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Item 1. Business

2023-02-23 compared with 2022-02-24 · 491 added, 462 removed, 1708 unchanged (36% of the section changed)

We are a biopharmaceutical company focused on discovering and developing novel small molecule therapeutics that selectively degrade disease-causing proteins by harnessing the body’s own natural protein degradation system.

Our proprietary targeted protein degradation, or TPD, platform, which we refer to as Pegasus, allows us to discover highly selective small molecule protein degraders with activity against disease-causing proteins throughout the body.

Our proprietary targeted protein degradation, or TPD, platform, which we refer to as Pegasus, enables us to discover highly selective small molecule protein degraders with activity against disease-causing proteins throughout the body.

We believe that our small molecule protein degraders have unique advantages over existing therapies and allow us to address a large portion of the human genome that was previously intractable with traditional modalities.

We focus on biological pathways that have been clinically validated but where key biological nodes/proteins have not been drugged or inadequately drugged.

We focus on biological pathways that have been clinically validated but where key biological nodes/proteins have not been drugged or have been inadequately drugged.

To date, we have utilized our Pegasus platform to design novel protein degraders focused in the areas of immunology-inflammation and oncology, and we continue to apply our platform’s capabilities to additional therapeutic areas.

We have a mission to drug all target classes in human cells using TPD.

Our current clinical stage programs are IRAK4, IRAKIMiD, and STAT3, which each address high impact targets within the interleukin-1 receptor/toll-like receptor, or IL-1R/TLR, and janus kinase/signal transducers and activators of transcription, or JAK/STAT, pathways, providing the opportunity to treat a broad range of immune-inflammatory diseases, hematologic malignancies, and solid tumors.

Our programs exemplify our focus on addressing high impact targets that have been elusive to conventional modalities and that drive the pathogenesis of multiple serious diseases with significant unmet medical needs.

In February 2021, we initiated the single ascending dose, or SAD, portion of our Phase 1 trial of KT-474 in adult healthy volunteers.

In July 2021, we initiated the multiple ascending dose, or MAD, portion of the Phase 1 trial of KT-474 in healthy volunteers.

We completed dose escalation in the SAD and MAD portions of this Phase 1 trial in December 2021.

A subsequent patient cohort is expected to include hidradenitis suppurativa, or HS, and atopic dermatitis, or AD, patients.

Our fourth clinical program, MDM2, targets both solid and hematologic malignancies.

With respect to our IRAK4 program, we are collaborating with Sanofi S.A, or Sanofi, on the development of drug candidates targeting IRAK4 outside the oncology and immuno-oncology fields.

In November 2021, we announced that we received FDA clearance of our IND to evaluate our STAT3 degrader, KT-333, in a Phase 1 clinical trial in patients with relapsed/refractory liquid and solid tumors, including aggressive lymphomas.

We initiated our KT-333 Phase 1 clinical study in January 2022.

In November 2021, we also announced that we received FDA clearance of our investigational new drug application, or IND, to evaluate our IRAKIMiD degrader, KT-413, in a Phase 1 clinical trial in patients with relapsed/refractory B cell lymphomas, including MYD88 mutant diffuse large B cell lymphomas (DLBCL).

We initiated our KT-413 Phase 1 clinical study in February 2022.

Our next program, currently in IND-enabling activities, is a degrader against the E3 ligase MDM2.

Our MDM2 degrader has been developed to stabilize the tumor suppressor p53 and address a wide variety of p53 wild type tumor types in both solid tumors and hematologic malignancies.

We are developing KT-474, a highly active and selective, orally bioavailable IRAK4 degrader, for the treatment of IL-1R/TLR-driven immunology-inflammation conditions and diseases with high unmet medical need, including hidradenitis suppurativa, or HS, an inflammatory skin disease, as well as atopic dermatitis, or AD, and potentially other indications.

We have completed our Phase 1 trial of KT-474, which included a single ascending dose, or SAD, portion, a multiple ascending dose, or MAD, portion and a single dose, food-effect cohort to establish the dose for the patient cohort, or Part C, in patients with HS and AD.

In December 2022, Sanofi notified us of its intent to advance KT-474 into Phase 2 clinical trials.

Phase 2 clinical trials of KT-474 will initially investigate its potential in HS and AD, with the clinical trial for the first indication initiating in 2023.

With respect to our oncology programs, we are evaluating KT-333, a STAT3 degrader, in a Phase 1 clinical trial in patients with relapsed/refractory liquid and solid tumors, including aggressive lymphomas.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2023.

We are also evaluating KT-413, our IRAKIMiD degrader, in a Phase 1 clinical trial in patients with relapsed/refractory B cell lymphomas, including MYD88 mutant diffuse large B cell lymphomas (DLBCL).

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2023.

In December 2022, we received FDA clearance for our investigational new drug, or IND, application to evaluate our MDM2 degrader, KT-253, in a Phase 1 clinical trial.

KT-253 has been developed to stabilize the tumor suppressor p53 and address a wide variety of p53 wild type tumor types in both solid tumors and hematologic malignancies.

We plan to initiate our Phase 1 clinical trial of KT-253 in early 2023.

Our mission is to discover, develop and commercialize novel and transformative therapies that improve the lives of patients with serious diseases, and we are committed to the selection of targets that enable a broad impact across multiple clinical indications with high unmet medical need.

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Pegasus TM has the potential to help us better understand not only the optimal pairing of disease-causing protein targets with E3 ligases, but also the degradation profiles across different cell types and tissues, further enabling us to convert our differentiated E3 binders into novel degraders.

We believe our ability to identify and utilize previously unliganded E3 ligases, particularly those with selective or restricted

expression, may unlock new opportunities across broad therapeutic applications, including using novel E3 ligases to degrade undruggable and non-ligandable high value protein targets using small molecule molecular glues.

We believe our ability to identify and utilize previously unliganded E3 ligases, particularly those with selective or restricted expression, may unlock new opportunities across broad therapeutic applications, including using novel E3 ligases to degrade undruggable and non-ligandable high value protein targets using small molecule molecular glues.

Continue to build a broad and diverse pipeline of novel protein degraders .

Guided by our drug development principles and the learnings from our IRAK4, IRAKIMiD, and STAT3 programs, we intend to continue to identify therapeutic targets that have disruptive therapeutic potential and are predicted to be well-suited for a TPD approach.

For example, in December 2021, we disclosed our most recent degrader development candidate, KT-253, a potentially first-in-class MDM2 degrader in development for liquid and solid tumors.

Guided by our drug development principles and the learnings from our IRAK4, IRAKIMiD, STAT3 and MDM2 programs, we intend to continue to identify therapeutic targets that have disruptive therapeutic potential and are predicted to be well-suited for a TPD approach.

Given the unique genetic profiles in some of the patient populations that we aim to serve, we plan to continue to leverage a precision medicine approach to help identify patients with the highest probability of responding to our degrader drug candidates.

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Targeted protein degradation is a new modality that co-opts this innate cellular process.

The core of the TPD modality consists of a small molecule (shown in magenta in the Figure 3 below) that we refer to as a heterobifunctional degrader.

The core of the TPD modality consists of a small molecule (shown in magenta in Figure 3 below) that we refer to as a heterobifunctional degrader.

The role of this heterobifunctional degrader molecule is to mediate a “new”

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However, unlike earlier approaches in this field, TPD takes this proven concept further to prospectively target the degradation of a wider range of proteins through the rational design of heterobifunctional degraders which coordinate the discreet binding of target proteins and E3 ligases to drive the desired protein degradation.

Currently, the field of TPD has largely been focused on the generation of heterobifunctional small molecule degraders against various targets by using the generally well-characterized E3 ligases, cereblon and VHL.

Heterobifunctional degraders targeting either the androgen receptor or estrogen receptor for the treatment of castration-resistant prostate cancer or advanced breast cancer are currently in Phase 2 and Phase 1 clinical testing, respectively.

Both degrader compounds are oral drugs administered daily with early signs of acceptable pharmacokinetics and safety and, in the case of the androgen receptor degrader, preliminary evidence of tumor growth inhibition.

An important factor for the efficiency of a degrader is the specificity and affinity to the targeted E3 ligase.

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Our proprietary drug discovery platform, called Pegasus TM , enables us to rationally design targeted protein degraders that have the potential to drug all target classes in the cell.

Our approach is rooted in an understanding of the relationship between

E3 ubiquitin ligases and target proteins, which allows us to identify the properties that make a target both ligandable and degradable, and determine how multiple factors impact potency, selectivity, pharmacokinetics, or PK, and pharmacodynamics, or PD.

Key components of our platform include our E3 ligase ligand toolbox, our understanding of degradation across healthy and diseased tissue types, our proprietary chemistry and our newly established Center for Molecular Glue Discovery.

Our approach is rooted in an understanding of the relationship between E3 ubiquitin ligases and target proteins, which allows us to identify the properties that make a target both ligandable and degradable, and determine how multiple factors impact potency, selectivity, pharmacokinetics, or PK, and pharmacodynamics, or PD.

Expanded E3 Ligase toolbox.

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Center for Molecular Glue Discovery .

Our newly established Molecular Glue Center is focused on identifying novel tissue restricted or selective E3 ligases, beyond cereblon, that enable the design of molecules that target both undrugged and un-ligandable proteins through small molecule interactions.

Our Center for Molecular Glue Discovery is focused on identifying novel tissue restricted or selective E3 ligases, beyond traditional cereblon/IMiD interactions, that enable the design of molecules that target both undrugged and un-ligandable proteins through small molecule interactions.

Our Therapeutic Pipeline

Our current clinical-stage programs are IRAK4, IRAKIMiD, and STAT3, which each focus on a single critical signaling node within the genetically and clinically validated IL-1R/TLR and JAK/STAT pathways.

Additionally, we recently announced our next degrader candidate, KT-253, a potentially first-in-class MDM2 degrader in development for liquid and solid tumors.

We believe degrading these targets has the potential to treat multiple immune-inflammatory diseases, hematologic malignancies, and solid tumors.

We completed dose escalation in the healthy volunteer SAD and MAD portions of our clinical trial for KT-474 in December 2021.

A subsequent patient cohort is expected to include hidradenitis suppurativa, or HS, and atopic dermatitis, or AD, patients.

In November 2021, we announced we received FDA clearance of our INDs to evaluate our STAT3 degrader, KT-333, and our IRAKIMiD degrader, KT-413.

Both programs have initiated Phase 1 studies.

We expect to file an IND for our MDM2 degrader, KT-253, in the second half of 2022.

Our current clinical-stage programs are IRAK4, IRAKIMiD, STAT3 and MDM2, which each focus on a single critical signaling node within the genetically and clinically validated IL-1R/TLR, JAK/STAT and p53 pathways.

We completed our Phase 1 clinical trial for KT-474 in October 2022.

Patient enrollment and dosing are ongoing for our Phase 1 clinical trials for KT-333 and KT-413.

In December 2022, we announced we received FDA clearance of our IND to evaluate our MDM2 degrader, KT-253 and we expect to start enrollment in the Phase 1 study in early 2023.

The following table summarizes our clinical stage pipeline.

We also have multiple programs in earlier stages of development and are exploring targets in therapeutic areas outside of our core areas of focus:

The following table summarizes our development pipeline:

Our IRAK4, IRAKIMiD, STAT3 and MDM2 Programs

We are developing KT-474, a highly active and selective, orally bioavailable IRAK4 degrader, for the treatment of IL-1R/TLR-driven immunology-inflammation conditions and diseases with high unmet medical need, including HS, an inflammatory skin disease, as well as AD and rheumatoid arthritis.

We are developing KT-474, a highly active and selective, orally bioavailable IRAK4 degrader, for the treatment of IL-1R/TLR-driven immunology-inflammation conditions and diseases with high unmet medical need, including HS, an inflammatory skin disease, as well as AD and RA.

We have chosen to pursue IRAK4 degradation due to the well-validated role of the IL-1R/TLR pathway in immunology and inflammation and the potential advantage that drugging a single node of multiple different mediators of inflammation has over other approaches focused on targeting one of many cytokines that stimulate the IRAK4 node.

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We therefore believe KT-474 has the potential to improve outcomes over current treatment options as well as other drugs currently in development.

In February 2021, we initiated the single ascending dose, or SAD, portion of our Phase 1 trial of KT-474 in adult healthy volunteers.

In July 2021, we initiated the multiple ascending dose, or MAD, portion of the Phase 1 trial of KT-474, including healthy volunteers.

The dose escalation in the SAD and MAD portions of this Phase 1 trial in healthy volunteers was completed in December 2021.

A subsequent patient cohort is expected to include hidradenitis suppurativa and atopic dermatitis patients.

We are collaborating with Sanofi on the development of drug candidates targeting IRAK4 outside of oncology and immuno-oncology fields.

escalation in the SAD and MAD portions of this Phase 1 trial in healthy volunteers was completed in December 2021.

In October 2022, we announced that we had completed the patient cohort, or Part C, of the KT-474 Phase 1 trial, which included hidradenitis suppurativa, or HS, and atopic dermatitis, or AD, patients.

We are collaborating with Sanofi on the development of drug candidates targeting IRAK4 outside of oncology and immuno-oncology fields, and in December 2022, Sanofi notified us of its intent to advance KT-474 into Phase 2 clinical trials in patients with HS and AD .

See “Business—Collaborations—Collaboration Agreement with Sanofi.”

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Further, we have seen additive and synergistic activity in vivo combining IRAKIMiD with ibrutinib (BTK), venetoclax (BCL-2 inhibitor), and rituximab (anti-CD20 monoclonal antibody), which are important back-bone therapies in these B cell lymphomas.

In November 2021, we announced that we received FDA clearance of our IND to evaluate

our IRAKIMiD degrader, KT-413, in a Phase 1 clinical trial in patients with relapsed/refractory B cell lymphomas, including MYD88 mutant diffuse large B cell lymphomas (DLBCL).

We initiated the Phase 1 clinical study in February 2022.

We are currently evaluating our IRAKIMiD degrader, KT-413, in a Phase 1 clinical trial in patients with relapsed/refractory B cell lymphomas, including MYD88 DLBCL.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2023.

We are developing our selective STAT3 degraders for the treatment of hematological malignancies and solid tumors, as well as autoimmune diseases and fibrosis.

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first, homology of SH2 domains among all STAT family members impacts the ability to achieve specificity for STAT3, and second, inability to block dimerization independent transcriptional activities of STAT3.

For these reasons, we believe that STAT3 degraders may provide a transformative solution to the development of targeted and selective drugs to address multiple STAT3 dependent pathologies In November 2021, we announced that we received FDA clearance of our IND to evaluate our STAT3 degrader, KT-333, in a Phase 1 clinical trial in patients with relapsed/refractory liquid and solid tumors, including aggressive lymphomas.

We initiated the Phase 1 clinical study in January 2022.

We recently disclosed our degrader development candidate, KT-253, a potentially first-in-class MDM2 degrader in development for liquid and solid tumors.

MDM2 is the crucial regulator of the most common tumor suppressor, p53 which remains intact in more than 50% of cancers.

We believe that our highly potent MDM2 degrader, unlike small molecule inhibitors, has the ability to suppress the MDM2 feedback loop and can thereby potently and rapidly upregulate p53 expression and induce apoptosis with acute upfront exposures.

We believe our MDM2 degrader has the potential to be effective in a wide range of hematological malignancies and solid tumors with functioning (wild type) p53.

We expect to file an IND for KT-253 in the second half of 2022.

For these reasons, we believe that STAT3 degraders may provide a transformative solution to the development of targeted and selective drugs to address multiple STAT3 dependent pathologies.

We are currently evaluating our STAT3 degrader, KT-333, in a Phase 1 clinical trial in patients with relapsed/refractory liquid and solid tumors, including aggressive lymphomas.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2023.

We are developing degraders that target MDM2 for the treatment of solid tumors and hematological malignancies.

MDM2 is the crucial regulator of the most common tumor suppressor, p53, which remains intact (or wild type) in more than 50% of cancers.

Unlike small molecule inhibitors, our MDM2 degrader, KT-253, has been shown preclinically to have the ability to overcome the MDM2 feedback loop and rapidly induce apoptosis, even with brief exposures.

In December 2022, we announced that we received clearance from the FDA for our IND for KT-253.

We plan to initiate a Phase 1 clinical trial of KT-253 in early 2023, which is designed to evaluate the safety, tolerability, PK/PD and clinical activity of KT-253 in adult patients with liquid and solid tumors.

Our Approach to Target Selection

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We are also exploring targets that are traditionally undrugged using other technologies.

In some instances, ligands to these targets may exist and, while inadequate on their own for inhibition, have potential to serve as part of a heterobifunctional targeted protein degrader.

Using such an approach, we have developed KT-333, which selectively degrades STAT3.

In some instances, ligands to these targets may exist and, while inadequate on their own for inhibition, have potential to serve as part of a heterobifunctional targeted protein degraders.

In other instances, undrugged targets may have no known ligands and potentially no accessible small molecule binding sites which may make them poor candidates for both inhibitors and current heterobifunctional molecules.

