BridgeBio Pharma, Inc. (BBIO) Earnings Call Transcript & Summary

Thanks so much. Really appreciate the time and the opportunity to present here, and thanks for everyone for coming. There's a lot going on right now at BridgeBio. We have 3 Phase IIIs already commenced or about to commence in ADH1, achondroplasia, and LGMD2i, and obviously, an important Phase II data set reading out later this year in congenital adrenal hyperplasia. But I wanted to spend the entirety of my time today talking about a key program in ATTR-Cardiomyopathy, one of our big catalysts that's upcoming this year, which is the final readout from our Phase III ATTRibute trial. And I want to spend some time on -- move this forward to Slide 2. The key questions highlighted on this second slide. First of all, what are the clinical expectations from this trial? And how might we compare the clinical data that we produce from a tribute to already available therapies and specifically, what does superiority look like? I want to then tie those clinical expectations to commercial expectations, where we've done quite a bit of work, as you'll see in trying to understand what relative market share we can expect based on the wide variety of outcomes we might get from this clinical trial. So let me start with -- on the clinical expectations segment. And before we get into the expectations and projections, I want to take you back about 10 years to where we, as a field started in the context of the ATTR-ACT trial. So recall, about a decade ago, what you can see against the most important Y-axis in the entirety of this field, which is that of survival. You can see that the placebo arm of ATTR-ACT delivered over the course of 30 months, 57% survival, which is consistent with the dramatic unmet need associated with ATTR cardiomyopathy. Now on the top of this chart, you can see an 85% survival rate, which is what we believe the best you can do in this space, e.g., this is what life looks like outside of ATTR cardiomyopathy. We arrived at this number by effectively calculating for a mean 77-year-old, what survival would look like over 30 months, with the attending comorbidities that we observed in our trial associated with AFib, hypertension, and Type 2 diabetes. So 85% looks like life without ATTR cardiomyopathy, 57% looked like survival some decade ago. And hearteningly, you can see with the partial stabilizer, Tafamidis, they were able to move a little less than halfway up, but deliver a compelling 70% survival rate over the course of their 30-month trial. Now over the course of the next decade, something very interesting happened, which is absent pharmacologic intervention, absent therapy, medical management improved -- we got better at diagnosing these patients moving from a cardiac biopsy to an associated type of diagnosis. We were better able to treat these patients with more aggressive diuresis and putting them on fewer and fewer counter-indicated medicines. And over time, what we saw, as you can see here, was an elevation of survival rates, again, absent pharmacologic intervention. The largest 5 observational studies that have been conducted since 2018, if you take the average of them, as shown here, suggest that 74% survival is achievable again without pharmacology in this space. That means to put it another way, that the placebo arms of our trial and every other trial that are run after this are likely to outperform the on-drug arm of the ATTR-ACT trial very interestingly. So what's possible now in the context of better medical management and more potent stabilization. We show that on this final slide. We have last patient, last visit in our attribute study, and we know now that the blinded blended survival rate is around 80% in our trial. Our hope is that our drug is able to separate meaningfully from placebo and drive survival rates on drug above 80%, closer and closer to the world or the life without ATTR cardiomyopathy. If we're able to do that, we believe that would be a profound advance for the clinical community and the patients that we serve. Furthermore, we'd like to do that while also attending 2 cardiovascular hospitalizations, a key parameter that both physicians and patients say is important. Here on Slide 7, I'm showing you the mean frequency of CV hospitalization events per year as reported from the ATTR-ACT Trial. Some 0.884 on placebo and unfortunately, in excess of hospitalization on therapy as driven by Tafamidis some 0.999. So you can see the mean frequency of CV hospitalizations per year going the wrong way. Our hope is that we're able to have a definitive and beneficial impact on CV hospitalizations, both important in terms of quality of life and quality of health for our patients, but also important from a pharmocoeconomic standpoint, recall that each one of these hospitalizations is about $16,000 to $20,000 per year. Okay. So that's what's possible, but there is a flip side, obviously, to the fact that the event rates are meaningfully lower and that survival is meaningfully higher in the context of these current trials and in the context of a tribute. The last time we were at 80% survival rates. There was no meaningful separation between therapy and placebo. These are the curves that are associated with the ATTR-ACT trial. And you can see a little over 18 months in where they reached a blinded blended rate of approximately 80%. There