Edgewise Therapeutics, Inc. (EWTX) 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 Edgewise Therapeutics. And presenting on behalf of the company, we have President and CEO, Kevin Koch. Kevin, over to you.

Okay. Thanks, Tessa. Always great to thanks for joining today. Let me get organized here. These are the forward-looking statements. Edgewise Therapeutics is a leading muscle disease-focused biopharmaceutical company developing novel orally active drugs for the treatment of muscular dystrophy, serious cardiac conditions and metabolic disease. The company's deep expertise in muscle physiology and is driving a new generation of first-in-class agents. Additionally, our mission is to change the lives of our patients and their families. We've had a very productive year in 2025. We completed with sevasemten, our drug for muscular dystrophy, completed enrollment in our Becker pivotal study of last February and expect a readout of that data in the end of this year. We also disclosed and discussed our Duchenne program extensively. The Duchenne's program showed in LYNX where patients who have previously been treated with steroid or in FOX where patients have been previously treated with gene therapy. We showed a decrease in the rate of decline of those patients and still have a number of patients as many as 60 on study. We'll be collecting data later this year on that subset of patients. We had positive data with 7500, our cardiovascular asset. This is a cardiac sarcomere modulator, a novel mechanism. What we showed was our 28-day data where we showed robust changes in feel and function measures like KCCQ and New York Heart Association, really astounding data. We initiated our Part D 12-week study over the summer. We reported data in December, where we had a very strong safety profile and in particular, no changes in left ventricular ejection fraction relative to the concentration of drug or drug dose, which is a really important differentiator for the product. In another cardiovascular asset, 15400, we filed the IND over the summer. We moved it into normal healthy volunteer studies, and that drug is now positioned to go into HFpEF studies in the second half of this year. And finally, we were able to raise based on that data, $200 million, which gives us a strong runway through '28. So really an exciting year. Today, I'm going to focus on 2 key programs. The Becker program with sevasemten, where, as I've said, we will have a pivotal study reading out at the end of the year and EDG-7500 for the treatment of hypertrophic cardiomyopathy, both obstructive and nonobstructive where I'll talk about some of the observations we had at the end of the year. So what's really exciting for me is we started the company in 2017. And from an idea from our founder, Dr. Russell here, we went all the way to Phase III and we'll have a readout in 9 years. Pretty amazing result, I think. And we're at the cusp of becoming a commercial organization. I'm going to tell you a little bit about why we think this product will be successful and how it will impact the patient community. So Becker is a rare genetic life-shortening, debilitating disease of adults, and this is a disease where these patients are missing a key structural protein called dystrophin. And these patients into the adult forms, they have a dysfunctional dystrophin. These patients are typically diagnosed in adolescents. They progress slowly over time, but ultimately die of cardiovascular comorbidities and lose ambulation in their 40s and 50s. So a debilitating disease. Our mechanism addresses the core underlying disease driver in that muscle damage whenever a patient moves of contraction-induced injury drives the loss of muscle and that loss of muscle leads ultimately to the loss of function. That loss of function ultimately drives how the FDA views you would measure this to actually show the benefit of the drug. So -- we have a unique mode of action. We've done extensive studies, and we're one of the first to identify that certain kinds of skeletal muscle called fast skeletal muscle are degraded before the slow skeletal muscle. And if you could block that skeletal muscle degradation, you would be protective of the disease progression in these patients. So we invented a fast myosin inhibitor of type 2 fast skeletal muscle, where we showed extensively that this affected the disease rate preclinically. In the clinic, we've seen decreases in biomarkers associated with muscle damage. And we think this particular mechanism will completely aggregate the progression of the disease. I'll show you data that I think supports that. So we've run a number of studies in the Becker population. ARCH was our first study. This was an open-label 12-patient study. We've now treated these patients out to almost 4 years. Really exciting. I think 11 of the 12 patients are still on study. We also ran a biomarker-based study, essentially a proof-of concept mechanistically in DUNE. So DUNE was we challenge a patient with exercise. That would drive their biomarkers up of muscle damage, and we were able to aggregate that with the drug. So exciting result actually validating the mechanism of action. We were the first