Kyverna Therapeutics, Inc. Common Stock (KYTX) 31 Oct 242024 Q3 Earnings call transcript

Good day and welcome to the Chimera Therapeutics Third Quarter 2024 Results Conference Call.

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I would now like to turn the conference over to Justine Komigsberg, Head of Investor Relations.

Please go ahead.

Thank you.

Good morning and welcome to Chimera's quarterly update call.

Joining me this morning are Nellie Monofi, Founder, President, and CEO, Jared Gullop, our Chief Medical Officer, and Bruce Jacobs, our Chief Financial Officer.

Please note that during Jared's remarks, we intend to reference data from slides in our corporate presentation, which is available within the IR section of our website at chimera.tx.com.

Following our prepared remarks, we will open the call to questions.

We ask that you please limit your questions to one and a relevant follow-up to ensure we have enough time to address everyone's questions.

Before we begin, I would like to remind you that today's discussion will include forward-looking statements about our future expectations, plans, and prospects.

These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

A description of these risks can be found in our most recent 10Q filed with the SEC.

Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call.

With that, I will now turn the call over to Nellie.

Thank you, Justine, and good morning, everybody.

We have a lot of important updates today, so let's jump right in.

First and foremost, we're extremely excited that we have started the phase one study of KT61, a first-in-class oral STAT6 degrader, and the first STAT6 medicine to ever enter clinical development.

It's important to highlight that we were able to accelerate the path to the clinic, given a recent increased focus of resources and capital that we're directing towards our growing immunology pipeline.

I believe this is also an important moment for the whole industry.

We have shown in preclinical species that a STAT6 degrader like KT61 can block IL-4 and IL-13 similarly, or even more importantly, than an upstream biologic like Dupilumab, in both cellular and in vivo models.

We've also shown that KT61 was well-tolerated in all safety studies that we have run in a wide variety of preclinical species.

In summary, we have an investigational drug that has the potential to have a Dupilumab-like profile in a daily oral pill.

Many of you know there are more than 150 million patients just in the US, Europe, and Japan who suffer from diseases associated with TH2 inflammation.

According to market data, less than a million of those patients receive Dupilumab.

While one could focus on the roughly million patients currently on Dupilumab, Chimera is focused on expanding access across the tens of millions of patients waiting for a convenient, safe, and effective oral pill.

One that doesn't require needles, refrigeration, syringes, and frequent trips to the doctor's office.

We believe KT61 is a medicine that has the potential to transform treatment paradigms in many diseases that affect millions of patients, such as atopic dermatitis, asthma, COPD, and EOE, just to name a few.

In addition, given that TH2 diseases are highly prevalent in children, we believe this has the potential to be a drug that will change quality of life for many families in the future.

Our next STAT6 update is expected to be upon completion of the Healthy Volunteer Study in the first half of 2025, at which point we will share the full results.

Following the completion of the phase one study, our plan is to move quickly into patients.

We have those plans well established, and we expect to provide guidance on the next stage of 6-1 clinical development next year.

Jared will share more details around the ongoing phase one study later in the call.

I also want to briefly highlight another important update on KT474, our first-in-class IRAK4 degrader.

This is another program where Chimera was first to clinic and has success that has influenced the industry, with several companies following our lead with other IRAK4-directed assets.

We are finally able to share more information on the expanded phase two studies that are being run by our partner Sanofi.

As you may have read in our press release earlier today, the program is transitioning from proof-of-concept-like phase two studies to fully powered phase two B studies, with dose-ranging as a means of accelerating our path to registration of phase three studies right at the conclusion of the ongoing studies.

In terms of the specific trial changes, we have basically added one dose group to each study so we have enough information to select the dose for the subsequent registration of phase three studies.

We are thankful to our partner Sanofi for the increased confidence in and commitment to this important program.

Turning to TIC2, we have exciting progress to report as well.

At an R&D day in January of this year, we introduced our TIC2 program and our lead molecule KT294.

