Cytokinetics, Incorporated (CYTK) Earnings Call Transcript & Summary

I'm Joanna Siegall, Senior Manager of Corporate Communications and Investor Relations at Cytokinetics. I'm pleased to welcome you to Charting The Commercial Course, our 2021 Analyst and Investor Day. We are pleased to be hosting this event in a hybrid fashion, and we welcome everyone here in the room as well as everyone attending online. We have a great program for you today, and we look forward to sharing updates on our go-to-market strategy for omecamtiv as well as our cardiovascular pipeline. Before I continue, please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements. Our actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings. We undertake no obligation to update any forward-looking statements after this call. I'm very pleased to welcome several leaders from our team to speak with you today: Robert Blum, President and CEO; Dr. Fady Malik, EVP, Research and Development; Andrew Callos, EVP, Chief Commercial Officer; Dr. Stuart Kupfer, MD, SVP, Chief Medical Officer; Ching Jaw, Chief Financial Officer; Jennifer Laux, VP, Cardiovascular Marketing; Diann Potestio, VP, Global Value, Access and Distribution; and Dr. Steve Heitner, Senior Medical Director, Clinical Research, Cardiovascular. I'm also thrilled to welcome 2 leading heart failure experts to join us on our panel discussion today: Dr. Alanna Morris, Associate Professor of Medicine, Division of Cardiology, and Director of Heart Failure Research, Emory University Clinical Cardiovascular Research Institute; as well as Dr. Tariq Ahmad, Associate Professor of Medicine, Medical Director of Advanced Heart Failure, Cardiovascular Medicine, Yale School of Medicine. Today, we will begin with an introduction from Robert Blum before setting the context around our heart failure landscape and reviewing existing data related to omecamtiv mecarbil from GALACTIC-HF. Next, we'll welcome our esteemed panel to discuss the challenges of treating patients with heart failure and the unmet need in this population. After that, we will review the potential for omecamtiv mecarbil to fill an unmet patient need and present our U.S. go-to-market strategy. After which, we'll pause for a moderated Q&A session, where we will take questions from both our in-person and online audiences. We'll take a brief 2- or 3-minute break around 10:15. Then we'll shift to HCM to review the HCM landscape, discuss aficamten, a potential next-in-class therapy, and its clinical program. We will revisit our franchise strategy and financial foundation before opening it up once more to questions before we close the meeting. For today's in-person attendees, if you're fully vaccinated, masks are not required, but they're encouraged if you're not actively eating or drinking. Please help yourself to coffee and breakfast in the back. And at the end, we will have boxed lunches available right outside the room as you leave. I wanted to point out that there are power strips in front of the tables for anyone here who needs to charge any devices. To ask a question during our Q&A portions, please raise your hand, and we'll bring a microphone to you to ask your question. And please state your name and firm as you ask questions. Finally, if you did not sign up before entering the room, if you could sign up on our sign-in sheet on the way out. We appreciate it. For our online attendees, use the tabs to the left of the dashboard to view speaker bios, the event agenda and other resources. [Operator Instructions]. With any technical issues with the online platform, please visit the tab called Help Desk for support. A recording of this event will be available on our website for further viewing. With that, I will turn it over to Robert Blum, our CEO.

So thank you, Joanna. Thank you for organizing such a wonderful event. It's so very nice to be back in person, to be back in New York and to see in-person faces that we've longed to be in connection with again. It's nice to be able to elaborate on our go-to-market activities for omecamtiv mecarbil and also our Phase III trial design for aficamten. We welcome your feedback. We welcome your questions. And both for those of you in person and online, thank you for joining us today. I'm going to be providing some brief introductory remarks before we get into the essence of our program. And I'll remind you that our mission at Cytokinetics, which has been a guiding light for this company for over 20 years, is to bring forward a new pharmacology rooted in muscle biology, in particular, for diseases of devastating cardiovascular neuromuscular implications associated with muscle dysfunction and weakness. And I hope what you'll hear today is further evidence of our long-standing commitment and convictions to fulfill that mission. How we approach the next few years matters. And as you'll hear more, we intend to execute on our Vision 2025 as would be enabling of us to bring to market at least 2, if not 3 new medicines arising from our research over the next couple of years. But however, we're also highly cognizant of the fact that most biopharma companies get this wrong. When they go to market, they oftentimes will do that as focuses to one program, one clinical trial result, one potential drug as would be enabling of a commercial launch but the expense of everything else they're doing. And oftentimes, that commercial activity is not so prudently invested, and they ultimately underperform expectations. What I hope you'll hear today is how Cytokinetics very thoughtfully and methodologically has engaged around a franchise-building strategy to go to market for what can be an emerging cardiovascular franchise. But however, it's very important that as we do that, we maintain the ingenuity and the innovation that has brought us here. The R&D programs at Cytokinetics, currently numbering 5 programs in clinical trials, we expect that to double to 10 over the next couple of years while also expanding the footprint of our science beyond the mechanics or bio machinery of muscle contractility to be inclusive of energetics growth and metabolism of muscle. We've pioneered this space, and we intend to continue to lead as we advance new medicines to patients who most importantly could benefit. At the same time, we have to maintain the centrality of patients as our North Star. And as we engage around continued R&D and commercialization, we want to make sure we continue to be mindful of the unmet needs around which this science can deliver promise. So when we think about how best to execute our vision, you see here some key tenets. We have already, over many years, demonstrated that we can execute on clinical trials for the benefit of high integrity data for what ultimately can be addressing high unmet needs. But we must continue to think like a patient about where that might ultimately play a role. Cytokinetics is an emerging biopharma company from the commercial space, and we have to ensure that we don't try to do too much but rather to do that which is consistent with our access to capital and our ability to provide equitable access and affordable access to new medicines for patients, continuing to focus to how we can build economies and synergies and a symmetry across our business for what could be a franchise strategy. You'll hear a lot more about franchise today. And I do think that Cytokinetics has a somewhat uncommon opportunity with focus to myosin, as you'll see in the next slide, as can be a cornerstone of a franchise opportunity and always, always with leading with science. As you know us now for over 20 years, that is a hallmark of how we think about our business. And I hope you'll continue to see that continue to be our priority as we also build our commercial business. So here's our pipeline at this point in time. Most of today, you'll hear us talking about omecamtiv mecarbil and aficamten but recognizing that underneath the hood are also other programs directed to modulating muscle biology for what could be sustainable, durable innovation and a continuing focus to portfolio and pipeline. We believe a combination of present value and future value is important for shareholders and to be enabling of our ability to execute on the promise. So as we think about our pipeline, we divide it into 2 verticals: those drug candidates that modulate proteins involved in cardiovascular, muscle biology and neuromuscular muscle biology; and there are touch points that connect those 2 verticals, as you'll hear more and more over time. But today is really about the cardiovascular franchise. Omecamtiv mecarbil, the subject of over 32 completed clinical trials including a positive Phase III study GALACTIC, soon we expect to be the subject of an NDA submission and a potential approval and go-to-market activity next year, while aficamten is moving into Phase III. Aficamten, not a myosin activator, but a myosin inhibitor. And as you'll hear more, both those same kinds of common denominator synergies that we've enjoyed in research and development, in developing these drug candidates, should play to our competitive advantage as we think about our commercial business and we go to market. And it's all predicated on this one mechanochemical enzyme, myosin, the engine of muscle force and production and power and that cornerstone of our research in cardiovascular medicine. Today, you'll hear a lot more about omecamtiv mecarbil, an activator of cardiac myosin; and aficamten, an inhibitor of cardiac myosin. And as such, we think that Cytokinetics somewhat uniquely now is poised to enter the next stage of our corporate development rooted in this one molecular target as give rise to a potential new commercial business franchise. And with that, I'll turn it over to my colleague, Fady Malik, who will elaborate on the opportunity for the management of patients with heart failure.

Thank you, Robert, and welcome, everybody. Today, I want to start with describing what inspires us and drives us every day to continue to pursue a novel treatment in heart failure. And this all comes back to the medical need and the unmet medical need in heart failure. Heart failure is what has been termed a public health emergency, a epidemic as our population ages, as our treatments for other cardiovascular diseases, including acute myocardial infarction improve, people survive, but go on to develop the consequences of impaired cardiac function in heart failure. We expect heart failure to increase as population ages by 46% between now and the year 2030. Heart failure is a grievous disease. Nearly 50% die of heart failure 5 years after diagnosis. And it comes with tremendous economic burden to our health care system, where the costs are expected to rise to nearly $70 billion by 2030. You've heard this before, but it's important to reiterate. Patients with heart failure, one of the most common admission diagnoses in people that are aged 65 and older, nearly 1 million people hospitalized just in the United States every year with heart failure. And once admitted with heart failure, their risk of coming back to the hospital is nearly 25% within 30 days and 49% within 5 years. So this is a disease of not just tremendous mortality, morbidity, but it's something that patients live with every day in decreased physical tolerance to exercise, shortness of breath, swelling in their legs. You'll hear more about that from our panelists later on. Now we -- over the last few years, we've had new heart failure therapies emerge. We've had the ARNis, the angiotensin receptor-neprilysin inhibitor. Entresto emerged. The utility of SGLT2 inhibitors emerged in heart failure. And an update to the heart failure guidelines in terms of how to approach treating patients and guideline-directed medical therapy. What's shown here is a treatment algorithm that was just updated by the European Society of Cardiology with guidelines from the American College of Cardiology expected early next year. And you can see at the top, foundational medical therapy includes 4 classes of drugs now. ACE inhibitors or ARNis, beta blockers, mineralocorticoid receptor antagonists or SGLT2 inhibitors. For patients that continue to need further treatment, there are potential device therapies. There are other things that can be implemented. And then at the bottom, it says there, if symptoms persist, move on to Class II recommended therapies. So it seems like problem solved, right? We've got lots of therapies. We have lots of options with which to treat our heart failure patients. But I'd say not yet. The problem isn't solved, and I'll show you why. If we just look at GALACTIC as a clinical trial that was recently completed, international trial, enrolled over 8,000 patients, and just look at the placebo rates, the event rates in patients in this trial, first one can look at them as a function of ejection fraction. Lower ejection fraction, in the dark green bars; higher ejection fraction, in the light green bars, they both -- whether your ejection fraction is low or high, your risk there on the left, shown as incidents per 100 patient years, your risk of a primary outcome, which is a heart failure event or cardiovascular death or heart failure hospitalization, cardiovascular death, all-cause death, is still double digit in all of these different endpoints and, in fact, approaching 30% per annum in patients as a primary outcome with lower ejection fraction. Another way that we look at classifying patients in terms of their risk profile is NYHA class. So NYHA class is a 4-point scale basically with 1 being asymptomatic and 4 being symptomatic at rest. And so here, the light green bar shows Class II heart failure. The dark green bar shows Class III/IV heart failure. And again, you see the risk there is similar to what I showed you with ejection fraction, double digit, approaching 30%, 35% for the Class III/IV patients. NT-proBNP is a biomarker commonly measured in patients with heart failure. You can see it's a very strong discriminator of higher and lower risk patients, with the dark green bars having a NT-proBNP that was above the median in GALACTIC, here approaching event rates of 40% in -- on the primary outcome. These are all easy metrics by which to characterize patients, but I want to emphasize, even those at lower risk still have nearly a 10% annual mortality. Well, this is a clinical trial, right? We enroll patients. We try and enrich patients for clinical outcomes. You may argue that these are a bit artificially inflated. Well, on the left is a real-world cohort. This is derived from the Duke database and where they essentially looked at all of their patients that had echocardiograms, looked at the patients whose ejection fractions, the measure of cardiac function that's predictive of outcomes. Injection fraction less than 35%, which was the cutoff we used in GALACTIC, and then asked whether they had a hospitalization within the last year or they hadn't had a hospitalization in the last year. And I'll point out that the y-axis here is no longer the same. The top end of that is 60%. The event rates here are nearly 50% higher for all-cause death and heart failure hospitalization, heart failure hospitalization and all-cause death. This is truly a grievous disease that I think is underestimated in terms of its impact in patients and the impact to our medical system. Now you may ask, what are all these patients taking, are they being treated appropriately. And here is the background of guideline-directed medical therapy. In GALACTIC, for instance, the first 3 panels I showed you, these patients run excellent guideline-directed medical therapy, some of the best that's been implemented in the clinical trial and yet, despite that, have these relatively high event rates. And then in the Duke cohort there, you see relatively similar profile. It's a very esteemed academic institution. They do a pretty good job of treating their patients. And yet, what you still see are even higher event rates. So clearly, the job is not done. There's more that needs to be done for these patients, so we can't really give up on them. I think another important point is to recognize what some of the limitations of our current therapies are. And those are shown on the right. Some of our therapies cause renal dysfunction in patients whose kidneys are tenuous. It caused low blood pressure. They cause kidney potassium to go up. They slow heart rate, they make people feel fatigued or depressed. And if you look in the graph there, this was a study that was done where physicians were asked on discharge to classify patients in terms of low, average or high risk. And if you just look on the bars to the right, 1 year mortality rate, you can see physicians are pretty good, and they're predicting who's going to -- who has the highest risk. That dark green bar is approaching a 50% 1-year mortality in the high-risk patients. And even the low-risk bar, let's not kid ourselves, that's 10% per year. Most of us wouldn't call that a low risk of mortality. Now you would also think, well, these -- we have a -- we're very good at predicting who are the patients at highest risk. Those are obviously the patients that we try and do the most for. So the left-hand plot show how medical therapies implemented in these low, average and high-risk groups. And what you can see there is actually an inverse relationship, meaning there are fewer patients that are receiving some of our guideline-directed therapies, whether it be ACE inhibitors, ACE, ARBs, beta blockers, higher their risk gets. And this is not because the physicians don't want to treat the right patients with the right drugs, it's because it's much harder to treat the highest-risk patients with the current medications that we have. So there's a mismatch here. And I think it still speaks to the need for alternative treatments in heart failure. So I will pose the question really as -- before we dive into the results of GALACTIC, that after foundational guideline-directed medical therapy, after clearly patients who continue to need added therapies or different ways of treating their heart failure, what's next? What do you do for your patient after you've done your best to get them on the existing therapies? What are your alternatives? And here's where we believe omecamtiv mecarbil can play a role in patients that have worsening heart failure, need alternatives, not just omecamtiv mecarbil. They need continued development of other heart failure therapeutics. And what kind of characteristics of new therapeutics are -- we think physicians are looking for? I think ultimately, it's simply they're looking for drugs that are easier to use, drugs that patients don't have side effects from. Even as the drugs have quite good benefits in terms of clinical outcomes, if they're hard to take, there can be hard to find patients that are compliant with them. Drugs that are treat -- that lower blood pressure, as many of our drugs do, very hard to implement in patients who don't have a whole lot of blood pressure to spare. This is thinking of this as the spending function in heart failure. You have only so much blood pressure, only so much kidney function. And as you start to titrate drugs in, you start to spend against those parameters, and that often limits the treatments that we can apply. So we need therapies that have more neutral effects in terms of the things that are limiting in heart failure. As well as we think, as we developed omecamtiv mecarbil, the therapeutic hypothesis there was essentially targeting the cause of heart failure, which is in reduced ejection fraction heart failure, decreased cardiac contractility may address one of the central features of the disease. So with that, I'm going to turn it over to Dr. Kupfer, who will review with you some of the results from GALACTIC-HF, which was our pivotal trial of omecamtiv mecarbil in HFrEF.