was no separation. And so we need to believe that we have a more potent drug to separate those curves at a time or underneath the conditions that prior therapies were unable to. We believe we have that more potent drug as we show on this next slide. I think many of you are familiar with this data. But our drug sees more target being less albumin bound, binds the target more effectively having a superior kd2, and glues the target together more effectively upon binding with its superior enthalpic binding mode. We've demonstrated this across free assays preclinically. We've demonstrated this with a better serum TTR level in the clinic in our Phase II and the Part A readout of our Phase III, and we've demonstrated this against NT-proBNP, a key biomarker in this space. So we believe we have that more potent drug that can overcome this higher bar that's attendant in our trial based on the fewer number of events. So what does all that mean in terms of what we can expect from the trial. On the left-hand side of the slide, I'm showing you here on Slide 10, you have our base case outcome. Starting with, number one, obviously, achieving statistical significance on our primary outcome, which is a hierarchical analysis where the win ratio as the primary endpoint. The second, the provision of unprecedented survival, 80-plus percent, which we haven't seen in the space before with clinically meaningful separation from placebo. And finally, best-in-class performance on key serum biomarkers, suggesting again that we have a more potent stabilizer and those key serum biomarkers were the ones I just discussed on the prior slide. On the right-hand side, you can see what we believe is the best possible outcome from this trial, which inclusive of the 3 things I just mentioned, adds on to it, best-in-class CV hospitalization performance as well as best-in-class win ratio performance, which is the primary endpoint of this trial, bettering the 1.7 that was put out by Pfizer in the ATTR-ACT trial. What does that mean in terms of market share -- in the left-hand side, you can see about a 25% market share based on our extensive analysis that I'll go into in a moment. On the right-hand side, you can see about a 40% market share. The range is relatively tight, no matter what analytic methodology you use. It's a little underneath, to be frank, what I had hoped when we first went into doing some of the research, but I think the 40% is consistent with second entrant movers in large categories like this, as you'll see in a moment. So we'll keep that 25% to 40% in your mind for a moment, and I'll move into exactly how we calculated these numbers over the course of our commercial work in the last 6 months. I'm going to start though by reminding you that this market is large and that this market is durable, which will set the context for how one understands the absolute numbers associated with each one of these market shares. I don't think there's much controversy in this room. Most of you know that the market is already $3 billion large, growing at above a 50% CAGR, and there are 3 significant tailwinds that are driving the increase in this market. Absent underdiagnosis, and recall, we probably only diagnosed 1/6 of the patients with ATTR cardiomyopathy in the U.S. alone. The first tailwind is the Inflation Reduction Act, which although might be at broadly hard for this industry for this category is good because it will take co-pays of some $14,000-plus on Medicare Part D for the small molecule stabilizers and bring them down to a little over $2,000; making today what is an unaffordable set of medicines affordable. We believe that doubles the market in the U.S. alone. Secondly, ex U.S. geographic penetration, recall, Tafamidis is just coming online or hasn't even come online in key geographies, such as the United Kingdom, Spain, Italy, and others. And so as we grow internationally, we expect to see the market grow. And then finally, improving and increased diagnostic awareness will continue to drive this market. And one of the things that you see on category after category, especially in the cardiovascular markets, is that as more brands come on, as more sponsors come online, you see a growth of the TAM in a way that you wouldn't see with a single sponsor. And so ultimately, we think this is a $10 billion to $20 billion market. Market consensus right now from analysts is about $10 billion. You can see here a calculation that we've done suggesting about a $20 billion total available market, inclusive of the impact of the IRA. So the market is large. The market is also durable, we believe. I don't think there's much controversy around the fact that our IP goes out to 2039. But there have been some questions that we've been fielding around what does the Tafamidis IP estate look like. With PTE, it's very clear if you do a little bit of work that they are protected out until at least 2029 in the U.S. and 2030 in the EU. But our strong belief is that the crystal in form of Vyndamax is going to be protected out to 2035 in the United States. We've had 2 separate law firms look at this, as well as our chemists, and we believe it for the following reason as shown on Slide 16. Recall that there are 2 ways, obviously, to challenge in genericizes a brand. Number one is the challenge of the IP for obviousness. That is actually occurring in the context of Tafamidis in