Cytokinetics, Incorporated (CYTK) Earnings Call Transcript & Summary

Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analysts. 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. For this session, we have Robert Blum, CEO of Cytokinetics. Welcome, Robert.

Thank you.

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

Sure, Jeff. Thank you, and I appreciate everybody's interest. Thank you to Morgan Stanley for inviting us to present. It's actually very timely for the fact that just yesterday, we convened an investor event, and on Sunday, highlighted the showcase late-breaker clinical trial presentation for results of our clinical trial REDWOOD-HCM. So I'll provide a little bit of background on the Company and where those results fit in, and then I guess we'll open it up for Q&A. I gather that people have copies of some slides that are available. I'll refer to a few of those slides and slide numbers. And I'll be making some forward-looking statements, so I just ask everybody to please refer to our SEC filings with regard to caveats to those statements. As I mentioned, we did present -- or I should say, Marty Maron, the principal investigator, presented on Sunday our clinical trial results from REDWOOD-HCM. This is a Phase II study of aficamten, our next-in-class cardiac myosin inhibitor. And on Slide 5, you can see those primary results. The results were really quite impressive. I'm sorry -- Slide 4 to begin. Slide 4 refers to the effects that were observed in Cohort 1 and Cohort 2. In terms of response, these are patients who received about 10 weeks of aficamten in cohorts 1 and 2, which looked at dose escalation, we saw clinically meaningful, relevant, robust responses with 11 of 14 in Cohort 1, 13 of 14 in the higher dose Cohort 2, achieving the effects of rapid reduction in left ventricular outflow tract gradients below 30 in terms of resting and below 50 in terms of Valsalva. That's compelling effects to show, as Marty referred to obliteration of the outflow tract gradient, and that should be deemed clinically meaningful for potential treatment of patients with obstructive HCM. That corresponded, Slide #5 now, with dose-dependent effects on proBNP and dose-dependent effects and improvement in NYHA class symptoms. So we are really encouraged by those results, as sets the stage for movement into Phase III. Slide 6 refers to the fact that those effects were observed as were -- without treatment interruptions or discontinuations, no imbalance in AEs. There were no SAEs reported that resulted in early termination. So the safety and tolerability profile was really quite encouraging. So, to put that in context, that's aficamten now moving into Phase III, that's our cardiac myosin inhibitor. But that should follow our cardiac myosin activator, which is the subject of now over 15 years of clinical research, including 32 clinical trials, including a pivotal Phase III study called GALACTIC that read out positively last year, and as we now are seeking to ready and finalize an NDA submission that we expect to complete this year to be enabling of, hopefully, filing an approval to support commercialization next year. And GALACTIC, which is described on Slide 7, is a pivotal study that I guess we'll get into in the Q&A coming up in a moment. That's also a lead into another Phase III study that is also underway and that's with reldesemtiv, our skeletal muscle activator for the potential treatment of ALS, and that study is now enrolling. So, to answer your question, Jeff, Cytokinetics is a muscle biology focused company with 3 late stage programs: omecamtiv, which is hopefully going to go-to-market next year; aficamten, entering Phase III this year; reldesemtiv, already in Phase III this year. All of these are modulators of the biomechanics of muscle, force, power and endurance discovered by our company scientists. And our focus is on the development and commercialization of new medicines for diseases of impaired muscle function and weakness. So that's the intro for our Company.

Great. Thanks, Robert. Maybe starting with aficamten. I know what KOLs were saying yesterday in terms of their physician feedback, but you were recently at the HFSA, what has the physician feedback been more broadly in terms of the aficamten data?

Yes. So Marty Maron presented these results in a late-breaker on Sunday, and it was in a packed ballroom, which is somewhat unusual in light of COVID. But this meeting of the Heart Failure Society attracted over 1,000 attendees in person, plus quite a bit more that were dialed in virtually. And in that late-breaker presentation, his presentation, I think, was perhaps the most animated and well received. He was surrounded by other clinical researchers and clinicians afterwards, and the reception was extremely positive. Keep in mind, there are no medical treatments available for patients with hypertrophic cardiomyopathy. It's expected that mavacamten should get approved next year as would be a first treatment. But like any new category, there's opportunities for next-in-class opportunities, and that's where we think aficamten may fit in. And I think his data presented underscore how some of the physiochemical and other properties that were engineered into aficamten are translating into potential next-in-class opportunities. And I think that was pretty clear from his presentation.

And either in the feedback that you've heard yourself from clinicians or from your team, what do physicians focus on as the main areas of differentiation from mavacamten? Are there additional aspects that physicians are gravitating toward beyond rapid onset and rapid reversibility?

