Earnings Call Transcript - KYMR Q2 2023

Operator, Operator

Hello and welcome to the Kymera Therapeutics Second Quarter 2023 Quarterly Results Call. I'd now like to turn the call over to Bruce Jacobs. Mr. Jacobs, please go ahead.

Bruce Jacobs, CFO

Good morning everyone and welcome to the Kymera Therapeutics quarterly conference call. I'm Bruce Jacobs, Chief Financial Officer at Kymera, and I'll be joined today by Nello Mainolfi, President and CEO; Jared Gollob, our Chief Medical Officer, and I'm also excited to welcome Justine Koenigsberg, Kymera's new Head of Investor Relations to her first Kymera quarterly call. After our prepared remarks, we'll open the call to your questions, as we always do. Before we get started, I'd like to remind everyone that some of the comments that management may make on this call include forward-looking statements as outlined in the press release. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors including those set forth in Kymera's most recent filings with the SEC and any other future filings that the company may make with the SEC. You are cautioned not to place any undue reliance on those forward-looking statements, and Kymera disclaims any obligation to update such statements, except as required by law. With that said, I'll now hand the call over to Nello.

Nello Mainolfi, President and CEO

Thanks Bruce and thank you everyone for joining us today. We're excited to review the progress we've made over the last quarter and discuss how it contributes to achieving our mission of building a best-in-class fully integrated global degrader medicines company. Over the past few months, we've shared updates on our clinical oncology pipeline and preclinical work, including multiple presentations at scientific meetings across the world relating to KT-253, KT-413, and KT-333. I will provide an overview of this progress and Jared will share more details during his remarks. Starting with the most recent addition to our clinical pipeline, we dosed the first patient in the Phase I study of our MDM2 degrader KT-253, which addresses a critical mechanism in cancer biology that has been pursued in the biopharma industry for many years. The data we presented at EHA in June showed that KT-253 has the potential to overcome the inherent limitations of small molecule MDM2 inhibitors against this well-validated target. In preclinical models of ALL and AML, a single dose of KT-253 drove durable tumor regressions showing differentiated pharmacology compared to a small molecule inhibitor. In June, KT-253 was also granted orphan drug designation by the FDA for the treatment of AML. This program exemplifies our unique approach of selecting targets with strong genetic validation in pathways where we believe targeted protein degradation offers the best or only option for an effective treatment, and we look forward to investigating it in a variety of cancers and sharing more on this program, including clinical proof of mechanism in patients later this year. With respect to KT-413, which targets IRAK-4 and IMiDs substrates Ikaros and Aiolos, and KT-333, which targets STAT3, both are continuing in the dose escalation stages of their Phase I studies. As a reminder, our focus this year for these programs is to evaluate the degradation and the safety profile of these first-in-class mechanisms and their biological and clinical impact in the appropriate patient population. We recently shared encouraging data from the trials, showing fidelity of PK/PD translation from preclinical models to patients. At the ICML meeting in June, we shared data demonstrating that both molecules were approaching or were already at the target degradation levels, which we believe, based on preclinical models, are sufficient to achieve antitumor activity without any dose-limiting toxicities observed. Later this year, we intend to provide additional data evaluating antitumor activity in the target patient populations for these two programs. Our first-in-class IRAK4 degrader KT-474 is in development with our partner, Sanofi, for the treatment of TLR IL-1R driven immune-inflammatory diseases with high unmet medical needs, such as hidradenitis suppurativa, atopic dermatitis and potentially others. We're very excited about the potential of KT-474 for patients with inflammatory diseases which currently lack effective oral medicines with a good safety profile, and we expect the Phase II studies in both HS and AD to initiate in the fourth quarter of 2023. This degrader is designed to block TLR-IL-1R-mediated inflammation more broadly compared to monoclonal antibodies targeting single cytokines and enable pathway inhibition that is superior to R4 kinase inhibitors by eliminating both the kinase and scaffolding functions of IRAK4. Jared recently presented the Phase I data from this program at the EADP symposium in Seville, which demonstrated that KT-474 administered to HS and AD patients showed tolerability, PK and PD similar to healthy volunteers, achieved robust degradation in blood and skin, associated with the systemic anti-inflammatory effect, and showed promising clinical activity in both HS and AD. In parallel to our clinical programs, we continue to drive the science of targeted protein degradation and identify first and best-in-class opportunities to transform the treatment of disease. We have several exciting programs in our preclinical pipeline that are designed to address well-validated pathways in areas of significant patient need with multi-billion-dollar revenue potential. We look forward to sharing more details on these programs later this year, early next year in an R&D Day. Along with our clinical and scientific progress, we've worked to ensure that we have the people and resources to build a sustainable, fully integrated company. To that end, we recently appointed Dr. Jeremy Chadwick as Chief Operating Officer, who will serve as a key member of our leadership team to guide the development of our first-in-class programs and scale our capabilities to support our growth. As Bruce mentioned, we're also very happy to welcome Justine Koenigsberg as Vice President and Head of Investor Relations. Justine spent more than 25 years in the industry, and she'll be engaging with many of you on the call in the upcoming weeks. Let me pause here and turn the call over to Jared, who will now cover in more detail recent progress from our clinical oncology programs before turning the call over to Bruce for a financial update.