Good morning, everyone. And now what we're going to do next is discuss some results from the GALACTIC-HF trial, which evaluated the effects of omecamtiv mecarbil in patients with heart failure and reduced ejection fraction. What we've learned over the past year since the primary results of GALACTIC were presented is omecamtiv mecarbil can fill an important unmet need in patients with worsening heart failure, who still remain at high risk, as Fady mentioned, despite treatment with effective guideline-directed medical therapy. So let's begin with highlighting some of the trial design and conduct findings and issues. So first of all, GALACTIC was one of the largest heart failure trials ever conducted. It enrolled over 8,000 patients in 35 countries. And this is important because as we review some of the subgroup analyses that we conducted, it means that the sample sizes for some of these subgroups are rather large. And it increases our confidence and precision in the data. Second, the primary end point of the trial was clinically meaningful for patients. It was time to first event of a cardiovascular death or a heart failure event. And third, the patient profile in GALACTIC was quite high risk, among the highest risk of patient populations enrolled in any contemporary heart failure trial. And part of the reason for this is that 1/4 of the patients enrolled in GALACTIC were enrolled as inpatients and sort of during the post-acute phase of their heart failure hospitalization. Now the baseline characteristics of the patient population in GALACTIC reflected this high-risk profile. These patients generally had a low left ventricular ejection fraction, high NYHA class, high levels of NT-proBNP and low systolic blood pressure. And these risk factors informed our pursuit or evaluation of some subgroup analyses and further characterized the patient population. And we'll get to those in just a moment. Now importantly, these patients were well treated with guideline-directed medical therapy and with cardiac devices. So GALACTIC was a positive trial. It was published in the New England Journal of Medicine late last year. We observed an 8% relative risk reduction for the primary composite endpoint. Much of the benefit was driven by a reduction of heart failure events, and most of those were heart failure hospitalizations. There was no overall risk reduction for cardiovascular death. However, it's important to note that omecamtiv mecarbil is the first medication that increases cardiac contractility but does not increase mortality. Now as we dug deeper into the data, we observed that patients who had more severe heart failure experienced a greater risk reduction with omecamtiv mecarbil. And so I want to shift the discussion then to some of these subgroup analyses of these higher-risk patients. So this is illustrated in analyses of subgroups of left ventricular ejection fraction. And what we observed is that patients with lower ejection fraction experienced greater risk reduction with omecamtiv mecarbil. And this is important because those patients with low ejection fraction are at significantly higher risk. And this is depicted in the panel on the left part of the slide. In the placebo arm of the GALACTIC trial, and that's the darker curve on top. And so shifting from right to left, from higher ejection fraction to lower ejection fraction, you can see that the incidence of the primary composite endpoint increases as the ejection fraction decreases, as we expected. However, looking at the omecamtiv mecarbil group, the green curve on the bottom, there was less of an increase for the primary composite endpoint event. And so what we observed is that this lower end of the ejection fraction range, there are absolute risk reductions on the order of 10% to 15%, which are quite large. And that translates into, on the right panel, relative risk reductions approaching 20% to 30% in the lower ejection fraction range. Now a similar profile was observed with analyses of NT-proBNP. And as Fady was commenting earlier, patients with higher levels of NT-proBNP are at higher risk of serious heart failure outcomes. But what we observed in GALACTIC and if we look at the graphs on this slide, shifting -- if we go from left to right, so lower NT-proBNP to higher, we observed that a treatment with omecamtiv mecarbil resulted in a decreased risk of these outcomes. So for the primary composite outcome on the left and heart failure hospitalizations on the right, there is progressively greater risk reduction as the baseline NT-proBNP increased. Now it's important, and I think you understand this, is that many patients with heart failure have very complex medical histories with many comorbidities, multiple risk factors. So we conducted some analyses evaluating combinations of risk factors. And we started with a high-risk subgroup that we've already touched upon. That is the LV ejection fraction subgroup of patients less than or equal to 28%, which was the median ejection fraction in GALACTIC. So combining this -- the patients in this subgroup with other heart failure risk factors, including a recent heart failure hospitalization, Class III/IV heart failure, high NT-proBNP, low systolic blood pressure, what we observed was that incrementally greater risk reduction was observed when we added these additional risk factors individually. And this incrementally increased the absolute risk reductions in the range of 5% to 8%. This is another analysis we did with evaluating multiple risk factors. And in this analysis, we looked at a subgroup of patients with severe heart failure. We used a modified definition that was proposed by the European Society of Cardiology. And that consisted of NYHA Class III/IV, ejection fraction less than or equal to 30% and a heart failure hospitalization within 6 months. This subgroup represented 27% of the GALACTIC population. And what we observed for the primary composite endpoint was a significant 20% relative risk reduction. And this corresponded with an over 8% absolute risk reduction and a number needed to treat of only 12 patients to prevent 1 heart failure event. Now regional subgroup analyses were prespecified in GALACTIC, and these were presented and published along with other subgroup analyses in the New England Journal paper. But we conducted some additional analyses looking at the North American subgroup compared to the rest of the world. Now 9 of every 10 patients in the North American subgroup were from the United States. And as Fady mentioned, the prevalence of heart failure is very high in the United States and continues to grow. This is an important subgroup for a number of reasons. One, it was actually a rather large subgroup. There were nearly 1,400 patients in the subgroup, representing 17% of the GALACTIC population. And this subgroup is twice as large as North American subgroups from any other contemporary heart failure trial. Secondly, the North American subgroup had a 50% higher risk profile than the rest of the world. And what we observed for the primary composite endpoint was a significant 15% relative risk reduction. And what's also notable about this analysis, and this is a consistent finding throughout all of the analysis, is that the treatment effect for omecamtiv mecarbil was apparent relatively early after treatment initiation. So you can see in this particular Kaplan-Meier graph is that these curves started separating quite soon after treatment began. And of course, the curves continue to separate over the course of a follow-up in the trial. Now the safety and tolerability profile is another distinguishing feature of omecamtiv mecarbil. And it was essentially comparable to placebo. So omecamtiv mecarbil had no adverse effects on blood pressure or renal function. There was no increase in serious adverse events compared to placebo. And interestingly, there was a decreased incidence of stroke that was adjudicated in the trial. And this may be related to the increased -- improved cardiac contractility with omecamtiv mecarbil leading to decreased formation of blood clots in the heart and embolization to the brain. So here are the key takeaways from the GALACTIC-HF trial. Omecamtiv mecarbil resulted in significant risk reduction of serious heart failure events in patients with worsening heart failure who were receiving a very good standard of care. We have observed that patients who are at higher risk of heart failure outcomes experienced a greater treatment benefit. And this was particularly evident in patients with low ejection fraction, high NT-proBNP and higher NYHA class. Now these treatment benefits did not occur at the expense of worse safety and tolerability, which means that omecamtiv mecarbil can be added to guideline-directed medical therapy without concerns of compromising blood pressure or impairing renal function. And I'll leave you with some perspectives from some heart failure experts who commented on the results of the GALACTIC trial. One said that this is the holy grail for inotropes. Another said that it does not increase arrhythmias or mortality. Particularly good benefit in sicker patients in serving a large unmet need. A unique mechanism of action that gets to the root cause of heart failure. Safety and tolerability is very good, including those patients who are unable to tolerate or titrate guideline-directed medical therapy. So with that, I will turn the podium back over to Dr. Fady Malik, who will moderate our discussion with our heart failure experts.

Okay. Well, it's my pleasure to moderate a discussion with Dr. Ahmad, Dr. Morris, who've joined us today. I'll ask them to introduce themselves in a moment. Following kind of the beginning of our discussion, we'll then invite questions from the audience. And we will also invite questions from those online that we'll relay to the rest of the room here. I'm really pleased to be joined by these 2 rising stars in the heart failure community. They represent the next generation of our heart failure leadership. And when I talked about all of the patients we'll have in the year 2030 and beyond, they'll be the ones that will be taken care of them because the rest of us will be retired. So this is an important problem and especially relevant to them, I think. And I want to maybe just to start, and I'll ask Dr. Morris first to begin just with a description of your clinical practice at Emory and what kind of patients you see there.

Sure, and thank you for having me. So I am an advanced heart failure cardiologist. At Emory, we do transplant, LVAD as well as see a large number of patients with advanced heart failure. My own clinical practice is very much skewed towards patients who have end-stage disease. For that reason, we're a large referral center. Georgia is relatively unique in that it only has 2 transplant centers that cover the entire state. So we really do see the sickest of the sick, many who are sort of referred in from not only Georgia, but many of the neighboring states. But in terms of heart failure across our system, it's massive. We actually published an experience in circulation heart failure last year, looking at our experience over about an 8-year period. Patients who are -- had primary secondary discharge diagnosis heart failure accounted for over 40,000 patients at just 2 of the 4 large hospitals in our system, accounting for about 85,000 encounters. So we see a ton of heart failure. And I think as advanced heart failure specialists, we probably see the minority of the heart failure that exists in the system.

And Dr. Ahmad?

Good morning, everyone. My name is Tariq. I am the Medical Director of Advanced Heart Failure and the Interim Chief of the heart failure section at Yale. My practice is based out of Yale New Haven Hospital, which is kind of the flagship hospital for the Yale New Haven Health system, which takes care of patients in Southern Connecticut. We've got 6 hospitals, and we've delved into the data around our heart failure population, which is around 30,000 patients, about 1/3 of which have a heart failure with reduced ejection fraction. I don't know if other cardiologists would agree, but I'd describe advanced heart failure doctors as the cardiologists' cardiologists because heart failure is the end stage or the final pathway of different cardiovascular diseases, be it valvular disease or atherosclerotic disease. Like someone who's had a heart attack, eventually, when the cardiologists feel that the patient is declining, they send the patient over to us for either a medical therapy that they're not as comfortable with or eventually heart transplantation or mechanical circulatory support, which is a mechanical heart. So those are the patients that we see in clinic. They're the sickest of the sick patients, and it's a large patient population. So there's 12 of us. All of us see patients who are needing transplant or LVAD, and we have pretty full clinics every day of the week. So it is -- really is, as Fady mentioned, a big unmet need in terms of -- so one thing I would say that I tell patients and other trainees is, the prognosis from advanced heart failure is much worse than almost any cancer. And we see this on an everyday basis in our clinics or in our hospital.

Thanks. Well, I guess the cardiology community recognizes as well now with a Board certification heart failure that it's a really growing need for trained specialists in the area. Maybe you can just tell me a little bit about how large is the heart failure practice. How many physicians at each of your institutions you think are dedicated to the treatment of heart failure?

So we also have 12 dedicated heart failure physicians just at Emory alone. So -- and similarly, I think on our -- we go back and forth between 2 of our flagship hospitals on a daily basis on our inpatient services. We routinely anywhere from 25 to 40 patients a day just on our services. In addition to that, we're consulting on patients who are sort of primarily taken care of on hospital services or general cardiology services because of the question of does this patient have worsening or severe heart failure and they like our involvement. In our clinic, it's similarly busy. We see at least 4,000 to 5,000 patients in our advanced heart failure clinic alone at Emory. So again, the numbers are quite large.

Absolutely, the very similar setup at Yale. We've got heart failure specialists down -- some of you may be familiar with Greenwich Hospital down in Greenwich, Connecticut, all the way up to Lawrence + Memorial and Westerly Hospital in Rhode Island. So we've got heart failure specialists at these places, with the caveat that the majority of the heart failure patients are still taken care of by general cardiologists and internist. But once they develop certain symptoms or signs of worsening heart failure, they do get referred to us.

Yes. Maybe my -- in my last question before we open it up to the audience for questions, and that's my queue for you guys to start thinking of some questions, is maybe you can tell me a little bit about the challenges in implementing guideline-directed medical therapy. We've obviously come a long ways in the last 20 years. But how do you use these therapies? And what are their challenges?

I mean again, with the recognition that the patient population that we see is highly skewed, it can be extremely difficult to get patients on for a drug therapy. As you noted in the presentation, the current clinical practice guidelines suggest that every patient should be on an evidence-based beta blocker, MRA, SGLT2 inhibitor and ACE, ARB, ARNi therapy. And it's actually quite challenging to get patients on all 4 of those therapies in our patient population. Typically, by the time these patients get to us, they're hypotensive. And so trying to add 4 vasoactive drugs can be very difficult particularly in younger patients in our population, we see quite a few young women who are not hypertensive to begin with, and they feel very tired. We routinely hear patients say, "I take all my drugs, and 1 hour or 2 later, I have to lie down because I just feel so fatigued." And the renal function is also a huge limitation not only for our ability to up-titrate drugs, but I think as advanced heart failure specialists, we probably have slightly more tolerance for seeing the renal function go up with the acknowledgment that these drugs are associated with better morbidity and mortality in the long term. Our referring clinicians, however, do not have that level of tolerance, so we often spend a significant amount of time trying to titrate the patient's medical therapy to sort of just the right dose, not only the GDMT but also the diuretics. And then they'll go back to their primary care clinician or someone who has less tolerance, and drugs will be stopped because the creatinine went up just slightly. And we have to start all over again once that patient gets hospitalized a month later in the interim between our clinic visits. So it can be a real challenge.

Absolutely. Exactly what Alanna said. And I would just add that heart failure with reduced ejection fraction is -- the heart's a muscle, and the muscle is not squeezing well, which means that a lot of these patients have low blood pressure. And 3 out of the 4 pillars of the heart failure therapy are blood pressure lowering medication. So a large percentage of the patients I see kind of have low blood pressure. I mean they have blood pressures in the 90s and 100s. And if you add antihypertensive, their blood pressure will go way -- very low, and they won't be able feel good. The other thing is that the risk factors for heart failure overlap significantly with kidney disease. So a large percentage of our patients have kidney disease, which disallows use of SGLT2 inhibitors, MRAs, ACE, ARB, ARNi, which is 3 out of the 4 medications. So despite our best efforts, it's very difficult to get a significant percentage of patients on these therapies.

That's great. Maybe I'll open it up to the room for questions and I got some hands there. Maybe, Joe?

Joe Pantginis from H.C. Wainright. I guess one of the things that I wanted to ask is, especially as the company is disclosing its go-to-market strategy today as well, is one of the themes we've heard for years regarding omecamtiv mecarbil is its complementarity with other therapies. So I'm wondering how you believe that will translate into your practice and are physicians in the more general community ready to accept the complementarity approach versus, say, either-or?

I mean I was joking already with some of the members on the panel that I've already wanted to have this drug in my clinical practice and sort of have been dying to get emergency use from it because, as we said, when we have patients who we cannot get on 4-drug therapy for a variety of reasons, but they are clearly suffering. These patients are very short of breath. They're very fatigued. They end up in the hospital frequently, and it's difficult to get them on these drugs. We constantly ask for something other than an IV inotrope. So in our practice, the only other drugs that we have for patients who are still symptomatic but don't tolerate 4-drug therapy is an IV medication that requires a PICC line. They have to go home with sort of a pump, and that's a huge step for many people, particularly patients who don't have good support systems. And so if you had something oral to offer those patients, even just to stabilize heart function, let alone actually make them feel better, I think that many of us are absolutely clamoring for a drug like that. And as we think about the larger community of physicians, again, who maybe are slightly less -- or slightly more risk averse perhaps than we are, because we're used to seeing this very sick patient population, again, I think the ability to have a medication that doesn't lower blood pressure, that doesn't affect renal function I think absolutely would have a very wide uptake in the community.

