To Q&A. If there are any questions along the way from the audience, please feel free to raise your hand, and we'll try and get a mic to you. Alternatively, please feel free to shoot me an email at paul.k.choi@gs.com, and I'm happy to read your question anonymously as well, too. So, with that, Robert, I'll turn it over to you.
Thank you, Paul, and thanks to Goldman Sachs for inviting us to participate again this year in this conference. This is a particularly important time for us as we've made a number of recent announcements around which I'm sure we'll get into some conversation, but maybe to just set some context for those comments. We're executing on a development program for aficamten, a next-in-class cardiac myosin inhibitor, and that includes readiness for commercialization next year. We intend to take it to market both in North America and in Europe in parallel, and at the same time, we're conducting a very broad development program for aficamten studies, including an open label extension study called FOREST, but also MAPLE, ACACIA, CEDAR, and a soon-to-be-announced phase I study in patients or rather healthy Japanese subjects.
So a very significant commitment to aficamten and potential label expansion for aficamten. And at the same time, we think it's in the best interest of shareholders that we continue to be investing in pipeline. And as such, we recently announced an expansion of our development pipeline to include advancement of omecamtiv mecarbil in a confirmatory phase III study, as could be enabling of its potential approval, as well as advancement of CK-586 in phase II. In order to accomplish all of this, we recently announced two side-by-side, financings or fundraising. One was an equity deal, one was a royalty monetization, and debt deal, and together, we raised either in committed capital or capital at our option, over $1 billion to support this, program. That's, we think, in the interest of maximizing shareholder value.
But at the same time, we also recently announced with an 8-K last week, that we had been in discussions earlier this year, relating to, the potential sale of the company. Why did we make that announcement and the timing of it? We did that because there had been an increasingly false narrative, a misunderstanding, that was exacerbated potentially when we did raise capital, and, there were questions and concerns about whether the management and the board were remaining open-minded to the best way to maximize shareholder value, as could come in the form of selling the company. And we made clear, in this 8-K last week that we had, engaged with a third party around potential sale of the company. We had thought we were aligned on terms that would be actionable, and the other party walked away from that deal.
We did this recently, announced this recently, just to make clear that we were and remain open-minded to the best way we can maximize shareholder value, whether that's in the form of selling the company or continuing to execute on plans as we would remain an autonomous and independent company. To be clear, we fully understand our fiduciary obligations, and we maintain objectivity to the best way to maximize shareholder value. All this is meant to provide a backdrop around which I'm sure we'll get into some conversation now, but I wanted to put that all on the table.
Okay. Thank you, Robert. Maybe starting with some of the clinical sides of things, you recently presented detailed SEQUOIA-HCM data at the ESC Heart Failure meeting in Lisbon. So, in your view, I guess, you know, what are the key highlights of the data and sort of what stands out most in your mind?
Yeah. So I'll tell you firstly, what stands out first in my mind is the reception that those results received when they were presented at the European Heart Failure meetings to a resounding applause in a sold-out auditorium. Not something you typically see in these medical meetings. But the Sequoia data were presented by the principal investigator, Martin Maron, and they demonstrated all that we had hoped to achieve. In fact, maybe even exceeding our best-case expectations for these results. Sequoia demonstrated that we not only hit on the primary efficacy endpoint, as demonstrates a meaningfully large improvement in exercise capacity for patients where that's very important, those with obstructive hypertrophic cardiomyopathy, and on top of standard of care, especially with and without beta blockers, which is, we think, an important point to emphasize.
But also we saw highly statistically significant effects on every single pre-specified secondary endpoint at different time points and for different other measures of efficacy. These data stand out for a differentiation opportunity. Importantly, however, more important even than efficacy, we think the safety of the findings are ultimately gonna carry the day. We believe that these safety findings, especially no evidence of dose termination, as required by EF excursions, nor any heart failure-related symptoms, would suggest that aficamten as a potential next-in-class opportunity in a category that desperately needs a new medicine that can be safe and convenient for use. We believe aficamten has what could be a potential to be expanding of a category meaningfully large and important for patients.
