Kymera Therapeutics, Inc. Q4 FY2025 Earnings Call

Good day, everyone. My name is Kahai Illani, and I will be your conference operator today. I would like to welcome you to the Kymera Therapeutics Fourth Quarter 2025 Results Call. I will now turn the call over to Justine Koenigsberg, Vice President, Investor Relations.

Good morning, and welcome to Kymera Therapeutics Quarterly Update Conference Call. Joining me today are Nello Mainolfi, our Founder, President and Chief Executive Officer; Jared Gollob, our Chief Medical Officer; and Bruce Jacobs, our Chief Financial Officer. Following our prepared remarks, we will open the call for questions from our publishing analysts. Before we begin, I would like to remind you that today's discussion will include forward-looking statements subject to risks and uncertainties described in our most recent Form 10-K filed with the SEC. Please note that any forward-looking statements speak only as of today's date. And with that, I will now turn the call over to Nello.

Thank you, Justine, and thank you all for being here this morning. As we reflect on our year-end 2025 call, I want to take a moment to highlight what has been an exceptional year for Kymera. Those familiar with us know that we tend to focus on the future and what lies ahead. Most of our discussion will center on that perspective. However, given the significance of our 2025 achievements, I believe a brief look back will help illustrate the solid foundation we’ve established for 2026 and the years to come. This year marks the 10th anniversary of Kymera’s founding in May 2016. Over the past decade, we have diligently followed our strategy and have developed the necessary capabilities, platform, and team to pursue our objective of creating next-generation breakthrough immunology medicines. While we have achieved a lot in our relatively short existence, 2025 was particularly noteworthy. We made significant strides in our first and best-in-class STAT6 Degrader Program. We reported excellent results from our Phase I healthy volunteer study and our Phase Ib study in atopic dermatitis patients. In the healthy volunteer study, KT-621 showed strong STAT6 degradation with outstanding safety and tolerability. This was complemented by encouraging efficacy results from the Phase Ib study, reinforcing our belief that KT-621 has the potential to offer strong effectiveness similar to pathway biologics, but with the ease of oral daily dosing. Building on these studies, we initiated our first Phase IIb study in patients with atopic dermatitis last fall and kicked off the asthma Phase IIb earlier this year. Jared will provide further details on our KT-621 clinical development strategies, but both studies are benefiting from increased awareness and enthusiasm for the data we have recently shared, as well as strong interest from clinicians and patients regarding promising oral options. We also advanced the remainder of our pipeline. In May, we introduced our first-in-class IRF5 program, which is backed by a compelling preclinical profile and validated human genetics. Last year, we completed IND-enabling studies, and this morning, we announced that we have initiated dosing in the Phase I healthy volunteer study for KT-579 after receiving IND clearance from the FDA. Additionally, we are building on our successful internal pipeline by furthering our collaborations with Sanofi around IRAK4 and signing a new partnership with Gilead last year for our first-in-class CDK2 molecular glue program. Bruce will later update us on potential upcoming collaboration milestones that could enhance our financial standing. Regarding our financial achievements in 2025, we raised nearly $1 billion, bringing our year-end cash balance to $1.6 billion. We believe this level of capital will allow us to pursue our broad development plans designed to maximize the potential of our wholly-owned programs while maintaining our discovery engine's productivity, which we expect will continue to grow our innovative pipeline. With 2025 behind us, we are fully focused on 2026 and the milestones we aim to achieve. For KT-621, we anticipate finishing enrollment in the atopic dermatitis study this year and sharing data by mid-2027. The first patient was dosed in the asthma trial last month, and we expect to present data for that in late 2027. In the meantime, we plan to report scientific publications and presentations to keep building awareness for this exciting program. This year is crucial for KT-579, our lead IRF5 degrader. We plan to complete the Phase I healthy volunteer study and share the results later this year. The subsequent step will be to move into a patient proof-of-concept study, likely focused on lupus soon after. Our partner, Sanofi, is expected to launch the Phase I healthy volunteer trial with KT-485 this year. We also aim to advance our CDK2 program with Gilead into further development. Lastly, we are committed to announcing at least one new program each year, and we are targeting the second half of this year to reveal our new development candidate program. We're gearing up for a busy 2026, and I'm particularly pleased to introduce the newest member of Kymera's leadership team, Neil Graham, who has joined us as Chief Development Officer. Neil brings over 30 years of experience in global drug development across a broad range of therapeutic areas, including dermatology, allergy, rheumatology, virology, and pulmonology. He has led several groundbreaking programs, including the development of dupilumab at Regeneron. We are excited to welcome him to our team as we enter this next growth phase and look forward to his contributions in building a fully integrated commercial company. Before I hand off the call to Jared, I want to take a moment to delve deeper into the significant market opportunity presented by our STAT6 program. The chance to significantly expand the patient population receiving effective treatment cannot be overstated. We frequently hear from both physicians and patients that current advanced therapies, such as biologics, are not enough. There is clear excitement surrounding the potential for an easy and convenient oral therapy for Type 2 diseases that does not compromise on safety or effectiveness. We have previously mentioned that there are about 140 million diagnosed Type 2 patients in the U.S., five major EU countries, and Japan, with approximately 50 million estimated to have moderate to severe disease. Despite this significant need, only an estimated 2 million patients are receiving advanced systemic therapies, primarily biologics, with dupilumab being the most prevalent. So, why are so many patients not receiving advanced systemic therapies? The issue is not due to a lack of need but rather barriers present in the current treatment framework. Many patients depend on local therapies, usually topical or inhalers, which often fail to address the underlying causes of Type 2 diseases, resulting in inadequate treatment for many with moderate to severe conditions. While there are existing oral systemic therapies in both asthma and atopic dermatitis, their efficacy can be limited. Safety concerns also exist with certain therapies, such as JAKs, which require blood monitoring and present other risks. Injectable biologics have brought significant advancements but come with challenging burdens such as injection site pain, needle fatigue, cumbersome loading regimens involving several injections in the first month, cold storage requirements, and high discontinuation rates over time. When we examine why so many moderate to severe patients remain untreated with advanced therapies, the explanations point to limited efficacy, safety concerns, and various conveniences and access hurdles woven into the system. Consequently, millions of patients who could benefit from more effective therapies remain untreated, rotating through suboptimal alternatives while living with poorly controlled diseases. This represents the unmet need and the opportunity we face. Shifting from patient numbers and unmet needs to market opportunities reveals that the gap is even larger. The 2 million patients receiving advanced systemic therapies for Type 2 diseases currently represent an annual market value of about $20 billion, with dupilumab being the leading drug. While this is a significant amount, the broader market potential is much greater due to the many patients who are not currently reached by approved medications. In fact, I would classify the current Type 2 market as still in its infancy. Historically, the introduction of new products and mechanisms has expanded immunology markets by gaining access to new patient populations. Additionally, an oral therapy that addresses many limitations of present treatments while ensuring safety and efficacy could provide a viable alternative for millions of patients across all age groups. I believe it is reasonable to anticipate that the current market for Type 2 diseases is set to grow substantially beyond the existing $20 billion figure. A comparable case can be observed in the psoriasis market, which has seen fivefold growth over the last decade, largely due to new drugs and oral treatments. The limitations of existing therapies combined with the potential of KT-621 to provide biologics-like efficacy and safety without requiring patients to sacrifice convenience should rally support for this transformation. How will we achieve this? Two key ways: first, by expanding the existing patient population receiving treatment, which is our primary goal; and second, by offering a simple and convenient alternative for patients currently relying on injectable biologics, many of whom, according to our market analysis and industry surveys, are eager to transition to an oral therapy. So, what might this paradigm shift look like? Our aim and the foundation of our development plan is to position KT-621 as the favored option for this large, underserved, or inadequately treated patient population. In many inflammatory diseases, advanced systemic treatments have traditionally been designated for patients who have failed conventional therapies, which often means those are biologics. We believe that having a safe and effective oral medicine can entirely transform the treatment landscape, making it feasible to intervene earlier in the disease journey rather than waiting for significant advancements or treatment failures. If successful, we believe KT-621 has the potential to change the current practice of advanced therapy from being a last resort for a limited group of patients to an everyday choice for millions, ultimately enhancing the standard of care. This perspective on the market opportunity underscores why we believe KT-621 could become one of the most significant programs in the biotechnology and pharmaceutical sectors. With that, let's turn the call to Jared for updates on the clinical progress of KT-621 and KT-579, our IRF5 degrader. Jared?

Thanks, Nello. As you've heard, we're building significant momentum across our pipeline, driven by the strong scientific, clinical and operational foundation that we've established. This morning, I'll discuss our ongoing KT-621 Phase IIb trials in atopic dermatitis and asthma. I'll then provide additional context on our clinical development strategy for KT-579, our oral IRF5 degrader. I'll begin with KT-621, our oral STAT6 degrader. In December, as many of you are aware, we released the BroADen Phase Ib results, providing the first look at KT-621's impact on patients with atopic dermatitis. The data demonstrated a dupilumab-like profile that strongly supports continued development of KT-621 in both AD and asthma. Across all of the study's objectives, we exceeded expectations. We demonstrated strong fidelity of translation from healthy volunteers to patients with deep STAT6 degradation in blood and skin. We observed a significant reduction in Type 2 biomarkers across blood and skin lesions, including TARC and Eotaxin-3 and importantly, also in lungs as measured using fractional exhaled nitric oxide or FeNO testing. The greatest impact on FeNO was observed in AD patients with comorbid asthma who had the highest baseline FeNO levels. We also achieved robust improvements across all key AD clinical endpoints, including EASI, Pruritus NRS, IGA, SCORAD and patient-reported outcomes or PROs, addressing disease severity and quality of life. For all of these endpoints, KT-621 data were in line with or numerically exceeded published data for dupilumab at 4 weeks, further highlighting the exciting potential patient impact. In addition to these effects on AD, KT-621 had a clinically meaningful impact on patient-reported outcomes, measuring disease control in patients with comorbid asthma as well as on symptoms and quality of life in patients with comorbid allergic rhinitis. And importantly, KT-621 was well-tolerated with a favorable safety profile. I should also note that we recently completed the 6- to 9-month GLP toxicology studies in rat and nonhuman primate and consistent with earlier KT-621 tox studies, we did not observe any adverse findings of any type across all doses and concentrations tested. We now have 2 parallel Phase IIb dose-ranging placebo-controlled trials underway in AD and asthma, supported by the positive biomarker and clinical endpoint results in both AD and comorbid asthma from BroADen. The BROADEN2 trial in approximately 200 adult and adolescent patients with moderate to severe atopic dermatitis has a primary endpoint of percent change from baseline in EASI at 16 weeks. The study continues to progress as planned with completion of enrollment expected by the end of 2026 and announcement of top-line results by mid-2027. We will update you all on enrollment later in the year, but we can say now that we are confident in achieving this timeline based on the strong interest from patients and clinicians in a safe and effective oral therapy and given the high level of awareness of and appreciation for the KT-621 data we have generated. Moving on to asthma. Just last month, we announced that we had dosed the first patient in our Phase IIb BREADTH trial in approximately 264 adult patients with moderate to severe eosinophilic asthma. The trial's primary endpoint is change from baseline in pre-bronchodilator FEV1 at 12 weeks. Using pre-bronchodilator FEV1 will allow assessment of effects across dose levels in a smaller, faster study and will inform dose selection and probability of success for subsequent Phase III trials. Data from this trial are expected in late 2027. Taken together, we expect to generate data in close to 500 patients next year from both KT-621 Phase IIb studies while also continuing to build our safety database with long-term treatment in AD patients rolling on to the 52-week open-label extension portion of BROADEN2. Importantly, these trials are designed to support parallel Phase III development beyond atopic dermatitis in asthma and other Type 2 dermatologic, respiratory and gastrointestinal diseases as part of the overarching regulatory strategy for KT-621. Turning now to our novel IRF5 degrader program. We view IRF5 as an exciting new opportunity to address complex autoimmune diseases. We continue to receive positive feedback from KOLs and investigators on the potential of KT-579 to offer an effective oral treatment for diseases such as lupus, IBD and RA. This past fall, we presented additional compelling KT-579 data in lupus and RA preclinical models at the American College of Rheumatology meeting in Chicago. Chronic heterogeneous inflammatory conditions like lupus, RA, IBD and others are driven by broad immune dysregulation across multiple inflammatory pathways, including Type 1 interferons, pro-inflammatory cytokines and B cell-derived autoantibodies. While biologics have clinically validated each of these pathways individually, the current treatment paradigm has been constrained by the reliance on injectable therapies optimized for narrow segments of disease biology and therefore, incapable of addressing the full complexity of the inflammation underlying the various disease manifestations. As a result, many patients experienced incomplete responses or loss of efficacy over time. An oral medicine capable of modulating multiple disease-defining immune pathways simultaneously could enable more effective and durable disease control and potentially expand access to treatment across broader patient populations. IRF5 is a genetically validated transcription factor that functions as a central amplifier of immune responses. In autoimmune diseases, where there is strong genetic association with IRF5, persistent IRF5-mediated immune activation drives skewed inflammatory signaling across Type 1 interferon, pro-inflammatory cytokine and autoantibody pathways. KT-579 is designed to selectively degrade IRF5, enabling modulation of these interconnected inflammatory pathways through targeting of a single master regulator with a goal of rebalancing the immune system while avoiding the infectious adverse events caused by broad immunosuppression. We are encouraged by the strong genetic rationale, our compelling preclinical efficacy and safety data and the potential to deliver a novel oral therapy across multiple serious autoimmune diseases with significant unmet medical need. With that said, we are now focused on advancing KT-579 in our ongoing Phase I healthy volunteer trial and reporting the first-in-human data in the second half of 2026. In terms of the Phase I specifics, the study is designed to evaluate both single and multiple ascending doses of KT-579 administered orally once daily compared with placebo. The primary aim of the SAD/MAD study is to demonstrate robust degradation of IRF5 in blood, which we define as a reduction of approximately 90% or greater at dose levels that are safe and well-tolerated. Because the IRF5 pathway is not activated in healthy volunteers, we plan to use full blood ex vivo stimulation assays to assess the functional impact of IRF5 degradation on the induction of Type 1 interferons, pro-inflammatory cytokines and inflammatory pathway gene transcripts by TLR7, 8 and 9 agonists. It's our expectation that we should see a 50% to 80% reduction in these biomarkers across the 3 TLR pathways assessed if we're engaging IRF5 effectively, which would increase the probability of IRF5 degradation translating into clinical activity in subsequent patient studies with KT-579. As we did with our STAT6 program, we also expect to conduct a Phase Ib patient study and intend to share more details on the design and patient population later. We have said, however, that we would expect to focus the study on lupus patients, which we believe is the right patient population for our first proof-of-concept study, given the strong genetic association of IRF5 with lupus and the robust activity of KT-579 across multiple mouse models of lupus. I'll now turn the call over to Bruce for a review of the fourth quarter results. Bruce?

