Hello, good morning, everyone, and thanks for joining us for Oppenheimer's Virtual Annual Healthcare Conference. I'm Justin Kim, one of the research analysts at Opco, and I have the distinct pleasure of welcoming Mr. Robert Blum, CEO of Cytokinetics, for this fireside chat to discuss sort of the latest and greatest for the company. So thanks for joining us today, Robert, and it's great to have you.
Good morning, Justin. Thanks to you and your colleagues for inviting us to participate.
Great. So maybe for those a little bit less familiar with the Cytokinetics story, could you just sort of provide a brief overview of what the company works on in the field of muscle biology and sort of what's been the latest across the pipeline?
Sure. So, our expertise, rooted in the science that goes back 25 years at Cytokinetics, is modulation of cytoskeletal proteins that gave rise to mechanical activities of cell behavior. And our scientists are pioneers, in particular, in looking for modulators of those proteins that are inherent in the generation of muscle force and power and fatigue. And over the years, our scientists have discovered, and we've been advancing, drug candidates that are modulators, in particular, of cardiac myosin, inhibitors and activators that give rise to potential new therapeutics, as could be addressing severe cardiovascular muscle dysfunction or heart disease that lends itself to a specialty cardiovascular model that we are building here as we think is somewhat unique relative to biopharma innovation.
So fast forward all these many years, and today we're looking now at next steps towards regulatory submissions for a drug candidate called aficamten, which is an inhibitor of cardiac myosin, the enzyme that's involved in driving the mechanics of cardiac pumping function. And aficamten was the subject of a positive phase III clinical trial called SEQUOIA that read out in late December, as gives us confidence for regulatory submissions this year, as could be enabling of go-to-market next year in North America and Europe, aficamten as a potential new treatment for obstructive hypertrophic cardiomyopathy.
Great, great. No, that's. I think that segues really nicely into, you know, when you think about sort of the being on the precipice of maybe a drug approval for aficamten, you know, what sort of are the current sort of steps this year that sort of create that line of sight for a drug submission and ultimately a PDUFA? Can you just sort of talk about, you know, how we should be thinking about the timing of those events and what sort of intermediary steps exist between now and, you know, a formal filing with the agency?
Sure. So it started well before this year, including activities last year. But now that we have the positive clinical trial results from SEQUOIA, we're putting the finishing touches on regulatory submissions both in North America and Europe and our partner in China. And we've already been engaging regulatory authorities in conversations about how to approach those, as should be enabling of us later this month on our earnings call to elaborate on plans and timing. But we've given guidance that we expect in parallel to be submitting in North America and Europe in the second half of this year.
Key amongst the activities still forthcoming are finishing some of the non-clinical work and the final study reports, as relates to the pivotal study and some other studies, including things that read on drug-drug interactions and ADME profile metabolics and things that ultimately have to be in place in order to make those submissions happen. What's been top of mind for us and shareholders is, might we expect a differentiated labeling for aficamten relative to a first-in-class drug currently being marketed called Camzyos.
We are engaged in conversations with regulatory authorities already about what might we expect that way and how should we be submitting in order to be able to take advantage of what we believe to be data that could lend itself to a differentiated profile, including but not limited to a potential differentiated REMS. Those conversations are ongoing and, as could be elaborated on, in the future.
Mm-hmm. You know, when you think about sort of those interactions around the REMS, you know, do you think that you'll have greater clarity by the time that the company submits a submission with the agency that, you know, at that point in time you'd have more sort of clarity, or is that something that, you know, you'd sort of still wait to maybe even get sort of a formal approval, and not necessarily have that sort of conviction or confidence ahead of such an event?
I think we will have greater clarity through these interactions, as we'll be informing our strategy for submission. B ut ultimately, whether we have a REMS or a lesser REMS will be a function of review of that submission and potential negotiations, which will provide maybe the final clarity. And in that regard, I don't expect we're going to be communicating in a play-by-play way to Wall Street where we are along the continuum of gaining greater clarity and ultimately what are our expectations.
