Cytokinetics Inc (CYTK) 2010 Q2 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics Second Quarter 2010 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 Barbari, Cytokinetics' Executive Vice President of Finance and CFO. Please go ahead.

Good afternoon and thank you for joining the Cytokinetics senior management team on this conference call today. Also present during this call are Robert Blum, our President and Chief Executive Officer; and Dr. Andrew Wolff, Senior Vice President of Clinical Research and Development and Chief Medical Officer.

Following the forward-looking statement disclaimer, Robert will provide an overview of the past quarter along with an update on the advancement of our development pipeline, focused on the biology of muscle function. Andy will then provide highlights and details on the progress of the Company's clinical development program. I will then provide some brief comments with respect to our financials and our investment in research and development activities. And Robert will then conclude the call with additional comments regarding our recent activities and discuss the projected Company milestones for the remainder of 2010. We'll then open the call for a brief question and answer session.

The following discussion, including our responses to questions, contains statements that constitute forward-looking statements for the purposes of Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to our financial guidance; to the initiation, enrollment, design, conduct, and results of clinical trials; and to other research and development activities. Our actual results might differ materially from those projected in these forward-looking statements.

Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings, including our most current quarterly report on Form 10-Q and our current report on Form 8-K. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website.

These forward-looking statements speak only as of today. You should not rely on them as representing our views in the future and we undertake no obligation to update these statements after this call.

Now I will turn the call over to Robert.

Thank you, Sharon. During the second quarter, Cytokinetics took additional steps to execute on the Company's business plan directed to the biology of muscle function. In the second quarter, we initiated dosing in two Phase IIa Evidence of Effect trials of the lead drug candidate from our skeletal muscle activator program CK-2017357 or CK-357; one in patients with amyotrophic lateral sclerosis or ALS and the other in patients with symptoms of claudication. With these trial initiations, we are demonstrating clear progress towards our goal of advancing a broad and sustainable pipeline of novel mechanism drug candidates.

We are especially pleased with the continuation of the Phase 11a trial of CK-357 in patients with ALS. In recent days, we conducted an interim review of the data with results supporting the continuation of this trial under the current protocol. As Andy will elaborate, we are pleased with what we have seen to date in terms of the apparent safety and tolerability of CK-357 in these patients as well as the dose proportional and predictable pharmacokinetic profile of this drug candidate in the patients studied. We look forward to additional data from this trial by the end of the year.

As Andy and I will both discuss later in the call, Amgen and Cytokinetics continued to work closely together in the development of omecamtiv mecarbil as a potential treatment for heart failure. We expect to be initiating in the coming months under Amgen's sponsorship a pharmacokinetic trial of two distinct oral formulations of omecamtiv mecarbil in stable heart failure patients as well as an additional study of an oral form of our drug candidate in renally-compromised patients. Moreover, we are together putting the finishing touches on the protocol for a Phase IIb trial intended to evaluate the intravenous form of omecamtiv mecarbil in more acutely ill heart failure patients.

Overall, in the second quarter, Cytokinetics continued to execute well against clinical development timelines with the goal of progressing our therapeutic pipeline and importantly doing so in a fiscally-responsible way.

I'd now like to turn the call over to Andy to elaborate on the specific clinical progress achieved during the last quarter in our respective drug development programs and to provide some insights into our plans for the future.

Thank you, Robert. The second quarter was a busy one as our activities centered on advancing our lead drug candidate from our skeletal muscle activator program, CK-357, in two Phase IIa Evidence of Effect trials designed and conducted by Cytokinetics. In the last quarter, we initiated dosing in our Phase IIa Evidence of Effect clinical trial of CK-357 in patients with ALS. You may recall that this trial is a double blind, randomized, placebo-controlled, three-period crossover, pharmacokinetic and pharmacodynamic trial of CK-357 in at least 36 and up to 72 male and female patients with ALS. To remind you, the primary objective of this hypothesis-generating trial is to evaluate the pharmacodynamic effects of CK-357 on the measures of skeletal muscle function or fatigability in patients with ALS as single doses of 250 and 500 milligrams. The secondary objectives of the trial are to evaluate the relationship, if any, between the plasma concentration of CK-357 and its pharmacodynamic effects to evaluate the safety and tolerability of the two single doses of CK-357 administered orally to patients with ALS and to evaluate the effects of this drug candidate on patient and investigator-determined global functional assessments.