company to run a controlled Phase II in CANYON in Becker population, that was a very successful study, 40 patients, we showed in a statistically significant manner decreases in biomarkers of creatine kinase and TNNI2, which is an on-target biomarker of disease progression. And then finally, GRAND CANYON was completed in 2024 -- 2025 in February, and I'll show you a little bit about that study. What's -- I think is the most astounding thing about this particular -- these trials is that 99% of the patients who have ever taken the drug and are eligible to go into the open-label extension are still on study, meaning that there's a durable response based on ARCH -- there is benefit, I think, to the patient because why would a patient go around and go and be part of a clinical trial, the drug wasn't providing benefit. And I think a very strong safety profile. So really excited about these results. Now how do we develop this drug? And how do you measure a functional capacity? So the FDA has guided to a key endpoint called the North Star. Now what is the North Star? The North Star is a 17 activity measure where you measure each activity at 0, 1 or 2 or can't do it, partially can do it, can do it like a normal person. So the total score is 34. So the question is we're powered for a 1 to 2-point change in North Star. So what does that really mean to a patient? So if you're walking across the street, and you get to the curb and you can't lift your leg. That's one point. If you're on the toilet and you're a 35-year-old guy, and you have to call your wife or your kids, I can't get up. That's a point. These guys fall very often, and they fall and they can't get up. It is a horrible disease, yet there is no treatments for any of these patients. And we're really the first to exploit and drive a new medicine for these guys. So here's the data. I think it's really exciting. On the bottom of this slide, you can look at the gray line. And we have expertise and have done a lot of work on the natural history of the Becker patient population and which patients lead to a homogeneous decline and that over a 3-year period, we would expect a decline of 4.4 North Star points. Interestingly, in the blue line, you see no change or no progression of the patient. This is an astounding result if you think about it. This has never been seen for these studies. So I think this really points to a durable effect and clear benefit to the patients. Here's the CANYON study. So the CANYON study is the first placebo-controlled study associated with Becker. There were about 3:1 randomization. As you see on the bottom line, we would -- this is a 12-month study, just to be clear. So on the bottom line, at the 12-month time point, the predicted value would be about 1.2 to 1.5 North Star points decline based on natural history. Our placebo virtually completely matched that results in the natural history. So how we're thinking about our natural history was predicted by the first placebo-controlled study and the decline of those placebos. Now again, what you can see with the treated patients is that we completely aggregated the progression of the disease. And then when we go out to 12 months to 18 months, what we saw that the patients now, all patients going on drug in MESA continue to benefit. So I think it's a really exciting result. So as you think about how we're going to develop this drug and what is going to be the supportive evidence beyond the primary endpoint and the secondary endpoints of time function tests. Can you build a model based on the natural history? So there are about 4 or 5 studies out there that have looked at the natural history over a 2- to 5-year period. So we took one of those studies and we built a model. And that model is built on things like age, North Star, 10-meter walk, time of onset, a host of different parameters. And what we did was we took each individual patient who was treated, and we predicted what they would be, how they would progress based on the background phenotype of the patient. And then we zeroed that, placed that at 0 and then asked the question, how did the drug affect those patients. As you can see on this slide in this waterfall plot, 21 of 27 patients had benefit from this drug outside of what you would have predicted from the natural history. So really interesting point can be used for supportive evidence with the FDA when we get our positive North Star response. So here's our Phase III study. We overenrolled the study. We were supposed to enroll about 120, 125 patients. There was such enthusiasm for the drug that we actually got 175 patients. We are keeping people away at that point. So this is now 98% powered or greater than 98% powered for an 18-month study at 10-milligram dose oral and to see a 1.7 point change in North Star. The tipping point of this particular study is about 0.7 points -- so anything above 0.7 points, we have a better than 50% chance of hitting. So very well-powered study, done extensive work in how do we decrease the variability of the measure of the North Star and how do we run a really ideal world-class study. So with all of this in mind, we're very bullish on the potential of this asset. And we