Cytokinetics Inc (CYTK) 2015 Q3 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics third quarter 2015 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. (Operator Instructions). I will now turn the call over to Diane Weiser, Cytokinetics' Vice President of Corporate Communications and Investor Relations. 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. Following Robert's initial comments, Fady Malik, our Senior Vice President of Research and Development, will provide an update on the clinical development program for omecamtiv mecarbil, our first in class cardiac myosin activator, which is being developed for the potential treatment of heart failure, and a recent announcement regarding results from COSMIC-HF.

Then Andy Wolff, our Senior Vice President and Chief Medical Officer, will provide an update on VITALITY-ALS, our Phase 3 clinical trial of tirasemtiv, our first in class, fast skeletal muscle troponin activator, which we are developing for the potential treatment of amyotrophic lateral sclerosis, or ALS. Andy will also provide an update on our clinical development program for CK-2127107, or CK-107, our next generation fast skeletal muscle troponin activator, including an update on the soon to be initiated Phase 2 clinical trial in patients with spinal muscular atrophy, or SMA.

Then, Sharon Barbari, our Executive Vice President of Finance and Chief Financial Officer, will provide a financial overview for the quarter, and Robert will conclude the call with additional perspectives and comments on key milestones for the remainder of 2015. We will then open the call for questions.

Please note that the following discussion, including our responses to questions, contains statements that constitute forward-looking statements for purposes of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements relating to our financial guidance in collaboration with Amgen and Astellas for the initiation, enrollment, design, conduct, and results of clinical trials; and to other research and development activities. Our actual results may 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 investors and media 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.

And now I will turn the call over to Robert.

Thank you, Diane, and thank you to everyone on the line for joining us for this call today. During the third quarter, we've been firing on all cylinders across our three clinical development programs as well as our ongoing research activities. Earlier this week, we announced top-line results from the expansion phase of COSMIC-HF, our Phase 2 clinical trial of omecamtiv mecarbil in patients with heart failure. Suffice it to say we are very pleased and encouraged with the results and believe the data exceeded expectations. We look forward to further discussing the data with our partner, Amgen, and preparing to submit the results for presentation at an upcoming medical conference. Fady will provide more details on COSMIC-HF in a moment.

In the third quarter, we began our first ever Phase 3 clinical trial of tirasemtiv, which we are developing for the potential treatment of ALS. We believe this is the only multinational Phase 3 trial currently enrolling patients with ALS, and we are encouraged by the early enthusiasm and support from the investigator community. We have designed VITALITY-ALS to assess the effects of tirasemtiv versus placebo on slow vital capacity and also on other measures of skeletal muscle strength, including respiratory function in patients with ALS.

We are also in advanced planning for our Phase 2 clinical trial of CK-107 for the potential treatment of SMA, an orphan hereditary disease most often diagnosed in infants and young children, and for which there are no current therapies. We have finalized the clinical trial protocol with our partner, Astellas, and we look forward to initiating this trial later this quarter. Based on our discussions with our lead investigator, Professor John Day of Stanford University, and others in the SMA community, we know there is great anticipation for this trial, particularly because it will be focused on patients 12 years and older, a population that is typically look not eligible for other ongoing trials which are more focused on an infant population. Shortly, Andy will provide further details on both the tirasemtiv and CK-107 development programs.

Finally, during the recent quarter, we made progress on our joint research program with Amgen directed to the discovery of next generation cardiac sarcomere activators. In addition, we continue to make progress under our joint research program with Astellas, directed to the discovery of next generation skeletal muscle activators. Let me now turn the call over to Fady so that he can provide some perspectives on omecamtiv mecarbil and the recently announced positive top-line results of COSMIC-HF.

Thank you, Robert. As Robert mentioned, and as you all saw earlier this week, together with Amgen, we just announced top-line results for COSMIC-HF, our Phase 2 clinical trial of orally administered omecamtiv mecarbil for the potential treatment of systolic heart failure. These results come almost 10 years to the day after omecamtiv mecarbil first entered human clinical trials in September 2005. With over a dozen clinical trials now completed, we now have a deep understanding of the pharmacokinetics, pharmacodynamics, tolerability, and safety of omecamtiv mecarbil upon which to build. While we certainly have more work to do as we look forward to potentially advancing to a Phase 3 outcomes trial in 2016, we are pleased to see that what we have observed in earlier trials over shorter durations is now reproduced in COSMIC-HF following 20 weeks of treatment in chronic heart failure patients with systolic dysfunction. We believe this trial is the last stepping stone towards the potential initiation of a Phase 3 program.

To remind you, COSMIC-HF is a double-blind, randomized, placebo-controlled, multicenter, dose escalation study designed to assess the pharmacokinetics and tolerability of three oral modified release formulations of omecamtiv mecarbil in patients with heart failure and left ventricular systolic dysfunction, and to select one formulation for further evaluation. During the dose escalation phase, 96 patients randomized 1 to 1 to 1 to 1, to placebo or one of three different oral formulations of omecamtiv mecarbil in each of two ascending dose escalation cohorts. Then, one of these three oral formulations was selected for use in the expansion phase of the trial.

The expansion phase of the trial enrolled 448 patients randomized 1 to 1 to 1 to receive placebo or omecamtiv mecarbil at either 25 milligrams twice daily, or a target dose of 50 milligrams twice daily. Escalation to the 50 milligram dose at week eight depended on plasma concentration of omecamtiv mecarbil following two weeks of dosing with the 25 milligrams twice daily. Consequently, because not all patients randomized to this group actually were titrated up to 50 milligrams twice daily, we refer to it as the dose titration group, rather than referring to any particular dose level.