Europe today, looks like Pfizer has a strong case and will prevail in Europe. Europe being a tougher market to prevail in in terms of obviousness challenges than the U.S. so we think that they will be able to overcome that issue. The second issue, however, though, has to do with formulation in CMC. Pfizer did something very interesting in that they patented the lowest free energy form of the 61mg form of Vyndamax when they were going to market with that drug. What does that mean? That means that anyone who actually manufactures generic Vyndamax will either have that low energy, lowest energy free form in their formulation, therefore, violating their patents or they will have to run a bioequivalent study akin to attribute, which generic manufacturers cannot want to do. So you'll literally either have to violate the laws of thermodynamic or you'll have to run another Phase III trial to overcome this patent estate that goes out to 2035. So we think the market is actually fairly durable out to 2035 in the U.S. Now what happens between 2035 and 2039. We've looked at a wide variety of cardiovascular categories. And what you can see is that when one brand genericizes, it's not as if the entire category genericizes. We intend to run a wide variety of Phase IV trials to continue to assert our elevated potency and superiority within this space. But you can see in the antihypertensive space, the Factor Xa space, the diabetes space, et cetera. Here is a statin example that when one brand goes away, it's not as if every other brand goes away. When Lipitor went away, for instance, in 2012 as shown here on Slide 17, Crestor sales continued to come along because there were certain sets of physicians that were reaching for a more potent LDL reducer. So we believe the market is durable not only out to 2035, what we believe Tafamidis will go away in the U.S. but also from 2035 to 2039, and we'll continue to be able to sell underneath our IP. All right. So within that large and durable market, how do we start to estimate the market share. And it wasn't just by calling 3 or 4 or 5 physicians, but rather by employing what is a relatively standard set of techniques to really understand what the ultimate market share in this space could look like. We started obviously with expert interviews, but we buttress that with the ever-important preference share survey. -- here covering some 185-or-so physicians, which is extraordinarily important because that's really 80% of the prescribing universe today. We also talk to ex-commercial executives, talk to market access and payer panels, look at industry databases, importantly, both to look at sales trajectories of analogs, but also to look at volume trajectories of analogs because sometimes pricing can allow you to misinterpret what relative share might look like, and then public databases associated with clinical trial data and labels. We employed these all together in a kind of a mechanism where we look bottom-up using the physician survey and using the physician interviews, and we look top-down looking at categories, mostly cardiovascular and other categories, akin to cardiovascular categories to understand what second entrants might look like, both from a sales perspective and a volume perspective. And as I'll show you over the course of the next few minutes, what was compelling is the remarkably consistent set of results that we got. Again, market ranges at a base case within 25% and 40% on the high case. I'll start with the preference share survey, which I think is one of the most important tools in this space. And I'll train you on to the left-hand side of this chart, which is what we might expect in a 2-player market. In a 2-player market, you can see in the best possible scenario, us getting 58% of share, 52% in the base case scenario. When we move over to the 4-player market with 2 stabilizers and 2 knockdowns, those numbers come down to between 27% of the base case and 40% in the best possible case. As many of you who have used preference share surveys know, you have to take a haircut on these numbers. They tend to overestimate the market share of any entrant brand. So taking a 10% to 20% haircut on these numbers, gets you into the range that we're talking about. And I think it's consistent with the numbers that I stated prior to. These numbers roughly agree with what we saw from our HCP detailed 15 KOL analyses, which is effectively that in the best possible case you're looking at 39% in the 2-player market, in the base case about 25%. And again, in a 4-player market, those numbers come down to 34% and 20%. So again, well within the ranges that we're talking about from 25% to 40%. What was quite interesting was when we look top down at a number of different case analogs, we saw roughly those same ranges once again. So here's how we look at sales share benchmarking. We started with all products in the known universe from the e-pharma ATC Level 3 database. We then removed the small categories, remove the categories where there was a multiplicity of indications because sometimes that overlap in sales between different indications can confound your results. And we were left with was 98 brands in 36 different categories that had either 2-players or 4-players. And we looked at those and tried to understand how second entrants might perform. You can see here on the left-hand side in 2-player