Myovant Waits For FDA Decision, Makes Commercial Progress

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Shares of Myovant Sciences (NYSE:MYOV) rose 12% since my previous article, a period during which the major indices and biotech stocks declined. However, the company made commercial and regulatory progress since my previous update and it also found a partner for Orgovyx in Europe. Overall, the situation is trending in the right direction and the main obstacle in the near term is the FDA’s decision on the sNDA for Myfembree for the treatment of endometriosis.

MYOV performance versus S&P 500 and XBI

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PDUFA date extended in the U.S. for Myfembree, Orgovyx approved in Europe

When the stock plunged in April due to the deficiencies identified by the FDA for the sNDA submission for Myfembree for the treatment of moderate to severe pain associated with endometriosis, there was a clear possibility the FDA would issue a complete response letter the next month.

And then, in early May, Myovant and partner Pfizer (PFE) announced that the FDA has extended the review period by three months and that the new PDUFA date is August 6, 2022. They said that the FDA required additional time to review additional information it requested from the companies regarding bone mineral density. On the earnings call, management clarified that this was part of the regular review process and that they are not sure whether the request is related to the deficiencies identified by the agency the month before, but it is plausible that this is the case.

Similar to the approved Orilissa which is in the same class of drugs, Myfembree does have a negative impact on bone mineral density, but this is an issue that can be addressed with appropriate product labeling, as it was in the case of Orilissa but also already in Myfembree’s case as it is already approved for the treatment of uterine fibroids.

There was a clear regulatory win as well – the European Commission has approved Orgovyx for the treatment of adult patients with advanced hormone-sensitive prostate cancer. Myovant was able to quickly take advantage of the approval to sign an exclusive license agreement with Accord Healthcare to commercialize Orgovyx in the EU, UK, Switzerland and Turkey, and with the right of first negotiation if Myovant decides to enter into licensing arrangements in the Middle East, Africa, and India.

Myovant received $50 million upfront and is eligible to receive commercial launch, sales-based and other milestones totaling $90.5 million, of which $15 million are near-term milestones, and tiered royalties on net sales from the high-teens to mid-twenties. Launch in Europe is expected later this year. This is a nice deal for Myovant, and ensures Orgovyx has a commercial presence in Europe.

Commercial progress – good growth in the first quarter

The fiscal Q4 2021 quarter (calendar Q1 2022) was a very decent quarter for Myovant’s commercial operations. Both Orgovyx and Myfembree registered strong sequential patient growth that was impacted by the seasonal headwinds – increased discounts and lower refill rates in the early part of the calendar year due to the annual resets of Medicare Part D plans and payer deductibles.

Orgovyx net sales in the U.S. increased 21% to $29.4 million with approximately 3,500 new patients, bringing the cumulative number of patients to approximately 14,500. There is still a very large market to penetrate into – approximately 300,000 patients in the U.S. every year.

For fiscal 2022, management expects gross to net discounts to expand from approximately 40% to the low to mid-40s, a slight pricing headwind for the year, assuming no list price increases.

Myfembree net sales were down sequentially despite the nearly doubling of commercial demand from the calendar Q4 2021. The offsetting factor is the significantly lower net price due to the January reset of commercial payer deductibles which forced the company to increase copay support to patients.

The net price should improve in the following quarters, and Myfembree has made good progress in this small market (in terms of net sales) as its new to brand prescription share has already reached 59% by the end of the quarter, just 8 months into the launch.

However, this is more a reflection of the low revenue base of the uterine fibroids market for the class and competitor AbbVie’s (ABBV) evident lack of effort around Orilissa and Oriahnn. It is also worth noting that Myovant is actually growing this category rather than taking patients from AbbVie – the GnRH antagonist market has grown 137% since the launch of Myfembree last year.

Myovant - Myfembree and GnRH class prescription growth

Myovant Sciences Presentation

The key for Myfembree is to get FDA approval for endometriosis because this is where the majority of Orilissa sales are coming from.

Financial review

Myovant has sufficient financial resources to execute its strategy – $475.5 million at the end of March, of which $434.2 million are cash and equivalents and $41.3 million of available borrowing capacity under the Sumitomo loan agreement. This does not include the $50 million milestone payment from Accord in calendar Q2. Spending will be higher this year but revenue growth should be more significant and should lead to reduced cash burn.

Conclusion

Myovant continues to execute well on the commercial front and the key event in the near term is the August 6 PDUFA for the sNDA for Myfembree for patients with endometriosis. We still do not know what deficiencies the FDA identified in April, but given the request for additional analyses of bone mineral density and the PDUFA date extension, it seems likely that this is the potential issue in the application. And this is an issue that can be addressed with appropriate product labeling.

Myovant remains well-positioned for long-term growth with Orgovyx as the primary driver and Myfembree will need endometriosis in its label to be a more significant player in the GnRH antagonist market.

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