Edgewise Therapeutics, Inc. (EWTX) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to our Piper Sandler Healthcare Conference. My name is Yas Rahimi. I'm a senior biotech analyst at Piper Sandler. So thrilled to have the team from Edgewise Therapeutics here and lots to cover, and I don't even know where to start in 25 minutes. So the team, I think probably the best place is to start with the near-term disclosure that you're going to provide across 7500, the CIRRUS study.

So I'm sure the first question from everyone throughout your meetings has been, are you on track to provide a disclosure this month? And what will the disclosure entail? So maybe help us understand that.

Yes. So maybe take a step back and what -- why we're disclosing what we're disclosing in December and then the subsequent disclosure in the first half of '26. So what we've noticed is the run rate for mavacamten in HCM is now above $1 billion. So remember, there's been a question, is about is there an HCM market? How big is that HCM market. So now with a run rate of north of $1 billion and additional agents probably coming into the area, it's a substantial market. So what has limited the market for mavacamten. It's that it's well utilized within the center of excellences. We have academic centers that can do the echos, work through the REMS and treat the patients with the safety liabilities. What's holding up that market is the ability to get into the community cardiologists. So why isn't it being utilized with the community cardiologists. It's simply because there are too many echos and the complexity of the REMS. And why would a community cardiologist use a CMI. So in the end, what we want to try and point out is that we have a fundamentally different mechanism where we do not see changes in ejection fraction to drive efficacy and therefore, will be utilized within the community docs, which expands the market exponentially for drugs in HCM. So what are we going to disclose in December? December will be additional data at the 25-milligram level for 28 days to show that we would -- we still do not have effects on ejection fraction -- with regardless of the concentration of the drug. That's the key differentiating factor for our mechanism. And if you notice with the CMIs, there's a high level of variability of the concentration of the drug relative to how much they lower the ejection fraction. That inherent variability of the CMIs limits the market opportunity for the CMI class relative to the sarcomere class that we're developed. Very important point. So why is that biochemically. Because we are a partial inhibitor, so you cannot fully inhibit the contraction of the heart. If you look at the CMIs, you can completely ablate contractions biochemically. And we believe how that translates is that you have an inherent variability in the ejection fraction measure. So the second piece to this ejection fraction, this is why we want to focus on the ejection fraction is you have an inherent safety liability of patients being driven below 50% in ejection fraction, which drives the REMS. The second, I think, important piece that's underappreciated on ejection fraction is if you lower ejection fraction by 10% or 15% or 20%, you're essentially lowering cardiac output. I'd like to pose the question, why would a patient feel better if you lower their ejection fraction by 15% or 20%, there's no reason to believe they should feel better. So the ejection fraction issue with CMIs drives 2 liabilities. One is you have to monitor them and you have to do multiple echos to get them to the optimal dose, and it limits the efficacy of the drug. And this is what we showed in April that we had outsized effects on KCCQ, large effects on your New York Heart Association changes and robust effects on NT-proBNP. So what we're going to show in December will support that hypothesis and that -- of our mechanism. And then later in the first half of '26, we'll have additional data to support the efficacy of our drug at 12 weeks.

So just to -- for this data, there will be -- it will be a quantitative readout for the 25 mg dose group, right? And it will include both obstructive cohorts and the nonobstructive cohort. Is that just the patients for which we saw data on in April that are followed longer? Or no, it's a complete new set of patients that are going to be, call it longer than 4 weeks, right?

No. So these -- the first 25-milligram will be 4-week data on entirely new patients. So what we -- I think the reason to look at the 25 milligrams is remember, we saw efficacy at 50. The agency would like us to look at what is the minimally effective dose. And then from our dose escalation strategy to optimize the dose for each individual patient, where do we start? Do we start at 25 or do we start at 50. There's pros and cons to starting with either dose. So I think this 25-milligram will give us some understanding of that.

And how large -- is that like 10 patients per cohort or like what.

We haven't given the number, but -- it's a meaningful number of patients, right. And it will add to this database that we have a very tight exposure response or lack of exposure response to AF.

Okay. I'm assuming since you're -- this is my assumption between reading [ materials ], it's the lowest dose. You're going to give an update that there will be -- even at your lowest dose, you're effective enough to show it like I don't know that that's me extrapolating.

You may or may not observe that.

