Cytokinetics Inc (CYTK) 2013 Q3 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to Cytokinetics' third quarter 2013 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 Company's request we will open 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 us on this conference call today. Leading today's call is Robert Blum, our President and Chief Executive Officer. After Robert's opening comments, Dr. Fady Malik, our Senior Vice President of Research and Early Development, will update you regarding recent progress in the clinical development of omecamtiv mecarbil for the potential treatment of heart failure.

Next, Dr. Andrew Wolff, our Senior Vice President of Clinical Research and Development and Chief Medical Officer, will provide an update on the clinical development of tirasemtiv in patients with atrophic lateral sclerosis, or ALS, and also will update -- provide an update on a Phase I clinical trial for CK-2127107, or CK-107, in healthy volunteers. I'll then provide a financial overview for the quarter. Robert will then conclude the call with additional comments regarding how these recent activities come together to align with our corporate strategy and projected milestones for the remainder of 2013. We'll then open the call for questions.

Please note that 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 and collaborations with Amgen and Astellas, 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 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. We undertake no obligation to update these statements after this call.

Now, I'll turn the call over to Robert.

Thank you, Sharon, and thank you to everyone on the line for joining us for this call today.

We had a productive quarter and made important progress. I'll start by giving a brief overview of the third quarter developments, before then asking each of Fady and Andy to elaborate on the specifics of clinical development progress for each of our programs, and then asking Sharon to put this all into the context of a financial overview.

Our focus continues to be on advancing our development stage drug candidates that have arisen from each of our cardiac and skeletal muscle programs, to complete comprehensive Phase II development programs before then potentially proceeding in latter stage clinical development.

Consistent with our stated plans, we continued to execute on those major priorities and we had another very positive quarter. In 2014 we expect to have the key data that will materially inform our plans.

Starting with our cardiac muscle contractility program, with presentations of results from ATOMIC-AHF at the ESC conference and additional analyses from the clinical trial presented a few weeks later at the HFSA conference, we were pleased with the encouraging feedback we received from a wide cross-section of the cardiology community, who expressed enthusiasm for omecamtiv mecarbil in this Phase IIb clinical trial.

In particular, expert clinicians who reviewed the results support the continued development of omecamtiv mecarbil for the treatment of heart failure. Fady will provide commentary regarding conclusions from ATOMIC-AHF and he will also provide an update on COSMIC-HF in patients with chronic heart failure.

We anticipate that the outcome of the COSMIC-HF trial, along with the data from ATOMIC-AHF, will inform final decisions regarding the progression of omecamtiv mecarbil into Phase III development for the potential treatment of heart failure. In the meantime, we continue to prepare for that possibility and to dial-up our activities in expectation of those decisions.

Moving to our skeletal muscle contractility program, and in particular our activities in support of tirasemtiv with focus to the BENEFIT-ALS trial, we are now nearing completion of enrollment in that trial. I am pleased to report that over 600 patients have been enrolled in BENEFIT-ALS and over 300 patients have completed 12 weeks of treatment. This large international Phase IIb trial is designed to inform our global registration plans and we are now preparing for multiple scenarios that we see as real possibilities for 2014 in order to capitalize on potentially positive clinical results.

In addition, we believe we are off to a great start in our collaboration with Astellas in the development of CK-107 and in the conduct of joint research. During the last quarter we completed our first-time-in-humans Phase I clinical trial, CY 5011. And more recently we have initiated another Phase I trial CY 5014. Both of these trials are intended to assess the safety, tolerability and pharmacokinetics of CK-107 in healthy volunteers prior to our possibly assessing its potential for the treatment of non-neuromuscular diseases in Phase II trials. Andy will elaborate on both these programs following Fady's update.

With that introduction, I'll turn the call over to Fady for an update on the progress of our cardiac contractility program.

Thank you, Robert.

As Robert mentioned, we reported the results from ATOMIC-AHF for the first time at the ESC Congress in Amsterdam and additional analyses of the data from this trial at the HFSA Annual Scientific Meeting in Orlando, Florida.

To remind you, ATOMIC-AHF was designed as a dose-finding study to investigate pharmacokinetic, pharmacodynamic and key safety parameters in this high-risk and symptomatic heart failure population. The trial is an international randomized, double-blind, placebo-controlled Phase II clinical trial that enrolled 613 patients hospitalized with acute heart failure in three sequential ascending-dose cohorts. Each cohort of approximately 200 patients was randomized one-to-one to omecamtiv mecarbil or a placebo.