I think if memory serves, there was actually more applause for the study hitting all the secondary endpoints than the primary endpoint.
Yeah.
And for those of us who were in the room. I guess, and you touched a little bit on physician reaction, but I guess as you've heard and, you know, listened to physician feedback, I guess, what do doctors say in terms of what they see as the most important differences versus Bristol's Camzyos? And, you know, are these differences significant in their view, in terms of the physician?
Maybe Andrew better served to answer that 'cause he's done some primary market research before we had the Sequoia results, and now that's continuing.
Physicians care, you know, first and foremost about efficacy, things like New York Heart Association class, which is meaningful to them, as well as, you know, the with or without beta blocker and speed of onset. The most, you know, to kind of Robert's point around differentiation, the thing that stands out most is preservation of LVEF and predictability, not having the excursions, not having symptoms of heart failure, not having stoppages of therapy, and then they associate it, you know, what we assume to be the risk management program associated with that. So that's really what physicians point to, is the amount of resources required, they feel will be, manageable, and the, safety and predictability of LVEF. Our research now, post Sequoia, you know, pre Sequoia, the research would, would...
Safety element and the associated risk management program are the difference.
Right. That you guys hosted was certainly interesting in terms of excursions or lack thereof, rather. And just to your point on dose interruptions not being a factor or dose titrations.
What's important to note is that while that was the primary results of the pivotal clinical trial, SEQUOIA, the profile seems to even be better in the open label extension study FOREST. We've presented some of those cuts of those data. More are forthcoming this summer and throughout this year, both presentations and publications. I think the FOREST Open Label Extension Study may be even more important predictively in terms of how we should think about real-world use of aficamten, absent the guardrails of a clinical trial. In FOREST, we're seeing even fewer EF excursions and physicians more comfortably even taking patients off of their beta blockers.
Okay. Now that you've presented top-line data, I want to talk a little bit about regulatory next steps. You've talked about two key regulatory interactions in the front half of this year, the next key one being a potential Type B meeting with the FDA. What can you maybe share on the Type B meeting to date here, and just, you know, what you would probably want to think about or investors should think about what in terms of what Andrew mentioned in terms of the shape of a REMS?
Yeah, the Type B meeting is very important. As you alluded, we had two meetings in February. One, a top-line meeting to review the Sequoia results, the second, a pre-NDA meeting, at which time FDA was permitting of us to initiate a rolling submission in Q3. So that was a win, as we would characterize it. But we also had conversations about risk mitigation and safety, and we were encouraged to request a Type B meeting, which we indicated would take place in the second quarter. And I haven't yet commented on whether it has or hasn't taken place, other than to say the Type B meeting is designed to have us asking certain questions of FDA, as could be contemplating a range of scenarios of risk mitigation.
Everything from a no REMS to a differentiated REMS, and as FDA will respond in writing to those questions, and as we'll inform ultimately our strategy as to how we submit an application in our Q2 earnings call in early August. Suffice it to say that we continue to believe that FDA is recognizing that aficamten is on its own merits and based on its own clinical evidence supportive of what could be a differentiated risk mitigation profile. And be able to, even this year, before... Other reasons in this calendar year that we think one should have as a base case, a differentiated risk mitigation profile for aficamten.
Okay, great. You know, outside of the NDA, you mentioned earlier, you know, you do have a robust clinical development program for aficamten, which includes the MAPLE HCM head-to-head study and the ACACIA study in non-obstructive. And can you maybe provide us a quick update on where MAPLE stands in terms of progress and enrollment? And then we can touch on ACACIA as well for the non-obstructive opportunity.
Yeah, so to Paul's point, MAPLE is designed as could be enabling of aficamten to be compared head-to-head with metoprolol, as is currently first-line treatment for patients with OHCM, and hopefully to demonstrate superiority in terms of exercise capacity in particular. That study is on track to complete enrollment in the third quarter, as could be permitting of data from that trial around the time we go to market with aficamten, and as we believe, could hopefully result in aficamten being listed in guidelines as would be potential first-line therapy. So that's a very important study. Consider that almost a phase four study that we brought forward prior to NDA submission. Similarly, ACACIA, a study of aficamten in non-obstructive HCM, and Andrew can speak to how the markets break out between oHCM and nHCM.
