Cytokinetics, Incorporated (CYTK) Earnings Call Transcript & Summary

Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analysts. Before we start, please note that this webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. This webcast is not for the members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. [Operator Instructions] For this session, we have Robert Blum, CEO of Cytokinetics. Welcome, Robert.

Thank you, Jeff. Nice to be here.

For those who may not be familiar with Cytokinetics, can you provide a brief introduction?

Sure. Cytokinetics is a company that I helped launch in 1998. So we've been in business for a long time. We're investing in discovery of new biology, focused to muscle, muscle contractility in the biomechanics or machinery of muscle force and power and endurance. And we have pioneered and lead in this area. We have built a pipeline currently of 5 drug candidates that either augment or suppress the activities and function of muscle for therapeutic gain. The lead amongst these is omecamtiv mecarbil, a cardiac muscle activator, a cardiac myosin activator, now in Phase III.

Great. Well, let's jump right into omecamtiv mecarbil. Can you walk us through how omecamtiv works and what you saw in the COSMIC study?

Sure. So omecamtiv mecarbil is a small molecule activator of cardiac myosin, which is the mechanochemical enzyme that drives cardiac muscle contractility. It drives the generation of cardiac muscle force and power. Omecamtiv mecarbil has effect to -- when binding to cardiac myosin extend the duration of cardiac contractility during each beat of your heart. So it has effect to increase systolic ejection time, which is the principal pharmacology. And in COSMIC, the trial you asked about, we saw that when dosed orally for 20 weeks in a population with chronic heart failure, omecamtiv mecarbil contributed to increases in cardiac performance as measured by increased systolic ejection time, but also measures of output, like ejection fraction. And that was accomplished in, over time, a way that also contributed to reductions in cardiac dimensions and volumes as well as in heart rate and proBNP, a cardiac measure of wall stress. So this was incredibly encouraging for what would be our interest to advance to a potential outcomes trial now being concluded, that trial called GALACTIC.

And so GALACTIC data is expected to read out in the next few months. Can you go through the design of the GALACTIC study?

Yes. A design paper published earlier this year -- and I'll highlight those key elements of its design. GALACTIC, which I should mention is being conducted by Amgen in collaboration with Cytokinetics, is a large outcome study. It enrolled over several years over 8,000 patients with heart failure, in particular, those who had been admitted into the hospital within 1 year. And in fact, as I'll elaborate, I'm sure, in a moment, we had about 25% of patients in GALACTIC randomized from within the hospital. But GALACTIC is designed to accrue endpoints. And when we achieved 1,590 cardiovascular deaths, then the trial proceeds to close out. The study is designed to assess whether omecamtiv mecarbil when overlaid to standard of care is having effect to reduce time to cardiovascular death and heart failure-related endpoints, most of which are hospitalizations. But it's statistically powered based on time to cardiovascular death alone, that being the first secondary endpoint. The study is designed with over 90% power to detect a clinically meaningful difference in time to cardiovascular death with an expected p-value of less than 0.05.

Great. And so what should we expect from the top line results? Will we see just the p-value for the composite primary endpoint? Or do you plan to provide the hazard ratio? And what about median values for each arm or the secondary endpoints?

Yes. Good question. I'm not sure I'm going to be able to answer it entirely to your satisfaction. But our objective, obviously, for this being such an important heart failure trial, is to ensure that its results are presented in a peer-reviewed fashion at a major medical meeting. And as such, we're going to have to be mindful of what will be the requirements of those meetings in terms of what we can disclose. In potentially top lining the results, we'll certainly want to disclose that which is deemed material. And therefore, it depends. It depends on the data. And we and Amgen are having conversations about what would be disclosed, whilst serving to ensure we still are permitting of the full results to be shared at a major medical meeting. At minimum, we'll be disclosing whether the trial met or did not meet its primary efficacy endpoint. Beyond that, I think it is still as needs to be determined.

Okay. What gives you confidence that omecamtiv should show benefit on outcomes?

So this has been amongst the most thoroughly studied new medicines for the potential treatment of heart failure, dating back all the way to first principles when about 20 years ago, we conceived of this therapeutic hypothesis and began screening for compounds that had certain activities that borrowed from what we knew were advantages of inotropes in terms of drugs that could enhance cardiac performance, but also without certain of those potential liabilities as it relates to arrhythmias, heart rate, et cetera. And we design into our assay systems the ability to discover compounds that bind directly to cardiac myosin that had certain preclinical properties. Over many years, we advanced those compounds, optimized and characterized them in preclinical and clinical studies, having completed already approximately 20 clinical trials before we might see results from GALACTIC. Along the way, we've understood that this is a compound that, in a pharmacokinetic-guided way, can enhance cardiac performance, as we've demonstrated not just in COSMIC, but in other studies in healthy volunteers, in acutely ill heart failure patients and in chronically stable heart failure patients. And we've seen a constellation of effects that are pharmacodynamic that are known to have high predictive value for improvement in outcomes, things like the reductions in dimensions and volumes; things like increases in ejection fraction and stroke volume without increasing heart rate; and perhaps most importantly amongst these, reductions in BNP. This is a particularly telling biomarker that has on a number of other studies, including recent heart failure trials, demonstrated that it augurs well for improvements in outcomes. In July, we presented some regression analyses demonstrating the predictive value of that and others. That's information that is archived on our website from an Investor Day presentation. I'd encourage anybody who's interested to do a deep dive on that to retrieve those slides.

