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Item 1. Business

2024-02-22 compared with 2023-02-23 · 820 added, 833 removed, 1366 unchanged (55% 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, enables 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, allows 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 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 focus on biological pathways that have been clinically validated but where key biological nodes/proteins have not been drugged or are inadequately drugged.

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

Our current clinical stage programs are IRAK4, STAT3, and MDM2, which each address high impact targets within biologically-proven pathways, providing the opportunity to treat a broad range of immuno-inflammatory diseases, hematologic malignancies, and/or 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.

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

Our disclosed preclinical programs target STAT6 and TYK2, two proteins in well-validated pathways where we believe our degrader technology has the potential to offer unique advantages as compared to competing therapies.

Both programs are currently in IND-enabling studies.

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.

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.

We believe the unique discovery capabilities of our Pegasus TM platform will position us to be a leader in the area of TPD.

Our goal is to become a fully integrated biopharmaceutical company with a pipeline of novel degrader medicines targeting disease-causing proteins that were previously intractable.

We are developing KT-474, a highly active and selective, orally bioavailable IRAK4 degrader, for the treatment of interleukin-1 receptor/toll-like receptor or 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 cohorts of healthy volunteers, as well as patients with HS and AD.

Phase 2 clinical trials of KT-474, conducted by Sanofi, are initially investigating its potential in HS and AD.

The clinical trials for both indications have been initiated, and patient dosing is ongoing.

With respect to our clinical 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 present additional clinical data in 2024.

In September 2023, we announced that the FDA, granted KT-333 Fast Track Designation for the treatment of relapsed/refractory peripheral T cell lymphoma, an indication for which we have previously received Orphan Drug Designation.

Our Phase 1 clinical trial of KT-253, our MDM2 degrader, was initiated in March 2023.

The study is evaluating the safety, tolerability, pharmacokinetics/pharmacodynamics, and clinical activity of ascending doses of KT-253 in adult patients with relapsed or refractory high grade myeloid malignancies, acute lymphocytic leukemia, or ALL, lymphomas, and solid tumors.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we provided initial safety, proof-of-mechanism and proof-of-concept data in November of 2023.

We expect to present additional clinical data in 2024.

In June 2023, KT-253 was granted orphan drug designation by the FDA for the treatment of acute myeloid leukemia.

In November 2023, we announced the decision to discontinue the development of our KT-413 (IRAKIMiD) program, despite reaching expected degradation levels and a lack of dose-limiting toxicities, in order to focus resources to support our growing immunology pipeline.

Our mission is to discover, develop and commercialize novel and transformative therapies that improve the lives of patients with serious diseases.

We have a unique target selection strategy that is focused on undrugged/inadequately drugged targets where targeted protein degradation (TPD) is the only or best unlocking drug modality.

Our first in class programs target proteins that have strong genetics and clinical pathway validation and serve areas with large clinical and commercial opportunities.

TPD is a disease-agnostic technology, and we are currently advancing this modality across several disease areas, with a primary focus in immunology as well as selected key therapeutic targets in oncology.

Our goal is to leverage our leading capabilities in TPD and to become a fully integrated biopharmaceutical company with a pipeline of novel degrader medicines.

We intend to achieve this goal by pursuing the following strategic objectives:

Advance the development of our IRAK4, IRAKIMiD , STAT3 and MDM2 programs to deliver transformative therapies to patients .

We maintain a core set of drug development principles which guide our protein target selection and our discovery and development efforts.

We are specifically focused on delivering therapeutic solutions that reach previously inaccessible targets, in particular those in which the biological pathways are clinically and genetically well-validated, in order to address significant unmet medical needs within broad patient populations.

We believe our IRAK4, IRAKIMiD, STAT3 and MDM2 programs have the potential to treat multiple immune-inflammatory and oncology disease indications that fit these criteria.

Further expand the capabilities of our Pegasus TM platform to identify the optimal pairing of therapeutic targets with E3 ligases for a range of disease states .

Our TPD platform, Pegasus TM , enables us to identify an expanded library of E3 ubiquitin ligases, or E3 ligases, to discover highly selective degraders with activity against disease causing proteins throughout the body.

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.

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, 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.

The capabilities of our discovery platform, such as our expanded toolbox that includes E3 ligases beyond the two predominantly used in the field today, cereblon and von Hippel-Lindau, or VHL, enable us to pursue targets linked to a wider range of indications.

• Advance our existing clinical pipeline .

We have advanced four programs into human clinic testing, including our current ongoing clinical stage programs which target IRAK4, STAT3 and MDM2.

We believe these programs have the potential to treat multiple immuno-inflammatory and/or oncology indications.

Our clinical pipeline is consistent with our target selection strategy that focuses on undrugged or inadequately drugged targets in validated pathways.

• Build a broad and diverse pipeline of novel protein degraders .

Guided by our drug development principles, innovative platform capabilities, and the learnings from our clinical-stage programs, we continue to identify therapeutic targets that have disruptive therapeutic potential and are well-suited for a TPD approach.

Our two most advanced pre-clinical programs, STAT6 and TYK2, reflect our increased pipeline focus on immunology.

These programs target significant and well-validated opportunities in which we believe our technology has the potential to deliver biologic-like activity with the convenience of an oral pill.

• Expand and protect our proprietary know-how and intellectual property .

We have developed a broad patent estate protecting our intellectual property, which we intend to expand to further protect our Pegasus TM platform and the drug candidates we develop.

Our intellectual property, which includes proprietary know-how as well as a series of patents, applies to not only our invented compounds but also to our E3 Ligase Whole-Body Atlas and our E3 Ligase Binders Toolbox.

We have developed a broad patent estate protecting our intellectual property, which we intend to expand to further protect the drug candidates we develop and our platform.

Our intellectual property includes proprietary know-how as well as a broad series of patents.

• Pursue synergistic collaboration opportunities .

To further our goal of delivering transformative therapies to the broadest possible patient population, we intend to become a fully integrated biopharmaceutical company.

As part of this plan, in addition to our ongoing collaborations with Vertex Pharmaceuticals Incorporated, or Vertex, and Sanofi, we expect to leverage additional strategic partnerships that can contribute complementary capabilities in discovery, development and commercialization in disease areas both within and outside of our core areas of therapeutic focus.

To further our goal of delivering transformative therapies to the broadest patient populations, we intend to become a fully integrated biopharmaceutical company.

In addition to our ongoing collaboration with Sanofi, we expect to leverage additional strategic partnerships that can contribute complementary capabilities in discovery, development and commercialization in disease areas both within and outside of our core areas of therapeutic focus.

• Build our organizational capabilities .

We continue to build capabilities across our organization, including expertise in key therapeutic areas and functions.

We view these capabilities as a strategic advantage, and as critical to our objective to become a fully-integrated biotechnology company.

Background of Targeted Protein Degradation

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With a deepened molecular understanding of various diseases and the characterization of the full human genome, research efforts have increasingly focused on the development of medicines to address malfunctioning proteins responsible for oncologic, auto-immune, cardio-metabolic, neurodegenerative, and rare genetic diseases.

The ‘druggable’

genome challenge

The ‘druggable’ genome challenge

Several therapeutic modalities have been developed over the years to address aberrant protein activity.

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We believe that TPD is such a modality.

Expanding the Druggable Human Proteome.

Targeted Protein Degradation

One of the methods that cells use to control the balance between the synthesis of new proteins and the degradation and disposal of damaged and/or misfolded proteins, is ubiquitin-proteasome system, or UPS.

The discovery of ubiquitin-mediated protein degradation provided important insights into specific processes like cellular division and DNA repair and led to the discovery of UPS’

critical roles in various cellular pathways, including the cell cycle, signaling pathways, the regulation of gene expression, and responses to oxidative stress.

The discovery of ubiquitin-mediated protein degradation provided important insights into specific processes like cellular division and DNA repair and led to the discovery of UPS’ critical roles in various cellular pathways, including the cell cycle, signaling pathways, the regulation of gene expression, and responses to oxidative stress.

The discovery of the UPS also revealed a new modality to harness this cellular process for the treatment of diseases.

The UPS comprises a series of finely orchestrated enzymatic sequences that ultimately lead to protein polyubiquitination and degradation by the proteasome in cells.

As shown below in figure 1, the UPS comprises a series of finely orchestrated enzymatic sequences that ultimately lead to protein polyubiquitination and degradation by the proteasome in cells.

Protein ubiquitination is a cellular process involving an enzymatic cascade consisting of ubiquitin-activating enzymes (E1), ubiquitin-conjugating enzymes (E2), and ubiquitin-protein ligases (E3).

In humans, there are two classes of ubiquitin activating E1 enzymes, more than 30 E2 enzymes, and approximately 600 E3 ligases.

As illustrated in the figure below, the E3/E2/ubiquitin ligase complex (shown in blue) binds to a substrate protein (shown in purple) to mediate the transfer of ubiquitin, which leads to degradation of the target protein through the proteasome.

Natural Protein Degradation Through Ubiquitin-Proteasome System.

The E3/E2/ubiquitin ligase complex (shown in blue) binds to a substrate protein (shown in orange) to mediate the transfer of ubiquitin, which leads to degradation of the target protein through the proteasome.

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 Figure 3 below) that we refer to as a heterobifunctional degrader.

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

interaction through the formation of a ternary complex between a disease-causing protein and an E3 ligase.

The E3 ligase tags the protein target for degradation by attaching a series of ubiquitin, and the proteasome recognizes the tagged protein and degrades it into small peptides.

The core of the TPD modality consists of a small molecule that we refer to as a heterobifunctional degrader.

The role of this heterobifunctional degrader molecule is to mediate a “new” interaction through the formation of a ternary complex between a disease-causing protein and an E3 ligase.

The E3 liaise tags the protein target for degradation by attaching a series of ubiquitin, and the proteasome recognizes the tagged protein and degrades it into small peptides .

Forming an efficient ternary complex, as shown in step 2 in the figure below, is a critical step in TPD, and its formation, function, and effect on cellular and in vivo systems is vital to the success of the degradation and its impact on disease.

In addition, the degrader molecule needs to be able to effect degradation in a variety of different cell types and contexts and have the right pharmaceutical properties to be therapeutically dosed to patients.

As shown in the figure below, after the degrader facilitates the ubiquitination of the target protein, and as the protein is degraded by the proteasome, the molecule separates from the protein, and is able to form another ternary complex to conduct the degradation process again.

As shown in step 3 and step 4 in the figure below, after the degrader facilitates the ubiquitination of the target protein, and as the protein is degraded by the proteasome, the molecule separates from the protein, and is able to form another ternary complex to conduct the degradation process again.

This iterative mechanism is catalytic, which results in increased potency even at lower concentrations, another key differentiator from other modalities such as small molecule inhibitors and therapeutic antibodies.

Overview of Targeted Protein Degradation.

Due to the unique advantages of TPD, this transformative modality is capable of targeting proteins traditionally undrugged by small molecules.

Specifically, TPD can target proteins without a catalytic function such as scaffolding proteins and transcription factors, with small molecule-like drug properties that can potentially be dosed orally and distributed systemically unlike oligo-based therapeutics such as RNAi’s.

TPD molecules also are amenable to existing small molecule manufacturing principles which are less costly than other therapeutic modalities.

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Our Pegasus TM Platform

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 Center for Molecular Glue Discovery.

Expanded E3 Ligase toolbox.

Our E3 ligase Whole-Body Atlas includes the expression profiles of approximately 600 unique E3 ligases.

Using this Atlas, we are able to match target proteins with appropriate E3 ubiquitin ligases based on expression, distribution, intracellular localization and biology, a process that is enabled with our machine learning-based algorithms.

Understanding of degradation across tissue types .

Our Quantitative System Pharmacology Model measures and predicts a diverse set of parameters that impact target protein levels, based on an understanding of PK/PD, both in vitro and in vivo, and across healthy and diseased tissues and cell types.

Proprietary Chemistry .

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

We have built extensive capabilities and knowledge that contributes to the development of our preclinical and clinical pipeline.

Our proprietary chemistry expertise enables the design and optimization of both E3 ligase and target protein binders, with artificial intelligence (AI) enabled insights, allowing for the opportunity to design of targeted protein degraders with optimal pharmaceutical properties.

Center for Molecular Glue Discovery .

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.

Additionally, we utilize our E3 ligase Whole-Body Atlas includes the expression profiles of approximately 600 unique E3 ligases.

We continue to utilize our Quantitative System Pharmacology Model, which measures and predicts a diverse set of parameters that impact target protein levels, based on an understanding of PK/PD, both in vitro and in vivo, and across healthy and diseased tissues and cell types.

We have also 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, 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:

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 RA.

Our pipeline includes immunology and oncology programs in various stages of clinical and preclinical development.

Our immunology programs include IRAK4, STAT6 and TYK2.

Our oncology pipeline includes STAT3 and MDM2.

We also have multiple programs in earlier stages of development, not depicted here, and are exploring targets in therapeutic areas outside of oncology and immunology.

The following table summarizes our publicly-disclosed clinical and near-term clinical stage pipeline.

1 KT-474 (SAR444656) partnered with Sanofi, with Kymera option to participate in the development and commercialization, and 50/50 profit split, in the United States.

Double digit tiered royalties in ROW;

2 Current indications:

Other diseases shown, where IL-1R/TLR pathway has been implicated in pathogenesis, are additional potential opportunities;

3 Assessment of STAT3 I/I opportunity is ongoing.

Our Immunology programs:

IRAK4, STAT6 and TYK2

The initial indications being pursued include HS and AD.

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.

IRAK4 is a critical node in the IL-1R/TLR signaling pathway, which is dependent on both IRAK4’s kinase activity and scaffolding function.

We have observed through our in vitro and in vivo studies that KT-474 induces IRAK4 degradation, impacting both the kinase and the scaffolding functions, and therefore can efficiently and selectively block IL-1R/TLR-mediated inflammation in a way we believe to be superior to IRAK4 kinase inhibitors.

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

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.”

We are developing another group of IRAK4 degraders, which we call IRAKIMiDs, with a unique profile that combines the activity of IRAK4 degradation and immunomodulatory imide drugs, or IMiDs, for the treatment of MYD88-mutated diffuse large B-cell lymphoma, or DLBCL.

In oncology, IRAK4 is an obligate protein in MYD88 signaling and this activated mutation is well characterized to drive oncogenesis.

IMiDs are a class of drugs that degrade zinc-finger transcription factors, such as Ikaros and Aiolos, resulting in the restoration of Type 1 interferon, or Type 1 IFN, signaling pathway which is relevant in treating lymphoma.

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 and in doing so are designed to produce broad activity against MYD88-mutant lymphomas.

In animal models, we have demonstrated that this combination in a single agent is superior to co-administering IRAK4 and IMiD agents.

We believe this will be the first precision medicine in lymphoma to target a genetically defined population, which accounts for approximately 25% of DLBCL patients.

We have observed that the functional synergy between the degradation of IRAK4 and IMiD activity results in 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.

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.

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.

STAT3 is a transcription factor activated through a variety of different cytokine and growth factor receptors via janus kinases, or JAKs, as well as through oncogenic fusion proteins and mutations in STAT3 itself.

We believe the diverse functions of STAT3 in tumor biology, evasion of immune surveillance by tumor cells, and inflammation and fibrosis provide opportunities to address a wide variety of high unmet need disease indications through the targeting of a single genetically and clinically validated pathway.

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

Sanofi recently advanced KT-474 into two Phase 2 clinical trials in patients with HS and AD, and the first patients were dosed in each trial in the fourth quarter of 2023.

See the section entitled “Business— Collaborations—Collaboration Agreement with Sanofi" appearing elsewhere in this Annual Report for more information.

We are developing degraders that target STAT6, an essential transcription factor specific to the IL-4/IL-13 signaling pathway and the central driver of Type 2 inflammation in allergic diseases.

STAT6 is a genetically validated target and we believe the pathway has been clinically validated by approved IL-4/IL-13-targeting biologics, such as dupilumab.

In preclinical studies, KT-621, our first-in-class oral STAT6 degrader, demonstrated full inhibition of the IL-4/IL-13 pathway in all relevant human cell contexts evaluated with strong picomolar potency similar or superior to pathway biologics such as dupilumab.

