10-Q 1 kymr-10q_20210331.htm 10-Q kymr-10q_20210331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________________ to ___________________

Commission File Number: 001-39460

 

KYMERA THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-2992166

(State or other jurisdiction of

incorporation or organization

(I.R.S. Employer
Identification No.)

 

 

200 Arsenal Yards Blvd., Suite 230

Watertown, Massachusetts

02472

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (857) 285-5300

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

KYMR

 

The Nasdaq Global Market 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☐    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  

As April 30, 2021, the registrant had 45,030,094 shares of common stock, $0.0001 par value per share, outstanding.

 

 


 

Summary of the Material and Other Risks Associated with Our Business

 

We are a biopharmaceutical company with a limited operating history and have not generated any revenue to date from drug sales, and may never become profitable.

 

We have incurred significant operating losses in recent periods and anticipate that we will incur continued losses for the foreseeable future.

 

We will need to raise substantial additional funding. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, scale back or discontinue some of our product candidate development programs or future commercialization efforts.

 

We are very early in our development efforts and our IRAK4, IRAKIMiD, and STAT3 programs are still in preclinical or early clinical development. If we are unable to advance them into and through the clinic for safety or efficacy reasons or commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.

 

Our approach to the discovery and development of product candidates based on our Pegasus platform is novel and unproven, which makes it difficult to predict the time, cost of development, and likelihood of successfully developing any products.

 

Business interruptions resulting from the coronavirus disease (COVID-19) outbreak or similar public health crises could cause a disruption of the development of our product candidates and adversely impact our business.

 

We may not be successful in our efforts to identify or discover additional product candidates or we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

 

If we experience delays or difficulties in the initiation or enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.

 

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.

 

Even if we receive regulatory approval for any of our current or future product candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.

 

We rely, and expect to continue to rely, on third parties to conduct our ongoing and planned clinical trials for our current and future product candidates. If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain marketing approval for or commercialize our current and potential future product candidates and our business could be substantially harmed.

 

If we are unable to obtain and maintain patent and other intellectual property protection for our technology and product candidates or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and drugs may be impaired.

 


i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, express or implied statements about:

 

the initiation, timing, progress, results, and cost of our research and development programs, and our current and future preclinical and future clinical studies, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

 

our ability to continue to construct Pegasus, our drug discovery platform, and to enable a rational and effective drug discovery and development engine;

 

the timing and the success of preclinical and clinical studies under our IRAK4, IRAKIMiD, and STAT3 programs;

 

our plans to submit investigational new drug applications to the FDA for current and future product candidates;

 

the subsequent initiation of planned clinical trials;

 

our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop product candidates, including by applying learnings from one program to other programs and from one modality to our other modalities;

 

our potential ability to manufacture our drug substances, delivery vehicles, and product candidates for preclinical use, for clinical trials and on a larger scale for commercial use, if approved;

 

the ability and willingness of our third-party strategic collaborators to continue research and development activities relating to our development candidates and product candidates;

 

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

 

our ability to obtain and maintain regulatory approval of our product candidates;

 

our ability to commercialize our products, if approved;

 

the pricing and reimbursement of our product candidates, if approved;

 

the implementation of our business model, and strategic plans for our business, product candidates, and technology;

 

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

 

estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

 

the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory and commercialization expertise;

 

future agreements with third parties in connection with the commercialization of product candidates and any other approved product;

 

the size and growth potential of the markets for our product candidates, and our ability to serve those markets;

 

our financial performance;

 

the rate and degree of market acceptance of our product candidates;

 

regulatory developments in the United States and foreign countries;

 

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

 

our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;

 

the success of competing therapies that are or may become available;

 

our ability to attract and retain key scientific or management personnel;

ii


 

 

the impact of laws and regulations;

 

developments relating to our competitors and our industry;

 

the effect of the COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies and future clinical trials;

 

our expectations regarding the time during which we will continue to be an emerging growth company or smaller reporting company as defined in federal securities regulations; and

 

other risks and uncertainties, including those listed under the caption “Risk Factors.”

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the Securities and Exchange Commission, or the SEC, could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Quarterly Report. Unless otherwise expressly stated, we obtained this industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.


iii


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Comprehensive Loss

2

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29

PART II.

OTHER INFORMATION

30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 3.

Defaults Upon Senior Securities

72

Item 4.

Mine Safety Disclosures

72

Item 5.

Other Information

72

Item 6.

