Cytokinetics, Incorporated (CYTK) Earnings Call Transcript & Summary

Welcome, everyone, to the 44th Annual JPMorgan Healthcare Conference. My name is Tessa Romero, and I'm one of the senior biotech analysts here at JPMorgan. Our next presenting company is Cytokinetics. And presenting on behalf of the company, we have President and CEO, Robert Blum. Robert, over to you.

Thank you, Tessa, and thank you to JPMorgan for inviting us again this year. This is a very important year for Cytokinetics, as I'll be elaborating as we are turning the page at Cytokinetics after over 20 years and presenting at this conference to now a company that is commercial considering that we just had our FDA approval of -- thank you. We appreciate that. And here today, we're going to talk about this monumental milestone and how we are prepared to meet the moment. I'll be making some forward-looking statements. I'll refer you to our SEC filings. For caveats to those statements, we don't undertake obligations to update those statements, but rather instead refer you to those filings. Cytokinetics from the beginning, over 25 years ago has been consistent and disciplined with regard to a focus to one area of biology, and it defines our mission. Cytokinetics is committed to bringing forward new medicines focused to the health span of people with devastating cardiovascular and neuromuscular conditions rooted and anchored in impaired muscle function. Why we do, what we do is captured in this video, and I'd like to share that with you as hopefully is defining what's next for our company and this next chapter. [Presentation]

