Kymera Therapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; filed May 6, 2021. Kymera is a clinical-stage biopharmaceutical company developing targeted protein degraders using its Pegasus platform. It has not generated revenue from product sales; reported revenue is from collaborations.
Financial results and liquidity
| Metric | Q1 2021 | Q1 2020 | Change |
|---|---|---|---|
| Collaboration revenue | $18.7 million | $3.4 million | +$15.3 million |
| Research and development | $26.0 million | $12.1 million | +$13.8 million |
| General and administrative | $5.9 million | $2.6 million | +$3.4 million |
| Total operating expenses | $31.9 million | $14.7 million | +$17.2 million |
| Loss from operations | $(13.2) million | $(11.2) million | Loss widened $1.9 million |
| Net loss | $(13.1) million | $(10.9) million | Loss widened $2.1 million |
| Basic and diluted loss per share | $(0.29) | $(10.23) | Prior period included a preferred-stock deemed dividend |
| Cash used in operating activities | $22.8 million | $12.1 million | Use increased $10.8 million |
Margins: No product gross margin is reported; the company has no product sales. Collaboration revenue was below operating expenses, resulting in an operating loss.
Balance sheet at March 31, 2021: Cash and cash equivalents were $53.1 million and marketable securities totaled $382.1 million, for combined cash, cash equivalents and marketable securities of $435.2 million. Current assets were $340.8 million versus current liabilities of $110.1 million. Total assets were $464.6 million, total liabilities $189.3 million, and stockholders’ equity $275.2 million. Accumulated deficit was $141.8 million. The filing reports no conventional borrowings; lease liabilities were $17.5 million in total, including operating and finance leases.
Deferred revenue was $152.6 million, primarily from Sanofi and Vertex collaboration payments. Operating cash use was partly affected by a $17.8 million reduction in deferred revenue. Investing activities provided $44.3 million, mainly from marketable-security maturities; financing activities provided $0.6 million, mainly from stock-option exercises.
Material changes and business developments
- Collaboration revenue rose to $18.7 million from $3.4 million, reflecting $11.6 million recognized under Sanofi and $7.1 million under Vertex; Q1 2020 revenue was entirely from Vertex.
- R&D expense more than doubled, driven by clinical and IND-enabling work across IRAK4, IRAKIMiD and STAT3, platform and exploratory research, and higher personnel and occupancy costs. G&A growth reflected public-company costs, professional fees and increased headcount.
- KT-474 began the single-ascending-dose portion of its Phase 1 trial in healthy volunteers in February 2021. The multiple-ascending-dose portion was on partial clinical hold pending FDA review of interim SAD data.
- The company expected to seek to begin MAD enrollment, including healthy volunteers and later HS and atopic dermatitis patients, in the second half of 2021, subject to FDA removal of the hold. It also expected to submit INDs for KT-413 and KT-333 in the second half of 2021 and, if cleared, begin Phase 1 trials thereafter.
Outlook, risks and contingencies
- Management estimated that $435.2 million of cash, cash equivalents and marketable securities would fund operating and capital requirements into 2025. The estimate depends on assumptions that may prove incorrect. The financial-statement note separately states the funds are sufficient for at least twelve months from issuance.
- Kymera expects increasing R&D and public-company expenses, continued operating losses and negative cash flows, and no near-term product-sales revenue. It may need additional capital; financing could dilute shareholders, impose debt covenants, or require giving up rights through collaborations or licenses.
- Development is early-stage and the targeted protein degradation approach is novel and unproven. Key risks include clinical safety or efficacy, regulatory delay or denial, the KT-474 partial hold, patient recruitment, third-party research and manufacturing performance, intellectual-property protection, competition and future financing needs.
- COVID-19 could disrupt laboratory work, clinical enrollment, suppliers and trial timelines. The filing notes that reduced laboratory staffing and vendor disruptions had been managed with contingency measures, but future effects remained uncertain.
- The company reported no current legal proceedings and no material changes to contractual obligations. It recorded no income tax for the quarter. Disclosure controls and procedures were assessed as effective; no material changes to internal control over financial reporting were reported.
Investor verification points
- Check FDA updates on the KT-474 partial clinical hold, interim SAD data, and the timing and scope of any MAD study.
- Track whether the expected second-half 2021 IND submissions for KT-413 and KT-333 occurred and whether the FDA cleared the programs to proceed.
- Assess cash burn against the stated runway into 2025, including the impact of planned clinical expansion and the distinction between cash, marketable securities and restricted cash.
- Monitor collaboration revenue recognition and remaining deferred revenue, as well as whether milestone or royalty payments are achieved; none had been received as of March 31, 2021.
- Review changes in R&D spending, share count and stock-based compensation, and any financing or collaboration terms that could affect dilution or retained product rights.