Study assessments include various measures of muscle strength or fatigue, employing both maximum and sub-maximum voluntary contractions as well as measures of pulmonary function. These measurements are taken at baseline and at 3, 6, and 24 hours post dosing after each of 2 single doses of CK-357 and placebo. A washout period of 6 to 10 days between doses exists. In this early Phase II hypothesis-generating trial, these multiple pharmacodynamic assessments are made without specifying a single primary endpoint.

As Robert mentioned, in July, we conducted an interim review of the data from this ongoing trial. I am pleased to report that the results demonstrated that CK-357 appeared to be well tolerated in these ALS patients and no serious adverse events were reported. Reports of dizziness, the most clearly dose-related adverse event observed, were all mild and were not unexpected based upon our Phase I studies in healthy volunteers. In particular, to date, we have observed a lower incidence of euphoria compared to the Phase I studies. In addition, in this review CK-357 appeared to exhibit dose proportional and predictable pharmacokinetics.

Based on these interim data, the Company has decided to proceed with the trial as designed with no changes to the protocol. We continued to enroll and dose patients in accordance with the Company's plan at 15 clinical trial sites.

During the quarter, we also initiated and dosed the first patients in a second Phase IIa Evidence of Effect clinical trial, also a double blind, randomized, placebo-controlled, three-period crossover, pharmacokinetic and pharmacodynamic trial of 357 but in patients with symptoms of claudication associated with peripheral artery disease. This trial will enroll at least 36 and up to 72 patients in which patients will receive in random order a single oral dose of placebo, 375 milligrams or 750 milligrams of CK-357 over the course of the 3 dosing periods, with a washout period of 6 to 10 days between doses.

The primary objective of this early Phase II hypothesis-generating trial is to evaluate the pharmacodynamic effects of single doses of CK-357 on measures of skeletal muscle function and fatigability in these patients. In this trial, multiple assessments of skeletal muscle function and fatigability will be performed, again without specifying a single primary pharmacokinetic endpoint. Assessments include the number of contractions, the time, and the work performed to the onset of claudication and to intolerable claudication pain or to maximum calf muscle fatigue during bilateral heal raise testing. A six-minute walk test will also be performed during each dosing period.

The secondary objectives of this trial are to evaluate and characterize the relationship, if any, between the doses and plasma concentrations of CK-357 and its pharmacodynamic effects and to evaluate the safety and tolerability of CK-357. We continue to enroll and dose patients in eight clinical sites in accordance with our plan. Additional information about these Phase IIa clinical trials can be found on www.clinicaltrials.gov.

Lastly, during the quarter, we continued our non-clinical development of the backup potential drug candidate to CK-357 from our fast skeletal muscle troponin activator program.

Moving now to our cardiovascular program and our collaboration with Amgen for the further development of omecamtiv mecarbil for the potential treatment of heart failure. In the second quarter, Cytokinetics and Amgen readied for the planned Phase Ib, IIa, and IIb clinical trials of omecamtiv mecarbil, which are expected to get underway over the next several quarters.

Turning to our smooth muscle myosin program, we continued those non-clinical development activities during the quarter.

With that update on our clinical development activities in the second quarter, I'll turn the call back over to Sharon.

Thank you, Andy. As our press release contained detailed financial results for the second quarter ended June 30th, 2010, let me refer you to that public statement.

We ended the second quarter with $87.6 million in cash, cash equivalents, and investments excluding restricted cash, which represents over 18 months of going-forward gross cash burn based on our 2010 financial guidance. Our guidance for the full year 2010 is anticipated to be a gross cash burn of between $52 million to $58 million and does not include any revenue from our partner Amgen or other revenue sources such as grant funding or potential strategic partnerships.

Our second quarter 2010 R&D expenses totaled $10.2 million. From a program perspective for the second quarter, approximately 79% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, 7% to our cardiac muscle contractility activities, and 12% to our other research and non-clinical development activities including our smooth muscle contractility program, and 2% to the wind down activities related to our mitotic kinesin inhibitor development and research activities.

For the 6 months ended June 30th, 2010, our R&D expenses totaled $19.3 million. From a program perspective for the 6 months, approximately 76% of our R&D expenses were attributable to our skeletal muscle contractility activities, 6% to our cardiac muscle contractility activities, and 14% to our other research and non-clinical development activities, which include our smooth muscle contractility program, and 4% to our mitotic kinesin inhibitor development and research activities.

