KYMR - NASDAQ

Hello and welcome to the Kymera Therapeutics Second Quarter 2023 Quarterly Results Call. I'd now like to turn the call over to Bruce Jacobs. Mr. Jacobs, please go ahead.

Good morning everyone and welcome to the Kymera Therapeutics quarterly conference call. I'm Bruce Jacobs, Chief Financial Officer at Kymera, and I'll be joined today by Nello Mainolfi, President and CEO; Jared Gollob, our Chief Medical Officer, and I'm also excited to welcome Justine Koenigsberg, Kymera new Head of Investor Relations to her first Kymera quarterly call. After our prepared remarks, we'll open the call to your questions, as we always do. Before we get started, I'd like to remind everyone that some of the comments that management may make on this call include forward-looking statements as outlined in the press release. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors including those set forth in Kymera most recent filings with the SEC and any other future filings that the company may make with the SEC. You are cautioned not to place any undue reliance on those forward-looking statements, and Kymera disclaims any obligation to update such statements, except as required by law. With that said, I'll now hand the call over to Nello.

Thanks Bruce and thank you everyone for joining us today. We're excited to review the progress we made over the last quarter and discuss how it contributes to achieving our mission of building a best-in-class fully integrated global degrader medicines company. Over the past few months, we've shared updates on our clinical oncology pipeline and preclinical work, including multiple presentations at scientific meetings across the world relating to KT-253, KT-413, and KT-333. I will provide an overview of this progress and Jared will share more details during his remarks. Starting with the most recent addition to our clinical pipeline, we dosed the first patient in the Phase I study of our MDM2 degrader KT-253, which addresses a critical untrack mechanism in cancer biology that has been pursued in the biopharma industry for many years. The data we presented at EHA in June showed that 253 has the potential to overcome the inherent limitations of small molecule MDM2 inhibitors against this well-validated target. In preclinical models of ALL and AML, a single dose of KT-253 drove durable tumor regressions demonstrate differentiated pharmacology compared to a small molecule inhibitor. In June, 253 was also granted or for drug designation by the FDA for the treatment of AML. This program exemplifies our unique approach of selecting targets with strong genetic validation in pathways where we believe targeted protein degradation offers the best or only option for an effective treatment, and we look forward to investigating it in a variety of cancers and sharing more on this program, including clinical proof of mechanism in patients later this year. With respect to KT-413, which targets IRAK-4 and IMiDs substrates Ikaros and Aiolos, and KT-333, which targets STAT3, both are continuing in the dose escalation stages of their Phase I studies. As a reminder, our focus this year for these programs is to evaluate the graduation and the safety profile of these first-in-class mechanisms and their biological and clinical impact in the appropriate patient population. We recently shared encouraging data from the trials, showing fidelity of PK/PD translation from preclinical models to patients. At the ICML meeting in June, we shared data demonstrated that both molecules were approaching or were already at the target degradation levels, we believe, based on preclinical models are sufficient to achieve antitumor activity without any dose-limiting toxicities observed. Later this year, we intend to provide additional data evaluating antitumor activity in the target patient populations for these two programs. Our first-in-class IRAK4 degrader KT-474, is in development with our partner, Sanofi, for the treatment of TLR IL-1R driven immune-inflammatory diseases with high unmet medical needs, such as hidradenitis suppurativa, atopic dermatitis and potentially others. We're very excited about the potential of KT-474 for patients with inflammatory diseases which currently lack effective oral medicines with a good safety profile, and we expect the Phase II studies in both HS and AD to initiate in the fourth quarter of 2023. This degrader is designed to block TLR-IL-1R-mediated inflammation more broadly compared to monoclonal antipodes targeting single cytokines and to enable pathway inhibition that is superior to R4 kinase inhibitors by eliminating both the kinase and scalding functions of IRAK4. Jared recently presented the Phase I data from this program at the EADP symposium in Seville, which demonstrated that 474 administered to HS and AD patients at tolerability, PK and PD similar to healthy volunteers, achieved robust direct for degradation in blood and skin, associated with the systemic anti-inflammatory effect, and showed promising clinical activity in both HS and AD. In parallel to our clinical programs, we continue to drive the signs of targeted protein degradation and identify first and best-in-class opportunities to transform the treatment of disease. We have several exciting programs in our preclinical pipeline that are designed to address well-validated pathways in areas of significant patient need with multi-billion-dollar revenue potential. We look forward to sharing more details on these programs later this year, early next in an R&D Day. Along with our clinical and scientific progress, we've worked to ensure that we have the people and resources to build a sustainable, fully integrated company. To that end, we recently appointed Dr. Jeremy Chadwick as Chief Operating Officer, who will serve as a key member of our leadership team, as guide the development of our first-in-class programs and scale our capabilities to support our growth. Jeremy joins us from Takeda where he held leadership roles in global regulatory affairs, drug safety global clinical supply chain, and development operations. As Bruce mentioned, we're also very happy to welcome Justine Koenigsberg as Vice President and Head of Investor Relations. Justine spent more than 25 years in the industry, and she'll be engaging with many of you on the call in the upcoming weeks. Let me pause here and turn the call over to Jared, who will now cover in more details recent progress from our clinical oncology programs before turning the call over to Bruce for a financial update.

