Cytokinetics Inc (CYTK) 2011 Q3 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics Third Quarter 2011 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 the call for questions and answers after the presentation.

I would now like to 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 highlights on the advancement of our clinical development pipeline. Andy will then provide details on the progress of the Company's clinical development program. I will provide some brief comments with respect to our cash position and our investment in research and development activities and our updated financial guidance. Robert will then conclude the call with additional comments regarding our recent activities, next steps for our development stage programs, including omecamtiv mecarbil and CK-2017357, which we'll refer to as CK-357, and a discussion of the projected company milestones for the remainder of 2011. He will also speak to our recent restructuring. We'll then open the call for a brief question and answer session.

The following discussion, including our responses to questions, contain statements that constitute forward-looking statements for purposes of the 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 recent annual report on Form 10-K, our quarterly reports on Form 10-Q, and our current reports 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'll turn the call over to Robert.

Thank you, Sharon.

In the past several months we've been very busy with various development activities relating to our skeletal muscle activator program directed to the potential treatment of ALS.

With respect to CK-357, in addition to completing a Phase I drug-drug interaction study, and also completing enrollment in the first of two cohorts or Part A of our Phase II multi-dose trial, our teams have been readying for the initiation of additional clinical trials of CK-357. We also have had discussions with US and European regulatory authorities and are on the (technical difficulty) clinical and regulatory strategies for this program. In particular, we are assessing options that could allow us to initiate a clinical trial of CK-357 in patients with ALS that may serve as a pivotal trial for global registration purposes.

In addition to working diligently on the skeletal muscle contractility program, our teams continue to collaborate actively with our partner Amgen on the ongoing Phase IIb clinical trial of our novel cardiac myosin activator, omecamtiv mecarbil. We are committed to the progression of these programs in late stage development and, as such, last week we announced a restructuring of the Company's workforce and operations, the specifics of which I will discuss later in the call.

Also, during the third quarter Cytokinetics novel research and clinical progress were recognized by both the scientific and medical communities with a peer-reviewed publication of results relating to each of our cardiac and smooth muscle programs. Andy will elaborate on these honors in a moment.

You will also hear from Sharon that we have taken certain steps to reduce our costs through a recently announced restructuring and other means to achieve expense reductions. I will speak to the implications of these actions towards the end of our call today, and I'll also provide some insights into our future plans.

Now, I'd like to turn the call over to Andy to elaborate on the specific progress that we achieved in the quarter with respect to our clinical development programs and since our last teleconference.

Thank you, Robert.

It was a busy third quarter for the clinical and regulatory teams at Cytokinetics, who balanced managing the ongoing clinical trials in our cardiac and skeletal muscle contractility programs with planning for the next steps in each program -- excuse me, sorry -- including meeting with regulatory authorities regarding CK-357 and considering potential registration strategies.

Over the past quarter we executed on our commitment to advance the development of CK-357 for the potential treatment of ALS. We recently completed a Phase I drug-drug interaction study of CK-357 administered orally to healthy volunteers. Results indicated that the co-administration of CK-357 and riluzole, which is the only drug currently approved for the treatment of ALS, approximately doubled the average maximum riluzole plasma level, but also reduced the variability of riluzole plasma levels in the study subjects.

Accordingly, we believe that a standard adjustment to the riluzole dose can be made for all patients receiving CK-357 in future clinical trials, regardless of the CK-357 dose level. The data from the part of this study that investigated the effect of food on the Pharmacokinetics of orally administered CK-357 indicated that CK-357 is best administered to patients in a fasting state.

We also recently completed enrollment in the first of two cohorts, or Part A of our Phase II clinical trial designed to assess the safety, tolerability, pharmacokinetic and pharmacodynamics of 14 days' dosing of 357 in patients with ALS who are not receiving riluzole. As Robert will elaborate in a moment, we expect to announce the results from Part A of this trial soon.

Next, as I mentioned during our second quarter update, we expanded this multiple fixed-dose trial to include an additional cohort of patients, or Part B. In Part B we will evaluate 14 days' treatment with CK-357 in patients with ALS who are also receiving 50 milligrams of riluzole per day. We expect Part B of this trial will be underway soon.

We believe the results from this trial could contribute important insights to our evolving understanding of the tolerability profile of CK-357. In particular, we will focus on reports of the adverse events similar to those observed in our single-dose trial of CK-357 in ALS patients, including lightheaded or dizziness, most of which were mild.

In addition to Part B of the trial that I just mentioned, we are also planning to initiate soon another Phase II trial designed to assess the safety and tolerability of CK-357 titrated to the maximum dose tolerated by each individual patient, using a twice daily regimen in patients with ALS taking 50 milligrams of riluzole a day. This trial should also help us to optimize dosing schemes for CK-357 in ALS patients.

In parallel with these clinical research activities, we also recently met with the FDA's Division of Neurology Products to update them on our clinical progress and to discuss a potential registration path for CK-357 in ALS. We are encouraged by these initial discussions and believe that a clinical trial to assess the effect of six months' dosing with CK-357 on the ALS functional rating scale, or ALSFRS-R, could serve as a pivotal trial to support registration in the US. We believe that this type of trial could also be designed to support a global registration program for CK-357.

We plan to continue our discussions with both US and European regulatory authorities over the coming months, and expect them to be informed by additional data from our ongoing Phase II clinical trials that will also help us to refine our proposed clinical plans.

Lastly, we continue to enroll patients in our Phase IIa Evidence of Effect Trial of CK-357 in patients with generalized myasthenia gravis. To remind you, this is a double-blind, randomized, placebo-controlled, three-period crossover pharmacokinetic and pharmacodynamic study. At least 36 patients may be enrolled at approximately 15 study centers in the United States.

Patients enrolled in the trial receive single oral doses of placebo, 250 milligrams and 500 milligrams of CK-357 in random order. This clinical trial, and for clinical research on myasthenia gravis, is funded by a $2.8 million grant from the National Institute of Neurological Diseases and Stroke, also known as NINDS. Enrollment in this trial has been slower than initially projected and Robert will provide an update on the timing of expected results in a moment.

Turning to our Cardiac Contractility Program, Amgen continues to enroll and dose patients in an international, randomized, double-blind, placebo-controlled Phase IIb clinical trial of omecamtiv mecarbil in the heart failure patients, now known as ATOMIC-AHF, which stands for Acute Treatment with Omecamtiv Mecarbil to Increase Contractility in Acute Treatment -- in Acute Heart Failure. This trial is planned to enroll approximately 600 patients with left ventricular systolic dysfunction, hospitalized for acutely decompensated heart failure into three sequential ascending dose cohorts.

In each cohort patients are randomized to receive omecamtiv mecarbil or placebo in order to evaluate the effects of 48 hours of treatment with the intravenous form of omecamtiv mecarbil on measures of dyspnea, patients' global assessments, change in N-terminal pro-brain type natriuretic peptide, which is a biomarker associated with the severity of heart failure, and short-term clinical outcomes in these patients.

This trial is now enrolling patients in countries throughout the world. We are currently enrolling patients in cohort one of this trial, which is designed to target a plasma concentration of omecamtiv mecarbil of approximately 115 nanograms per ml.

As always, additional information about all our Phase II trials can be found at www.clinicaltrials.gov.

Before I conclude, I would like to mention that during the past quarter Cytokinetics' novel research and development were highlighted in two important peer reviewed publications. We were honored that omecamtiv mecarbil was the subject of back-to-back publications in the August 20th issue of The Lancet. These two manuscripts presented data regarding the safety, tolerability, pharmacokinetics and pharmacodynamic effects of omecamtiv mecarbil from our Phase I first-time-in-humans clinical trial in healthy volunteers and our Phase IIa clinical trial on stable heart failure patients, respectively. Both trials were conducted by Cytokinetics.

In addition, our preclinical research regarding smooth muscle myosin as a novel therapeutic target for the treatment of hypertension appeared in the October 1st issue of the Journal of Pharmacology and Experimental Therapeutics.

We are proud of the novel preclinical research and clinical development activities at Cytokinetics and are pleased that the scientific and medical communities also appreciate what our scientists are contributing to the understanding of muscle biology and pharmacology.

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

Thank you, Andy.

As our press release contains detailed financial results for the third quarter 2011, I will refer you to that public statement for the details on our P&L and balance sheet.

We ended the third quarter with approximately $57.6 million in cash, cash equivalents and investments, excluding restricted cash, which represents over 12 months of going forward net cash burn based on our revised 2011 financial guidance.

Our third quarter 2011 R&D expenditures totaled $8.9 million. From a program perspective for the third quarter, approximately 62% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, 11% to our cardiac muscle contractility activities, and 16% to our smooth muscle contractility program activities, and 10% to our other research activity.

For the nine months ended September 30th, 2011, our R&D expenditures totaled $28.5 million. From a program perspective for the nine months, approximately 64% of our R&D expenditures were attributable to our skeletal muscle contractility activities, 7% to our cardiac muscle contractility activities, 15% to our smooth muscle contractility program activities, and 13% to our other research activities.

We continue to focus our financial resources largely on the progression of our skeletal muscle contractility research and development program. We believe that this program, together with our contract muscle -- excuse me, cardiac muscle contractility program that is partnered with Amgen, represents opportunities for the nearest term value generation for the Company, as Robert will outline in a moment with the remaining milestones for 2011.

As a result of our recent activities intended to reduce operating expenses, we are announcing updated financial guidance reflecting lower anticipated expenditures for the remainder of 2011. We anticipate our 2011 revenue to be in the range of $3 million to $4 million. Our cash R&D expenses are estimated to be in the range of $37 million to $39 million, and cash G&A expenses to be in the range of $13 million to $14 million.

This financial guidance is on a cash basis and does not include an estimated $4.6 million in non-cash operating expenses, primarily related to stock compensation expense. In addition, this guidance does not reflect potential revenue from potential collaborations with other partners, as well as the estimated one-time restructuring costs of $1.3 million, which may be revised later in the year.

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

Thank you, Sharon.

Before I get to other specifics from the past quarter and the milestones for the remainder of the year, I would like to speak to the Company restructuring, which we announced last week. The restructuring of our workforce was a necessary step, which we took in connection with our reinforcing commitment to focus our resources on the development of our later-stage development programs for CK-357 and omecamtiv mecarbil. To be sure, this was a difficult decision to make and one that both Cytokinetics Management and our Board spent significant time deliberating.

Even after taking into consideration the effect of a restructuring on certain activities, we continue to maintain an integrated R&D organization at Cytokinetics, which ensures we can also maintain the functional capabilities required to meet our obligations to Amgen and NINDS.

In particular, we retain the organization required to advance CK-357 for the potential treatment of ALS, as well as the requisite infrastructure and capabilities to advance our follow-on skeletal muscle troponin activators; as well as certain other research and development programs also directed to muscle biology. Our taking this step at this time reflects our confidence in the advancement of CK-357 for the potential treatment of ALS and towards a potential pivotal registration trial.

Moving in that direction has other implications as well. It remains an important corporate priority to transact a potential partnership for CK-357 and our skeletal muscle program. Along those lines, we continue to progress discussions with several parties. Our focus continues to be on securing a deal by the end of the year.

At the same time, though, we are seeking collaborations that can enable the Company to offset certain research costs. One example is a recently agreed collaboration with Global Blood Targeting, an early stage biopharmaceutical company funded by Third Rock Ventures, that is focused on the discovery and development of small molecule therapeutics targeting blood. Under this agreement we will contribute personnel and other resources in connection with the collaborative research program and will be reimbursed for certain associated costs.

As you heard from Andy today, Cytokinetics continues to make progress with both our cardiac and skeletal muscle contractility development stage programs. Our key achievements during the third quarter enable us to proceed forward with what we believe is a clear set of next steps for the development of CK-357 in patients with ALS.

Based on the results from the drug-drug interaction study and recent feedback from US regulatory authorities, I'm confident that we are executing on an appropriate development path for this drug candidate that can point us towards a potential global registration trial for CK-357.

However, we also continue to examine opportunities to expand our development portfolio. During the past quarter we've progressed CK-2127107, known as CK-107, a selective fast skeletal muscle troponin activator, into investigational new drug, or IND, enabling studies. CK-107 is a potential drug candidate that arose from Cytokinetics optimization of a different chemical series than that which produced CK-357.

We believe that this strategy of advancing follow-on and next generation drug candidates represents both prudent drug discovery and development, as well as presents an opportunity to expand the clinical potential of the novel mechanism of fast-twitch skeletal troponin activation. As such, our advancing CK-107 is intended to create greater value for our shareholders in the long term. Another compound from this program in development also may benefit our partnering activities.