Exactly what -- I completely agree with Alanna. And I -- I've -- like you, I've known about this omecamtiv for a very long time as a fellow and as a faculty member, and I've been waiting for it to be available because I think that this is the patient population that I take care of. I mean my patient population is not going to be able to tolerate more than a very low dose of beta blocker or ACE, ARB, ARNi or other medications. So -- and this medication will hopefully make them feel better, and it's going to improve the contractility of their heart, which is something that no other medication does. So I think that there'll be a lot of enthusiasm within the cardiology and heart failure community to use this medication. I don't know if your question was like is it going to be like a fifth line [ patient ] or is it going to be a replacement. I'm -- it's going to depend on the individual patient because if they have renal disease or they have low blood pressure, this might be one of the first medications I'd try.

Jason Butler?

Jason Butler, JMP. I was just wondering if the panel can help us understand how you think about the clinical value of keeping patients out of the hospital versus having a mortality benefit.

You can start, Dr Ahmad.

This -- that's an excellent question. The hospitalization in these heart failure patients is an incredible burden. And I would say it's only the tip of the iceberg, right? So think about what brings the patient into the hospital. They've been feeling bad for a very long period of time. They have really bad symptoms. I mean in clinic, I ask my patients who have wearable devices or phones that track their steps. I mean I can see how little they're doing. They're almost not doing anything because they're so symptomatic. And that's kind of what leads up to them getting hospitalized. So I think it's a massive burden to the patients and to health care systems, where we've got readmission rates of 20% to 30% in some cases, even higher than that. And as you know, from outside of just the patient burden, which is very, very important in terms of health care systems being accountable for quality of care and trying to keep people out of the hospital is one of the most important things at least with our health system. So I'll give you the example at Yale, where this upcoming year, preventing heart failure hospitalization has become the key corporate objective of the entire health care organization. So they're going to put in all the resources that they have available to prevent readmissions across the health care system. So absolutely from the patient point of view and from the health care point of view, it's probably the most important thing on a health care organization level.

I would agree with that. I mean I think we also have to remember that patients who have frequent hospitalizations also have a higher risk of mortality. And so oftentimes, our clinical trials are designed to sort of follow patients over a relatively short period of time compared to how often we see them on a longitudinal basis as their clinicians. But we clearly know that those patients who start getting hospitalized, even once, that is very ominous sign as compared to the patient who's never hospitalized. So that one hospitalization has already sort of indicated that, that patient is on a different trajectory than your other patients who are stable and who never end up hospitalized. So it's a huge issue, not only from a perspective of health care resource utilization, but also just prognosis. I know that patient is a higher risk for death over the long term.

Salim?

Salim Syed, Mizuho. So one of the things that the Cytokinetics management team has spoken about is that they're attempting to get a broad label when they file for the -- for approval. And I know your practice is more in the severe population, and we know this drug has more activity in the severe population. But just out of curiosity, how are you thinking about how this may change? Would a broad label here matter in terms of how you use this drug? Or how you envision your peers using this drug? Could it be used in a wider population beyond this severe if they get a broad label?

Yes. I mean I think again, we have to sort of think about real-world practice versus what we do in clinical trials. Most clinical trials are designed such that a select patient population is brought into those trials. And then when we're trying to translate it into clinical practice, we're often trying to patients who maybe weren't included in the clinical trial, either because of a GFR limitation or because of a blood pressure limitation. And we are often -- I don't want to call it off-label use, but that's much of what we do in the real world. And so there's a ton of those patients out there. Again, the patient that has a GFR that does not allow me to start an MRA or an SGLT2 inhibitor, and this might be absolutely the option for them. Even if that patient is not sort of spiraling the drain, for lack of a better word, in terms of progressing towards end-stage heart failure.

That's a great question. So what I would say is that unlike most severe disease states, heart failure is -- causes a lot of symptoms to the individual patient that, unfortunately, we don't have that level of granularity for a lot of studies. So if you go to hospitalization and death, that's a very -- that's a big outcome, right? But if you have therapy that can make people feel better as well and prevent that, I mean that would be incredible, right? So you go to a physician as a heart failure patient, and they give you something that can make you feel better, that would be a game changer. So that's the perspective that I'm looking at it from because these patients are maybe -- the stable heart failure patients are still very, very unstable. So even if they're not going to the hospital, they're not going to be -- they're not doing anything at home. They're basically like sitting on their couch. They're not able to walk around. They feel fatigued all the time, and if there's something that can address that, that's something we don't have right now.

I'll take one more from the room. Jeff Hung?

Jeff Hung, Morgan Stanley. A variation on the last question. I guess with the greater benefit observed in the higher risk patients with ejection fraction less than the median 28, I guess how important or arbitrary do you view that 28 number versus 30 or 40? And how would you consider ejection fraction in your patients in thinking about whether to recommend omecamtiv mecarbil?

I mean in truth, ejection fraction is just one parameter of the many parameters that we look at. I think the prioritization is on patient symptoms. I mean we have to remember that there are patients with normal ejection fractions who are just as sick in many ways, sometimes as the patients who have ejection fractions at 10% to 15% range. Many of our HFrEF patients are hospitalized all the time. They're very short of breath. They've got substantial or extremity edema. So the ejection fraction, as much as we sort of bank on that as a marker, and certainly our patients bank on that, it really is guided by patient symptoms and quality of life. And hospitalizations are far more important, I think, than the EF itself.

Absolutely. So this is -- ejection fraction is a marker of risk, and you need to have a certain number of events in any clinical trial to be able to assess benefits. So it's tracking with risk, but we're going to be looking at the individual patients. So if you have someone with an ejection fraction of 32, NT-proBNP of 3,000 and highly symptomatic, they'll probably get more benefit than injection fraction 25, who feels better. But again, I think that this is -- the real-world kind of use of the medication will probably be different from the trial as we kind of get to know how people feel with it, and clinicians will kind of come up with their own assessment of who best to use it for.

So we're receiving some questions coming in from the online audience, some of which I'll defer to the next discussion panel. But for this panel, one question coming in from Yasmeen Rahimi from Piper Sandler. Why are high-risk patients showing greater benefit mechanistically? Why would a less than 28 ejection fraction benefits, for instance, more than at less than 35 percentage point ejection fraction?

And maybe I'll take that one as a mechanistic question. So I think the answer lies in when does cardiac function become super central to the disease. As our ejection fraction falls, our body has many ways of compensating. Hormones start to go up. Blood vessels start to constrict in order to maintain blood pressure. The kidney needs to change their function. The heart sends out NT-proBNP as a sort of a signal that it needs to adjust its filling pressures. And -- but at some point, those compensatory mechanisms max out. And probably in heart failure, they -- GALACTIC, the pharmacology of omecamtiv mecarbil would suggest that they start to max out as ejection fraction falls. And maybe 35 is not where they max out. It's probably 30 or 28 or whatever you want to say. But I wouldn't think of it as an absolute cutoff, just as we don't think of blood pressure being normal at 109 and abnormal at 111 or something. You -- it's a continuum, and as the panel has pointed out, there are other things you should factor in with that in terms of assessing severity.

So she's asking a few other questions, which I think were addressed already by some of the panel comments. But one that was not, given the benefits of analyses in GALACTIC, what are your thoughts on the use of omecamtiv in patients with stroke? And I'll just maybe add to that. What might be a therapeutic hypothesis around which we saw some of those data in patients with stroke?

Yes. I guess maybe I'll just ask a comment on what -- that was an interesting finding out of GALACTIC. And what do you hypothesize as being the etiology for that?

Yes, I mean I think the idea that -- and we see this all the time in clinical practice. Many of these patients with low ejection fraction develop thrombi that often are not clinically evident until they stroke until the thrombus goes somewhere that it's not supposed to be. We will routinely echo patients looking at the left atrial appendage and find thrombi that are -- they're there. And we clearly know those patients, those thrombi embolize and cause significant morbidity and sometimes mortality in this patient population. So again, if there is something that is improving cardiac contractility and keeping perhaps those thrombi from forming, which, again, are usually subclinical, I think that could absolutely be a hypothesis as to why we saw that.

Absolutely. So exactly what Alanna said, I mean I'd love to obviously see more data. But when blood doesn't move, it clots. And in a lot of heart failure patients, if you look at the ultrasound of their heart, the heart muscle is not moving at all, and you form a clot in the heart that can dislodge and cause a stroke. So my hypothesis would be that it's increasing flow around the heart.

Well, I think also the -- interesting to note and the analysis is that the incidence of stroke was just as common in patients that were in sinus rhythm as the ones that were in atrial fibrillation and even with anticoagulation. So -- and the event rates of stroke and heart failure are quite high. So that was a -- it's a pretty important problem for patients.

So with that, I'd like to thank Fady and our expert panel for their commentaries. Very much appreciated and they'll be available afterwards also for further conversation for those of you here in the room, as you may wish. I'd now like to lead us to the next part of our agenda, which is how do we turn this into a business? How might this ultimately be recognizing an unmet need as Cytokinetics can build a commercial organization to address that for the benefit of the business and shareholders. And with that, I'd like to invite my colleague, Andrew Callos, our Chief Commercial Officer, to kick us off. And he'll be joined afterwards by 2 of his newer hires who have joined us as our commercial leadership team, and you'll have an opportunity to meet them as well. Andrew?

Thanks, Robert. So good morning. With this section, I really wanted to describe how the value proposition of omecamtiv mecarbil could satisfy several areas of unmet need in the current treatment landscape. So if you look into these boxes to the right, these green boxes, this value proposition really is driven from the evidence from GALACTIC-HF. From a clinical value point of view, certainly, the proof point there was the evidence you saw Dr. Kupfer present from our clinical trial and how that works in patients with worsening heart failure. In terms of an add-on, there's certainly rationale for the mechanism in terms of it targeting directly the heart muscle and how that can be complementary to existing therapies. It was an add-on to a standard of care in our GALACTIC-HF, and it's neutral in blood pressure, kidney function and potassium. So again, I guess there was the evidence around that value proposition. And the third one around reduction of hospital and associated cost. We did see, from the primary end point, that reduction in hospitalization -- the hospitalization is the driver of cost. I think you heard that from our panel as well. So for this value proposition really to work, it has to satisfy an unmet need in the marketplace. And so really, what we want to drill down now is these gray boxes to the left in terms of what that marketplace is. I think you're going to hear many of the same themes, not driven from practical application but from data, research and claims. So these are the same 3 boxes, the large unmet need. It's a really large patient population. Overall heart failure is 6 million patients. Those that have HFrEF are half that number, and those with an ejection fraction of less than 30 are 2 million patients. So it's a very large subset of patients who have this ejection fraction less than 30. The second thing is the limitations of current treatment. There are no existing therapies that directly target the heart muscle, the organ that is failing. And there's very few patients, as you heard, that are on guideline-directed medical therapies. While effective, many of the products that are used for heart failure are neurohormonal, and therefore, they do impact blood pressure, kidney and/or potassium. So -- and this is even truer for patients that worsen, those that are the ejection fraction, less than 30. So clearly, we do need additional treatment options, both health care providers and patients, that would be effective as an add-on that are neutral on blood pressure, kidney and potassium. And there's also a high-cost burden. Hospitalization drives cost. It is the biggest cost driver of Medicare. 4% of Medicare overall is heart failure. And as your EF decline, your rate of hospitalization increases. So let me just drill down in a couple of these areas. From a -- I described this patient population, if you look in the bottom green row, the 2 million patients, as patients -- there's really good treatments available for heart failure, clearly still a lot of need, but those treatments, combined with an aging population, has heart failure growing at 3x the rate of the general population. So by 2032, the estimate is that number of the 2 million I described of EF less than 30% will grow to 2.6 million. So it's a really high growth rate. Secondly, when you look at current treatment -- I'll now orient you to this slide. The first kind of horizontal row you see with the 3 green boxes, those 3 green boxes are the current ACC/AHA guidelines in the U.S. And it's really to use these concomitantly together, as well as a consensus recently adds mRNA and SGLT2 in terms of consideration. They were not a kind of step 1 guideline. You look to the right: Fady described the ESC guidelines. It uses all 5 of these classes of medications together. And really they should be administered as early as possible together due to the beneficial effects on mortality and hospitalization. The U.S. is expecting guidelines to update in early '22. If you look to the horizontal [ load ] below those 3 green blocks, the plus. They're kind of class II recommendations, add-ons. And our expectation is that, after approval, we certainly could be an add-on in that class II for the ejection fraction less than 30%, i.e., the sicker patient given the evidence. And given that -- the treatment trend is to prescribe the initial multidrug regimen earlier, which certainly then should follow that -- those add-ons for those existing appropriate population should be followed quicker as well. The guidelines are really supported by a lot of recent entrants with strong evidence. I think we saw sacubitril/valsartan get approved earlier this year for HFpEF, the SGLT2s get approved for HFrEF irrespective of diabetes status. Empagliflozin had positive data for HFpEF as well. So you can start to see, when you look at the range of heart failure and the range of ejection fraction, there is point estimates of ejection fraction where products are approved and where they could certainly be utilized, although some of these existing therapies have had challenges with sicker patient populations. If you look in VERQUVO's label, it certainly describes in patients with the highest-quartile NT-proBNP, which is certainly a measure of heart failure severity, outcomes did not improve. And when you look at the LIFE trial for sacubitril/valsartan, compared to valsartan alone -- did not reduce NT-proBNP or clinical outcomes among patients with advanced HFrEF. In addition, no improvement was seen in events or hospitalization. And in that same LIFE trial, 48% of patients were at the target dose. So clearly, additional treatment options are needed for the sicker patient. And when -- and from a data point of view, we talked about, if you look at the left of this slide, the guideline-directed medical therapy all impact one or more, blood pressure, kidney or potassium. And this is one of the drivers, as you heard from our panel, of patients not able to get to target therapy. If you look at the U.S. CHAMP-HF registry, which is the data you see to the right, clearly you can see in this registry the RAS inhibitors, the 17% and 14%, so you get 1 in -- less than 1 in 5 patients getting to a target dose. And beta blocker is just about 1 in 4 patients getting to target dose, so certainly, existing options are needed where they don't impact these systems. From a hospitalization point of view, there's about 1 million hospitalizations a year related to heart failure. If you look at that purple chevron that says hospitalization -- and you can see the cascade, but it's the most common diagnosis in Medicare and the most -- #1 reason that patients are hospitalized over the age of 65. The less than 1 month, 24%, that's readmittance. Hospitals get penalized financially for readmittance, and 1 in 4 patients being readmitted within a month is certainly an area that needs improvement. And then if you go to the end of the term in terms of a year, 2/3 of patients being hospitalized in a year, so -- and these are average numbers. If you look at patients with worse and lower ejection fractions, these numbers are certainly at a higher risk. So this data is based on a little over 27,000 echoes in Canada. And what it shows is that, in -- for every 10% range of EF, you have higher risk in rates of hospitalization. So where HFrEF starts at 40%, we kind of indexed. You can see that line at the one across the horizontal, that black line. That's an index of 1 for those with HFrEF. If you go to HFrEF of 30% or lower -- I'm sorry, ejection fraction of 30% or lower, there's a 70% higher rate, risk of hospitalization. And you go down to the 25%. It's almost at 2:1. So you can certainly see that, as your ejection fraction decline, you're at a much higher risk and rate of hospitalization. And hospitalizations drive cost. $43.6 billion in 2020, that's projected -- if there's no difference and change in outcomes, then that is projected to raise by 60% in just 10 years to almost $70 billion. If you look to the right: a hospitalization event, $17,000, very expensive. The course of treatment with that event over the course of the next year is double that. Over the lifetime, it's 80%, with drug being very little of the overall cost. The biggest issue, and you heard obviously, is the burden it puts on caregivers and the burden it puts on patients. As patients have very distressing symptoms -- you can see these very high rates of shortness of breath, fatigue, tiredness, trouble sleeping. And it also puts a big impact on caregivers. They're -- there's a big burden, obviously, taking care of a loved one, both emotionally and physically; and give very little time for caregivers to live life. You can see from this data here reducing social interactions and ability to work and ability to do recreation, but patients, they really begin to lose [ dependence ]. They can't do simple things, walk across a room. They're often very scared and fearful of being hospitalized or even death, which leaves them very anxious and [ suppressed ]. So I think, in short, if you kind of hear and understand what a patient is going through, patients really do start to -- with heart failure really start to lose their life before they actually lose their life, so it's really an area of unmet need where we certainly feel like the evidence from omecamtiv mecarbil can certainly help and give additional options. So given that evidence, really what myself and Jen and Diann want to walk through is our go-to-market strategy of how we plan on bringing omecamtiv mecarbil to market, to cardiologists and to the centers that they're -- treat at. So first and foremost, in earlier this year, we started building out our commercial capabilities and while -- and advancing our approved -- go-to-market strategy that our Board approved. And the commercial vision and aspirations is really driven by the Vision 2025 you heard Robert talk about. There's really 3 elements of that vision that I just want to call out that drove our strategy: first and foremost, improving the lives of patients with impaired muscle function. Second is building our commercial capabilities, and third is generating sustainable and growing revenues. So they're really the 3 areas, and our approach is really based on thoughtful choices we make and continue to make. There's critical market choices that will determine how much money we spend, what level of investment we need, what level of return we think we'll get, things like who are the customers we need to educate. How broad is that group? What patients really would you think would benefit and focus? How are we going to compete with the major pharmas or big pharmas with very large field forces and share of voice? And what is the right price? And how are we going to engage payers? There's also internal choices like how we organize ourselves, how big should our field force be. What type of field force, and who should they call on? And what level of investment do we need? And these forces were really informed by our analytics and data and experience. They also follow the evidence from GALACTIC-HF, and you heard obviously the patient. And they will be supported by investment levels that should enable a reasonable return for Cytokinetics to bring omecamtiv mecarbil to market alone in the U.S. without a partner. And the evidence is really based on this target product profile. This is where it starts. This profile obviously does not represent an approved product. It's really our aspiration from the evidence you saw from GALACTIC. The final profile will obviously be based on a label if approved by the FDA, but there's really 3 elements. One is the treatment effect you see in the efficacy; and how that efficacy improves as the ejection fraction declines, starting at 30%. Second is the mechanism as the only product that will directly target the heart muscle, the organ that's failing; and third, that it's neutral on blood pressure, neutral on potassium and neutral on kidney. Our go-to-market strategy really focuses on these key areas from an organization point of view and pillars of success. We started with our commercial organization design. And that design really had to be flexible to make sure we could launch in the U.S., be ready for aficamten from a franchise point of view and enable us to expand geographically when needed. The gated build element of it really is saying we're going to be focused with a very modest field force. And our planned total investment will be released over time as derisking events occur, a derisking event like a filing obviously, an approval. The strategy is really across these 4 key pillars of insights, education, access and support: insights in terms of having a really deep understanding of who the advanced -- I'm sorry, who the worsening heart failure patient is, that unmet need. Who are the cardiologists that treat them, and where do they get treated? Because it's a very small subset overall. From an insight point of view -- I'm sorry, from an education point of view is to ensure that cardiologists really understand the data and the evidence and how that benefit increases as EF declines. From an access point of view, making sure we have affordable co-pays for patients soon after launch; and that we -- from a support, that we provide high-touch support to patients, including things like co-pay support for commercial patients, reimbursement services and educational resources. From a organization point of view, obviously it starts with people and our leaders. We have very deep confidence in our ability to be successful in the marketplace because we are hiring world-class leaders to add to the existing talented colleagues that started Cytokinetics and advancing our potential medicines over 23 years ago. So given our portfolio of a Phase III complete, 2 Phase IIIs about to start in ALS and HCM, we're attracting very top talent. And all the roles have been very competitive. I guess, probably put simply, it's a really special place and people really want to be here. And first and foremost, we saw very deep and experienced leaders with a good mix of big pharma and biotech background as well as relevant product launches. And we've made great progress. We have the entire leadership team that's hired, and we've -- also have our whole payer account management team hired and the vast majority of our marketing team hired. Our leadership team on average has over 27 years experience, and collectively we have over 60 launches, so certainly a very deep and experienced group to better inform decision-making as we get to the many key decisions we're going to need to make. The archetype for our hires really is very deep and relevant functional experience, but more than that, it's really people who want to be part of what we're building and are principally centered on having a relentless pursuit for wanting to improve the lives of patients. Together, we're preparing for more than the launch of omecamtiv as well. We're really -- this is really part of a larger organizational transformation. Cytokinetics, for 23, has been -- for 23 years, has been primarily an R&D organization, so we're really building and integrating a commercial organization into this broader organization, new systems, new processes, new governance. So very detailed planning, disciplined project management and a deep focus on operational excellence is essential so we're ready to go for launch, hopefully if we're approved, in mid-2022. So from a investment point of view, our approach really is to limit our at-risk spend to only those activities that really require a lead time to make sure we're ready for a successful launch. We should have around 50 commercial employees by the end of this year. And that amount of FTEs is more than sufficient enough for our planning and our readiness for launch, and it's still less than 20% of our overall target. Additional spending and hiring will be released once we file, but the largest spend area, things like field force, patient support, hub service, speaker programs, that won't be released until we're approved. So we've created this [ approach that's ] very financially responsible while ensuring we have just-in-time investment that we have a successful commercialization of omecamtiv. And now let me introduce Jen Laux, our VP of Marketing, to share the first point of our go-to-market strategy, which is really around patient and customer insights.