The primary objective of the expansion phase was to characterize the pharmacokinetics of oral omecamtiv mecarbil during 20 weeks of treatment. The secondary objectives included evaluation of safety, tolerability, and echocardiographic measures of cardiac function, heart rate, and N-terminal pro-brain natriuretic peptide, or NT-proBNP, a biomarker associated with the severity of heart failure, during 20 weeks of treatment. Approximately 100 sites in 13 countries participated in one or both phases of COSMIC-HF.

On Tuesday morning, we reported top-line data from the expansion phase of COSMIC-HF. The first key takeaway is that pharmacokinetic, or PK, guided dose titration appeared to adequately control patient exposure to omecamtiv mecarbil. In the dose titration group, this was achieved simply by measuring the plasma concentration of omecamtiv mecarbil and basing the decision to titrate the dose upward on a single trough plasma concentration. This precision medicine approach appears well-suited to preventing excessive exposures to omecamtiv mecarbil.

Very importantly, we also saw statistically significant improvements in several pre-specified echocardiographic measures of cardiac function measured at 20 weeks following randomization. These pharmacodynamic effects of omecamtiv mecarbil were generally dose-dependent. Systolic ejection time, the pharmacodynamic signature of the mechanism of action that has been followed throughout the development program, increased in a statistically significant manner that persisted over the 20 weeks of dosing. Similarly in the dose titration group, we observed statistically significant and potentially clinically meaningful decreases in cardiac dimensions, which were evident after 20 weeks of dosing.

There were increases in stroke volume, accompanied by decreases in heart rate, with lower heart rates being a very good reflection of increased cardiac efficiency. These changes were gratifying, as we had observed similar changes in prior studies of acute dosing and now have observed them following 20 weeks of chronic oral therapy. As you may recall, the signature pharmacodynamic effect of omecamtiv mecarbil has been the prolonged systolic ejection time. In this study, we were looking to see if this affect might produced a durable effect on other measures of cardiac function, which we did observe.

Finally, we saw a decrease in the neural hormone, NT-proBNP, something not observed in prior studies that employed short-term dosing of omecamtiv mecarbil. NT-proBNP increases with the severity of heart failure and consequently decreases in this biomarker are thought to predict clinically meaningful decreases in the occurrence of negative clinical outcomes such as death and rehospitalization for heart failure. Adverse events, including serious adverse events, in patients on omecamtiv mecarbil appeared comparable to those on placebo. A small increase in troponin was seen among subjects receiving omecamtiv mecarbil. Increases in troponin were independently adjudicated, and none were determined to be due to clinical events of myocardial ischemia or infarction. There was no imbalance in deaths and cardiac adverse events were generally balanced between the placebo and active treatment groups.

In summary, we are very enthusiastic about the consistency and durability of the pharmacodynamic measures and the balance of major adverse events of interest in this first clinical trial of chronic oral dosing of omecamtiv mecarbil. I would like to thank the patients and the investigators who participated in COSMIC-HF, as well as my colleagues at Cytokinetics and collaborators at Amgen for their dedication and substantial commitment to the development of this novel mechanism of action for the potential treatment of heart failure.

In anticipation of the data and potential progression of Phase 3, during the quarter we continued to conduct collaborative planning activities in the areas of clinical development, manufacturing, and market research with our partner Amgen. On the clinical front we held an advisory meeting with leading heart failure experts to gain insight and perspective into our proposed Phase 3 trial design and have continue to refine the design of a potential Phase 3 outcome study.

Additionally in the quarter, we attended the annual meeting at the Heart Failure Society of America. Based on themes at the HFSA and meetings we had with the leadership of the organization, key opinion leaders, and treating physicians, we believe that addressing the burden of heart failure remains a significant challenge given the still high event rates of cardiovascular death and heart failure hospitalization, as well as the cost to society associated with these events. Despite the recent introduction of new therapies, we believe there is still a large unmet need for a therapy like omecamtiv mecarbil that has the potential to impact these clinical outcomes by directly increasing systolic function.

We look forward to continuing to advance development of omecamtiv mecarbil and believe the results of COSMIC-HF support the movement to Phase 3. Our goal would be to make this decision jointly with Amgen in the next few months. And with that update on our cardiac program, I'll turn the call over to Andy for an update on our skeletal muscle activator programs.

Thank you, Fady. As you know, this past quarter we began VITALITY-ALS, our Phase 3 clinical trial designed to assess the effects of tirasemtiv versus placebo on slow vital capacity, or SVC, and other measures of skeletal muscle strength, including measures of respiratory function in patients with ALS. I reviewed the study design on our last call, so I won't go into that detail again. It's available on clinicaltrials.gov. I would, however, like to highlight some of the key design elements we included in VITALITY-ALS to address some of the challenges we encountered during BENEFIT-ALS.

First, we've extended the open label lead-in phase from one to two weeks in VITALITY-ALS to give patients a little more time to acclimate to any potential adverse events they may experience and also to give them, along with their physicians, more time to determine if they can tolerate the starting dose over a longer duration after randomization. As you may recall, the one week open label lead-in phase in BENEFIT-ALS may have been too short to allow an adequate consideration of the tolerability of the starting dose of 125 milligrams twice daily, and consequently this contributed to a higher than expected dropout rate from the tirasemtiv group after randomization.