Yes. I think those are means to an end. So we engineered into aficamten what could be a shorter half-life to enable more rapid onset, more rapid relief of symptoms and enabling of echo-guided dose titration versus what may be echo-guided and PK-guided dose titration. That's enabling of physicians an ease of dose titration in a facility and the management of these patients that could translate to relief of symptoms within weeks instead of within months. But that perhaps is just the tip of the iceberg as that also affords us given the lower inter- and intra-patient variability to assess aficamten in a Phase III study design, which will be elaborated at an investor event that we're planning to convene both in person at New York and also virtually on October 7, but at that event, you'll learn more about the design of our planned Phase III study, which should be enabling of us to broaden inclusion and exclusion criteria for enabling of a more amplified safety and efficacy profile. That's our goal, as should be the goal of any next-in-class opportunity.

And so enrollment of Cohort 3 is underway. What is the purpose of this cohort? And how might you incorporate learnings from that cohort into the Phase III study?

Yes. So enrollment of Cohort 3 is going very well. We're looking there at the combination of aficamten with disopyramide. And as that is -- a drug that is occasionally used in the management of these patients. We wanted to make certain that we could understand the potential for its combination use as would be potentially enabling an amendment to our Phase III study after it's already underway. So we're not waiting on those data in order to start the Phase III study. That's a study start that's planned for in Q4 this year. But as we'll have data from Cohort 3, maybe towards the end of this year, early part of next year, that may be enabling of us to expand the way we approach patients for inclusion in this trial.

Great. The Phase III is expected to begin next quarter. And I'm guessing that your answer is going to be have to wait until October 7th, but I'm going to ask it anyways. Has the study design been finalized? And what aspects remain outstanding? And then maybe you can -- if you can talk about how that study, even if it's just broad strokes, how that might be different from EXPLORER?

Yes. So we have had now both Type C and end of Phase II interactions with FDA to be enabling of us to lock down on the protocol. So the protocol is now final, and we're going through the motions in terms of study start-up to be providing for the beginning of enrollment in Q4. The study that we aim to do, I can speak of in a general sense before we might elaborate in details on October 7, firstly, because of the way we studied aficamten in REDWOOD-HCM, you should expect that we will be employing echo-guided dose titration, not echo-guided and PK-guided dose titration. You should expect that we'll be assessing for effects as would be enabling of a longer-term duration treatment than was studied in REDWOOD, comparable you might expect to what was in EXPLORER. You should expect similar endpoints, but not necessarily the same endpoints. And certainly, we're not going to be reliant on biomarkers as would be sufficient for a primary efficacy analysis. So you might expect, therefore, that the primary objective will be clinical events, clinical objective measures. You should also expect that we'll be looking at time points that might be earlier than has been assessed previously because we can. And in that way, for our interest to see whether there's symptom relief and gradient reductions and having that translate into clinical effects sooner, you might expect that, that will be baked into the study design. Ours will be a very international study. We expect to be enrolling patients in North America and throughout other regions of the world. And you should expect that we'll be looking at the possibility of amplified efficacy as may be enabling of us to enroll sicker patients who could stand to do better by having access to a cardiac myosin inhibitor.

And I know you've had experience with other trials, but how are you avoiding disruptions from the pandemic in the way that you're designing the Phase III?

It's a good question. So we're looking at minimizing the number of study visits that may be required. We're looking at centers that we already know well for having enrolled REDWOOD during the height of the pandemic, and therefore, we already have experience with which studies -- I'm sorry, which study sites are best suited to be enrolling, given the recognition that there's other things that those institutions are attending to.

Great. And then you announced the start of the open-label extension for aficamten from patients in cohorts 1 and 2. What do you hope to accomplish with that study? And when might we see the initial data?

Good question. So as we're now enrolling the open-label extension, we're going to be looking at long-term safety. We're going to be looking at effects that hopefully will be durable beyond the 10 weeks that were studied during REDWOOD-HCM. And you might have heard mention yesterday from Marty Maron that there's a question, I think it's a very legitimate one about whether the effects of cardiac myosin inhibitors are disease-modifying? Are these effects that are affecting, for instance, remodeling? Are we looking at effects that will be sustainable and durable and safety that is sustainable and durable? Because ultimately, there is an opportunity to put patients on these medicines for life, and not all patients have the same symptom burden. So if you're looking at patients who are either -- on either extreme, either more severe or less severe, you want to understand what would be the consequences and opportunities and upside associated with they're being on a drug like this for an indefinite period. And then for the fact that many of these patients receive surgical intervention, one wants to understand whether the effects of a pharmacologic treatment can be not as would be only reducing gradient, but could provide more permanent clinical benefit beyond the study period of a randomized clinical trial. So that's where the open-label extension starts to provide more evidence in support of what could be that level of confidence.

