Exclusive: $KYMR | Kymera Therapeutics

2,000 words

Aug 9, 2021

Thank you for subscribing! Your support does not go unnoticed and we appreciate you as an early reader of our exclusive research.

Kymera ($KYMR): Our best bet for TPD

Commentary

Kymera is a clinical stage company developing heterobifunctional degraders for immuno-oncology. Kymera’s main asset is KT-474, an IRAK4 degrader being developed for treatment of various inflammatory diseases. KT-474 has recently started Phase I clinical trials. Other assets include KT-413 and KT-333.

KT-474 is a bifunctional degrader of IRAK4, a serine/threonine kinase that plays a key role in Toll-like and Interleikin-1 receptor signaling. Additionally, IRAK4 independently functions as a scaffold for the assembly of the myddosome, a protein complex used by the innate immune system to activate signal transduction pathways. Workers have linked IRAK4 to numerous immune and inflammatory diseases. Traditional small molecule inhibitors of IRAK4 are currently in the clinic from several companies, including Gilead and Pfizer. However, by choosing this target Kymera has an opportunity to highlight an advantage of a TPD based approach, since degrading IRAK4 would halt assembly of the myddosome. Clinical trials for KT-474, focused on Atopic Dermatitis and Hidradentis Suppurativa, are underway. Interim Phase I data suggests that KT-474 is well tolerated and analysis of patient derived peripheral blood mononuclear cells demonstrates that IRAK4 is significantly degraded by a single dose and lasted for at least 6 days.

KT-413 is an IRAK4 and iMiD substrate degrader being developed for the treatment of MYD88-mutant diffuse large B cell lymphoma (DLBCL). Unlike many other B-cell malignancies, Bruton’s tyrosine kinase inhibitors have not been approved for treatment so there is a significant unmet need. KT-413 is framed as a first-in class treatment that is attempting to combines the degrading ability of lenalidomide and KT-474 into a single molecule. MyD88 mutation drives disease progression in 20-25% of DLBCL cases. There are ~7,000 cases of MYD88-mutant DLBCL a year and patients have worse prognosis than those without MYD88 mutated. MYD88 mutation leads to chronic activation of the TLR signaling pathway. Like IRAK4, MYD88 is a protein in the myddosome, so using a degrader of IRAK4 to halt its scaffold ability can stop overactivation of TLR signaling pathway caused by the mutation of MYD88.

While KT-474 may be sufficient on its own for some response, another pathway that plays a role in the progression of the disease relies on IKZF1 and IZKF3, the target of IMiD drugs. So instead of developing KT-474 as a treatment they combined an IRAK4 degrader with an IKZF1/3 degrader that way they can target simultaneously two pathways with a single molecule. Since IMiD are monofunctional degraders they acts as both the ligand for E3 ligase CRBN and proteins of interest IKZF1/3. So linking a IMiD to a binder of IRAK4 creates an IRAK4 and IKZF1/3 degrader. Preclinical data using in vivo and in vitro models demonstrates that KT-413 degrades both IRAK4 and IKZF1/3.

KT-333 is STAT3 degrader being developed for the treatment of PTCL with aberrant STAT3 activation. STAT3 is transcription factor in the JAK/STAT pathway, whose hyperactivation is linked to several types of tumors. Although the oncogenic roles of STAT3 have been published on extensively, there is more recent literature demonstrating that in certain contexts STAT3 is tumor suppressive. Though this is an interesting test case for the ability of modality to drug a target that has traditionally been thought of as undruggable and is linked to numerous cancers, I am somewhat concerned about the potential of adverse effects. However, the STAT3 degrader may rely on a novel E3 ligase referred to Ligase X in Kymera’s presentation that is supposed to be tissue specific. Additionally, demonstrating that a transcription factor can be intentionally drugged in humans would convincingly demonstrate how TPD technologies can expand the druggable space. Preclinical data for KT-3333 has been presented and shows that mutant and wild type STAT3 can be >90% degraded in a several in vivo and in vitro models for lymphomas.

