Good day everyone. My name is Megan and I will be your conference operator today. At this time, I would like to welcome you to the Kymera Therapeutics Fourth Quarter 2024 Results Call. At this time, I would like to turn the call over to Justine Koenigsberg, Vice President of Investor Relations.

Good morning, and welcome to Kymera's quarterly update. As you will notice, we have moved to video format which we hope you will enjoy. Joining me this morning are Nello Mainolfi, our Founder, President and CEO; Jared Gollob, our Chief Medical Officer; and Bruce Jacobs, our Chief Financial Officer. Following our prepared remarks, we will open the call to questions, where we will take questions from our publishing analysts on video. To be sure, we have enough time to address everyone's questions, we ask that you please limit your questions to one and a relevant follow-up. Before we begin, I would like to remind you that 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-K 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 will now turn the call over to Nello.

Thank you, Justine. Welcome everybody. We're excited to have you with us today as we transition our quarterly financial updates to a video format. I believe this reflects our continued commitment to transparency, open communication, and deeper connections with our stakeholders. We will have lots of data updates this year, so it will be productive to have videos and slides. We'll use today's call to briefly reflect on our achievements of 2024, which positions us for what I anticipate will be a very exciting 2025. Stepping back, we started 2024 with our R&D Day, where we shared our expanded focus on immunology, with the goal of developing therapies that have the potential to deliver biologic-like efficacy with the convenience of an oral daily pill. There we introduced STAT6 and TYK2, which exemplify programs we believe have the potential to disrupt conventional treatment paradigms and expand access to millions of patients around the world. As we mentioned at the time, the strategic effort was years in the making, but it has materialized rapidly with our recent clinical progress. Our team executed exceptionally over the past year and successfully delivered on all of our key priorities. Here's a quick recap of what we did last year. For STAT6, we completed IND-enabling studies for KT-621, filed an IND and initiated the Phase I healthy volunteer study. Now, we're completing the final MAD cohorts. This is the first STAT6 targeted agent to enter clinical development. While the attractiveness of STAT6 as a target and the strong validation of our preclinical work has attracted many others to the space, we believe we are the unquestioned leader, a position on which we intend to build. With TYK2, progress continued as well. Since the first introduction in January again of last year, we named an advanced and novel development candidate KT-295 and are now completing IND-enabling studies. Regarding IRAK4, we continue to support our partner Sanofi in their efforts to progress the two ongoing Phase IIb studies in HS and AD. Importantly, following an interim analysis in the middle of last year, Sanofi expanded the studies to accelerate the overall development timelines on path to pivotal trials. Finally, while less visible to investors, we progressed our early pipeline of novel immunology programs to the point where we're poised to soon share our new exciting immunology target. So, with all the progress that I just discussed that reflects a year of truly outstanding accomplishments, we're positioned for an even more productive 2025, where we'll have several clinical advancements across our immunology pipeline. To summarize, here is what you can expect this year. Starting with STAT6, we're on track to report KT-621 Phase I data this year for both the healthy volunteer trial which will happen in June and the Phase Ib trial in AD, which will happen in the fourth quarter of 2025. And we also initiate two Phase 2b studies. AD will start in the later part of 2025 and asthma will start in early 2026. For TYK2 we're on track to advance KT-295 into the clinic next quarter, with Phase 1 healthy volunteer data before year-end. Stay tuned in May, as we plan to unveil our next program, a previously undrugged transcription factor that has the potential to be a first-in-class agent for multiple rheumatic as well as other autoimmune diseases. Importantly, we will not stop here. Our goal remains to deliver at least one new IND per year, so you should expect more exciting new developments to be disclosed at a consistent pace. I want to finish my comments here where we started this call, with our drug development principles and strategy. Kymera is deeply committed to developing an industry-leading immunology pipeline featuring innovative oral small molecule therapies. We're determined to ensure that patients won't have to choose or make trade-offs between efficacy, safety, convenience, and cost. We believe that, if we achieve this, we will expand the choices available to patients and transform how patients are treated in immunology and potentially beyond. Traditional small molecules have always offered convenience benefits, but delivering powerful pharmacology, compared with biologics has been elusive. We believe our oral medicines can provide a differentiated and potentially better solution, oral drugs with biologics-like efficacy and we're dedicated to making this a reality. Our work to deliver on that promise continues, and we look forward to delivering on and sharing multiple data readouts in the next 12 to 18 months that we believe will validate our strategy and put us that much closer to addressing many important markets with next-generation oral drugs. Before handing the call over to Jared, I'd like to take a moment to thank Leigh Morgan, who has been a Director at Kymera for the last three years. As you may have seen in the filing today, she's decided not to stand for reelection at our upcoming Annual Shareholder Meeting in June. I would love to personally thank her for all the contributions she's made at Kymera over the last several years, which have been much appreciated. With that, let me pause here so Jared can give you more details on our clinical strategy plans and data.