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Our efforts here are focused on systematically identifying tissue sparing and tissue selective E3 ligases, which enables us to access clinically validated targets where on-target, unwanted pharmacology limits the clinical utility of small molecule inhibitors.

We are currently working on a target in this category that is expected to enter clinical development in 2H22.

We are currently working on several programs, at different stages of development, pursuing tissue restricted or selective degradation.

Our Approach to Target Selection

Our Pegasus TM Platform

Our proprietary drug discovery platform, Pegasus TM , enables us to rationally design targeted protein degraders that have the potential to drug all target classes in the cell.

Key components of our platform include our E3 ligase toolbox, our understanding of degradation across healthy and diseased tissue types, our proprietary chemistry and our newly established Center for Molecular Glue Discovery.

We have developed a proprietary human whole body E3 Atlas for mapping expression patterns of all known human E3 ubiquitin ligases in both healthy and disease contexts by combining the power of quantitative, high-resolution proteomics with proprietary algorithms.

We are refining the characterization of the expression profiles in healthy and diseased tissues of well-established liganded E3 ligases such as cereblon and VHL and, more importantly, of other naturally occurring E3 ligases, which remain unliganded to date.

We have established subcellular localization indices for each E3 ligase and are determining their absolute abundances.

We believe our approach is designed to overcome the limitations of relying on publicly available RNA or antibody-based protein expression datasets, which often lead to inaccuracies in determining relative E3 ligase expression levels in different biological contexts.

Our proprietary E3 Ligase Whole-Body Atlas enables data-driven, disease-selective protein degradation strategies based on all of the mapped E3 ligases, which we view as a paradigm shift from relying on the limited number of E3 ligases typically exploited for TPD and provides us with a distinct competitive advantage.

Using comparative analyses of expression patterns, we can identify selective pairings of E3 ubiquitin ligases with therapeutic targets of interest, including tissue-selective or tissue-restrictive pairings.

We believe this approach is central to building out a toolbox of differentiated E3 ubiquitin ligase binders.

Furthermore, we are able to use our custom-built Quantitative Systems Pharmacology Models in combination with proprietary data to understand the absolute abundance of E3 ligases and protein targets to predict cellular efficacy.

Figure 5 below shows an example of diverse expression profiles, using circle size as a relative abundance measure, for E3 ligases and selected targets across a panel of healthy tissues (on the x-axis), taken from our proprietary E3 Ligase Whole-Body Atlas.

Novel E3 Ligases to Drug a New Generation of Targets

As an example of our work in this area, we have identified a tissue-selective E3 ubiquitin ligase that we believe, based on a comprehensive analysis using both proteomics and transcriptomics, is localized to a specific cell type, our target cell, and is not expressed in several other cell types.

We believe this profile may allow for the selective degradation of a protein only in our target cells.

We have fully characterized this novel tissue selective ligase and, through hit-finding campaigns, have identified unique chemical matter which has affinity for this E3 ligase below 1 uM.

We have also shown productive ternary complex formation against the identified therapeutic target.

Figure 6 illustrates, on the left, the tissue-selective expression of the E3 ligase and, on the right, the binding affinity of the lead compound and ternary complex formation with the target protein of interest.

We are also developing targeted protein degraders directed against a well-validated and high-value oncology target that has known on-target heme toxicity.

Utilizing our discovery platform, we have identified an E3 ligase that has very low expression in the target cell responsible for this toxicity, as illustrated in Figure 7 below in the Western Blot analysis.

We have developed novel degraders for this oncology target that have demonstrated potent degradation of target type, as shown in the top panel of Figure 8.

As illustrated in the middle panel, we have also shown that our degrader does not degrade

the target in the key blood cell type.

Additionally, as shown in the bottom panel, when comparing this novel degrader, versus a well-known small molecule inhibitor, we were able to show that the degrader allows these blood cells to survive while the small molecule inhibitor led to substantial cell death.

This is the first in vivo proof-of-concept of selectively degrading this target while avoiding known on target heme toxicity, which we believe is a significant advance that demonstrates the capabilities of our platform.

As illustrated in Figure 9 below table, we utilize a broad range of hit finding approaches to develop small molecules against our selected targets.

Specifically, we use virtual screening and artificial intelligence enabled iteration to characterize the binding pocket of target proteins and E3 ligases, to evaluate ligandability and to find small molecule ligands.

We also use high content screening such as DNA-encoded libraries (DEL), Affinity Selection Mass Spectrometry (ASMS) or traditional high throughput screening (HTS).

We use Fragment Based Screening (FBS) and covalent screening for more targeted approaches where protein topology is understood.

We also utilize X-ray and cryoEM capabilities to enable not only hit finding, but also ternary complex optimization.

As illustrated in Figure 10 below, our proprietary chemistry approach utilizes ternary complex modelling, which leverages cloud computing to evaluate millions of compounds with the objective to design both an optimal linker and to identify the correct vectors to enable efficient binding of both an E3 ligase ligand and protein ligand.

We use molecular chameleonicity to accurately design and predict ADME and PK profiles of these complex molecules which is critical to designing molecules with high oral bioavailability.

Our experienced chemistry and computational chemistry teams utilize artificial intelligence driven insights to understand those design parameters driving clearance, permeability and efflux.

We also utilize a mechanistic modelling process to predict accurately both human PK and PD from preclinical data, an example of which is illustrated in Figure 11.

We first applied an indirect PK/PD response model to describe the mechanism of action of TPD.

We then accounted for the biodistribution of drug to target tissue and used an Emax exposure-response model to describe the mechanism of action of TPD.

A preclinical PK/PD study was conducted in dog to understand the kinetics of protein degradation in tissues at different dose levels, with data used to estimate in vivo degradation potency and protein turnover rate in the target tissue.

We then “humanize”

the PK/PD model by applying human PK parameters, adjusting for species’

differences in potency and protein turnover rate, if necessary, to predict protein degradation in the clinic.

As shown in the far right of Figure 11, the model accurately predicted human PD, as measured by predicted IRAK4 reduction, using preclinical PK/PD animal data (orange) to predict human PK/PD data in (blue).

Our newly established Center for Molecular Glue Discovery is focused on identifying novel E3 ligases, beyond cereblon, that enable the design of molecules that target undrugged and un-ligandable proteins through small molecule interactions.

Molecular glues, rather than requiring a defined binding pocket on the undruggable target, leverage a weak preexisting interaction between an E3 ligase and an unligandable protein of interest. Through binding of the molecular glue to the E3 ligase, the protein-protein interaction interface of the E3 ligase is remodeled, leading to enhanced interaction of the two proteins, thus facilitating degradation.

Our approach is to move beyond the traditional approach of molecular glues, which mostly utilize cereblon/IMiD based molecular glues.

We have recently established strategic partnerships with several academic centers and biotechnology research teams including A-Alpha Bio, the University of Washington and NYU.

Our work with these groups is focused on identifying and characterizing novel E3 ligase/substrate pairs for molecular glue interactions that exploit natural affinity augmented with small molecules.

We are utilizing genetic screening, structural insights, and pathway and computational biology to identify novel matched pairs of E3 ligases and high value undrugged targets.

IRAK4 Degrader for IL-1R/TLR-driven Immunology-inflammation Diseases

We are developing KT-474, a highly active and selective, orally bioavailable IRAK4 degrader, for the treatment of IL-1R/TLR-driven immune-inflammatory conditions and diseases with high unmet medical need, including HS, AD and rheumatoid arthritis, or RA.

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We therefore believe KT-474 has the potential to improve outcomes over current treatment options as well as other drugs currently in development.

In July 2020, we announced a strategic collaboration with Sanofi to develop and commercialize therapies targeting IRAK4 in patients with immune-inflammatory diseases.

The dose escalation in the SAD and MAD portions of this Phase 1 trial in healthy volunteers was completed in December 2021.

In October 2022, we announced that we had completed the patient cohort, or Part C, of the KT-474 Phase 1 trial, which included HS and AD patients.

followed by other indications.

See the section entitled “Business—Collaborations—Collaboration Agreement with Sanofi”

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The function of IRAK4 is dependent both on its kinase activity and on its scaffolding function, which are required for the assembly of the myddosome complex following TLR or IL-1R engagement and MYD88 activation.

While the kinase function is primarily responsible for the phosphorylation events in the IRAK4-JNK axis, the scaffolding function is primarily

responsible for the NF-KB activation and downstream gene traction of several key pro-inflammatory cytokines and chemokines.

While the kinase function is primarily responsible for the phosphorylation events in the IRAK4-JNK axis, the scaffolding function is primarily responsible for the NF-KB activation and downstream gene traction of several key pro-inflammatory cytokines and chemokines.

We believe IRAK4 degradation is superior to IRAK4 kinase inhibition as our preclinical data suggests that it is critical to block both the kinase activity and scaffolding functions of the IRAK4 protein, which requires removal, as opposed to just inhibition, of the protein.

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We are initially prioritizing indications such as HS, AD, and RA where there is clinical proof of concept for targeting cytokines impacted by the IL-1R/TLR pathway but for which there continues to be a high level of unmet need.

IL-1 Family Cytokines

Hidradenitis Suppurativa

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AD is a chronic, pruritic inflammatory skin disease that occurs most frequently in children but also affects adults.

In the major global markets, the diagnosed prevalence of AD is estimated at 60.5 million patients, with approximately 40%, or 24 million, falling into the moderate-to-severe category.

In the major global markets, the diagnosed prevalence of AD is estimated over 60 million patients, with approximately 40%, or 24 million, falling into the moderate-to-severe category.

AD follows a chronic relapsing course over month to years, with dry skin and severe pruritus as the primary symptoms, sometimes accompanied by skin thickening from chronic scratching and fissuring.

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Rheumatoid Arthritis

RA is the most common inflammatory arthritis, affecting approximately 5 million individuals in the 7 major markets worldwide, with a prevalence of 0.7% of the U.S.

RA, an additional potential indication for our IRAK4 degrader, is the most common inflammatory arthritis, affecting approximately 5 million individuals in the 7 major markets worldwide, with a prevalence of 0.7% of the U.S.

The synovial inflammation characteristic of RA is driven by Th1 and Th17 immune responses with production of TNF-a and IL-1 family cytokines, including IL-1, IL-18 and IL-33, IL-6 and IL-17.

Multiple therapies targeting the IL-1R/TLR pathway are approved for RA, and recently an IRAK4 kinase inhibitor

(PF-06650833) has shown clinical activity comparable to the JAK inhibitor tofacitinib and a favorable safety profile in a randomized, placebo-controlled Phase 2b study in RA patients with inadequate response to methotrexate.

Multiple therapies targeting the IL-1R/TLR pathway are approved for RA, and recently an IRAK4 kinase inhibitor (PF-06650833) has shown clinical activity comparable to the JAK inhibitor tofacitinib and a favorable safety profile in a randomized, placebo-controlled Phase 2b study in RA patients with inadequate response to methotrexate.

Based on these early signs of activation, we believe a degrader-based approach which impacts both the kinase activity and the scaffolding function of IRAK4 may have the potential for a more transformative effect on the disease.

Preclinical Studies and Data

Preclinically, we have observed KT-474’s high activity, selectivity and therapeutic potential in both in vitro and in vivo studies.

Stimulation and Comparison to IRAK4 Kinase Inhibitors

We assessed the functional activity of KT-474 by measuring pro-inflammatory cytokine levels upon activation.

Cells were pretreated with KT-474, a negative control, and small molecule IRAK4 kinase inhibitors.

Figure 14 below shows KT-474 is better able to inhibit IL-6 under both LPS and LPS + IL-1B than clinically active IRAK4 small molecule kinase inhibitors.

IRAK4 Degradation Superior to Kinase Inhibition in Cytokine Production

Topical application of the TLR7/8 agonist, imiquimod, or IMQ, induces skin thickening associated with inflammatory cell infiltration, activates the NF-KB pathway and IL-23/IL-17 axis, and produces IL-1 family cytokines from keratinocytes, recapitulating several key pathological features of skin inflammation, including HS and psoriasis.

In this in vivo model, orally administered KT-474 inhibited topical IMQ-induced skin thickening, which was a reflection of local and systemic inflammation, to an extent comparable to a topical corticosteroid (clobetasol) at doses achieving at least 60-70% IRAK4 knockdown in skin and spleen (Figure 15).

KT-474 Downregulates IRAK4 Expression and Inhibits Skin Thickening in Mouse Imiquimod Model of Psoriasis

In a 14-day non-GLP toxicology study of daily, orally administered KT-474 in rats and non-rodents, the compound was well-tolerated at doses of up to 600 mg/kg in rats and 100 mg/kg in non-rodents.

Notably, pharmacodynamic assessment showed complete knockdown of IRAK4 24 hours after the last dose on day 15 in multiple tissues including skin, spleen, lymph nodes and animal peripheral blood monocytes, PBMCs, as shown in Figure 16.

Together, we believe this showed that nearly complete systemic degradation of IRAK4 was well-tolerated and supported the advancement of KT-474 into further development.

IRAK4 Knockdown in Tissues After 14 Days of KT-474 Dosing

in Non-Rodent Non-GLP Toxicology Study

In addition, the reversibility of IRAK4 knockdown in vivo was observed in mice and non-rodents, where recovery of IRAK4 levels in blood (PBMC) and skin was observed within 48 to 72 hours following cessation of daily oral dosing.

believe these data point to a potential safety advantage for TPD relative to genetic medicines approaches of protein knockdown, as cessation of the TPD agent is sufficient to restore protein levels back to steady state within a reasonable timeframe.

The anti-inflammatory effect of KT-474 and its superiority to IRAK4 kinase inhibitors were also shown in vivo in various mouse models of inflammation.

Figure 17 shows the effect of KT-474 on IRAK4 levels in whole blood and on measures of inflammation in intradermal challenge models using IL-1 family cytokines, including IL-33 and IL-36, and in a model of Th17-mediated multiple sclerosis.

In these models, KT-474 outperformed an IRAK4 kinase inhibitor and was comparable to either potent corticosteroids or standard of care anti-inflammatory drugs at doses achieving over 85% IRAK4 knockdown in blood.

Similar activity was observed in the mouse MSU-gout model, driven by TLR4 activation, and in the imiquimod-psoriasis model, driven by TLR7 and 8 activation.

In summary, we believe these preclinical data show that orally administered KT-474 was able to suppress safely and selectivelyIRAK4 expression in rodents and non-rodents, inhibit inflammation, including neutrophil infiltration, in murine models mechanistically relevant to the pathogenesis of HS, AD, and RA and potentially other diseases, and provide support for a potential therapeutic advantage of IRAK4 degradation over IRAK4 kinase inhibition.

Clinical Studies and Data

In 2021, we completed dose escalation in the single ascending dose, or SAD, and multiple ascending dose, or MAD, portions of the KT-474 Phase 1 clinical trial in healthy volunteers.

The primary endpoints of the Phase 1 trial are to determine the safety and tolerability of KT-474 when administered as daily oral doses at escalating dose levels.

Secondary endpoints include characterization of the pharmacokinetic and pharmacodynamic profiles of multiple doses of KT-474 over an established timeframe.

In the SAD portion of the trial, after a single dose of KT-474, strong, dose dependent IRAK4 degradation was observed in PBMC using mass spectrometry.

Mean and median percent reduction from baseline for IRAK4, shown at the nadir 48 hours post-dose across each of the dose levels, demonstrated a steep dose-response, plateauing after the 600 mg dose.

At single doses of 600-1600 mg, mean IRAK4 knockdown was 93-96%, with absolute IRAK4 protein levels approaching or exceeding the lower limit of quantitation for the highly sensitive mass spec assay, as shown in Figure 18.

An ex vivo cytokine stimulation assay was used to establish proof-of-biology by demonstrating the impact of IRAK4 lowering in PBMC in vivo on the ability of TLR agonists to stimulate myddosome-dependent proinflammatory cytokine and chemokine production in whole blood ex vivo.

Whole blood samples were drawn pre-dose and at various timepoints post-dose into TruCulture tubes containing either LPS, a TLR4 agonist, or R848, a TLR 7 and 8 agonist.

After overnight incubation, supernatants were separated from cells and then analyzed for multiple disease-relevant cytokines and chemokines.

Inhibition of ex vivo cytokine stimulation was associated with IRAK4 knockdown in PBMC of ≥85% at 24-48 hours post-dose.

Results for LPS- and R848-induced cytokines in the top 2 dose levels are shown in Figure 19 as mean maximum inhibition at 24-48 hours compared to pre-dose baseline.

Broad inhibition of multiple cytokines and chemokines, including IL-1b, IL-6, TNF-a, IL-8, IL-12 and IL-17, among others, was seen for both LPS and R848, with maximum inhibition of up to 97%.

In the MAD portion of the trial, as shown in Figure 20, 14 daily doses of KT-474 resulted in robust and sustained knockdown of IRAK4 in PBMC with low inter-subject variability across all dose levels, with steady-state degradation occurring

between Days 7 and 14 that approached the lower limit of quantitation for the highly sensitive mass spec assay in all cohorts.