Similar to all of our programs, as KT294 was being advanced through preclinical development, we had parallel work ongoing on other promising compounds.

One of the compounds we were evaluating demonstrated an even more compelling profile than KT294, highlighted by greater in vivo activity with a similar selectivity and safety profile.

As a result, we've decided to advance the new compound KT295 as our lead clinical candidate.

Finally, we believe we can do that without impacting our previously stated TIC2 development timelines, which assume the phase one trial start in the first half of 2025.

Finally, I just wanted to provide everyone with a broader strategic update and specifically as it pertains to our oncology programs.

As many of you recall, it was around this time last year that we first shared we had increased our focus in immunology.

The rationale was driven by the profoundly impactful profiles we believe we could generate in immunology with oral degraders that could compete with injectable biologics in terms of efficacy and safety.

As shown with KT474 in the clinic and with our STAT6 and TIC2 efforts preclinically, we think we're positioned to develop the potential best-in-industry portfolio of oral immunology assets with opportunities to impact millions of patients.

We have more today with KT474 in multiple phase two B trials, KT621 in the clinic, and KT295 close to the clinic.

Other exciting immunology programs will be unveiled starting next year.

We believe now is the time to focus even more of our resources into this space where we believe we can create outsized value.

As a result, while we've made some encouraging progress with our clinical oncology pipeline, demonstrating promising clinical activity in a variety of tumor types as we have completed phase one enrollment, we have made the decision that we will only advance KT333, our STAT3 degrader, and KT253, our MDM2 degrader, beyond phase one with a partner.

You can expect that we'll share more on this if and when it makes sense to do so.

While there are many considerations that contributed to this decision, ultimately we believe our internal resources, both capital and people, are best focused on our expanding immunology pipeline.

It should be noted that we did not take this decision lightly or without thinking about the potential impact on patients.

We're grateful to patients, families, investigators, and the Chimera team who support their studies and these programs.

In conclusion, as we approach year-end, it is quite exciting to see the trajectory that Chimera has had in 2024, especially within our immunology pipeline.

We've advanced KT61 in the clinic with what could become one of the biggest programs in our industry.

We have supported Sanofi to advance KT474 into expanded phase two studies.

We've developed a TIC2 degrader with a compelling profile and are closer to the clinic.

And we've raised a total of approximately $600 million in just 2024, enabling us to have cash into mid-2027 and through several inflection points across our pipeline.

I'll pause here and let Jared share more details on our programs, and Bruce will walk you through the third-quarter financial results.

I'm looking forward to the Q&A session at the end of our prepared remarks.

Thanks, Nella.

As it relates to immunology, I'd like to first recognize our KT61 team for the rapid progression to advance this first-in-class program through IND-enabling studies, culminating in the IND adherence and the initiation of the phase one healthy volunteer study earlier this month.

As we have not shared many details on the trial design, I wanted to take the opportunity now to provide a quick overview of the phase one design.

The SAD-MAD healthy volunteer trial includes single and multiple ascending dose cohorts evaluating KT61 as compared to placebo.

In the SAD component, each subject receives a single dose of either KT61 or placebo.

In the MAD component, each subject receives a daily dose of either KT61 or placebo over 14 days.

In terms of data we plan to share, the main objective of the trial is to demonstrate that we can robustly degrade STAT6 in blood and skin at doses that are safe and well tolerated.

Based on our preclinical work, we are targeting STAT6 degradation of 90% or more, which is the level at which we saw strong biologics-like activity in our preclinical models.

In fact, levels of pathway blockade, in this case measured by STAT6 levels, are the data that have shown to be translatable to patient efficacy.

As we have said, STAT6 degradation and safety and tolerability are the key readouts from this study.

Additionally, as many of you know, we plan to measure certain TH2 biomarkers, specifically IgE and TARC, in the healthy volunteers on our study.

We fully expect KT61 to have an impact on these biomarkers.

However, we believe the impact is likely to be much more robust and relevant in patients, as is also true for Dupilumab.