And then I think the next question that people will have is, since April, you guys went back and optimized the patient selection, making sure that they had no sick heart valves, made sure that their AF history was 180 days or no, like just tell us like what is the protocol. Is the protocol of this low-dose group the same as in the 12-week study? Or is it the same protocol as the April data study.

So you remember in April, what we did was we noticed in that original disclosure that some of the patients we recruited were not HCM patients because the wall thick was symmetrical. Second, we noticed that even though we required the patients to be -- have an ejection fraction above 60, some of those patients were actually, I think 4 of them were below 60. And what we noticed was a disparity between the core lab which is a single lab reading all the echos and the individual investigators read of the echos. So what we did, and we did this quite quickly within weeks was to institute a different paradigm. One was to add additional restrictions on the inclusion criteria. The second was to have an individual at Edgewise read the echo and then had an additional core lab to read the echo. So we essentially have a group of people deciding who goes on the study and who does not. So we -- the 25 milligrams allowed us to work through that bug very quickly to optimize that. And then we started developing the Part D strategy. We rebuilt the database because we were going to do a drug optimization that took about 6 weeks, talked to the FDA, talked to the IRBs and started screening in June with Part D. Now remember, the Part D is a 12-week study. And to be precise about how we're dosing that 12-week study, we start at 25 for 2 weeks. We go to 50 for 2 weeks. We go to 100 for 4 weeks and then 150 the next 4 weeks. That's a 12-week cycle, and then those patients roll into an open-label extension after the 12 week. So we have completed some patients through 12 weeks. We'll give you an update this month about how many patients, where we are, what we've promised is at least 20 patients' worth of safety data in Part D and with at least 40 patients of data at the total in the first half of '26 when we have the efficacy. The reason why we can't just put out all the data that we have right now is that we want to wait for what people call the core lab data. So the core lab is a single lab that reads all the echos. It takes about 4 to 6 weeks to get that data after you've completed the 12-week, partly because you're batching all that data and it's one individual reading it. So we're measuring baselines at the core, and we get the 12-week at the core. That data is the most reproducible and actually the most accurate. And think of it as in cancer studies, an unconfirmed partial response versus a partial response. So we want to only report partial responses or complete accurate data as opposed to muddling up a mix of PI data and core lab data.

And I assume the type of disclosure in December is very similar to what you had in April, sort of the breakdown across efficacy, right, and safety, right? I assume...

On the 25 mg efficacy. And on the Part D will largely just be safe.

Okay. Got it. I think one of the things that I think investors have -- obviously, they understood that patient selection is really critical in assessing AFib, right, because it's a high comorbidity. Could you maybe talk about -- you talked about the thick hard walls that should have never been in the study. What is the requirement in the 12-week study as well as the low-dose study? Is it -- if you have a history of AFib or you completely ruled out? What is sort of the process.

No. We'll have the -- generally, the CMIs have capped the prior AFib in and around 15%. We will be roughly in the same place. We've not put a formal cap in, but I think that's realistic to believe that. We incorporated having a 6-month look back. You could argue you could go back further or not have any AF at all, but I think it's representative of the Phase III populations observed in EXPLORER and SEQUOIA. So that's important. And then one of the other -- the couple of things that we need to look at are the ventricle diameter, which is important. If you notice from the patient demographics, it's up at 20. When you get below, say, 15, you start running into patients who have no mutation and below 15, they start looking like HFpEF patients. The other thing is that they start becoming more fibrotic, depending on which population you look at and how many comorbidities they have, you're really testing a different hypothesis than the HCM. So you really want to recruit HCM patients. On the atria, one of the most important things is 2 parameters. One is the left atrial size. The second is left atrial reservoir strain. If you go into the literature and you look up left atrial reservoir strain, you'll find that's the highest predictor for future AF. So you don't want to be too low. And it turns out 3 of the 4 patients that we dosed had very low left atrial reservoir strain. So it doesn't occur in all patients. You don't expect to see AF just because you have a certain reservoir strain. What it does is put you in a position where you will have random AF on a much higher level. So we've incorporated all those things for the study.

One of the questions that will come up also as you're -- going back to the December disclosure of the lowest dose. If 25 is as effective as 50, like it seems like you haven't achieved your lowest ineffective dose, do you still have to do more dose exploration on the low-end side for regulatory agency. Or is that really not necessary to keep going.

I don't think we have to get to 0 effect. And it is important to understand what is a minimal effect and the starting point.