But ACACIA is on track to complete enrollment next year, and as we would hope, could provide results in 2026 to support a potential label expansion to that cohort of patients that also have very high unmet need. And we think ultimately, cardiac myosin inhibitors, aficamten in particular, should represent a mainstay treatment for both oHCM and nHCM.
Yeah, and to follow up Robert's points there around nHCM market sizing. Overall, when we evaluate kind of longitudinal claims data, it seems there's around 300,000 HCM patients diagnosed in the U.S. About 90% of them are treated, mostly with beta blockers and/or calcium channel blockers. The split between OHCM and NHCM is two-thirds to one-third, where 1/3 being non-obstructive HCM. Non-obstructive is being diagnosed at a higher rate, so we certainly expect that split to maybe be more 60/40 or even 50/50 in the future. And the true prevalence, unlike, you know, not unlike rare diseases in general, the true prevalence is likely three to four times that of HCM overall.
We expect, you know, over 1 million patients, and that's been documented by others as well in terms of what that true prevalence is.
Wall Street's been primarily focused on the use of aficamten in OHCM. I think there's a significant untapped opportunity from the standpoint of valuation metrics to think about NHCM as well. I think this is an area that we've already demonstrated in cohort 4 of Redwood, a phase II study, very large compelling effects on endpoints that we're now studying in phase III. So it augurs well for what we should hope to see in NHCM also.
Could you maybe briefly remind us, just in terms of the ACACIA study, this is, you know, a slightly different population, as you mentioned, in terms of non-obstructive. What are sort of the relevant clinical measures here for this population versus exercise capacity for the obstructive population?
Here, you're also looking at symptom improvement as measured by NYHA class improvements in KCCQ. These are things that these patients carry alongside of limitations otherwise, and these are the same things we measured in phase II.
Okay, great. Maybe to wrap it up here, in terms of the regulatory path, you obviously have now top lined and presented SEQUOIA. You also have the ongoing FOREST OLE data. Will those two datasets compromise the bulk of your regulatory file? Are there any other sort of ongoing obligations or you know, planned mini studies as part...
Other planned studies, everything is as has been completed, with the exception of we're still collecting some additional time points on ongoing stability batches for registration batches manufactured, where the prior stability time points are all quite predictably linear and consistent with expectations. We just have some additional time points to collect before that can be finished. Everything else is in the stage of writing up reports for what was already conducted, assembling them into an NDA. That should be starting in Q3 as part of the rolling submission, and also finishing in Q3, so that we would be hopefully aware of in Q4, the status of that as would be accepted for filing, and at that point, we'll learn if it's priority review or standard review.
Okay.
So we-
These are just the standard heat, humidity, light, and bag testing for stability batches? Okay.
Yeah, we're, we're focused on the U.S., but we're also planning on filing in Europe by the end of the year, and our partner in China, Ji Xing, will be filing this year as well. So, it's not just the U.S.
Okay. Speaking of Asia, Robert, maybe you can update us on terms of your business development efforts here to find partners for ex-China and just sort of what are the status of these discussions. I think that's been of investor interest recently.
Yeah, so we highlighted earlier this year that we have an intention to enter into a partnership for aficamten in Japan, and as could provide some additional capital. It's less about the capital and more about ensuring that aficamten is available to patients in Japan, albeit the capital doesn't hurt either. With that said, the interest has increased over recent weeks and months, such that we're looking at what's the best way to optimize here, maximize potentially as well. And for having done this recent financing and fundraising, we don't feel compelled to necessarily make this happen quickly, as much as do the right deal at the right time. I still expect we'll get a deal done, but we're entertaining some additional offers and ways that we might consider partnering in Japan for aficamten.