Thanks, Jared. As I walk through the fourth quarter results, please reference the tables found in today's press release, which was filed this morning. Collaboration revenue in the fourth quarter of 2025 of $2.9 million is attributable to our Gilead partnership. More broadly, with respect to Gilead, we received an upfront payment of $40 million upon signing the licensing and option agreement last year. Under this agreement, we're eligible for up to $750 million in total milestone payments, including a $45 million payment payable if and when Gilead exercises its option on the CDK2 program at the declaration of a mutually agreed-upon development candidate. In addition, Sanofi is advancing KT-485, our oral IRAK4 degrader, with plans to initiate Phase I testing this year. We expect to share additional updates on this program in the coming months, including the receipt of a milestone upon dosing of the first healthy volunteer. As a reminder, under the structure of the Sanofi agreement, we have the potential to realize nearly $1 billion in total milestones. While these 2 potential near-term milestones are not reflected in our current cash guidance and are not expected to materially impact our runway, they remain important validation points and support a continued advancement of these partnered programs and the downstream value we can realize. We look forward to sharing further progress as these programs move forward. With respect to operating expenses, R&D for the quarter was $83.8 million. Of that, approximately $7.6 million represented noncash stock-based compensation. The adjusted cash R&D spend of $76.2 million, which excludes that stock-based comp, reflects a 16% increase from the comparable amount in the third quarter of 2025. On the G&A side, our spending for the quarter was $16.9 million, of which $6.9 million was noncash stock-based comp. The adjusted cash G&A spend of $10 million, again, excluding that stock-based comp, reflects a 1% increase from the comparable amount in the third quarter of 2025. And finally, we are well-capitalized to execute on our goals. As Nello mentioned previously, we ended in December with a cash balance of $1.6 billion, providing a runway into 2029. This allows us to complete both KT-621 Phase IIb trials in AD and asthma and to fund a large part of the first Phase III trial for KT-621. The runway also will allow us to advance KT-579 through initial POC testing and to progress our research pipeline as we scale and grow Kymera. With that, we'll pause while we regroup in our conference room and assemble the queue for your questions. Thank you.

