Milestone Pharmaceuticals Inc. (MIST) Earnings Call Transcript & Summary

Greetings. Welcome to the Milestone Pharmaceuticals 2Q26 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Michael Wood from LifeSci Advisors. Thank you, Michael. You may begin.

Thank you, and good morning, everyone, and welcome to Milestone Pharmaceuticals' second quarter 2026 financial results and business update conference call. Earlier this morning, the company issued a press release providing an overview of its financial results for the quarter ended June 30, 2026, and recent corporate highlights. The release can be accessed on the Investors & Media section of the company's website, milestonepharma.com. Before we begin, I would like to remind you that some of the information presented on this conference call contains forward-looking statements under the securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause actual clinical programs, future results, progress timing, performances, or achievements to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties associated with Milestone's business, and factors that could cause or contribute to such differences, are described in detail in the company's filings with the SEC, including in the Risk Factors section of the Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 20, 2026. Speaking on the call today will be Joseph Oliveto, President and Chief Executive Officer; Lorenz Muller, Chief Commercial Officer; and Amit Hasija, Chief Financial Officer and EVP of Corporate Development. In addition, Dr. David Bharucha, the company's Chief Medical Officer, will also be available during the Q&A session. I will now turn the call over to Joseph Oliveto. Please go ahead.

Thank you, Michael. Good morning, everyone, and thank you for joining us today to hear about our progress through the second quarter. Until this year, patients experiencing sudden attacks of paroxysmal supraventricular tachycardia, or PSVT, had no FDA-approved self-administered treatment available to them. Now a growing population of patients in the U.S. have Cardamyst in their homes, in their workplaces, in their pockets, or wherever it's convenient for them to have on hand to treat their PSVT. Today, we're excited to report on our first full financial quarter since our commercial launch in mid-February. We've seen growing evidence that physicians, patients, and payers recognize the value of Cardamyst as a new treatment paradigm for PSVT. I'll start by taking you through total scripts, the number of unique prescribers, and patients filling prescriptions, and we'll report these figures for the quarter, compare them to the prior quarter, and add them for the first half results. Realize that the first quarter is a partial quarter and first half figures represent approximately 4.5 months of promotion between mid-February and the end of June. I'll also provide an update on market access coverage and how it has changed since our last investor call in May. For the second quarter of 2026, ending June 30, we continue to view the breadth of prescriber experience as one of the more important positive early indicators for the launch. More than 600 unique healthcare professionals wrote prescriptions for Cardamyst in the second quarter, compared with approximately 200 in the first quarter, for a total of greater than 800 unique prescribers across the first half of the year. We recorded more than 1,200 total prescriptions in Q2, compared with approximately 300 in the first quarter, bringing the total prescriptions for the first half of 2026 to more than 1,500. And more than 1,000 patients received Cardamyst in the second quarter, compared with nearly 300 in the first quarter, for a total of more than 1,300 patients in the first half of the year. As of today, we have secured formulary coverage representing more than 50% of commercially insured lives. Most of this progress of additional coverage has come very recently, specifically in July and August. During the second quarter, coverage remained relatively unchanged at approximately 25% of commercially insured lives, which we reported on at our May investor call. Our recent crossing of the 50% commercially insured mark is an important achievement, which will enable increased access to Cardamyst for patients in those plans, as well as providing us with increased confidence for gaining coverage from additional plans. Lorenz will share further insights about the launch, but before turning the call over to Lorenz, I'll provide an update on the AFib-RVR program. From the start of our development of this novel compound and delivery system, our aim has been to shift appropriate acute care for tachycardias from the current treatment state, which is reactive and healthcare setting intensive, to one that is proactive and patient empowering by enabling patients to treat themselves outside the hospital. We are now at an exciting intersection of both fulfilling that promise for patients with PSVT and having begun the registrational Phase 3 stage of evaluating etripamil in the broader population of patients, those who experience atrial fibrillation with rapid ventricular rate, or AFib-RVR. We have begun our pivotal Phase 3 trial evaluating etripamil for treatment of AFib-RVR as announced in our last earnings release. Thanks to the efforts of the Milestone clinical team, our lead clinical sites are now active and we expect our first patients to be enrolled shortly. We believe AFib-RVR represents a substantially larger opportunity for etripamil to help patients than it has for PSVT. Atrial fibrillation is a growing problem in the U.S., estimated to impact over 10 million people. Of this, we estimate an addressable population with burdensome symptomatic RVR of 3 to 4 million patients. Somewhat like PSVT, patients with AFib-RVR experience symptomatic episodes and currently for AFib have limited and suboptimal self-administered treatment options. As a result, many of these episodes are managed in the emergency department using intravenous therapies or even electrical cardioversion. We're looking to leverage the strong and unique foothold that we have established in the cardiovascular space to address these current limitations. The design of our Phase 3 AFib study, called ReVeRA-301, follows the same approach that was the basis for our successful Phase 3 program in PSVT. Patients self-administer study medication, either etripamil or placebo in a double-blinded fashion, at home in response to their symptoms using the same 70-milligram dose and repeat dose regimen that is already approved for Cardamyst in PSVT. Many of the operational components of the study and many of the clinical sites are the same as those that were performed and performed well in our PSVT program. We believe this continuity between the 2 programs lowers our executional risk and reflects the experience we, meaning our team, the clinical investigators, and our collaboration partners, have built across the etripamil program. Our regulatory approach in AFib using our Phase 3 study is a single-study supplemental new drug application, or sNDA. This is an efficient registrational pathway to a potential label expansion, and we will provide further updates on this program as it progresses. In addition to our progress toward an indication for AFib-RVR, we are progressing towards regulatory decisions in PSVT in Europe and China. If successful, these will expand access to etripamil globally. Our marketing application with the European Medicines Agency, or EMA, remains on track for a decision expected in the first half of 2027. For China, the engagement with the Chinese regulators is being carried by our partner, Everest Medicines. I will now turn the call over to Lorenz to cover our commercial progress in more detail.