Jared Gollob, Chief Medical Officer

Thanks Nello. I'll provide a brief recap of where we stand with our clinical programs and what we expect in the coming months. As Nello mentioned, we have begun dosing patients in the Phase I multicenter open-label dose escalation clinical trial, evaluating our investigational MDM2 degrader KT-253, and recruitment in the trial is going well. MDM2 is the crucial regulator of the most common tumor suppressor P53. P53 remains intact or wild-type in close to 50% of cancers, meaning that it retains visibility to modulate cancer cell growth. We believe 253 has the potential to be a highly potent degrader that unlike small molecule inhibitors has been shown pre-clinically to have the ability to overcome the MDM2 feedback loop and rapidly induce apoptosis even with limited exposures. KT-253 has the potential to be effective in a wide range of hematological malignancies and solid tumors with functional P53. We've shown pre-clinically that 253 has superior activity compared to MDM2 small molecule inhibitors and demonstrated greater than 200-fold improvements in both in-vitro cell growth inhibition and apoptosis. Additionally, we presented data at EHA in June demonstrating that a single high dose of 253 administered intravenously in preclinical models of AML and ALL led to greater than 90% MDM2 degradation in tumors within one hour of dosing, strong P53 upregulation, and induction of apoptosis within the first eight to 24 hours, and sustained tumor regressions. In contrast, lower doses of 253 administered more frequently or repeat dosing with an oral MDM2 small molecule inhibitor led only to relatively weak P53 activation and modest tumor growth inhibition. These preclinical results suggest that a pulse IV dosing regimen of 253 has the potential for an improved efficacy and safety profile over MDM2 small molecule inhibitors currently in the clinic. The Phase I trial is evaluating the safety, tolerability, PK/PD and clinical activity in patients with relapsed or refractory high-grade myeloid malignancies, ALL, lymphomas, and solid tumors. Patients in the Phase I dose escalation study are receiving IV doses of 253 administered once every three weeks. The open-label study is intended to identify the recommended Phase II dose and is comprised of two arms with ascending doses of 253 in each arm. Arm A consists of patients with lymphomas and advanced solid tumors and arm B consists of patients with high-grade myeloid malignancies and ALL. Dosing in arm B will start once a pharmacologically active dose has been reached in arm A, at which time dose escalation will proceed in parallel across both arms and continue until the maximum tolerated dose is established for each arm. We plan to share initial safety and proof of mechanism data from the Phase I clinical trial later this year. Now, turning to our other two ongoing oncology trials. STAT3 is a transcriptional regulator that has been linked to numerous cancers as well as to inflammatory and autoimmune diseases. KT-333 is being developed for the treatment of STAT3-dependent hematological malignancies and solid tumors. The Phase I clinical trial of KT-333 is designed to evaluate the safety, tolerability, PK/PD and clinical activity of 333 dosed weekly in adult patients with relapsed and/or refractory lymphomas, leukemia, and solid tumors. In June, at ICML, with a data cutoff date of May 1st, 2023, Kymera shared that 13 patients received the mean of five doses across the first four dose levels of the trial, including patients with solid tumors as well as CTCL and PTCL. While the fourth dose level was still open for accrual at that time, data reported from dose levels 1 through 3 found plasma exposure increased with dose reaching levels close to those predicted to be efficacious and demonstrated dose-dependent STAT degradation with up to 88% mean maximum reduction in peripheral blood mononuclear cells with evidence of STAT pathway inhibition and down regulation of inflammatory biomarkers. Degradation profiles at dose levels 3 were near levels of knockdown that led to antitumor activity in preclinical models. We shared at ICML that there were no dose-limiting toxicities observed in the study. The Phase I dose escalation stage is ongoing, recruiting broadly across solid and liquid tumors. KT-413 is a novel heterobifunctional degrader that targets degradation of both IRAK4 and the IMiDs substrates Ikaros and Aiolos. KT-413 was designed to address both the INR TLR and the type 1 interferon pathway synergistically to broaden activity against MYD88 mutant B-cell malignancies. The Phase I clinical trial is designed to evaluate the safety, tolerability, PK/PD, and clinical activity of KT-413 administered as an IV infusion once every three weeks to adult patients with relapsed and/or refractory B-cell Hodgkin lymphoma. In conjunction with the ICML meeting, we shared that as of June 1st, the first three dose levels have been completed and the fourth was accruing patients. At that point, five patients were treated across dose levels 1 through 4 and received a mean of 2.2 doses, including patients with transformed activated B-cell like diffuse large B-cell lymphoma, follicular lymphoma, marginal zone lymphoma, and plasmacytoid lymphoma, all of whom were MYD88 wild-type except for one who had a MYD88 gain of function mutation. Data reported across dose levels 1 through 4 showed plasma exposure increase with dose, reaching levels close to those predicted to be efficacious. KT-413 achieved dose-dependent degradation of up to 70% IRAK4 and 96-100% Ikaros and Aiolos in peripheral blood mononuclear cells after a single dose. Degradation profiles at dose levels 3 and 4 were consistent with knockdown levels associated with antitumor activity in preclinical models of MYD88-mutant lymphoma. We showed at ICML that there were no dose-limiting toxicities or drug-related neutropenia observed in the study. The Phase I dose escalation portion of the trial is ongoing, recruiting a broad population of B-cell lymphoma patients. We look forward to sharing data evaluating the antitumor activity of KT-333 and KT-413 in their respective target patient populations later this year. Finally, the KT-474 Phase II studies in both HS and AD, which are being advanced by Sanofi, are expected to commence in Q4 2023, first in HS and followed shortly thereafter in AD. We will share more details around the trial as we approach the dosing of the first patients.

