Cytokinetics Inc (CYTK) 2008 Q2 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics second 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, Cytokenics' Senior Vice President of Finance and CFO. Please go ahead.

Good afternoon and thank you for joining the Cytokinetic senior management team on this conference call to discuss our second quarter 2008 results. Also present during the 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 Michael Rabson, Senior Vice President of Business Development and General Counsel.

Following the forward-looking statement disclaimer, Robert will provide an overview of the past quarter. Andy will then provide highlights and details of the progress of company's clinical development program. Afterwards, I will review the financial performance for the second quarter, and Robert will then review certain of our past quarter's 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 discussion.

The following discussion, including our responses to questions, contain 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 activity; and the results and the significance of results from such activities; our provision of data to Amgen to inform its potential exercise of its options; 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 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 quarterly report on Form 10-Q. 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.

During the quarter Cytokinetics continued to advance drug candidates and key clinical development activities across each of our heart failure and our oncology programs. Most notably, in the second quarter we announced clinical data in our heart failure clinical development program for CK-1827452, or CK-452, our novel cardiac myosin activator. Andy will elaborate; in a late-breaking trial session at the June 2008 Heart Failure Congress of the European Society of Cardiology, we announced interim phase 28 data from an ongoing clinical trial of CK-452. These data show that CK-452 produced statistically significant and clinically relevant increases in cardiac pumping function in stable heart failure patients. These data from this trial, together with encouraging data from three other Phase I trials of CK-452 also announced in the second quarter, add to our enthusiasm for this novel drug candidate. We look forward to more data to follow from more trials expected to conclude in 2008. We continue to be pleased with the quality of execution and the pace of enrollment in these trials, as you will hear more in a moment.

Leveraging what we have learned from this program, we have been increasingly focusing on building out our research programs to capitalize on our expertise in muscle contractility. As evidence of progress in this area, in this past quarter we announced the selection of a development compound that represents a potentially novel therapeutic approach to activating skeletal muscle for the potential treatment of skeletal muscle weakness associated with neuromuscular diseases and other conditions. I will expand on these activities later in the call.

In our oncology program, Cytokinetics announced presentations made at the American Society of Clinical Oncology, or ASCO, relating to our most advanced kinesin spindle protein, or KSP, inhibitor, ispinesib. In addition, again at ASCO and also at the 10th International Conference on malignant lymphoma, we announced presentations relating to our second KSP inhibitor, SB-743921, or SB-921. Most significant amongst these presentation were data that reflected the favorable safety profile and increased dose density achieved when these drug candidates are dosed every two weeks versus every three weeks. We believe these data lend support to the therapeutic hypothesis that in our current more frequent treatment schedule we may observe amplified clinical activity compared to what has previously been previously observed on the every three--week schedule, while still also preserving favorable tolerability.

Lastly, also in the second quarter investigators presented clinical data at the American Association of Cancer Research, or AACR, relating to our third anti-cancer compound, GSK-923295, or GSK-295, an inhibitor of centromere-associated protein-E, or CENP-E. As you will hear throughout our call today, we feel we had another strong quarter, and are continuing into the second half of the year with optimism and momentum on multiple fronts.

With that, I will now turn the call over to Andy.

Thank you, Robert. This was indeed a busy quarter for the company, with presentations of data from both our cardiovascular and oncology programs at several medical conferences. But obviously the highlight of the second quarter was the announcement of promising interim results from our ongoing multicenter, 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 in this patient population. The safety data from this interim analysis suggests that the drug was well tolerated, with no serious adverse events reported in patients exposed to the intended range of doses and plasma concentrations. In addition, a pharmacodynamic, pharmacokinetic analysis which included 22 patients, eight patients from each of the completed cohorts 1 and 2, and six patients from the then ongoing cohort 3, showed that when compared to placebo, CK-452 produced clinically significant and clinically relevant increases in Doppler-derived stroke volume and fractional shortening as a consequence of statistically significant prolongations of systolic ejection time.

In the high CK-452 concentration study, stroke volume, the volume of blood bumped during each heart beat, increased versus placebo from its mean baseline value of 71 ml by an average of 19 ml. In addition, on average, fractional shortening increased versus placebo by 4 percentage points and systolic injection by 95 milliseconds. All of these increases achieved statistical significance, with P values less than or equal to .01. Cytokinetics continues to enroll patients in the fourth cohort of this trial.

