Kymera Therapeutics, Inc.

Good day, everyone. My name is Megan and I will be your conference operator today. At this time, I would like to welcome you to the Chimera Therapeutics fourth quarter 2024 results call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time and if you have joined via the webinar, please use the raise hand icon which can be found at the bottom of your webinar application. If you have joined by phone, please dial star nine on your keypad to raise your hand. At this time, I would like to turn the call over to Justine Koenigsberg, Vice President of Investor Relations.

Good morning and welcome to Chimera's quarterly update. As you will notice, we have moved to video format, which we hope you will enjoy. Joining me this morning are Nello Manolfi, our founder, president and CEO, Jared Gallup, our chief medical officer, and Bruce Jacobs, our chief financial officer. Following our prepared remarks, we will open the call to questions where we will take questions from our publishing analysts on video. To be sure we have enough time to address everyone's questions, we ask that you please limit your questions to one and a relevant follow up. Before we begin, I would like to remind you that today's discussion will include forward-looking statements about our future expectations, plans and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A description of these risks can be found in our most recent 10K filed with the SEC. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call. With that, I will now turn the call over to Nello.

Thank you, Justine. Welcome, everybody. We're excited to have you with us today as we transition our quarterly financial updates to a video format. I believe this reflects our continued commitment to transparency, open communication, and deeper connections with our stakeholders. We will have lots of data updates this year, so it will be productive to have videos and slides. We'll use today's call to briefly reflect on our achievement of 2024, which positions us for what I anticipate will be a very exciting 2025. Stepping back, we start the 2024 with our R&D day, where we shared our expanded focus on immunology with the goal of developing therapies that have the potential to deliver biologic-like efficacy with the convenience of a normal daily pill. There, we introduced Stat6 and TIC2, which exemplify programs we believe have the potential to disrupt conventional treatment paradigms and expand access to millions of patients around the world. As we mentioned at the time, the strategic effort was years in the making, but it has materialized rapidly with our recent clinical progress. Our team executed exceptionally over the past year and successfully delivered on all of our key priorities. Here's a quick recap of what we did last year. For Stat6, we completed &D-enabling studies for KT621, filed an I&D, and initiated the Phase 1 Healthy Volunteers Study. Now we're completing the final MAD cohorts. This is the first Stat6-targeted agent to enter clinical development. While the attractiveness of Stat6 as a target and the strong validation of preclinical work has attracted many others to the space, we believe we are the unquestioned leader, a position on which we intend to build. With TIC2, progress continued as well. Since the first introduction in January of last year, we named an advanced and novel development candidate, KT295, and are now completing &D-enabling studies. Regarding IREC4, we continue to support our partner Sanofi in their efforts to progress the two ongoing Phase 2B studies in HS and AD. Importantly, following an interim analysis in the middle of last year, Sanofi expanded the studies to accelerate the overall development timelines on path to pivotal trials. Finally, while less visible to investors, we progressed our early pipeline of novel immunology programs to the point where we're poised to soon share a new, exciting immunology target. So with all the progress that I just discussed, which reflect really a year of truly outstanding accomplishments, we're positioned to an even more productive 2025, where we'll have several clinical advancement across our immunology pipeline. To summarize, here is what you can expect this year. Starting with Stat6, we're on track to report KT621 Phase 1 data this year for both the Healthy Volunteer Trial, which will happen in June, and the Phase 1B Trial in AD, which will happen in the fourth quarter of 2025. And we'll also initiate two Phase 2B studies. AD will start in the later part of 2025, and asthma will start in early 26. For Tick2, we're on track to advance KT295 into the clinic next quarter, with Phase 1 Healthy Volunteer data before year end. Stay tuned in May, as we plan to unveil our next program, a previously undrugged transcription factor that has the potential to be -in-class agent for multiple rheumatic as well as other autoimmune diseases. Importantly, we will not stop here. Our goal remains to deliver at least one new IND per year, so you should expect more exciting new developments to be disclosed at a consistent pace. I want to finish my comments here, where we started this call, which is with our drug development principles and strategy. Kemer is deeply committed to developing an industry-leading immunology pipeline, featuring innovative oral small molecule therapies. We're determined to ensure that patients won't have to choose or make trade-off between efficacy, safety, convenience, and cost. We believe that if we achieve this, we will expand the choices available to patients and transform how patients are treated in immunology and potentially beyond. Traditional small molecules have always offered convenience benefits, but delivering powerful pharmacology compared with biologics has been elusive. We believe our oral medicines can provide a differentiated and potentially better solution, oral drugs with biologics-like efficacy, and we're dedicated to making this a reality. Our work to deliver on the promise continues. We look forward to delivering on and sharing multiple data readouts in the next 12 to 18 months, that we believe will validate our strategy and put us that much closer to addressing many important markets with next-generation oral drugs. Before handing the call over to Gerrit, I'd like to take a moment to thank Lee Morgan, who has been a director at Kemer for the last three years. As you may have seen in the filing today, she has decided not to stand for reelection at our upcoming annual shareholder meeting in June. I would love to personally thank her for all the contributions she's made at Chimera over the last several years, which have been much appreciated. With that, let me pause here so Gerrit can give you more details on our clinical strategy plans and data. Thanks, Nello.