Bruce Jacobs, CFO

Thanks Jared. I will quickly cover the financials before turning the call back to Nello for some concluding remarks. For the quarter, we recognized $16.5 million of collaboration revenue, and at the end of the quarter, our deferred revenue total on the balance sheet was approximately $45 million. That reflects partnership revenue we expect to recognize over the next several years, excluding the receipt of any potential future milestones. With respect to operating expenses, R&D for the quarter was $45.8 million. Of that, approximately $5.7 million represented non-cash stock-based compensation; the adjusted cash R&D spend of $40.1 million, which excludes that stock-based compensation reflects a 7% increase from the comparable amount in the first quarter of 2023. On the G&A side, our spending for the quarter was $14.1 million, of which $5.5 million represented non-cash stock-based compensation; the adjusted cash G&A spend of $8.6 million, again excluding stock-based compensation, reflects a 9% increase from the comparable amount in the first quarter of 2023. We exited the first quarter with a cash and equivalents balance of approximately $472 million. As we shared earlier in the year, we believe that our cash runway extends into the second half of 2025, a projection that includes milestones only related to the start of the first two Phase II trials for KT-474, both of which we stated today are expected to occur in 2023. I'll now turn the call back to Nello.

Nello Mainolfi, President and CEO

Thanks Bruce. As I said, we're very excited to be soon in Phase II with KT-474 in two indications as well as by the progress we've made on our oncology clinical programs. Our rapid progress in building our pipeline, generating clinical momentum and advancing the science of targeted protein degradation gives us confidence that Kymera will be able to capitalize on the untapped potential of this powerful modality to enhance the treatment of disease and improve patients' lives. We look forward to sharing exciting updates on our clinical programs, platform, and company in the second half of the year. I will now hand the microphone to the operator so we can take your questions.

Operator, Operator

Thank you. At this point, we will open the call for questions. Thank you for waiting. Your first question comes from Marc Frahm from TD Cowen. Your line is open.