So good morning. So now what we're going to do is take a look at our plans to introduce omecamtiv mecarbil to customers and to the market following FDA approval, of course. And so our -- a core tenet of our launch strategy is to focus, and that focus begins with patients. Our focus will be on the worsening heart failure patient. These are patients with very high unmet needs, as we've heard, and patients that benefit the most from omecamtiv mecarbil, based on the data from GALACTIC. So secondly, from an -- a health care provider perspective, we plan to focus on cardiologists and their care teams and those that are treating patients with worsening heart failure. And then finally, from a setting of care perspective, we'll be focused on where worsening heart failure patients are cared for. And that's in heart failure clinics and also in hospitals. So let's take a closer look at the patients that have worsening heart failure. We already heard this from our panel. These are patients that are on guideline-directed medical therapy. Sometimes, they're optimally treated but often not optimally treated because of tolerability issues; and despite this, their symptoms continue to deteriorate. And these patients require additional treatment, intensification of treatment, but unfortunately, options are very limited today. And so these patients have huge unmet need. And what's important to recognize as well, providing more color, is that these patients are very fragile. They have lower ejection fractions. They've recently been hospitalized. And we've heard the impact of what a hospitalization can mean on -- for patients in terms of residual risk and in terms of the impact on their life. And then finally, they have comorbidities that include things like low blood pressure, kidney function, impairment and also high potassium. These are comorbidities that can be exacerbated with current treatments. And so these patients need something more, and this is where we're going to be focused with omecamtiv mecarbil. And based on the GALACTIC data, we feel really confident that we can provide benefit to these patients because this is exactly where we saw the most benefit and that we can provide a treatment option that is safe and doesn't exacerbate comorbidities in these already very fragile patients. And so we're really excited at Cytokinetics about interacting and engaging with patient advocacy communities. We do this across all of our disease states and we learn from them. And what we've heard is really compelling snippets about what it's like to live with worsening heart failure. And here is just a sampling of what we've heard about the impact on patients' lives: "It takes my life from me. I'm a burden to my loved ones. The simple pleasures that I took for granted like walking my dog are beyond my reach right now." And the one thing that these patients dread perhaps more than anything else is going back into the hospital. Hospitalizations are something that they fear. And then we think about the caregiver and the significant burden on the caregiver as they care for their loved one. It really is a full-time job. And so as we prepare to launch and as we're putting our plans together, a central tenet for us is going to be to engage with patients and their caregivers. And we're planning a very focused but also very high-touch set of initiatives in order to connect with the worsening heart failure community. That's going to be absolutely critical, and we have 3 key objectives. The first is to educate patients and caregivers on omecamtiv mecarbil and the benefit that it may be able to provide for them. These are people that don't have many treatment options and this can really provide hope for them. And secondly, what we want to do is activate these patients and caregivers to learn more about omecamtiv mecarbil; and also to engage with their cardiologists, their care team, their heart failure specialists [ in ] learning more about this potential treatment. And then finally, we plan to support these patients in accessing omecamtiv mecarbil because we know that that's not going to be easy initially. And so now let's turn our attention to where we may actually have touch points to reach patients in their journey. And so the worsening heart failure patient experiences these exacerbations of symptoms, and they may present in a number of different settings. So one might be a routine visit to their cardiologists either in the community or at a heart failure clinic. A second way they may present is with an urgent outpatient visit that's not scheduled. And then the third way and a very common way that they present when they have acute symptoms is through the hospital, and they're often admitted so that they can be stabilized. So these 3 settings are all viable settings for omecamtiv as an add-on treatment to guideline-directed medical therapy. And the data from GALACTIC and the study design really supports us engaging with cardiologists in all of these care settings, including the hospital because we studied patients that were hospitalized. That makes us different than -- from some of the other treatments out there in terms of the settings of care that we can speak to with our very compelling data. And so now let's turn our attention to health care providers. As I said, core tenet is to be focused. And so our team at Cytokinetics has done rigorous analytics to identify who we're going to be targeting at launch, and obviously that's cardiologists and heart failure specialists. And what we've been able to do is identify who the high prescribers are, who those cardiologists are that see the most worsening heart failure patients. And we've also been able to identify the early adopters, those cardiologists that may be most likely to adopt omecamtiv mecarbil out of the gate. And so we understand these high-potential physicians as targets and we also know where they're actually practicing, and that's really key to us. And so let's have a look at the data. A key insight here is that the community that is caring for worsening heart failure patients is very concentrated, and on the left we get a sense of how concentrated it is. So 1/3 of all the cardiologists that are practicing in the U.S. are caring for and treating approximately 80% of patients with worsening heart failure. This allows us to be very focused. And on the right, you see this lovely heat map. And this shows where these high-potential, high-prescribing cardiologists are practicing. Again it's very concentrated. And it's clustered, maybe not surprisingly, around urban centers. And so as we think about how we're going to deploy a field sales team at launch, we can be very targeted. And we can deploy a modestly sized field sales team, which is going to be very important to us as we think about getting to the right HCPs in the right way, efficiently and effectively. Now that's also not to say that we're going to forget about the geographies that aren't lit up on the heat map. That would not be prudent because there are cardiologists practicing there that need to be made aware of omecamtiv mecarbil. And this is where remote engagement will come into play. And also this is where digital engagement will come into play to educate these cardiologists and their care teams, very importantly. And so we know where to go to find these cardiologists and to educate them, but importantly, what do they think about omecamtiv mecarbil? And our panel gave us some really nice insight into what they as heart failure specialists are thinking about. And our market research that we've done, both qualitative and quantitative, very much echoes their enthusiasm for omecamtiv mecarbil. And so first and foremost, cardiologists in research told us that they see a very clear unmet need in the worsening heart failure patients. These are patients that they find the most challenging to treat. These are patients that they are the most concerned about; and therefore they are looking for new treatments, novel treatments, for this patient population. And when we shared a product profile for omecamtiv mecarbil based on our GALACTIC data, the reaction was very positive, and it was positive along 3 dimensions. So the first is around the efficacy of omecamtiv; and specifically the efficacy in patients with lower ejection fractions, patients that have the most unmet need. And that's where we saw the greatest benefit in outcomes. That's very compelling to cardiologists. And secondly is safety. Some cardiologists went as far as to say that the safety profile of omecamtiv is a game changer. And we've heard about guideline-directed medical therapy and the challenges in getting patients to optimal doses because these medications exacerbate underlying comorbidities and patients can't tolerate them. That's not so with omecamtiv mecarbil. And then finally, the mechanism. So a novel mechanism, for sure, but one that's also very intuitive in terms of the direct impact that omecamtiv mecarbil has on the heart, the increase in contractility and being able to get at the underlying cause of heart failure. So taken all together, this profile is very differentiating relative to other treatment options in heart failure. And importantly, the cardiologists, when they see this, could immediately see where omecamtiv would fit in their practice and how they could help patients specifically with worsening heart failure. They can identify these patients. They recognize these patients and they want to use omecamtiv mecarbil. And so we've talked a little bit about patients and we've talked a little bit about health care providers and how we're going to connect with them at launch. Let's now turn our attention to the institutions or the settings of care that are so important for worsening heart failure patients. And so it's the heart failure clinics, and I look over to our panelists that talked about the types of patients that they see in their clinics. These are the most complex heart failure patients. And there's comprehensive care teams led by heart failure specialists board-certified to really care for these patients. And so these centers or these clinics tend to have physicians that are the early adopters that want to try the newest medications. And also they have support in place in terms of staff that are able to help patients to get access to these newer medications, so heart failure clinics are going to be a key area for us to focus on at launch. And then secondly, it's the hospital setting because that's where worsening heart failure patients end up, unfortunately. And the hospitals that we'll be focusing on will be the major academic centers, those with integrated delivery networks as well. And these are the centers that see the vast majority of worsening heart failure patients when they're having that heart failure event. And so hospitals are going to be important to us. That's where the KOLs are, the thought leaders. And that's where influence cascades into the community. We'll be focused there. And I will say that the trends, as we look at the data, are very favorable for hospitals not only to be centers of influence but also importantly opportunities for patients, as they've been stabilized while they are still inpatient in that hospital, to have a change in treatment and, in our case, to add omecamtiv mecarbil to guideline-directed medications to help to relieve their worsening symptoms. And so the data that we've been looking at shows that, over the past 4 years, there's been a threefold increase in the likelihood that patients actually had a change and a new class of treatment added while they are in the hospital. This is really encouraging data for us because it points to the opportunity that we have for omecamtiv mecarbil when these patients need it most, when they've experienced a worsening heart failure event, to be cared for and have omecamtiv mecarbil added in the hospital setting. And something that's differentiating about the profile of omecamtiv is that this could be done safely without prolonging the stay for monitoring of the patients. This isn't the case with other heart failure drugs and so this is a wonderful opportunity for us. So now I'll turn to how we're thinking about engaging with health care providers. And so we know that COVID has really accelerated the evolution of customer engagement models. And we at Cytokinetics have been very fortunate to have been able to observe what's happening and to consider this as we build our customer engagement model from the ground up. And so there are some very interesting data that we've been following on what's happening with customer interactions on a face-to-face basis since COVID, and what we see on the left is that the interactions are rebounding in both specialty settings and in primary care. That's good news. And perhaps even better news is the data that is shown on the right, where cardiology is leading the way in terms of having more and more face-to-face interactions at over 80% of the level that was occurring prior to COVID. And so this is very encouraging for us as we think about being able to deploy a field sales team that's modestly sized, focused on the right targets and to engage face to face. And so face to face is going to be an important part of our launch strategy, but it doesn't really stop there. As we think about our customer engagement model, our goal is to meet our customers, our cardiologists and their care teams where they're at. And by this, what I mean is that each cardiologist, each member of the care team may have different preferences for where, when and how they prefer to receive information. And so we're putting in place a customer engagement model that will be agile and that will be nimble and that will be responsive to these preferences. And we are planning for a mix of face-to-face interaction, remote interaction and also digital engagement so that we can tailor the approach and better bring value in our conversations and interactions with key customers. And the second component of our customer engagement strategy is to think beyond where our field force is going and to think about how we're going to engage more broadly with other cardiologists and care teams that need to know about omecamtiv mecarbil. We'll be using digital to do this, and also remote engagements, so that these cardiologists broadly will be educated on the value that omecamtiv can bring; and also how to use it; and in what patients they can be using it to get the most benefit, the worsening heart failure patients. So with that, I'll conclude by saying that we're ready to bring omecamtiv mecarbil to market following FDA approval. We will be ready to launch this product, and importantly, we've built an experienced team. We feel that we have the right strategy. And we have -- we are putting in place the tools that will help us to bring omecamtiv to the patients that need it most. So with that, I'd like to turn it over to my colleague Diann Potestio, who is going to talk a little bit more about the value that omecamtiv promises to bring and also how we are going to help support patients to access it.