Additionally, unlike in BENEFIT-ALS, in which we attempted to titrate all patients to 500 milligrams daily, in VITALITY-ALS we are targeting three different dose levels, while again enabling patients to up and down titrate based on tolerability. Together, we believe these design changes in VITALITY-ALS may decrease the early termination rate we observed after randomization in BENEFIT-ALS and help to determine the optimal tirasemtiv dosing strategy going forward.

Regarding our start-up activities, during the quarter we focused on initiating our North American and Canadian sites. We will turn our attention to our European sites this quarter and expect that the majority of centers should be enrolling by year end. In fact, based on continued interest and increased enthusiasm for VITALITY-ALS, we have decided to add sites in additional European countries, bringing our planned totals to more than 75 centers in 11 countries in North America and Europe. Based on current enrollment rates, we anticipate enrollment to complete in the first half of 2016 and expect results from VITALITY-ALS by mid-2017.

In parallel, we also engaged in manufacturing, commercial planning, and advocacy related activities this quarter in support of VITALITY-ALS and tirasemtiv. We also conducted a webinar for key advocacy groups in North America and Canada to review the trial design and ensure they were well equipped to provide information to their patient constituencies.

You will recall that we received a $1.5 million grant award from the ALS Association's proceeds from the Ice Bucket Challenge for the conduct of VITALITY-ALS, including the collection of clinical data and plasma samples from patients in VITALITY-ALS, in order to help to advance the discovery of potentially useful biomarkers in ALS. During the quarter, we achieved a milestone payment in accordance with our agreement with the ALS Association.

Turning to the development of CK-107, our next generation skeletal muscle troponin activator partnered with Astellas, we continue to make progress toward our goal of initiating a Phase 2 clinical trial in patients with SMA in the fourth quarter of this year in accordance with an agreed plan with Astellas. As you know, SMA is a disease in great need of new therapies to address functional limitations, and we believe CK-107 has the potential to improve muscle function in the adolescent and adult patients we intend to enroll in our trial, whether the drug is used alone or in combination with other therapeutic approaches being pursued.

We have finalized the protocol following our investigator meeting which we held last weekend. As has been our practice, we will provide additional details regarding the trial design when it is open to enrollment, but I will quickly recap the key elements. We plan to focus on SMA types II, III, and IV, including both ambulatory and non-ambulatory patients, and evaluate endpoints including respiratory and other measures of skeletal muscle function following treatment to steady-state with CK-107. We anticipate enrolling approximately 75 patients and to treat them for eight weeks at approximately 10 to 12 centers in the United States.

Our study in patients with SMA is only one of several studies of CK-107 that will get underway under our collaboration with Astellas. While our study of CK-107 in patients with SMA will be the first Phase 2 trial of CK-107 and will occur in patients with a neuromuscular disease, in parallel, Astellas is focusing on non-neuromuscular disorders in which there is also impaired muscle function. Toward that objective, we expect Astellas to initiate a Phase 2 trial of CK-107 in patients with chronic obstructive pulmonary disease, or COPD, in the first half of 2016. The goal of this trial is to evaluate the potential of CK-107 to increase measures of exercise performance and time to muscle fatigue.

With that update on our plans for our skeletal muscle program, I will now turn the call over to Sharon for an update on our financials.

Thank you, Andy. As our press release contains detailed financial statements for the third quarter of 2015, I will refer you to that public statement for the details of our P&L and balance sheet. We ended the third quarter with approximately $98 million in cash and cash equivalents and investments, which represents over 15 months of going forward net cash burn based on our 2015 guidance. Our guidance includes our current estimated cost for VITALITY-ALS for tirasemtiv in 2015 and 2016.

Revenues for the third quarter of 2015 were $7.9 million compared to $9.4 million during the same period in 2014. Revenues for the third quarter of 2015 included $4.1 million of license revenues and $3.2 million of research and development revenues from our collaboration with Astellas, and $0.6 million in research and development revenues from our collaboration with Amgen. Revenues for the same period in 2015 included $2.7 million of license revenues and $4.8 million of research and development revenues from our collaboration with Astellas, and $1.9 million of research and development revenues from our collaboration with Amgen.

Our third-quarter 2015 R&D expenditures totaled $11.6 million. From a program perspective for the third quarter, approximately 77% of R&D expenses were attributable to our skeletal muscle contractility research and development activities, which includes both expenses associated with tirasemtiv and CK-107; 13% to our cardiac muscle contractility activities; and 10% to our other research activity.

Revenues for the nine months ended September 30, 2015, were $18.9 million compared to $25.2 million during the same period in 2014. Revenues for the nine months ended September 30, 2015, included $8.8 million of license revenue and $8.2 million of research and development revenues from our collaboration with Astellas, and $1.9 million in research and development revenues from our collaboration with Amgen. Revenues for the same period in 2014 include $7.6 million of license revenues and $14.1 million of research and development revenues from our collaboration with Astellas, and $3.4 million of research and development revenue from our collaboration with Amgen.

For the nine months ended September 30, 2015, R&D expenses totaled $33.1 million. From a program perspective for the third quarter, approximately 76% of R&D expenses were attributable to our skeletal muscle contractility research and development activities, which include both expenses associated with tirasemtiv and CK-107; 13% to our cardiac muscle contractility activities; and 11% to our other research activities.