KT-621 also demonstrated strong activity in multiple preclinical efficacy studies.

In addition, at low oral doses, KT-621 demonstrated nearly full in vivo STAT6 degradation and was well-tolerated in multiple preclinical toxicity studies.

KT-621 has been developed as a once daily oral small molecule degrader which we believe has the potential to have broad activity across multiple diseases, which may include atopic dermatitis, asthma, chronic obstructive pulmonary disorder, eosinophilic esophagitis and chronic rhinosinusitis with nasal polyps, among others.

We expect to initiate a Phase 1 clinical trial in the second half of 2024.

We are developing degraders that target TYK2, a member of the Janus Kinase or JAK family required for Type I interferon or IFN, interleulin-12, or IL-12 and interleulin-23, or IL-23 signaling.

TYK2 is a genetically- and clinically-validated target in autoimmune and inflammatory diseases.

TYK2 has a well-established scaffolding function that plays a key role in cytokine receptor surface expression and activation.

In preclinical studies, KT-294, our first-in-class oral TYK2 degrader, demonstrated picomolar to nanomolar potencies across all relevant human cell contexts evaluated, representing what we believe is the only approach to TYK2 targeting that has the potential to recapitulate the human loss-of-function biology of nearly full pathway inhibition of Type I IFN, IL-12 and IL-23, while also sparing interleukin-10, or IL-10.

Degradation of TYK2 has the potential to overcome the challenges of small molecule inhibitors, which have limitations due to lack of selectivity, limited target engagement, and/or lack of potent activity against Type I IFN.

KT-294 has been developed as a once daily oral small molecule degrader with a potential biologics-like activity profile, which we believe has the potential to address conditions such as inflammatory bowel disease, psoriasis, psoriatic arthritis and lupus, among others.

We expect to initiate a Phase 1 clinical trial in the first half of 2025.

Our Oncology programs:

STAT3 and MDM2

We are developing our selective STAT3 degraders for the treatment of hematological malignancies and solid tumors.

We are also exploring the potential for STAT3 degradation in autoimmune diseases.

STAT3 is a transcription factor activated through a variety of different cytokine and growth factor receptors via JAKs as well as through oncogenic fusion proteins and mutations in STAT3 itself.

indications through the targeting of a single genetically and clinically validated pathway.

While the JAK-STAT pathway has been partially addressed with several clinically successful JAK-targeting agents, we believe there are currently no drugs that specifically affect STAT3 broadly across all the relevant cell types.

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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.

Patient enrollment and dosing are ongoing in the Phase 1a dose escalation portion of the trial, and we expect to provide additional clinical data in 2024.

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.

MDM2 is the crucial regulator of the most common tumor suppressor, p53, which remains intact (or wild type) in close to 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

We maintain a unique approach to target selection within the TPD field focused on targets within three distinct categories, as described below and shown in Figure 4.

Inadequately Drugged (ID).

We are focused on targets that have been inadequately drugged with other technologies and, importantly, where degradation provides a clear advantage over enzyme inhibition.

We have identified and targeted proteins where removal offers superior therapeutic benefit versus inhibition of enzymatic activity or blockade of a binding site.

Examples of targets we are pursuing in this category include IRAK4 and MDM2.

Undrugged Targets (UD).

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 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.

In these instances, we are pursuing a molecular glue approach in which a new surface on an E3 ligase is created via a small molecule with potential to engage the protein target of interest through a specific protein-protein interaction.

An example of a target we are pursuing in this category is STAT3.

Tissue Restricted (TR) .

The final category of targets includes targets which can uniquely be accessed using our proprietary human whole body E3 ligase Atlas.

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 several programs, at different stages of development, pursuing tissue restricted or selective degradation.

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

Patient enrollment and dosing are ongoing in the Phase 1a dose escalation portion of the trial, and we expect to provide additional clinical data in 2024.

Our Approach to Target Selection

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, RA and others.

To realize on the promise of TPD, we have taken a unique and differentiated approach to target selection, which has several key tenets that guide our research and development efforts, as seen in Figure 3.

We focus on undrugged or inadequately drugged targets, such as transcription factors and scaffolding proteins, within pathways with clear clinical validation and validation through human genetics/causal biology.

We identify targets where TPD is the best or the only solution, with a strong degrader rationale and line of sight to demonstrating superiority of our modality over existing drugs within these pathways.

Additionally, we focus on areas of significant patient need and large commercial opportunities.

Clinical Immunology:

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

IRAK4 is a critical node in the IL-1R/TLR signaling pathway, which is dependent on both IRAK4’s kinase activity and scaffolding function.

We have observed through our in vitro and in vivo studies that KT-474 induces IRAK4 degradation, impacting both the kinase and the scaffolding functions, and therefore can selectively block IL-1R/TLR-mediated inflammation in a way we believe to be superior to IRAK4 kinase inhibitors.

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

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”

appearing elsewhere in this Annual Report for more information.

Biology and Mechanism of Action of IRAK4 Degrader

The KT-474 Phase 1 trial, which included healthy volunteers and HS and AD patients, was completed in October 2022.

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

Sanofi has advanced KT-474 into Phase 2 clinical trials in patients with HS and AD, both which were initiated in the fourth quarter of 2023.

See the section entitled “Business—Collaborations—Collaboration Agreement with Sanofi” appearing elsewhere in this Annual Report for more information.

Biology and Mechanism of Action

IRAK4 is a key component of the myddosome, a multiprotein complex involved in innate immunity that mediates signaling through TLRs and IL-1Rs.

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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.

IL-1 family cytokines, including IL-1a, IL-1ß, IL-18, IL-36, and IL-33, have been implicated in a variety of different immunology-inflammation conditions and diseases.

As both TLRs and IL-1Rs are involved in the production and response to all of these IL-1 family cytokines, IRAK4 targeting with a single small molecule degrader could impact multiple different cytokines and chemokines and thereby provide a transformative approach to the treatment of IL-1R/TLR-driven diseases.

IRAK4 Function is Comprised of Both Kinase-Dependent and -Independent Activity.

Development Opportunities and Differentiation from IL-1 Family Cytokine Antibodies

Development Opportunities

We estimate that more than 150 million people in the US, Europe and Japan suffer from TH1-driven diseases.

There are numerous cutaneous, rheumatic and gastrointestinal immunology-inflammation disease indications for which pathogenesis involves IL-1 family cytokines as well as TLR stimulation.

These present opportunities where we believe a highly efficient and selective IRAK4 degrader would provide significant advantages over both currently approved treatment options and those in clinical development.

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

We are initially prioritizing HS and AD, autoimmune dermatologic conditions 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.

There are many other diseases where the IL-1R/TLR pathway has been implicated in pathogenesis and could be additional potential opportunities targeting respiratory, GI and rheumatology.

Hidradenitis Suppurativa

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Thus, there remains a high unmet need for better therapies for the treatment of HS.

Bacterial activation of TLRs, as well as the production of IL-1a, IL-1ß, and IL-36 by keratinocytes and inflammatory cells leading to inflammation characterized by high levels of TNF-a, IL-6, and IL-17, are central to the pathogenesis of HS.

Monoclonal antibodies targeting individual cytokines such as IL-1a (bermekimab), IL-1a/ß

receptor (anakinra), and IL-17 (secukinumab and bimekizumab) have shown preliminary clinical activity in HS and provide clinical validation for targeting the IL-1R/TLR pathway in HS.

Monoclonal antibodies targeting individual cytokines such as IL-1a (bermekimab), IL-1a/ß receptor (anakinra), and IL-17 (secukinumab and bimekizumab) have shown preliminary clinical activity in HS and provide clinical validation for targeting the IL-1R/TLR pathway in HS.

As such, an IRAK4 degrader which acts on multiple cytokines as well as TLRs has the potential to offer a significant advantage over the single-cytokine-targeting agents currently being developed.

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AD is treated symptomatically with topical therapies, including emollients, corticosteroids, and phosphodiesterase inhibitors.

The lone FDA-approved systemic treatment is the IL-4Ra targeting antibody dupilumab, though only approximately 40% of moderate-to-severe disease patients met the primary endpoint in its Phase 3 trials, leaving a significant percentage of patients who are currently underserved.

Furthermore, there is evidence that IL-33 and IL-1 are both involved in the generation of inflammation in both AD and other allergic diseases, including eosinophilic asthma and chronic rhinosinusitis.

Single-cytokine-targeting monoclonal antibodies against IL-33 (etokimab) and IL-1a(bermekimab) have shown preliminary clinical activity in AD.

Thus, we believe the ability of an IRAK4 degrader to impact the production of both IL-33 and IL-1, through complete TLR signaling blockade, and the cellular response to both cytokines, through complete IL-1R signaling blockade, provides a compelling mechanistic rationale for development in AD.

Rheumatoid Arthritis

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.

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.

The leading FDA-approved systemic treatment is the IL-4Ra targeting antibody dupilumab, though only approximately 40% of moderate-to-severe disease patients met the primary endpoint in its Phase 3 trials, leaving a significant percentage of patients who are currently underserved.

Furthermore, there is evidence that IL-18 and IL-1 are both involved in the generation of inflammation in both AD and other autoimmune and inflammatory diseases, including eosinophilic asthma and chronic rhinosinusitis.

Single-cytokine-targeting monoclonal antibodies against IL-18 (GSK1070806) and IL-1a (bermekimab)have shown preliminary clinical activity in AD while a monoclonal antibody against IL-1a/b (lutikizumab) has shown preliminary clinical activity in HS.

Thus, we believe the ability of an IRAK4 degrader to impact the production of both IL-18 and IL-1, through complete TLR signaling blockade, and the cellular response to both cytokines, through complete IL-1R signaling blockade, provides a compelling mechanistic rationale for development in AD and HS and other autoimmune and inflammatory diseases.

Clinical Studies and Data

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

In December 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 trial in healthy volunteers.

The trial evaluated safety, tolerability and pharmacokinetics in 105 healthy volunteers.

The SAD portion consisted of single doses ranging from 25 to 1600 mg.

The MAD portion consisted of escalating doses ranging from 50 mg to 200 mg that were administered for 14 consecutive days.

Highlights of the healthy volunteer portion of the trial included robust (>95%) and sustained IRAK4 degradation with single and multiple daily doses (Figure 5) and broad inhibition of ex vivo TLR-mediated cytokine induction (Figure 6).

KT-474 was generally well-tolerated across all dose groups.

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.

The HS and AD patient cohort was an open label study in 21 patients with HS and AD.

The patients were administered a 75 mg daily dose taken with food, which we estimated would be equivalent exposure to 100 mg fasted, one of the doses in our SAD/MAD trial.

The patient cohort dose of 75 mg was administered for 28 consecutive days.

The KT-474 plasma PK at the 75 mg once daily, or 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.

Additionally, 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 demonstrated high skin exposure in the skin of evaluable HS and AD patients, as shown below in Figure 7.

Additionally, 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 level in skin lesions of AD and HS patients was reduced to approximately the same level as healthy subjects, as shown below in Figure 8.

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

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.

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.

The patient cohort 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.

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

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

Disease-relevant biomarkers

log2(fold change):

-1 = 50% decrease, -2 = 75% decrease, -3 = 87.5% decrease.

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.

The endpoints were chosen 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 10, 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 11, 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)

The Validated Investigator’s Global Assessment, or vIG, of disease severity improved in 2 of 7 AD patients and remained stable in the others out to Day 42.

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 AN count was reduced by up to an average of 46% in all HS patients and by an average 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 12, 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.

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As also shown in Figure 13, 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)

There also 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.

Additionally, 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.

Clinical Development Plan

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

We are developing another group of IRAK4 degraders, which we call IRAKIMiDs, with a unique profile that combines the activity of IRAK4 degradation and IMiDs for the treatment of MYD88-mutated DLBCL.

In oncology, IRAK4 is an obligate protein in MYD88 signaling and this activated mutation is well characterized to drive oncogenesis.

IMiDs are a class of drugs that degrade zinc-finger transcription factors, such as Ikaros and Aiolos, resulting in the restoration of Type 1 IFN signaling pathway which is relevant in treating lymphoma.

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 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.

IRAKIMiDs combine both of these mechanisms in a single compound.

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.

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

In DLBCL, the activating mutation of MYD88 drives activation of the NF-KB transcription factor and pro-survival mechanisms such as IRF4.

MYD88 is a protein that forms a multiprotein signaling complex, known as the myddosome, which transduces receptor agonism from both the TLR and IL-1 b receptors.

IRAK4 is an integral component of the myddosome, and both its catalytic kinase activity as well as its scaffolding function are required to drive downstream signals from the myddosome.

The constitutive activation of NF-KB is a hallmark of several B-cell lymphoma subtypes.

In DLBCL, NF-KB activation is driven by a range of oncogenic alterations in several upstream pathways and regulators.

Multiple co-mutations in these complexes often occur within the same tumor, emphasizing the dependence of these cancers on NF-KB activation.

IMiDs such as lenalidomide drive a partial downregulation of NF-KB and IRF4, resulting in the restoration of Type 1 IFN signaling and promoting cell death.

NF-KB is Activated by Complimentary Mechanisms in Diffuse Large B Cell Lymphoma.

Leveraging knowledge and chemistry expertise derived from the design of our selective IRAK4 degrader program, we have designed a novel class of heterobifunctional IRAK4 degraders, which we call IRAKIMiDs, that utilize an active IMiD as the cereblon binder to simultaneously engage and degrade both IRAK4 and IMiD substrates, such as Ikaros and Aiolos, thus combining the activity of two molecules in a single agent.

IRAKIMiDs therefore combine two highly relevant therapeutic mechanisms in a single compound, enabling the functional synergy of NF-kB inhibition and upregulation of the Type 1 IFN response that results in increased and broader single-agent activity in MYD88-mutated DLBCL as compared to either mechanism alone.

IRAKIMiDs (right) Combine Both IRAK4 Degradation and IMiD Activity in a Single Agent.

Development Opportunities and Differentiation of Novel Therapies in MYD88-Mutated DLBCL

Oncogenic mutations of MYD88, most commonly MYD88L265P, are common in several subsets of DLBCL.

In particular, MYD88 is estimated to be mutated in approximately 30-40% of activated B cell DLBCL, or ABC-DLBCL, cases;

30-80% of primary CNS lymphoma cases;

and 45-75% of primary extranodal lymphomas cases.

In addition, MYD88 is mutated in approximately 90% of Waldenström macroglobulinemia cases.

The presence of MYD88 mutations in DLBCL is often associated with poorer response to chemotherapy and reduced overall survival compared to other genetic subtypes, supporting the need for more effective therapies targeting MYD88-mutated DLBCL.

Front-line treatment of DLBCL typically involves the R-CHOP treatment regimen of chemotherapy combined with rituximab.

While effective in many other patients, front-line chemotherapy has significantly poorer survival rates in DLBCL subsets where MYD88 mutations are prevalent.

In additional lines of therapy, several novel targeted therapies have been approved recently, including the combination of polatuzumab, bendamustine and rituximab, as well as CD19-targeting chimeric antigen receptor T-cells.

While these agents have some notable activity, many patients fail to respond to or subsequently relapse from these therapies, with no adequate treatment options.

Several targeted therapies that impact the NF-kB pathway, such as the Bruton’s tyrosine kinase inhibitor ibrutinib, or the IMiD lenalidomide, have shown modest single agent activity, with poor durability of response in MYD88-mutated DLBCL.

Based on our preclinical data, we believe KT-413, which synergistically combines the activity of both IRAK4 and IMiD substrate degradation to exploit complimentary pathway signaling, will have the potential to improve upon the efficacy of IRAK4 kinase inhibitors and other therapies, including BTK inhibitors and IMiDs, and provide single-agent activity in MYD88-mutated DLBCL.

In the fourth quarter of 2023, the first patients were dosed in the Phase 2 clinical trials of KT-474 in HS and AD.

The Phase 2 clinical trial in HS, or ZEN, is a double blind, placebo-controlled, 2-arm randomized trial consisting of a KT-474 oral tablet, or placebo, once-daily.