truly believe this will be a successful program, be positive readout in December. And so that we've gone off and built and started to build our commercial program. And we've hired the senior leadership in marketing, market access, med affairs, our own patient advocacy group, which we've built and our sales force. So we're poised to be able to -- with a successful trial at the end of the year, be able to jump right to the NDA filing and the launch of the product. So how big is this market? I mean it's got tremendous potential. There are 6,000 Becker patients in the U.S., 12,000 in the major markets. This is for the ambulatory patients, which is about 70% or 80% of the patients. We would anticipate we could perhaps get all the patients, whether ambulatory or non-ambulatory because of the mechanism of action of this drug. That's a regulatory negotiation with the FDA. But this is potentially a $5 billion market based on the sales of other products in this type of space, rare disease drugs. So really important drug, really important for the patients, important for the shareholders and the staff. So -- turning the page on to the cardiovascular program. So people always talk about actually my Board says, we're running 2 biotech companies, which we are running 2 distinct biotech companies. But there -- interestingly, there is quite a bit of overlap. So we've taken our second drug, 7500 and shown this is a highly differentiated mode of action with strong efficacy in the original trials. So what is hypertrophic cardiomyopathy? This is a severe inherited disease of the heart. They have progressive disease. This is something -- if you go back and you think about this, there is these athletes who die suddenly in their 20s. They often have an enlarged heart, and that's the -- trademark is that the ventricle thickens and that thicken ventricle leads to dysfunction in the heart, and you can have acute coronary events because of this. This particular disease is carved up into 2 major types: obstructive HCM and nonobstructive HCM. Obstructive HCM is that you have a thicken wall of the ventricle, but the mitral valve actually comes over and closes down that path out to the aorta, which generates what's called a gradient. So that group of patients are called obstructive HCM patients. Patients with just a thicken wall, but don't have the obstruction are called nonobstructive HCM patients. There have been some new current therapies specifically designed for obstructive and nonobstructive HCM, and they are approved for obstructive HCM. But there are some issues. And I think these challenges have led to a decrease in the ability of these drugs to actually attain the market potential they could attain. What is that issue? Well, the mechanism of action leads to decreases in the contraction of the heart. That's called left ventricular ejection fraction. For both of the CMIs, that has led to a black box warning of heart failure. Now I don't know about you, but if I'm a heart failure patient, I'm an HCM patient, I have heart failure and you tell me, I'm going to give you a drug that has heart failure as a side effect. That may not be the best marketing strategy. In fact, I think what we've heard from our research is that patients are concerned about both the potential of heart failure, but also that they have to go back to the doctor over and over and over again to titrate their dose to get them to the right dose. What this has always often also done is that it's driven utilization of the drug entirely into the academic centers. So 80% of the patients in HCM actually reside with the community doctors, not at the center of excellences. So if you could find a drug that didn't cause heart failure, meaning you had no changes in ejection fraction, that drug would open up a multibillion-dollar market. Well, that's what we have. We have a drug mechanism where we do not see ejection fraction changes where we still see strong efficacy. And you can measure this by the dose of the drug or the concentration of the drug. I'm going to show you some evidence of this in the next couple of slides, but it's a very important differentiating factor for our mechanism. Second key aspect of this mechanism is how it affects that benefits the patient, but doesn't affect the ejection fraction is we slow the rate of contraction, not the actual contractual site. The other thing we do, which I think is really novel and important is that a hallmark of heart failure in general is that the left ventricle becomes very stiff. So what you want is a mechanism that relaxes the ventricle. This is called the diastolic effect when it's filling. So you fill the ventricle with more oxygenated blood to be pumped out. And what we're able to show in our studies is that we had a diastolic effect, meaning that we could enhance the relaxation of the ventricle, fill it with more blood, pump out more oxygenated blood, and that makes the patient feel better. So the profile of this mechanism is that we don't lower ejection fraction. So there's no risk of heart failure, yet the patients feel much better. And some of our data is probably some of the best data on feel and function you've seen in the industry. So