Our goal is to get a deal done this year, so as to be enabling of a path forward for aficamten in Japan. We're a very ambitious company, but our focus and aspirations have been on our own account to go to market in North America and Europe, and to seek a partner in Japan who might be in a better position to commercialize in Japan.
Okay. I want to give Andrew maybe a moment to talk a little bit about commercial prep in terms of where you are, in terms of key milestones, in building out the sales infrastructure and commercial infrastructure, MSLs, and so forth. And also just sort of the go-to-market plan. I think, you know, those of us, you know, who follow Bristol have probably seen a little bit of DTC here and there in terms of TV ads and so forth. And so could you maybe just speak to those two things?
Sure. So from a commercialization point of view, I'll start with the US. The US, we've built our headquarter-based commercial team, our first-line field manager team, our account managers who call on payers. All those headcount exist and are working towards commercialization. We will launch a disease awareness campaign at HFSA later this year that our marketing team has been focused on, as well as working on our overall promotional program based on the differentiation across safety, efficacy, and risk management. Our account managers who call on payers have interacted with every major payer. We cover over 90% of lives, commercial lives and Medicare lives with those account managers. They'll be going through what we call pre-approval information exchange the second half of this year-
Okay
... based on the Sequoia data, as well as the economic impact and outcome impact of those data. We will finalize our pricing and contracting strategy. We're working right now through our specialty distribution approach and our patient support programs, as well as finalizing our field force sizing. It's gonna be around 125-150. We're gonna focus on around 80% of the market in cardiology. We're kind of drawing out the territories and all the programs it takes to kind of manage a field force. We have a very disciplined kind of program management around the launch and commercialization, given this is the first product we're commercializing, but everything's going extremely well. In that the field force will be hired in proximity to launch.
In Europe, we have the European leadership in place. Our first launch will be in Germany. German leadership is now in place. Europe is a little bit different, as I think many of you know. You can launch in Germany with free pricing while you're negotiating. We will plan on launching in Germany toward the end of next year, you know, assuming regulatory approval, and then submitting our HTA, our dossiers, our value dossiers to the HTA agencies in kind of EU5 and then beyond, to make sure we get reimbursement. We've been very pleased with what we're seeing as a best analog, which is mavacamten's HTA ratings in France and Germany, and by NICE in the UK.
But we will launch Europe on a country-by-country basis, based on reimbursement, and that's when we'll hire field reps and MSLs. But Europe planning is also going very well. So we're very pleased with how things are going. We're very pleased in the differentiation we believe we'll have because of Sequoia, and feel like we're gonna be compete really well in this market.
Okay. I want to turn to maybe other areas of the pipeline, and starting with CK-586. Later this year, you'll present sort of phase I SAD and MAD data, you know, in your investigational drug for HFpEF here. So I guess, you know, how should we think about what good PK/PD data looks like from your SAD and MAD studies here? And, you know, how do you think about potential other measures, such as fractional shortening and/or diastolic response here?
Yeah. So CK-586 is a second cardiac myosin inhibitor that we're taking forward into a very, adjacent but different, population of patients with heart failure and preserved ejection fraction. A subset of those patients, there are roughly 3-4 million patients in the United States that have heart failure with preserved ejection fraction, but about 1 million of them, we think, roughly, have those syndromes and anatomy that would be resembling of the NHCM patients that we're studying with aficamten. And in phase I, we're looking at CK-586 as could be differentiated from aficamten in this population. You know, what would, what does one want to look at in phase I data?
You want to see good safety and tolerability in dose linear PK, enabling of us to potentially ensure once daily dosing in a population of HFpEF, and where one might be able to get by without having to do echo cardiographic monitoring of these patients through an uptitration phase and fixed daily dosing is, is a possibility. So you want to be able to see echo parameters that would be predictive of that, and fractional shortening and other parameters. I don't wanna front run those data by suggesting what you should see from them, other than I think you'll see in these data in latter half of this year, that which we believe is convincing to support progression to Phase 2. A Phase 2 study now as funded by Royalty Pharma, given the deal we recently announced.
