Cytokinetics, Incorporated (CYTK) Earnings Call Transcript & Summary

Good morning, and welcome to day 3 of the Barclays Global Healthcare Conference. My name is Carter Gould, senior biopharma analyst here at Barclays. I am pleased to welcome Cytokinetics to join me in the next virtual fireside chat. We recently initiated on the company, and they are entering a defining period with a key Phase II readout forthcoming on CK-274 while they're also beginning to gauge with regulators on omecamtiv after positive Phase III data late last year. Joining -- representing the company is CEO, Robert Blum. Robert, welcome. Thanks for joining us. I believe you're going to start with some opening comments.

Yes. Thank you, Carter. Thanks for inviting us. I'll share my slides. Tell me if you can see that okay.

Great.

I'll just make a couple of introductory comments using slides, and then, I gather, we'll have a chat. I'll be making some forward-looking statements and refer you to our SEC filings for caveats to those statements. Here's our pipeline. This is the pipeline arisen from our own drug discovery and development activities, all organic to our science. And today, I gather, we'll spend most of our time talking about our cardiac muscle vertical driven by 2 lead programs in good balance, one to the other. One is omecamtiv mecarbil, our cardiac myosin activator, as Carter mentioned, subject of recently positive Phase III clinical trial results, and we'll be looking to engage regulatory authorities in support of potential registration and commercialization. The other is our cardiac myosin inhibitor, CK-274, a next-generation compound directed to potential treatment of obstructive HCM, and that's following behind MyoKardia's mavacamten now belonging to BMS. We have other compounds in our pipeline, other activators, other inhibitors, and I doubt we'll have time to go too much into those today, but recognizing that we pioneered and lead this field, we're advancing a pipeline of multiple drug candidates. Here are the primary results from the GALACTIC trial of omecamtiv mecarbil. You can see that there's a clear distinction between the drug treated group on top of standard of care versus placebo, which is standard of care, albeit the effect size here is modest, about an 8% relative risk reduction across the entirety of the treatment population. That effect was driven not by cardiovascular death, but a reduction in heart failure events, predominantly hospitalizations. And you can also see here a nominal effect on KCCQ, which was not deemed statistically significant because of the way in which we allocated alpha in the prespecified hierarchy of testing. Here's some especially good news in terms of a balance between AEs and SAEs, those patients receiving omecamtiv mecarbil having effects that really look quite like standard of care. That's especially important because omecamtiv mecarbil is a drug candidate that increases cardiac function and performance. And other compounds in that category have been associated with increased arrhythmias, increased myocardial infarction, and we believe that omecamtiv mecarbil has the potential to be distinguished that way. Here is perhaps the most important slide amongst these, and that demonstrates that there was a consistency across all prespecified subgroups. You can see that across all of these prespecified subgroups, including some that are quite large, including larger than most conventional trials in heart failure, you're seeing effects that favor omecamtiv mecarbil versus standard of care, especially as you look at those highlighted in green, those with ejection fractions below the median, the median representing 28% ejection fraction. That size subgroup is over 4,000 patients. So that's what we intend to explore more fully. And as we've done so through secondary analyses, we see coming together of effects that demonstrate omecamtiv mecarbil when added to standard of care, especially in these advanced heart failure patients, is associated with an increased both relative and absolute risk reduction beyond that of the overall population. And the effect size seems to grow in amplification and in magnitude as the ejection fraction falls. We think that's especially telling especially in light of how ejection fraction is a good biomarker of advanced risk in heart failure. The advanced heart failure patient population is not small. It's not a niche indication. Rather instead, if you look at around 6 million patients today with heart failure, about half of whom have reduced ejection fraction, about 2/3 or 1 million to 2 million of those appear to have ejection fractions below 30%. And when you consider other comorbidities, that's a population that we think represents a good opportunity for omecamtiv mecarbil, especially when these patients are maxed out on standard of care. How we might commercialize to them is still the subject of ongoing work streams, but you can imagine we're thinking about where those hotspots are of heart failure hospitalizations and how we might engage them both with feet on the ground commercially, but also digitally, especially recognizing post-pandemic, that's going to be increasingly an efficient way of penetrating commercial opportunities. Moving now to CK-274, our next in class cardiac myosin inhibitor. It's a subject of an ongoing Phase II trial called REDWOOD-HCM. We think that it represents a potential advancement in the field as it has properties, physiochemical and otherwise, that we think may lend it to be a preferred alternative in this category. We're conducting the REDWOOD trial. It's now completed in enrollment. It's a 2-cohort trial, Cohort 1 completed, and we then entered in an opened enrollment to Cohort 2. We announced in December the results of the interim analysis in Cohort 1, and you can see those summarized here. This informed progression to Cohort 2, which has completed enrollment. The interim analysis did demonstrate clinically relevant and substantial reductions in average resting left ventricular outflow tract gradient and post-Valsalva, outflow track gradient reductions in pressures, only modest increases in LVEF or ejection fraction. No SAEs attributed to study treatment. So we saw that as encouraging for the continuation of the study. That trial should read out midyear. So as Carter mentioned, we have both programs moving forward in parallel. They really do feed each other. The investment in infrastructure we expect to support omecamtiv mecarbil we anticipate could pay dividends as we might then 2 to 3 years later be commercializing CK-274 in many of the same proximity centers. So with that, I'll thank you for your interest, and I'll turn it back to you, Carter, for conversation.