Today we also updated our financial guidance for 2015. The Company anticipates cash revenue will remain in the range of $44 million to $47 million, cash R&D expenses will be in the range of $51 million to $54 million, and cash G&A expenses will be in a range of $18 million to $21 million. This guidance includes approximately $30 million in revenue which will be deferred and recognized over a two-year period ending in 2016 under Generally Accepted Accounting Principles. This guidance excludes an estimated $4.6 million in non-cash related operating expenses primarily related to stock compensation expense.

During the quarter, we also established a $40 million controlled equity offering, or ATM, line with Cantor Fitzgerald as part of our ongoing financial stewardship. As a practice, we have put ATMs in place in the past and assess them opportunistically based on the capital markets and the timing of company events. Our intent is to use this ATM in a similar manner. We also recently announced that we entered into a growth capital loan with Oxford Financial and Silicon Valley Bank. This growth capital loan allows the Company to access up to $40 million in a series of term loans. Upon the signing of the loan agreement, the Company received $15 million. We may, at our sole discretion, borrow from the lenders additional capital, provided the prespecified conditions under the loan agreement are met. Both the ATM and the growth capital loan provide with the flexibility to fund the Company in 2016 as we prepare for data with VITALITY-ALS and begin the Phase 3 development program for omecamtiv mecarbil.

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

Thank you, Sharon. So as you've heard, we really dialed up our momentum in the third quarter of 2015 across all of our clinical programs, and we believe we're in the midst of a transformational time at Cytokinetics. We are extremely encouraged by the results from COSMIC-HF and we believe we are in a stronger position to advance the planning activities that have already been underway for many months, in collaboration with Amgen. For the rest of 2015 and into early 2016, we will focus our activities on continued data analyses, planning for potential progression to Phase 3, and preparations for the full disclosure of the data from COSMIC-HF at an upcoming medical conference.

The results from COSMIC-HF reinforce and validate our commitment to, and progress in, muscle biology and illuminate the substantial promise that a first-in-class cardiac sarcomere activator may hold for patients suffering from heart failure. We also believe our other development stage programs may similarly hold great promise for patients battling diseases characterized by impaired muscle function.

As I mentioned earlier, during the recent quarter, we also continued research activities under our joint research program with Amgen, directed to the discovery of next-generation cardiac muscle activators, as well as under our joint research program with Astellas, directed to the discovery of next-generation skeletal muscle activators. Of note, together with Astellas, we've recently selected a skeletal muscle activator candidate and anticipate initiating IND-enabling studies in 2016. We will continue working diligently with trial sites in VITALITY-ALS to progress activation and patient enrollment, particularly as you've heard on the European front, with the goal of having the majority of sites up and running by year end.

We deeply recognize the urgency within ALS community to advance new medicines for people battling this progressive, debilitating disease and we remain fully committed to doing our part. We are also encouraged by the tremendous momentum within the ALS community to advance guidelines to accelerate drug development and regulatory approval of potential medicines for ALS. We are working to lend our support to the ALS Association on these initiatives.

Starting this, our very first Phase 3 clinical trial, was a key milestone for Cytokinetics and the ALS community at large. We very much appreciate how important a potential therapy that may slow the decline of respiratory function and potentially reduce the time to assisted ventilation and other such independence-limiting activities can be for patients and their caregivers. We are equally excited to begin our Phase 2 trial of CK-107 in patients with SMA, that will occur we expect in the coming months. The feedback from the SMA community continues to be positive and encouraging, and we recognize the opportunity to advance this potential new medicine, especially at a time when adolescent and adult patients have no therapeutic options.

We are very proud of the strides that Cytokinetics is taking as a leader in neuromuscular disease and muscle biology in general, and know patients are counting on us. As a company, we spend considerable time with patients and their loved ones and this quarter participated in a number of fundraising walks, bike rides, and other civic activities. As well we participated in the second annual Ice Bucket Challenge with our employees.

Finally, you may have noticed something new on today's press release. We recently launched new branding for Cytokinetics, including a new corporate logo and website. Our goal was to better reflect the Company's evolution and maturation over the years. From our initial roots in cell biology to our now becoming a recognized leader in muscle biology, with multiple drug candidates advancing towards commercialization. We encourage you to check out our new website.

Now I would like to recap our expected milestones for the remainder of 2015. For tirasemtiv, we anticipate concluding enrollment of VITALITY-ALS over the next 6 to 9 months. For CK-107, we expect to initiate a Phase 2 trial of CK-107 in patients with SMA in the fourth quarter of 2015. In addition, we expect Astellas will initiate a Phase 2 clinical trial of CK-107 in patients with COPD in the first half of 2016. And for omecamtiv mecarbil we expect to continue joint development activities in collaboration with Amgen directed to the potential advancement of omecamtiv mecarbil to Phase 3 clinical development.

Operator, with that, we conclude the formal portion of our call today. I would now like to open the call up to questions, please.

(Operator Instructions). Joe Pantginis, ROTH Capital Partners.

Congratulations on the omecamtiv data. A couple quick questions. First, with regard to the data, I know you are looking to maintain the data for a medical conference, but I was just curious if there's anything you can comment on with regard to the improvements that you saw with heart functions relative to the standard of care that's currently out there, and also potential synergies between those drugs as you anticipate the future landscape for omecamtiv.

Okay, so thank you, Joe. I'm going to stop short of making any comparative statements. Certainly this is a Phase 2 study. We are evaluating only omecamtiv mecarbil. What I can say is that we are very pleased with the consistency and the totality of the effects. It's not like we saw effects in one echocardiographic parameter and not others in such a way that would give us pause for concern. Rather instead, the consistency across these measures, as were detailed in our press release, is what I think is especially gratifying.