Thanks Nello. I'll provide a brief recap of where we stand with our clinical programs and what we expect in the coming months. As Nello mentioned, we have begun dosing patients in the Phase I multicenter open-label dose escalation clinical trial, evaluating our investigational MDM2 to greater KT-253, and recruitment in the trial is going well. MDM2 is the crucial regulator of the most common tumor suppressor P53. P53 remains intact or wild-type and close to 50% of cancers, meaning that it retained visibility to modulate Camper cell growth. We believe 253 has the potential to be a highly potent degrader that unlike small molecule inhibitors has been shown pre-clinically to have the ability to overcome the MDM2 feedback loop and rapidly induce apoptosis even with exposures. 253 has the potential to be effective in a wide range of hematological malignancies in solid tumors with function P53. We've shown pre-clinically that 253 has superior activity compared to MDM2 small molecule inhibitors and demonstrated greater than 200-fold improvements in both in-vitro cell growth inhibition and apoptosis. And additionally, we presented data at EHA in June, demonstrating that a single high dose of 253 administered intravenously in preclinical models of AML and ALL led to greater than 90% MDM2 degradation in tumors within one hour of dosing, strong P53 upregulation, and induction of apoptosis within the first eight to 24 hours, and sustained tumor regressions. In contrast, lower doses of 253 administered more frequently or repeat dosing with an oral MDM2 small molecule inhibitor led only to relatively weak P53 activation and apoptosis induction and modest tumor growth inhibition. These preclinical results suggest that a pulse IV dosing regimen of 253 has the potential for an improved efficacy and safety profile over MDM2 small molecule inhibitors currently in the clinic. The Phase I trial is evaluating the safety, tolerability, PK/PD and clinical activity in patients with relapsed or refractory high-grade myeloid malignancies, ALL, lymphomas, and solid tumors. Patients in the Phase I dose escalation study are receiving IV doses of 253 administered once every three weeks. The open-label study is intended to identify the recommended Phase II dose and is comprised of two arms with ascending doses of 253 in each arm. Arm A consists of patients with lymphomas in advanced solid tumors and arm B consists of patients with high-grade myeloid malignancies and ALL. Dosing in arm B will start once a pharmacologically active dose has been reached in arm A, at which time dose escalation will proceed in parallel across both arms and continue until the maximum tolerated dose is established for each arm. We plan to share initial safety and proof of mechanism data from the Phase I clinical trial later this year. Now, turning to our other two ongoing oncology trials. STAT3 is a transcriptional regulator that has been linked to numerous cancers as well as to inflammatory and autoimmune diseases. KT-333 is being developed for the treatment of STAT3 dependent hematological malignancies and solid tumors. The Phase I clinical trial of 333 is designed to evaluate the safety, tolerability, PK/PD and clinical activity of 333 dosed weekly in adult patients with relapsed and/or refractory lymphomas, leukemia and solid tumors. In June, at ICML, with a data cutoff date of May 1st, 2023, Kymera shared that 13 patients received the mean of five doses across the first four dose levels of the trial, including patients with solid tumors as well as CTCL and PTCL. While the fourth dose level was still open for accrual at that time, data reported from DL1 through 3 found plasma exposure increased with dose reaching levels close to those predicted to be efficacious and demonstrated dose-dependent stat degradation with up to 88% mean maximum reduction in peripheral blood mononuclear cells with evidence of stat pathway inhibition and down regulation of inflammatory biomarkers in prop blood. Degradation profiles at DL3 were near levels of knockdown that led to antitumor activity in preclinical models. We shared at ICML that there were no dose-limiting toxicities observed in the study. The Phase I dose escalation stage is ongoing, recruiting broadly across solid and liquid tumors. KT-413 is a novel heterobifunctional degrader that targets degradation of both IRAK4 and the image substrate Ikaros and Aiolos. 413 was designed to address both the INR TLR and the type 1 interferon pathway synergistically to broaden activity against MYD88 mutant B-cell malignancies. The Phase I clinical trial is designed to evaluate the safety, tolerability, PK/PD and clinical activity of 413 administered as an IV infusion once every three weeks to adult patients with relapsed and/or refractory B-cell Hodgkin lymphoma. In conjunction with the ICML meeting, we shared that as of June 1st, the first three dose levels have been completed and the fourth was accruing patients. At that point, five patients were treated across DL1 through 4 and received a mean of 2.2 doses, including patients with transformed activated B-cell like diffuse large B cell lymphoma, follicular lymphoma, marginal zone lymphoma, and plasma plastic lymphoma, all of whom were MYD88 wild-type except for one who had a MYD88 gain of function mutation. Data reported across DL1 through 4 showed plasma exposure increase with dose, reaching levels close to those predicted to be efficacious. 413 achieved dose-dependent degradation of up to 70% IRAK4 and 96,100 Ikaros and Aiolos in peripheral blood mono-cellular cells after a single dose. Degradation profiles at DL3 through 4 were consistent with knockdown levels associated with antitumor activity and preclinical models of MYD88-mutant lymphoma. We showed at ICML that there were no dose-limiting toxicities or drug-related neutropenia observed in the study. The Phase I dose escalation portion of the trial is ongoing, recruiting a broad population of B-cell lymphoma patients. We look forward to sharing data evaluating the antitumor activity of KT-333 and KT-413 in their respective target patient populations later this year. Finally, the KT-474 Phase II studies in both HS and AD, which are being advanced by Sanofi are expected to commence in 4Q 2023, first in HS and followed shortly thereafter in AD. We will share more details around the trial as we approach the dosing of the first patients. I will now hand the call to Bruce, who will share some brief comments on our financial results for the second quarter.