Thank you, Joe, and good morning, everyone. Building on Joe's remarks, I will highlight what we are seeing 6 months into the launch and specifically how we are well positioned to accelerate in the coming months. We're excited about the progress of our work towards securing commercial coverage for Cardamyst, which is a critical goal that can define success in the first year of a drug launch. As of Q2, we had secured coverage for an estimated 25% of commercial lives, which primarily accounted for the early win we achieved at the end of Q1 with Express Scripts. In the weeks since the quarter closed, we have seen a meaningful step up in coverage. As of last week, approximately half of commercially insured lives are now covered, driven by formulary decisions at UnitedHealthcare and several other prominent commercial insurers that use either Express Scripts or Optum Rx as their pharmacy benefit manager. It is important to see our focused and persistent market access work gain traction, and we remain optimistic about securing the last of the major PBMs and associated insurance providers, as well as pulling through additional plans who work with ESI and Optum Rx. The receptivity among payers is an important signal. We believe it tells us that they appreciate the clinical value of Cardamyst and anticipate that demand will continue to grow. As Joe mentioned at the top of the call, we're also very encouraged by the growing breadth of prescribers we've seen to date, and just as importantly, that electrophysiologists are strongly engaged in prescribing Cardamyst for their patients. Recognized as the key opinion leaders in the treatment of tachycardias, these physicians represent many of the early adopters of Cardamyst. This experience among electrophysiologists is important because as awareness of Cardamyst continues to grow, use and endorsement by this subspecialty will influence demand generation in general cardiology. In terms of demand generation, in Q2 we have seen steady, consistent growth in prescriptions for Cardamyst. In addition to electrophysiologists, our sales efforts have established a broad and growing receptive base of prescribers that include clinical and interventional cardiologists as well as advanced practice providers, such as nurse practitioners, within cardiology practices. As we move through the second half of the year, our efforts will continue to grow this base of new prescribers while simultaneously focusing on the early adopters of Cardamyst with the goal of driving greater depth of prescribing, encouraging the healthcare providers already using Cardamyst to prescribe it more consistently across their eligible patients. A second area of our launch strategy that we are initiating is targeted patient activation. With coverage now at approximately 50% of commercially insured lives, we believe we've reached an important tipping point where patients can have greater confidence in accessing Cardamyst. We've also learned from market research that when patients ask their healthcare provider about Cardamyst, there is a high likelihood that they will receive it. With that foundation in place, we believe that now is the right time to begin building patient awareness through our enhanced Cardamyst.com experience and targeted digital advertising. This investment will encourage interested patients to speak with their healthcare providers and download resources that make Cardamyst affordable for commercially insured patients. Together, we believe that enhanced promotion to healthcare providers as a result of learnings from the first 6 months of launch, combined with newly initiated patient activation efforts, will support an acceleration of demand for Cardamyst in the quarters ahead. I'll now turn the call over to Amit for a review of our financials.

