Cytokinetics Inc (CYTK) 2007 Q3 法說會逐字稿

Good afternoon, and welcome, ladies and gentlemen, to the Cytokinetics third quarter 2007 conference call. At this time, I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open up the call for questions and answers after the presentation. I would now like to turn the call over to Sharon Surrey-Barbari, Cytokinetics Senior Vice President of Finance and CFO. Please go ahead.

Good afternoon. And thank you for joining the Cytokinetics senior management team on this conference call to discuss our third quarter 2007 results. Also present during this call are: Robert Blum, our President and Chief Executive Officer, and Dr. Andrew Wolff, Senior Vice President of Clinical Research and Development and Chief Medical Officer. Following the forward-looking statement disclaimer, Robert will provide an overview of the company's activities since our last quarterly call and Andy will then provide highlights and details on the progress of the company's clinical development program. I will then review the company's financial performance for the third quarter and nine months ended September 30, 2007, along with updated financial guidance for 2007. And Robert will close the call with a review of our research activities and our projected company milestones for the remainder of 2007. We will then open up the call for a brief question-and-answer session.

Please be advised that the following discussion, including our responses to questions at the end of our formal remarks, contains certain statements that constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Examples of such statements include, but are not limited to: statements regarding our financial guidance, our use of and the ability to draw down capital under our committed equity financing facility, the expected initiation, enrollment, conduct, timing, design, scope, and results of our and our strategic partners' research and development programs, and the utility of those results, the identification of multiple compounds in 2008 for potential development, research and development milestones for 2007, anticipated dates of availability of data from clinical trials, our strategic partnering efforts, the initiation of additional sites and increased enrollment rates for clinical trials, and the potential benefits of our drug candidates and potential drug candidates. These statements involve a number of risks and uncertainties that could cause actual results and the timing of events to differ materially from those anticipated by these forward-looking statements.

These risks and uncertainties include a variety of factors, some of which are beyond our control. These forward-looking statements speak as of today. You should not rely on them as representing our views in the future. And we undertake no obligation to update these statements after this call. Please refer to our SEC filings including our annual report on Form 10K, and quarterly reports on Form 10Q for a more detailed description of the risk factors that may affect our results, as well as our earnings release posted on our website and filed with the SEC on Form 8K. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website. Now, I will turn the call over to Robert.

Thank you, Sharon. I would like to thank all of you for joining us today on our third quarter 2007 conference call. In the past quarter, Cytokinetics continued to advance both our cardiovascular and oncology programs towards potentially key proof of concept, clinical stage milestones. Within our cardiovascular program, this quarter, we presented additional data from healthy volunteers in our first in humans phase I clinical trial of CK-1827452, or CK-452, our novel cardiac myosin activator and from our CK-452 oral bioavailability study. In addition we continued to enroll patients in our first phase IIa clinical trial of CK-452 in patients with stable heart failure, as well as our phase II trials with CK-452 in healthy volunteers, details of which Andy will provide to you in a moment. Within our oncology portfolio, we were pleased to see the continuing activities under our collaboration with our partner, GlaxoSmithKline, or GSK, result in the entry of our third anticancer compound GSK-923295 or GSK-295 into human clinical trials. GSK-295 represents the fourth drug candidate to come forward from Cytokinetics research activities which has generated multiple compounds with novel mechanisms of action. We feel that by continuing our investment in research and development, we continue to strengthen our pipeline and diversify risk associated with our business. Moreover, we believe these continuing investments in research and development provide greater value to our shareholders going forward. To provide greater detail on our ongoing clinical development activities, I would now like to turn the call over to Andy Wolff, our Chief Medical Officer.

Thank you, Robert. Within each of our cardiovascular and oncology programs, we are either conducting or are positioned to soon initiate proof of concept trials that we believe will inform potential registration paths for these novel drug candidates in their intended patient populations. Beginning with our cardiovascular program, in September, Cytokinetics presented two posters related to CK-452, at the 2007 Annual Heart Failure Society of America, or HFSA, meeting in Washington, D.C. The first poster provided additional data from our phase I first in humans clinical trial evaluating the plasma concentration response relationship of CK-452 on left ventricular function in healthy volunteers. The authors concluded that CK-452 increased left ventricular ejection fraction and fractional shortening over a range of well tolerated plasma concentrations, both left ventricular ejection fraction and fractional shortening are measures of how effectively the heart is pumping blood.