Thanks, Nello. This is an exciting time for Kymera from a development perspective. We are well positioned to achieve multiple clinical data readouts that will further validate our approach and strategy. So let's go ahead and jump in. Last month, we laid out our accelerated development strategy for the STAT6 program, which starts with Phase 1, Phase 1b and parallel Phase 2b trials that enable subsequent registrational Phase 3 studies across multiple indications. Each of these trials serves a distinct and unique purpose in our clinical development strategy for KT-621. I'll walk you through some details on each of these trials today, but I want to first start at a high level. So starting with the Phase 1 healthy volunteer study, our primary goal there is to demonstrate STAT6 degradation and safety. In addition, we will also take an early look at several Th2 biomarkers. Now, while we will look at biomarkers in the Phase 1a, the Phase 1b study will be a much more relevant and meaningful opportunity to assess the impact of STAT6 degradation on multiple Th2 biomarkers in blood and skin. And that study will also take an early look at any clinical efficacy signals. After these two Phase 1 studies, the parallel Phase 2b trials in AD and asthma are intended to measure the clinical activity in two key indications and enable dose selection for registrational studies in multiple indications. In terms of the specifics on some of these activities, our Phase 1 healthy volunteer study is ongoing, and is evaluating single and multiple ascending doses of KT-621 versus placebo. The primary objective is to show that we can robustly degrade STAT6 in blood and skin, which we define as a reduction of 90% or more at doses that are safe and well tolerated. Given all the human genetics data, the preclinical data we have generated and the pathway validation, we believe that if we can demonstrate this, it will largely derisk the program and increase the probability of success once we move into patients. As we've shared in the past, in healthy volunteers, we expect to see some impact on several Th2 biomarkers such as TARC and IgE. Our expectation entering the trial is that the effect would likely be comparable to what has been reported for dupilumab. Though as we have said, we believe the best opportunity to show effect on a variety of Th2 biomarkers will come in patient studies where these are greatly elevated at baseline. In terms of the trial status, we are recruiting the last remaining cohorts, and we're on track to report results in June. As we approach the start of the Phase Ib trial next quarter, we want to take a moment and provide a few more details about the study. The Phase Ib trial in moderate to severe atopic dermatitis will be a relatively small single-arm open-label trial with dose selection optimized based on Phase I healthy volunteer results. Patients will be administered KT-621 once daily for four weeks. The trial is expected to include approximately 20 patients. The key study aim is to show that robust STAT6 degradation in blood and skin by KT-621 has a dupilumab-like effect on reducing multiple Th2 biomarkers in the blood, such as eotaxin, TARC, periostin, IgE, and others and on the transcriptome of active AD skin lesions. The study will also assess KT-621 effect on AD clinical endpoints such as EASI and pruritus NRS. We decided to make this a streamlined biomarker-focused study to transition quickly into Phase IIb, which is on a critical path to Phase III initiation and eventually registration. In the fourth quarter, we'll read out the Phase Ib data and also initiate the first Phase IIb placebo-controlled dose range finding trial in moderate to severe atopic dermatitis. In the first quarter of 2026, we will start a second Phase IIb trial in moderate to severe asthma. This initial parallel development strategy is intended to accelerate late-stage development across multiple Th2 dermatological, gastrointestinal, and respiratory indications. So turning now to TYK2. This is another program where we believe we can mimic the human genetics TYK2 loss of function profile and achieve biologics-like activity with an oral drug. We're on track to start the KT-295 Phase I healthy volunteer study in the second quarter. The primary goal is to demonstrate safety and full TYK2 degradation in blood and skin, which, if achieved, we believe would be the first time an oral small molecule was able to show complete blockade of TYK2 signaling. And we expect data will be shared in the fourth quarter of 2025. Now to round out our immunology franchise, I'll wrap up with IRAK4. As Nello mentioned, last year, Sanofi took steps to accelerate the overall KT-474 development timeline. The decision to expand the Phase II program was to structure the hidradenitis suppurativa and atopic dermatitis trials with the necessary regulatory perspective to enable dose selection and advancement directly to pivotal Phase III studies, ultimately with a meaningfully shorter development timeline. To support this strategy, the size of the studies increased with additional doses planned for evaluation in both trials. There are no changes to the Phase II study endpoints. With the planned expansion of the trials, the primary completion dates were adjusted to the first half of 2026 and mid-2026 for HS and AD, respectively. The progress made by our team in 2024 sets us up to execute in 2025. Importantly, within our immunology franchise, we believe KT-621, our first and we believe best-in-class oral STAT6 degrader has the ability to transform the treatment of Th2 inflammatory diseases, and we look forward to sharing Phase I data in healthy volunteers next quarter and advancing the program into patient studies while also initiating the TYK2/KT-295 Phase I trial next quarter and sharing data by year-end. And as Nello mentioned, we're excited to introduce our next immunology program, which aligns perfectly with our pipeline portfolio strategy. We're planning to host a company webcast in early May to unveil the new target, and we'll share more information as we get closer. I should point out that the KT-621 Phase I healthy volunteer data, which we expect will be reported in June, will be its own separate event. I'll now turn the presentation over to Bruce for a review of the fourth quarter and full year financials.