As you can see, we continue to focus our financial resources largely on our skeletal research and development program, which we believe may provide the nearest term value generation for the Company. In addition, in July, as part of the settlement agreement with UBS AG related to the failed auction rate securities held by Cytokinetics, the remaining auction rate securities of $7.5 million were purchased at par by UBS AG.

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

Thank you, Sharon. As you have heard, in the second quarter, Cytokinetics continued to execute on key milestones associated with each of our programs in development. Beginning with our skeletal program and our Phase IIa trial of CK-357 in patients with ALS, our most recent activities have focused to the conduct of an interim review of the data from this ongoing trial. This interim look allowed us to determine whether we needed to modify the conduct of this study in any way. The interim review of the tolerability of CK-357 in this intended patient population is encouraging. And as Andy indicated, no serious adverse events were reported. Those events that were reported were largely categorized as mild and were not unexpected.

In addition to this review, our clinical, regulatory, and legal teams have worked very hard to gain site approvals and initiate the remainder of the clinical sites to be involved in this trial while also supporting those that were already up and running. We continue to be impressed with the pace of enrollment of this ongoing Phase IIa trial as well as the enthusiasm from participating investigators who are also working diligently in the field to (inaudible) results that may inform the promise of this novel approach to treating this uniformly fatal disease.

As mentioned previously, we believe that if CK-357 demonstrates promise in ALS patients, then it also may have the potential to demonstrate activity in terms of an improved functional status in patients with other neuromuscular dysfunction. The initiation of our second Phase IIA Evidence of Effect trial in patients with symptoms of claudication associated with peripheral arterial disease demonstrated Cytokinetics commitment to also exploring CK-357 in non-neuromuscular indications. We are pleased with this trial's pace of enrollment as well. While it is too early to point to where we might see data from this trial, we believe that if CK-357 demonstrates promise in patients with claudication, then it may also have the potential to demonstrate activity in a number of other conditions tied to muscle impairment and loss of muscle function, as is increasingly common in the frail elderly.

When we first outlined our strategy behind selecting ALS in claudication for our first two Evidence of Effect trials, we indicated that these hypothesis-generating trials could allow us to also chart a path into additional indications. As further recognition of our commitment to exploring novel ways to expand our non-clinical and clinical research in this area, earlier this week we announced that Cytokinetics was awarded a $2.9 million grant from the National Institute of Neurological Disorders and Stroke as part of the American Recovery and Reinvestment Act of 2009. The proceeds from this award are intended to support both preclinical and clinical development of CK-357 as a potential treatment for myasthenia gravis. Cytokinetics will continue to explore avenues such as this to fund additional programs as we believe that these additional funds can be tapped to supplement our internally-funded programs and enable us to expand the number and breadth of our programs.

And lastly with respect to CK-357, in July, a late-breaking abstract summarizing data from the second part of a two-part Phase I clinical trial of CK-357 was presented at the International Congress of Neuromuscular Diseases. The authors concluded that the mechanism of action of CK-357, which was demonstrated in preclinical models, can be translated into statistically-significant and potentially clinically-important increases in skeletal muscle performance in healthy volunteers.

Moving now to our cardiac contractility program. As you've heard, Amgen and Cytokinetics have been working together in advancing the omecamtiv mecarbil program through the next stages of development. The two companies are locking down the design of the Phase IIb clinical trial for the intravenous form of our novel drug candidate, which will be conducted as part of a development program that also will include a Phase IIa pharmacokinetic trial scheduled to begin in mid-2010 and a Phase Ib pharmacokinetic study scheduled to begin in the second half of the year. We believe that this strategy represents prudent drug development and that the results should provide us with key information that can rapidly inform potential next steps in the latter stage development of our first-in-class compound.

Heart Failure, a journal of the American Heart Association. In the paper, the authors concluded that chronic infusion of omecamtiv mecarbil improves left ventricular function in a preclinical model of systolic heart failure without the limitations of progressive desensitization and increased oxygen consumption. This publication exemplifies Cytokinetics' commitment to execute a publication strategy in support of our scientific contributions.

Turning now to our smooth muscle biology program and as a reflection of similar progress relating to our ongoing research activities, we continued to [inform] potential applications of our smooth muscle myosin inhibitors. During the quarter, we presented a poster at the American Thoracic Society's 2010 International Conference in which the results suggest that direct inhibition of smooth muscle myosin may be a novel therapeutic approach for the treatment of chronic obstructive pulmonary disease and asthma. We look forward to sharing with our shareholders our future plans for the further development of these first-in-class compounds arising from this program.