The primary outcome measure is percent change from baseline in total abscess and inflammatory nodule (AN) count.

Select secondary outcome measure include proportion of patients achieving HiSCR50, AN Count ≤2;

absolute change from baseline in HIS4;

proportion of patients with improvement in Hurley Stage, AN50;

change from baseline in reported daily worst pain HS-Skin Pain-NRS;

and proportion of participants achieving at least 30% reduction and at least 1 unit reduction in daily worst pain using HS-Skin Pain-NRS.

The Phase 2 clinical trial in AD, or ADVANTA, is a double blind, placebo-controlled, 3-arm randomized trial consisting of a KT-474 dose 1 oral tablet, a KT-474 dose 2 oral tablet, or placebo, once-daily.

The primary outcome measure is percent change from baseline in EASI.

Select secondary outcome measure include proportion of participants with vIGA-AD of 0 or 1 and a reduction from baseline of ≥2 points;

proportion of participants achieving EASI-50 EASI-75 EASI-90;

proportion of participants with reduction of weekly average of daily PP-NRS by ≥4 points from baseline;

percent change from baseline in weekly average of daily PP-NRS;

and absolute change from baseline in weekly average of daily PP-NRS.

Topline data from the two ongoing trials is expected in the first half of 2025.

Additionally, Kymera and Sanofi are evaluating opportunities to expand in indications beyond HS and AD.

Preclinical Immunology:

STAT6 and TYK2

We are developing degraders that target STAT6, an essential transcription factor specific to the IL-4/IL-13 signaling pathway and the central driver of Type 2 inflammation in allergic diseases.

STAT6 is a genetically validated target and the pathway has been clinically validated by approved IL-4/IL-13-targeting biologics, including dupilumab.

Biology and Mechanism of Action

STAT6 is the specific transcription factor required for IL-4 and 13 cytokine signaling.

There are two types of IL-4 receptors, type I consisting of IL-4 receptor alpha and gamma C, and type II with IL-4 receptor alpha and IL-13 receptor alpha 1.

IL-4 signals through both type I and II receptors and IL-13 signals through type II only.

Upon IL-4 or IL-13 binding to the receptor, the downstream activated JAK kinases phosphorylate and activate STAT6, leading to allergic TH2 inflammation.

STAT6 regulated cytokines are clinically validated targets for allergic diseases as demonstrated by the clinical efficacies of the biologics targeting IL-4 and IL-13 signaling.

Unlike JAK inhibitors, which are activated by multiple cytokine pathways, STAT6 is specifically activated by IL-4 and 13 cytokines, which supports STAT6 as a means to selectively block IL-4 and 13 signaling.

The pathogenic role of STAT6 is also supported by human genetics showing that gain of function mutations of STAT6 cause severe early onset allergic diseases in human.

Additionally, STAT6 knockout in mice is protective in multiple allergic disease models, and those mice develop normally and are viable and fertile.

Development Opportunities

We estimate that more than 150 million people in the US, Europe and Japan suffer from TH2-driven diseases.

There are existing pathway therapeutics that have validated many of these diseases, including atopic dermatitis, prurigo nodularis, Asthma, COPD, chronic rhinosinusitis with nasal polyps, eosinophilic esophagitis and others.

We believe that STAT6 degradation has the potential to demonstrate full pathway inhibition comparable to biologics, but with the benefit of a simple, daily, oral profile.

The preference that many patients may have for an oral option could allow us to access many more patients worldwide than current injectable biologics, potentially transforming the treatment paradigm of TH2 diseases.

Preclinical Studies and Data

In support of our preclinical development, we have observed our IRAKIMiD degraders’

high selectivity and therapeutic potential in both in vitro and in vivo studies.

To assess the activity of our IRAKIMiD degraders in both MYD88-mutated and -wild-type cells lines, we conducted various in vitro studies in a panel of cell lines.

MYD-88-mutated cell lines included ABC-DLBCL lines such as OCI-Ly10, SUDHL2, and TMD8 while MYD-88-wild-type cell lines included OCI-Ly19, U2932, and SUDHL6.

We have shown that IRAK4 degradation, as opposed to IRAK4 inhibition, shows additivity and synergy when combined with IMiDs in vitro.

Specifically, combining an IRAK4 degrader with the IMiD pomalidomide shows additive and synergistic activity in several MYD88-mutated cell lines in vitro, supporting the combined effect of targeting both the MYD88 and IRAK4 pathways together.

Notably, we did not see an additive effect when IRAK4 kinase inhibitors were combined with IMiDs, suggesting that the greater activity of IRAK4 degradation is needed for synergistic activity.

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

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.

Super Anti-Tumor Activity

In addition to the robust single agent antitumor effects of KT-413, Figure 30 summarizes the combination data with agents used in the treatment of lymphoma.

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.

Our lead STAT6 degrader, KT-621, is an extremely potent degrader of STAT6.

As shown in Figure 15, KT-621 demonstrated picomolar degradation potencies across all the disease relevant human primary cell types that were studied, making KT-621 one of the most potent heterobifunctional degraders we have designed and tested at Kymera.

We demonstrated STAT6 degradation across hematopoietic cells which are involved in all TH2 diseases;

epithelial cells, including keratinocytes and lung epithelial cells, which are involved in skin and respiratory indications;

smooth muscle cells from the lung and esophagus, which are involved in respiratory and GI indications;

and vascular endothelial cells which are involved in inflammatory cell infiltration in all TH2 diseases.

We also demonstrated dose-dependent degradation across both Hematopoietic cells and tissue cells, as shown below in Figure 16.

We use mass spectrometry to measure the degradation selectivity profile of all our programs, including STAT6.

The following figure is a volcano plot that depicts the degradation selectivity of KT-621.

As shown in the figure, at concentrations as high as 100 times the DC90 of KT-621, STAT6 is the only protein that KT-621 degraded out of the approximately 10,000 proteins that were detected by mass spectrometry.

Specifically, no other STAT proteins were degraded, demonstrating the very high degradation selectivity of KT-621.

We tested KT-621 for functional selectivity against all the other STAT proteins in cytokine assays, which are shown below in the tables and graphs.

Consistent with the observed proteomics selectivity, KT-621 only inhibited STAT6 function, and did not impact any other STAT proteins, as shown in the flat dose response curves, further demonstrating the high functional selectivity of KT-621.

KT-621 was also evaluated in TH2 functional assays to assess its impact on IL-4 and 13 signaling.

Specifically, we measured IL-4 and 13 induced TARC release assays in human PBMC, IL-4 and 13 induced CD23 expression assays in human CD19 B cells (which is a B cell activation marker and correlates with IgE class switch) and IL-13 induced periostin release assays in human bronchial and esophageal smooth muscle cells.

We chose TARC, IgE and periostin as PD biomarkers as they are all well-established biomarkers that are used in the clinic for TH2 diseases.

We also compared the ability of KT-621 to

block the pathways with dupilumab.

As shown below in Figure 19, in our preclinical testing, KT-621 fully blocked the IL-4/IL-13 pathway in human TH2 functional assays with IC50’s lower than dupilumab.

We also evaluated KT-621 by assessing levels of degradation in vivo.

In our studies, KT-621 robustly degraded STAT6 across multiple preclinical species including mouse, rat, dog and non-human primates.

Specifically, KT-621 was able to achieve dose-dependent deep degradation of STAT6 with low oral doses.

In Figure 20, we depict KT-621’s in vivo degradation in dogs, illustrating dose-dependent degradation.

We tested doses ranging from 0.2 to 12.8 mpk, with doses between approximately 1 and 3 mpk leading to maximal STAT6 degradation near depletion.

Additionally, in our studies KT-621 demonstrated rapid degradation onset, notably within just a few hours following a single oral dose.

These results, and other PK/PD studies we have completed, suggest the potential for low and developable efficacious doses of KT-621 in humans.

We also evaluated the degradation of STAT6 in key disease relevant tissues in non-human primates.

The following Figure 21 illustrates that KT-621, dosed at 10 mpk for 14 days, degraded STAT6 across key disease-relevant tissues, including blood, spleen, skin and lung.

The above degradation represented dosing at the lowest dose level in our dose range finding safety study.

In that study, we dosed as high as 300 mpk daily for 14 days and reached concentrations that were above 40-fold of our efficacious concentration.

At all dose levels in our study, including the highest dose level, KT-621 was well tolerated with no adverse events or relevant findings.

In preclinical models of the skin and lung, we assessed the in vivo activity of KT-621.

First, we assessed KT-621 in a two-week atopic dermatitis model induced by topical application of low-calcemic vitamin D3 analog MC903.

The model utilized IL-4/IL-4Rα humanized mice which allowed response to dupilumab and enabled us to compare preclinical activity.

KT-621 was dosed once daily orally for 11 days at 2, 8, and 32 mpk.

These doses led to ~70%, 80% and 90% degradation, respectively, in the spleen as illustrated in Figure 22.

In this preclinical study, dupilumab was dosed 4 times subcutaneously, at 25 mpk twice weekly, a level expected to ensure constant IL-4Rα saturation with full IL-4/13 blockade.

We estimated that dose to be equivalent to 300 mg every other week in humans, which is the highest approved dose regimen in humans.

As illustrated in Figure 23, the prominent TH2 inflammation demonstrated by the elevated total serum IgE in the PO vehicle and the SubQ IgG4 control groups, compared to the no MC903 group.

In contrast, KT-621 robustly and dose dependently inhibited IgE elevation to levels that were comparable to dupilumab, in this preclinical study.

Of note, the KT-621 dose that led to 90% STAT6 degradation produced similar activity in this preclinical model to an IL-4Rα saturating dose of dupilumab, indicating full IL-4 and IL-13 blockade by KT-621 in vivo .

* Significance to PO vehicle (MC903);

# Significance to SC IgG4 25 mpk BIW

We assessed KT-621 in a one-month lung inflammation model induced by intranasal house dust mite (HDM) administration, which we believe is considered to be the most relevant preclinical model of TH2 inflammation.

Unlike ovalbumin, which is commonly used in mouse models but does not induce airway inflammation in humans, house dust mite is a real-world allergen that can induce asthma in humans.

The intranasal HDM model has a dominant TH2 inflammation and was used for the preclinical development of dupilumab.

Similar to the skin model previously described, we used the IL4/IL4Rα humanized mice.

KT-621 was dosed once daily orally for 31 days at the same three dose levels, 2, 8 and 32 mpk, leading to 72, 85 and 91% degradation in the spleen, respectively, consistent with the previous skin model.

Dupilumab was dosed 9 times subcutaneously twice weekly at 25 mpk, meant to ensure constant IL-4Rα saturation with full IL-4/IL-13 blockade, and similarly equivalent to that of the highest approved dose of 300 mg every other week in humans.

As illustrated in Figure 24, the dominant TH2 inflammation was demonstrated by the greatly elevated IgE in the serum, TARC and periostin release in the bronchoalveolar lavage, and eosinophil recruitment to the lung.

All are well-established TH2 biomarkers.

KT-621 showed robust inhibition at all three dose levels.

In this preclinical study, KT-621 blocked TH2 inflammation in vivo equally or better than an IL-4Rα saturating dose of dupilumab in the intranasal HDM asthma model for all these TH2 measures.

*Significance to PO vehicle (HDM);

# Significance to SC IgG4 Ctrl 25 mpk

Clinical Development Plan

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

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

Our lead STAT6 degrader, KT-621, is currently in IND enabling studies.

We expect to begin a Phase 1 clinical trial in the second half of 2024, and to report the Phase 1 results in 2025.

We are developing highly potent and selective degraders of TYK2, a member of the JAK family required for Type I interferon, or IFN, IL-12 and IL-23 signaling with both genetic and clinical validation in autoimmune and inflammatory diseases.

Biology and Mechanism of Action

As seen in Figure 25, TYK2, a member of the JAK family of kinases, binds the IL-12, IL-23 and Type I IFN receptors to recruit and phosphorylate signal transducer and activation of transcription (STAT) transcription factors.

Additionally, TYK2 has a well-established scaffolding function that plays a key role in cytokine receptor surface expression and activation.

A loss of function variant is protective in autoimmune diseases and an allosteric inhibitor (deucravacitnib) of TYK2 as well as multiple biological agents targeting IL-12, IL-23 and IFN-α have been approved for the treatment of multiple autoimmune diseases, making TYK2 a highly validated target.

Degradation of TYK2, which can fully recapitulate the human knockout biology by completely removing the protein, has the potential to overcome the challenges of small molecule inhibitors, which have limitations due to lack of selectivity, limited target engagement, and/or lack of potent activity against Type I IFN.

TYK2 degraders therefore have the potential to achieve full pathway inhibition of Type I IFN, IL-12 and IL-23 while sparing IL-10 in a once daily oral pill with a potential biologics-like activity profile.

Development Opportunities

We estimate that more than 20 million people in the US, Europe and Japan suffer from Type I IFN and IL-12/IL-23 mediated diseases.

There are numerous indication opportunities across multiple immunological therapeutic areas including dermatology, gastroenterology, rheumatology, and CNS.

The potential for TYK2 to be effective across multiple indications is supported by pathway biologics and TYK2 small molecule inhibitors.

We believe that TYK2 degradation differentiates from inhibition and has the potential to demonstrate full pathway inhibition comparable to biologics, but with the benefit of a daily, oral profile.

Preclinical Studies and Data

We have developed a highly potent and selective TYK2 degrader, KT-294.

In Figure 26, our proteomics data demonstrates KT-294, a highly selective picomolar TYK2 degrader, recapitulates TYK2 human deficiency biology and fully inhibits Type I IFN and IL-12/23 signaling and spares IL-10/IL-22.

In particular, KT-294 is extremely selective over the JAK family members.

In Figure 27, we achieved picomolar degradation in human PBMC and keratinocytes and low nM inhibition of our functional assays across a range of cell types.

We have potent preclinical efficacy on the IL-23 and IL-12 signaling pathways in PBMCs and potent inhibition on the Type I IFN pathway in PBMCs and also in specific B-cell assays.

We demonstrated that we spare the IL-10 and IL-22 pathways completely.

IL-10 has essential roles in intestinal homeostasis such as epithelial repair and mucosal healing, which is important in diseases such as Inflammatory Bowel Disease, or IBD.

In fact, loss of function mutations of IL-10 cause early onset refractory colitis in humans.

In Figure 28, we show western blots demonstrating that when TYK2 is not present in a cell, we can induce pSTAT3 with IL-10, showing TYK2 is not necessary for IL-10 signaling.

We also show the TYK2 small molecule inhibitor, deucravacitinib, can block that pathway signaling exclusively due to its ability to inhibit JAK1, and not through TYK2.

In Figure 29, we have an assay where we induce phospho-STAT3 in monocytes with IL-10, in this context our degrader has no effect on pSTAT3 because it doesn’t inhibit the IL-10 pathway.

However, in contrast, deucravacitinib potently inhibits the IL-10 signaling as shown with the decrease of the orange data points.

Similarly in Figure 30, we have monocytes where we use IL-10 to suppress LPS induced TNF-α.

KT-294 has no effect on IL-10 suppression of LPS induced TNF-α release, however deucravacitinib inhibits IL-10’s function of suppressing LPS induced TNF-α release and see an increase in TNF-α, which is demonstrated by the orange data points.

Additionally, we compared KT-294 to TAK-279, an investigational TYK2 inhibitor that is selective over JAK, and as a result spares IL-10.

In our experiment, we used a concentration of TAK-279 that was expected to fully occupy TYK2 and a concentration of KT-294 that was expected to fully degrade TYK2 to assess if there were any biological differences between the two compounds.

The concentrations were determined based on the IC95 of the IFNα pSTAT2 assay which is the most difficult TYK2-related cytokine assay to inhibit.

RNAseq data show KT-294 has superior inhibition of the IFN pathway signature genes, as illustrated in the 21 gene signature score in Figure 31.

Differences in the innate immune pathway, as shown in Figure 32, were observed.

We believe this is due to the fact KT-294 fully removes the protein, and all possible scaffolding functions, phenocopying human knockout.