As a reminder, the ongoing cohort 4 is similar to cohort 3, in which we examine doses that target plasma concentrations in the same range that was evaluated in cohorts 1 and 2. That is, between 90 and 650 nanograms per ml. In cohorts 1 and 2, we infused the study drug for two hours; in cohorts 3 and 4, we extended the duration of infusion to a total of 24 hours.

Regarding the rest of our clinical program for CK-452, Cytokinetics continued to enroll patients in a double-blind, randomized, placebo-controlled Phase IIa trial designed to evaluate the safety and tolerability of 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 treadmill exercise tolerance. The secondary objectives of this trial are to assess the tolerability of CK-452 administered as an oral formulation for seven days, and to evaluate the resulting plasma concentrations. The trial is designed to evaluate two cohorts, each of 45 patients, with each patient in each cohort having an injection fraction less than or equal to 35%.

It is important to note that this trial is designed to be a safety trial, and is not powered to evaluate efficacy endpoints. Instead, the trial is intended to assess whether patients may have difficulty during maximal exercise while receiving CK-452. I am pleased to report that Cytokinetics has completed enrollment of the first cohort in this trial, meaning that 45 patients have received either a CK-452 regimen targeting 295 nanograms per ml, or placebo in a 2 to 1 ratio. This trial began in late April, and so to have enrolled 45 patients so quickly is a real testament to the diligence of our investigators, the CRO, and our team at Cytokinetics. We are now conducting an interim safety evaluation of the first 30 patients in the first cohort. If this evaluation does not reveal safety issues associated with the use of CK-452 in these patients, we may then proceed with the second and final cohort, in which patients would be randomized 2 to 1 to CK-452 at a target peak plasma concentration of 550 nanograms per ml, or placebo.

Cytokinetics continues to screen patients for our open-label, non-randomized Phase IIa clinical trial designed to evaluate 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 oxygen efficiency, 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 patient and, when we do, in keeping with our precedent, we will elaborate further on this trial's design. The delays we have experienced in initiating dosing in this trial come as a result of patients failing to meet the study's entry criteria. Of note, there is not one criterion that is primarily responsible for our difficulty in enrolling patients; but rather, several, considering that over 40 patients have now been evaluated for dosing in the trial. We remain confident that the one clinical site now screening patients has available the appropriate population for the conduct of this trial. That said, we are also adding additional sites, and we expect them to be online in the third quarter. This trial is not designed to be large in terms of patient numbers. We anticipate data from this trial will be available in 2009.

Also during the quarter, Cytokinetics announced updates relating to three Phase I clinical trials of CK-452. The first trial is designed to evaluate the potential for drug-drug interactions occuring via each of two drug metabolizing enzymes; cytochrome P-4503A4, often shortened to CYP3A4, and also CYP2D6. Interim results show that in CYP2D6 extensive metabolizers ketoconazole, a potent inhibitor of CYP3A4, caused a modest reduction in the clearance of CK-452, and consequently a modest but statistically significant increase in the elimination half-life of CK-452 from 22 to 27 hours. This modest increase in the half-life of CK-452 with ketoconazole resulted in an approximate 50% increase in the area under the CK-452 plasma concentration versus time curve, or AUC, which reflects the overall exposure to the study drug, and which increase was also statistically significant. Importantly, however, the maximum CK-452 plasma concentration, or C-MAX, was unaffected by ketoconazole. It was 65 nanograms per ml without ketoconazole and 67 nanograms per ml with, a difference which was not significant.

In contrast with these data, clinically significant interactions with ketoconazole are often characterized by increases in the C-MAX and AUC in the range of 20 to 30 fold. Diltiazem, a moderate inhibitor of CYP3A4, had no effect on either the C-MAX or the AUC of CK-452 when the two were coadministered to extensive metabolizer subjects, although the half-life increased slightly from 18 to 20 hours, and this relatively small increase did achieve statistical significance. Cytokinetics continues to screen and enroll subjects with the poor metabolizer genotype for CYP2D6, who comprise 5% or less of the population.

The second trial was designed to evaluate the safety, tolerability, pharmacokinetics and dose proportionality of an oral formulation of CK-452, administered both as a single oral dose and as multiple oral doses of 10 mg and 30 mg capsules. Final results showed CK-452 was well tolerated in the trial, with no drug-related serious adverse events. Dose proportionality was demonstrated between a 10 mg and 30mg dose level.

The third trial evaluated three modified release formulations of CK-452, from which one formulation was selected for further clinical testing. In both the fasted and fed states, the single dose pharmacokinetics of this formulation demonstrated lower peak and higher trough CK-452 plasma concentrations as compared to the immediate release formulation, without a substantial effect on overall bioavailability.