Thank you. Your first question comes from the line of Marc Frahm with TD Cowen.

Congrats on all the progress. Maybe a high-level one for Nello. Since your Phase I data came out with the STAT6, a handful of other kind of early mid-stage programs in AD have also read out data, and there were some data even ahead of yours. So over the past year, there's just a lot going on in AD. What's your kind of vision for what the treatment of AD looks like and how these therapies all fit together when you roll the clock forward a few years? And then maybe if I can sneak a little bit in for Jared also. Just for IRF5, can you just remind us what really could be learned in the healthy volunteer portion of that trial beyond target engagement and safety or do we really need to learn more and have to wait for that lupus cohort to enroll?

Thanks, Marc. That's a great question. To address the first point, the market for Type 2 diseases, particularly atopic dermatitis, is still in its early stages. There are approximately 40 to 50 million moderate to severe patients across the seven major markets, yet only about 2 have received advanced systemic therapy. This highlights the demand for more treatment options. As we noted, if we compare atopic dermatitis to psoriasis, the psoriasis market has expanded fivefold in the past decade. Atopic dermatitis may be at a comparable stage to psoriasis from 5 to 10 years ago, indicating significant growth potential in this market. This expansion will rely on introducing new therapies. Importantly, this is not a zero-sum game; the introduction of new treatments can greatly benefit patients as well as the companies that develop various therapies. Patients need convenient oral options that enhance their chances of accessing effective treatments for moderate to severe disease, which I believe will change the way these conditions are managed. With our mechanism targeting STAT6, we focus on a well-established pathway linked to Th2 inflammation, specifically IL-4 and IL-13. We are pursuing reliable efficacy and safety within a clearly defined patient demographic, giving us a level of derisking that is, in my opinion, superior to many other interesting agents available. The need for more therapy is clear, and while it's encouraging to see more drugs emerging, we do need to advance to late-stage development to better understand the risk-benefit profiles of our drug and others. Jared, would you like to discuss the IRF5?

Sure. Yes, Marc. Regarding IRF5, as you mentioned, the primary clinical objective is safety and then our primary translational objective is to show 90% or greater IRF5 knockdown in blood. And showing that knockdown is going to be important, we think, from a derisking standpoint for the subsequent patient studies because of the strong genetic association between IRF5 and lupus and the strong preclinical activity in multiple lupus models that we've seen with that degree of IRF5 knockdown. Now with that being said, yes, it's true that unlike STAT6, where we had circulating biomarkers like TARC and Eotaxin-3 that were useful for us to assess that sort of translation in healthies, with regard to IL-4/IL-13 pathway. Here for IRF5, while we don't have those circulating biomarkers, as we mentioned, we have these ex vivo stimulation assays, which I think will provide very important functional information around IRF5 degradation. These assays are looking at stimulation of toll-like receptor 7, 8 and 9, which are the 3 toll-like receptors driving hyper interferon, pro-inflammatory cytokine and B cell autoantibody production. And to be able to show an impact across those 3 pathways on ex vivo stimulation, we believe, significantly derisks our probability of success in subsequent patient studies, including the lupus studies.