With enrollment underway, we continue to expect to report the full SAD-MAD phase one results for KT61 in the first half of 2025.

At or before that time, we will also share our plans for the next stage of KT61's development.

I'll now turn to our TIC2 program.

As Nello mentioned, we made the decision to advance a new development candidate, KT295, into the clinic, which we believe we can do without impacting our stated timelines over the first half of 2025 for the start of the phase one study.

I thought I would take a few minutes to share some details around KT295, particularly a comparison to KT294 that influenced our decision.

You can also reference the TIC2 program slides in our corporate presentation, which is available on our website.

On slides 48 and 49 of our corporate deck, you can see that in preclinical testing, KT295 demonstrated picomolar degradation potency and potent inhibition of the IL-23, IL-12, and type 1 interferon pathways, showing its potential to recapitulate the biology of human TIC2 loss-of-function mutations.

Like KT294, on slide 50, KT295 did not impact any of the other JAK proteins and spared IL-10 signaling, a feature important in the treatment of inflammatory bowel disease.

Importantly, KT295 had greater in vivo activity compared to KT294 as shown back on slide 48.

With this profile, KT295 has the potential to replicate the TIC2 loss-of-function profile and achieve biologics-like activity at lower doses than what was predicted for KT294.

To round out our I&I franchise, I will cover IRAK4.

We are pleased that Sanofi has taken steps to accelerate the overall KT474 development program.

As a reminder, the goal of the previously announced decision to expand the Phase 2 program was to structure the hidradenitis suppurativa and atopic dermatitis trials with the necessary regulatory perspective to enable dose selection and advancement directly to pivotal Phase 3 studies, ultimately with a meaningfully shorter timeline.

To support this strategy, the size of the studies has increased with additional doses being evaluated in both trials.

There are no changes to study endpoints.

Specifically, the HS Phase 2 trial has been expanded from 99 to 156 patients and will evaluate two doses of KT474 versus placebo compared to just one active dose previously.

The AD Phase 2 trial has increased from 115 to 200 patients and will evaluate three doses of KT474 compared to placebo versus just two active doses previously.

These changes drive the primary completion dates to the first half of 2026 and mid-2026 for HS and AD, respectively.

While that obviously extends the time before the complete Phase 2 data readout, we expect that it will meaningfully reduce overall development timelines for the KT474 program by allowing a faster path to pivotal studies.

We're energized by the progress and potential impact of our immunology programs, each representing pipeline-in-a-product opportunities.

We believe our oral degraders are uniquely positioned to have both the efficacy and safety of biologics with multiple development opportunities and large high-unmet need indications.

Finishing up on oncology, I will not add too much more to what Nella said earlier.

But I did want to remind everyone that we will be sharing the totality of the Phase 1 data for our STAT3 degrader, KT333, at ASH in December.

As a reminder, our latest enrollment was focused on Hodgkin's lymphoma patients given the promising responses we observed in that population, and those results will be included in the poster presentation.

I'll stop here and ask Bruce to review the third quarter financial results.

Thanks, Jared.

As we have a lot to cover on this call, and I'm sure you all have many questions, I'm going to provide a quicker than normal overview of our financials and then refer you to the financial statements in the press release and our 10Q, which we filed this morning.

In the quarter, we recognized $3.7 million of revenue.

That was all attributable to Sanofi and the collaboration.

Combined spending of R&D and SG&A, excluding non-cash stock-based compensation, was $61 million in the quarter, and that's down about 2% sequentially from the June quarter.

Finally, we ended the quarter with $911 million of cash on our balance sheet, providing a cash runway to mid-2027.

I'll now turn the call back to Nella.

Thanks, Bruce and Jared.

Before we open the call for questions, I just want to reiterate that we're more enthusiastic than ever about the opportunities in front of us.

Advancing KT61 in the clinic is a significant milestone for Chimera and the industry, and we're doing so with a very exciting drug profile based on our preclinical findings.

