrophils.

Next question would be from Vikram Purohit of Morgan Stanley. Please go ahead.

Good morning, everyone. This is Gospel on for Vikram. So, we have one question. Given the release mentions a focus for the company on immunology moving forward, do you plan to keep developing the STAT3 and MDM2 programs beyond the initial clinical data sets? Or could those programs be halted or partnered up? Thank you.

Okay. Great question. So just to be clear, I think we're seeing two important things today. One is that, as we have continued to say over the years, we want to ensure that we deploy our platform against clear unmet needs, focusing on targets that have not been drugged or drugged well. We also said that our focus is on large problems that have not been solved by other technologies, and more importantly, in patient populations we believe are sizable. So when we talk about immunology, we believe that area is prime for this technology. We believe, as you'll hear much more in January, that oral degrader medicines in immunology could offer amazing opportunities for many diseases that are now either underserved or served only by injectable biologics. Having said that, there are areas of oncology that still fulfill the investment thesis we've outlined, meaning we believe we have programs that can unlock larger opportunities by targeting avenues that have not yet been drugged or effectively treated by other technologies. So, the main theme is focusing on sizable opportunities, and deploying the technology where it's best applicable. It's fair to say that we believe the opportunities in immunology are probably broader and less competitive than in oncology, and we will continue to evaluate whether our case continues to hold as we evolve this program. So, I think that’s where we are. As we head into January, the pipeline choices and the prioritization will be even clearer.

Next question will be from Marc Frahm of TD Cowen. Please go ahead.

Marc, are you there?

We'll come back to Marc. Next up, we have Geoff Meacham, Bank of America. Please go ahead.

This is John Joy on for Geoff Meacham. I guess looking at KT-474, what are your clinical benchmarks in atopic dermatitis? Like is the bar to beat still?

Great question. The goal with our IRAK4 degrader, which is really a first-in-class medicine that is trying to block the path to the IL-1R/TLR pathway with a single oral molecule. In doing so, we hope to elicit biological and hopefully clinical impacts that upstream biologics aren't able to do, and demonstrate clinical activity potentially for all upstream biologics with a single molecule. While the IL-1R/TLR pathway is not the IRAK4/STAT3 pathway, we view IRAK4 as a broad anti-inflammatory agent that can be effective, well-tolerated, and convenient for a broad patient population. Our bar right now, in the absence of Phase III data that would allow us to position the drug commercially in a credible manner, is that the target product profile for KT-474 is to be an orally active drug with a good safety profile. I would argue that this is not currently present in either the HS or AD markets, and that's really the goal of that development program.

Okay. Awesome. And then one quick follow-up. Is there any read-through or material impact to Kymera from Sanofi's increased R&D spend announcement?

I think it's a positive read-through from where I stand, obviously. I can't comment on Sanofi's decision. If I had to share my opinion, I think it's refreshing to see a large pharmaceutical company taking a bold move and investing in R&D. That's all I'm going to say.

Next question will be from Marc Frahm of TD Cowen. Please go ahead.

Can you hear me now?

Yes.

Okay. Sorry about that. Maybe for Jared, the description of the ASH abstract in there, there's nine non-evaluable patients, I believe. Can you describe those? How many are still on trial, and maybe along with that, how many should we expect where single-agent activity might actually be part of the hypothesis when we get to the ASH presentation? And I do have a follow-up there.

Yes, Mark. Yes, we really can't comment on the sort of results beyond what is in the abstract. And as you noted, we've enrolled 21 patients so far to the first five dose levels. We noted that 12 patients were evaluable across the first four dose levels, and we talked about the one partial response in the CTCL patient at dose level two, and three solid tumor patients who are stable at those level three and level four. Our plan in December at ASH is to provide updates on those patients, as well as any additional patients who have enrolled onto the trial between that abstract cutoff date and the cutoff date for the ASH poster.

Maybe if I won't get in trouble with ASH here, I just want to add a couple more things. One, I guess, the ones that were not evaluable. It's a mix of patients that progressed too early and patients that are still early in their dosing in the more recent cohorts. It's fair to say that for the ASH abstract, we do expect to see an evaluation of more liquid tumor patients. We can't say how many, but we expect to see more than the first two at dose level two.