To add to what Jared mentioned, I’d like to share my perspective at a broader level. The strength of our program lies in its genetic association. There are very few drug development programs that possess the genetic depth we have with IRF5, making it one of the most compelling immunology programs for the next 5 to 10 years. With this genetic association, we aim to understand its biological implications. Our preclinical evidence shows that activating IRF5 leads to increased levels of pro-inflammatory cytokines, Type 1 interferons, and activates B cells and autoantibodies. We have demonstrated in healthy volunteers that we can inhibit these three pathways of inflammation even in ex vivo settings. This suggests that combining our findings with genetic insights will likely yield positive outcomes in patients.

Can you hear me? Okay, great. I have a couple of questions. Thanks for the question, first of all. Regarding the BROADEN2 and BREADTH studies, they should be mature next year. We are accustomed to seeing Phase I biomarker data and a lot of data points along the way. For these Phase IIb studies, will you wait for the final data, or do you plan to have any biomarker or interim analysis for these two studies? Additionally, the IRF5 program is quite interesting. The indications you've mentioned, like lupus and Sjogren's, represent significant unmet needs and are less competitive. I'm curious how that shapes your priorities for the development of this program.

Thank you, Geoff. Regarding the Phase IIb studies, we would like to gather data throughout the process to understand what is happening, but since these are important placebo-controlled studies, we will wait until they are complete before unblinding and sharing the results. For IRF5, I refer back to the reasons to believe in this target's relevance to areas such as human genetics, lupus, Sjogren's, myositis, RA, and IBD. These factors, along with preclinical data, are guiding our approach. We often discuss these indications because they align well with the genetics, the preclinical evidence, and the unmet medical need. Notably, diseases like lupus and Sjogren's lack effective or at least approved oral therapies, which could benefit a much larger population compared to what is currently being studied in clinical development, which is likely aimed at late-stage patients.

Congrats on the quarter. One question from our side. I guess, as you think about starting Phase IIs for 621 outside of asthma or AD, what are sort of some of the gating factors?

Yes. So as we've outlined in the past, I believe it's still on our corporate deck. There is a new one today on our website. Our strategy is to use the ongoing dose-ranging Phase IIb study, the one in AD to support late development in all of the other derm indications, the one in asthma to support late development in the other respiratory indications. So we actually do not plan to start any new Phase II studies. The new studies that you see us starting will be, we believe, all registrational studies. Now obviously, some of this still has to be vetted with the right authorities, but that's our current strategy. And we believe this is a strategy that has been proven to be successful with other drugs in this pathway. So it wouldn't be the first time that this is adopted.

A question from me on the trigger to start the KT-621 Phase IIIs. So to initiate, how far into the Phase IIs do you need to reach and what needs to be collected from those studies? And will this be one study start or multiple at once?

Thank you, Brad. Unlike how we may have accustomed everyone to starting a study while the previous one is still underway, for a Phase III study, we need to complete Phase II first. We also require an FDA meeting after Phase II before initiating Phase III. I assure you that we will do our utmost, as we always have, to move quickly. However, there are necessary steps to transition to Phase III. Regarding the number of studies, as you know, the typical approach in the past decade for atopic dermatitis registration has been three Phase III studies: two placebo-controlled studies and one with topical corticosteroids. If this continues to be the trend, which we will examine based on recent FDA updates, you can expect us to initiate all studies in parallel as much as possible.

Congrats on all the progress. In terms of 621, if you could talk about both the clinical and preclinical data that you've seen, where do you see the most potential room for efficacy improvements over dupilumab? And can you talk about some of the respiratory preclinical model data and compare that to what's been seen preclinically in atopic dermatitis?

Yes. Thanks, Eli. You often asked the tricky question. So we want to make sure like we maintain kind of our credibility when we compare a drug that has been so successful in millions of patients with the drug that has been so far in about a couple of hundred patients or subjects and up to 28 days. So I'm always very thoughtful about how we make comparisons. What I can say is that in our preclinical models, if you look at the asthma models that we both published, KT-621 has performed at least as well and in many cases, better than dupilumab. We don't know whether that is the result of the model or it's actually real biological differences or drug distribution differences. And that's why we're really excited that we're in a Phase II study, so we can assess the full clinical activity of our drug in a large study with hundreds of patients. With regards to AD, the preclinical AD models are not very robust. We like to talk about the asthma model because it's a highly translatable model. The AD preclinical models, you have this local activation with a pathway activator that is not really, in many cases, a Type 2 discrete pathway activator. So we also show really robust activity. But to be honest, as a scientist myself, I don't like to talk about preclinical AD models that are mostly useless. But if we look at the clinical data, obviously, you've seen the data from last December, we have shown really robust activity. I start from biomarkers. I look at what we've shown even with biomarkers that were either not shown to change much with dupilumab like IL-31 or the ones that we showed comparable if not superior Eotaxin, even FeNO. And then we look at all the clinical endpoints that we measured, we've been consistently at least as good as the injectable biologics. So again, it's hard for me to say it will be equal, slightly inferior, slightly better. But I think we delivered that ballpark scenario that we talked about for last year. And so for us to really know how it looks, we need to wait for the Phase II studies. And to be honest, the only other thing to keep in mind is you can never compare drugs unless you run a head-to-head study. But our goal, again, is to deliver an oral drug with biologics-like activity with great safety and the convenience of being an oral pill that one can take once a day, stop and start whenever they want. I think that will transform the treatment paradigm for Type 2 diseases well beyond whether the drug is exactly like dupilumab, slightly less or slightly better. I don't think that will matter if we can deliver the type of drug with the profile that we speak about.

