Shares of Kymera Therapeutics (KYMR 5.33%), a clinical-stage biopharmaceutical company, are tumbling in response to its latest quarterly update.
Kymera said it is updating a clinical trial testing the company's lead candidate, which will cause the study to last longer than expected, and disappointed investors pushed the stock down 24.6% as of 11:24 a.m. ET on Tuesday.
Kymera Therapeutics reported first-quarter 2022 results this morning. As a pre-commercial business without any products to sell, all eyes were on the company's lead candidate, an IRAK4 degrader called KT-474. Investors began the morning with a bad taste in their mouth for KT-474 because Pfizer recently discontinued the development of a candidate that works along the same lines after advancing it into phase 2 testing.
Kymera's IRAK4 candidate is still in a phase 1 trial that so far has only tested healthy volunteers, not people with autoimmune disorders like eczema that KT-474 is designed to treat. Kymera's stock is tanking today because the company told investors it would extend its phase 1 trial to account for a longer dosing period. The company also intends to incorporate new clinical endpoints for the patients it intends to enroll in the next part of its ongoing phase 1 study.
When they woke up this morning, Kymera Therapeutics investors were expecting to hear that KT-474 would progress into a phase 2 trial soon. Instead, the company told investors it would send patient data from its elongated phase 1 trial to its collaboration partner Sanofi in the second half of 2022 before starting a phase 2 trial. Now, investors are worried Sanofi could walk away from KT-474 the same way Pfizer just walked away from its own IRAK4 inhibitor.
When presenting first-quarter results, Kymera was awfully quick to tell investors that it had initiated clinical trials for two new oncology candidates. This pivot away from KT-474 could be a simple attempt to diversify its operation, but it can also be taken as a sign that the company lacks confidence in its lead candidate.