Okay, great. One other area of the pipeline I want to touch is your decision or recent statements on omecamtiv mecarbil. You've indicated that you wanna do another clinical trial here, which is a bit of a reversal from your prior stance. And so I guess the question is, what insights have you gained since you presented the GALACTIC-HF results, and how will you apply these in a new study here?
Yeah. I wouldn't call it a reversal as much as we admittedly had pushed pause on the further development of omecamtiv while we collected some additional information, and now we've reactivated that program. And in large part, what motivated us to do that? Firstly, we had to know that we had aficamten moving forward, both go-to-market and broadening development program, as could be enabling of a lower cost of capital, and where that is undeniably the focus of the company. But secondly, in looking at our pipeline, where might additional risk capital be best able to unlock shareholder value where it's currently not being appreciated? And we began, over a year ago, discussions with experts in the study of heart failure, as well as with FDA statisticians and CROs, AROs.
Over the course of a year, in very intensive conversations, we got to a place where we believe the lowest-lying fruit for us, especially as we could be investing Royalty Pharma money, is in the further study of omecamtiv mecarbil. I'll remind you that omecamtiv mecarbil was studied in 32 clinical trials, and in one of those, an 8,000-patient study of heart failure patients, a landmark study among the largest ever done in heart failure, we saw a positive result. A positive result with omecamtiv mecarbil layered on top of standard of care, producing an effect on hard clinical endpoints, death and hospitalization. That, by itself, is positive, but for the fact that the effect size was more modest. Despite a relative risk reduction of about 8%, it was a P of 0.025.
FDA has a standard by which, if you're gonna try to seek approval for a single study, it has to be less than 0.01. So we had a single study, but not sufficiently P-valued to be standalone. And FDA very collaboratively engaged us in a process by which we designed a confirmatory study in higher-risk patients, where the effect size was double that in the overall population of GALACTIC. We saw in higher-risk patients in GALACTIC a 15% relative risk reduction, and that was consistent any way you measured high risk, whether that's by low ejection fraction, recent hospitalization, high BNP, low blood pressure. Any way you look at advanced heart failure, the effect size was double.
FDA, through a series of multiple interactions with us, was permitting of us to do a study of roughly 2,000 patients as a confirmatory study to validate what we saw in that 8,000 patient study, of which 4,000 of those patients had high-risk heart failure. So in many ways, this is the opposite of what you typically do, where you take a phase II study and that supports movement into phase III. Here, you've got a large phase III study, and all we're being asked to do is confirm what we already saw, and in a smaller, faster, cheaper study. So we believe this is the equivalent of being first in goal on the five-yard line and just needing to bring it over the goal line in order to see this drug also approved. And we believe it's highly synergistic.
Not only is it unlocking of shareholder value, but, from an R&D standpoint and a commercial standpoint, we believe this is gonna be providing great synergy, especially as Andrew can elaborate, for what his sales force is gonna be wanting a couple of years from now, selling this myosin activator alongside of a myosin inhibitor to the same concentrated customers.
Yeah, I mean, the customer base here, and especially the advanced heart failure physicians, were pretty disappointed in that, you know, we weren't able to bring omecamtiv to market. There's a high unmet need, especially in this population. They're continuing to worsen. You know, guideline-directed medical therapy has advanced with things like Entresto and SGLT2s, but yet there's still high unmet need. It's the number one reason that people over 65 go to the ER. It's the number one cost driver for Medicare.
And this population, as they worsen and the ejection fraction goes down below 30, physicians start to run out of treatment options, especially if people have, comorbidities like low blood pressure, high levels of potassium, renal function, where omecamtiv, given the mechanism, is neutral, where guideline-directed medical therapy often exacerbates these things, and they have to be kind of scaled down. So it's a subset of cardiology, that focus on worsening heart failure. It's a wonderful overlap for where we're going with aficamten. So essentially, we're going after a high unmet need, with clear clinical benefit that we'll have to confirm in a second trial, with really the same cost and infrastructure we have already and that we're building for aficamten. Very little increase in cost.
