10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________________ to ___________________

Commission File Number: 001-39460

 

KYMERA THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-2992166

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

200 Arsenal Yards Blvd., Suite 230

Watertown, Massachusetts

02472

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (857) 285-5300

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

KYMR

 

The Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of August 5, 2022, the registrant had 51,862,959 shares of common stock, $0.0001 par value per share, outstanding.

 

 


 

Summary of the Material and Other Risks Associated with Our Business

We are a biopharmaceutical company with a limited operating history and have not generated any revenue to date from drug sales, and may never become profitable.
We have incurred significant operating losses in recent periods and anticipate that we will incur continued losses for the foreseeable future.
We will need to raise substantial additional funding. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, scale back or discontinue some of our product candidate development programs or future commercialization efforts.
We are very early in our development efforts and our IRAK4, IRAKIMiD, STAT3 and MDM2 programs are still in preclinical or early clinical development. If we are unable to advance them into and through the clinic for safety or efficacy reasons or commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.
Our approach to the discovery and development of product candidates based on our PegasusTM platform is novel and unproven, which makes it difficult to predict the time, cost of development, and likelihood of successfully developing any products.
Business interruptions resulting from the ongoing coronavirus disease (COVID-19) pandemic or similar public health crises could cause a disruption to our supply chain or the development of our product candidates and adversely impact our business.
We may not be successful in our efforts to identify or discover additional product candidates or we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
If we experience delays or difficulties in the initiation or enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
Our current or future product candidates may cause adverse or other undesirable side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.
Even if we receive regulatory approval for any of our current or future product candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
We rely, and expect to continue to rely, on third parties to conduct our ongoing and planned clinical trials for our current and future product candidates. If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain marketing approval for or commercialize our current and potential future product candidates and our business could be substantially harmed.
If we are unable to obtain and maintain patent and other intellectual property protection for our technology and product candidates or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and drugs may be impaired.

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, express or implied statements about:

the initiation, timing, progress, results, and cost of our research and development programs, and our current and future preclinical and future clinical studies, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;
our ability to continue to construct PegasusTM, our drug discovery platform, and to enable a rational and effective drug discovery and development engine;
the timing and the success of preclinical and clinical studies under our IRAK4, IRAKIMiD, STAT3 and MDM2 programs;
our plans to submit investigational new drug applications to the FDA for current and future product candidates;
the subsequent initiation of planned clinical trials;
our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop product candidates, including by applying learnings from one program to other programs and from one modality to our other modalities;
our potential ability to manufacture our drug substances, delivery vehicles, and product candidates for preclinical use, for clinical trials and on a larger scale for commercial use, if approved;
the ability and willingness of our third-party strategic collaborators to continue research and development activities relating to our development candidates and product candidates;
our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;
our ability to obtain and maintain regulatory approval of our product candidates;
our ability to commercialize our products, if approved;
the pricing and reimbursement of our product candidates, if approved;
the implementation of our business model, and strategic plans for our business, product candidates, and technology;
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;
estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;
the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory and commercialization expertise;
future agreements with third parties in connection with the commercialization of product candidates and any other approved product;
the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
our financial performance;
the rate and degree of market acceptance of our product candidates;
regulatory developments in the United States and foreign countries;
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;
the success of competing therapies that are or may become available;

ii


 

our ability to attract and retain key scientific or management personnel;
the impact of laws and regulations;
developments relating to our competitors and our industry;
the effect of the ongoing COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies and future clinical trials;
other risks and uncertainties, including those listed under the caption “Risk Factors.”

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the Securities and Exchange Commission, or the SEC, could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Quarterly Report. Unless otherwise expressly stated, we obtained this industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.

iii


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Condensed Consolidated Statements of Stockholders’ Equity

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

31

PART II.

OTHER INFORMATION

31

Item 1.

Legal Proceedings

31

Item 1A.

Risk Factors

31

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

73

Item 3.

Defaults Upon Senior Securities

73

Item 4.

Mine Safety Disclosures

73

Item 5.

Other Information

73

Item 6.