Of the companies in the space, Kymera has the most well-articulated description of their discovery platform and it seems top notch. Their Pegasus platform seems like a combination of in silico software, drugs libraries, pharmacokinetics and pharmacodynamics models, Whole-Body Atlas, and know-how. The Whole-Body Atlas is a tool that maps the expression profile of unique profile of unique E3 ligase. The tool also maps differences in expression between healthy and disease contexts. This is set up to allow Kymera to mix and match the POI with an appropriate E3 ligase and guide the discovery process. In silico experiments are used to rank the how likely it is to discover ligands for a given E3 ligase. Well established proteomic, structural biology, techniques, and screening techniques are used to accelerate the discovery process. This combination of tools could give Kymera an edge going forward, especially if developing tissue specific treatment to limit undesired degradation. If KT-333 is based on a novel degrader and has minimal off target degradation that be amazing proof of the potential of their discovery platform.

We like how Kymera is very science centric and focused on developing tools that will lead to the future success of the company. Their choice of targets are very good, as they are just not focused on a bunch of clinically validated targets with well known inhibitors. Their main assets are focused on degrading a scaffold protein and a transcription factor. This is not the lowest hanging fruit and we find that attractive. In short - they are using their discovery platform to open future avenues and build a scientific moat.

Overview

KT-474 covers multiple markets, which means that the addressable market for this drug would be huge if clinically validated. KT-474’s market includes atopic dermatitis, Rheumatoid, Hidradenitis Suppurativa, among others, where AD’s market is the largest. Other competitors on this track including the previously written $FBRX.
IL-1R/TLR pathway has been validated by the academic field. But the oral-distributed market is still relatively empty. KT-474 can fill this void and be a first-in-class player in this market.
KT-474’s ambition is more than just oncology. It is the first heterobifunctional small molecule protein degrader outside of oncology to enter clinical development.
1
(e.g. inflammation)

KT-474: the main asset of Kymera, with recent positive P1 interim results

Pipeline

Most of the pipeline are still in the discovery stage. The focus is on IL-1R/ TLR and JAK/STAT3 pathways, which are still incredibly nascent. Kymera’s approach selectively obliterates IRAK4 functionality and is one of the few early companies in this exciting new space (along with $CRIS).

Results

KT-474 Phase 1: Positive interim results from Single Ascending Dose portion of Phase 1 trial of first-in-class oral IRAK4 degrader KT-474 demonstrated degrader proof-of-mechanism.
Achieved and exceeded Phase 1 target degradation of 85% within the SAD portion of the Phase 1 trial dosed, with 90% median degradation at the 300 mg dose. Degradation was maintained for >6 days at all dose levels, with no adverse events observed
FDA lifted partial clinical hold on Multiple Ascending Dose portion of Phase 1 trial and Kymera initiated repeat dosing in July 2021

Save the Date

Inaugural R&D Investor Day in 2H21
They are still trying to expand their platform and go for further discovery
Expects to announce a novel program at their R&D day later in the year. They expect the program to enter the clinic in 2022.
KT-474 Phase 1 healthy volunteer data due 4Q 2021 with AD and HS patient cohort data due 1H 2022.
KT-413 preclinical data (MYD88MT DLBCL) expected 2H 2021
KT-333 (liquid & solids) expected Q4 2021

Things to note

Kymera only has one drug in phase 1, and others are all in pre-clinical/discovery stage.
Being in multiple fields not only means larger markets but also more competitors. The drugs need to outcompete multiple players in different markets.
On June 28th, KYMR announced 4M Share Proposed Public Offering of Common Stock. In addition, Kymera granted a 30-day option to purchase up to an additional 600,000 shares of its common stock.
2
The stock price dropped a bit but had strong follow-up strength in the following weeks.