Thank you, Jen. Good morning, everyone. I'm happy to share that our team is ready, as Jen said to all of you, to make an impact with physicians and payers to ensure that omecamtiv mecarbil is available to patients early. As someone who's launched over 2 dozen different new medications to payers in my career and many of those being cardiovascular products, I understand the importance of value. And we believe that omecamtiv mecarbil brings significant value to the community. I'm going to discuss that today with you in terms of our plan with regard to access. I'm also going to discuss the importance of Medicare Part D and how we intend to accelerate access as soon as we launch. So you've heard from many of the clinicians today in HFrEF. We understand patients are hospitalized more often. Omecamtiv mecarbil will bring clinically meaningful benefits to these patients; and our access activities, we intend to impart the clinical value of omecamtiv mecarbil. We intend to partner with key institutions to bring real-world evidence, using HEOR and demonstrating the economic impact and value. And we intend to work with our market access teams early. You heard Andrew say we've already hired our national accounts team, and we are intending to engage with them early. We're already doing it and having very meaningful conversations with them because we understand Medicare Part D as a key focus. As you look at this graph, you can see, in green, 3 out of 4 patients reside in Medicare Part D. 50% of those patients get their pharmacy benefits from UnitedHealthcare, Anthem, Aetna, Cigna and Kaiser Permanente. So our team is focused here. And we will be ready to engage bids as they come in and to address this particular book of business. You also heard that we've hired our national accounts team. We spent a lot of time to pick the right team because we know how important this space is. And so as we saw many resumes come in, we looked for individuals that had experience in the marketplace for a mean of 20 years. Collectively we have people, if you can believe it or not, that have engaged with payers for almost 2 centuries, so they really know their payers. And overall, many of them have had experience in the industry for a long time. The reason this is so important is because we know access is important to get out early; to engage payers; to have good, strong conversations. And supporting patients is the #1 thing that we're focused on at Cytokinetics to make sure that we're providing the right education to payers but also to make sure before launch that we're out there helping to educate in this space. We also intend to support by developing an innovative hub for patient services because we understand that these patients often are on multiple products. And the insurance industry, as you all may know, is sometimes not easy to navigate. So as you've heard from many of our folks today, we put patients at the center of everything we do. I want to draw your attention, as this slide builds, to what we're calling the 4 As: access, affordability, adherence and analytics. So when you think about a patient, and we think about them every day, we need to help them to navigate reimbursement support. We need to help them because many of these patients may be facing an insurer that has utilization management controls. We may even need to help them with appeals assistance. We also know that many of the patients are on multiple products. And they may be on limited incomes, so it's important for us to help them to get started and initiate therapy, so we may offer a free sample of co-pay support. These are things that we're considering. In addition, it's important that, once they get on therapy, we help them stay on it for the long run. And so we need to help them navigate those barriers over the long run as well. And our team will be very focused on analytics so that we understand. How is that patient journey progressing? Because we want to make sure that -- as they stay on therapy, that they're able to obtain positive outcomes. So a mix of high-touch support is really important, that we focus on our patients and caregivers, but we're also really focused on offering digital assistance and [ innovative ] patient services that help patients not only start on product but, again, stay on it for the long run. You heard Andrew address this slide, but it seems like such an important slide to end on. And that is basically that we are ready; that we have built a very strong team to address the value proposition of omecamtiv mecarbil, to make sure that we address unmet needs with payers that's really important, that we also understand the patients and that we help to reduce the cost burden overall. He discussed with you that we have built, I believe, a world-class organization in a gated way. We also are looking very closely at our care -- core capabilities to make sure that we understand the market well, that we're educating properly but, most importantly, from my perspective, that we're focused on access and that we support our patients in the long run because patients are the focus of everything we do at Cytokinetics. Thank you.

So thank you, Diann. Thank you, Jen. Now as Andrew and his colleagues are going to be here at the podium for questions, I want to start with a couple of questions from here in the room as we can talk now more about our go-to-market strategy. We also received some questions online that I'll come to in a minute. And I see a first hand up in the back, Joanna.

It's Graig Suvannavejh from Goldman Sachs. A quick question just on the initial targeting and the segmentation of the market. How much of that represents the totality of the market? I know you're doing this in a staged fashion going after specialty clinics and target hospitals. I'm just trying to get a sense of what that represents in terms of what you think you can get. And then also, a nice job laying out the value proposition, but in terms of optimizing the launch, where do you think right now is going to be the greatest pressure points from a commercialization perspective? Is it simply market access? Or is there still an element of market awareness that has to be built either for the product itself or for who you are, Cytokinetics, as a company?

Thank you, Graig. So I'll start. And then I'll turn it over to Andrew, to share with also his colleagues. So I think your 2 questions are actually very related. So how we might overcome challenges is a function of how we think about segmenting the market. We're going to -- it's imperative that we're going to be efficient and lean. As you'll hear, we're good students of what have been underperforming commercial launches in the cardiology sector amongst both big pharma and large biopharma companies. And I think we've done a better job, hopefully, than most, as you'll appreciate through the remainder of this morning, of thinking about how to segment in order to be able to consider the cascade of influence amongst physicians and where they practice. It fundamentally comes down to not just promoting omecamtiv mecarbil, when the time is right, on parameters of safety and efficacy but also pharmacoeconomics and value proposition. The health economics and outcomes research here is really quite compelling. Being able to demonstrate a reduction in hospitalizations and rehospitalizations; and be able to, hopefully, afford physicians the ability to keep patients alive and out of hospital longer, that creates compelling rationale for adoption of a new product. And as a company, that's how we think that we can make a dent in promotion alongside of those companies that are promoting along guideline-mandated treatments. With that, I'll turn it over to Andrew.

Yes. Thanks, Robert. I think, to the first question, we spent a lot of time really focusing on who are the health care providers that treat the patient type given the evidence of GALACTIC. And we looked at who's doing procedures. Who has the [ sub certification ] for heart failure and transplant. And looking at this, it quickly was evident that we need to focus on cardiology, subset of cardiology only. We don't need to go to primary care. We don't need to go to other specialties. It's all about cardiology. And cardiologists that we're selecting to really focus on treat 3 to 4x the amount of heart failure patients than a general cardiologist. So we know we're going to the right places. We're certainly, after launch, going to monitor how uptake is; and if there's other [ writers ], other areas. And if we need to adjust, we'll certainly do that over time, but we're very confident that we're hitting the right places. Largely too there's -- and you heard from our panel, in the academic centers, in large IDNs in major cities, this is where many of those cardiologists also practice. So it's less than 1,000 hospitals. There's almost 7,000 in the U.S., so it's less than 20%, so it does create a very focused organization for us and knowing where to go. I think some of the -- looking at past launches of other companies with large aspirations going too wide, too deep, trying to start with primary care -- and it doesn't work that way. You really have to start with the specialists. And so I think that was critical for us. The second question, around -- it's really around access. And maybe I'll ask Diann to address this as well, but the data we have around keeping out of a hospital as well as readmittance are key data that we certainly know drive our economic argument and certainly will be interesting not only from a health care system point of view but to payers as well. I don't know [ if maybe you want to add to that ].

No. I think it's perfect.

Okay, great.

So one of what could be our competitive advantage if we play our cards right here is Cytokinetics doesn't need to counter detail against Merck, Novartis, AstraZeneca or other companies active in the space. What we have is a mechanism of action that, if approved, would be a novel add-on therapy as could be complement and adjacent to and afford physicians advantage relative to those patients who are difficult to treat. And I hope that, a year or 2 from now, we'll see evidence of the fact that this complementarity to existing therapy and guideline-mandated therapy will be to our commercial advantage. Next question, from Salim.

Great. Salim Syed, Mizuho. So a couple for me. The -- so Robert, I don't know if anybody -- or Andrew, team, maybe you can answer this question, which is one that I think a lot of people are wondering about but might be hard to answer. It's the dollar figure, right? So you've kind of put out the patient number, 2 million patients, right? We know this is [ Entresto-like pricing ] probably. Can you -- Street is modeling this is a $0.5 billion drug, more or less, ballpark. Can you give us some color around that? Is the Street totally missing this? Or like just give us some color quantitative or qualitative. That would be appreciated. And the second question here. You mentioned mid-'22 as a potential PDUFA in the time line and in the comments as well. Just curious if you're thinking about that as a base case or more as an upside case.

Thank you, Salim. So you always have an uncanny way of asking questions that, frankly, are probably premature for me to be so specific to, but I'll do what I can. It's too early for us to speculate on pricing. Obviously there's a tight band around pricing for existing heart failure therapies, but there's still a lot of work we have to do around both qual and quant research in order to get to a price that we think is affordable, enabling equitable access and going to be acceptable to payers. With that said, I do think that the Street is underestimating what could be the upside here, in large part because I do think that it's only after a session like this that I think you'll begin to understand what may be the potential in terms of prevalence and the number of patients that could stand to benefit from a drug like omecamtiv if approved. And I do think that there is a much more compelling need for add-on therapies here for patients who aren't getting to what might be optimal outcomes given existing standard of care, so it's our job in order to be able to make that happen with education and awareness and building and that's something that our team is prepared to do. With that, I'll turn it over to Andrew to see if there's anything further he want to add.

Yes -- no. The only thing I would add in terms of a PDUFA is that it's a base case [ for -- yes ].

Next question coming in?

Great. Carter Gould, Barclays. 2 questions for me. First one, maybe a different spin on the segmentation question, maybe more in terms of the patient journey; and just trying to think about sort of the -- I guess, the efficiency across those different points, whether it's hospitalization or referral or worsening with an existing patient; just how you think about sort of the efficiency in which you can kind of grab those patients at those different points and the relative contribution of those different opportunities; and then just as we think about the sort of the segment that you're focusing on, how you think about duration. Clearly -- I think it was 21 months in the broader study. I don't think you've ever kind of broken out kind of what that was [ in sort ] of the segment you've been kind of more narrowly focused on. You've laid out a pretty good rationale here why the drug would be a good fit, but any color on that front would be helpful too.

Thank you, Carter. I'll turn it over to Andrew, who I know will want to also ask Diann and Jen to comment, but to your points, there are I think opportunities to ensure that, once patients are started on omecamtiv mecarbil, it's important that they stay on omecamtiv mecarbil. And if anything, we've learned from GALACTIC and other studies that maintenance of adherence and compliance to new medicines is essential to outcomes in this population. Given that so many patients will start upon discharge from hospitals, it's incumbent upon us to help those health care physicians and also their patients maintain adherence to new medicines. So with that, I'll turn it over to our panelists to comment on how we might make that happen.

Yes. So maybe I can address the second question, and then I'll turn the first question to Jen. So the second question, I'll just start with real quick. In terms of how we think about the overall product really would be we're focused on kind of the journey that moves patients very quickly to centers, as you heard from our panel. So these general cardiologists certainly move them much quicker than we had originally thought. And that gives you kind of a 2 to 3x the rate, as I mentioned before, in terms of number of treaters. And maybe Jen can elaborate a little more on that from the research.

Yes, sure. So the continuity of care question that I think that you're asking is really important and we've thought about that a lot. And so maybe we, I can break down where prescriptions are being written right now and where patients tend to be initiated on treatment, with heart failure. So a lot of this is still coming from community cardiologists. And we'll be in the community, talking to these cardiologists. A disproportionate amount of prescriptions are initiated there. However, as we think about the worsening heart failure patient, what we expect is that a lot of the early adoption will be occurring in the clinics, the heart failure clinics that we talked about with our panelists. And that's because they tend to be the early adopters. This is going to be a new treatment with a new mechanism. And community cardiologists very well may be looking to the heart failure specialists as thought leaders and may even be referring their patients to the heart failure specialists in order to be initiated on omecamtiv mecarbil at the beginning. So we're going to be very focused disproportionately on those heart failure clinics because that's where we expect to see the earliest lift and the earliest usage. And then that will cascade as the community starts to see the benefits of omecamtiv mecarbil and also has consultations with the heart failure specialists that are using the product. The hospital setting is really interesting as a setting of care for initiation of treatment. I showed the data that shows that more and more of these hospitals are initiating new classes of medication with patients, and I talked to a thought leader about this just to get more color as to why this is happening. And some of the drivers are with, for example, the SGLT2 inhibitors. They're very safe to initiate in the hospital. Other treatments in the past have not been. And because they have to be monitored, so a patient that maybe has low blood pressure would have to be monitored, that extends the days in the hospital. Hospital systems don't want that, obviously. And so some of the trends are safer products. Omecamtiv will be one of those that is, based on its safety profile, easy to initiate in the hospital. Other trends are penalties by CMS for readmissions, and health care systems are getting much more sensitive to this. And then thirdly, and this is really important in the context of continuity of care, a lot of the academic centers now, medical centers, are focusing on what to do, ways to help patients, as they're initiated on a treatment, actually be transferred back to the community in a way that their monitoring is continued and in a way that the patients are continuing on their therapy. This has been very disjointed in the past. And academic centers are more and more focused on helping the patient to make that transition. I'm not going to say that this is happening at every center, but there is a clear trend towards this. And so again these are trends that are in our favor. And as we think about our marketing tactics, part of what we will be thinking very carefully about and what we are planning for currently is ways to educate and ways to follow the patients through that continuity of care so that they're not lost as they move from the hospital setting to either the heart failure clinic or the community.

The only -- and then going back to the -- thanks, Jen. The only -- going back to the first question. The main reason that people don't stay on therapy are 2 really, are tolerability and safety and cost. So we're really focused on access that you heard Diann speak to. I think, the profile, I mean ultimately it will depend on what the approved label is, but as of now, the profile looked fairly clean. It doesn't look like we'll have many safety or tolerability challenges within the label. So our expectation is that we would be probably at least at, if not better than, duration of therapy for existing therapies in heart failure. And that's kind of how we've looked at it.

So demonstration projects have underscored the importance of maintaining adherence during that continuity of care from hospital to patient. And one of the things we can do for the heart failure community is not just launch a new medicine but provide patient support services that assist physicians to maintain continuity for their patients. And we'll have hub services and other activities that Diann and her team will be overseeing to make that happen. So we did get some questions coming in also online. I want to make sure we attend to those too. So Dane Leone from Raymond James has asked: What is the expectation for omecamtiv mecarbil placement on formularies? And what are critical aspects of the written label that support the formulary placement that your team is targeting? Andrew, could I pose that to you and then maybe also Diann?