This was followed by recovery towards baseline by Day 28, 14 days post last dose.

Near complete IRAK4 degradation of up to 98% was observed in PBMC at steady state with multi-dosing as predicted based on the PK, plateauing after 100 mg, a substantially lower dose compared to over 600 mg that was required to maximize degradation following a single dose.

The effect across all dose levels was highly significant relative to placebo, as shown in Figure 21.

Proof of mechanism in the skin was achieved through the demonstration of IRAK4 knockdown using mass spectrometry.

As shown in Figure 22, baseline levels of IRAK4 in healthy adult skin were 5- to 10-fold lower than PBMC.

Dose-dependent reduction was observed, with IRAK4 levels nearing the lower limit of quantification of the assay by Day 14 at the top dose of 200 mg, representing knockdown of up to 90%.

Knockdown did not appear to be at steady state on Day 14, suggesting that continued dosing beyond 14 days could result in further decline in IRAK4 levels.

As shown in Figure 23, dose-dependent inhibition of multiple disease-relevant cytokines and chemokines induced by either LPS or R848 was observed, comparable to the effect seen at the top SAD cohort of 1600 mg, with greater than 50% inhibition of most cytokines, and maximum inhibition of 85% at 100 mg.

Ex Vivo Inhibition of 9 Disease-Relevant Cytokines, Day 7-14

Blinded safety analysis of cohorts randomized 9:3, KT-474 to placebo, showed that multiple daily doses of KT-474 from 25 to 200 mg, leading to substantial IRAK4 knockdown for at least 21 days, were safe and well-tolerated, with no serious adverse events reported.

The most common treatment related adverse events deemed possibly or probably related to KT-474 by investigators were mild to moderate headache, mild nausea and palpitations.

The reported palpitations were self-reported, transient episodes during 21 days of inpatient observation that were not associated with any objective findings.

Similarly, all other adverse events were self-limiting, and none led to interruptions in dosing.

In December 2021, we completed dose escalation in the SAD and MAD portions of the KT-474 Phase 1 trial.

The following figure summarizes the trial design of the healthy volunteer portion of the trial.

KT-474 Healthy Volunteer Study

The summary of key findings in the healthy volunteer portion of the KT-474 clinical trial included:

IRAK4 was reduced to near the lower limit of quantification using Mass Spectrometry

Degradation was associated with up to 85% inhibition of multiple disease-relevant cytokines and chemokines in ex vivo TLR stimulation assay at the 100 mg dose level

Dose-dependent IRAK4 degradation in skin exceeded 50%

KT-474 was generally well tolerated at doses up to 200 mg, with no serious adverse events

Following the healthy volunteer portion of the trial, we completed a single dose, food-effect cohort to establish the dose for the patient cohort, or Part C, of the KT-474 Phase 1 trial, which included HS and AD patients and which was completed in October 2022.

Part C enrolled 21 patients, the demographics of which are shown below in Figure 8.

KT-474 Part C Baseline Demographics

The Part C baseline disease characteristics are shown below in Figure 9.

One HS patient withdrew for personal reasons after dose 4, and one AD patient withdrew for personal reasons after dose 5.

KT-474 Part C Baseline Disease Characteristics

As shown below in Figure 10, the KT-474 plasma PK at the 75 mg once daily (QD) dose (in the fed state) in patients was comparable to healthy volunteers in the MAD portion of the Phase 1 clinical trial who received 100 mg once daily in the fasted state, the MAD cohort which we refer to as MAD3.

Additionally, mean Cmax (6-hour post dose concentration) and Ctrough (pre-dose concentration) levels at steady state in Part C were in line with MAD3 levels at Day 14, and the mean half-life of 44 hours was within the range observed in MAD (34-59 hours)

Part C KT-474 Plasma PK

As shown in Figure 11, KT-474 concentrations in plasma led to a comparable level of IRAK4 degradation in healthy volunteers and HS/AD patients.

Specifically, at concentrations above 3 ng/mL degradation was generally above 80% in both populations.

Additionally, IRAK4 levels in PBMC in patients with evaluable samples were near the lower limit of quantification at Day 28.

PK/PD Correlation in Plasma/Monocytes (FLOW)

Baseline IRAK4 levels in skin lesions of evaluable HS and AD patients were approximately twice the levels of healthy volunteers.

By Day 28 of dosing, the mean IRAK4 in skin lesions of AD and HS patients was reduced to approximately the same level as healthy subjects, as shown below in Figure 12.

IRAK4 Levels in Skin Lesions

KT-474 was generally well-tolerated.

There were no serious adverse events, no drug-related infections, and no adverse events observed leading to dose interruption or discontinuation.

The below figure lists adverse events related to study drug occurring in greater than 1 Patient.

KT-474 Part C Adverse Events

In addition, a modest, non-adverse QTc prolongation, consistent with that observed by Day 7 in the MAD portion of the healthy volunteer study, was also observed in the patient cohort but spontaneously resolved back to baseline with continued dosing during the 28-day dosing period.

A whole blood ex vivo stimulation assay using the TLR ligands LPS or R848 showed broad inhibition of multiple disease-relevant cytokines and chemokines of up to 84-98% in HS and AD patients from Days 14 to 28, comparable or superior to what was observed in the healthy volunteer MAD3 cohort, as shown below in Figure 14.

KT-474 Whole Blood ex vivo stimulation

To determine whether KT-474 had a systemic anti-inflammatory effect in HS and AD patients, plasma levels of IL-6, CRP, SAA and IL-1b were measured at baseline and at various times during and after the 28-day treatment period.

In patients whose baseline levels were greater than the upper limit of normal, the evaluable patients showed suppression of all 4 analytes, with mean maximum reductions through Day 42 ranging from 41 to 63%, as shown below in Figure 15.

Plasma Levels

Part C also evaluated how systemic IRAK4 degradation in blood and skin would affect the expression of proinflammatory genes known to be relevant to either AD or HS.

Figure 16 illustrates select disease-relevant genes downregulated in skin lesions of at least 50% of AD or HS patients at Day 28 compared to baseline.

In AD, affected genes included the Th2 cytokine IL-5, the inflammasome NLRP3, as well as CXCL1 and IL-2RB.

Genes affected in HS included IL-1 family cytokines IL-1 and IL-36A, mediators of Th1 inflammation such as IFN-g and GZMB, the Th17 cytokine IL-17A, and drivers of innate immunity such as IL-8 and CSF3.

The downregulation was substantial with many genes inhibited more than 90% in both diseases.

Disease-relevant biomarkers

Part C included exploratory clinical endpoints used for HS and AD.

The endpoints were chosen in order to assess the effect of KT-474 treatment on the burden of skin disease as well as on symptoms such as pain and pruritus that impact quality of life for HS and AD patients.

In AD patients, as shown in Figure 17, there was a mean 37% reduction in skin lesions as measured using the Eczema Area and Severity Index (EASI) score, with reductions in individual patients of up to 76%.

Maximum reduction was seen by Day 28 and was maintained at Day 42.

Mean EASI Score Over Time (n=7)

As shown in Figure 18, mean peak pruritus in AD patients over the past week or past 24 hours was reduced by 52% and 63%, respectively, with maximum reductions occurring by Day 42.

Peak pruritus responders, defined as ≥4 Unit reduction in peak pruritus over the past week or past 24 hours, were seen in 57% and 71% of AD patients, respectively, with responses sustained after Day 28.

Peak Pruritus Numerical Rating Scale in AD patients

The Validated Investigator’s Global Assessment (vIGA) of disease severity improved in 2 of 7 AD patients and remained stable in the others out to Day 42, as shown in Figure 19.

vIGA-AD Score Over Time (n=7)

In HS patients, the efficacy analyses were performed in all patients, which included two patients with very severe disease.

In addition, efficacy analyses were also performed in a subset of HS patients that only had moderate to severe disease, which was the target population for this study.

As shown in Figure 20, the AN count was reduced by up to an average of 46% in all HS patients and of 51% in the moderate to severe subset, with reductions in individual patients of up to 100% and with maximum reduction occurring by Day 42.

The proportion of patients achieving an AN count of 0, 1 or 2 at Day 28 was 42% in all HS patients and 50% in those with moderate to severe disease.

AN count over time

HiSCR50 response is defined as a 50% or greater reduction in AN count and no increase in abscesses or draining fistulas.

As shown in Figure 21, at Day 42, the proportion of HiSCR50 responders was 42% in all HS patients and 50% in those with moderate to severe disease.

% of Patients with HiSCR50

HiSCR75 response, defined as 75% or greater reduction in AN count, was seen in 25% of all HS patients and 30% of those with moderate to severe disease.

Symptoms of pain and pruritus were also measured.

As shown in Figure 22, there was a 49 to 55% mean reduction in the Pain Numerical Rating Scale, or NRS, in all HS patients and in those HS patients with moderate to severe disease, respectively, with maximum reduction occurring between Days 28 and 42.

Pain NRS30 response is defined as at least a 30% reduction and at least one unit reduction from baseline in Pain NRS.

As also shown in Figure 22, the Pain NRS responder rate was 50% in all HS patients and 60% in those HS patients with moderate to severe disease, sustained after Day 28.

Pain Numerical Rating Scale in HS patients

As shown below in Figure 23, there was a mean reduction in peak pruritus of 62% in all HS patients and 68% in those HS patients with moderate to severe disease, with maximum reduction by Day 42 in all HS patients and by Day 28 in those with moderate to severe disease.

Mean % Change in Peak Pruritus Over Past Week

The Physician’s Global Assessment of disease severity improved in 5 HS patients, including clearing of disease in 1 patient with moderate disease at baseline, and remained stable in the other evaluable patients out to Day 42, as shown in Figure 24.

Physician’s Global Assessment (HS-PGA)

Clinical Development Plan

We plan to characterize the pharmacokinetic and pharmacodynamic profile of the recommended Phase 2 dose of KT-474 in an additional cohort of up to 20 AD and HS patients before initiation of Phase 2 studies.

We expect that the combination of safety, pharmacokinetic and pharmacodynamic endpoints, including PK/PD relationships, will inform selection of one or more predicted-effective doses to take into subsequent proof of concept trials in our prioritized indications.

Phase 2 randomized placebo-controlled trials are expected to be conducted in one or more indications including, but not limited to, AD, HS, and RA.

On December 14, 2022, we announced that Sanofi notified us of its commitment to advance KT-474 into Phase 2 clinical trials in 2023.

Phase 2 clinical trials of KT-474 will initially investigate its potential in HS and AD with the first clinical trial for the first indication planned for initiation in 2023.

IRAKIMiD Program in Oncology

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Our IRAKIMiDs combine the activity of the IMiDs with IRAK4 degradation in a single agent and address both the IL-1R/TLR and the Type 1 IFN pathways synergistically with a goal of demonstrating broad activity against MYD88-mutant lymphomas.

We believe this will be the first precision medicine in lymphoma to target a genetically defined population, which accounts for at least 25% of the estimated approximatley 150,000 DLBCL patients currently diagnosed in the major global markets.

We believe this will be the first precision medicine in lymphoma to target a genetically defined population, which accounts for at least 25% of the estimated approximately 150,000 DLBCL patients currently diagnosed in the major global markets.

We have observed the degradation of IRAK4 and IMiD activity results in additivity and synergy in vitro.

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Our IRAKIMiD degrader, KT-413, has been observed to have broad activity against MYD88-mutant lymphomas in vitro and in mouse xenograft models, leading to rapid, complete and sustained tumor regressions, even when dosed intermittently.

In November 2021, we announced that we received FDA clearance of our IND to evaluate our IRAKIMiD degrader, KT-413, in a Phase 1 clinical trial in patients with relapsed/refractory B cell lymphomas, including MYD88 mutant diffuse large B cell lymphomas (DLBCL).

We initiated a Phase 1 clinical study in February 2022.

We are currently evaluating our IRAKIMiD degrader, KT-413, in a Phase 1 clinical trial in patients with relapsed/refractory B cell lymphomas, including MYD88 mutant DLBCL.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2023.

Target Rationale and Mechanism of Action

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We believe these data support the development of our unique class of IRAKIMiD degraders.

As shown graphically in Figure 26, KT-413 is a potent degrader of IRAK4 and the IMiD substrates, Ikaros and Aiolos with single digit nM DC50 values against all three targets with maximal growth inhibition observed with approximately 80% target knockdown.

KT-413 is a potent degrader of IRAK4 and the IMiD substrates, Ikaros and Aiolos with single digit nM DC50 values against all three targets with maximal growth inhibition observed with approximately 80% target knockdown.

As shown in Figure 27, KT-413 is more potent and more active in MYD88-mutated DLBCL than either an IRAK4-selective degrader compound, or a clinically active IMiD, supporting our hypothesis that simultaneous degradation of IRAK4 and IMiD substrates is more effective than degrading either alone.

KT-413 Potency

Figure 28 summarizes results of in vivo experiments in xenograft models of MYD88 mutant DLBCL demonstrating profound antitumor activity with durable complete responses in animals treated with KT-413 on intermittent dosing schedules as infrequent as every 2 or 3 weeks.

As shown, this level of activity is superior to that of an IRAK4 kinase inhibitor or the clinically active latest generation IMiD compound.

KT-413 In vivo xenograft models

Figure 29 highlights the unique PK/PD properties of KT-413 that result in protracted tumor exposure and robust knockdown of the targets for at least 72 hours, committing tumor cells to apoptosis that leads to tumor regressions.

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In these experiments conducted in MYD88 mutant DLBCL models, sub-optimal doses of KT-413 combined with ibrutinib (BTK) venetoclax (BCL-2 inhibitor), or rituximab (Rituxan, an anti-CD-20 monoclonal antibody), showed deep and durable regressions highlighting the potential of KT-413 combination to be used in earlier lines of therapy in patients with MYD88 mutant lymphoma.

KT-413 Combination therapy

Clinical Studies and Data

In 2022, we initiated our Phase 1 clinical trial of KT-413 to evaluate the safety, tolerability, PK/PD and clinical activity of KT-413 administered as an intravenous, or IV, infusion once every 3 weeks to adult patients with relapsed and/or refractory B-cell non-Hodgkin’s lymphomas.

Figure 31 below shows the details of the trial design.

KT-413 Phase 1 Clinical Trial Design

In December 2022, we announced that dose level 1 (0.16 mg/kg) and dose level 2 (0.32 mg/kg) were completed.

Patients in both dose cohorts were heavily pretreated, having received multiple prior lines of therapy, and included follicular lymphoma and nodular lymphocyte-predominant Hodgkin lymphoma, which were both wild-type for MYD88.

Plasma PK and PD translated as we expected in humans with dose level 1 and dose level 2 showing dose-dependent degradation of IRAK4, Ikaros and Aiolos in PBMC, with up to 95/100% knockdown of Ikaros/Aiolos and 40% knockdown of IRAK4 in dose level 2 as summarized below in Figure 32.

Target Degradation in PBMC by FLOW

Figure 33 highlights that serial tumor biopsies at Cycle 3/Day 4 in the patient treated at dose level 1 showed comparable knockdown of Ikaros/Aiolos and IRAK4 as in plasma.

Target Knockdown in Tumor by Targeted MS

There were no dose limiting toxicities or treatment-related serious adverse events and no neutropenia observed in dose level 1 and dose level 2 patient cohorts.

Clinical Development Plan

In November 2021, we announced that we received FDA clearance of our IND to evaluate our IRAKIMiD degrader, KT-413, in a Phase 1a/1b trial in adult patients with relapsed or refractory B cell lymphoma.

The primary objective of the study is to evaluate the safety, pharmacokinetics and pharmacodynamics of KT-413 administered intravenously, once every three weeks.

In the Phase 1a part, patients with relapsed or refractory B-cell lymphomas will be treated in escalating doses until the maximum tolerated dose (MTD) or recommended phase 2 dose (RP2D) is identified.

The IRAKIMiD Phase 1b expansion part is then expected to enroll patients with both MYD88 mutant and MYD88 wild-type relapsed or refractory DLBCL.

Efficacy will be assessed in both Phase 1a and 1b, and exploratory endpoints will include pharmacodynamic assessments including knockdown of IRAK4, Ikaros, and Aiolos, and downstream effects in peripheral blood as well as in tumor biopsies.

Based on the observed safety, PK/PD, and clinical activity of single agent KT-413, the protocol may be amended to include evaluation of KT-413 combinations with standard of care agents and to evaluate monotherapy KT-413 in other MYD88 mutant lymphomas.

Developing IRAK4-selective Degraders for Other Hematologic Malignancies and Solid Tumors

In addition to our IRAKIMiD program, we are also exploring the therapeutic potential of IRAK4-selective degradation without IMiD biology, in both liquid and solid tumors, as there are certain cancers where this approach may be effective either as a monotherapy or in a combination therapy.

Potential indications could include MYD88-mutant Waldenström macroglobulinemia, subsets of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS), and non-small cell lung cancer.

This program is in an earlier stage of development.

The Phase 1a dose escalation portion of the trial is ongoing.