Based on clinical findings, TAK-279 does not achieve clinical exposures of more than about 77nM with 35mg repeat dosing, which is close to the TAK-279 Phase 3, 30 mg dose.

At clinically relevant exposures, we believe it is likely that TAK-279 will not reach these levels of pathway inhibition shown by KT-294 in figure 31.

KT-294 achieved dose dependent deep degradation of TYK2 in vivo with low oral doses.

Specifically, in non-human primates, or NHP, upon repeat daily low oral doses, KT-294 can degrade TYK2 in a dose responsive manner and reach full degradation of TYK2, providing a path to pharmacological target engagement, as shown in figure 33.

Clinical Development Plan

We expect to initiate a Phase 1 clinical trial of our TYK2 degrader, KT-294, in the first half of 2025 and to report data in 2025.

Clinical Oncology:

STAT3 and MDM2

We are developing our selective STAT3 degraders for the treatment of hematological malignancies and solid tumors.

We are also exploring the potential for STAT3 degradation in autoimmune diseases.

STAT3 is a transcription factor activated through a variety of different cytokine and growth factor receptors via JAKs, as well as through oncogenic fusion proteins and mutations in STAT3 itself.

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Small molecule STAT3 dimerization inhibitors targeting the SH2 domain have been in development, but significant challenges remain.

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 develop targeted and specific drugs to address multiple STAT3 dependent pathologies.

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.

Homology of SH2 domains among all STAT family members impacts the ability to achieve specificity for STAT3, and an 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.

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 2024.

Biology and Mechanism of Action of STAT3 Degrader

Biology and Mechanism of Action

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

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In addition, STAT3 regulates the crosstalk between tumor, stroma, and immune cells to promote an immunosuppressive tumor microenvironment.

STAT3 activation by IL-6 and TGF-ß

is also involved in the pathogenesis of autoimmunity and fibrosis.

STAT3 activation by IL-6 and TGF-ß is also involved in the pathogenesis of autoimmunity and fibrosis.

These various roles of STAT3 in disease pathogenesis make it an attractive target for drug development in cancer and autoimmune and fibrotic diseases.

Differentiation from JAK and IL-6 Inhibitors

Small molecule inhibitors against JAK family kinases, such as JAK1, JAK2, JAK3, and TYK2, have been approved for the treatment of autoimmune diseases such as RA, psoriatic arthritis, and ulcerative colitis and target the JAK2/STAT5 pathway.

In oncology, JAK inhibitors have been approved for hematological malignancies with mutations leading to activation of the JAK2/STAT5 pathway, including primary myelofibrosis and polycythemia vera, and for acute graft versus host disease.

Small molecule inhibitors against JAK family kinases, such as JAK1, JAK2, JAK3, and TYK2, have been approved for the treatment of autoimmune diseases such as rheumatoid arthritis, psoriatic arthritis, and ulcerative colitis and target the JAK2/STAT5 pathway.

versus host disease.

JAK inhibitors block signaling of a number of cytokines and growth factors and reduce activation not only of STAT3 but also STAT1 and STAT5 in response to these stimuli.

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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.

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

and cytokines such as IL-12, IL-2 and IL-15.

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 and cytokines such as IL-12, IL-2 and IL-15.

Consequently, targeting STAT3 directly has the potential to block multiple signaling pathways that converge on STAT3 and reverse pathological processes that contribute to a tumor-permissive microenvironment.

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The multiple effects of a STAT3 degrader on oncogenesis, tumor cell resistance to tyrosine kinase inhibitors and chemotherapy, and evasion of immune surveillance provide multiple development opportunities in hematologic malignancies and solid tumors.

Additionally, the role of STAT3 in chronic inflammation and fibrosis, as also observed in patients with germline STAT3 gain-of-function mutations, informs opportunities in autoimmune and fibrotic diseases.

Hematologic Malignancies

Oncogenic STAT3 mutations and/or STAT3 pathway activations are highly common in peripheral T-cell lymphoma, or PTCL and cutaneous T-cell lymphoma, or CTCL.

PTCL has an estimated prevalence of approximately 40,000 patients in the major global markets and CTCL has an estimated prevalence of approximately 100,000 patients across the major global markets.

Every year, approximately 8,000 patients are diagnosed with PTCL and approximately 6,000 patients are diagnosed with CTCL across major global markets.

STAT3 mutations and pathway activations along with responsiveness of PTCL subsets and CTCL to immune checkpoint inhibitors point to a dependency on STAT3 in these indications and therefore the opportunity to develop a STAT3 degrader as a monotherapy.

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Specifically, STAT3 degraders have the potential to improve responses upfront in combination with these modalities or overcome acquired resistance as add-on therapy in second line.

Autoimmune and Fibrotic Diseases

Patients with rare germline STAT3 gain-of-function mutations develop multiple autoimmune and fibrotic diseases, including systemic sclerosis, or SSc, AD, interstitial lung disease, enteropathies, and RA.

We believe these manifestations, and their response to JAK inhibitors, provide support for STAT3 degrader development in immunology and inflammation.

There are numerous publications that highlight the role of STAT3-mediated IL-6 and TGF-ß

signaling in the pathogenesis of SSc, idiopathic pulmonary fibrosis, or IPF, Crohn’s disease, and multiple sclerosis.

There remains a high unmet need for drugs that can target both the inflammation and fibrosis in SSc, IPF and other diseases that cause Progressive Fibrosing Interstitial Lung Disease (PF-ILD) and halt or reverse disease progression.

A STAT3 degrader has the potential for this dual effect and could therefore provide a transformative approach to treating PF-ILD as well as Crohn’s disease and RA.

Preclinical Studies and Data

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.

Figure 36 summarizes results from a mouse syngeneic colorectal cancer model, in which a STAT3 degrader resulted in an IFN-gamma-dependent gene expression signature that has previously been identified as a predictor of response in cancer patients treated with pembrolizumab.

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.

Furthermore, in the combination group, there was no tumor growth when re-challenged one month after last dose, suggesting development of long-term immune memory.

In addition to causing tumor regressions, the combination extended survival relative to either PD-1 inhibitor or STAT3 degrader alone.

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

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Figure 35 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.

In December 2023, we presented clinical data from the Phase 1 clinical trial of KT-333 in a poster session at the 2023 American Society of Hematology (ASH) Annual Meeting and Exposition.

The poster provided an interim update with a data cut-off as of October 18, 2023.

As of that date, twenty-nine patients, with median age of 65 years, had been treated across five dose levels (DL1-5) with a mean of eight doses, including five with cutaneous T-cell lymphoma (CTCL), two with large granular lymphocytic leukemia, or LGL-L, one each with peripheral T-cell lymphoma, or PTCL, B-cell and Hodgkins’s lymphoma, and nineteen with a variety of solid tumor malignancies.

Overall, the data demonstrated early signs of antitumor activity at doses that were generally well-tolerated and associated with substantial STAT3 knockdown in blood and tumor.

The following table highlights the demographics of the 29 patients that were treated across 5 dose levels as of the October 18, 2023, data cut-off.

cholangiocarcinoma;

colon adenocarcinoma;

colorectal (4);

head and neck (3);

ovarian, pancreatic (2), peritoneal, rectal and renal;

⌂ = anaplastic T-cell lymphoma;

Data cut-off:

18 October 2023.

KT-333 was generally well tolerated with primarily Grade 1 and 2 adverse events which included constipation, fatigue, nausea and anemia.

The only KT-333 related adverse events that were Grade 3 or higher were stomatitis, arthralgia, and decreased weight in one patient each.

Two dose-limiting toxicities (DLTs), stomatitis and arthralgia, occurred in LGL-L patients at DL5 and no DLTs were observed in solid tumor/lymphoma patients.

Based on these findings, the study protocol was revised to continue dose escalation in solid tumor and lymphoma patients separately from patients with leukemia, including LGL-L and T-cell prolymphocytic leukemia, or T-PLL patients.

To demonstrate proof-of-mechanism, STAT3 degradation was evaluated in peripheral blood in cycles 1 and 2 using targeted mass spectrometry as shown in Figure 37.

Mean maximum degradation of STAT3 in PBMCs post KT-333 infusion increased from 70% to 84% between dose levels 1 and 5 respectively.

Percent change in STAT3 represents mean percent change of two STAT3 peptides from baseline.

Up to 96% maximum knockdown of STAT3 protein was observed in PBMCs from patient in dose level 4.

Recovery of STAT3 protein was observed between doses.

As shown in Figure 38, pathway engagement in tumor was demonstrated through semiquantitative analysis of multiplex immunofluorescence data which showed a 69% decrease in STAT3 positive cells and 87% reduction in phospho STAT3 positive cells in a CTCL biopsy ~ 24 hours post KT-333 infusion compared to baseline.

We observed clinical activity in 3 of 5 CTLC patients, including 2 partial responses and 1 stable disease.

We also observed 1 partial response in Classic Hodgkin lymphoma, or cHL.

Collectively, these results demonstrated single agent activity in liquid tumors that was supported by preclinical data.

In solid tumors, where preclinically no strong single agent activity was observed, a pattern of more prolonged stable disease, or SD in Head & Neck tumors was observed with a total of 4 patients.

The following tables highlight the response data as of the October 18, 2023, data cut-off.

*Mucoepidermoid carcinoma of parotid gland (C7+), sinonasal adenocarcinoma (C5), cholangiocarcinoma (C3), renal cell cancer (C3+).

* Received steroids during 1st week of C1 to treat symptoms arising from Sezary Syndrome;

¥ Discontinued d/t AE (Gr.

2 squamous cell carcinoma of skin);

discontinued d/t PI discretion (stable disease at discontinuation);

HNC1 = Mucoepidermoid carcinoma of parotid gland;

HNC2 = Sinonasal adenocarcinoma.

KT-333 resulted in substantial reduction of STAT3, pSTAT3 and SOCS3 in a CTCL patient tumor with concomitant induction of IFNγ-stimulated genes, suggestive of positive immunomodulatory response in the tumor microenvironment that both clinically and preclinically has been shown to enhance the activity of anti-PD-1 drugs, supporting potential expansion into combinations of KT-333 and anti-PD-1 agents.

An interferon gamma signature predictive of sensitivity to anti-PD-1 therapy was induced in the tumor biopsy of a cutaneous T-cell lymphoma (CTCL) patient following treatment on the Phase 1 trial, indicating the potential of KT-333 to synergize with PD-1 antibody therapy.

Clinical Development Plans

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.

We expect to provide additional clinical data in 2024.

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 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.

KT-253 targets MDM2, the crucial regulator of the most common tumor suppressor, p53.

p53 remains intact (wild type) in close to 50% of cancers, meaning that it retains its ability to modulate cancer cell growth.

While small molecule inhibitors (SMIs) have been developed to stabilize and upregulate p53 expression, they have been found to induce a feedback loop that increases MDM2 protein levels, which can repress p53 and limit their efficacy.

In preclinical studies, KT-253 has shown the ability to overcome the MDM2 feedback loop and rapidly induce cancer cell death with brief exposures, providing the opportunity for an improved efficacy and safety profile.

In May 2023, we began dosing in a Phase 1 clinical trial of KT-253.

The study is designed to evaluate the safety, tolerability, PK/PD and clinical activity of KT-253 in adult patients with liquid and solid tumors.

KT-253 has achieved clinical proof-of-mechanism in the Phase 1 trial and shown signs of anti-tumor activity in liquid and solid tumor types.

Patient enrollment and dosing are ongoing in the Phase 1a portion of the trial, and we expect to provide additional clinical data in 2024.

Biology and Mechanism of Action

The murine double minute 2 (MDM2) oncoprotein is the major E3 ligase which controls the tumor suppressor p53.

p53 is a transcription factor that regulates cellular responses to stress and guides cell fate decisions such as cell cycle arrest, DNA repair, senescence, and apoptosis and 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 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

KT-253 is designed as a potent and selective degrader of MDM2.

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).

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.

This single low dose sends the established tumor model into deep regression for weeks, while also allowing time for recovery of any normal cells affected.

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

The large numbers of p53wt cell lines dependent on MDM2, as depicted in Figure 52 above on the left blue, gives a high-level view of the potential breadth of opportunities in oncology for a potent and well tolerated agent for this pathway.

The large numbers of p53wt cell lines dependent on MDM2, as seen in Figure 44, gives a high-level view of the potential breadth of opportunities in oncology for a potent and well tolerated agent for this pathway.

These tumor cell types include but are not limited to cancers which have amplification and over expression of MDM2.

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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 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 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 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

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 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.

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.

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.

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.

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.

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 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.

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 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

Our focus on key undrugged or inadequately drugged nodes within therapeutically validated pathways combined with the target and disease agnostic features of our Pegasus TM platform gives us opportunity to develop new therapies across various therapeutic areas.

We are taking advantage of our proprietary E3 Ligase Whole-Body Atlas on the differential expression profile of E3 ligases to pursue targets that can benefit from potentially tissue-restricted degradation as well as programs that can be enabled by novel molecular glue mechanisms.

Our early pipeline includes programs in genetically defined oncology and immunology indications.

Through our Vertex collaboration, we are engaged in the discovery of additional targets that are able to fully leverage our aforementioned capabilities and expand our impact across several diseases outside of oncology and immunology.

Collaborations

Master Collaboration Agreement with Vertex Pharmaceuticals Incorporated

On May 9, 2019, we entered into a collaboration agreement with Vertex, focused on the research and development of our small molecule targeted protein degraders against multiple targets in disease areas outside our core strategic focus.

The collaboration leverages our expertise in targeted protein degradation and our Pegasus TM platform as well as Vertex’s scientific, clinical, and regulatory capabilities to accelerate the development of medicines for people with serious diseases.

We refer to this agreement as the Vertex Agreement.

Under the terms of the Vertex Agreement, we conduct research activities in multiple targets pursuant to an agreed-upon research plan.

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.

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.

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.

No additional payments have been made by Vertex under the Vertex Agreement to date.

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.

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

The JAC will, among other responsibilities, review and oversee, certain strategic activities performed under the Vertex Agreement, including reviewing the research plan and budget for the research activities and reviewing the research activities performed by each party.

The initial research term of the collaboration is four years, extendable for an additional one-year period upon mutual agreement by the parties and payment by Vertex of certain per-target fees.

The Vertex Agreement may be terminated by Vertex either in its entirety or on a target-by-target basis, upon prior written notice to Kymera.

Either party may terminate the collaboration agreement upon the other party’s material breach, subject to specified notice and cure provisions, or upon the bankruptcy, insolvency, dissolution or winding up of the other party.

Kymera also has the right to terminate the agreement with respect to a certain target upon 30 days’

prior written notice in the event that Vertex ceases all research, development and commercialization activities related to such target for a certain period of time, provided that the cessation is not the result of events outside of Vertex’s control.

Collaboration Agreement with Genzyme Corporation

Our initial disease areas of interest are hematological malignancies and solid tumor indications where preclinically we see that MDM2 degradation leads to an acute apoptotic response predictive of clinical activity with intermittent dosing.

For hematological malignances, KT-253 has potential monotherapy and combination opportunities in Acute Myeloid Leukemia (AML), and potential opportunities across Myelofibrosis, Myelodysplastic Syndrome (MDS), Acute Lymphocytic Leukemia (ALL) and TP53WT lymphomas.

For solid tumors, KT-253 has monotherapy opportunities across a subset of adult and pediatric tumors, to be informed by emerging gene signature with potential for a tumor-agnostic development path.

We are assembling a comprehensive preclinical and clinical dataset examining the factors impacting in vivo response to intermittent dosing with KT-253 across multiple different solid and liquid tumor types in order to derive patient selection biomarkers for the next stage of development after Phase 1a.

Preclinical Studies and Data

KT-253’s potent p53 stabilization, with brief exposures, drives apoptosis in cancer cells.

In Figure 45, KT-253 demonstrated greater than 200-fold improvements in both in vitro cell growth inhibition and apoptosis than small molecule inhibitors.

Unlike small molecule inhibitors, KT-253 removes the protein, which can overcome the p53-dependent feedback loop that upregulates MDM2 production.