And beyond obstructive HCM, any updates on the plans in non-obstructive HCM? Or when we can expect further details from that indication?

Yes, it's a very, very good question, because now that we have the results of REDWOOD and also understand the full results, we are not only looking at getting started a Phase III trial in patients with obstructive HCM, but also what will be our plans for non-obstructive HCM as well as those patients with [ HFpEF ] who might have hyperactive ventricles and where hypercontractility is contributing to morbidity and mortality. And that's where I do think you should expect to hear more from us, but not in the next few weeks, rather instead over the next few months as we roll into 2022.

Great. Maybe moving on to omecamtiv mecarbil. At ACC earlier this year, you presented results from a secondary analysis of GALACTIC-HF based on the baseline ejection fraction. Can you just review what you saw?

Thank you. Yes. We've done not only additional pre-specified analyses, but additional post hoc analyses, and all of them are coming in with a very, very consistent theme, and much of this has been not only presented but published in manuscript form. That is while GALACTIC looked at patients with ejection fractions of 35% and below, and we saw an 8% relative risk reduction, driven primarily by reduced hospitalizations. As you look lower at the ejection fraction at 30% and below at 28%, which was the median in GALACTIC and below, you see an amplified effect, a doubling or more than doubling of the effect associated with lower ejection fraction. And that's also consistently bolstered by our evaluation of other risk factors associated with higher event rates and more treatment benefit, like higher BNP, like recent hospitalization, like Class 3 or Class 4 symptoms. All of those together paint the picture of advanced heart failure or worsening heart failure. And as the event rates go up in those patients, most of the treatments available for the management of heart failure today have lesser efficacy. In contrast, omecamtiv has amplified efficacy, and still maintain safety; still no effects on blood pressure, kidney function, et cetera. So the view here has been now presented and published in multiple forms is that omecamtiv is going to be occupying a space as an add-on therapy to standard-of-care, but more likely reserved for those sicker patients.

And you'll have data from METEORIC-HF in early '22. Can you talk about that study and remind us of what you hope to learn?

Sure. So METEORIC is a second Phase III study of omecamtiv. It's completed enrollment, and we're looking at the possibility of data in early 2022. There, we're looking at the potential for omecamtiv when added to standard-of-care to increase exercise endurance and stamina and capacity, which is severely limited in patients with heart failure. And there aren't medicines for heart failure that have demonstrated an opportunity to enhance those activities of daily living. So that's considered to be supplemental to what will be our registration strategy. We're going forward to submit an NDA based on GALACTIC, but if METEORIC is positive, we'll follow behind with a supplemental NDA as could be expanding on [ labeling ].

Great. And obviously, you'll be providing more details on October 7th, but how are the commercial readiness preparations going? Can you remind us how you're thinking about the launch strategy and the size of the sales force needed to reach the target physicians?

Sure. Very good questions. And yes, we will elaborate on that on October 7, but we have been working towards this for many years. Initially, as would be in a co-promotion arrangement intended under our collaboration with Amgen, and now more recently, post Amgen's exit from the collaboration as we look to this on our own. We've built out the commercial leadership. We have been investing in supply chain. We're having conversations with payors, and we're readying for what would be other market development commercial activities following approval. The expectation is that we can do this on our own in North America. We believe that it's something that we can be accomplishing with a limited size sales and marketing infrastructure, leveraging both in person and digital engagement. This is not like a lot of cardiovascular program launches largely in areas of lower unmet need and more stiff competition. We believe that Cytokinetics can blanket those high-volume hospitals and heart failure centers of excellence where there's both a compelling clinical and pharmacoeconomic rationale for omecamtiv mecarbil, where repeat hospitalizations and readmissions is a high cost burden issue for those institutions and where standard-of-care is not adequate. So we'll be elaborating on the size of that organization, the timing of our deployment of it, and how that sets the stage, not just for omecamtiv mecarbil, but as is prudent and good investment for aficamten, which will be largely commercialized in those same institutions approximately 2 years down the road. So we think about this as a franchise strategy in support of both a cardiac myosin activator and cardiac myosin inhibitor promoted into the same institutions to largely the same customer segments.

