What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-06 · 156 added, 124 removed, 439 unchanged (39% of the section changed)

32 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized as of March 31, 2021 and December 31, 2020;

0 shares issued or outstanding as of March 31, 2021 and December 31, 2020

10,000,000 shares authorized as of June 30, 2021 and December 31, 2020;

0 shares issued or outstanding as of June 30, 2021 and December 31, 2020

Common stock, $ 0.0001 par value;

150,000,000 shares authorized at March 31, 2021 and December 31, 2020, 44,971,052 and 44,592,288 shares issued at March 31, 2021 and December 31, 2020, respectively;

44,879,376 and 44,482,186 shares outstanding at March 31, 2021 and December 31, 2020, respectively

150,000,000 shares authorized at June 30, 2021 and December 31, 2020, 45,401,203 and 44,592,288 shares issued at June 30, 2021 and December 31, 2020, respectively;

45,327,681 and 44,482,186 shares outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31, 2021 and 2020

Three and Six Months Ended June 30, 2021 and 2020

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

Three Months Ended

Six Months Ended

Collaboration Revenue—from related parties

9 unchanged sentences

Other comprehensive loss:

Unrealized gain on marketable securities

Unrealized gain (loss) on marketable securities

Total comprehensive loss

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

For the three months ended March 31, 2021

For the three months ended June 30, 2020 and 2021

(In thousands, except for share amounts)

Preferred Stock

Comprehensive

Stockholders’

Balance at December 31, 2020

Balance at March 31, 2020

Vesting of Series A Preferred

Stock in connection with

collaboration arrangement

Issuance of Series B Preferred Stock,

net of issuance costs of $ 0

Issuance of Series C Preferred Stock,

net of issuance costs of $ 320

Exchange of Series A Convertible

Preferred Stock for Series C

Preferred Convertible Preferred Stock

Exercise of stock options

2 unchanged sentences

Unrealized gain on marketable securities

Balance as of June 30, 2020

Balance at March 31, 2021

Exercise of stock options

Vesting restricted stock

Issuance of shares under employee stock

purchase plan

Stock-based compensation expense

Unrealized gain on marketable securities

Balance at June 30, 2021

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (continued)

For the three months ended March 31, 2020

For the six months ended June 30, 2020 and 2021

(In thousands, except for share amounts)

10 unchanged sentences

collaboration arrangement

Issuance of Series B Preferred Stock, net of issuance costs of $0

Issuance of Series C Preferred Stock,

Issuance of Series B

Preferred Stock,

net of issuance costs of $ 0

Exchange of Series A Convertible Preferred Stock for Series C Preferred Convertible Preferred Stock

Issuance of Series C

Preferred Stock,

net of issuance costs of $ 320

Exchange of Series A Convertible

Preferred Stock for Series C

Preferred Convertible

Preferred Stock

Exercise of stock options

Vesting restricted stock

Stock-based compensation

Unrealized loss on marketable

Balance at June 30, 2020

Balance at December 31, 2020

Exercise of stock options

Vesting restricted stock

Issuance of shares under employee

stock purchase plan

Stock-based compensation

Unrealized gain on marketable

Balance at March 31, 2020

Balance at June 30, 2021

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2021 and 2020

For the six months ended June 30, 2021 and 2020

(In thousands)

Three Months Ended

Six Months Ended

Operating activities

13 unchanged sentences

Operating lease liabilities

Other liabilities

Other assets and liabilities

Net cash used in operating activities

8 unchanged sentences

Proceeds from stock option exercises

Proceeds from employee stock purchase plan

Payments of offering costs in connection with initial public offering

7 unchanged sentences

Supplemental disclosure of noncash investing and financing activities

Offering costs included in accrued liabilities

Property and equipment purchases included in accounts payable and accrued expenses

Purchase of property and equipment through finance lease

Offering costs included in accrued expenses

Supplemental disclosure of noncash operating activities

Tenant improvements included in other assets

Reduction of right-of-use asset and liability due to lease modification

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of each of the periods shown above:

12 unchanged sentences

Principal among these risks are the uncertainties of the product discovery and development process, dependence on key individuals, development of the same or similar technological innovations by the Company’s competitors, protection of proprietary technology, compliance with government regulations and approval requirements, the Company’s ability to access capital and uncertainty of market acceptance of products.