Now, I'd like to review the upcoming 2010 milestones relating to each of the programs in clinical development. For omecamtiv mecarbil, we anticipate that in mid-2010, Amgen will initiate a multi-center, open label, Phase IIa clinical trial of a modified release and an immediate release oral formulation of omecamtiv mecarbil in male and female stable heart failure patients. We anticipate that in the second half of 2010, Amgen will initiate a Phase Ib multi-center, open label, single dose, safety and pharmacokinetic clinical trial of a modified release oral formulation of omecamtiv mecarbil in patients with various degrees of renal dysfunction. And we anticipate that by year end 2010, Amgen will initiate a randomized, double blind, placebo-controlled, Phase IIb clinical trial of an intravenous formulation of omecamtiv mecarbil in hospitalized acute heart failure patients with left ventricular systolic dysfunction.

Turning to our skeletal muscle program, in December we plan to present data from the ongoing Phase IIa Evidence of Effect clinical trial of CK-357 in patients with ALS at the 21st Annual International Symposium on ALS MND in Orlando.

In concluding, we believe that the work that we have done in the first half of 2010 has placed Cytokinetics on solid footing to support the further advancement of our novel drug candidates in well-considered clinical trials and in well-characterized patient populations. I'm pleased that there continues to be enthusiasm within the medical, scientific, and patient communities for the work we are doing and to the novelty of our drug candidates that we are developing. Our employees continue to execute well in the interest of potentially bringing value to patients in severe need of better therapeutics to address their grievous illnesses.

Along side these activities, and hand in hand with our demonstrated progress, we believe we are potentially building enhanced and sustainable value for our shareholders.

Operator that concludes the formal portion of our call today. I'd now like to open up the call to questions if you please.

(OPERATOR INSTRUCTIONS) Your first question comes from the line of Charles Duncan with JMP Securities.

Good afternoon, Charles.

Good afternoon. Thanks for taking my question. Congratulations on a nice quarter of progress. I had a question on 357 with regard to ALS. It's nice to see that the drug appears to be-- drug candidate appears to be safe at least in-- so far in your trial. Is that-- can that give you any sense as to I'll call it mechanistic proof that you've got a dose that might be working? Is there-- is it good to not have any events there? Can you provide more color on that observation?

Well I did mention that the most clearly dose-related adverse event was dizziness, which we also saw in a dose-related fashion in one of our Phase I studies. Actually, we saw dizziness throughout our healthy volunteer studies. It was generally mild. But it was there and in the study where we had the most doses in a crossover design and could most clearly evaluate the dose response, the incidence of that particular report did increase with increasing dose. And we see that again here with ALS. So I think we're in an active range based upon that.

And with regard to compelling evidence of efficacy in the ALS study, we've talked about that before but are you really looking for muscle strength parameters to improve? And what's your view on the predictive value of those kind of measures? Or is it more of a biomarker look that you'd like to see?

Well we're looking at a variety of different assessments in the ALS study in particular. And certainly measures of strength in various muscle groups including large limb muscle groups and grip strength both at maximum voluntary contraction and at sub-maximum targets are part of the evaluation. So also, we mentioned but very briefly in the call is a patient global assessment. Just do you feel better, worse, or unchanged, the same? The physicians are asked the same thing. Is the patient better, worse, or unchanged since before dosing? And you may be familiar that there is a patient-reported outcome tool called the ALS Functional Rating Score, which has been revised and goes by the unwieldy abbreviation of ALSFRS-R. But that's been the primary endpoint in several large trials. However, if you ask the patient to report their symptoms in comparison with how they felt before they had any ALS symptoms. So that wouldn't be in that form appropriate for a single dose trial like ours. But we worked with our thought leader investigators to modify that assessment because certain domains could potentially respond to 357 in the shorter term. For example, assessments of the patient intelligibility of speech, their difficulty swallowing, the clarity of their handwriting, that kind of thing. And so those domains have been taken from the ALSFRS-R, a long-term reported outcome tool and put into what we now call the ALS functional assessment, which allows the physician to make objective assessments supplemented by the patient reports. So all those things are part of what we're looking at in this trial.

Okay, that's helpful, added color, Andy. One last question regarding December presentation of data at the symposium on ALS. Have you submitted an abstract or is-- and is that going to be a presentation of the data that you have in hand now or do you think that you'll have data from kind of the second phase of this study available in December?