Thanks Jared. I will quickly cover the financials before turning the call back to Nello for some concluding remarks. For the quarter, we recognized $16.5 million of collaboration revenue, and at the end of the quarter, our deferred revenue total on the balance sheet was approximately $45 million. That reflects partnership revenue we expect to recognize over the next several years, excluding the receipt of any potential future milestones. With respect to operating expenses, R&D for the quarter was $45.8 million. Of that, approximately $5.7 million represented non-cash stock-based compensation, the adjusted cash R&D spend of $40.1 million, which excludes that stock-based comp reflects a 7% increase from the comparable amount in the first quarter of 2023. On the G&A side, our spending for the quarter was $14.1 million, of which $5.5 million represent non-cash stock-based comp, the adjusted cash G&A spend of $8.6 million, again, excluding stock-based compensation reflects a 9% increase from the comparable amount in the first quarter of 2023. We exited the first quarter with a cash and equivalents balance of approximately $472 million. As we shared earlier in the year, we believe that our cash runway extends into the second half of 2025 projection that includes milestones only related to the start of the first two Phase II trials for KT-474, both of which we stated today are expected to occur in 2023. I'll now turn the call back to Nello.

Thanks Bruce. As I said, we're very excited to be soon in Phase II with KT-474 in two indications as well as by the progress we've made on our oncology clinical programs. Our rapid progress in building our pipeline, generating clinical momentum and advancing the science of TPD gives us confidence that Kymera will be able to capitalize on the untapped potential of this powerful modality to enhance the treatment of disease and improving patients' lives. We look forward to sharing exciting updates on our clinical programs, platform and company in the second half of the year. I will now hand the microphone to the operator so we can take your questions.

Thank you. At this point, we will open the call for questions. [Operator Instructions] Thank you for waiting. Your first question comes from the line of Marc Frahm from TD Cowen. Sir, your line is open.

Thanks for taking my questions. Maybe start off with KT-333. Monotherapy clinical responses are kind of expected to be only relevant for maybe a fraction of the opportunity and that segment is a bit of a different hypothesis than the rest of the population. Can you look to your kind of how you plan to approach dose selection as you get this larger data set later this year?

Thanks Marc, so Nello here. So, maybe I'll just take the first part of the question, and then I'll pass it to Jared. So, just to remind everybody, so our STAT3 program, which encompasses a livid tumor opportunity, a solid tumor opportunity and opportunities outside of oncology and started with our first clinical endeavor with KT-333. So, obviously, it's a broader opportunity across several potential indications, and we have clear hypothesis that we're pursuing in the clinic. The first one, which is, in our mind, the earliest one that could lead to proof of concept is single-agent activity in a subset of T cell lymphoma leukemia that we've discussed in the past, PTCL, CTCL LGL leukemia, which obviously also have subsets. The reason why we have focused on those indications as a single agent opportunities is because we've seen pre-clinically that when we dose our degrader, KT-333 once a week or even once every two weeks, we're able to achieve profound antitumor effects as single agent, and we can actually rationalize it translationally by the fact that many patients in those particular subsets have either statutory mutation or pathway activation. So we have a biomarker activity as well as biomarker sensitivity in those opportunities. The Phase I dose escalation includes those particular subtypes as well as solid tumors. As I've said in the past, we said in the past, in solid tumors, the opportunities are based on our preclinical data in combination. We've talked about combination with immune therapy. We've mentioned combination with targeted agents that we haven't discussed externally yet, and so now circling back to your question, just so that it's all clear. So, in terms of single-agent activity, in terms of responses, antitumor activity that we expect to being able to talk about later in the year will come from a subset of patients from these Phase I dose escalation, and we said in the past, a handful of patients that might include CTCL, PTCL, LGL. With regards to how we think about selecting, I assume you meant the Phase II dose, maybe I'll let Jared comment on that.

Sure. So Marc, we've always sort of stated that our dose selection will be based on a combination of PD and safety. We've looked at our preclinical data, especially in these stat three dependent T cell malignancies where we found that 90% or greater or not that for 48 to 72 hours associated with antitumor activity. So, our aim is to be able to get to a dose that gives us at least that sort of a profile, 90% or greater knockdown in prior blood and/or in tumor where we can get tumor biopsies, that's lasting. 48 to 72 hours in that associated with a favorable safety profile, that's the sort of a PD profile that we want to be able to take into the Phase I expansion. So, our recommended Phase II dose will likely be a combination of being able to see that level of PD along with safety. If possible, as Nello mentioned, if in a handful of patients in the target patient population with the STAT3 dependent T cell malignancies, we can see a few responses at those doses that are giving us a sense sort of PD and safety that would give us even more confidence in bringing that dose into the next phase, which are these Phase I expansions, which right now are slated to be in these T cell malignancies like CTCL, PTCL, and LGL as well as in solid tumors.