Thank you, Lorenz. As of June 30, 2026, we had cash, cash equivalents, and short-term investments of $170.6 million, compared with $106 million at December 31, 2025. We expect cash, cash equivalents, and short-term investments to be sufficient to cover operating expenses and capital expenditure into the future, the second half of 2027. Product revenue for the 3 months and 6 months ended June 30, 2026, was $0.6 million and $0.8 million respectively. There is no product revenue recorded in the 3 or 6-month periods ended June 30, 2025. Research and development expense net of tax credits was $3.5 million for the second quarter of 2026, compared with $3.7 million for the same period in 2025. After 6 months ended June 30, 2026, research and development expense was $6.8 million compared with $8.6 million for the same period in 2025. The decrease was a result of a decrease in outside service costs related to drug development and research. Selling, general and administrative expense was $22.6 million for the second quarter of 2026 compared with $8.9 million for the second quarter of 2025. For the 6 months ended June 30, 2026, selling, general and administrative expense was $43.3 million compared with $24.4 million for the same period in 2025. The increase was a result of additional personnel costs, professional costs, and other operational expenses related to the launch of Cardamyst. Net loss for the second quarter of 2026 was $28.6 million, or 21 cents per share, compared with a net loss of $13 million, or 20 cents per share, for the second quarter of 2025. For the 6 months ended June 30, 2026, net loss was $54.7 million, or 41 cents per share, compared with $43.7 million, or 51 cents per share, for the same period in 2025. For further details on our financial results, please refer to our quarterly report on Form 10-Q for the quarter ended June 30, 2026, which was filed with the SEC this morning. I'll now turn the call back over to Joe for closing remarks.

Thank you, Lorenz and Amit. Today we've reported on numbers and metrics that we are following closely and I'm sure we'll discuss further. Let's remember why we're here and the value of our product. I'd like to share some recent anecdotes we've received from the field about PSVT patients and their experience with Cardamyst. This includes having received stories from patients with self-described history of, quote, unquote, multiple trips to the emergency department who successfully converted to normal sinus rhythm on Cardamyst and without the trip to the ED. We heard recently from a medical assistant who, after she recounted the specifics of the patient's success story, which I unfortunately can't share the details, finished the note with she, meaning the patient, is excited, the doctor is excited, and I'm excited, and I needed to let you know. And another patient who actually made a special trip back to his provider's office only to share the great success he had with Cardamyst. These stories serve as powerful reminders of the transformational impact we're having on patients' experience with PSVT. They lift us up and reinforce our commitment to the cardiology patient community. And we can't help but believe stories like these also lift healthcare providers up because they can offer an innovative option that their patients are excited about. In closing, the first half of the year has given us a solid foundation to build on. We have established a broad and growing receptive base of prescribers, which we believe tells us the clinical value of Cardamyst is resonating. We have expanded commercial coverage to roughly half of commercially insured lives and fully expect to pull through more commercial coverage. Together with continuously improving refined sales and marketing strategies, our goal is to continue to accelerate growth in the second half of the year. Thank you. Looking beyond the PSVT launch, we are particularly excited about initiating our Phase 3 AFib-RVR study and in enrolling the first patient soon. We will share that news as soon as it's available. That concludes our remarks, and we will now open the call for questions.

[Operator Instructions] Our first question is from Ritu Baral with TD Cowen.

Hi guys, this is Athena Chan on for Ritu Baral. I wanted to get more color on your prescribing trends, especially on the 600 new or unique prescribers through Q2. What percentage of them were high volume writers versus one-time prescribers and how are you seeing the breakdown between prescribing trends between cardiologists, electrophysiologists, and nurse practitioners kind of shifting throughout this launch?

Hey, Athena, thanks for the question. To come back to specific numbers through Q2, we're at around 800 unique prescribers. That is a strength that leads us as a forward indicator for that prescription growth going forward. And we did report that 800 unique prescribers prescribed to about 1,300 patients over that first 4.5 months through June 30. So just doing the math, you can see a lot of those writers are, if you will, one-time writers. We see this as a strength. As we've gotten out into the field, we've probably reached about half of our targets. Recall that we have about 10,000 high-value targets on our call list. Of those targets, we also have explained that we call on the whole office, and there's about 16,000 what we call affiliate members associated with the offices of those targets. So, a call universe of about 26,000, of which we've reached about half, let's say. So, of the 10,000 targets, about half have been called on, about 800 have written so far, which we think is a good number for that high-value target list. And as I had said, a fair number of them were one-timers. We've also seen promotional response that Lorenz will talk about, and I'll also ask him to talk about the diversity of writers, but he had mentioned in the call script the value of the electrophysiologist, so he'll also comment on that.

Yes, thanks, Athena. Regarding the mix, I mean, we're pleasantly surprised that it's broad. Not only is it a significant number of writers, but also it's a healthy mix of clinical cardiologists, interventional cardiologists, nurse practitioners, what we call APPs, but also electrophysiologists, as I alluded to in the prepared remarks. You know, we always expected EPs to treat these patients, but we didn't expect them to write as early and as broadly because, you know, let's face it, their job is to do ablations, right? And so we always expected some use, but we're seeing, I think, more than we even expected, which I think is an early sign of, you know, a good sign for the market where we've got the thought leaders that are getting experience and then going to be advocating for it. On the promotional response, we also obviously measure this. We're now 6 months in, so we're starting to get a small number of doctors that are getting 5, 6, 7, 8, 10 calls. And we are pleased to see real response, meaning as you get more promotions, you do get more prescriptions. And again, that's across the board. It's not isolated to EPs or cardiologists, but I can tell you that EPs have a strong promotional response, meaning when they hear about the drug, it's a calcium channel blocker. They see these patients frequently, and they have a real use case for it, prescribing it relatively early in what we typically see for cardiology launches.

Yes. So, Athena, just to put a wrap on it, what that means for us going forward is we would still expect to see continued breadth and growth of breadth of prescribers as seen by prescribers that write after 1 or 2 calls, but given the promotional response, now it directs us to go with more frequent calling where it's appropriate and we see that there should be benefits once you get beyond 5 or 6 calls to actually have further writing. So it's a double-pronged approach that'll start going forward where depth will be added to breadth.

Got it. Thank you.

Our next question is from Ted Tenthoff with Piper Sandler. Please proceed with your question.

I wanted to get a sense, it may still be a little bit early, but just kind of any commentary you have on pricing and whether or not there's gross-to-net discounting that you're seeing. And then also, again, still maybe a little bit early, but any early indications on repeat use? I'm trying to kind of get back to sort of the real-world numbers that you used for annual attack rate.

Yes, so I'll start. I'll ask Amit to add any additional color on average selling prices. And I'll start there, though. Foundationally, this is a market that hasn't had any new development, certainly on the drug side for decades. So we consciously went into this market knowing that, knowing that it is a market that has to be broken into and woken up a little bit. And the thought process was the value prop would ring true across the continuum of patients, physicians, and payers. And we made a bet, and we continue to believe that's the right strategy, to try to make the drug easy to get as we work through coverage. So we're really happy to report very recent 50% coverage, but through the second quarter, which is what these numbers are on, Ted, really, while we're happy to get Express Scripts early in the quarter and eventually see that pulled through, the second quarter, we really had relatively low coverage, if you think about it, right? 25% of commercially covered lives, about half of the overall population. So we're talking about a small piece of the overall population. As a result of that, our strategy was to allow for a fair amount of copay mitigation. And when you don't have a lot of coverage, that means a lot of denial conversion, meaning that, you know, the script is basically given away and we don't make any revenues from it. So that really swamps out your average selling price over that period while coverage is low. With Q3 now starting and we're just getting, and I mean literally, in July and even in July, just the other day, we got more coverage. July into mid-August here, that's growing down 50%. As that grows, we think that amount of denial conversion and overall copay mitigation will start to come down over time. It's hard to predict exactly when, but we still believe we got the right strategy. Let's make it easy to get the drug. Let's make it a good experience for doctors and patients when they get it. And not having a good experience means going through a lot of paperwork. So we try to limit that until we can get coverage. And that's when we'll start to see increases in average selling price kick up as we get better coverage and less denial conversion.

That makes a lot of sense.

Yes, you talked about also repeat use, right? And if we look at just the numbers, Q1, very early, 300 scripts, 300 patients, Q2, I guess we had 1,500 scripts over 1,300 patients. So good signal that we're starting to see repeat use per patient, which is a great sign. And obviously, as time goes by, we'll see that more and more, right? We've seen it in our clinical trials. We expect that to happen in the real world as well.

Great, excellent. Thanks for all that additional color.

Our next question is from Mohit Bansal with Wells Fargo. Please proceed with your question.