This is an exciting time for Chimera from a development perspective. We are well positioned to achieve multiple clinical data readouts that will further validate our approach and strategy. So let's go ahead and jump in. Last month, we laid out our accelerated development strategy for the STAT6 program, which starts with Phase I, Phase Ib, and paralleled Phase IIb trials that enable subsequent registrational Phase III studies across multiple indications. Each of these trials serves a distinct and unique purpose in our clinical development strategy for KT621. I'll walk you through some details on each of these trials today, but I want to first start at a high level. So starting with the Phase I Healthy Volunteer Study, our primary goal there is to demonstrate STAT6 degradation and safety. In addition, we will also take an early look at several TH2 biomarkers. Now, while we will look at biomarkers in the Phase Ia, the Phase Ib study will be a much more relevant and meaningful opportunity to assess the impact of STAT6 degradation on multiple TH2 biomarkers in blood and skin. And that study will also take an early look at any clinical efficacy signals. After these two Phase I studies, the paralleled Phase IIb trials in AD and asthma are intended to measure the clinical activity in two key indications and enable dose selection for registrational studies in multiple indications. In terms of the specifics on some of these activities, our Phase I Healthy Volunteer Study is ongoing and is evaluating single and multiple ascending doses of KT621 versus placebo. The primary objective is to show that we can robustly degrade STAT6 in blood and skin, which we define as a reduction of 90% or more at doses that are safe and well tolerated. Given all the human genetics data, the preclinical data we have generated, and the pathway validation, we believe that if we can demonstrate this, it will largely de-risk the program and increase the probability of success once we move into patients. As we've shared in the past, in healthy volunteers, we expect to see some impact on several TH2 biomarkers, such as TARC and IgE. Our expectation entering the trial is that the effect would likely be comparable to what has been reported for Dupilimab, though as we have said, we believe the best opportunity to show effect on a variety of TH2 biomarkers will come in patient studies, where these are greatly elevated at baseline. In terms of the trial status, we are recruiting the last remaining cohorts and we're on track to report results in June. As we approach the start of the Phase 1b trial next quarter, we want to take a moment and provide a few more details about the study. The Phase 1b trial in moderate to severe atopic dermatitis will be a relatively small, single-arm open-label trial, with dose selection optimized based on Phase 1 healthy volunteer results. Patients will be administered KT621 once daily for four weeks. The trial is expected to include approximately 20 patients. The key study aim is to show that robust statics degradation in blood and skin by KT621 has a Dupilimab-like effect on reducing multiple TH2 biomarkers in the blood, such as Eotaxin, TARC, Periostin, IgE, and others, and on the transcriptome of active AD skin lesions. The study will also assess KT621 effect on AD clinical endpoints, such as EZ and parietal NRS. We decided to make this a streamlined biomarker-focused study to transition quickly into Phase 2b, which is on critical path to Phase 3 initiation and eventually registration. In the fourth quarter, we'll read out the Phase 1b data and also initiate the first Phase 2b placebo-controlled dose range finding trial in moderate to severe atopic dermatitis. In the first quarter of 2026, we will start a second Phase 2b trial in moderate to severe asthma. This initial parallel development strategy is intended to accelerate late-stage development across multiple TH2, dermatological, gastrointestinal, and respiratory indications. Turning now to Tick2, this is another program where we believe we can mimic the human genetics Tick2 -of-function profile and achieve biologics-like activity with an oral drug. We're on track to start the KT295 Phase 1 healthy volunteer study in the second quarter. The primary goal is to demonstrate safety and full Tick2 degradation in blood and skin, which, if achieved, we believe would be the first time an oral small molecule was able to show complete blockade of Tick2 signaling. We expect data will be shared in the fourth quarter of 2025. Now, to round out our immunology franchise, I'll wrap up with IRAC4. As Nelo mentioned, last year, Sanofi took steps to accelerate the overall KT474 development timeline. The decision to expand the Phase 2 program was to structure the hydradenitis suprativa and atopic dermatitis trials with the necessary regulatory perspective to enable dose selection and advancement directly to pivotal Phase 3 studies, ultimately with a meaningfully shorter development timeline. To support this strategy, the size of the studies increased with additional doses planned for evaluation in both trials. There are no changes to the Phase 2 study endpoints. With the planned expansion of the trials, the primary completion dates were adjusted to the first half of 2026 and mid-2026 for HS and AD respectively. The progress made by our team in 2024 sets us up to execute in 2025. Importantly, within our immunology franchise, we believe KT621, our first and we believe best in class oral statistics to grader, has the ability to transform the treatment of TH2 inflammatory diseases. And we look forward to sharing Phase 1 data and healthy volunteers next quarter and advancing the program into patient studies while also initiating the TIC2-KT295 Phase 1 trial next quarter and sharing data by year end. And as Nelo mentioned, we're excited to introduce our next immunology program, which aligns perfectly with our pipeline portfolio strategy. We're planning to host a company webcast in early May to unveil the new target, and we'll share more information as we get closer. I should point out that the KT621 Phase 1 healthy volunteer data, which we expect will be reported in June, will be its own separate event. I'll now turn the presentation over to Bruce for a review of the fourth quarter and full year financials. Bruce?

