Thank you for joining us for the post-lunch session. We have an exciting company. With us, we have Milestone. We have Joe, the CEO of the company, and Lorenz, the head of commercial of the company, with us. Thank you very much for joining us today.
Thank you, Mohit. Appreciate all the colleagues at Wells Fargo for having us at this great conference.
Thank you. Before we get started, why don't you just introduce the company, and then those who are new to the story, tell us the investment case in the company right now.
Yeah. No, sure. Happy to. Milestone Pharmaceuticals is a company that's focused on our lead drug, which is called CARDAMYST, for the trade name, and etripamil is the generic name. Really designed prospectively from day one to be a treatment for patients living with types of tachycardias. This drug itself is at a stage where it's been approved for its first indication in what we call SVT, supraventricular tachycardia. We'll talk a lot about the launch of that indication. As I said, from day one, it's a nasal spray calcium channel blocker, and the thought was to really, wherever an IV calcium channel blocker could be used, this could be used in the at-home setting rather than the emergency department. The next indication is atrial fibrillation patients that have episodes of rapid ventricular rate, which we've started a phase III trial on.
The company's founded in Canada and has U.S. headquarters in Charlotte, North Carolina. We're a team of about 150 people right now.
Got it.
Yeah.
Again, exciting times. You have launch and you have the development, both these things going on right now. Maybe let's just focus on launch and early adoption a little bit here. It has been a few months, like you started middle of February.
Correct
Earlier this year, right? What have been the most positive surprises and the biggest challenges so far in this launch so far?
Yeah. We have launched in mid-February, so going six to seven months into the launch here.
Right.
We feel like it's a great time to take a step back, see what's worked really well, and where we need to adjust. I would say, from two perspectives, the area that we're most excited about is the initial reaction to the actual compound. When we get in front of healthcare providers, whether they be electrophysiologists, cardiologists, nurse practitioners, a very important segment of this particular market, they react very well to the actual drug itself.
It's a nasal spray calcium channel blocker. It's designed to break these episodes of SVT, and the profile in terms of efficacy and safety is really well responded to. They get the concept, they get the value prop. The idea of keeping people out of the emergency department is a good win for them, and it's a good win whether they're a healthcare provider, the patient itself, or the system in general.
That reaction has been really strong. It's very comforting and in particular, the breadth of prescribers. We're getting many people prescribing this after even as little as one or two details.
Right.
They become aware of it, and they're ready to prescribe it. That reaction's been really positive. Also, payers are reacting quite well to the drug and the value proposition. We've so far achieved coverage in, I would say, two of the main verticals out of the three main that we have on the commercial side of the business. We just announced that at the last quarterly call that we just got the UnitedHealthcare sleeve of business, if you will. The combination of the coverage and the reaction from the doctors and the breadth of prescribing are really the areas I think we're most excited about. I think when we think about what's to grow going forward, it's really breaking into, if you will, and I'll ask Lorenz to expand a little bit more, relative to electrophysiology, breaking into the cardiologists, right?
Electrophysiologists are the key opinion leader experts
Right.
who are writing a disproportionate number of the scripts. That's a great thing for us because they are so influential
across the board. But really our next challenge and opportunity is getting the word to the cardiologists, having them have it top of mind when they're in front of a patient. And remember, they're not seeing SVT patients every day, maybe a little bit more like a weekly
two or three times a month. So that remembering of it, top of mind when they have a patient in front of them, is really where we need to go and really where a lot of our programs are based going forward.
Six months into a launch, we're seeing both EPs and cardiologists write for patients, but it's more of a narrow subset of patients that I would call the most engaged patients, ones that have been newly diagnosed, ones that have recently been to the emergency department, where the patient is very animated about their episode and they want to do something about it.
Right.
That works great with the electrophysiologist because almost every patient that comes to them is considering an invasive procedure, so they're already by definition engaged. With a clinical cardiologist, which is where most of the patients are for SVT, they're managed chronically. The ones that they're currently writing for, it just represents a small subsegment.
We want to work on making sure these doctors are aware that the patients, frankly, the majority of the patients in their practice that they're seeing every week, they may not be considering for CARDAMYST because they aren't as engaged, but they have just as much need. They're just not communicating it to the doctor in the way that they might if they just came out of the emergency department. So that's something we can manage in how we message and how we ask our reps to engage with doctors, talking about the variety of patients that they treat as opposed to just going in and talking about CARDAMYST.