Thanks, Jared. As I review our fourth quarter 2024 financial highlights, please reference the tables found in today's press release. Revenue in the fourth quarter of 2024 was $7.4 million. All of that was attributable to our Sanofi collaboration. With respect to operating expenses, R&D for the quarter was $71.8 million of that approximately $6.8 million represented non-cash stock-based compensation. Adjusted cash R&D spend of $65 million excluding that stock-based compensation reflects a 23% sequential increase from the third quarter. G&A for the quarter was $16.3 million of that approximately $7 million was non-cash stock-based compensation, and adjusted cash G&A spend of $9.3 million again excluding stock-based compensation was up 13% sequentially. Our cash balance at the end of 2024 was $851 million. Our cash balance is expected to provide a runway into mid-2027 and that will enable us to execute on multiple data readouts you've heard today, including several important Phase II trials across our programs. So this concludes our prepared remarks. If you just give us a moment to assemble in our conference room, we'll be happy to address any questions you have there.

We will now move to our question-and-answer session. Our first question will come from Faisal Khurshid with Leerink Partners. Please unmute your audio and video and ask your question.

Hi, guys. Good to literally see you and congrats on the updates. Just a quick one for us. What supports your view that the 28 dosing in the atopic derm Phase Ib is enough time to show robust biomarker activity? And then could you also comment a little bit on how you've kind of thought about the inclusion/exclusion criteria for that Phase Ib?

Good morning. Good to see you as well. Jared why don't you take this one?

It's an important question. From previous dupilumab trials that included 16-week endpoints in moderate to severe atopic dermatitis, we observed that the analysis did not focus solely on six weeks; earlier time points were also considered. At four weeks, there was a significant impact on Th2 biomarkers and clinical endpoints such as EASI and pruritus NRS. We are confident that 28 days of treatment with an optimal dose selected from Phase Ia will allow us to observe a clear effect on Th2 biomarkers, which is the primary objective of the study, and also provide an opportunity to assess the impact on clinical endpoints. Regarding eligibility criteria, it's crucial to implement strict guidelines to ensure we are enrolling patients who definitely have atopic dermatitis, particularly those with moderate to severe disease. This is vital to minimize any potential placebo effects. Another key aspect to reduce placebo effects is to adopt a rigorous site selection process, ensuring we choose sites capable of accurately identifying the right atopic dermatitis patients for the study and have qualified personnel to conduct clinical assessments meticulously. Additionally, we will closely monitor drug compliance among participants and ensure that they are not taking any other concurrent medications.

I would like to add that we not only have a significant opportunity with this drug, but we also bear a unique responsibility to engage in proper drug development. One reason for the 28-day study, besides it being sufficiently long to measure and appropriately powered to detect meaningful biomarker changes, is that it is critical for progressing into a dose-ranging Phase IIb study, which is on track to transition into Phase 3 for registration. Therefore, we want to avoid spending unnecessary time in early clinical development on studies that, while informative, are not essential.

Yes. And then, just to kind of clarify on the choice to not have a placebo arm in the Phase 1b, especially given kind of like what's been seen in other atopic derm studies?

Yes. I'll start by reiterating what I mentioned earlier. The goal of the study, as mentioned, is to showcase a biomarker profile in blood and skin that we feel will be reliable and can be compared to the dupilumab four-week data. For this type of study, we do not think a placebo is necessary. We have observed that biomarkers don’t change significantly in the placebo group of these studies. Additionally, if we needed to conduct a placebo-controlled study for four weeks designed to show a difference in clinical outcomes, it would require a much larger and longer study. This approach does not align with our objective to advance to Phase 2b as soon as we can.

Got it. Super helpful. Thank you, guys, so much.

Our next question is connecting. One moment. Our next question will come from Andy Chen with Wolfe Research. Please unmute your audio and video, and ask your question.

Hi. Nice to see you in person. So the Phase 1b is designed to be single-arm. So we won't be able to see dose response on biomarkers. Do you think the Th2 biomarker data is going to be so clean that we won't need to see dose response across different doses to be comfortable with the data? Just curious if we're going to have enough data to answer additional questions about efficacy by Q4? Thank you.