Thanks, Jared. As I review our fourth quarter of 2024 financial highlights, please reference the tables found in today's press release. Revenue in the fourth quarter of 2024 was $7.4 million. All of that was attributable to our Santa Fe collaboration. With respect to operating expenses, R&D for the quarter was $71.8 million. Of that, approximately $6.8 million represented non-cash stock-based compensation. Adjusted cash R&D spend of $65 million, excluding that stock-based comp, reflects a 23% sequential increase from the third quarter. G&A for the quarter was $16.3 million. Of that, approximately $7 million was non-cash stock-based comp. And adjusted cash G&A spend of $9.3 million, again, excluding stock-based comp, was up 13% sequentially. Our cash balance at the end of 2024 was $851 million. Our cash balance is expected to provide a runway into mid-2027, and that will enable us to execute on multiple data readouts you heard today, including several important Phase II trials across our programs. So this concludes our prepared remarks. If you just give us a moment to assemble in our conference room, we'll be happy to address any questions you have there. Thanks very much.

We will now move to our question and answer session. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will receive a message on your screen asking to be promoted to a panelist. Please accept, wait a moment, and once you've been promoted, you will hear your name called and you may unmute your video and audio to ask your question. As a reminder, we are allowing analysts one question and a relevant follow up. We will now pause a moment to allow the team to gather and assemble the queue. Our first question will come from Faisal Kershid with Learing Partners. Please unmute your audio and video and ask your question.

Hey guys, good to literally see you and congrats on the updates. Just a quick one for us. What supports your view that the 28 dosing in the atopic nerve phase 1B is enough time to show robust biomarker activity? And then could you also comment a little bit on how you've kind of thought about the inclusion exclusion criteria for that phase 1B?

Good morning, good to see you as well. Jared, why don't you take this one?

Sure. It's an important question. You know, and we know from prior Dupilimab trials, you know, where there have been 16 week endpoints in AD and moderate to severe AD, that when you look at the time course of what's happening, they don't just look at six weeks. They also look at earlier time points and looking at four weeks, it was shown that there was a clear, you know, very clear impact on TH2 biomarkers as well as on clinical endpoints like EZ and parietis NRS. I think we're very confident that 28 days of treatment using an optimal dose selected from phase 1A should allow us to see a clear impact on TH2 biomarkers, which is the primary objective of the study. It also gives us an opportunity to see an impact on clinical endpoints. In terms of eligibility criteria, I think here it's going to be very important that we have, you know, stringent criteria that make sure that we're getting, number one, patients that definitely have AD and secondly, patients that have moderate to severe disease. I think that's very important in trying to minimize any sort of placebo effect is to pay close attention to those particular eligibility criteria. That's going to be a very important part of the study. Maybe just mentioning a few other things that are important to reduce or minimize placebo effect. One is, you know, having a rigorous approach to site selection, making sure we bring on sites that are able to select the right AD patients for the study and have personnel that can perform the clinical assessments in a rigorous manner. And to also make sure that we're closely monitoring for drug compliance on the study and also making sure that patients are not taking any other con meds.

Maybe if I can just add one thing, obviously, hopefully it's appreciated that I think we have not only an amazing opportunity with this drug, but I also think we have a unique responsibility to do the right type of drug development. And so also another reason for the 28 day study, besides being long enough to measure and actually the study is powered enough for 28 day to measure strong biomarker changes, is that what's a critical path is going into a dose ranging face to face study, which is on path to go to phase three and registration. So what we don't want to do is spend time unnecessarily in early clinical development in studies that are informative, but not critical.

Yeah, and then, can I just ask you to clarify on the choice to not have a placebo arm in the phase one, especially given kind of like what's been seen in other atopic germ studies? Yeah,

maybe, Gerard, maybe I'll start to learn. It kind of goes back to what I just said. So the goal of the study, as Gerard said, is to demonstrate a biomarker profile in blood and skin that we believe will be robust and can be compared to, for example, the Dupilomab for weak data. And that's for that type of study. Actually, we don't believe we need the placebo. We know that biomarkers do not move substantially in the placebo arm of these studies. And again, if we had to run a placebo controlled study for four weeks powered to demonstrate a difference on clinical endpoints, this would be a much larger and longer study. And again, this does not fulfill our drive, which is to go into phase two BSAP.

Got it. That's super helpful. Thank you guys so much.

Our next question is connecting. One moment. Our next question will come from Andy Chen with Wolf Research. Please unmute your audio and video and ask your question.

Hi, nice to see you in person. So the phase one B is designed to be single arm, so we won't be able to see those response on biomarkers. Do you think the TH two biomarker data is going to be so clean that we won't need to see those response across different doses to be comfortable with the data? Just curious if we if we're going to have enough data to answer additional questions about efficacy by Q4. Thank you.