So Cytokinetics is very pleased to now be in front of JPMorgan with Myqorzo approved by the U.S. FDA for the treatment of adults with obstructive hypertrophic cardiomyopathy. Myqorzo is now launched, and I'll be speaking today in some detail to elaborate on our commercial strategy and how it's differentiated and what our goal is in defining of this opportunity to build a specialty cardiology franchise business. But Myqorzo is the tip of the spear, if you will, and the United States, the first of its frontiers. Myqorzo is also now approved in China. And in December, we were pleased to announce that we received positive CHMP opinion for the approval of Myqorzo in Europe with the expectation that the European Commission will be approving of it in Q1 this quarter, enabling of us to go to market in Germany in Q2. This is all consistent with everything we've been saying about Cytokinetics and our plans to exploit this business opportunity for so many years, and Myqorzo represents the leading edge in oHCM as will be followed, we expect with a positive, hopeful study in Q2 this year, Myqorzo aficamten being studied in nonobstructive HCM. Again, results expected in Q2. That's a very meaningful opportunity, as I'll elaborate later in this presentation. And again, that's one leg of the 3 legs of the stool that we've been building at Cytokinetics all along the way. omecamtiv in HFrEF, heart failure with reduced ejection fraction, ulacamten in HFpEF. These are legs 2 and 3 as we build what we hope to be an enduring and sustaining growth business against the backdrop of already a strong balance sheet, north of $1 billion reported at the end of Q3 last year with access to capital, as I'll elaborate more in the coming slides. I mentioned we're building a specialty cardiology franchise. What's meant by that? This is not an accident. This is very purposeful to the way we exploit this biology. We believe in a commercial rationale that's been defining of our business ambitions for many, many years, addressing concentrated customer segments, high revenue per prescriber, enabling of a high return on investment and at the same time, categories that are not actively managed by payers, rather instead managed to label, where we think we, even as a smaller company with more limited access to capital can build a very valuable growth business. This is the pipeline that's going to get us there. This is the same pipeline you've been seeing advancing over many years. But now Myqorzo approved in oHCM and with a differentiated risk mitigation profile approved in the United States and in China and with potential expansion of opportunity in nHCM, again, ACACIA data expected Q2 this year. And you can see how that ripples through the rest of the pipeline. Aficamten being studied in CEDAR, in FOREST, and also omecamtiv, ulacamten and other muscle biology-directed research. As we turn the page for this company on to commercialization, don't sleep on the fact that we've got a pipeline underlying the opportunities here to enable further news flow catalyst growth and a sustainable enduring business. But today is about Myqorzo. Myqorzo approved in the United States, 5 milligram, 10 milligram, 15 and 20-milligram strengths. And you can see it pictured in the bottles that will soon be in the hands of patients. Myqorzo was approved by the U.S. FDA based on the SEQUOIA-HCM study, data that were top lined in 2024, published, and you can see these data here. Myqorzo on top of standard of care in patients suffering significant symptom burden demonstrated meaningfully large, clinically relevant increases in peak VO2 out to week 24. Standard of care, no change from baseline. Those patients on Myqorzo, you can see a dramatically large increase in their ability to exercise and sustain that. But accompanied also by highly statistically significant, large clinically meaningful changes in other secondary endpoints as also reported on the right-hand side of the slide, meaningful changes in grade or pressure as well as relief of symptoms, disease status, significant reductions in biomarkers and all of this accompanied by anatomical changes in heart structure and function that corresponded with clinical benefit. These results published in the New England Journal of Medicine and accompanied by a safety profile consistent compatible with standard of care and no serious adverse events. This is underscoring of what we believe to be an important feature of the Myqorzo go-to-market strategy. Our go-to-market strategy is defined by the business opportunity. Consider this an onion, if you will. Currently, there are roughly 700 physicians accounting for over 80% of prescriptions for the cardiac myosin inhibitor class. This represents the low-lying fruit and the most important of the audience to which we're going to direct promotional activity. But also, there are 2,000 physicians who have previously written a cardiac myosin inhibitor. There are over 8,000 based on claims data that we should be approaching with our promotional activities. Not everybody will get the same reach and frequency, but we'll be focusing to the 10,000 health care professionals who are treating at least 80% of the obstructive symptomatic Class II and III patients out there. And we believe this is tractable to our focus with a commercial organization hired, trained and certified now in their territories already calling on customers. We hired in 2025 in 2 waves, a sales organization to accompany the 15 or so area business managers and we had over 9,000 applicants for the roughly 100 positions. We are able to bring on board a highly experienced group of cardiovascular trained, experienced sales professionals. We call them cardiovascular account specialists, and they have, on average, each of them over 5 years of President awards. These are the top of the ladder people that have come to join our company on this next leg of the journey. And what are the launch pillars? What are the pillars that define the way we're going to go to market? Of course, it starts with efficacy and clinical differentiation. We believe that Myqorzo affords the physician an experience that can be unique, a rapid and sustained symptom improvement and reduction in obstruction, but with flexibility around the way one can dose up titrate and the windows associated with that. We did not experience any dose terminations in our clinical studies based on EFs below 40 or heart failure hospitalizations. We believe that affords the physician a confidence, a user experience that will be distinctive to how we can grow the business. And it echoes to the REMS program. We said all along the way, we expected a differentiated risk mitigation profile and how that could be captured in a REMS. And the FDA-approved label in REMS carries forward that expectation now to the marketplace. The REMS program for Myqorzo is different. It affords different features that I'll elaborate on in a moment, and we believe that can be enabling of category growth and penetration, but it also doesn't stop there. We believe as a company doing this for the first time, it's incumbent upon us to show up in the marketplace with a physician and patient experience that's unique to this opportunity, bespoke to the way we do business and our patient support services, how we engage the office administration staff and the patients will be specific to Cytokinetics and the way we approach a single point of contact, delivering a consistent tailored user experience, enabling a streamlined and seamless engagement and rooted in the values and the purpose-driven convictions of Cytokinetics. We have already gone live with our health care professional and our patient delivered promotional campaigns. You can see them on the website. Like any good company should be doing, there are hundreds of materials that we'll be going to market with that define the positioning. With health care professionals, it's about moving forward, moving forward rapidly to get patients to symptom burden relief sooner with more flexibility as should be compatible with a next-in-class opportunity that aspires to be best-in-class. For patients, we recognize what they want. We listen to them. They were involved in the design of our campaign. They want to be heard, and we believe this campaign addresses what they're interested in and the gratitude associated with how they see their life journey. I mentioned the REMS is distinctive. The REMS for Cytokinetics and Myqorzo is different than the REMS for Camzyos. Listed here are the many ways that it differs. We believe that these things matter and our market research echoes that. We believe that currently, limitations on the adoption of cardiac myosin inhibitors are based on things like the number of echoes, the complexity of the patient monitoring forms, the number of DBI checks, how that's administered by phone and with whom and ultimately, the number of months required to get to maintenance dose. These are all things that we think in addition to the amount of drug that can be dispensed, the windows associated with echoes, all