Okay. That's helpful. And then as you laid out earlier in response to one of the other questions, the bigger hypothesis here really is combination for solid tumors. Can you lay out what you need to show in this trial in order to trigger those combination cohorts?

Yes. Before we proceed, I want to ensure that I don't come across as overly optimistic, but I also aim to be realistic. We have demonstrated for the first time that STAT3 degradation can benefit patients, which has not been accomplished in this manner before. It’s important to recognize that this is first-in-class data. While we can discuss the size of the patient population targeted by the single-agent activity, we must remember that our goal is to assist patients with innovative first-in-class medicines. I’m not sidestepping your question. Now, regarding your question, there are several factors we need to assess to move into an expansion cohort in solid tumors. First, we need to evaluate the safety of degradation and any signs of activity we observe as a single agent in solid tumors. As you know, we do not anticipate seeing strong single-agent activity. We have observed some stable diseases, and it is challenging to determine the extent to which this is due to the disease's slow progression versus the actual degradation of STAT3. We hope it might be a combination of both. Additionally, we are examining tumor biopsies to see if we can replicate the effects shown both preclinically and in clinical settings with other agents, including those dependent on STAT3, in terms of modifying the tumor microenvironment. We also have ongoing preclinical efforts that not only explore the STAT3-PD-1 combination but also STAT3 in conjunction with other targeted therapies. Currently, we are optimistic that this mechanism has potential in oncology drug development. However, it is still too soon for us to define what that potential is until we complete all these studies, both clinical and preclinical.

Next question will be from Eliana Merle, UBS. Please go ahead.

This is Jasmine on for Eli. Thanks for taking my question. On STAT3, how are you thinking about the dose response and the optimal levels of degradation? Do you think that the optimal dose could be different in solid tumors versus the hematological phase? And then I have a follow-up on 333.

Jared, do you want to take that one?

Yes, it certainly is possible that there could be different recommended Phase II doses for solid tumors and lymphomas, which is Arm A of the Phase Ia versus high-grade myeloid malignancies, including AML, which is Arm B. We think, ultimately, activity is going to be a function of MDM2 degradation and the level of p53 pathway activation that we're able to elicit either in solid tumors or lymphomas or in AML, along with the sensitivity of those tumor types to p53-mediated apoptosis. It's also going to be dependent on the safety profile of the drug, which may be the same in liquid and solid tumors or could differ. These factors will all be investigated in these two arms on study, looking at safety, degree of p53 pathway engagement and activation, and, of course, clinical activity. This will determine what will be either the maximum tolerated dose or the recommended Phase II dose for the next phase of development, which will be Phase Ib. It's also possible that it may end up being the same dose across all those indications, or there could be different doses for solid tumors versus liquid tumors depending on the study design we have in place.

And just to add, while we have limited data, I want to highlight that the CTCL for 253 was and continues to be that with a degrader mechanism, you can drive tumor cells to a rapid apoptotic response and have an infrequent dosing regimen that maximizes both efficacy and safety. While we have limited data, it was exciting for us to see that the thesis is playing out as we imagined, if not better at this point. I encourage everyone to keep an eye on this program because if it continues to evolve in this way, I think we'll have a very large opportunity set in evolving patient certification thesis that we'll share more about next year.

Awesome. And then just quickly on 333. Those three stable diseases that you saw in solid tumor patients, can you give any color on what tumor types those were?

We actually saw stable disease across a variety of different solid tumor types. As Nello mentioned, we have some patients who have had fairly prolonged stable disease as well. I think we'll be able to provide more color on the actual solid tumor types at the ASH presentation in December. But I think it's very encouraging that on the study, we've been able to enroll a variety of different solid tumor types as well as various different T-cell malignancy types, including PTCL, CTCL, and others as well. We look forward to providing more of those details and updates in December at the ASH presentation.

Next question will be from Eric Joseph, JPMorgan. Please go ahead.