Things we like

“Our vision was, and continues to be, focused on becoming a fully integrated biotech company that will discover, develop and commercialize a new generation of medicines based on targeted protein degradation”

Platform plays need a mix of strong management, prestigious capital, actual science, and the right connections. Kymera seems to have it all. You need to know how to form the right win-win partnerships and keep business development running at all times, while pushing on the right indications and pathways in terms of risk-reward
We believe that an all-star team of board of directors means deep connections across the industry
Compared to the other TPD companies, there are also strong academic collaborators pushing the research end, backed up by a very very robust scientific advisory board
We like the management team and have some confidence in the CEO, even if he recently sold $1.8m worth of shares (~$60 ea). He has a heavy science background with PhD and 7 years at Novartis, but doesn’t seem to carry as strong of a business acumen relative to other biotech CEOs from our experience. See short interview with him here.
Atlas Ventures also did $NTLA. Atlas is a big investor (20%) in KYMR – we believe they know how to make this model work as they sort of helped incubate the company.

Partnerships

Kymera has inked substantial deals with Vertex and Sanofi. The finer details of these deals are on the hush-hush. In 2020, Sanofi signed a deal that gave Kymera $150 million upfront and up to $2 billion in milestone payments to develop IRAK4 degraders for immune-inflammatory diseases. In 2019, Vertex signed a deal that gave Kymera $70 million upfront and up to $1 billion in milestone payments to develop multiple undisclosed targets.

Sanofi and Kymera Therapeutics

Date: July 9th 2020

Amount of $: $150 million upfront with more than $2 billion in potential milestones plus royalty payments

Summary: 2 programs in total (second undisclosed). The R&D focus is on its small-molecule IRAK4 protein degraders.

IRAK4:

Kymera will advance the IRAK4 program through phase 1
Should all go well, Sanofi will then take over, while also leading all clinical development activities for the second program
Kymera holds on to the rights for its IRAK4 program in cancer
Kymera retains the option to participate in US development and commercialization for both programs.
This includes the ability to participate equally in the costs, profits and losses after opt-in, and to co-promote partnered products in the US.

Undisclosed part of deal:

Sanofi will lead all clinical development activities for the second program.
Kymera will have the option to participate in the development of both programs in the US during clinical development.

Vertex and Kymera Therapeutics

Amount of money : 70 million upfront and equity investment to KYMR
Date: May 15, 2019
Summary: a four-year strategic research and development collaboration in order to advance small molecule protein degraders against multiple targets
Platform: KYMR’s Pegasus™ drug discovery platform (see below image): the platform consists of informatics driven target identification, novel E3 ligases, proprietary ternary complex predictive modeling capabilities and degradation tools
Deal details: Kymera is also eligible to receive more than $1 billion in potential payments based upon the successful achievement of specified research, development, regulatory, and commercial milestones for up to six programs optioned as part of the collaboration. In addition, Vertex will pay tiered royalties on future net sales on any products that may result from this collaboration.

Financial Health

Around $435M cash. The company has over 5 years of cash runaway. This calculation takes the upcoming clinical trials into consideration, which will definitely increase the total R&D cost.
ARVN is 70% held by institutions, 9% by insiders, and has a float of 60% (out of 50M shares outstanding).

Who’s with us?

Ownership by Percentage: Atlas Venture Fund 20%, Vertex Pharma 7%, BVF 5.8%, Redmile 5.8%, Baker Bros 4.3%

Price Targets

$69 - Morgan Stanley
$80 - UBS
$85 - HCW

Note: as $KYMR and the rest of TPDs are still in early innings, we will likely update and revisit this company next year after more mature readouts.

https://lifescivc.com/2021/07/targeted-protein-degradation-the-first-proof-of-mechanism-in-a-randomized-placebo-controlled-study/

https://www.streetinsider.com/Corporate+News/Kymera+Therapeutics+%28KYMR%29+Announces+4M+Share+Proposed+Public+Offering+of+Common+Stock/18614934.html