Exhibits

73

Signatures

74

 

 

 

 

iv


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

 

 

March 31,

2021

 

 

December 31,

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,098

 

 

$

31,004

 

Marketable securities (Note 4)

 

 

280,439

 

 

 

265,198

 

Accounts receivable—due from related parties

 

 

856

 

 

 

577

 

Contract assets—due from related parties

 

 

878

 

 

 

856

 

Prepaid expenses and other current assets

 

 

5,520

 

 

 

4,704

 

Total current assets

 

$

340,791

 

 

$

302,339

 

Marketable securities, non-current (Note 4)

 

 

101,639

 

 

 

162,531

 

Property and equipment, net (Note 6)

 

 

10,752

 

 

 

10,841

 

Right-of-use assets, operating leases

 

 

9,750

 

 

 

9,845

 

Other non-current assets

 

 

30

 

 

 

30

 

Restricted cash

 

 

1,590

 

 

 

1,589

 

Total assets

 

$

464,552

 

 

$

487,175

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

8,348

 

 

$

4,368

 

Accrued expenses (Note 8)

 

 

10,572

 

 

 

10,330

 

Deferred revenue

 

 

87,912

 

 

 

92,552

 

Operating lease liabilities

 

 

2,408

 

 

 

2,572

 

Finance lease liabilities

 

 

640

 

 

 

689

 

Other current liabilities

 

 

257

 

 

 

106

 

Total current liabilities

 

$

110,137

 

 

$

110,617

 

Non-current liabilities

 

 

 

 

 

 

 

 

Deferred revenue, net of current portion

 

 

64,654

 

 

 

77,838

 

Operating lease liabilities, net of current portion

 

 

13,924

 

 

 

14,128

 

Finance lease liabilities, net of current portion

 

 

498

 

 

 

604

 

Other non-current liabilities

 

 

92

 

 

 

100

 

Total liabilities

 

$

189,305

 

 

$

203,287

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

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

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

417,096

 

 

 

412,777

 

Accumulated deficit

 

 

(141,840

)

 

 

(128,765

)

Accumulated other comprehensive loss

 

 

(13

)

 

 

(128

)

Total stockholders’ equity

 

 

275,247

 

 

 

283,888

 

Total liabilities and stockholders’ equity

 

$

464,552

 

 

$

487,175

 

 

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

1


 

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31, 2021 and 2020

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

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

 

 

2021

 

 

2020

 

Collaboration Revenue—from related parties

 

$

18,702

 

 

$

3,428

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

$

25,962

 

 

$

12,116

 

General and administrative

 

 

5,909

 

 

 

2,559

 

Total operating expenses

 

 

31,871

 

 

 

14,675

 

Loss from operations

 

 

(13,169

)

 

 

(11,247

)

Other income (expense):

 

 

 

 

 

 

 

 

Interest Income

 

 

118

 

 

 

349

 

Interest Expense

 

 

(24

)

 

 

(34

)

Total other income:

 

 

94

 

 

 

315

 

Net loss

 

$

(13,075

)

 

$

(10,932

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

Unrealized gain on marketable securities

 

 

115

 

 

 

214

 

Total comprehensive loss

 

$

(12,960

)

 

$

(10,718

)

Reconciliation of net loss to net loss attributable to common

   stockholders:

 

 

 

 

 

 

 

 

Net Loss

 

$

(13,075

)

 

$

(10,932

)

Deemed dividend from exchange of convertible preferred stock

 

 

 

 

 

(9,050

)

Net loss attributable to common stockholders

 

$

(13,075

)

 

$

(19,982

)

Net loss per share attributable to common stockholders, basic

   and diluted

 

$

(0.29

)

 

$

(10.23

)

Weighted average common stock outstanding, basic and diluted

 

 

44,649,572

 

 

 

1,952,667

 

 

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

 

2


 

KYMERA THERAPEUTICS, INC.

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

For the three months ended March 31, 2021

(In thousands, except for share amounts)

(Unaudited)

 

 

Common Stock

 

Additional

Paid in

 

Accumulated

 

Accumulated

Other

Comprehensive

 

'Total

Stockholders’

 

 

Shares

 

Value

 

Capital

 

Deficit

 

Loss

 

Equity

 

Balance at December 31, 2020

 

44,482,186

 

$

4

 

 

412,777

 

$

(128,765

)

$

(128

)

$

283,888

 

Exercise of stock options

 

378,762

 

 

 

 

1,147

 

 

 

 

 

 

1,147

 

Vesting restricted stock

 

18,428

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

3,172

 

 

 

 

 

 

3,172

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

115

 

 

115

 

Net Loss

 

 

 

 

 

 

 

(13,075

)

 

 

 

(13,075

)

Balance at March 31, 2021

 

44,879,376

 

$

4

 

$

417,096

 

$

(141,840

)

$

(13

)

$

275,247

 

3


 

 

KYMERA THERAPEUTICS, INC.