The primary objective of this trial was to evaluate the effect of 48 hours of intravenous omecamtiv mecarbil compared to placebo on dyspnea in patients with left ventricular systolic dysfunction and were hospitalized for heart failure. The second area objectives were to assess the safety and tolerability of these three dose levels of omecamtiv mecarbil compared with placebo and to evaluate the effects of 48 hours of treatment with the intravenous omecamtiv mecarbil on additional clinical and pharmacodynamic measures.

One needs to examine the totality of the data to fully appreciate the performance of omecamtiv mecarbil in this clinical trial. Although the primary efficacy endpoint of dyspnea symptom response was not met, there were favorable and statistically significant relationships between the dose and plasma concentration of omecamtiv mecarbil in dyspnea response.

The incidents of worsening heart failure within seven days of initiating treatment was lower in each of the cohorts on omecamtiv mecarbil compared to the pooled placebo group of patients. And the rates of adverse events, or AEs, serious AEs, adjudicated deaths and hospitalizations were similar between omecamtiv mecarbil and placebo groups.

Importantly, the data obtained in the sick heart failure population continue to support the initial therapeutic hypothesis for this program. Omecamtiv mecarbil was not associated with an increased incidence of tachyarrhythmias, nor were heart rate of blood pressure adversely affected. In fact, heart rate decreased to a greater extent on omecamtiv mecarbil than placebo. Systolic ejection time, the echocardiographic signature of omecamtiv mecarbil, increased in a concentration-dependent manner similar to that previously reported in healthy volunteers and in stable heart failure patients.

So with pharmacokinetic data from over 300 patients and estimates of the placebo response rate in the symptomatic acute heart failure population, we now have a unique and valuable data set to inform dose selection and design for potential Phase III trials of omecamtiv mecarbil.

ATOMIC-AHF is one of the two final Phase II studies meant to inform the potential progression of the program into Phase III. COSMIC-HF is the other. The primary clinical development objectives of COSMIC-HF are to select an oral modified-release formulation of omecamtiv mecarbil and to characterize its pharmacokinetics in patients with heart failure and left ventricular systolic dysfunction.

The secondary objectives are to assess safety, tolerability, changes from baseline in cardiac function and dimensions as measured by echocardiography, heart rate in N terminal pro-brain natriuretic peptide, which is a biomarker associated with the severity of heart failure.

The trial is a double-blind, randomized, placebo-controlled, multi-center trial with a dose escalation phase followed by an expansion phase. During the escalation phase, over 40 patients were randomized one-to-one-to-one-to-one to placebo or one of three different oral formulations of omecamtiv mecarbil in each of the two descending-dose cohorts. Omecamtiv mecarbil was dosed at 25 milligrams twice daily for one week in the first cohort and 50 milligrams twice daily for one week in the second cohort.

I'm pleased to report that these two cohorts are now complete and an oral formulation of omecamtiv mecarbil has been selected for evaluation in the planned expansion phase of the trial. Cytokinetics and Amgen are discussing an amendment to the protocol of COSMIC-HF prior to initiating enrollment in the planned expansion phase. This is an important step forward for omecamtiv mecarbil and this program and I'm pleased to share this news relating to COSMIC-HF.

I'm also happy to report that recently Cytokinetics and Amgen agreed on the protocol and budget for a planned Phase I pharmacokinetic study of omecamtiv mecarbil in healthy volunteers of both Japanese and non-Japanese ethnicity. The trial, CY 1211, will be conducted by Cytokinetics in collaboration with Amgen. The cost of the trial will be reimbursed by Amgen. Following the expansion of our collaboration with Amgen to include Japan, which we announced in June, we have now moved plans forward so that this next study can inform the potential inclusion of Japan in the global registration programs in Phase III.

So with that update on clinical development activities for omecamtiv mecarbil, I'll turn the call over to Andy for an update on our skeletal muscle contractility program.

Thank you, Fady.

I am pleased to provide an update on recent developments in our skeletal muscle program, especially because we can announce that we are nearing completion of enrollment in BENEFIT-ALS. This Phase IIb trial is a multinational, double-blind, randomized, placebo-controlled clinical trial designed to evaluate the safety, tolerability and potential efficacy of tirasemtiv in patients with ALS.