But I will say our base case assumption is a differential REMS, a lesser REMS, based on the fact that with SEQUOIA and importantly also with FOREST and the DDI studies and the ADME profile of aficamten, it stands to reason we should expect a different label and therefore a different REMS. And already in the course of conducting clinical studies, phase two and phase three, the FDA has been permitting a different approach, given the physicochemical properties of aficamten. We believe that augurs well for what should be differential labeling for aficamten if approved.
Mm-hmm. And just to maybe go a little bit more specifically to what, you know, a lesser REMS might entail: I think previously we talked about echocardiography maybe on a twice-a-year basis, if I recall, as potentially being something as sort of, something like a lesser REMS. And can you just sort of talk about how that compares with, you know, the way patients are treated on Camzyos today and, you know, why you think that, you know, can be sort of a meaningful difference and for the, I guess, the patient community and just the landscape broadly?
So when we do our market research, certainly the frequency of echoes and the burden associated with the time window to conduct those and the consequences, if you miss that time window, are issues that physicians care about. But it's not limited to that. It's the consequences of the dose titration, the requirements for down titration as well as up titration that produce impediments. So as we look at a REMS program, we're looking at frequency of echoes, time windows, and consequences, but not only those things, when we think about what we might propose to the FDA as ultimately would be negotiated.
And what we're encouraged by is, in SEQUOIA and also in FOREST, down titrations have been an enabling of us to manage risk even in the open-label extension without EFs falling into a danger zone or without any patients suffering heart failure symptoms or consequences. So one way to manage this in a potential approval scenario is with a lesser frequency of echoes to monitor patients. But you could also imagine a scenario by which the echo frequency is a function of, what you learn when you do an echo.
You know, for instance, you might have a different frequency for patients whose EFs are closer to 50 than those whose EFs are farther from 50. So these are different things that we can discuss with the FDA. And ultimately, if you read the summary basis of approval for mavacamten, you learn about what the FDA was seeking to manage by putting in place the REMS that it did for Camzyos. And that's not a function strictly of EFs below 40. It's a function of DDI. It's a function of half-life. It's a function of metabolic pathways.
These are things that were managed in part with PK-guided dose titration in the EXPLORER study. You see a different frequency of EFs falling below 40 when you look at EXPLORE versus EXPLORE OLE. We want to be good students of all of that as we pursue potential approval for aficamten, as could be enabling of us to propose something that proactively addresses the FDA's interests.
Understood, understood. Another element or aspect, I guess, around the submission has been the sort of timing and whether the submission might be treated under priority review or standard review. I think the last time we had talked, we were thinking that it, you know, would be a base case of a standard review. But, you know, just kind of curious if there's any sort of puts and takes there, what the argument for sort of a priority review versus a standard review might be, just, you know, based on precedent or any of the communications you've already had.
So there are no communications we've already had that read on that per se. There are precedents. As a next-in-class compound, it would be, I think, more unusual to get priority review. But it's certainly possible, especially in light of the fact that we do have breakthrough designation and we do believe we have a differentiated, potential product profile. So ultimately, the FDA will inform us as to whether it's priority or standard once they've initiated their review. There have been times, where we believe, for instance, the FDA has given guidance to one and then changed its mind. So we're not banking on priority review, but we're preparing for priority review. Our base case is standard review.
Okay, understood. And if I recall, mavacamten had priority review but ultimately sort of had a standard review given it had to sort of adjust for the REMS and sort of that sort of PK dynamic that you had mentioned previously.
I think that's right. You know, we don't know for not having been in the room where that happened. But, there was a priority review that got extended, if you will, such that it ultimately was equivalent to a standard review in light of the discussions that we presume were related to the REMS.
You know, as you sort of then shift gears and sort of start thinking about the commercial market and what has been sort of presented with aficamten thus far, how do you think about sort of the oHCM market and launching into that market and sort of the target patient, so to speak, or early adopter of the therapy, as you sort of prepare for these preparations?
We're very enthusiastic about what this can mean for us and aficamten for patients and ultimately for shareholders. You know, I've been in and around cardiovascular innovations since 1982, and I've been associated and involved significantly from a commercial standpoint in the launches of multiple cardiovascular drugs that ultimately went from next-in-class to best-in-class. I think aficamten has that potential. This is a market opportunity that is enabling of a focused go-to-market strategy with a concentrated customer segment, not a particularly managed category from a payer standpoint, and which is enabling of a limited sales and marketing investment for a high return on sales and shareholder equity.