Yes, maybe I started. Jared can connect more specific points. Thanks, Andy. I think this is a great question. So our goal is to take into this phase one B study a dose that has demonstrated in healthy volunteer the type of profile that we're looking for. And as we said, at least 90 percent degradation in blood and skin, we have shown pre clinically that that type of profile leads to extremely robust biomarkers effect in a plethora of the readouts. So our development is based on our understanding of the biology and both in terms of all the preclinical data we've we've amassed as well as the human genetics. So we expect that a dose with that profile will have a do peel my black effect. And that's really what we want to show if if we were not certain. And if this was really an exploratory phase one B study to show an early proof of concept, we'd probably design it differently. We're designing this study with expecting a successful outcome based on all the experience that we built internally and all the data we've generated so far.

And maybe just to add the opportunity for being able to see an impact on both to biomarkers and clinical endpoints to see a dose response there will come from phase two B where that will be a true dose range finding study. And that will give us a strong opportunity to do that. And as I said earlier, the key really is for us to use phase one A information to select the doses for the dose range finding phase two B study and to get to phase two B as quickly as possible. And then phase two B becomes a great platform for us to show, you know, perhaps differences in impact on two biomarkers and clinical endpoints, depending on the doses that we select for phase two B. And that will ultimately allow us to pick the optimal dose for the phase three registrational studies.

Thank you, Jared. Next question.

Our next question will come from Michael Schmidt with Guggenheim. One moment as they connect. Michael Schmidt with Guggenheim, please unmute your audio and video and ask your question.

Hi, guys. Thanks for taking our question. This is Paul on for Michael Schmidt. Just on the STAT6 program, you know, what do we know currently about the potential bioability of KT621 in tissues of interest, for example, skin versus lung tissue or others that might be disease relevant down the line? How predictive are the preclinical models there? Is there any opportunity to look into that in the early phase one or one B? Thank you.

Yeah, so obviously I can't speak to the phase one healthy volunteer data, but I can speak to the preclinical data that we generated. And we generated extensive data across all species that you can imagine, mouse, rat, dog, non-human primates, and others where we've been able to demonstrate that KT621 not only is Orally bioavailable, but is actually highly active at low oral doses and distributes evenly across all tissues of interest. We've shown in non-human primates equal both distribution and degradation in blood, skin, spleen, lungs. And so our expectation is that the preclinical profile will translate equally in human and a way to measure that. Obviously, we can take lung and spleen, but obviously we can take blood and skin as we've done for other programs. And so we believe that those are great surrogate tissues to show not only hopefully the desired degradation that we expect to have, but also a consistent degradation across multiple tissues. I would just go back to what we've been saying, you know, for the past years, I would say that, you know, we've been fortunate that all of our programs have translated Impeccably, I would say, between preclinical and clinical. So we hope and expect that 621 will follow suit on that on that particular front.

Great. And if I could just add a quick follow up on the the clandesign for the phase two AD study. Is the sort of ongoing IRAC4 study a reasonable comp, you know, three different doses plus placebo? Any meaningful differences in the type or severity of AD patients you might recruit there?

I'm going to save Jared on this one. I think at this point, we're not going to comment. Hopefully you guys appreciate that we're sharing the relevant information when when it's the right time, as we're doing today for the phase one B. We promise you that when it's the right time, we will share that kind of information as well. Great. Thanks very much. Thanks, Bob.

Our next question will come from Ron Feiner with JP Morgan. Please unmute your line, your video and ask your question.

I was just going

to say

that you guys don't have to show the video in case you don't want to, right? I think it's OK just to ask the question. But anyway, go ahead.

Thanks. To Ron for Eric. I just wanted to ask again on the dose selection, maybe you will be evaluating only one dose in this phase one B for AD. And how does the sad, mad data so far from the healthy volunteers trial kind of give you information on the effective range, at least from a PD perspective?

Yeah, I mean, unfortunately, we can't go into the answer, but what I think I can say Jared has already said it, but I'll say it again. The beauty of protein degradation, unlike any other technology out there, that you can measure target engagement both in a dose responsive manner as well as in a time responsive manner. So, you know, what is the level of degradation of your target at different doses at different time points? And so we have designed a really comprehensive phase one healthy volunteer study that is looking at a range of doses that will allow us to understand as well as we can the relationship between those PK and degradation in blood and skin. With that, with that set of data, as we said in the clinical trial, we expect up to 120 subjects on the study. So we'll have a really large data set. We will be able to have enough to confidently select the, let's say, three doses for the phase two B studies. And we don't believe that, and we've already shown with IREC4 that there is a really strong translation of degradation between healthy and diseased patients in terms of degradation profile. And so we believe that everything that we've designed going from a very comprehensive phase one healthy going into one B to really demonstrate that, you know, one of the doses, you know, that likely will be taken into phase two is giving the type of profile that we expect in patients. It's a, let's say, confirmatory study and then run, you know, go into a phase two BSAP. We feel very confident about our plan right now. And so, you know, again, we look forward to sharing the data along the way and then, you know, get to the end of the year with those big studies.