Before I update our expected corporate milestones, to repeat, our top priorities at Cytokinetics continue to be the partnering of our skeletal muscle activator program and generating data from ongoing Phase II trials of CK-357 in ALS, which are intended to inform a potential pivotal registration trial. I continue to be optimistic about our delivering on these key company priorities and look forward to sharing additional details as appropriate.

Now, let me turn to the milestones for the remainder of the year. For omecamtiv mecarbil we anticipate a decision regarding the potential progression to the second cohort of the ATOMIC-AHF clinical trial to occur in the first half of 2012, following the review of data from the first cohort by an independent data monitoring committee.

Next, we anticipate that Amgen will initiate a study designed to assess the safety, tolerability and pharmacokinetics of multiple oral formulations of omecamtiv mecarbil in healthy volunteers in early 2012.

Lastly, Cytokinetics and Amgen are discussing plans for the initiation of an additional clinical trial designed to assess the safety, tolerability and pharmacokinetics of multiple oral formulations of omecamtiv mecarbil in stable heart failure patients. We expect to provide updated guidance on the timing of that trial following further discussions with Amgen.

Turning to our skeletal muscle contractility program. In November we plan to present two abstracts at the 22nd International Symposium on ALS and motor neuron disease meetings to be held in Sydney, Australia. To that point, we anticipate that data will be available from Part A of our ongoing Phase II multiple-dose safety, tolerability, pharmacokinetic and pharmacodynamic clinical trial of CK-357 in patients with ALS who are not receiving riluzole to occur by the end of 2011.

We plan to initiate Part B of our ongoing Phase II multiple-dose, safety, tolerability, pharmacokinetic and pharmacodynamic clinical trial of CK-357 in patients with ALS who are also receiving riluzole, that to occur by the end of 2011, with data from that trial anticipated to be available in the first half of 2012.

We plan to initiate a Phase II dose titration clinical trial of CK-357 in patients with ALS, that to occur also by the end of 2011 and with data anticipated to be available in the first half of 2012.

And lastly, we anticipate that data will be available from the ongoing Phase IIa evidence of effect clinical trial of CK-357 in patients with generalized myasthenia gravis in the first half of 2012.

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

(Operator Instructions.) Ritu Baral, Canaccord.

Good afternoon, Ritu.

Hi, guys. Thanks for taking the question. Moving to the ALS program, the cohort, the riluzole combination, how many patients are you expecting to put on two weeks of treatment?

So, that Part B will be designed comparable to the Part A cohort, so a like number of patients.

And will you be looking at any particular category -- I guess I should say measure of side effect for these patients, especially around peak riluzole concentrations? Is there any -- are there any scales that will give you sort of a better characterization of the side effects?

I don't think there are specific scales. I think assessing reports of patients' complaints. They're frequently asked in an undirected fashion, how are you feeling? How are you feeling? And that's a pretty standard way to go about it. And then, if they do report anything untoward, there's a judgment as to whether the symptom is mild, moderate or severe. I mean, certainly that's been sufficient to identify the dizziness as really the most frequent and clearly dose-related adverse effect we've seen so far and it's mostly mild.

So, that -- and there will be in these relatively few patients other assessments that would be efficacy assessments, but they're more to pilot the design of a larger study. We don't really have sufficient clinical -- or I'm sorry, sufficient statistical power to expect to see any effect on those kinds of assessments.

Got it. And given that the efficacy endpoints are very sort of patient driven and -- effort dependent, I should say, how often are you taking them and are you sort of accounting for sort of circadian cycles in a patient's life?

Well, they're taken always at the same time for all the patients. So, whatever sort of circadian influence there may be, all of the patients in this parallel group trial are getting studied at about the same time of day on each assessment. So, that is -- it's accounted for.

Great. And as far as the registration trial that you guys are considering and the ALSFRS endpoint -- the ALSFRS-R, have you guys considered looking at the endpoint that Biogen is using for its ALS trial, the rank-sum endpoint?

It's heavily based on ALSFRS-R. The reason why we feel we would just look at the ALSFRS-R, per se, and not analyze it in that regard is I think beyond the scope of a call right now. But, it's not that different and, in fact, it's not really a different endpoint as much as it is a different analysis.