I think we should also point out in response to another element of your question, the study was done over a background of standard of care. So these salutary findings that we described in our press release were in addition to beta blockers, diuretics, ACE inhibitors, ARVs, etc.

(multiple speakers) I think the other thing I might underscore, Joe, is that this is the first time we've had an opportunity to evaluate oral dosing of omecamtiv for weeks duration of treatment, and in that way we were able to unveil other advantages, perhaps, of this therapy as we may want to now further verify those in a potential Phase 3 study.

That's helpful, thank you. And then if I could just switch gears for my second question to VITALITY. Maybe can you remind us with regard to the potential for any interim analyses? Looking forward with rosy-colored glasses, hopefully if you were to see something dramatic regarding the positive impact on breathing function, could the DSMB halt the study early for ethical reasons?

So let me answer the question and then I will turn it over to my colleague, Fady, to also elaborate. I will remind you that this is a study that has as its primary efficacy endpoint the change from baseline in slow vital capacity as measured at 24 weeks on patients receiving tirasemtiv versus those receiving placebo or standard of care. But then also we are continuing the conduct of a study in a double-blind, randomized way so that all patients continue through to later time points. And at 48 weeks, we will be measuring certain secondary endpoints, including time to fall in the ALSFRS, respiratory domains, time to mechanical ventilation, respiratory failure, etc. So certainly, in order to be able to satisfy the objectives of both the primary and secondary endpoints, we need to have patients proceeding through to the secondary endpoints as measured at 48 weeks.

Now I'll turn it over to Fady to comment on the potential for early stopping.

Yes, I think as Robert indicated, in order to maintain the integrity of the study while it's proceeding through 48 weeks, there are no pre-specified stopping rules, per se. Most of the time, when you implement those, those are related to overwhelming efficacy on an endpoint that is similar to mortality or something like that. So, in the course of 48 weeks, not enough of these patients really are going to die in that time course to trigger that sort of -- triggers that sort of event. But as Robert indicated, continuing the study in a double-blind fashion, even as a primary endpoint, may be read out eventually measured at the 24-week time point, will enable us to see what the effects of the drug are over longer-term treatment.

So another way to put this, I will remind you is that in designing VITALITY-ALS, our aim is to confirm and extend the findings we observed on SVC in BENEFIT-ALS, which were measured at 12 weeks. So in this study we really do want to get patients longitudinally out to 48 weeks. There will be interim meetings of a DMC to review primarily safety, but not otherwise will they be chartered to early stopping based on efficacy.

Okay, great, thank you so much guys.

Jason Butler, JMP Securities.

Congratulations on all the progress. I just wanted to ask another question on the omecamtiv results from COSMIC. And this is a topic that we've discussed a lot about this drug over the years. So I guess can you just put into context for us once again the impact that this drug has on troponin levels, and what you see for omecamtiv and the impact on troponin and its relevance to clinical outcomes? Thanks.

Certainly. And I will start again and turn it over to my colleagues afterwards. So, we have assessed omecamtiv mecarbil in multiple clinical trials over the years, as you point out, and in earlier studies we have evidence that excess concentrations of omecamtiv can sometimes induce an ischemic complication that can be associated at times with elevated troponins. We also know that in heart failure patients, there can be oftentimes spurious elevations of troponins, whether patients are on omecamtiv or not. That's a consequence of the disease.

So, in this trial of 20 weeks duration treatment, we had a good opportunity to evaluate background troponins, and we agreed to do very intensive monitoring of troponins over many weeks treatment. And as patients came in for their visits and they were also getting evaluations of PK for exposures and concentrations, we were also in a position to evaluate troponins. Without going into numbers, what I can say is there were troponin elevations in both placebo and treated populations. But as we agreed to do in this trial -- and I say we; it was on the part of the investigators -- investigators were then asked in each case to submit all of the EKGs and other data associated with those patients when a troponin elevation was observed to an independent third-party for adjudication.

As you saw in the press release, each and every instance where there were troponin elevations that triggered that adjudication, in each and every case, they were adjudicated negatively for either ischemia or infarction. That's quite an impressive number. That number is zero. So in light of that, while I don't think this will put the issue to bed, it certainly is encouraging that we can now see, in 20 weeks of treatment, that these background troponins, at least in this trial, may not be associated with those adverse consequences. Maybe now I'll turn it over to Fady and Andy to comment on their perspective, and in particular why what we also observed with respect to pro-BNP is reassuring.

I will just make a comment that troponin is a biomarker, much like the other things that we saw. And as Robert mentioned, in this case that biomarker was not associated with any clinical adverse events of consequence. None of those troponin increases were adjudicated as potential -- as myocardial infarctions. They were balanced in the other cardiac adverse events. The other biomarkers, on the other hand, of potential benefit are things like the reduction in cardiac dimensions, the reduction in NTpro-BNP, and other measures of cardiac function, as well as decreases in heart rate. All of those things are biomarkers of potential benefit. And I think what a Phase 3 trial has to do now is to, if you will, adjudicate the balance of those things and ask what wins, and where does the risk/benefit profile end up looking like at the end of the day.

Great, that's really helpful. And then just a question on CK-107 and the new plans to move into COPD. Can you talk a little bit about the rationale for investigating the drug in COPD and whether it's tied in some way to the impact on lung function that you see with tirasemtiv?