Perfect. I think that did a great job of setting the stage, Robert. So let's just jump right into 274. And you highlighted some of the Cohort 1 data. I think that's really helpful. I guess now when we think about Cohort 2 and we think about differentiation, can you maybe just talk a little bit more in terms of how you're thinking about differentiation across different axis, both titration, which you kind of referenced, but -- dosing, but also safety and potential efficacy?

Sure. So as you know, our scientists played the key role in discovering mavacamten, which was optimized compound from compounds we had discovered in Cytokinetics, and that was licensed to MyoKardia prior to its acquisition by BMS. We know that compound quite well from its physiochemical properties, and we've used that as a benchmark in looking for compounds plural that might be next in class. So we've looked at a number of properties. We've looked at different chemical scaffolds. We've looked at mechanism of action. CK-274 and CK-271 have different mechanisms of action relative to MyoKardia's mavacamten, now BMS. But perhaps even more to the point, a shorter half-life and a flatter PK/PD relationship, we believe, should afford ease-of-use dose titration, more rapid reversibility, the ability to get to target concentrations more rapidly, therefore, have clinically meaningful effects sooner. In addition, we think the ADME properties are quite different, enabling what might ultimately be, like a lot of next-in-class compounds, potential for best-in-class. We also foresee that these properties of the compound may be enabling of us to demonstrate in clinical trials amplified efficacy and safety as we could then consider enrolling different types of patients, and also that would be enabling of more pronounced efficacy potentially.

Perfect. Maybe just a follow-up on that. As you think about sort of the mavacamten experience and through clinical development thus far, are there any key lessons you take away from those studies in terms of help guiding your execution, not just for REDWOOD, but also as you think about the Phase III?

Yes. So I think MyoKardia did a very good development program, both Phase II and Phase III, and we have opportunity, as we should, with a next-in-class compound to expand on the knowledge base. So they limited the types of patients that they enrolled in the study, focusing mostly to Class II patients that might be at best expected to improve one class in their disease. We have an opportunity to also look at other combination treatments and background therapy that weren't explored as fully in that clinical trials program. The Phase II study of mavacamten was an open-label study and didn't employ, therefore, a placebo control. And placebo patients in these studies are expected to improve. So one needs to look at placebo-corrected effects in order to be able to really understand the differential effect of the investigational drug. So our trial is a placebo-controlled study, and we think that'll inform more precisely what types of effects we might be able to aim towards into Phase III.

Okay. And obviously, there's a lot of focus on the potential and the promise of potentially differentiating on efficacy. As you think about that, how do you think about benchmark? I guess what are the appropriate benchmarks to think about with mavacamten? You pointed out that there were key differences between the Phase II and Phase III for mavacamten. Also, you're looking at different time points relative to, say, the mavacamten Phase III, although that's also by design with your different titration schedule. So as you think about benchmarking across the various metrics, where should investors be focused?

