On Friday, B.Riley, a financial services firm, increased the price target for Kymera Therapeutics (NASDAQ: KYMR) to $41 from the previous target of $36, while maintaining a Neutral rating on the stock. The adjustment follows the company's announcement of its third-quarter earnings for 2024 and a comprehensive business update.
Kymera Therapeutics has initiated patient dosing for KT-621, its investigational STAT6 degrader, and management anticipates initial data from the Phase I study to be available in the first half of 2025. The update has sparked interest among investors eager for insights into the drug's potential.
The company's management has cautioned against drawing early conclusions from comparing KT-621's impact on cytokine levels to historical data from other drugs like dupilumab, noting the variability and modest biomarker reductions in early data from healthy volunteers. Analysts suggest the preclinical data for KT-621 indicates a reasonable chance of showing activity in TH2-driven diseases, but emphasize that it is too early to predict its efficacy compared to existing treatments.
In a separate development, Kymera Therapeutics has revised its timeline for the Phase II results of another drug candidate, KT-474, an IRAK4 degrader. The expected readout has been shifted from the first half of 2025 to mid-2026 due to the addition of an extra dose level that is intended to expedite the drug's development trajectory.
Based on these updates, B.Riley has modified its financial model for Kymera Therapeutics, increasing the probability of success for KT-621 in treating atopic dermatitis to 35%. This revision underpins the decision to raise the price target to $41.
In other recent news, Kymera Therapeutics has made significant strides in its financial and clinical operations. The company reported a Q2 2024 revenue of $25.7 million, primarily due to its partnership with Sanofi (NASDAQ:SNY), and announced a public offering of $200 million in common stock and pre-funded warrants. Kymera is advancing its clinical trials for KT-621, a novel oral drug designed to degrade STAT6, a protein involved in allergic diseases, with initial data expected in the first half of 2025.
Jefferies, Oppenheimer, Leerink Partners, and Wolfe Research have all expressed confidence in Kymera's potential. Jefferies raised the price target for Kymera shares to $59, while Oppenheimer increased its target to $56, both maintaining an Outperform rating. Leerink Partners initiated coverage with an Outperform rating, citing potential in Kymera's KT-621, and Wolfe Research upgraded Kymera shares to an Outperform rating after evaluating the company's main assets, IRAK4 and STAT6.
Kymera is also intensifying its focus on the immunology and inflammation segment, redirecting resources from its oncology programs, KT-333/STAT3 and KT-253/MDM2. The company revealed promising preclinical data for its new drug candidate KT-621 and plans to initiate Phase 1 testing in the latter half of 2024. Additionally, Kymera is expanding Phase II trials of the IRAK4 program and advancing the STAT6 program, showing promising activity and tolerability in its oncology programs, KT-253 and KT-333. These are recent developments in the company's operations.
InvestingPro Insights
Kymera Therapeutics' recent developments and B.Riley's price target increase are complemented by additional insights from InvestingPro. The company's financial health shows some strengths, with InvestingPro Tips indicating that Kymera "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations." These factors could provide the company with financial flexibility as it advances its drug candidates through clinical trials.
However, investors should note that Kymera is currently not profitable, with InvestingPro Data showing a negative gross profit margin of -136.15% for the last twelve months as of Q2 2024. This aligns with the InvestingPro Tip that the company "suffers from weak gross profit margins." Despite this, Kymera has demonstrated strong revenue growth, with a 71.38% increase over the same period.
The stock's performance has been notably volatile, with a significant 299.74% price total return over the past year. This volatility is reflected in the InvestingPro Tip stating that "stock price movements are quite volatile." For investors considering Kymera, it's worth noting that InvestingPro offers 11 additional tips that could provide further context for the company's financial situation and market position.
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