Kymera Therapeutics, Inc. — Q1 2024 Form 10-Q
Business context and reporting period
Quarter ended March 31, 2024; year-over-year comparisons are to the three months ended March 31, 2023. Kymera is a clinical-stage biopharmaceutical company developing targeted protein degraders. It has no approved products and has not generated revenue from drug sales; reported revenue is from collaborations.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Collaboration revenue | $10.3 million | $9.5 million; up $0.8 million |
| Research and development expense | $48.8 million | $42.2 million; up $6.6 million |
| General and administrative expense | $14.4 million | $12.6 million; up $1.8 million |
| Long-lived asset impairment | $4.9 million | None |
| Operating loss | $57.8 million | $45.3 million |
| Net loss | $48.6 million; $0.69 per share | $40.9 million; $0.70 per share |
| Operating cash used | $39.6 million | $44.0 million |
Revenue was entirely from Sanofi in Q1 2024. The company reported no product sales or royalties. Higher R&D costs reflected personnel, stock compensation and occupancy, as well as STAT6 and discovery work; increased interest income partly offset operating losses. Profit margins are not meaningful for this pre-commercial company.
At March 31, cash, cash equivalents and marketable securities totaled $744.9 million, versus $436.3 million at December 31, 2023. Cash and cash equivalents were $93.5 million; marketable securities were $651.4 million. Current assets were $537.3 million and current liabilities $56.1 million. Total liabilities were $157.0 million, including $87.1 million of operating and finance lease liabilities; the filing reports no conventional borrowings. Management estimates available cash and securities will fund operations into the first half of 2027, subject to assumptions and without additional collaboration funding.
Investing activities used $330.6 million, principally reflecting purchases of marketable securities; financing activities provided $353.8 million. Financing included $301.4 million net proceeds from the January public offering and $48.7 million net proceeds from at-the-market sales. Operating cash use was lower than the prior-year quarter.
Material changes and operating developments
- Net loss increased by $7.6 million year over year as operating expenses grew, including the new $4.9 million impairment charge. The impairment followed the move into the new facility and exit of the former leased space.
- In February 2024, Kymera began occupying its 100,624-square-foot facility and is seeking to sublease its former premises through March 2030. Management said further impairment could be identified and could be material.
- Common shares issued and outstanding rose to 61.35 million from 55.59 million at year-end. There were also 11.64 million pre-funded warrants outstanding; weighted-average shares used for Q1 loss per share were 70.77 million, including pre-funded warrants.
- Sanofi’s KT-474 Phase 2 trials in hidradenitis suppurativa and atopic dermatitis had begun dosing. Kymera’s KT-333 (STAT3) and KT-253 (MDM2) Phase 1a trials were enrolling and dosing; the company expected additional clinical data from both in 2024. STAT6 and TYK2 were in IND-enabling studies.
Outlook, risks and contingencies
Management’s stated cash-runway estimate extends into the first half of 2027 and is expected to cover KT-474 Phase 2 data, further KT-253 and KT-333 proof-of-concept data, and clinical inflection points for STAT6 and TYK2. This is an estimate, not a guarantee; the filing provides no formal financial guidance. Kymera expects increased research, development and capital needs and may seek financing, collaborations or other strategic arrangements. Equity financing could dilute shareholders, while other arrangements could require rights to be relinquished.
Key risks include early-stage clinical and preclinical uncertainty, possible safety or efficacy failures, trial enrollment and timing, reliance on third-party trial and manufacturing providers, intellectual-property protection, and the possibility of needing further capital. Sanofi controls development after specified milestones and may terminate for convenience under the agreement. The company and Sanofi ceased work on the second collaboration target in 2023. No material legal proceedings were reported. Management said disclosure controls were effective as of March 31, 2024.
Important facts for investors to verify
- Whether management’s first-half-2027 runway estimate remains supported by spending, trial plans and financing assumptions.
- Timing and completeness of KT-474 Phase 2 data and the anticipated 2024 KT-253 and KT-333 clinical updates.
- Whether the former facility is subleased and whether additional impairment charges are required.
- Potential dilution from outstanding pre-funded warrants, equity awards and any further at-the-market or other share issuance.
- Sanofi’s continued commitment to KT-474 development and the timing and conditions for any future milestones or royalties.