We're executing on the rest of our immunology pipeline, and we look forward to sharing updates on TIC2 and providing more visibility on other pipeline programs, which we have yet to disclose, likely next year.

We're well-resourced to advance our best-in-industry pipeline of degrader therapeutics, and look forward to keeping you updated with our progress.

The next six to twelve months will provide multiple value-creating catalysts, and we look forward to sharing these with you.

Finally, I want to thank the Chimera team and our collaborators for continuing to deliver on very ambitious goals and first-in-industry endeavors.

I'll pause here and ask the operator to open the call to questions.

Thank you.

We will now begin the question and answer session.

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At this time, we will pause momentarily to assemble our roster.

Thanks for taking my questions.

Maybe thinking about the KT61 Healthy Volunteer data, and thanks for the clarity on exactly where the target profile is.

But maybe thinking through to the TH2 biomarkers, investors seem to be really trying to compare this to what was seen with Dupilumab, as you alluded to.

How reliable do you think these percentage changes in IgE and TARC from the Healthy Volunteer study almost a decade ago really are?

How comparable and how tight of a range do you think you need to get to?

Maybe I'll start. Jared, please jump in.

The first thing is, as Jared explained, the main goal of the phase one study for any program, but especially for us, is first to demonstrate that we have predictable PKs and the safety is translating from the amazingly well-tolerated profile that we've seen preclinically.

With a degrader, as we've done multiple times, we have this unique opportunity to access a direct biomarker.

So don't forget that lots of other modalities and companies use downstream biomarkers because they're not able to have a proximal biomarker.

We have the most proximal biomarker, which is STAT6 protein levels.

We can look at STAT6 protein levels in blood and skin to show that we're able to block the IL-4 and IL-13 pathway fully.

That's the goal of the study. That is the only biomarker that has been correlated to disease impact.

Blocking the pathway has been correlated to disease impact.

In fact, there was a recent paper where they found partial loss-of-function variants of STAT6 that were protective against TH2 asthma.

So that actually now, for the first time, correlates protein function and levels to protection in TH2.

Many companies, including Regeneron back in the day, and others with long-acting biologics, look at downstream levels because they can't measure their direct biomarkers.

People have looked at IgE and TARC. IgE is mostly detected by Dupilumab data, and I think recent publications from other companies.

TARC and phosphorylated STAT6 levels are key for other companies.

It's important to understand that these are modestly elevated in healthy volunteers, with intersubject variability, making it difficult to predict the degree of reduction.

If you look at the published paper of Dupilumab in healthy volunteers, IgE impact is between 10 and 30 percent, up to 15 percent for the sub-Q dose, with variability.

TARC is between 15 and 35 percent, in line with data from long-acting IL-13 biologics in phase one.

I would discourage people from overanalyzing the exposure-to-biomarker relationship since data can be noisy.

The critical goals are safety, PK, and STAT6 degradation levels, which correlate with efficacy.

We expect to change biomarkers within a known range seen in other clinical agents.

Sorry for the long answer.

Long, but very helpful.

Then maybe just more on the model, with Bruce: could you talk through with the continued prioritization of the immunology side?

Are there any savings from oncology, or will all resources be redeployed into immunology?

Yeah, thanks, Mark. It's a good question.

There are savings in aggregate because some of the clinical development plans we contemplated won’t be pursued internally.

However, most of that, if not all, will be reinvested in our immunology pipeline.

That includes both clinical development of programs you know about and those we haven’t disclosed yet.

While there might be a modest change in our cash runway, not enough to change our guidance, expect most savings to be reinvested.

Our next question comes from CalPIT Patel from B. Reilly. Please go ahead.

Yeah, hey, good morning, and thanks for taking the question.

On the STAT6 program, have you made comparisons to Dupilumab preclinically, especially regarding ear thickness in the atopic dermatitis model, the MC930?

Also, I think the 32 milligrams per kilogram dose showed the most reduction in IgE. What does that translate to in human doses?