The Company has historical net losses and anticipates that it will continue to incur losses for the foreseeable future and had an accumulated deficit of $141.8 million as of March 31, 2021.

The Company has funded these losses principally through issuance of common stock, including its initial public offering (“IPO”), which was completed in August 2020, preferred stock, convertible notes and from cash proceeds received in connection with the Company’s collaboration agreements with Vertex Pharmaceuticals Incorporated (“Vertex”) and Genzyme Corporation (“Sanofi”) (see Note 5).

The Company has historical net losses and anticipates that it will continue to incur losses for the foreseeable future and had an accumulated deficit of $ 166.5 million as of June 30, 2021.

The Company has funded these losses principally through issuance of common stock, including its follow-on offering and concurrent private placement completed in July 2021, initial public offering (“IPO”), which was completed in August 2020, preferred stock, convertible notes and from cash proceeds received in connection with the Company’s collaboration agreements with Vertex Pharmaceuticals Incorporated (“Vertex”) and Genzyme Corporation (“Sanofi”) (see Note 5).

The Company expects to continue to incur operating losses and negative cash flows until such time as it generates a level of revenue that is sufficient to support its cost structure.

As of March 31, 2021, the Company had cash, cash equivalents and marketable securities of $435.2 million.

The Company believes these cash, cash equivalents and marketable securities will be sufficient to fund its operations and capital expenditure requirements through at least twelve months from the issuance of these condensed consolidated financial statements.

As of June 30, 2021, the Company had cash, cash equivalents and marketable securities of $ 404.4 million.

The Company believes these cash, cash equivalents and marketable securities together with the net proceeds from the sale of its common stock in a public offering on July 6, 2021 of $ 243.1 million will be sufficient to fund its operations and capital expenditure requirements through at least twelve months from the issuance of these condensed consolidated financial statements.

The Company expects to finance the future research and development costs of its product portfolio with its existing cash, cash equivalents and marketable securities, or through strategic financing opportunities that could include, but are not limited to future offerings of its equity, collaboration agreements, or the incurrence of debt.

9 unchanged sentences

Summary of Significant Accounting Policies

The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note, and elsewhere in the accompanying condensed consolidated financial statements and notes.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note, and elsewhere in the accompanying condensed consolidated financial statements and notes.

Principles of Consolidation

5 unchanged sentences

Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 11, 2021.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments necessary, all of which were normal and recurring, for the fair statement of the Company’s financial position as of March 31, 2021, and the results of operations and cash flows for the three months ended March 31, 2021 and 2020.

The results for the three months ended March 31, 2021 are not necessarily indicative of the results for the year ended December 31, 2021 or for any future period.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments necessary, all of which were normal and recurring, for the fair statement of the Company’s financial position as of June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020.

The results for the six months ended June 30, 2021 are not necessarily indicative of the results for the year ended December 31, 2021 or for any future period.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2020 Annual Report on Form 10-K.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended June 30, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2020 Annual Report on Form 10-K.

Recent Accounting Pronouncements

11 unchanged sentences

As an emerging growth company, the Company expects to delay adoption until January 1, 2023 and is evaluating the impact that the adoption of ASU 2016-13 will have on its condensed consolidated financial statements.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value Measurements

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2021 and December 31, 2020 (in thousands):

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of June 30, 2021 and December 31, 2020 (in thousands):

Fair Value Measurements at

March 31, 2021:

June 30, 2021:

Cash equivalents

19 unchanged sentences

Restricted cash

During the three months ended March 31, 2021 and the year ended December 31, 2020, there were no transfers between Level 1, Level 2 and Level 3.

During the six months ended June 30, 2021 and the year ended December 31, 2020, there were no transfers between Level 1, Level 2 and Level 3.

Marketable Securities

The following table summarizes the available-for-sale debt securities held at March 31, 2021 and December 31, 2020 and (in thousands):

March 31, 2021

The following table summarizes the available-for-sale debt securities held at June 30, 2021 and December 31, 2020 and (in thousands):

June 30, 2021

treasury securities

Corporate securities

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

1 unchanged sentence

Corporate securities

As of March 31, 2021, the Company held 32 securities that had been in an unrealized loss position for less than 12 months with an aggregate fair value of $137.7 million.

As of June 30, 2021, the Company held 28 securities that had been in an unrealized loss position for less than 12 months with an aggregate fair value of $ 91.0 million.