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

For the three months ended March 31, 2020

(In thousands, except for share amounts)

(Unaudited)

 

 

Series Seed

Convertible

Preferred Stock

 

Series A

Convertible

Preferred Stock

 

Series B

Convertible

Preferred Stock

 

Series B-1

Convertible

Preferred Stock

 

Series C

Convertible

Preferred Stock

 

 

 

Common Stock

 

Additional

Paid in

 

Accumulated

 

Accumulated

Other

Comprehensive

 

Total

Stockholders'

Equity

 

 

Shares

 

Value

 

Shares

 

Value

 

Shares

 

Value

 

Shares

 

Value

 

Shares

 

Value

 

 

 

Shares

 

Value

 

Capital

 

Deficit

 

Income

 

(Deficit)

 

Balance at December 31, 2019

 

3,000,000

 

$

5,900

 

 

14,720,126

 

$

29,237

 

 

14,827,580

 

$

59,918

 

 

3,059,695

 

$

14,025

 

 

 

$

 

 

 

 

1,929,516

 

$

 

 

2,044

 

$

(76,456

)

$

6

 

$

(74,406

)

Vesting of Series A Preferred

   Stock in connection with

   collaboration arrangement

   (Note 5)

 

 

 

 

 

55,394

 

 

111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

1,182,265

 

 

4,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series C Preferred Stock,

   net of issuance costs of $320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,539,141

 

 

88,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

(1,988,802

)

 

(3,950

)

 

 

 

 

 

 

 

 

 

1,988,802

 

 

13,000

 

 

 

 

 

 

 

 

(2,333

)

 

(6,717

)

 

 

 

(9,050

)

Vesting restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

46,297

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

371

 

 

 

 

 

 

371

 

Unrealized gain on marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

214

 

 

214

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,932

)

 

 

 

(10,932

)

Balance at March 31, 2020

 

3,000,000

 

$

5,900

 

 

12,786,718

 

$

25,398

 

 

16,009,845

 

$

64,718

 

 

3,059,695

 

$

14,025

 

 

15,527,943

 

$

101,180

 

 

 

 

1,975,813

 

$

 

$

82

 

$

(94,105

)

$

220

 

$

(93,803

)

 

 

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

 

4


 

 

KYMERA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2021 and 2020

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

 

 

2021

 

 

2020

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(13,075

)

 

$

(10,932

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

3,172

 

 

 

371

 

Depreciation and amortization

 

 

485

 

 

 

387

 

Premiums and discounts on available-for-sale marketable securities

 

 

1,279

 

 

 

 

Non-cash research and development expense

 

 

 

 

 

111

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(816

)

 

 

(1,477

)

Receivables—due from related parties

 

 

(279

)

 

 

 

Contract asset—due from related parties

 

 

(22

)

 

 

 

Accounts payable

 

 

4,150

 

 

 

(161

)

Accrued expenses and other current liabilities

 

 

235

 

 

 

690

 

Deferred revenue

 

 

(17,822

)

 

 

(3,428

)

Operating lease right-of-use assets

 

 

95

 

 

 

4,295

 

Operating lease liabilities

 

 

(368

)

 

 

(1,913

)

Other liabilities

 

 

143

 

 

 

 

Net cash used in operating activities

 

$

(22,823

)

 

$

(12,057

)

Investing activities

 

 

 

 

 

 

 

 

Purchase of property and equipment, net

 

 

(164

)

 

 

(1,395

)

Purchases of investments

 

 

(16,013

)

 

 

(36,008

)

Maturities of investments

 

 

60,500

 

 

 

 

Net cash provided by (used in) investing activities

 

$

44,323

 

 

$

(37,403

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from the issuance of Series B Convertible Preferred Stock, net of issuance costs

 

 

 

 

 

4,800

 

Proceeds from the issuance of Series C Convertible Preferred Stock, net of issuance costs

 

 

 

 

 

88,462

 

Proceeds from stock option exercises

 

 

1,147

 

 

 

 

Payments of offering costs in connection with initial public offering

 

 

(397

)

 

 

 

Payments on finance leases

 

 

(155

)

 

 

(142

)

Net cash provided by financing activities

 

$

595

 

 

$

93,120

 

Net increase in cash, cash equivalents and restricted cash

 

 

22,095

 

 

 

43,660

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

32,593

 

 

 

77,789

 

Cash, cash equivalents and restricted cash at end of period

 

$

54,688

 

 

$

121,449

 

Supplemental disclosure of cash flow activities

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

24

 

 

$

34

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

 

 

 

Offering costs included in accrued liabilities

 

$

 

 

$

281

 

Property and equipment purchases included in accounts payable and accrued expenses

 

$

259

 

 

$

1,714

 

 

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

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Cash and cash equivalents

 

$

53,098

 

 

$

121,250

 

Restricted cash

 

 

1,590

 

 

 

199

 

Total cash, cash equivalents, and restricted cash

 

$

54,688

 

 

$

121,449

 

 

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

 

5


 

 

KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Nature of Business

Kymera Therapeutics, Inc., together with its subsidiary Kymera Securities Corporation, is referred to on a consolidated basis as the “Company”. The Company is a biopharmaceutical company focused on discovering and developing small molecule therapeutics that selectively degrade disease-causing proteins by harnessing the body’s own natural cellular process, a method known as targeted protein degradation. The Company has devoted its efforts principally to research and development since formation. The Company has not yet completed product development, filed for or obtained regulatory approvals for any products, nor verified the market acceptance and demand for such products. As a result, the Company is subject to a number of risks common to emerging companies in the biotech industry. 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 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.

