MyoKardia, Inc. (NASDAQ:MYOK) Q2 2020 Earnings Conference Call August 4, 2020 4:30 PM ET

Company Participants

Tassos Gianakakos – President, CEO & Director

Jay Edelberg – SVP, Clinical Development

William Fairey – Chief Commercial Officer & EVP

Taylor Harris – CFO

Conference Call Participants

Anupam Rama – JPMorgan Chase & Co.

Tazeen Ahmad – Bank of America Merrill Lynch

Ritu Baral – Cowen and Company

James Birchenough – Wells Fargo Securities

Alethia Young – Cantor Fitzgerald & Co.

Martin Auster – Crédit Suisse

Etzer Darout – Guggenheim Securities

Jeff Hung – Morgan Stanley

Keith Tapper – Citigroup

Gobind Singh – BMO Capital Markets

David Nierengarten – Wedbush Securities

Operator

Good afternoon, everyone. I’m Michelle Corral, MyoKardia’s Head of Corporate Communications and Investor Relations. Welcome to today’s call to review second quarter results and recent business updates.

A press release summarizing Q2 results has been posted to the Investors section of the MyoKardia website. Leading today’s call is MyoKardia’s CEO, Tassos Gianakakos. Tassos is joined today by Dr. Jay Edelberg, our Chief Medical Officer; Bill Fairey, our Chief Commercial Officer; and Taylor Harris, our Chief Financial Officer. Following their prepared remarks, we will open the line for Q&A, where we will also be joined by Jake Bauer, our Chief Business Officer.

Before we begin, let me remind you that the information discussed during this call will include forward-looking statements, which represent the company’s view as of today, August 4, 2020. We undertake no obligation to update or revise any forward-looking statements to reflect new information or future events, except as required by law. Please refer to today’s press release as well as our filings with the SEC for information concerning risk factors that could cause actual results to differ materially from those expressed or implied by these statements. I’d like to now hand the call over to our CEO. Tassos?

Tassos Gianakakos

Good afternoon, everyone. This has really been an incredible quarter. I couldn’t be prouder of the team at MyoKardia, especially during these unique and unpredictable times. The second quarter accomplishments would be remarkable under any circumstances, even more so with these.

So I’d like to start today with a thank you. Thank you to our employees and their families, to the people who have and continue to participate in our studies and their loved ones who support them and to the study investigators and their staff who are working harder than ever right now. The resoundingly positive EXPLORER readout was a massive inflection for MyoKardia in some obvious and perhaps some less obvious ways. These data extend our position as the leader in the science and the treatment of HCM and put us on a clear and urgent path to registering mavacamten as the first targeted therapy in obstructive HCM, underscored by its recent breakthrough designation, which is rare for cardiovascular drugs.

The EXPLORER results reinforce our aspirations beyond HCM of being the world’s leading cardiovascular medicines company, whose mission is to change the lives for the millions of people around the world suffering from cardiovascular disease through bold and innovative science. Of course, we remain laser-focused, first and foremost, on the U.S. regulatory approval and launch of mavacamten for obstructive HCM. Our relationships and commitment to the HCM community who have been with us from the start continue to deepen, and we’re anxious to enable the physicians caring for people with HCM to be able to prescribe mavacamten.

So with our confidence high coming out of EXPLORER, let’s inventory some of the top questions that we are concentrating on right now. First, what’s the likelihood of mavacamten’s U.S. approval and when? What could the label look like? What are we doing to be ready to successfully launch our company’s first drug perhaps in a COVID-impacted environment? What do we think the potential value of mavacamten as an approved therapy might be? How do we think about the addressable patient population over time? And how do we improve on the low diagnosis rate? What could the adoption curve look like and what are the key factors that we think will influence adoption over time? How are we approaching access and availability of mavacamten? What do we think therapy might be priced at? And finally, looking outside the U.S., what are our plans in Europe, Asia and beyond? Rest assured we’ll be addressing this entire list of questions between now and launch.

Today’s call will focus on the march towards a U.S. regulatory approval in obstructive HCM as well as the ways we’re thinking of expanding mavacamten’s availability globally. While not the focus today, we plan on discussing details around our preparations for the U.S. introduction of mavacamten during a call around the time of our ESC presentation of EXPLORER data on August 31.

I do want to take a moment, though, to emphasize our growing belief that mavacamten has the potential to be a backbone therapy in HCM and maybe even beyond. We’re working hard to extend our disease area leadership across multiple dimensions that you should be aware of. First, within obstructive HCM, continued generation of clinically valuable evidence from ongoing and future clinical trials. Next, outside obstructive HCM, the continued exploration of additional disease profiles where we believe mavacamten may have benefit, non-obstructive HCM and targeted HFpEF being 2 we have discussed.

Third, the deliberate and thoughtful expansion of our geographic reach aimed at increasing the number of people with HCM who can access mavacamten globally. And finally, the expansion of clinical value with the next-generation therapies, including MYK-224. Introducing mavacamten for the treatment of obstructive HCM in the U.S. is just the beginning.

As compelling as we think mavacamten is, we are not a one therapeutic company, as you know. Our cardiovascular R&D platform continues to generate important potential therapies, including the 3 that are currently in clinical study. We won’t spend time today on danicamtiv, but I do want to highlight the unique and differentiated effects danicamtiv has shown by directly activating the left atrium along with the left ventricle. This finding has generated a lot of enthusiasm as a novel approach to potentially reduce the burden of atrial fibrillation in people with heart failure. This is a very challenging condition, which is growing at a significant rate across the globe. Our advancing program with danicamtiv is another great example of MyoKardia’s R&D approach yielding valuable and novel results, learning about our molecules first in well-defined patient populations and thoughtfully expanding into additional patient subgroups in a scientifically rigorous and efficient way, which we’ve also done successfully now with mavacamten and danicamtiv.

With that, let’s get into today’s discussion around mavacamten’s U.S. regulatory update and high-level global strategy from my colleagues, Dr. Jay Edelberg, Chief Medical Officer; and Bill Fairey, Chief Commercial Officer. Taylor Harris, our Chief Financial Officer, will then walk through our 2Q financials and provide an update on the timing of several important milestones we’d like you to be thinking about. Jay, over to you.

Jay Edelberg

Thank you, Tassos. I’m excited to share the recent meaningful progress for mavacamten. As Tassos mentioned, following positive results from EXPLORER, we’re moving forward quickly to prepare our submission of a planned new drug application, or NDA, with the FDA in the first quarter of 2021. We’re also moving quickly with the start-up of VALOR-HCM, the first of several planned studies intended to build evidence for mavacamten as a backbone therapy for HCM.

Let’s start with our regulatory update. Following the EXPLORER data readout, we reached out to the agency to arrange a pre-NDA meeting to review the data and ask questions regarding planned next steps. Based on their comments to our feed materials, it’s clear that the dossier that we are working toward is in alignment with the agency expectations, and the data is sufficient for our filing. The recent receipt of Breakthrough Therapy Designation provides further validation that we are on the right track.

As a reminder, breakthrough designation expedites the development and review of a candidate on clinical evidence of substantial improvement of benefit for existing therapies. This designation recognizes the gravity of hypertrophic cardiomyopathy and the need for new therapeutic options. HCM was also recently the subject of an externally led Digital Drug Development Day in June, which the FDA participated. This multi-hour session offered comments and testimonials from individuals living with HCM, talking about the burden of their disease and its impact on daily living, family life and their long-term health. We are proud to be able to partner with the HCM on this important event for patients, encouraging all to visit their website to view a replay of the event.

These events speak to the ongoing commitment of the FDA in this division to encourage the development of novel cardiovascular therapeutics. While breakthrough designation become increasingly common in certain disease areas, such as oncology, they remain exceedingly rare for the cardiovascular and nephrology division, where there’s been only one therapy approved that has been granted breakthrough since the designation was introduced in 2012.

Based on our data, the premeeting feedback received and the ramping of breakthrough designation, we didn’t feel it was necessary to do the form of the meeting. We have a clear path ahead of us, and breakthrough ensures ongoing access to the agency for advice and feedback throughout the submission process. We will continue to work closely with our counterparts with the FDA in the preparation, submission and filing of our NDA. We anticipate submitting our NDA in the first quarter of 2021.

Last September, we announced our partnership with Cleveland Clinics CR5 academic research organization to conduct a Phase III study evaluating the use of mavacamten as an alternative to septal reduction therapy. After being delayed due to the pandemic, we’re excited to have begun patient dosing in the VALOR-HCM Phase III clinical trial. The goal of VALOR is to show that a once-daily dose oral medication can obviate the need for an invasive surgical procedure. It’s a unique study design and one that we believe will produce exciting evidence for mavacamten’s ability to make a dramatic difference in the lives of the patients.

The VALOR study is just our next step in our commitment to HCM disease area leadership. As we look to build further value of the mavacamten program, one part of this strategy is to conduct supplemental studies beyond those needed for our initial submission package that could ultimately [indiscernible] and continue to meet the medical needs of the HCM community. Now with our accomplishment of these objectives, it will serve likely as the first of such supplemental data sets that could ultimately expand mavacamten’s obstructive HCM label.

VALOR enables us to work with several important HCM sites that are new to the mavacamten program, including the largest-volume centers, Cleveland Clinic and Mayo Clinic, that are among the dozen or so sites that have committed enthusiastically to participating to test the ability of mavacamten to help avoid the need for surgery, an important outcome for patients. The study expands the oHCM indication beyond EXPLORER, including New York Heart Association Class IV patients, and allows us to test anticipated real-world dosing approach based solely on clinically-based criteria. Indeed, we look forward to the results of VALOR as a future supplement to the NDA that we are currently preparing.

In closing, we are extremely well positioned as we move forward with our submission of our NDA application for regulatory approval in the U.S. and with VALOR as we start looking beyond our initial label to provide mavacamten to as many patients as possible for whom its distinct mechanism may provide benefit. Starting with obstructive HCM and the prospect of being able to point to a once-daily oral medication as an alternative to an elective open heart procedure will be compelling to doctors, payers and patients.

As we move ahead in the U.S., as another component, we’re thinking about bringing mavacamten to people beyond the U.S. For an update on our global strategy, let me turn the call over now to Bill. Bill?

William Fairey

Thanks, Jay. The strength of the EXPLORER data, coupled with our Breakthrough Therapy Designation, reinforces our belief that mavacamten has the potential to be a significant advancement in the treatment of obstructive HCM. We are keenly focused on U.S. precommercial and medical education activities, and we look forward to sharing more of these details on some of this work as part of our planned call around ESC that Tassos alluded to a bit earlier.

Today, I’m excited to be able to discuss our value creative strategy to bring mavacamten to patients around the world and build — and the build of our commercial footprint, a footprint that will include territories in which we establish our own infrastructure and territories for which we will engage partners for the majority of the work. Our ultimate objective is to be the global leader in the treatment of HCM with the aim of ensuring that 80% of the world’s population, at least with HCM, have access to mavacamten by 2026.

To accomplish this goal, we are currently investigating the opportunity to launch mavacamten ourselves in certain regions such as Europe. And in order to provide access to patients as quickly and efficiently as possible, we know that we’ll be working with partners in at least some parts of the world.

Here is how we are thinking about the core tenets of our global approach as well as how we’ll be evaluating the decision on a region-by-region and sometimes country-by-country basis. First, mavacamten should be a clear priority of the organization that is launching the brand in a given country or region. This disease requires focused effort to both foster and partner with the local HCM community as well as to optimize the uptake of the brand.

Second, we will establish a global brand reflective of our product’s distinct characteristics and our company’s core values, and we intend to control the image of that brand everywhere.

Next, we will take a global perspective on pricing and lead the pricing strategy by territory. As you know, many countries use a reference-based model to negotiate price. Our launch sequencing will be crucial to managing these dynamics. We will lead all decisions regarding the development of mavacamten beyond its initial indication.

And finally, we will establish a local presence in territories that are strategically important and where we believe we can optimize long-term value for MyoKardia as well as our shareholders. We know the worldwide opportunity is significant. HCM does not discriminate. It’s estimated that 1 in every 500 people will have HCM, and a significant number of those will go on to develop the obstructive form of the disease. This translates into a worldwide HCM prevalence estimated at 14 million.

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As in the U.S., current treatment options are limited and geared toward alleviating symptoms rather than addressing the disease directly, and we know that the diagnostic rates vary widely around the world. Consequently, the pressing need for new treatment alternatives that we see here in the U.S. is similar across other regions. Europe is the first region where we anticipate seeking approval outside the U.S. And as a reminder, over 50% of the EXPLORER trial population were from Europe, representing 37 treatment centers and 11 European countries. So we’ve been directly engaged with the HCM community over there for many, many years.

In February of this year, we hired Willem van Weperen as our Head of Europe and established an office in Amsterdam. He and his team, our task was continuing to develop and more thoroughly assess the HCM opportunity in both the EU and the U.K. What we’ve learned so far is that the region in HCM care is highly centralized with slight differences between countries. All major countries have centers of excellence. The KOLs in these centers often follow large patient groups on a regular basis. In some cases, several hundreds per center. We expect these centers to drive treatment initiation, while community cardiologists will likely play, in many instances, a maintenance role in the treatment of these patients.

As in the U.S., KOLs strongly agree that there’s an unmet need in HCM, and they express a desire to treat the underlying disease. They also acknowledge that HCM is underdiagnosed and are willing to educate their community cardiology colleagues. The European EXPLORER investigators, as a subgroup of this group, are eager and interested in increasing the attention to HCM among their national colleagues, particularly now that there’s a potential new therapy on the horizon.

Today in Europe, we are preparing interactions with regulatory authorities in anticipation of a potential EU and U.K. filing in 2021. We’re also engaging country-specific market access expertise to determine optimal routes to mavacamten reimbursement. We’re working with supply chain experts to prepare the pan-European distribution strategy. We’re assessing the HCM market with regard to prevalence, eligible patient pool, patient journey and patient segmentation. And finally, we’re engaging with the key opinion leaders to better understand local treatment patterns, treatment guidelines and opportunities for medical education.

Next steps for us in Europe include requesting meetings with the EU regulatory authorities in the fourth quarter of this year, completing our assessment — our commercial assessment, including our launch sequencing and go-to-market strategy for the region.

Now we anticipate following a similar model for Japan. Japan is the third-largest pharma market behind the U.S. and Europe with a highly developed health care system that encompasses care for both genetic and rare disease patients. HCM has been designated as an intractable disease, a classification for rare disease in Japan, which means the government promotes research and financially supports patients with these diseases.

We believe that the diagnosed obstructive HCM population today in Japan is 30,000. We’ve had discussions with Japan’s Pharmaceuticals and Medical Devices Agency and have aligned on a development pathway that could enable mavacamten’s registration for obstructive HCM. We plan to conduct a Phase III study in partnership with a local clinical research organization and anticipate beginning that study in the first half of next year. Over the course of that Phase III program, we will further assess the opportunity in Japan and ascertain whether value is best derived from independent commercialization efforts or in a partnership.

Now I’d like to briefly turn to China, where HCM is estimated to affect over 1 million people. There, we are inclined to partner with a locally-based entity that meets some of the criteria that I mentioned earlier. We would expect to maintain control over the brand, pricing and development programs, but we also feel very strongly that for a regional partner in the area to be successful, it must be willing to make mavacamten a clear and/or #1 priority. And while there are numerous pharmaceutical companies in the region, few have the experience with novel therapeutics that we’re looking for. And so we’re being quite thoughtful to ensure that as we go forward in China, we do so with the right partner and the correct model.

I look forward to keeping you all updated on our global efforts to bring mavacamten to patients worldwide as well as the activities we’re undertaking here to set the stage for mavacamten’s anticipated U.S. launch. With that, I’ll hand it over to Taylor for an update on the company’s financial results for the second quarter. Taylor?

Taylor Harris

Thanks, Bill, and good afternoon, everyone. We ended the second quarter of 2020 in a strong financial position with cash and investments totaling $918 million compared to $430 million at the start of the year. The increase in our cash balance came from our successful financing during the second quarter following the announcement of positive EXPLORER results, in which we raised approximately $605 million of net proceeds. So let me pause there to express our deep appreciation for the support of all of our shareholders and in particular, the participation of so many new and long-standing investors in our offering. On behalf of the MyoKardia team, we take our responsibilities to deliver on our mission very seriously, and we’re thrilled to have so many of you share in our excitement for the opportunities that lie ahead as we bring mavacamten to patients in need and apply our precision medicine approach to additional cardiomyopathy and heart failure conditions.

While much of today’s focus has been on efforts to bring mavacamten to as many obstructive HCM patients as we can, our progress across the portfolio remains steady, with several milestones anticipated between now and year-end or early next year. Starting with mavacamten in obstructive HCM. Dr. Iacopo Olivotto will be presenting the EXPLORER data in a late-breaker presentation at the upcoming ESC Virtual Scientific Congress. We’re planning a virtual IR event on August 31 to review those data with Dr. Olivotto, the principal investigator for EXPLORER, and we expect to also discuss some of the precommercial activities currently underway to support mavacamten’s introduction. Of course, a major driver of our obstructive HCM program will be the submission of our first new drug application in the first quarter of next year.

The mavacamten in diseases of diastolic dysfunction, we anticipate beginning our Phase II study in a subset of HFpEF patients before year-end. Additionally, we plan to meet with the agency later this year to review MAVERICK results and discuss mavacamten’s regulatory pathway in non-obstructive HCM.

Lastly, with respect to danicamtiv, we’re gearing up for 2 clinical studies following encouraging clinical and preclinical results presented during the second quarter, which pointed to a unique mechanism of action. A Phase II study of danicamtiv for genetic dilated cardiomyopathies is expected to begin enrollment in the second half of this year. And a new study looking at danicamtiv in patients with systolic dysfunction and atrial fibrillation is expected to begin in the first half of 2021.

In order to provide a deeper look at our ongoing efforts across research, our development plans for mavacamten and danicamtiv and preparations for the commercial launch of mavacamten in obstructive HCM, we’re planning a series of webinars starting in the fourth quarter. We look forward to rolling out details for these events in the coming weeks.

Let me now open the call up to your questions. Operator? Jeff, are you there? We’re ready to start the Q&A period.

Question-and-Answer Session

Operator

[Operator Instructions]. Just first question from the line of Anupam Rama.

Anupam Rama

Great. Just two quick ones for me. Any new analyses at ESC from the EXPLORER trial that we should be looking for beyond what we know from the top line data? And the other question that we get a lot is just the time lines on the EXPLORER filing in 1Q. So what are the gating factors to getting that done? And are there any potential things that could expedite — or efficiencies that can be gained to expedite that filing given you have so much preclinical data and the PIONEER results already in hand?

Taylor Harris

Sure. Anupam, it’s Taylor. So for ESC, we — there will be some additional data that will be presented. These are the complete results from EXPLORER. Now I will say we had a fairly extensive release at top line and so there’s — it’s not — that, for sure, was the most material set of information. So you should expect some additional analysis to be provided, and we’ll have that at ESC. But then keep in mind, we have a long-term extension component of EXPLORER that we’ve resumed enrollment in. It’s continuing to accrue patient years, and so there’s going to be additional analysis that comes out over time. So ESC isn’t the final stop on the journey of the data set that we’re generating here with this study.

On timing, we feel good about the submission timing in the first quarter of next year. I think that’s the right expectation for people to have. You can certainly rest assured we’re pushing as hard as we can. And — but Q1, I think, should be the right expectation. I’ll turn it over to Jay just to talk about the process with the agency, which certainly has been super collaborative and is aided by the breakthrough designation that we received. Jay?

Jay Edelberg

Yes. So with breakthrough, we have the opportunity for multiple interactions with the agency. We know that we’re on the right track with what we actually have already showed them, and we’re now preparing all the integrated documents there with the CSRs, et cetera, to be able to actually file this with them. And we now have the opportunity, of course, to be able to have this interaction through our preparation, through the submission and the eventual filing.

Operator

Next question from the line is Tazeen Ahmad.

Tazeen Ahmad

Tassos, I wanted to get a little bit of your thoughts on how you’re thinking about the paradigm shift that might be needed at least initially when obstructive HCM launches in the U.S. We’ve talked in the past in detail about the potential of mava to not only delay surgical ablation, for example, but in some patients, maybe even completely eliminate the need for it. As you think about the ramp expectations, how do you think doctors, at least initially, will need to be educated in order to better understand that particular aspect of it? And then a follow-up that I have is, how much can the VALOR study, based on its design, potentially increase the market opportunity for mava over time?

Tassos Gianakakos

Tazeen, good to hear from you. So let me start maybe giving a big picture view of your question and then have Bill add some specifics around the educational efforts that the team has been working on now for some time. Keep in mind, in terms of dynamics at launch, we’ve got a reasonable number of prescribers in the diagnosed population who have familiarity with mavacamten through EXPLORER. So this is great.

So generally speaking, the education there is going to be a little bit — they’re educated, and we’re building on that and they see sort of the benefits. The good news for us is we — the study was designed to measure the things that really matter to the physicians, and we’re stepping into a relatively old standard of care context. So for us, we have essentially demonstrated that mavacamten is hitting all the elements that physicians are interested in and so we feel pretty good about their willingness to want to use it. Improving of symptoms, improving of function, the safety profile was great. And so I’ll come back to your VALOR question maybe after giving Bill an opportunity here to elaborate a little on the educational piece and adoption.

William Fairey

Yes. Thanks, Tassos. We estimate a diagnostic rate today somewhere in the 15% to 20% range, and we fully expect that diagnostic rate to double over a certain period of time as we approach and get into launch. So — and to drive that are a couple of things — I mean, more than a couple of things. I mean the data — clearly, I think as doctors recognize how good this drug is in treating this obstructive form, they’re going to start looking more for the disease. But we’ve already identified some kind of barriers that exist today, and one of those happens to be the quality and interpretability of echos, right? When we talk to doctors and centers around what are some of the barriers to an accurate diagnosis, they point to echocardiography as a rate limiting step. So we’re in the process of working with the American Society of Echocardiography, AHA, ACC on ways to help improve the quality and interpretation of echos.

We’ve also — as you’ve heard us talk about, we launched a disease state campaign, which is geared at this point toward HCPs. We launched that in November of last year, and we’re continually adding. This is the exposed HCM disease state campaign, and we’re continually adding content to that. We’re working with advocacy groups, et cetera. We’re doing quite a bit, working with the major medical associations, campaign. Our RMLs are working with the field as well. So there’s a lot that we’ve done, and there’s a lot to be done, but I think the key point here is that we fully expect the diagnostic rates to improve dramatically over the launch of the drug.