Yes. So maybe I'll start. Jared can add more specific points. So thanks Andy. I think this is a great question. So our goal is to take into this Phase 1b study a dose that has demonstrated in healthy volunteers, the type of profile that we're looking for, and as we said, at least 90% degradation in blood and skin. We have shown pre-clinically that that type of profile leads to extremely robust biomarkers effect in a plethora of readouts. So our development is based on our understanding of the biology, and both in terms of all the preclinical data we've amassed as well as on human genetics. So we expect that a dose with that profile will have a dupilumab-like effect and that's really what we want to show. If we were not certain and if this was really an exploratory Phase 1b study to show an early proof-of-concept, we would probably design it differently. We're designing this study expecting a successful outcome based on all the experience that we've built internally and all the data we've generated so far.

And maybe just to add, the opportunity for being able to see an impact on both Th2 biomarkers and clinical endpoints to see a dose response, there will come from Phase 2b where that will be a true dose range finding study and that will give us a strong opportunity to do that. And as Nello said earlier, the key really is for us to use Phase 1a information to select the doses for the dose range finding Phase 2b study and to get to Phase 2b as quickly as possible. And then Phase 2b becomes a great platform for us to show perhaps differences in impact on Th2 biomarkers and clinical endpoints depending on the doses that we select for Phase 2b. And that will ultimately allow us to pick the optimal dose for the Phase 3 registrational studies.

Thank you, Nello. Thank you, Jared.

Next question.

Our next question will come from Michael Schmidt with Guggenheim. One moment, as we connect. Michael Schmidt with Guggenheim, please unmute your audio and video, and ask your question.

Hey, guys. Thanks for taking our question. This is Paul on for Michael Schmidt. Just on the STAT6 program, what do we know currently about the potential bioavailability of KT-621 in tissues of interest, for example, skin versus lung tissue or others that might be disease relevant down the line? How predictive are the preclinical models there? Is there any opportunity to look into that in the early Phase 1 or 1b? Thank you.

Yes. So obviously, I can't speak to the Phase 1 healthy volunteer data but I can speak to the preclinical data that we've generated. And we generated extensive data across all species that you can imagine mouse, rat, dog, non-human primates and others, where we have been able to demonstrate that KT-621 not only is orally bioavailable but is actually highly active at low oral doses and distributes evenly across all tissues of interest. We've shown in non-human primates, equal both distribution and degradation in blood, skin, spleen, lungs. And so our expectation is that the preclinical profile will translate equally in humans. And a way to measure that obviously, we can take lung and spleen but obviously we can take blood and skin as we've done for other programs. And so we believe that those are great surrogate tissues to show not only hopefully, the desired degradation that we expect to have but also a consistent degradation across multiple tissues. I would just go back to what we've been saying for the past years I would say that we've been fortunate that all of our programs have translated impeccably I would say between preclinical and clinical. So we hope and expect that 621 will follow suit on that particular front.

Great. And if I could just have a quick follow-up on the planned design for the Phase 2 AD study. Is the ongoing IRAK4 study a reasonable comparison with three different doses plus placebo? Any meaningful differences in the type or severity of AD patients you might recruit there?

I'm going to save Jared on this one. I think at this point we're not going to comment. Hopefully, you guys appreciate that we're sharing the relevant information when it's the right time as we're doing today for the Phase 1b. We promise you that when it's the right time we will share that kind of information as well.

Thanks, Paul.

Our next question will come from Ron Feiner with JPMorgan. Please unmute your line, your video and ask your question.

I was just going to – you guys don't have to show the video in case you don't want to, right? I think – it's okay, just to ask your question. But anyway go ahead.

It's Ron on for Eric. I just wanted to ask again on the dose selection maybe you will be evaluating only one dose in this Phase 1b for AD? And how does the SAD/MAD data so far from the healthy volunteers trial kind of give you information on the effective range at least from a PD perspective?

Yes. I mean unfortunately, we can't go into the answer. But what I think I can say Jared has already said it, but I'll say it again. The beauty of protein degradation unlike any other technology out there that you can measure target engagements both in a dose-responsive manner as well as in a time-responsive manner. So you know what is the level of degradation of your target at different doses at different time points. And so we have designed a really comprehensive Phase 1 healthy volunteer study that is looking at a range of doses that will allow us to understand as well as we can the relationship between dose PK and degradation in blood and skin. With that set of data as we said in clinicaltrials.gov, we expect up to 120 subjects on the study. So we'll have a really large data set. We would be able to have enough to confidently select the let's say three doses for the Phase 2b studies. And we don't believe – and we've already shown with IRAK4 that there is a really strong translation of degradation between healthy and diseased patients in terms of degradation profile. And so we believe that everything that we've designed going from a very comprehensive Phase 1 healthy going into 1b to really demonstrate that one of the doses that likely will be taken into Phase 2 is given the type of profile that we expect in patients. Let's say, a confirmatory study and then Ron go into a Phase 2b ASAP. I think we feel very confident about our plan right now. And so again we look forward to sharing the data along the way and then get to the end of the year with these big studies.

Thanks. And then just maybe if I can try on the new program are you guys geared more towards staying in the Th2 space or anything additive or orthogonal to current programs or is it going to be completely new?

Well I think what we've tried to do if you look at our pipeline so in immunology, I think we're shaping up to have the best oral immunology pipeline in the industry. I know my team doesn't like me to say it, but I keep saying it. If you look at IRAK4, this is a classical Th1, Th17 program with IL-1 TLR activity. If you look at TYK2, it's IL-23, Type 1 interferon. If you look at STAT6, it's a classical maybe the best Th2 target I would say. And so these are all complementary pathways that actually one can imagine could be synergistic in a combination one day. And so you should expect this other target to be a complementary pathway to the ones that we've shared so far.

Thanks.

Our next question will come from Jeff Jones with Oppenheimer. Please unmute your audio/video and ask your question.

Good morning, guys. Thanks for taking the question. I think we've asked a lot on STAT6. Curious to get your view on the TYK2 program from a similar perspective as we think about biomarkers and tissue penetration, how we should think about looking at that data which is obviously some way out. So can you share how you're going to be looking at not only safety but efficacy signals there from a perspective of TYK2 and biomarkers?

Jared, do you want to take this?

Sure. Yes. I think for the TYK2 program I think we have a unique opportunity to show pharmacology that is differentiated from what's out there for typical TYK2 small molecules. And that's why we believe this program can eventually attain biologic-like activity, hopefully which has not really been attained by the small molecules. And to do that is important we believe that for the pharmacology to show that we can fully degrade TYK2 95%-plus percent and keep that degradation level 24/7, sort of around the clock in order to give us that full pathway blockade that would be the equivalent of what you can get with an injectable upstream biologics. So I think when we look at the Phase 1 study, just as we've done in STAT6, we're going to have very detailed looks at the impact on TYK2 levels in blood and in skin in healthy volunteers looking over time, looking at different dose levels in SAD as well as in MAD. And that's going to really give us a very good idea as to whether our pharmacology can really achieve what we've seen preclinically in animals where we can achieve that sort of profile, a very deep chronic degradation of TYK2 at doses that are safe and well tolerated. So that's going to be I think critical for us in terms of the biomarkers that will be looked at in that TYK2 study. There will be other opportunities potentially to look at additional biomarkers that reflect impact on IL-12, IL-23 type one interferon pathways and sparing IL-10. But I think the primary focus will be on achieving that sort of pharmacology that I just mentioned in terms of the impact on TYK2. And if we're able to see that sort of impact I think that will be very encouraging for us. And our plan then is the next step after Phase I is to then do a Phase 2 proof-of-concept study probably a placebo-controlled study that might be in a disease like psoriasis where there we want to be able to bring optimal dose or doses from that Phase 1a study into Phase 2 and really demonstrate there that we have biologics-like activity, for example, that we have SKYRIZI-like effect on PASI 90 in psoriasis. And that would be the key inflection point for us to then say okay here we have a compound that is clearly differentiated from small molecule inhibitors. It has biologics-like activity. And then we would want to move it forward potentially across multiple potential different indications that are both interferonopathies such as lupus, IBD, in addition to psoriasis.

Great. Appreciate that. And just one quick follow-up. As you mentioned the possibilities in Phase 2, how do you think about in terms of patient selection, patients who have prior exposure to say deucrav or one of the biologics impacting the IL-23 pathway?

Maybe it's a bit too early, Jeff to discuss it. Obviously, let's say we end up going in psoriasis there are lots of patients that are available to us to ask the question in a way that is not influenced by failures on let's say pathway agents. So we'll obviously be very thoughtful about the patient selection, but we'll share more of that as we're getting closer to the study.

Thank you guys.

Our next question comes from Kelly Shi with Jefferies. Please unmute your audio/video and ask your question.

Hi. Thank you for taking my question. This is Evan on behalf of Kelly from Jefferies. Another question on STAT6, so for the biomarker analysis in the MAD portion, how long is the follow-up going to be? Can we expect like data from IgE and TARC at multiple time points across the dosing period and after 14 days of dosing or we may only expect one or two time points? And also wondering how would this biomarker data in healthy volunteers guide your decision on dose levels in Phase 1b and the Phase 2 trials in patients? Thank you.