As seen in Figure 46, MDM2 levels are increased by the small molecule inhibitor (feedback loop), impairing p53 stabilization.

In preclinical models, 4-hour target coverage by KT-253 was sufficient to induce apoptosis, as shown in Figure 47.

These data support an intermittent dosing schedule of KT-253 can drive efficacy while increasing therapeutic index.

KT-253 potently degrades MDM2 leading to pathway impact and antitumor activity superior to a small molecular inhibitor in preclinical models.

Targeted proteomic analysis of RS4;11 (ALL) tumors demonstrated robust degradation of MDM2 one hour post dosing and associated pathway activation biomarkers including p53 and GDF15, as show in Figure 48.

Figure 49 shows sustained tumor regressions in MV4;11 (AML) CDX models after a single 3 mg/kg KT-253 dose.

Additionally, KT-253 demonstrated robust anti-tumor activity in MCC models.

No efficacy was observed with the clinically relevant dosing regimen of the small molecule inhibitor (DS-3032).

Clinical Studies and Data

The Phase 1 trial, began dosing patients in May 2023, is evaluating the safety, tolerability, PK/PD, and clinical activity of KT-253 in patients with relapsed or refractory high grade myeloid malignancies, including AML, ALL, lymphoma and solid tumors.

Patients in the Phase 1 dose escalation study will receive intravenous doses of KT-253 administered once every 3 weeks.

The open-label study is intended to identify the recommended Phase 2 dose, and is comprised of two arms, with ascending doses of KT-253 in each arm.

The first arm consists of patients with lymphomas and advanced solid tumors and the second arm consists of patients with high grade myeloid malignancies and ALL.

As of the October 20, 2023, data cut-off date, a total of 9 patients with solid tumors had been enrolled onto dose levels 1-3 of Arm A and received a mean of 2.3 cycles with a range of 1 to 6 cycles.

The data from Arm A of the ongoing Phase 1a trial demonstrated KT-253 clinical proof-of-mechanism and initial signs of clinical activity in the first 2 dose levels in patients.

Clinical response results for all patients within a dose cohort were available for dose level 1.

Based on exposures we did not expect this dose level to be clinically active, however, we observed that among the 3 solid tumor patients treated on dose level 1, there was 1 confirmed partial response after 4 cycles with treatment continuing after 6 cycles, 1 confirmed stable disease after 4 cycles with the patient subsequently discontinued from the study after 6 cycles for lack of response, and 1 patient with disease progression after cycle 1, as seen in Figure 51.

The patient with the partial response had Merkel Cell Carcinoma, or MCC, metastatic to abdominal lymph nodes and skin who had previously been treated with chemotherapy as well as multiple different immune checkpoint inhibitors.

There were no dose-limiting toxicities across dose levels 1-3.

As of the data cut-off date, the most common drug-related adverse events.

or AE’s, occurring in 2 or more patients included Grade 1/2 nausea and Grade 1 diarrhea.

One patient at dose level 1 had a serious adverse event, or SAE, of Grade 3 hypotension during cycle 4 that was due to diminished oral intake deemed related to study drug.

Treatment included IV fluids and the patient remains on study without dose reduction or recurrence of hypotension.

As of the data cut-off date, there were no neutropenia or thrombocytopenia AEs even in patients who had received up to 6 cycles of therapy.

Clinical Development Plan

The KT-253 Phase 1a trial is an open label dose escalation study where adult patients with relapsed or refractory high grade myeloid malignancies, ALL, lymphomas and solid tumors receive IV doses of KT-253 once every 3 weeks.

The study is intended to evaluate safety, tolerability, PK/PD and initial clinical activity and identify the recommended Phase 2 dose.

It is comprised of two arms with ascending doses of KT-253 in each arm.

Arm A is in patients with advanced solid tumors and lymphomas and Arm B is in patients with relapsed or refractory high grade myeloid malignancies, including AML, and ALL.

The first patient was dosed in May 2023 and the first 2 dose levels in Arm A have been fully enrolled, with enrollment ongoing.

Enrollment onto Arm B has also been initiated following demonstration of on-target pharmacology in the first 2 dose levels of Arm A.

The Company expects to share additional clinical data in 2024.

Collaboration Agreement with Sanofi (formerly Genzyme Corporation)

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.

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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.

In addition to the upfront payment, we will also be eligible to receive certain development milestone payments of up to $1.48 billion in the aggregate, of which more than $1.0 billion relates to the IRAK4 program, upon the achievement of certain developmental or regulatory events.

In addition to the upfront payment, under the agreement we were eligible to receive certain development milestone payments of up to $1.48 billion in the aggregate, of which more than $1.0 billion relates to the IRAK4 program, upon the achievement of certain developmental or regulatory events.

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.

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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.

We or Sanofi may terminate the agreement upon the other party’s material breach or insolvency or for certain patent challenges.

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.

We or Sanofi may terminate the agreement upon the other party’s material breach or insolvency or for certain patent challenges.

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, in December 2022, Sanofi provided us with written notice of its intention to take KT-474 into Phase 2 clinical trials.

In the fourth quarter of 2023, the Company achieved two milestones of $40.0 million and $15.0 million relating to the dosing of the first patient in the Phase 2 clinical trial for the first and second indications, respectively.

As of December 31, 2023, the Company had received the $40.0 million milestone with the $15.0 million included within the accounts receivable on the consolidated balance sheet.

In September 2023, the Company and Sanofi mutually agreed to cease activities related to the undisclosed target and we are no longer eligible for the milestone and royalty payments associated with the second target.

Manufacturing / Supply Chain

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The competition is likely to come from multiple sources, including larger pharmaceutical companies, biotechnology companies, and academia.

Competitors in our efforts to develop small molecule protein degraders therapies for patients, include, but are not limited to, Arvinas, Inc., C4 Therapeutics, Inc., Nurix Therapeutics, Inc., and Foghorn Therapeutics, Inc.

Companies developing small molecule protein degraders therapies for patients, include, but are not limited to, Arvinas, Inc., C4 Therapeutics, Inc., Nurix Therapeutics, Inc., and Foghorn Therapeutics, Inc.

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.

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.

Many of these indications already have approved standards of care which may include more traditional therapeutic modalities.

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 competitors we face in developing small molecule protein degraders, we will also face competition in the indications we expect to pursue with our IRAK4, STAT6, TYK2, STAT3, and MDM2 programs.

Many of these indications have approved standards of care which may include more traditional therapeutic modalities.

In order to compete effectively with these existing therapies, we will need to demonstrate that our protein degrader therapies are favorable to existing therapeutics.

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Our success depends in part on our ability to secure intellectual property protection for our product candidates and future products, as well as our platform protein degradation technologies and any other relevant inventions and improvements that are considered commercially important to our business.

Our success also depends on our ability to defend and enforce our intellectual property rights, preserve the confidentiality of our proprietary information, and operate without infringing, misappropriating or otherwise violating the valid and enforceable patents and proprietary rights of third parties.

Our success also depends on our ability to defend and enforce our

intellectual property rights, preserve the confidentiality of our proprietary information, and operate without infringing, misappropriating or otherwise violating the valid and enforceable patents and proprietary rights of third parties.

As with other biotechnology and pharmaceutical companies, our ability to secure and maintain intellectual property protection for our product candidates, future products, and other proprietary technologies will depend on our success in obtaining effective patent coverage and enforcing those patents if granted.

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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 20, 2023, included nine granted U.S.

Our intellectual property portfolio is in its very early stages, and, as of December 31, 2023, included 19 granted U.S.

patents, about 100 U.S.

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

patent applications, about 25 international patent applications, five granted foreign patents, and about 449 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 20, 2023, our platform E3 ligase ligand patent families included three granted U.S.

patents, four U.S.

As of December 31, 2023, our platform E3 ligase ligand patent families included three granted U.S.

patents, five U.S.

patent applications, and three patent applications in Europe.

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

patent, seven U.S.

As of December 31, 2023, our protein degrader patent families included two granted U.S.

patent, five U.S.

patent applications and about 19 foreign patent applications filed in foreign jurisdictions, such as Australia, Canada, Europe, Israel, Japan, Mexico, New Zealand, and the Russian Federation.

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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 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.

As of December 31, 2023, our target-specific degrader patent families included 14 granted U.S.

patents, about 87 U.S.

patent applications, about 22 international patent applications, three granted foreign patents, and about 423 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 20, 2023, our IRAK-specific patent families included four granted U.S.

As of December 31, 2023, our IRAK-specific patent families included 11 granted U.S.

patents, about 34 U.S.

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.

patent applications, about eight international patent applications, three granted foreign patents and about 293 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, 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.

With respect to the KT-474 product candidate, as of December 31, 2023, we own three granted U.S.

patent, eight pending U.S.

patent applications, five pending international patent applications, one granted foreign patent and about 128 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 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.

As of December 31, 2023, our STAT-specific patent families included two granted U.S.

patent, about 18 U.S.

patent applications, three international patent applications, and about 49 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.

Other Target-Specific Patent Families

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

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.

As of December 31, 2023, we own one granted U.S.

patent, about 31 U.S.

patent applications, 10 international patent applications and about 81 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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When possible, we expect to apply for patent term extensions for patents covering our product candidates and their methods of use.

We intend to file applications for trademark registrations in connection with our product candidates and other technologies in various jurisdictions, including the United States.

We have and intend to file applications for trademark registrations in connection with our product candidates and other technologies in various jurisdictions, including the United States.

We have applied to register both the KYMERA mark and the KYMERA THERAPEUTICS mark in the United States, Europe, and Canada.

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In addition, we filed applications for E3 HUMAN ATLAS and E3 LIGASE WHOLE BODY ATLAS in connection with pharmaceutical research and development and drug development and discovery services.

All of our European Union trademarks in existence as of December 31, 2020 were automatically cloned onto the United Kingdom register due to “Brexit.”

Most recently, we filed an application for our K & Design mark in the United States, and we plan to file European Union, United Kingdom, and Canada applications based on our U.S.

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If we fail to comply with applicable FDA or other requirements at any time with respect to product development, clinical testing, approval or any other legal requirements relating to product manufacture, processing, handling, storage, quality control, safety, marketing, advertising, promotion, packaging, labeling, export, import, distribution, or sale, we may become subject to administrative or judicial sanctions or other legal consequences.

These sanctions or consequences could include, among other things, the FDA’s refusal to approve pending applications, issuance of clinical holds for ongoing studies, suspension or revocation of approved applications, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution.

The process required by the FDA before our product candidates are approved as drugs for therapeutic indications and may be marketed in the U.S.

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• a determination by the FDA within 60 days of its receipt of an NDA, to accept the filing for review;

satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

• satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

• potential FDA audit of the clinical trial sites that generated the data in support of the NDA;

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Preclinical studies include laboratory evaluations of drug chemistry, formulation and stability, as well as in vitro and animal studies to assess safety and in some cases to establish the rationale for therapeutic use.

The conduct of preclinical studies is subject to federal and state regulations and requirements, including GLP requirements for safety/toxicology studies.

The conduct of preclinical studies is subject to federal

and state regulations and requirements, including GLP requirements for safety/toxicology studies.

The results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND.

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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.

The clinical stage of development involves the administration of the product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirements that all research patients provide their informed consent for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the parameters and criteria to be used in monitoring safety and evaluating effectiveness.

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Clinical trials to evaluate therapeutic indications to support NDAs for marketing approval are typically conducted in three sequential phases, which may overlap.

Phase 1 —Phase 1 clinical trials involve initial introduction of the investigational product into healthy human volunteers or patients with the target disease or condition.

• Phase 1 —Phase 1 clinical trials involve initial introduction of the investigational product into healthy human volunteers or patients with the target disease or condition.

These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, excretion the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness.

Phase 2 —Phase 2 clinical trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition to evaluate the drug’s potential efficacy, to determine the optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.

Phase 3 —Phase 3 clinical trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.

• Phase 2 —Phase 2 clinical trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition to evaluate the drug’s potential efficacy, to determine the optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.

• Phase 3 —Phase 3 clinical trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.

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 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,”

which outlines how drug developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology drug development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.

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,” which outlines how drug developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology drug development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.

Information to support the design of individual expansion cohorts are included in IND applications and assessed by FDA.

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Written IND safety reports must be submitted to the FDA and the investigators fifteen days after the trial sponsor determines the information qualifies for reporting for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing that suggest a significant risk for human volunteers and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

The sponsor must also notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible but in no case later than seven calendar days after the sponsor’s initial receipt of the information.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing the drug product in commercial quantities in accordance with cGMP requirements.

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Marketing Approval for Drugs

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

An NDA is a request for approval to market a new drug for one or more specified indications and must contain proof of the drug’s safety and efficacy for the requested indications.

The marketing application is required to include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive findings.

Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product to the satisfaction of the FDA.

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Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the NDA.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective for the indications sought and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

Under the goals and polices agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA targets ten months, from the filing date, in which to complete its initial review of a new molecular entity NDA and respond to the applicant, and six months from the filing date of a new molecular entity NDA for priority review.

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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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Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter.

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, depending on the specific risk(s) to be addressed it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.

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Orphan designation does not convey any advantage in or shorten the duration of the regulatory review and approval process, though companies developing orphan products are eligible for certain incentives, including tax credits for qualified clinical testing and waiver of application fees.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to a seven-year period of marketing exclusivity during which the FDA may not approve any other applications to market the same therapeutic agent for the same indication, except in limited circumstances, such as a subsequent product’s showing of clinical superiority over the product with orphan exclusivity or where the original applicant cannot produce sufficient quantities of product.

Competitors, however, may receive approval of different therapeutic agents for the indication for which the orphan product has exclusivity or obtain approval for the same therapeutic agent for a different indication than that for which the orphan product has exclusivity.

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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.

In June 2023, KT-253, Kymera’s MDM2 degrader in development for hematological malignancies and solid tumors, was granted orphan drug designation by the FDA for the treatment of acute myeloid leukemia.

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

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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.

Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the agency may review portions of the marketing application before the sponsor submits the complete application, as well as Priority Review, discussed below.

Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the

potential for rolling review once a marketing application is filed, meaning that the agency may review portions of the marketing application before the sponsor submits the complete application, as well as Priority Review, discussed below.

In addition, a new drug may be eligible for Breakthrough Therapy designation if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

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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 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.

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A drug can also obtain pediatric market exclusivity in the U.S.

Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms.

This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial or of multiple pediatric trials in accordance with an FDA-issued “Written Request”

for such trials.

Pediatric exclusivity, if granted, adds six months to existing exclusivity periods for all formulations, dosage forms, indications of the active moiety and patent terms.

This six-month exclusivity, which runs from the end of other exclusivity protection, may be granted based on the voluntary completion of a pediatric trial or of multiple pediatric trials in accordance with an FDA-issued “Written Request” for such trials, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining.

Post-Approval Requirements for Drugs

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.

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The FDA may impose a number of post-approval requirements as a condition of approval of an NDA.

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, 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.

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The 510(k) premarket notification pathway generally takes from three to twelve months from the date the application is completed, but can take significantly longer.

A PMA must be supported by valid scientific evidence, which typically requires extensive data, including technical, preclinical, clinical and manufacturing data, to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device.

For diagnostic tests, a PMA typically includes data regarding analytical and clinical validation studies.

As part of its review of the PMA, the FDA will conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the Quality System Regulation, or QSR, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures.

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’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.

A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable.

Once granted, PMA approval may be withdrawn by the FDA if compliance with post-approval requirements, conditions of approval or other regulatory standards is not maintained, or problems are identified following initial marketing.

On July 31, 2014, the FDA issued a final guidance document addressing the development and approval process for “In Vitro Companion Diagnostic Devices.”

According to the guidance document, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic device could be essential for the safe and effective use of the corresponding therapeutic product, the premarket application for the companion diagnostic device should be developed and approved or cleared contemporaneously with the therapeutic, although the FDA recognizes that there may be cases when contemporaneous development may not be possible.

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.