We currently anticipate dose levels 3 and 4 to be clinically active doses, and we plan to provide additional clinical data in 2023.

STAT3 Degrader for Cancer and Autoimmune/Fibrotic Diseases

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For these reasons, we believe that STAT3 degraders may provide a transformative solution to develop targeted and specific drugs to address multiple STAT3 dependent pathologies.

We initiated the Phase 1 clinical study in January 2022.

In September 2022, our STAT3 degrader, KT-333, was granted its second orphan drug designation by the FDA for the treatment of cutaneous T-cell lymphoma, following its orphan drug designation for peripheral T-cell lymphoma, earlier that year.

We are currently evaluating KT-333 in a Phase 1 clinical trial in patients with relapsed/refractory liquid and solid tumors, including aggressive lymphomas.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2023.

Biology and Mechanism of Action of STAT3 Degrader

STAT3 (signal transducer and activator of transcription 3) is a transcription factor and a member of the STAT protein family.

In response to cytokines and growth factors, STAT3 is phosphorylated by receptor-associated serine/threonine kinases, and phosphorylated STAT3, or p-STAT3, then forms dimers that translocate into the nucleus, bind to DNA, and regulate

transcription of a wide variety of genes involved in oncogenesis, inflammation and fibrosis.

STAT3 is frequently mutated and activated in numerous cancers, including clinically aggressive hematologic malignancies with high unmet medical need.

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Monoclonal antibodies directed against pro-inflammatory cytokines such as IL-6 or their receptors IL-6R have also been approved for select autoimmune diseases.

However, autoimmune and fibrotic diseases and certain cancers are often regulated by multiple cytokines.

However, autoimmune and fibrotic diseases and certain cancers are often regulated

by multiple cytokines.

As such, targeting STAT3 has the potential to be more effective since it is involved in signaling by not just IL-6, but also by TGF-ß

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These findings are highly indicative of STAT3 dependency, which is further supported by the preliminary clinical activity of JAK inhibitors in these patients.

activation is also commonly observed in AML and in DLBCL even though STAT3 mutations are infrequent.

STAT3 activation is also commonly observed in AML and in DLBCL even though STAT3 mutations are infrequent.

PD-L1 overexpression in DLBCL has been linked to worse disease outcomes and responses to anti-PD-1/PD-L1 drugs have been reported in these patients.

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Figure 34 shows the selectivity of our STAT3 degrader as evidenced by proteomic analysis demonstrating that at KT-333 concentrations 10-fold greater than the DC95, STAT3 is the only protein to be degraded among over 10,000 proteins evaluated including other closely related STAT family members.

Change in Protein Levels

The in vivo activity of KT-333 is summarized in Figure 35, which shows weekly administration resulting in robust antitumor activity with full regressions that are durable in animals bearing STAT3-dependent T cell lymphomas.

These regressions were associated with >90% STAT3 knockdown in tumors.

KT-333 In vivo activity

While KT-333 single agent leads to profound anti-tumor activity, based on the role of STAT3 in the tumor microenvironment, additional studies were undertaken to explore the potential immune effects of STAT3 degraders on tumors.

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These findings are consistent with STAT3’s role in remodeling the tumor microenvironment and provide the rationale for combining STAT3 degraders with immune checkpoint inhibitors.

Mouse Syngeneic Colorectal Cancer Model

As shown in Figure 37, a mouse syngeneic CT-26 colorectal cancer model, the addition of KT-333 augmented the activity of a PD-1 inhibitor in a syngeneic mouse model of colorectal cancer (CT-26), resulting in complete regressions in a majority of animals.

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Collectively, we believe these data suggest that the addition of STAT3 degraders could significantly augment the clinical efficacy of immune checkpoint inhibitors.

STAT3 Degradation and Anti-PD-1 Synergy

Clinical Studies and Data

In 2022, we initiated our Phase 1 clinical trial of KT-333 to evaluate the safety, tolerability, PK/PD and clinical activity of KT-333 dosed weekly on Days 1, 8 and 15 of 28-day cycles in adult patients with relapsed and/or refractory lymphomas, leukemias and solid tumors.

Figure 38 below shows the details of the trial.

KT-333 Phase 1 Clinical Trial Design

In December 2022 we announced that dose level 1 (0.05 mg/kg) had been completed with a total of four patients enrolled.

All patients were heavily pretreated with multiple prior lines of therapy and included three patients with solid tumors and one patient with cutaneous T-cell lymphoma.

As summarized in Figure 39, plasma PK and PD translated as we expected in humans with mean maximum STAT3 degradation in PBMC following the first 2 doses averaging 66%, with maximum STAT3 knockdown of up to 86% as measured by mass spectrometry.

Clinical Pharmacodynamics in Peripheral Blood Mononuclear Cells by Mass Spectrometry

There were no dose limiting toxicities or treatment-related serious adverse events observed in dose level 1.

Clinical Development Plans

In November 2021, we announced that we received FDA clearance of our IND to evaluate our STAT3 degrader, KT-333, in a first-in-human Phase 1a/1b trial in adult patients with lymphomas, large granular lymphocytic leukemia, and solid tumors.

The primary objective of the study is to evaluate safety, pharmacokinetics, and pharmacodynamics of KT-333 administered intravenously on a weekly regimen.

Phase 1a is expected to enroll patients with relapsed or refractory lymphomas, with an expansion into solid tumors at the MTD or RP2D.

A Phase 1b expansion is planned to consist of separate cohorts of patients with relapsed/refractory PTCL, CTCL, and LGL-L and advanced solid tumors.

Efficacy will be evaluated in all cohorts in Phase 1a and Phase 1b and exploratory endpoints will include pharmacodynamic assessments, including level of STAT3 knockdown and its downstream effects in peripheral blood and in tumors.

Although KT-333 has robust single agent activity in preclinical models, we also plan to explore combining KT-333 with other agents used to treat PTCL or CTCL, as well as with immune checkpoint inhibitors in patients with solid tumors and hematologic malignancies.

As a result, subsequent to establishing the safety/tolerability, and PK of KT-333 monotherapy, the protocol may be amended to evaluate combinations with standard of care regimens in PTCL or CTCL and with standard of care immune checkpoint inhibitors in solid tumors.

The Phase 1a dose escalation portion of the trial is ongoing.

We currently anticipate dose levels 3 and 4 to be clinically active doses, and we expect to provide additional clinical data in 2023.

Preclinical Studies and Data in Autoimmunity

The following figures summarize the results of multiple preclinical experiments demonstrating robust antifibrotic and anti-inflammatory activity of STAT3 degraders in mouse models of systemic scleroderma, arthritis, and CNS inflammation.

In the Tight Skin model, shown in Figure 40, a spontaneous TGF beta dependent model of fibrosis that is representative of scleroderma, STAT3 degradation resulted in significant reduction in skin thickening and completely inhibited myofibroblast contraction in an in vitro gel contraction assay.

In Vivo tight Skin Model (Fibrosis)

In the Collagen Induced Arthritis (CIA) model, which is a prototypical model of RA, as shown in Figure 41, STAT3 degradation reduced the clinical signs of disease in a dose dependent manner.

The effect of STAT3 degrader is also reflected by the significant reduction in pathology scores and periosteal bone growth.

In Vivo CIA Model (RA)

Figure 42 illustrates the effect of STAT3 degradation in the Experimental Autoimmune Encephalomyelitis (or EAE) model representative of MS.

In this model STAT3 degradation not only had a profound effect on severity of disease but also greatly reduced the incidence of disease and delayed onset of encephalomyelitis in the animals.

In Vivo MS Model

Collectively, these findings highlight the pleiotropic effects of STAT3 degraders in fibrosis and inflammation, demonstrating the potential for this approach across a broad spectrum of autoimmune diseases.

MDM2 is the crucial regulator of the most common tumor suppressor, p53 which remains intact in more than 50% of cancers.

We believe that our highly potent MDM2 degrader, unlike small molecule inhibitors, has the ability to suppress the MDM2 feedback loop and thereby rapidly induce robust p53 upregulation and apoptosis with brief exposures.

Our MDM2 degrader has the potential to be effective in a wide range of hematological malignancies and solid tumors with functioning (wild type) p53.

Our lead MDM2 candidate, KT-253, is currently in IND enabling studies, and we expect to file our IND in the second half of 2022.

We are developing degraders that target MDM2 for the treatment of solid tumors and hematological malignancies.

MDM2 is the crucial regulator of the most common tumor suppressor, p53, which remains intact (or wild type) in more than 50% of cancers.

In December 2022, we announced that we received clearance from the FDA for our IND for KT-253.

Target Rational and Mechanism of Action

MDM2 is the ligase which controls the tumor suppressor p53.

Functional in over 50% of cancers, p53 is both liquid and solid, and many p53 functional cell lines are dependent on MDM2 overexpression for p53 suppression and survival.

MDM2 is the major E3 ligase which controls the tumor suppressor p53.

p53 is functional in close to 50% of cancers, both liquid and solid, and many p53 functional cell lines are dependent on MDM2 overexpression for p53 suppression and survival.

Stabilization and upregulation of p53 by removal of MDM2 by degradation can cause cells to undergo cell death and/or cell cycle arrest.

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This feedback loop results in upregulation of MDM2 protein expression, which in turn makes it more difficult for occupancy-driven small molecules to inhibit MDM2.

As a result, small molecule inhibitors have had a more modest effect on p53 upregulation which more often leads to cell cycle arrest rather than apoptosis, thereby limiting efficacy.

This feedback loop also necessitates more chronic exposure to drug to maintain modest MDM2 inhibition in tumors, leading to toxic effects on normal cells that limits the safety and tolerability of these inhibitors.

Degraders have the potential to block the MDM2 feedback loop by completely removing the protein in a catalytic manner.

As a result, small molecule inhibitors have had a more modest effect on p53 upregulation which often leads to cell cycle arrest rather than apoptosis, thereby limiting the efficacy of MDM2/p53 small molecule inhibitors.

This feedback loop also necessitates more chronic exposure to drug to maintain modest MDM2 inhibition in tumors, potentially leading to toxic effects on normal cells that limits the safety and tolerability of these inhibitors.

Degraders have the potential to overcome the MDM2 feedback loop by completely removing the protein in a catalytic manner.

This enables the development of highly potent drugs that are able to induce strong p53 upregulation and an irreversible acute apoptotic response in tumor cells with just brief exposures, thereby maximizing efficacy and improving the safety profile by allowing time for the recovery of normal cells.

MDM2 Feedback Loop

Preclinical Data

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Figure 44 displays the sub-nanomolar potency of KT-253 as compared to a small molecule inhibitor currently in clinical trials.

KT-253 Sub-nanomolar Potency

We observed increased p53 stabilization over small molecule inhibitors, as shown in Figure 45.

p53 Stabilization

As a result, we believe KT-253 has potential to have stark potency differences versus the inhibitors in cell killing assays in p53 wild type Acute Lymphocytic Leukemia, as shown in Figure 46.

Tumor cell killing (pM range)

As shown in Figure 47, KT-253 is 200-fold more potent in the RS4-11 Acute Lymphocytic Leukemia cell line compared to what has been published, to date, on the most potent MDM2 small molecule in the clinic (DS-3032).

The potency of KT-253 relative to a MDM2 small molecule inhibitor is the result of its ability to suppress the feedback up-regulation of MDM2, as shown below in Figure 43.

This mechanism of action enables the MDM2 degraders to be extremely efficient in triggering the acute apoptotic response with short exposures that we believe should provide a superior therapeutic index over small molecule inhibitors.

Figure 44 shows washout experiments.

With just 4 hours of coverage, KT-253 was observed to produce cell killing in this cell line, whereas the small molecule inhibitor was not.

KT-253 Potency in the RS4-11 Acute Lymphocytic Leukemia cell line

We believe the potency of KT-253 relative to a MDM2 small molecule inhibitor is the result of its ability to overcome the feedback up-regulation of MDM2, as shown below in Figure 48.

Degrader Overcomes MDM2 Feedback Loop

Figure 49 illustrates that with a single low dose at 1mg/kg, KT-253 induces PD markers of MDM2 inhibition, including brisk p53 upregulation and acute apoptotic readouts such as PUMA.

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Clinically equivalent exposures of small molecules have not been observed to have significant in vivo activity in this xenograft model.

KT-253 PD markers

Figure 50 shows that a single dose of KT-253 at 1mg/kg, Q3W achieves in vivo tumor regression in the CTG-2227 AML patient-derived xenograft (PDX) model as measured by reduction of human CD45+ cells in the bone marrow and AML blats in whole blood.

KT-253 In Vivo tumor regression

Figure 51 shows that KT-253 administered once every three weeks in combination with the AML standard of care agent, venetoclax, was more active than either compound alone in the MOLM13 AML CDX model, resulting in sustained tumor regression.

Strong Single Agent and Combinatorial Activity

in Venetoclax Resistant AML Models

Figure 52 illustrates MDM2 dependency is seen across a large subset of tumor types as shown on the left by genetically knocking out MDM2 across a panel of cell lines and on the right, showing effects on cell lines by pharmacologically removing MDM2 with a degrader.

KT-253 shows marked superiority over the SMI DS-3032 in the panel of Acute Lymphocytic Leukemia (ALL), AML, DLBCL and Uveal melanoma cells.

MDM2 Dependency

Development Opportunities

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While the opportunities are very diverse, we plan to focus our development efforts on tumors which are most susceptible to the acute apoptotic response elicited by our degraders, where we believe we will be able to achieve the greatest therapeutic index and efficacy.

Our initial disease areas of interest are AML, Uveal melanoma and lymphomas, in addition to other indications where preclinically we see that MDM2 degradation leads to an acute apoptotic response predictive of clinical activity with intermittent dosing.

Our initial disease areas of interest are AML, Uveal melanoma and lymphomas, in addition to other solid tumors indications where preclinically we see that MDM2 degradation leads to an acute apoptotic response predictive of clinical activity with intermittent dosing.

Clinical Development Plans

In December 2022, we announced we received FDA clearance of our IND to evaluate KT-253 and we expect to initiate our Phase 1 trial in solid tumors and hematologic malignancies in early 2023.

We have identified AML as an initial hematologic indication for development based on strong pre-clinical KT-253 activity.

Preclinical data also support potential development in other hematologic indications, such as ALL and NHL, as well as in select sensitive solid tumors.

Our Pegasus TM Platform

Our proprietary drug discovery platform, Pegasus TM , enables us to rationally design targeted protein degraders that have the potential to drug all target classes in the cell.

Key components of our platform include our E3 ligase toolbox, our understanding of degradation across healthy and diseased tissue types, our proprietary chemistry and our Center for Molecular Glue Discovery.

We have established subcellular localization indices for each E3 ligase and are determining their

absolute abundances.

We believe this approach is central to building out a toolbox of differentiated E3 ubiquitin ligase binders.

Figure 53 below shows an example of diverse expression profiles, using circle size as a relative abundance measure, for E3 ligases and selected targets across a panel of healthy tissues (on the x-axis), taken from our proprietary E3 Ligase Whole-Body Atlas.

Novel E3 Ligases to Drug a New Generation of Targets

We believe this profile may allow for the selective degradation of a protein only in our target cells.

We have fully characterized this novel tissue selective ligase and, through hit-finding campaigns, have identified unique chemical matter which has affinity for this E3 ligase below 1 uM.

We have also shown productive ternary complex formation against the identified therapeutic target.

Figure 54 illustrates, on the left, the tissue-selective expression of the E3 ligase and, on the right, the binding affinity of the lead compound and ternary complex formation with the target protein of interest.

Tissue-selective expression and binding affinity

We are also developing targeted protein degraders directed against a well-validated and high-value oncology target that has known on-target heme toxicity.

Utilizing our discovery platform, we have identified an E3 ligase that has very low expression in the target cell responsible for this toxicity, as illustrated in Figure 55 below in the Western Blot analysis.

Western Blot analysis

We have developed novel degraders for this oncology target that have demonstrated potent degradation of target type, as shown in the top panel of Figure 56.

As illustrated in the middle panel, we have also shown that our degrader does not degrade

the target in the key blood cell type.

Degrader profile

As illustrated below in Figure 57, we utilize a broad range of hit finding approaches to develop small molecules against our selected targets.

We also use high content screening such as DNA-encoded libraries (DEL), Affinity Selection Mass Spectrometry (ASMS) or traditional high throughput screening (HTS).

We use Fragment Based Screening (FBS) and covalent screening for more targeted approaches where protein topology is understood.

We also utilize X-ray and cryoEM capabilities to enable not only hit finding, but also ternary complex optimization.

Hit finding approaches

As illustrated in Figure 58 below, our proprietary chemistry approach utilizes ternary complex modelling, which leverages cloud computing to evaluate millions of compounds with the objective to design both an optimal linker and to identify the correct vectors to enable efficient binding of both an E3 ligase ligand and protein ligand.

We use molecular chameleonicity to accurately design and predict ADME and PK profiles of these complex molecules which is critical to designing molecules with high oral bioavailability.

Our experienced chemistry and computational chemistry teams utilize artificial intelligence driven insights to understand those design parameters driving clearance, permeability and efflux.

