Kymera Therapeutics, Inc. — Q3 2022 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2022. Kymera is a clinical-stage biopharmaceutical company developing targeted protein degraders. It has no drug-sale revenue; reported revenue comes from research collaborations.
Financial performance and liquidity
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Collaboration revenue | $9.6m | $20.3m | $30.7m | $57.6m |
| Research and development expense | $43.9m | $38.3m | $121.1m | $99.5m |
| General and administrative expense | $10.6m | $10.7m | $32.2m | $24.6m |
| Operating loss | $(44.9)m | $(28.6)m | $(122.6)m | $(66.5)m |
| Net loss | $(43.0)m | $(28.6)m | $(119.9)m | $(66.3)m |
| Basic and diluted loss per share | $(0.79) | $(0.56) | $(2.28) | $(1.42) |
- Revenue declined 53% in Q3 and 47% for the nine-month period. Nine-month operating expenses rose 24%; net loss increased 81% year over year. Collaboration revenue is not product revenue.
- Management attributed higher R&D spending mainly to MDM2 IND-enabling work, investment in other programs and the platform, and increased personnel costs; lower direct clinical-program costs partly offset the increases. Nine-month G&A growth reflected public-company, professional-services, facility and personnel costs.
- At September 30, cash and cash equivalents were $155.7m and marketable securities totaled $439.9m, for $595.6m combined. Current assets were $494.0m and current liabilities $91.1m. Total liabilities were $125.6m, including $16.7m of operating and finance lease liabilities; the filing reports no borrowings under a debt facility.
- Nine-month operating cash use was $113.5m, versus $90.6m in 2021. Investing activities provided $70.2m, primarily from net maturities of securities; financing activities provided $151.0m, primarily from the August 2022 PIPE. Cash, cash equivalents and restricted cash ended the period at $161.8m.
Material developments and outlook
- The August 2022 PIPE generated $149.8m of net proceeds. It included 2,769,228 common shares and 3,000,000 pre-funded warrants, exercisable at $0.0001 per share and subject to ownership limits. No warrants had been exercised by September 30.
- Management said the $595.6m of cash, cash equivalents and marketable securities was expected to fund operating and capital requirements at least into 2025. The estimate depends on assumptions that may prove incorrect; the filing also says additional funding will be needed to meet longer-term development and commercialization goals.
- KT-474’s Phase 1 patient cohort in hidradenitis suppurativa or atopic dermatitis was reported completed. Enrollment and dosing were ongoing in Phase 1 trials of KT-333 and KT-413. MDM2 was in IND-enabling development, with IND submission among the company’s stated plans. The filing provides no numerical financial guidance.
- Collaboration revenue recognized in the nine months was $22.1m from Sanofi and $8.6m from Vertex. No milestone or royalty payments had been received under either agreement. A separate collaboration with an unnamed pharmaceutical company was terminated effective April 27, 2022.
- Unrealized losses on available-for-sale securities were $5.3m for the nine months and recorded in other comprehensive loss, not net loss. Management attributed the declines to non-credit factors and reported no credit losses. Higher interest rates contributed to increased interest income.
- Principal risks include clinical safety or efficacy failures, the unproven targeted-protein-degradation approach, trial enrollment and timing, reliance on third-party manufacturers and clinical partners, intellectual-property protection, and the possibility of needing capital on unfavorable or dilutive terms. The company also cited potential COVID-19-related operational and trial disruption.
- The company reported no current material legal proceedings, and management concluded disclosure controls and procedures were effective as of September 30, 2022.
Investor verification priorities
- Track clinical-trial updates for KT-474, KT-333 and KT-413, including safety, efficacy, enrollment and timing; assess progress toward the planned KT-253 IND.
- Reconcile cash burn and collaboration-revenue recognition with the stated runway into 2025, and monitor whether further financing is required.
- Review the PIPE’s pre-funded warrants, potential share dilution, and the unused $250m at-the-market sales authorization.
- Monitor R&D and G&A growth, the planned 2023 occupancy of the new laboratory and office space, and related lease commitments.
- Check future collaboration milestones, reimbursements, opt-in decisions and partner responsibilities; none of the disclosed milestone or royalty amounts are guaranteed.