Thanks. And then just maybe if I can try on the new program, are you guys geared more towards staying in the phase two space or anything additive or orthogonal to current programs or is it going to be completely new?

Well, I think what we've tried to do, if you look at our pipeline, so in immunology, I think we're shaping up to have the best oral immunology pipeline in industry. I know my team doesn't like me to say it, but I keep saying it. The if you look at Iraq for this is a classical teach one teach 17 program with I want to our activity. If you look at tick to is, you know, I have 23 type one interferon. If you look at that six, it's a classical maybe the best to target, I would say. And so these are all complementary pathway that actually one can imagine could be synergistic in a combination one day. And so you should expect this other target to be a complementary pathway to the ones that we've shared so far.

Thanks. Our next question will come from Jeff Jones with Oppenheimer. Please unmute your audio video and ask your question.

Good morning, guys. And thanks for taking the question. I think we've asked a lot on stats six curious to get your view on the tick to program from a similar perspective as we think about biomarkers and tissue penetration. How we should think about looking at that data which at the healthy volunteer data which is obviously some way out. So can you share how you're going to be looking at not only safety but but efficacy signals there from a perspective of tick to and biomarkers.

Do you want to take this? Yeah, I think for the tick to program, you know, I think we have a unique opportunity to show pharmacology, you know, that is differentiated from what's out there for typical tick to small molecules. And that's why we believe this program can eventually attain biologics like activity, hopefully, which has not really been attained by the by the small molecules. And to do that is important. We believe that for the pharmacology to show that we can fully degrade tick to ninety five plus percent and keep that degradation level 24 seven sort of round the clock in order to give us that full pathway blockade. That would be the equivalent of what you can get with an injectable upstream biologic. So I think when we look at the phase one study, just as we've done in stat six, we're going to have very detailed looks at the impact on tick to levels in blood and in skin and healthy volunteers looking over time, looking at different dose levels and sad as well as in mad. And that's going to really give us a very good idea as to whether our pharmacology can really achieve what we've seen pre clinically in animals, but where we can achieve that sort of profile, a very deep, chronic degradation of take two at doses that are safe and well tolerated. So that's going to be, I think, critical for us in terms of the biomarkers that will be looked at in that tick to study. There will be other opportunities potentially to look at additional biomarkers that reflect impact on IL-12, IL-23, type one interferon pathways and sparing IL-10. But I think the primary focus will be on achieving that sort of pharmacology that I just mentioned in terms of the impact on tick to. And if we're able to see that sort of impact, I think that will be very encouraging for us. And our plan then is the next step after phase one is to then do a phase two proof of concept study, probably a placebo controlled study that might be in a disease like psoriasis where there we want to be able to bring optimal dose or doses from that phase when a study interface to and really demonstrate there that we have biologics like activity, for example, that we have sky Rizzi like effect on PASI-90 and psoriasis. And that would be the key inflection point for us to then say, OK, here we have a compound that is clearly differentiated from small molecule inhibitors. It has biologics like activity, and then we would want to move it forward potentially across multiple potential different indications that are both interferonopathies, such as lupus, IBD, in addition to psoriasis.

Great. Appreciate that. And just one quick follow up. And as you mentioned, the possibilities in phase two, you know, how do you think about in terms of patient selection, you know, patients who fire exposure to say Dukra or one of the biologics impacting the in that the L23 pathway.

Maybe it's a bit too early, Jeff, to discuss it. Obviously, you know, let's say we end up going in psoriasis. There is, you know, lots of patients that that are available to us to ask the question in a way that is not influenced by, you know, failures on, let's say pathway agents. So obviously be very thoughtful about the patient selection, but we'll share more of that as we get in closer to the study. Thanks, you guys.

Our next question comes from Kelly Shi with Jeffreys. Please unmute your audio video and ask your question.

Hi, thank you for taking my question. This is Yifan on behalf of Kelly from Jeffreys. Another question on step six. So for the biomarker analysis in the MAD portion, how long is the follow up going to be? Can we expect like data from IG and the TARC at multiple time points across the dosing period and after 14 days of dosing, or we may only expect one or two time point. And also wondering how would these biomarker data in health volunteer guide your decision on those levels in phase one B and phase two trials in patients? Thank you.

Maybe I'll start. It's a great question, actually. So the first part, it's obviously it's easy. Yes, we will have several time points, both during doses and post-dosing period. The second question is actually it's a great question because it allows us to touch on a very important point, which is if you look at the Dupilomab healthy volunteer studies where we know we now have it in our deck sometimes to show it to investors. What does their data look like? Instead of just talking about numbers, actually looking at the totality of the Dupilomab data, you will actually see that in most cases, if not in all cases, there is actually a lack of those response between the different doses. So if you actually chose the healthy volunteer biomarker data for those selection for Dupilomab, let's talk about Dupilomab, you would probably pick the wrong dose to go into phase two or phase three. But obviously how we're going to select these doses by looking at the totality of the data, right? For us, the key information is can we degrade stat6 robustly? And by that we mean 90 percent or more in blood and skin. Is that safe and well tolerated? And that's really what we're going to use to make a dose selection. But we will also look at the totality of the data and obviously share it with you at the right time.