Marc Frahm, Analyst

Thanks for taking my questions. Maybe start off with KT-333. Monotherapy clinical responses are kind of expected to be only relevant for maybe a fraction of the opportunity and that segment is a bit of a different hypothesis than the rest of the population. Can you look to your kind of how you plan to approach dose selection as you get this larger data set later this year?

Nello Mainolfi, President and CEO

Thanks Marc, so Nello here. So, maybe I'll just take the first part of the question, and then I'll pass it to Jared. So, just to remind everybody, our STAT3 program, which encompasses a liquid tumor opportunity, a solid tumor opportunity and opportunities outside of oncology, started with our first clinical endeavor with KT-333. So, obviously, it's a broader opportunity across several potential indications, and we have clear hypotheses that we're pursuing in the clinic. The first one, which is, in our mind, the earliest one that could lead to proof of concept is single-agent activity in a subset of T-cell lymphoma leukemias that we've discussed in the past, including PTCL, CTCL and LGL leukemia, which obviously also have subsets. The reason why we have focused on those indications as single-agent opportunities is because we've seen pre-clinically that when we dose our degrader, KT-333 once a week or even once every two weeks, we're able to achieve profound antitumor effects as single agents, and we can actually rationalize it translationally by the fact that many patients in those particular subsets have either STAT3 mutations or pathway activation. So we have a biomarker activity as well as biomarker sensitivity in those opportunities. The Phase I dose escalation includes those particular subtypes as well as solid tumors. As I've said in the past, we said in the past, in solid tumors, the opportunities are based on our preclinical data in combination. We've talked about combinations with immune therapy. We've mentioned combinations with targeted agents that we haven't discussed externally yet, and so now circling back to your question, just so that it's all clear. So, in terms of single-agent activity, the antitumor activity that we expect to be able to talk about later in the year will come from a subset of patients from these Phase I dose escalation, and we said in the past, a handful of patients that might include CTCL, PTCL and LGL. With regards to how we think about selecting, I assume you meant the Phase II dose, maybe I'll let Jared comment on that.

Jared Gollob, Chief Medical Officer

Sure. So Marc, we've always stated that our dose selection will be based on a combination of PD and safety. We've looked at our preclinical data, especially in these STAT3-dependent T-cell malignancies where we found that 90% or greater knockdown for 48 to 72 hours is associated with antitumor activity. So, our aim is to be able to get to a dose that gives us at least that sort of a profile, 90% or greater knockdown in peripheral blood and/or in tumors where we can get tumor biopsies, that's lasting 48 to 72 hours in association with a favorable safety profile. That's the sort of a PD profile that we want to be able to take into the Phase I expansion. So, our recommended Phase II dose will likely be a combination of being able to see that level of PD along with safety. If possible, as Nello mentioned, if in a handful of patients in the target patient population with the STAT3-dependent T-cell malignancies, we can see a few responses at those doses that are giving us a sense of PD and safety that would give us even more confidence in bringing that dose into the next phase, which are these Phase I expansions, which right now are slated to be in these T-cell malignancies like CTCL, PTCL, and LGL as well as in solid tumors.

Marc Frahm, Analyst

Okay, that's very helpful. And then maybe a similar topic question, but for MDM2, can you just walk through the depth of prediction you want to get and with that pulse dosing? But how long do you think you need to be at 90%? Kind of what's the minimum there?

Nello Mainolfi, President and CEO

I'll start, and if needed, Jared can add. The advantage of the MDM2 program and our development approach is that we aim to replicate findings from cancer genetics, where the deletion of the MDM2 gene leads to a quick and complete dependence on this gene in various cancer cells with wild-type P53. From our experimental observations, the gene deletion is permanent, while protein degradation is reversible. Your question revolves around how long we need to maintain the target depletion to see effects. In our preclinical models, we found that just four to eight hours of exposure to a degrader that efficiently causes degradation is enough to significantly trigger apoptotic cell death. Thus, instead of the typical requirements for programs, which demand sustained degradation for either 48 or 72 hours, this program only requires a few hours of treatment to elicit a strong apoptotic response.

Operator, Operator

Thank you. Your next question comes from the line of Brad Canino from Stifel. Sir, your line is open.

Brad Canino, Analyst

Good morning. For KT-333, now that you're getting a handle on the clinical PK/PD, should we expect you to open a healthy volunteer study to dial in the STAT3 degradation and green kinetics that you need based on your I&I models in order to prepare for a potential Phase I/II I&I study? Or is this going to be pursued by a separate asset altogether?