In summary, we are pleased that the data emerging from the Phase I and IIa trials of CK-452, and we will have more to say about these trials in the coming months. Moreover, we are pleased with the pace of enrollment in our ongoing clinical trial intended to satisfy the requirements of Amgen's potential option exercise decision relating to CK-452.

Now moving to our oncology clinical development program, in June at AFCO Cytokinetics announced interim 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 naive patients with locally advanced or metastatic breast cancer. The authors concluded that preliminary data suggests that ispinesib it is well tolerated when dosed on days 1 and 15 every 28 days at doses up to 12 mg/m2. Cytokinetics continues to enroll patients and to dose-escalate in the Phase I portion of this trial.

Also at ASCO, the National Cancer Institute presented final data from a Phase I clinical trial designed to evaluate the safety, tolerability, pharmacodynamics and pharmacokinetic profile of ispinesib as monotherapy administered as a one-hour infusion on days 1, 8 and 15 of a 28-day schedule to pediatric patients with relapsed or refractory solid tumors. Of the 24 patients enrolled in this clinical trial, 18 were evaluable for toxicity, and 23 evaluable for a response. The authors concluded that the maximum tolerated dose, or MTD, on this schedule for this patient population was 9 mg/m2. The best response observed is a stable disease at seven courses. Three patients experienced stable disease for longer than three courses of therapy. The authors concluded that ispinesib was well tolerated in pediatric patients, with neutropenia and hepatotoxicity representing the most commonly observed dose-limiting toxicities, or DLTs.

In June, in association with proceedings at both ASCO and the Tenth International Conference on Malignant Lymphoma, interim data was presented from the phase I portion of a Phase I/II clinical trial of SB-921 as a potential treatment for with Hodgkin or non-Hodgkin lymphoma. The authors concluded that the pattern of neutropenia onset and recovery support a dosing schedule for SB-921 of days 1 and 15 of a 28-day cycle. The maximum tolerated dose of SB-921 was 6 mg/m2 when given on days 1 and 15 every 28 days, without granulocyte colony-stimulating factor, or G-CSF, support. This represents a greater dose density and average daily dose exposure of 0.43 mg/m2/day than on the previously studied schedule of 4 mg/m2 or 0.19 mg/m2/day when given every 3 weeks. The only dose-limiting toxicities observed without G-CSF was neutropenia; therefore, further dose escalation with empiric, prophylactic G-CSF is ongoing. To date, one objectively confirmed partial response has been observed at the maximum tolerated dose without G-CSF in a patient with Hodgkin lymphoma.

Also in June, Cytokinetics announced the results of a Phase Ib clinical trial sponsored by GlaxoSmithKline designed to evaluate ispinesib in combination with capecitabine, an oral chemotherapy agent commonly used in the treatment of breast cancer. The investigators in this clinical trial concluded that the combination of ispinesib with capecitabine had an acceptable tolerability profile on the 21-day schedule investigated in the trial. The dose-limiting toxicities in this combination regimen were consistent with the monotherapy toxicities of ispinesib, which was prolonged neutropenia, and capecitabine, which was rash. In this trial, the best response observed among the 24 patients treated was one partial response in a patient with advanced breast cancer. 11 patients had a best response of stable disease.

Turning to GSK-295, during the quarter GSK continued to enroll and dos-escalate patients in the ongoing first-time in humans clinical trial. This open-label, non-randomized, dose-finding Phase I trial is designed to investigate the safety, tolerability, pharmacodynamics and pharmacokinetic profile of GSK-295 in patients with advanced solid tumors. An oral presentation at the 2008 (AACR Annual Meeting highlighted interim clinical data from this trial, and concluded that the pharmacokinetics of GSK-295 were generally dose-proportional over the dose range of 10 to 80 mg/m2, and that intrapatient pharmacokinetics on days 1 and 15 were similar.

With that update on our clinical development progress in the second, I will now turn the call back over to Sharon, who will detail our second quarter 2008 financials.

Thank you, Andy.

For the second quarter ending June 30th, 2008, our net less was $15.4 million or $0.31 per share, compared to a net loss for the same period in 2007 of $12.6 million or $0.27 per share. Revenues from research and development collaborations for the second quarter 2008 were $3.1 million, compared to $3.2 million for the same period in 2007. Revenues for both the second quarter 2008 and 2007 were primarily derived from the company's collaborations and option agreement with Amgen. Total research and development, or R&D, expenses in the second quarter of 2008 were $14.9 million, compared to $13.7 million for the same period in 2007. The increase in R&D expenses in the second quarter of 2008 compared to the same period in 2007 was primarily due to clinical and preclinical outsourcing costs, and higher laboratory and personnel expenses.

