By Bill Alpert

Shares of the biotech Kymera Therapeutics are up 50% since Monday, when data from an early trial hinted that its pill might relieve dermatitis and asthma comparably to the Regeneron Pharmaceuticals blockbuster injectable Dupixent.

Wall Street applauded. Shares of the Boston drug developer got several upgrades to a Buy. A half-a-dozen analysts boosted price targets -- if only to stay ahead of the stock's jump from $30 to $46.

Kymera's Phase 1 study compared its pill to a placebo in 118 healthy volunteers. Its pill, KT-621, is one of a new class of drugs called protein-degraders, which can block proteins that act as the on-switches for particular troublemaking genes. That could make them good treatments for cancer and for autoimmune ailments.

KT-621 appears to be the first drug to successfully block STAT6, which triggers inflammation in autoimmune disorders like dermatitis. The Phase 1 data showed STAT6 levels dropping near zero. Two biochemical markers of inflammation also fell -- in amounts comparable to that shown with Dupixent, the $15 billion a year injectable drug sold by Sanofi and Regeneron.

The Kymera drug also had a clean safety profile, with side-effect observations similar those of the placebo.

Those results persuaded Morgan Stanley analyst Vikram Purohit to go from a Hold to a Buy. His Monday note raised his target by 60%, from $49 to $79.

"The data suggest the ability to define a broad therapeutic window with a potent molecule," wrote Purohit, "and provides positive read through to Kymera's degrader platform potential."

The next events in KT-621's development will be a fourth-quarter report on a Phase 1 study in patients with dermatitis. Early next year, Kymera will start Phase 2 trials in dermatitis and asthma. Morgan Stanley projects that an approval for dermatitis could lead to $1.3 billion to $2.3 billion in annual sales by 2035.

Kymera has degraders in development for the triggers of two other inflammation-driving genes. So Purohit believes the company remains undervalued -- even after this week's jump in its market capitalization to $2.8 billion.

Guggenheim Securities' Michael Schmidt was already at a Buy when Kymera reported its trial results. But he raised his price target from $52 to $60.

"We are highly encouraged by the 'clean sweep' on KT-621 first-in-human [healthy volunteers] data," Schmidt wrote Monday. He thinks Kymera's degrader drugs show promise for asthma, dermatitis, and the lung disorder known as COPD.

At H.C. Wainwright, analyst Andrew Fein also maintained his Buy rating on Kymera. He arrives at a $54 target for the stock, after discounting back from a forecast for $5 a share in earnings in the year 2031.

One last suggestion on opportunities for Kymera comes indirectly, in a Tuesday note on Regeneron by RBC Capital analyst Brian Abrahams. He writes that Regeneron could face a $10 billion hole in its annual revenue when it eventually loses exclusivity on Dupixent.

A good use for some of Regeneron's $18 billion in cash, says Abrahams, could be a business development deal with Kymera.

Write to Bill Alpert at william.alpert@barrons.com

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June 05, 2025 16:16 ET (20:16 GMT)

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