Nello Mainolfi, President and CEO

Brad, thanks. This is a great question that I'm going to answer high level now and then hopefully, I think when we meet in an R&D Day that, as I said, most likely late this year or early next, I think we will cover hopefully, with more details that question. But I can say right now that we're evaluating opportunities both for a potential 333 transition into immunology as well as other particular assets or other formulations. So, maybe I'll leave it at that. This is where we're investigating. But I think what we take from this Phase I study, which is not to be underestimated is the really good translation that we've seen not only in PK and PD, which to be honest with this company has been constant now for multiple programs, but more importantly, on safety. So, we feel now we're in a place where we can much more comfortably plan outside of oncology clinical studies for a first-in-class target that has obviously very broad biological applications. So sorry if I can't answer it with details, but hopefully, this gives you an idea about what we're thinking about.

Brad Canino, Analyst

That's all right. I look forward to that update. Let me also ask on MDM2. When you think about the safety data from the prior small molecule inhibitors and then particularly knowing that your target population is AML where the blood count recovery is going to be important for those patients. What are you looking to see in terms of platelet impact thrombocytopenia rates in this first look at a confidence in the profile for continued development? Thank you.

Nello Mainolfi, President and CEO

Thank you, Brad. I'll let Jared address your question in detail, but I want to add that our clinical development team has crafted a well-thought-out plan to assess the pharmacokinetics, pharmacodynamics, safety, and efficacy in solid tumors, liquid tumors, and myeloid malignancies. We plan to separate the dose escalation for AML and ALL from other indications since the contexts differ significantly. Currently, we are escalating doses in solid tumors and other liquid tumors until we determine the clinically active dose, and we will only move into the AML space once we are active clinically to ensure that safety assessments do not adversely impact the evaluation of clinical activity. Additionally, the mechanism of this molecule involves rapid degradation with recovery in the first three weeks, which should help us establish a therapeutic index to assess the clinical activity of MDM2 degradation in MDM2 PC3 sensitive tumor types. Like all programs in Kymera's pipeline, we aim to examine this aspect during early clinical development, specifically in Phase I or late Phase I studies. Our goal in Phase I is to develop a therapeutic index, and if we can demonstrate this effectively, it would significantly reduce the risks associated with this program and allow us to confidently invest in its development. If we cannot achieve this, we will be prepared to make strategic decisions. This is the philosophy we apply across all our programs. Jared, could you share your thoughts on how we are approaching thrombocytopenia and any related events anticipated from P53 upregulation?

Jared Gollob, Chief Medical Officer

Sure. Well, I think as you just alluded to, with this hit-and-run approach of dosing once every three weeks, and based on our GLP tox data, our expectation is that our sort of depth of myelosuppression and/or the duration of myelosuppression will be less than what is seen with the small molecule MDM2 inhibitors, which as Nello just said, should give us a superior therapeutic index. With that being said, in AML, of course, the tolerability of myelosuppression is much higher. In fact, one does expect to see a certain degree of myelosuppression as you're clearing blasts and having an effect on the bone marrow that usually would then lead to clinical responses, hopefully complete responses, and so that's why we've separated out these two arms, the high-grade myeloid malignancies and ALL separate from the arm looking at solid tumors and lymphomas because there is a different level of tolerability in terms of how clinicians view myelosuppression. So, we may see myelosuppression in AML patients, which would be a good thing because that would be telling us that we're seeing a response to MDM2 inhibition. But again, we do expect the depth and duration of that myelosuppression to be less and to give us a better therapeutic index. Likewise, in solid tumors, we do expect to see less myelosuppression in that particular population, which could allow us more traction in developing the drug in patients with lymphoma and solid tumors compared to the small molecule inhibitors that have been limited in their dosing by the dose-limiting toxicities of GLP tox as well as myelosuppression.

Operator, Operator

Thank you. Your next question comes from the line of Chris Shibutani from Goldman Sachs. Sir, your line is open.

Chris Shibutani, Analyst

Great. Thank you very much. Good morning. Two questions. So on KT-474, it certainly is reassuring that Sanofi has formally committed, if I understand the conversation that we've had in June that you guys, it seemed as if AD was a trial that was going to start in 2023, perhaps with a little less clarity and possibly to follow in HS, perhaps have gotten that mix. But to be clear, I think the update today is that both trials will commence by the end of this year. Is that the case? And then, Bruce, what kind of additional sort of timeline should we think about in terms of milestone payments as this program progresses? And are you guys advancing 474 or any of the other tool compounds through Phase I type work potentially to look at additional indications? I know, Nello, you've highlighted mechanistically, biological rationales to go into other broader categories, RA, lupus, et cetera? Thank you.