Maybe I'll start. This is a great question actually. So the first part, it's obviously, it's easy. Yes, we will have several time points, both during doses and post-dosing period. The second question is actually it's a great question because it allows us to touch on a very important point, which is if you look at the dupilumab healthy volunteer studies, where we now have in our deck sometimes to show to investors what does the data look like. Instead of just talking about numbers, actually looking at the totality of the dupilumab data, you will actually see that in most cases if not in all cases there is actually a lack of dose response between the different doses. So if you actually chose the healthy volunteer biomarker data for dose selection for dupilumab, let's talk about dupilumab. You will probably pick the wrong dose to go into Phase 2 or Phase 3. But obviously, how we're going to select this dose is by looking at the totality of the data right? For us the key information is can we degrade STAT6 robustly. And by that we mean 90% or more in blood and skin. Is that safe and well-tolerated? And that's really what we're going to use to make a dose selection. But we'll also look at the totality of the data and obviously share it with you at the right time.

Thank you.

Our next question will be coming from Brad Canino with Stifel. Please unmute as he connects.

Great. Good morning. So, look, I think you've done a really good job previewing the STAT6 healthy volunteer data. And I can see how the target profile will allow you to move into patients with conviction. You can marry that to the preclinical outcomes. It's the outstanding question, and you started to touch on this in some of the prior responses is how you see the Phase 1b building on that conviction, 20 patient study short four-week treatment. How do you really see that being a useful tool to shape the view of the profile potential even though it's not designed to be a definitive assessment of the drug in patients?

Our perspective is that this could potentially be the drug of the decade or the century. Therefore, we need to be very careful with our study designs and ensure we are asking the right questions in each study. If we don't, we risk causing confusion instead of clarity. The questions guiding our studies are thoroughly considered, and I believe we will frame the right question for the right study. For healthy volunteers, we continually ask if we can effectively degrade the target, and whether that is safe and well tolerated. This is a significant derisking step since it’s the first time STAT6 has been targeted. Collecting biomarkers is crucial, and I anticipate they will resemble those of dupilumab in healthy individuals. Our study is structured to facilitate a swift transition into Phase 2b. The primary aim of our Phase 1b study is to generate data, particularly regarding biomarkers, to determine if a STAT6 degrader functions similarly to a dupilumab-like agent. We can’t accomplish this effectively in healthy volunteers for various reasons. The biomarkers don't have enough variability, and often, there isn't a clear dose-response relationship; it’s more about whether they move at all. However, in patients, we can observe a wide range of chemokines and cytokines in blood and skin. Within four weeks, we expect to achieve significant reductions with our drug. This study aims to communicate to potential investigators and patients involved in our Phase 2b studies that this drug is safe, well tolerated, effectively degrades the target, and shows dupilumab-like effects in biomarkers. I am confident that these findings will lead to advantageous clinical outcomes for patients, enabling us to expedite Phase 2b study recruitment. The Phase 1b study is a valuable opportunity rather than a critical requirement, but it is essential for reinforcing our claims over the last year and a half about STAT6 being a dupilumab alternative. I believe the data will clearly showcase this, without needing additional doses or placebo, as biomarkers are reliable indicators.

Thank you.

Our next question comes from Marc Frahm with TD Cowen. Please unmute your audio, video and ask your question.

Yes. Thanks for taking my question. Maybe just start off with one clarifying question on some of the enrollment criteria, you mentioned earlier for the Phase 1b. Just take that obviously, no concomitant meds, but will you be requiring people to be biologic and JAK therapy naive? Or could there be a patient or two that end up in this trial, that at some point seen some of these more modern agents? And then, I'll have a follow-up after that.

Yes, that's a good question, Marc. No, I mean, we will allow patients who have had prior systemic therapy or biologics that could include dupilumab or could include JAK inhibitors, as long as they responded to it. So, there will be those patients enrolled onto the study, as well as patients who are biologics naive.

Thank you. Regarding the Phase 2b trials you are planning for atopic dermatitis and asthma, DUPIXENT has several dosing strategies depending on the specific condition. Do you believe these trials will provide sufficient information on dosing to proceed to Phase 3 for the IL-4 STAT6 pathway across the board? Or do you anticipate needing additional Phase 2b trials for some of these other conditions to determine the appropriate doses? If that's the case, should we expect those trials to be conducted simultaneously with atopic dermatitis and asthma, or will you wait for the data from those trials before starting any additional ones?

As we mentioned in our previous discussion about the healthcare conference earlier this year, our development plan is informed by past experiences with other pathway agents in the Th2 space. This includes the selection of a dose for advancing to Phase 3 in atopic dermatitis and for moving into other skin indications, as well as a Phase 3 dose for asthma that leads to other respiratory indications. We are quite confident that these will be the only Phase 2b studies we conduct, enabling us to progress into seven, eight, or more Phase 3 programs. However, we want to emphasize that this will need to be validated throughout the process. We believe this can be achieved, but we must complete the studies to confirm it.