From a program perspective, for the second quarter of 2008 approximately 35% of our R&D expenses were attributed to our cardiac contractility development and research activities, 14% to our mitotic kinetic development and research activities, and 45% to our other research and preclinical development activities. Our other research and preclinical programs include our programs directed towards smooth and skeletal muscle contractility.

Total general and administrative, or G&A, expenses for the second quarter of 2008 were $4.3 million, compared to $4 million in the same quarter of 2007. The increase in G&A expenses in the second quarter compared to the same period in 2007 was primarily due to increased spending for outside services. Cytokinetics also reported results of our operations for the six months ended June 30, 2008. Revenues from research and development collaborations for the six months ended June 30th, 2008 were $6.1 million, compared to revenues of $6.4 million for the same period in 2007. The decrease in collaborative research revenues for the first six months in 2008 as compared to the same period in 2007 was primarily the result of lower revenue from our collaboration and research agreement with GSK.

Total R&D expenses for the six months ended June 30th, 2008 were $29 million, compared to $26.2 million for the same period in 2007. This increase in R&D expenses in the first six months of 2008 over the same period in 2007 was primarily due to the company's clinical and preclinical outsourcing costs and higher laboratory and personnel expenses.

From a program perspective, for the first six months of 2008 approximately 36% of our R&D expenses were attributable to our cardiac contractility development and research activities, 14% to our mitotic kinesin development and research activities, and 44% to our research and preclinical development activities. Total G&A expenses for the six months ended June 30th, 2008 were $8.4 million, compared to $8.5 million for the same period in 2007. The decreased spending in the first six months of 2008 over the same period in 2007 was primarily due to lower legal fees, which was partially offset by an increase in spending for outside services and personnel expenses.

The net loss for the six months ended June 30th, 2008 was $29.3 million or $0.59 per share, compared to a net loss of $24.3 million or $0.52 per share for the same period in 2007. As of June 30th, 2008 our cash, cash equivalents, restricted cash and long-term investments totaled $109.8 million.

That concludes the financial portion of today's call, and with that I will now turn the call over to Robert.

Thank you, Sharon.

To conclude, I would like to highlight some key points related to ongoing research and nonclinical development activities. As I mentioned earlier, during the quarter Cytokinetics announced the selection of a development compound that is a selective activator of a skeletal sarcomere. 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. The compound has demonstrated encouraging pharmacological activity in nonclinical models that suggest that it could be developed as a potential treatment for skeletal muscle weakness associated with neuromuscular diseases or other conditions. We believe that our increasing focus on our muscle biology franchise is an important investment in our future, and one that may allow us to develop novel drug candidates that address serious unmet medical needs.

During the second quarter, Cytokinetics also advanced novel smooth muscle inhibitors in lead optimization activities towards the potential selection of one or more development compounds. Company scientists have characterized the compounds in pharmacology studies, and demonstrated encouraging evidence of efficacy for inhaled formulations of certain of these compounds in preclinical broncho-constriction models relating to asthma and other reactive airways disorders. Increasingly, we are sharpening our research focus to muscle biology, as we seek to optimize and characterize modulators of muscle contractility that may point to multiple drug candidates and an array of clinical indications in an expanding pipeline.

In addition, in June, Cytokinetics announced that we agreed to extend the research term under our strategic alliance with GSK to continue to research activities focused towards CENP-E. A strategic alliance initiated in June 2001 included an initial 5-year research term, and has been extended on two prior occassions; in each case with the objective to conduct joint research directed towards CENP-E. The companies have agreed again to extend the research program for an additional year, during which each company at its own expense will continue to perform translational research directed towards CENP-E in accordance with an agreed plan.

On the corporate front, during the quarter we appointed Denise Gilbert to the company's Board of Directors. Denise brings over 20 years in the life science industry, and we are very pleased to have her now on our Board. On July 1, 2008, Charles Homcy resigned from the company's Board of Directors. Dr. Homcy remains a member of our SAB and a consultant to the company. We look forward to his continued contributions to the company's research and clinical strategies.