Nello Mainolfi, President and CEO

Yes, thanks, Chris. I'll address several of your questions, which were very thoughtful, and then I'll let Bruce touch on the milestone question. To clarify, for the past seven months since December, we've indicated that Sanofi would take over the clinical development of KT-474 and that they would initiate at least one Phase II study in 2023, specifically the HS Phase II study. They also committed to starting an AD Phase III study, but we did not specify when the Phase I would commence, and it was uncertain whether that would occur in 2023. Today, we are updating that the Phase II study for AD will indeed begin in 2023. The HS study will go first, followed by the AD study, both scheduled to start in the fourth quarter of 2023. We appreciate Sanofi for allowing us to share more details and for expediting the launch of the second Phase II study. Regarding other indications, before Bruce comments on milestones, we are continuing discussions as collaborators about additional opportunities. We both believe there are further options, both mechanistically and clinically, that align with the profile of an IRAK4 degrader. While we can't share more details at this time, we will provide updates as things progress.

Bruce Jacobs, CFO

Yes, and thanks, Chris. This is Bruce. Just to clarify on the milestone. So what we've said in the past is that the first Phase II patient does generate milestones by indication up to a certain number, and we said at least two and hadn't commented before that. Beyond that, I should say the first two milestones for HS and AD are included in our runway guidance, but no other milestones. And then I think I heard you ask about the additional program or the additional molecules that we might generate targeting IRAK4 that was contemplated in the initial collaboration agreement. So, the work that is ongoing there has the potential to generate milestones as well. We just haven't said specifically what those critical events are and the timing. But I think that's something you'll hear updates from us on over time as well.

Chris Shibutani, Analyst

Great, and you said the initial collaboration agreement, there was an update to that collaboration agreement in November of 2022. So, that's still contemplated in this most recent active agreement, correct?

Bruce Jacobs, CFO

Yes, exactly. When we discussed the amendment, we made the comment at the time that the aggregate milestones remain unchanged and that includes with respect to the follow-on compound molecules that may be generated as well. So, the aggregate total remains unchanged.

Chris Shibutani, Analyst

Thanks. Confirmation reassuring progress. Appreciate it.

Operator, Operator

Thank you. Your next question comes from the line of Michael Schmidt from Guggenheim. Your line is open.

Michael Schmidt, Analyst

Yes, good morning. Thanks for taking my questions. I had one on KT-413, where we've seen the updated Phase I data at ICML recently, it looks like you're achieving target degradation already at dose level three or four. Can you talk a bit about how the neutrophil recovery in neutropenia has tracked with your expectations based on the cyclic dosing and also perhaps talk about the scope of the clinical update later this year and expectations for that? Thank you so much.

Nello Mainolfi, President and CEO

Thanks Michael. So, maybe I'll start with the second part of your question, and then I'll let Jared address the first part of your question. With regard to expectations, so for both programs, as we said, the goal is really to continue and evaluate PK/PD safety and potentially complete the dose escalation portion of the Phase I study, and as you know, the goal of dose escalation would establish safety in this case, also PK/PD. But as you know, in clinical development, especially in oncology, it is important to assess early signs of antitumor activity to solidify the hypotheses of these oncology programs providing benefits to patients. So, as part of the dose escalation for both programs, we hope to be able to report on a complete data set on the PK/PD and safety as part of the dose escalation study and then hope to have a handful of patients from each of the studies that fit the sensitive patient population, where we would be able to evaluate the antitumor activity of these first-in-class mechanisms. What we're now going to be able to discuss is obviously the extent of response rates and metrics just because we believe that those are more scientifically sound in a better-designed study to evaluate the clinical activity, which we believe is expansion cohorts and beyond. But again, antitumor activity, validation of these mechanisms, and the ability to correlate degradation to impact on tumors is what we hope to be able to share later in the year. So, maybe, Jared, you can talk about the neutropenia question.