In addition, it was determined that systolic ejection time was the most sensitive marker of drug effects, and that increases in ejection fraction and fractional shortening were well correlated with these increases in ejection time. Systolic ejection time is easily measured and may serve as a useful indicator of drug effect in patients with heart failure. These data supplement data previously presented at the 2006 annual HFSA meeting in Seattle, Washington. The second poster provided data from an oral bioavailability study as CK-452 in healthy volunteers, where CK-452 is administered as a liquid form in the fasted state and as a solid capsule both in fasted and fed states, versus a reference intravenous infusion. The authors concluded that the absolute bioavailability of CK-452 approached 100% for all formulations. The near complete absolute bioavailability suggested that there is little or no first pass metabolism of this drug candidate. In addition, food did not have a substantial effect on bioavailability, but appeared to delay drug absorption in some subjects. In both the oral and the intravenous formulations, CK-452 is well tolerated in this trial, with no significant safety issues observed. Both of these posters can be found under the research and scientific publication tabs of our website.

As we discussed during our second quarter earnings call, in April, we dosed the first heart failure patient in a Phase II clinical trials program evaluating CK-452, our novel cardiac myosin activator for the potential treatment of patients with either acutely decompensated or chronic heart failure. The first trial in this program is a phase IIa multi-centered double blind randomized placebo-controlled dose escalation trial designed to evaluate the safety, tolerability pharmaco kinetics and pharmaco dynamics profile of an intravenous formulation of CK-452 in patients with stable heart failure. This clinical trial's primary objective is to evaluate the safety and tolerability of CK-452 in stable heart failure patients. We recognize that there is a great deal of interest in how this trial is progressing so I will provide a brief update.

Cytokinetics recently completed a protocol specified review of safety data from the first cohort of this trial which permitted initiation of dosing in the second cohort earlier this month. However no formal efficacy analysis has been performed to date. Although this clinical trial experienced slow enrollment during the summer, enrollment has improved at these sites in recent months. In addition we have initiated and are continuing to initiate additional clinical trial sites which we believe should favorably impact enrollment rates for subsequent cohorts. We continue to believe that data from this trial will be available in 2008.

Cytokinetics continues to enroll subjects in two additional phase I clinical trials of CK-452. The first is a single center open label sequential parallel group study designed to evaluate the potential for certain drug/drug interactions with CK-452. And the second is a single center study which progresses from a single blind single dose phase to a randomized double blind placebo controlled multi-dose phase in order to evaluate the pharmaco kinetics of an oral evaluation of CK-452 in healthy volunteers.

In developing this clinical trials program, we have solicited feedback from our partner, Amgen, and have worked closely with key opinion leaders in the field of heart failure. We believe that we have designed a thoughtful and detailed clinical development plan, intended to yield a solid understanding of the potential therapeutic application of this drug candidate in the heart failure patient population.

Now, I would like to provide you with an update on the oncology program. In August, Cytokinetics announced that GSK initiated the first time in humans phase I clinical trial of GSK-923295, or GSK-295, a small molecule inhibitor of the mitotic kinesin centromere-associated protein E, or CENP-E. This is an open label nonrandomized dose finding trial designed to investigate the safety, tolerability and pharmaco kinetics of GSK-295 in patients with advanced solid tumors. The initiation of this clinical trial triggered a milestone payment of $1 million from GSK to Cytokinetics under the terms of the company's strategic alliance established in June, 2001. That strategic alliance was amended in 2006 and 2007 to conduct further research in this area, upon which Robert will elaborate later.

As previously reported at the 2007 annual meeting of the American Association for Cancer Research, GSK-295 demonstrated a broad spectrum of activity against a range of human tumor xenografts grown in nude mice including models of colon, breast, ovarian, lung and other tumors. In addition, Cytokinetics continued clinical development activities in support of our two kinesin spindle protein, or KSP inhibitors, Ispinesib, and SB-743921, or SB-921. Cytokinetics is now in the final stages of preparing to initiate the phase I portion of a phase I/II clinical trial evaluating Ispinesib as monotherapy in the first line treatment of patients with locally advanced or metastatic breast cancer. We will be exploring a more dose dense schedule of Ispinesib administered as an intravenous infusion once every other week as opposed to the once every three week schedule used in a majority of prior trials conducted with Ispinesib. We believe we may be able to increase the dose density of Ispinesib on this schedule.