Now turning to key milestones. On the cardiovascular side of our business, in August, Cytokinetics plans to present additional data from the first 22 patients who completed treatment in the ongoing Phase IIa clinical trial of CK-452 in stable heart failure patients. These data are scheduled to be presented at European Society of Cardiology 2008 Congress in Munich, Germany. In September, Cytokinetics plans to present additional data from the ongoing Phase IIa clinical trial of CK-452 in stable heart failure patients as part of the Late Breaking Clinical Trials Session at the Annual Meeting of the Heart Failure Society of America in Toronto. Cytokinetics plans to initiate a Phase IIa clinical trial designed to evaluate an intravenous formulation of CK-452 administered to patients with stable heart failure undergoing clinically-indicated coronary angiography in a cardiac cath lab. We anticipates data will be available from this trial in 2009.

In the second half of 2008, Cytokinetics anticipates that data will be available from the ongoing Phase IIa trial of CK-452 in patients ischemic cardiomyopathy and angina. In 2008, Cytokinetics that final data will be available from the Phase I trial of CK-452, evaluating the potential for certain drug-drug interactions. As enrollment progresses in 2008 in all of the ongoing clinical trials of CK-452, we anticipate providing updated guidance on the timing and availability of expected data.

With respect to our oncology drug candidates, in September, Cytokinetics plans to present data from the ongoing Phase I portion of its open-label, non-randomized Phase I/II clinical trial designed to evaluate ispinesib as monotherapy administered as a first-line treatment for chemotherapy-naive patients with locally advanced or metastatic breast cancer at ASCO's 2008 Breast Cancer Symposium to be held in Washington.

In the second half of 2008, Cytokinetics anticipates final data will be available from the Phase I portion of its ongoing Phase I/II clinical trial of SB-921 as a potential treatment of patients with Hodgkin or non-Hodgkin lymphoma In October, GSK plans to present data from its Phase I clinical trial of GSK-295 in advanced solid tumors at the EORTC-NCI-AACR triple meeting International Conference in Geneva. As enrollment progresses in 2008 in these clinical trials, we anticipate providing updated guidance on the timing and availability of expected data.

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

In the first six months of 2008, Cytokinetics executed against an array of clinical development activities, while also sharpening focus to research programs that increasingly leverage our expertise and competitive advantages. We believe that in doing so, we are properly attending to opportunities to enhance our business prospects, and prudently proceeding with a strategic eye on building a durable and sustainable company. We also recognize that like many peer group biopharmaceutical companies, we are meeting with certain challenges in the current environment, and are doing what we can to position the company well for multiple-value creation opportunities.

As CEO of Cytokinetics, I am pleased to see how our employees continually are rising to the occasion. To our shareholders, I believe our collective efforts are producing results, and I look forward to keeping you abreast of our continuing progress.

That concludes the formal portion of our call today, and I would now like to open up the call to questions.

(OPERATOR INSTRUCTIONS)

your first question is from the line of Michael Aberman with Credit Suisse.

Good afternoon, Michael.

Congratulations on a good quarter and thank you for reiterating the press release here. Can we -- can you clarify the Phase 2 IV to oral? Of the 45 patients in the first cohort, how many have finished, of the total cohort, the entire oral dosing study?

So I am going to turn it over to Andy, but just to repeat, your question is how many have finished the dosing, and I don't know that we can say anything beyond what we have said, which is that we have completed enrollment in the first cohort.

Yes, I don't think there is more that we can say. So we have got it fully enrolled. You know that at least 30 have, because we are analyzing them for safety to inform the opening of cohort 2, so it probably would be -

I mean, is it 30 of the first 30 got through the full oral dosing?

They are available for analysis of safety.

We would not be in a position to review the safety data in order to proceed into the second cohort without our ability to analyze the full safety data from the first 30 patients. So I think that probably --

Let me see if I can ask the question. My understanding of this trial is that you test the patients and they do not go forward into the oral dosing unless the second treadmill is okay?

Michael, we cannot answer that question right now. We will answer it when we present the data. You are actually asking us to give you the results of the trial. That is an outcome. It was safety trial, as you know, and you are asking for premature termination data, which we would not normally give under these circumstances.

[Lying] in a blinded fashion, if it is still blinded, I thought you would have some number of the overall.

Of course we do. Of course we monitor it, but it is not something that we or in my experience most companies are going release on an ongoing basis. There can be premature terminations in any trial, but we do not comment on them on an ongoing basis ,nor can we here. When we have the opportunity to present the data in its totality, so that we can talk about the enrollment, the patient population, all the evaluations that we've done, the laboratory parameters and everything, then we will look forward to making those data available to you. But it is not the kind of thing, unfortunately, that we can just give you right now.

