Q2 2019 Earnings Call
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Yes.
In in seven eight Onenine one.
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On a speakerphone.
Good morning.
And to some light on making theater.
I'm, having a little bit of trouble hearing you ma'am.
And sorry, let me just close for can you hear me okay.
Yes ma'am.
Now please have the conference I'd number.
Yeah and.
Then 881918.
Thank you.
Me. Please have the spelling of your first on your last name.
I guess first name is Catherine see 88, he or I and E last names Ericsson H R I and.
Yes.
May I. Please have the spelling of your company name.
Oh, Hey, I E R.
Okay.
Please have your email.
Yes, Catherine at Era dotcom.
So.
Hi.
Thank you.
I'll join you know your line will be on a musical hold until the conference begins.
In Q.
You're welcome.
Any economic interest in Myokardia, which was a royalty on us sales of Maverick Hampton and in Y K two to four.
Which ranged from 5% to 10% based on annual sales volume.
In exchange for reclaiming this royalty interest we made an initial payment of $50 million and we'll make a subsequent payment of $30 million currently held in escrow in the middle of 2020, we are thrilled to have been able to consolidate global economic and commercial rights to our HCM franchise during 2019.
And we believe that the purchase price for this royalty stream represents a great deal from Myokardia and our shareholders. We are confident in the opportunity ahead of US which is why we decided to increase our economic interest in the program and we are now positioned with full control and strategic optionality across our portfolio.
In our third quarter financials, we plan to reflect the full $80 million consideration as an expense for PNM purposes, and as a reduction of our balance of cash and investments now.
Turning toward our second quarter 2019 financial results total operating expenses were $41.6 million, including $27.7 million R&D and $13.9 million of Gionee expense.
This reflects a year over year increase of approximately $15 million driven by R&D spending, reflecting the advancement of magic Hampton into late stage studies, including Maverick explore and map Ltd.
In Q2, R&D expense was net of approximately $10 million of reimbursement from Samit fee with the collaboration concluded this will be our final quarter to recognize R&D credits related to the matter Campton program.
We ended the second quarter of 2019 with $602 million in cash and investments, which does not yet reflect the payments in association with the royalty buyback.
We're fully funded and to execute on all of our planned operational activities into the second half of 2021.
More than a year past the expected topline data readout for explore.
Included in our runaway projection is the full registration program dramatic Hampton in obstructive HCM and the ability to aggressively advance our pipeline, including both MK 491, and in why K two to four following anticipated positive milestones starting later this year.
So far in 2019, and Weve released six month pioneer oily data.
We've completed enrollment in Maverick and screening and explore and in the months to come before 2019 draws to a close.
We will have data from maverick as well as additional longer term data from pioneer oily and data from the phase two study in why K 491.
A lot of significant progress to look forward to so with that I'd now like to open up the call to your questions. As a reminder, here with me and torso or Dr., Jay Albert and Jake power.
Thank you.
Ladies and gentlemen, if you have a question at this time. Please press Star then the one key on your Touchtone telephone.
And if your question has been answered or you wish to remove yourself from the queue. You May press the pound key.
And as a reminder, we ask that you please limit yourself to one question.
Our first question comes from the line of Martin <unk> Oster with Credit Suisse. Your line is now open.
Okay, Thanks, everybody and congratulations on the progress over the last quarter, especially the royalty purchase from Sanofi.
Todd you spoken previously about there being fairly broad potential commercial pricing range from Abbott count them as you guys think about that.
As we get closer to the explore data the analyst community is starting to kind of optimistic we look forward to commercialization and I was wondering if you could update us on how you're thinking about pricing comps and what factors would cause you to swing towards a lower or higher and.
The pricing range and then just in general beyond exercise capacity improvements and explore what data do you think will be seen as most valuable by conditions and repair communities in that data set.
Thanks.
Hey, Marty yes. Thanks, the early for us to really comment too much on pricing given where we are right now very dynamic context as we all know I think the main driver for us and what we're focused on is creating the evidence that is going to really illustrate to the ecosystem that this is a this is a valuable therapy, we're talking about introducing a product. The first one that is going to be targeting the underlying cause of disease in the disease area that is really one.
With inadequate option. So we like that context, let's say from a value standpoint, the ranges for us outside outside of.
Things out of our control are really going to be influenced by the data. So looking at what our primary aims at.
Symptom improvement and functional improvement as you know we are looking beyond that.
For the program in totality around disease modification slowing down the progression of disease potentially reversing the progression of disease. These are things weve seen in preclinical models that are relevant to disease and we're starting to see any open label extension. So thats really exciting so the more of that that we are going to be able to see.
And have.
The ability to really hang our hat on I think relatively we'll see more value for the therapy as were slowing down and potentially reversing what is a progressive disease that ultimately ends up.
Taking a majority of these patients life.
Thank you.
And our next question comes from the line of re route with Cowen. Your line is now open.
Hey, guys just a shot sitting in for re too. Thank you so much for taking my question.
Now one thing that's been kind of wondering about is just from the thing about the pathophysiology. This is just disease in a lot of the efficiency. The biggest thing is kind of written yet burden and risk of the sudden cardiac death.
And your open label extension studies or even in the explored trial will you guys be exploring kind of burden of arrhythmias are.
No risk of like non sustained ventricular tachycardia or those kind of measures as well.
Jay So it's a great question and we'll be looking at the overall rhythmic burden there with a range of different modalities.
I think the thing that's most promising that we see today is that reduction in the left ATRIO volume size that was reported out in the only set and we'll continue to follow it out over the course of time, we know about the correlation of left ATRIO volume too.
Burden so were really very very excited about what we're seeing.
Thank you.
And our next question comes from the line of Jim Birchenough with Wells Fargo. Your line is now open.
Hi, guys. Congrats on all the progress question on Maverick and just.
Expectations relative to what we saw out of the pioneer study.
Trying to understand if we should expect baseline characteristics to be similar in terms of baseline Ti Vo two in New York Heart Association classification, just want to make sure that these are patients that have the potential potential to show similar benefit as we saw in pioneer and and then in terms of expectations are we just looking for correlations between either plasma exposure or echo parameters and some of those clinical endpoint. Thanks.
Hey, Jim Yes, so the baseline characteristics between the pioneer population and Maverick are very similar we check those Jay and his team here looking at those and.
They are similar we can tell you that straight away.
You know the this an important study for us Maverick its got two dimensions to it that for us are really exciting and.
Have the potential to create value along the lines of expansion of NAV ACAMS as potential use in the non American patients as well as starting to really give us.
Strong evidence in a study constructed like this around improvements in diastole, which moves us into half half in those areas, which as we've touched on in the prepared remarks, maybe one of the biggest remaining unmet needs.
On the planet is helping folks that have diastolic dysfunction.
So we're feeling very good about the study's design and enabling success, we expected to be successful and maybe Jay Thats, a little bit more about what success looks like in Maverick.
Because this is a dose ranging study we're going to have patients at a range of different PK. So we're going to be looking for those patients who get the most benefit based on functional class. The symptomatic the move in the Biomarkers, the echocardiogram and to find the profile of response and the dose.
Oh led to that response, that's going to be what successes.
Thank you.
And our next question comes from the line of I know Palm Rama with JP Morgan. Your line is now open.
Hi, guys. This is Paul fulfilling Tom Congratulations from us on all the progress on thank you for taking my question.
Just one last small the view that perhaps the magnitude of benefit on the ARPU and I'm like Joe class.
On a non obstructive population could be less than what we've seen on the abstract of HCM population.
Specifically glass from what you observed in port own.
How are you thinking about that and can you just remind us a ban on how to be thinking about the placebo Hymel Maverick.
Hi on that and what would be kind of a lumpy marry out there. Thanks, so much guys.
So when we're thinking about this we know that there is no gradient that we're going to be reducing so we're looking for the potential benefits on improving that diastolic component.
That's impaired in these patients with non destructive HCM. So we're going to really focus on the totality of the data. In addition to the symptomatic and functional improvement that we hope to see also going to be looking at those medical components in the plasma biomarkers to find that response.
So that's really where we're going to look and so we want to see that totality out that right dose concentration.
Thank you.
And our next question comes from the line of Jeff Hong with Morgan Stanley . Your line is now open.
Thanks for taking the question for last one on one learning. So have you had from an account that you can apply in diastolic heart failure and can you remind us what preclinical data you're expecting by year end.
I learned a hey, Jeff learnings from MABA camped in that we can apply to diastolic dysfunction. Yeah. So a couple of things that we know we're we're we're understanding the underlying disease pathophysiology. The mutations that cause the disease are the same how it affects the the hemodynamics in the physiology of the heart were really understand very very well and a lot of our translational models and we're assessing that and our current and ongoing clinical studies with MABA camp and so that that is a.
Repository of data around diastolic compliance and function that we're bringing back to help us really learn about magic hamptons effect in on diastolic relaxation as well as the disease itself and how diastolic dysfunction factors into it. So I would say that is those are really important insights that were getting because we're in the studies that we're in and we're collecting all this information and have of course the data sets.
In hand.
In terms of Nonclinical data that we plan on releasing between now and the end of the year I know we did there is a lot that we are lining up for the remaining roster of medical conferences, the DSC as well as the ha so be on the lookout for for that and what we're planning on sharing there.
Thank you and our next question comes from the line of a leafy young with Cantor Fitzgerald. Your line is now open.
Hi, this is <unk> on for Alethia.
For for nine one I believe we saw increases of cardiac contract I guess from 5% to 20% higher exposures in phase one.
Just wondering if you could provide any context around a potential range of what we could see in the phase two and then also any key metrics that we should be looking at one where increasing contract Tony.
Yes, you bet you bet. So for nine one is a valuable valuable drug candidate asset for us that you'll be hearing more and more.
From us about we haven't talked a whole lot about it so far given all the great progress that we want to update on NAV of Camden.
But towards the end of this year, you're going to get data from our ongoing phase two study.
And a little bit more about our intended plans to advance the program into targeted segments, where we think there's a lot of opportunity. We think here we're talking about.
Patients that have impaired assist Ali function. There are several targeted subsets that were keyed in on and we'll share more of how we plan to pursue creating value for patients.
On that as we released data later this year.
I hope youve accurately characterize the data that we find encouraging from phase one we're seeing improvements in stroke volume and importantly, what we think gives.
For nine one best in class potential in myosin activation is the fact that we're able to we're seeing so far we've designed a molecule to increase cardiac output stroke volume contractility without impairing diastole and that's really important so that is a signature feature of four nine one's mechanism. So we'll be sharing then information around diastolic function, while we share data like the data youve referenced that speaks to improvements in CES dollar function as well.
Thanks, that's helpful.
And our next question comes from the line of Gobain Singh with BMO capital markets. Your line is now open.
Hi, guys. Congrats on another quarter or this is going on for George Farmer is two questions was the royalty buyback from Sanofi competitive process and if so maybe you could just share any details how many parties anything along those lines and then the second question was.
Was there any reason why the patient enrollment was increased and explore and how are those patients going to be treated in the primary secondary analyses. Thank you.
Yeah. So Jake is on the line and we will have him answer in a second the the royalty question and maybe Jay a little bit about the enrollment.
So it exceeds so the enrollment was really quite robust in so many patients came into screening at the end of the trial.
That we wanted to make sure that all patients who entered screening were given the opportunity to enroll so we'll be able to handle those as part of the overall protocol will be handled is we would be the primary and secondary endpoints without any difficulty and a lot of the I think some of that acceleration of the timing and the numbers and patients in screening I think it really underscores the enthusiasm that's out there from the community. The investigators in particular are very hopeful for a new therapy to patients are there at the clinical sites and so for us it's gratifying to see that translate into.
More patient numbers and accelerated timeframe from the study.
Jay maybe hand, it over to you.
Yeah on the royalty on it we're excited to receive the full rights back we feel it's captured value in the transaction with respect the process.
I'm not sure how competitive was what we tried to act quickly when we found out Santa fee eligible I. It was going to monetize that asset. We do believe there was another bidder, but we moved quickly before there was a broad competitive process.
Thank you very helpful.
Thank you.
And our next question comes from the line of Mohit Bansal with Citigroup. Your line is now open.
Great. Thanks for taking my question and congrats on all the progress.
From my end is that.
Just wondering so on not stuck to try to.
We have discussed in the past that CV compliance is going to be.
A key part of slide Maverick Canton, Mike well yeah.
So based on your preclinical, but do you think the amount of CV compliance. We are witnessing here would be enough to show a benefit into the timeframe. We are looking at a in the Maverick trial. Thank you.
So I think the most compelling data that we should look at is actually the data from the pioneer or where are we in the oil Lee we see that.
We're seeing improvements in both plasma and Echo Biomarkers.
Even after the gradient has been relieved so specially that reduction in L.A. volume size or even after the ratings have been reduced.
It is a good indirect indicator of the potential benefits in diastole and so we would expect that since they share the same genetic predisposition that we would hope that those would be able to translate into the patients who never have an obstruction with non obstructive HCM.
Thank you.
And I'm showing no further questions at this time, so with that I will turn the call back over to CEO Tousled Gianakakos for closing remarks.
Thanks, a lot Andrew this is such an interesting point in time for Myokardia. We are incredibly energized as you can imagine about all the opportunities we have before us to make a meaningful difference in the lives of people with serious cardiovascular disease, starting with HCM.
Now less than a year away from pivotal phase three data from ever camp than we're gearing up for the regulatory process and potential commercial launch and between now and topline data in the second quarter of next year, we expect to build further value through the two important phase two study readouts, we've talked about today for 491 and unobstructed with Mab with Maverick.
So I look forward to keeping you updated on the progress across our portfolio and hope to see many of you over the next month or so as we participate and several of the upcoming investor and medical conferences.
Thanks to everyone for your time today and for your continued support of Myokardia and our mission.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect everyone have a wonderful day.
[laughter].