Cytokinetics, Incorporated (NASDAQ:CYTK) Q1 2024 Earnings Call Transcript May 9, 2024
Cytokinetics, Incorporated isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon. And welcome ladies and gentlemen to Cytokinetics First Quarter 2024 Conference Call. [Operator Instructions] I will now turn the call over to Diane Weiser, Cytokinetics, Senior Vice President of Corporate Affairs. Please go ahead.
Diane Weiser: Good afternoon. And thanks for joining us on the call today. Robert Blum, President and Chief Executive Officer, will begin with an overview of the quarter and recent developments. Fady Malik, EVP of R&D, will provide updates related to aficamten focused to SEQUOIA-HCM and FOREST-HCM and recent interactions with FDA. Stuart Kupfer, SVP and Chief Medical Officer, will provide additional updates regarding the ongoing clinical trials of aficamten, MAPLE-HCM and ACACIA-HCM and will also discuss progression of CK-586 and our emerging pipeline. Andrew Callos, EVP and Chief Commercial Officer, will speak about commercial readiness activities for aficamten. Sung Lee, our new EVP and Chief Financial Officer is with us today, but just listening alongside us as this is his first day at Cytokinetics.
Robert Wong, VP and Chief Accounting Officer will provide a financial overview of the past quarter. And finally, Robert Blum will review our corporate development strategies before closing the call by reviewing expected key milestones for the year. Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements. Our actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements contained in our SEC filings, including our current report regarding our first quarter 2024 financial results filed on Form 8-K that was furnished to the SEC today.
We undertake no obligation to update any forward-looking statements after this call. And now I will turn the call over to Robert.
Robert Blum: Thank you, Diane, and thanks for joining us on the call today. In the first quarter, we made substantial progress executing on our muscle biology focused portfolio, anchored by the broad development program of aficamten. On the heels of positive top line results from SEQUOIA-HCM, our pivotal Phase 3 clinical trial of aficamten in patients with obstructive hypertrophic cardiomyopathy, we are running at full throttle in preparation for an ambitious set of presentations and publications scheduled to occur over the course of the year. In addition, we are laser-focused on regulatory submissions in the second half of the year, continued conduct of the ongoing clinical trials program, accelerating our commercial readiness activities and further expanding our pipeline.
While top line results of SEQUOIA-HCM announced last December, included a comprehensive high-level view of the safety and efficacy of aficamten, a priority of ours is to present more fully the results from SEQUOIA-HCM at a major medical meeting. Recently, we announced that, that Forum will be the European Society of Cardiology Heart Failure 2024 Congress in Lisbon next week, Monday, May 13, where we will have three late-breaking clinical trial presentations related to SEQUOIA-HCM. Along with the primary results, we have two other late breakers with data from additional analyses from SEQUOIA-HCM on which Fady will elaborate. He will also lay out the steady stream of presentations and publications that we anticipate sharing related to aficamten throughout 2024 as we believe will nicely elaborate on its next-in-class profile.
During the first quarter, we also engaged meaningfully with FDA ahead of our planned submission of an NDA for aficamten in the third quarter of this year. We convened two meetings with FDA in the month of February, including a first meeting to review the results of SEQUOIA-HCM and a second pre-NDA meeting to cover specific topics related to our submission. We are pleased with the agency’s feedback, and we look forward to additional discussions to occur this quarter, which will address specific questions we are posing relating to potential REMS scenarios. We’ve also been preparing for our planned submission of an MAA with EMA expected in the fourth quarter of this year. Moreover, in 2024, many other work streams and activities were pushed into the next phase of execution, notably commercial readiness activities, which Andrew will speak about in more detail.
And while SEQUOIA-HCM represents the forward edge of the Phase 3 development program for aficamten, we now have two other ongoing Phase 3 clinical trials evaluating aficamten, which each represent additional opportunities to expand the clinical evidence use case and hopefully reach more patients in need. Of course, we’re also continuing our ongoing open-label extension study FOREST-HCM to collect longer-term data on the safety and efficacy of aficamten. And as Stuart will elaborate, MAPLE-HCM, the Phase 3 clinical trial of aficamten as monotherapy compared to metoprolol as monotherapy is expected to complete enrollment in the third quarter. This trial will provide an evidence-driven answer to the question clinicians are beginning to ask with the emergence of cardiac myosin inhibitors.