Great. Well, given that the data are expected in the fourth quarter, I guess, has the last patient last visit occurred? And is it now in the analysis phase?

So I can't comment on that other than to say that we and Amgen are adhering to our time line that we'll have results in the fourth quarter. This was a trial that we guided to results in the fourth quarter earlier this year and already communicated that we'd be proceeding through closeout procedures in stages in order to ensure that we could meet that timeline. The event rates have come in on time. We have been proceeding through closeout of sites and countries. This is being conducted and operationalized by Amgen, but under our joint oversight. And as we're proceeding through to what would be the preview of the results, everything is as expected. We're going to, as we enter the fourth quarter, no longer engage in some of these types of activities around investor conferences or meetings with analysts or investors, in part so that we can focus on those matters and not otherwise be scrutinized for what might be our body language or anything we might have said in order to be able to maintain discipline and commitment to results in the fourth quarter.

Okay. Well, the measures that were reported from COSMIC, I mean they were associated with benefits and outcomes. But how do you think about the expected magnitude of benefit since COSMIC wasn't designed to look at outcomes?

Yes. So COSMIC was perhaps as good a study as one could conduct in Phase II to set the table for Phase III without itself being an outcomes trial. The magnitude of benefits were evidenced in ranges, like 8% to 10% relative improvements in cardiac performance associated with significant drops in BNP and end-systolic and end-diastolic volumes. If you look through the literature, you don't need to have large magnitude effects on cardiac function to demonstrate statistically significant and clinically meaningful improvements and outcomes. So in that range, in that magnitude, we designed GALACTIC very much in mind with certain expectations with regard to what would be deemed clinically meaningful. To your question, we'd like to see at least a 10% effect on cardiac composite of death and heart failure-related events. We'd like to see, as we've seen with other clinical trials, at least a 10% to 15% on effect on time to CV death. I think these are the magnitude of effects that have been demonstrated across other studies around which we've also designed and powered GALACTIC.

And given that some of the other heart failure studies have shown about 20% to 25% risk reduction, how should we interpret the results if the risk reduction is in the 10% to 20% range? And how should we think about the results in the context of the other studies?

That's a good question. So GALACTIC is designed with a very different therapeutic hypothesis, very different mechanism of action. And we're studying omecamtiv mecarbil on top of standard of care. To your question, those different studies of Novartis' Entresto, of Merck-Bayer's vericiguat and of the SGLT2 inhibitors have produced an array of results that have a wide span of effects on different endpoints for different patient populations. But with that said, there are some impressive results on time to CV death, especially with AstraZeneca's DAPA-HF trial. Inasmuch as that's setting one bar for that category in that class, there have been questions about what would be a minimal effect on time to CV death that could make a difference here. And I think it has to be considered in the context of the patient populations being studied, their risk profile and whether these drugs would be used together or separate. I believe that a 10% to 15% effect on time to CV death is going to be enough to be competitive and above that even better. And I don't have insights or visibility into the data. But I certainly believe that seeing effects on CV death will be important, maybe not even essential but important. And certainly, as payers look at this category, they're looking for what they can do to compare across trials, even though these are studies that are designed very, very differently.

And in COSMIC, you saw elevated troponin. I guess what gives you confidence that troponin shouldn't be a concern in GALACTIC? And if we do see elevated troponin, how should investors think about that? Do you have a sense for why you do see elevated troponin? Is that part of the reverse cardiac remodeling?

It could be. There are a number of hypotheses that are being chased down as to what's happening. You and I, we have our troponins going up and down on any given day as we might climb stairs or go about our activities of daily living. The magnitude of difference observed in COSMIC was really quite small and would have been undetected outside of a clinical trial, employing an ultrasensitive assay, but yet they are important to understand. And we have been, as you might remember in COSMIC, looking to adjudicate these troponin elevations when they occur. In COSMIC, there were 278 such excursions, all of them were adjudicated. 0 of them were deemed by an independent objective third-party to be associated with any clinical consequence. We are measuring troponins in GALACTIC. I suspect if we had an issue with troponins, it might have come up through the many data monitoring committee reviews that have occurred already with GALACTIC. That group was meeting quarterly for a couple of years before they changed their schedule to less frequently. And we've also conducted 2 interim analyses where they reviewed the data in totality unblinded. I suspect if we were seeing a troponin signal, they might have recommended we measure troponins more often or we alter the dose or conduct of the trial. I can't be sure of that, but I suspect we may have derisked around that matter between COSMIC and these DMC reviews, such that we'll see the data to be sure, but that's perhaps maybe been managed through the course of these activities.