excited about this clinical profile. Here's just some quick tidbits of what we showed last April. We were able to -- 89% of the patients, you could relieve their gradient down below a threshold of normal. You could -- 56% of the patients actually were in the normal range or driven to the normal range on a biomarker called NT-proBNP. This is a surrogate marker for diastolic effect. and 56% getting the normal, normal is normal. That's what you want to do with a cardiac patient. We were able to show directly the diastolic effect via echo parameters. And most excitingly, what we saw were 89% of the patients benefited greater than 10 points on KCCQ, an open-label study, but profound benefit to the patients as well as the measure of New York Heart Association changes where they -- 78% went to normal type 1, astounding data. Also saw the same type of activity in nonobstructive HCM. We saw an 88% benefit to patients, 10 points or more in nonobstructive HCM, deep responses on NT-proBNP and our diastolic effect that occurs very rapidly. So this is, I think, some of the most robust data ever seen in nonobstructive HCM. So we're really enthusiastic about this result. So -- we then moved on to -- that was a 28-day study. Now we've moved on to 3-month studies, 12-week studies. This is the Part D of the CIRRUS program. We're dosing patients up and trying to get each patient to their optimal dose. And at each dose range, we measure every parameter, ejection fraction, KCCQ, New York Heart Association, NT-proBNP. And what we want to do is we're not planning to run multiple echoes in the Phase III. We're planning to look at the profile of the drug and ask how do I use perhaps just feel and function to get patients up to the right dose. So AHA guidelines are not driving a dose to a gradient reduction or an NT-proBNP. It's largely driven by how does the patient feel. So if we can do that, we would fit ourselves into current standard practice in the community doctor, which is the goal of the drug. So here's the data in the ejection fraction. The new data are the green diamonds across the study. As anyone can really see here, there is no relationship to the concentration of the drug and the effect on ejection fraction. In fact, as you look at the above the line out at 600, 700, 800 nanograms per milliliter, we actually see people with increases of ejection fraction. So this is dead flat. So really exciting result. We talked about this in December. So how does that affect the commercial opportunity for this mechanism, this drug? Right now, the CMIs are largely utilized in the academic centers and the HCM-focused clinics. What we can do with our mechanism is address the 80% that the CMIs can't address. That's provided in the community to the cardiologists. They don't have the echo capability with the academic centers too. They don't have the organization to monitor the REMS, and we can move this product from perhaps a $2 billion opportunity to a much larger opportunity. So how large is that opportunity? 165,000 patients have symptomatic HCM, and that group is growing. It's a growing number. We think this is a $10 billion opportunity. And back in the day, when Bristol acquired MyoKardia, they thought that it was a $6-plus billion market opportunity. Now mavacamten is making $1 billion, a very successful agent, but they're only accessing 20% of the docs who can prescribe this drug. Our mechanism can open that up. So all this, you need cash, and we were able to raise $200 million last year. We're very well financed. We have $563 million in the bank, no debt and runway through '28. So in a really good financial position to drive the organization to hit all our milestones. So what are our milestones for the next year? So obviously, GRAND CANYON is going to read out. We're on track for readout in the fourth quarter of this year and NDA submissions in '27. We'll make a decision on the Duchenne studies. We have a readout in the second quarter of an additional year of data to try to understand, can we block the progression of disease even in a much more aggressive group of patients in the Duchenne population. We'll -- in the 7,500 space, we expect to report data on the 12-week Part D complete study in the second quarter of this year. We expect to initiate our Phase IIIs, and we're already in discussions with our advisers and looking forward to an interaction with the FDA in regard to the trial design for Phase III in obstructive and nonobstructive HCM. We also have taken our 15400 molecule, second-generation molecule, the same mechanism in the healthy volunteers. We expect to be able to report data in the second quarter on that program, initiate a trial in HFpEF in -- over the summer and read out data in the first half of '27. So exciting times, tremendous progress. It's going to be an eventful year, so to speak. And so I look back and we were developing this slide presentation, I thought to myself, wow, we have 2 multibillion-dollar differentiated assets. How many companies have that? This is really going to be an amazing year for the company. So thank you for your attention. Look forward to presenting the data in the future, and I'll take any questions.