Yes. So I think the mavacamten Phase III program very importantly demonstrated meaningful reductions in end points, but it took many months to get to target concentrations, and those effects were observed after 4, 6 and longer months. Getting to those types of effects sooner would be a welcome improvement potentially as perceived by investigators in our market research, but also being able to demonstrate more significant and durable reductions and with a drug that might be enabling more predictable pharmacokinetics. The objective here is to get to those steady-state concentrations more rapidly in order to be able to, with assurance, know that you're not only in a place that is affording important improvements in outflow tract gradient reductions, but also the objective should be to get there sooner and more predictably with a steady-state concentrations within a tight range, thereby not requiring potentially as many check-ins later down the road to understand where the exposures are. The risk here is there's risk benefit associated with the mechanism. You've got improvements in outflow tract gradient reductions, but you also have to ensure that you're keeping ejection fractions within a normal and safe range. And falling below 50% is sort of that threshold. Knowing that you can do that without having to continue to monitor that with echo or PK months down the road would be desirable, and that's one of the things we hope to be able to look at.

And certainly, the initial data you've kind of highlighted on Cohort 1 is encouraging towards that...

We came into this trial with some pretty high expectations, and Cohort 1 has already exceeded those expectations. Now we're in Cohort 2, and we hope to see the dose response curve rounded out. Not everybody in Cohort 1 got to the outflow tract gradient reductions we are looking for, but many did. And with what we hope will be a wider therapeutic window, we'll see where we are with Cohort 2. We'll have that data soon enough.

Great. And we had Bristol the other day, and we were talking before we get started. They -- we talked for some time around how they think about the market. They very notably put a $4 billion peak -- not peak, but a potential for them to hit with mavacamten by the end of the decade, just in obstructive HCM, which I would point out is higher than most Street estimates. I guess just when you think about the commercial dynamics and sort of what really is most promising for you here, can you just kind of walk through that? Clearly, the unmet need is a key part of that, but I guess, I'm not asking you to support $4 billion sales outlook, but just kind of walk through some of the commercial dynamics that are most promising to you and if there are good comparable kind of cardiovascular markets that you kind of keep in mind as you think about HCM evolving?

Yes. It's a very good question. So I'm very impressed by some of the numbers that they're sharing, and they obviously wouldn't have paid as much as they did for MyoKardia if they didn't believe that. I think they believe it's at least that, or else they wouldn't be saying that. That's really quite remarkable, and I hope they're right. With regard to mavacamten in that category, I think there's going to need to be some heavy-lifting here in terms of education and awareness. This is a very significant population that doesn't have current treatments, but it is an asymptomatic disease in many patients or at least intermittently so. So there's going to need to be, I think, some category building and awareness that they're really in a good position to do and, hopefully, as we may come in with a next-in-class compound that could be benefiting them and us for category expansion. I do believe that this is an unusual cardiovascular marketplace because, a, there's no currently approved treatment for these patients, and the alternatives are actually quite worrisome. But at the same time, there isn't a great proxy. Maybe the best other proxy you might look at is in the pulmonary hypertension space. I think that's a relevant comp. And there's other potential comps we might look at, but it may be premature until we see our data for me really to be able to speak to that.

Perfect. I think that's really helpful. You also have a follow-on backup molecule, however you want to characterize it, with CK-271, which is moving forward. You've talked about some of the Phase I data. I guess are we going to see any of that data soon? And maybe to whatever extent you can talk about, differentiation between the 2 programs.

Yes. So CK-271 comes from the same chemical scaffold as CK-274. And therefore, it's not as differentiated. We advanced it into Phase I with the expectation that if something idiosyncratic were to surface with CK-274, we'd have an opportunity to also switch horses if need be. And so far, CK-274 is very well behaved, and we don't foresee the need to advance CK-271, at least in obstructive HCM. And we'll be looking to go into Phase III with CK-274 pending results of REDWOOD. CK-271 affords us an opportunity to think about expanded indications beyond HCM, potentially including HFpEF, and that's something that we'll consider, alongside of other compounds we're also advancing. Having pioneered this space and this biology, we know it pretty well, and we're able to look at other mechanisms and other programs coming out of this effort that might surface even better compounds that are cardiac sarcomere inhibitors. And we have some of those advancing in research towards development. So we expect to be advancing other compounds, too, and it'll be from that list of compounds that we might advance some in other indications. We expect to build a franchise space here much like we're doing in the cardiac muscle activation area, and that's where I think our science and our continuity to this vision plays to our strengths.