If I may, on VALOR, you asked how we expect VALOR to impact — I think you asked how we expect VALOR to impact uptake. And when we were running the market research, we do these share calls, and we throw out different TPPs for physicians. And it’s clear that the TPP with VALOR does give us a lift. A lot of doctors believe that based on EXPLORER alone, we would expect to reduce the need for surgery. But I think VALOR is going to be an important addition to the evidence behind mavacamten. And it addresses a subgroup that we didn’t get a chance to explore thoroughly in EXPLORER, which is the sicker patients, right, the kind of late functional Class III, functional Class IV population. So it’s a small group, and we believe that doing the work there is the right thing to do for a company that intends to lead in this space. It will very much help round out, we think, the utility of mavacamten in that population.

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Tassos Gianakakos

Tazeen, I would add just at an overarching level, this is — VALOR is the first study we’re talking about here, and a bigger strategy for us to just continue to generate evidence that we believe is clinically valuable. So in addition to adding some of the more sicker patients, we are engaging Cleveland Clinic and Mayo here, along with a dozen or so other sites. And Cleveland and Mayo are the #1 HCM sites in terms of patient volumes that they see, and they were not a part of EXPLORER. So there are various aspects to the study beyond the impact, let’s say, to the label that might influence uptake. So we’re thrilled to be getting that study going, look for more efforts like that from us beyond, let’s say, the initial label based on EXPLORER that we’ll continue to elaborate on as we hopefully look to continue to increase the standard of care for patients with more and more evidence of clinical benefit from our work.

Operator

Next question from the line of Ritu Baral.

Ritu Baral

I wanted to follow up on the MRI cohort from EXPLORER. Can you comment on how data capture from that cohort is going, especially if there’s any COVID confounding? And what are you guys thinking now as far as timing of that data, especially in comparison to any VALOR timing? And I’ve got a follow-up.

Jay Edelberg

So you know that there was a substudy within EXPLORER, which patients actually got MRIs, cardiac MR. We’ll actually be reporting that data out in the future as we get all the data analyzed, but COVID wasn’t a negative impact to that. We’ll obviously continue to follow patients in the long-term extension and have the opportunity to extend on these data, but updates on the timing of the presentation is a little bit later on.

Ritu Baral

Got it. And is that later like later than the NDA filing? Later than that? Or I guess I’m wondering, like rough time frame, are we talking 2021, 2022 or even further out from that?

Jay Edelberg

The totality of the data that we’ve gotten from EXPLORER will be part of the filing so the specific congress that will present the data needs to be defined.

Ritu Baral

Understood. Okay. And then I want a quick follow-up on your comments about your FDA interactions. You indicated you didn’t have a precise NDA meeting. And that instead, you were moving forward just on comments to the dossier — I guess on the BDT status. Could you just comment on what you got that gave you such confidence that you don’t need to pursue a meeting, especially with the reorg and the — I mean, the investors have had a really rough road with the new office head over there in CV right now. So how confident are you with the reorg and the new personnel and what you have…

Jay Edelberg

Well, we’ve had a great relationship with the agency in this division throughout the development of mavacamten even before it got into the clinic. So with the breakthrough designation and the preread materials that we submitted for our pre-NDA meeting, the feedback that we got was extraordinarily clear. It told us that we do — that what we were preparing was in line with what the expectations were and would be good for our submission. And with breakthrough, we have the opportunity to come back and have additional dialogues with them throughout the process there. So we didn’t actually need the meeting because the result — because the feedback was so clear.

Operator

Next question from the line of Jim Birchenough.

James Birchenough

Congrats on all the progress and on the breakthrough designation. So maybe starting with that, was there one aspect of EXPLORER data that was the focus of the breakthrough designation? And one part of the end point, was it peak VO2, New York Heart Association classification, the composite? Or just a sense of what was valued by FDA in granting the breakthrough designation.

Jay Edelberg

Well, I think the FDA valued the totality of the evidence. Obviously, the primary end point and all of the key secondary [indiscernible] clinically meaningful to patients and physicians there. The highest level of statistical significance, how well it was done, I think, are important elements on top of the fact that there is incredible unmet medical need in HCM. So that all told builds a strong case for breakthrough, and we were very, very pleased to have received it.

James Birchenough

And then just following up on VALOR. With the goal of obviating the need for septal ablation surgery, what is the criteria for septal ablation surgery? And what level of LVOT reduction or other improvements would obviate the need? Just trying to understand what you need to do to actually obviate the need for surgery and what’s the indication for surgery.

Jay Edelberg

So guidelines recommend considering patients for septal reduction therapy when they continue to be highly symptomatic despite medical therapy and have a gradient of over 50 millimeters of mercury. For these patients, then the only option for getting symptomatic relief, functional improvement, is in an open heart procedure, where the ventricle is opened and you actually remove part of septum as part of obstruction or alternatively, go to the cath lab 5 and actually inject alcohol into a coronary artery. With mavacamten, we can give once-daily medicine, which we think, based on EXPLORER, will be able to reduce the gradients for the majority of these patients and give them symptomatic improvement as well and replace the need for these patients who need to go onto septal reduction therapy to get the symptomatic and the functional improvement and take them below what guidelines — the guideline criteria quite readily. As you know, in the EXPLORER trial, over 3/4 of the patients were able to get their gradients below 50 millimeters of mercury. And over half of the patients were able to get below the criteria for a diagnosis of obstruction, getting below 30 millimeters of mercury. So we’re very confident in this trial going forward.

James Birchenough

And just one final question just in terms of the prelaunch preparation. Cardiology, in general, seems very guideline-driven. And so how important are getting on to guidelines? What are the important groups that decide guidelines for obstructive HCM? And is there anything you can do now to get in front of those Guideline Committees?

William Fairey

It’s Bill. Great question. So the guidelines are driven in HCM by AHA, which we have a long-standing kind of relationship and partnership with as well as ACC. And we’re keeping an eye on their guideline flow, their timing, working with them so that when the opportunity presents, we’re well positioned to get mavacamten and EXPLORER data represented in those guidelines. As far as — yes. I was going to say, as far as importance, in the long run, guidelines are important, for sure, and we don’t have any doubt that we’re going to be included there. In the short term, whether we’re going to be as part of the guideline at launch or not is still something that we’re trying to evaluate, right? We’re trying to work with those 2 organizations to find out if there’s an opportunity for some kind of supplemental publication that we might be able to drive. I don’t see guidelines as being a critical barrier — or lack of being in guidelines as being a critical barrier to the launch of mava. There are so many patients out there already that have been on background therapy that are still symptomatic that are being referred to surgery that I think there’s enough pent-up demand there that this drug is going to be used at launch, whether we’re in a guideline or not.

Operator

Next question is from the line of Alethia Young.

Alethia Young

At some of the progress. I guess two questions. Just one, on a geographic basis, I know it’s early. Can you just kind of help us frame like kind of how the market dynamics differ or how kind of doctors think about the treatment landscape? And then second question is like maybe for Tassos and team. From a big picture, are you launching for the 100,000 claims? Are you launching for like kind of a bigger opportunity set? And I guess, I’m curious in relation to your comments around kind of your partnering aspirations and interest around the globe.

William Fairey

Alethia, it’s Bill again. Let me start, and maybe Tassos can close off if I missed some of your points. I think your first question was what are we learning about the various geographies and the nuances around the market dynamics. So what we’re learning is that there is an unmet need just about everywhere we look. We’re getting fairly deep into Europe, but we’ve also explored some of the other regions as well, and there’s clearly an unmet need there. There’s clearly a desire of — and particularly in Europe, where we’ve done the actual kind of hard-core research from physicians for something that addresses the underlying disease that can help these patients that are already and continue to be symptomatic despite standard of care. Some countries have a more centralized approach to the way they manage the patients, where patients are referred only to centers of excellence, whereas — the U.K. is maybe an example of that. Whereas there are countries like Germany, for example, where it’s not as centralized. There are centers, and they clearly will treat a number of patients, but the community-based cardiologists will also initiate therapy. So we’re working through those dynamics. So I think that kind of the upshot of it is there seems to be more similarities across these countries and regions than dissimilarities in terms of pent-up demand and opportunity. Obviously, pricing and those types of things are going to vary. So I hope I answered…

Tassos Gianakakos

Alethia, it’s Tassos here.

Alethia Young

Yes. That was exactly it. And then my second question was just on, philosophically, are you launching for kind of a smaller, the 100,000 claims, or for the bigger kind of true diagnosis that really exists.

Tassos Gianakakos

Well, you’re super kind to repeat the question. I did have it this time, Alethia, but thanks. Yes, we — you know us. We are in this for the long haul, and we’re looking to build — I mean, our strategy is to be the world’s leading cardiovascular medicines company. And we want — and that starts with HCM. So this is about really disease area leadership, build relationships around the globe with our “customers,” who are the patients, the physicians, the health authorities, the insurers are central to us. So we’re going to build those relationships directly. And I think you heard from Bill some tenets that are really consistent with that. And then kind of operationally how to, let’s say, optimize the — our ability to get them — get the therapy to patients and improve access on a region-by-region basis, we might need to customize. So it’s — we are very much a global company. This is a global disease. And when you want to bring transformative therapies that take on diseases, I think you’ve got to be prepared to play that way.

Operator

Next question is from the line of Marty Auster.

Martin Auster

I wanted to go back to something that — I think it was Bill who was talking about before when you were introducing different target product profiles to clinicians and getting feedback around potential share opportunities with different kind of pictures around that. But I’m curious if you’ve done the same sort of work either with payers or with kind of cost-effective analysis groups like ICER and things like that. I’m curious if things like VALOR or other studies, complementary studies in the HCM market that you’re planning down the road, how much influence and resonance those have in terms of either kind of supporting pricing or confirming pricing if they’re likely to kind of readout post — kind of post-approval pricing decisions are made. And then my second question would just be curious if there’s any update around timing of 224 and just kind of your strategic thoughts about that asset going forward at this point.

William Fairey

Marty, it’s Bill. I’ll take the first one, and then maybe kick it over to Jay or Taylor for 224. We’re doing a lot of work on our modeling. We’ve kicked off burden of illness work with our health economics and outcomes group. We’re in a midst of building out our cost effectiveness model, and we’ve got some preliminary information there that we’re building on. And we’re — kind of all this rolls into the overall value prop or the value dossier that we’re going to be taking forward to payers in the U.S. and abroad, ultimately. So were doing a lot of work there, and the signs of the initial work are quite encouraging.

What we’ve learned specifically in the U.S. is as we started to engage — so let me back up. We did some market research with payers testing different price points around restrictions and access about 2 years ago. And we’re comfortable — as we think about our pricing framework, we’re comfortable that we’re going to be pricing the drug at a price where payers aren’t going to be intervening in a significant way. So we’re not overly concerned about payers being the rate-limiting step to patients getting the drug based on price. We’ve begun to share the EXPLORER data with a lot of the key payers, the MCOs and the PBMs out there, and they’re quite interested in it. And they’re returning our calls and they’re very interested in learning more. And so we’ll continue to build those relationships as we get closer to launch.

So look, I feel like we’re getting close to aligning around what the pricing is going to look like based on the work we’ve described. Not yet ready or prepared to kind of guide you or the others more than we have been. We’ve been talking about kind of orphan disease-type pricing, not ultra-orphan disease-type pricing. So we’re still in this $20,000 to $100,000 per annual range. I think VALOR will help. I — the cost of these surgeries are expensive, and we’re modeling today what that will look like. So I think VALOR only gives us upside. I don’t really see any downside to VALOR at all regardless of the way it reads out. I just only see upside. Tassos or Taylor on 224?

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Taylor Harris

Yes. Marty, it’s Taylor. So thanks for the question on MYK-224. This is a program we’re in Phase I, and we have resumed enrollment in that Phase I study. 224 — our study was one of those that had to be put on pause due to COVID, but we have resumed. We haven’t reset timing guidance on when we’ll have Phase I data just because there are still challenges due to COVID and we want to make sure that we fully understand enrollment rates before we give firm guidance. But it’s moving along, and we would expect that in the relatively near future.

Now strategically, we’re still thinking about 224 very similarly to the way we’ve described it in the past. I guess what has changed over the last few months is that we’ve delivered data on mavacamten, and it’s really hard to find gaps in the mavacamten data. So we’re super excited about that, but we acknowledge that we’re still early in this. And our goal as a company is to be the disease area leader for individuals who have HCM to meet the full set of unmet need and to continue to raise the bar on standard of care for these people. And so we want to be the company to do that. We think we’re absolutely on a path to doing that with mavacamten. And as we go forward, we’re going to learn more about what the residual need is. And we’ll see as we deliver on Phase I or subsequent data sets from 224 if there is a need that it can uniquely fill. Similarly, we will have to lose one. We’ve got other programs earlier in the pipeline that we would hope could continue to round out the care for HCM patients. So that’s the way we’re thinking about it. The only thing that’s changed is, obviously, mavacamten is setting a super high bar for any therapy that comes behind in the HCM space.

Operator

Next question from the line of Etzer Darout.

Etzer Darout

Congrats on the progress. Just a couple of questions on VALOR. I just wondered if you could maybe discuss any of the powering assumptions around the treatment effect for the planned interim of the 50 patients for VALOR. And then just secondly, just wondered, the 15 HCM centers highlighted in the press release, if you could maybe talk about what percentage of sort of septal reduction procedures in the U.S. does those HCM centers represent.

Jay Edelberg

So we’re not really power assumptions for the study. We’ll get all that if [indiscernible] in likely a design paper in the not-too-distant future. We’ll discuss the timing of that later. But the time effect is powered off of what you’ve seen in EXPLORER with the ability of getting patients below 50. Obviously, we can do very well, getting them below 30 and the tolerability that you’ve seen. So that’s what is taken into consideration for powering assumptions there. We’ll get all the details of that.

When we think about the sites that we actually have participating, these are the sites that actually do [indiscernible] both surgical as well as alcohol in states that are participating in our trial. So it’s a great opportunity to engage additional centers that [indiscernible].

Tassos Gianakakos

That was Jay. He’s battling with the East Coast hurricanes now where he is so apologies for his line being choppy. But what he’s saying is — and this is Tassos here. What he’s saying is the 15 sites represent the majority of the septal reduction treatments, and that’s both the myectomy and the alcohol septal ablations that are done in the U.S.

Operator

Next question is from the line of Jeff Hung.

Jeff Hung

I had some questions on one of your earlier programs. Can you remind us what are the gating factors for advancing ACT-1 into a clinic? And is it still on track to begin in the first half of next year?

Tassos Gianakakos

Yes. Jeff, it’s Tassos here. Thanks for asking about the pipeline. And I think it’s both — we haven’t talked a lot about danicamtiv, which we’re excited about and is moving forward. ACT-1, to remind the audience, is a program that is also an activator of the proteins in the cardiac muscle cells. It’s still advancing very well in the research phase. And in terms of our guidance, Taylor, do you have that at the tip of your tongue here?

Taylor Harris

Yes. We haven’t — Jeff, we haven’t updated our guidance on preclinical programs in a while. That is something we mentioned on the call we’re planning a series of webinar events starting here in the fourth quarter. And so we will have one that’s dedicated to our research efforts, and we’ll be covering that in more detail.

Jeff Hung

Okay. Great. And how might the targeted HFrEF indications for ACT-1 differ from those for danicamtiv? Are there any learnings from danicamtiv that you can apply to ACT-1 given that there does appear to be some overlap in potential patient populations?

Tassos Gianakakos

Yes. Taylor, it’s Tassos here, if you don’t mind. I think what you’re getting at there, Jeff, is really central to our whole philosophy and why we think the platform is so powerful and efficient at MyoKardia. So rather than sort of describe to you today where — the Venn diagram of patient profiles with systolic dysfunction, I think the thing to think about is we’re generating evidence, and we do this across all of our molecules that really help us refine this as we go. And we’re in new territory.

We’ve got very thoughtful strategies about how to map the patient profiles relative to biomarkers, imaging markers like echocardiography, clinical history, symptom and function. Because what you know, I think, and most of the audience at least has heard us, if we think about 3 million people in the country that have systolic dysfunction, the way they get to that systolic dysfunction is different that is likely going to need different treatments, different approaches, different doses. So if you think of our programs, we now have — we’ve got ACT-1, we’ve got danicamtiv. Danicamtiv is aiming now at genetic DCM and then a second group of HFrEF with AFib. So we’re going to learn a lot about the differences in these patients, their underlying biology and what they need. And so ACT-1 definitely brings something different to the table. So standby on that. Just know that we are collecting really important insights probably proprietary that have not been unearthed before that are going to give us a real leg up in matching drug mechanism to disease mechanism.

And I think what we’re hoping to see, and I think will happen, is in maybe 5 to 10 years, we’re no longer talking about 3 million people with HFrEF that we categorize with one crude measurement of ejection fraction, but we’re really talking about a handful of different disease profiles that are framed much more thoughtfully and robustly.