Jared Gollob, Chief Medical Officer

Sure Mike. So, in terms of your question about neutropenia, when we provided our update back in June around the ICML meeting, we indicated that we have not seen any of those toxicities or any drug-related neutropenia, which was very encouraging to us as you mentioned because we were seeing strong amid activity with greater than 90% knockdown of Ikaros and Aiolos, but we're not seeing neutropenia. Yes, we're expecting to see some decrease in the neutrophil count. We have seen some decrease in neutrophils followed by recovery, but it hasn't risen to the level of being neutropenia, which is in line with our preclinical data, our GLP tox data, where we did see some decline in neutrophils but that we saw a recovery prior to the next dose three weeks later. So, the use of this every three-week dosing schedule, at least so far in the clinic, has been successful from a safety standpoint and helping us to mitigate any sort of dose-limiting neutropenia, which we think is important because we do have this potent activity as part of KT-413, of course, along with the strong IRAK4 lowering activity that our ability to dose escalate without being limited by myelosuppression, especially neutropenia or by other events is something which we see as being very encouraging so far.

Operator, Operator

Thank you. Your next question comes from the line of Kalpit Patel from B. Riley Securities. Sir, your line is open.

Kalpit Patel, Analyst

Yes, hey, good morning and thanks for taking the question. For the planned Phase II study in HS, can you give us any color on the expected trial design? And maybe what types of patients you're planning to include in that trial? Would you allow the use of prior HUMIRA in that study? And then I have a follow-up.

Nello Mainolfi, President and CEO

Kalpit, thanks for the question. It's a great question. Unfortunately, we're not in the position to comment on it. But I think soon enough, I believe there'll be updates on clinicaltrials.gov. At that point, we might be able to add some color around what's been disclosed. That's what we've agreed with our partner at this point.

Kalpit Patel, Analyst

Okay, got it. And what are you looking in terms of expectations for that trial in HS? Are you looking to beat or match what HUMIRA has performed historically? Or do you think there's a slight wiggle room here that you don't need as much efficacy because you have an oral option?

Nello Mainolfi, President and CEO

Another great question. I'm glad we're starting now to set expectations. So, let's start with what we've seen so far. We've seen completely encouraging activity. I would say in both HS and AD. Obviously, your question was focused on HS, which is okay. But I would say on both indications, we look at this point, a well-tolerated potent oral option that can help patients manage these really difficult diseases, especially the moderate to severe cases, and our goal is to have an oral option that is well-tolerated, works well and has an impact on patients, and that we believe can be competitive with other agents that have been approved in those patient populations. I think once we complete the study, and we have a data set that is placebo-controlled and solid, we can then start to discuss if that type of data set is repeated in the Phase III study, where is the commercial strategic placement of this particular drug. But I think right now, it's premature to discuss the commercial option. All I can say in terms of clinical and patient impact, we are planning to develop this drug. And to be honest, other than that you'll hear about in the future to fill a need, which again, these are my words, is an oral option for patients that don't have one that is both well-tolerated and active. Our limited experience, I would say limited again in both HS and AD running studies in patients has been that regardless of the activity of existing options, patients are looking for well-tolerated, easy to take oral drugs, and that's what Kymera is going to be focused on in the next few years.

Operator, Operator

Thank you. Your next question comes from the line of Vikram Purohit from Morgan Stanley. Sir, your line is open.

Vikram Purohit, Analyst

Hi, good morning. Thanks for taking our questions. So, one follow-up, and apologies if this was discussed and we missed it. But on the topic of additional potential indications for KT-474 beyond HS and AD, what is your in Sanofi's kind of cadence of decision-making there? Is that going to be dependent on data from the planned Phase II studies in these two indications? Or is that a separate decision-making process that you're going through with Sanofi at this time? And then secondly, I'm not sure to the extent you can talk about this, Nello, just given your recent remarks on the other question around HS. But has the thinking around the design for the HS study and the patients you might enroll been impacted at all by recent competitive developments in that indication? Thanks.