On July 31, 2014, the FDA issued a final guidance document addressing the development and approval process for “In Vitro Companion Diagnostic Devices.” According to the guidance document, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic device could be essential for the safe and effective use of the corresponding therapeutic product, the premarket application for the companion diagnostic device should be developed and approved or cleared contemporaneously with the therapeutic, although the FDA recognizes that there may be cases when contemporaneous development may not be possible.

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.

Once cleared or approved, the companion diagnostic device must adhere to post-marketing requirements including the requirements of the FDA’s QSR, adverse event reporting, recalls and corrections along with product marketing requirements and limitations.

Like drug makers, companion diagnostic makers are subject to unannounced FDA inspections at any time during which the FDA will conduct an audit of the product(s) and our facilities for compliance with its authorities.

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Our business operations and any current or future arrangements with third-party payors, healthcare providers and physicians may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we develop, market, sell and distribute any drugs for which we obtain marketing approval.

In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency, and patient data privacy and security laws and regulations.

In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency, pharmaceutical price reporting, and patient data privacy and security laws and regulations.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and responsible individuals may be subject to imprisonment.

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If any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to similar actions, penalties and sanctions.

Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from its business.

Insurance Coverage and Reimbursement

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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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A decision by a third-party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, our operations and financial condition.

Additionally, a third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.

Additionally, a third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of products have been a focus in this effort.

Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products.

Coverage policies and third-party payor reimbursement rates may change at any time.

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• created an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs;

expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

expanded manufacturers’

rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,”

or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices;

• expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

• expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices;

• addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

• expanded the types of entities eligible for the 340B drug discount program;

established the Medicare Part D coverage gap discount program by requiring manufacturers to provide point-of-sale-discounts off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’

outpatient drugs to be covered under Medicare Part D;

• established the Medicare Part D coverage gap discount program by requiring manufacturers to provide point-of-sale-discounts off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;

• created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

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Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

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.

President Biden has issued multiple executive orders that have sought to address the issue of prescription drug costs.

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.

Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.

In August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030 unless additional Congressional action is taken.

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 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.

The Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032 unless additional Congressional action is taken.

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.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

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In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their commercial products, which has resulted in several Congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products.

For example, at the federal level, the current administration’s budgets for fiscal years 2019 and 2020 contained further drug price control measures that could be enacted in future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients.

Additionally, the current administration released a “Blueprint”

to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out-of-pocket costs of drug products paid by consumers.

Department of Health and Human Services has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority.

For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020.

This final rule codified CMS’s policy change that was effective January 1, 2019.

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.

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.

On May 30, 2018, the Right to Try Act was signed into law.

The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval.

Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program.

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.

The Inflation Reduction Act of 2022, or IRA includes several provisions that may impact our business t o varying degrees, including provisions that reduce the annual out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2024, thereby eliminating the coverage gap;

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.

Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that disease or condition.

If a product receives multiple orphan designations or has multiple approved indications, it may not qualify for the orphan drug exemption.

The implementation of the IRA is currently subject to ongoing litigation that challenges the constitutionality of the IRA’s Medicare drug price negotiation program.

The effects of the 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.

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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We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

We maintain workers’

compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage against potential liabilities.

We maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage against potential liabilities.

However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us.

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For instance, in the United Kingdom and the European Economic Area, or the EEA (comprised of the EU Member States plus Iceland, Liechtenstein and Norway), medicinal products must be authorized for marketing by using either the centralized procedure or a national procedure.

Centralized procedure —If pursuing marketing authorization of a product candidate for a therapeutic indication under the centralized procedure, following the opining of the European Medicines Agency’s Committee for Medicinal Products for Human Use, or CHMP, the European Commission issues a single marketing authorization valid across the EEA.

• Centralized procedure —If pursuing marketing authorization of a product candidate for a therapeutic indication under the centralized procedure, following the opinion of the European Medicines Agency’s Committee for Medicinal Products for Human Use, or CHMP, the European Commission issues a single marketing authorization valid across the EEA.

The centralized procedure is compulsory for human medicines derived from biotechnology processes or advanced therapy medicinal products (i.e.

gene therapy, somatic cell therapy and tissue engineered products), products that contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, neurodegenerative disorders, diabetes, autoimmune diseases and other immune dysfunctions, viral diseases, and designated orphan medicinal products.

For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the European Medicines Agency, or EMA, as long as the medicine concerned contains a new active substance not yet authorized in the EU, is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the EU.

For medicines that do not fall within these categories, an

applicant has the option of submitting an application for a centralized marketing authorization to the European Medicines Agency, or EMA, as long as the medicine concerned contains a new active substance not yet authorized in the EU, is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the EU.

Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP.

Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days.

Where the CHMP gives a positive opinion, it provides the opinion together with supporting documentation to the European Commission, who makes the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation.

Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation.

The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding clock stops, but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment.

National procedures —There are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products that fall outside the scope of the centralized procedure:

o Decentralized procedure —Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EU country of medicinal products that have not yet been authorized in any EU country and that do not fall within the mandatory scope of the centralized procedure.

o Mutual recognition procedure —In the mutual recognition procedure, a medicine is first authorized in one EU country, in accordance with the national procedures of that country.

• National procedures —There are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products that fall outside the scope of the centralized procedure:

o Mutual recognition procedure —In the mutual recognition procedure, a medicine is first authorized in one EU country, in accordance with the national procedures of that country.

Following this, additional marketing authorizations can be sought from other EU countries in a procedure whereby the countries concerned recognize the validity of the original, national marketing authorization.

Now that the United Kingdom (which comprises Great Britain and Northern Ireland) has left the European Union, Great Britain is no longer covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland).

All medicinal products with a current centralized marketing authorization were automatically converted to Great Britain authorizations on January, 1, 2021.

For a period of two years from January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or MHRA, the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a new Great Britain marketing authorization.

A separate application will, however, still be required.

Now that the United Kingdom (which comprises Great Britain and Northern Ireland) has left the European Union, Great Britain is no longer covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations currently continue to be recognized in Northern Ireland).

On January 1, 2024, a new international recognition framework was put in place by the Medicines and Healthcare products Regulatory Agency, or MHRA, the UK medicine’s regulator, under which the MHRA may have regard to decisions on the approval of a marketing authorization made by the EMA and certain other regulators when considering whether to grant a Great Britain marketing authorization.

The MHRA also has the power to have regard to marketing authorizations approved in EU Member States through decentralized or mutual recognition procedures with a view to more quickly granting a marketing authorization in the United Kingdom or Great Britain.

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

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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There is no guarantee that a product will be considered by the EMA to be an innovative medicinal product, and products may not qualify for data exclusivity.

Even if a product is considered to be an innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical tests, preclinical tests and clinical trials.

The criteria for designating an “orphan medicinal product”

in the EU are similar in principle to those in the U.S.

Even if a product is considered to be an innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained marketing authorization based on an MAA with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials.

The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the U.S.

In the EU, a medicinal product may be designated as orphan if:

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and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU or, if such a method exists, the product will be of significant benefit to those affected by that condition.

Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication.

Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a marketing authorization,

entitled to ten years of market exclusivity for the approved therapeutic indication.

During this ten-year orphan market exclusivity period, no MAA shall be accepted, and no marketing authorization shall be granted for a similar medicinal product for the same therapeutic indication.

A “similar medicinal product”

is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.

A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.

An orphan product can also obtain an additional two years of market exclusivity in the EU where an agreed pediatric investigation plan for pediatric studies has been complied with.

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The ten-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

Additionally, marketing authorization may be granted to a similar product for the same therapeutic indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;

Additionally, a marketing authorization may be granted to a similar product for the same therapeutic indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;

(ii) the marketing authorization holder for the authorized orphan product consents to a second orphan medicinal product application;

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This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

Similar to as in the U.S., the various phases of non-clinical and clinical research in the European Union are subject to significant regulatory controls.

In April 2014, the EU adopted the new Clinical Trials Regulation, (EU) No 536/2014 (Clinical Trials Regulation) which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022.

Similar to the U.S., the various phases of non-clinical and clinical research in the European Union are subject to significant regulatory controls.

In April 2014, the EU adopted the Clinical Trials Regulation (EU) No 536/2014 (Clinical Trials Regulation) which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022.

The Clinical Trials Regulation is directly applicable in all the EU Member States, meaning no national implementing legislation in each EU Member State is required.

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.

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

The transitory provision of the Clinical Trial Regulation provide that, by January 31, 2025, all ongoing clinical trials must have transitioned to the Regulation, The Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union.

The main characteristics of the regulation include:

a streamlined application procedure via a single-entry point, the “Clinical Trials Information System”

a streamlined application procedure via a single-entry point, the “Clinical Trials Information System” or CTIS;

a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors;

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However, overall related timelines will be defined by the Clinical Trials Regulation.

The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of the EU Member States, plus Norway, Liechtenstein and Iceland.

The aforementioned EU rules are generally applicable in the European Economic Area, or EEA.

Reform of the Regulatory Framework in the European Union

The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the EU for all medicines (including those for rare diseases and for children).

The European Commission has provided legislative proposals to the European Parliament and the European Council for their review and approval.

In October 2023, the European Parliament published draft reports proposing amendments to the legislative proposals,

which will be debated by the European Parliament.

Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into EU law.

Government regulation of data collection outside of the United States

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The GDPR applies to the processing of personal data by any company established in the EEA and to companies established outside the EEA to the extent they process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior of data subjects in the EEA.

processing, limitations on retention of personal data, mandatory data breach notification and “privacy by design”

requirements, and creates direct obligations on service providers acting as processors.

The GDPR enhances data protection obligations for data controllers of personal data, including stringent requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, requirements to conduct privacy impact assessments for “high risk” processing, limitations on retention of personal data, mandatory data breach notification and “privacy by design” requirements, and creates direct obligations on service providers acting as processors.

The GDPR also imposes strict rules on the transfer of personal data outside of the EEA to countries that do not ensure an adequate level of protection, like the United States.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EEA Member States, which may deviate slightly from the GDPR, may result in fines of up to 4% of a company’s global revenues for the preceding financial year, or €20,000,000, whichever is greater.

Moreover, the GDPR grants data subjects the right to claim material and non-material damages resulting from infringement of the GDPR.

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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.

However, as of January 1, 2021, the United Kingdom’s European Union (Withdrawal) Act 2018 incorporated the GDPR (as it existed on December 31, 2020, but subject to certain UK specific amendments) into UK law, referred to as the UK GDPR.

The UK GDPR and the UK Data Protection Act 2018 set out the United Kingdom’s data protection regime, which is independent from but aligned to the European Union’s data protection regime.

Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide revenue, whichever is higher.

Although the UK is regarded as a third country under the European Union’s GDPR, the European Commission has now issued a decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EU to the UK remain unrestricted.

Like the EU GDPR, the UK GDPR restricts personal data transfers outside the United Kingdom to countries not regarded by the United Kingdom as providing adequate protection.

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Brexit and the Regulatory Framework in the United Kingdom

On June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union (commonly referred to as “Brexit”), and the UK formally left the EU on January 31, 2020.

The UK formally left the EU on January 31, 2020.

There was a transition period during which EU pharmaceutical laws continued to apply to the UK, which expired on December 31, 2020.

However, the EU and the UK have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021.

The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations.

At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework will continue to apply in Northern Ireland).

The regulatory regime in Great Britain therefore largely aligns with current EU regulations, however it is possible that these regimes will diverge in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.

The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not provide wholesale mutual recognition of UK and EU pharmaceutical regulations.

However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under the new international recognition procedure in the UK

mentioned above, the MHRA may take into account decisions on the approval of a marketing authorization from the EMEA (and certain other regulators) when considering an application for a Great Britain marketing authorization.

On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”.

This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the U.K.

In principle, the MHRA will be responsible for approving all medicinal products destined for the U.K.

market (i.e., Great Britain and Northern Ireland) and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland.

A single UK-wide marketing authorization will be granted by the MHRA for all medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.

The Windsor Framework was approved by the EU-UK Joint Committee on March 24, 2023, so the UK government and the EU will enact legislative measures to bring it into law.

On June 9, 2023, the MHRA announced that the medicines aspects of the Windsor Framework will apply from January 1, 2025.

Employees and Human Capital

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We consider the intellectual capital of our employees to be an essential driver of our business and key to our future prospects.

Our workforce expanded during FY22;

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.

We continually evaluate the business need and opportunity and balance in house expertise and capacity with outsourced expertise and capacity.

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We consider our relations with our employees to be good.

We support our employees’

further development with individualized development plans, mentoring, coaching, group training, conference attendance and financial support including tuition reimbursement.

Response to COVID-19

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;

Decreasing density and increasing physical distancing in workspaces for employees working onsite by scheduling adjustments and adding work from home flexibility;

Adjusting attendance policies to encourage those who are sick to stay home;

Increasing cleaning protocols at our Watertown, MA headquarters;

Providing additional personal protective equipment and cleaning supplies;

Implementing weekly COVID-19 testing;

Implementing protocols to address actual and suspected COVID-19 cases and potential exposure;

Prohibiting all domestic and international non-essential travel for all employees;

Requiring masks to be worn in all locations.

We support our employees’ further development with individualized development plans, mentoring, coaching, group training, conference attendance and financial support including tuition reimbursement.

Our corporate headquarters are located in Watertown, Massachusetts, where we lease and occupy approximately 34,522 square feet of office and laboratory space.

The current term of our Watertown lease expires March 31, 2030, with an option to extend the term five additional years with 12 months’

notice with rent set at an agreed upon market rate.

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

The current term of our Watertown lease expires March 31, 2030, with an option to extend the term five additional years with 12 months’ notice with rent set at an agreed upon market rate.

In December 2021, we entered into a lease for 100,624 square feet of office and laboratory space in Watertown, Massachusetts, which we are beginning to occupy in February 2024.

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.

We intend to sublease our current space to third parties after we have completed the move to our new facility.

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

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The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC.

The SEC’s Internet website address is http://www.sec.gov.

A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website, www.kymeratx.com, under “Investors”.

The SEC’s Internet website address is http://www.sec.gov.

Ris k Factors.

Our business involves a high degree of risk.

You should carefully consider the material and other risks and uncertainties described and summarized below, as well as the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

and “Special Note Regarding Forward-Looking Statements,”

before you make an investment decision.

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Annual Report on Form 10-K.

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As a result, the market price of our common stock could decline, and you may lose all or part of your investment in our common stock.

New risks can emerge from time to time, and it is not possible to predict the impact that any factor or combination of factors may have on our business, prospects, financial condition and results of operations.

Risks Related to Our Financial Position and Need for Additional Capital

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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 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, follow-on offering and PIPE offering.

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.

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 collaborations and our initial public offering (IPO), follow-on offerings, PIPE offering and at-the market sales program.

From our inception through December 31, 2023, we raised an aggregate of approximately $1.07 billion of gross proceeds from such transactions and through our collaborations.

In January 2024, we received approximately $316.2 million, before deducting underwriting discounts and commissions and estimated offering expenses, from a public offering of our common stock and pre-funded warrants to purchase shares of our common stock.

In February 2024, we received $50 million before deduction sales commissions from sales of common stock under our sales agreement with Cowen and Company, LLC.

As of December 31, 2023, our cash and cash equivalents and investments were $436.3 million.

We have incurred net losses in each year since our inception, and we had an accumulated deficit of $530.8 million as of December 31, 2023.

For the years ended December 31, 2022, 2021 and 2020, we reported net losses of $154.8 million, $100.2 million and $45.6 million, respectively.

For the years ended December 31, 2023, 2022 and 2021, we reported net losses of $147.0 million, $154.8 million, $100.2 million, respectively.

Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

We expect to continue to incur significant expenses and increasing operating losses over the next several years and for the foreseeable future.

Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’

deficit and working capital.

Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ deficit and working capital.

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 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 future product candidates ;

• initiate and complete preclinical studies and clinical trials for current or future product candidates

• prepare and submit Investigational New Drug applications, or INDs, with the 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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In addition, if we obtain marketing approval for our current or future product candidates, we will incur significant expenses relating to sales, marketing, product manufacturing and distribution.