During our last earnings call on July 31st, I announced that over 500 patients had been enrolled in BENEFIT-ALS. Today I am pleased to report that over 600 patients have been enrolled and over 300 patients have completed 12 weeks of treatment, all of which illustrates the dedication of ALS patients, their caregivers and BENEFIT-ALS clinical site personnel and investigators to the search for potential new treatments for this grievous disease. We continue to be grateful for their commitment to this trial.

We at Cytokinetics and our colleagues in eight countries are working to ensure that BENEFIT-ALS progresses as efficiently as possible. To that end, I am also pleased to report that the Data Safety Monitoring Board recently completed another scheduled meeting to review data from BENEFIT-ALS and recommended that we continue the trial without making any changes to the protocol or to the conduct of the study. We still expect to complete enrollment in BENEFIT-ALS during the fourth quarter of 2013 and will announce when enrollment has completed.

Turning now to the development of CK-107, in the last quarter we completed enrollment of CY 5011, a Phase I first-time-in-humans clinical trial of CK-107 in healthy male volunteers conducted by Cytokinetics under our collaboration with Astellas.

CY 5011 is a double-blind, randomized, placebo-controlled study designed to assess the safety, tolerability and pharmacokinetics of single ascending oral doses of CK-107 administered to healthy adult males in a three-period, dose-escalating crossover design. We are compiling the data and look forward to presenting results at an appropriate medical conference in the near future.

Also, recently we initiated CY 5014, a Phase I clinical trial of CK-107 in healthy male volunteers. This trial is a randomized, open-label, two-period crossover study to assess the relative oral bioavailability, pharmacokinetics, safety and tolerability of two oral forms of CK-107. We expect that these two Phase I studies of CK-107, alongside others planned for 2014, will inform decisions regarding potential progression to Phase II.

Our recently-announced collaboration with Astellas has already enabled Cytokinetics to increase our commitment to the investigation of CK-107 in non-neuromuscular conditions associated with muscle fatigue and weakness. We look forward to providing further updates regarding CK-107 when appropriate.

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

Thank you, Andy.

As our press release contains detailed financial results for the third quarter of 2013, I'll refer you to that public statement for the details of our P&L and balance sheet.

In the past quarter we were focused on the enrollment of BENEFIT-ALS and executing on the development and research plans associated with the Astellas collaboration that we signed at the end of June. We ended the third quarter with approximately $85.4 million in cash, cash equivalents and investments, which represents approximately 20 months of going forward net cash burn based on our 2013 financial guidance.

Revenues for the third quarter 2013 was $4.5 million. This revenue included the recognition of $1.4 million of the $16 million Astellas license fee and $2.3 million in program expense reimbursement and other revenues related to that agreement.

Revenues for the third quarter also included revenues from our collaboration with Amgen of $0.6 million and $0.2 million from our collaboration with MyoKardia.

Revenues for the 9 months ended September 30th were $6.3 million. This revenue included the recognition of $1.4 million of the $16 million Astellas license fee and $2.3 million in program expense and other revenues associated with that agreement, as well as $1.5 million in revenue from our Amgen collaboration and $1 million in revenue from our MyoKardia collaboration. The Company will recognize the Amgen license fee of $15 million associated with that collaboration in the fourth quarter of 2013.

Our third quarter 2013 R&D expenditures totaled $13.4 million. From a programs perspective for the third quarter, approximately 86% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, which include both the development of tirasemtiv and the research and development of CK-107.

With respect to 107, Astellas will reimburse our agreed costs under the research and development plan and will be primarily responsible for the conduct of Phase II development and commercialization.

In addition, 7% of our R&D expenses were attributable to our cardiac muscle contractility activities and 7% to our other research activities.

For the 9 months ended September 30, 2013 our R&D expenditures totaled $35.6 million. From a program perspective for those 9 months, approximately 80% of our R&D expenses were attributable to our skeletal muscle contractility activities, 7% to our cardiac muscle contractility program, and 12% to our other research activities.

Today Cytokinetics affirmed its previous financial guidance for 2013. Cash revenues are expected to be approximately $40 million to $42 million, cash R&D expenses are expected to be in the range of $52 million to $55 million, and cash G&A expenses are expected to be in the range of $15 million to $16 million.

This financial guidance is on a cash basis and does not include the deferral of approximately $10 million in revenue to future calendar years and an estimated $5.6 million in non-cash related operating expenses, primarily related to stock compensation expense.