Okay. Maybe last question on the HCM side is just when we do get the results from Cohort 2, I think you've communicated those will be disclosed by some sort of top line press release. Will we have enough information in that press release to at least inform us around the differentiation beyond -- obviously beyond titration, around, say, efficacy relative to mavacamten?

Yes. So we're not developing press releases simply to be able to address differences with mavacamten, but I do think we have an obligation to the field in order to be able to support why we think this could be a next-in-class, potential best-in-class compound, and therefore, will probably be different than your typical top line press release, but we still want to make sure we're not doing anything to jeopardize what would be its presentation at an upcoming medical congress, whether that's ESC at the end of August, early September or whether that's HFSA in September or AHA in November, it's going to hopefully be one of those meetings.

Okay. Perfect. Why don't we move on to omecamtiv? You highlighted some of the positive Phase III data at the end of last year. You've got the asset back from your partner or at least moving towards culmination of that process. How is -- I guess maybe set the stage for conversations with regulators, the time frame those are expected to happen, and then how we should think about communication around how you guys are now seeing the commercial opportunity.

Yes. So we mentioned on our earnings call that we expect to have a first regulatory interaction to review the top line results of GALACTIC in this Q1 to be followed by other interactions in Q2. We also mentioned we weren't going to provide the play-by-play on each of those interactions, but suffice it to say that we're continuing to plan for what will be other regulatory interactions. And with the expectation that assuming all those go according to plan, we'll be in a position to file an NDA in the second half of the year. Reviewing the top line results of GALACTIC was always the plan even as Amgen and Cytokinetics constructed that plan together. But on a go-forward basis, that's something obviously that we do on our own. And the signs are pointing positively towards what would be, being in a position by midyear to not only reflect back on those regulatory interactions, but also the many work streams that we think are informing our go-to-market strategy. We believe that there is a potential opportunity here that could be quite significant and that could be efficient to a return on investment in terms of commercial infrastructure that would make this not only NPV positive but perhaps strikingly so. And therefore, we need to pull together that case and make that case in a go-to-market strategy to shareholders, and we expect to do that. Already, having talked to nearly 200 opinion leaders, there's a very strong near unanimous consensus that this is a drug that should be approvable in large part because heart failure physicians recognize these patients don't have an opportunity to do much else for them because they're maxed out on beta blockers and RNEs and angiotensin receptor blockers and other drugs. They can't address their issues and remaining unmet need by titrating those drugs any differently, and there's also concerns about potential for lowering blood pressure or compromising kidney function. So a new medicine that could be available that would augment cardiac function and without increasing hypotension, without reducing kidney function, others of these comorbidities could be welcomed as an add-on to standard of care for these patients who are very easily identifiable, tend to be treated by a subset of specialty heart failure physicians, and they're recognizable as they are oftentimes the frequent flyers in U.S. hospitals contributing very importantly to the Medicare economic burden. So there's an opportunity, we think, with a concentrated selling effort focused to hospitals in order to be able to follow these patients and be in a position to potentially maintain them at a better treatment outcome. So that's the goal, and we'll be able to lay out why we think that's affordable, tractable and potentially quite profitable as we finish these work streams, and we'll probably lay all that out, alongside of some of our plans from a registration standpoint, at an Investor Day. We hope that may occur in Q3.

Perfect. And I think you talked on the call most recently about some of the synergies between that commercial effort and in HCM. I mean, I guess, logically, that makes sense. But I guess, any additional metrics you can provide around that overlap, to what extent it exists or as you think then around commercializing, say, 274 in the future?

Yes. I'll elaborate on that at the Investor Day in terms of the specific metrics. But suffice it to say that there are about 1,200 hospitals that account for about 80% of the discharge diagnoses with heart failure and reduced ejection fraction based on ICD-10 and other data. And that when you look at that with regard to the high-volume centers of excellence that treat a majority of the HCM centers, there is, again, a very high degree of overlap, either in the same tertiary care centers or in very close geographic proximity. So we believe that the investment of infrastructure to support omecamtiv mecarbil will, in fact, enable us to be developing goodwill and relationships in those same institutions with many of the same cardiologists that will be also potential customers interested in CK-274 at that time.

Perfect. Well, Robert, we've come to the end of our uptime allotted here, but thank you very much for the conversation. Look forward -- looking forward to the next few months and seeing the story evolve here.

Thank you, Carter. Appreciate your following the story.

Thank you.