Yes, actually it isn't, oddly enough. You might go in that direction, but it really has to do with the fact that patients with severe COPD have significant muscle wasting and even metabolic abnormalities of their skeletal muscle that probably contribute to their exercise limitation even more in these advanced patients than do their diminished lung function. In fact, in terms of their skeletal muscles of respiration in patients with really severe obstructive disease, they actually tend to be hypertrophied because of the extra effort of breathing that these patients experience. So we're really targeting the appendicular muscle, the legs, in order to help them increase their exercise tolerance because their diminished exercise tolerance is a significant part of their morbidity.

That's really helpful. Thanks for taking the questions and congratulations again.

Thanks, Jason. I will just maybe summarize that by saying we're very pleased that Astellas is stepping up by doing this trial. And also for the first time, we will have an opportunity to evaluate a skeletal troponin activator in a non-neuromuscular setting. As you know, we expanded our deal with Astellas in 2014 and we are also talking about other potential Phase 2 indications that they follow. So we are really going to dial-up the breadth of the clinical development programs around CK-107, and we should have more to say about that through 2015.

Operator, if we could have the next question, please.

Chad Messer, Needham.

Hi. This is actually Esther sitting in for Chad. Thanks for taking my question and congratulations on the COSMIC data. My first question is actually about VITALITY. Do you guys have any updates on the SPA discussions with the FDA?

No, and that's a consistent question that we're getting from Needham on these earnings calls. I don't have an update for that and don't expect that we will have one. If there is something more to say about that, then we certainly will.

Okay, thanks. And turning over to the COSMIC data, I know you guys are holding out for a conference. Do you have any ideas which conference you might go to?

We don't yet. We know what we may have eligibility for, so the good news is the abstract submission deadline for ACC was earlier this week. AHA is coming up in just a few weeks and certainly it's too soon relative to that conference, but one conceivable venue would be ACC, which is in April 2016. And then we will consider whether there may be others as well.

And I have another question on omecamtiv. Could you remind us of the IP on that?

So public information can be found in our quarterly filings with Form 10-Q, but the composition of matter patent for omecamtiv mecarbil is due to expire without any extensions in 2027. And certainly we would expect extensions beyond then.

Okay, thanks. And lastly for the CK-107 program, diving in a little more on the COPD program, what kind of endpoints would you expect? Would you do a six-minute endpoint, or would it be more on lung function?

Again, as we were discussing it, this is really about overall exercise tolerance. Now, we will make some ancillary measures of inspiratory and expiratory pressure, but that really has more to do with what happens with air trapping in the lung during vigorous exercise, so the primary endpoints will be duration of a particular exercise test. Frankly, it's a little bit more complicated than just a six-minute walk test; it's done on a special bicycle. And we will have more details about that when we open the study to enrollment in the next several weeks.

Okay, thank you.

Ritu Baral, Cowen.

So, can you help us frame the systolic ejection time data that will be coming upon presentation of the data? Speaking to KOLs, they haven't given some of us who've spoken to them on consultations any sort of minimally clinically important difference on that. Just in your understanding of that measure, literature, natural history, what should we be looking for as far as magnitude?

Sure, I will start and then I'll turn it over to Fady. So one thing I will point you to is a poster that was presented at the Heart Failure Society of America meetings recently by Scott Solomon and his group, which looked historically at systolic ejection time and how it correlated with severity of heart failure in a population of cardiac disease patients. And certainly shorter systolic ejection time was associated with lower frequency of heart failure. I'm sorry, with lower frequency -- shorter systolic ejection time associated with higher frequency of heart failure. Sorry.

What I can tell you is that in this study we had patients that were chronic heart failure patients. We haven't yet reported on the baseline characteristics, but these are patients who, as you saw in the press release, did evidence statistically significant increases in systolic ejection time. The quantifications are going to need to await a full presentation of the data. But maybe Fady can speak to what our -- for a population of heart failure patients, what would be a typical systolic ejection time and how that might change over time.

Yes, I think the systolic ejection time is probably one of the oldest markers of cardiac function. It was something that could be measured long before we had echocardiograms and other, fancier ways of measuring cardiac function. And as Robert mentioned, if you looked at data sets at -- that measured systolic time, and then followed patients for years, shorter ejection times were associated with a greater incidence of developing heart failure, as well as cardiovascular mortality. And also, if your cardiac function gets worse, your ejection time get shorter. It's the heart spending less time, it can generate less force, so it can really eject blood for a shorter period of time.

Omecamtiv mecarbil, by increasing ejection time is increased the amount of blood that's being ejected from the ventricle and is normalizing that decrease, if you will. I think the magnitude of change is small changes. If you look at, again, the poster that was presented at Heart Failure Meeting, small changes -- on the order of 10 milliseconds -- had significant increases in cardiovascular morbidity. And so, one could expect that maybe potentially in reverse, that small changes -- small increases could also have potential improvements. But that's something that this drug mechanism really will be the first to demonstrate.

Well, certainly systolic ejection time appears to be the characteristic signature of the mechanism of action of omecamtiv mecarbil. Were we to see only that and not also associated increases in stroke volume and other reductions in dimensions, etc. that would be perhaps interesting but not as compelling. I think we're compelled by the fact that in these data sets that we've reviewed, there was a consistency effect across the echocardiographic parameters for which we have more evidence that those things tend to be associated with improved clinical outcomes.

That's really helpful. And actually that leads into my second question, Robert. When you talk about statistically significant differences in dimensions, in echo dimensions, what were the measures taken and which ones do you believe, Fady, especially which are the most important dimensional measures that relate to cardiac function in exercise capacity?