Okay, sure. So from a formulary point of view, we certainly expect some payers to maybe look, as a step, that we would have to go as an add-on from the therapy point of view as well as maybe for -- even for a specific population. That actually could be to our benefit because that -- payers generally like when they know exactly who the patient is they're paying for and that they're going to get a benefit, but I'll maybe turn it to Diann maybe for some additional commentary.

I think that's a really important point that you made, which is that we will be in a special space, but I think it's most important that we help payers understand the unmet need currently for heart failure patients today. And we're engaged with a lot of those discussions right now. As I spoke, we are -- we have our aim focused on Medicare Part D for the obvious reasons. And we will be ready to look at those bids as they come in early. And I think we're going to obviously seek for alignment with our label. I think that, that will be a very good place for us to be focused on. So yes.

Okay, last question coming in online, from Charles Duncan of Cantor Fitzgerald. Charles is asking. Regarding omecamtiv mecarbil and its clinical utility, what are the primary set of factors that we'll rely on to establish the pharmacoeconomic value for the highest-burden patients? Diann, can you speak to some of the things that already are underway in terms of the HEOR support for our commercialization plans?

Absolutely. We've been working on evidence generation currently, as you know, Robert; and obviously working very closely with many of our academic institutions and key opinion leaders to be addressing the real-world evidence, obviously, as we move forward but also building our value proposition which is really important. As I discussed earlier, value is key today in every conversation that we have. So we have a team also that will be going out on the field and engaging with our national accounts team to have these conversations to help payers understand our value and understand where our product fits.

The only thing maybe I would add to that is we showed the cost for hospitalization and just the event of a hospitalization of $17,000. Reduction of hospitalization certainly should be a cost offset and that will obviously be a key driver of the value that Diann described.

Absolutely.

Diann is looking at me and smiling because she knows that, for a long time at Cytokinetics, I've been pushing very hard on this agenda of health economics [ and ] outcomes research. And long before we had even started GALACTIC, Cytokinetics has been sponsoring at the Heart Failure Society of America meeting each year a symposium around health economics and how that is affecting choice of care in heart failure management. And I think we've established a lot of credibility and goodwill amongst heart failure physicians for what is the underlying issues associated with not just clinical safety and efficacy but economics in heart failure because that's obviously driving payer and physician behavior. Cytokinetics will make it a core competitive advantage to be out there with outcome specialists driving what will be not only understandings of value and pharmacoeconomics but also where this might have effect to reducing budget impact. And that's where I think Cytokinetics can -- as a smaller company alongside of those other larger companies who are difficult to compete with from the standpoint of share of voice, we can add value. And I think that will make a big difference in terms of differentiating what we are doing, offering services and also information alongside of what could be a new mechanism product. So with that, we'll bring this to a close, this session. We're going to take a very short break. We're running about 15 minutes behind schedule. We will try to catch up; maybe 2 minutes just, please, to grab some coffee and come right back. And then we'll move to the next portion of our agenda. And to those of you online, we'll be right back just in about 2 minutes, please. [Break]

We're now going to move on to our second cardiovascular product in our franchise, aficamten, which is a subject of a planned Phase III study start and hypertrophic -- for hypertrophic cardiomyopathy, obstructive hypertrophic cardiomyopathy, or HCM. HCM is the most common genetic cause of heart disease. It's a chronic progressive disease that can be extremely disabling. Patients are at a substantially elevated risk for complications [ or ] comorbidities, things like AFib and heart failure; and also have a higher, much higher, mortality rate than the general population overall. In terms of the numbers of HCM, you can see in these green -- 2 green-shaded areas there's about 280,000 diagnosed patients with HCM. 2/3 of those are obstructive HCM, the other 1/3 nonobstructive. Again, the obstructive HCM is where we're looking from a Phase III point of view. Furthermore, there is an estimated prevalence 2 to 3x greater than that all the way up to around -- a little over 1 million patients with HCM that are currently undiagnosed with this condition. There's a lot going on really to -- ways to increase diagnosis of HCM, artificial intelligence models. Companies like 23andMe do report on several genetic factors associated with HCM. Genetic testing is also in the 2020 ACC/AHA guidelines, which really includes a 3-generation family history which is a class I recommendation; let alone multiple pharma companies, including Cytokinetics, raising awareness, doing clinical trials, spending money on media, attending congresses and at launch, if, when -- if and when approved, both medical and field sales organizations really to educate and raise awareness. So many activities going on really to help raise awareness and increase diagnosis overall. From an unmet need point of view, you can see the different ways that we segment the market from an HCM point of view: about 70% of the market symptomatic that is either in kind of New York Heart Association class II; the more severe patients in class III, class IV. And you can see the products that these patients use, these existing therapies, but these existing therapies do have very significant limitations. Pharmacologically, when you look at the standard-of-care beta blockers and calcium channel blockers, neither one of these products are actually indicated for FTM -- HCM. They do not address the underlying cause of the disease. They, for some patients, provide some symptomatic relief but really don't provide overall relief as well. From a surgical point of view, surgery is very costly, invasive, risky and not always permanent, so clearly more options are needed. From a cost point of view, when you look at the medical cost pre diagnosis, post diagnosis, because of the treatment, because of the care, the medical cost alone increase over threefold. And when you look at a myectomy, one of the surgical options for an HCM patient, you can see the cost of surgery alone is right under $100,000. And then the 12-month post care, not including the surgery cost, is another $120,000, so really high costs for the existing therapies that -- really not satisfying the market. When and if we get approved for aficamten, these are really the key areas of unmet need we are foreseeing if we would enter the market, really patient -- drugs that can improve exercise, function and capacity. They work in more severe patients across the whole range, including that 30% more severe patients that are the class III, class IV. They don't have long-term complications. Or they could relieve them or reduce them, things like AFib and heart failure. Used potentially even preventively in people with genetic abnormalities that could be associated with HCM, as well as drugs that actually reduce septal thickening in terms of reverse remodeling. So our hope for aficamten really would be a next-generation therapy to satisfy several of those unmet needs with no plasma monitoring, reduced time to optimal dosing, a much wider therapeutic window and fewer dose adjustments needed. That could translate into those benefits you see to the right, including dose optimization and rapid reversibility. So obviously we don't have a Phase III trial result yet. These elements of our target product profile are elements that we are thinking from an aspirational point of view given where we ended Phase II and how we're planning on Phase III. And obviously the overall label, if approved, will be the ultimate determinant of this, but from an efficacy point of view: improved [ capacity of ] exercise, improvement of a class or 2 in New York Heart classification for many patients as well as overall quality of life. From a safety and tolerability point of view, minimal drug interactions, maintaining the vast majority of the patients over injection fraction of 50% that's reversible with a titration down pretty quickly. Timing of titration, pretty quick in terms of 2-week titration using only echocardiogram with no monitoring of plasma. So when we look at the opportunity for us, we really do think of those patients that are diagnosed today as well as those undiagnosed patients for those reasons I stated where diagnosis could be increased. Certainly there will be many patients who are not treated with a next-generation therapy. There'll be newly diagnosed patients. There'll be patients on therapy failure as well as patients maybe that are excluded. As an example, we're studying patients with disopyramide that could be an excluded population. So we certainly see many sources of existing patients for aficamten. So in summary, kind of our value proposition, before we get into the Phase II data and the Phase III design, really would be that we could address all patients regardless of severity, with minimal drug interactions, which would be a largely untapped market with many patients potentially still undiagnosed and many different sources of revenue in terms of where those patients will come from. So to get into the actual study results, let me introduce Dr. Heitner to review both Phase II and our Phase III study design.

Good morning, everyone. Thanks, Andrew. That was a great platform to dive into aficamten as the next-in-class therapy. But before I go on to the next slide, I just wanted to say that while I am employed at Cytokinetics, and I thank these guys for that, I still practice cardiology and I see HCM patients regularly. And when I think about what is important to me as a treating cardiologist, these are the 4 attributes that make a medication very attractive. So when a patient is sitting in front of me, they have these disabling symptoms that they've experienced for many, many years. And if I'm able to offer them a drug that is able to address those symptoms in as little as 2 weeks, I mean that's earth-shattering. The ability to choose the right dose for the patient that's sitting in front of me without exposing them excessively to too high a dose or under-dosing them and being given the tools to choose those doses in my own hands without having to rely on plasma testing or anything like that is something that I would experience as extremely satisfying. And then, lastly, because of the mechanism of action of these drugs, the fact that they are known to cause reduction in ejection fraction and sometimes we may overshoot that, I want to be given the confidence that if that were to happen, the pharmacodynamic effect would ultimately be rapidly reversible and I wouldn't be in trouble with my patients for a prolonged period of time. And the reason why I think that we have a drug that can do those things is because of what we've seen in the REDWOOD-HCM study, the Phase II study that we've recently completed the first 2 cohorts of. You'll see that we studied a total of 5 doses in 2 overlapping cohorts. We randomized patients on a 2:1 basis to aficamten plus standard of care versus placebo plus standard of care. And these were patients with obstructive HCM, who had persistent symptoms. And we leveraged that pharmacology that we have been talking about such that these patients ultimately were able to be up-titrated accordingly every 2 weeks according to an echocardiogram that was done at the site. And we continued the patients on treatment for a total of 10 weeks and then looked at a 2-week washout period. These are the doses that the patients ultimately ended up on. So Cohort 2, which is in gray, started out at a higher dose, at the 10-milligram dose. And you'll see that the majority of patients ranged between 5 and 20 milligrams. It was just the 1 patient that ended up in the 30-milligram dose. And we used this to inform what you'll see later on in the design of our SEQUOIA study. The baseline characteristics are very typical for what you would see in a hypertrophic cardiomyopathy clinic: slightly younger than your average heart failure patient, equal split between men and women and with evidence of severe obstruction on echocardiography. And from a very high level, when you take a step back and you look at how patients responded to aficamten in the 2 cohorts and we defined a responder as patients who ultimately had no evidence of surgical threshold gradients, either with address, which is 30 milligram -- 30 millimeters of mercury or with provocation using the Valsalva maneuver of 50 millimeters of mercury, you'll see that in the higher dose cohorts, that's Cohort 2 on the far right over there, almost all of the patients ended up being defined as a complete responder. Just 1 out of the 14 patients failed to reach that definition. And if we drill down and look at the actual numbers, the granular details, so this is resting gradient, what I'm going to draw your attention to is that by week 2, you had a rapid and substantial, highly statistically significant reduction in your gradients. So these are the patients that I was describing to you earlier on and you can say to them, listen, I'm going to start you on this medication. And in as little as 2 weeks, you may derive the benefit that you've been after. The other thing that I'll point out is that the treatment effect was sustained throughout the treatment period, more so with the higher dose cohort. And then at week 10, when we stopped therapy, we had a rebound of the pharmacodynamic effect and the patients went back to the pretreatment levels of obstruction. This is the same display but except using provoked obstruction. So these are patients looking with Valsalva. You'll notice a couple of things, firstly, that the threshold, that orange dashed line in the middle over there, is at 50 as opposed to 30. That's the threshold for provoked gradients. Again, as early as 2 weeks, especially in the higher dose cohort, patients demonstrated a rapid and sustained reduction in provoked gradients. And at week 10, you had that same rebound that we saw with the resting gradients. So what about ejection fractions? So I've already mentioned that because of the on-target effect of the drug, it reduces ejection fraction. I'll point out a couple of things: firstly, hypertrophic cardiomyopathy is a disease of hypercontractility. So the resting ejection fraction in these patients is higher than you would see in the normal non-HCM population. And you can see that, that's in the low 70% range for all 3 groups. The teal dash line over there is the Cohort 1, the lower dose. We reduced the ejection fraction on average by about 5%. And in the green line, the higher dose cohort, on average, about 10% and that was seen throughout the study duration. But very importantly, at week 10, when we stopped aficamten, you had a rapid return of the ejection fraction to what it was at the beginning of the study. On the left-hand side over here, we were looking at NT-proBNP. And what we did was we pooled Cohort 1 and Cohort 2 and compared the changes in NT-proBNP in those 2 cohorts to the placebo. And it was -- there was a highly statistically significant reduction in NT-proBNP when compared to placebo. And on the right, while the study hasn't been powered in order to detect a statistically significant difference in symptom burden, what you can see quite clearly is a nice dose response relationship as you're going into the higher dose cohorts where you have an improvement. Almost 2/3 of patients reported at least 1 point reduction in New York Heart Association Functional Class severity. In terms of safety, we couldn't have asked for a better outcome. In essence, there was no difference between the adverse event profile comparing placebo to the aficamten-treated arms. I will point out on the far right at the bottom of the slide over there, there were 2 patients that experienced ejection fractions that went below that 50% threshold. One of them underwent a protocol-directed dose reduction in the aficamten treatment. That patient did not have a treatment interruption. Both of these patients incidentally were asymptomatic as far as the low EF event goes. In fact, both of those patients reported a symptom improvement, had obliteration of their gradients and had a reduction in their NT-proBNPs. So by and large, they would have been considered therapeutic successes were it not for that safety line that we drew in order to make sure that we didn't extend below that 40% threshold. We're in the midst of our Cohort 3. So this is the third cohort within the REDWOOD group. These are patients that Andrew was talking about. These are probably the most severely affected HCM patients who have treatment refractory symptoms, who are receiving both an AV nodal blocker, that's a beta-blocker, or a calcium channel blocker plus disopyramide. We're doing this in an open-label fashion. We're using the same dose titration schedule, where sites are using the echocardiogram to up- or down-titrate therapy. And we're studying them for the same period of time. We've completed enrollment and patients are trickling through the protocol as we speak. And we're looking forward to showing these results in the near future. The other portion of REDWOOD is we have an open-label extension. This is designed to explore long-term exposure to aficamten. We've also embedded a cardiac MRI sub-study within this, and it's designed right now to run for a period of up to 5 years. Again, taking a step back and looking at the clinical development plan that we have for hypertrophic cardiomyopathy as a whole. You'll see that we've already spoken about the REDWOOD Cohort 1 and Cohort 2 data. But if you look at the very bottom row of this swim lane chart over here, you'll see that we're also planning on doing a proof-of-concept study similar to REDWOOD in obstructive HCM but this time in non-obstructive patients. We're also going to roll patients from the Phase III study, which I'll tell you about in a minute, into the same open-label extension that the Phase II study is rolling into. And then we -- depending on what we learn from that proof-of-concept study, we'll be doing a Phase III study in non-obstructive HCM. And then lastly, before we go and look at the SEQUOIA data, what I wanted to point out is that while we've looked at obstructive hypertrophic cardiomyopathy at the apex over there and we're planning on looking at non-obstructive hypertrophic cardiomyopathy, many heart failure physicians believe that there is no better model for heart failure preserved ejection fraction than non-obstructive HCM. So these are patients who have preserved EF, truly speaking, and have signs and symptoms of heart failure and evidence of elevated filling pressures. And what we're going to -- what we're planning on doing is taking the learnings from both the obstructive and the non-obstructive populations and subsequently applying that to the heart failure preserved ejection fracture group. So now for the first time, I wanted to publicly present the SEQUOIA-HCM study, which is our Phase III study in obstructive HCM. And before we delve into the actual protocol, I wanted to talk to you about what the strategic objectives were as to why we did the study. And again, it's leveraging the pharmacology of our molecule so that it can best treat patients and empower physicians so that we can deliver the best available care to patients. We want to demonstrate a robust improvement in exercise capacity. We don't want to leave any efficacy on the table. And we want to get all patients to the appropriate dose where we can reduce their gradients, improve their symptoms and their quality of life. And we want to do that as quickly as humanly possible using echocardiographic dosing only. Very importantly, we want to focus on safety especially because these patients are on background therapy of beta blockers, calcium channel blockers and actually, most likely, disopyramide. So the entry criteria that we're looking at, and I'm not going to go through the whole slide over here, these are HCM patients that we see every day in clinic. The main difference that I'll point out that we're looking at over here is these are patients who have demonstrated objective exercise capacity. So we're using in the CPET not only as a primary endpoint but also as an arbiter of whether the patients are truly debilitated from their HCM or not. And we're using a cut point of less than 80% when you're comparing them to the age and gender matched cohorts. So looking at the endpoints, you'll notice that we have exercise capacity as our singular primary endpoint, and we're using a change in peak VO2, as measured by the cardiopulmonary exercise test from baseline, to week 24, again, leveraging the ability to rapidly titrate our patients to the target doses. We're also looking at symptoms and we're measuring that using KCCQ and New York Heart Association Functional Class. And we have 2 endpoints in the New York Heart Association and KCCQ arena: one at week 12, hoping to demonstrate early resolution of symptoms; and again at week 24. We're looking at the pharmacodynamic effect in terms of the LVOT gradient. And then lastly, we are attempting to translate the peak VO2 into a clinically meaningful metric that cardiologists can use in the office in order to kind of explain what we're doing and what is expected to patients. And that's the total workload, which is a metric derived from cardiopulmonary exercise testing. Here's a schema. So I'm going to point out a couple of things. Firstly, we are evaluating patients with obstructive HCM and have persistent symptoms, randomizing them 1:1 to aficamten versus standard of care. We're using the echocardiogram, like I said, to choose the doses for these patients. We're getting a CPET at the beginning, at the end. But the thing that I wanted to point out is actually we're starting 4 doses. We want to capture everybody. We want everybody to get on to the dose that is appropriate for them, and we want them to stay on that dose rather than leaving any efficacy on the table. We're looking at symptoms right throughout the study, again, looking at the timing at which symptom resolution occurs. Again, embedded inside the SEQUOIA, we have a cardiac MRI sub-study. And for those of you who are not familiar with cardiac MRI, it really gives us an exquisite ability to look at the structure and the function of the heart as well as being able to quantify some of the less apparent things in the heart like fibrosis burden and the degree of extracellular volume. Both of those have been thought to be associated with adverse outcomes. And if we're able to demonstrate improvements in those, that would be a step in the right direction in terms of showing some disease-modifying effects. And then lastly, before I hand over back to Andrew to talk about the franchise, I wanted to mention a couple of things. So SEQUOIA-HCM is about these global HCM studies that we can get in the modern era. We're enrolling patients from North America, from Western Europe, from China, and we're hoping to enroll patients from Japan, too. And this is extremely important to me personally. As a doctor who treats these patients, what I know is that HCM doesn't know any national boundaries. It doesn't know any gender boundaries. And it's not associated with any differences on the race or ethnicity. It affects everybody in the world equally. But not everybody has access to the therapies that we do in this country. Not everybody can go to the Mayo Clinic or the Cleveland Clinic for their myectomy. And in fact, this is personal for me, not only professional. My father suffered from HCM for many years, having had obstruction and being on beta blockers -- well, actually, he was on calcium channel blockers because he didn't tolerate the beta blockers very well and disopyramide. And yet he still had persistent symptoms with no available treatment in the part of the world where he lived. And aficamten, as far as I'm concerned, represents a potential therapy that will provide light at the end of this dark tunnel that so many patients have had to deal with throughout their lives. So with that, Andrew?