In addition, we believe that this trial could amplify results already observed to date in women with locally advanced or metastatic breast cancer. We look forward to providing you details on the specifics and design of the trial as we expect to enroll the first patient in this trial in the fourth quarter.

In addition, the MCI continues to enroll patients in a phase I clinical trial designed to evaluate the safety, tolerability, pharmaco kinetics and pharmaco dynamics of Ispinesib as monotherapy, administered on days one, two, and three of a 21-day cycle to adult patients with prolapsed or refractory acute leukemias, chronic myelogenous leukemia in blast crisis or advanced myelodysplastic syndrome. The MCI also continues to enroll patients in a phase I clinical trial to evaluate the safety, tolerability, pharmaco kinetics, and pharmaco dynamics of Ispinesib as monotherapy administered on days one, two, and three, of a 21-day cycle to pediatric patients with relapsed or refractory solid tumors. Furthermore, we continue to enroll and dose escalate patients in the phase I portion of a phase I/II clinical trial of SB-921 in the treatment of patients with NonHodgkins Lymphoma. The phase I portion of in clinical trial is designed to evaluate the safety, tolerability, pharmaco kinetics and pharmaco dynamics of escalating doses of intravenous SB-921 as monotherapy, administered on days one and 15 of the 28-day treatment cycle in patients with Hodgkin's disease or NonHodgkin's Lymphoma. With that, let me turn the call back over to Sharon, who will now detail our third quarter 2007 financials.

Thank you, Andy. For the third quarter ended September 30, 2007, revenues from research and development collaborations were $4.1 million, compared to $0.1 million in the third quarter of 2006. Revenues for the third quarter of 2007 were derived from license revenue of $3.1 million from our collaboration and option agreement with Amgen and a milestone payment from GSK of $1 million for the initiation of a phase I clinical trial of GSK-295. Revenues in 2006 were derived from our collaboration and license agreement with GSK. Total research and development, or R&D, expenses for the third quarter of 2007 were $13.2 million, compared to $12.5 million for the third quarter of 2006. The increase in R&D expenses in the third quarter of 2007 over the same period in 2006 was primarily due to increased spending for clinical and pre-clinical outsourcing costs as well as higher personnel expenses.

From a program perspective, for the third quarter of 2007, approximately 43% of our R&D expenses were attributable to our cardiac contractility development and research activities, 10% to our mitotic kinesin development, and research activities and 42% to our other research programs. Our other research programs include our programs directed towards smooth and skeletal muscle contractility, and Robert will comment more on our activities in research in a moment.

Total general and administrative, or G&A, expenses for the third quarter of 2007 were $4.1 million, compared to $3.6 million in the third quarter of 2006. The increased spending in the third quarter of 2007 over the same period in 2006 was primarily due to increased personnel and medical education expenses offset in part by lower patent and legal fees. The net loss for the three months ended September 30, 2007, was $11.3 million, or $0.24 per share, compared to a net loss for the same period in 2006 of $14.9 million, or $0.41 per share.

We also reported results of our operations for the nine months ended September 30, 2007. Revenues from research and development collaborations for the nine months ended were $10.5 million, compared to revenues of $3 million for the same period in 2006. Revenues for the first nine months of 2007 were largely derived from license revenue from Amgen. Revenues for the first nine months of 2006 were largely derived from our collaboration and license agreement with GSK. The increase in collaborative research revenues for the first nine months of 2007 as compared to the same period in 2006 was primarily the result of the recognition of $9.2 million of license revenue from Amgen. Total R&D expenses for the nine months ended September 30, 2007, were $39.4 million, compared to $36.2 million for the same period in 2006. The increase in R&D expenses for the first nine months of '07 were -- over the same period in 2006, was primarily due to increased spending for clinical and preclinical outsourcing costs, as well as higher personnel and facilities expenses.

From a program perspective, for the first nine months of 2007, approximately 44% of our R&D expenses were attributable to our cardiac contractility development and research activities, 11% to our mitotic kinesin development and research activities, and 39% to our other research programs. Total G&A expenses for the nine months ended September 30, 2007, were $12.6 million compared to $11.1 million for the same period in 2006. The increased spending in the first nine months of 2007 over the same period in 2006 was largely attributable to increased expenses associated with increased personnel expenses, along with higher accounting services fees. Net loss for the nine months ended September 30, 2007, was $35.6 million, or $0.76 per share, compared to a net loss of $41.2 million, or $1.15 per share for the same period in 2006.

Earlier this month, we entered into a committed equity financing facility with Kingsbridge Capital, or Kingsbridge, a private investment group in which Kingsbridge committed to provide up to $75 million of capital over a three-year period through the purchase of newly issued shares of Cytokinetics common stock at a discount ranging from 6% to 10%, depending on the average market price during the eight-day pricing period. Under the terms of the agreement, Cytokinetics can, subject to certain conditions and limitations, determine the exact timing and amount of any drawdowns. We have established the Kingsbridge line to provide an available source of capital in the event that we are unable to otherwise access the financial markets, whether as a result of general market conditions, or because our clinical timelines may shift or unexpected events may occur in our development programs that would delay what we believe could otherwise be financeable events for the company.

Now, I would like to provide you with our updated financial guidance for 2007. As stated previously, Cytokinetics revenue guidance for 2007 is estimated to be in the range of $11 million to $13 million. However, our guidance for R&D expenses is being reduced to be in the range of $55 million to $60 million, down from our previous guidance of between $70 million and $75 million. G&A expense guidance remains in the range of $17 million to $19 million. This guidance includes the estimated effects of FAS 123 (R) share-based payments which requires the expensing of stock-based compensation. This concludes the financial portion of today's call. With that, I'd now turn the call back over to Robert, who will review expected clinical and research and development milestones for 2007.

Thank you, Sharon. Before I review the milestones for the remainder of the year I would like to provide you with a brief update on other research activities at Cytokinetics. In June, we announced that we had agreed to another one-year extension to the research term under our strategic alliance with GSK, focused to the mitotic kinesin CENP-E, and in August we announced that GSK had initiated a phase I trial with our CENP-E inhibitor GSK-295. CENP-E is a key component of the spindle assembly checkpoint and as such it is essential for cell proliferation.

In preclinical and in vitro models GSK-295 has shown to be active in an arresting cell cycle arrest in mitosis. Last week we announced that two posters related to GSK-295 were presented at the AACR-NCI-EORTC international conference on molecular targets in cancer therapeutics here in San Francisco. One poster identified the molecular determinants of sensitivity to GSK-295, a novel and selective inhibitor of CENP-E. The authors concluded that certain cell lines are sensitive to apoptosis following mitotic arrest with the inhibitor CENP-E and that heterogeneity of response was observed. The second poster concluded that GSK-295 elicits a dose dependent metaphase arrest in replicating tumor cells followed by an associated increase in apoptosis and is active of a broad panel of both solid and hematological tumor cell lines in cell culture. We share our partner's excitement in the advancement of this drug candidate into clinical trials, and believe that with this event, Cytokinetics is advancing a pipeline of candidates that balances our risk exposure, while creating a possibility of multiple value drivers for our shareholders.

As Sharon mentioned earlier, if you break out our spending for the first nine months of the year, the investments made in research activities with the objective of further expanding our portfolio of potential drug candidates account for approximately 39% of our total R&D spending. We believe that this is a prudent level of spending that could lead to identification of several additional drug candidates in 2008 and 2009. Towards that objective, we are encouraged by recent in vivo data that validate approaches we are taking in our muscle biology research programs, directed towards potentially new treatments for hypertension, various bronchoconstriction and pulmonary diseases, as well as certain neurological conditions and diseases of muscle wasting. On the partnering front, we continue to look towards possible partnering and other corporate development activities to compliment our financing activities. These corporate activities include our early stage partnering activities focused to our smooth and skeletal muscle programs, as well as the possible partnering of CK-452 in Japan.

