Good afternoon, everyone. Thanks for joining us. My name is Brandon Folkes. I'm one of the equity research analysts here at H.C. Wainwright. Next up we have a fireside chat with Milestone Pharmaceuticals, and joining me from Milestone is Joseph Oliveto, CEO, as well as Lorenz Muller, Chief Commercial Officer. Joe, Lorenz, thanks very much for joining us. I'm gonna dive right in. You know, I wanna talk about the launch of CARDAMYST. Can you just talk about sort of PSVT, the need you're seeing out there in the PSVT market, and the CARDAMYST launch to date?
Yeah. Well, thanks, Brandon Folkes. We always love coming to the H.C. Wainwright conferences, this is my first time at this one, so really, really great venue and great set of meetings for us today. Yeah, I think just as a refresher for those around the table, PSVT, it stands for paroxysmal supraventricular tachycardia. It's a bit of a mouthful. We've been really dedicated to this indication for the better part of six , seven years now as we've gone through phase III development, now gotten the drug approved just in December, so we're very proud of that. Really to understand this investment thesis, you have to understand the medical burden that these patients face. It's characterized by very rapid heart rates, not uncommon to be above 200 beats per minute, and highly symptomatic events.
Patients don't know when they're gonna have these episodes or, as they call them, attacks, and how long they're gonna be and how burdensome they're gonna be. Really foundational to our intervention is being able to put control in the hands of the patients such that they can live their lives and not have to worry about when the next event's gonna occur and needing to go to the emergency department, which is where the standard of care is currently provided. That's what we've been all about. We've spent a lot of time on patient education materials, and now, very proud to say we have a product to help these patients. Yeah.
Fantastic. Yeah, we see the scripts obviously sort of going up every week. It's actually very positive. You know, what has gone well to date in the launch? You know, what are some of the areas that in a launch like this may take a bit of time?
Every launch is unique, and ours is as well. We're really excited about the launch. We're excited that we're able to get drug into the market within essentially six weeks and get the sales force up and running within eight weeks, and that's thanks to Lorenz and his team. I think the things that have gone particularly well from what we can see now, and sincerely, we're only pretty much three months into the promotional launch, is that the reaction to the drug has been extremely positive. I know we'll talk about that a little further. From the eyes of the HCPs, and we're primarily talking about cardiologists now, some, the rhythm experts, electrophysiologists, but also nurse practitioners, really, it doesn't take them long to get what this product is about.
CARDAMYST is a nasal spray calcium channel blocker. They're used to seeing IV calcium channel blockers work for this. The fact that this can be delivered at home by the patient wherever it occurs, is an easy concept to get. That's really exciting to see that within one call, we've seen physicians and nurse practitioners, et cetera, write the scripts for their patients. That's going exceedingly well. I'd say also, from the payer side, the fact that we're able to get traction from payers, we felt good going into the approval, to actually see Express Scripts, one of the major PBMs for commercial payers come through within essentially a quarter, is surprisingly positive for us.
I think the uniqueness for us is, and for this particular launch is this is an area that hasn't had any new developments in three decades. Last drug at least developed and last drug approved was adenosine in 1989. That was the last advancement. What we're gonna need to do and the opportunity ahead of us is to be able to change treatment patterns. All of us get set in our ways, right? It takes a little bit of time to change treatment patterns. It takes them remembering that there's a new drug available before they actually go and write. They get it. They understand that this drug in a patient's pocket is a good idea. When we tell them that, you know, and maybe they see a patient in a week or two, it may not stick, right?
It's a little bit of what we're learning need to go back in and really give them reminder calls is the way we think about it. The last thing that I think every launch faces, but we're facing as well, is that idea of coverage. While we're happy to get Express Scripts, we still have a lot of coverage to go. Physicians very naturally think about what is the cost of coverage. It's gonna be a lot of work for me to get this drug for my patients, so. That, those are the where areas I think of opportunity.
The only other tailwind, Brandon Folkes, is, you know, that we announced on the earnings call that we've had over 600 scripts written since the beginning of the launch. Half that was in the most recent month, it came from 400 unique prescribers. We're not seeing a narrow group of doctors write a lot, like early adopters or friends and family, whatever. We're seeing pretty broad adoption right out of the gate, I think that portends well for being able to build both reach and or breadth and depth of prescribing going forward.