We may increase sales reps, you know, 25 or so, with the launch of omecamtiv mecarbil, and maybe a small marketing team. Other than that, we have the cost infrastructure covered.
I have an email question from the audience regarding pipeline, not on any direct drug, but the question is: Given obesity seems to be the most popular investment thematic here in healthcare currently, do you guys have any sort of muscle program that potentially touches on some of the issues that, that come up with obesity drugs, such as GLP-1s or anything like that?
Yeah, absolutely. You know, we've been in business for 25 years as a pioneer and a leader in muscle biology, and our expertise is in ways to augment muscle function. And that extends to skeletal muscle function, where we've demonstrated with fast skeletal troponin activators that we have compounds already validated in the clinic that can increase muscle force and power and time to muscle fatigue. And increasingly, as we see the markets evolving around GLP-1s, we believe that drug candidates, including one that will advance into the clinic later this year, have the potential to be used alongside of those to increase muscle function.
It's still early days, mind you, but we believe that, alongside of myostatin inhibitors that may demonstrate increase in muscle mass, no one has the advantages that Cytokinetics has as it relates to muscle function, and we believe we'll have lots more to say about that over time.
Okay, troponin program. Very interesting. We're coming up on time, so I wanted to maybe just address one question that also is in the investment community, just regarding your deal terms with Royalty Pharma. Can you maybe just briefly summarize the terms of your recent financing for them and in terms of you know, what was sort of the impetus and genesis of the drugs? And just sort of you know, what are sort of your various upside and downside scenarios here?
Sure. So this is the third deal we've done with Royalty Pharma. I believe that may be more than anyone else has ever done, and this is perhaps the best deal we've done with Royalty Pharma. It's largely misunderstood, and maybe that's on us a bit because the way it came out side by side with an equity financing. But these two deals are meant to be seen together as they provided a quantum of capital of over $1 billion to support our business. The equity financing raised, between that which was the initial proceeds and the shoe, well over $500 million to support aficamten.
But we wanted to, as we indicated we would, demonstrate we could fortify our capital structure, diversify our access to capital, and lower our overall cost of capital by providing additional risk capital to support advancement of the later-stage pipeline, which we did. With the Royalty Pharma deal, we have now upwards of $575 million, $250 million of which was already committed, and we have options, or they have options, on additional capital. It includes... They purchased $50 million of our equity.
They gave us some additional capital to support the launch of aficamten, but they also gave us $100 million to support the phase III study of omecamtiv, and $50 million to support a phase II study of CK-586, as well as they have an option to provide another $150 million for CK-586 as it moves into phase III. So looking at those two components together, there's been some criticism of this deal, which I think is underscoring a misunderstanding of the deal. Yes, as it relates to omecamtiv, Royalty Pharma gets paid whether or not we succeed in bringing omecamtiv to market. If the phase III confirmatory study is positive and we get approval, they get paid out of royalty.
They also get paid if it fails, and out of longer-term debt, they get paid, about a 2.3x return, as would be potentially starting in 2028 or 2030, over 18 or 22 quarters from that point, and as equates to a lower cost of capital, we believe, double digit, low double-digit market rate competitive. But you can't look at that without also considering that which they're giving us for CK-586 together, and this is where I think The Street might have gotten it wrong. They're giving us $50 million for CK-586 for a compound moving from phase I to phase II, for which if it never sees the market, they never get repaid. And another $150 million for phase III, that if it never sees the market, they never get paid.
Together, those as blended, represent, we believe, an overall lower cost of capital, where they support, with risk capital, the advancement of our later-stage pipeline. We think that that speaks to exactly what we should be doing to maximize shareholder value, deploying their risk capital in support of, later-stage pipeline programs and at a lower cost of capital.
Okay. We've come up on time here, so we'll have to end it on that note. My thanks to Robert and Andrew for joining us, and we'll end the session now. Thank you.
Thank you.
Thank you.