Kymera Revenue Drops 55 Percent in Q2

Kymera Therapeutics (KYMR -4.54%), a biotechnology company recognized for its targeted protein degradation technology, released its second quarter 2025 results on August 11, 2025. The most notable news was a sharp decline in GAAP revenue for Q2 2025, with reported revenue of $11.48 million versus analysts' estimates of $22.24 million—a 48.4% shortfall, coupled with increased operating losses driven by higher research spending. GAAP revenue was $11.5 million, well below the estimated $22.24 million (GAAP). GAAP loss per share (EPS) was $(0.95), also worse than the anticipated $(0.81) GAAP EPS. Research expense surged due to increased investment in the STAT6 program, platform and discovery programs, and growth in the research and development organization. The quarter highlighted significant scientific progress, but GAAP financial performance trailed expectations.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

Kymera specializes in targeted protein degradation (TPD), a novel drug discovery approach that uses small molecules to direct the body’s cellular machinery to eliminate proteins involved in disease. This enables the company to address conditions that have been resistant to older drug technologies. The company's current strategy centers on applying TPD to immunology, aiming to treat diseases like atopic dermatitis, asthma, lupus, and rheumatoid arthritis with degraders that offer the benefits of biologic drugs in convenient oral form.

Over the past year, Kymera has focused on two main product programs: KT-621, a STAT6 degrader for allergy-driven inflammatory diseases, and KT-579, an IRF5 degrader targeting autoimmune conditions. It also maintains strategic partnerships with companies such as Sanofi and Gilead for additional drug discovery and development programs. The company's strength lies in its ability to bring multiple new candidates into the clinic, broad intellectual property protection, and prudent outsourcing of manufacturing to streamline operations. These factors are essential to building value in the high-risk, innovation-driven biotechnology sector.

Period Highlights: Financial and Pipeline Progress

GAAP revenue for Q2 2025 fell by more than half compared to Q2 2024, totaling $11.5 million. This shortfall was primarily due to the timing of collaboration revenue, including the deferral of a large upfront payment from the Gilead partnership and the winding down of Sanofi collaboration payments in Q2 2025 (GAAP). Analysts had expected $22.24 million (GAAP) in revenue for Q2 2025, so the revenue gap underscores Kymera’s dependence on milestone and partnership payments rather than sales of approved therapies. GAAP research and development expense rose sharply to $78.4 million in Q2 2025, compared to $59.2 million in Q2 2024. General and administrative expense was relatively steady at $17.6 million. The company reported a net loss of $76.6 million, mainly reflecting expanded investment in the pipeline ahead of meaningful revenue from new drugs. Cash and investments totaled $963.1 million as of Q2 2025, up 13.2% from the end of 2024 (Q2 2025 vs. December 31, 2024), boosted by a $288 million equity raise and upfront cash from Gilead in Q2 2025. Management stated the current cash "runway" is expected to support operations into the second half of 2028, based on the cash position as of July 31, 2025.

The centerpiece of Kymera’s pipeline is KT-621, an oral small molecule STAT6 degrader intended to treat inflammatory diseases like atopic dermatitis (a chronic skin condition) and asthma. Kymera completed a Phase 1 study of KT-621 in healthy volunteers in Q2 2025, showing over 90% STAT6 reduction in blood and skin and a safety profile similar to placebo. The company launched a Phase 1b "BroADen" trial of KT-621 in moderate to severe atopic dermatitis patients, aiming to report data in the fourth quarter of 2025. Two Phase 2b trials for atopic dermatitis and asthma are planned to begin in Q4 2025 and Q1 2026, with the goal of advancing to larger Phase 3 studies. Another focus is KT-579, an IRF5 degrader targeting autoimmune diseases like lupus and rheumatoid arthritis. This program remains in preclinical development, with first human studies planned for early 2026. Preclinical data for KT-579 have shown promising activity and selectivity, but clinical proof awaits. Kymera also progressed its IRAK4 degrader program in partnership with Sanofi, triggering a $20 million milestone payment in Q1 2025. Notably, Sanofi deprioritized the KT-474 molecule, but KT-485 (a second-generation IRAK4 degrader) is expected to enter Phase 1 testing in 2026. Looking at partnerships, Kymera signed a high-value collaboration with Gilead on a CDK2 degrader, which could yield up to $750 million in future payments if milestones are hit.

In Q1 2025, Kymera made a strategic decision to pause its TIC2 program (an oral TYK2 degrader), even though all preclinical safety studies were successful. Management cited a desire to focus resources on the most promising and differentiated assets -- KT-621 and KT-579. The company also strengthened its executive team with the appointment of a new Chief Business Officer. Investing for late-stage growth, Kymera ended the quarter positioned to fund pivotal data readouts and program launches over the next 12–18 months. The company maintains a heavy reliance on collaboration partners for revenue, which can be "lumpy" and unpredictable as milestone timing depends on external decisions. With no marketed products yet, expenses and losses are likely to remain high until own-drug approvals are achieved, which is several years away.

While GAAP revenue for Q2 2025 reflected the phasing out of Sanofi collaboration revenue and the deferral of the Gilead upfront payment, the balance sheet strengthened. The company had approximately $1 billion in cash, cash equivalents, and investments as of July 31, 2025, positioning it to support multiple large clinical trials. However, analysts and management recognize the main risks remain clinical trial outcomes and the timing of partner-driven revenue, both of which influence the future pace of development and commercial launch.

On the science front, the STAT6 degrader program may offer benefits over current biologic therapies by potentially providing similar efficacy in a more convenient, orally dosed format. Early results support target engagement, but key proof will come once patient data from ongoing and planned trials are released. The IRF5 program is also seen as first-in-class, but it is only entering human testing in 2026. Both programs are backed by strong human genetics and preclinical data suggesting disease-modifying potential.

Outlook and What to Watch

Looking forward, Kymera plans to share data from the Phase 1b trial of KT-621 in atopic dermatitis patients in the fourth quarter of 2025. Phase 2b studies in both atopic dermatitis and asthma are on track to begin in Q4 2025 and Q1 2026, respectively. The KT-579 program will file to enter Phase 1 trials and begin first-in-human dosing in early 2026. These milestones will be critical to determine whether Kymera’s therapies can meet efficacy and safety expectations in relevant patient populations. Management did not offer specific financial guidance for the next quarter or year.

Investors and observers should watch for updates on the KT-621 program's clinical readouts, progress in KT-579’s transition to human studies, and developments in collaboration milestones, particularly those tied to Sanofi and Gilead. Since the company relies mainly on partner payments, periods without new milestone events may translate into lower reported revenue. Ongoing R&D spending is expected to remain high as Kymera readies multiple parallel studies. The ability to move candidates through pivotal development phases and eventually into market approval will define the company's transformation from a research-driven firm to a commercial operation.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.