On February 16, 2017 Cytokinetics, Inc. (Nasdaq:CYTK) reported total revenues for the fourth quarter of 2016 were $33.1 million, compared to $9.8 million, during the same period in 2015. Net income for the fourth quarter was $7.2 million, or $0.18 and $0.16 per basic and diluted share, respectively (Press release, Cytokinetics, FEB 16, 2017, View Source;p=RssLanding&cat=news&id=2246868 [SID1234517762]). This is compared to a net loss for the same period in 2015 of $9.2 million, or $0.24 per basic and diluted share. As of December 31, 2016, cash, cash equivalents and investments totaled $163.9 million. The 2016 year-end cash and cash equivalents does not include $100 million received from a royalty monetization deal with Royalty Pharma that closed in February 2017.
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"2016 culminated with another productive quarter marked by progress and momentum across our pipeline of late-stage muscle biology-directed drug candidates," said Robert I. Blum, Cytokinetics’ President and Chief Executive Officer. "With two drug candidates in Phase 3 clinical trials and a third advancing in multiple Phase 2 clinical trials, we are executing well against our Vision 2020 strategic initiative, alone and in collaboration with our partners. We expect 2017 to be a pivotal year highlighted by the expected results from VITALITY-ALS, our Phase 3 trial of tirasemtiv, as well as key data from our Phase 2 trial of CK-2127107 in patients with spinal muscular atrophy."
Recent Highlights
Cardiac Muscle Program
omecamtiv mecarbil
Announced the start of GALACTIC-HF (Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure), the Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil which is being conducted by Amgen, in collaboration with Cytokinetics.
Announced additional results from COSMIC-HF (Chronic Oral Study of Myosin Activation to Increase Contractility in Heart Failure), a Phase 2 trial evaluating omecamtiv mecarbil in patients with chronic heart failure, showing that omecamtiv mecarbil improved left atrial (LA) structure and function in patients with chronic heart failure with reduced systolic function. The results were presented in a Clinical Poster Session at the American Heart Association’s Scientific Sessions 2016 in New Orleans.
Completed enrollment of a Phase 2 clinical trial of omecamtiv mecarbil in Japanese patients with chronic heart failure.
Skeletal Muscle Program
tirasemtiv
Announced the first patient has been enrolled in VIGOR-ALS (Ventilatory Investigations in Global Open-Label Research in ALS), an open-label extension clinical trial designed to assess the long-term safety and tolerability of tirasemtiv, in patients with ALS who have completed their participation in VITALITY-ALS.
Announced new data at the 27th International Symposium on ALS/MND in Dublin, Ireland including:
– Baseline characteristics from VITALITY-ALS showed patients enrolled in VITALITY-ALS are similar to those from BENEFIT-ALS and other recently conducted clinical trials in patients with ALS.
– Results from the first part of a research collaboration to refine and prospectively validate a computer model developed by Origent Data Sciences to predict the course of ALS disease progression analyzing data from the placebo groups of earlier clinical trials in patients with ALS (including BENEFIT-ALS, Cytokinetics’ Phase 2b clinical trial of tirasemtiv) and the open-access Pro-Act database. The analyses showed that the Gradient Boosting Machine (GBM) algorithm was the optimal model to predict slow vital capacity (SVC) at times subsequent to baseline and that forced vital capacity (FVC) records could be used to predict slow vital capacity (SVC) scores of ALS patients using this machine learning technique.
– Results of an international physician survey on the use of non-invasive ventilation (NIV) in the treatment of ALS presented by Terry Heiman-Patterson, M.D., Director of the Center for Neurodegenerative Disorders, and Professor of the Department of Neurology at the Lewis Katz School of Medicine at Temple University, revealed similarities in best practices for initiating NIV in North America and Europe, and differences in the time to initiation.
CK-2127107
Continued enrollment of Cohort 1 in the Phase 2 clinical trial of CK-2127107 in patients with spinal muscular atrophy (SMA), conducted by Cytokinetics in collaboration with Astellas.