Okay. And then lastly, as we get that more robust efficacy readout from these Phase 2bs obviously, the goal is to every bit match DUPIXENT maybe even potentially exceed it a little bit. But if that isn't the case and you end up being a bit lower on efficacy, is that acceptable? And how close do you think you need to be to justify kind of the expense of late-stage trials?

Yes. First, I would like to clarify our expectations. I understand yours, Marc. Our expectation is that based on the biology and what we've observed preclinically, we should have an effect in Th2 diseases that is similar to dupilumab. We have demonstrated some numerical superiority preclinically, but we expect our results to align with that. To be honest, we do not anticipate having a lesser effect. We have spoken with and others have consulted with KOLs in the space who have argued that a less active oral drug that is safe and well tolerated could also achieve significant success. Therefore, we believe the bar for success is not merely dupilumab-like, but we aim to be dupilumab-like.

Okay, super helpful. Thank you.

Our next question comes from Ellie Merle with UBS Securities. Please unmute your audio/video, and ask your question.

Hey guys. Congrats on all the progress. Maybe just in terms of dose selection how are you thinking about how the doses you plan to study in Phase IIb will compare between atopic derm and asthma? I guess do you expect to study the same doses in each indication? And then kind of a broader question about STAT6 as it relates to dose selection. How does STAT6 expression potentially differ across indications or maybe between patients? Thanks.

I'll let Jared respond to your question, but I want to add one point regarding your later inquiry. Based on our preclinical data, the expression level of STAT6 does not impact our degradation kinetics. This indicates that regardless of the expression levels, we can achieve degradation to the necessary levels, which in preclinical trials has been over 90%. Jared, would you like to discuss the Phase 2 dose?

Yes, Ellie in our preclinical models and we have I think good preclinical models for both asthma and atopic dermatitis we've shown in both those models that doses of 621 that give us at least 90% degradation lead to sort of optimal activity or dupilumab-like effect. So, I think our expectation therefore is that the doses that we choose for Phase 2b coming out of Phase 1a will be similar doses for both the Phase 2b asthma study and the Phase IIb AD study.

And the question could be is the Phase 3 dose going to be different? I think it's unlikely, but that's the point of the Phase 2 studies. I asked a follow-up already, Ellie.

Our next question comes from Parth Patel with Morgan Stanley. Please unmute your line and ask your question.

Hi guys. Can you hear me?

Yes.

My video is not working. This is Parth on for Vikram. So just a question on 621. So, following the Phase 2 studies in AD and asthma how expansive of a Phase 3 development program would you expect to initiate for KT-621? And how would you prioritize indications given the broad potential you've laid out for the molecule?

Okay. I'm going to take this and we're going to try more quickly because I hear we have many questions and limited time. So, what we've said is that we want to develop this drug with two key goals in mind that are actually not mutually exclusive. One is a pace and path to registration and breadth of opportunities. And so we're going to run these important Phase 2b studies to inform Phase 3 selection for potentially eight different indications. And we're going to run parallel Phase 3 campaigns for several of those indications. I think it's too early for us to say which and how many. But you can expect that if you look at the dupilumab market where now asthma and AD account for more than 80% of the revenues, I would add that once COPD picks up it will probably be another important pillar of the revenues for the drug. I would expect that we will definitely prioritize those three. And then we have to between now and Phase 3 campaign start decide whether we want to add additional campaigns in parallel versus slightly staggered.

Our next question comes from Kripa Devarakonda from Truist Securities. Please unmute your audio/video and ask your question.

Thank you for taking my question. This format is quite interesting. You've mentioned degradation levels before, and I'm curious if you anticipate seeing levels similar to those observed in your preclinical studies. Will the degradation levels be comparable in different tissues, such as skin and plasma, considering you're measuring it in healthy volunteers? Also, do you expect these findings to translate to patients? Would you predict similar degradation levels in patients as in healthy volunteers?

Yeah. So again preclinically we've seen robust degradation. If you look at our studies we were able to show more than 90% degradation in all species. We've also seen as I mentioned we have non-human primate data. We also have other species that we haven't shared data for, but where we've seen consistent degradation across tissues. So we do expect to see robust degradation again, 90% or above in healthy volunteers. And yes, based on both STAT6 preclinical data, where we've done let's say healthy animals versus disease models where we haven't seen changes of degradation profile. But I would probably speak more about for example, IRAK4, where we haven't seen any difference of degradation between healthy and AD which is relevant obviously for STAT6 in a way. So yes, we expect all of that. Obviously, we'll have to show it. And that's the point of some of these studies that are ongoing or will be ongoing.

Our next question comes from Derek Archila with Wells Fargo. Please unmute your video and audio and ask your question.