When we think about breadth and depth of prescribing going forward, you know, it always is a focus and a balance between the two, right? How should we think about growing breadth and depth, you know, the priority for 2026 and, you know, as we live and die by metrics from where we sit, right, how should we think about sort of what's successful in terms of breadth versus depth this year?
Yeah. Yeah, the short answer is you need both. As I just mentioned, we're excited to see early breadth, and that means doctors after a detail or two, many of them that's all they've gotten since the approval, harder to get into cardiology offices, have already written a script that got filled. Not only did they get it written, but they were able to prosecute it through prior auths and medical exceptions, that's very promising. That allows our reps who have large geographies to be able to find additional doctors to get started on the journey, also go to back the ones that have written, work with that office, and continue to identify new patients and get more depth. Unfortunately, the answer is you have to do both, and I think both are important.
Right out of the gates, if you gave me a choice, I'd rather have breadth and depth in the first few months, and then build into a, you know, more penetration as we get into the launch year.
Mm-hmm. I think the one thing we also learned from the clinical trials is patients that use the drug had a good experience.
Doctors like to provide drugs that provide their patients a good experience, and it's not that common in cardiology where you have these really severe symptomatic events. A lot of cardiology is preventing events that are gonna happen in two or three decades, right? Heart attacks that are gonna happen are MACE events. This is very tangible. A patient will call their doctor and tell them about their experience. We think that's gonna be gold, and as physicians and nurses learn about that, they're gonna remember and wanna prescribe it to their other patients.
Granted, it is early in the launch, but are you hearing that sort of feedback from prescribers and patients at this stage of the launch? Are you hearing anything in the field that, you know, the drug is acting like it did in the clinical trial?
Yes.
Okay.
It's what causes you to get up in the morning some days.
Yeah.
I often get one late on a Friday 'cause my head of sales knows that it helps late on a Friday, and it's like, "Great note from the field here and there." They are anecdotal. I don't wanna put too much emphasis on it, but it is the reason It's our why. I mean, we're not, you know, selling widgets here. We're actually improving patients' lives, and for a patient to take the effort to send in a note or call their healthcare provider, usually the nurse, and that to make it back to the CEO, I think that says a lot.
Yeah.
So.
Absolutely. In terms of what's driving prescriptions at this stage, right, how much of it is the physician recommending it to the patient? You know, are you at this stage of the launch, you know, are patients aware of CARDAMYST? Is there word of mouth happening? You've had any sort of feedback that a patient's come in and heard about CARDAMYST and asked their physician? Can you just talk about what's driving prescriptions today, and then how should we think about that evolving over time?
I mean, I'll start anecdotally, then I'll let ask you to expand on our strategy. There was a little bit of pent-up demand, right? You had patients in studies tracking this, waiting for this. In the beginning, there were some really important patient testimonials about going to their doctor, wanting it. The good news is that a doctor will prescribe it if they are asked about it 80%-plus of the time. That's some general metrics that we have in our prescriber base. We have heard about that, but I wouldn't say that drives it, right? Really what's gonna drive it is foundationally healthcare providers knowing about it and then providing that tool and option to their patients, at least at this early stage.
Once they're aware of it and that starts to happen, then there's a natural progression to informing patients.
That's really the strategy in the launch year, and we've been saying that for years, is the initial part of the launch, the majority of the investment goes toward generating awareness and trial amongst the physicians. This is unique to cardiology. Most physicians don't like to have a patient of theirs come into their office, ask for a product they've never heard of. That can irritate them. Generate the awareness and the trial, a little bit of experience first, put most of the energy into that, and then you start to pilot. Half the market needs to be woken up, meaning those patients are not actually going into the healthcare system in that year. They're fed up with the existing treatments. They just suffer at home.
There is a big opportunity to activate patients, to ask them to come in, to develop a relationship with them, and we're starting to pilot some of that this year, learn about which tactics work and not, both which ones work in terms of finding patients and acquiring them, getting them to opt in, but also then what do they wanna do once they're opted in, what kind of marketing tactics work. We're piloting that now and we'll start to deploy more of that later in the year and then really ramp it up next year.
Do you have a sense of what do you use to replace those? Is it pill in the pocket? Is it sort of a broad range of, you know, sort of therapies that were used, you know, or in particular, are you positioning it, you know, as a replacement for a specific therapy?
I don't think there's anything driving it. It's a little early, Brandon Folkes, but we have heard, and I've been in the field and I've heard the two basic use cases are with the cardiologist community primarily in terms of management across the range of what those patients are doing now, whether it's constant oral medications every day or a pill in the pocket.
Equally, we're hearing from the electrophysiologists the use of the product as their patients wait for their ablations or those patients that can't be convinced to have an ablation and/or wanna think about it a little bit. I'm hearing both in a general sense, but can't say whether either one would necessarily be driving it so far.
Fantastic. Yeah, I just wanna move into reimbursement, right? We touched on it.
Yeah.
Express Scripts came on very early on in the launch. You know, I guess maybe first up on that one, was that expected? You know, not often we see such a big PBM that early on in the launch. How do we think about your commercial contracting strategy going forward from here?
Yeah. I'll start with the high level, but ask you to really expand.
Yeah.
Lorenzo and his team have been at the forefront of this, and we felt good going into the approval, right? We've really been very thoughtful about producing the data we think that the payers would want, and it's based on their guidance over years. These are things like the cost associated with PSVT. These patients go into the emergency department, that's a costly visit. About 25% of those patients get admitted to an overnight stay in the hospital. That's real data published that actually payers can look at and interrogate. There is a cost to SVT. They weren't aware of it, and it allows for a great offset for this product. We thought we had a chance, and actually I would say Express Scripts came in sooner than expected. Maybe you could talk about-
You know, the plans and strategies as we go forward.
Yeah. As you mentioned, Brandon Folkes, the focus in the launch here has been on commercial insured patients just because typically they contract faster. Up until the contract, we can co-pay mitigate and reduce the cost burden on the patient. You can't do that effectively in Medicare or government business. That was the strategy to start with. Now we are also contracting, swapping paper with Medicare providers, but really for next year's formulary decisions. Within the commercial book of business, as you mentioned, we did get ESI at the end of March. We're now focusing on the other two big PBMs. About 80%, 85% of commercially insured lives in the U.S. are under the control of three big PBM GPOs. ESI or Ascent is the first one.
The next one is MSR, which has United and Optum under it. The third one that people would know about is called Zinc, but they probably know it more commonly as CVS Caremark or, and Aetna. That's often the order that they tend to cover drugs. It doesn't mean it always has to happen that way, but we're working with all of them right now. Not just like having, you know, Pre-Approval Information Exchange or any clinical data exchange or even budget impact models. We're at the point of contracting and discussing terms and having them really understand, you know, how to use the drug, getting clinical support, and then actually pulling that through into actual coverage decisions either later in the year or early next year.
Yeah. Getting that coverage has two impacts. One is obviously on making it smoother for the patient to get it and better gross-to-net likely. For the physician who has it in the back of their mind, this idea of how much work is it for me and my staff and my office to get the patient the drug, it's very clear that with coverage will come, I think, an opening up of the writing of the script as well.
I want to talk about refills.
Right? I think you've been very helpful in terms of sort of putting out a lot of data recently as well as sort of at your commercial day last year. You know, you've been conservative, right, in terms of managing expectations on refills, but we've actually seen early refills, right, which seems to be very promising. Can you just talk about 1, you know, what's driving a lot of those refills at this stage? Secondly, you know, insurance, how does insurance feel about refills? Maybe just loading on top of that, you know, why would a patient, if they have success with CARDAMYST, not want to keep a CARDAMYST at work, home, and in their car, as you may a rescue inhaler for asthma or even an EpiPen?
Yeah. I'll start again, top level, I agree with you. I don't know why you would want it in the car.
We know they would actually. They told us that.
Is that within an insurance, a viable insurance framework that patients could be getting 3 prescriptions in a short period of time to have that set up?
I'd say yes and no.
Okay.
It depends on the insurer really. If you go to the value prop, right.