Nello Mainolfi, President and CEO

Thank you, Vikram. Both are great questions, and I can address both. First, I can't speak for Sanofi. What I can say is that as a responsible drug development organization, we are evaluating potential opportunities for an asset like this. Kymera has been doing this for a few years now, so we don't need to reinvent the wheel too often. The conversations focus on potential opportunities beyond HS and AD. I can't comment on the decision-making process. From my perspective, generating promising data in HS and AD may influence other indications that are closely related, mechanistically and biologically. However, it will not affect indications that are biologically and pathologically distinct from HS and AD. If you look at the list of potential indications on our website, you'll see many opportunities that align with both categories. I'll leave it at that for now. Regarding your second question about whether other studies have impacted our clinical trial design, the answer is no. The Phase II study we designed with Sanofi aims to evaluate safety and clinical activity of an IRAK4 degrader in HS and AD. We believe our design will answer that question. Our goal is not to compare the drug's clinical superiority or inferiority to other drugs. We recognize there is a clear need in HS and AD, and I would also argue in COPD and IPD, for well-tolerated and effective oral medications, which is what we're working to develop.

Operator, Operator

Thank you. Your next question comes from the line of Derek Archila from Wells Fargo. Your line is open.

Derek Archila, Analyst

Hey good morning. Thanks for taking my questions. Just a follow-up to an earlier question on KT-333 or potentially another STAT3 degrader you might develop for I&I indications? Is this something that you would explore yourself? Or is this purely for something that you would look to partner KT-474?

Nello Mainolfi, President and CEO

No, our strategy is not to partner immunology programs. We did partner KT-474 in 2020, and at that time, it was the right decision for the company, but that is not our primary strategy going forward. You should not expect that the next immunology program will be partnered. It will depend on various factors, but our primary approach is not to partner these programs before they reach key inflection points in general.

Operator, Operator

Thank you. Your next question comes from the line of Kelly Shi from Jefferies. Your line is open.

Unidentified Analyst, Analyst

Hi, this is Jasmine on for Kelly. Thanks for taking our question. So, one of your three objectives is to deliver two new INDs, can you provide more color in terms of the indication and targets and how the learnings from the current clinical programs have instructed your plan? Thank you.

Nello Mainolfi, President and CEO

Yes, it's a great question. I'm not going to go into the specifics of the numbers there. But just generally, what I said earlier is that we've learned a lot from the first seven years of this company. I think it's fair to say we're pioneering protein degradation, and for sure, we're pioneering its pre-integration in immuno-inflammatory diseases. Lots of learnings on how to develop at least early to discover an early development of immune-inflammatory degraders that have the potential to be best-in-class oral options. And so I think the expectation to have is that there'll be a lot of focus on those particular type of programs, large opportunities, unmet needs, oral immune-inflammatory drugs, and other indications. But I would say that the expectation is a lot of focus in that particular area.

Operator, Operator

Thank you. Your next question comes from the line of Rich from Credit Suisse. Your line is open.

Unidentified Analyst, Analyst

Morning. This is Grace on for Rich. Thank you for taking our question. Just wondering for the Phase II study, how are you thinking about positioning that in lines of therapy in the Phase II study? Are they trying to stay broad? Or will you narrow a more specific patient population in the study? Thank you.

Nello Mainolfi, President and CEO

Thank you. I addressed this earlier. Currently, we are developing a drug that we believe has the potential to be safe, effective, and accessible to a wider range of patients who are not currently served by existing therapies. When we discuss labels and commercial positioning, that will occur later in clinical development. At this time, we have no reason to believe we will face any limitations.

Operator, Operator

Thank you. The last question in the queue comes from the line of Geoff Meacham from Bank of America. Your line is open.

Unidentified Analyst, Analyst

Good morning. This is calling in for Geoff Meacham. Thank you for the question. Just a follow-up on business development. Aside from immunology, are you considering business developments for your other therapeutic areas? If so, what are some key factors you consider when making these decisions?

Nello Mainolfi, President and CEO

Yes, we have addressed this topic in the past, so I’ll keep it brief. Our company has a wide-ranging pipeline and serves as a platform that fosters ongoing innovation. We are open to exploring potential partnerships that could create synergies. However, I can't share specific details about areas or programs at this time. This sentiment will likely remain relevant for a company like Kymera, which has a strong capability to deliver potentially groundbreaking therapies.

Operator, Operator

Thank you. I'm showing no further questions in the queue. I'll now hand the call over to Justine for closing remarks.

Justine Koenigsberg, Head of Investor Relations

Thank you. And thank you, everyone, for participating in today's call. I am very excited to join the Kymera team and look forward to working with many of you going forward. In the meantime, please don't hesitate to reach out to me or Bruce if you have any follow-up questions. Thank you and this concludes today's call.

Operator, Operator

This concludes this conference. You may now disconnect.