Milestone Pharmaceuticals Inc. (MIST)

Executive Summary / Key Takeaways

• Milestone Pharmaceuticals is focused on developing etripamil, a novel, self-administered nasal spray calcium channel blocker for paroxysmal supraventricular tachycardia (PSVT) and atrial fibrillation with rapid ventricular rate (AFib-RVR), addressing a significant unmet need for at-home treatment options.
• Etripamil's core technological advantage lies in its rapid-onset nasal delivery, designed to allow patients to self-treat episodes outside of a medical setting, potentially offering faster symptom relief and reducing costly emergency department visits compared to existing IV or oral therapies.
• The company recently received a Complete Response Letter (CRL) from the FDA for its CARDAMYST (etripamil for PSVT) NDA, citing Chemistry, Manufacturing and Controls (CMC) issues related to nitrosamine impurities and a manufacturing facility inspection, but no clinical safety or efficacy concerns.
• Milestone has submitted its response to the CRL, which the FDA has accepted, setting a new PDUFA action date of December 13, 2025, making this regulatory decision the critical near-term catalyst for the company.
• Financial performance in Q1 2025 showed a significant increase in net loss driven by pre-launch commercial spending (now paused) and R&D, with $56.0 million in cash and investments providing runway for at least 12 months, contingent on managing expenses and potential future funding needs.

The Promise of Self-Administered Cardiac Care

Milestone Pharmaceuticals is a biopharmaceutical company dedicated to bringing innovative cardiovascular medicines to market, with a central focus on its lead product candidate, etripamil. This novel calcium channel blocker is being developed as a rapid-onset nasal spray, designed with a clear vision: to empower patients experiencing sudden, debilitating cardiac events like paroxysmal supraventricular tachycardia (PSVT) and atrial fibrillation with rapid ventricular rate (AFib-RVR) to self-treat outside of traditional healthcare settings. This strategic focus positions Milestone to address a significant unmet need in the management of these conditions, aiming to shift care from burdensome and costly emergency department visits to convenient at-home intervention.

The company's journey has been characterized by a deep commitment to research and development, investing substantially in clinical trials to demonstrate etripamil's potential. This has historically resulted in operating losses and negative cash flows, common for a clinical-stage biotech. Milestone became a publicly traded entity on Nasdaq in May 2019, providing access to capital markets necessary to fund its ambitious development programs. Subsequent financing activities, including a public offering in February 2024 and establishing an At-the-Market (ATM) facility, underscore the capital-intensive nature of drug development and the company's efforts to secure funding. A notable strategic financing move was the Royalty Purchase Agreement with RTW, promising $75.0 million upon FDA approval of etripamil, highlighting the potential value tied to regulatory success.

Etripamil: A Differentiated Technological Approach

At the heart of Milestone's strategy is etripamil itself, a potent calcium channel blocker delivered via a nasal spray. This delivery mechanism is the key technological differentiator, offering a non-invasive, rapid-onset alternative to current treatments. For conditions like PSVT, where episodes are sudden and require prompt intervention, the ability for a patient to self-administer a fast-acting therapy at home represents a significant advancement over existing options.

Current approved treatments for acute PSVT episodes, such as adenosine, verapamil, and diltiazem, require intravenous administration under medical supervision, typically in an emergency department. While oral drugs are sometimes used off-label in a "pill in the pocket" approach, they lack proven efficacy and safety for this acute use. Etripamil's design aims to provide the rapid action of IV treatments with the convenience of self-administration. Clinical data from the Phase 3 RAPID trial demonstrated a median time to conversion of 17.2 minutes for etripamil compared to 53.3 minutes for placebo, showcasing its rapid effect. The NODE-303 study further supported its real-world application and safety profile in a self-administered outpatient setting.

