Kymera Therapeutics, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. This is an annual filing; it does not provide a clear standalone fourth-quarter financial summary. Kymera became publicly traded in August 2020 and is a precommercial biotechnology company developing targeted protein degraders through its Pegasus platform.
Business and pipeline
The company reported three lead programs: KT-474, an IRAK4 degrader for inflammatory diseases; KT-413, an IRAKIMiD candidate for MYD88-mutated lymphoma; and KT-333, a STAT3 degrader for cancers, with potential applications in inflammatory and fibrotic diseases. At year-end, KT-474’s IND had been submitted, but its Phase 1 trial began in February 2021. KT-413 and KT-333 remained preclinical.
Financial results and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Collaboration revenue | $34.0 million | $2.9 million |
| Research and development expense | $62.1 million | $37.2 million |
| General and administrative expense | $18.2 million | $8.0 million |
| Operating loss | $46.3 million | $42.2 million |
| Net loss | $45.6 million | $41.2 million |
- Revenue came from research collaboration arrangements, principally Sanofi and Vertex; Kymera had no product-sales revenue or collaboration royalties.
- R&D expense increased $24.9 million, reflecting greater IRAK, STAT3, platform and exploratory-program spending, as well as higher personnel and occupancy costs. G&A rose $10.3 million, mainly with growth and public-company costs.
- Cash, cash equivalents and marketable securities totaled $458.7 million at year-end, versus $92.0 million in 2019. Management estimated this would fund operations into 2025, subject to assumptions and without further collaboration funding.
- Operating cash flow was positive $88.1 million, primarily reflecting the $150 million Sanofi upfront payment and increased deferred revenue; investing cash outflow was $422.6 million, largely purchases of marketable securities; financing cash inflow was $289.3 million, including IPO and private-placement proceeds.
- Current assets were $302.3 million and current liabilities $110.6 million. The company reported no conventional borrowings; balance-sheet lease liabilities included $1.3 million of finance leases and $16.7 million of operating leases.
- A $9.1 million deemed dividend from a preferred-stock exchange increased net loss attributable to common stockholders to $54.6 million and basic and diluted loss per share to $3.15. This was not an operating expense.
Material changes and agreements
- In August 2020, the IPO and concurrent Vertex private placement generated approximately $213.3 million in gross proceeds combined. Preferred shares converted to common stock at the IPO.
- Sanofi paid a $150 million upfront amount under a 2020 collaboration covering IRAK4 outside oncology and a second undisclosed target. Kymera recognized $18.8 million of Sanofi collaboration revenue in 2020; $132.6 million remained deferred at year-end. Further milestone and royalty amounts are contingent, not guaranteed.
- Vertex collaboration revenue was $15.2 million in 2020. The agreement provides for potential milestones and royalties, but no milestones had been achieved by year-end.
- Research and development investment accelerated as the company advanced its pipeline. Accumulated deficit reached $128.8 million, and management expects continued losses and rising expenses.
Outlook, risks and unusual items
- Management expected to begin KT-474’s multiple-ascending-dose phase in the second half of 2021, subject to FDA clearance of a partial clinical hold. The filing does not report subsequent trial results.
- Management planned an IND submission for KT-413 in the second half of 2021 and for KT-333 in the fourth quarter of 2021, followed by Phase 1 trials if cleared. These are forward-looking plans, not achieved milestones.
- Key risks include the unproven targeted-degradation approach, early-stage pipeline and clinical/regulatory uncertainty; the partial hold on KT-474’s MAD portion; potential adverse effects; dependence on third-party trial operators and manufacturers; and possible COVID-19-related trial or supply disruptions. A Wuhan-based starting-material vendor’s temporary shutdown caused a minor delay in 2020.
- Kymera relies on external manufacturers and had no long-term supply arrangements. It may need additional capital sooner than projected; future financing could dilute shareholders or require licensing rights.
- The Sanofi agreement offers substantial potential milestones and royalties, but depends on future development, regulatory and sales achievements. The agreements also allocate rights and responsibilities between the parties.
- The financial statements received an unqualified audit opinion. Management judged disclosure controls effective; the filing did not include an auditor attestation on internal control over financial reporting under the transition available to newly public companies.
Important facts for investors to verify
- Check FDA status and safety, pharmacokinetic and pharmacodynamic results for KT-474, including whether the MAD hold was lifted.
- Verify whether planned KT-413 and KT-333 IND filings and clinical starts occurred, and assess data quality and timing.
- Track cash and investment balances, quarterly cash use, deferred collaboration revenue and the assumptions behind the stated runway into 2025.
- Distinguish recognized collaboration revenue and upfront cash from contingent milestones, royalties and potential future opt-in economics.
- Assess dilution, stock-based compensation, lease commitments, manufacturing capacity and supply-chain redundancy as development advances.