Proprietary chemistry approach

We also utilize a mechanistic modelling process to predict accurately both human PK and PD from preclinical data, an example of which is illustrated in Figure 59.

We first applied an indirect PK/PD response model to describe the mechanism of action of TPD.

We then accounted for the biodistribution of drug to target tissue and used an Emax exposure-response model to describe the mechanism of action of TPD.

We then “humanize”

the PK/PD model by applying human PK parameters, adjusting for species’

differences in potency and protein turnover rate, if necessary, to predict protein degradation in the clinic.

As shown in the far right of Figure 59, the model accurately predicted human PD, as measured by predicted IRAK4 reduction, using preclinical PK/PD animal data (orange) to predict human PK/PD data in (blue).

Modeling Approach

Our Center for Molecular Glue Discovery is focused on identifying novel E3 ligases, beyond cereblon, that enable the design of molecules that target undrugged and un-ligandable proteins through small molecule interactions.

Our approach is to move beyond the traditional approach of molecular glues, which mostly utilize cereblon/IMiD based molecular glues.

We have established strategic partnerships to advance our molecular glue initiatives.

Our work with these groups is focused on identifying and characterizing novel E3 ligase/substrate pairs for molecular glue interactions that exploit natural affinity augmented with small molecules.

We are utilizing genetic screening, structural insights, and pathway and computational biology to identify novel matched pairs of E3 ligases and high value undrugged targets.

We recently announced the discovery of a novel degron interaction for a target that we believe is undrugged and not ligandable.

This finding has led to the identification and characterization of a highly selective novel molecular glue of an ‘undruggable’

transcription factor, and to the initiation of multiple molecular glue discovery programs.

Other Programs

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Collaborations

Collaboration Agreement with GlaxoSmithKline Intellectual Property Development Limited

On October 3, 2017, we entered into a collaboration agreement with GlaxoSmithKline Intellectual Property Development Limited, or GSK, to jointly identify, research and conduct preclinical development of collaboration compounds against specified collaboration targets to identify drug candidates.

We refer to this agreement as the GSK Agreement.

Under the GSK Agreement, GSK is using its DNA-encoded libraries, which can be used to scan trillions of compounds tagged with DNA bar codes that can be sequenced to reveal the structure of any hits, to screen a limited number of drug discovery targets of interest.

The GSK Agreement also provides that the parties will collaborate to discover novel ligase binders.

The GSK Agreement supports ongoing collaboration between the parties, with each party having a right to use certain insights gained in the collaboration for its own programs.

The GSK Agreement also provides a mechanism for GSK to negotiate to license certain collaboration programs.

GSK has granted us a royalty-bearing, exclusive, non-transferrable, worldwide, sublicensable right and license to research, develop and commercialize certain compounds.

As partial consideration for this agreement, we issued GSK 886,305 Series A preferred units of Kymera Therapeutics, LLC.

In addition, low single-digit royalties would become payable by us to GSK on worldwide net sales in a given calendar year if a product comprising certain licensed compounds were to be commercialized.

Royalties would be payable on a product-by-product and country-by-country basis for a period commencing upon the first commercial sale of any such product and continuing for ten (10) years thereafter.

Unless earlier terminated, the GSK Agreement will continue on a product-by-product and country-by-country basis until there are no more royalty payments owed to GSK on any product under the agreement.

Either party may terminate the GSK Agreement upon an uncured material breach, or upon the bankruptcy, insolvency, dissolution or winding up of the other party.

The GSK Agreement may also be terminated by either party for convenience upon sixty (60) days’

prior written notice to the other pa

Master Collaboration Agreement with Vertex Pharmaceuticals Incorporated

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Upon designation of a clinical development candidate, Vertex has the option to exclusively license molecules against the designated target.

We are eligible to receive an aggregate of up to $170 million in potential payments per licensing product based upon the successful achievement of specified research, development, regulatory and commercial milestones, as well as option exercise payments, for up to six (6) programs optioned by Vertex for licensing as part of the collaboration.

well as option exercise payments, for up to six (6) programs optioned by Vertex for licensing as part of the collaboration.

No milestones have been achieved to date under the Vertex Agreement.

In addition, Vertex will pay low single-digit royalties on future net sales on any products that may result from the commercialization of the licensed molecules.

Vertex’s royalty obligations are on a product-by-product and country-by-country

basis and are subject to certain reductions, including (i) in the event that the exploitation of a product is not covered by a valid claim with the licensed patent rights and (ii) in the event of third parties achieving specifically negotiated levels of competitive market share.

Vertex’s royalty obligations are on a product-by-product and country-by-country basis and are subject to certain reductions, including (i) in the event that the exploitation of a product is not covered by a valid claim with the licensed patent rights and (ii) in the event of third parties achieving specifically negotiated levels of competitive market share.

Such royalty obligations will expire on a country-by-country and product-by-product basis upon the later of (a) the expiration of the last patent which covers a product in such country, (b) the expiration of any exclusivity granted by a regulatory authority and (c) 10 years following the first commercial sale of a product in such country.

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As initial consideration for the collaboration, Vertex paid us $70 million upfront including an equity investment in us through the purchase of 3,059,695 shares of our Series B-1 preferred stock.

In connection with its equity investment, Vertex holds certain rights to invest, in its sole discretion, in future private placements or public securities offerings by Kymera, on a pro rata basis and subject to certain conditions.

Under the Vertex Agreement, the parties established a joint advisory committee, or JAC.

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Collaboration Agreement with Genzyme Corporation

On July 7, 2020, we entered into a collaboration agreement, or the Sanofi Agreement, with Genzyme Corporation, a subsidiary of Sanofi, to co-develop drug candidates directed to two biological targets.

The Sanofi Agreement became effective during the third quarter of 2020.

On July 7, 2020, we entered into a collaboration agreement, or the Original Sanofi Agreement, with Genzyme Corporation, a subsidiary of Sanofi, to co-develop drug candidates directed to two biological targets.

The Original Sanofi Agreement became effective during the third quarter of 2020.

On November 15, 2022, we entered into an Amended and Restated Collaboration and License Agreement with Sanofi, or the Amended Sanofi Agreement, which amended the Original Sanofi Agreement to revise certain research terms and responsibilities set forth under the Original Sanofi Agreement.

The Amended Sanofi Agreement also specifies details around the timing and number of Phase 2 trials required under the terms of the collaboration.

The Amended Sanofi Agreement became effective on December 5, 2022.

The Original Sanofi Agreement, as amended by the Amended Sanofi Agreement, is referred to herein as the Sanofi Agreement.

Under the Sanofi Agreement, Kymera grants to Sanofi a worldwide exclusive license to develop, manufacture and commercialize certain lead compounds generated during the collaboration directed against IRAK4 and one additional undisclosed target in an undisclosed field of use.

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In addition, pursuant to the Sanofi Agreement, Sanofi will grant to us an exclusive option, or Opt-In Right, exercisable, at our sole discretion, on a collaboration target-by-collaboration target basis that will include the right to (i) fund 50% of the United States development costs for collaboration products directed against such target in the applicable field of use and (ii) share equally in the net profits and net losses of commercializing collaboration products directed against such target in the applicable field of use in the United States.

In addition, if we exercise our Opt-In Right, Sanofi will grant to us an exclusive option, applicable to each collaboration target, which upon exercise will allow us to conduct certain co-promotion activities in the field in the United States.

In addition, if we exercise our Opt-In Right, Sanofi will grant to us an exclusive

option, applicable to each collaboration target, which upon exercise will allow us to conduct certain co-promotion activities in the field in the United States.

In consideration for the exclusive licenses granted to Sanofi under the Sanofi Agreement, Sanofi paid to us an upfront payment of $150.0 million.

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We will also be eligible to receive certain commercial milestone payments up to $700.0 million in the aggregate, of which $400.0 million relates to the IRAK4 program, which are payable upon the achievement of certain net sales thresholds.

We will further be eligible to receive tiered royalties for each program on

net sales ranging from the high single digits to high teens, subject to low-single digits upward adjustments in certain circumstances.

We will further be eligible to receive tiered royalties for each program on net sales ranging from the high single digits to high teens, subject to low-single digits upward adjustments in certain circumstances.

The Sanofi Agreement, unless earlier terminated, will expire on a product-by-product basis on the date of expiration of all payment obligations under the Sanofi Agreement with respect to such product.

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In addition, Sanofi may terminate the agreement for convenience or for a material safety event upon advance prior written notice, and we may terminate the agreement with respect to any collaboration candidate if, following Sanofi’s assumption of responsibility for the development, commercialization or manufacturing of collaboration candidates with respect to a particular target, Sanofi ceases to exploit any collaboration candidates directed to such target for a specified period.

Additionally, on December 2, 2022, Sanofi provided us with written notice of its intention to advance the collaboration target 1 candidate, KT-474, into Phase 2 clinical trials.

We are entitled to receive milestone payments upon the dosing of the first patient(s) in Phase 2 studies per indication up to a specified number of indications as further set forth in the Sanofi Agreement.

Manufacturing / Supply Chain

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We rely on and expect to continue to rely on third-party manufacturers for the production of both drug substance and finished drug product.

We have engaged third-party manufacturers to supply the drug substances for our drug candidates and a third-party manufacturer to develop and manufacture finished drug product for KT-474 that we are using in our Phase 1 clinical trial.

We currently obtain our supplies from these manufacturers on a purchase order basis and do not have long-term supply arrangements in place.

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We have selected these compounds not only on the basis of their potential efficacy and safety, but also because we anticipate an ease of synthesis and cost of goods.

We have produced drug substances and drug product for use in our KT-474 Phase 1 clinical trial and continue to refine our production processes.

We have produced drug substances and drug products for use in our clinical trials and continue to refine our production processes.

The drug substance and drug product processes are amenable to scale-up and do not require unusual equipment in the manufacturing process.

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Further, several large pharmaceutical companies have disclosed preclinical investments in this field.

Our competitors will also include companies that are or will be developing other targeted protein degradation methods as well as small molecule, antibody, or gene therapies for the same indications that we are targeting.

Our competitors will also include companies that are or will be developing other targeted protein degradation methods as well as small molecule, antibody, or gene therapies

for the same indications that we are targeting.

In addition to the competitors we face in developing small molecule protein degraders, we will also face competition in the indications we expect to pursue with our IRAK4, IRAKIMiD, STAT3, and MDM2 programs.

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Our intellectual property includes a portfolio of wholly owned patent families covering our platform E3 ligase ligand technology and our novel bifunctional degrader product candidates, including claims to compositions of matter, pharmaceutical compositions, methods of use, methods of treatment, and other related compounds and methods.

Our intellectual property portfolio is in its very early stages, and, as of January 21, 2022, included two granted U.S.

Our intellectual property portfolio is in its very early stages, and, as of January 20, 2023, included nine granted U.S.

patents, about 101 U.S.

patent applications, and about 130 foreign patent applications.

patent applications, about 20 international patent applications, and about 259 foreign patent applications.

Our patent portfolio is generally organized into two categories:

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Our platform E3 ligase ligand patent families are wholly owned and include four patent families directed to novel ligands for the cereblon E3 ubiquitin ligase, as well as methods of treatment and other related methods.

As of January 21, 2022, our platform E3 ligase ligand patent families included four U.S.

patent applications and four foreign patent applications, including one international patent application and three patent applications in Europe.

As of January 20, 2023, our platform E3 ligase ligand patent families included three granted U.S.

patents, four U.S.

patent applications, and three patent applications in Europe.

or foreign patents resulting from these applications, if granted and all appropriate maintenance fees paid, are expected to expire between 2038 and 2040, absent any patent term adjustments or extensions.

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Our protein degrader patent families are wholly owned and are directed to novel bifunctional degrader compounds that are useful in affecting ubiquitination of a target protein, as well as methods of treatment and other related methods.

As of January 21, 2022, our protein degrader patent families included four U.S.

patent applications and about 10 foreign patent applications, including one international patent application and patent applications filed in foreign jurisdictions, such as Europe, Australia, Canada, Israel, Japan, Mexico, New Zealand, and the Russian Federation.

As of January 20, 2023, our protein degrader patent families included one granted U.S.

patent, seven U.S.

patent applications and about 14 foreign patent applications filed in foreign jurisdictions, such as Australia, Canada, Europe, Israel, Japan, Mexico, New Zealand, and the Russian Federation.

or foreign patents resulting from these applications, if granted and all appropriate maintenance fees paid, are expected to expire between 2038 and 2043, absent any patent term adjustments or extensions.

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Such targets include, for example, IRAK (interleukin-1 receptor-associated kinases) and STAT (signal transducers and activators of transcription).

As of January 21, 2022, our target-specific degrader patent families included two granted U.S.

patents, about 30 U.S.

patent applications and about 110 foreign patent applications, including about 20 international patent applications and patent applications filed in foreign jurisdictions, such as Europe, Australia, Brazil, Canada, China, Eurasia, Israel, India, Japan, Mexico, New Zealand, Singapore, South Africa, and Taiwan.

As of January 20, 2023, our target-specific degrader patent families included five granted U.S.

patents, about 84

patent applications, about 20 international patent applications, and about 241 patent applications filed in foreign jurisdictions, such as Australia, Brazil, Canada, China, Eurasia, Europe, Israel, India, Japan, Mexico, New Zealand, Singapore, South Africa, and Taiwan.

or foreign patents resulting from our target-specific degrader patent families, if granted and all appropriate maintenance fees paid, are expected to expire between 2038 and 2044, absent any patent term adjustments or extensions.

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Our IRAK-specific patent families are wholly owned and include patent families covering degrader compounds that are designed to specifically target IRAK for degradation and patent families covering novel IRAK ligands.

As of January 21, 2022, our IRAK-specific patent families included two granted U.S.

As of January 20, 2023, our IRAK-specific patent families included four granted U.S.

patents, about 34 U.S.

patent applications, about 10 international patent applications, and about 70 patent applications filed in foreign jurisdictions, such as Europe, Australia, Argentina, Brazil, Canada, China, Eurasia, Gulf Cooperation Council, Israel, India, Japan, Mexico, New Zealand, Singapore, South Africa, and

patent applications, about 9 international patent applications, and about 158 patent applications filed in foreign jurisdictions, such as Australia, Argentina, Brazil, Canada, China, Europe, Eurasia, Gulf Cooperation Council, Israel, India, Japan, Mexico, New Zealand, Singapore, South Africa, and Taiwan.

or foreign patents resulting from our IRAK-specific patent families, if granted and all appropriate maintenance fees paid, are expected to expire between 2038 and 2044, absent any patent term adjustments or extensions.

With respect to the KT-474 product candidate, as of January 20, 2023, we own one granted U.S.

patent, seven pending U.S.

patent applications, two pending international patent applications, and patent applications filed in foreign jurisdictions, such as Europe, Australia, Brazil, Canada, China, Eurasia, Israel, India, Japan, South Korea, Mexico, New Zealand, Singapore, South Africa, and Taiwan, each with claims directed to compositions of matter covering KT-474 and/or methods of making or using KT-474.

patent, 15 pending U.S.

patent applications, three pending international patent applications, and about 81 patent applications filed in foreign jurisdictions, such as Australia, Brazil, Canada, China, Europe, Israel, India, Japan, South Korea, Mexico, New Zealand, Singapore, South Africa, and Taiwan, each with claims directed to compositions of matter covering KT-474 and/or methods of making or using KT-474.

or foreign patents resulting from these patent families, if granted and all appropriate maintenance fees paid, are expected to expire between 2039 and 2044, absent any patent term adjustments or extensions.

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Our STAT-specific patent families are wholly owned and focus on degrader compounds that are designed to specifically target signal transducers and activators of transcription (STAT) for degradation.

As of January 21, 2022, our STAT-specific patent families included three U.S.

patent applications, two international patent applications, and about 20 patent applications filed in foreign jurisdictions, such as Australia, Canada, China, Europe, India, Israel, Japan, South Korea, Mexico, and Taiwan.

As of January 20, 2023, our STAT-specific patent families included one granted U.S.

patent, 14 U.S.

patent applications, two international patent applications, and about 33 patent applications filed in foreign jurisdictions, such as Australia, Canada, China, Eurasia, Europe, India, Israel, Japan, South Korea, Mexico, and Taiwan.

or foreign patents resulting from our STAT-specific patent families, if granted and all appropriate maintenance fees paid, are expected to expire between 2040 and 2044, absent any patent term adjustments or extensions.

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As of January 20, 2023, we own about 36 U.S.

patent applications and about 10 foreign patent applications, including 5 international patent applications and patent applications filed in Argentina, Gulf Cooperation Council, and Taiwan, which focus on degrader compounds designed to specifically target other proteins.

patent applications, nine international patent applications and about 50 patent applications filed in Australia, Argentina, Brazil, Canada, China, Europe, Gulf Cooperation Council, Israel, India, Japan, Mexico, New Zealand, Singapore, South Africa, and Taiwan which focus on degrader compounds designed to specifically target other proteins.

or foreign patents resulting from these patent families, if granted and all appropriate maintenance fees paid, are expected to expire between 2040 and 2044, absent any patent term adjustments or extensions.