We believe with a focused, experienced expert group of medical scientists and cardiovascular sales reps, Cytokinetics can compete very effectively in a market that is measured in billions of dollars in the U.S. and also equivalent in Europe, and where we believe it's growing with prevalence as a new innovation, is enabling of what is right now a relative few numbers of prescribers, to produce, large returns. We think that this market opportunity is growing with mavacamten, which is an excellent drug, probably paving the way with education and awareness.
A nd as would be our responsibility with a next-in-class, potential product to expand the category beyond the centers of excellence that are treating a majority of patients today on Camzyos to include other cardiologists given the safety profile of aficamten. We do believe that even then, you're still talking about fewer than 10,000 cardiologists, so you don't need a large primary care directed sales force. So we think this has the benefits of a specialty pharma model combined with the innovation of biopharma to produce something the likes of which we just don't see except in rare instances, like when Vertex went to market in cystic fibrosis or Gilead in the antiviral space.
We think we can take Cytokinetics from its current market cap of $8 billion-$10 billion to levels of $15 billion-$20 billion as aficamten penetrates that category, and that category penetrates the increasing prevalent population. And as aficamten reads out with subsequent clinical studies like MAPLE, like ACACIA, that borrow and build from SEQUOIA, and as our pipeline in the same cohesive biology also builds on the momentum of aficamten. We think we have the makings of what can be enabling of not only bringing science to bear on innovation for patient benefit, but meaningfully for shareholders as well.
Okay. You know, maybe speaking about that first label, you know, one of the things we've always sort of focused in on has been the surgery-eligible patient population, that sort of septal reduction therapy population, that, for mavacamten or Camzyos at least, took sort of that second study, right, about the VALOR study to achieve an expanded label. But the SEQUOIA study had a pretty meaningful proportion of patients who fell under that criteria on a randomized, you know, basis. Does the team feel pretty confident that, you know, that first cut at the apple will include that population?
Do you think that sort of surgery-eligible population would be sort of first adopters of a treatment, or maybe not, you know, based on either dynamics around who the prescribers are, the surgeons there, or, you know, maybe they're a little bit more progressed and more symptomatic? Just any thoughts in terms of, one, the label enabling of the phase III study, as well as sort of two, as you sort of reach the market, would these sort of be the initial patients embracing aficamten?
So yes, we do believe that the SEQUOIA data, together with the FOREST data, together with CMR data that we've recently highlighted, would be enabling of all of that and as could be supportive of, that to be incorporated into labeling from the get-go. As to whether those are the patients that would be the early adopters and the physicians who treat them as the early innovators, that's hard to say because we haven't yet done the market research that I would like to do in order to answer that question now that we have the SEQUOIA data. That's going to be occurring this year.
But I think it's inclusive of those who will be, treated. These are not your, necessarily, your low-lying fruit relative to other low-lying fruit. So ultimately, to answer your question, I'd want to have the market research by my side. But certainly, patients who may be eligible for septal reduction appear to be good candidates for treatment with aficamten, especially because you can get surgical-like efficacy and as maybe more enduring than the surgery itself, although that's something that ultimately one needs to understand in the context of more longitudinal data.
Surgery is not necessarily a fix as would be permanent, and you still have underlying disease. And some have even said that these surgical interventions are basically turning oHCM patients into nHCM patients. And our goal is to be able to, with ACACIA, also be able to address that other side of the equation. So I think our clinical development program will ultimately be reading on the evidence to support any of those kinds of assumptions and expectations.
Understood, understood. Yeah, I think that's a really interesting perspective that even the ACACIA study could read into how physicians treat oHCM, right, and view the surgical option as maybe potentially not delivering the sort of full benefit that a cardiac myosin inhibitor could offer.
Yeah, please understand that, you know, while SEQUOIA data are very encouraging and meet our best case scenario, the profile of aficamten gets better and better, we hope, as you'll see presented and published in Q2, those data and other data and the MAPLE trial and the ACACIA study, we believe, will also expand how one thinks about cardiac myosin inhibition and specifically aficamten in nHCM also. And we believe this is just the beginning of what will be a very meaningful story we hope to tell with clinical evidence and not waiting years and years, but as will be coming soon. And we think this is ultimately going to be informing of a potential, profile for aficamten in the marketplace.