The Company -- again the Company will recognize the license fee of $15 million associated with the June 2013 amendment to our collaboration agreement with Amgen in the fourth quarter of 2013. With the added cash resources from the Amgen and Astellas deals transacted in June of this year, we believe we are in a solid financial position headed into potentially key value-driving events from our clinical development programs in heart failure and ALS.

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

Thank you, Sharon.

The third quarter was a busy period. The results underscore significant progress for Cytokinetics.

Recently in the fourth quarter we have dialed up activities even more in anticipation of potentially positive clinical trial results from our lead development programs in 2014.

I would like to take this opportunity to thanks the very dedicated employees of Cytokinetics for their diligence, especially in light of multiple planning scenarios.

As we have discussed on several of these earnings teleconferences, at Cytokinetics we take pride not only in the quality of our execution, but also in the quality of our planning. Peering into 2014 we must prepare for different contingencies and alternatives, not knowing what our clinical trials may demonstrate.

In the third quarter we positioned the Company for potential successes in clinical trials programs for each of omecamtiv mecarbil, tirasemtiv and CK-107. All three programs are poised for major milestones in 2014 and we must continue to ensure we are well positioned to capitalize on those corporate events.

The ATOMIC-AHF results support the continuing development of omecamtiv mecarbil and we are pleased that we now have selected an oral formulation of this novel cardiac myosin activator following the review of data from the dose-escalation phase of COSMIC-HF with our partners at Amgen. We look forward to initiating the expansion cohort of COSMIC-HF and enrollment in that phase of the trial will inform guidance for results to be potentially available in 2014.

Preparing for success in the third quarter, we began a series of meetings with heart failure experts to discuss ways we may approach the design of a Phase III program for omecamtiv mecarbil. We are optimistic about the development of this novel mechanism compound.

Similarly, with regard to tirasemtiv, the BENEFIT-ALS trial is now nearing completion of enrollment. We are pleased with the recent DSMB decision to allow us to continue the trial without changes to the protocol and we now expect enrollment to conclude by the end of the year. On that schedule, this large international Phase IIb clinical trial should read out results in the first half of 2014.

This is an especially important time for Cytokinetics and the patients who suffer from ALS. We're optimistic about the potential for this trial to generate positive results that may support the value of skeletal muscle activation as a clinically beneficial treatment strategy for patients suffering from this grievous illness.

In these last few months we have been scaling up and optimizing the manufacturing of both the active pharmaceutical ingredient, as well as tablets of tirasemtiv. We are preparing for each of two scenarios with tirasemtiv in 2014; one that has Cytokinetics initiating a Phase III trial of tirasemtiv next year, and the other which has us potentially readying to file applications for marketing authorization with regulatory authorities.

We are also taking other steps from the corporate development standpoint to inform practical strategies for commercialization of tirasemtiv. We have placed an emphasis in recent internal strategic planning and budgeting exercises on plans intended to ensure Cytokinetics is well positioned to capitalize on potentially positive results for the benefit of patients with ALS, their caregivers and also our shareholders.

Lastly, we have made important progress in the third quarter under our recently-initiated collaboration with Astellas. We are pleased to have both completed enrollment in the first-time-in-humans Phase I trial of CK-107 and to have recently initiated enrollment in a second Phase I trial of CK-107.

Under our collaboration agreement we are responsible for Phase I studies and other Phase II readiness activities. We are executing well on these trials in 2013 in accordance with an agreed development plan and also under the joint oversight of Cytokinetics and Astellas. Together we are setting the stage for the investigation of skeletal muscle activators in non-neuromuscular disease indications.

The promise for CK-107 to address syndromes and conditions associated with muscle fatigue and weakness remains our priority and we look forward to sharing future updates.

In concluding, we are pleased with Cytokinetics' progress and execution in the last quarter and remain hopeful for the implications for a bright future for our company and shareholders.

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

(Operator Instructions). Simos Simeonidis, Cowen and Company.

Hi, Simos. Good afternoon.

Hi, Robert. Hi, everyone. Thank you for taking the questions.

If you can tell us what the amendment in the protocol in COSMIC is and what is the rationale behind it, that would be my first question.

Certainly. So, I won't be able to go into those details today. Rather, what I'll be able to share with you is that, for what will be data that came out of the escalation phase relating to the PK and relating to plans that we now have that may potentially read on implications for a Phase III design, we think a protocol amendment may be appropriate. We're discussing that with Amgen and for what will be I hope primarily administrative matters, we'll be in a position to initiate the expansion phase here soon enough.