Great question.

We use a 30-32 mg/kg dose in mice to reach 90% degradation, but in dogs and monkeys, lower doses, in single-digit mg/kg, are effective.

Mice have higher protein binding, requiring a larger dose compared to dogs, monkeys, or humans.

Projections are more accurate using dog or monkey data rather than mice.

Our dose exploration will likely mirror that of our IRAK4 programs.

Regarding models, we focus on TH2 biomarkers and outcomes, using asthma models for lung infiltrate and biomarkers.

Ear thickness isn’t a monitored outcome because it’s more composite and non-TH2.

Okay, got it. Thanks for taking the questions.

Our next question comes from Crepa de Veraconda from Tuist Securities. Please go ahead.

Hi, this is Alex Sanagathon for Crepa.

On the TIC2 asset: do you think a degrader could address efficacy challenges seen in conditions like IBD?

Would you consider enrolling TIC2 inhibitor-experienced patients in future trials?

Great question.

TIC2 is genetically validated, and inhibitors have driven multiple molecules forward, but they only address partial TIC2 function.

Our degrader fully blocks TIC2, removing the protein entirely, which we believe will be transformative.

If our degrader looks like the inhibitor, we would have failed.

We aim for a drug that competes with biologics, with an even more active molecule in KT295.

Jared, do you want to add on the recruitment question?

Yes, we wouldn’t initially enroll patients who progressed on prior TIC2 inhibitors.

We might include those who stopped due to tolerability issues.

Later, we’d be interested in understanding our drug’s efficacy in patients who have progressed on prior inhibitors, but not in the first study.

Our next question comes from Brad Canino of Stiefel. Please go ahead.

Hi, good morning.

You stated that the next steps for STAT6 will be shared after the SAD-MAD results, but Dupilumab replication in TH2 patients is the major question.

Is there a type of TH2 disease that’s best to test this?

How long would testing need to be, and are clinical endpoints required, or will biomarkers suffice?

Great question.

The phase one goal is to show therapeutic STAT6 degradation safely. Regeneron and Sanofi have defined Dupilumab’s biomarker signature well in AD patients.

We could quickly validate STAT6 degradation's impact in a biomarker study in patients.

This could accelerate moving into large studies in key indications.

We’ll share plans for patient studies soon.

Our next question comes from Vikram Paroheed from Morgan Stanley. Please go ahead.

Hi, good morning.

On KT253 and KT333, what would an ideal partnership look like?

Are discussions underway, and should we expect a partnership soon?

We can’t comment on ongoing discussions, but our oncology pipeline has translated well into the clinic, with exciting early activity.

Given the promising data in hematologic cancers, we would look for a partner with strong clinical and commercial franchises in that area.

The goal is to best serve patients while focusing our internal resources on immunology.

Our next question comes from Kelly Shee of Jefferies. Please go ahead.

Congratulations on the progress, and thank you for taking my questions.

What are the major differentiators of targeting STAT6 compared to IL-4, IL-13, or OX40 from a biological perspective?

STAT6 is involved in innate immunity as well, so what indications could the STAT6 program pursue?

Great question.

STAT6’s activity in immune cells is driven by IL-4 and IL-13 signaling, shown by reduced phosphorylated STAT6 when blocking those pathways.

We expect STAT6 degradation to address TH2 biology effectively.

Gain-of-function STAT6 variants cause severe allergic TH2 diseases, while partial loss-of-function variants are protective.

STAT6 targeting mimics full IL-4 and IL-13 blockade, with potential in diseases like asthma, atopic dermatitis, COPD, and more.

STAT6 degradation could achieve more sustained pathway blockade compared to upstream antibodies, benefiting diseases with complex TH2 components.

We’ve shown in models and human sensory neurons that STAT6 degradation reduces itch and pain transcripts, key symptoms in AD.

We believe STAT6 targeting provides a unique and comprehensive approach.