That makes sense. If - in terms of the interim analysis, could you give us some understanding of what type of analysis you will be doing in those first 30 patients to determine whether you can move on to the second cohort?

Sure, I mean we will be looking at the major safety variables which we've said have to do with symptom-limited exercise tolerance. So we will be looking for how patients perform during exercise on double-blind study drug, compared to their baseline before they were treated, and the primary comparison there will be how do patients fare when they are randomized to 452 versus placebo, we'll be looking at usual safety data like electrocardiographic data, laboratory data including cardiac biomarkers like troponins, and total CPK and CKMB, and then adverse events and vital sign data.

The timing, will you announce to us and let us know when you are moving that second cohort, when you start rolling that second cohort so we know that that safety analysis is complete?

That would be our expectation, that upon completion of the safety review, if it looks like we are in a position to then proceed into the second cohort, we would be announcing that.

Okay. And lastly, I just want to clarify, the trial that is being pushed out to 2009, the catheter trial, that trial is not necessary to inform Amgen's decision, is that correct?

So what I can say is that it is not being pushed out to 2009 in terms of initiation. Certainly it is our expectation we will be initiating in the second half of the year. We expect data will be available in 2009, and while I cannot comment on what is included in the Amgen option requirements, I can reiterate that we expect to deliver what is required to Amgen in order to satisfy their option by the end of this calendar year.

Perfect. That is great. I appreciate the time and I will get back in the queue.

Thanks, Michael.

Thank you.

Your next question is from the line of Mark Monane with Needham.

Thank you. Good afternoon. Greetings from New York City. Could you comment on the -- a little bit of what we might expect or what is left in the story to be told of the 22 patients? We heard presentation from Munich, and then - but I see that there is going be more presentation of data coming up in August, and then some more data it looks like at the Heart Failure Society meeting in September. Could you outline what parameters to look for what and how might - what news might be incremental to what we already know?

Good question. So you know that we presented data on the first 22 patients in Milan at the Heart Failure Congress, and as we have indicated we will have additional data on those patients in Munich at the European Society of Cardiology. The meeting is taking place at he end of August, early September around Labor Day weekend. Then we have been accepted for presentation of data at the Late Breakers Session at the Heart Failure Society of America meeting in mid-September.

I am going to turn to Andy to elaborate on what you might expect at each of those two upcoming conferences.

Thanks, Robert. So Munich we will, as you've noted and as we've said today, have additional data from the same 22 patients that were in the analysis that was presented in Milan. In Milan, the echocardiographic variables that we were able to analyze and get summarized and presented were only the systolic injection time, the fractional shortening, the injection fraction and stroke volume. I think other echocardiographic variables that will be of interest will be the left ventricular volumes, the left ventricular and systolic and diastolic volumes to be specific.

Also, I think in terms of the drug's mechanistic on the myocardium, knowing - and I realize that I am going to get pretty technical here, but the isovolumic times, isovolumic contraction and relaxation times can inform whether the drug is working in the way that we expect it to, and its safety profile. And a poster presentation will really give us an opportunity to lay out these data in more detail than, frankly, we could do in an oral presentation, and to provide some interpretation. So, while often it is nice to have an oral presentation because it is sort of impactful and carries a lot of buzz with it, I think we are well served in this case to have a poster where we can really stand by it and go through it with you as you come, and have data tabulated in some detail. Also some of the Doppler data that bear upon diastolic parameters of the left ventricle, we'll be able to tabulate. So while it is the same 22 patients, there will be a lot more data from the echocardiographic evaluation that will be available in Munich compared to what you saw from Milan.

Then when we get to Heart Failure Society of America in Toronto, we can expect to have additional patient data available. How many? I can't say right now, but there will be more. And I just point out that each patient according to the protocol gets studied four separate times in terms of dosing, and each time they are dosed they have four echos, and every time they get an echo, that produces multiple parameters that are paired with plasma concentration. So a few patients can generate a lot more additional data, and might change things that were borderline in terms of statistical significance in Milan to statistical significance now.

So I am hopeful, and obviously I don't know, but I am hopeful that we may see emerging clarity into the pharmacodynamic effects across the plasma concentration range as we get more data to evaluate in Toronto.

That was helpful. And in terms of the standard of care in heart failure now, do you believe that these patients will be on - the stable heart failure patients that are being studied now, do you expect them to be on dijoxin and [lasix] ACE inhibitors, or ARBs in reference to different therapies?