So does this amendment translate into a delay in starting the expansion and, if yes, how significant a delay?

So it will affect a delay, a delay that I don't think will be particularly long. Based on our current planning, I'm hoping that we'll have that amendment filed here soon. And we may be in a position to initiate dosing in the expansion phase also soon.

And maybe you won't be able to answer this, but I'll try. Is the amendment have anything to do with the dosing or frequency of dosing or is it something different?

Again, I don't think I could go into it until we know that, together with Amgen, we're on the same page about how to approach an amendment. Soon enough we'll be in a position that I think we can elaborate on that to your full satisfaction.

Okay. And then you said that you have 600 patients enrolled in BENEFIT-ALS. Just to get an idea when the trial's going to be fully enrolled, you said fourth quarter. Can you tell us whether you think it might be November or December, or how quickly you're enrolling patients in terms of rate of enrollment, let's say on a per day or per week basis?

So I'll point you to the statement that Andy made regarding where we were on the last earnings call and where we are on this one, but also point out that in that intervening period a substantial number of the centers were going through the administrative processes of then approving a protocol amendment, so patients were not being enrolled for a large portion of that time. However, I think that as you were seeing between our Q1 earnings call and our Q2 earnings call, we were enrolling patients at quite a rapid rate. I believe that we're enrolling at a rate similar there. And in that regard, I think you might be able to do the math and answer your question. What I'll say is that I think we're very confident that we can complete enrollment in this fourth quarter and, once we do so, we'll make the announcement.

Andy, I don't think -- is there anything you want to add?

I don't think there's anything to add to that.

Okay. And then in terms of your thoughts on partnership, are discussions still ongoing? I know you spoke towards the end of the call about corporate development and being ready to act if you have a positive result. How are you thinking about corporate -- or partnership right now?

Good question. I should elaborate. With regard to corporate development, I was not referring to business development and licensing as much as I was referring to what might be required of Cytokinetics if we were to build out a commercial business, a commercial business that would be in major markets not only in North America, but internationally. And in that regard, we're preparing for that potential scenario and understanding what would be, from a market access standpoint, from a tax, legal, IP, human resources and clinical sales and marketing standpoint, understanding all the implications of what it would take to build affordably a business that could return significantly on investment.

If we did choose to partner the program, having that information would certainly be informative to any potential partnering discussion, but partnering tirasemtiv is not currently a priority for Cytokinetics.

So the current thinking is to build out a commercial infrastructure in the US at least.

I think that's fair.

And ex-US?

That's what we're evaluating now by going through this exercise.

Charles Duncan, Piper Jaffray.

Thanks for taking the questions and congratulations on the recent progress.

Thank you.

My questions are primarily on tirasemtiv. I'm not sure if I heard your correctly or am interpreting something thing you said in your prepared remarks regarding manufacturing and possibly getting ready for a Phase III or to file for regulatory approval applications. Is -- did I hear that correctly for 2013 activities? And then perhaps does that reflect any insights on how things are going with BENEFIT-ALS?

So, I'll answer that and then also turn to my colleagues in R&D. We're preparing for those scenarios with anticipation that we will have potentially positive results and, therefore, not knowing until we have further discussions with data in hand with the regulatory authorities whether we have a basis with trial results to support a standalone registration, we certainly need to know what that entails and be prepared to do that if the data are sufficiently positive to warrant that. But, more probabilistic for a program such as this in Phase IIb, we should assume that the next incremental step would be a Phase III trial. We also have to be well prepared for that.

So, each scenario caries with it different investments, different timelines, different priorities and urgencies. And in that regard, we are spending so that we ensure that we are able to react with data to which scenario we may then find ourselves on.

And Andy can speak to that from the maybe clinical R&D standpoint and maybe I'll ask Fady to elaborate on the non-clinical R&D.

Well, I think as we've discussed many times before, our base case assumption is that a positive BENEFIT-ALS would still need confirmation by a larger and longer Phase III study. But, there are scenarios where a remarkably positive result from BENEFIT may encourage regulatory authorities to approve the drug sooner than that on the basis of some post-approval commitments that would need to be negotiated. So, given that possibility, I think it's prudent to make these preparations.

And Fady can speak to this next, but in particular one of the questions was with respect to manufacturing the drug substance in tablets and we would need that whether we were on a Phase III scenario or whether we were on an early commercialization scenario.

Yes. Charles, I think, as Andy laid it out, one just needs to invest prudently to be prepared with enough drug supply to embark on either scenario. If it's a Phase III trial, we need drug supply to minimize the start-up time in that trial. If we were going forward to registration, we need to be able to demonstrate that we can reproducibly manufacturing the drug and do all those things as well. So, there are different aspects to each scenario that sort of both involve the same thing.

So it sounds like you are making prudent steps for the future without a lot of information and not necessarily reading into anything in terms of the trial with regard to making these observations.

If you're asking if we have any insights into the data, the answer is no. We do know the study enrolled well. We do know that the DSMB has given us a green light to proceed to complete enrollment. And in that regard we know that investigators are enthusiastically embracing the study and that to us encourages us to want to make certain that we're well prepared to return that confidence with our being poised to act promptly on data with the goal that we could be their filing a registration application or proceeding to Phase III.

We can't know which one it'll be; or it may be neither, of course, but we certainly have to be prepared for the positives. And in that regard, we want to make certain that we don't have delays in the supply chain. We want to make certain that we're in the best position on the non-clinical and clinical side to discuss with regulatory authorities what might be required for potential registration.

Okay, Robert. That makes sense. And then with regard to the DSMB meeting, can you review the criteria that they might have considered for continuing this study? Was there any efficacy component of that analysis?

They review all the data in an unblinded fashion.

Okay. And then a final question is you said that 300 or so patients have been on the drug for 12 weeks. Could you please remind me what happens after 12 weeks? Do they stop taking the drug or are they given the option to continue taking the drug and, if so, what percentage of them have continued to take the drug?

So, they finish 12 weeks of double-blind treatment and they stop. And maybe I'll remind everyone that they really do receive 13 weeks of treatment because the first week is open-label. Everybody gets 125 milligrams twice a day and then patients are randomized for an additional 12 weeks of dose titration on active tirasemtiv or a placebo. After those 12 weeks of double-blind therapy they come off treatment. There is no option for them to continue and they have follow-up assessments 7 and 28 days after terminating double-blind treatment.

But however, also, just to be explicit to your question, we do not have for this study a continued enrollment program. So patients do come off of study drug.

Okay. Thanks for the added color, guys.

Paul Matteis, Leerink.

So, I know you can't disclose any of the details regarding your amendment to COSMIC, but can you help us understand kind of what exactly constitutes success with this trial relative to ATOMIC? And kind of what you believe you need to see and what Amgen needs to see in order to advance the program to Phase III?

So, I won't comment as to what I think Amgen needs to see because I shouldn't speak for Amgen. I'll tell you what the study is designed for and I think that will hopefully address what Cytokinetics and Amgen will be considering in light of decisions regarding potential progression to Phase III.

The study is designed primarily for safety, tolerability, pharmacokinetics and understanding potential effects on pharmacodynamics. This is not a study that has a principal efficacy objective or clinical outcome. So it really is about understanding if the oral form that has now been selected is well tolerated and produces predictable PK and a pharmacodynamic effect that is durable.

So as you know, this is a study that will enroll patients now for weeks of treatment. And we've seen already in prior studies that the drug is safe and well tolerated at plasma exposure levels that are similar to the ones that are being investigated here.

What we also know is that very sensitive measures of a drug in fact are found in echocardiographic parameters. So we'll be looking at echocardiographic parameters here again with more patients in order to be able to understand if those are maintained and durable out to longer-term evaluations.

Maybe I'll turn to Fady and see if there's anything further you want to add.

Yes. I think, just in a nutshell, this will be the first time where we dose patients for a sustained period of time. And we want to demonstrate safety and tolerability of that in conjunction with seeing some changes in the echocardiograms of these patients that might -- that look favorable in terms of cardiac function of the structure.

I'll point you back to the ATOMIC data and remind you that systolic ejection time with relatively few patients that participated in the echocardiographic sub-study of ATOMIC produced dose dependent and plasma concentrated related effects that were consistent with the therapeutic hypothesis and the mechanism of this novel cardiac myosin activator. And we've seen in study after study that systolic ejection time and some of these other echocardiographic parameters can be quite responsive to this new mechanism.

So, that's the kind of thing that we'll be looking again at here. And in that regard, I think that COSMIC is designed in such a way that we'll be able to answer some questions about what pharmacodynamically we may be hopefully able to one day correlate with clinical outcomes.

I want to underscore how significant it is that we did select an oral form for progression to the expansion cohort. I'll remind you that last year we were looking at six oral forms and we were doing that in healthy volunteers in Phase I. And then we initiated the COSMIC study to compare three of those oral forms versus placebo in dose escalation. And now we've selected an oral form and we look at that as a big positive.

Great, thanks. That's really helpful. And then just -- now that you're initiating the trial in Japan, and then also there's a protocol amendment, I'm just kind of wondering exactly -- do you still expect COSMIC data in 2014? When do you expect to potentially see data from the Japanese study? And then after those two data readouts occur, what's kind of the timeframe for which Amgen could decide whether or not Phase III is a go or a no go?

So firstly, the decision to proceed to Phase III is a join development committee decision that Amgen and Cytokinetics make together. I want to underscore that. That's the way our collaboration agreement is set up.

Regarding timing, it really does have to do with how quickly we can process this protocol amendment and be then in a position to initiate enrollment and have enrollment inform the answer to your question. I do believe that as enrollment may go quickly in the study, then we'll be in a position to answer those key questions in 2014. But we're not on this call giving guidance to 2014. More importantly, we'll see enrollment and be hopefully in a position to do that with our next earnings call.

As far as the Japanese ethnicity pharmacokinetic study, I'll point out that that's a study that will be done in the United States. I didn't want to imply by our comments and your question that'll be performed in Japan. It'll be performed in the United States, but in healthy volunteers, including those who have Japanese ethnicity. And that's a study that Cytokinetics will do here and under the IND, but which will produce data which will allow us to potentially include Japan in a registration program, that we're looking forward to that data in 2014.

Chad Messer, Needham & Company.

Just quickly on 107, since a lot of my questions on the other programs have been answered. The fact that you've completed dosing in the dose escalation Phase I, does that imply you've reached the dose-limiting toxicity and is there anything you can share with us on what that might be?

So, that's an excellent question and one that I can't comment on, nor can my colleagues comment, in large part because these data are very fresh and we want to share them with our colleagues at Astellas and be then in a position to communicate them together.

What I'll tell you is that the study was a single ascending-dose study, not so much intended to look for a dose-limiting effect, but rather to assess and evaluate doses up to a maximum level.

Okay, great. And then maybe a quick one for Sharon. Just on the Astellas collaboration, I know you recognized some of the revenue from the two portions of the revenue you're getting from that collaboration. Can you just remind me how that's going to be recognized going forward? I think I was expecting it over eight quarters, but it doesn't look like it's straight line. Is it like a percent of completion or reimbursement or just how is that going to hit your P&L?

It's going to be on a proportional performance basis. So percent completion is -- it's basically looking -- it's one single unit of accounting. And so we'll look at the total cost incurred and then it'll be done proportionately over time.

Alright. Thanks, guys.

So it will not be based on--.

Congratulations on the progress.

Jason Butler, JMP.

Just on the BENEFIT-ALS trial, could you just walk us through your expectations of timing from the completion of enrollment until when you expect to be able to give top-line results?

So, I think we're still quite comfortable with the kind of feedback we gave to that same question earlier, which is to say that following last patient, last visit in what will amount to weeks, we hope to be in a position to have data collected in order to then proceed to database lock, analysis of data and reporting of the data. So, we're talking about weeks to maybe a couple of months, but not longer than that.

The reason I say that is we are making a big push right now, for patients who have already completed enrollment, to collect those data and be in a position so that when the last patients come off the study drug, we have many fewer patients that we have to collect data for in order to be able to proceed to locking the database.

In prior calls we've pointed to where we think we could be in a position to present these data. And while this is not formal guidance, we would like to be in a position to present these data in the first half of 2014. And in that regard, one potential place where those data could be presented would be the AAN meeting which is at the end of April in Philadelphia.

Okay, great. Thanks. And then just a question for Sharon. You said in the press release that you expect to recognize the $15 million from Amgen as revenue in 4Q. Have you already -- did you receive that cash in 3Q?

We actually received that cash in 2Q. So--.

Okay.

We received that cash--.

So, you've already received that cash. Yes.

Yes. We received that cash. We just didn't meet the criteria for revenue recognition until the fourth quarter.

Operator, are there any other questions?

There seem to be no further questions at this time.

Thank you, then. And also, thank you to all the participants on the teleconference today for your continued support and interest in Cytokinetics and our progress.

And Operator, with that we can conclude the call. Thanks very much.

Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may all disconnect.