That is which drug do we initiate first, MAPLE-HCM may be an important opportunity for aficamten as we hope it may inform a critical change in treatment practice as could be outlined in emerging guidelines. Stuart will also share an update on ACACIA-HCM, our Phase 3 clinical trial of aficamten in patients with non-obstructive HCM and he’ll also describe a third late-stage clinical trial called CEDAR-HCM, which is now open to enrollment in a pediatric population of patients with oHCM. We are especially pleased to maintain a strong financial position at the end of the first quarter, alongside of our maturing R&D programs. As I’ll speak to in more detail later in this call, we believe that we are in an advantaged position in terms of our options for accessing diversified capital to further fuel our science for the benefit of patients and to deliver increasing shareholder value.
And lastly, we were pleased to recently announce that we had finalized our search for a new CFO. And as you hopefully saw from the 8-K we issued, I’m pleased to welcome Sung Lee to our team. When we began our search, we had several key criteria for the ideal candidate including previous experience in both large and midsized biopharma companies, global commercial finance experience and a track record of innovative financing deals. Sung brings all of that and more, and we couldn’t be happier to have him join our team. Prior to Cytokinetics, Sung was CFO of Vir Biotechnology and also MorphoSys AG and Sangamo Therapeutics. Previously, he built his career expertise over 14 years at Gilead, where he served in various roles obtaining leadership expertise in tax, accounting, operations and IR.
You will hear from Sung in our Q2 earnings call. And for those of you who don’t already know him, you’ll soon have a chance to meet him at our upcoming conferences and one-on-one meetings. And with that, I’ll turn the call over to Fady, please.
Fady Malik: Thanks, Robert. Top of mind for all our late-breaking clinical trial presentations next week at Heart Failure 2024 in Lisbon. The presentations include, of course, the primary results of SEQUOIA-HCM, which will provide a complete view of the results related to the baseline characteristics, the primary and secondary endpoints, subgroup analyses and select exploratory end points. There will also be two additional late breakers on other data analyses from the trial, one will elaborate on the dosing and safety experience in SEQUOIA-HCM and another is a deep dive into the improvements in exercise capacity affected by aficamten based on a detailed review of the CPET data. These presentations will not only expand on what was in the top line press release, but go further in providing an in-depth look at this very rich data set and its implications for clinical practice.
As Robert mentioned, our presentations next week represent only the beginning of our plan to fully dissect the results from SEQUOIA-HCM and build a comprehensive picture of the differentiated profile that continues to emerge for aficamten. We have an aggressive plan that starts with HFA and lays out over the course of the year, a series of presentations and publications that will further elaborate on the efficacy and safety of aficamten. You can expect presentations at the European Society of Cardiology, The Heart Failure Society of America and the American Heart Association Meeting as well as accompanying publications in leading medical journals. These include deeper dives into the echocardiographic, Kansas City cardiomyopathy questionnaire data, CMR data, cardiac remodeling and biomarker data as well as an integrated analysis of efficacy.
We look forward to sharing more as the year progresses. Shifting to FOREST-HCM. Last month at ACC, we shared additional 48-week data from 46 patients with obstructive HCM and FOREST-HCM that showed the treatment with aficamten is associated with sustained improvements in resting and Valsalva left ventricular outflow tract gradient, NYHA functional class, NT-proBNP and measures of cardiac structure and function. Furthermore, occasions of left ventricular – low left ventricular ejection fraction were very infrequent and were not associated with treatment interruptions or heart failure events. These data continue to reinforce the safety and efficacy of longer-term treatment with aficamten and oHCM. With nearly 300 patients currently enrolled in FOREST-HCM, we look forward to reporting more longer-term data in the future.
Importantly, during the quarter, we had many opportunities to engage with KOLs and treating clinicians in the community to discuss the results generated to date from the program for aficamten. Feedback has been incredibly positive, and we believe that once presented and published, the full results will reaffirm this enthusiasm. Specifically, our therapeutic medical science liaisons have interacted with over 500 healthcare professionals and completed profiling of physician practices with HCM treatment programs. At the same time, our managed healthcare medical science liaisons engaged integrated delivery networks or IDNs around the results of SEQUOIA-HCM and finalized work to build our payer clinical value narrative. On the regulatory front, as Robert mentioned, during the first quarter, we held two meetings with FDA ahead of our NDA submission.