of these things are distinctive to the REMS program for Myqorzo as we believe will be enabling of greater category growth and penetration. But again, how do we engage patients, how do the office staff in the physicians' offices, how do they engage around this opportunity. That's where Myqorzo in you comes in. This is a program that was designed bespoke to this experience. How we think about providing support for reimbursement, how physicians and their office personnel engage with us is defined by a one-on-one relationship with territory managers and nurse navigators, so that there's always the same person with whom one is engaging. It's not a patient experience that's evolved for this opportunity based on other opportunities, but rather one that was architected and implemented unique to Myqorzo. And here, again, how that is enabling a point of contact is, we think, going to be distinguishing of Cytokinetics in the marketplace, our access colleagues being CEOs of their territories, one-on-one relationships with cardiologists and the same is true for the office staff with our nurse navigators and the patients with the nurse navigator. We believe in the bespoke experience that will be defining of how Myqorzo is launched. How will it be priced? We've indicated we always thought it would be priced around the same ZIP code. Today, I'm announcing that Myqorzo is going to be priced with a wholesale acquisition cost of $108,400, a parity slight plus, meaning that we're going to be in the marketplace, not so much competing on price, but rather at the same time, as I've been saying, on the clinical and physician patient experience. That speaks to how we think about market access. Here, you see the business as it is defined by payer mix. Medicare roughly 50% to 60% commercial, 30% to 35%. We do not intend to be competing on access or price, rather instead looking to achieve parity access with coverage criteria consistent with our clinical evidence in 2026. Our global value and access colleagues have already been in the field for a couple of years engaging with payers, and we believe that's going to confer to us a competitive advantage as we now roll out the Myqorzo launch. And how are we going to communicate to shareholders? We expect to be sharing with you key metrics that define launch momentum and velocity, focusing on the number of health care professionals who's prescribing Myqorzo, the depth and the breadth amongst those tiers of the onion I shared with you earlier and the volume of patients. We believe that we're in a good position to grow this category, and you should be holding us accountable to these kinds of metrics throughout the year. What precedents do we have to be defining of how this market can be growing based on a next-in-class that aspires to be best-in-class. Here, borrowing a page from the playbook of Bristol-Myers Squibb, we see how Eliquis in a similar cardiovascular category was able to catalyze and go from next-in-class to best-in-class based on a differentiated clinical and safety profile. We believe in my 40 years of experience in cardiovascular sales and marketing would indicate that this is not uncommon. It's common that a next-in-class drug becomes a best-in-class in cardiology based on metrics and measures that define a safety and tolerability. We hope that, that can be the case for Myqorzo. And similarly, you're seeing something like that already playing out in the amyloidosis space. The introduction of Attruby led to a catalytic growth in the marketplace even more amplified based on announcements this morning. And we believe that the same is possible also for Myqorzo entering the CMI category. You can see on the right hand of the slide, BMS has done a very good job. They will likely eclipse $1 billion in 2025 full year sales. But at the same time, it's been largely linear growth quarter-to-quarter. And we think the introduction of Myqorzo can make a meaningful difference impacting category growth and penetration beyond centers of excellence to also community-based cardiologists, so more physicians feel comfortable prescribing a cardiac myosin inhibitor for more patients. So Myqorzo advancing globally. I've been talking about U.S. strategy. It's consistent also with how we approach Europe, but in a more gated investment spend. We did recently announce that our partner, Sanofi, was able to get Myqorzo approved in China. We think the same thing will happen in China. So imagine Cytokinetics now with Myqorzo active in markets as far away as China and ourselves in North America and Europe. And that's the business that we're building and today at JPMorgan turning the page on that narrative. And that forms the anchor, the tip of the spear, if you will, for the franchise strategy that we've been talking about and is now one step closer to reality. Here, you can see how our specialty cardiology franchise strategy applies to adjacent markets with similar characteristics. And you can see both in terms of HCM, a specialty cardiology market, but also those specialty cardiology patients and opportunities in severe heart failure with reduced ejection fraction as well as heart failure and preserved ejection fraction, Myqorzo followed by omecamtiv followed by ulacamten, and you begin to see how we can build an enduring growth, sustainable business. I've talked about oHCM, and I want to make sure I also highlight nHCM. We believe recent claims data and soon to be published will be elaborating on how the growing market in HCM is more and more taking a dimension where nHCM represents about 50% of all claims. And we think that Myqorzo is very well positioned to be the first new medicine approved for nHCM based on what we believe can be the promise of the ACACIA study due to read out in Q2 this year. The ACACIA data is a Phase III study that is going to read out in Q2, and it follows from the REDWOOD Cohort 4 data already presented and published. Here, you can see the 12-week data, meaningfully large increases in KCCQ and reductions in NYHA functional class, large, almost unprecedented increases in symptom burden relief in this REDWOOD Cohort 4 Phase II data and even out to 96 weeks, demonstrating durability as presented and published. And we believe that we've designed the right experiment in over 500 patients, monitoring the patients coming into the study. We're monitoring things like standard deviation, safety, all the things you'd expect of us in the blinded data, and we're bullish and optimistic about what could be the promise of Myqorzo or aficamten in this study as we expect its results to be top line in Q2. And again, ongoing clinical trials, omecamtiv in a confirmatory Phase III study that will continue in 2026, ulacamten in a Phase II study, at least 2 cohorts and possibly data by the end of the year in that study. The hits they keep coming at Cytokinetics as we continue to advance pipeline. At the same time, we're building the commercial business. How do we do that with our financial resources with thanks to disciplined OpEx and spending in 2025 and also deals we did in 2024 and 2025, largely nonequity dilutive, we've been able to build a balance sheet of over $1 billion and with access to additional capital from Royalty Pharma, as you can see here. We think we're being prudent and good stewards of shareholder capital as we build the business and turn the page on to the narrative and deliver on the expected milestones you see here on the right-hand side of the slide. Most important amongst these are a successful U.S. commercial launch with good velocity demonstrating that we can get by the end of the year, at least 50% of new patients, at least parity access and all the metrics that are defining of a strong momentum. And at the same time, submitting in Q1 this year, the supplemental NDA based on MAPLE data for a potential label expansion by the end of the year, reflecting the MAPLE data. And in Q2, hopefully, a readout of the ACACIA study, opening the gates hopefully, to what could be further expansion of the commercial opportunity on nHCM and all the while, while continuing the other clinical trials with potential readouts to follow. We believe we delivered on what we promised in 2025. We expect to do the same thing in 2026 and enable the runway to our Vision 2030, already well in hand as we are making Myqorzo available in multiple countries for what will be over 100,000 patients by 2030 and at the same time, augmenting pipeline, expanding pipeline, bringing other potential new medicines to patients, consistent with mission, purpose and values. With that, thank you. Thank you for following Cytokinetics, your interest all these many years. We're pleased to be able to turn the page on to the important new narrative. And with that, maybe we can be addressing some questions. I'm joined today by our Chief Commercial Officer, Andrew Callos; our Head of R&D, Fady Malik, who -- it's his vision we've been following in this science for over 25 years; and Sung Lee, our Head of Finance, CFO. All 3 of them will join me in answering Tessa's questions. Thank you.