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Government Regulation

effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs.

The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs.

We, along with our vendors, contract research organizations and contract manufacturers, will be required to navigate the various preclinical, clinical, manufacturing and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval of our product candidates.

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The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the clinical trial, including concerns that human research patients will be exposed to unreasonable health risks, and imposes a full or partial clinical hold.

FDA must notify the sponsor of the grounds for the

hold and any identified deficiencies must be resolved before the clinical trial can begin.

FDA must notify the sponsor of the grounds for the hold and any identified deficiencies must be resolved before the clinical trial can begin.

Submission of an IND may result in the FDA not allowing clinical trials to commence or not allowing clinical trials to commence on the terms originally specified in the IND.

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These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval and physician labeling.

In August 2018, the FDA released a draft guidance entitled “Expansion Cohorts:

In March 2022, the FDA released a final guidance entitled “Expansion Cohorts:

Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,”

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The FDA may refer an application for a novel drug to an advisory committee.

An advisory committee is a panel of independent experts, including clinicians and other scientific experts, which reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

An advisory committee is a panel of independent experts, including clinicians and other scientific experts, which reviews, evaluates and provides a recommendation

as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

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may be lost if the FDA later determines that the request for designation was materially defective or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

In September of 2022, KT-333, Kymera’s STAT3 degrader in development for relapsed and/or refractory lymphomas and solid tumors, was granted its second orphan drug designation by the U.S.

Food and Drug Administration for the treatment of cutaneous T-cell lymphoma (CTCL), following its orphan drug designation for peripheral T-cell lymphoma (PTCL) in June of 2022.

These designations provide incentives to encourage the development of medicines for rare diseases.

Expedited Development and Review Programs for Drugs

The FDA maintains several programs intended to facilitate and expedite development and review of new drugs to address unmet medical needs in the treatment of serious or life-threatening diseases or conditions.

These programs include Fast Track designation, Breakthrough Therapy designation, Priority Review and Accelerated Approval, and the purpose of these programs is to either expedite the development or review of important new drugs to get them to patients earlier than under standard FDA development and review procedures.

These programs include Fast Track designation, Breakthrough Therapy designation, Priority Review, Accelerated Approval and platform technology designation and the purpose of these programs is to either expedite the development or review of important new drugs to get them to patients earlier than under standard FDA development and review procedures.

A new drug is eligible for Fast Track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address unmet medical needs for such disease or condition.

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Additionally, products are eligible for Accelerated Approval if they can be shown to have an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or an effect on a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality which is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

Accelerated Approval is usually contingent on a sponsor’s agreement to conduct additional post-approval studies to verify and describe the product’s clinical benefit.

The FDA may withdraw approval of a drug or indication approved under Accelerated Approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product.

In addition, unless otherwise informed by the FDA, the FDA currently requires that all advertising and promotional materials that are intended for dissemination or publication within 120 days following marketing approval be submitted to the agency for review during the pre-approval review period, and that after 120 days following marketing approval, all advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.

Accelerated Approval is usually contingent on a sponsor’s agreement to conduct additional post-approval studies to verify and describe the product’s clinical benefit and, under the Food and Drug Omnibus Reform Act of 2022, or FDORA, the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.

Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a drug or indication approved under Accelerated Approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product.

In addition, for products being considered for accelerated approval, the FDA generally requires, unless otherwise informed by the Agency, that all advertising and promotional materials that are intended for dissemination or publication within 120 days following marketing approval be submitted to the agency for review during the pre-approval review period, and that after 120 days following marketing approval, all advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.

Under FDORA, a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under an NDA;

(2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety;

and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process.

A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND application for a drug that incorporates or utilizes the platform technology that is the subject of the request.

If so designated, the FDA may expedite the development and review of any subsequent original NDA for a drug that uses or incorporates the platform technology.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time period for FDA review or approval may not be shortened.

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Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, tracking and tracing, reporting of adverse experiences with the product, complying with promotion and advertising requirements, which include restrictions on promoting products for unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific and educational activities.

Manufacturers and other parties involved in the drug supply chain for prescription drug products must also comply with product tracking and tracing requirements and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the United States.

Although physicians may prescribe legally available products for off-label uses, manufacturers and individuals working on behalf of manufacturers may not market or promote such uses.

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For example, the FDA may require post-market testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, drug manufacturers and their subcontractors involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our contract manufacturers.

In addition, drug manufacturers and their subcontractors involved in the manufacture and distribution of approved drugs, and those supplying products, ingredients, and components of them, are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our contract manufacturers.

Failure to comply with statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, product seizures, injunctions, civil penalties or criminal prosecution.

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The FDA’s review of an initial PMA is required by statute to take between six months, although the process typically takes longer, and may require several years to complete.

If the FDA evaluations of both the PMA and the manufacturing facilities are favorable, the FDA will either issue an approval letter or an approvable letter, which usually

contains a number of conditions that must be met in order to secure the final approval of the PMA.

If the FDA evaluations of both the PMA and the manufacturing facilities are favorable, the FDA will either issue an approval letter or an approvable letter, which usually contains a number of conditions that must be met in order to secure the final approval of the PMA.

If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will deny the approval of the PMA or issue a not approvable letter.

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However, in cases where a drug cannot be used safely or effectively without the companion diagnostic, the FDA’s guidance indicates it will generally not approve the drug without the approval or clearance of the diagnostic device.

The FDA also issued a draft guidance in July 2016 setting forth the principles for co-development of an in vitro companion diagnostic device with a therapeutic product.

The FDA also issued a draft guidance in July 2016 setting forth the principles for co-development of an in

vitro companion diagnostic device with a therapeutic product.

The draft guidance describes principles to guide the development and contemporaneous marketing authorization for the therapeutic product and its corresponding in vitro companion diagnostic.

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The process for determining whether a third-party payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved.

Third-party payors are increasingly challenging the prices charged, examining the medical necessity, reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs.

Third-party payors are increasingly challenging the prices charged, examining the medical necessity, reviewing the cost-effectiveness of medical

products and services and imposing controls to manage costs.

Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

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Prior to the Supreme Court's decision, President Biden issued an Executive Order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The Executive Order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

The Executive Order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among

others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is unclear how other healthcare reform measures of the Biden administrations or other efforts, if any, to challenge repeal or replace the ACA, will impact our business.

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The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended these reductions from May 1, 2020, through March 31, 2022 due to the COVID-19 pandemic.

Then, a 1% payment reduction will occur beginning April 1, 2022 through June 30, 2022, and the 2% payment reduction will resume on July 1, 2022 .

Then, a 1% payment reduction occurred beginning April 1, 2022 through June 30, 2022, and the 2% payment reduction resumed on July 1, 2022.

In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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Although a number of these and other measures may require additional authorization to become effective, Congress and the current administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

Additionally, in the United States, the Medicare Modernization Act, or MMA, contains provisions that call for the promulgation of regulations that expand pharmacists’

and wholesalers’

ability to import cheaper versions of an approved drug and competing products from Canada, where there are government price controls.

Further, the MMA provides that these changes to U.S.

importation laws will not take effect, unless and until the Secretary of the HHS certifies that the changes will pose no additional risk to the public’s health and safety and will result in a significant reduction in the cost of products to consumers.

On September 23, 2020, the Secretary of the HHS made such certification to Congress, and on October 1, 2020, FDA published a final rule that allows for the importation of certain prescription drugs from Canada.

Under the final rule, States and Indian Tribes, and in certain future circumstances pharmacists and wholesalers, may submit importation program proposals to the FDA for review and authorization.

Since the issuance of the final rule, several industry groups have filed federal lawsuits challenging multiple

aspects of the final rule, and authorities in Canada have passed rules designed to safeguard the Canadian drug supply from shortages.

On September 25, 2020, CMS stated drugs imported by States under this rule will not be eligible for federal rebates under Section 1927 of the Social Security Act and manufacturers would not report these drugs for “best price”

or Average Manufacturer Price purposes.

Since these drugs are not considered covered outpatient drugs, CMS further stated it will not publish a National Average Drug Acquisition Cost for these drugs.

Separately, the FDA also issued a final guidance document outlining a pathway for manufacturers to obtain an additional National Drug Code, or NDC, for an FDA-approved drug that was originally intended to be marketed in a foreign country and that was authorized for sale in that foreign country.

The market implications of the final rule and guidance are unknown at this time.

Proponents of drug reimportation may attempt to pass legislation that would directly allow reimportation under certain circumstances.

Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

In August 2022, the IRA was signed into law.

The IRA includes several provisions that may impact our business to varying degrees, including provisions that establish a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, impose new manufacturer financial liability on many drugs reimbursed under Medicare Part D, allow the U.S.

government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, and require companies to pay rebates to Medicare for drug prices that increase faster than inflation.

The effect of IRA on our business and the healthcare industry in general is not yet known.

Outside the United States, ensuring coverage and adequate payment for a product also involves challenges.

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Some countries provide that products may be marketed only after a reimbursement price has been agreed upon.

Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.

Some countries may require the

completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.

For example, the European Union provides options for its member states to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

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Depending on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, exclusion from federal healthcare programs, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, relabeling or repackaging, or refusal to allow a firm to enter into supply contracts, including government contracts.

Any claim or action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention

from the operation of our business.

Any claim or action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

Prohibitions or restrictions on marketing, sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.

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In the EU, innovative medicinal products for therapeutic indications that are authorized for marketing (i.e., reference products) qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization.

The data exclusivity period prevents generic or biosimilar applicants from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU.

The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until ten years have elapsed from the initial authorization of the reference product in the EU.

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or (iii) the marketing authorization holder for the authorized orphan product cannot supply enough orphan medicinal product.

EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.

Prior to obtaining a marketing authorization in the EU, applicants must demonstrate compliance with all measures included in an EMA-approved pediatric investigation plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.

The respective requirements for all marketing authorization procedures are laid down in Regulation (EC) No 1901/2006, the so-called Pediatric Regulation.

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The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation will depend on the duration of the individual clinical trial.

If a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation became applicable the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

If a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation became

applicable the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

The new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union.

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Given the breadth and depth of changes in data protection obligations, maintaining compliance with the GDPR will require significant time, resources and expense, and we may be required to put in place additional controls and processes ensuring compliance with the new data protection rules.

There has been limited enforcement of the GDPR to date, particularly in biopharmaceutical development, so

we face uncertainty as to the exact interpretation of the new requirements on any future trials and we may be unsuccessful in implementing all measures required by data protection authorities or courts in interpretation of the new law.

There has been limited enforcement of the GDPR to date, particularly in biopharmaceutical development, so we face uncertainty as to the exact interpretation of the new requirements on any future trials and we may be unsuccessful in implementing all measures required by data protection authorities or courts in interpretation of the new law.

In addition, further to the United Kingdom’s exit from the European Union on January 31, 2020, the GDPR ceased to apply in the United Kingdom at the end of the transition period on December 31, 2020.

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Our workforce expanded during FY22;

new employees were hired to support and extend our clinical and preclinical pipeline, with hires in commercial, clinical development and operations, research, manufacturing, and general and administrative functions.

new employees were hired to support and extend our clinical and preclinical pipeline, with hires in clinical development and operations, research, manufacturing, and general and administrative functions.

We expect to continue to add additional employees in 2023 with a focus on expanding increasing expertise and bandwidth in clinical and preclinical research and development.

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We monitor our compensation programs closely and provide what we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our equity programs.

To attract qualified applicants, the Company offers a total rewards package consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation for every employee.

To attract qualified applicants, the Company offers a comprehensive benefits package consisting of base salary and cash target bonus, medical and other benefits and equity compensation for every employee.

Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility.

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Beginning in March 2020, we have supported our employees and government efforts to curb the COVID-19 pandemic through a multifaceted communication, infrastructure, and behavior modification and enforcement effort.

Practices that were implemented at different times in 2022 included the following:

Establishing clear and regular COVID-19 policies, safety protocols, and updates to all employees;

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notice with rent set at an agreed upon market rate.

Our existing facilities are sufficient to meet our current needs.

To meet the future needs of our business, we may lease additional or alternate space, and we believe suitable additional or alternative space will be available in the future on commercially reasonable terms.

On December 20, 2021, we entered into a noncancelable lease for 100,624 square feet of office and laboratory space in Watertown, Massachusetts.

This lease has an initial term of 134 months, and we have two consecutive options to extend the term of the lease for five years each at then-market rates.

Our new facility is expected to be sufficient to meet our current needs.

Our Corporate Information

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Biopharmaceutical drug development is a highly speculative undertaking and involves a substantial degree of risk.

Since our formation in 2015 and our initial funding in 2016, our operations to date have been limited primarily to organizing and staffing our company, business planning, raising capital, researching and developing our drug discovery technology, developing our pipeline, building our intellectual property portfolio, undertaking preclinical studies of our product candidates and initiating a Phase 1 first-in-human clinical trial of KT-474, a highly active and selective, orally bioavailable IRAK4 degrader.

Since our formation in 2015 and our initial funding in 2016, our operations to date have been limited primarily to organizing and staffing our company, business planning, raising capital, researching and developing our drug discovery technology, developing our pipeline, building our intellectual property portfolio, undertaking preclinical studies and conducting Phase 1 clinical trials of our product candidates.

We have never generated any revenue from drug sales.

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Consequently, any predictions we make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors, such as the ongoing COVID-19 pandemic.

We will need to transition from a company with a research and development focus to a company capable of supporting late-stage development and commercial activities.

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Since inception, we have focused substantially all of our efforts and financial resources on developing our proprietary targeted protein degradation drug discovery platform, or the Pegasus TM platform, and initial product candidates as well as supporting our collaborations and partnerships.

To date, we have financed our operations primarily through the issuance and sale of our convertible preferred stock to outside investors and collaborators in private equity financings, upfront payments under our existing collaborations and our initial public offering and follow-on offering.

From our inception through December 31, 2021, we raised an aggregate of $877.1 million of gross proceeds from such transactions and through our collaborations with Genzyme Corporation, or Sanofi, and Vertex Pharmaceuticals Incorporated, or Vertex.

From our inception through December 31, 2022, we raised an aggregate of approximately $1.03 billion of gross proceeds from such transactions and through our collaborations with Genzyme Corporation, or Sanofi, and Vertex Pharmaceuticals Incorporated, or Vertex.

As of December 31, 2022, our cash and cash equivalents and investments were $559.5 million.

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We expect our expenses to significantly increase in connection with our ongoing activities, as we:

initiate and complete preclinical studies and clinical trials for current or future product candidates, including the ongoing Phase 1 trials of KT-474, KT-413 and KT-333;

initiate and complete preclinical studies and clinical trials for current or future product candidates, including KT-474, KT-413, KT-333 and KT-253;

prepare and submit Investigational New Drug applications, or INDs, with the U.S.

Food and Drug Administration, or FDA, for KT-253 and future product candidates ;

Food and Drug Administration, or FDA, for future product candidates ;

develop and scale up our capabilities to support our ongoing preclinical activities and clinical trials for our product candidates and commercialization of any of our product candidates for which we may obtain marketing approval;

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The development of pharmaceutical drugs is capital-intensive.

We have commenced clinical development of KT-474, KT-413, KT-333 and are currently advancing multiple development candidates through preclinical development across a number of potential indications.

We have commenced clinical development of KT-474, KT-413, and KT-333, and plan to initiate clinical development of KT-253 this year.

We are also currently advancing multiple development candidates through preclinical development across a number of potential indications.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue the research and development of, advance the preclinical and clinical activities of, and seek marketing approval for, our current or future product candidates.

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In August 2020, we completed an IPO of our common stock by issuing 9,987,520 shares of our common stock, including the exercise in full by the underwriters of their option to purchase up to 1,302,720 additional shares of common stock, at a public offering price of $20.00 per share.

The aggregate gross proceeds to the Company from the offering, before deducting underwriting discounts and commissions, and other estimated offering expenses payable by the Company, were approximately $199.8 million.

Concurrent with the IPO, the Company announced the sale of 676,354 common shares at the public offering price per share in a private placement to Vertex.

The aggregate gross proceeds to the Company from the concurrent private placement were approximately $13.5 million.

The aggregate gross proceeds to us from the offering, before deducting underwriting discounts and commissions, and other estimated offering expenses payable by us, were approximately $199.8 million.

Concurrent with the IPO, we announced the sale of 676,354 common shares at the public offering price per share in a private placement to Vertex.

The aggregate gross proceeds to us from the concurrent private placement were approximately $13.5 million.

The concurrent private placement also closed in August 2020.

In July 2021, we completed a follow-on offering of our common stock and an additional private placement transaction with Vertex resulting, in the aggregate, in net proceeds of approximately, $243.1 million.

We expect that the approximately $567.6 million of cash and cash equivalents and investments at December 31, 2021 will be sufficient to fund our operations into 2025.

In August 2022, we completed a PIPE offering of our common stock and pre-funded warrants resulting in gross proceeds of $150.0 million.

