What changed in this filing

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Item 1A. Risk Factors

2021-08-06 compared with 2021-05-06 · 35 added, 32 removed, 1250 unchanged (5% of the section changed)

19 unchanged sentences

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 IPO.

From our inception through March 31, 2021, we raised an aggregate of $617.8 million of gross proceeds from such transactions and through our collaborations with Genzyme Corporation, or Sanofi and Vertex Pharmaceuticals Incorporated, or Vertex.

As of March 31, 2021, our cash and cash equivalents and investments were $435.2 million.

We have incurred net losses in each year since our inception, and we had an accumulated deficit of $141.8 million as of March 31, 2021.

For the years ended December 31, 2020 and 2019, we reported net losses of $45.6 million and $41.2 million, respectively, and $13.1 million and $10.9 million for the three months ended March 31, 2021 and 2020, respectively.

From our inception through June 30, 2021, we raised an aggregate of $617.8 million of gross proceeds from such transactions and through our collaborations with Genzyme Corporation, or Sanofi and Vertex Pharmaceuticals Incorporated, or Vertex.

As of June 30, 2021, our cash and cash equivalents and investments were $404.4 million.

We have incurred net losses in each year since our inception, and we had an accumulated deficit of $166.5 million as of June 30, 2021.

For the years ended December 31, 2020 and 2019, we reported net losses of $45.6 million and $41.2 million, respectively, and $24.7 million, $14.0 million and $37.7 million and $24.9 million for the three and six months ended June 30, 2021 and 2020, 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.

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If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, scale back or discontinue the development and commercialization of one or more of our product candidates, and may be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

As of March 31, 2021, we had approximately $435.2 million of cash and cash equivalents and investments.

On August 25, 2020, we completed an IPO of our common stock by issuing 9,987,520 shares of our common stock, including the exercise in full by the underwriters of their option to purchase up to 1,302,720 additional shares of common stock, at a public offering price of $20.00 per share.

As of June 30, 2021, we had approximately $404.4 million of cash and cash equivalents and investments.

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

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

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

The concurrent private placement also closed on August 25, 2020.

We expect that the approximately $435.2 million of cash and cash equivalents and investments at March 31, 2021 will be sufficient to fund our operations into 2025.

The concurrent private placement also closed in August 2020.

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

We expect that the approximately $404.4 million of cash and cash equivalents and investments at June 30, 2021 plus the $243.1 million in proceeds raised in July 2021 will be sufficient to fund our operations into 2025.

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

30 unchanged sentences

We intend to take advantage of these extended transition periods, but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses.

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

Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to

substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

The rules and regulations applicable to public companies substantially increase our legal and financial compliance costs and make some activities more time-consuming and costly.

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

the results of the single ascending dose, or SAD, portion of the Phase 1 trial of KT-474 in healthy volunteers;

our plans to initiate enrollment of the multiple ascending dose, or MAD, portion of the Phase 1 trial of KT-474, which is currently on partial clinical hold pending FDA review and clearance of interim data from the SAD portion of the trial, in healthy volunteers in the second half of 2021;

the results of the single ascending dose, or SAD, or multiple ascending dose, or MAD, portions of the Phase 1 trial of KT-474 in healthy volunteers;

submitting INDs to the FDA for KT-413, KT-333 and other current or future product candidates;

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Our future success depends on the successful development of this novel therapeutic approach.

No product candidates using TPD have been approved in the United States or Europe, and the data underlying the feasibility of developing such therapeutic products is both preliminary and limited.

No product candidates using a heterobifunctional degrader has been approved in the United States or Europe, and the data underlying the feasibility of developing such therapeutic products is both preliminary and limited.

In addition, we have not yet succeeded and may not succeed in demonstrating the efficacy and safety of any of our product candidates in clinical trials or in obtaining marketing approval thereafter.

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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 ).

We have initiated dosing of healthy volunteers in the SAD portion of the Phase 1 clinical trial .

T he program is on partial clinical hold regarding the MAD portion of the Phase 1 trial, pending FDA review of interim data in healthy volunteers from the SAD portion of the trial.

We cannot be certain that the FDA will lift the partial clinical hold on KT-474 for the MAD portion of the Phase 1 trial to proceed which could negatively impact the future clinical development of KT-474.

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 initiate d enrollment in the MAD portion of the Phase 1 trial of KT-474, including healthy volunteers .

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

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

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Our current or future product candidates may cause adverse or other undesirable side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

We have initiated a first-in-human Phase 1 clinical trial of KT-474, but have not evaluated any other product candidates in human clinical trials.

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

Undesirable side effects caused by our current or future product candidates could cause us to interrupt, delay or halt preclinical studies or could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.

204 unchanged sentences

Third-party payors include government healthcare programs (e.g., Medicare and Medicaid), managed care providers, private health insurers, health maintenance organizations and other organizations.