Charles, I'll take that one. We only provide such more concrete information if we know that we have had an abstract accepted for presentation, which is the case in terms of that particular meeting. So yes, we did submit and it has been accepted and we expect by that point in time, we will have much more data to share beyond the interim review that we've already conducted.

Okay, very good. Well that will be interesting to see. And then last question is in terms of next steps. Once you see that data is that do you think that you'll be able to put together a protocol that is a more definitive kind of study of call it dose and pharmacological parameters that could give you more clinical outcomes?

Yes, it's a bit premature to speculate and obviously that also has to be done in concert with what we would hope then would be discussions with regulatory authorities. But the idea here is for this study as it is hypothesis generating to then feed into a hypothesis-testing study that would potentially correlate these pharmacodynamic endpoints with measures of clinical benefit.

Okay, that's very helpful. I'll hop back in the queue. Thank you.

Thanks, Charles.

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

Good afternoon, Joel.

Afternoon. Thanks for taking the question. So, let me see, I guess the follow-up to the last question, I'm just wondering if you can tell us how many patients you've seen so far? And if things go well, how many patients might we see at the conference in December? And will you be able to comment on evidence of efficacy by any of those measures that you mentioned before at that conference?

So, at this time, we're not in a position to comment on the number of patients that contributed to this interim review. But yes, what we can say is that by the time that December rolls around, based on these enrollment rates, we expect we're going to be in a good position to report on evidence of effect arising from the data. So it won't just be a safety review. We do not expect it'll be limited to that, but rather instead also that we'll be in a position to report on some of these effects across these multiple pharmacodynamic assessments.

Okay and then when and if we see the abstract that won't include the preliminary efficacy. Presumably that would be in the poster at the meeting itself?

Correct. That doesn't mean we wouldn't choose to when we have such information as would be deemed material, issue a press release to precede the meeting. I can't say we would or would not until we might then possess the data. But, it would not likely, therefore, be in a published abstract.

Got it. Understood, okay. And then on-- okay, got that, all right. And then on omecamtiv, just a couple questions there. It looks like things are proceeding pretty much on track as far as timeline. I guess two questions for you there. Is there any way to work with your partner to maybe accelerate this? I'm wondering how the partnership is working in your view and how much say you have. Cause obviously we'd all like to see an acceleration along those lines. And the second part of that question is the timeframe for milestone payments. When's the next one you will receive? Can you give us some guidance on that as far as timing?

So I'll take those questions in order. With respect to our contributions, Cytokinetics is involved extensively in non-clinical and clinical development activities together with Amgen for this program. And we have been if not on the telephone than in person nearly every day if not several times a day working through a number of matters. And I think things are going well. We have not initiated these studies so you could interpret that to mean things could go more quickly. But I do also believe that if you look at the scope of work that's going to be done, you'll be impressed with the quality of the effort. And as these studies do get underway, I think you'll be similarly impressed.

I am very encouraged by the extent to which Andy and others in his team are engaging together with Amgen. And Amgen is taking not only their comments but engaging Cytokinetics in substantive ways that relate to strategy as well as tactics for the conduct of these studies. So, it's all good. And I think you'll see evidence of that in this second half of 2010.

You asked a second question and now I'm forgetting what it is?

Yes, when the next milestone payment might be from Amgen?

That's right. The next milestone payment. So I apologize I cannot say. We're bound to confidentiality on what would be events that would trigger milestone payments.

Fair enough. Thanks a lot.

Thanks, Joel.

Your next question comes from the line of Mark Monane with Needham & Company.

Hi, Mark.

Hey, good afternoon from New York City. The summer is flying by. And that makes me think about the time that we-- has flown by since we saw the Phase II omecamtiv data which got everybody excited. And I was wondering if you and Andy could please comment on the progress in thinking about [CHS] at other companies? Any strategies have come by that you think are disruptive or potentially additive to the strategy that you and Amgen are pursuing?

I'll make a brief mention and then turn it over to Andy. I'm not aware of for other competitive or related programs in the development of heart failure that there's anything that's informing any shifts in our strategy, a strategy that we're executing on and that's been in place for some time. It preceded Amgen entering into collaboration with us. That's both the good and the bad of it. Good from the standpoint of we have a consistent strategy that I think still serves us very well as we proceed forward. Now, together with Amgen, that is a sense that it underscores what I think is a quite significant unmet need in heart failure that I don't think is being largely addressed by other programs that suggests this is problematic for heart failure patients. But I hope that the work we're going to be doing both with the intravenous and the oral form of omecamtiv mecarbil will address that need.

Well I would agree. I think there are no other companies that are doing what we're doing in particular by targeting the sarcomere directly. And most of the other new therapies in development of which I'm aware are looking at other parts of the equation that are diuretics nephroprotective agents; basically maybe modest improvements over pharmacology that already exists.

That's helpful. And in terms of-- think about the combination strategies with the current medications that are out there. Are there a particular set of agents either ACE inhibitors or ARBs or digoxin or [laseks] or beta blockers that you think might be even more beneficial than others in thinking about appropriate management of the patient?

Well I think ACE inhibitors and beta blockers to be sure have been demonstrated to increase survival and decrease hospitalization and other pre-morbid endpoints. And they're part of the [RM interim]. And so we'll need to study the drug over a background of those therapies as it has been to date. And almost all patients are on diuretics and that will continue. And they'll be received in combination with our compound as we go forward in clinical trials. Digoxin is not as commonly used as it used to be. It's the one drug among the ones that you've mentioned that actually is at least intended to do something similar, increase systolic function. Although we all know it doesn't do it particularly well. And again as I say, it's been demonstrated potentially to reduce hospitalization but not impact mortality. And we're not seeing a lot of patients, particularly in the United States.

That's helpful. And then in the-- on the ALS trial in the Evidence of Effect, congratulations on getting to the next step. What kind of difference on the scales might be clinically relevant? I mean none of these patients are able-- are in long-term care or and therefore, they're assisted. Some are still in the community setting and could benefit from strategies and integrations to allow them to stay in the community setting. What kind of change on a scale or on a functional assessment or even maybe a prevention of institutionalization might be clinically relevant when you talk to your investigators?

Well generally they'll say that the ALS functional rating scale, the patient reported outcome tool that I mentioned earlier and not the modification of it that we're using in our study will decline in patients receiving standard of care at about one point per month.

Okay.

And so any meaningful or statistical or detectable decrement in that slope or really it would be-- making the slope more shallow or making that rate of decline significantly less is viewed as meaningful. Or sometimes if the study is run for let's say for example three months, you would expect a three-point decline from zero to three months in the untreated group. And so in the active group, showing that the decline moves only 1.5 or 2 points on average would be viewed as highly meaningful.

All right. Thank you very much for the added information and we'll look forward to the initiations and the data in the second half.

Thank you, Mark.

Your next question comes from the line of Ritu Baral with Canaccord.

Hi, Ritu.

Hi. Thanks for taking the question. I'll start with 357. So your decision not to add an additional dose at this point to the trial, was that driven more by the safety data that you've seen or have you taken a look at the blinded efficacy data?

So I'll start and again turn it to Andy. I think as we've commented publicly in the past, in as much as we were going into ALS patients for the first time with this novel mechanism drug candidate, we couldn't know whether the doses we were selecting were necessarily the right ones to conduct this clinical research. And I think we've concluded that they can be. That this is the right range for us to be operating, in terms of answering some of the questions that we're trying to answer and that was predominantly informed by the safety review. So it was not a interim review intended to look at other matters but rather one with focus to these aspects of safety.

Right, so I think in looking at the data that we have in front of us, the most I can really say at this point is there was no compelling evidence that suggested we should either increase the existing doses or need to decrease them from where they are.

Got you. Do you still have the option at this point to add a higher dose later or a lower dose later if needed? Or is that--?

We can amend any protocol taking the proper steps with regulators and ethics committees to do so. So that option continues to be there for us if we felt we needed to do it.

Okay. And have you seen any falls related to the dizziness that you've seen?

No.

In ALS patients? Okay. And the euphoria side effect, has there been any progress on elucidating that mechanism? Any theories as to why there's less of that in ALS patients than in the healthy volunteers you used in the Phase I?

To comment on why the incidence is different would be so purely speculative that I'll refrain from doing it. We do see meaningfully less than we saw in the healthy volunteers. I'll say that in general and this is across my experience of over 20 years of doing drug development and as borne out by the literature and conversations I've had with others with similar experience to mine, in general healthy volunteers report more AEs than patients. They just do. And I think for one reason, they're used to feeling healthy. So they're-- they come into a clinical trial and any little thing that at all strikes them as different becomes an adverse event to them. Patients with chronic illness are used to being chronically ill. And I think they tend to report fewer complaints in general. That's just in general with respect to anything.

Right. And then could we get any additional specific timelines for your follow-on skeletal muscle compounds, your backups?

So that's a very good question. I don't know that we can give you anything more specific other than what we're doing here in Phase IIa may inform the need or not the need to advance one of the backup or follow-on compounds as well as the potential partnering of this program may inform decisions for around that. So it's both a risk mitigation strategy as well as one that may allow us to broaden the scope and reach of the program into other indications. We can only afford to do ourselves so much right now. And with that in mind, we haven't made the decision to advance into the clinic as much as we maintain that readiness position.

Okay and can I ask about the ongoing partnership interest and talks?

Certainly. You can ask. I'm not sure how much I can answer. What I'll tell you is it continues and it continues well. And we are advancing discussions. And it's not with a single party but with multiple parties. It's not something that I could comment on in terms of when a partnership or partnerships may occur. But we continue to be pleased with the interest that we're seeing. Obviously, more data is better. But as we engage in further research and non-clinical and clinical development, we share what we can.

Right. And then moving on to omecamtiv, so the Phase IIb that you described today that was with the IV formulation. Is there any update on next steps after the IIa, so the-- basically any update on an oral Phase IIb trial? Do you need the full readout from the soon-to-be-started IIa's before starting that trial?

We do not need the readout from the Phase IIb with the IV product to begin Phase IIb with the oral product. But we are looking to data from the pharmacokinetic studies to inform which form of oral to advance into Phase IIb. So the studies that I've mentioned, one in renally-compromised patients and one comparing two of the oral forms, those studies do inform and are gating to the entry into Phase IIb for the oral program.

Got it. And so those PKPD studies, what's the estimated sort of size and duration of those? Are those things that are-- studies that will read out in-- by mid-2011?

I would first of all say they're really just PK studies.

Okay.

And so for-- they're in the range of numbers that you would accept for pharmacokinetic studies, usually a couple dozen patients or so PK studies. The Phase IIa was the oral. You could expect maybe larger, depending upon how many different doses and formulations eventually are under study.

So we can't really say much more than that although we do intend once dosing has been initiated and the protocol is firm and will likely also be communicated publicly through www.clinicaltrials.gov, we'll be in a better position to elaborate.

Great. Thanks so much.

Appreciate it, Ritu.

Your next question comes from the line of Jeremiah Shepard with Wedbush.

Good afternoon.

Good afternoon. Thank you for taking my questions. In regards to the ALS Phase IIa study, you had mentioned previously that it's scheduled to enroll 36 patients but possibly up to 72 patients. Was there any gating factor for stopping at 36 patients?

Was there any gating factor-- I don't know that I--

36 is the minimum. So it wouldn't be that there is-- I mean it-- there is much flexibility with respect to enrollment and statistical analysis in this study. It's meant to really cast a broad net to look for any evidence of a pharmacodynamic effect that we can find. Obviously, you have to tell regulators and members of ethics committees how many patients you intend to put, as they would see it, at risk in the study. And so based on some preliminary calculations of variability of the assessments that we're performing, we imagined that it would probably take at least 36 patients to generate statistically significant changes versus placebo in these assessments and possibly more. And that's why we wrote the protocol to allow us to enroll from 36 to 72 to be informed by interim looks at the data when there are sufficient data to be able to make assessments of pharmacodynamics.

So you've mentioned that you've done this interim analysis a few days ago or early part of July. Is there any more plans to do an interim analysis or is the next analysis be the final analysis?

Well, first of all I think we were careful to refer to it as a review and not an analysis. And as I did just say, we do have a lot of flexibility to undertake additional reviews and analyses of the data without doing things like adjusting your alpha error spend and so forth, as long as we do for prospectively-designed, rigorously-controlled Phase III study. So I won't say that we will or we won't provide additional interim data, but that the option is there.

Okay and on regards to the parting discussions, right now I think there's the two ongoing Phase IIa's and the planned myasthenia gravis Phase IIa in the near term. Is there any certain amount of data that you're hoping to have in hand before progressing with parting discussions?

It's a good question. I know that you'd want, as would I in your position, to handicap sort of the timing of when such an announcement could occur for partnering. The way we're approaching partnering is not at all predicated on availability of final data from these Phase IIa studies. This is a program for which there have been years of investment and research as well as non-clinical and now clinical development. And it's the totality of the information that will drive the partnering discussions. I imagine there are some potential partners who would prefer to wait for that data. There are certainly others, for whom I do not expect that to be the case. And we'll see where the dynamic of discussions may ultimately lie in terms of negotiating a deal that would ultimately be acceptable to both parties. So I wouldn't assume that per say the data is required to close a deal.

All the questions I have. Congratulations on the quarter.

Thanks so much.

Your next question comes from the line of George Zavoico with McNicoll, Lewis, & Vlak LLC.

Hi, George.

Hey Robert. Hi, Sharon. Hi, Andy. Congratulations on a good quarter, as usual. A couple of quick questions. A lot of questions have been answered already. Can you just explain why the ALS trial has doses of 250 and 500 in claudication 375 and 750? What's the rationale for that difference?

The ALS study was designed first when we were less progressed through the single dose escalation trial in healthy volunteers. And that-- those doses were at the time doses we felt were clearly likely to be well tolerated even potentially in patients who are more frail and sicker than healthy volunteers. By the time we then turned our attention to the claudication study, we'd progressed further in the dose escalation toward maximum tolerated dose and felt that we could go to somewhat higher doses. That's primarily it.

Okay. And with regard to the claudication, I mean this is a very-- well first of all, it's a larger indication so that's good. But it's also very heterogeneous one with patients that have various alternatives for surgery and that sort of thing to help restore the blood flow. In that regard how-- and I guess that explains why with the crossover each patient serves as their own control, which is very important I guess in this indication. But do you have any restrictive-- less or more restrictive inclusion-exclusion criteria to eliminate or include patients with-- who are candidates for surgery for example or who are stable claudicates? That sort of thing to help perhaps enroll the trial faster or to keep the patient population as homogeneous as you can?

Yes, I think our angle on this study is to get a fairly homogenous patient population. And as we've described, the assessments in that study are built around bilateral heal raises; so basically just asking the patient to go up on tiptoes, step there for a second, back down for a second, up for a second. In our preliminary experience, prior to actually beginning the randomization, our investigator told us that our investigators confirmed that every patient they had with calf claudication upon doing repeated heal raise testing was on account of the claudication. So, it appeared to be an endpoint that would be less fraught with variability than things like treadmill testing or six-minute walks. Probably things we go to get a homogenous group of patients that have calf claudication in at least one leg per say. And that can demonstrate that they can do heal raise testing to claudication in order to come into this study.

So I think they are somewhat more homogenous than maybe the case in some other claudication trials. But again, we're looking here for some evidence of a pharmacodynamic effect in some disease population and not necessarily for results that would indicate definitively clinical benefit on other endpoints in a more heterogeneous population. I think if we show that we can increase the number of heal raises or the work performed until the onset of claudication and then until intolerable claudication or just complete fatigue of the calf muscle, I think that would convince most potential partners and experts in the field that the drug is doing what it is intended to do and probably would prolong exercise time and more standard assessments used in claudication trials in the types of patients that would be enrolled in those studies. But that wasn't really our goal for this particular study.

Yes, it's an evidence of efficacy trial. And in that regard is it all single dose or multiple dose with multiple extensions or--?

This study is a three-period trial where each patient gets a single dose of placebo, one of 375 milligrams and one of 750 milligrams in a random order in a double blind fashion. And they're assessed before and at certain time points after each of those three double blind doses. And that's really what it'll be.

And similar question in pending heart failure trials because those are all-- it sounds like most of them the PK is really the key endpoint, probably because I guess you're evaluating various formulations and various roots of administration. Again, is that-- so it's a single dose? Multiple dose? And what's the rationale for that design?

I'm sorry.

The pending trials of the-- with Amgen, the new heart failure trials. They're mostly-- it sounds like they're mostly PK for various alternative formulations.

I don't think I can make any more comments regarding the design of those studies than we've done at this point. And when they're initiated and they go up on clinical trials, then you can get information there. I think we may be able to say more about them at that point.

Okay, fair enough. And finally, are you-- have you submitted any abstracts or planning to present anything at the Heart Failure Society meetings in September?

We don't comment on submissions. We just comment on acceptance.

Okay. Okay. Fair enough. Thank you very much and congratulations again on a great quarter.

Thank you, George.

There are no further questions at this time. I'd like to turn the call back over to Robert Blum, Cytokinetics President and CEO, for closing comments.

So I'd like to thank all the participants in our teleconference today for continued interest in Cytokinetics. Look forward to updating you on our activities and progress. Operator, with that we can conclude the call and wishing everyone a good day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation. You may now disconnect.