Thank you, Dr. Heitner. So I want to talk a little bit more about our franchise strategy overall. We really -- when we built our commercial organization design and our go-to-market strategy, we did so, as I mentioned, with aficamten in mind because the guiding principles we really looked at in developing our overall organization and approach, were, first and foremost, focused on patient and customer centricity. So there's a couple of areas, you can see to the right here, I just want to highlight. The end of that phrase, multiple CV medicines, that's a key driver, obviously. And we'll have multiple medicines into the next decade. So that's an important element for us. Patients. Obviously, we can help a broader number of patients with multiple CV meds. And from a cardiology point of view, you can see these deep relationships with cardiologists. When you have multiple products, you can become more valuable to your customers as well. So you generally will have now more things -- more interactions, more information and education, more resources to share as well as overall offerings, which equate to really more valuable relationship between our company and cardiologists. So that's an important element that really drove where we were going. From a cost efficiency point of view, synergy obviously is the key value. We can share resources. We can share systems. We can share people. So we have great synergies across both the organization. And it's certainly going to allow us -- I mean, today, we're going through a transformation. We're building an entire commercial organization, systems, processes, et cetera. When we launch aficamten, that will all be in place. So that certainly allow us to accelerate the launch of aficamten as well. And from a scalability point of view, we're really focused on an efficient spend where the areas to us are core. So there's core areas like pricing and market access and [ ATOR ] that we want to make sure we hire Cytokinetics employees for those areas and we build those core areas. There's other areas that we're going to be cost efficient and outsource, things that are maybe more transactional like running an incentive comp plan for our field force, running our fleet services for our field force, software that they would use, et cetera. So those areas where big pharma generally will actually have that in-house. We're going to outsource because they're not core for us in terms of really building that franchise. And when you look at from a customer, we talked about the really focused subset of customers that we need to focus on to launch omecamtiv, less than 1,000 hospitals, less than 1/3 of cardiologists. There's an 85% overlap between those same treaters and the treaters that treat HCM. So that 85% overlap certainly is going to translate into another reason we can accelerate the launch of aficamten. We're not going to be introducing who we are. We're not going to be introducing Cytokinetics. We're not going to be meeting that representative for the first time. The representative that is representing both aficamten and omecamtiv will know the office staff, will know the physicians and that's certainly a big accelerator for us as well. Beyond our sales team, there's many areas of synergies we really do garner from the omecamtiv launch. So our commercial support functions, our medical affairs organization as well as our corporate support function, over the next 12 years that's about $0.5 billion of synergy that we'll gain by having 2 products in the cardiovascular space as compared to one. So we are in a period of very significant transformation at Cytokinetics. As I mentioned, omecamtiv will be, if approved, the first launch of a product in Cytokinetics history. So -- and you can see internally all the types of elements that we're really focused on to build and go through that transformation. Externally, really, it's enabling us to establish these deep relationships, partnerships with patient advocacies and to show up in the marketplace, representing -- and creating our reputation, I should say, in the marketplace as an organization that's focused on science, a science that really is meeting unmet need from a patient point of view and an organization that is focused on those patients, both through services and support as well as partnership with advocacy. Because I think very clearly, what we're building today will be in place for tomorrow to enable us to be an accelerator for launch of aficamten and really leaders among the pharmaceutical industry in the cardiovascular space. So these are really important elements for us in terms of what we build today being ready for tomorrow. So let me turn it over to Ching Jaw, our CFO, to talk more about the overall foundation and how we pay for all this.

Thank you, Andrew. Now that you have heard all about our data, the plans and the strategies of how we want to further advance our pipeline as well as potential commercialization of omecamtiv mecarbil, I now want to introduce to you how we plan to raise and deploy capital necessary to fund those activities. I will start by providing you with a snapshot of our current financial summary. I'm very pleased to report that Cytokinetics is in a very strong financial position. We have a very strong balance sheet. We have additional avenue to raise nondilutive capital later this year. And we're managing our expenses very carefully. The numbers on this slide shouldn't be any surprise. As I've spoken about them in our earnings call, we anticipate to have approximately $600 million of cash at the end of 2021, and this is including $297 million we raised via a very successful equity offering in July net of expenses. We have a total debt of $183 million, which is comprised of $45 million of term loan with Oxford, SVB as well as a convertible debt with a par value of $138 million, which is currently trading well above par value. Our spending guidance for this year is $195 million to $215 million, which we are on track to hit the mark. And $600 million that we will have at the end of this year represents more than 3 years of forward cash runway based on the spending guidance for the current year. However, I do want to caveat by saying that with the expectation of a potential commercial launch of omecamtiv mecarbil and the funding of 2 Phase III clinical trials, SEQUOIA-HCM and COURAGE-ALS, I do expect our 2022 and 2023 cash burn rate will increase relative to the 2021 spending, the details of which I will provide guidance in our upcoming Q4 earnings call early March. Cytokinetics has always strived to build our business based on strong financial foundation as well as our ability to make deals. As I said earlier, we have a very strong balance sheet, but we don't rest on our laurels. We continue to seek ways to further strengthen that balance sheet. Having done an equity offering earlier this year, our focus in Q4 will be to seek nonequity-dilutive financing transactions such as corporate partnerships. And I can tell you that we are currently having multiple discussions with potential partners for omecamtiv mecarbil in Asia and Europe. And those discussions are advancing quite nicely. In parallel, we are also making progress in structured financing discussions with multiple potential investors. The nature of these transactions could include royalty monetization and structural debt. I'm happy to report that we have received great interest on that front and multiple discussions with potential investors, and those discussions are advancing quite well. Again, our goal for completing these deals in Q4 is to end 2021 with more than 24 months of forward cash runway even as we expect our spending, as I said earlier, in 2022 and 2023 to be higher than the spending in 2021. Many of you have seen this slide in the past. Unlike many other peer companies who access capital primarily through the capital markets, Cytokinetics has a track record of utilizing strategic partners as well as capital markets to infuse capital into the company. Our financing history depicts a picture of a company who doesn't rely on a particular method to raise capital, but we take a very balanced approach. And we're proud of our ability to form strategic partnerships and monetizing our drug candidates through nondilutive financing means. As we prepare ourselves to launch omecamtiv mecarbil, we're keenly aware of investors' concerns relating to a small bio company such as Cytokinetics trying to launch a new therapy into CV space, competing against big pharma companies with much deeper pockets than we have. As such, we try to be good students of recent history and we have the advantage of learning from others' successes and failures. We will try to avoid pitfalls such as overestimating the market potential both in terms of patient population and in terms of pricing, and as a result of that overconfidence, investing in sales and marketing too quickly and too aggressively. We will also be mindful about the competitive landscape of where we play and we will focus on areas where we think we can win, and we do that by emphasizing the pharmaco-economic value of our medicines. And lastly, we're aware of some of the pitfalls other companies have fallen into of not raising sufficient capital in events of a launch. And to that front, I think we're doing a relatively good job of that and we'll continue to focus Q4 on raising nondilutive capital. To give you an example of how we fund -- try to fund the launch in order to achieve profitability sooner, I know I'm not giving you a quantitative depiction of when I expect profitability to be, but it's fair to say that on the investment front, we'll be taking a very prudent approach to fund the launch. Majority of our investment will be gated on regulatory and commercial milestones such as our submission of the NDA, the FDA's filing and approval of our NDA as well as our meeting certain predefined sales thresholds. Our overall CV franchise strategy also calls for leveraging across brands on expenses, head count and commercial infrastructure. Our intent is to leverage what we will build for omecamtiv mecarbil in preparation for the aficamten potential launch 2 to 3 years down the road. The sales force we'll put in place, the relationships we'll be building with the heart failure physicians and the systems and processes we'll be establishing for the omecamtiv mecarbil launch could you also be used by aficamten without significant incremental investments for the aficamten launch. And this is due to the overlapping nature of the physician and hospital basis between HCM and heart failure. I think Cytokinetics is uniquely positioned financially and strategically to execute on advancing our pipeline and launching omecamtiv mecarbil. We will continue to leverage our strong balance sheet and our proven ability to execute and to form strategic partnerships to do that. And with that, I'll turn it back to Robert for Q&A. Andrew and Steve, you guys want to...

So thank you, Ching. And as Andrew and Steve are also joining here at the table, we will entertain questions here from -- within the room and then also some that have come in online. And then I'll just make some concluding remarks, and we'll thank you for your participation. So starting with Joe, I think Joe's hand is up.

Great. Thanks again. Joe Pantginis, H.C. Wainwright. I have a more generalized question that applies to both omecamtiv and aficamten, and that's your manufacturing readiness and I want to link that to the macro environment right now. Are you anticipating or have you any -- do you have any potential concerns with the global supply chain issues that the world is seeing right now?

It's a very good question, and I'll turn to Andrew in a moment to comment, but I'll start by saying that as part of our transitions under the collaboration with Amgen, we purchased 2 metric tons of API that we will be formulating into tablets that would be enabling of a commercial readiness from the supply chain standpoint to serve not only the marketplace but also continued Phase 4 life cycle management development of omecamtiv mecarbil. And we're working with strategic partners, both on the API side and the drug supply side, to enable us to have longer, deeper relationships with a couple of key contractors to be enabling of continuity of supply chain. We recently hired a person to lead that activity. He's building out that function. He's coming to us from having launched over 50 drug products in connection with a similar supply chain build-out. And I think he's really quite an expert in terms of helping us to transition those capabilities. Andrew, anything you want to add?

Maybe just 2 quick things to add would be, I think as Robert talked about, the API we're purchasing and given our forecast that we do have launch with several years of supply. Secondly, we're in the process with the individual that Robert discussed. He's going to be leading this function of really putting in what's considered a best practice, which is a monthly kind of forecasting update between finance, supply and commercial. So we're really clear 2 to 3 years out what we think that forecast looks like from a demand point of view by SKU. And we update that monthly based on kind of market data. So a process like that can also ensure with our key suppliers that we're giving them enough notice if there's an adjustment needed for supply. So I think the combination of those things collectively we feel like we'll certainly have the supply we need for the market.

It's a good question because it's oftentimes overlooked. I do think we have the benefit of some of the continuity here. And being that this is a small molecule drug development and supply moving to commercial, I think some of the risks that we're all aware of that tend to limit companies as they transition from R&D to commercialization may not be as applicable in this instance. But we still have to manage it effectively. Next question?

Jason Butler, JMP, again. Just thinking about the clear obvious comparison between the EXPLORER trial and SEQUOIA, can you talk about the driving decision to include CPET as an enrollment criteria and how ultimately you think that helps contrast between the 2 studies?

Yes, thank you, Jason. And we also got that similar question from others online. Clearly, for our developing in aficamten a potential next-in-class drug candidate, it's imperative that we'd be thinking about how we're going to be advancing the field, expanding perhaps the category. And I think Fady and Stuart and Steve and others at our company have been thinking long and hard about how might SEQUOIA-HCM move the needle beyond what has already been a positive study with EXPLORER. And with that, I'll turn it maybe to you, Steve, to kind of talk about how we're doing that and maybe a little compare and contrast.

So yes, commonly asked and very good question. And I'll kind of draw your attention to a slide that Andrew had in his deck where he showed that about 70% of patients with obstruction are symptomatic. So the corollary is that 30% of patients with obstruction are actually asymptomatic. The issue is that human beings often confuse symptoms. And while they may complain of, for example, fatigue, they may not actually have true exertional limitation as a direct consequence to the obstruction. And in an effort to demonstrate that by relieving the obstruction, we're actually going to impact the primary endpoint. We thought it was important to link those 2 biomarkers and it would also improve our likelihood of success.

Steve, could you also speak about some of the other elements that might differentiate SEQUOIA from EXPLORER?

Sure. So there are several of those. The first is that we're -- nice to see you. The first is that we are exploring a greater opportunity for dosing. And we feel that by doing so, we're going to be able to address almost, we hope, all patients with any degree of obstruction. The second is that we're not using pharmacokinetic-based dosing so that the adjustment to doses will be able to be made on the day that the patients come in for their visit, whereas in other instances, that wasn't the case. The third is that the actual duration of our study is a little bit shorter than, say for example, the EXPLORER study. And that we've been able to achieve because the half-life and the time to achieving steady-state is faster. And we don't have to wait that 6-week period minimum in order to get to the point where we can make assessments accurately. Fady, I don't know if you have anything to add on that.