I think that's a good point. And then I'll also add, Ritu, it's perhaps premature to speculate explicitly on what would be a registration endpoint. We've had initial discussions and they are continuing. And we'll also be informed by additional Phase II data that will be gained from the ongoing and soon-to-be-initiated trials.

So, before we would provide specific guidance that a study is to be initiated, we would have had more official end of Phase II-like meetings, both with FDA and EMA, in order to be able to lock down on a specific endpoint. And that's something that I think is expected to occur in the first part of 2012 and we'll keep you updated on that.

Great. Thanks. The last question before I hop back in the queue. Can you go over a little more detail on how 107 differs from 357 in its profile?

So, it's a good question. So, from a physiochemical standpoint, it's entirely distinct. Different pharmaca for -- from a chemical series that is entirely different from that which yielded CK-357, as well as a prior compound you might remember we mentioned in prior calls. And we made the case that we were looking for, in a follow-on series, compounds that, A, did not cross the blood-brain barrier in the same way and, B, that could afford other potential advantages in as much as we do not know of any specific liabilities for CK-357. Part of that is still somewhat prophetic. But, we do have in CK-107 properties with respect to potency, specificity, and also other in vitro and in vivo data that suggest it's different. And I probably shouldn't mention anything more about that until we have a chance to present the pharmacology in a more peer-reviewed format.

But, what this does for us is not only buy insurance, we believe, given what could be issues that may arise with CK-357, but it also affords us and a potential partner opportunities to think about this mechanism of action, not only with respect to certain perhaps orphan drug designated neuromuscular diseases, but we also now can be thinking about advancing both compounds as may afford opportunities for a broader clinical program in non-neuromuscular diseases, too.

And as you know from conversations we've had, and also on these types of teleconferences, our goal is to ensure that this program gets developed broadly in conditions and clinical indications that go beyond simply neuromuscular deficit and dysfunction, but also other areas of muscle impairment and wasting.

Did that answer your question? Hopefully?

Charles Duncan, JMP Securities.

Hi, Charles.

Hi. It's Jason in for Charles. Thanks for taking the question. I guess a question for Sharon. Could you give us a little bit more color on the guidance? I guess I'm just not really sure how you get to a lower expense number in 4Q than you do in -- than you have in 3Q, based on the guidance that you've given.

So, I think what -- our guidance is never on a quarterly basis. It's always on an annual basis. So, we reduced guidance pretty significantly on an overall basis. So, from a quarter-to-quarter perspective, I think you're looking at maybe a similar type of a burn, but it's definitely reduced overall for the year.

Okay. So, you expect a similar level of spending in -- and that's both on DNS G&A or G&A for 4Q?

Yes. Yes.

Okay. And then just looking forward, the trial that you're starting this quarter, do you anticipate most of the -- well, we'll call it the -- do you anticipate the costs of those trials to be more front-end loaded or most of the trial -- the cost to be -- to come in 2012?

So, I think the way -- the best way to answer that is those trials will get up and running here in the fourth quarter. Obviously, you have one month that has passed and they're not up and running. So, given the fact that we believe that we'll have data in the first part of 2012 for those trials, I would probably say it's one-third, two-thirds.

Okay, great. Thanks a lot.

Yigal Nochomovitz, Rodman & Renshaw.

Hi, Yigal.

Hi, Robert. Hi, everyone. Thanks for taking the question. If I could just revisit the issue of the really low drug-drug interaction study, I guess I'm still trying to understand this result. I'm not sure what it means, necessarily.

Sure. Let me start it and then I'll turn it over to Andy. So, I'll remind you that in the single dose study that we conducted and for which data was presented, were presented last December, we had some patients on riluzole, some not. And we did observe an increase in riluzole plasma concentrations, but for which that was not the purpose of the study, nor was it controlled to really understand that interaction.

So, we did know already that CK-357 coadministered with riluzole would result in increases in riluzole plasma concentrations. So, what we wanted to do with this specific study is understand it, in a more well-controlled setting, what were the effects and were they predictable and how could we then plan on a going forward basis to adjust and address what we learned.

So, I'll turn it over to Andy now to talk about this study.

So, what we found is that 357 -- but we already knew from preclinical that there was a potential for drug-drug interaction because 357 is a pretty potent inhibitor of the cytochrome P450 drug metabolizing enzyme 1A2. And that enzyme is primarily responsible for the metabolism of riluzole. We had every reason to predict that riluzole levels would be higher in the presence of 357.