And then a lot of investors are also starting to kind of visualize the 12-week time point. And now with the dose optimization and being able to go up to even 200 mg, often, they're asking us what do you hope to gain by driving the effect because you're already in 4 weeks, your effect sizes were as good as the CMIs at a fixed dose, and that wasn't even optimized, right? So people are trying to figure out now you're going like 9 weeks longer plus you're exploring a higher dose? What do you hope to find.

I think it's important to think about the depth of the response between 4 weeks and 12 weeks. That's important to see, in particular, in nonobstructive. So in obstructive, what you normally see is the gradient reduction occurs very quickly, and that translate doesn't deepen necessarily over time from -- at least from our data, from 7 days to 28 days, it didn't deepen. It's kind of -- I think it's a little bit unknown how the response would deepen between in a non-obstructive patient from, say, 4 weeks to 12 weeks. That's a very important piece of this. So can you go low and long. We noticed in the original data disclosure that our diastolic effect occurred very quickly, which we don't know how that translates from early to late in each population, right? So either one of those things. I think from what we originally looked at, even at the low dose got up to the higher dose levels if you went longer. So all these things were -- this is the type of things we'll try to figure out.

And how soon could you -- post the 12-week data is going to come out in 1Q, how soon can you engage with the agency to think about Phase III development?

Go ahead.

On Phase III?

Yes.

So we've already started thinking about what kind of trial we're going to run. We've got 2 options that we're exploring right now. I think we're just waiting for some of the efficacy data from Part D to finalize it. But I think we're still on track to kick off the Phase III fourth quarter of '26. That hasn't changed. And I think that's really the key. I think the idea is to have a discussion with the agency sometime in the second quarter of '26 and just align on endpoints, trial duration. We've got some like really interesting ideas that we're exploring that will be really, really good to bring up to the agency. The other thing that we've spent a lot of time on is the question we often get is what is the bar to walk away from the REMS, right, because that's clearly the impediment for broader adoption of the CMIs. And I think we've spoken to a number of folks who used to head up the cardiorenal at the FDA. And the feedback we got was somewhere in the 80 to 100 individuals, so healthy volunteers and subjects dosed. If you don't see a concentration to LVEF relationship, there's no reason for the FDA to look at that data set and say, you need a REMS, right? Plus we're a different mechanism. So you've got a couple of things that we -- and to rely on. And I think the strategy is put the data package together and go to the FDA and say, "Look, here it is. Don't ask, do we need a REMS. Let them tell you if you actually need one." And I think that's the philosophy.

So the goal here is the Phase II, we will measure everything at every time point. And then the goal will be to have 0 echos because you don't need an echo other than baseline in the study to look at, say, diastolic parameters. But can you eliminate echos and can you replace them with other measures. So the 2 main measures we're looking at right now are New York Heart Association changes and NT-proBNP. So what we noticed in the original disclosure what we provided was that it's not the percent decrease of NT-proBNP, but it's the depth of the response. So if you can drive people to normal in NT-proBNP, you've probably dosed them high enough. If you could drive someone from NYHA Class III or Class II and drive them to one where they're asymptomatic, that's probably enough, right? So you don't have to continue to dose patients if they're normal.

And that goes back to your question around why are we exploring the dose over 12 weeks is we're trying to drive a philosophy of let's get as many people to normal as possible. And I think the value there is really we know that at least some of the CMIs are on the market, you're seeing patients who are not responding. You're seeing patients not reaching efficacy. And part of that issue is either you're dropping ejection fraction or the physician is dosing to the minimally efficacious dose because they're concern around ejection fraction. If you don't have an ejection fraction problem, it's pretty easy to continue to like dose an individual.

All right. So now in obstructive, I think it's very -- and we talk across these 2 different populations like they're one, but they are a little bit different, meaning when you remove the obstruction, you have a very rapid benefit to the patient. They feel it immediate. In nonobstructive, you probably have to drive a level of remodeling to feel the full benefit. And what we saw was with mavacamten in the ODYSSEY study, they had 21% of the patients had an ejection fraction below 50%. We know from some of the data they've put out, they haven't given us all of the data, but that patients who started with low ejection fraction and patients who went down too far did not benefit as much from the forest plots. So clearly, there's a narrow TI in the nonobstructive patients. And what we would try to -- try to understand is what is the time relationship? And what is the depth of the response you can see in nonobstructive?