Yeah
You think about, you know, let's just say three of these, one in the office, one at home, and one in your briefcase, right? That's a certain expense. That well offsets the cost of emergency room visit.
Yeah.
Definitely an admission, right? We know about 20% to 25% of these patients do go to the emergency department. You can do the math on that. That's why when we talk about not only coverage, but quality coverage, that means without a lot of onerous oversight, and that includes a willingness to include things like quantity limits, but not three . We're hoping at least six, right? You know, some patients need six of these in the course of a year. What they don't want is the patient, the insurers don't want 66, right? Let's narrow it down and be very accepting of the idea of, we price this such that a patient uses it a handful of times at steady state.
In the beginning, it's probably one to two. Again, out at steady state, maybe a handful of times per year. It's priced that way. It's kind of contracted with the payer that way. We think that's a great value prop. If a payer's not willing to accept that's our job to go in and educate them. We have seen patients walking out of the office and showing it on social media that they have three. One patient was going on a trip to the Philippines, was gonna be there for a month. They wanted a few of these, right? You don't want to get an SVT episode on a flight to the Philippines. That's a horrible time to get it, right? When you're there, not wanting to go to the hospital and mess up a day, right?
We think it's a logical approach. Physicians are sometimes cautious. They often like to say, "Start, see how it goes. Give me a call. I'll write you a refill." There is the whole bell curve of life, and we're dealing with that right now.
Fantastic. I want to just change gears quickly to AFib.
Right? sort of big news there from that Milestone recently.
Yeah.
Right? Is the intention to start up that trial again? I guess maybe just sort of a few questions. You know, why now? What are the gating factors to starting the study?
Yeah, I'd love to spend a couple minutes on the study itself.
Yeah
For those that are following the story, but need a little refresher. Yeah, we announced at the last quarter that we are starting. Our whole goal was to let's get it over the finish line for SVT, get the launch under our belt, and restart the study. It's one thing to start the study because it's in your corporate plans. It's another thing when your customers are really pressing you to start a study. The electrophysiologists especially are asking us when are we gonna see this for atrial fibrillation. They're aware of the phase II data, which I'd love to mention, are anxious to study it for phase III, and that's what we're gonna do. Our expectation is that we'll get that study started with first patient in the second half of the year.
What we're doing right now is essentially labeling drug, engaging sites, getting sites contracted. All that startup cost doesn't cost a lot of money, but we wanna get that going so we can get the study really initiated with first patient second half. We think it's about a two-year study to data, and it's about a $30 million-$40 million ticket item that'll be spread out over probably three years or so. It's not a huge burn on the company, but it's an important aspect of showing the growth of the product and really satisfying some of our key customers. Just by way of pressure, the phase II study really outperformed. This was a study done, we reported 2 years ago, it was done in the emergency department.
We were looking to show a 20 beat per minute drop in blood, in heart rate, actually. The study performed so well, it showed a 30-35 beat per minute drop in heart rate. It was really remarkable in terms of the drop, how fast it happened, and it was prolonged. That was a single 70-milligram dose. We think the drug has a lot of potential, especially with the repeat dose regimen where you can take one , and then 10 or 15 minutes later, you take the second one, could even extend it longer. We think it's got a lot of potential, and more importantly, our healthcare providers really are looking forward to seeing the data.
Great. Just wanna open it up. Anyone in the room have any questions? Just in closing, you know, the patient registry, right? You touched on some of the PSVT. Just for context, bringing it back to PSVT, patients getting admitted. Is that sort of real world data going to be included in the patient registry, further validate the health economic benefit here of CARDAMYST? What should we expect from this patient registry?
Yeah. It's part of being a leader in the field.
Yeah
number one, and important data in terms of real world data. I love your exact words, Brandon. Real world data on whether CARDAMYST versus not on CARDAMYST, what does it mean for healthcare resource utilization, how are patients feeling about it? Being able to publish on that is really what this registry is all about. We think that's an opportunity, again, to be a leader in the field and to really carry the flag for those patients who are in need of help for their SVT.
Yeah. Definitely. Yep. We're running a bit out of time. Congrats on the launch today, team, thank you for being here.
Thanks so much, Brandon Folkes.
Thanks, Brandon.
Thanks, everyone.