As of December 31, 2020, the Company held 65 securities that had been in an unrealized loss position for less than 12 months with an aggregate fair value of $ 392.2 million.

As of March 31, 2021, the Company had 47 securities with a fair value of $280.4 million with a contractual maturity of less than 12 months and 15 securities with a fair value of $101.6 million with a contractual maturity of greater than 12 months.

As of June 30, 2021, the Company had 43 securities with a fair value of $ 274.2 million with a contractual maturity of less than 12 months and 12 securities with a fair value of $ 45.3 million with a contractual maturity of greater than 12 months.

As of December 31, 2020, the Company had 48 securities with a fair value of $ 295.6 million with a contractual maturity of less than 12 months and 25 securities with a fair value of $ 162.5 million with a contractual maturity of greater than 12 months.

There were no sales of marketable securities during the three months ending March 31, 2021 and 2020.

The Company evaluates securities for other-than-temporary impairments based on quantitative and qualitative factors, and considered the decline in market value for the 32 securities in an unrealized loss position as of March 31, 2021 , to be primarily attributable to the then current economic and market conditions.

There were no sales of marketable securities during the three and six months ending June 30, 2021 and 2020.

The Company evaluates securities for other-than-temporary impairments based on quantitative and qualitative factors, and considered the decline in market value for the 28 securities in an unrealized loss position as of June 30, 2021 to be primarily attributable to the then current economic and market conditions.

The Company neither intends to sell these investments nor concludes that it is more-likely-than-not that the Company will have to sell them before recovery of their carrying values.

13 unchanged sentences

The Company 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 the Company 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.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In addition, Sanofi may terminate the Sanofi Agreement for convenience or for a material safety event upon advance prior written notice, and the Company may terminate the Sanofi 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.

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

The Company will also be reimbursed for certain research activities for a certain backup degrader under the IRAK4 program, unless certain criteria are not met for an initial IRAK4 degrader.

The Company will also be reimbursed for certain research activities for a certain backup degrader under the

IRAK4 program, unless certain criteria are not met for an initial IRAK4 degrader.

In addition to the upfront payment and the reimbursements , the Company is 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.

The Company will be eligible to receive certain commercial milestone payments up to $ 700 .0 million in the aggregate, of which $ 40 0.

0 million relate to the IRAK4 program, which are payable upon the achievement of certain net sales thresholds.

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

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

22 unchanged sentences

The Company determined the allocation of the $ 150.0 million transaction price between Collaboration Target 1 and Collaboration Target 2 based on the value of the research and development for the programs from projected research and development costs for each collaboration target plus a developer’s profit and the total potential milestones for each collaboration target.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company recognizes revenue associated with each performance obligation as the research and development services are provided using an input method, according to costs incurred as related to the research and development activities for each individual program and the costs expected to be incurred in the future to satisfy that individual performance obligation.

2 unchanged sentences

Reimbursement consideration added to the transaction price will be recognized as revenue on the same pattern as Collaboration Target 1, with a cumulative catch-up upon becoming unconstrained.

The performance obligation has not been fully satisfied as of March 31, 2021 .

In the thre e months ended March 31, 2021 , the Company recognized $ 1 1.6 million in revenue under the Sanofi Agreement, of which $ 9.5 million was associated with Collaboration Target 1 and $ 2.1 million was associated with Collaboration Target 2.

The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligations and recorded in deferred revenue at March 31, 2021 and December 3 1 , 2020 is $ 1 22.0 million and $ 132.6 million, respectively .

During the three months ended March 31, 2021, the Company received $ 0.6 million in cost reimbursement payments .

N o milestone or royalty payments have been received under the Sanofi Agreement.

As of March 31, 2021, the Company recorded unbilled accounts receivable of $ 0.9 million related to reimbursable research and development costs under the Sanofi Agreement for activities performed during the first quarter of 2021.

As of March 31, 2021, the Company recorded $ 0.9 million in accounts receivable for amounts billed under the Sanofi Agreement .

The Company will recognize the deferred revenue related to the research and development services based on a cost input method, as described, over the remaining research term , which is a maximum of three years as of March 31, 2021 .

The performance obligation has not been fully satisfied as of June 30, 2021.

In the three months ended June 30, 2021, the Company recognized $ 14.4 million in revenue under the Sanofi Agreement, of which $ 12.0 million was associated with Collaboration Target 1 and $ 2.4 million was associated with Collaboration Target 2.