During the second quarter, we plan to engage FDA once again, this time for a type B meeting focused specifically on potential risk mitigation. While this is a topic that came up in both of our previous meetings, this next engagement affords us the opportunity to elaborate on the safety and pharmaceutic properties of aficamten, discuss their potential impact on different approaches to manage risk and gain insight into FDA’s perspective on these matters. In these discussions with FDA, our position is that the benefit risk profile of aficamten merits an approach to risk mitigation, that’s reflective of the safety profile of aficamten as demonstrated in SEQUOIA-HCM and FOREST-HCM. Altogether, we remain optimistic and we believe these discussions will inform our proposal for a differentiated approach to risk mitigation in our NDA.
As we’ve previously shared, we’re planning for a rolling submission for the NDA, which will provide FDA the opportunity to begin their review of completed modules. We expect to begin and complete the submission during the third quarter. As I’m sure you’ll appreciate, there is a tremendous amount of work that goes into an NDA and our teams are working diligently towards this very important milestone for the company. Meanwhile, we’re also preparing our marketing application, which we expect to submit to EMA in the fourth quarter of this year and are coordinating with our partner, JI XING in China to support their plans to support an NDA as well. During the quarter, we are pleased to welcome a new Head of Regulatory for Europe will lead regulatory strategy and product registration in Europe and support the launch readiness activities.
While SEQUOIA-HCM is taking center stage at the moment, it’s followed and supported by additional clinical trials and the development program for aficamten that we believe have the potential to expand the utility of cardiac myosin inhibitors. I’ll hand it over to Stuart to elaborate more on these additional clinical trials as well as provide an update on our earlier-stage clinical development pipeline.
Stuart Kupfer: Thanks, Fady. I’ll start with our two ongoing Phase 3 clinical trials, MAPLE-HCM and ACACIA-HCM. We believe both of these trials have the opportunity to expand the potential benefit of aficamten to additional patients with obstructive and nonobstructive HCM and to elevate aficamten in treatment guidelines. MAPLE-HCM, which is evaluating the potential superiority of aficamten as monotherapy compared to metoprolols monotherapy in patients with obstructive HCM is on track to complete enrollment in the third quarter. Over 75% of our global sites are activated, and we’re expecting sites in China and South America to join MAPLE-HCM. By the end of the second quarter, we expect to be at approximately 50% of target enrollment and foresee a large increase in enrollment in the third quarter.
The results from SEQUOIA-HCM have provided a strong tailwind for enrollment in our ongoing trials, including MAPLE-HCM, and we’ve observed strong enthusiasm from sites for completing the trial and getting us across the finish line. We expect MAPLE-HCM to read out in 2025 around the time when we hope to be commercially launching aficamten, and a positive will provide the evidence base to potentially position aficamten in guidelines for use as first-line therapy in obstructive HCM. ACACIA-HCM, the pivotal Phase 3 clinical trial of aficamten in patients with symptomatic nonobstructive HCM is also entering what we will expect via rapid phase of site activation and enrollment. During the second quarter, we’re meeting with many of our investigators and study staff at their sites around the world, and we recently held a successful investigator meeting in San Francisco.
Given positive results from Cohort 4 of REDWOOD-HCM, clinicians are enthusiastic about the promise of aficamten for the potential treatment of patients with non-obstructive HCM. And we look forward to continuing enrollment this year towards a goal of completion in 2025. Turning our attention to another important patient population. Just this morning, we announced the start of yet another clinical trial of aficamten called CEDAR-HCM, a randomized double-blind, placebo-controlled trial and open-label extension evaluating the efficacy of pharmacokinetics and safety of aficamten in a pediatric population with symptomatic obstructive HCM. CEDAR-HCM will enroll two cohorts, approximately 40 adolescents aged 12 to 17 years, will be enrolled in the initial cohort.
A second younger cohort of up to 10 children aged 6 to 11 years, will begin enrollment after data from at least 20 adolescent patients supports safety and dose selection in the younger cohort. In the cohort of adolescence, the treatment regimen for aficamten will be the same as for adults. That is once daily doses of 5 to 20 milligrams individually selected based on echocardiographic parameters. Primary and secondary endpoints will be evaluated after 12 weeks of double-blind treatment. The primary endpoint is change in Valsalva left ventricular outflow tract gradient, and secondary endpoints include change in rest ingredient, pharmacokinetic print measures, cardiac biomarkers and symptoms. After 12 weeks of double-blind treatment, all patients will roll over into an open-label extension.