Well, if you look at the literature, the most important metric, if you will, of cardiac function that is thought to be associated with improved outcomes is the reduction in cardiac volumes. And so dimensions, volumes -- they are basically a sign that the heart is getting smaller. So those are the kinds of things that one -- because in heart failure, what happens is the heart gets bigger to accommodate for the fact that its function is poor. So a sign that the heart is getting smaller is a positive sign. It's probably what people think of as the most important sign.

Something like less ventricular volume?

The volumes are what -- yes, volumes are generally what are published in the literature as being the most -- the key cardiac marker. Heart rate, though, is also an important marker as is NTpro BNP. So, again, you can find many papers and literature showing that lower heart rate is better; patients have better outcomes with lower heart rate, and patients with lower NT-proBNPs have better outcomes. That constellation is all a pleasing picture, if you will, in terms of the effects on cardiac function and hemodynamics.

Got it. Thanks for taking the questions.

George Zavoico, JonesTrading.

Congratulations on a good quarter and it looks like a lot of moving forward coming up soon. I have a couple of questions. First a continuation of what you were just talking about with Ritu, and that's the change in the dimensions of the heart size that you've seen in the 20 weeks. Is this -- one of the holy grails, if you will, in heart failure is positive remodeling. And this seems to be going in that direction. And the fact that it occurred within 20 weeks is certainly encouraging. Could you put that into context in terms of how fast it happens? You already talked a little bit about its significance, so maybe -- you don't have to do that -- but the typical standard of care now for heart failure, you rarely see that, is that correct?

So, I think what one sees in other situations is that the changes evolve over time. There aren't studies that have looked at the time course of this. Often they look at 12 months and you look at the effects there. But in terms of how rapid they are produced, I think the period of time that we studied them in COSMIC is probably the minimum amount of time one would want to look for those kinds of changes to occur.

Well, the fact that they happened, again you take it is a good sign. But in the context of current standard of care, which really is just beta blockers, diuretics, etc., you really don't see that, do you?

You do see -- so beta blockers do produce reductions in cardiac dimensions over time, and data has been published to that effect. That data goes back to the mid-90s, basically.

Okay.

But certainly with respect to drugs that are primarily acting by a mechanism to increase cardiac performance, this is an interesting finding, and we'll want to follow it up with further clinical trials. But in order to be able to say anything about remodeling, I think we would have to be looking at longer duration treatments. And also you have to be able to assess that in a way where patients have the drug withdrawn as well, and then you can be able to assess whether that change diminishes. So, that's going to be one of those things that will be very interesting to pursue in further clinical trials and over time, but you can be sure that that's a provocative interest and finding that we will want to pursue.

Yes. Not only that, but as you say, longer duration dosing should provide a lot more interesting information as well. So I imagine we will see that in the next trial. My next question regards to titration, because you titrate omecamtiv to a certain plasma levels. Does this suggest that patients should get on this drug -- on omecamtiv in the course of their treatment period, will need to go and get monitoring for dose levels once they reach a particular target, in case there's any changes due to other co-morbidities, dietary changes, like I'm thinking warfarin, for example. Although I don't think you've seen any dietary changes. So could you comment on how this might be monitored going forward in terms of what the proper dose might be?

To be clear, what was done in the dose titration group was not targeting any particular plasma concentration. Plasma concentration was measured only once at the end of the dosing interval, or at trough as we say, in the morning. And if it was above a certain threshold then the patient was kept on 25 milligrams twice a day and not titrated up. And if it was below a certain threshold, then they got the dose increase. And while plasma concentrations were measured at subsequent visits, there were no decisions regarding dosing made. They were just for our information from the study. So, if we were to do that again in Phase 3 and when the product is hopefully commercialized, it would just be based on one single plasma concentration, around a week or two after initiating treatment. Now, as we understand the data more fully, we may decide to modify that algorithm a little bit in Phase 3, but that's -- we haven't had the time to really consider that carefully yet.

Okay. That would certainly make it more convenient if you only had to do it once. And my last question about VITALITY, in the Phase 3, you are targeting three different doses. Is the intent to, in the Phase 3, ultimately to pick one dose? Because it doesn't seem to me -- yet, at least -- that there is any criteria or biomarkers that you are going to direct the patients to any particular dose.

Well, based on the data from BENEFIT-ALS, we couldn't really. Because we tried to get everybody up to the top dose of 250 milligrams twice a day, or 500 total daily dose. And about half of those that finished the trial got there, and about another quarter who finished were at 375 today, and the other at 250. So, when you looked at their changes in vital capacity, they weren't remarkably different across those three dose levels, but you have to remember that the patients weren't randomized to them, because they got there based on tolerability. So we don't really know if the patients who ended the trial at 250, if they could've gotten to 500, might not have done better.

We also don't know if the patients who ended on 500 might have done just as well at 250. So VITALITY is intended to answer that question. So some patients will never titrate up. They will stay on that starting dose of 250 a day. Others will titrate once and others will be attempted to go up to 500. Now, they won't all necessarily stay there based on tolerability, but the data at the end of the trial will tell us whether the best strategy is never titrate or to titrate once and then that's enough, or to try to get patients up to 500 if they can tolerate it. We don't have the data yet but VITALITY will provide that data.

Okay, that really helps. Great. Thanks very much. Looking forward to -- for the primary. Thank you very much.

Vernon Bernardino, FBR and Company.