Is there a low-hanging fruit when it comes to cardiologists that if you target X amount of cardiologists, you'll probably cover a lot of those patients as well?
Yeah. We did a lot of work, as you know, ahead of approval to try to figure out how patients are concentrated across the different specialties.
Right.
Because as you know, we had a staged launch. We did not go out with 200 reps.
We can just carpet bomb all of cardiology. The results of that, actually, and we continue to refine it, and we are actually now using monthly claims data to look at this. What it tells us is that there is a subset of cardiologists which are within our 10,000 targets that we are going after, that disproportionately manage more patients, meaning that there are cardiologists out there that might see one or two patients a month, whereas others are seeing one every other day.
It is much easier when you are trying to generate awareness in trial to get a doctor to write for multiple patients when they are seeing multiple patients a week.
If you have a doctor that is seeing a patient every other week or every third week, by the time that third second patient comes in, they may have forgotten if the rep had not gotten in there.
Right.
We are focusing very much. This will not be an issue later in the launch, but right now, in terms of getting maximum efficiency, we are trying to make sure our reps are in front of the right doctors that see the most patients and doing it frequently enough where it becomes top of mind so that they start to write it pretty much for every patient they could write it for, not just for the one that they remember to write it for.
Got it. It is more of an awareness thing, and then once they start writing it, they will probably-
And habit. Yeah.
Habit.
Trying to form a habit.
Got it. Got it. Where does the payer sit in this equation? I know you are doing a lot of work trying to get payers on board, so can you talk a little bit about the progress there with access and payer?
Yeah. We feel like we're a little ahead of the game
relative to expectations. We announced as early as, I think it was March or April, our first call, that we received coverage from Express Scripts, right? That's one of the big three or that sleeve of coverage. That enabled us to report about 25% of commercially covered lives had CARDAMYST coverage, right? Remember, about half of this market is commercial. About half of this market is Medicare. The learning there was that the value prop resonated quite well with them. They brought it on early, then at the second quarterly call, which was in August, we had just announced getting the UnitedHealthcare book of business, plus other pull-through from Express Scripts, and even from the third payer sleeve, which is CVS Caremark, right? So we announced being over 50% coverage.
What we do see, though, and what we did learn over Q1 is, while we have 25% of commercially covered lives, it is not like a step change where it automatically converts to
Right
more scripts and better gross- to- nets, if you will. It kind of trickles through as that comes down through the plans. We will expect that now, having seen it with the additional coverage that we will expect from UnitedHealthcare and then through the rest of the year. But at the end of the day, the value proposition is really resonating, is what we are seeing. We are a little ahead of plan, and our expectation is that will continue as we continue to engage these payers, both on the commercial side and then as we move into next year, Medicare.
Got it. Completely makes sense. So at this point, it is basically getting the access. Paint me a picture when you get into next year. How should we think about this, the launch here? We all are hawkishly looking at the scripts as well, so what should we learn from those scripts and what should we not over-interpret from the scripts when we see them?
Scripts are a double-edged sword, right?
Yeah.
We see them every week. We look at them as soon as we get them, and obviously it is a big barometer. There's many other leading indicators. As we think of it, in this market where you haven't had anything new, really for decades, quite honestly, at least on the drug side, and it is a little bit of a waking up of this market, we don't see scripts as the ultimate indicator for the success of this market. We see it as a combination of scripts, a combination of influence, ability to get towards guidelines. All these things will really ultimately drive what an etripamil or CARDAMYST will be for PSVT. Then, as we think forward, coverage will help scripts but also help those revenues come through.
We view this year as a big set-up year, and with additional programs that we're putting in place, we'll see that inflection, expect that inflection of scripts to happen later in the year and into next year.
Got it.
Then with Medicare, it is just a timing thing. When does the Medicare come out?
Medicare starts as early as next year. We are in conversations with them now. Lorenz, maybe you could expand a little further. We are expecting some coverage to come right out of the gate. The hardest coverage to get with Medicare is the first year you are trying to get in.
when budgets are not set yet.
Right.
Right. We will expect to have some next year, but then it is not a one and done. You get to continue to engage them and have coverage come on at reapply for Medicare and come through the rest of the year. We will expect some to happen early in the year and then continue through, like commercial in many ways. It will be a gradual build.
Yeah. We are actively engaging with them. We have made our initial offers. We are continuing to follow up on that. We would expect them to publish their coverage decisions in the fourth quarter, because they then market that, as you know, to patients in the fourth quarter when they open up enrollment periods, trying to grab Medicare patients, and then in the new year, coverage starts.
We should know where we have been successful and not, but it is not like a one bid and done. We are actively engaging, especially with the ones that have Medicare Advantage as the majority of their book of business, because that is the plan that has both a drug and a medical risk profile. And so the cost- offset potential resonates better with them than, say, a PDP plan, which is just a drug benefit where they do not value the medical risk part of the equation.
Got it. Very helpful. So with the script, there is one more related question there. At least early on, there is a little bit of free drug program as well in the system. You are trying to form habit for these prescribers at this point as well. So how do you think about the revenue per script right now and the evolution of it over time? How should we think about that as an investor?
Yes, so another great question, Mohit. We have made the conscious decision that the best way to build muscle memory here-
for a physician is to get the drug in their patients' hands. Right? So we have, by design, provided. We do want them to write the script. We want them to, we call it ping the system, look for that coverage. But we do not want any hurdles or hurdles to be too onerous-
because we find that those scripts get caught up in queues, and then that delays getting the drug in patients' hands. So we have been very aggressive with pinging down those early scripts, and we will continue to see that through the year. On the commercial side, it will get better now that we are over 50%, but we expect that happening through the remainder of the year, let us say. Why? Because we want the drug in as many patients' hands as possible, and we do not want to trade one set of problems for the physician, which is their patients having angst over this condition at home-
with another set of not being able to get the drug.
Got it.
We've made that choice. We would expect our average revenue from a script to be low this year.
It'll get better as we get towards a little bit into Q4, but really better next year, I would say.
We will continue to do that. Now, once we get to a critical mass of coverage, once we get that third payer on-
whenever that starts to happen, we get at least more confidence that it will go through a little cleaner, then I think we will start to dial that down.
Got it.
We have guided in the past to our expectations that steady state would be to get to a $500-$1,000 net price per prescription or per SKU when we get to steady state. Obviously, in a launch year, you do not get to steady state necessarily, at least not at the beginning of it. But that is the range where we typically dollarize our models at in terms of scripts to dollars.
Yeah. Got it. The payer coverage so far, at least from net basis, is somewhere in that range. Is that fair?
No, it is below that now.
Okay
Because we are. And this requires some clarification. If it is covered, it is in that range.
Got it. That is what I am saying.
But it's getting swamped out by the amount of free drug that we're providing.
Got it. My question, the covered stuff is still in that range, basically.
Yes.
Got it. Very helpful. Now, when we look at the stock price, though, definitely the market is significantly discounting the peak potential there.
Yes.
Can you talk a little bit about what you see in this market that investors are not able to see that? And in next 12 months or so, what are we going to learn that will help probably change the perception?
Yeah. I would say that investors really look at the scripts, and the scripts are off to a reasonable start, but it's a little bit linear right now.
We expect that to inflect up. We have every reason to believe that based on our strategy of how we went out. We went out to canvass this market. We thought about this six to nine months as being that period where you really learn about this market, see how hard that muscle memory is to break.
Canvass it, and now we feel like we can dive in. We really are excited about the breadth of coverage. We like the idea that now we can start diving in with more frequency with those doctors we believe have the most patients. As coverage comes on, we start to engage patients. The better one aspect we haven't spoken about is patients actually becoming aware of this drug.
Right
Going in and asking for it with their doctors. That's just starting now. We were conscious to wait until we had at least a reasonable amount of coverage before we did that. So that's an exciting aspect of what lies ahead. I would say lastly, especially as you think out 12 months, remember foundationally, this product was really developed for two indications. Right?
Wherever a nondihydropyridine IV calcium channel blocker works, this theoretically should work, right?
Right.
We think of now, I'll say etripamil because it's CARDAMYST for PSVT.
Right.