Exhibits

74

Signatures

75

 

iv


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share amounts)

(Unaudited)

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,914

 

 

$

47,976

 

Marketable securities (Note 4)

 

 

315,395

 

 

 

394,442

 

Contract assets

 

 

2,370

 

 

 

135

 

Prepaid expenses and other current assets

 

 

8,091

 

 

 

8,720

 

Total current assets

 

$

402,770

 

 

$

451,273

 

Marketable securities, non-current (Note 4)

 

 

90,182

 

 

 

125,187

 

Property and equipment, net (Note 6)

 

 

12,748

 

 

 

11,881

 

Right-of-use assets, operating leases

 

 

9,181

 

 

 

9,426

 

Other non-current assets

 

 

2,427

 

 

 

2,022

 

Restricted cash

 

 

6,113

 

 

 

6,116

 

Total assets

 

$

523,421

 

 

$

605,905

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,374

 

 

$

4,005

 

Accrued expenses (Note 8)

 

 

21,738

 

 

 

22,971

 

Deferred revenue

 

 

59,460

 

 

 

61,739

 

Operating lease liabilities

 

 

2,498

 

 

 

2,461

 

Finance lease liabilities

 

 

1,158

 

 

 

1,138

 

Other current liabilities

 

 

272

 

 

 

228

 

Total current liabilities

 

$

87,500

 

 

$

92,542

 

Non-current liabilities

 

 

 

 

 

 

Deferred revenue, net of current portion

 

 

24,071

 

 

 

39,295

 

Operating lease liabilities, net of current portion

 

 

12,708

 

 

 

13,224

 

Finance lease liabilities, net of current portion

 

 

927

 

 

 

1,140

 

Other non-current liabilities

 

 

264

 

 

 

66

 

Total liabilities

 

$

125,470

 

 

$

146,267

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; 150,000,000 shares authorized as of June 30, 2022 and December 31, 2021,
   
51,856,668 and 51,573,924 shares issued at June 30, 2022 and December 31, 2021, respectively; 51,847,049 
   and
51,536,181 shares outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

707,852

 

 

 

689,275

 

Accumulated deficit

 

 

(305,923

)

 

 

(228,982

)

Accumulated other comprehensive loss

 

 

(3,983

)

 

 

(660

)

Total stockholders’ equity

 

 

397,951

 

 

 

459,638

 

Total liabilities and stockholders’ equity

 

$

523,421

 

 

$

605,905

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three and six months ended June 30, 2022 and 2021

(In thousands, except for share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Collaboration Revenue—from related parties

 

$

11,514

 

 

$

18,519

 

 

$

21,136

 

 

$

37,221

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

41,293

 

 

$

35,220

 

 

$

77,238

 

 

$

61,181

 

 

General and administrative

 

 

11,031

 

 

 

8,029

 

 

 

21,642

 

 

 

13,939

 

 

Total operating expenses

 

 

52,324

 

 

 

43,249

 

 

 

98,880

 

 

 

75,120

 

 

Loss from operations

 

 

(40,810

)

 

 

(24,730

)

 

 

(77,744

)

 

 

(37,899

)

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

594

 

 

 

98

 

 

 

884

 

 

 

217

 

 

Interest and other expense

 

 

(41

)

 

 

(28

)

 

 

(81

)

 

 

(53

)

 

Total other income:

 

 

553

 

 

 

70

 

 

 

803

 

 

 

164

 

 

Net loss

 

$

(40,257

)

 

$

(24,660

)

 

$

(76,941

)

 

$

(37,735

)

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on marketable securities

 

 

(767

)

 

 

14

 

 

 

(3,323

)

 

 

128

 

 

Total comprehensive loss

 

$

(41,024

)

 

$

(24,646

)

 

$

(80,264

)

 

$

(37,607

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(40,257

)

 

$

(24,660

)

 

$

(76,941

)

 

$

(37,735

)

 

Net loss per share, basic and diluted

 

$

(0.78

)

 

$

(0.55

)

 

$

(1.49

)

 

$

(0.84

)

 

Weighted average common stock outstanding, basic and diluted

 

 

51,772,440

 

 

 

45,094,238

 

 

 

51,712,081

 

 

 

44,873,083

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the three months ended June 30, 2022 and 2021

(In thousands, except for share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders’

 

 

Shares

 

 

Value

 

 

Capital

 

 

Deficit

 

 

Gain/(Loss)

 

 

Equity

 

Balance at March 31, 2021

 

44,879,376

 

 

$

4

 