And I think also one of the things is that you have a drug that works on the diastolic phase and nonobstructive is diastolic disease. And so you have a much larger therapeutic window where you're not really have to handpick a very moderate population to hand select to see a clinical benefit. And I'm making, therefore, the assumption that both in this 25 mg dose group as well as the 12-week CIRRUS study, you're just including all kinds of patients from nonobstructive. You're not trying to stay and like a broad spectrum.

We have reasonable -- we have a relatively broad spectrum of patients in the nonobstructive. I think it's clear that you will have a ceiling effect. So if you pick people with a KCCQ score of 85, well, you can only go up so much. If you pick people that are, say, below 20, right, how -- are they really HCM patients? Are they -- how fibrotic are they, how sick or have you gone beyond the threshold. At the same time, you want to be able to recruit your study with the patients in the middle. Well, it's kind of a fine line, I think.

And I know there's like 2.5 minutes, and you have many more inflection points in 2026. But maybe I think a lot of investors are also very excited about 15400, which is in heart failure, the healthy volunteer data set is going to come out in the first half. So I guess, I think a lot of investors understand because you could -- what do you want to see to want to move forward to a small Phase II study in HFpEF.

I think 15400 has some unique characteristics that are different to 7500 that make it a little bit more amenable to the HFpEF population. So I think, honestly, like the bar we've set for ourselves from the healthy volunteers is to see pretty much the same thing that we saw with 7500. So no LVEF or plasma concentration. And I think we're in the middle of the MAD right now. We have a healthy volunteer MAD. We'll have that data in the first half of '26. And we've already got a plan on what kind of Phase II we want to run, and that's going to kick off in the second half of '26.

It's pretty clear endpoints too for a relatively small IIa and where we would want to see changes in NT-proBNP, about 20%. That's kind of the rule of thumb in heart failure. Second, we'd like to see a very nice profile from a standpoint of the variability of dosing with the drug. And of course, we don't want to see the ejection fraction change is the same as 7500. So I think all those things would bode well, and you can measure all those things in a IIa study in those patients.

Yes. Great. And then team, I know we have like 48 seconds. Also another big milestone that's going to be the pivotal GRAND CANYON study reading out in 4Q. I think it's very clear, any statistical separation would warrant moving forward and filing in a big opportunity in this orphan indication. Help us understand sort of what do you see on a blinded basis. And sorry, on the [ NAF ] -- it's blinded, we don't know who's on there, but how is it tracking with your assumptions, I guess? Sorry I can only ask one question.

We haven't disclosed that particular aspect of that. Obviously, we are looking very carefully. I think there's probably a good time in maybe perhaps next year to provide both the demographics of who we enrolled and perhaps an update on MESA, which is the CANYON data in the open-label extension and perhaps some analysis of what we have in the -- what we have in GRAND CANYON. But of course, blinded data sometimes is a fool to go hunting for that. We have built -- I should say, we have built a very robust model based on the [ Leiden ] data of natural history and built a model how you would look at North Star relative to the expected response over time. We've validated that model with 2 other natural history data sets. And I think quite importantly, we published this in a poster at World Muscle is that, that model correlated very well with our placebo in CANYON. So I think that's an important piece of the supportive data for the NDA filing once we hit [ stat stake ] on North Star and whatever secondary endpoint we described.

Perfect. And recently announced adding Chris Martin, who many of you know, was the Chief Commercial Officer of Verona. And many of you who watched the story and I was the covering analysts from very early on can say what a tremendous job Chris and his team have done. Maybe help us understand now that he joined Edgewise, obviously, he's going to be a great asset as the company potentially will be getting ready for Becker and also in preparation for HCM.

Yes. We've made very selective early investments in the commercial buildup. We have a really experienced team at Edgewise, who's done this before in rare disease. And Chris sitting on the Board is just an added benefit. He's just gone through one of the most successful launches in a very competitive space. And we're in a space with Becker where we have no competition, and then we're going into a space where we're going to be competing with the CMI. So his insights have already been invaluable to kind of our strategy. He's gone through our whole launch plan. I've spent a lot of time with him, and he's adding value already. And I think...

Board's -- I mean, a very astute aspect to our Board was we could have gotten someone who's kind of sitting atop of the vision of something at a big pharma or we hire someone who's actually built a group that was highly successful hands on. And I think that's an important differentiator as we build out our group.

No, that's amazing. I've had the pleasure working with him, and I have the pleasure of working with you guys. So it is between your personality fits and the way we work, it's like a perfect relationship, like honestly, and I'm very excited for you guys for you guys to work together. So let's thank the Edgewise team. We are super excited for December in 2026.