Thank you. Our next question will be coming from Brad Canino with Stifle. One moment as he connects. Brad Canino, please unmute your audio video and ask your question.

Right. Good morning. So I think you've done a really good job previewing the stat6 healthy volunteer data, and I can see how the target profile will allow you to move into patients with conviction. You can marry that to the preclinical outcomes. It's the outstanding question. You started to touch on this in some of the prior responses, is how you see the phase one be building on that conviction? So, you mentioned the 20 patient study, short four week treatment. How do you really see that being a useful tool to shape the view of the profile potential, even though it's not designed to be a definitive assessment of the drug in patients?

Yeah, so look, Brad, our view is that this is going to be, you know, I don't know what we want to call it, the drug of the decade or the drug of the century. So we have to be we have to be really thoughtful about the study designs along the way. And we have to really ask the right question in each study. Otherwise, we end up creating confusion instead of clarity. So the questions for our studies are very well thought out, and I think we're going to get the right question in the right study. So for healthy volunteer, the question is, I'm going to keep saying it, can we degrade the target well? Robustly, I should use the same word. And is that safe and well tolerated? To me, to us, this is a huge de-risking step. This is the first time the stat6 have been drugged. So this is paramount type of information. We will collect the biomarkers. I expect that they will look like the pillumab, in healthy. I was talking about. And then the study is really designed for us to move into phase 2B ASAP. Now, why are we running the phase 1B study? First of all, the main goal is really to generate data, especially around biomarkers, that will allow us to, I think, close the circle on is a stat6 de-grader, a DUPI-like agent. We really cannot do it in healthy volunteers for all the reason we discussed. These biomarkers don't move enough. There is a lot of noise. In many cases, you don't even see a dose response. It's more of a yes or no. But they move. Can we change them? I expect. Right. But in patients, we have a plethora of chemokines, cytokines in blood and skin. And in four weeks, we can actually see a big window that we should be able to reduce robustly with our drug. And to me, that's really what we're trying to show in that study. This study is telling, you know, potential investigators and patients on our phase 2B studies, look, this is a drug that is safe and well tolerated, degrades the target well, and actually also shows that has a DUPI-like effect in biomarkers. And I'm confident that that will translate into a beneficial clinical effect in these patients so that we can power up the studies and recruit fast our phase 2B studies. That's really what we're trying to do. I think the phase 1B, it's in a luxury. It's not a critical path study, but we believe it's a powerful study to really demonstrate everything that we've been saying for the past year and a half on the stat6 to be a DUPI in a pill. I think that that data will clearly demonstrate that without the need of other doses or placebo because biomarkers don't lie. Thank you.

Our next question comes from Mark Frame with TD Cohen. Please unmute your audio video and ask your question.

Hey, guys, thanks for taking my questions. Let me just start off with one clarifying question on some of the enrollment criteria you mentioned earlier for the phase 1B. Just take the, obviously, no concomitant meds, but will you be requiring people to be biologic and jack therapy naive, or could there be a patient or two that end up in this trial that have at some point seen some of these more modern agents? And then I'll have a follow-up after that.

Yeah, yeah, that's a good question, Mark. No, I mean, we will allow patients who have had prior systemic therapy or biologics that could include DUPI or could include a jack inhibitor as long as they responded to it. So there will be those patients enrolled onto the study as well as patients who are biologics naive.

Okay, thanks. And then just on the phase 2Bs that you're planning in AD and asthma, To Picsson has a kind of a range of a handful of different kind of dosing paradigms, depending upon the indication. Do you think those trials will ultimately give you enough information about dosing to go to phase 3 for kind of across the board of the IL-4, STAT6 pathway, or are you expecting that you'll ultimately need more phase 2Bs and some of these other indications as well to help select those for the different indications? And if so, should we see the expectancy, those trials done in parallel to AD and asthma, or you're going to really wait for AD asthma data until you would open up anymore?

So as we said in the last discussion around the healthcare conference early in the year, our development plan is based on previous experience of other pathway agents in this space in TH2, where eventually they were able to select a dose from, let's say, AD to go a phase 3 dose in AD to go into the other skin indications and a phase 3 dose from asthma to go into the other respiratory indications. And so we have high degree of confidence that these would be the only phase 2B studies that we will run that will allow us to go into 7, 8 or more phase 3 programs. But obviously, just to be absolutely clear, that will have to be demonstrated also along the way. Obviously, we think that can happen, but we'll have to go through the studies to make sure that will happen.

And then lastly, as you get that more robust efficacy readout from these phase 2Bs, obviously the goal is to every bit match, it may be even potentially exceeded a little bit. But if that isn't the case, and you end up being a bit lower on efficacy, is that acceptable? And how close do you think you need to be to justify the expense of late stage trials? Yeah,

so first, I like to say, I like to clarify our expectations. I hear yours, Mark. So our expectation is that based on the biology and what we've seen preclinically that we should have an effect in TH2 diseases that is similar to Dupilumab. Again, we've shown some numerical superiority preclinically, but I think for us, our expectation is that it will look to be like, you know, we, to be honest, are not expecting that we will have lesser effect. We have talked to and others have done calls with KOLs in the space that have made the case that a less active drug that is oral and safe and well tolerated could be also extremely successful. So we believe that the bar for success is not Dupilike, but our bar is that we're going to be Dupilike. Superable. Thank you.

Our next question will come from Ellie Merle with UBS Securities. Please unmute your audio video and ask your question.

Hey guys, congrats on all the progress. So, maybe just in terms of dose selection, how are you thinking about how the doses you plan to study in phase 2B will compare between atopic germ and asthma? I guess do you expect to study the same doses in each indication? And then kind of a broader question about STAT6 as it relates to dose selection. How does STAT6 expression potentially differ across indications or maybe between patients? Thanks. So

I like Jared answered the question. I just want to add one thing to address the later part of your question. So we have seen, and I can only speak about preclinical data, that expression level of STAT6 have no effect on our degradation kinetics. So, which means that our expectation is no matter the expression levels, we'll be able to degrade it to the level that we need to or we want to, which pre-cleaning is being 90% plus. But Jared, do you want to speak to the phase 2 dose? Yeah, Ellie, you

know, in our preclinical models, and we have, I think, good preclinical models for both asthma and atopic dermatitis, you know, we've shown in both those models that doses of 621 that give us at least 90% degradation lead to sort of optimal activity or doobie-like effect. So I think our expectation, therefore, is that the doses that we choose for phase 2B coming out of phase 1A will be similar doses for both the phase 2B asthma study and the phase 2B

AD study. Then the question could be, is the phase 3 dose going to be different? I think it's unlikely, but that's the point of the phase 2B studies. I asked to follow up already, Ellie, so.

Okay,

great. Thanks, guys. Our next question comes from Parth Patel with Morgan Stanley. Please unmute your line and ask your question.

Hi, guys. Can you hear me? Yeah. Sorry, my video is not working. This is Parth on for Vikram. So just a question on 621. So following the phase 2 studies in AD and asthma, how expansive of a phase 3 development program would you expect to initiate for KT621? And how would you prioritize indications given the broad potential you've laid out for the molecule?

Okay, I'm going to take this and we're going to try and move quickly because here we have many questions at a limited time. So what we've said is that we want to develop this drug with two key goals in mind that are actually not mutually exclusive. One is pace and path to registration and breadth of opportunities. And so we're going to run this important phase 2B studies to inform phase 3 selection for potentially eight different indications. And we're going to run parallel phase 3 campaigns for several of those indications. I think it's too early for us to say which and how many, but you can expect that if you look at 2P market where now asthma and AD account for more than 80% of the revenues, I would add that once COPD picks up, it would probably be another important pillar of the revenues for that drug. I would expect that we will definitely prioritize those three and then we have to, you know, we have to bet between now and phase 3 campaign start, decide whether we want to add additional campaigns in parallel versus slightly staggered. Okay, thank you.

At this time, we will only be taking one question and no follow up. Our next question comes from Kripa Dhervakonda with Truer Securities. Please unmute your audio video and ask your question.

Hey guys, thank you so much for taking the question. This is a really interesting format. So what you mentioned this before, but in terms of degradation levels, do you expect to see similar to what you've seen in the preclinical studies degradation levels similar in different tissues, skin and plasma? I know you're measuring it in healthy volunteers and do you expect that to be to follow through into patients as well? Like what you see in healthy volunteers, would you expect similar degradation levels in patients as well?

Yeah, so again, preclinically we've seen robust degradation. If you look at our studies, we were able to show more than 90% degradation in all species. We've also seen, as I mentioned, we have non-human primate. We also have other species that we haven't shared data for, but where we've seen consistent degradation across tissues. So we do expect to see robust degradation, again, 90% or above in healthy volunteers. And yes, based on both STAT6 preclinical data where we've done, let's say healthy animals versus disease models where we haven't seen changes in the disease. Of degradation profile, but I would probably speak more about, for example, IRC-4 where we haven't seen any difference of degradation between healthy and AD, which is relevant, obviously for STAT6 in a way. So yes, we expect all of that. Obviously we'll have to show it. And that's the point of some of these studies that are ongoing or will be ongoing.

Our next question comes from Derek Arquilla with Wells Fargo. Please unmute your video and audio and ask your question.

Hey guys, this is Yvonne for Derek. Thanks for taking our question. A quick one from us. So you mentioned on biomarkers, you know, for the STAT6 that they should be comparable to DUPI. So could you provide a little bit more polar on what this means in terms of like the two weeks to biomarkers and just remind us like what did we see for DUPI here? Thanks.