Maybe just talking about MAPLE, before getting to maybe the more the corporate stuff, and we're sort of rushing out of time. But, Dr. Masri, one of the biggest sort of champions of aficamten, you know, recently posted about how the removal of beta blockers and HFpEF patients was observed to be associated with an improvement in functional capacity. And obviously that's sort of a different indication, but it's maybe a close cousin to oHCM.
And so I was just curious, as you think about MAPLE, you know, our going assumption was that beta blockers don't help in that dynamic. But the fact that they might hurt, you know, is that sort of how the team feels about, you know, the head-to-head comparison where you feel even stronger that, you know, that signal could be the best signal that you could generate to make a CMI shine, so to speak?
Yes. You're very observant to have picked up on his LinkedIn posting about that manuscript and what o ne can learn from beta blockers, not only in HCM, but how it reads ultimately on HFpEF. And, you know, there we're testing that therapeutic hypothesis with CK-586, which has a similar mechanism to aficamten. But you're right, beta blockers could limit exercise capacity, not to mention they're associated with adverse effects that are very challenging for physicians and patients.
So a cardiac myosin inhibitor, and specifically aficamten in MAPLE, aficamten in ACACIA, for nHCM and CK-586 in HFpEF, this is representative of a continuum where we do believe this mechanism may produce not only clinical effects, but could ultimately be disease-modifying. And we think that would be distinguishing from the standard of care, including beta blockers. So that's why we're optimistic and encouraged by what we've seen with SEQUOIA, not just on exercise capacity, but on symptoms and, you know, PROs. This is ultimately, I think, going to read on how we think about inhibiting cardiac myosin as a therapeutic strategy across a wider array of patients.
Okay, great. Maybe just the final one, you know, regarding sort of the cash balance and, you know, preparing for commercialization, can you just talk about, you know, what, you know, how you think about the company's financial position to embark on sort of those activities and, you know, what kind of options sort of are on the table and not sort of how you think about maybe if you have a preference for certain options that seem attractive versus others?
Yeah. So I'll answer this question against the backdrop of some of the rumors that have been circulating around our company also. And I'll correct at least one misstatement. We have not been conducting a for-sale process for Cytokinetics. But when people knock on our door, we have a fiduciary obligation to open the door and address and engage. And we have been doing so. And in particular, we're very active, as we've mentioned many times in the BD conversations, with focus to partnering in Japan, but also in partnering other of our pipeline programs. And in so doing, we've been managing our balance sheet.
We think we are in a good position to maximize shareholder value, whatever may be the best way to do that, with continuing BD discussions that ultimately could tip into M&A, to be sure, but also at the same time by executing on that which we can control, and how we go about capitalizing on SEQUOIA data and building a business that can reward shareholders where that under our own supervision also.
With our earnings call later this month, we'll report on our end of 2023 cash balance, which I think will likely be north of some consensus expectations, given measures we took in late 2023. If you look at our 10-Q filed, in Q4 for Q3, we mentioned that we had drawn on the ATM. We also reduced spending so that our end of cash in 2023 would afford us more runway in 2024.
As we look at 2024, we'll give guidance later this month on that earnings call for net of revenue spending, but for which we think we'll try to maintain approximately two years of forward cash while we pursue business development and other non-equity dilutive sources for access and new capital, but deploying that capital very smartly at the same time while we await potential regulatory approvals and, in Europe, HTA feedback before we invest meaningfully larger in spending and sales and marketing.
We think we've got several levers we can pull when you think about our convert structured finance deals and other things so we don't have to rely on equity dilutive capital. If we were relying solely on equity dilutive capital, we might have already raised capital based on the enthusiasm for SEQUOIA. But we don't know that that's necessarily in the best interests of shareholders. We're pursuing a multi-pronged strategy, as we'll elaborate more later this month.
Okay, great. Looks like we're going to have a lot of updates at the 4Q call and, you know, looking forward to future presentations. ACC always sort of being a great one and, really a pleasure to have you as always, Robert.
Thank you so much. Appreciate the time.
Thanks everyone.