On the earnings call, you indicated that you had about half a dozen payor meetings that have mostly been introductory. Any update on the feedback you've heard from meetings with payors?

We're getting a sense of what will be their requirements of us in order to support review and as would be indicative of a placement in their guidelines and in connection with formularies. And all of that is informing how we think about investment as well as things like gross to net planning and how we think about what could be the profitability picture for omecamtiv mecarbil. So those conversations -- and we've had multiple conversations with each of the major payors, those conversations are introductory as we are still in a pre-commercial stage, but where we're introducing ourselves, our science, our commitment, our pipeline, our intentions, and we're getting to know their processes.

Great. Maybe moving on to reldesemtiv. You recently announced that the enrollment had begun for COURAGE-ALS. How is that going? And is there any update on that front?

Yes. So this is perhaps one of the less well appreciated aspects of Cytokinetics. I think the fact that folks have been so interested in aficamten makes sense and omecamtiv behind that. But what is also ongoing at Cytokinetics is a pivotal Phase III study of reldesemtiv in patients with ALS, building on very encouraging Phase II study results. And the enrollment is going well in a study that's designed to enroll approximately 500-plus patients. So it's going to take us still some time. But even into next year, we expect we'll have sufficient enrollment to enable us to do the first interim analyses on this study. Keep in mind that this study is designed to assess reldesemtiv as in a population enriched for study -- rather disease progression. So these are patients who are declining in function and reldesemtiv is being assessed as its ability to slow the decline of that function as was observed in Phase II and hopefully can be reaffirmed in Phase III. So I would recommend that people get to know reldesemtiv and the study design, because I think that is an important meaningful milestone and catalyst for the Company going into 2022.

Great. And maybe if I can ask you on the interim analyses that you would expect next year, how should we be thinking about in terms of -- or what should we be expecting in terms of how that might read out? Will it be like a press release like you've had for some other interim analyses that just says it continues as planned, or are there going to be specific details in that analyses?

Assuming that the study is progressing, we won't be unblinded to the data, but rather because it's testing for futility, if we're seeing that patients are responding as we would expect they should, we'll just continue the study.

And can you remind us how many interim analyses are there?

There are 2 interim analyses. The first one is really built more around test for futility. The second one, also futility, but could be enabling of expansion of enrollment if there's a suggestion that, that may be required.

Okay. And then can you talk about the primary endpoint? It's -- why is the primary endpoint a little bit different than what was used in FORTITUDE-ALS when that was SVC? And then what are you doing encouraged to optimize the chances of success?

Very good question. So the endpoint in Phase III is change from baseline in the ALS functional rating scale, which declines roughly 1 point per month in these patients on average. And this is the commonly accepted endpoint for approval in both Europe and the US for patients with ALS. Unfortunately, it has not been an endpoint that other drugs have been able to affect, but it has demonstrated with both tirasemtiv and reldesemtiv in prior studies to be moved by this mechanism of action. We saw a rather compelling effect on the ALSFRS in the FORTITUDE-ALS study with reldesemtiv, a relatively short duration study. And now if we can just reproduce that in Phase III, we have a win. And this study is longer as could be enabling of a more significant treatment effect, a larger magnitude treatment effect. In FORTITUDE-ALS, the Phase II study, we saw a rapid separation of the curves that was getting larger over time. And if that happens again in Phase III, that's a positive study. So ALS physicians are typically assessing their patients with every subsequent visit as to their functional scale and rating, and roughly 20% to 25% decline in ALSFRS is deemed clinically meaningful. So we have a study that's powered to assess for that effect.

Great. Maybe in the last minute or 2, just a broader question. I guess you talked about how you recommend that investors get more familiar with reldesemtiv. I guess are there any other aspects of your pipeline that you think are underappreciated or that you would highlight?

Yes. So we have in Phase I, a compound called CK-136; that's a cardiac troponin activator. We expect that will be moving forward as could be enabling of that study in indications adjacent to heart failure with reduced ejection fraction. So there's upside there as would be reflective of proof-of-concept that could be achievable in the next 1 to 2 years for CK-136. We also expect CK-271 and other compounds to be moving forward as would be enabling of us to expand upon our development programs and potential franchises beyond where investors are currently focused. So we're on track to have additional compounds entering clinical trials as well as those in Phase I moving through Phase II as well as the ones I've already mentioned already in Phase III. So Cytokinetics expects to have 10 programs in clinical development by 2025 as we continue to invest in the innovation that brought us here and the research and development continues to be prolific.

Great. It looks like we'll have to leave it there. Thanks so much for your time, Robert.

Thank you, Jeff.