This is Anna on for Kripa. One quick question on 621. I was just wondering if you could give us kind of an overview on how you're thinking about compliance you're seeing in the Phase IIb trials right now and how the durability of 621 kind of ties into that?

That's a great question. When you refer to compliance, are you talking about patients taking the drug? Yes, that's an important point because during a clinical trial or with injectable biologics, you can ensure full adherence since patients typically go on-site for their injections. The advantage of oral drugs is that they provide patients with freedom, which is a significant benefit. This aspect plays a role in clinical studies as well. We have implemented measures that may exceed standard practices to ensure we have a clear understanding of patient adherence. Therefore, we are confident that patient adherence will significantly contribute to maintaining the integrity of our study. Additionally, unlike small molecule inhibitors, if a dose of a small molecule is missed, all activity is lost. Missing a single dose of KT-621 doesn’t result in loss of pathway degradation. It's not an encouragement to skip doses, but it's important to note that if a dose is missed, it won't hinder the overall effectiveness. This offers an extra layer of protection against any potential issues that may arise from patients forgetting a dose during a study or in everyday life.

Congrats on the progress. Just on IRF5, I think we're clear on how you think about STAT6 degradation versus inhibition. Kind of same question for IRF5. I think we'll get a little bit of preclinical data from an inhibitor next month. And then just on the targeted nature of your degrader, any risk of kind of pan-IRF inhibition? I think IRF8 has been a question in degrading IRF5 previously.

Yes. I can start and then hand it over to Jared to discuss our perspective on the safety of IRF5. I'll focus on the chemistry aspect, as I am technically still a chemist. The challenge with this target is that it's very difficult to find a molecule that binds exclusively to IRF5 without also binding to other IRFs, of which there are possibly 11 or 12. It’s essential that we target only IRF5, including its various splicing variants, which need consistent targeting across the IRF5 family while avoiding binding to any other IRFs. We have successfully achieved this with our molecule, which is truly selective as it only engages with IRF5 and its splicing variants without inhibiting any functions. This ensures maximum selectivity, and we don't have concerns regarding non-target interactions. Jared, would you like to elaborate on why we believe that focusing solely on IRF5 is particularly promising?

Yes. I believe that IRF5 is one of several different IRFs, which means there is some redundancy regarding its role in innate immunity. Therefore, eliminating IRF5 does not significantly affect overall innate or adaptive immunity. Additionally, the expression of IRF5 is quite limited, mainly occurring in certain immune cell types such as B cells, dendritic cells, monocytes, and macrophages. This restricted expression makes it possible to reduce its levels safely. Its activation is context-dependent, primarily occurring during pathological inflammation in specific cell types. This is why we can effectively and continuously degrade IRF5 without causing broad immunosuppression or increasing the risk of infections. In fact, studies on mouse models lacking IRF5 show no increased susceptibility to infections or other notable changes. In our preclinical animal toxicity studies, including four-week GLP toxicity studies in nonhuman primates and rats, we have not observed any adverse effects or susceptibility to infection. For all these reasons, we consider this a safe target for deep and chronic degradation.

Hope you guys can hear me okay. Maybe one on 579 and something kind of maybe related to something you just said, Jared. But I was looking at another healthy volunteer study for another anti-inflammatory drug, and they actually utilized a skin immune challenge model where they injected volunteers with actually a TLR agonist and then looked at cytokines. Wondering if you guys are aware of that model, whether you considered this? And if you did consider why you didn't decide to use it? And then I guess related, what informs the 50% to 80% target reductions in biomarkers? Is that all preclinical or is there some genetic basis for that target reduction?

So maybe I'll take the first one and Jared takes the second one. So yes, we're obviously well aware of there are many type of skin challenge model, sometimes even systemic models, systemic challenge models, people have done LPS, inhaled LPS, local LPS. So there are many models that one could run preclinically for healthy volunteer studies. We philosophically feel like the right context to ask these pathway questions are in patients. And what you do by activating the skin is you artificially activate a pathway and then you look at downstream regulation. You can do that just the same way by taking the blood and ex vivo activating the pathway. So yes, you could do those things. We just don't believe that it's the complexity of it derisks any more or less what we would do with an ex vivo blood stimulation. If you have questions about does your drug reach particular tissues and especially with small molecule inhibitors where you actually cannot measure target engagement, that is a way to do it. But we can measure target engagement directly. So we don't need a surrogate downstream biomarker to make sure our drug gets to the tissue. So that's at least our view. Jared, do you want to speak to the?