In the six months ended June 30, 2021, the Company recognized $ 26.0 million in revenue under the Sanofi Agreement, of which $ 21.5 million was associated with Collaboration Target 1 and $ 4.5 million was associated with Collaboration Target 2.

The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligations and recorded in deferred revenue at June 30, 2021 and December 31, 2020 is $ 108.4 million and $ 132.6 million, respectively.

During the six months ended June 30, 2021, the Company received $ 1.7 million in cost reimbursement payments.

No milestone or royalty payments have been received under the Sanofi Agreement.

As of June 30, 2021, the Company recorded unbilled accounts receivable of $ 0.9 million related to reimbursable research and development costs under the Sanofi Agreement for activities performed during the second quarter of 2021.

As of June 30, 2021, the Company did no t have any research and development costs under the Sanofi Agreement for activities performed during the second quarter of 2021 in accounts receivable.

The Company will recognize the deferred revenue related to the research and development services based on a cost input method, as described, over the remaining research term, which is a maximum of 2.7 years as of June 30, 2021.

Any consideration related to performance based milestones will be recognized when the risk of probable reversal is resolved, at which point the Company shall adjust the transaction price determined for the agreement accordingly and recognize revenue on a cumulative-catch up basis, reallocating the revised arrangement consideration to the performance obligations.

16 unchanged sentences

Vertex also has the ability to terminate for convenience with prior written notice to the Company, and either party may terminate for an uncured material breach.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accounting Treatment

15 unchanged sentences

The amounts received that have not yet been recognized as revenue are deferred as a contract liability on the Company’s consolidated balance sheet and will be recognized over the remaining research and development period until the performance obligation is satisfied.

The performance obligation has not been fully satisfied as of March 31, 2021.

During the three months ended March 31, 2021 and 2020, the Company recognized $7.1 million and $3.4 million in revenue under the Vertex Agreement.

All $7.1 million revenue recognized in the three months ended March 31, 2021 was recognized from amounts that were recorded in deferred revenue as of December 31, 2020.

The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligation and recorded in deferred revenue at March 31, 2021 and December 31, 2020 is $30.6 million and $37.7 million, respectively.

The Company will recognize the deferred revenue related to the research and development services based on a cost input method, over the remaining research term, which is a maximum of 1.6 years as of March 31, 2021.

The performance obligation has not been fully satisfied as June 30, 2021.

During the three months ended June 30, 2021 and 2020, the Company recognized $ 4.1 million and $ 3.3 million, respectively, under the Vertex Agreement.

During the six months ended June 30, 2021 and 2020, the Company recognized $ 11.2 million and $ 6.7 million respectively, in revenue under the Vertex Agreement.

All $ 11.2 million revenue recognized in the six months ended June 30, 2021 was recognized from amounts that were recorded in deferred revenue as of December 31, 2020.

The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligation and recorded in deferred revenue at June 30, 2021 and December 31, 2020 is $ 26.5 million and $ 37.7 million, respectively.

Any consideration related to sales milestone payments (including royalties) will be recognized when the related milestone events or sales occur and therefore is recognized at the later of when the related sales occur or the relevant performance obligation is satisfied.

7 unchanged sentences

These shares vested in equal installments over three years and the Company recorded expense over the vesting period based on the fair value of the shares under the Collaboration.

The Company recorded $0.1 million to research and development expense related to the vesting of 55,394 shares of Series A Preferred Stock for the three months ended March 31, 2020.

The Company recorded $ 0.2 million to research and development expense related to the vesting of 110,788 shares of Series A Preferred Stock for the six months ended June 30, 2020.

As of December 31, 2020, all shares under the Collaboration were fully vested and all expenses had been recognized.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The royalty payments are contingent and as such are not being recorded until incurred.

The Company determined that the license is representative of an in-process research and development asset, with no future alternative use.

As such, the Company records the expense related to the vesting of shares of Series A Preferred Stock as research and development expense in the Company’s consolidated statements of operations and comprehensive loss.

As such, the Company recorded the expense related to the vesting of shares of Series A Preferred Stock as research and development expense in the Company’s condensed consolidated statements of operations and comprehensive loss.

The Collaboration can be terminated by either party for convenience with 60 -days written notice and may also be terminated in the event of a material breach.

