Kymera Therapeutics, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. Kymera is a clinical-stage biotechnology company developing targeted protein degraders through its Pegasus platform. It had no revenue from drug sales; reported revenue came from research collaborations.
Financial results and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Collaboration revenue | $46.8 million | $72.8 million |
| Research and development expense | $164.2 million | $137.0 million |
| General and administrative expense | $43.8 million | $36.3 million |
| Total operating expenses | $208.1 million | $173.4 million |
| Loss from operations | $161.3 million | $100.5 million |
| Net loss | $154.8 million | $100.2 million |
| Net loss per share, basic and diluted | $2.87 | $2.09 |
| Cash used in operating activities | $153.1 million | $128.9 million |
- Revenue declined 35.7%, while operating expenses increased 20.0%; R&D growth reflected MDM2 IND-enabling work, other pipeline/platform investment and increased staffing. Higher interest income contributed to $6.4 million of other income, versus $0.3 million in FY2021.
- At year-end, cash and cash equivalents were $68.4 million and marketable securities were $491.1 million, totaling $559.5 million. Current assets were $419.4 million and current liabilities $71.3 million.
- Management estimated available cash, cash equivalents and marketable securities would fund operations into the second half of 2025, including anticipated early proof-of-concept milestones. This estimate depends on assumptions and excludes prospective financing or collaboration proceeds.
- FY2022 financing cash flow was $153.0 million, primarily net proceeds from the $150.0 million PIPE. No borrowings are reported; year-end finance lease liabilities were $2.7 million and recognized operating lease liabilities were $14.7 million. Total lease commitments were $137.1 million, including a facility lease not yet commenced.
- There is no product-sales margin to report. The company had an accumulated deficit of $383.8 million and expects continued losses and additional funding needs.
Business developments and changes
- KT-474 (IRAK4 degrader): Kymera completed Phase 1, including a 21-patient HS/AD cohort. Sanofi notified Kymera it intended to advance the candidate to Phase 2, initially in hidradenitis suppurativa (HS) and atopic dermatitis (AD), with the first trial planned for 2023.
- In the KT-474 patient cohort, the company reported substantial target degradation and biomarker changes, exploratory improvements in skin-disease measures and symptoms, and no serious adverse events or drug-related infections. A modest, non-adverse QTc prolongation resolved during continued dosing. The small, short-duration cohort does not establish clinical efficacy.
- KT-413 (IRAKIMiD degrader) and KT-333 (STAT3 degrader) were in Phase 1 dose escalation, with further clinical data expected in 2023. Initial KT-413 cohorts had no dose-limiting toxicities or treatment-related serious adverse events; the first KT-333 dose cohort likewise had no dose-limiting toxicities or treatment-related serious adverse events.
- FDA cleared the KT-253 MDM2 degrader IND in December 2022; Kymera planned to begin Phase 1 in early 2023. Its efficacy claims remain preclinical.
- Collaboration revenue fell from $72.8 million to $46.8 million as revenue was recognized over the remaining research obligations. FY2022 revenue comprised $36.0 million from Sanofi and $10.8 million from Vertex; no royalties had been received. At year-end, deferred collaboration revenue was $63.3 million.
- Sanofi’s amended agreement set out Phase 2 trial terms for KT-474. Kymera may qualify for development milestones, commercial milestones and tiered royalties; these are contingent and not assured. Vertex had achieved no milestones under its agreement by year-end.
Outlook, risks and unusual items
- Management expects R&D spending to rise as clinical programs advance and the pipeline expands. No numerical revenue or earnings guidance was provided.
- Key risks include early-stage clinical uncertainty; the novel, unproven degrader platform; safety or off-target effects; reliance on CROs and contract manufacturers, including limited or sole-source suppliers; competition; intellectual-property challenges; and the need to raise additional capital.
- Kymera reported $4.3 million of unrealized losses on marketable securities in other comprehensive loss, primarily attributed to market conditions; it said it did not intend or expect to be required to sell the securities before recovery.
- The company signed a lease for 100,624 square feet of Watertown office and laboratory space, expected to be occupied beginning in November 2023. This adds substantial future lease commitments.
- Ernst & Young issued unqualified opinions on the financial statements and internal control over financial reporting; management also concluded disclosure controls were effective.
Most important facts for investors to verify
- Whether KT-474 Phase 2 starts as planned and produces controlled, clinically meaningful results beyond the exploratory Phase 1 findings.
- Updated cash use, collaboration receipts and clinical-development costs against management’s second-half-2025 runway estimate.
- Progress, safety and dose selection in KT-413 and KT-333, and initiation and early results for KT-253.
- Revenue-recognition assumptions, remaining collaboration obligations, and the conditions and timing attached to Sanofi milestones and royalties.
- Future financing needs and dilution, including the 3.0 million pre-funded warrants outstanding at December 31, 2022.
- Manufacturing capacity and supply continuity, and the timing, cost and occupancy implications of the new facility lease.