Kymera Therapeutics, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. Kymera is a pre-commercial biopharmaceutical company developing targeted protein degraders through its Pegasus platform. Its lead programs are IRAK4, IRAKIMiD, and STAT3. It has no product sales; reported revenue comes from collaborations.
Financial performance
Amounts below are in millions of U.S. dollars, except per-share data.
| Metric | Q2 2021 | Q2 2020 | First half 2021 | First half 2020 |
|---|---|---|---|---|
| Collaboration revenue | $18.5 | $3.3 | $37.2 | $6.7 |
| Research and development expense | $35.2 | $13.8 | $61.2 | $25.9 |
| General and administrative expense | $8.0 | $3.7 | $13.9 | $6.2 |
| Operating loss | $(24.7) | $(14.2) | $(37.9) | $(25.4) |
| Net loss | $(24.7) | $(14.0) | $(37.7) | $(24.9) |
| Net loss per share | $(0.55) | $(6.98) | $(0.84) | $(17.18) |
- Revenue was from Sanofi and Vertex: Q2 2021 included $14.4 million from Sanofi and $4.1 million from Vertex; first-half revenue was $26.0 million and $11.2 million, respectively. No collaboration milestones or royalties had been received.
- Operating expenses grew faster than collaboration revenue. Management attributed R&D growth principally to clinical and IND-enabling work, platform and exploratory programs, and increased personnel and facility costs. G&A growth reflected public-company and headcount-related costs. No conventional product gross margin is reported.
- Net loss per share comparisons are affected by the IPO and the markedly different weighted-average share counts: 45.1 million in Q2 2021 versus 2.0 million in Q2 2020.
Financial position and cash flows
- At June 30, 2021, cash and cash equivalents were $84.9 million and marketable securities totaled $319.5 million, or $404.4 million combined. Total assets were $434.4 million; current assets were $364.8 million and current liabilities $108.7 million.
- Six-month operating cash use was $53.3 million, versus $23.5 million in 2020. The filing cites net losses and a $35.5 million decrease in deferred revenue as significant uses. Investing activities provided $105.0 million, mainly reflecting $152.0 million of investment maturities, partly offset by purchases of securities and equipment. Financing activities provided $2.2 million.
- Total liabilities were $176.3 million, including deferred revenue of $134.9 million and lease liabilities. The filing reports $2.2 million of finance lease liabilities and $16.1 million of operating lease liabilities; it does not report conventional borrowings.
- Accumulated deficit was $166.5 million. In July 2021, the company completed a follow-on offering and concurrent private placement; it reported combined net proceeds of approximately $243.1 million. Management expects cash, investments, and those proceeds to fund operations into 2025, subject to assumptions that may prove incorrect.
Developments, outlook, and risks
- The FDA lifted the partial clinical hold on the multiple-ascending-dose portion of the KT-474 Phase 1 trial in June; enrollment began in July 2021. A later cohort was expected to include hidradenitis suppurativa and atopic dermatitis patients.
- Management expected to submit INDs for KT-413 and KT-333 in the second half of 2021, with Phase 1 trials to follow if cleared. These were forward-looking plans, not completed events as of the filing.
- The Sanofi agreement includes an upfront payment of $150 million and potential development milestones of up to $1.48 billion, commercial milestones of up to $700 million, and tiered royalties. These contingent amounts are not assured; milestones and royalties had not been received. The company also has potential U.S. opt-in rights requiring it to share development costs.
- Principal risks include early-stage and unproven drug development, clinical safety and efficacy, regulatory and enrollment delays, dependence on collaborators and third-party manufacturers, COVID-19 disruption, intellectual-property protection, and the need for substantial future funding. The company cautions that it may never become profitable.
- Management reported disclosure controls and procedures were effective at the reasonable-assurance level, with no material change in internal control over financial reporting during the quarter. The company reported no current material legal proceedings; a European Union trademark opposition remained pending.
Investor facts to verify
- Subsequent KT-474 MAD trial enrollment and later patient-cohort timing, and progress toward the planned KT-413 and KT-333 IND submissions.
- Whether collaboration revenue recognition, deferred revenue balances, and any future milestone or royalty receipts develop as expected.
- Actual cash burn and runway versus management’s “into 2025” estimate, including the use of July offering proceeds.
- Clinical safety and efficacy evidence, COVID-19 or vendor-related delays, and the company’s continuing reliance on third parties.
- Share dilution from the July offering and equity compensation, and the potential effects of the pending trademark matter and broader IP risks.