We expect that the approximately $559.5 million of cash and cash equivalents and investments at December 31, 2022 will be sufficient to fund our operations into the second half of 2025.

We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

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the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory clearances to market our current or future product candidates.

Identifying potential current or future product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve drug sales.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve drug sales.

In addition, our current or future product candidates, if approved, may not achieve commercial success.

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and proxy access.

We are required to implement these requirements in 2022, and we may incur unexpected expenses in connection with such implementation.

We were required to implement these requirements beginning in 2022 and incurred unexpected expenses in connection with such implementation.

Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

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If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.

The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services.

The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business.

For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage.

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We are also unable to predict when, if ever, we will be able to generate revenue from such product candidates due to the numerous risks and uncertainties associated with drug development, including the uncertainty of :

the results of the planned multiple ascending dose, or MAD, portion of the Phase 1 trial of KT-474 in patients and the results of the Phase 1 trials of KT-413 and KT-333;

timing of IND clearances, and/or subsequent clinical trial costs, for KT-253 and other current or future product candidates;

the results of our ongoing or planned clinical trials of our product candidates, including KT-474, KT-413, KT-333 and KT-253;

the results of preclinical studies and timing of IND clearances of future product candidates, and/or clinical trial costs for current and future product candidates;

our successful initiation, enrollment of and completion of clinical trials for current and future product candidates, including our ability to generate positive data from any such clinical trials;

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the costs associated with the development of any additional development programs we identify in-house or acquire through collaborations or other arrangements;

our ability to establish manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing;

our ability to establish and maintain manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing;

obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates;

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We cannot be certain that we will be able to discover degraders by matching the right target with the ideal E3 ligase and the right linker in a timely manner, or at all.

We have commenced a Phase 1 clinical trial of KT-474, but we have not yet assessed safety of any other product candidates in humans.

All of our product candidates are in preclinical or early clinical development.

As such, there may be adverse effects from treatment with any of our current or future product candidates that we cannot predict at this time.

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We currently have no product candidates approved for sale and may never be able to develop marketable product candidates.

Our business depends heavily on the successful development, regulatory approval and commercialization of our

current or future product candidates, including our IRAK4, IRAKIMiD, STAT3 and MDM2 programs.

The preclinical studies and clinical trials of our current or future product candidates are, and the manufacturing and marketing of our current or future product candidates will be, subject to extensive and rigorous review and regulation by numerous government authorities in the U.S.

Our business depends heavily on the successful development, regulatory approval and commercialization of our current or future product candidates, including our IRAK4, IRAKIMiD, STAT3 and MDM2 programs.

The preclinical studies

and clinical trials of our current or future product candidates are, and the manufacturing and marketing of our current or future product candidates will be, subject to extensive and rigorous review and regulation by numerous government authorities in the U.S.

and in other countries where we intend to test or, if approved, market any of our current or future product candidates.

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This process can take many years and may include post-marketing studies and surveillance, which will require the expenditure of substantial resources.

Of the large number of drugs in development in the U.S., only a small percentage will successfully complete the FDA regulatory approval process and will be commercialized, with similarly low rates of success for drugs in development in the European Union obtaining regulatory approval from the European Medicines Agency, or EMA.

Accordingly, even if we are able to obtain the requisite financing to continue to fund our development and preclinical studies and clinical trials, we cannot assure you that any of our current or future product candidates will be successfully developed or commercialized.

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As a result, in July 2021, we initiated enrollment in the MAD portion of the Phase 1 trial of KT-474, including healthy volunteers.

A subsequent cohort is expected to include HS and AD patients.

We completed dose escalation in the SAD and MAD portions of this Phase 1 trial in December 2021.

We completed a single dose, food-effect cohort to establish the dose for the patient cohort, or Part C, of the KT-474 Phase 1 trial.

Part C has completed and included patients with either moderate-to-severe HS or AD.

We are not permitted to market our current or future product candidates in the U.S.

until we receive approval of a New Drug Application, or an NDA, from the FDA, in the European Economic Area, or EEA, until we receive approval of a marketing authorization application, or an MAA, from the EMA, or in any other foreign countries until we receive the requisite approval from such countries.

until we receive approval of a New Drug Application, or an NDA, from the FDA, in the European Union, or EU, until we receive approval of a marketing authorisation application, or an MAA, from the European Commission following scientific evaluation by the EMA, or in any other foreign countries until we receive the requisite approval from such countries.

Obtaining approval of an NDA or MAA is a complex, lengthy, expensive and uncertain process, and the FDA or EMA may delay, limit or deny approval of any of our current or future product candidates for many reasons, including, among others:

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There may be delays in trial initiation, and we may not be able to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the U.S.

In particular, our ability to open clinical sites and enroll patients may be significantly delayed by the evolving COVID-19 pandemic and we do not know the extent and scope of such delays at this point.

Moreover, some of our competitors have ongoing clinical trials for current or future product candidates that treat the same patient populations as our current or future product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’

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Interim, “topline,”

and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

and preliminary data from our clinical trials that we announce or publish from time to time, including relating to our Phase 1 clinical trials of KT-474, KT-413 and KT-333, may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or topline data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.

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As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.

Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

Topline data also remain subject to audit and verification procedures that may result in the final

data being materially different from the preliminary data we previously published.

As a result, topline data should be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our clinical trials.

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may

materially change as patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments for their diseases.

Interim data from clinical trials that we may complete, including data from of our Phase 1 trials of KT-474, KT-413 and KT-333, are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments for their diseases.

Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.

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Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial, including our Phase 1 trials of KT-474, KT-413 and KT-333, is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, results of operations, prospects or financial condition.

Positive results from early preclinical studies and clinical trials of our current or future product candidates are not necessarily predictive of the results of later preclinical studies and clinical trials of our current or future product candidates.

If we cannot replicate the positive results from our preclinical studies of our current or future product candidates in our future clinical trials, we may be unable to successfully develop, obtain regulatory approval for and commercialize our current or future product candidates.

Positive results from our preclinical studies of our current or future product candidates, and any positive results we may obtain from our early clinical trials of our current or future product candidates, including our Phase 1 trial of KT-474, may not necessarily be predictive of the results from required later preclinical studies and clinical trials.

Similarly, even if we are able to complete our planned preclinical studies or clinical trials of our current or future product candidates according to our current development timeline, the positive results from such preclinical studies and clinical trials of our current or future product candidates, including our Phase 1 trial of KT-474, may not be replicated in subsequent preclinical studies or clinical trials.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and we cannot be certain that we will not face similar setbacks.

These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain approval from the FDA or comparable foreign regulatory authority.

If we fail to produce positive results in our planned preclinical studies or clinical trials of any of our current or future product candidates, the development timeline and regulatory approval and commercialization prospects for our current or future product candidates, and, correspondingly, our business and financial prospects, would be materially adversely affected.

Additionally, our planned or future clinical trials may utilize an “open-label”

trial design, such as the open-label patient portion of our Phase 1 clinical trials of KT-474, KT-413, KT-333 and KT-253.

An “open-label”

clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo.

Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels.

Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment.

Open-label clinical trials may be subject to a “patient bias”

where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment.

In addition, open-label clinical trials may be subject to an “investigator bias”

where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.

The results from an open-label trial, including our Phase 1 trials of KT-474, KT-413 and KT-333, may not be predictive of future clinical trial results with any of our product candidates for which we include an open-label clinical trial when studied in a controlled environment with a placebo or active control

The incidence and prevalence for target patient populations of our product candidates have not been established with precision.

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In December 2019, a novel strain of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes COVID-19, surfaced in Wuhan, China and has since spread worldwide, including to Eastern Massachusetts where our primary office and laboratory space is located.

The pandemic and policies and regulations implemented by governments in response to the pandemic, most of which have been lifted, have had a significant impact, both direct and indirect, on businesses and commerce.

The coronavirus pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures.

The extent to which the coronavirus impacts our operations or those of our third-party partners, including our preclinical studies or clinical trial operations, will also depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that will emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.

The continued spread of COVID-19 globally, including the identification of new variants of the virus, could adversely impact our preclinical or clinical trial operations in the U.S.

The continued spread of COVID-19 globally, including the ongoing identification of new variants of the virus, could adversely impact our preclinical or clinical trial operations in the U.S.

and abroad, including our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19.

For example, similar to other biopharmaceutical companies, we may experience delays in enrolling subjects in our clinical trials.

For example, similar to other biopharmaceutical companies, we may experience additional delays in enrolling subjects in our clinical trials.

COVID-19 may also affect employees of third-party CROs located in affected geographies that we rely upon to carry out our clinical trials.

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Additionally, timely enrollment in clinical trials is dependent upon clinical trial sites which will be adversely affected by global health matters, such as pandemics.

We are conducting and plan to conduct clinical trials for our product candidates in

geographies which are currently being affected by the coronavirus.

We are conducting and plan to conduct clinical trials for our product candidates in geographies which are currently being affected by the coronavirus.

Some factors from the coronavirus outbreak that will delay or otherwise adversely affect enrollment in the clinical trials of our product candidates, as well as our business generally, include:

the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, including the attention of physicians serving as our clinical trial investigators, hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our prospective clinical trials;

limitations on travel that could interrupt key trial and business activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to clinical trial sites, including any government-imposed travel restrictions or quarantines that will impact the ability or willingness of patients, employees or contractors to travel to our clinical trial sites or secure visas or entry permissions, a loss of face-to-face meetings and other interactions with potential partners, any of which could delay or adversely impact the conduct or progress of our clinical trials;

face-to-face meetings and other interactions with potential partners, any of which could delay or adversely impact the conduct or progress of our clinical trials;

the potential negative affect on the operations of our third-party manufacturers and the supply chain for our product candidates.

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business disruptions caused by potential workplace, laboratory and office closures and an increased reliance on employees working from home, disruptions to or delays in ongoing laboratory experiments and operations, staffing shortages, travel limitations or mass transit disruptions, any of which could adversely impact our business operations or delay necessary interactions with local regulators, ethics committees and other important agencies and contractors.

We have taken temporary precautionary measures intended to help minimize the risk of the virus to our employees, including temporarily requiring part or all of our employees to work remotely, suspending all non-essential travel worldwide for our employees and discouraging employee attendance at industry events and in-person work-related meetings, which could negatively affect our business.

We cannot presently predict the scope and severity of the planned and potential shutdowns or disruptions of businesses and government agencies, such as the SEC or FDA.

For example, since March 2020, foreign and domestic inspections by the FDA have largely been on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis.

Since April 2021, the FDA has conducted limited inspections and employed remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates.

Ongoing travel restrictions and other uncertainties continue to impact oversight operations both domestic and abroad and it is unclear when standard operational levels will resume.

The FDA is continuing to complete mission-critical work, prioritize other higher-tiered inspectional needs (e.g., for-cause inspections), and carry out surveillance inspections using risk-based approaches for evaluating public health.

We cannot presently predict the scope and severity of additional planned and potential shutdowns or disruptions of businesses and government agencies, such as the SEC or FDA.

For example, since March 2020, the FDA has been working to resume pre-pandemic levels of inspection activities, including routine surveillance, bioresearch monitoring and pre-approval inspections.

Should the FDA determine that an inspection is necessary for approval of any NDAs we may submit and an inspection cannot be completed during the review cycle due to restrictions on travel at that time, and the FDA does not determine a remote interactive evaluation to be adequate, the agency has stated that it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the application until an inspection can be completed.

During the COVID-19 public health emergency, a number of companies have announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.

Regulatory authorities outside the U.S.

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Further, uncertainty around these and related issues could lead to adverse effects on the economy of the United States and other economies, which could impact our ability to raise the necessary capital needed to develop and commercialize our product candidates.

Other global health concerns could also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.

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.

We are in early clinical development with KT-474 and have not evaluated any other product candidates in human clinical trials.

Undesirable side.

All of our product candidates are in preclinical or early clinical development, and there may be adverse effects from treatment with any of our current or future product candidates that we cannot predict at this time.

Undesirable side effects caused by our current or future product candidates could cause us to interrupt, delay or halt preclinical studies or could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.

As is the case with many treatments for inflammatory and autoimmune diseases, cancer or other diseases, it is likely that there may be adverse side effects associated with the use of our product candidates.

Additionally, a potential risk in any protein degradation product is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of

the targeted protein in itself could cause adverse events, undesirable side effects, or unexpected characteristics.

Additionally, a potential risk in any protein degradation product is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein in itself could cause adverse events, undesirable side effects, or unexpected characteristics.

It is possible that healthy proteins or proteins not targeted for degradation could be degraded using our degrader molecules in any of our current or future clinical studies.

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We believe that any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidates and could substantially increase the costs of commercializing our current or future product candidates, if approved, and significantly impact our ability to successfully commercialize our current or future product candidates and generate revenues.

Positive results from our preclinical studies of our current or future product candidates, and any positive results we may obtain from our early clinical trials of our current or future product candidates, may not necessarily be predictive of the results from required later preclinical studies and clinical trials.

Similarly, even if we are able to complete our planned preclinical

studies or clinical trials of our current or future product candidates according to our current development timeline, the positive results from such preclinical studies and clinical trials of our current or future product candidates may not be replicated in subsequent preclinical studies or clinical trials.

Additionally, our planned or future clinical trials may utilize an “open-label”

trial design, such as the open-label MAD portion of our Phase 1 clinical trial of KT-474.

An “open-label”

clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo.

Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels.

Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment.

Open-label clinical trials may be subject to a “patient bias”

where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment.

In addition, open-label clinical trials may be subject to an “investigator bias”

The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates for which we include an open-label clinical trial when studied in a controlled environment with a placebo or active control.

Manufacturing our current or future product candidates is complex and we may encounter difficulties in production.

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We do not have our own manufacturing facilities or personnel and currently rely, and expect to continue to rely, on third parties for the manufacture of our current or future product candidates.

These third-party manufacturing providers may not be able to provide adequate resources or capacity to meet our needs and may incorporate their own proprietary processes into our product candidate manufacturing processes.

These third-party contract manufacturing organizations, or CMOs, may not be able to provide adequate resources or capacity to meet our needs and may incorporate their own proprietary processes into our product candidate manufacturing processes.

We have limited control and oversight of a third party’s proprietary process, and a third party may elect to modify its process without our consent or knowledge.

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We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials.

As our current or future product candidates progress through preclinical studies and clinical trials towards potential approval and commercialization, it is expected that various aspects of the manufacturing process will be altered in an effort to optimize processes and results.

If any CMO with whom we contract fails to perform its obligations, we may be forced to enter into an agreement with a different CMO, which we may not be able to do on reasonable terms, if at all.

This could significantly delay our clinical trials supply as we establish alternative supply sources.

In some cases, the technical skills required to manufacture our product candidates or products, if approved, may be unique or proprietary to the original CMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be

unable to transfer such skills at all.

In addition, if we are required to change CMOs for any reason, we will be required to verify that the new CMO maintains facilities and procedures that comply with quality standards and with all applicable regulations.

We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority.

The delays associated with the verification of a new CMO could negatively affect our ability to develop product candidates or commercialize our products in a timely manner or within budget.

Furthermore, a CMO may possess technology related to the manufacture of our product candidate that such CMO owns independently.

This would increase our reliance on such CMO or require us to obtain a license from such CMO in order to have another CMO manufacture our product candidates.

In addition, as our current or future product candidates progress through preclinical studies and clinical trials towards potential approval and commercialization, it is expected that various aspects of the manufacturing process will be altered in an effort to optimize processes and results.

Such changes may require amendments to be made to regulatory applications which may further delay the timeframes under which modified manufacturing processes can be used for any of our current or future product candidates and additional bridging studies or trials may be required.

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If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our current or future product candidates, we will not be able to commercialize, or will be delayed in commercializing, our current or future product candidates, and our ability to generate revenue will be materially impaired.

Our current or future product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, distribution, import, and export, are subject to comprehensive regulation by the FDA and other regulatory

agencies in the U.S.

and by comparable authorities in other countries.

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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

As of May 26, 2021, the FDA noted it is continuing to ensure timely reviews of applications for medical products during the ongoing COVID-19 pandemic in line with its user fee performance goals;

however, the FDA may not be able to continue its current pace and review timelines could be extended.

In addition, even if we were to obtain approval, regulatory authorities may approve any of our current or future product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our drugs, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

Even if we were to obtain approval, regulatory authorities may approve any of our current or future product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our drugs, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

Any of the foregoing scenarios could materially harm the commercial prospects for our current or future product candidates.

If we experience delays in obtaining approval or if we fail to obtain approval of our current or future product candidates, the commercial prospects for our current or future product candidates may be harmed and our ability to generate revenues will be materially impaired.

Breakthrough Therapy Designation and Fast Track Designation by the FDA, even if granted for any of our current or future product candidates, may not lead to a faster development, regulatory review or approval process, and such designations do not increase the likelihood that any of our product candidates will receive marketing approval in the United States.

We may seek designation for our Pegasus discovery platform as a designated platform technology, but we might not receive such designation, and even if we do, such designation may not lead to faster drug development or a faster regulatory review or approval process.