Thanks, Kevin, so much for that presentation. We covered a lot of ground, and I have 13 minutes of Q&A here. So let's see what I can accomplish in that time. So let's just dig right in. So as we think about your upcoming -- let's start with the HCM side of the business first. As we think about your upcoming Phase II CIRRUS-HCM update, can you maybe characterize in a little bit more detail the size and the scope of data that you will be providing at that time?

Yes. So we promised 20 patients, and we got 20 patients by the end of the year. And actually, we had overenrolled that study. There was a lot of enthusiasm with the investigators. I think they're seeing things they've not seen with the CMIs. We had recruited by the end of the year about 40. We had -- we stopped screening. As remember, we have a screening process for a month, then we enroll and we have about another month to get the data for the core lab. So we've stopped screening. A few more patients will go on the study. We think somewhere between 50 and 60 ultimately will be read out by the end of the second quarter.

Okay. And key efficacy measures, safety, everything that we would -- we should normally be think about...

Everything we provided in the Part B and C in the 28-day study would exactly be the same thing.

Okay. And if you had to think about the scenario outcomes here and those like scenario boxes that we like to do, like how would you characterize what a win looks like in 2Q versus what might be a home run versus what might fall a little bit short?

I think our base case is that we will continue to see no changes in ejection fraction even as we continue to go up. I think with increased length of dosing, we'll see a deepening of the response. I don't know how far that goes. But in my personal opinion, I think a drug that doesn't lower ejection fraction, the ejection fraction lowering has an effect on the total feel and function measures. So one of the deficits of the CMIs is that by lowering ejection fraction, you're decreasing your efficacy broadly. So I think we could see deepening and more robust efficacy. And then clearly, everything else we've seen, we feel the drug is well tolerated. Always a lot of discussion around atrial fibrillation. What we've showed with our last presentation was we're in the noise of the placebo. Single-digit AF is part of the phenotype. Nothing to worry about. Every KOL has said exactly the same thing. They have to deal with this all the time. Not a big deal.

Okay. And at 12 weeks, do you think you'll be able to ascertain whether or not 7500 is looking different than the cardiac myosin inhibitors? And in what ways do you believe there may be differences at 12 week in terms of clinical benefit? Are you able to get a little bit more granular on what efficacy biomarkers...

I think the feel and function, as I just have said, I think there's the potential of having deeper responses on NT-proBNP. That's really important because NT-proBNP has provided the strongest correlate for peak VO2. And peak VO2 is the approvable endpoint, both in obstructive and nonobstructive HCM. So I think that measure is highly predictive of the potential of how big the response on peak VO2 and that peak VO2 response sizes how big of a trial you need to run and what the actual benefit of the patient is. So I think that's an important parameter to be able to monitor.

Okay. And any like numbers, benchmarks that you want to put out there?

No. No.

Why?

Well, we know what good looks like. So we can talk about what that might be, but it's really in the context of the entire trial.

Yes. Okay. And just to put a little bit of a finer point on the statement you made on AFib. Kevin, set the record straight here. What causes nuance at AFib in patients with HCM? Does your drug cause it or not? And is there any ways to mitigate these events in a broader Phase III?

Well, there's nothing mechanistically that would say that this mechanism has any effect on the AF rate. What we've consistently seen across every study, not just our studies, are patients who are at high risk of AFib get spontaneous AFib. I'll give you a tidbit that is a little bit new is that we had a patch, a Zio patch to look at the event rate of a whole variety of tachycardias and atrial fibrillation. And we -- that was provided before we dosed the patients, so the screening period. During that screening period, we found 3 patients who were asymptomatic AFib, who did not have AFib in a prior study, meaning that those patients had new onset during the screening period. That means that's a 10% rate of new onset in the population of the patients we're treating. So it just happens to be, people will have to get used to single-digit events of AFib, which is exactly what you've seen with the CMIs, nothing different. So it's not a story.

Okay. And another question we just get is, are there any potential risks over time to decoupling LVOT gradient reduction from LVEF in patients with HCM?

Risk of...

Like is there any adverse risk to not seeing those reductions?

The depth of the gradient response and how important that is.

Yes.

The gradient response, I think, is it's not an approvable endpoint. The gradient response is something that some of the physicians use. But again, the physicians -- the guidance is to go to feel and function. So gradient is a guidepost for potential benefit, but the real benefit is measured in the KCCQ and the peak VO2. So the depth of the -- and I think from all of our data, we have astounding effects on gradient. So I think it's kind of a mute point again.

Okay. Okay. And so maybe any -- I know you've talked a little bit about your Phase III program before here. Obviously, we have a fairly large Phase III nonobstructive HCM study reading out for aficamten in 2Q. Can you talk a little bit more about the internal and competitive data points that might influence how you design the study?

There's a couple of variables here. You can run 2 studies, 1 in obstructive, 1 in nonobstructive HCM, and you can run them very similar to the EXPLORER, SEQUOIA relative to ODYSSEY and ACACIA. That's easy, perhaps the right thing to do. But I think there's a couple of other parameters. One is, would you utilize an active comparator? Second might be, would you want to run one large study because if you don't need to measure ejection fraction, because of the safety of the mechanism, perhaps you can just use feel and function and look at both populations simultaneously, which would streamline the trial and accelerate the rate in which you could recruit patients and read out the trial. So those are all different kind of parameters that we're evaluating. We've not made any decisions yet. We will be discussing with the FDA some of these options in the coming months. And obviously, the Part D data will inform some of the decisions we make to run the most efficient, effective and differentiating trial in Phase III.

Okay. And maybe I have -- let's see here. I have like 4 more minutes. Let's see, where do we go next? Maybe we could just talk briefly on GRAND CANYON here. Like Kevin, you talked a little bit about your powering here and the size of the study, patient population, et cetera. But like how are you optimizing the conduct of this study to optimize the chance that you have for success?

Yes. So there's a few things. You have to get down into the weeds of running these trials. So you have a physical therapist actually trained to measure the North Star and the other parameters. So it's key to have a well-trained PT. That means that we have to know who the PTs are. We need to make sure there's homogeneous training. This is done through a group called ATOM that actually trains these folks. But we do see differences between a different PT with a measurement later on. So what we try to do is we want the same physical therapists to read out the baseline as well as the primary endpoint. So by having that, you remove the essentially user variability of the PT on one case. We also look at measures, for instance, the difference between the screening North Star and the baseline North Star. And if you see big differences, that's unlikely to be a patient effect because we generally do not see wide swings in North Star. If you see a point or 2, that's typically in the range. If you see 5 points, there's something wrong. We go back. And what we do is we video the patients and actually had a third party say, okay, what is the right answer here? And then we go back and retrain again. So this has been a point of concern for everybody in the Duchenne space in North Star because Duchenne patients have very wide ranges of North Star, a lot of variability. But we've cut down that standard deviation because of our efforts in training the PTs and because adults generally can perform the North Star better than 4- and 5-year-old kids. You think about it, if you're a 4- or 5-year-old kid and you tell them I have to -- you have to do 17 different activities and do them as hard as you can. We all have had 4-year-olds. They don't perform like that. So I think for the adults, we have a much higher level of certainty that we'll get very high-quality data and that will result in the success of the trial or at least make this trial much more likely to be successful.

All right. Last question for me is just you do kind of have 2 businesses and 1 here, 2 different verticals. How do you think about where you direct your resources across these 2 verticals of the company? Like -- and if you could talk a little bit about your cash on hand and just how you're thinking about overall investments.

Yes. So I think the front of mind at the moment is to build the commercial backbone to be able to launch sevasemten. So I think we need to find room to do that. We're not going to go crazy. We'll gate it for the Becker release. But at the same time, I want the expertise. I want to have a deep understanding of this disease state and be able to launch the product. The second is you look at the opportunities for each of these indications. I think clearly, we can execute on obstructive and nonobstructive HCM ourselves. We can clearly launch a product in Becker and continue to run the Duchenne studies. I think about HFpEF. HFpEF is an interesting area, perhaps the largest opportunity, but inherently, there have been very large trials run. So the question becomes, do I really need to run a Phase III that's 3,000 or 4,000 patients in 3 years? Or is there a targeted group within that HFpEF population where you may be able to run a smaller study that's more focused where you see a very large effect size, that is part of the design strategy right now for what we're going to run in Phase II. I think for HFpEF, really interesting turn of events in HFpEF with GLP-1s coming into play. We're talking extensively about how many patients will be taking a GLP-1, perhaps on a backbone of SGLT2 inhibitors in HFpEF 3 or 4 years from now. And what we've noticed, which is really important is in those studies, they did not see a true diastolic benefit. And that is the fundamental basis of our mechanistic advantage is that being able to relax the ventricle. So I think that's a really prime opportunity. We certainly want to recruit patients into our HFpEF study who are on that background and see if we can move the diastolic effects.

Kevin, I want to thank you so much and the entire Edgewise team for being here and everyone for joining. Thank you.