No. You did well.

So we also got a question coming in online from Dane from Raymond James. Could we discuss what the expected enrollment time line of SEQUOIA will be under the expectation that mavacamten may be approved in the U.S. during the early part of 2022?

Do you want me to take that?

Would you, please?

Yes. So right now, we're targeting opening the SEQUOIA study by the end of this year or early next year. We expect that enrollment will be rapid, and we are hoping to complete enrollment by the end of 2022 with results in early 2023. In terms of the second part of the question, which was how do we expect that mavacamten's availability is going to impact enrollment? Well, firstly, I'll point out that we're running a global study, so we're opening our -- opening sites around the world, and mavacamten will probably not be available around the world. Secondly, we expect that uptake, as you've seen with all new medications, will be slow to start in North America. And thirdly, what we're doing, as I pointed out during my presentation, is that we have an open-label extension, which patients from the SEQUOIA study will be able to roll over into for a period of up to 5 years. That will give all participants access to aficamten for as long as 5 or 6 years depending on when they enroll. So we think that the combination of those factors will result in a situation where enrollment will be rapid, independent of whether mavacamten is available or not.

So Akash from Jefferies is asking a series of questions, some of which you've touched on. But one, he's asking, will we expect to enroll more NYHA Class III patients or patients with higher obstruction levels in SEQUOIA?

Well, again, this kind of points to one of our inclusion criteria showing that we want patients to have an objective limitation of their exertional capacity. Based on that, one would expect that we would enroll patients with more severe symptoms. However, what we do know from patients with obstructive HCM is that, unfortunately, there's no direct correlation between the actual severity of the gradient and the degree of symptoms. So you could potentially have a patient with a gradient of about 100 who's asymptomatic. And by the same token, you could have a patient with a gradient of 30 who is a functional Class III or IV. So I don't think that you can draw parallels between the degree of exertional capacity and the severity of the obstruction.

Thank you, Steve. Another question here from the floor?

Great. Carter Gould, Barclays. Two for me. First off, I just -- I wanted to -- I guess, a clarification question on will there be an MRI sub-study as part of the Phase III? Or is that only going to be done in the OLE portion? And maybe in answering that, you can just talk about the importance of that in terms of growing the market and maybe going beyond kind of what we saw with an EXPLORER on that front. And then I'm going to ask the unfair question of having Robert respond to news that came out today in terms of the ICER analysis. I know he's not going to comment on your price but just what that might mean for the space, and any color would be helpful.

So let's take that one at a time. Firstly, Steve, with regard to the sub-study?

So the short answer is that the MRI sub-study will be part of both the Phase III and the open-label. The benefit to that is that patients who participate in the MRI sub-study in the Phase III study will continue to get serial MRIs for a period of up to 5 years. So we may be in a situation where we'll have a substantial number of patients with MRI data for a period of 6 years, which would be fantastic from a scientific standpoint. The next part of your question had to do with how MRI metrics might impact the market. The Europeans are fixated on us demonstrating disease modification. And that's something that hasn't been well defined in hypertrophic cardiomyopathy to date. Now a lot of opinion leaders have gotten together and tried their best to define what disease modification might look like, and MRI is the best metric that we can use to do that. So we're looking at simple things like chamber size, left atrial size, wall thickness. And then those 2 other metrics, I imagine, number one was the extracellular volume and fibrosis burden. ECV or extracellular volume is slightly more plastic metric, so it can fluctuate a little bit easier than, say, fibrosis. And one would expect that you would start to see changes or reduction in extracellular volume earlier on. Fibrosis is something that tends to be more fixed. It's scar tissue. And the hope is that we'll be able to demonstrate moving forward a reduction in fibrosis burden, but I would say that, that's a stretch goal more than anything else.

And then, Carter, was one of your questions how might that translate into the commercial arena?

Just on the market or...

Andrew, do you have any thoughts about that?

I mean the only obvious thing is that there will be evidence for populations that there weren't evidence before that it gives us then, if we were to get those additional data, to be able to promote it and talk about it. So there's elements of growing the market. And depending on the price point, oftentimes insurance companies will limit the label. So it certainly could open up populations from that point of view as well. So -- and probably the last thing I'd make is that when you can show a drug works in so many different and diverse populations, it gives the overall emphasis of confidence because when you looked at it multiple times and get similar results. So I think those -- the combination of all those collectively certainly give us additional populations.

So then your last question, the unfair one you mentioned was relating to the publication ICER put out this morning pertaining to mavacamten. And obviously, I'm not going to comment on BMS' approach to pricing. That's not my place. But what I will highlight is I think this is underscoring what may be the interest for a new mechanism treatment where currently there is no approved therapy. And the fact that ICER is spending so much time in advance of a potential drug to be approved, already anticipating its wide adoption, is underscoring what is a high unmet need for where new pharmacotherapies can make a meaningful dent in the management of those patients. At what price point it's all to be determined in large part, I think, with BMS being a first mover to the marketplace, and we'll obviously take a note of how they're approaching it from both pricing and discounting. But we're on the sidelines right now as it relates to aficamten and those matters. Our priority right now is to conduct a proper clinical trial, and the market will evolve under BMS' supervision before we get there. So we'll listen and learn and hopefully adapt well. But I don't have anything to say about ICER at this point until such time as those things play out. I do think it's very interesting, though, to monitor for the fact that this is all occurring preapproval. Do we have any other questions? Looks like Salim may have another question and then another one from Graig in the back. And then I'm going to take one more from online, and then we'll wrap up and thank you for your interest. So Salim?

Great. Salim Syed, Mizuho. So I had a couple of questions on the Phase III trial design. One, on geographical differences. So when we look at REDWOOD, REDWOOD is predominantly a U.S. enrolled study. SEQUOIA, my guess you guys have a bunch of sites in the U.S.. But given mavacamten may come to the market, I'm presuming that's going to be a predominantly ex U.S. enrolled study. And I don't recall seeing in the [ Nava ] forest plots any geographical breakout where they trended, and you guys probably have very little data on that in REDWOOD. So I'm just curious, should we be viewing this as a risk? Or have you seen data trend, whether it's on gradient or otherwise, U.S. better or ex U.S. better? That's the first question, and I'll ask my second question, I guess.

Can I take that? So I'm not -- I'll try and answer your question, but there's really going to be no hard and fast answer to it. You're right that the majority of patients that we recruited in the REDWOOD study were from the U.S. However, there are centers of excellence in Europe, in Western Europe in particular, that use the same metrics that we do. In fact, there's this ongoing battle between the European HCM experts and the North American HCM experts about who does things better. And truth be told is that there's excellent care on both sides of the pond. And I don't think that there's going to be any difference in the symptom burden or the likelihood of treatment effect that we see, say, for example, in the GALACTIC or other heart failure studies. The HCM community is a tight-knit community and there's a lot more cross-talk, I would say, and a lot more centralized specialized care than there is in other forms of heart disease. The next part of your question was you implied that we're going to be recruiting predominantly from ex U.S. sites for SEQUOIA and I don't think that that's true. Maybe I didn't make myself clear. We do have a lot of sites in the United States. There has been tremendous excitement from the investigators. They all want to participate. They loved what they saw in terms of the REDWOOD data. And I would be very surprised if we didn't recruit robustly from within the United States and potentially Canada. Did I hit everything there?

Yes. And then the other question I had was, I think, part of the value proposition with 274 is that you're going to -- if this does come to market, you will try to highlight the quicker onset to action versus mavacamten. And I think that's easy to do on gradient just given we have comparative plots. But on peak VO2, given that you're only measuring it seemingly at the beginning of the trial and at the end, just curious if that's part of the quicker onset to action value proposition or no?

Well, so you're correct, we're only measuring peak VO2 at the beginning at the end. And the reason is because it's not practical to do repeated cardiopulmonary exercise testing on patients throughout the period of a short clinical trial. We did entertain that idea. But after speaking to patients and investigators, the general feeling was that would result in an unwieldy clinical trial. And because of that, we've opted to focus on patient-reported outcomes for the earlier time points and the peak VO2 for the overall study.

And then a question from Graig in the back, and then I'll close a few from the online.

Graig Suvannavejh, Goldman Sachs. A question about SEQUOIA as well just on as you design the Phase III study, besides hope we see differences on the primary efficacy endpoint, how have you thought about secondary endpoints as it relates to reimbursement, market access, commercialization so you can differentiate the product perhaps versus what we've seen with mavacamten. So that's the first question. And then second, going back to an earlier comment around some of the lessons learned from seeing other CV launches, and I believe you gave a case study about perhaps a company guiding The Street to a launch analog that wasn't appropriate. So as we think about in the more near term omecamtiv mecarbil, what do you think should be a proper launch analog for investors to be thinking about?

So 2 good questions. Firstly, with regard to the secondary endpoints in SEQUOIA and how might that translate to access and payer interest, obviously, the secondary endpoints that we're looking at tie to relief of symptoms and ultimately what may be important to patients and the physicians who treat them and not necessarily so much as to outcomes. So one of the questions that we came -- that came in online also speaks to whether it's ultimately going to need to be an outcome study that will drive adoption of this category as could become standard of care. So I'll first pose that to you, Steve. How do you see these studies explore and potentially SEQUOIA as could be enabling of mavacamten and subsequently aficamten as could be standard of care, recognizing that there is no approved therapy today. And then maybe to you, Andrew, might those secondary endpoints also drive adoption and access.

Well, so I think you asked about secondary endpoints that I didn't list up on that slide. The obvious category would be patient-reported outcomes. We've taken advice from various health authorities around the world and we're looking at those patient-reported outcomes as a means to differentiation, firstly. And then secondly, what you're seeing is really just our first step into the obstructive HCM world and we are thinking hard about other studies that would help differentiate our therapy from other therapies, firstly; and secondly, potentially even move it up further upstream, resulting in either positioning it as a first-line therapy or a superior therapy to invasive treatments.

So you may have noted that, first, MyoKardia then BMS have been engaging in other studies too beyond EXPLORER, and we're obviously taking note of that. And while we're today talking about SEQUOIA, don't assume that's the only study that we might also engage. Our goals will be very much to be further expanding on the clinical evidence and support of this new mechanism of therapy. Andrew?

In terms of access, I mean obviously, access is pretty complicated, a lot of factors involved. What price point do we set, what price points in the marketplace, what kind of economic benefit is from the product as demonstrated by the clinical trial, how do the payers want to negotiate when there's more than one party in place. The secondary outcomes could be helpful. Additional populations could be helpful, but it's not typically driven by what those secondary outcomes would be. I think all those other factors are probably more important let alone, I think what Steve just alluded to, what additional evidence are we going to show in the marketplace relative to that. So I think those are probably more of the factors that we would be looking at and what our research has told us so far relative to getting access as likely a second market entrant.

So one question for you, Ching, coming in from Dane from Raymond James. How do you weigh the risk/reward of engaging in additional royalty monetization ahead of a commercial partnership? Specifically, isn't carving out royalty streams to investment firms a disincentive for larger biopharma to engage with you for a commercial partnership? I'll speak to it and then maybe turn it over to you as well. This gets to the heart, pardon the pun, of our want to ensure that we diversify access to capital. I don't foresee that were we to, like we did with omecamtiv, sell a low single-digit royalty would that be a disincentive for us or a partner to step in as would also be engaging in a co-development commercial partnership. There's still plenty of economics to go around. But Ching, maybe you could speak to some of the feedback you're getting from our campaign to engage around structured finance and how we're approaching that with different kinds of elements.

Yes. So we're talking to various parties on potential structured finance. Again, these deals could take in the shape of royalty monetization or it could take in the shape of structured debt, meaning senior debt or subordinated debt. There are interests in omecamtiv mecarbil and there are interests in aficamten as well. As Robert said, we probably would not stack up royalty on a particular molecule so that the royalty rate goes into the double-digit realm. So that is to making sure that we protect the profitability of the molecule and we retain majority of the economic interest of any particular molecule so that potential partners would still be interested in engaging with us.

So I'm going to wrap up this panel and just present a couple more slides as we wrap up this event. For my closing remarks, I want to maybe end where we started, and that is to talk about myosin and this molecular target as is the cornerstone for a potential new commercial franchise that we're building. Too many biopharma companies look to commercialization like it is, itself, a goal line, a finish line. And the way we think about transitioning and evolving our corporate development to include commercialization, it's predicated on how we got here. So for over 20 years, Cytokinetics has been a pioneer and a leader in the research and development as it pertains to muscle biology, myosin being at the crux or the nucleus of that strategy. And then much like we've enjoyed R&D synergies and economies and we've built out expertise under fatty supervision to lead in this space from the R&D area, so too do we expect that to confer competitive advantage as we move commercially. And it should be seamless. It should be part of a continuum as our R&D should be informing commercialization. And vice versa, commercialization should pay dividends back to R&D. And how we think about going to market is fundamentally predicated on a knowledge around how myosin plays a key role in cardiovascular medicine. And we have with an activator and an inhibitor an opportunity to do something unconventional to build a business for a biopharma company that is pivoting around a single molecular target. And as you've heard from Andrew and Jen and Diann today, that's core to our go-to-market strategy: to build a commercial franchise around a cardiovascular target. Building that franchise is predicated on a number of key tenets. They're all captured on this slide. We've touched on all of these points today, and I would encourage you to think about this and use this as a scorecard for key performance indices as we build our business. We need to be focused to ensuring gated investment in accordance with key milestones. We need to be thinking about franchise strategy not just in an event like this, but every day if we're truly going to be able to do this. Unlike most biopharma companies who launch in the cardiovascular sector, we have to be thinking about where are there overlaps in customer segments, where might we with the competitive advantage, focus to health economics provide support and services beyond that, which is simply a drug. We need to be thinking about how that addresses not just a clinical unmet need but where there's economic burden that a drug like omecamtiv mecarbil, and subsequently, aficamten may address, where increasingly public policy visibility is focused on these patients as they represent significant economic burden to the Medicare system. We have to be tied to the aging demographics in our strategies, and we have to be thinking about life cycle management. It's not enough to get to market. It has to be that we continue to advance the ball down the field with continuing investigator-sponsored studies and Phase IV activity. We want to do that a prudent and thoughtful way by diversifying our access to capital and ensuring that we're building a lean organization tractable to our customer segments and our access to capital as could be affording a reasonable return on investment that scales over time. We should be thinking about this with regard to layering in cash flows not just for a product launch, but sustainable and durable revenue build. And we should always be thinking about where we have a strong biological pharmacological rationale as affords us advantages not just with the products we're bringing to market today, but for those franchises that we want to build increasingly over time. We have an uncommon opportunity in light of the fact that we are a leader in muscle biology. This is an area that has legs, if you will, in terms of what can be an entirely new opportunity commercially for cardiovascular medicine and then beyond that. And I hope that as we continue to engage with shareholders around these types of matters, we will demonstrate that the same way we got here with high-quality, high-integrity R&D, we can similarly build our commercial business the same way as would be rewarding to shareholders, but most importantly, delivering on the promise of our science for the benefit of patients. So with that, we will bring this meeting to a close. I want to thank you for your attention over these several hours. I hope you got what you came here to hear. And we'll hang around afterwards as you may have additional questions. And also, as you leave the room, please note that there's boxed lunches for you. And for those of you online, thank you for sticking it out with us, and we look forward to your further questions and comments as well. Thanks, everyone.