Hey guys. This is Eva on for Derek. Thanks for taking our question. A quick one from us, so you mentioned on biomarkers for the STAT6 that they should be comparable to dupilumab, so could you provide a little bit more color on what this means in terms of like the Th2 biomarkers? And just remind us like what did we see for dupilumab here? Thanks.

Thank you. Regarding healthy volunteer studies, data from Regeneron indicates that Dupilumab shows a dose-response effect both intravenously and subcutaneously. Within the first two weeks, we observed a maximal effect in TARC of approximately 35%, which peaked early and began to diminish by week two. It didn’t show a strong dose-response relationship, appearing somewhat random, but there was a noticeable reduction with one of the doses. For IgE, the first two weeks didn’t show significant changes, likely around 5%, 6%, or 7%. I haven't calculated the exact figure yet, but IgE changes are minimal initially. It's understood that impacting IgE takes longer given what we know about Th2 biology. So, while I've shared some data and context, it's important to note that we shouldn’t focus too much on the exact numbers, as they can be variable and for IgE, they are quite close to baseline.

Okay. Thanks.

Our next question comes from Eric Wong with Goldman Sachs. Please unmute your audio and ask your question.

Hi, this is Eric Wong on for Chris Shibutani. Thank you for taking the question. Just a quick one for me. So just thinking beyond the Sanofi collaboration, how are you thinking about strategic partnerships to accelerate development or derisking programs? I guess particularly in oncology, can you elaborate on the criteria you'll be using to select partners and how you intend to maximize the value of those assets and potential deals?

I would start with a broad perspective. The biopharma industry has thrived through mutually beneficial partnerships for decades, and we are an integral part of this ecosystem. We will continue to identify win-win opportunities. Regarding our immunology pipeline, we believe that partnering at this stage won’t add value or expedite our programs. Therefore, we will advance our immunology pipeline independently and are building a strong team led by Jared, which I believe is and will become exceptional in its efforts. As for oncology, at some point, we may seek partnerships, especially as we approach Phase III registration. If we achieve significant success across our pipeline, it’s possible we could form partnerships for specific programs. Last year, we decided to continue our oncology programs through Phase I and then advance them only through partnerships. For any collaboration, it must be beneficial for both parties involved. The criteria for selecting a partner are straightforward; we need a company that is motivated, interested, and capable of effectively supporting these programs. Next question.

Our last question will come from Jeet Mukherjee. Please unmute your audio and you may ask your question.

Great. Thanks for taking the question. So just given the novel nature of STAT6 as a target, thoughts on its potential in the post-DUPIXENT setting? And if this is an area you plan to evaluate in a more fulsome manner considering the Phase Ib will enroll some biologic experienced patients as you just mentioned?

I want to clarify that biologically experienced patients would only be enrolled if they did not discontinue due to lack of response. It is possible they stopped for other reasons, such as tolerability or simply getting tired of self-injections, which we know can happen. The potential for STAT6 is to be the Th2 drug and the first choice for all patients with Th2 inflammation, whether they have asthma, atopic dermatitis, COPD, or eosinophilic esophagitis, among others. There is an opportunity for post-DUPIXENT, but I don't believe that’s the main issue we are addressing. The real challenge is ensuring access for the millions of patients who are not currently on DUPIXENT, either because they aren't eligible, can't get reimbursement, or dislike injections, so they can have access to an effective medication. I am confident we will recruit enough patients as we continue development, and we will assess what that will involve. However, I honestly believe this drug is not positioned primarily for that post-DUPIXENT scenario. The focus is on improving patient access to an effective drug that addresses many issues.

Our last question comes from Sudan Loganathan with Stephens. Please unmute your audio and ask your question.

Yes, thank you for answering the questions and being on video today. My question is regarding the R&D spending. As you increase efforts for 2025 in the two trials for 295 and 621, how do you plan to allocate the R&D expenses between the two programs? Additionally, should we expect any changes in the expense profile based on the progress of these two trials over the next one to two years?

Thank you, Sudan. I didn’t think I would have to speak on this call, but here I am, especially during the Q&A. We currently have $850 million, which will support us through the middle of 2027. If you calculate that over the next 10 quarters, it's clear that our cash burn will increase. I expect the rate of increase to be sharper in 2026 when the bulk of our clinical trial activities ramp up, and then to rise at a slower pace into 2027. I hope that gives you some perspective. The key point is that we are well-funded to navigate through the significant readouts we discussed today.

Maybe the only thing I'd add is you should expect the STAT6 portion of it to be dramatically superior to the TYK2 portion of expenses, especially as we continue at least in the next two to three years.

There are no more questions at this time. I'd now like to turn the call over to Nello for closing remarks.

Thank you all for joining us today. I hope you appreciate the new video format. I assure you the background is real, not fake. As you know, we're available for any follow-up. We'll be at the Cowen conference in Boston next week and we're happy to take any questions offline. Thank you again, and see you soon.