Okay, that's very helpful. And then maybe a similar topic question, but for MDM2, -- just kind of walk through the depth of perdition you want to get and with that postal dosing. But how long do you think you need to be at 90%? Kind of what's the minimum there?

I mean -- so I'll start this, and then if needed, Jared can add. So the nice thing about the MDM2 program and how we're developing it, is really trying to replicate what we've seen in cancer genetics, which is ablation of the gene, in this case, MDM2 leads to a rapid and complete reliance on this gene from a wide variety of counter cells that have P53 wild-type, and what we've then observed experimentally, obviously, the gene deletion is irreversible. Protein degradation, as we all know, is reversible. So then the question that you're asking is how long do you need to deplete the target to see activity. So, what we've seen in our models pre-clinically that as little as four to eight hours of exposure to a degrader that leads to robust degradation is sufficient to drive a profound commitment to apoptotic cell death. And so actually, in a way, it's -- as you know, with those once every three weeks and while for other programs, that degradation needs to be sustained either for 48 hours or 72 hours in this particular program, we only need a few hours, single-digit hours in order to drive this strong apoptotic response.

Thank you. Your next question comes from the line of Brad Canino from Stifel. Sir, your line is open.

Good morning. For KT-333, now that you're getting a handle on the clinical PK/PD, should we expect you to open a healthy volunteer study to dial in the STAT3 degradation to green kinetics that you need based on your I&I models in order to prepare for a potential Phase I/II I&I study? Or is this going to be pursued by a separate asset altogether?

Brad thanks. This is a great question that I'm going to answer high level now and then hopefully, I think when we meet in an R&D Day that, as I said, most likely late this year but most likely early next. I think we will cover hopefully, with more details of that question. But I can say right now that we're evaluating opportunities both for a potential 333 transition into immunology as well as other particular assets or and other formulations. So, maybe I'll leave it at that. This is where we're investigating. But I think what we take from this Phase I study, which is not to be underestimated is the really good translation that we've seen not only in PK and PD, which to be honest with this company has been constant now for multiple programs, but more importantly, on safety. So, we feel now we're in a place where we can much more comfortably plan outside of oncology clinical study for a first-in-class target that has obviously very broad biological application. So sorry, if I can answer it with details, but hopefully, this gives you an idea about what we're thinking about.

That's all right. I look forward to that update. Let me also ask on MDM2. When you think about the safety data from the prior small molecule inhibitors and then particularly knowing that your target population is AML where the blood count recovery is going to be important for those patients. What are you looking to see in terms of platelet impact thrombocytopenia rates in this first look at a confidence in the profile for continued development? Thank you.

Yes. Thanks, Brett. I'll actually let Jared comment specifically on your question, but I do want to take the opportunity to add something to your question, which is -- so our clinical development team has designed, I think I would say elegant people don't like this word, but I still use it. An elegant plan to evaluate the PK/PD safety and activity in both solid tumors, liquid tumors and these myeloid malignancies, and the idea was to split the AML, ALL type of dose escalation from the other indications because as you know and as you mentioned, the context is quite different, and so the plan is, right now, we're escalating in solid tumor and other liquid tumors until we feel we've reached the clinically active dose and that entered the AML space only when we're clinically active already so that the safety does not unnecessarily or sometimes the more challenging safety assessment doesn't influence the readout on the clinical activity. One other thing that I would say is that the way that this molecule works, which is, as we said, a rapid degradation with the recovery within the first three weeks should allow us to build a therapeutic index that should allow us to evaluate the clinical activity of MDM2 degradation in MDM2 PC3 sensitive tumor types, and as with all the other programs in Kymera pipeline, we believe we can answer this question in early clinical development, meaning in Phase I or late Phase I clinical investigation. Our ability to build the therapeutic index is really the goal of our Phase I study, and if we're able to show that and demonstrate that to ourselves, I think that will hugely de-risk this program and will allow us to be confident in investing a lot of money to develop this program. If not, we obviously will be willing to make decisions. And that's what the philosophy is around all of our programs. But Jared, maybe you can comment specifically on how we're looking at thrombocytopenia and other possibly related events that one might expect from P53 upregulation.

Sure. Well, I think as you just alluded to, with this hit-and-run approach of dosing once every three weeks, and based on our GLP tox data, our expectation is that our sort of depth of myelosuppression and/or the duration of myelosuppression will be less than what is seen with the small molecule MDM2 inhibitors, which as Nello just said, should give us a superior therapeutic index. With that being said, in AML, of course, the tolerability of myelosuppression is much higher. In fact, one does expect to see a certain degree of myelosuppression as you're clearing blast and having an effect on the bone marrow that usually would then lead to clinical responses, hopefully complete responses, and so that's why we've separated out these two arms, the high-grade myeloid malignancies and ALL separate from the arm looking at solid tumors and lymphomas because there is a different level of tolerability in terms of how clinicians view myelosuppression. So, we may see myelosuppression in AML patients, which would be a good thing because we're -- that would be telling us that we're seeing a response to MDM2 inhibition. But again, we do expect the depth and duration of that myelosuppression to be less and to give us a better therapeutic index, and likewise, in solid tumors, we do expect to see less myelosuppression in that particular population, which could allow us more traction in developing the drug in patients with lymphoma and solid tumors compared to the small molecule inhibitors that have been limited in their dosing by the dose-limiting toxicities of GLP tox as well as myelosuppression.