Okay. Terrific. So I thought I might start the conversation here on how you think about what the opportunities are and any potential challenges as you start the launch of Myqorzo? How has the Bristol launch of Camzyos informed your launch plans?

So I'm going to turn it over quickly to Andrew to answer that question. But firstly, I want to say that I think BMS has done a very good job launching Camzyos. And over the last 4 years, as I mentioned, they're going to do north of $1 billion in sales in 2025. But like any cardiovascular launch, it's been primarily linear and where a next-in-class that aspires to be best-in-class can make a meaningful difference. Andrew has been a good student. He's been with us now over 4 years, thinking about how to go to market, and I think his team is well poised to meet the moment. Andrew?

Yes. Thanks for the question, Tessa. So in terms of opportunity, there's at least 80% of the market available, meaning symptomatic oHCM patients that are not on a CMI. In terms of the Bristol launch and what it's informed, I think first and foremost is that our campaign highlights the areas of difference. There's 3 that we really will be focusing on. One is around rapid and sustained reduction in obstruction and symptom improvement. Two is the ability and this adaptable titration schedule. And three is that there were no treatment interruptions or symptoms of heart failure in our clinical trial. You saw the campaign move forward. So that's one of the key areas. The second key area is that our patient support program and our REMS program are -- provide a consistent and positive experience for patients and HCPs. We had patients and patient organizations involved in our campaign, involved in designing our patient support and how we communicate our REMS to make sure it resonates with patients. I think that's another kind of key area of information. So having a REMS program that's adaptable, automated and provide that good user experience with that clinical differentiation, with that patient support. And then the last is how we designed our model, which Robert alluded to, which is a one-to-one point of contact for a physician and a rep and a one-to-one point of contact for a patient and a navigator. They are the key areas that we were informed in terms of the Bristol launch.