While pediatric HCM may be rare, it’s associated with a high risk of heart failure and serious arrhythmias. HCM tends to present similarly in children and adolescents as a dozen adults and is associated with shortness of breath, fatigue and poor exercise tolerance, impacting overall quality of life. We’re optimistic, given the results from SEQUOIA-HCM in adults that aficamten may prove promising for this key segment of the HCM population. During the second quarter, we’ll also be starting a Phase 1 study to evaluate the pharmacokinetics, safety and tolerability of aficamten in healthy Japanese participants to advance our global clinical program in that geography. Additionally, during the first quarter, we advanced CK-586, another cardiac myosin inhibitor in development for the potential treatment of a subgroup of patients with heart failure with preserved ejection fraction, or HFpEF.
Earlier today, we announced top line data from the Phase 1 study of CK-586, which showed that CK-586 was safe and well tolerated in healthy participants with generally linear pharmacokinetics. These findings are supportive of advancing the program to a Phase 2 clinical trial, which we expect to begin in the fourth quarter of this year. We plan to present the data from the Phase 1 study in more detail at a Medical Congress in the second half of the year. We believe CK-586, which has a different mechanism of action than aficamten has the potential to further unlock the potential biology of myosin modulation for patients with high unmet need. Finally, further work continued in the past quarter on our earlier stage programs that we expect to mature from our labs into the clinic later this year and next, extending beyond muscle contractility for the areas of muscle metabolism and energetics.
These emerging programs are an important part of our long-term vision as we continue to pioneer the field of muscle biology and pharmacology. And toward that end, we’re pleased to be sponsoring a dedicated muscle biology symposium here in South San Francisco next Friday called [CLI], Contemporary Landscapes in Muscle Biology. This one day event will bring together scientists, researchers and emerging professionals to share innovative research in the field of muscle biology. The goal of this gathering is to foster collaboration, facilitate networking opportunities and promote scientific interdisciplinary dialogue with the ultimate goal of driving advancements in the understanding and treatment of muscle-related diseases and disorders. With that, I’ll turn the call over to Andrew.
Andrew Callos: Thanks, Stuart. After sharing top line results from SEQUOIA-HCM at the end of last year, in the first quarter, we began the design and build phases of our go-to-market strategies. We worked to refine our market development campaign, which we plan to launch at HFSA later this year and initiated the design and build of our comprehensive patient support services program, as well as our specialty distribution strategy. We continue to strengthen our commercial team with new hires, including a U.S. patient marketing lead and ahead of Germany, which, if approved, is the first European country where we plan to launch aficamten. In 2024, hiring in our commercial organization and in Europe will remain modest with more hire expected in 2025 and 2026, gated to regulatory milestones in the U.S. and EU and reimbursement levels on a country-by-country basis in the EU.
On that topic, we are pleased to continue to see more positive health technology assessments for the CMI class during the last several quarters, including from Germany, France and the U.K. with signals a potentially positive forecast for the future reimbursement of aficamten across key countries, if approved in Europe. During the quarter, we continue to build the value proposition for aficamten for various stakeholders, including payers and HTAs by generating data around health economics and outcomes research or HEOR. In the first quarter in recent weeks, our team published and presented HEOR abstracts on topics, including the impact of ethnicity, sex, region and payer healthcare coverage on outcomes in HCM, medical therapy usage post septal myectomy and long-term cost of care for patients with symptomatic obstructive HCM.
Our findings around patient outcomes and costs related to obstructive HCM further underscore the clinical and economic unmet need for this growing patient population. Looking ahead, after we present and publish the primary results from SEQUOIA-HCM next week, we will continue engagement with U.S. payers. Our payer and medical account team began dialogue with every major payer in 2023. And beginning in Q3 of this year, we plan to initiate preapproval information exchange with every major payer to review the results of SEQUOIA-HCM, so the payers understand the clinical meaningfulness of the results as well as the cost and outcome burden of obstructive HCM. I’m pleased with our progress for commercial readiness so far in 2024. As I’ve spoken to before, the obstructive HCM market has a highly concentrated customer base, which is typical to specialty cardiology.