Operator

Next question from the line of Mohit Bansal.

Keith Tapper

Congratulations on the quarter. This is Keith on for Mohit. Just have one question regarding HFpEF. So we’re all looking at the FDA decision on ENTRESTO in HFpEF, and Novartis has filed on the subgroup analysis of PARAGON-HF trial. Could you help us understand the significance of the outcome from your point of view since you’re also working on this indication? And then also, where do you think the FDA stands on approving drugs in these indications on biomarkers as opposed to waiting for functional end points?

Jay Edelberg

So let’s start the first part as the FDA’s potential approval for HFpEF based on biomarkers. And we’ve seen, I think, that there’s a definite openness to using field function end points as something that they’re open to. So I think that this is something the FDA has clearly signaled, their openness to this with their position paper last year and we really applaud them for that. That’s very much in line with where we’re going.

In terms of being able to develop a program that complements where we see our program with HFpEF, we’re clearly targeting patients with EFs that are at the higher end, where we think that we’ll be able to actually really be able to benefit that’s really quite distinct from the HFmEF population there. I think that we really need to be able to start to drill down much more specifically into the [indiscernible] of targeted diastolic dysfunction and stop lumping half of heart failure as just preserved ejection fraction. So I think that we will be able to become leaders in the space to be able to really define who’s actually been able to benefit from different therapies, and then you recategorize the disease this way.

Tassos Gianakakos

Keith, it’s Tassos here. That was Jay on the line there, just for the transcript purposes. The ENTRESTO event here on HFpEF, just keep in mind that we have had nothing approved in HFpEF. So it’s one of the more major unmet medical needs around on the planet. Diastolic dysfunction is affecting over 10 million people around the world. But what we’re doing is fundamentally different than what ENTRESTO does. So different mechanistically and back maybe to my previous answer on the previous call — or question, it’s important for us to think about designing and developing drugs that are going to have this transformative effect and eventually, hopefully, our goal is to get to disease modification. Our view is as we’re matching drug mechanism to underlying disease biology and disease driver, you stand the greatest opportunity to fundamentally disrupt disease progression and effect of the totality of what patients and clinicians are looking for, quality of life, improved symptom burden, improved function as well as hospitalization mortality.

And so that is something that when we design our molecules — and the mavacamten and danicamtiv are absolutely designed with this in mind. We believe they have that potential. My view is that’s not how ENTRESTO has been designed. There might be and there could be benefit, and that benefit in HFpEF is going to be really welcome because we need something. But there will be, in my estimation, more work to be done in HFpEF for molecules that are really mechanistically targeted.

Operator

Next question from the line of Gobind Singh.

Gobind Singh

This is Gobind on for George. Congrats from the BTD and the late-breaker. Just we had a few questions. If I remember correctly, I think EXPLORER was about a 30% population that was Class III. How representative of that is of the overall like obstructive HCM population that gets referred for some sort of surgical correction? And then should I think about it the other way around? I’m wondering if there — in the population, what percentage is not a candidate for septal ablation or surgical correction because the problem is not actually at the septum. I’m trying to figure out, is that might be something I’m wondering that would be amenable to mavacamten? Maybe it is surgical and I’m thinking about this all wrong, but it would be great to hear your thoughts on that.

Jay Edelberg

So I think that we have good results in both our Class II and our Class III patients in EXPLORER. So we got good benefit in terms of symptom reduction and our overall primary end point. I think that this will translate very well into VALOR. We’re seeing an increasing number of patients who are Class II being referred for septal reduction therapy. This had previously been mostly Class III and some Class IV, but the trend has been for more Class II. But overall, we think that the EXPLORER results will then be able to model and be able to be predictive of the really beneficial results.

William Fairey

Yes. It’s Bill. Let me just add one thing here. We think EXPLORER is highly representative of the population here in the U.S. and Europe. Given that, when we think about the symptomatic population, the breakout between functional Class II, Functional Class III is about 70-30. It’s probably a little closer to 60-40, but highly representative.

Operator

Next question from David Nierengarten.

David Nierengarten

A couple of questions on VALOR. First off, maybe I missed something, but could you explain how the randomization works with surgery versus pharmaceutical? And how do you avoid bias of the surgeon or a physician? And then second, what’s the time point for that given that, presumably, surgery patients, as I recall, experience improvements immediately, and then it might taper over time where the converse is true for mavacamten, it seems, where the improvements continue to strengthen over time? What’s the choice on the end point for timing purposes?

Jay Edelberg

So this is Jay. Let me clarify. In the VALOR study, patients who are being referred for SRT, who come into the trial, are randomized to either receive placebo or mavacamten for a 6-week duration. And then at the end of that, it will be deemed whether they either get — they elect to get SRT or they’re guideline eligible for SRT at the end of the study. And then everyone will be allowed to continue in an open-label extension.

David Nierengarten

And so during that open label, well, I guess, they meet the guidelines so that if they get septal ablation for the open-label extension, I guess, that’s really more the point is for that extension study. To support the findings that presumably mavacamten is effective, you would — you just follow them for how long? Or is there an additional time point there? Kind of how is that constructed?

Jay Edelberg

Yes. So we’ll be continuing to study them for a prolonged period of time. It’s not only to be able to avoid the need for surgery over the first 16 weeks, but it’s to actually be able to have a durable benefit and that these patients would not need SRT for a prolonged period of time.

Operator

Okay. There are no further questions at this time. Please continue.

Tassos Gianakakos

Great. Thanks, Jeff, and thanks to everybody for joining us today. Just a reminder that we will have our data being presented at ESC at the end of August, and we’ll be hosting an investor event shortly after that. So stay tuned for more details. We look forward to speaking with you then, and thanks again for joining us today.

Operator

Thank you, and that concludes today’s conference. Thank you, everyone, for participating. You may now all disconnect.



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