These third-party payors decide which medications they will pay for and establish reimbursement levels.

These third-party payors decide which medications they will pay for and establish

reimbursement levels.

The availability of coverage and extent of reimbursement by governmental and other third-party payors is essential for most patients to be able to afford treatments such as targeted protein degradation therapies.

36 unchanged sentences

Changes in regulations, statutes or the interpretation of existing regulations could impact our business by requiring, for example:

(i) changes to our manufacturing arrangements, (ii) additions or modifications to product labeling, (iii) the recall or discontinuation of our products or (iv) additional record-keeping requirements.

(i) changes to our manufacturing arrangements, (ii) additions or modifications to product labeling, (iii) the recall or discontinuation of

our products or (iv) additional record-keeping requirements.

If any such changes were to be imposed, they could adversely affect the operation of our business.

12 unchanged sentences

This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013, and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and subsequent legislation, the 2% Medicare sequester reductions have been suspended from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic.

Proposed legislation, if passed, would extend this suspension until the end of the pandemic.

13 unchanged sentences

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.

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.

Additionally, former President Trump signed a series of Executive Orders on July 24, 2020 and September 13, 2020 aimed at lowering drug pricing and seeking to implement several of the administration’s proposals.

116 unchanged sentences

Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization of new drugs.

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

and C4 Therapeutics, Inc., which are both in clinical development, Nurix Therapeutics, Inc., Foghorn Therapeutics, Inc., and Vividion Therapeutics, Inc., each of which is in preclinical development.

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

Nurix Therapeutics, Inc., and Vividion Therapeutics, Inc., each of which is in preclinical development.

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

133 unchanged sentences

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 March 31, 2021, our patent portfolio covering novel compounds discovered by our Pegasus platform included 46 patent families.

As of June 30, 2021, our patent portfolio covering novel compounds discovered by our Pegasus platform included 50 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.

143 unchanged sentences

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 Kymera’s applications for KYMERA and KYMERA THERAPEUTICS have proceeded to registration in the European Union and should do so without issue in the United States as well.

Opposition or cancellation proceedings may be filed against future trademark applications or registrations, and our trademark applications or registrations may not survive such proceedings.

In the United States and other jurisdictions that recognize common law trademark rights, we intend to rely on both registration and common law protection for our trademarks.

However, if we are unable to obtain registrations of future trademarks due to trademark office obstacles or third party objections, we may not be able to compete as effectively and our business may be adversely affected.

This dispute was amicably settled in October 2020 and the involved applications for KYMERA and KYMERA THERAPEUTICS have proceeded to registration in the European Union and should do so without issue in the United States as well.

In June 2021, Idorsia Pharmaceuticals Ltd filed oppositions against our newly-filed European Union applications to register KYMERA in color logo form based on its claimed rights in the KYMFABI mark.

These proceedings remain pending.

If we are unable to adequately protect and enforce our trade secrets, our business and competitive position would be harmed.

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Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the research and development, clinical and business development expertise of Nello Mainolfi, Ph.D., our President and Chief Executive Officer, Jared Gollob, M.D., our Chief Medical Officer, Bruce Jacobs, our Chief Financial Officer, and Richard Chesworth, DPhil, our Chief Scientific Officer, as well as the other principal members of our management, scientific and clinical teams.

We are highly dependent on the research and development, clinical and business development expertise of Nello Mainolfi, Ph.D., our President and Chief Executive Officer, Jared Gollob, M.D., our Chief Medical Officer, Bruce Jacobs, our Chief Financial Officer, Richard Chesworth, DPhil, our Chief Scientific Officer and Elaine Caughey, our Chief Business Officer, as well as the other principal members of our management, scientific and clinical teams.

Although we have entered into employment letter agreements with our executive officers, each of them may terminate their employment with us at any time.

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We will need to develop and expand our company, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations.

As of March 31, 2021, we had 92 full-time employees, and we will continue to increase our number of employees and the scope of our operations.

As of June 30, 2021, we had 112 full-time employees, and we will continue to increase our number of employees and the scope of our operations.

To manage our anticipated development and expansion, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

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As of December 31, 2020, we also had federal and state research and development tax credit carryforwards of $2.7 million and $1.3 million, respectively, which begin to expire in 2036.

These net operating loss and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities.

In addition, in general,

under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses or tax credits, or NOLs or credits, to offset future taxable income or taxes.

net operating loss and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities.

In addition, in general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses or tax credits, or NOLs or credits, to offset future taxable income or taxes.

For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who own at least 5% of a corporation’s stock increases by more than 50 percentage points over the lowest ownership percentage of such stockholders or groups of stockholders within a specified testing period.

71 unchanged sentences

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 1A. Risk Factors