Unlike biopharma companies that have come before us who did not perform the market expectations, we believe our focus on specialty cardiology anchored by aficamten would enable us to successfully reach the subset of cardiology — cardiologists to treat approximately 80% of the obstructive HCM patients. We believe that we are uniquely advantaged for success, and we’re keeping our foot on the gas across our commercial readiness preparations this year. Just as our company successfully build a formidable R&D organization that cultivated the robust pipeline we have discussed today, we’re well on our way towards building an equally outstanding commercial organization poised to stand shoulder to shoulder with our highly respected R&D colleagues. Together, we are pioneering new frontiers of success, driven by our shared vision and mission to help patients.
And with that, I’ll turn the call over to Robert Wong.
Robert Wong: Thanks, Andrew. We ended the quarter with approximately $634.3 million of cash on the balance sheet, which represents two years of forward cash runway, including capital we expect to be available to us under our deal with Royalty Pharma upon satisfaction of conditions. Our first quarter 2024 R&D expenses increased to $81.6 million from $79.4 million in the first quarter of 2023, primarily due to spending on our cardiac myosin inhibitor programs, offset by lower expenses for our skeletal muscle programs in the prior year. Our first quarter 2024 G&A expenses were $45.5 million down from $49.7 million in Q1 2023 due primarily to higher pre-commercial expenses in the prior year. With that, I’ll hand it back over to Robert Blum.
Robert Blum: Thank you, Robert. As you’ve heard, our cohesive biology anchored by cardiac myosin inhibition continues to drive shareholder value and growth as we execute on our plan to advance to the next tier of biopharmaceutical companies. In the near term, we remain focused on elaborating on the positive results from SEQUOIA-HCM in presentations and publications, as well as preparing for the successful launch of aficamten if approved, in 2025, while also continuing to invest in expanding our promising pipeline directed to our plans to build a specialty cardiovascular franchise. In 2024, we’ve been focused on parallel opportunities to sustain and grow our company by diversifying access to capital and strengthening our balance sheet, and we’re prepared to execute on a series of primarily non-dilutive transactions such as comes with partnering and structured financial engineering.
We hope to have more to say about these initiatives as they come to closure and commit to ensure not only access to diversified sources of capital, but we also focus to capital efficiencies as we deploy capital towards advancing our pipeline and emerging commercial business. Our priority remains our ongoing business development campaign for aficamten in Japan. During the quarter, we continued discussions with multiple parties and with momentum, we hope to consummate a deal. We’re also looking at restructuring and expanding current financial instruments and deals to lower our overall cost of capital and potentially monetize additional R&D progress. We expect to remain diligent about the different levers we can pull as could be enabling of us in a principally non-equity dilutive manner to continue to augment shareholder value, and may also consider equity financing at the right time as part of a broader capital access strategy.
Shaping our business conduct today and into the future is our pledge to corporate responsibility. And recently, we were proud to release our second annual corporate responsibility report, which highlights our actions and progress against our goals of keeping patients at the center of our work, advancing a high-integrity, diverse and inclusive culture and supporting sustainable communities. As we look at our longer-term goals and vision, which will be articulated in our Vision 2030 early next year, the company we aspire to be is a sustainable commercial enterprise with an enduring R&D organization. Our vision is to maintain our pioneering leadership in muscle biology and pharmacology and grounded in financial stewardship and doing what’s right for the patients we serve.
Now I’ll recap our upcoming milestones. For aficamten, we expect to present the primary results from SEQUOIA-HCM at the European Society of Cardiology Heart Failure 2024 Congress next week. We expect to submit an NDA to the FDA in Q3 2024 and an MAA to the EMA in Q4 2024. We expect to complete enrollment in MAPLE-HCM in Q3 2024 and continue enrollment in ACACIA-HCM throughout 2024. We expect to continue enrollment in CEDAR-HCM in 2024 and to begin a Phase 1 study of aficamten in Japanese healthy volunteers in Q2 2024, and we expect to continue advancing our go-to-market strategies for aficamten. For CK-586, we expect to present primary data from the Phase 1 study at a medical meeting in the second half of this year and to start a Phase 2 clinical trial in Q4 2024.
And for preclinical development and ongoing research, we expect to initiate clinical development with another muscle directed compound later this year as well as continue our research and expanded muscle biology activities. Operator, with that, we can now open up the call, please, to questions.
Operator: Thank you. [Operator Instructions] And our first question will come from Charles Duncan from Cantor Fitzgerald. Your line is open.
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