What we found in this study is that the inhibition of 1A2 by 357 is so complete, even at low doses, that there is little -- there is really no dose dependency of the effect over any of the range of doses that we would likely study in later trials.

So, instead of having to dose adjust the riluzole differently based on the dose of 357, the good news is that any 357 at all is going to basically pretty much turn off 1A2. And so, the riluzole dose adjustment in future clinical trials can be the same, we believe, whatever the 357 dose is that they're randomized to. So basically, you've raised everybody's levels with the -- riluzole levels, be clear -- everybody's riluzole levels go up, but the variability across the population actually narrows. They're actually now in a narrower range than they were in the absence of 357. So, there's really more predictability.

Does that answer the question?

Joe Pantginis, Roth Capital Partners.

Hi, Joe.

Hey, guys, how are you? Thanks for taking the question. Let me ask this question a bit generically, since obviously you can't discuss with us who you're in discussions with for a potential partnership. So, I'll ask the question this way. Who -- what kind of a partner is Cytokinetics looking for? What would they like to see a partner bring to the table?

Okay. So, we're talking, as I've mentioned publicly in the past, to different kinds of companies. Some are more multinational and others are more geographically focused. And in talking to both kinds of companies, we are specifically looking for the following. We're looking for up front economics that we think appropriately values the investment we've made in the program to date; not only as it relates to CK-357, but also in the larger franchise.

And also, importantly, we're looking for a very significant commitment on the part of the partnership to fund and development CK-357 and other compounds for ALS and other indications. And in particular, with respect to that, we're looking for Cytokinetics to play a very significant role in the conduct of the activities of development, and also in the activities associated with that, including with regulatory authorities.

So, there are different forms of deals that are being contemplated, some for which we would be taking on more lead roles, and otherwise where we also are defining geographic splits. And I can't say ultimately how this is going to shake out, but what I can say is that we're encouraged by the progress and we believe that we can make a deal happen here.

And ultimately, it's important to demonstrate to those potential partners that we mean business and that we're in a position to advance this program and we look forward to doing that with them onboard, and having both the financial resources, as well as the feedback from regulatory authorities, as well as the data from these studies that we've referenced all contribute to helping make that happen.

Thank you for the update.

Sure thing.

Brian Klein, Lazard Capital Markets.

Hi, Brian.

Hi. How are you?

Good.

So, first on omecamtiv. Can you remind us how many patients have been treated in the first cohort? And will we see that data?

So, if I were to remind you, that would be suggesting that I've mentioned that or we have and, unfortunately, we cannot. We have not been disclosing the specific enrollment numbers as opposed to what the study is designed to enroll. And the study is designed to enroll 200 patients per cohort in a study that is intended for three cohorts and 600 patients. Each cohort would be randomized 100 on drug, 100 on placebo. And what we are saying now is that the study is enrolling in the first cohort. So, the best you can do, therefore, would be the math to suggest that we are still within the first 200 patients of that first part of the study.

Got it. And like I -- as I said previously, will we be able to get that data from the first cohort? Will that be available or is it just an independent monitoring board decision?

So, the way the study is designed is that independent board reviews the data and may recommend progression to the second cohort. And it's that information which we would expect to be able to share, but for which we would ourselves still potentially remain blinded to the activity of drug versus placebo. So in that regard, we would not expect to be able to communicate any efficacy results, or anything else for that matter, until the study concludes and the full study is unblended.

Great. Thanks. And just one more on 357. You had previously mentioned that the Phase IIb Proof of Concept Study could be a three-month study, which could potentially be used as a registrational trial. And today, I believe Andy say it would be a six-month study. So, I'm just wondering about the change there and what the thinking behind that was.

Yes. So, I'll start and see if Andy wants to add.

Based on the conversations we're having with key opinion leader consultants, as well as with CROs, as well as, as we think about this from a budgetary standpoint, and lastly and perhaps most importantly, as we've engaged together with regulatory authorities, we do think it may be in our interest to enroll this study with a minimum six-month duration of treatment; not because having three months of data wouldn't be informative, but six months of data may be more valuable and also we think perhaps be more impactful for the program as it would be received.

So, if this were a strict Phase IIb study, you might imagine three months would be informative to move then to a Phase III registration program. And the distinction today is that we may consider this next study to have implication for registration. And in that regard, we think we're benefited by the additional three months of duration.