They all must per protocol be on a beta-clocker, and either an ACE inhibitor or an angiotensin receptor blocker. They will have to be on those. They all may be on diuretics and the great majority of them are. I wouldn't want to speak without looking at the data, but my guess is that they probably all are. The dijoxin in this particular trial is excluded because its effects on the [FT] segment, making it difficult to evaluate the electrocardiogram for ischemia, and given that we want to make the ECGs in these patients be as sensitive an indicator of any potential ischemic effects as we can, we have excluded dijoxin from this study.

That makes sense. Speaking of measurements, can we turn to Sharon and ask a little bit more about what we might expect expenses to be in the - going forward in the - there's obviously a number of initiations going forward, and how many people now are at Cytokinetics, and if that is the optimal number?

So we have approximately 160 people at Cytokinetics today, and we maintain our previous guidance on a GAAP basis of $12 million in revenue between $62 million and $67 million in R&D expenses, and G&A expenses of $20 to $22 million, and that includes $9 million of noncash related expense. So we are not revising our guidance at this time for 2008.

Thank you very much for the added information, and look forward to the third quarter.

Thank you, Mark, appreciate it.

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

Hi, Joel.

Hi, thanks. I want to follow up on - I guess more generally on the previous lines of questions. You have a lot of studies going on here for 452. Can you take a step back and tell us whether you are pretty much on track with what you need to do on the critical path, not only to get what you need to get to Amgen but also just in general for moving this forward as expeditiously as possible? That is kind of the general question. And the specific question is on that cath lab study, what is going on there? Why is it that you have 40 patients that you've evaluated, and you haven't been able to find one to start the trial?

I will start again and then turn it over to Andy. Good questions.

With respect to 452 development in general, I think your point is a good one. It is not all about, necessarily, satisfying Amgen's option but also developing the drug. In this case, we have initiated and concluded or concluding five Phase I trials and opened enrollment or concluding three Phase IIa trials, so we are doing a rigorous development program for CK-452, and what we are learning in the course of developing CK-452 is that it is behaving as one would predict, based on what we new preclinically, and in healthy volunteers, and that is translating nicely now as we move forward in pharmacodynamic studies in heart failure patients. Both the IV and the ora are being studied together, as we ready to begin Phase IIb in 2009.

That Phase IIb trial in 2009 would be the first opportunity to see IV and oral married together, as maybe then reading on clinical endpoints and composite scores in heart failure that ultimately could inform how we approach Phase III. So I think we are very much on track. We are doing, I think, a particularly careful and thoughtful investigation of the PK and PD in a variety of sub-populations, so that we can be very best informed as we go into Phase IIb as to what would be the proper inclusion and exclusion criteria, and how best to allow this drug to be studied to maximize its potential performance. That said, there is obvious risks, but I think we are doing the right thing. We are on timeline. We are planning to begin that Phase IIb program in 2009. Andy, I don't know if you want to elaborate anything further to that?

I will pick up the second question, is what is going on with the cath lab study. I can't say that I expected this much difficulty getting the first patient in, but on the other hand I would say that I always knew that getting each individual patient into this trial is going to be tough. It is not a big study. The patients for this kind of an invasive study where they are instrumental invasively and studied very exhaustively are -- they are very specific and rigorous. However, each patient that we get and finally treat and study will provide a real wealth of information. So, as I mentioned during the call, it is not like there is one particular entry criterion that is really getting us. It seems like we are losing them here, there and everywhere so far. Some of it's just been bad luck, but there is as you might imagine is an injection fraction cut off. We had several patients that just don't qualify. Their injection fractions are a little bit too high.

Another frequent reason is they are approached and they may agree to participate, but then as they undergo their coronary evaluation they have no indication for cardiac catheterization, so they just never make it to the table. We have lost several that way. There have been a number of reasons but we are working with an experienced investigator, and he has enrolled these kinds of studies in the past. He, himself, assures us that this is unusual, that he can find them, and we will have more centers coming online. So we will get the relatively small number of patients that we need to complete this study, I believe, but it has been a tough start.

Okay. That is helpful. Back to the first question, just to flush it out a bit. Next year, will there be multiple Phase IIb's or is that unknown or just one? How will that work?

You know, it is not yet locked down and defined. We certainly have been making plans, and we are talking through those plans with our clinical consultants, as well as with Amgen, and I think it is probably premature for us to define what may be the clinical development activities in 2009. We certainly would give better guidance as we get closer to 2009 and into 2009. The fact of the matter is there could very well be additional Phase I and Phase II studies to go alongside coinciding Phase IIb as we approach Phase III. But I would expect that there would be at least one key Phase IIb trial that would inform movement into Phase III. Now, if Amgen were to exercise, this is subject to an agreement between Cytokinetics and Amgen, for which obviously that would have to occur post their exercise, so I can'r really be any more definitive to that.