Good morning. Could you discuss how your experience with KT-333 has influenced the appeal of STAT3 in your oral immunology pipeline planning compared to other targets? Additionally, does your experience with KT-333 provide an advantage for developing an oral degrader in relation to the other targets? What lessons have you learned from the IV formulation that could impact the oral formulation? Thank you.

Yes, Eric. Great question. I wouldn't want to not answer your question, but I would first highlight that what we learned the most about oral degraders in immunology is from the KT-474 program. We took a bold approach a few years ago to take targeted protein degradation into immunology, and I believe we've been rewarded by that approach. We've shown how an oral degrader can be safe, well-tolerated, effective at degrading proteins, and it also has shown early signs of clinical activity. We have to be cautious about overweighing this clinical activity due to the small sample size. However, it's clear that there are benefits seen in patients. Besides what is publicly available, we've learned a lot about drug development of degraders in immunology. So, I think that has inspired us and driven us to take that concept into large clinical opportunities. You will see in January that the programs and data we're generating are impressive. I'll leave it at that. With regards to 333, we've learned that this is an extremely powerful mechanism with a good safety profile in oncology patients as per the data shared so far. This has probably indicated that there are pathways or particular targets that will be or can be amenable to this approach, even if the safety of that pathway or target had not been previously derisked either in clinical settings or through human genetics. So, hopefully, that gives you insight into what we will discuss in January.

And just a reminder, we do not have enough time to get through the remainder of the questions. We'd like to ask that you limit it to one question.

Maybe I'll try to be faster in the answers.

Next from Michael Schmidt of Guggenheim. Please go ahead.

Hi, good morning. This is Paul on for Michael. Thanks for taking my question. Mine's on KT-253. I just wondered if you could provide some color on the Merkel cell carcinoma patient who had a PR. Did the patient have MDM2 application or any biomarkers like CDK 2A loss that might be related to the response? And were you able to achieve your target degradation level in this patient? I'm just trying to understand the activity here at level one. Thank you.

Yes. This Merkel cell patient was p53 wild type and had the Merkel polyomavirus, which the majority of Merkel cell carcinoma patients have. That patient had previously been treated with chemotherapy, and had responded initially to anti-PD-1 but progressed after their last anti-PD-1 before coming onto our study. On the study trial at dose level one, that patient showed a very robust induction of GDF15, which as we mentioned, is the downstream biomarker of MDM2 degradation. So that particular patient who has an ongoing partial response demonstrated clear on-target pharmacology with elevation of GDF15. We’ve been very encouraged to see this partial response even at the first dose level in a solid tumor that had previously progressed after anti-PD-1. This finding supports our mechanistic and therapeutic hypothesis about affecting these p53 wild-type tumors with p53 activation and pathway upregulation, with a safety profile where we're not seeing any hematologic toxicity which was the case for this patient.

Next question will be from Srikripa Devarakonda of Truist Securities. Please go ahead.

Hi, everyone. Thank you for answering my question. I attended the TBD conference, and one key point that stood out was that degraders seem to be held to a higher safety standard compared to how small molecules have historically been treated. Do you believe there is now a standard in place for evaluating safety in this field? Or is it evaluated on a case-by-case basis for each drug? Additionally, do you anticipate that the landscape will continue to evolve until we see early approvals in this area?

No, great question. I don't know if your comment reflects the fact that this is a new generation of medicines. While I think it's not widely appreciated that this is a new generation of medicines, this might lead to questions about the interplay between safety and efficacy. Personally, I believe it has been extensively shown through approved drugs. There are degraders that have been on the market for years, and investigational drugs that have been in the clinic for years now. Safety issues related to degradation programs are tied specifically to their on-target and off-target safety profiles. There’s no safety that we, at Kymera, have seen related to the actual technology. If you have a well-tolerated mechanism and no off-target activities, you see molecules that are well tolerated. That has been consistent across the industry. The technology is extremely powerful, which is why we believe in its huge potential. Thus, specificity of our molecules must be paramount, and I encourage everyone to focus on that.