markets, us skewing pretty close to that 60-40 type thing that many of you who are in sales and marketing may have learned when you first entered the industry at 64% for Tafamidis and 36% using our TPP -- and -- I'm sorry, just for the second entrant in these categories, not using our TPP. And in 4-player markets, the mean of about 37% for a second entrant. I think what was really interesting is we did this work over the course of about 7 months and prior to an important paper getting published last week in Nature Reviews Drug Discovery from BCG, where they actually looked at relative market shares for first, second, third and fourth entrants in large markets. And you can see here data from one of their figures. They were looking at the present value of global sales, so a little bit different than absolute share at any given point, but relatively close. And you can see here, I'll just point you to the second column for second entrants that are either clinically differentiated or effectively me too, but with not a significant liability; that share looks somewhere between 46% and 38%. Interestingly, as you move from the middle row to the top row, you don't see a gain, actually, you see a slight loss, suggesting that there are great many other levers that need to be pulled just outside of clinical differentiation to really drive share as a second entrant. And I'll get to that in a moment. I'll be brief on the volume share benchmarking because I largely agreed with the sales share benchmarking. What you can see from our data is that second entrants tend to price more aggressively. I don't think that will be the case in this category. But as we looked across some 40 brands in terms of ATC3 groups, we actually supplemented that with some of the brands we saw in the BCG paper as well, arriving at a total of some 70 brands in 26 categories that we were able to look at volume or share scripts across the categories. And we found again that the second interest gets about 32% in the case of a 2-player market and 29% in the case of a 4-player market. Again, well within the ranges that are articulated at the outset. So how do some of these second and third mover brands actually overcome the first entrant. You obviously, history is replete with these types of examples from the Factor Xas actually the statins, as we were mentioning earlier, to SGLT2s. And you can see some of the examples here that are either near CV or within CV, think PAH is an interesting category to look at. A wide variety of commercial levers that can be pulled. Many of them have to do with access and pricing. Some of them have to do with HCP segmentation and how one serves clinical communities in different ways. Off-times, they are supplemented or buttressed by real-world evidence or key Phase IV clinical trials that are run, which certainly we intend to do. And sometimes they have to do with sales and marketing, innovative DTC or using other types of promotional models. And so you can see there are a number of tactics that we're obviously thinking carefully about. We hope to employ them. We hope that we get an upside case, and we're hopeful we're able to drive above 40% market share. But 25% to 40% market share within a durable market that looks like it's between $10 billion and $20 billion is our base case set of assumptions against this trial if it is to hit in late July. Another upside driver that I alluded to at the outset of the talk here is that TAM can actually grow significantly as multiple brands enter. And I think it's pretty obvious what that's driven by increased awareness, increased diagnosis, and increased patient access. You can see some concrete examples here coming from both CV as well as from the cancer space with CDK4/6. Okay. So I'm going to wrap up there and just remind everyone of the key points that are being made here today, and we're happy to get into these in our one-on-one discussions or in the hallways. We're also going to post these slides plus many of the analytics that go underneath, some of the numbers that you've seen today on our website just immediately after this talk. But first and foremost, we believe there's a profound opportunity to improve survival in this space, above 80% and getting toward the effective space where ATTR cardiomyopathy risk is fully eliminated. Secondly, we think there's a profound opportunity as well to reduce hospitalization rates. All of that comes within the context of having a higher bar. There are fewer events today against which a therapy like ours can effectively separate from placebo. And separation itself will require a more potent drug than we've seen in the past. If we're able to separate and get on to the playing field, we believe that this market is large and we believe that it is durable. We believe that a set of market share estimates that you can use a wide variety of analytic techniques to arrive at suggest we would be somewhere between 25% and 40% of this market, absolutely using some of the upside levers that I talked about. And that other drug categories suggest that we should and could use tactics such as market access, real-world evidence, Phase IV clinical studies and the like to hopefully exceed those 25% to 40% range and drive up above 50%. So I'll stop there with a few minutes for questions, if anyone has them, or we can pick it up in our one-on-ones and thank you for the time.