Our next question comes from Jeff Jones of Oppenheimer. Please go ahead.

Good morning, and thanks for taking my question.

On KT621, your IRAK4 partner Sanofi is collaborating with others targeting STAT6.

How does your degrader approach compare, and is there a differentiation from competitors like Nurex?

We’re the only company with extensive preclinical data comparing STAT6 degradation to approved drugs, showing Dupilumab-like activity or better.

Our degrader fully blocks STAT6 and pathway signaling, unlike inhibitors that may not achieve full blockade.

We believe we have a highly potent, catalytic degrader that doesn’t rely on PK/PD correlation.

It’s hard to comment on competitors since they haven’t shown data or nominated development candidates.

We remain confident in our leadership in this space.

Our next question comes from Eric Joseph of JP Morgan. Please go ahead.

Hi, good morning. Could you discuss the number of dose cohorts and patient numbers in the SAD and MAD components?

Will the first-half readout include both components, or will it be partial?

Also, is the prior IRAK4 phase one a good roadmap for expectations?

We can't provide full details, but comparing it to the IRAK4 phase one is reasonable.

Both SAD and MAD components will be placebo-controlled, with MAD involving 14 days of dosing.

We expect to report the complete SAD-MAD data set in the first half of next year.

The trial entry will be on clinicaltrials.gov soon, showing around 120 participants for SAD and MAD.

Great, thank you. That clarifies things.

Our next question comes from Ellie Murrell of UBS. Please go ahead.

Hey, it's Sam on for Ellie.

Could you discuss your confidence in IRAK4's efficacy in HS versus AD?

Also, how soon after SAD-MAD do you expect to move KT621 into patient studies, and any timeline for an IND filing?

We plan to move into patients soon after phase one, but we're not sharing details yet.

Our competitive strategy will dictate when we disclose more.

Jared, your thoughts on IRAK4?

We have high confidence in HS and AD based on mechanistic data.

Phase one showed symptom and biomarker modulation in both HS and AD patients, so we expect robust efficacy in phase two trials.

Our next question comes from Michael Schmidt from Guggenheim. Please go ahead.

Hey, good morning. On KT621, what are potential on-target or off-target AEs you might expect in high doses?

What learnings do you have from STAT6 knockout models?

Great question. STAT6 degradation has shown no adverse events at even 40-fold the effective dose in preclinical studies.

Our compound is highly selective, with no off-target activity in extensive testing.

STAT6 knockout mice are normal and fertile, and partial loss-of-function variants in humans are protective against TH2 diseases.

We believe STAT6 is a perfect target and hope our preclinical safety translates to the clinic.

Thanks. How will you prioritize indications for subsequent studies?

Are AD and asthma at the top of the list, or do you have a broader approach?

We consider KT621 a TH2 drug, not limited to AD or asthma.

We’re aiming for broad impact, prioritizing large indications like AD, asthma, and COPD but are committed to addressing all relevant diseases.

Our next question comes from Faisal Khashid from Leary Partners. Please go ahead.

Hey, thanks for taking the question. I realize it’s early, but how are you thinking about potential partnerships for KT621?

We aren’t thinking about partnerships for KT621 right now. We believe we’re best positioned to develop it through phase two B.

When we get closer to phase three, we’ll consider our options, but our current focus is advancing the program ourselves.

Our next question comes from Andy Chen from Wolf Research. Please go ahead.

Hey, thanks for clarifying the IRAK4 trial changes.

Sanofi is adding an extra dose; is that because previous doses were too safe or not effective enough?

Great question. The additional dose isn’t about safety or efficacy concerns but fulfilling regulatory requirements for dose-ranging.

Early data showed enough promise to accelerate the study, so this is about meeting regulatory expectations for phase three.

Makes sense. Thank you.

Thanks, everyone, for joining.

We’re always available for follow-up questions. Thanks to our team and collaborators for their hard work.

Looking forward to updating you on our exciting year ahead.

This concludes today’s presentation.

You may now disconnect.