Okay. Great. And as we stand here today, how would you say the level of awareness is around Myqorzo at this point across physicians and institutions? Are there any key gaps you think you need to fill?

So when we looked at an ATU, which looks at exactly that question, our awareness levels, especially with that 700 -- those 700 physicians or 80% of the market are extremely high going into our launch. We've been in the field for several months. We've had several thousand interactions already. We'll get to those 700 physicians by the end of this month with our field force and medical colleagues. We've already been to about 40% of them in the first week.

And we're already learning that a number of those folks have been awaiting the launch of Myqorzo to be prescribing. They've been following the literature, following the presentations. Fady, you may want to speak to the number of manuscripts that published in 2024 and 2025, adding to the literature for this category.

Over the last 2 years, we've probably published close to 20 papers, I think, not knowing exact numbers, but been very prolific in terms of both expanding on the analysis of SEQUOIA, but also obviously presenting earlier last year, the MAPLE data and subsequent analysis of that. And then finally, analyses from the open-label extension FOREST, which look both at long-term effectiveness and safety in the o and nHCM populations. Importantly, I think some of that long-term nonobstructive HCM information is relevant to how we think about ACACIA.

A company like Cytokinetics that's both a pioneer and a leader in this area of pharmacology as we have been for so many years, develops relationships with the top of the pyramid influencers, cardiologists and also advocacy groups. And that confers to us a competitive advantage as we go to market. Those relationships, that history, that credibility and report, we expect will serve us well.

So zooming ahead at this time next year, what do you hope to have accomplished with the Myqorzo launch versus what might still be untapped in your kind of year 2 and beyond?

In terms of launch, you saw those 3 metrics that Robert showed, breadth of prescribing, depth of prescribing and number of patients. We'll report on those 3 metrics at our quarterly earnings call longitudinally. Our expectation would be that we increased depth of prescribing, meaning that those 700 physicians and 2,000 that prescribe today, our market share is greater than 50% for new patients. The second thing would be breadth of prescribing. There's 8,000 existing physicians who treat HCM, but don't use CMIs. So starting to get more prescribers and broadening that prescriber base. And the third thing is that to do at least as well as Bristol did year 1 in terms of number of patients on therapy or greater. The number, as I recall, is around 3,800. So our expectation that we -- again, we would do that or better. We have MAPLE in the label by the end of the year. And obviously, we'll know ACACIA and whether or not we're in process of filing ACACIA to continue to grow the category and have category leadership in terms of new-to-brand prescriptions.

Okay. Great. And can we talk a little bit about quarterly dynamics when it comes to payer? And can you just remind us in this population, the Medicare and commercial dynamics here? And what percent of the business you expect each of those segments to make up?

So there was a slide in the deck that showed mix of payers. The category right now is about 55% to 60% Medicare. Medicare, our expectation is we will have comparable access in Medicare. Most of Medicare is not formally covered because of the Inflation Reduction Act. And therefore, although it's almost 60% of prescriptions, that goes through medical exception. We're expecting the same, and we'll provide support as we can through medical exception. About 35% will be commercial. Our expectation is towards the end of the year, we will have comparable access in commercial. You can support commercial patients with a bridge program up to 12 months of free drug as we're helping support patients get on paid therapy as well as co-pay assistance once they are on paid therapy. Our expectation, again, is that we're differentiating and growing the market and competing on clinical difference, REMS and patient support, and we're not differentiating on pricing and access, meaning that there'll be comparable pricing and access.

Okay. And do you think all institutions will prescribe both Myqorzo and Camzyos? If they don't, why not?