Well, yeah, thank you. So if you're talking about healthy volunteer studies, so if you look at data from publication from Regeneron, they showed, for example, that DUPILOMAB, those response manner, both IV and sub Q with multiple doses, were able to show within the first two weeks, right? So we need to compare the first two weeks of effect, a maximal effect in TARC around, I believe, 35 percent actually peaked early and then started to be less already by week two. Again, it was not really those responsive, so it seemed a bit stochastic in nature, but there was a clear reduction for one of the doses. And then for IG, for the first three weeks, we really don't see much. I think if you draw a line, it's probably five, six, seven percent. I haven't actually done the calculation myself yet. So for the first two weeks, IG is pretty minor. And it does take, I think people that understand the H2 biology, it's understood that it does take longer to impact IG. So now that I've shared some numbers and a bit of context around, it's not surprising that we're trying to guide to, you know, we'll probably look like that without getting too hung up on the actual number because those are, you know, again, noisy. And for example, for IG, pretty close to baseline.

Okay,

thanks. Excellent.

Our next question will come from Eric Wong with Goldman Sachs. Please unmute your audio and ask your question.

Hi, this is Eric Wong on for Krisha Bhutani. Thank you for taking the question. Just a quick one for me. So just thinking beyond the Sanofi collaboration, how are you thinking about strategic partnerships to accelerate development or view risking programs? I guess particularly in oncology, can you elaborate on the criteria you'll be using to select partners and how you intend to maximize the value of those assets and potential deals? Yeah,

so I would start maybe with most of the general answer. So, you know, I think that the biopharma industry can thrive by creating win-win partnerships and has done so for decades. So we are part of this ecosystem and we will continue to think about where are the win-win opportunities. As we've said clearly for our immunology pipeline, we don't believe that partnering in this point will add any value or accelerate our programs. So for those reasons, we are continuing to advance our immunology pipeline independently and we're building the team. Jared is building a great team of immunology development that I believe, you know, is and will be even more so best in class and doing what we're doing. So with regards to the oncology, again, in immunology at some point, that might happen, right, as we get closer to phase three registration and if we're amazingly successful across the whole pipeline, it is possible, if not likely, that, you know, there could be some partnership for a program or another. For oncology, as we said clearly last year now that we had decided to continue those programs through the end of phase one and then advance it beyond only in partnerships. And so, you know, in order for us to partner program, it will have to be a win-win for both parties. The company that takes the program on and asks, and, you know, the criteria are simple. I don't know that I need to go through the details, but obviously a company that is driven, interested and has the capability to do justice to those programs. Next question.

Our next question will come from G. Please unmute your audio and your video and ask your question.

Great. Thanks for taking the question. So just given the novel nature of STAT6 as a target, you know, thoughts on its potential in the post-Dupixin setting and if this is an area you plan to evaluate in a more wholesome manner, considering the phase 1B will enroll some biologic experienced patients, as you just mentioned. Thanks.

Yeah, I just want to clarify. So the biologically experienced would have to, would be enrolled only if they didn't fail for kind of lack of response, right? So it might be that they discontinued for other reasons, tolerability, or they just got tired of injecting themselves, for example, which we know happens. So I would say, look, the potential for STAT6 is to be the TH2 drug and to be the first option for every patient that has TH2 inflammation, whether it's asthma, AD, COPD, or EOE, etc. So yes, is there an opportunity for post-Dupix? Sure. But I don't think that's really the problem we're solving. I think the problem we're solving is getting these millions of patients that are not on Dupix, that either can't get it, can't get reimburs, that don't like the needles, to actually have an effective drug. And I'm sure we will recruit enough patients as we continue development to also look at what that will look like. But I would say, honestly, it's not really where I think this drug will be positioned for. That's not the problem we're trying to solve. The problem is patient access to an amazing drug that solves a lot of problems. Thank you.

Our last question comes from Sudan Loganathan with Stevens. Please unmute your audio and ask your question.

Yes, thank you for taking the questions and being on video today. So mine is going to be just on the R&D and the spend. Just kind of curious on, you know, as you're ramping up 2025 in those two trials for 295 and 621, you know, how do you expect that to be the R&D expenses to be allocated between the two programs? And then could we anticipate any expense profile changes as, you know, depending on the progress of those two trials over the next one or two years?

Thanks, Sudan. I thought I was going to escape talking on this call, but I guess not. Or at least on the Q&A part. So just, you know, obviously we have 850 million. The runway takes us into the middle part of 2027. If you just do the math over that, you know, 10 quarters, obviously our cash burn will increase. I'd say that the trajectory gets a little steeper in 2020 into 2026 when the bulk of the some of the clinical trial activity really kicks into higher gear and then maybe rises at a slower rate into 2027. Hopefully that gives you a little perspective. But, you know, obviously the important point is that we are well capitalized to get us through many of these important readouts that we discussed on the call today.

Maybe the only thing I'd add is you should expect the Stat6 portion of it to be dramatically superior to the TIC2 portion of expenses, especially as we continue in the next two to three years. Thank

you.

Appreciate it.

There are no more questions at this time. I'd now like to turn the call over to Nello for closing remarks. Well,

great. I want to thank everybody for joining us today. I also hopefully the new video format is appreciated. I assure you the background is real. It's not fake. And, you know, we, as you all know, we're available for any follow up. We'll be at the Power and Conference in Boston, finally a conference in Boston next week. And happy to again take any questions offline. Thanks again and see you again.