Got it. Okay. Thanks a lot.

Sure thing, Joel.

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

Hi, Charles.

Hi, guys. Thanks for taking my question and congratulations on a good quarter.

Thank you, very much.

I had a question regarding the Heart Failure Society of America meeting coming up. Wondering if you could perhaps expound a little bit on the criteria that they use for determining whether or not you should be involved in an oral session? I imagine that Late Breaker kind of high hurdle. But perhaps were you able to provide some insights on the statistical significance or the novel data that you will be presenting?

You know, I can't speak for the people on the selection committees of these various meetings, but what I will say, because it is my personal observation, is to be selected for two Late Breaking Sessions at two Heart Failure meetings in a matter of months I think just indicates the high degree of interest in the heart failure thought leadership for what we are doing. Oftentimes when you apply for a Late Breaker, and I am just saying oftentimes and I am just speaking generically, you don't necessarily even know what the data are at the time that you put it in. You just say you think you will have this much data on these many patients, and here is the design of the study, and the results will be available at the time. So, I mean I think we have gotten a real vote of - more than confidence but really intense interest in our program from, as I said before, the thought leadership of the heart failure community.

Okay. Thanks for that added, Andy. On the oral form that you plan to take into further clinical testing, can you provide any additional characterization of that? How does that look relative to the previous oral formulation?

Yes. As you may recall, we did an oral bioavailability study in 2007, and announced this was a drug that looked like it had high oral bioavailability, essentially 100%, but where it also had a very rapid absorption, and we wanted to try to [blunt] that absorption in order to bring the peak and trough plasma concentrations more in line with one another. As we have recently announced with a summary of our Phase I activities coming out of our second quarter, we think we have accomplished that by studying a couple of different - three, rather, prototype formulations of modified release CK-452, and we've selected one then for movement into Phase IIb based on that criteria of smoothing out the pharmacokinetics, and where we would expect that we are looking at the possibility of BID dosing, if not QD dosing, or once-a-day dosing, as we may move forward.

So this is looking very positive and encouraging for our ability to have done this proper formulation sciences and formulation development. I think we are feeling quite encouraged as we approach that Phase IIb.

Good deal. You believe that will be available, Robert, for those Phase IIb's?

Yes.

Okay. And then if we could just provide a little bit more information on a follow-up to the previous questions with regard to phase IIIs. If you pull out your crystal ball, any sense as to when Phase IIIs might be entered? Is that earlyish 2010 or is it perhaps later than that?

You know, Charles, I think that would be unfair speculation at this point. So much of that is predicated on what would be end of Phase II meetings with FDA, and also conversations that could potentially include Amgen. We certainly have for internal planning purposes forecasts and projections, but I don't think it would be proper to share them externally at this stage. I think it would only be deemed premature.

Okay. That makes sense. And then my final question is more of a 30,000-foot strategy question. I like the dialogue on really sharpening the focus on muscle biology, because that appears to be a real differentiating characteristic of your platform versus some of the other things that you are working on. Can you give us some sense on the, you know, the cancer therapy side? Would it make sense at some point to really out-license that or see two different companies come from the two different platforms?

I will start with that, and I think I should probably be brief because I really don't think those kinds of conversations would be appropriate for this type of call. But what I can say is that GSK currently holds an option on our KSP inhibitors, and they are developing our CENP-E inhibitor, and those are the clinical drug candidates. We are prosecuting those programs forward with the expectation that GSK may exercise its option by the end of the year.

As we look forward, we certainly recognize what you are pointing to, which is that oncology is dynamic, it's competitive, it's complicated. But we still believe that this may be the prudent path forward, and as such we are looking at the possibility of GSK exercising its option by the end of the year. If GSK did not exercise its option, then under our renegotiated agreement with GSK, we are in a position then to proceed forward independent of them, or otherwise repartner it, and that's something that could attract additional funding.

Okay. Thanks, Robert, for the added color.

Thanks.

There are no further questions at this time. Mr. Blum, are there any closing comments?

Yes, thank you. I would like to thank all of the participants in the conference call today for continued interest in Cytokinetics. We look forward to updating you as the quarter and the second half of the year progresses. And Operator, with that we can conclude the call. Have a good day.

Thank you for participating in today's Cytokinetics second quarter 2008 conference call. You may now disconnect.