Continued enrollment in a Phase 2 clinical trial of CK-2127107 in patients with COPD, conducted by Astellas in collaboration with Cytokinetics.
Pre-Clinical Research
Continued research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activators and under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. In addition, company scientists continued independent research activities directed to our other muscle biology programs.
Announced the publication of preclinical data characterizing a smooth muscle myosin inhibitor that induces smooth muscle relaxation. The manuscript titled, "Highly Selective Inhibition of Myosin Motors Provides the Basis of Potential Therapeutic Application," published in PNAS, Proceedings of the National Academy of Sciences, illustrates a mechanism of action with potential relevance for diseases of smooth muscle hypercontractility such as asthma and chronic obstructive pulmonary disease.
Corporate
Received a $26.7 million milestone payment from Amgen coincident to the start of GALACTIC-HF (Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure), the Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil which is being conducted by Amgen in collaboration with Cytokinetics.
Announced Cytokinetics has been selected for addition to the Nasdaq Biotechnology Index (NBI) as part of the annual re-ranking of the NBI.
Announced that Cytokinetics has agreed to sell to Royalty Pharma a 4.5% royalty on potential worldwide sales of omecamtiv mecarbil for $90 million and $10 million of Cytokinetics common stock.
Announced that Cytokinetics agreed to exercise its option under its collaboration agreement with Amgen to co-invest $40 million in the Phase 3 development program of omecamtiv mecarbil. As a result, Cytokinetics is eligible to receive an incremental royalty of up to 4% on increasing worldwide sales of omecamtiv mecarbil outside of Japan. Exercising its option and co-funding will afford Cytokinetics the right to co-promote omecamtiv mecarbil in institutional care settings in North America, with reimbursement by Amgen for certain sales force activities.
Financials
Revenues for the fourth quarter of 2016 were $33.1 million, compared to $9.8 million during the same period in 2015. Revenues for the fourth quarter of 2016 included $26.0 million from our collaboration with Amgen, and $3.6 million of research and development revenues and $3.2 million of license revenues from our collaboration with Astellas, and $0.3 million in research and development revenues from our collaboration with The ALS Association (ALSA). Revenues from our collaboration with Amgen included $26.7 million in a milestone payment, and $0.6 million in research and development revenue, partially offset by a payment of $1.3 million related to the option to co-fund a Phase 3 clinical trial for an increased royalty percentage. Revenues for the same period in 2015 were comprised of $5.1 million of license revenues and $4.0 million of research and development revenues from our collaboration with Astellas, and $0.6 million of research and development revenues from our collaboration with Amgen.
Total research and development (R&D) expenses for the fourth quarter of 2016 were $18.8 million, compared to $13.2 million for the same period in 2015. The $5.6 million increase in R&D expenses for the fourth quarter of 2016, compared with the same period in 2015, was primarily due to an increase of $4.0 million in outsourced clinical costs mainly associated with VITALITY-ALS, our ongoing Phase 3 trial of tirasemtiv, an increase of $1.2 million in personnel related expenses due to increased headcount costs and increased non-cash stock compensation expense, and an increase of $0.3 million in laboratory expenses, partially offset by a decrease of $0.3 million in outsourced pre-clinical costs.
Total general and administrative (G&A) expenses for the fourth quarter of 2016 were $6.7 million compared to $5.5 million for the same period in 2015. The $1.2 million increase in G&A expenses for the fourth quarter of 2016, compared to the same period in 2015, was primarily due to an increase of $0.8 million in personnel related expenses due to increased headcount and non-cash stock compensation expense and an increase of $0.2 million in outsourced costs related to commercial development, recruitment, consulting, and patent legal fees.
Revenues for the twelve months ended December 31, 2016 were $106.4 million, compared to $28.7 million for the same period in 2015. Revenues for the twelve months of 2016 included $62.2 million of license revenues, $13.1 million of research and development revenue, and $2.0 million of milestone payments from our collaboration with Astellas, and $27.9 million from our collaboration Amgen, and $1.1 million in research and development revenues from our collaboration with ALSA. Revenues from our collaboration with Amgen included $26.7 million in a milestone payment, and $2.5 million in research and development revenue, partially offset by a payment of $1.3 million related to the option to co-fund a Phase 3 clinical trial for an increased royalty percentage. Revenues for the same period in 2015 included $13.9 million of license revenues and $12.2 million of research and development revenues from our collaboration with Astellas, and $2.5 million of research and development revenues from our collaboration with Amgen.
Total R&D expenses for the twelve months ended December 31, 2016 were $59.9 million, compared to $46.4 million for the same period in 2015. The $13.5 million increase in R&D expenses for the twelve months of 2016, over the same period in 2015, was primarily due to an increase of $12.1 million in outsourced clinical costs, $4.5 million in personnel related expenses and non-cash stock compensation expense, and $0.8 million in outsourced research costs, partially offset by a decrease of $4.2 million in outsourced preclinical costs mainly associated with clinical manufacturing activities. The increase in outsourced clinical costs was comprised of an increase of $16.6 million in outsourced clinical costs mainly associated with VITALITY-ALS offset by a $4.5 million litigation settlement in June 2016 from a contract research organization for BENEFIT-ALS, our Phase 2 clinical trial of tirasemtiv which was concluded in 2014.
Total G&A expenses for the twelve months ended December 31, 2016 were $27.8 million, compared to $19.7 million for the same period in 2015. The $8.1 million increase in G&A spending in the twelve months of 2016 compared to the same period in 2015, was primarily due to $4.2 million in personnel related expenses due to increased headcount and non-cash stock compensation expense, an increase of $1.7 million in corporate and patent legal fees, and an increase of $1.7 million in outsourced costs related to commercial development, grants and sponsorships, and accounting and finance and recruitment related costs.
Net income for the twelve months ended December 31, 2016, was $16.5 million, or $0.41 and $0.39 per basic and diluted share, respectively, compared to a net loss of $37.5 million, or $0.97 per basic and diluted share, for the same period in 2015.
2017 Financial Guidance
Cytokinetics also announced financial guidance for 2017. The company anticipates cash revenue will be in the range of $21 to $23 million, cash R&D expenses will be in the range of $108 to $112 million, and cash G&A expenses will be in the range of $30 to $32 million. This guidance excludes approximately $7.0 million in unearned revenue from the 2014 amendment of our collaboration with Astellas, which will be recognized in 2017 under generally accepted accounting principles, as well as any potential future milestones that may be achieved in accordance with our collaboration agreements with our partner Astellas. This guidance also excludes an estimated $8.9 million in non-cash related operating expenses primarily related to stock compensation expense.
2017 Corporate Milestones
Skeletal Muscle Program
Tirasemtiv
Expect results from VITALITY-ALS in Q4 2017.
Expect to continue to enroll patients who complete VITALITY-ALS into VIGOR-ALS, an open-label extension trial throughout 2017.
CK-2127107
Expect data from a Phase 2 clinical trial of CK-2127107 in patients with SMA in 2H 2017.
Expect Astellas to continue enrollment in a Phase 2 clinical trial of CK-2127107 in patients with COPD in 2017.
Expect Astellas to begin a Phase 1b clinical trial of CK-2127107 in elderly patients with limited mobility in 1H 2017.
Expect to begin a Phase 2 clinical trial of CK-2127107 in patients with ALS in mid-2017.
Cardiac Muscle Program
omecamtiv mecarbil
Expect to continue to enroll patients with chronic heart failure in GALACTIC-HF, our Phase 3 clinical trial of omecamtiv mecarbil, throughout 2017.
Expect data from a Phase 2 clinical trial of omecamtiv mecarbil in Japanese patients with chronic heart failure in Q3 2017.
Pre-Clinical Research
Expect to continue research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activators and under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators.