Cytokinetics Inc (CYTK) 2011 Q4 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics fourth quarter and year-end 2011 conference call. At this time I would like to inform you that this call is being recorded and that all participants are in listen-only mode. At the request of the Company, we will open the call for question and answers after the presentation.

I will now turn the call over to Ms. 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 recent highlights on the advancement of our clinical development pipeline. Andy will then provide details on the progress of the Company's clinical development programs. I will provide some brief comments with respect to our cash position and our investment in research and development activities and our 2012 financial guidance.

Robert will then conclude the call with additional comments, our next steps for our development stage programs, omecamtiv mecarbil and CK-2017357, which we will refer to as CK-357, and a discussion of the projected company milestones for 2012. We will 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, included -- 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 10K, our quarterly reports on Form 10Q, and our current reports on Form 8K. 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.

I'll now turn the call over to Robert.

Thank you, Sharon.

Since our last quarterly call, we have made important progress in advancing both of our phase II clinical trial programs. With respect to our skeletal muscle activator program, we presented key tolerability data regarding our lead drug candidate, CK-357, at the ALS MND Symposium in December in Sydney, Australia. We believe these results from Part A of our Phase II multiple-dose trial in patients with ALS are encouraging, as Andy will elaborate in a moment.

These data further build upon our enthusiasm for the potential of this drug candidate in the treatment of ALS as we prepare for the next steps in the CK-357 clinical development program and move towards potential registration studies.

In parallel with our progressing CK-357, Cytokinetics' clinical research teams also continue to collaborate with our partner Amgen on the ongoing Phase IIb clinical trial of our novel cardiac myosin activator, omecamtiv mecarbil. As you will hear shortly, we anticipate that Amgen will continue to advance this drug candidate into additional studies.

Moreover, on the research front we are pleased to announce that in the last quarter we expanded our joint research activities with Amgen directed to next generation compounds in our cardiac muscle contractility program.

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

Thank you, Robert.

As Robert mentioned, we progressed the clinical development of our lead skeletal muscle activator drug candidate, CK-357, during the fourth quarter with the completion of Part A of our Phase II multiple-dose trial, CY 4024, and the presentation of key tolerability data from that study.

Part A of this trial was a randomized, double-blind, placebo-controlled multiple-dose clinical trial designed to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of 14 days' dosing of CK-357 in 24 patients with ALS who were not concurrently receiving riluzole. We conducted this trial to better understand the adverse event of dizziness, which we observed in ALS patients after a single dose of CK-357 in our Phase IIa Evidence of Effect study, which we presented in December, 2010.

Now, in Part A of CY 4024, we found that CK-357 appeared well tolerated as a single agent at the three dose levels we evaluated; 125 milligrams, 250 milligrams and 375 milligrams daily. The incidence and persistence of dizziness appeared dose related, but was mild in severity in all patients who completed the study drug treatment. Most importantly, most reports of dizziness began early after initiation of treatment and resulted spontaneously within the first week. No serious adverse events were reported.

Although the trial lacked a statistical power to detect significant differences in parameters of clinical effectiveness, trends to improved clinical outcome measures were observed. These improvements were observed especially after the highest dose of 375 milligrams daily.

Four of five patients who completed treatment in this dose group reported improvement in their global assessments, and three of these five patients improved at least one point on the revised ALS functional rating scale, or ALSFRS-R. The changes observed in maximum voluntary ventilation after two weeks of dosing at 375 milligrams compared favorably to improvements observed at 24 hours after a single 500 milligram dose of CK-357 in the prior Phase IIa Evidence of Effect clinical trial in ALS patients.

In addition to this trial, during the fourth quarter we initiated two Phase II clinical trials in ALS patients, both of which are enrolling well. We initiated Part B of CY 4024, which is designed to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of 14 days' dosing of CK-357 in 24 additional patients with ALS who are also concurrently received riluzole 50 milligrams per day. We expect that the results from Part B, along with those gathered in Part A, will assist us in further understanding the tolerability profile of CK-357 administered as a fixed dose each day.

Also during the quarter we initiated a Phase II clinical trial in patients with ALS, CY 4025. CY 4025 is a randomized, double-blind, placebo-controlled clinical trial in which CK-357 is administered for 21 days in ascending multiple doses of 7 days each, using a twice-daily regimen to an estimated 24 patients with ALS taking riluzole 50 milligrams per day.

Patients are randomized three-to-one to receive twice daily oral doses of CK-357 or a placebo. After seven days of treatment with CK-357 at the starting dose of 125 milligrams twice daily, the dose is escalated to 125 milligrams in the morning and 250 milligrams in the evening, and after seven days at this dose, to 250 milligrams twice daily for the final seven days of dosing.

Patients who do not tolerate a dose escalation may return to the previous tolerated dose level and remain at that dose level to complete the study. Placebo patients undergo a similar dummy-dose titration to maintain the blind.

The primary objective of CY 4025 is to assess the safety and tolerability of CK-357 when administered using this twice-daily dosing regimen to patients with ALS.

The secondary objectives of this clinical trial are to evaluate the ALSFRS-R, other measures of pulmonary function, muscle strength and fatigue, physician and patient global assessments and relationships between dose, plasma concentrations and functional effects in these patients while receiving three weeks' treatment with CK-357 at the indicated doses or a placebo. Data from this trial, together with data from CY 24 Parts A and B, may help us optimize dosing schemes for CK-357 in ALS patients.

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. Up to 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 and a CK-357 at 250 milligrams and 500 milligrams in random order approximately one week apart. This clinical trial and preclinical research on myasthenia gravis is funded by a $2.8 million grant from the National Institute of Neurological Disorders and Stroke. 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 make progress in enrolling and dosing patients in an international randomized, double-blind, placebo-controlled Phase IIb clinical trial of intravenous omecamtiv mecarbil in patients hospitalized with acute heart failure, known as ATOMIC-AHF, which stands for Acute Treatment with Omecamtiv Mecarbil to Increase Contractility in Acute Heart Failure.

The study is comprised of three successive ascending-dose cohorts, each of which will enroll approximately 200 patients randomized one-to-one to omecamtiv mecarbil versus placebo. The dose of omecamtiv mecarbil in cohort one targets a peak plasma concentration of omecamtiv mecarbil of approximately 115 nanograms per ml. Cohort two will target a peak concentration of approximately 230 nanograms per ml, and cohort three will target 310 nanograms per ml.

This trial is now enrolling patients into cohort one at over 100 centers in countries throughout the world. An independent data monitoring committee will review the data when each cohort has reached a specified number of treated patients and determine whether it is safe to open the next cohort. As always, additional information about all of our Phase II trials can be found at www.clinicaltrials.gov.

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

Thank you, Andy.

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

We ended the fourth quarter with approximately $49 million in cash, cash equivalents and investments, excluding restricted cash, which represents approximately 15 months of going-forward net cash burn based on our 2012 financial guidance, which will follow.

Our fourth quarter 2011 R&D expenditures totaled 80 -- excuse me, $8.5 million. From a program perspective for the fourth quarter, approximately 64% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, 8% to our cardiac muscle contractility activities, and 16% to our smooth muscle contractility activities, and 12% to our other research activities.

For the 12 months ended December 31, 2011, our R&D expenditures totaled $37.2 million. And from a program perspective for the 12 months, approximately 64% of our R&D expenses were attributable to our skeletal muscle contractility activities, 7% to our cardiac muscle contractility activities, 15% to our smooth muscle contractility 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 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 milestones for 2012.

Today we are announcing financial guidance for 2012. We anticipate our 2012 revenue to be in the range of $4 million to $5 million. Our cash R&D expenses are anticipated to be in the range of $30 million to $33 million, and our cash G&A expenses to be in the range of $11 million to $12 million. This financial guidance is on a cash basis and does not include an estimated $4.7 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. This current guidance reflects an approximate 10% reduction in cash burn as compared to our 2011 actual financials.

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

Thank you, Sharon.

In reference to the guidance, in the past quarter we have taken steps to respond to our financial landscape and further adapt our company to current priorities and opportunities. Last year we made a very difficult decision to restructure our workforce and focus our resources on our later-stage development programs for CK-357 and omecamtiv mecarbil.

In addition, we sought out collaborations that enable the Company to offset certain research costs. Two recent examples of that form of research collaboration are our continued research with Amgen announced today, and our agreement with Global Blood Targeting announced on our Q3 call. We are contemplating other agreements of this type as may further contribute to the sponsorship of our research organization and as may further reduce our net operating costs.

In addition to the advancement of our clinical-stage development programs that Andy described, we continue to conduct IND-enabling studies of CK-20127107 or CK-107. As mentioned in our Q3 call, our scientists optimize this potential drug candidate from a different chemical series than that which yielded CK-357. We believe that moving another compound from the skeletal program into development may further benefit our partnering activities and expand the potential array of indications for evaluation with our novel mechanism, skeletal muscle activators.

Before I update you on our expected corporate milestones in 2012, I will emphasize that our top priorities at Cytokinetics continue to be the partnering of our skeletal muscle activator program and the generating of data from our ongoing Phase II trials of CK-357 in ALS and which are intended to inform a potential registration program. 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 2012. For omecamtiv mecarbil, in the first half of 2012 we expect a decision regarding the potential progression to the second cohort in the ATOMIC-AHF clinical trial following the review of data from the first cohort by an independent data monitoring committee.

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

Lastly, we are discussing plans with Amgen for the initiation of an additional clinical trial designed to assess the safety, tolerability and pharmacokinetics of oral 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 now to our skeletal muscle contractility program. In the first half of 2012 we anticipate that data will be available from Part B of CY 4024, our ongoing Phase II multiple-dose safety, tolerability, pharmacokinetics and pharmacodynamics clinical trial of CK-357 in patients with ALS who are also receiving riluzole. I'm pleased to announce today that we're planning for a platform presentation relating to this clinical trial at the American Academy of Neurology's 64th Annual Meeting in New Orleans on April 25th, 2012.

In the first half of 2012 we also anticipate that data will be available from CY 4025, our ongoing Phase II multiple-dose, dose titration clinical trial of CK-357 in patients with ALS. We are also planning for a poster presentation relating to this clinical trial at the same American Academy of Neurology 64th Annual Meeting in New Orleans, also on April 25th.

In the first half of 2012 we also anticipate that data will be available from CY 4023, our ongoing Phase IIa Evidence of Effect clinical trial of CK-357 in patients with generalized myasthenia gravis.

In 2012 we anticipate meeting with US and European regulatory authorities to discuss our progress in the development of CK-357 as a potential treatment for patients with ALS and to discuss potential registration strategies.

Lastly, by the end of the year we anticipate filing an IND for CK-107, our follow-on selective fast skeletal muscle troponin activator.

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

(Operator Instructions.) Charles Duncan, JMP Securities.

Good afternoon, Charles.

Hi, guys. Thanks for taking the questions. And congratulations on a good quarter of progress.

Robert, I had a couple of questions. First of all, on 357, I'm wondering if you can give us an update on the partnering discussions that might be ongoing. I'm wondering if it would be prudent of us to expect those to come to fruition after meeting with the US and European regulators. And would it be your intent to do a partnership before you enter into pivotal studies with 357?

So, let me take those one at a time. Good questions. Firstly, the partnering discussions continue and they continue well and we are in advanced discussions.

As we discussed when you and I were together in January, as we've discussed also publicly, I would not take for the fact that we did not yet announce a deal that those discussions have in any way gone south. In fact, they continue to progress well, as I just mentioned.

As far as the timing, I probably can't comment to that to your satisfaction on a call like this or otherwise and, instead, I'll just have to ask you to be patient. But, what I would say is that we don't have any reason to believe that any of the potential partners with whom we're in discussions are awaiting any additional clinical trials' data or, for that matter, are expecting to defer on signing a deal until such time as we've had those regulatory discussions.

In fact, to your last question, our assumption is that we're proceeding with those also in parallel and that a deal can be get-able before such time as we're making those final preparations for movement into registration studies.

Does that --?

It helps. Yes, Robert, that really -- that does help. So, it's not that they're looking for the data out of 425 -- or 4025 or anything, and it's not that they're waiting for outcome of those regulator -- regulatory discussions in terms of pivotal development. It's just really getting a deal done between now and then.

I think that's right, although I'll caveat that statement, Charles, by saying that I can't speak for them and I don't know all of what's going on internal to each of these companies. But, what I can say is I don't have any reason to believe that that's what would be in the calculus for doing the deal.

Okay. And then thank you for the information on the AAN presentations and the day. That helps with travel schedules. But, could you provide us a little bit more color on the platform presentation that you were talking about with regard to 357 and ALS. Is that going to be one that's focused more on the disease state or a specific -- call it mechanisms and potential advantage differentiation?

It'll be the data from Part B of CY 4024. So, it will be very similar to what we presented in Sydney in December because the design of Part B is identical to that of Part A, except for in Part A the patients were not receiving riluzole and in Part B they will be.

We also will be able to analyze certain of the efficacy variables of the two put together and we'll be able to at least see -- and it's too small to do this definitively, but certainly we'd be able to see if there are any major trends towards differences in efficacy with and without riluzole. Which, I'll point out, we certainly wouldn't expect because riluzole has never been shown to have any effect on any functional assessment in ALS. But, we'll have those data. And also, we'll be able to see if there's any major differences in tolerability of either riluzole or 357 when they're dosed together.

So, I think it'll be very informative incremental data to what you saw in December.

Just to add to that, Charles, in as much as it's a platform presentation, that's not meant to imply that it's about the disease state. This is, I think, a higher profile presentation for these clinical trial data.

Okay. That makes sense. My last question, then I'll hop back in the queue, is also on 357. You mentioned myasthenia gravis and enrollment timelines in terms of their -- call it speed. Would you anticipate or do you think that the -- call it slower enrollment than expected, is a function of the patient availability or something that reflects the enthusiasm of the investigator drug or the concept or the potential for it to be effective?

I'll start and then turn it over to Andy. I don't think it's at all related to any change in the enthusiasm relating to CK-357 in this population. Rather, instead, I think there's some logistical issues associated with identifying some of the patients, as maybe Andy can elaborate.

Yes. No, the investigators are enthusiastic. But, I think what this really highlights is the difference in the patient experience between ALS, where we continue to enroll our studies pretty rapidly in myasthenia gravis. And that comes down to the fact that, for ALS, there is no treatment that improves functional status at all. Riluzole, as you know, only prolongs life but has never been shown to have any effect on function, and so those patients are extremely motivated to come into the trial.

While the scientific rationale to support the use of 357 in myasthenia gravis is equally strong, you have to recognize that the disease itself is just not as dire. There are treatments, namely steroids and cholinesterase inhibitors. They do improve strength. They have tolerability issues, which may be advantaged for 357. That may be an advantage to 357. But, these are people that, by and large, are functional, they have jobs, they go to work. And it's just a lot more difficult to get them to come in to a clinical trial than the unfortunate patients with ALS who are truly desperate for some sort of relief, even if it's only temporary.

That's helpful. Thanks for the added color, gentlemen.

Thank you, Charles.

Ritu Baral with Canaccord.

Hi, Ritu.

Hi, guys. Thanks for taking the question. Hi, Robert.

So, some questions on the 4024-B and the 4025 trial design. You're using 50 milligrams of riluzole every day. What is the standard riluzole dose in ALS patients now? And about what percentage get dizziness from that drug and how would you sort of describe the degree?

So, the standard doze of riluzole is 50 milligrams in the morning and 50 in the evening, or twice daily or BID. And as we have discussed previously, there is a drug-drug interaction between 357 and riluzole because 357 is a time-dependent and mechanism-based inhibitor of the enzyme that is primarily responsible for the metabolism of riluzole, which is cytochrome P450 1A2. So, that's why we have to adjust the dose downward.

I don't really have at my fingertips and so I don't want to misstate the stated incidence of dizziness on riluzole. It would be easy enough for us all to look up on the package insert. And that's what I would suggest you do, because I know that it is a frequent side effect on riluzole, but I don't want to be in a position of estimating the stated incidence and getting it wrong when the data are so easily available to us all.

Got it. And so, the dosage you're using in 24 and 25, would that get you to about the same plasma levels of riluzole as you would with the BID dosing?

Actually, no. The plasma levels with 50 milligrams once a day in the presence of 357 would be roughly double what you would see with 50 milligrams BID in the absence of 357. So, they are higher.

Okay.

And it will allow us to begin to assess whether there are any tolerability problems with that combination or not.

Got it. That's very helpful. Thank you.

And going to the 4025 study, do you expect most patients to be able to make it to the 500 milligram dose, or how do you expect patients to fall between the mid 375 and the final 500 dose?

Well, I mean, the data will eventually tell us, but we do expect the majority of patients, based on the plasma levels that we predict, will be able to tolerate it. It's a higher dose than what we studied in terms of the daily dose in 4024 parts A and B, but by dividing it so that it's given twice a day. So, in other words, yes, 500 milligrams a day but administered at -- excuse me, 250 in the morning and 250 in the evening, we will reduce the maximum plasma concentrations that the patients experience.

And so, based on that modeling, we do expect that patients will tolerate -- the majority of them will tolerate 250 BID. And we really have to anticipate that they may tolerate it well enough that we might wonder if we could have gone even higher and we may choose to explore that in one way or another. Say, for example, 250 in the morning and 375 in the evening. But, that's pure speculation until we really see the data from 4025.

Got it. And last question and I'll hop back in the queue. In 4025 you mentioned that you're going to be looking at pulmonary function measures. Can you go over the measures that you'll monitor, and also if these have been informed by pulmonary function measures from other rare disease trials, like I believe pulmonary function was used in Naglazyme and Aldurazyme development as well.

Well, sure. I mean, the one we're going to focus most upon is called the maximal voluntary ventilation, which I believe we talked about before, in which patients are instructed to inhale and exhale as deeply and as rapidly as they can over a period of -- I believe its six seconds. And then the volume that they manage to move in and out of their lungs is measured and we multiply it by 10 so that you get units that are liters per minute. And we've focused on this, not because of experience in other diseases, but because of our own experience with this evaluation in the first Phase IIa evidence of the Effect study in ALS in which we saw some significant increases after the 500 milligram dose of around four liters per minute.

So, we looked again in 4024 Part A and we saw increases across the doses that were even larger. They weren't statistically significant because of the small study, but they were on the order of around six liters per minute; and really, quite an impressive increase. That will be the pulmonary function measure that we'll look at most closely and the reason why is because of our own prior experience with it in patients with ALS treated with 357.

Great. Thanks for the color.

Thanks, Ritu.

Brian Klein, Lazard Capital Market.

Hi, Brian.

Hi. Thanks for taking my questions. First, on omecamtiv mecarbil, can you tell us if there is any associated milestone payments with initiation of the oral trials?

I'm sorry, I cannot comment on what might trigger milestone payments under that deal. Those are matters of confidentiality in our agreement with Amgen.

Got it. How about any guidance for some milestone payments in 2012 from that program?

So, we don't give guidance on milestones until they're actually achieved. And the revenue guidance that we gave today are those things that we're assured of. In other words, that we've got a contract in place that's FTE and out-of-pocket expenses. But, we don't ever do guidance on things that would be speculative with respect to milestones and when certain events might happen until they actually happen.

Okay, that's fair. On 357, would you expect that you would need to wait for a partnership before proceeding into Phase III, or do you think you might be able to initiate registrational trials on your own?

It's a good question and we're going through the calculations on that right now. I don't think right now we could both start and conclude the registration study on our own. And in that regard, we do think that a partner who would be providing up-front cash and also co-funding those activities would be important.

Great, thanks. And then -- and lastly, do you expect any residual restructuring costs coming into the first quarter?

No, we don't expect anything of any substance coming into the first quarter. We had a few people that were on a transition plan, but it's not material.

Great. Thanks so much.

Thank you, Brian.

George Zavoico with MLV & Co.

Hi, George.

Hi, Robert. Hi, Sharon. Hi, Andy. Congratulations on a good quarter and making the progress that you did.

Thank you.

I have a couple of quick questions. With regard to the dizziness issue, have you thought at all about titrating 357 in before reaching the desired concentration?

Well, yes. I mean, that is exactly what we'll be doing in CY 4025. As I described earlier, we'll start with a week at 125 milligrams in the morning and in the evening. And then, after a week, go to 125 milligrams in the morning and 250 milligrams in the evening. And then, the third week would be 250 milligrams in the morning and 250 milligrams in the evening.

So, the -- achieving the maximum plasma concentration the patients will experience in the course of the study, which will almost certainly occur in the third week, more gradually we have data that we've modeled from our earlier studies to suggest that that will produce better tolerability. And then, also, as I mentioned earlier, dividing the dose so that it's given twice a day will also reduce the maximum plasma concentration. And our earlier data that we've modeled suggests that the maximum plasma concentration is what's associated with the dizziness, not so much the total exposure. So, I think both the titration and the division of the dose should improve things.

And I'll just remind you, the other thing that we've already shown in CY 4024 Part A is, even when this dizziness does occur, it's almost always mild and it almost always goes away within the first week of dosing.

I meant from even lower than 125. I guess at 125 you're pretty satisfied that dizziness is not an issue, then, at all.

Well, we'll see. I mean, we'll have the data but I don't --.

Okay.

Expect that we'll have too many problems with it. I mean, this -- I'll emphasize again, some of you were, on a call that we had -- when was that? In --.

December.

December, where we had Professor Jeff Rothstein from Johns Hopkins really be very clear that he thinks the focus on this is inordinate, that it's a mild side effect. It doesn't stop patients from taking the drugs almost ever, and it goes away spontaneously. These are patients who are going to die. So, it's highly unlike in our consultant's view that it's really going to limit the use of the compound. But still, we're looking for ways to reduce its incidence and hopefully eliminate it just by gradual dosing. And you're right, I think we wouldn't really see much value in starting lower than 125 BID. We'll get the data, but I will be surprised if we have trouble with that started dose.

And as I recall from that conference call, it wasn't even really dizziness; it was more sort of a -- kind of like a euphoria. I forgot exactly how we described it, but dizziness isn't really that accurate, is it?

No, it's not. And it's something of an artifact of the thesaurus that's called MedDRA that we need to use to code adverse events to standard terms. Most of the time it's reported as lightheadedness and the term dizziness is not so frequently actually used by the patients. But, when you put it through the coding system it comes out to dizziness.

And you're right. We have speculated that what some patients experience as what they call lightheadedness or woozy, others will describe as a buzz or put it in terms of feeling like they've had a couple of stiff drinks, etc. And we can't really know because we can't get inside of these patients' head, but we and our investigators suspect that it may well be the same symptom described differently by different patients.

And again, Dr. Rothstein emphasized this on the call, and I've heard it from several of our investigators who say patients can perceive this, but I'm not so sure it's really even unpleasant, that it's just something that they can perceive when they're taking the drug. And another thing I've heard frequently is I doubt we even hear about it if we weren't in the context of a clinical trial where we're asking the patients repeatedly how do you feel, how do you feel, how do you feel.

Yes. Okay, great. With regard to 107, the next generation 357, follow-on to 357, what exactly are you looking for? Is it a different mechanism of action? Does it bind to troponin in a different place? Are you looking for a drug that's not metabolized by the cytochrome P450 that hits 357?

All good questions. So, CK 107 was optimized in recognition of some of the potential issues with CK 357. And what we specifically were going for is something that was distinguished chemically. And by dint of that, we found compounds in a different chemical series.

CK 107 appears to be more potent, appears not to cross the blood/brain barrier to a similar extent and, therefore, to a much lesser extent. CK 107 has different other PK properties that warrant further characterization. But, to be clear, there are still some things we don't know about CK 107 and we'll learn as we conduct these IND enabling studies. But, it might have a profile that could afford it a broader utility than CK 357, but even that is speculation right now.

So, it's good to have two compounds, especially ones from different chemical series. We don't have any reason to believe that they have a different mechanism of action. In fact, we've validated that the mechanism of action appears to be quite similar. And as far as where they bind, that appears also to be similar, although we can't be precise to that point yet.

Okay. And one final short question. In the myasthenia gravis trial you mentioned that these patients get steroids and cholinesterase inhibitors. Are you adding 357 on top of the steroids and cholinesterase inhibitors?

So, they do maintain their steroid dose. We ask that they refrain from cholinesterase inhibitors for a specified period of time prior to their visits for evaluation. They can take them during the week, but not on the day that they come in to be evaluated. They have a very short half-life, as you probably know, and a very short duration --.

Yes.

(Inaudible.) So, it's not like they have to forego treatment for a prolonged period of time.

Yes. Yes. Okay, great. Look forward to the results coming up in April. Thank you very much.

Thank you, George. Thank you.

[Dorr Steinberg] with Anson Group.

Hi, Dorr. Nice to hear from you.

Hi, Robert.

I had a few questions starting with the -- I guess in terms of the -- without including any milestones or royalties, just up-front payment, what would you -- would you say it's reasonable that you would expect to get maybe potentially three years of runway from a partnering deal?

Would I say it's reasonable? I'm going to leave that to you to project. What I can say is that there are comparable deals in which case that is achievable. When you look at the comparable deals, and we discuss these with potential partners, that is within the realm of what I would say is achievable, but, there are a lot of tradeoffs.

And I'll tell you that what we're aiming for with a deal that we're seeking to do here, and as we've discussed publicly several times, is a deal that not only augments cash on our balance sheet, but also one that has effect to our net burn for this program and for where we are continuing to maintain a very active role in leading development in ALS and other neuromuscular indications and, in particular, in North America.

So, a different potential partners, there are different trade-offs as it relates to that. And the deals that we're looking at cut across different geographies, cut across different indications. And in that regard, I don't think there's one size fits all to answer your question.

But, the deal that Biogen did with Knopp, that was just based on a three-month study. Their drug does not have the broad indications relative to other indications that 357 has. So with that in mind, it's reasonable to think that you should have a deal every bit as good as theirs or better and that deal was $345 million.

So again, I'll leave that to you to project. I do believe that the mechanism of action for CK-357 and also CK-107 may have a broader application. It's not for me to comment on what's known or not known about the Knopp drug the Biogen Idec program. But to this point, we've been quite clear that we think that CK-357 and CK-107 ought to be developed in ALS and also other neuromuscular indications. But also, we believe the mechanism of action translates beyond neuromuscular disease as you're, I think, suggesting. The deal that Biogen Idec and Knopp did also has a quite significant equity component. And in that way, you'd have to make your own guesstimates as to cash versus equity in terms of what would be the ultimate way of thinking about a deal we might do.

But, would you anticipate a partner paying for a registration trial that would satisfy both the FDA and the EMEA?

Yes. I'd certainly think a partner would be expected to participate in that level of commitment and more so. And as you suggested, there would be milestones and royalties to follow.

And without putting you in any kind of timing corner, would you be surprised -- I understand you've been at the term sheet stage for several months. Would you be surprised if a deal isn't consummated by the end of this quarter?

So again, I'm not going to speak to timing like that, but I will respond to the comment about term sheets and I'll say that we've advanced beyond that stage, as I've said before.

Okay. And as far as this new research expansion with Amgen to do research on -- to do next generation compound research, is this something that has come to light recently or was this something kind of in the vision of both you and Amgen for a while? It's a wonderful extension to the collaboration. I'm just wondering if it's fairly new in terms of conception.

No, no. It's not new. It's -- last year we had a smaller research collaboration in which each company was contributing to activities conducted under a joint research plan and those activities that we were conducting were being reimbursed by Amgen sponsorship. What we're announcing today is an expansion of that, what amounts to a larger collaboration between our companies.

And is this also helping to -- I mean, I've always felt that Cytokinetics has a wonderful ratio of scientists to overall staff. And this certainly would help making sure you keep your scientists busy because, obviously, you've had to cut back in your own preclinical work.

So, I think that's a large part of the objective here, which is, as we've said previously, it's very important here at Cytokinetics to maintain the expertise that brought us these very innovative drug candidates that have advanced now into these later stages of clinical studies. And we're constantly going back to the well in terms of understanding mechanistically and otherwise this pharmacology. So, those people who contributed so importantly to the discovery and the characterization of our lead compounds are ones who continue to play a very important role as we advance them.

But, it's -- as you know, and you and I have discussed this in the past, a challenge as to how a company like ours can mature. And as we increasingly devote to the later stage clinical studies, how do you maintain that research infrastructure, that's a difficult thing. And a lot of companies, frankly, just pick up their foot from what would have been in research and plant it fully in development and I think that's to their potential detriment.

In our case, this is a key way that we can continue to maintain that expertise and that know-how at the Company and do so in a fiscally responsible way. And our goal with not only the Amgen collaboration, but with the one we mentioned with Global Blood and others that we're contemplating, is to be able to keep that research organization sponsored, not entirely, but to a large extent, while we also focus increasingly to development. And were we to be able to do that, I think we'll be one of the more uncommon companies that can keep everything here together.

I'm impressed. What can I say? I like that approach. And I just wish you guys the best in terms of -- on the scientific front and on the business front. It's a very exciting -- particularly the first half of this year. I look forward to your progress. Thank you.

Thank you. Thank you so much for your support.

And your final question is a follow-up from the line of Ritu Baral with Canaccord.

Hey, Ritu.

Hi. Thanks for taking the follow-up. I thought this time around I'd focus on omecamtiv. In the upcoming -- well, and the DSMB looks for at the ATOMIC trial, what are the key sort of safety measures that you and Amgen are going to be looking for as far as the go/no go decisions? What are the major safety concerns at this point?

Well, (inaudible) again, it won't be us or Amgen, it'll be the data monitoring committee.

Sure.

They will have access to all the data; not just safety data, but all the data. So, they'll be looking at everything and adverse events, laboratory, ECG, what -- everything that we're collecting they will have access to.

Will there be a futility component?

No.

No? Okay. And then, the status of the next-generation Amgen candidate, can you talk to where that is in either preclinical development or discovery?

Yes, those are activities that relate to the discovery characterization and potential optimization of compounds that are still some ways away from even preclinical development. So, I would not factor those into your development expectations anytime soon.

Okay. Will they have sort of the similar mechanisms or can they target other cardiac muscle sort of pathways?

We haven't commented publicly on it other than to say that we're looking at sarcomere activation broadly. And as you are suggesting, there may be ways to do that, but I unfortunately am not in a position to comment more.

Got it. And final question. The R&D breakout that Sharon mentioned, will that sort of breakout between smooth, skeletal and cardiac be sort of steady going forward given the recent reorganization, or are there still sort of adjustments to be made there?

Yes, I think it really is priorities. Obviously, we're going to probably -- we'll have more resources on the cardiac side of the business in 2012 based on the additional research plan that has been -- the resources attached to the research plan that we have agreed with Amgen on. So, there will be some shifts, but the majority of the resources will be on skeletal.

Great. Thanks, guys.

Thank you, Ritu.

And there are no further questions in queue. Mr. Robert Blum, do you have any closing remarks?

Thank you, operator. And thank you to all the participants on our teleconference today for your continued support and also for your interest in Cytokinetics. And with that, we will now conclude the call.

Ladies and gentlemen, we thank you for your participation. You may now disconnect.