I don't think there's much else to add to that.

Great. Thanks a lot.

Sure thing.

Christopher James, MLV & Company.

Hi, Chris.

Hi. Thanks for taking my question. Just a quick follow-up on the drug-drug interaction study. Is it possible to identify patients that would have a higher maximum plasma level of riluzole, or is it across the board these patients just have higher levels in combination with 357?

Well, across the board they have higher levels, but the good news is the ones that have the highest levels when 357 is absent have the least increase in their levels in the presence of 357. And the ones that have the lowest riluzole levels in the absence of 357 have the largest increase. That's just the background to what I said earlier, which is that although everyone's levels go up, the variability actually goes down. The range of concentrations of riluzole in the absence of 357 is a broader range, that when they all go up, then they go up and they all fit in a narrower range.

Right.

So, the ones that have the highest concentration before you give the drug, they're going to stand to increase the least.

Right. And with respect to AEs or incremental adverse events in combination, are you seeing any changes there in lightheadedness or dizziness?

It's a study blinded. It's really too soon to say anything about that.

Okay. And then quickly on 107, would you expect to see any differences there on the AE profile? Just postulating on the differences in crossing the blood-brain barrier.

Well, because of that, we think we may. But again, you don't really know that until you actually get it into the clinic, but that's our hope.

Alright, thanks. Thanks for taking my questions.

Sure, Chris.

Jason Butler, JMP Securities.

Hi, Jason.

Hi, guys. This is Charles. Thanks for taking our follow-up. I had a question which is related to the balance sheet. And I've got to say that -- maybe address the elephant in the room, and that is that you said that you had cash through year-end '12. I guess I'm kind of wondering what you think is the most likely way to extend that. Is it the partnership for this year, or that could be done this year, or do you anticipate some milestones from Amgen over the course of the next 12 months?

So, our primary focus is on trying to bring the partnership home for 357, so that's where the additional cash influx would come from. Obviously, we look at other scenarios with respect to how else we can manage, including expense reductions. And as we said in our press release, if we need to do further reduction in force if we can't bring the partnership home, that's something that we would have to consider as well. But, our primary focus is on bringing the 357 partnership home.

And in the past you've been very good at partnering and monetizing your platform. I guess you said that it was still a goal. Is it a probability? I'm just very concerned about the near-term cash situation.

We, too, have those concerns. And we're so concerned, in fact, Charles, that we took the steps, as difficult as they were, last week to ensure that we were doing the right thing by the Company and its stakeholders.

I can't go so far as to assign a probability. That's, I think, what you as an equity research analyst should be best trying to do. All I can say is that at Cytokinetics we remain optimistic. We're encouraged by the progress and we're going to do what we need to do to make it happen.

And just to further understand last week, and I appreciate that was a very difficult decision, but was that decision taken in order to strengthen the Company going forward, assuming that a partnership was done, or was it a decision based on eroding probabilities of getting something done in this timeframe?

It was not based on eroding probabilities of getting something done, to be clear. Instead, it was based on recognizing that our cash balance has been reduced. You might recall we raised money through an equity capital fundraising in the second quarter. And given where our stock is priced, we did not think it prudent to at this time go back to the capital markets but, instead, thought we had other levers that we should pull and that included reducing certain expenses.

So, not only with respect to a restructuring but, as Sharon pointed out, we have been reducing spending in other ways and also with this announcement of this other research collaboration. So, we're trying to do what we can responsibly to extend our cash runway, not because we think a deal is any less probable, but more so in recognition that a deal has not yet been signed.

Okay. But, you remain confident that things are progressing.

If we didn't think that things were progressing, we would've had to take still other steps.

Okay. I appreciate that added color, Robert, and I know it was difficult to do what had to be done last week.

If I could ask one question of Andy, a lot of questions on the drug-drug interaction study and that you've made the observation that it's better to give the drug in a fasting state. Can you help us understand whether or not that may impact the dosing parameters, say, for the drug should it get to the market? Is there going to be any challenges to doing that standard adjustment with riluzole and is fasting state a problem for patients?

I don't think so. Lots of drugs are on label to be administered, taken in the fasting stages. Some others are labeled to be administered with food. So, I don't see that as a big deal, nor do I think that dose adjustment will be difficult in clinical practice if the drug is approved.

So, your first observation -- I know, I mean there are drugs that I take that have to be taken without food or with food. But in this patient population, I'm asking you specifically, do you think that that could be --?

I don't think so. I mean, these people are on other medications, generally speaking, that some -- most take riluzole for their ALS. The only thing that is actually indicated right now for ALS, they have other medications that they take and they generally take them in the morning and then riluzole gets taken in the evening as well in the absence of 357. I think it's a population of patients that generally have a dedicated caregiver and that are focused very much on their own care. And I don't think these are difficult instructions with which to comply at all, and are not very different from what a lot of medications have for various other diseases.

Okay. And the last question's more conceptual for Robert. If we fast forward, say 12 months from now, do you think that we'll have enough data with 357 to be considering a capital efficient route to market in terms of the next steps, in terms of the clinical program?

So, fasting -- fast forward 12 months from now we will have completed, we hope, the Phase II studies and maybe in the registration study that could support a global program. The registration endpoint, ALSFRS-R, would have been evaluated in several small studies, but specifically not powered to demonstrate an effect that instead requires many hundreds of patients as would be enrolled in Phase III. So, we certainly will have encouraging signs of activity, we hope, and tolerability and understand how best to dose the drug, alone and together with riluzole. So, we'll have done all the basic blocking and tackling, but that's why you do Phase III studies.

I do believe that the way we're approaching this drug development program would in fact provide, as best we can without yet having done the Phase III study, a capital efficient route to market. And we certainly understand in some significant detail what it takes, we believe, to commercialize a product like this. And we underscore again that this is something that we think is tractable to our access to capital, albeit that the cost of those clinical studies would benefit from a partner coming onboard and co-funding that and that's what we're aiming to do.

I hope that answers your question. Let me know if it does not.

No, I think it does, Robert. I'm just looking forward to seeing that progress. And I appreciate --

The other thing I'll mention, Charles, is while we are very committed to now proceeding forward in ALS, we believe that, together with a partner, one of the added advantages is that this mechanism of action may translate well beyond ALS. And that's something that we haven't spent as much time talking about; there's not as much to talk about. But, a year from now we may be in a position to point to those other opportunities as well. And this is not even yet taking into consideration where we may also be with our heart failure program, partnered with Amgen, a year from now.

Robert, for the 357 partnering that could be done shortly, will that be indication specific or broader to all the indications that might be contemplated given that mechanism of action?

It's hard to say until a deal gets signed, but the approach we're taking should not limit it, per se, to a single indication.

The approach in the partnering discussions that are ongoing?

That's right.

Okay. Thanks for the added color.

Thank you, Charles.

Yigal Nochomovitz, Rodman & Renshaw.

Hi, again, Yigal.

Hi. Just a follow-up question on the Amgen partnership. As you know, recently Amgen announced some changes in reductions in R&D. Does that in any way affect the timelines for the omecamtiv mecarbil program?

So, we don't know yet; we don't believe so. We haven't been informed as such. And right now, the Phase IIb study appears to be enrolling independent of any of those changes. We have not yet learned of anybody that we've been interacting with, for instance, that is caught up in that restructuring at Amgen.

As you know, we are not only doing development work together with Amgen, but also we have a research program that they have been funding here at Cytokinetics and we have continuing discussions with Amgen with respect to both the development and the research. So to this point, we're not aware of anything from Amgen that would suggest that, based on cost reductions, that they are intending to change the way they're approaching this collaboration.

Okay, thanks. And just one little question on the numbering. This 2066260 is another lead candidate which had been mentioned in the past, is it safe to assume that 107 has now superseded that as the IND candidate?

It appears to be the case, yes. We are still comparing 107 to 260. 260, you might recall, arose from the same chemical series as 357, and 107 from a distinct series, but it appears that in order to really diversify risk and expand the potential clinical footprint here, there may be some advantages to 107 relative to 260, but that's still to be determined by ongoing preclinical work.

Okay. Thank you very much.

Sure thing.

This is the end of our question and answer session. I would now like to turn the call over to Mr. Robert Blum, Cytokinetics' President and CEO, for any closing remarks.

So, we covered a lot of ground and material today and I appreciate everybody's participation in the teleconference and your continued interest and support of Cytokinetics.

Operator, with that we can conclude the call. Thank you very much.