Next question will be from Derek Archila of Wells Fargo. Please go ahead.

Thanks for taking my question. Just one. Given the future focus on sizable I&I indications, how does that change the calculus on cash runway? And is it fair to assume that you'll run more traditional Phase II studies to achieve proof of concept for those programs? Thanks.

Yes, so let me answer the question. Bruce, if you want to add anything, feel free. As noted, we've extended our runway from the second half of '25 to now the first half of '26, and that includes all the plans we have for our expanding immunology pipeline. We are committed to developing those drugs with the goal to launch registrational studies as quickly as possible, while ensuring that our investment thesis is realized in early development. So, it would be a mix of validating our strategies to make large investments, while maintaining an eye on the path to approval in these large indications.

Next question will be from Chris Shibutani of Goldman Sachs. Please go ahead.

Thank you. Many of the questions have been asked. But again, regarding the immunology strategy, are you thinking about ultimately collaborating or partnering some of the more advanced clinical development? And part of the protein degradation was discussed at a recent R&D presentation from a large pharmaceutical company. As we think about new medicines, cell therapies moving into immunology as well, if you had to guess where the market is headed, what might be unique about targeted protein degradation?

I think, Chris, it's a simple answer. I don't want to give away too much of the January message. But I would look through this landscape. We've learned a lot about immunology in the past 15 years, focusing on pathways that have been validated mostly through targeted biologics. We've learned how TNF, IL-17, IL-23, IL-4, IL-13 play roles in diseases, enabling us with high specificity, and in many cases, excellent efficacy, but potentially with suboptimal convenience and high costs. We believe degraders can deliver biologics-like specificity, strong efficacy, coupled with the convenience of small molecules, giving us a clear differentiation from traditional small molecules that lack the capacity for complete pathway inhibition. Therefore, oral I&I degraders can solve the problem of providing well-tolerated oral drugs with significant efficacy.

Next question will be from Kalpit R. Patel of B. Riley. Please go ahead.

Yes. Good morning. Regarding the STAT3 degradation levels. As you see relatively higher STAT3 degradation for the one responder in DL2, and the three patients with stable disease relative to the other patients in those cohorts, were those patients closer to that 80% or 90% degradation level that you're aiming for?

We've actually seen robust STAT3 degradation in the blood, really across many of the dose levels that we've tested, including dose levels two, three, and four. The numbers are still small, probably too small to make correlations between degradation and response. But so far, I think it's fair to say we've seen robust degradation in most of our patients at those levels. We're not necessarily seeing a correlation between degradation and response.

Next question will be from Kelly Shi of Jefferies. Please go ahead.

Hi, good morning. This is on behalf of Kelly. I have a follow-up question regarding your previous comments. I understand you noted clinical activity at those levels, although you didn't expect to see such activity, and that the patient numbers remain limited at this early stage. Is there a chance that there could be a disconnect between target protein degradation and clinical activity? Additionally, do you anticipate that patient responses might shift when you begin exploring combination therapy, and what implications might this have for immunology indications?

To be clear, we’re observing responses and degradations across the STAT3 cohorts, and those responsive pathway engagements/degradations in the MDM2 program. It's essential to note that we achieve over 80% degradation in some patients in early cohorts for STAT3, and we've observed robust pathway engagement in the MDM2 program. Hence, there may be particular patients or subsets of patients that are sensitive to this mechanism, where full degradation may not be required. We are confident that as we increase the dose and engagement profile, the patient population yielding a response will be larger than what we've seen in these early doses, as you’d expect for a technology that has considerable control over target engagement. These results are likely driven by small sample sizes and the limited number of patients in the trial, coupled with the strong degradation we have seen at early doses.

Okay. We'd like to thank everyone for joining us this morning, and we look forward to keeping you updated on our progress. In the meantime, for a list of upcoming conferences that we will be attending, please visit the Events page in our Investors section of our website. Additionally, details around our upcoming R&D Day will be released in December. And in the meantime, please don't hesitate to reach out if there are additional questions. And this concludes today's call.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.