Thank you. Your next question comes from the line of Chris Shibutani from Goldman Sachs. Sir, your line is open.

Great. Thank you very much. Good morning. Two questions. So on KT-474, it certainly is founding reassuring that Sanofi has formally committed, if I understand the conversation that we've had in June that you guys, it seemed as if AD was a trial that was going to start in 2023, perhaps a little bit less clarity and possibly to following in HS, perhaps have gotten that mix. But to be clear, I think the update today is that both trials will commence by the end of this year. Is that the case? And then, Bruce, what kind of additional sort of time line should we think about in terms of milestone payments as this program progresses? And are you guys advancing 474 or any of the other tool compounds through Phase I type work potentially to look at additional indications. I know Nello you've highlighted mechanistically, biologically, rationales to go into other broader categories, RA, lupus, et cetera? Thank you.

Yes. Thanks Chris. So, I'll answer some of these, and I think you had like three or four questions in there that was very elegant, and then I'll let Bruce answer the milestone question. So, first one, yes, just to clarify further, so what we've said for the past nine months since December -- seven months, we've said that Sanofi was going to take over clinical development of KT-474, and that there was a commitment to initiate at least one Phase II study in 2023 that was named to be the HS Phase II study. They did commit also to initiate an AD Phase III study, but we were not as a collaborator as collaborations, we did not point to the exact time of Phase I start. It was not clear that would have been in 2023. So, what we're updating today was finally that also the Phase II start of AD will happen in 2023. So, HS will be first, and AD will be second. Both of them will start in fourth quarter of 2023. And so we want to thank Sanofi for allowing us to share more details and also to accelerating the initiation of the second Phase II study. With regards to other indications before I let Bruce's comment on the milestones. I mean, we, as collaborators, continue to discuss other opportunities. And I think we both feel I can probably speak for both, we both feel that there are other opportunities that are both mechanistically and clinically that fit the profile of an IRAK4 degrader. We're just not at this moment able to share more details. But rest assured that as things progress, we will be updating on those strategies.

Yes, and thanks, Chris. This is Bruce. Just to clarify on the milestone. So what we've said in the past is that the first Phase II patient does generate milestones by indication up to a certain number, and we said at least two and hadn't commented before that. Beyond that, I should say the first two milestones for HS and AD are included in our runway guidance, but no other milestones, and then I think I heard you ask about the additional program or the additional molecules that we might generate targeting IRAK4 that was contemplated in the initial collaboration agreement. And so the work that is ongoing there has the potential to generate milestones as well. We just haven't said specifically what those critical events are and the timing. But I think that's something you'll hear updates from us on over time as well.

Great, and you said initial collaboration agreement, there was an update to that collaboration agreement in November of 2022. So, that's still contemplated in this most recent active agreement, correct?

Yes. Exactly. When we discussed the amendment, we made the comment at the time that the aggregate milestones remain unchanged, and that includes with respect to the follow-on compound molecules that may be generated as well. So, the aggregate total remains unchanged.

Thanks. Confirmation reassuring progress. Appreciate it.

Thank you. Your next question comes from the line of Michael Schmidt from Guggenheim. Your line is open.

Yes, good morning. Thanks for taking my questions. I had one on KT-413, where we've seen the updated Phase I data at ICML recently, it looks like you're achieving target degradation already at dose level three or four. Can you talk a bit about how the neutrophil recovery in neutropenia has tracked with your expectations based on the cyclic dosing and also perhaps talk about the scope of the clinical update later this year and expectations for that? Thank you so much.

Thanks Michael. So, maybe I'll start with the second part of your question, and then I'll let Jared address the first part of your question. With regard to expectations, so for both programs, as we said, the goal is really to continue and evaluate PK/PD safety and potentially complete the dose escalation portion of the Phase I a study, and as you know, the goal of dose escalation would establish safety in this case, also PK/PD. But as you know, in clinical development, especially in oncology, it is important to assess early signs of antitumor activity to solidify the hypotheses of these oncology programs providing benefits to patients. So, as part of the dose escalation for both programs, we expect that we'll have a handful of patients for 413 MYD88-mutant and out of the old B-cell lymphoma that we're recruiting and for 333 CTCL, LGL, and PTCL [Indiscernible] lipid and solid tumor cohorts in order for us to, again, establish early signs of antitumor activity. So, again, in terms of expectation, we hope to being able to report on a complete our close complete data set on the PK/PD and safety as part of the dose escalation study and then hope to have, let's say, a handful of patients from each of the studies that fit the sensitive patient population, where we would be able to evaluate the antitumor activity of these first-in-class mechanisms. What we're now going to be able to discuss is obviously extend of response rates and metrics just because we believe that those are more scientifically sound in a better design study to evaluate the clinical activity, which we believe is expansion cohorts and beyond. But again, antitumor activity, validation of these mechanisms, ability to correlate degradation to impact on tumors is what we hope to being able to share later in the year. So, maybe, Jared, you can talk about the neutropenia question.

Sure Mike. So, in terms of your question about neutropenia, when we provided our update back in June around the ICML meeting, we indicated that we have not seen any of those toxicities or any drug-related neutropenia, which was very encouraging to us as you mentioned because we were seeing strong amid activity with greater than 90% knockdown of Ikaros and Aiolos, but we're not seeing neutropenia. Yes, we're expecting to see some decrease in new total count. We have seen some decrease in neutrophils followed by recovery, but it hasn't risen to the level of being neutropenia, which is in line with our preclinical data, our GLP tox data, where we did see some decline in neutrophil but that we saw a recovery prior to the next dose three weeks later. So, the use of this every three-week dosing schedule, at least so far in the clinic, has been successful from a safety standpoint and helping us to mitigate any sort of dose-limiting neutropenia, which we think is important because we do have this potent mid activity as part of KT-413, of course, along with the strong IRAK4 lowering activity that our ability to dose escalate without being limited by myelosuppression, especially neutropenia or by [Indiscernible] is something which we see as being very encouraging so far.

Thank you. Your next question comes from the line of Kalpit Patel from B. Riley Securities. Sir, your line is open.

Yes, hey, good morning and thanks for taking the question. For the planned Phase II study in HS, can you give us any color on the expected trial design? And maybe what types of patients you're planning to include in that trial? Would you allow the use of prior use of HUMIRA in that study? And then I have a follow-up.

Kalpit, thanks for the question. It's a great question. Unfortunately, we're not in the position to comment on it. But I think soon enough, I believe there'll be updates on clinicaltrials.gov. At that point, we might be able to add some color around what's been disclosed. That's what we've agreed with our partner at this point.

Okay, got it. And what are you looking in terms of expectations for that trial in HS? Are you looking to beat or match what HUMIRA has performed historically? Or do you think there's a slight wiggle room here that you don't need as much efficacy because you have an oral option?

Another great question, I'm glad we're starting now setting expectations. So, let's start with what we've seen so far. We've seen completely encouraging activity. I would say in both HS and AD. Obviously, your question was focused on HS, which is okay. But I would say on both indications. In both indications lock at this point, a well-tolerated potent oral option that can help patients manage these really difficult diseases, especially obviously, the moderate to severe cases, and our goal is to have an oral option that is well-tolerated and that works and has patients and that we believe can be competitive with other agents that have been approved in those patient populations. I think once we complete the study, and we have a data set that is placebo-controlled and solid, I mean, we can then start to discuss if that type of data set is repeated in the Phase III study, where is the commercial strategic placement of this particular drug. But I think right now, it's premature to discuss the commercial option. All I can say in terms of clinical and patient impact, we are planning to develop this drug. And to be honest, other that you'll hear about in the future to fill a need, which is an oral option for patients that don't have one that is both well-tolerated and active. And our limited experience, I would say, limited again in both HS and AD running studies in patients has been that regardless of the activity of existing options, patients are looking for well-tolerated, easy to take oral drugs, and that's what Kymera going to be focused on in the next few years.

Thank you. Your next question comes from the line of Vikram Purohit from Morgan Stanley. Sir, your line is open.

Hi, good morning. Thanks for taking our questions. So, one follow-up, and apologies if this was discussed and we missed it. But on the topic of additional potential indications for 474 beyond HS and AD, what is your in Sanofi's kind of cadence of decision-making there? Is that going to be dependent on data from the planned Phase II studies in these two indications? Or is that a separate decision-making process that you're going through with Sanofi at this time? And then secondly, I'm not sure to the extent you can talk about this, Nello, just given your recent remarks on the other question around HS. But has the thinking around the design for the HS study and the patients you might enroll been impacted at all by recent competitive developments in that indication? Thanks.

Yes. Thanks Vikram. Both great questions, and I think I can address both. So, the first one, I can't speak for Sanofi, unfortunately. So what I can say, though, that we are -- as any responsible drug development organization and in this case, partnership are discussing what potential other opportunities are for an asset like this, and as you know, Kymera on our own, have been doing this for now a few years. So, obviously, we don't have to reinvest the wheel that many times. But the conversations are around what are the other potential opportunities beyond HS and AD. I can't speak to the decision-making process. But maybe from my perspective, what I can say is that obviously, generating exciting data in HS and AD might influence some other indications that are very close, mechanistically and biologically to HS and AD. But it will not, in my mind, again, influence indications that are biologically and pathologically differentiated from HS and AD, and if you look at the list of potential indications that even we have on our website, you can imagine that there are numerous opportunities that fit the first packet and the second packet. So, maybe I'll leave at that at this point. For the second question, which was around have other studies impacted our clinical trial design. The short answer is no. The way that we and Sanofi had designed the Phase II study is to evaluate the clinic, obviously, safety, as you know, safety and the clinical activity of an IRAK4 degrader in HS and in AD, and we believe that our design is going to be able to answer that question. The question is whether the drug is superior, inferior clinically to other drugs. That's not the goal of our Phase II study. I put it out there already, so as you can imagine, again, and this goes back to, we believe there is a clear need in HS and AD, I would argue in COPD in IPD of well-tolerated -- and this again, these are my words of oral well-tolerated active drugs, and that's what we're trying to develop here.

Thank you. Your next question comes from the line of Eric Joseph from JPMorgan. Sir, your line is open.

Thanks. Thanks for taking the questions. Just a couple from us on 253, and just this player differentiation where you expect to be bypassing the feedback regulation of MDM2, maybe can you just remind us the cinch feedback and is looking at sort of degradation after cycle one, enough to support having a differentiated degradation profile? Or would you perhaps need to look at degradation with subsequent cycles to get a better understanding of the MAX degradation profile and use that to optimize schedule collection?

Yes, another great question. We're very fortunate here with a great questions today. So the 253, what is the kinetics of the feedback loop and where does the overcoming of the feedback loop impact the biology of P53 I might add a kind of a follow-up point to your first point. What we have experimentally demonstrated that the feedback loop needs to overcome -- it needs to be overcome, which means we need to retain a high level of MDM2 degradation only for the first few hours. Actually, beyond the first few hours, it doesn't matter anymore, whether you're degrading MDM2 or not. Because once you degrade it for the first few hours, cells have irreversible commitment to that, and so that's the hypothesis here. Small molecules, it actually doesn't really depend on the dose as a really hard time overcoming that just because it's limited by how much compound you can give in the pace of the re-synthesis of P53 of MDM2 being a catalytic it doesn't really matter exactly what the dose is were able to degrade a large amount of MDM2 every minute the compound is on board. So, we should be able to evaluate mechanistically our ability to suppress MDM2 and to lead to sell that on cycle one. Now multiple cycles might be needed to have maximal antitumor effect. But that, as you know, it's just standard oncology drug development, and importantly, for us, the hypothesis is MDM2 degradation leads to apoptosis leads to cancer cells that leads to antitumor activity before we hit those limiting toxicity, which does not happen with small molecule inhibitors, and that's why I said earlier, we should be able to show that in a Phase I study. Again, we're not going to be able to talk about what is the response rate in population X, Y and

Thank you. Your next question comes from the line of Eliana Merle from UBS Financial. Your line is open.

Hey guys. This is Jasmine [ph] on for Ellie. Thanks so much for taking our question. We saw from the update in June that the majority dose of 413 have been MYD88 trial type and not yet? So, how should that like inform our expectations for any potential anti-tumor effects you're expecting to be? Do you expect that proportion to change this moment to continue? And then I have a follow-up.

So, I didn't hear it very well, but I think you asked -- I think I'm going to answer anyway, and you tell me if I understood your question. So it's true that as of the ICML update, which I want to remind everybody, the cutoff date, I believe, was June 1st. All the patients but one were MYD88 wild-type, and actually, the only patient that was MYD88-mutant was the first patient in dose level four, which in a way, I think it was a bit of a coincidence, but it was a fortunate incidence, meaning that the only -- or the first patient with MYD8- mutant or mutation was at a cohort that we believe should be or could be clinically active. We do expect to see activity only MYD88-mutant patients. That's based on our preclinical data, where really strong activity was seen only in MYD88-mutant patients. So our ability to demonstrate antitumor activity, as I said earlier, in this program will be driven by our ability to have multiple MYD88-mutant patients, as I said, a handful as part of the dose escalation to evaluate the clinical activity. While the rest of the patients, I assume, will be mostly generating PK/PD and safety data, which is, again, really the official goal of the Phase I study. But hopefully, that answers your question.

Yes, thank you. And then on the Phase III program, how should we think about the discontinuation that you expect going forward and then the adverse events classified as related to reset that you showed in the ICML poster. Do you see those as like related to the mechanism, do you expect to see any of those going forward?

I going to ask Jared to answer this one, Jared. Hopefully, you heard it well.

Well. Yes, I sort of heard part of it. A little bit of it wasn't entirely clear--

So, maybe Jared summarize the potential discontinuation rates in 333 and then the -- what did we see in terms of relatedness of adverse events in the 333 study up to the ICML disclosure, that's my edition.

Yes. I mean, we really haven't seen much in the way of discontinuation due to adverse events, we have had people who eventually have come off to a study, but not due to adverse events. So in terms of what do we expect in terms of future discontinuation rate, hopefully, it will be low in terms of adverse events. Patients may come up for other reasons like disease progression, for example, but hopefully not for adverse events. If we look pre-clinically at what we saw in terms of safety as we push on higher doses in preclinical studies, we did see GI side effects there and relatively modest effect on platelets. So far, we've seen relatively little of that as we've been dose escalating, and we have had adverse events, many of which have been related to disease as opposed to being related to the drug itself. But as we continue to dose escalate, we'll be watching carefully for any adverse events that are thought to be related to treatment and see how those line up with what we saw really, but I think that's the whole point really of Phase 1 really is as we dose escalate to really see how well the level of STAT3 that we're seeing is tolerated by these patients. It is difficult sometimes in these early Phase I studies, we do have very heavily pretreated patients to be able to sort out events that you're seeing that are related to the disease itself versus those that are related to the drug and the investigators at the sites ultimately have to make the call there. But so far, the safety profile has been encouraging, and we'll just continue to watch as we enroll patients onto the trial.

Operator, in the interest of time, can we ask the questions just to keep to one question, so we can try to get through the rest of the queue.

Understood. Thank you. Now, your next question comes from the line of Srikripa Devarakonda from Truist Securities. Your line is open.

Good morning. Thank you so much for taking my question. I know a lot of them have been answered with respect to Sanofi initiating programs in HS and AD. But given Sanofi's footprint in that space and also the evolution of the competitive landscape in HS as well as in AD, would be great to get your thoughts on potential for combos that could be synergistic. For instance, with an antibody targeting a downstream cytokine and the pathway, be a potential combo partner? Thank you.

Yes. No, great question. So I mean, I would start with, again, saying what I said earlier, which is in both indications and others, patients still need effective therapies. If you look at even DUPIXENT, which is one of the most successful drugs in immuno-inflammatory diseases has really limited penetration, and so I think there is still a need for effective therapy that are simple to use and they are well-tolerated. If I want to indulge your question on the scientific merit, yes, sure, there are opportunities to synergize across these multiple immune mechanisms, and I can't speak to those plans because, to be honest, have not been discussed. But one would say, let's say, an observer of how the understanding of immuno-inflammatory diseases is evolving with time, that yes, there could be potential synergies across more than one mechanism. But that's just a scientific observation at this point from my standpoint.

Thank you. Your next question comes from the line of Derek Archila from Wells Fargo. Your line is open.

Hey good morning. Thanks for taking my questions. Just a follow-up to an earlier question on KT-333 or potentially another STAT3 degrader you might develop for I&I indications? Is this something that you would explore yourself? Or is this purely for something that you would look to partner KT-474? Thanks.

No, I mean our strategy is not to partner immunology programs. We did partner KT -- I should say, IRAK4 in 2020, and that at the time was the right thing to do for the company, but that is not what our base case strategy is. So you should not expect that the next immunology program is going to be partnered. I think it will depend on many factors. But I think you should not expect that we -- our base case is to partner these programs before they reach key inflection points in general.

Thank you. Your next question comes from the line of Kelly Shi from Jefferies. Your line is open.

Hi, this is [Indiscernible] on for Kelly. Thanks for taking our question. So, one of your three objectives is to deliver two new INDs, can you provide more color in terms of the indication and targets and how the learnings from the current clinical programs have instructed your plan? Thank you.

Yes, it's a great question. I'm not going to go into the specifics of the numbers there. But just generally, what I said earlier is that we've learned a lot from the first seven years of this company. I think it's fair to say we're pioneering protein degradation, and for sure, we're pioneering its pre-integration in immuno-inflammatory diseases. Lots of learnings on how to develop at least early to discover an early development of immune inflammatory degraders that have the potential to be best-in-class oral options. And so I think the expectation to have is that there'll be a lot of focus on those particular type of programs, large opportunities, unmet needs, oral immune inflammatory drug and other indications. But I would say that the expectation is a lot of focus in that particular area.

Thank you. Your next question comes from the line of Rich [Indiscernible] from Credit Suisse. Your line is open.

Morning. This is Grace on for Rich. Thank you for taking our question. Just wondering for the -- just wondering for the [Indiscernible], how are you thinking about positioning that in lines of therapy in the Phase II study? Are they trying to play stay broad? Or will you narrow a more specific patient population in the study? Thank you.

Thanks. I kind of addressed this earlier. At this point, we're developing a drug that we believe will be -- has the potential to be safe, active and access a broader population of patients that right now are not served by existing therapies. Again, when we talk about labels and commercial positioning, that then will happen further in clinical development. Right now, we don't have any reasons to believe that we will be limited by any factors at this point.

Thank you. The last question on the queue comes from the line of Geoff Meacham from Bank of America. Your line is open.

Good morning. this is [Indiscernible] calling in for Geoff Meacham. Thank you for the question. So, just a follow-up on BD. Other than immunology, are you looking for BDs for assessing your other therapeutic areas? And if so, what may be some things topped your mind when you're making these type of decisions?

Question was BD -- did you say BD like business development or a--

Yes. BD, like KT-474 type of collaboration?

Yes. So, I mean we've commented on this particular topic in the past. So, I'll try and keep this short. I mean, at the company with a broad pipeline that is an enabling platform that can deliver sustained innovation will continue to entertain potential synergistic partnerships I would say that's a broad concept. I don't think right now, we're in the position to discuss specifics about indications area programs. But I think that statement apply -- probably will apply always for a company like Kymera that has this such an effective engine to deliver innovative -- potentially innovative therapies.

Thank you. I'm showing no further questions in the queue. I'll now hand the call over to Justine for closing remarks.

Thank you. And thank you, everyone, for participating on today's call. I am very excited to join the Kymera team and look forward to working with many of you going forward. In the meantime, please don't hesitate to reach out to me or Bruce if you have any follow-up questions. Thank you and this concludes today's call