KYMERA THERAPEUTICS THIRD QUARTER 2026 RESULTS CALL - KYMERA THERAPEUTICS INC

Financial Performance:

• Reported R&D expenses were $128.5 million (excluding $10.9 million in stock-based compensation), an 8% increase from Q2 2026.
• Reported G&A expenses were $18.7 million (excluding $7.9 million in stock-based compensation), representing a 14% decrease from Q2 2026.
• Adjusted cash G&A was $10.8 million.
• No collaboration revenue was recognized in Q3 2026; no further collaboration revenue is expected in 2026 as milestones with Sanofi and Gilead were fully recognized in Q2.
• Ended Q3 2026 with $1.6 billion in cash, cash equivalents, and investments, providing a runway into 2029.
• Financial position supports advancement of KT621 Phase 3 studies in AD and initial Phase 3 stages in asthma, alongside KT579 Phase 1b.

Guidance and Future Outlook:

• KT621 (AD): Expect Phase 2b data readout by year-end; plan to initiate Phase 3 in AD by mid-2027 pending data and FDA alignment.
• KT621 (Asthma): BREATH study ongoing with top-line results expected in late 2027; data will support Phase 3 initiation in respiratory indications.
• KT579: Plans to advance into Phase 1b lupus trial (Lumora study) early next year.
• Quiet Period: Entered a quiet period starting next week ahead of Stat 6 (KT621) data; no further commentary on the program until results are reported.
• Pipeline Expansion: Next undisclosed program introduction delayed until 2027; goal to advance one program to Development Candidate annually.
• Other Programs: Sanofi advancing KT485 (IREC4) in Phase 1; Gilead advancing KT200 (CDK2) with IND planned for 2027.

Business Segments and Product Lines:

• KT621 (STAT6 Degrader): Phase 2b (Broaden 2) completed 16-week placebo-controlled portion; 98% of eligible patients enrolled in 52-week open-label extension. Market research suggests high demand for oral therapies due to barriers with injectables/box warnings.
• KT579 (IRF5 Degrader): Completed Phase 1 in healthy volunteers; robust degradation (>90% in top 5 cohorts) and functional modulation of inflammatory cytokines, interferon response, and B-cell biology. Moving to Phase 1b (Lumora) in lupus patients (approx. 30 patients, 16 weeks).
• Pipeline Strategy: Focus on building a world-class pipeline of wholly-owned immunology programs targeting fundamental disease pathways; potential to expand KT579 beyond lupus to IBD, Sjogren's, and RA based on mechanism.
• Market Expansion: Expect KT621 to expand the market for advanced systemic therapies in atopic dermatitis, potentially capturing patients currently untreated due to reluctance to use injectables, similar to trends seen with JAK inhibitors (upadacitinib) in psoriasis.

Market and Competitive Landscape:

• Atopic Dermatitis: 6-9 million patients in US (12+); only ~400,000 (5%) on advanced systemic therapies. Main barrier is preference for oral over injectable biologics.
• Therapeutic Profile: KT621 aims to be the first safe, effective oral for Type 2 inflammation; efficacy expectation is "ballpark" of Dupilumab, though market success is driven by oral convenience rather than superior efficacy alone.
• Competitive Landscape: Competitors like Dupilumab dominate injectable space; oral options (e.g., JAK inhibitors) face safety/efficacy perception hurdles.
• IRF5 Mechanism: Historically difficult target; KT579 validates the degrader platform against undruggable transcription factors.

Risks and Challenges:

• Efficacy Uncertainty: Final efficacy of KT621 relative to biologics (e.g., Dupilumab) and impact on endpoints like itch (IL-31 reduction) to be confirmed by upcoming data.
• Safety Monitoring: Need to monitor for expected safety signals (e.g., conjunctivitis) for KT621; IRF5 degradation safety in patients to be validated in Phase 1b.
• Market Adoption: Success depends on overcoming patient/physician hesitation regarding injectables and proving oral efficacy is sufficient.
• Regulatory: Phase 3 initiation for KT621 is contingent on supportive data and FDA alignment.
• Data Sensitivity: Competitive pressures led to limited data sharing on specific dose-response curves and biomarker saturation levels to protect IP.

Management Commentary and Tone:

• Tone: Highly confident and celebratory regarding the "impeccable human translation" of the degrader platform across multiple programs.
• Strategy: Emphasizes the compound effect of learnings across seven first-in-class degraders entering the clinic.
• Confidence: Management expressed strong belief in KT579's ability to modulate disease biology in lupus and the market potential of an oral STAT6 degrader.
• Communication: Adopted a cautious stance on specific efficacy comparisons and dose-response details, citing competitive reasons and the need to preserve data for future disclosures.

Analyst Questions and Answers:

• Lupus Trial Design: Phase 1b (Lumora) will enroll both interferon-high and low patients to avoid premature subset selection; steroid taper will be incorporated; study focuses on biomarker movement and clinical outcome measures.
• Dose Selection for KT579: Saturation observed at dose level 3; multiple dose options available for Phase 1b, selection based on achieving >85% degradation required for biology.
• KT621 Placebo Mitigation: Broaden 2 study focused on quality site/investigator selection and strict patient criteria, leading to early enrollment and mitigation of high placebo response.
• Irving 5 Safety: Preclinical and Phase 1 data show no signal regarding infection risk; target redundancy in IRF5 family considered safe for long-term use.
• Dosing Frequency: Drug half-life is in hours, allowing for rapid reversibility if safety issues arise; currently dosed once daily.
• Future Indications: KT579 shows potential in IBD, Sjogren's, and RA; KT621 intended for all Type 2 inflammatory indications beyond AD and asthma.
• Financial Outlook: R&D expenses expected to increase gradually in 2027, accelerating with KT621 Phase 3 initiation mid-2027; runway extends to 2029.
• Conjunctivitis: Mechanistically expected for KT621; absence would be a differentiating factor to discuss post-data.

Other Key Points:

• KT579 Biomarkers: Demonstrated median cytokine reduction of 87-94%, 98% inhibition of interferon-beta, and modulation of B-cell transcripts in healthy volunteers.
• Platform Validation: Repeated success in translating preclinical data to human proof-of-mechanism across STAT6, IRF5, and other programs.
• Market Research Insight: Patients and physicians prefer oral treatments that do not require the high efficacy threshold of biologics if safety and convenience are superior, citing examples of upadacitinib and JAK inhibitors.
• Data Presentation: Company decided to retain some dose-response biomarker data under non-disclosure to maintain competitive advantage.
• 2027 Catalysts: Major catalysts identified as KT621 AD data (end of 2026) and KT621 asthma data (late 2027), followed by Phase 3 launches.