The following table presents the changes in accounts receivable, contract assets and liabilities for the three months ended March 31, 2021 (in thousands):

The following table presents the changes in accounts receivable, contract assets and liabilities for the six months ended June 30, 2021 (in thousands):

Balance at December 31, 2020

Balance at March 31, 2021

Balance at June 30, 2021

Accounts receivable and contract assets:

7 unchanged sentences

Property and Equipment

Property and equipment consists of the following as of March 31, 2021 and December 31, 2020 (in thousands):

Lab and office equipment under finance

right-of-use asset

Property and equipment consists of the following as of June 30, 2021 and December 31, 2020 (in thousands):

Lab and office equipment under finance right-of-use asset

Lab equipment

6 unchanged sentences

Property and equipment, net

Depreciation expense for the three months ended March 31, 2021 and 2020 was $0.5 million and $0.4 million, respectively.

Included in property and equipment is lab and office equipment right-of-use assets under finance leases with a cost basis of $2.8 million as of March 31, 2021 and December 31, 2020 and accumulated amortization expense of $1.4 million and $1.2 million, respectively.

Amortization expense related to right-of-use assets was $0.2 million during both the three months ended March 31, 2021 and 2020.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Depreciation expense for the three months ended June 30, 2021 and 2020 was $ 0.6 million and $ 0.4 million, respectively.

Depreciation expense for the six months ended June 30, 2021 and 2020 was $ 1.0 million and $ 0.8 million, respectively

Included in property and equipment is lab and office equipment right-of-use assets under finance leases with a cost basis of $ 4.0 million and $ 2.8 million as of June 30, 2021 and December 31, 2020, respectively and accumulated amortization expense of $ 1.5 million and $ 1.2 million, respectively.

Amortization expense related to right-of-use assets during both the three months ended June 30, 2021 and 2020 was $ 0.2 million.

Amortization expense related to right-of-use assets during both the six months ended June 30, 2021 and 2020 was $ 0.4 million.

In February 2018, the Company entered into a noncancelable facility lease agreement (the “Lease”) for 9,836 square feet of research and development and office space in Cambridge, Massachusetts.

9 unchanged sentences

The New Lease has an option to be extended for an additional five years .

The lease is not reasonably certain to be extended and as such the additional term is not included in the measurement of the lease.

The New Lease is not reasonably certain to be extended and as such the additional term is not included in the measurement of the lease.

The New Lease includes a rent escalation clause, and rent expense is being recorded on a straight-line basis.

1 unchanged sentence

The full allowance amount had been collected from the landlord as of December 31, 2020.

In accordance with the New Lease, the Company is required to maintain a security deposit and provided a letter of credit to the landlord for $1.6 million, which is classified as restricted cash on the condensed consolidated balance sheets as of March 31, 2021.

In accordance with the New Lease, the Company is required to maintain a security deposit and provided a letter of credit to the landlord for $ 1.6 million, which is classified as restricted cash on the condensed consolidated balance sheets as of June 30, 2021.

The Company’s finance lease obligations consist of certain property and equipment financed through capital leases.

The components of the lease costs for the three months ended March 31, 2021 and 2020, were as follows (in thousands):

The components of the lease costs for the three and six months ended June 30, 2021 and 2020, were as follows (in thousands):

Three Months Ended

Six Months Ended

Operating lease costs

4 unchanged sentences

Total lease costs

Supplemental cash flow information relating to the Company’s leases for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

Three Months Ended

Supplemental cash flow information relating to the Company’s leases for the six months ended June 30, 2021 and 2020 was as follows (in thousands):

Six Months Ended

Cash paid for amounts included in the measurement

4 unchanged sentences

Financing cash flows used in finance leases

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Weighted average remaining lease terms and discount rates as of March 31, 2021 and 2020 were as follows:

Three Months Ended

Weighted average remaining lease terms and discount rates as of June 30, 2021 and 2020 were as follows:

Six Months Ended

Remaining lease term:

4 unchanged sentences

Finance lease

The undiscounted future lease payments for operating and finance leases as of March 31, 2021, were as follows (in thousands):

2021 (excluding the first quarter)

The undiscounted future lease payments for operating and finance leases as of June 30, 2021, were as follows (in thousands):

2021 (excluding the first and second quarter)

Total minimum lease payments

2 unchanged sentences

Accrued Expenses

Accrued expenses consist of the following as of March 31, 2021 and December 31, 2020 (in thousands):

Accrued expenses consist of the following as of June 30, 2021 and December 31, 2020 (in thousands):

Research and development expenses

13 unchanged sentences

The Company enters into standard indemnification agreements in the ordinary course of business.

Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

connection with any U.S.

patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited.

The Company is not aware of any claims under indemnification arrangements, and it has no t accrued any liabilities related to such obligations as of March 31, 2021 or December 31, 20 20 .

The maximum potential amount of future payments the Company could be required to make under these

indemnification agreements is unlimited.

The Company is not aware of any claims under indemnification arrangements, and it has no t accrued any liabilities related to such obligations as of June 3 0 , 2021 or December 31, 20 20 .

Convertible Preferred Stock

5 unchanged sentences

The fair value of the shares of Series C Preferred Stock issued exceeded the carrying value of the shares of Series A Preferred Stock exchanged by $ 9.1 million, which was recognized as a deemed dividend through a reduction of $ 2.3 million to additional paid-in capital and an increase of $ 6.7 million to the accumulated deficit.

The $9.1 million deemed dividend increased the net loss for the three months ended March 31, 2020 to arrive at net loss attributable to common stockholders in the calculation of earnings per share.

The $ 9.1 million deemed dividend increased the net loss for the six months ended June 30, 2020 to arrive at net loss attributable to common stockholders in the calculation of earnings per share.

Immediately prior to the IPO, the Company’s Articles of Association (the “Articles”), as further amended and restated (the “2018 Amended Articles”), authorized a total of 52,483,788 shares of convertible preferred stock with a par value of $ 0.0001 per share, of which 3,000,000 shares have been designated as Series Seed Convertible Preferred Stock, 14,886,305 shares have been designated as Series A Preferred Stock, 16,009,845 shares have been designated as Series B Preferred Stock (the “Series B Preferred Stock”), 3,059,695 shares have been designated as Series B-1 Preferred Stock and 15,527,943 shares have been designated as Series C Preferred Stock.

14 unchanged sentences

These limits are subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization.

As of March 31, 2021, there were an aggregate of 3,563,845 shares remaining available for future grants.

As of June 30, 2021, there were an aggregate of 3,150,858 shares remaining available for future grants.

2020 Employee Stock Purchase Plan

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In August 2020, the Company and its stockholders approved the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which became effective August 20, 2020.

3 unchanged sentences

Stock Options

A summary of stock option activity under the 2020 Stock Option and Grant Plan during the three months ended March 31, 2021 is as follows (in thousands except share and per share data):

A summary of stock option activity under the 2020 Plan during the six months ended June 30, 2021 is as follows (in thousands except share and per share data):

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Exercisable at March 31, 2021

The i ntrinsic value of stock options exercised during the three months ended March 31, 2021 was $19.9 million.

No options were exercised during the three months ended March 31, 2020.

The weighted-average fair value of options granted during the three months ended March 31, 2021 and 2020 was $29.25 and $3.57, respectively.

As of March 31, 2021, the total unrecognized stock-based compensation expense for unvested stock options was $62.8 million, which is expected to be recognized over 3.0 years.

The following table outlines our equity-based compensation expense for stock options for the three months ended March 31, 2021 and 2020:

Outstanding at June 30.

Exercisable at June 30, 2021

The i ntrinsic value of stock options exercised during the three months ended June 30, 2021 and 2020 was $ 17.1 million and $ 0.0 million, respectively.

The i ntrinsic value of stock options exercised during the six months ended June 30, 2021 and 2020 was $ 37.1 million and $ 0.1 million, respectively.

The weighted-average fair value of options granted during the three months ended June 30, 2021 and 2020 was $ 26.99 and $ 3.32 , respectively.

The weighted-average fair value of options granted during the six months ended June 30, 2021 and 2020 was $ 28.66 and $ 3.62 , respectively.

As of June 30, 2021, the total unrecognized stock-based compensation expense for unvested stock options was $ 69.7 million, which is expected to be recognized over 2.8 years.