Beyond PSVT, Milestone is developing etripamil for AFib-RVR, another condition characterized by symptomatic rapid heart rates. Positive Phase 2 data from the ReVeRA study showed etripamil significantly and rapidly reduced ventricular rate, achieving a mean reduction of 29.91 bpm relative to placebo (p<0.0001). Importantly, patients reported significant improvements in effectiveness and symptom relief, highlighting the potential for self-management. The FDA has indicated a supplemental NDA (sNDA) pathway may be available for AFib-RVR if etripamil is approved for PSVT, potentially streamlining the regulatory path for this second indication. The company has finalized a Phase 3 protocol for AFib-RVR, although initiation is currently delayed.

The technological advantage of etripamil's nasal spray delivery and rapid action translates directly into potential benefits for patients and the healthcare system. By enabling self-treatment, etripamil could reduce the need for emergency department visits, which are costly (estimated $5 billion annually spent on PSVT management in the US, with significant costs tied to ED visits and hospitalizations). Market research suggests cardiologists see utility in this profile, indicating a willingness to prescribe to a significant portion of their PSVT and AFib-RVR patients. A recently allowed U.S. method-of-use patent further strengthens the intellectual property protection around etripamil's application.

Navigating the Competitive Landscape

Milestone operates within the broader cardiovascular drug market, competing with established pharmaceutical giants and other biotech firms developing arrhythmia treatments. Major players like Pfizer (PFE), AstraZeneca (AZN), and Johnson & Johnson (JNJ) have extensive portfolios including drugs used to manage atrial fibrillation and other arrhythmias. These companies benefit from significant scale, diversified pipelines, vast R&D budgets (Pfizer invested ~$11 billion in 2024, JNJ >$12 billion), and established global commercial infrastructures. Their existing therapies, while effective for chronic management or acute treatment in supervised settings, generally lack the rapid-onset, self-administered profile that etripamil offers.

Milestone's competitive positioning is defined by its focus on a specific niche: acute, episodic cardiac events that patients can treat themselves. While large competitors offer drugs with potentially better long-term efficacy for chronic conditions or lower per-unit manufacturing costs due to scale, etripamil's potential lies in its unique delivery and speed of action. This could allow Milestone to capture a specific segment of the market – patients who experience frequent, disruptive episodes and seek greater control over their condition. Market research indicates a substantial addressable market for etripamil in PSVT (estimated 500,000-800,000 patients in peak years) and a large potential market in AFib-RVR (up to 4-5 million patients by 2030).

Indirect competitors include non-pharmacological interventions like catheter ablation procedures, which offer a potential cure for some patients but are invasive and costly. Wearable ECG technology is also increasing PSVT diagnosis rates, potentially expanding the addressable market but also enabling alternative monitoring strategies. Milestone's strategy leverages partnerships, such as the licensing agreement with Corxel Pharmaceuticals for Greater China, which recently reported positive Phase 3 data for etripamil in China, demonstrating the drug's potential in other large markets and validating the clinical profile.

Milestone's competitive advantages are primarily technological and strategic: a differentiated product profile addressing an unmet need and a focused development and commercialization approach. However, its disadvantages are financial and operational scale compared to large pharma, higher R&D costs relative to revenue, and vulnerability to supply chain disruptions (e.g., API manufacturing in China). The recent CRL also highlights regulatory hurdles as a significant challenge, impacting the timeline and potentially requiring further investment to resolve.

Financial Performance and Liquidity

Milestone's financial results for the three months ended March 31, 2025, reflect its pre-commercial stage and increased investment ahead of the anticipated regulatory decision. The company reported a net loss of $20.8 million for Q1 2025, a significant increase from the $10.4 million net loss in Q1 2024. This widening loss was primarily driven by a substantial increase in operating expenses, which totaled $20.5 million in Q1 2025 compared to $10.5 million in the prior-year period.

The most notable increase was in Commercial expenses, which surged by 259.9% to $10.4 million in Q1 2025 from $2.9 million in Q1 2024. Research and development expenses, net of tax credits, also increased by 36.8% to $5.0 million, mainly due to higher consulting costs in drug manufacturing and regulatory activities.

General and administrative expenses rose by 30.7% to $5.2 million, primarily due to increased outside service costs.

As of March 31, 2025, Milestone held $56.0 million in cash, cash equivalents, and short-term investments.

This compares to $69.7 million as of December 31, 2024. The company's accumulated deficit reached $388.3 million by the end of Q1 2025. Cash used in operating activities was $14.0 million in Q1 2025, an increase from $8.9 million in Q1 2024, reflecting the higher operating expenses.

The company believes its existing cash and investments are sufficient to fund operations for at least the next 12 months from the filing date (May 14, 2025). This assessment is based on the operating plan, which included temporarily pausing the ramping up of commercial expenditures following the CRL. Future funding needs will depend heavily on the outcome of the FDA review, the timing and costs of commercial launch (if approved), and further development activities for AFib-RVR.

Outlook and Key Catalysts

The immediate outlook for Milestone Pharmaceuticals is dominated by the regulatory path for CARDAMYST in PSVT. The receipt of the CRL in March 2025, while a setback, was focused on CMC issues rather than clinical data, which management views positively. The submission and acceptance of the company's response by the FDA, leading to a new PDUFA action date of December 13, 2025, establishes a clear timeline for the pivotal regulatory decision.

Management has stated that 2025 is expected to be a transformative year, contingent on FDA approval. The company has built commercial capabilities and maintains the ability to launch quickly if approval is granted. A positive decision would unlock the potential to commercialize etripamil for PSVT in the large U.S. market and trigger the $75.0 million payment from RTW under the Royalty Purchase Agreement (now extended through 2025).

Beyond PSVT, the planned Phase 3 study for etripamil in AFib-RVR represents a significant future growth opportunity, targeting an even larger patient population. While enrollment for this study is currently delayed pending the PSVT outcome, positive results could pave the way for a second indication via the sNDA pathway, further expanding etripamil's market potential.

However, the outlook is not without risks. The primary risk remains the FDA's final decision on the NDA, which hinges on satisfactorily addressing the CMC issues and passing the manufacturing facility inspection. Failure to secure approval would severely impact the company's financial condition and future prospects. Even with approval, successful commercial execution in a market with established treatment paradigms and large competitors will be critical. Funding beyond the current 12-month runway will be necessary, likely requiring additional equity or debt financing, which could dilute existing shareholders or impose restrictive covenants. External factors like trade policies affecting manufacturing inputs also pose potential risks.

Conclusion

Milestone Pharmaceuticals stands at a critical juncture, with its future prospects largely tied to the upcoming FDA decision on CARDAMYST for PSVT. The company's core investment thesis is compelling: etripamil, with its rapid-onset, self-administered nasal spray technology, offers a potentially transformative treatment option for patients suffering from unpredictable and disruptive episodes of PSVT and AFib-RVR. This differentiated approach addresses a clear unmet need and could capture a significant market share by providing convenience and potentially reducing healthcare utilization costs.

While the recent CRL introduced uncertainty and delayed timelines, the FDA's focus on CMC rather than clinical data, coupled with the acceptance of Milestone's response and a defined PDUFA date of December 13, 2025, provides a tangible path forward. The company's financial position, bolstered by recent financings and the contingent RTW royalty payment, offers runway to reach this critical milestone. However, the significant increase in operating expenses, particularly in commercial readiness (now paused), underscores the financial demands ahead if approval is granted. Investors should closely monitor the FDA decision, the successful resolution of the CMC issues, and the company's ability to secure future funding and execute its commercial strategy. The potential expansion into the larger AFib-RVR market represents a significant upside opportunity, but its realization is currently dependent on the PSVT outcome. Milestone's story is one of innovation targeting specific unmet needs, facing the inherent binary risks and capital requirements of clinical-stage biotechnology, with the next chapter set to be written by the FDA's verdict in December.