Kymera Therapeutics, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed February 24, 2022. Kymera is a clinical-stage biopharmaceutical company developing targeted protein degraders. It had no approved products and no revenue from drug sales; reported revenue came from collaborations.
Key financial results
| Metric | FY2021 | FY2020 |
|---|---|---|
| Collaboration revenue | $72.8 million | $34.0 million |
| Research and development expense | $137.0 million | $62.1 million |
| General and administrative expense | $36.3 million | $18.2 million |
| Operating loss | $100.5 million | $46.3 million |
| Net loss | $100.2 million | $45.6 million |
| Net loss per share, basic and diluted | $2.09 | $3.15 |
| Cash used in operating activities | $128.9 million | Cash provided: $88.1 million |
Revenue more than doubled, reflecting collaboration research activity, while R&D and G&A spending also rose sharply. Management attributed increased R&D costs to clinical and IND-enabling work, platform and exploratory programs, collaboration activity, and higher headcount. The company reported no product-sales revenue. A gross margin is not meaningful for this development-stage business, and the filing does not present one.
At year-end, cash and cash equivalents were $48.0 million and marketable securities were $519.6 million, or approximately $567.6 million combined. Total assets were $605.9 million, total liabilities $146.3 million, and stockholders’ equity $459.6 million. Recorded finance-lease liabilities were $2.3 million; the company also had operating-lease liabilities. No material conventional borrowing balance is identified in the supplied financial statements.
Operating cash use turned negative from the prior-year inflow, mainly reflecting the $100.2 million net loss and a $69.4 million decrease in deferred collaboration revenue. Financing provided $250.3 million, primarily from the July 2021 follow-on offering. Investing used $99.8 million, including purchases of marketable securities net of maturities. Management estimated existing cash, cash equivalents and marketable securities would fund operations into 2025, subject to assumptions and without additional collaboration funding.
Business progress and material changes
- KT-474 (IRAK4 degrader): completed healthy-volunteer Phase 1 single- and multiple-ascending-dose escalation in December 2021. The company reported substantial target degradation and no serious adverse events in the blinded multiple-dose safety analysis; common treatment-related events included mild-to-moderate headache, nausea and palpitations. Patient cohorts in hidradenitis suppurativa and atopic dermatitis were planned.
- KT-333 (STAT3 degrader) and KT-413 (IRAKIMiD degrader): FDA cleared their INDs in November 2021; Phase 1 studies began in January and February 2022, respectively.
- KT-253, an MDM2 degrader, was disclosed as a development candidate in December 2021 and remained in IND-enabling work; an IND filing was expected in the second half of 2022.
- Collaboration revenue was $18.5 million from Vertex and $54.3 million from Sanofi in 2021. No collaboration milestones had been achieved under the Vertex agreement. Sanofi milestone and royalty amounts are contingent and are not guaranteed revenue.
Outlook, risks and unusual items
The filing gives no formal revenue or earnings guidance. Management expects continued operating losses and significant spending as programs advance, and says additional funding will be needed for ongoing development and potential commercialization. The stated runway into 2025 is an estimate, not a guarantee.
- Clinical, regulatory and platform risk is high: programs are early-stage, and targeted protein degradation is a novel approach with no assurance of safety, efficacy, approval or commercial success. Preclinical results may not predict clinical outcomes.
- Further financing may be required; equity issuance could dilute shareholders, while debt or collaborations could impose restrictions or require surrendering rights.
- Kymera relies on third-party CROs and manufacturers, with limited or single-source supply arrangements in some cases. COVID-19 had previously caused a minor starting-material delivery delay; further disruption could affect trials or supply.
- In December 2021, the company signed a lease for 100,624 square feet expected to be occupied in November 2023. The filing lists $116.0 million of undiscounted operating-lease payments for this lease; it had not yet recorded a right-of-use asset or lease liability for the space at year-end because control had not commenced.
- The auditor issued unqualified opinions on the financial statements and internal control over financial reporting. Collaboration revenue recognition was identified as a critical audit matter because it depends on management estimates of remaining research costs and progress toward performance obligations.
Important facts for investors to verify
- Latest clinical data, safety findings and patient-cohort plans for KT-474, KT-333 and KT-413, including subsequent updates after the 10-K.
- Actual cash burn, investment balances and any change to the company’s estimated funding runway; distinguish cash and marketable securities from restricted cash.
- Progress, option exercises, milestone achievement and termination rights under the Sanofi and Vertex collaborations; do not treat maximum potential payments as committed funding.
- Timing and costs of the KT-253 IND and other development plans, and whether clinical or regulatory delays alter expected spending.
- Lease commencement, occupancy costs and the effect of the new Watertown facility commitment on future cash needs.