So I mean Camzyos has been on the market for nearly 4 years. There's many patients who have benefited from Camzyos. I think it's too early to tell and answer that question in terms of all, but I certainly expect that having 2 options on the market that many physicians will use both based on what they see fit for physicians. Many are comfortable with the workflow around Camzyos, and they've kind of learned it. So I would expect that. I also would expect that over time, that Myqorzo would be the market leader.

The flip side to that question is, why aren't more patients on a cardiac myosin inhibitor today still being over 80% of the market eligible for treatment and what's holding them back. And our market research would indicate that the things that we believe Myqorzo can deliver should be enabling of many more patients treated for an experience that would be supportive of more symptom burden relief.

Okay. Just looking at the time here. So I'd love to turn the conversation here and talk a little bit about the expansion potential here in nonobstructive HCM. Fady, maybe this is a question for you. What are all the levers that you're thinking about that drive your confidence that you'll have a successful study here for ACACIA?

I think it's really the careful development that we did from Phase II to Phase III. We started Phase II studying aficamten in a nonobstructive population in the REDWOOD trial, piloting a dosing scheme that we intended to employ in Phase III very successfully. Those patients demonstrated, as you saw on the slide in Robert's presentation, improvements in KCCQ, improvements in NYHA classes as well as improvements in NT-proBNP, a biomarker of cardiac wall stress. Those patients then went on to the open-label extension and demonstrated the same improvements now sustained over 96 weeks as we've presented recently. In designing ACACIA, we employed the same dosing paradigm, so that we could be confident that patients would tolerate aficamten that we wouldn't have an excessive number of treatment interruptions or discontinuations. We haven't had any patients discontinue from the open-label extension. The other in terms of conduct is getting to trial sites where we had a lot of confidence based either on their performance in our prior trials or recommendations from some of our experienced steering committee members or site visits ourselves, qualifying those studies in terms of echo and CPET and training them on the endpoint of KCCQ, which is a patient-reported outcome, but actually, you need to carefully train the patients and the physicians in terms of how to administer it. And then finally, monitoring the conduct of this trial ensuring that every patient that gets in is reviewed by our own medical team. The echocardiograms are consistent with nHCM that the rest of the case history is also consistent and just trying to get the highest quality patients enrolled.

And on a blinded basis, like are you able to tell us what you're seeing from a titration perspective or most of these patients getting up to the high dose?

Well, I can't tell you that because we're blinded to those sorts of data, obviously. I mean what I can tell you is that we monitor the variability in the endpoints because that's one of the aspects of powering the trial. And we've noted to date, and I've said this before, that the variability remains within our expectations and within what we assumed when we powered the trial. And based on all those things, I think we have a good power to resolve a meaningful change.

How do you think about key risks to the study? Like what keeps you up at night?

Well, there's always unpredictable things that happen in clinical development, unpredictable placebo effects or other things. I think we've tried to minimize all of those things through the course of the trial. And I feel -- I guess, I sleep pretty well, but you never know what can happen. But I think, again, given our experience now having conducted SEQUOIA, MAPLE, other trials using these endpoints, I think we've become very good at ensuring that these things go smoothly.

Perhaps it's worth noting that the same team has been in place for the design and conduct of all of these studies. So whether you're talking about SEQUOIA or MAPLE or FOREST or ACACIA, all of those studies, and we've already seen very high integrity data coming from the previously reported studies, the same team designed and conducted ACACIA.

I might also note, it's a team of a very high degree of expertise with internationally recognized HCM experts, cardiologists that have been working with nHCM, as Robert points out now for half a dozen years and all of them working together and ensuring best conduct of this trial.

Last question for me is just how does the launch curve look with and without the expansion into the nonobstructive population?

So in our research we've done is that -- the launch curve that I described in our expectation was based on obstructive only independent of ACACIA. So efficacy wasn't positive. ACACIA is positive, there is a halo effect, if you will, even before approval in that a third data set, MAPLE being the second, SEQUOIA being the first, highlighting and reinforcing that safety and efficacy. So there certainly is a bump in both penetration, i.e., more patients treated as well as share. Once ACACIA would launch, then the patient population overall doubles because, again, it's about a 50-50 mix. And it certainly then learning the label, the safety, assuming that they're similar would reinforce even greater share for Myqorzo as the single agent that would be approved in both obstructive and nonobstructive patients.

All right. Terrific. Thank you so much to the entire Cytokinetics team and everyone for joining.