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. However, there is no guarantee that any of these strategic or financing opportunities will be executed or realized on favorable terms, if at all, and some could be dilutive to existing stockholders. If the Company fails to obtain additional future capital, it may be unable to complete its planned preclinical studies and clinical trials.

Reverse Stock Split

On August 20, 2020, the Board approved a 1-for-1.5949 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each of the Company’s outstanding series of preferred stock. All share and per share amounts in the accompanying condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital.

Initial Public Offering

On August 20, 2020, the Company’s registration statement on Form S-1 relating to its initial public offering of its common stock was declared effective by the Securities and Exchange Commission (“SEC”). In the IPO, which closed on August 25, 2020, the Company issued and sold 9,987,520 shares of common stock, including full exercise of the underwriters’ over-allotment option to purchase an additional 1,302,720 shares, at a public offering price of $20.00 per share and the aggregate gross proceeds before deducting underwriting discounts and commissions, and other estimated offering expenses payable by the Company, were approximately $199.8 million. Concurrent with the IPO, the Company issued and sold 676,354 shares of common stock at $20.00 per share in a private placement to Vertex and the aggregate proceeds were $13.5 million.

2. 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.

6


KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

 

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Kymera Securities Corporation. All intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) as found in the Accounting Standards Codification (“ASC”), Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. 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.

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.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard was effective beginning January 1, 2021. The Company adopted this standard as of January 1, 2021 and it did not have a material impact on its financial position or results of operation.

Recently Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements. The new standard requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. It also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. 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.

7


KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

 

3. 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):

 

 

 

Fair Value Measurements at

March 31, 2021:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market fund

 

$

23,321

 

 

$

 

 

$

 

 

$

23,321

 

Marketable securities, current

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US treasuries

 

 

201,758

 

 

 

 

 

 

 

 

 

201,758

 

Corporate bonds

 

 

 

 

 

78,681

 

 

 

 

 

 

78,681

 

Marketable securities, non-current

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US treasuries

 

 

86,799

 

 

 

 

 

 

 

 

 

86,799

 

Corporate bonds

 

 

 

 

 

14,840

 

 

 

 

 

 

14,840

 

Restricted cash

 

 

1,590

 

 

 

 

 

 

 

 

 

1,590

 

Total

 

$

313,468

 

 

$

93,521

 

 

$

 

 

$

406,989

 

 

 

 

Fair Value Measurements at

December 31, 2020:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market fund

 

$

19,943

 

 

$

 

 

$

 

 

$

19,943

 

Corporate bonds

 

 

 

 

 

10,499

 

 

 

 

 

 

10,499

 

Marketable securities, current

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US treasuries

 

 

192,275

 

 

 

 

 

 

 

 

 

192,275

 

Corporate bonds

 

 

 

 

 

72,923

 

 

 

 

 

 

72,923

 

Marketable securities, non-current

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US treasuries

 

 

132,589

 

 

 

 

 

 

 

 

 

132,589

 

Corporate bonds

 

 

 

 

 

29,942

 

 

 

 

 

 

29,942

 

Restricted cash

 

 

1,589

 

 

 

 

 

 

 

 

 

1,589

 

Total

 

$

346,396

 

 

$

113,364

 

 

$

 

 

$

459,760

 

 

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.

4. Marketable Securities

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

 

Description

 

Amortized

Cost

 

 

Unrealized

Gains

 

 

Unrealized

Losses

 

 

Fair

Value

 

March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury securities

 

$

288,541

 

 

$

16

 

 

$

 

 

$

288,557

 

Corporate securities

 

 

93,557

 

 

 

 

 

 

(36

)

 

 

93,521

 

Total

 

$

382,098

 

 

$

16

 

 

$

(36

)

 

$

382,078

 

8


KYMERA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

 

 

 

Description

 

Amortized

Cost

 

 

Unrealized

Gains

 

 

Unrealized

Losses

 

 

Fair

Value

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury securities

 

$

324,917

 

 

$

 

 

$

(53

)

 

$

324,864

 

Corporate securities

 

 

102,946