Kymera Therapeutics, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report; the supplied filing text does not provide a separate standalone fourth-quarter income statement.
Business context
Kymera is a clinical-stage biopharmaceutical company developing small-molecule targeted protein degraders through its Pegasus platform. Its programs focus primarily on immunology and oncology. No product has been approved, and the company has generated no drug-sales revenue; reported revenue comes from collaboration arrangements.
Financial and liquidity highlights
| Metric | FY2023 / December 31, 2023 | Prior comparable period |
|---|---|---|
| Collaboration revenue | $78.6 million | $46.8 million in FY2022 |
| Research and development expense | $189.1 million | $164.2 million in FY2022 |
| General and administrative expense | $55.0 million | $43.8 million in FY2022 |
| Total operating expenses | $244.1 million | $208.1 million in FY2022 |
| Loss from operations | $165.5 million | $161.3 million in FY2022 |
| Other income, net | $18.6 million | $6.4 million in FY2022 |
| Net loss | $147.0 million; $2.52 per share | $154.8 million; $2.87 per share in FY2022 |
| Cash used in operating activities | $102.8 million | $153.1 million in FY2022 |
| Cash, cash equivalents and marketable securities | $436.3 million | $559.5 million at December 31, 2022 |
| Accumulated deficit | $530.8 million | $383.8 million at December 31, 2022 |
Current assets were $405.3 million and current liabilities were $85.7 million at year-end. The filing reports operating lease liabilities of $82.1 million and finance lease liabilities of $2.6 million; it does not report conventional borrowings in the supplied financial statements. Gross margin is not presented and is not a meaningful operating measure for the company’s current collaboration-led, pre-commercial business.
Management expects cash, investments, first-quarter 2024 financing proceeds and a $15 million Sanofi milestone received in January 2024 to fund operations into the first half of 2027. This estimate depends on assumptions and excludes any additional financing or collaboration proceeds.
Material changes versus prior periods
- Revenue increased $31.8 million year over year, primarily reflecting $55 million of Sanofi milestones associated with starting Phase 2 trials of KT-474. Of that milestone amount, $40 million had been received by year-end; $15 million was recorded as a receivable and received in January 2024.
- Operating expenses rose $36.0 million, with higher internal R&D, preclinical activity, clinical development and staffing costs. Operating loss widened despite higher collaboration revenue.
- Net loss narrowed by $7.8 million, principally as higher collaboration revenue and interest income more than offset increased operating expenses.
- Operating cash use fell by $50.3 million. Investing activities provided $139.9 million, mainly from marketable-security maturities; financing activities provided $4.2 million.
- The Vertex collaboration’s research term ended in May 2023, and Kymera recognized the remaining related deferred revenue. The parties also discontinued work on Sanofi’s second, undisclosed target; associated future milestones and royalties are no longer available.
- Kymera discontinued KT-413 in November 2023 to prioritize its immunology pipeline. It reported expected target degradation and no dose-limiting toxicities as part of that decision.
Pipeline, outlook and key risks
- KT-474 (IRAK4): Sanofi-led Phase 2 trials in hidradenitis suppurativa and atopic dermatitis began dosing in Q4 2023. Topline results were expected in the first half of 2025. Kymera retains an option to fund 50% of U.S. development costs and share U.S. profits and losses.
- KT-333 (STAT3): Phase 1 dose escalation is ongoing. Interim results through October 2023 included 29 patients, substantial STAT3 knockdown and early signs of activity, including partial responses in two of five CTCL patients and one Hodgkin lymphoma patient. The small, early-stage dataset is preliminary; additional data were expected in 2024. FDA Fast Track designation was granted for relapsed/refractory PTCL and CTCL.
- KT-253 (MDM2): Phase 1 is ongoing. At the October 2023 cutoff, nine solid-tumor patients had been enrolled in dose levels 1–3; the company reported proof of mechanism and initial activity, including one confirmed partial response at the lowest dose level. Additional data were expected in 2024. FDA orphan drug designation was granted for AML.
- KT-621 (STAT6): In IND-enabling studies; Phase 1 initiation was expected in the second half of 2024, with results expected in 2025.
- KT-294 (TYK2): In preclinical development; Phase 1 initiation and data were expected in 2025.
- Key risks include clinical and regulatory failure or delay, uncertain translation of preclinical and early clinical findings, potential adverse effects, reliance on third-party manufacturers and CROs, intellectual-property challenges, and the need for substantial future capital. The company has no product-sales revenue and expects continued losses.
- Sanofi collaboration revenue depends in part on estimates of remaining research costs and progress toward performance obligations. The auditor identified collaboration revenue recognition as a critical audit matter because of the judgment involved in those estimates.
- Management and the auditor reported effective internal control over financial reporting; the financial statement audit opinion was unqualified. No material litigation was reported.
Important facts for investors to verify
- Whether the KT-474 Phase 2 trials meet enrollment, safety and timing expectations, and whether topline results arrive as projected.
- Whether updated, adequately sized clinical datasets confirm the preliminary KT-333 and KT-253 findings, including response durability and safety.
- Whether the company’s stated runway into the first half of 2027 remains achievable as R&D spending and facility costs evolve.
- How much of future revenue depends on Sanofi milestones, and the implications of ending the second-target collaboration and the Vertex research term.
- The dilution and share-count effects of the January 2024 offering, pre-funded warrants and February 2024 at-the-market sales.
- Whether manufacturing capacity, supplier availability and intellectual-property protection can support continued clinical development.