The following table outlines our equity-based compensation expense for stock options for the three and six months ended June 30, 2021 and 2020:

Three Months Ended

Six Months Ended June 30,

Research and development

1 unchanged sentence

Total equity-based compensation

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The weighted-average assumptions that the Company used in the Black-Scholes option pricing model to determine the grant date fair value of stock options granted to employees and non-employees for the three months ended March 31, 2021 and 2020 were as follows:

The weighted-average assumptions that the Company used in the Black-Scholes option pricing model to determine the grant date fair value of stock options granted to employees and non-employees for the three and six months ended June 30, 2021 and 2020 were as follows:

Three Months Ended

Six Months Ended

Expected term (in years)

3 unchanged sentences

The Company has granted shares of restricted common stock with service-based and performance-based vesting conditions.

A summary of restricted stock activity under the 2018 Plan during the three months ended March 31, 2021 is as follows:

A summary of restricted stock activity under the 2018 Plan during the six months ended June 30, 2021 is as follows:

Unvested at December 31, 2020

Unvested at March 31, 2021

No restricted stock awards were granted during the three months ended March 31, 2021 and 2020.

As of March 31, 2021, the total unrecognized stock-based compensation expense for unvested restricted stock was $0.2 million, which is expected to be recognized over 1.3 years.

During both the three months ended March 31, 2021 and 2020, the Company recognized equity-based compensation expense of approximately $0.1 million for restricted stock of which $0.1 million and an immaterial amount were included in research and development and general and administrative expense, respectively.

Unvested at June 30, 2021

No restricted stock awards were granted during the three or six months ended June 30, 2021 and 2020.

As of June 30, 2021, the total unrecognized stock-based compensation expense for unvested restricted stock was $ 0.2 million, which is expected to be recognized over one year .

During the three months ended June 30, 2021 and 2020, the Company recognized an immaterial amount of equity-based compensation expense for restricted stock.

During both the six months ended June 30, 2021 and 2020, the Company recognized approximately $ 0.1 million for restricted stock of which approximately $ 0.1 million and an immaterial amount were included in research and development and general and administrative expense, respectively.

Equity-Based Compensation Expense

Total equity-based compensation expense recorded as research and development and general and administrative expenses for employees, directors, and non-employees during the three months ended March 31, 2021 and 2020 is as follows (in thousands):

Total equity-based compensation expense recorded as research and development and general and administrative expenses for employees, directors, and non-employees during the three and six months ended June 30, 2021 and 2020 is as follows (in thousands):

Three Months Ended

Six Months Ended

Research and development

3 unchanged sentences

In addition to the collaborations discussed in Note 5, the Company had the following related party transactions for the period presented in the accompanying condensed consolidated financial statements, which have not otherwise been discussed in these notes to the condensed consolidated financial statements.

The Company made payments of $0.4 million to an investor for rent expenses during the three months ended March 31, 2020.

No such payments were made during the three months ended March 31, 2021.

Income taxes for the three months ended March 31, 2021 and 2020 have been calculated based on an estimated annual effective tax rate and certain discrete items.

For the three months ended March 31, 2021 and 2020, no income tax was recorded.

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company made payments of $ 0.4 million to an investor for rent expenses during the six months ended June 30, 2020.

No such payments were made during the three or six months ended June 30, 2021.

Income taxes for the three and six months ended June 30, 2021 and 2020 have been calculated based on an estimated annual effective tax rate and certain discrete items.

For the three and six months ended June 30, 2021 and 2020, no income tax was recorded.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic.

7 unchanged sentences

Three Months Ended

Six Months Ended

Deemed dividend from exchange of convertible preferred

4 unchanged sentences

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following from the computation of diluted net loss per share attributable to common stockholders at March 31, 2021 and 2020 because including them would have had an anti-dilutive effect:

Three Months Ended

The Company excluded the following from the computation of diluted net loss per share attributable to common stockholders at June 30, 2021 and 2020 because including them would have had an anti-dilutive effect:

Six Months Ended

Convertible preferred stock

1 unchanged sentence

Options to purchase common stock

Subsequent Events

In July 2021, the Company completed a follow-on offering and issued and sold 5,468,250 shares of common stock, including full exercise of the underwriters’ over-allotment option to purchase an additional 713,250 shares, at a public offering price of $ 47.00 per share.

The aggregate gross proceeds before deducting underwriting discounts and commissions, and other estimated offering expenses payable by the Company were approximately $ 257.0 million.

Concurrent with the follow-on offering, the Company issued and sold 49,928 shares of common stock at $ 47.00 per share in a private placement to Vertex and the aggregate proceeds were $ 2.3 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements