Cytokinetics Inc (CYTK) 2008 Q1 法說會逐字稿

Good afternoon and welcome ladies and gentlemen to the Cytokinetics First Quarter 2008 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 will now turn the call over to Sharon Surrey-Barbari, Cytokinetics' Senior Vice President of Finance and CFO. Please go ahead.

Good afternoon and thank for you joining the Cytokinetics' senior management team on this conference call to discuss our first quarter 2008 results. Also present during this call are Robert Blum, our President and Chief Executive Officer; Dr. Andrew Wolff, Senior Vice President of Clinical Research and Development and Chief Medical Officer; and a new addition to our executive team, Michael Rabson, our Senior Vice President of Business Development and Legal Affairs and General Counsel, who Robert will formally introduce later in the call.

Following the forward-looking statement disclaimer, Robert will provide an overview of the past quarter. Andy will then provide highlights and details on the progress of the company's clinical development programs. Afterwards, I will review the company's financial performance for the first quarter and Robert will then review our past quarters, other corporate and research activities and then close the call with our projected company milestones for the remainder of 2008. We will then open up the call for a brief question and answer session.

The following discussion including our responses to questions contains certain statements that constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Examples of such statements include but are not limited to statements relating to our financial guidance for 2008; the expected conduct, initiation, design, timing, scope, enrollment, progress, and completion of our and our partners' research and development activities; and the result and the significance of results from such activities; and potential benefits of our drug candidate 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 our forward-looking statements. These risks and uncertainties are affected by 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. We undertake no obligation to update these statements after this call.

For a more detailed description of the risk factors that may affect our results, please refer to our SEC filings including our recent annual report on Form 10-K. Copies of these statements may be obtained from the SEC or by visiting the Investor Relations section of our website.

I will now turn the call over to Robert.

Thank you Sharon. Cytokinetics has begun the year on solid footing. We executed this quarter in line with our key clinical development and strategic objectives in both our cardiovascular and oncology franchises while also ensuring that we push forward effectively in research with a disciplined eye towards advancing programs to development.

Starting with our cardiovascular clinical development program, I'm pleased to report on our progress with CK-1827452 or CK-452, our novel Cardiac Myosin activator. In the first quarter, we completed the treatment phase of our second dose-escalation cohort in our first and ongoing Phase IIa clinical trial of CK-452 in patients with stable heart failure. We announced positive top line results from an interim analysis of this trial at the end of March. As Andy will elaborate in a moment, the data from this interim analysis indicate that CK-452 demonstrated statistically significant and clinically relevant increases in several measurements of cardiac performance.

In regards to this data, we held an investor breakfast at the American College of Cardiology meeting during which a panel including two clinical trial investigators offered their perspectives on the meaning, utility, and importance of these measurements of cardiac performance. We believe that this discussion set the stage for the proper interpretation of the data from this trial when they are made available in June. A replay of that webcast as well as accompanying slides will be available on our website until the middle of May.

As further evidence that we continue to execute well in this trial, I'm pleased to report that we recently completed enrollment of the third cohort in this Phase IIa trial. Patients in this cohort are now receiving CK-452 as an intravenous infusion out to 24 hours in duration.

Earlier today we announced the initiation of our second Phase IIa trial of CK-452, a trial designed to evaluate CK-452 in patients with ischemic cardiomyopathy and angina. In addition, we recently opened enrollment for our third planned Phase IIa trial within our CK-452 clinical trials program and we are actively recruiting patients in that trial. We also recently completed two other Phase I clinical trials in this program and are awaiting final data.

So as of today, all of our currently planned Phase IIa and Phase I clinical trials relating to CK-452 are open to enrollment, underway or have been completed. I'm pleased to report that we have turned an important corner in this program and believe we are executing well. Investments we made in the second half of 2007 are now producing results in 2008. In addition, as you will hear from Andy, the initial findings from our ongoing Phase IIa and Phase I trial look encouraging. To reiterate, we anticipate completing our ongoing trials of CK-452 into 2008.

Our oncology clinical development programs for ispinesib and SB-743921 or SB-921 are inhibitors of kinesin spindle protein or KSP continued to advance in their respective trials as well. Our ongoing Phase I/II clinical trial that is evaluating an alternative dosing schedule of ispinesib in chemo-nave metastatic breast cancer patients as well as our ongoing Phase I/II clinical trial that is evaluating an alternative dosing schedule of SB-921 in Hodgkin and non-Hodgkin lymphoma patients, both continued to enroll patients and dose escalate.

As to our fourth drug candidate, GSK-923295 or GSK-295, a novel inhibitor of centromere-associated protein E or CENP-E, we are pleased to note its progression in a Phase I clinical trial under the sponsorship of GlaxoSmithKline or GSK. I'll have more to say about this drug candidate later in this call.

Lastly, we're pleased to announce that earlier this month we advanced a skeletal muscle sarcomere activator compound as a next potential drug candidate into IND enabling studies. This program offers promise in the potential treatment of skeletal muscle weakness associated with neuromuscular diseases and other conditions. We believe that our novel research programs can offer important strategic advantages to our building a more sustainable and durable company that seeks to mitigate the inherent risk associated with pharmaceutical discover and development.

With that introduction, I'll now turn the call over to Andy.

Thank your Robert. I would like to begin by speaking to how activities in the first quarter and also during the past two weeks importantly shaped expected deliverables from our clinical programs throughout 2008. The first quarter's highlight was the announcement of positive, top line, interim results from our ongoing multi-center, double-blind, randomized, placebo-controlled, dose escalation Phase IIa clinical trial evaluating CK-452 administered intravenously to patients with stable heart failure. To remind you, the trial is designed to evaluate the safety, tolerability, pharmacodynamics and pharmacokinetic profile of CK-452. The safety data from this interim analysis suggests that the drug was well tolerated with no serious adverse events reported in heart failure patients exposed to the intended range of doses and plasma concentration. In addition, data from the first two cohorts demonstrated that when compared to placebo, CK-452 produced statistically significant and clinically relevant increases in Doppler derived stroke volume and fractional shortening in association with statistically significant prolongation of systolic ejection time.

Statistically significant correlations were observed between the increases in each of three indices of cardiac ventricular function and increases in the plasma concentration of CK-452. Left ventricular ejection fraction, a measurement with high variability in patients with ventricular disease, also increased with increasing plasma concentration. However, this increase in left ventricular systolic function did not reach statistical significance in these initial cohorts.

Across the plasma concentration levels evaluated, the pharmacokinetics of CK-452 were generally linear with respect to dose and similar to those observed in the healthy volunteers in the first-time-in-humans Phase I trial of CK-452. Heart rate decreased slightly at the higher concentrations and blood pressure remained unchanged in the first two cohorts of this Phase IIa trial.

In recent weeks, we have completed enrollment of the third cohort of this Phase IIa clinical trial and continued to dose these patients. We are encouraged by the initial findings from this ongoing trial and look forward to the planned release of the data emerging from this interim analysis in June at the Heart Failure Congress of the European Society of Cardiology. To remind you, in the ongoing cohort three, we are examining doses that target plasma concentrations which are expected to fall in the same range that was evaluated in cohorts one and two. That is between approximately 90 and 650 nanograms per milliliter. In cohort three however, we extend the duration of infusion out to a total of 24 hours.

Over the last few months, we have initiated several additional clinical sites in this trial. We are now observing an increased enrollment rate across these sites and within individual sites. As we predicted during our last earning call, the third cohort enrolled faster than the second. Recall also that the second cohort enrolled faster than the first. We are pleased with the results tied to these activities initiated last year and still continuing. And to underscore Robert's earlier comments, we believe that we have turned the corner in terms of addressing previous enrollment concerns related to this trial.

In a press release issued earlier today, we announced that we initiated a double-blind, randomized, placebo-controlled, Phase IIa clinical trial designed to evaluate both an intravenous and an oral formulation of CK-452 in patients with ischemic cardiomyopathy and angina. The primary objective of this trial is to assess the effect of intravenous CK-452 on symptom-limited exercise tolerance in these patients. The secondary objectives of this trial are to assess the tolerability of CK-452 administered as an oral formulation and the resulting plasma concentration. This trial is designed to investigate whether symptom-limited exercise capacity in ischemic cardiomyopathy patients with angina is affected by treatment with CK-452.

The trial will evaluate two cohorts of 45 patients each with ischemic cardiomyopathy, angina, and an ejection fraction of less than or equal to 35%. These patients will undergo symptom-limited, treadmill testing at baseline and during a double-blind infusion of CK-452 versus placebo. Patients in the first cohort will be randomized in a 2-to-1 ratio to either 452 at a lower dose level or to placebo. Patients in the second cohort will be randomized in a 2-to-1 ratio to either 452 at a higher dose level or to placebo. Eligible patients in each cohort will be randomized to receive a 2-hour loading dose of CK-452 followed by 18-hour intravenous infusion of 452 or placebo. In each cohort, patients whose symptom-limited exercise tolerance during the double-blind infusion does not deteriorate relative to baseline will then receive ether CK-452 or placebo administered orally for 7 days, after which tolerability will be assessed. CK-452 plasma levels will be measured before and one hour after the final oral dose.

In addition, we recently opened enrollment and are currently recruiting patients into an open-labeled, non-randomized, Phase IIa clinical trial evaluating an intravenous formulation of CK-452 administered to patients with stable heart failure undergoing clinically-indicated coronary angiography in a cardiac catheterization laboratory. The primary objective of this trial is to evaluate the potential effects of CK-452 on myocardial efficiency, which is defined as the ratio of ventricular performance to myocardial oxygen consumption. The secondary objective of this trial is to measure the potential effects of CK-452 on ventricular performance, myocardial oxygen consumption, hemodynamics, pressure volume relationships and systolic ejection time. In this trial, we will begin dosing immediately following the successful screening of the first patients. And when we do, in keeping with our precedent, we will elaborate further on this trial's design.

Turning to the continuing Phase I clinical trials for CK-452, we recently conducted a preliminary evaluation of results from a single-center, Phase I clinical trial designed to evaluate the pharmacokinetics of an oral capsule formulation of CK-452 administered as both single and multiple doses of two different strength capsules to healthy volunteers. The evaluation demonstrated dose proportionality between the two dose levels, both after a single dose and after multiple doses to steady state.

During the quarter, we also completed enrollment and are awaiting final data from an additional Phase I, single-center, clinical trial designed to assess the pharmacokinetics and relative bioavailability of three different oral modified release prototypes of CK-452.

I am pleased to report that based on a preliminary analysis, one of the prototype formulations of CK-452 in this trial has been selected to proceed forward into further clinical testing. We are continuing to conduct a single-center, open-label, sequential, parallel group, Phase I clinical trial of CK-452 designed to evaluate the effects of oral ketoconazole, a strong inhibitor of the metabolic enzyme cytochrome P-453A4 or 3A4 on the pharmacokinetics of a single oral dose of CK-452 in up to16 healthy male volunteers, 8 of whom have normal genotype for cytochrome P-452D6 or 2D6 and up to 8 of whom have reduced 2D6 activity. There was a modest drug-drug interaction between ketoconazole and CK-452 when the two were co-administered in subjects with a normal genotype for 2D6. In addition, the effects of diltiazem, a moderate 3A4 inhibitor, on the pharmacokinetics of CK-452 were assessed in 8 additional volunteers who were also normal metabolizers by way of 2D6. Diltiazem had no effect on plasma concentrations of CK-452 when the two drugs were co-administered in this group.

We continue to enroll healthy subjects who are poor metabolizers with respect to 2D6 in order to examine the pharmacokinetics of CK-452 in this population. Screening and identifying this small subset of patients has been challenging but still relevant in order to compose an appropriate drug profile for CK-452.

In summary, we're pleased with the data emerging from Phase I and Phase IIa trials of CK-452 and we'll have more to say about these results in the coming months as we conclude these Phase I trials in each respective data set analysis.

Now, moving to our oncology clinical development program, during the quarter we continued to enroll patients in the Phase I dose escalation portion of an open-label, non-randomized, Phase I/II clinical trial designed to evaluate ispinesib as monotherapy administered as a first line treatment for chemotherapy-nave patients with locally advanced for metastatic breast cancer.

Also during the quarter, the National Cancer Institute or NCI completed enrollment in two Phase I clinical trials. The first was designed to evaluate the safety, tolerability, and pharmacokinetics of ispinesib as monotherapy administered as a 1-hour infusion on days 1, 2, and 3 of a 21-day cycle to adult patients with relapsed or refractory acute leukemia's, chronic myelogenous leukemia in blast crisis or advanced myelodysplastic syndromes. The second was designed to evaluate the safety, tolerability, pharmacodynamics and pharmacokinetics of ispinesib as monotherapy administered as a 1-hour infusion on days 1, 8, and 15 of a 28-day schedule to pediatric patients with relapsed or refractory solid tumors.

Turning to SB-921, we continued to enroll patients and dose escalate in the Phase I portion of a Phase I/II clinical trial designed to evaluate 921 as a potential treatment for patients with Hodgkin or non-Hodgkin lymphoma. The Phase I portion of this clinical trial is designed to evaluate the safety, tolerability, pharmacodynamics, and pharmacokinetic profile of escalating doses of SB-921 as monotherapy administered as a 1-hour fusion on days 1 and 15 of a 28-day treatment cycle first without and then with the prophylactic administration of granulocyte colony stimulating factor or GCSF. During the quarter, Cytokinetics completed treatment in the non-GCSF segment of this trial and began treatment in the GCSF segment.

Overall, the first quarter was a busy one for Cytokinetics with respect to our conduct of multiple clinical trials for our cardiovascular and oncology drug candidates. Positive results are emerging from these programs both in terms of speed of enrollment as well as initial results that read on the activities of our drug candidates. And we look forward to furthering this progress during the remainder of 2008.

Lastly, I wanted to conclude by mentioning that earlier this month an oral presentation highlighting interim clinical data from an ongoing, first-time-in-humans clinical trial of GSK-295, our CENP-E inhibitor was presented at the 2008 American Association of Cancer Research Annual Meeting. The authors concluded that the pharmacokinetics of GSK-295 were generally dosed proportional over the range of 10 to 80 mg per meter squared and that intra patient pharmacokinetics on days 1 and 15 were similar. During the quarter, GSK continued to enroll and dose escalate patients in this Phase I clinical trial.

With that, let me turn the call back over to Sharon who will detail our first quarter 2008 financials.

Thank you Andy. This certainly has been an eventful quarter for Cytokinetics.

For the first quarter ending March 31, 2008, our net loss was $13.9 million or $0.28 per share compared to a net loss for the same period in 2007 of $11.7 million or $0.25 per share. Revenues from research and development collaborations for the first quarter of 2008 were $3.1 million compared to $3.2 million for the same period in 2007. Revenues for both the first quarter of 2008 and 2007 were primarily derived from the company's collaboration and option agreement with Amgen.

Total research and development or R&D expenses in the first quarter of 2008 were $14.1 million compared to $12.5 million for the same period in 2007. The increase in R&D expenses in the first quarter compared to the same quarter in 2007 was primarily due to increased spending related to the company's clinical and preclinical programs along with increased laboratory and personnel expenses.

From a program perspective for the first quarter of 2008, approximately 37% of our R&D expenses were attributable to our cardiac contractility development and research activities; 14% to our mitotic kinesins and development and research activities; and 44% to our other research programs. Our other research programs include our programs directed towards both smooth and skeletal muscle contractility.

Total general and administrative or G&A expenses for the first quarter of 2008 were $4.2 million compared to $4.5 million in the same quarter of 2007. The decrease in G&A expenses in the first quarter when compared to the same period in 2007 was primarily due to lower legal fees which were partially offset by an increase in personnel expenses.

As of March 31, 2008, our cash, cash equivalents, restricted cash and long-term investments totaled $128.8 million.

That concludes the financial portion of today's call. With that, I'll turn the call over to Robert.

Thank you Sharon. To conclude, I'd like to highlight some key activities arising out of our ongoing activities in research.

Firstly, in March, a poster relating to non-clinical data of CK-452 was presented at the 2008 Annual Scientific Sessions of the American College of Cardiology Meeting in Chicago. The authors concluded that CK-452 increased left ventricular function and reduced filling pressures in dogs with heart failure. But in contrast to convention inotropic agents did not increase myocardial oxygen consumption nor reduced subendocardial blood flow in the studying of heart failure or in heart failure with severe left ventricular hypertrophy.

Secondly, at the American Association of Cancer Research meetings in San Diego, a non-clinical poster presentation detailed findings in a preclinical model of Human Neuroblastoma, in which the authors concluded that CENP-E is a rational target for the treatment of Neuroblastoma. Increased expression was associated with both tumor progression in a transgenic mouse model driven by the gene MYCN and with a high risk disease in humans and that GSK-295 is effective in vitro and in vivo against Neuroblastoma.

Another non-clinical poster presented at the same meeting examined potential biomarkers that may identify sensitivity to GSK-295. The authors concluded that the proliferation of cell lines from a diverse panel of tumor types was inhibited by GSK-295 and that CENP-E transcript levels did not correlate with sensitivity to 295. The authors also concluded that c-MYC amplification and/or over expression is a potential biomarker that could be used to select patients more likely to respond to this drug candidate.

In addition, earlier this month Cytokinetics announced a selection of a development compound that is directed towards the skeletal sarcomere. Preclinical data indicate that this compound is a highly specific, small-molecule activator of the skeletal muscle troponin complex, increasing its sensitivity to calcium and subsequently leading to an increase in skeletal muscle contractility. This development compound has demonstrated encouraging pharmacological activity in non-clinical models that may relate to the potential utility for treatment of diseases associated with skeletal muscle weakness associated with neuromuscular disease or other conditions. This potential drug candidate is the fifth development compound to emerge from the company's research activities which have focused on discovering novel therapeutics directed towards cytoskeletal biology. We are proud of the continuing productivity of our research organization as we further augment our development pipeline.

Before I proceed to outlining expected milestones for the remainder of 2008, I'd like to mention that during the last quarter we were pleased to appoint Michael Rabson, Senior Vice President, Business Development and Legal Affairs and General Counsel. Prior to joining us, Michael served as General Counsel and Senior Vice President at Maxygen. Prior to that, he was a partner in the Life Sciences and Licensing Group of Wilson Sonsini. Michael brings with him a great deal of business development, legal, and licensing experience that we will leverage as we continue to execute on our business plans in 2008 and afterwards. We're very pleased to have Michael joining us today on the call and to have another seasoned professional join our executive team. Welcome to you Michael.

Now turning to key milestones on the cardiovascular side of our pipeline, in June we plan to present data from our ongoing Phase IIa clinical trial of an intravenous form of CK-452 in stable heart failure patients at the Heart Failure Congress in Milan. In addition, we anticipate that final data from this trial will be available during the second half of 2008.

In the first half of 2008, we anticipate that final data will be available from the two recently completed Phase I trials of CK-452 in healthy volunteers. Again one designed to evaluate the single-dose and multi-dose pharmacokinetics of an oral formulation of 452 and the other designed to evaluate three different oral-modified release prototypes of CK-452.

In the second half of 2008, we anticipate that data will be available from the Phase I trial of CK-452 evaluating the potential for certain drug-drug interactions in healthy volunteers. And again as enrollment progresses in 2008 and the other Phase IIa clinical trials of CK-452, we anticipate providing updated guidance on the timing and availability of expected data.

Turning to our oncology drug candidates, in June we plan to present initial data from the Phase I portion of the ongoing Phase I/II clinical trial of ispinesib administered as monotherapy as a first line treatment in chemotherapy-nave patients with locally advanced or metastatic breast cancer. That will occur at the Annual Meeting of the American Society of Clinical Oncology or ASCO. We anticipate additional data to be available from the Phase I portion of this trial later in 2008.

In June, data from NCI's Phase I trial evaluating ispinesib as a monotherapy administered to pediatric patients with relapsed or refractory solid tumors is also planned to be presented at ASCO.

In the first half of 2008, we also anticipate that final data will be available from GSK's Phase Ib clinical trial evaluating ispinesib in combination in capecitabine.

In June, we plan to present data from the Phase I portion of the ongoing Phase I/II clinical trial of SB-921 in patients with Hodgkin or non-Hodgkin lymphoma. That will also occur at ASCO. We anticipate final data from the Phase I portion of this trial will be available in the second half of 2008.

Also in 2008, we anticipate that additional data will be available from GSK's Phase I clinical trial of GSK-295, our CENP-E inhibitor in advanced solid tumors.

To underscore the anticipated timing of the availability of data from GSK and NCI's clinical trials, is based on information provided by GSK and NCI. And the occurrence of these events is outside of our control. However as enrollment progresses in 2008 in all of our clinical trials, we anticipate providing updated guidance on a timing and availability of expected data.

Lastly, on the corporate front, we anticipate providing the required clinical data from our CK-452 Phase IIa clinical trials program to our partner Amgen in the second half of 2008 in order to inform the potential exercise of their option under the strategic alliance between the companies.

So in conclusion, overall these last few months of 2008 have presented encouraging opportunities for Cytokinetics, most especially when viewed in context of the challenging equity capital markets. We are advancing our business and executing in accordance with key objectives that we believe will translate well into value drivers for our business.

That does conclude the formal portion of our call today. And operator, I'd now like to open up the call to questions please.

Thank you. [OPERATOR INSTRUCTIONS] Your first question is from the line of Mark Monane with Needham.

Hi Mark.

Thank you. Good afternoon and greetings from New York City. Lots of data to review and useful. Thanks for the comprehensive review.

You're welcome.

A couple questions remain for me though. Can you talk about the IV dosing schedule that you're using for the development of 452? Importantly, is this meant to mimic what potentially may be the opportunity in the commercial setting, the 23-hour stay in the hospital? Could you comment on that?

Sure. I'll turn that over to Andy and I'll follow up.

Certainly we would imagine that patients who are admitted with acutely decompensated heart failure might be receiving the drug for periods of time longer than an hour or two, certainly including up to 24 hours and even longer than that. And so the development program does anticipate providing data demonstrating the safe use of the drug for probably up to 72 hours.

I think that's right Mark. So as we have ourselves evaluated the commercial potential for CK-452, clearly we recognize that patients may be on drug candidate such as this through the course of a longer duration hospital stay. The average length of stay for these patients may be being as much as 4 to 6 days and in ICU, CCU perhaps 2 to 3 or 3 to 4 days. But as we're now in the process of evaluating the pharmacodynamics of the drug, we're starting with the shorter infusions and we will over time with additional cohorts and clinical trials evaluate longer infusions.

That was helpful. In terms of the drug-to-drug iteration studies you're doing, do you anticipate that these patients may also be on digoxin in stable heart failure and do we know anything about the effect on digoxin metabolism?

We haven't specifically studied any interaction between digoxin and 452. However, based on what we know from in vitro data, we wouldn't anticipate a meaningful interaction between digoxin and 452.

Can you comment about-- can you comment on the recent trial that we saw data in at the breakfast. I believe there was one patient that got higher than the intended dosing. Can you tell-- can you give us some details around that? And if that patient was included in any of the further analyses?

Sure. The patient inadvertently received a dose of the drug that was four times higher than was intended for him at that time, over four times higher and over twice as high as would have been intended for any patient at any point in the trial because of a pharmacy error. The patient was administered drug in an undiluted state. We estimate that plasma concentrations of around 1,700 nanograms per ml were achieved in this patient at the time that the infusion was discontinued, which is higher than has been experienced by any human subject or patient to date.

The good news I believe is that even at this high concentration, higher than we've seen in the past, the patient experienced a constellation of signs and symptoms that were very similar to what we saw in the healthy volunteers who received the highest doses of the drug in the first-time-in-humans study. They suggested myocardial ischemia which we know is the dose limiting effect of the drug. And the patient did have slight increases in the cardiac biomarkers troponin and creatine kinase MB fraction. These symptoms and signs all resolved within an hour of discontinuing the infusion and on a follow-up visit, even out to 30 days later, we could find no evidence of any change in the patient's overall cardiac status.

Did that get to the question?

I think if I were to sum up I would say the bad news is that there was an error in dosing that we would like not to have seen. The good news is that it shows us that the therapeutic index of the compound is certainly no lower in heart failure than it was in healthy volunteers.

And the troponin increase was-- it was noted but it was not clinically relevant. Is that what you were saying Andy?

I'm not saying that. I'm saying that it was probably we would have to call it a small myocardial infarction but because that's what you say when you can find troponin at an elevated level in the blood and certainly creatine kinase MB. I am saying that it had to be a very small one however because on follow-up we couldn't find any deterioration in the patient's ventricular function.

As far as including the patient in the data analysis, these signs and symptoms became evident at about 45 minutes into the infusion, which was before the on treatment echo was obtained and certainly at this point, the investigator and his staff properly directed their attention not to obtaining an echo but rather to taking care of the patient. So there were no pharmacodynamic data from this patient to include in an analysis.

I think bottom line Mark is that this is what one would expect at these super therapeutic doses. And while it's unfortunate that this occurred from the standpoint of the pharmacy error, nothing unexpected occurred in the context of the patient's response.

That was helpful. That was helpful to know on the follow-up. And then the last question concerning follow-up for you and for Michael, that is in terms of in the press release, talking about the Amgen relationship and the Amgen option, what basically can happen after you turn in your required clinical data? What are the decision trees or decision nodes that may happen after that event occurs?

Okay I'll take a stab at that. We have agreed with Amgen as to what would be defined as the data package that would be delivered to them from the ongoing clinical trials program. It's a subset of the studies that we're currently conducting that are going to be delivering data that satisfy that option requirement. So with the delivery of that data, and it doesn't happen as a point in time but there is a point in time by which we'll have satisfied all of the data delivery requirements. With that, there then begins the clock if you will during which Amgen has a limited time then to exercise their option. Upon doing so, they then would, if exercise, pay us the option exercise fee and we would go forward under the collaboration agreement as specified.

So for 2008 if you will, our goal is to satisfy those data requirements from the agreed clinical trials. We basically agreed to a development program from which we are obligated to give data. And that's what we intend to do.

Thank you for the added information. I'll step back in the queue and let somebody else go.

Thanks Mark. Good to speak with you.

Your next question is from the line of Joel Sendek with Lazard.

Hi Joel.

Hi thanks. So I just want to get the purpose of this new Phase IIa study straight. And so from what I think you said in the press release and to the previous questions, so you're looking to-- you have an MTD but that MTD might be too high if you mix in exercise. Is that effectively what's going on and you're looking to maybe explore whether the exercise scenario that they-- you might want to use a lower dose? Is that right?

I would phrase it a little bit differently. I might--

You're a doctor and I'm not.

Well no. You know I would just come at it a little differently. I wouldn't expect that the higher dose that we're using will be a problem with exercise. But I want to be able to demonstrate that even with the increase in heart rate that occurs during exercise, concentrations of the drug that produce meaningful increases in ventricular performance are well tolerated.

Okay so I get it. Okay. And then I know you just talked about how long you give the drug and you're trying to figure that out, but what is the dose that you're going to start at for this study?

In this study, the easier way to talk about it is in terms of the plasma concentrations that we'll generally be targeting at the two dose levels because it would have been a little complicated to describe a loading infusion, a maintenance infusion, and then oral dosing following that. But to be simple about it, in the first cohort, we'll be targeting plasma concentrations that across the IV infusion and then the subsequent oral dosing will be less than around 300 nanograms per ml. And then in the second cohort, the IV infusion and the oral dosing should target plasma concentrations that would be at or less than 550 nanograms per ml.

Okay great. And then my final question is will there be any clinical endpoints that you'll look at in this study?

We'll look at a wide variety of laboratory and clinical safety endpoints in addition to the exercise endpoints. But in a study of 90 patients, we anticipate that there will mainly be descriptive.

Okay. That's it. Thanks a lot.

Thank you Joel.

Your next question is from the line of Michael Aberman with Credit Suisse.

Hi Michael.

Hey guys. Congratulations on getting a lot done this quarter.

Thank you very much.

Quick question. It seems like the third cohort data might be available in time for the June Heart Failure meeting. Is that something that you will anticipate potentially presenting at the same time?

It's a very good question. I think the way we're going to approach that right now is what we can say is cohort three has completed enrollment. But as you know treatment doesn't necessarily track linear with enrollment. So as you also know patients are dosed such that they have to be at least one week apart from their various dosing periods. At this point, we can't say whether or not we'll have data yet from cohort three in time for the June meeting in Milan. I think it's possible but I think that's the best we can say to you right now.

Okay but your goal is to try to get it there?

Our goal is to complete cohort three as soon as possible and get cohort four under way as soon as possible. So in that regard yes.

Okay and I'm going to go back to the Amgen option and maybe just try to get more just clear. In your first press release that you went today, you talk about the ending of the defined period being dependent on the satisfaction of certain conditions. So will the data you plan on presenting by the end of this year satisfy those conditions to end defined period?

It's a good question. So that language has not varied from the first time we described this deal over a year ago.

Sure.

But in as much as you ask, I can't tell you that all of the data that will be presented will be thereby deemed consistent with what Amgen will itself require but certainly we intend to deliver. So there's a difference between what we will be delivering--

No I understand. No I meant for your corporate goal is to provide the required clinical data to inform.

Correct.

I just want to make sure when you say to inform does that mean satisfy the conditions?

That is correct.

Okay, fine. Great. The other-- just going back again to the two (inaudible) and just kind of asking or ask why are you not taking an echoes or any efficacy in a 90-patient trial with a first time in the oral. Is this not an opportunity not only to look at safety but at least see if there's anything you can gleam from an efficacy standpoint in this new IIa trial?

We are looking primarily at safety endpoints in this study.

The reason being there, as you can appreciate Michael, I mean inasmuch as we saw in Phase I intolerable effects that were tied to ischemic changes. In particular in this patient population we want to appreciate whether this drug can be safely used as an IV to oral regimen in patients who have the co-morbidity of ischemia.

I think there was also a desire to keep the trial as streamlined and as simple as we could and to avoid extraneous evaluations that could limit recruitment.

Are you-- and you're dosing seems to be all targeting a plasma concentration. So the question is will dosing be weight-based? Do you anticipate it being weight-based for the IV and the oral? And what type of dosing difference, I mean how predictable is the serum concentration been or plasma concentration been--?

Okay first of all we don't anticipate to do weight-based dosing.

Okay.

And in fact, I can tell you that the oral doses that will be used in those patients who progress from IV to oral dosing in the two cohorts will be 12.5 mg 3 times a day and 25 mg 3 times a day. So straight doses not adjusted for weight.

And the TID dosing is this with the modified release formulation?

No it is not.

Okay.

So this is with an earlier crude capsule, powder in a capsule formulation. We're very optimistic that the modified release formulation which we're developing will allow us to dose no more frequently than twice a day. And I would say that once daily dosing is a possibility.

And again going back to drug-drug interaction obviously Coumadin. Is Coumadin likely to be one of the drug-drugs that you-- drugs you look at for drug interaction. What do you anticipate based on the ketoconazole results?

Well I think the more relevant issues are probably 2D6 if memory serves me correctly. And there I don't have the data as we continue to try to finish out recruiting the patients who are poor metabolizers via 2D6 and so we can compare them meaningfully with the patients who have unimpaired metabolism via 2D6. So--

Can you remind us the percentage of patients who have or 2D6?

It's about 5% which is one of the reasons it's taken so long to finish this part of the trial.

Alright. I think that's it. Again, congratulations.

Thanks Michael.

Your next question is from the line of Christopher James with Rodman & Renshaw.

Good afternoon Chris.

Hi, good afternoon. Thanks for taking my questions. My first question with respect to the Phase, the recently initiated Phase IIa study. How many-- can you comment on the number of patient visits that will be required? And will that be a rate-limiting factor in getting the study underway?

I don't think it's too burdensome. There are two baseline screening exercise tests. Then there's the exercise test that we described which is done during the infusion of double-blind, drug or placebo. Then they're given oral 452 or placebo to take for a week and they come back again.

Okay. So this roughly compares with the previous Phase II study about-- about how many visits in total?

No I would say that this is a good bit simpler than the ongoing--

Okay.

Study. The ongoing study they need to come in and stay initially overnight four separate times--

Right.

At least a week apart. And then now with the cohort that we're doing, they have to stay over two nights in order to have a 24-hour infusion and then an appropriate period of observation afterwards. So this is-- and I won't get into the great details, but we've even taken care to be able, if it suits the patient and the clinician's schedule to collapse some of the screening into one day. So there is options to do things in one day or two days, just to make it convenient. They do have an overnight stay for that 18-hour infusion. They have their treadmill the following morning. They can go home that same day on their oral medication and then come back in a week. So it's actually substantially less burdensome both for the clinical site and the patient than the ongoing trial.

Right. Thanks. And do both of these Phase II, the one that recently started and the one that will start dosing patients, do both of those inform the Amgen option?

So we for reasons of confidentiality under our agreement with Amgen, we're not able to disclose which studies do and don't. What I can tell you is that it's from within the set of three Phase I studies and three Phase IIa studies that we have this data obligation. And it's within the studies that are completed, underway, or open to enrollment that we're going to be able to satisfy it. So there are no new additional studies that we are obligated to initiate in order to be able to satisfy their options.

Great. Thanks. And I guess in-- my final question. Can you give a little bit more color around the timeline as to when you submit the final data, when they will-- when Amgen or is there a clock that starts when they ultimately trigger the option?

Again there is a clock and I am sorry that I can't disclose to you the specifics of that. Again, that's a matter of confidentiality between us and Amgen.

Okay. Thanks Robert.

Thank you.

Your next question is from the line of Charles Duncan with JMP Securities.

Hi guys. Congratulations on a productive quarter.

Thank you Charles very much.

I had a couple of questions sort of kind of beating a dead horse here on the Amgen deal. First of all, the $600 million roughly milestone payments that you had laid out could be paid to you. Could you give us a rough percentage estimate of what amount of that would be pre-commercial stage versus commercial stage milestones?

It's a very good question. And obviously these are things that when we first signed the deal with Amgen we negotiated with them and came to a mutual agreement about what we could and could not say. And the only thing I can say about that is that they are weighted towards the achievement of preclinical events and not also commercial ones. But I can't break it down more specifically than that.

I'm sorry so they're weighted to preclinical or--

I'm sorry, pre-commercial. My apologies, pre-commercial.

Okay good. So maybe the majority or more than 50% are pre-commercial?

That would be my definition.

Of weighted. Okay.

Weighted.

Okay, good. That's helpful. Also it seems to me-- a lot of good questions have been asked so I'm not going to dive into the clinical stuff on 452. But it seems to me you've got clearly a very broad productive platform, broad utility. Can you give us an update on kind of where you stand with regard to IP and push them forward with the number of patents filed etc.? And then subsequently give us some additional thoughts with your new chief business officer if there could be more partnering or do you feel that you've gotten sufficient kind of external validation with two partners that you have?

Okay so let me take a stab at that. From the standpoint of IP, for ten years now we've been investing in this area of biology and this new pharmacology. And we think we've got a solid position that speaks not only to our ability to have continued freedom to operate but also in general our ability to potentially exclude others. But that's all stuff that speaks in general. What might be specific to a program I really can't get into on this kind of call. What I can say is that we have over 100 issued U.S. patents and foreign equivalents and we continue to prosecute our leadership position here as we are a first mover in the area of cytoskeletal pharmacology. And that matters a lot to us. So it's an area we continue to want to prosecute forward.

With respect to other partnering, so we're continuing to invest and as Sharon outlined invest significant sums in our research pipeline. That's highly relevant to the way we think about our business. In particular, because we think now as a pioneer in this space, we can generate novel drug candidates and other first-in-class compounds that, as they progress, represent opportunities and assets if you will for monetized new deals. I don't think that we would expect that we would only have GSK and Amgen as partners for our pipeline. But as we are now advancing additional compounds towards development or in preclinical development, we think they're at a point where they can be potential opportunities for partnership and we are in conversations and continuing to explore those types of opportunities.

Okay I think that's helpful Robert. And as I said, congrats on a good quarter of progress. Maybe we'll see you in Milan.

Thanks Charles.

Your next question is from the line of Meg Malloy with Goldman Sachs.

Good afternoon Meg.

Hi. Thanks very much for taking the question. I just wanted to get a little clarity in terms of what would happen if you submit the data that you think you need to, to Amgen and Amgen decided that a little more was needed at least in terms of how they were reading the agreement. Would that be communicated to us? And what do you think reasonable is? I realize you can't be terribly specific but would a quarter be a good way to think about a reasonable timeframe for a decision?

To answer your first question, I guess I would have to then confer with counsel and understand circumstance specific. What would then be deemed material to warrant disclosure. So I can't really answer in the abstract as much as I understand your motivation for asking the question. We do have mechanisms within the contract as we've disclosed publicly to ensure that this can't drag on forever. And as we've also announced that as we may, following the expiration of the option period, proceed forward into Phase IIb clinical trials. That renders their option null and void. So that provides some back end to it.

I'll also mention with respect to your question about whether a quarter is a right way to think about it, again I regret that that's a matter of some confidential detail that I am not at liberty to discuss.

Okay.

This is Michael Rabson. Let me just add one additional comment to that. Obviously we are in close conversation with Amgen about the program and are actively soliciting their thoughts, questions, what have you. So in addition to the formal black letter words of the contract, obviously the ongoing dialogue is important in terms of making sure that we are providing them information that satisfies their questions.

Yes I think that's a very good point Meg. As I think you and I may have discussed in the past, we're engaged with a regular, near daily, dialogue with Amgen on matters as varied as clinical trial design, data interpretation, formulation sciences and development, safety pharmacology, and everything in between. So we are quite transparent with Amgen as to where we are through the course of the conduct of this program. And it's not as if we're just going to dump a data package on their doorstep and start a clock. This is a very regular conversation we're having with them and we invite them into that dialogue and they've provided some very valuable inputs to us as we conduct this program.

Okay that's very helpful. And if I could follow-up a question to Andy, in terms of further down the line when you're in a position to assess efficacy, what do you think would be the primary measures in an acute setting? And what would be the primary measurers in a chronic setting?

Well, as we've disclosed in the past, we're intending to develop the drug to show a reduction in death and recurrent hospitalization for heart failure. And it's not currently our intention to register separately the IV from the oral. So in that scenario, we don't need to demonstrate per say.

It's our understanding now and obviously all this would need to be further discussed and confirmed with the FDA, but when using the intravenous formulation in a trial simply as a bridge to the oral, which is what we would be doing in our proposed design, we don't necessarily need efficacy endpoints to be demonstrated to be significantly affected by the drug.

Now we will certainly look at things. We'll look at the global symptom scores that you've seen used in other trials of acutely decompensated heart failure. We'll certainly look at this dyspnea. We'll certainly look at global status evaluations. And all the other things that can and have been used in trials of acutely decompensated heart failure. But we won't be pressed to show that they're significantly affected by IV treatment per say in order to have a positive outcome to the trial. If they are, the trial will be designed in such a way to make clear statistical statements about those endpoints following achievement of the initial primary endpoint. Then we'll step down into the secondary endpoint.

So Meg, we have a real advantage here for having the same molecule being available as both an IV and an oral to track these patients longitudinally both in hospital and outpatient. And I think Andy and his advisors have come up with a very clever and validated approach that allows us to track patients when they are at most high risk of events that would benefit from drug treatment. And as we can collect events both in hospital and outpatient across the continuum of care that would be our aim.

And if I may just one follow-up on that. That's very helpful. I'm wondering-- I know this-- I don't believe this has been done but given the unique mechanism and in a potential impact on contractility, I'm wondering if particularly in acute-- well I don't know maybe it takes longer but would something like improved ejection fraction on its own be--?

I doubt it. The agency has always taken a particularly dim view of ejection fraction in particular as an endpoint. They have accepted wedge pressure in the case of Nesiritide. But they wanted also a demonstration of an improvement in symptoms coincident with that. So I think what they'll accept has been pretty well aligned out. And what the EMEA will accept and what the FDA will accept are not the same, which makes registration of an IV-alone compound more and more problematic. So we'll-- I mean I don't think it'll be disappointed by the degree of or the richness of the endpoints that we will evaluate but I think you'll see that we're in an advantage by not having to necessarily move them in a statistically significant fashion with the IV alone.

By combining the IV and oral into one regimen and evaluating that in a registration study, we also believe that we may have the potential for a global registration dossier that could satisfy both U.S. and other foreign regulatory authorities.

Okay and if may one last one and I know this premature cause you don't have all the data, but do you have any sense about the sizing of the study then with a reduction in death and MI as a primary endpoint in heart failure?

I think the only thing that would be prudent to say and certainly it's not going to be hundreds but it would in the thousands.

Yes and I wouldn't necessarily point you to death and MI Meg because it's quite possible that the way we might construct this composite endpoint would be looking at death and hospital readmission, something that has been validated by existing development programs that FDA has already provided a read on and where that event rate, the hospital readmission rate especially for patients recently discharged is quite high.

Okay. Well thanks a lot. It's very helpful

Thank you Meg.

Your final question is from the line of George Zavoico with Cantor Fitzgerald.

Hi George.

Hi Robert, Andy, Sharon, hi everyone. A couple quick questions regarding the skeletal muscle program. Number one, that's standalone. Amgen has no option on that whatsoever or first look, do they?

That is correct. They do not.

Okay and can you remind us of what the guidance was on that regarding the IND?

So we haven't really given specific guidance on that. I think it's premature until we conduct some of these IND-enabling studies. I don't think it's unreasonable to assume it could occur in '09. But that's not something that we're specifically stating until such time as we've completed the safety, pharmacology, and tox work. We've done the scale up to the point where we think we're at a better position to make a bold statement like that. But it's not atypical for a preclinical development program to be 6 to 12 months.

Okay. For the new Phase II trial, did you say how many trial size you're opening on that one? I may have missed that.

We didn't say.

And are you going to say or can you say?

It's not our intention to go through it like that. Although I will tell you George as you and others know that in due course this study like others once they are initiated get posted to clintrials.gov and they'll be additional information that we'll be made available and public then.

Okay. And you've got a pretty good sense of Phase I and Phase II program now. You've got exercise tolerance, drug-drug interactions, oral formulation studies various subsets of heart failure, stable and ischemic, the IV to oral. Do you see that the Phase I program is now fairly complete with regard to what you need to do or is there a possibility that you might need to do some more Phase I trials?

There will definitely need to be some more Phase I studies that we can do in parallel with later Phase II and Phase III studies. I mean for example some of them are pretty mundane. One example would be from the final supply chain. For a modified release formulation you need to do a food fasting study. We've mentioned in the past that we want to look at the kinetics of the drug in patients with significant renal disease because of the prevalence of meaningful renal dysfunction and acutely decompensated heart failure. For an oral compound that's administered chronically, we'll need to look at patients with hepatic impairment. So there will be other studies. And if you sat and looked at any generic drug development program, you could predict them.

Yes and as Andy points out those would more likely, were they to occur, happen in parallel with prosecution of CK-452 through to Phase IIb and Phase III and not something that we're pointing to for 2008 nor something therefore that would be required to satisfy Amgen's option.

Okay and with regard to Amgen's option, if they do exercise it, did they-- could you remind us whether they take over pretty much all of the clinical development costs including the additional Phase I trials that may occur that you just mentioned?

That's correct. They would be then responsible for sponsorship of the full program 100% of the costs and we would be with them jointly architecting the development plan against which those costs would be incurred as well as we have certain rights as a preferred provider if you will of clinical research services so to speak to be in first position to conduct those on behalf of the collaboration, to operationalize them if you will. So in that way we could be the beneficiary of sponsored development dollars. But it would be at their expense that any further development would occur if they were to exercise. And then as you know, we would then be ourselves party to milestone payments and an option we retain to co-invest in the late-stage development in order to buy up our economics.

Okay. Terrific. Thank you. Thank you very much and congratulations.

Thanks George. Appreciate it.

There are no further questions at this time. I will now turn the call back over to Mr. Robert Blum for closing remarks.

Again, thank you to all the participants for your continued interest in Cytokinetics. Operator, I guess we can conclude the call. Have a good day everyone.

Thank you for participating in today's conference call. You may now disconnect.