 

$

417,096

 

 

$

(141,840

)

 

$

(13

)

 

$

275,247

 

Exercise of stock options

 

422,471

 

 

 

1

 

 

 

1,470

 

 

 

 

 

 

 

 

 

1,471

 

Vesting restricted stock

 

18,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares under employee stock purchase plan

 

7,680

 

 

 

 

 

 

307

 

 

 

 

 

 

 

 

 

307

 

Stock-based compensation expense

 

 

 

 

 

 

 

5,726

 

 

 

 

 

 

 

 

 

5,726

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

13

 

Net loss

 

 

 

 

 

 

 

 

 

 

(24,660

)

 

 

 

 

 

(24,660

)

Balance as of June 30, 2021

 

45,327,681

 

 

$

5

 

 

$

424,599

 

 

$

(166,500

)

 

$

 

 

$

258,104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2022

 

51,692,666

 

 

$

5

 

 

$

697,597

 

 

$

(265,666

)

 

$

(3,216

)

 

$

428,720

 

Exercise of stock options

 

120,257

 

 

 

 

 

 

377

 

 

 

 

 

 

 

 

 

377

 

Vesting restricted stock

 

13,033

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares under employee stock purchase plan

 

21,093

 

 

 

 

 

 

256

 

 

 

 

 

 

 

 

 

256

 

Stock-based compensation expense

 

 

 

 

 

 

 

9,622

 

 

 

 

 

 

 

 

 

9,622

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

(767

)

 

 

(767

)

Net loss

 

 

 

 

 

 

 

 

 

 

(40,257

)

 

 

 

 

 

(40,257

)

Balance at June 30, 2022

 

51,847,049

 

 

$

5

 

 

$

707,852

 

 

$

(305,923

)

 

$

(3,983

)

 

$

397,951

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

 

 

 

 

3


 

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the six months ended June 30, 2022 and 2021

(In thousands, except for share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders'

 

 

Shares

 

Value

 

 

Capital

 

 

Deficit

 

 

Gain/(Loss)

 

 

Equity

 

Balance at December 31, 2020

 

44,482,186

 

$

4

 

 

$

412,777

 

 

$

(128,765

)

 

$

(128

)

 

$

283,888

 

Exercise of stock options

 

801,233

 

 

1

 

 

 

2,617

 

 

 

 

 

 

 

 

 

2,618

 

Vesting restricted stock

 

36,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares under employee stock purchase plan

 

7,680

 

 

 

 

 

307

 

 

 

 

 

 

 

 

 

307

 

Stock-based compensation expense

 

 

 

 

 

 

8,898

 

 

 

 

 

 

 

 

 

8,898

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

128

 

 

 

128

 

Net loss

 

 

 

 

 

 

 

 

 

(37,735

)

 

 

 

 

 

(37,735

)

Balance at June 30, 2021

 

45,327,681

 

$

5

 

 

$

424,599

 

 

$

(166,500

)

 

$

 

 

$

258,104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

51,536,181

 

 

5

 

 

$

689,275

 

 

$

(228,982

)

 

$

(660

)

 

$

459,638

 

Exercise of stock options

 

262,527

 

 

 

 

 

826

 

 

 

 

 

 

 

 

 

826

 

Vesting restricted stock

 

27,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares under employee stock purchase plan

 

21,093

 

 

 

 

 

256

 

 

 

 

 

 

 

 

 

256

 

Stock-based compensation expense

 

 

 

 

 

 

17,495

 

 

 

 

 

 

 

 

 

17,495

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

(3,323

)

 

 

(3,323

)

Net loss

 

 

 

 

 

 

 

 

 

(76,941

)

 

 

 

 

 

(76,941

)

Balance at June 30, 2022

 

51,847,049

 

$

5

 

 

$

707,852

 

 

$

(305,923

)

 

$

(3,983

)

 

$

397,951

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2022 and 2021

(In thousands)

(Unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(76,941

)

 

$

(37,735

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

17,495

 

 

 

8,898

 

Depreciation and amortization

 

 

1,392

 

 

 

1,037

 

Premiums and discounts on available-for-sale marketable securities

 

 

1,852

 

 

 

2,511

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

630

 

 

 

(91

)

Receivables—due from related parties

 

 

 

 

 

(