We don't know what it'll be for AFib. It was really designed for both of these indications. Now with the start of the AFib phase III trial, 12 months from now, we'll be well into that trial. We think greater awareness of etripamil as a result of being out with a phase III trial will help the overall drug, and I think we should start thinking about the value of the product being PSVT and beyond, I would say. Lastly, just on the last piece, I know you asked about it relative to the launch, but we did just achieve the approval in China.
Right.
Right? We've always had the idea that this drug applies across the world. The value prop is the same. Really, no one wants to get treated in the emergency department for this condition. That should apply to China. It should apply to Europe, should we get the approval, again, within that 12-month period. So we think the drug has a lot of legs ahead of it.
To make patients ask for it, is there a direct-to-consumer campaign you can run? They cost a lot.
They do.
For a company your size, what can you do to create the awareness in the patient or consumer side of things?
Yeah. You want to?
Yeah. We have to clarify. Direct- to- consumer, we define that as television ad networks.
Yes.
$50 million plus a year. That is not what we are talking about here.
Got it. Yeah.
With the advent of digital media and streaming services and social media, you can actually do direct-to-patient marketing.
where you advertise for patients. Develop a relationship with them by drawing them to a website or someplace where you can get them to opt in, offer services, ask them to go see their rep, co-pay cards, that kind of stuff. That's what we've built, and we're now spending money. You build that and it's a fixed cost, and then you invest in a collection of media that different vendors can help you with that actually identify where patients with PSVT disproportionately go, whether it's social media or endemic advertising on websites like WebMD or-
or just search engines.
Right.
A mix of investments in different markets that you can then measure. You know those patients are there. Figuring out how many of them do you advertise to, how many click on an ad, how many go to your website, how many download things-
Right
and even ultimately, how many go see a doctor and fill a script.
Got it.
That is what we have started now. It takes three to six months, maybe more,
from the time you start advertising to the time you actually see a lot of scripts being filled in pharmacies as a direct result of that initiative. We think it is like adding gasoline to a fire, because if a doctor at that point is aware, they are writing for all the patients that are appropriate in their practice, you are just driving more patients
Right
earlier into their practice.
Right.
That is really the goal here, to get what you asked about before, which is sort of those determinants of acceleration.
Yeah, no one watches TV anymore anyways. This is very helpful. Let us just move on to the other indication.
For calcium CCB. Before we get there is one question we get a lot from investors, is that, why can't others do the same thing with calcium channel blockers? What is your IP/the drug device combo that gives you a moat against someone else trying to do the same thing?
Yes. I think a lot of investors think they hear calcium channel blockers.
Yeah
nasal spray, it's a 505(b)(2). It is not. As a new chemical entity, it's got composition of matter around the actual molecule. It's got IP that's been granted in the U.S. and other areas of the world around the formulation.
Then we have additional patents around the unique dosing regimen that we have, which is a repeat dosing regimen. So that forms three sets of protective patents. We also have blocking patents around it, as a result of the way we developed the drug. And that patent protection runs out to 2042, if you consider all three, and that's without any extensions from regulatory as a result of the development timeline. So, we feel it's very well protected. They would have to, if you will, get a new compound, really, to be able to deliver that-
Right
in the way that we do.
Got it.
Yeah.
Very helpful. Thank you for clarifying that.
I think the first question I had you already answered, basically why should it work in AFib? Because calcium channel blockers work in this indication.
Calcium channel blockers specifically impact the AV node of the heart.
Right.
It slows the rhythm across that AV node from the atria to the ventricles, and for AFib, the atria is going very fast. They call it quivering at 300, 400 beats per minute, and that makes its way down to the ventricle for some patients and some events, and really, a calcium channel blocker just blocks that and slows it.
Right.
When you can slow the ventricles, you bring the rate down, and you bring down symptoms.
Very helpful.
Yeah.
Can you just walk us through the data generated in phase II ReVeRA trial? What can we learn from that trial that gives you greater confidence into the phase III trial?
Yeah. ReVeRA was done in phase II in the emergency department. We always like to start there where there's a lot of measurables.
We take patients that came in that were in atrial fibrillation and a rate above 100 beats per minute, and we gave them double- blind randomized drug, single dose actually.
Right
of etripamil or placebo. We powered it to be able to see about a 20- beat- per- minute difference between drug and placebo.
And we chose that because that's relatively what diltiazem, IV diltiazem, or verapamil.
produce in the emergency department. So again, if we can replicate the efficacy of an IV verapamil in the at-home setting, that's really what we want to do. And what we saw was actually a 35- beat- per- minute drop. The placebo had five. That was a 30- beat- per- minute difference. It was highly statistically significant. Patients' symptoms were also resolved, which is very important for the phase III study. And most interestingly, again, our drug is a fast-acting but relatively short-acting drug. Works and stays on board for about an hour or so, and the primary endpoint was over that hour. But we saw the effect last out to three hours, again, with a single dose of drug. That was a unique learning for us, and we think gives it an even greater potential in the at-home setting, right?
If you can bring the heart rate down and have it last longer
the idea of another drug being put on, you can take your time to put other drugs on and have them convert the patient or continue rate reduction out with an oral drug for days if you want. The fact that it came down quickly, stayed down, and stayed down for a long period of time was really what was most amazing about the drug in the phase II trial.
Now it's a matter of really doing that transition of phase III, as we did with the PSVT program.
In phase III, did you plan to have the second dose as well? Just like
We will have the second dose.
Right.
Now, what was interesting is we saw that average rate reduction of 35 beats per minute, but there were patients that didn't respond, so we think that second dose will bring it down for those patients.
And the repeat dose works such that if you see the effect, you do not take the second dose.
Right.
If you don't see the effect, if you still have symptoms, then you take it. So we think we have a little bit more of a hedge to get even more patients to resolve their symptoms.
I'm just cutting you off every time you take a drink.
No, that's fine.
Very helpful. The one question I have is that, going from emergency department to an at-home setting, it kind of introduces another risk here.
Right.
How do you mitigate that at home versus emergency department?
Right. We've really wrapped ourselves around the axle on, again, in the PSVT program.
We had to convert or translate, if you will, from the phase II being in the electrophysiology lab, and that's in that case to the outpatient setting. We're going to use a lot of the same tried and true factors that work there. We'll go to the similar sites that performed well.
We'll go and use similar cardiac monitoring systems that worked well and avoid the ones that didn't, because we had some that didn't. We got really good at understanding how safety events are measured relative to time. We're going to take all those learnings from the SVT study and really apply them to the AFib study. In addition, for the AFib study, we have this requirement to show that patients not only reduce their rate but have symptomatic improvement as well. That's a requirement in the FDA. That's a secondary endpoint of this trial.
It is an important one to hit to get the approval. There, what we're going to rely on, again, is patient-reported outcomes that performed well in our PSVT program.
and similar PROs that performed well in phase II to translate to this phase III study that we're going to do and need that endpoint. We feel we have a lot of confidence based on the experience, is the bottom line.
The heart rate decline after the drug, is it also measured by patient? How is it like-
It's measured on this cardiac monitor that the patient puts on.
You have it too. Got it.
They do not see their heart rate.
It is measured by a third-party adjudication committee that will see the rate reduction and confirm that it was AFib with RVR. That is an important factor. Then what the rate is, and the primary endpoint is over the first 30 minutes.
Got it.
Yeah.
Yeah, there are wearables now, so you can probably do a little scan.
I'm sorry?
There are wearable technologies now, so you can probably do them and then-
Well, we don't put them in the trial. We don't preclude patients from having them, though, right?
Right.
That's just the real world.
Right.
The reason we do not include it in the trial and require it is we feel that that could potentially bias the patient, right? If you see your heart rate-
Right
either not reducing or reducing-
Right
you will feel better or not when you fill out the patient-reported outcome. There is no way to blind the patient from their own wearable, but our cardiac monitor, that is why they do not see their heart rate.
Got it.
Yeah.
Got it. Very helpful. Does FDA also care about patient-reported outcomes here? That is a secondary endpoint.
Yeah, that is one thing we want to make sure investors are aware of. We have powered it based on really the secondary endpoint.
If we powered it based on the primary of ventricular rate reduction, it would be a very small trial.
Got it.
It is a 150-event trial.
Again, we model it like we have modeled our PSVT trials, which are around the same size. We will probably enroll somewhere in the range of 400 or 500 patients to get 150 events in about two years.
Got it. AFib is a much bigger market compared to PSVT.
It is.