On the financial front, as Sharon also mentioned, we believe our Kingsbridge line provides a flexible source of capital for the company in the event we are otherwise unable to access the financial markets. While this year has seen our clinical development programs advancing, another drug candidate entering first in time -- first time in human trials and research compounds moving towards development, we anticipate that the remainder of the year will also allow us to execute on still several other milestones. In our cardiovascular program, we anticipate initiating an additional phase I trial, and an additional Phase IIa clinical trial of CK-452, both in the fourth quarter of 2007. Also in the fourth quarter of 2007, we plan on initiating the phase I portion of a phase I/II monotherapy clinical trial evaluating Ispinesib in the first line treatment of patients with locally advanced or metastatic breast cancer. In the first half of 2008, we anticipate data to be available from GSK's phase Ib clinical trial evaluating Ispinesib in combination with Capecitabine.

Regarding SB-921, we will be presenting interim phase I data from an ongoing phase I/II clinical trial in patients with Hodgkin's disease and NonHodgkin's Lymphoma at the annual meeting of the American Meeting of Human Society of Hematology in Orlando, Florida, in December. All in all, this has been another busy and productive quarter. We continue to execute on our business rooted squarely in a growing portfolio of novel drug candidates and continued investments in research. We will remain committed to progressing this pipeline towards potential proof of concept validation and clinical trials, and look forward to sharing results that may inform potential registration studies for our novel drug candidates. That concludes the formal portion of our call today. And I'd now like to open up the call for questions. Operator, if you please.

(OPERATOR INSTRUCTIONS) We'll pause for just a moment to compile the Q&A roster. Your first question comes Michael Abeerman with Credit Suisse.

-- comment that you expect the phase IIa data in 2008, some of us were expecting it earlier 2008. You can comment on that time line? And also, you finished the first cohort. How many cohorts are expected and is there any possibility of presenting data on a cohort by cohort basis given this is, I presume, an open label trial?

I'll take a first stab at that, Michael. And I'm going to turn over also to Andy. In terms of data guidance we've always pointed to 2008 for this study and I think that is more reliably what can be expected. We have as we indicated with this earnings press release pointed to the fact that enrollment in the first cohort was slow. We expect that enrollment in cohorts two and subsequent cohorts will be faster, and with that I think it is better to point to 2008 for data coming out of this first phase IIa trial.

And there is a possibility of releasing the data on a cohort by cohort basis. It really depends upon how quickly we enroll them and whether there is really material information within them. So we need to be guided by the data as we see them. And currently, all we've done, as I mentioned earlier, is a safety review of the data to allow us to open the second safety cohort, but we don't yet have a formal analysis of any efficacy data from the first cohort.

So were we to conduct an interim analysis that would provide an efficacy read, information that we deem material, we would elect to then disclose that by top line disclosure in a press release, to be then followed up by what would be expected to be a more complete analysis presented at the next appropriate medical meeting.

I guess, suppose, you are probably starting low and going slow with this trial, but based on your phase I data in healthy volunteers and your animal modeling, at about which cohort would you expect to start seeing efficacy that might be worth doing interim analysis, cohort two, cohort three?

I don't think we can get into that level of detail. We haven't disclosed what would be the plasma concentrations that we would be evaluating on a cohort-by-cohort basis. What we have indicated is that this study is designed to evaluate dose levels that correlate with plasma concentrations that overlap with what we evaluated in phase I, but which are focused more to lower ends of the dose response curve, and where we would expect to see activity, based on the preclinical evaluations, again, at the lower end of the dose response curve. We would expect to see activity associated with plasma concentrations in the early cohorts, where the early cohorts allow us to get to what is designed in the trial to be the maximal plasma concentrations to be studied, with subsequent cohorts intended to prolong the duration of those infusions. So it would not be expected that it would have to wait for the latter cohorts for us to be able to see the pharmaco dynamic response that we anticipate based on hitting the maximal plasma concentration in earlier cohorts.

Got it. And what about this next trial that you are initiating in the fourth quarter? Can you give us some color on this additional phase IIa trial?

You're talking about the additional phase IIa trial for CK-452?

Yes.

We haven't disclosed any details of that study. What we have indicated publicly are two populations that we intend to study in two phase IIa trials to be initiated, and those are patients that would be undergoing catheterization with stable heart failure, where we would like to be able to point to, as we have seen preclinically, that this mechanism may translate into increased systolic effect -- systolic function without increase in oxygen consumption. And we've also indicated that our next phase IIa study will allow us to enroll patients with ischemic cardiomyopathy, where we will be primarily looking to evaluate safety of CK-452 in the presence of ischemia, given how that comorbidity often times can complicate the treatment of heart failure. What we haven't indicated is what would be the order of those two studies, nor which one is likely to be in the fourth quarter.

Okay. Will we -- might we expect data from more than one of -- this trial that is starting in the fourth quarter, I guess would you expect it to take more than a year for data? Or is this becoming data as well in 2008?

I think as we've indicated previously, the phase IIa program which comprises these different phase IIa studies and different phase I studies are designed to deliver data across these studies in 2008.

Okay. I will get back in the queue. Thanks, guys.

Thanks, Michael.

Your next question comes from the Joel Sendek with Lazard Securities.

Hi. Can you guys hear me?

Yes.

Yes. It is Lazard Capital Markets, just for the record. Two questions. I'm wondering just as a follow-up to that two question. Why is it that enrollment was slow? Is it more due to the fact that the sites weren't just up and running? Or is there any skepticism with regard to the drug? Can you just --

It is a combination of things. We had barriers to getting the sites up and running. It was a little more difficult to get each of them up and going than we had anticipated. And then by the time we got the majority of them going, it was the summer months, which is always a slow time for enrollment, especially when you have a study to design that, it requires patients to have to come back, and stay overnight four separate times, so just getting past the vacation months helped that a lot. And we began to -- well, we have been able to finish enrolling the first cohort and move into cohort two, but we have also added, as I mentioned earlier, additional sites to ensure that the subsequent cohorts enroll more quickly than the first one did.

When we announced in the second quarter that we had initiated dosing in April, in this first phase IIa trial, that was obviously the first patient in the first center, and like any clinical trial, there is a J-curve that speaks to other centers coming online, and increasing enrollment per center, as well as across multiple centers. And I think this trial is no exception.

Okay. So you're up the curve at this point?

Say that again.

You're up the curve at this point and enrolling quickly.

Yes, we're moving up the curve at this point, and we're adding more centers as well as increasing enrollment at existing centers.

Okay. And then just a question on the GSK-295, can you give us any more detail on the trial design there, or when we might see some data and the timing?

I think we've said the data from the trial will come in 2008, and it is a fairly standard dose escalation study in patients with relapse or refractory solid tumors.

Okay. And ASCO would be too early to see when we would see results of that study?

It is hard to say at this point, Joel. We're still -- the first patient was dosed in August. And GSK is sponsoring this trial, is responsible really for the conduct. We're dose escalating. I don't know whether it could be ASCO we will hopefully have more to say as we get more clarity on the enrollment patterns, and frankly, it has so much to do with where you hit your MTD as to what would be accepted for presentation from a phase I study at a place like ASCO. So I think it is premature to speak to guidance on when in 2008.

Alright. Fair enough. And can you just repeat, you mentioned you had one of the studies or some data at [SB]. Can you tell me again what that is?

We have interim data from the phase I/II study of our second KSP inhibitor, SB-921, in patients with Hodgkin's disease and NonHodgkin's Lymphoma.

You might recall, we already presented this year some interim data from that phase I portion, and this will in follow-up to that be more data from the same phase I/II trial of this second KSP inhibitor.

I mean the first one I believe was the first cohort, and we'll have quite a bit more data now.

That's right.

Great. Thanks a lot.

Sure thing, Joel.

Your next question comes from Mark Monane with Needham.

Hi, good afternoon. It is actually Alan Carr for Mark.

Hey, Alan.

Hey, I just wanted to make sure I got everything right on 452 program. Have you just disclosed how many sites you intended to open and how many are open in this trial?

Good question. We have not. What we have disclosed is that we had initiated this study in the U.K., and that we were adding sites in the U.K.

So the trial would be done only in Britain then?

No. With additional sites, we're now embarking beyond the U.K. to enroll patients outside the U.K. as well.

The rest of Europe or U.S.? Can you add to that, or no?

We haven't really added anything more to that.