Because of the numerous risks and uncertainties associated with developing pharmaceutical drugs, including in light of the ongoing evolution of the COVID-19 pandemic, we are unable to predict the extent of any future losses or when we will become profitable, if at all.

Because of the numerous risks and uncertainties associated with developing pharmaceutical drugs, we are unable to predict the extent of any future losses or when we will become profitable, if at all.

Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis.

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The development of pharmaceutical drugs is capital-intensive.

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 are engaged in clinical development activities on various programs and 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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We may also need to raise additional funds sooner if we choose to pursue additional indications and/or geographies for our current or future product candidates or otherwise expand more rapidly than we presently anticipate.

Furthermore, we expect to incur additional costs associated with operating as a public company.

Furthermore, we expect to continue to incur additional costs associated with operating as a public company.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

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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.

In January 2024, we completed a follow-on offering of our common stock and pre-funded warrants resulting in gross proceeds of $316.2 million before deducting underwriting discounts and commissions and estimated offering expenses.

In February 2024, we received $50 million before deduction sales commissions from sales of common stock under our sales agreement with Cowen and Company, LLC.

We expect that the approximately $436.3 million of cash and cash equivalents and investments at December 31, 2023, together with the net proceeds from the first quarter of 2024 offerings and the $15 million milestone payment received in January of 2024 under our collaboration agreement with Sanofi, will be sufficient to fund our operations into the first half of 2027.

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.

This estimate also assumes that we do not obtain any additional funding through collaborations or other strategic alliances.

This estimate also assumes that we do not obtain any

additional funding through collaborations or other strategic alliances.

Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including:

the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our current or future product candidates, including additional expenses attributable to adjusting our development plans (including any supply related matters) in response to the ongoing COVID-19 pandemic;

• the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our current or future product candidates, including additional expenses attributable to adjusting our development plans (including any supply related matters);

• the scope, prioritization and number of our research and development programs;

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The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or current or future product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospec ts.

We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

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Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted.

There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas, such as “say on pay”

and proxy access.

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

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The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or FDIC, as receiver.

Since that date, SVB has announced they have been acquired by First Citizens Bank and have resumed mostly normal operations.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

Since then, additional financial institutions have experienced similar failures and have been placed into receivership.

In addition, if any of our customers, suppliers or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

In this regard, counterparties to SVB credit agreements and arrangements, and third parties such as beneficiaries of letters of credit (among others), may experience direct impacts from the closure of SVB and uncertainty remains over liquidity concerns in the broader financial services industry.

Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis.

Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.

Although the U.S.

Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program.

Additionally, there is no guarantee that the U.S.

Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.

Although we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with whom we have credit agreements or arrangements directly, or the financial services industry or economy in general.

These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations.

These could include, but may not be limited to, the following:

• Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;

• Delayed or lost access to working capital sources and/or delays, inability or reductions in our ability to enter into new credit facilities or other working capital resources;

• Potential or actual breach of contractual obligations that require us to maintain letters of credit or other credit support arrangements;

• Potential or actual breach of financial covenants in any credit agreements or credit arrangements;

• Potential or actual cross-defaults in other credit agreements, credit arrangements or operating or financing agreements.

In addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws.

Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.

In addition, any further deterioration in the macroeconomic economy or financial services industry could lead to losses or defaults by our customers or suppliers, which in turn, could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition.

For example, a supplier may determine that it will no longer deal with us as a customer.

In addition, a supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse impacts on us, including but not limited to delayed access or loss of access to uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution.

Any supplier bankruptcy or insolvency, or any breach or default by a supplier, or the loss of any significant supplier relationships, could result in material losses to us and may have a material adverse impact on our business.

Risks Related to Drug Development and Regulatory Approval

Risks Related to Preclinical and Clinical Development

We are very early in our development efforts.

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

If we are unable to commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.

We are very early in our development efforts and our IRAK4, STAT3 and MDM2 programs are in early clinical development.

If we are unable to advance them through the clinic for safety or effective reasons or commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.

Our ability to become profitable depends upon our ability to generate revenue.

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

• the results of ongoing or planned clinical trials of our product candidates;

• 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;

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Because we have limited financial and management resources, we focus on a limited number of research programs and product candidates.

We are currently focused on our four most advanced development programs, IRAK4, IRAKIMiD, STAT3 and MDM2, which target key signaling pathways implicated in multiple inflammatory and autoimmune diseases as well as numerous cancers.

We are currently focused on our immunology portfolio, consisting of IRAK4, STAT6 and TYK2 programs, which target key signaling pathways implicated in multiple inflammatory and autoimmune diseases, as well as our oncology portfolio, consisting of our STAT3 and MDM2 programs, which target numerous cancers.

In some instances, we may decide to discontinue our investment in programs.

For example, in November 2023, we announced the decision to discontinue the development of our KT-413 (IRAKIMID) program in order to focus resources to support our growing immunology pipeline.

As a result, we may forego or delay pursuit of opportunities with other current or future product candidates or for other indications that later prove to have greater commercial potential.

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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.

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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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.

For example, in December 2020, we submitted an IND application for KT-474 to initiate a first-in-human Phase 1 randomized, double-blind, placebo-controlled clinical trial in healthy volunteers and patients with hidradenitis suppurativa (HS) or atopic dermatitis (AD).

The program was initially placed on partial clinical hold regarding the multiple ascending dose (MAD) portion of the Phase 1 trial, pending FDA review of the interim data in healthy volunteers from the SAD portion of the trial.

In June 2021, the FDA lifted the partial clinical hold on the MAD portion of the Phase 1 trial of KT-474 following review of interim SAD results.

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

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.

The program was initially placed on partial clinical hold regarding the multiple ascending dose, or MAD) portion of the Phase 1 trial, pending FDA review of the interim data in healthy volunteers from the SAD portion of the trial.

In June 2021, the FDA lifted the partial clinical hold on the MAD portion of the Phase 1 trial of KT-474 following review of interim SAD results, and the Phase 1 trial has since been completed.

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 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.

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 authorization 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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• the contract research organizations, or CROs, that we retain to conduct our preclinical studies and clinical trials may take actions outside of our control that materially adversely impact our preclinical studies and clinical trials;

the FDA or applicable foreign regulatory agency may find the data from preclinical studies and clinical trials insufficient to demonstrate that our current or future product candidates’

clinical and other benefits outweigh their safety risks;

• the FDA or applicable foreign regulatory agency may find the data from preclinical studies and clinical trials insufficient to demonstrate that our current or future product candidates’ clinical and other benefits outweigh their safety risks;

• the FDA or applicable foreign regulatory agency may disagree with our interpretation of data from our preclinical studies and clinical trials;

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• the FDA or the applicable foreign regulatory agency may determine that the manufacturing processes or facilities of third-party manufacturers with which we contract do not conform to applicable requirements, including current Good Manufacturing Practices, or cGMPs;

the FDA or applicable foreign regulatory agency may be delayed in its review processes due to staffing or other constraints arising from the ongoing COVID-19 pandemic;

• the FDA or applicable foreign regulatory agency may be delayed in its review processes due to staffing or other constraints;

• the FDA or applicable foreign regulatory agency may change its approval policies or adopt new regulations.

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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 disruptions of patient care or 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’

current or future product candidates.

Patient enrollment may be affected by other factors including:

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• the proximity and availability of clinical trial sites for prospective patients;

factors we may not be able to control, such as potential pandemics that may limit subjects, principal investigators or staff or clinical site availability (e.g., the outbreak of COVID-19).

Interim, “topline,”

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.

• factors we may not be able to control, such as potential pandemics that may limit subjects, principal investigators or staff or clinical site availability

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.

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.

For example, in December 2023, we announced positive interim results from our Phase 1 trial of KT-333 and in November 2023, we announced positive interim results from our Phase 1a trial of KT-253.

However, there can be no assurance that the final topline data from either trial will be consistent with such results or otherwise viewed as positive.

We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

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, 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.

Interim data from clinical trials that we may complete, including data from of our clinical trials, 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, 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.

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.

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.

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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.

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 the ongoing clinical trials of KT-474, KT-333 and KT-253 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/or clinical trials of our current or future product candidates, including KT-474, KT-621, KT-294, KT-333 and KT-253, may not be replicated in subsequent preclinical studies or clinical trials.

In particular, while we have conducted certain preclinical studies of KT-621 and KT-294, we do not know whether either of these product candidates will perform in our planned clinical trials as it has performed in these prior preclinical studies.

For example, in preclinical studies, (i) KT-621 demonstrated full inhibition of IL-4/IL-13 pathway in all relevant human cell contexts with picomolar potency that was superior to dupilumab, and equivalent or superior activity to dupilumab, and (ii) KT-294 demonstrated picomolar to nanomolar potencies across all relevant human cell types evaluated.

However, there is no guarantee these preclinical results will be replicated in 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.

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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.

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-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.

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-333 and KT-253, 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.

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The number of patients for our product candidates in the United States and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19 or its variants, may materially and adversely affect our business and our financial results and could cause a disruption to the development of our product candidate.

A pandemic, epidemic, or outbreak of an infectious disease may materially and adversely affect our business and our financial results and could cause a disruption to the development of our product candidate.

Public health crises such as pandemics or similar outbreaks could adversely impact our business.

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.

For example, 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 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 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.

In addition, the patient populations that our lead and other core product candidates target may be particularly susceptible to COVID-19 or its variants, which may make it more difficult for us to identify patients able to enroll in our clinical trials and may impact the ability of enrolled patients to complete any such trials.

Any negative impact that the ongoing COVID-19 pandemic has to patient enrollment or treatment, or the execution of our product candidates could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses, and have a material adverse effect on our financial results.

The coronavirus pandemic has evolved considerably, and led to the

implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures which now have been lifted.

The extent to which any future pandemic 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 disease and the actions to contain the disease or treat its impact, among others.

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

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

In addition, the patient populations that our lead and other core product candidates target may be particularly susceptible to infectious diseases or its variants, which may make it more difficult for us to identify patients able to enroll in our clinical trials and may impact the ability of enrolled patients to complete any such trials.

Any negative impact that any future infectious disease spread has to patient enrollment or treatment, or the execution of our product candidates could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses, and have a material adverse effect on our financial results.

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.

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:

Some factors from any public health crisis that may 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;

• 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;

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

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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.

may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

These and other factors arising from the coronavirus could worsen.

Any of these factors, and other factors related to any such disruptions that are unforeseen, could have a material adverse effect on our business and our results of operations and financial condition.

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• regulatory authorities may withdraw or limit their approval of such current or future product candidates;

regulatory authorities may require the addition of labeling statements, such as a “boxed”

warning or a contraindication;

• regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication;

• we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;

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• our reputation may suffer.

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.

approved, and significantly impact our ability to successfully commercialize our current or future product candidates and generate revenues.

Manufacturing our current or future product candidates is complex and we may encounter difficulties in production.

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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.

These modifications, such as any impacting the product formulation, could negatively impact our manufacturing, including by resulting in product loss or failure that requires additional manufacturing runs or a change in manufacturer, either of which could significantly increase the cost of and significantly delay the manufacture of our current or future product candidates.

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We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials.

Legislative proposals are pending that, if enacted, could negatively impact U.S.

funding for certain biotechnology providers having relationships with foreign adversaries or which pose a threat to national security.

The potential downstream adverse impacts on entities having only commercial relationships with any impacted biotechnology providers is unknown but may include supply chain disruptions or delays.

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.

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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.

We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials.

Any such delay could have a material adverse impact on our business, results of operations and prospects.

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Before we can commercialize any of our current and future product candidates, we must obtain marketing approval from the regulatory authorities in the relevant jurisdictions.

We have not received approval to market any of our current product candidates from regulatory authorities in any jurisdiction, and it is possible that none of our current product candidates, nor any product candidates we may seek to develop in the future, will ever obtain regulatory approval.

We have not received approval to market any of our current product candidates from regulatory authorities in any jurisdiction, and

it is possible that none of our current product candidates, nor any product candidates we may seek to develop in the future, will ever obtain regulatory approval.

As a company, we have only limited experience in filing and supporting the applications necessary to gain regulatory approvals and expect to rely on third-party CROs and/or regulatory consultants to assist us in this process.

Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy.

Securing regulatory approval also requires the submission of information about the drug manufacturing process to, and inspection of manufacturing facilities and often clinical sites by, the relevant regulatory authority.

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• the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

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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.

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;

(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 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.

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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.

In the third quarter of 2023, the U.S.

Food and Drug Administration granted Fast Track designation to KT-333 for the treatment of both relapsed/refractory CTCL and relapsed/refractory PTCL.

If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for Fast Track Designation.

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The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

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.

Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

We may seek approval of KT-474, KT-621, KT-294, 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.

We may seek accelerated approval of KT-474, KT-621, KT-294, 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.

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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.

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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.

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 some 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.

The FDA has granted Orphan Drug Designation for KT-333 for the treatment of peripheral T cell lymphoma and cutaneous T cell lymphoma and for KT-253 for the treatment of acute myeloid leukemia.

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.

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In the U.S., Orphan Drug Designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

Similarly, in Europe, the European Commission, upon the recommendation of the EMA’s Committee for Orphan Medicinal Products, grants Orphan Drug Designation to promote the development of drugs that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in Europe and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant benefit to those affected).

Additionally, designation is granted for drugs intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in Europe would be sufficient to justify the necessary investment in developing the drug.

In Europe, Orphan Drug Designation entitles a party to financial incentives such as reduction of fees or fee waivers

Generally, if a product with an Orphan Drug Designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for the same drug for that time period.

Similarly, in the European Union, the European Commission, upon the recommendation of the EMA’s Committee for Orphan Medicinal Products, may grant orphan designation with respect products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in the European Union and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be of significant benefit to those affected by the applicable condition).

Additionally, designation may be granted for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the product in the European Union would be sufficient to justify the necessary investment in developing the product.

In the European Union, orphan designation entitles a party to financial incentives such as reduction of fees or fee waivers.

The applicable period is seven years in the U.S.

and ten years in the European Union.

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.

The exclusivity period in the European Union can be reduced to six years if at the end of the fifth year, it is established that a product no longer meets the criteria for Orphan Designation, including where it is shown that the product 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.

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Congress passed the FDA Reauthorization Act of 2017, or FDARA.

FDARA, among other things, codified the FDA’s pre-existing regulatory interpretation to require that a drug sponsor demonstrate the clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity.

The new legislation reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period regardless of a showing of clinical superiority.

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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.

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.

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• injunctions or the imposition of civil or criminal penalties.

The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current or future product candidates.

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.

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.

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may take longer and be more costly than obtaining approval in the U.S.;

our customers’

ability to obtain reimbursement for our current or future product candidates in foreign markets;

• our customers’ ability to obtain reimbursement for our current or future product candidates in foreign markets;

• the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements;

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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.

Many foreign regulatory authorities have similar approval requirements.

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Among other matters, U.S.

and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, which we collectively refer to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.

and foreign anti-corruption, including the Foreign Corrupt Practices Act (FCPA), anti-money laundering, export control, sanctions, and other trade laws and regulations, which we collectively refer to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.

Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly.

Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

As we increase our activities outside the United States, which may include increased interactions with officials and employees of government agencies or state-owned or -affiliated entities, our risks under these laws may increase.

Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, adverse media coverage, and other consequences.

Any investigations, actions or sanctions could harm our business, results of operations, and financial condition.

We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations.

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In some countries, particularly in the European Union, the pricing of prescription pharmaceuticals is subject to governmental control.

In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a drug.

In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.

To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.

In addition, many countries outside the U.S.

have limited government support programs that provide for reimbursement of drugs such as our product candidates, with an emphasis on private payors for access to commercial products.

have limited government support programs that provide for reimbursement of products such as our product candidates, with an emphasis on private payors for access to commercial products.

If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed.

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Our ability to commercialize any current or future product candidates successfully also will depend in part on the extent to which coverage and reimbursement for these current or future product candidates and related treatments will be available from government authorities, private health insurers and other organizations.

Moreover, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

We cannot be sure that coverage will be available for any product candidate that we commercialize.

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The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate a payor will pay for the product.

One third-party payor’s decision to cover a particular product or service does not ensure that other payors will also provide coverage for the medical product or service.

Third-party payors may limit coverage to specific products on an approved list or formulary, which may not include all FDA-approved products for a particular indication.

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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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The requirements governing product pricing vary widely from country to country.

For example, in the EU pricing and reimbursement of pharmaceutical products are regulated at a national level under the individual EU Member States’

social security systems.

For example, in the EU pricing and reimbursement of pharmaceutical products are regulated at a national level under the individual EU Member States’ social security systems.

Some foreign countries provide options to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and can control the prices of medicinal products for human use.

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pharmaceutical industry.

The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, expands the types of entities eligible for the 340B drug discount program, addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increases rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual fees and taxes on manufacturers of certain branded prescription drugs, and creates a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

and provided incentives to programs that increase the federal government’s comparative effectiveness research.

which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

and provided incentives to programs that increase the federal government’s comparative effectiveness research.

Since its enactment, there have been judicial, administrative, executive and Congressional legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

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Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

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.

In addition, President Biden has issued multiple executive orders that have sought to address the issue of prescription drug costs.

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

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

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 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.

The BBA also amended the ACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.”

On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.

• The Budget Control Act of 2011, among other things, created measures for spending reductions by Congress that included, along with subsequent legislation, aggregate reductions of Medicare payments to providers of up to 2% per fiscal year will remain in effect through 2032 unless additional Congressional action is taken.

• The American Taxpayer Relief Act of 2012 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.

• The American Rescue Plan Act of 2021 eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.

• On May 30, 2018, the Right to Try Act, was signed into law.

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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.

• The Inflation Reduction Act of 2022, or IRA, includes several provisions that may impact our business to varying degrees, including provisions that reduce the annual out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025, thereby effectively eliminating the coverage gap;

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.

If a product receives multiple orphan designations or has multiple approved indications, it may not qualify for the orphan drug exemption.

The implementation of the IRA is currently subject to ongoing litigation that challenges the constitutionality of the IRA’s Medicare drug price negotiation program.

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

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

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Congressional inquiries and has further resulted in 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, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

For example, at the federal level, the prior administration’s budget for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.

On March 10, 2020, the prior administration sent “principles”

for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.

Additionally, the prior administration previously released a “Blueprint”

to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of product candidates paid by consumers.

However, it is unclear whether the Biden administration will challenge, reverse, revoke or otherwise modify these executive and administrative actions.

HHS has solicited feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority.

For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020.

This final rule codified CMS’s policy change that was effective January 1, 2019.

It is unclear how these developments could affect covered hospitals who might purchase our future products and affect the rates we may charge such facilities for our approved products in the future, if any.

On December 20, 2019, former President Trump signed into law the Further Consolidated Appropriations Act (H.R.

1865), which repealed the Cadillac tax, the health insurance provider tax, and the medical device excise tax.

It is impossible to determine whether similar taxes could be instated in the future.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices.

Specifically, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S.

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.

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.

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.

Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and 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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These laws may impact, among other things, the business or financial arrangements and relationships through which we market, sell and distribute any current or future product candidates for which we obtain marketing approval.

Restrictions under applicable federal and state healthcare laws and regulations, include, among others:

the federal Anti-Kickback Statute, which prohibits, among other things, any person or entity from knowingly and willfully soliciting, offering, receiving, providing or paying remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, or arranging for, any item, good, facility, or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid.

The federal Anti-Kickback Statute has been interpreted to apply to arrangements between manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other.

A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Violations can result in significant civil monetary and criminal penalties for each violation, plus up to three times the amount of remuneration, imprisonment, and exclusion from government healthcare programs.

Further, a violation of the federal Anti-Kickback Statute can also form the basis for False Claims Act liability or federal civil monetary penalties;

the federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which prohibits individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual acting as a "whistle blower" in the name of the government permitting the whistleblower to share in any monetary recovery.

Violations of the False Claims Act can result in very significant monetary penalties for each false claim and three times the amount of the government’s damages.

Manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause”

the submission of false or fraudulent claims.

In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes additional criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of, or payment for, healthcare benefits, items or services.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

the federal physician payment transparency laws, including the federal Physician Payment Sunshine Act created under the ACA, which requires manufacturers of certain drugs, devices, biologics and medical supplies, among others, to track and disclose payments under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) and other transfers of value they make to U.S.

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 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.

Failure to disclose required information may result in civil monetary penalties for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual submission;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing regulations, including the final omnibus rule published on January 25, 2013, which imposes, among other things, certain requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,”

defined as independent contractors or agents of covered entities that create, receive, maintain, transmit, or obtain, protected health information in connection with providing a service for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

In addition, there may be additional federal, state and non-U.S.

laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs;

federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

analogous state law equivalents of each of the above U.S.

federal laws, such as state anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients;

state and local marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements;

state laws that require the reporting of information related to drug pricing;

state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information;

state and local laws that require the licensure and/or registration of pharmaceutical sales representatives;

state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government;

and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals.

In addition to the above, on November 20, 2020, the Office of Inspector General, or OIG, finalized further modifications to the federal Anti-Kickback Statute.

Under the final rules, OIG added safe harbor protections under the Anti-Kickback Statute for certain coordinated care and value-based arrangements among clinicians, providers, and others.

The final rule (with some exceptions) became effective January 19, 2021.

We continue to evaluate what effect, if any, these rules will have on our business.

See the section of this report titled “Government Regulation -other Regulatory Matters – Other Healthcare Laws” for additional information.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.

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It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may

apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws.

Further, defending against any such actions can be costly and time consuming, and may require significant financial and personnel resources.

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Payments made to physicians in certain EU Member States must be publicly disclosed.

Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States.

These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the EU Member States.

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We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain workers’

compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

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Other activities subject to these laws include the improper use of information obtained in the course of clinical trials or creating fraudulent data in our preclinical studies or clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation.

We have adopted a code of conduct applicable to all of our employees, but it is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.

these laws or regulations.

Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred.

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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.

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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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, STAT6, TYK2, STAT3 and MDM2 programs.

Many of these indications already have approved standards of care which may include more traditional therapeutic modalities.

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Risks Related to Our Dependence on Third Parties

We rely, and expect to continue to rely, on third parties to conduct preclinical studies and clinical trials for our current and future product candidates.

We rely, and expect to continue to rely, on third parties to conduct our ongoing and planned preclinical studies and clinical trials for our current and future product candidates.

If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain marketing approval for or commercialize our current and potential future product candidates and our business could be substantially harmed.

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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.

We also are required to register certain ongoing clinical trials and provide certain information, including information relating to the trial’s protocol, on a government-sponsored database, ClinicalTrials.gov, within specific timeframes.

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, 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.

Although we designed the Phase 1 trials of KT-474, 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 and timing will be outside of our direct control.

Our reliance on third parties to conduct clinical trials will also result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff.

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For example, in February 2020, one of our vendors for API starting materials based in Wuhan, China ceased its operations for several weeks due to the COVID-19 pandemic, which caused a minor delay in the delivery of API starting materials to a separate vendor who manufactures API.

Legislative proposals are pending that, if enacted, could negatively impact U.S.

funding for certain biotechnology providers having relationships with foreign adversaries or which pose a threat to national security.

The potential downstream adverse impacts on entities having only commercial relationships with any impacted biotechnology providers is unknown but may include supply chain disruptions or delays.

For all of our current or future product candidates, we intend to identify and qualify additional manufacturers to provide such API, drug product and drug substance prior to submission of an NDA to the FDA and/or an MAA to the EMA.

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While we seek to maintain adequate inventory of the drug product and drug substance used in our current or future product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain such API, drug product and drug substance from alternate sources at acceptable prices in a timely manner, could impede, delay, limit or prevent our development efforts, which could harm our business, results of operations, financial condition and prospects.

Our success is dependent on our executive management team’s ability to successfully pursue business development, strategic partnerships and investment opportunities as our company matures.

We may also form or seek strategic alliances or acquisitions or enter into additional collaboration and licensing arrangements in the future, and we may not realize the benefits of such collaborations, alliances, acquisitions or licensing arrangements.

We have entered into collaboration and licensing arrangements with Vertex and Sanofi and may in the future form or seek strategic alliances or acquisitions, create joint ventures, or enter into additional collaboration and licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our current product candidates and any future product candidates that we may develop.

We have entered into a collaboration and licensing arrangement with Sanofi and may in the future form or seek strategic alliances or acquisitions, create joint ventures, or enter into additional collaboration and licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our current product candidates and any future product candidates that we may develop.

Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business.

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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’

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;

• collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property;

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We also cannot be certain that, following a strategic transaction, license, collaboration or other business development partnership, we will achieve the revenue or specific net income that justifies such transaction.

Any delays in entering into new collaborations or strategic partnership agreements related to our current or future product candidates could delay the development and commercialization of our current or future product candidates in certain geographies or for certain indications, which would harm our business prospects, financial condition and results of operations.

Any delays in entering into new collaborations or strategic partnership agreements related to our current or future product candidates could

delay the development and commercialization of our current or future product candidates in certain geographies or for certain indications, which would harm our business prospects, financial condition and results of operations.

As discussed elsewhere in this Annual Report on Form 10-K, our collaboration partner, Sanofi, is conducting a randomized Phase 2 clinical trial evaluating KT-474 in HS and a second randomized Phase 2 trial in AD.

Sanofi will have significant discretion in determining the efforts and resources that it will apply to advance those clinical trials.

As a result of the factors noted above, we may not be able to realize the benefit of our existing collaboration and licensing arrangements or any future strategic partnerships or acquisitions, collaborations or license arrangements we may enter into, which could delay our timelines or otherwise adversely affect our business.

Our manufacturing process needs to comply with FDA regulations relating to the quality and reliability of such processes.

Any failure to comply with relevant regulations could result in delays in or termination of our preclinical and clinical programs and suspension or withdrawal of any regulatory approvals.

In order to commercially produce our products either at our own facility or at a third party’s facility, we will need to comply with the FDA’s cGMP regulations and guidelines.

We may encounter difficulties in achieving quality control and quality assurance and may experience shortages in qualified personnel.

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governing the use, manufacture, storage, handling and disposal of medical and hazardous materials.

Although we believe that our manufacturers’

procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials.

Although we believe that our manufacturers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials.

As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations.

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Our commercial success depends in part on our ability to obtain and maintain patent or other intellectual property protection in the U.S.

and other countries for our current or future product candidates and our core technologies, including our proprietary Pegasus TM platform, our initial IRAK4, IRAKIMiD, STAT3 and MDM2 programs, which are our four most advanced development programs, as well as our proprietary compound library and other know-how.

and other countries for our current or future product candidates and our core technologies, including our proprietary Pegasus TM platform, our initial IRAK4, STAT3 and MDM2 programs, which are our most advanced development programs, as well as our proprietary compound library and other know-how.

We seek to protect our proprietary and intellectual property position by, among other methods, filing patent applications in the U.S.

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We own patent applications and one patent related to our platform E3 ligase ligand technology and our novel bifunctional degrader compounds, including claims to compositions of matter, pharmaceutical compositions, methods of use, methods of treatment, and other related methods.

As of January 20, 2023, our patent portfolio covering novel compounds, and the methods of making and using thereof, included 77 patent families.

As of December 31, 2023, our patent portfolio covering novel compounds, and the methods of making and using thereof, included 101 patent families.

Patent term adjustments, supplementary protection certificate filings, or patent term extensions could result in later expiration dates in various countries, while terminal disclaimers could result in earlier expiration dates in the U.S.

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If we fail to comply with our obligations in our current or any future agreements under which we may license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

We are dependent on patents, know-how and proprietary technology, both our own and in-licensed from Vertex, Sanofi and other collaborators.

Our commercial success depends upon our ability to develop, manufacture, market and sell our current or future product candidates and use our and our licensors’

proprietary technologies without infringing the proprietary rights of third parties.

Vertex, Sanofi and other collaborators may have the right to terminate their respective license agreements in full in the event that we materially breach or default in the performance of any of the obligations under such license agreements.

We are dependent on patents, know-how and proprietary technology, both our own and in-licensed from Sanofi and other collaborators.

Our commercial success depends upon our ability to develop, manufacture, market and sell our current or future product candidates and use our and our licensors’ proprietary technologies without infringing the proprietary rights of third parties.

Sanofi and other collaborators may have the right to terminate their respective license agreements in full in the event that we materially breach or default in the performance of any of the obligations under such license agreements.

Any termination of these licenses, or if the underlying patents fail to provide the intended exclusivity, could result in the loss of significant rights and could harm our ability to commercialize our current or future product candidates, the Pegasus TM platform, or other technologies, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to ours, and we may be required to cease our development and commercialization of certain of our current or future product candidates.

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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 and October 2022, respectively, the USPTO issued preliminary office action refusals against our applications to register E3 LIGASE WHOLE BODY ATLAS and E3 HUMAN ATLAS and our K & Design logo mark.

While E3 LIGASE WHOLE BODY ATLAS and E3 HUMAN ATLAS have since been published and notices of allowance issued, we do not yet know whether the USPTO will issue a subsequent office action against our application for our logo mark, 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 are now registered or 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 as our intellectual

Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Risks Related to Intellectual Property Litigation and Infringement Claims

We may initiate, become a defendant in, or otherwise become party to lawsuits to protect or enforce our intellectual property rights, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe any intellectual property we may own or in-license, including our patents and trademarks.

In addition, any intellectual property we may own or in-license also may become the subject of a dispute, including those based on inventorship, priority, validity or unenforceability.

To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.

We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.

In addition, in an infringement proceeding, a court may decide that any intellectual property we may own or in-license is not valid or is unenforceable or that the other party’s use of our technology that may be patented falls under the safe harbor to patent infringement under 35 U.S.C.

There is also the risk that, even if the validity of these patents is upheld, the court may refuse to stop the other party from using the technology at issue on the grounds that any patents we may own or in-license do not cover the technology in question or that such third party’s activities do not infringe our patent applications or any patents we may own or in-license.

An adverse result in any litigation or defense proceedings could put one or more of any patents or other intellectual property we may own or in-license at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our own applications at risk of not issuing.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, patient support or distribution activities.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

Post-grant proceedings provoked by third parties or brought by the USPTO may be necessary to determine the validity or priority of inventions with respect to our patent applications or any patents we may own or in-license.

These proceedings are expensive and an unfavorable outcome could result in a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party.

Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms.

In addition to potential USPTO post-grant proceedings, we may become a party to patent opposition proceedings in the EPO, or similar proceedings in other foreign patent offices or courts where our patents may be challenged.

The costs of these proceedings could be substantial, and may result in a loss of scope of some claims or a loss of the entire patent.

An unfavorable result in a post-grant challenge proceeding may result in the loss of our right to exclude others from practicing one or more of our inventions in the relevant country or jurisdiction, which could have a material adverse effect on our business.

Litigation or post-grant proceedings within patent offices may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees.

We may not be able to prevent misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the U.S.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.

If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

We may not be able to detect infringement against any intellectual property we may own or in-license.

Even if we detect infringement by a third party of any intellectual property we may own or in-license, we may choose not to pursue litigation against or settlement with the third party.

If we later sue such third party for infringement, the third party may have certain legal defenses available to it, which otherwise would not be available except for the delay between when the infringement was first detected and when the suit was brought.

Such legal defenses may make it impossible for us to enforce any patents or other intellectual property we may own or in-license against such third party.

Intellectual property litigation and administrative office challenges in one or more countries could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.

In August 2021, we initiated a US patent office

proceeding, a post-grant review, to challenge a third-party patent unrelated to our current product candidates.

In response, the owner of the challenged third-party patent disclaimed that patent in full.

We may challenge additional third-party patents in the future.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

As noted above, some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our preclinical studies and future clinical trials, continue our research programs, license necessary technology from third parties, or enter into development collaborations that would help us commercialize our current or future product candidates, if approved.

Any of the foregoing events would harm our business, financial condition, results of operations and prospects.

We may be subject to damages or settlement costs resulting from claims that we or our employees hav

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What changed 10-K

Item 1. Business