Do you think one trial is enough in of like 400 to 500 patients, like is that-
Yeah. There is two aspects, and I will ask Lorenz to talk a little bit about the market there. But from a regulatory standpoint, it is not the size of the market that drives the trial, it is really the regulatory pathway.
Got it.
Here, since we are using the same dose and dosing regimen as the approved dose in SVT, you are able to follow what is called the supplemental NDA pathway or sNDA.
Got it.
That's where you could rely on the safety data from the PSVT program and leverage it-
and really aim to prove efficacy in your single study. It's modeled at a p.05 powering to be able to deliver a single study. You are right, Mohit, this is a much bigger market than PSVT. Maybe you can mention a little bit about-
Yeah, I mean, not only is it bigger, but it's growing much faster too.
Right.
Latest estimates are it is about five times as large as SVT, 10 million versus two million patients diagnosed prevalence. Of those, we have done some research long ago, so we will have to revalidate this. Physicians tell us about 30%-40% of their patients with a diagnosis of AFib have episodes of rapid rate that require treatment.
Think of that as 30% or 40% of 10 million, or three million to four million patients would be our target addressable market. Then it is all about how frequently do they have these episodes? How many times would they use it a year? We do not have a lot of good information on that, but it is no reason to believe it will be that dramatically different, although it might be a little lower than SVT. Just in terms of a typical patient with SVT has 12- 15 episodes a year from work we have done. I do not think the frequency of episodes in AFib is quite that large.
It is still significantly more than one or two. I think on balance, yes, a bigger opportunity, and one that we are really excited about getting, especially because it is the same dosing regimen and everything based on the commercially available product. There is even some patients, about 20% of patients with a diagnosis of PSVT also have a diagnosis of AFib.
Got it.
There's even some overlap between the two indications in the same patient.
Got it. What is the overlap between the two prescribers? Is this the same prescriber base?
I mean, it's virtually 100%.
Okay.
It's the same docs managing both patients.
Got it.
They are just seeing where they see a handful of patients a month with SVT.
One a week, one every two weeks. They are seeing multiple patients a day with AFib.
Got it.
and treating them.
Got it. Very helpful. To that extent, it seems like a very de-risked trial as well, right? Because you've already seen the data. You have the phase II data. You have to basically execute on that.
It's a well-known mechanism of action.
Right.
You know what it works, you know what to look for on the safety side. Yes.
Right.
We think it's de-risked, and we're very bullish on it hitting, and we'll execute on that.
Got it. At this point, what are the timelines at this point?
Yeah. Again, based on our modeling off of the SVT program, we're thinking about two years-
from the start. We did just start, we just announced that a couple of weeks ago, so second half of 2028 for data.
Got it.
Then we would look to quickly file that with the FDA, and it would take a one-year review.
Got it. Very helpful. Very helpful. I think one last question I have, and I want both of you to answer this question, basically. One year from now, Wells Fargo 2027-
Okay
I hope we all are sitting here. What would make you look back at the year and say, "It was a great year for us?
Yeah. I am going to let Lorenz answer his portion around the launch, which is a big focus. Let us not forget that we are going to be along the path on an AFib phase III study. My full hope and expectation is that the launch in China is sticking off.
We are starting to see revenues from that, and it would be great to see it approved in Europe.
Right.
Right? Getting access to those patients, and we will be on the search for a partner for Europe as well.
I would expect that to be a great year from us, but maybe you could talk a little bit more about the launch a year from now.
Yeah. Looking back a year from now, I want to see broad commercial coverage. I want to see all three GPOs. I want to see well more than we have now, and where it is really not an obstacle for physicians to write based on what the insurance that the patient has.
I would like to see a fair bit of Medicare coverage as well.
Got it.
I think that is both achievable in 2027. As Joe alluded to earlier, I want to see an acceleration of prescription growth off of the current trends. I think that will be enabled by coverage in part, but also by physicians being more familiar, more aware, and writing it for five, 10, 15 patients in their practice, not just one or two. I think the patients that got a script in 2026 will start to refill those scripts in 2027, and that adds a compounding effect as well. All those things to me gives us inflection upward in trajectory, and that is how I would measure our success next year.
Awesome. On that high note, all the best, and thank you very much for joining us today.
Thank you, Mohit.
Thanks, Mohit.
Appreciate it.
Thank you.
Thanks, everyone.