Okay. And, I'm sorry, I may have missed this earlier, but can you tell me a little bit more about the following cohorts. I seem to remember that the fourth and fifth were a little different. Can we expect those to move more quickly than the first three, or is it just a matter of just getting more patients going up on this J-curve, as you mentioned?

I think as we have more sites online and more sites coming online, I do anticipate that the subsequent cohorts will enroll more quickly. As Robert's already said, the full breadth of coverage of the plasma concentration range we intend to study will occur within the first two cohorts, and the subsequent cohorts only extend the duration of intravenous infusion.

Do you have to get FDA clearance from going -- from each cohort to the next cohort, or just the first to second?

No. No, we don't. Actually, this is not a regulatory issue. This is just our own safety review.

Oh, okay. And you mentioned -- I wanted to turn to the partnering earlier, you mentioned you brought up partnering with it. Are you looking to partner some of these -- you mentioned the muscle program, the skeletal programs, and that sort of thing, are you looking to partner those before getting into the clinic? And can you elaborate on that?

Yes, I mean it is certainly possible. We are moving toward the clinic in the absence of partnerships, in our smooth and skeletal programs, certainly having a partner on board would help broaden the type of development programs we could pursue, and even accelerate some of those programs towards the clinic. But not having a partnership isn't precluding us from moving forward and investing significantly towards that objective. As to whether we partner before the clinic or after the clinic, that really is going to be a function of what kind of deal terms are negotiated, and how we might be able to justify partnering sooner, versus afterwards. We have done deals, as you know, both for programs at the lead optimization stage moving toward candidate selection, in the case of our first deal in 2001 with GlaxoSmithKline, and our partnership with Amgen for CK-452 came with that compound in phase I moving to phase IIa. So it will have more to do with what kinds of terms are available to us under the potential mutually agreeable partnership that will inform the timing.

Is there a rate at which we can expect to see new candidates from those other programs coming into the clinic starting next year?

I'm reluctant to commit to that yet, given that these programs are still in research, not even yet where we have designated them for candidate selection in nine IND enabling studies. We look to INDs across both '08 and '09, and it's possible in '08 as we might designate compounds for formal development that we might point to INDs at that time. But given where we are now, still working with compounds that are eligible for selection for development, I think that would be premature to point to an IND rate at this stage.

Okay. Thanks very much.

Sure thing.

Your next question comes from Meg Malloy with Goldman Sachs.

Hi, Meg.

Hello, Robert. Just a very quick one. Could you tell us what you're thinking about in terms of the Ispinesib breast first line study? I seem to recall that this kind of should be a relatively small sort of proof of principle study. We just wanted to hear what you're thinking.

In terms of spending, or in terms of design or objective?

In terms of design timing, that type of thing.

So I will start and ask Andy to elaborate. This will be a study that will begin with a phase I portion that is a dose escalation design moving then into Phase II. And again, looking to amplify what was a 9% objective response rate in the previous Phase II studies that was conducted under GSK's sponsorship, we haven't given outside guidance as to what we would expect from Phase II. But rather, we're looking, and GSK is looking together with us, at being able to amplify what we saw previously as monotherapy in the second or third line patients.

I guess I'm a little confused why you're calling it a phase I. Would this not be in breast cancer patients?

It is. And it is all in women who have previously untreated locally advanced or metastatic disease. The phase I portion is because we really believe that everything that we have seen to date with Ispinesib tells us that the optimum dosing schedule of the drug is every other week because the neutropenia is at a maximum at about seven days and it is reproducibly and very consistently fully recovered by the 15th day. So there is really no reason to wait another week to administer the drug as prior studies have done, which have administered the drug every 21 days. But we do have to dose escalate on that every other week schedule to find the maximum tolerated dose. And then in that same population of women with previously untreated locally advanced or metastatic breast cancer, we will then take that optimum dose determined in the phase I portion of the study and do a fairly typical staged phase II study, and we haven't described it in more detail than that and we will of course when we enroll the first patient.

Great. No. That's very helpful. Thank you.

Thanks, Meg.

Your next question comes from George Zavoico with Cantor Fitzgerald.

Hi, George.

Hi, Robert. Hi, Sharon. Hi, Andy. Everybody do okay through the earthquake today?

Yes. We survived. Thank you.

A quick question and then -- a couple of quick questions, actually, the first one is did you -- have you disclosed how many patients were treated in the first cohort?

We have said when we announced the design of the study that we would be enrolling cohorts of N=8 per cohort.

Okay. And with regard also to that phase I trial in the U.K., I understand during the summer vacation months it was difficult to enroll patients. Did you have to -- I don't even know if it is allowed in the U.K. Did you have to develop or offer any incentives or inducements to get patients to come to the trial above and beyond what you started with in April and May?

Our primary strategy here really is to add more centers and otherwise to increase enrollment per center by ourselves and our CRO visiting the centers, and extolling the virtues of the design and why this would be a particularly good study for them to participate in.

I see. Okay. And these patients are with stable heart failure, right? So how often do they actually come to the centers for checkups, where they might be able to encounter a representative from the CRO?

Well, they -- it is not so much a representative from the CRO. They see the investigator when they come. And it does involve coming back and receiving study drug on four separate dosing days, where they stay overnight.

All right. Thanks for providing the update on the enrollment. And one last question regarding the Kingsbridge financing. What was the cost to you of getting that line of credit? And do you think it was too high, just right? Do you think you got a good deal?

I think the cost to us is really variable depending on the price of the shares issued. The value of the warrants are actually very minor. They're less than a 1/2% of the overall dollar amount committed or the shares committed, as part of this committed equity financing line, so it is a very low cost compared to what you're seeing out in the capital markets today, both as registered directs, and even marketed follow-ons on what the price and discounting along with banker's fees are.

I see. Okay. Thank you very much.

Thank you, George.

Your next question comes from Jason Kantor with RBC.

Hi. Thanks for taking my question. Obviously a lot of the questions have been asked. But I guess my question is for the CENP-E inhibitor. What have you learned from your trials with Ispinesib that is going to make this different? Are you and GSK going to go do seven phase II trials looking at all of these different indications? Because it doesn't seem clear preclinically where the sweet spot is for this drug. I don't know if you might identify something in phase I, but my guess is you are going to be going into phase II somewhat blind to the best indication for it. Is there a way to hone in on that earlier?

It is a very good question. And it is something that we continue to actively discuss with GSK, what have we learned from our KSP inhibitor experience that could read on what we do with CENP-E, recognizing that CENP-E is a different molecular target, this is a different chemical structure and it could very well be entirely different clinical profile. But we have, I think, profiled GSK-295 differently preclinically. We're looking at what might be the potential for biomarkers to inform strategies that could benefit us in phase II. I don't think we've locked in on anything right now that we can speak to publicly, but there are conversations along those lines, how might we best engage GSK resources, NCI resources, should we take a shotgun approach, which I think is fair to characterize the way we did with KSP inhibitors, nine phase II studies with Ispinesib, or might we look at a more targeted way and when might we consider combination studies and how could there be imaging analysis and other ways of looking at our phase I data. There are all sorts of different things that we are talking about, and nothing from that have we committed to, or certainly are we in a position to discuss publicly.

And have any of your enrollment timelines with the heart failure program, has that changed at all the timing of the potential Amgen option?

No. We are still comfortable with indicating that we expect Amgen will be in a position to exercise their option in 2008.

Thanks.

You have a follow-up question from Michael Abeerman with Credit Suisse.

Yes, Michael.

Sorry, it's going to be quick. Just a housekeeping question. You guided for revenue of I think a peak of $13 million reaffirming, but if you take what you've been amortizing over the past three quarters, it gets you to more than that, based on what you got in the first three quarters. Do you expect the license revenue amortization to change in the fourth quarter?

No, so I don't expect the license revenue amortization to change in the fourth quarter. I think that guidance, you might be slightly above $13 million, but I think the guidance provides for -- it is in the ballpark of where we think we are going to be. There is no additional changes. We did have some patent reimbursements from GSK in the first half of the year that we may or may not receive in the fourth quarter.

Okay. That's all. I will get to trick-or-treating now. Thanks.

Okay. Thanks.

Thanks, Michael.

There are no further questions at this time.

Thank you to all of the participants today for your continued interest in Cytokinetics. We look forward to keeping you apprised of our development and research programs in the future. With that, have a good day. Happy Halloween. Operator, we can conclude the call.

This concludes today's conference call. You may now disconnect.