Yes. I mean we know in terms of the amount of knockdown that we think we need or the amount of functional inhibition that we would need for those pathways. One has to keep in mind that here, we're talking about not just one pathway that's controlled by IRF5, but multiple pathways. Here, we're looking at 3 different TLR pathways, for example, 7, 8 and 9. And so whereas you're talking about one pathway and all your activity is dependent on one pathway, you might have a threshold that could be 80%, 90% or more to really have clinical impact. Here, we know that if you're impacting multiple different pathways in parallel at the same time, you don't need necessarily 90-plus percent inhibition; 50% to 80% inhibition from our preclinical data across multiple different pathways can have a synergy that can give you significant activity in preclinical models. So that's the reason why we say that, that's sort of a range, which is really just a range, if you're seeing it across multiple different TLR pathways with these ex vivo stimulation models would be very encouraging, and we would expect to translate into activity in subsequent patient studies in diseases like lupus.

This is Hal. I'm calling in for Derek. Our question is about the potential oral autoantibody delivery program, specifically regarding the timing and what data or events we can expect to hear more about from these assets.

Sorry, I didn't quite get the question. Say that again?

The internal oral antibody.

So do you mean the next oral immunology program that we were going to disclose? Yes. So as we said in, I believe it's in the press release and in our remarks earlier, we plan to disclose at least a novel program, most likely an immunology program this year and likely would be in the second half of the year.

Just on IRF5, as you mentioned, 50% to 80% reduction across the TLR7, 8, 9 pathways. Just thinking about IRF5 regulates many of the levers in the pathways. Are there any specific downstream cytokines that you can point to today that will be the most impacted, most reliable and perhaps the easiest to monitor from an ex vivo stimulation test setting to best assess the PD of the drug?

Yes, that's a great question. Jared, do you want to take that one?

Yes. Through the stimulation of these pathways, there are key cytokines that we can look at. So for example, Type 1 interferon psych interferon beta, we can look at interferon beta protein production in these ex vivo stim assays. We can also look at gene transcripts that are part of the type 1 interferon pathways, looking beyond just the interferon itself. You can look at various genes that are part of the type 1 interferon pathways. We can also look for pro-inflammatory cytokines like IL-12 and tumor necrosis factor and even IL-6, which are stimulated by macrophages and dendritic cells. So these are a number of different pro-inflammatory cytokines that are coming off of these TLR pathways that can all be measured either the protein level or the gene transcript level that will be very helpful biomarkers for us.

Can you hear me? This is Kevin speaking on behalf of Brian. I’m interested in your thoughts on the degradation related to IRF5. You mentioned whole blood, but what about PBMCs and possibly skin as well? I believe this is something you're examining in the MAD portion. You also indicated that IRF5 is not as activated in healthy volunteers, so I’m curious about what our expectations should be regarding degradation in those tissues. Additionally, how much do we really understand about IRF5 expression in healthy volunteers and how it might influence your expectations for the study?

Yes. In blood, we know that we can measure IRF5 effectively. We typically need PBMCs for this, as we isolate them to measure using mass spectrometry. The expression of IRF5 in healthy volunteers in the skin is very low. For this reason, we believe it will be quite challenging to measure IRF5 in healthy volunteers. However, as we move into patient studies, particularly with lupus that shows skin manifestations or even CLE, there may be contexts where we can evaluate IRF5 expression. We expect this expression to be extremely low, even lower than in any other program we've examined, including preclinical studies. Therefore, it will be difficult to measure.

I wanted to ask my question around 621's opportunity in asthma. Looking at the current FDA-approved treatment options for AD, not all of them have really panned out that well in asthma as maybe people have expected. STAT6 degradation is a new approach. So curious to hear what theoretical and preclinical data you may have that gives you some conviction here that it also has an opportunity in asthma.

I believe IL-4 and IL-13 are significant, and it's important to note that dupilumab is the only drug that targets both of these interleukins. It has demonstrated strong effectiveness in treating eosinophilic asthma, eosinophilic COPD, and chronic rhinosinusitis with nasal polyps. It is well-established that this drug has a substantial impact on patients suffering from Type 2 inflammation in the respiratory system. We have extensively researched STAT6 biology both preclinically and during early clinical development, and we have been able to replicate the same blockade of IL-4 and IL-13. I encourage you to look at the asthma studies we have published, which highlight the strong activity we observe in terms of biomarkers and efficacy endpoints. The reduction in patient phenotypes has been even more pronounced than what we see with biologics in asthma patients. Therefore, we have a solid foundation for believing that this drug has the potential to be highly effective in treating asthma.

As we just look ahead to the evolving competitive landscape in atopic dermatitis and specifically on the next-gen oral agents that might be coming around the corner, just your thoughts on ITK as a target and some of the recent data we've seen there and how that might compare and contrast to STAT6.

Yes, great question. As I said earlier, I think more mechanisms are great for patients first. I think, obviously, these are very different mechanisms. STAT6 is an IL-4 and 13 drug, as I said, the most validated pathway in the space, both in terms of safety and efficacy. We have shown preclinically that we can mimic biologics, both in terms of efficacy. And I would actually argue in safety, we just shared today that we completed chronic tox, so 6- to 9-month tox in rodents and nonhuman primates, again, without any adverse event. Other targets, ITK is a target that we've looked extensively at Kymera. We decided not to work on it because the human genetics show that because of challenges with clearing ETV, I think all patients end up developing some form of lymphoma. So this is the reason why we decided not to work on that target. That doesn't mean that it could not be a great target. It's just something that we don't believe fulfills the risk-benefit profile of Kymera and how our target selection strategy has been evolved over the years. But again, I think more mechanisms, especially with complementary pathways, whether it's ITK or others, I think are going to be great for patients and expand in this market that we need to do so that more patients get access to more therapies.

I wanted to ask, as you guys get the sites up and running in the Phase IIb studies, do you expect to provide any kind of color or context around how enrollment is going in those studies?

No, we will not provide ongoing updates on enrollment as long as we remain on track with our expectations. However, if we find ourselves deviating from those expectations, we will make sure to share that information.

Congrats on the quarter and all the progress. For the Phase IIb AD trial, what measures are you taking in the trial to mitigate against placebo response? For example, will you be requiring photographic evidence of AD at baseline to provide evidence of moderate to severe disease on screening? So I guess that's first question. Second question on 579. I know you're enrolling healthy volunteers. However, there are healthy volunteers that may have positive antinuclear antibodies, but do not have autoimmune disease. Would you potentially screen for these types of healthy volunteers and that may potentially provide read-through into your Phase Ib lupus trial?

Great question, Biren. I'll take the second one quickly. Jared, do you mind taking the first one? Yes. So great idea. Sometimes simple is better than complicated. So we're going to actually enroll healthy volunteers that are healthy, move quickly through it, selected dose and go into patients. That doesn't mean your idea is not a good one. It's just not what we're planning to do. Jared, do you want to take that?

Yes. I think in the Phase IIb, I mean, your question about avoiding high placebo rates is an important one. And while I can't get into all the details at a high level, I can tell you that we're paying a lot of attention to this, both with regards to our eligibility criteria, how we're providing oversight with every patient that comes on and is screened in terms of looking to make sure that patients are truly meeting eligibility criteria, not just in terms of actually having AD, but also having moderate to severe disease. And we've carefully trained the investigators and selected investigators who are certified dermatologists to make sure that they're fully capable of doing all of the clinical endpoint measurements across the study and that they're doing it consistently from baseline all the way through to the end of the study. And we also have global site selection. So we're not just in the U.S., we're also ex U.S. And in fact, the majority of our sites are ex U.S., whether that be in Europe or in Asia and Australia. And I think that's also important because access to drugs like dupilumab is diminished ex U.S. And so those are patients who are more apt to come in maybe more on the severe end of the spectrum of disease, and that can also be very helpful in helping to mitigate placebo effect, which you tend to see in milder patients compared to more severe patients. So I think all of those steps are being taken, and we're really very actively staying on top of all of that to try to mitigate a high placebo rate on study.

We're working on a lot of initiatives, likely more than anyone has attempted before, to ensure we address this issue. While we can't promise to achieve the lowest placebo rate, we're putting in our best efforts.

Your final question comes from Paurav Desai with B. Riley. I mean we're doing a lot of things, probably more than anyone has done before to ensure that we address this issue. Obviously, we can't guarantee the lowest placebo rate, but we're trying our best.

I'm on for Mayank. On asthma trial, if you could kindly confirm the dose levels are the same as BROADEN2? And how might you be enriching for pheno in your target patient population? And is there a chance your 12-week FEV1 endpoint data could come around the same time as your 16-week BroADen Phase II study? And also it would be helpful to learn competitive trial enrollment dynamics in atopic dermatitis versus asthma.

Yes, thank you. These are four questions in one. Let's see if you can help me remember. The first question is about dose levels, which are indeed the same for both atopic dermatitis and asthma. The inclusion criteria for the asthma study require high eosinophils, specifically more than 300, and a high pheno score above 25. This is how we will select our patient population. In terms of timing, we expect to have data from the Phase IIb atopic dermatitis study by the middle of next year, while the asthma data should be available by the end of next year. I believe that answers your question. Of course, things can change, and if there are any significant changes, we will inform you. Regarding competitive dynamics, we've observed a great deal of enthusiasm for our study in both atopic dermatitis and asthma, and this is due to a couple of main reasons—actually, three. First, both sites and potentially patients value the very interesting and innovative scientific approach of our program. They recognize that although this is a novel target, it is grounded in well-established biology and clinical experimentation. It's also an oral drug with compelling early data. When you combine all of this, we have seen a substantial amount of enthusiasm, and we hope that this will lead to strong enrollment. This is what we are experiencing so far, but we still have a long way to go before reaching the finish line.

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

Yes. So first, let me apologize. This call has taken the longest that we've ever done. I'm not really sure why. But I want to thank everybody for attending the call. All great questions, so I don't blame our analysts. And you know where to find us. We're very excited about where we are. This is a pivotal time for the company. And so we're excited to engage beyond the call if there are questions, and enjoy the rest of the day.