We may seek designation for our Pegasus platform as a designated platform technology.

Under the Food and Drug Omnibus Reform Act of 2022, or FDORA, a platform technology incorporated within or utilized by a drug product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under an NDA;

If so designated, the FDA may expedite the development and review of any subsequent original NDA for a drug that uses or incorporates the platform technology.

Even if we believe our Pegasus platform meets the criteria for such designation, the FDA may disagree and instead determine not to grant such designation.

In addition, the receipt of such designation for a platform technology does not ensure that a drug will be developed or reviewed more quickly or receive FDA approval.

Moreover, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation.

We may seek Breakthrough Therapy Designation and/or Fast Track Designation for any of our current or future product candidates.

These designations, even if granted by the FDA, may not lead to a faster development, regulatory review or approval process, and such designations do not increase the likelihood that any of our product candidates will receive marketing approval in the United States.

We may seek a Breakthrough Therapy Designation for one or more of our current or future product candidates.

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In any event, the receipt of a Breakthrough Therapy Designation for a current or future product candidate may not result in a faster development process, review or approval compared to therapies considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.

In addition, even if one or more of our current or future product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

In addition, even if one or more of our current or future product

candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

We may seek Fast Track Designation for one or more of our current or future product candidates.

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Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

We may seek Orphan Drug Designation for certain of our current or future product candidates, and we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity.

As part of our business strategy, we may seek Orphan Drug Designation for certain indications of our current or future product candidates, and we may be unsuccessful.

We may seek approval of KT-474, KT-413, KT-333, KT-253 or any other future product candidate, where applicable, under the FDA’s accelerated approval pathway.

This pathway may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval.

We may seek accelerated approval of KT-474, KT-413, KT-333, KT-253 or future product candidates.

A product may be eligible for accelerated approval if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies.

In addition, it must demonstrate an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit.

As a condition of accelerated approval, the FDA likely would require that we perform adequate and well-controlled post-marketing clinical trials, and under FDORA the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.

FDORA also gives the FDA increased authority to withdraw approval of a drug or biologic granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug’s predicted clinical benefit.

Under FDORA, the FDA is empowered to take action, such as issuing fines, against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress.

In addition, the FDA currently requires, unless otherwise informed by the Agency, pre-approval of promotional materials for products receiving accelerated approval, which could adversely impact the timing of the commercial launch of the product.

Thus, even if we seek to utilize the accelerated approval pathway, we may not be able to obtain accelerated approval and, even if we do, we may not experience a faster development, regulatory review or approval process for that product.

In addition, receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval.

We have obtained orphan drug designation for one of our product candidates.

We may also seek Orphan Drug Designation for certain of our other current or future product candidates, and we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity.

The FDA has granted Orphan Drug Designation for KT-333 for the treatment of peripheral T cell lymphoma and cutaneous T cell lymphoma.

As part of our business strategy, we may also seek Orphan Drug Designation for certain indications of our other current or future product candidates, and we may be unsuccessful.

Regulatory authorities in some jurisdictions, including the U.S.

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The exclusivity period in the European Union can be reduced to six years if a drug no longer meets the criteria for Orphan Drug Designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

Orphan Drug exclusivity may be lost if the FDA or EMA determines that the request

for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Orphan Drug exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Even if we obtain Orphan Drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because competing drugs containing a different active ingredient can be approved for the same condition.

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These requirements include submissions of safety and other post-marketing information and reports, registration requirements, and continued compliance with cGMPs and Good Clinical Practices, or GCPs, for any clinical trials that we conduct post-approval.

For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States.

Any regulatory approvals that we receive for our current or future product candidates may also be subject to limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the drug.

Additionally, under FDORA, sponsors of approved drugs and biologics must provide 6 months’

notice to the FDA of any changes in marketing status, such as the withdrawal of a drug, and failure to do so could result in the FDA placing the product on a list of discontinued products, which would revoke the product’s ability to be marketed.

The FDA closely regulates the post-approval marketing and promotion of pharmaceutical and biological products to ensure such products are marketed only for the approved indications and in accordance with the provisions of the approved labeling.

Later discovery of previously unknown problems with a drug, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

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If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.

Inadequate funding for the FDA, the SEC and other government agencies, including from government shutdowns, or other disruptions to these agencies’

operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations

Risks Related to Foreign Regulatory Approval and Foreign Markets

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population and U.S.

medical practice, (ii) the trials were performed by clinical investigators of recognized competence and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FA is able to validate the data through an on-site inspection or other appropriate means.

medical practice, (ii) the trials were performed by clinical investigators of recognized competence and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.

Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met.

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Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.

Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.

We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.

In addition to their safety and efficacy.

In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price, or ASP, and best price.

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In order to secure coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA or comparable regulatory approvals.

Additionally, we may also

need to provide discounts to purchasers, private health plans or government healthcare programs.

Additionally, we may also need to provide discounts to purchasers, private health plans or government healthcare programs.

Despite our best efforts, our product candidates may not be considered medically necessary or cost-effective.

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In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

For example, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

Specifically, the Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit

reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

Specifically, the Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013, and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and subsequent legislation, the 2% Medicare sequester reductions have been suspended from May 1, 2020 through March 31, 2022, due to the COVID-19 pandemic.

Following the temporary suspension, a 1% payment reduction will occur beginning April 1, 2022 through June 30, 2022, and the 2% payment reduction will resume on July 1, 2022.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and subsequent legislation, the 2% Medicare sequester reductions were suspended from May 1, 2020 through March 31, 2022, due to the COVID-19 pandemic.

Following the temporary suspension, a 1% payment reduction occurred from April 1, 2022 through June 30, 2022, and the 2% payment reduction resumed on July 1, 2022.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

In August 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

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Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programs.

At a federal level, President Biden signed an Executive Order on July 9, 2021 affirming the administration’s policy to (i) support legislative reforms that would lower the prices of prescription drug and biologics, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and, by supporting the development and market entry of lower-cost generic drugs and biosimilars;

and (ii) support the enactment of a public health insurance option.

Among other things, the Executive Order also directs HHS to provide a report on actions to combat excessive pricing of prescription drugs, enhance the domestic drug supply chain, reduce the price that the Federal government pays for drugs, and address price gouging in the industry;

and directs the FDA to work with states and Indian Tribes that propose to develop section 804 Importation Programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and the FDA’s implementing regulations.

such implementing regulations on September 24, 2020, which went into effect on November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada.

On September 25, 2020, CMS stated drugs imported by states under this rule will not be eligible for federal rebates under Section 1927 of the Social Security Act and manufacturers would not report these drugs for “best price”

or Average Manufacturer Price purposes.

Since these drugs are not considered covered outpatient drugs, CMS further stated it will not publish a National Average Drug Acquisition Cost for these drugs.

If implemented, importation of drugs from Canada may materially and adversely affect the price we receive for any of our product candidates.

Further, on November 20, 2020 CMS issued an Interim Final Rule implementing the Most Favored Nation, or MFN, Model under which Medicare Part B reimbursement rates would have been calculated for certain drugs and biologicals based on the lowest price drug manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product per capita.

However, on December 29, 2021 CMS rescinded the Most Favored Nations rule.

Additionally, on November 30, 2020, HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

On December 2, 2020, HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.

Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2026.

This deadline was pushed back to January 1, 2027 by the Bipartisan Safer Communities Act.

The IRA further delayed implementation of this rule to January 1, 2032.

Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, financial condition, results of operations and prospects.

Legally mandated price controls on payment

amounts by third-party payors or other restrictions could harm our business, financial condition, results of operations and prospects.

In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs.

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physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified-nurse midwives).

Effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified-nurse midwives).

This information is subsequently made publicly available in a searchable format on a CMS website.

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The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses

and divert our management’s attention from the operation of our business.

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

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Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization of new drugs.

Competitors in our efforts to develop small molecule protein degraders therapies for patients, include, but are not limited to, Arvinas, Inc., C4 Therapeutics, Inc., Foghorn Therapeutics and Inc.

Nurix Therapeutics, Inc., some of which have entered clinical development.

Competitors in our efforts to develop small molecule protein degraders therapies for patients, include, but are not limited to, Arvinas, Inc., C4 Therapeutics, Inc., Foghorn Therapeutics Inc.

and Nurix Therapeutics, Inc., some of which have entered clinical development.

Further, several large pharmaceutical companies have disclosed preclinical and clinical investments in this field.

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To achieve commercial success for any approved product candidate for which we retain sales and marketing responsibilities, we must build our sales, marketing, patient support, managerial and other non-technical capabilities or make arrangements with third parties to perform these services.

In the future, we may choose to build a focused

sales and marketing infrastructure to sell, or participate in sales activities with our collaborators for, some of our current or future product candidates if and when they are approved.

In the future, we may choose to build a focused sales and marketing infrastructure to sell, or participate in sales activities with our collaborators for, some of our current or future product candidates if and when they are approved.

There are risks involved with both establishing our own sales and marketing and patient support capabilities and entering into arrangements with third parties to perform these services.

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We cannot assure you that, upon inspection, the FDA will determine that any of our clinical trials will comply with GCP.

In addition, our clinical trials must be conducted

with current or future product candidates produced under cGMP regulations.

In addition, our clinical trials must be conducted with current or future product candidates produced under cGMP regulations.

Our failure or the failure of third parties that we may contract with to comply with these regulations may require us to repeat some aspects of a specific, or an entire, clinical trial, which would delay the marketing approval process and could also subject us to enforcement action.

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Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Although we designed the Phase 1 trials of KT-474, KT-413 and KT-333 and intend to design other clinical trials for our current or future product candidates, or be involved in the design when other parties sponsor the trials, we anticipate that third parties will conduct all of our clinical trials.

Although we designed the Phase 1 trials of KT-474, KT-413, KT-333 and KT 253, and intend to design other clinical trials for our current or future product candidates, or be involved in the design when other parties sponsor the trials, we anticipate that third parties will conduct all of our clinical trials.

As a result, many important aspects of our clinical development, including their conduct, timing and response to the ongoing COVID-19 pandemic, will be outside of our direct control.

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We are not certain, however, that our single-source and dual source suppliers will be able to meet our demand for their products, either because of the nature of our agreements with those suppliers, our limited experience with those suppliers or our relative importance as a customer to those suppliers.

It may be difficult for us to assess their ability to timely meet our demand in the

future based on past performance.

It may be difficult for us to assess their ability to timely meet our demand in the future based on past performance.

While our suppliers have generally met our demand for their products on a timely basis in the past, they may subordinate our needs in the future to their other customers.

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collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates.

For example, the collaboration agreement with Vertex may be terminated by Vertex either in its entirety or on a target-by-target

basis, upon one hundred eighty days’

For example, the collaboration agreement with Vertex may be terminated by Vertex either in its entirety or on a target-by-target basis, upon one hundred eighty days’

prior written notice to us, upon our material breach, subject to specified notice and cure provisions, or upon our bankruptcy, insolvency, dissolution or winding up;

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It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain

the patents, covering technology that we license from or to third parties.

Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from or to third parties.

Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

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Patent and Trademark Office, or USPTO, the European Patent Office, or EPO, or in other countries.

In addition, we may be subject to third-party submissions to the USPTO, the EPO, or elsewhere, that may reduce the scope or preclude the granting of claims from our pending patent applications.

In addition, we may be subject to

third-party submissions to the USPTO, the EPO, or elsewhere, that may reduce the scope or preclude the granting of claims from our pending patent applications.

Competitors may challenge our issued patents or may file patent applications before we do.

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We will not obtain patent or other intellectual property protection for all current or future product candidates in all jurisdictions throughout the world, and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.

We may not be able to pursue patent coverage of our current or future product candidates, the Pegasus platform, or other technologies in all countries.

We may not be able to pursue patent coverage of our current or future product candidates, the Pegasus TM platform, or other technologies in all countries.

Filing, prosecuting and defending patents on current or future product candidates, the Pegasus TM platform, and other technologies in all countries throughout the world would be prohibitively expensive, and intellectual property rights in some countries outside the U.S.

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In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S.

Consequently, we may not be able to prevent third parties from infringing on our inventions in all countries outside the U.S., or from selling

or importing products made using our inventions in and into the U.S.

Consequently, we may not be able to prevent third parties from infringing on our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S.

or other jurisdictions.

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Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to pharmaceutical products, which could make it difficult for us to stop the infringement of any patents we may own or in-license or marketing of competing products in violation of our proprietary rights generally.

could make it difficult for us to stop the infringement of any patents we may own or in-license or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce any rights we may have in our patent applications or any patents we may own or in-license in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put any patents we may own or in-license at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.

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Risks Related to Patent Protection

Obtaining and maintaining our patent protection, including patent term, depends on compliance with various procedural, document submission, deadlines, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated if we miss a filing deadline for patent protection on these inventions or otherwise fail to comply with these requirements.

The USPTO and foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after issuance of any patent.

In addition, periodic maintenance fees, renewal fees, annuity fees and/or various other government fees are required to be paid periodically.

While an inadvertent lapse can in some cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Noncompliance events that could result in abandonment or lapse of a patent include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.

In such an event, our competitors might be able to enter the market with similar or identical products or platforms, which could have a material adverse effect on our business prospects and financial condition.

Depending upon the timing, duration and specifics of FDA marketing approval of our current or future product candidates, one or more of the U.S.

patents we own or license may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.

Different laws govern the extension of patents on approved pharmaceutical products in Europe and other jurisdictions.

However, we may not be granted a patent extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.

For example, we may not be granted an extension in the U.S.

if all of our patents covering an approved product expire more than fourteen years from the date of NDA approval for a product covered by those patents.

Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.

If we are unable to obtain patent term extension or restoration or the term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our ability to generate revenues could be materially adversely affected.

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our current or future product candidates.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity and are therefore costly, time consuming and inherently uncertain.

Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.

Additionally, there have been recent proposals for additional changes to the patent laws of the U.S.

and other countries that, if adopted, could impact our ability to obtain patent protection for our proprietary technology or our ability to enforce our proprietary technology.

Depending on future actions by the U.S.

Congress, the U.S.

courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Risks Related to our Trademarks, Trade Names and Trade Secrets

If our trademarks and trade names for our products or company name are not adequately protected in one or more countries where we intend to market our products, we may delay the launch of product brand names, use different or less effective trademarks or tradenames in different countries, or face other potentially adverse consequences to building our product brand recognition.

Our trademarks or trade name may be challenged, infringed, diluted, circumvented, declared generic, or determined to be infringing on other marks.

In such a circumstance, we may not be able to protect our rights to these marks or may be forced to stop using product names, which we need for name recognition by potential partners and customers in our markets of interest.

In addition, during the trademark registration process, we may receive Office Actions from the USPTO or from comparable agencies in foreign jurisdictions refusing registration of our trademarks.

For example, in April 2021, the USPTO issued preliminary office action refusals against our applications to register E3 LIGASE WHOLE BODY ATLAS and E3 HUMAN ATLAS.

While E3 HUMAN ATLAS has now been approved for publication, we do not yet know whether the USPTO will issue a subsequent office action against our application for E3 LIGASE WHOLE BODY ATLAS, to which we will have to respond, and which we may not ultimately be able to overcome, or if this application will be approved for publication as well.

In the USPTO and in comparable agencies in many foreign jurisdictions, third parties are also given an opportunity to oppose pending trademark applications and/or to seek the cancellation of registered trademarks.

For example, in November 2019, Novartis AG filed actions in the U.S.

and European Union trademark offices opposing our applications to register KYMERA and KYMERA THERAPEUTICS for pharmaceuticals and drug development services on the basis of its claimed rights in the KYMRIAH mark.

This dispute was amicably settled in October 2020 and the involved applications for KYMERA and KYMERA THERAPEUTICS and are now allowed in the United States and have proceeded to registration in the European Union.

If we are unable to adequately protect and enforce our trade secrets, our business and competitive position would be harmed.

In addition to the protection afforded by patents we may own or in-license, we seek to rely on trade secret protection, confidentiality agreements, and license agreements to protect proprietary know-how that may not be patentable, processes for which patents are difficult to enforce and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that may not be covered by patents.

Although we require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, trade secrets can be difficult to protect and we have limited control over the protection of trade secrets used by our collaborators and suppliers.

We cannot be certain that we have or will obtain these agreements in all circumstances and we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary information.

Moreover, any of these parties might breach the agreements and intentionally or inadvertently disclose our trade secret information and we may not be able to obtain adequate remedies for such breaches.

In addition, competitors may otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.

If we choose to go to court to stop a third party from using any of our trade secrets, we may incur substantial costs.

These lawsuits may consume our time and other resources even if we are successful.

Furthermore, the laws of some foreign countries do not protect proprietary rights and trade secrets to the same extent or in the same manner as the laws of the U.S.

As a result, we may encounter significant problems in protecting and defending our intellectual property both in the U.S.

If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, financial condition, results of operations and future prospects.

In the case of employees, we enter into agreements providing that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.

Although we require all of our employees to assign their inventions to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.

The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business