Congratulations also from me regarding the COSMIC results. Very excited for you guys. You had mentioned that you had already conducted planning activities for Phase 3 with Amgen. That certainly is positive. Now, I guess a question that pops into my head was perhaps Amgen just -- is this part of just the process? Or do you think that Amgen was so optimistic about perhaps the results being positive that they certainly wanted to get ahead of these kind of activities? Because I think you mentioned that some of these were clinical but they were also certainly manufacturing. Just wonder if you could comment a little bit about the activities.

Sure. I'm able to comment to the extent that I'm reflecting on Cytokinetics and our interests, and a lot of folks have been asking us, what's Amgen going to do? And I think it's best to ask Amgen that question. As far as what we've been doing collaboratively, what I can say is it's good, prudent planning in anticipation of results of a clinical trial such as COSMIC-HF to be ready to go to the next level. So, over many months, we and Amgen together have been engaged in planning processes that are typical of readiness associated with manufacturing, associated with regulatory interactions, associated with designing clinical trials and protocols, getting budgets in order, and being in a best position to move promptly upon a decision to proceed potentially to Phase 3. So, I know that this is an activity and a series of work streams that we've been engaged in for quite a long time together with Amgen. And I guess that's all I probably can and should say.

Okay. So it sounds like it's just, like you said, a prudent part of the process. Now, you had mentioned that you just got the data recently. What are the current activities now as far as the data is concerned? And what needs to be done before you perhaps make a call or request a meeting with the FDA, or maybe even just getting together with Amgen?

So, I'm not going to be able to go into this probably to the detail that you will find satisfying, but what I will say is these data are relatively fresh, relatively new, and there's still a lot of pouring through the data that needs to occur. So we want to understand these data from COSMIC. And also integrating these data with other data that we've generated from ATOMIC and other studies, it's important to understand what we can learn from dose response relationships, PK/PD, exposure relationships, etc. So there's a lot of integrated kinds of analyses that I'm sure are going to be occurring as well.

There's still work that needs to occur to finalize a potential protocol for potential progression to Phase 3. That includes certain statistical analyses and other sorts of readiness. There's other work that needs to occur as pertains to getting feedback from regulatory authorities, and also even internally as we think about budgets, potential forecasts, return on investments, etc. So, there are were work streams across all facets and functions here at the company, at Cytokinetics, so that we can be best poised to be a good partner to Amgen and help inform these decisions. And ultimately I suspect those things are occurring also at Amgen. And then we will come together and we will make a decision together.

Terrific. That's helpful. And this is a question perhaps for Sharon, but -- so, assuming Amgen exercises their option, you get the milestone payment. How will the payment be treated as far as the income statement is concerned?

It most likely will be amortized. There's another piece of that from an accounting rule that goes along with that. And that happens to be our ability to opt in, in a similar type of a time frame. So that will dictate -- those two events don't -- aren't necessarily de-linked from an accounting treatment standpoint. So, we will have to take a look at that at the time those two events take place.

Okay, just wanted to confirm it won't be a lump, it will be GAAP treated.

Yes.

Okay, great. Thank you for taking my questions and congratulations again.

Sarah Weber, Piper Jaffray.

Hi, this is Sarah on for Charles. So, congratulations on the data. I had one question. How are you thinking about the IV versus the oral market for omecamtiv going into Phase 3?

How are we thinking about the marketplace or how are we thinking about the use of the IV versus the oral in Phase 3?

I guess both, but you can talk about Phase 3.

So, with regard to Phase 3, there's still discussions that we and Amgen are having about how best to design a Phase 3 program, were we to proceed to one. What would it look like? Would that be one outcome study? Would that be multiple studies? Would include hospitalized patients or just outpatients? Would it be patients who might first receive the IV and then transition to the oral? Those are still things that are in conversation, so no decisions have been made with regard to that.

As you may be alluding, by your question, there are markets for each of the IV and the oral that come into play here, and the oral certainly can extend in hospital well. So what we do know is that the biggest issue right now amongst the heart failure community is what can we do better to treat patients such that we can reduce the high morbidity and mortality associated with a diagnosis right now of heart failure and also acute heart failure. So many these patients, even upon discharge from hospitalization, die or readmitted within three months, six months, and 12 months.

So, as we and Amgen have spoken in the past, our goal with a potential outcome study, or studies, would be to try to make a dent in that. And that means potentially taking patients who had higher risk of death and readmission, and on a treatment regimen with omecamtiv mecarbil, seeking to see whether or not we can reduce death and readmission in that population. Whether that means starting patients on the IV and transitioning to the oral, or starting them in the hospital on oral and transitioning them outpatient on oral, we're starting patients who were recently discharged on oral and continued on oral. Those are all things that are subject of active dialogue.

Okay, that makes sense. And then just one question on the VITALITY study. So, in addition to enrollment, will we get any updates on patient characteristics or the dropout rates?

It's a good question. It's too early for that now that, but that may be something that we're in a better position to speak to in 2016, especially as we are nearing or completing enrollment. We may be in a position to talk about some of those things. Check back with us, and that's something that we will be determining. I don't want to do anything that would bias the conduct of the study, so we have to make certain that that wouldn't put us at risk that way.

Great. Thanks for taking the questions.

Ritu Baral, Cowen.

Thanks for taking the follow-up. It's on 107. You gave us some nice detail on the Phase 2 that will start. Could you give us any more granularity on the efficacy endpoints, the respiratory and skeletal muscle function? Specifically, are you looking at function or are you looking at strength? And when you look at respiratory, what's more important in a disease like this? Are you looking for MIP or MEP? Or are you looking for something like vital capacity?

So just to clarify, are you referring to the Phase 2 study in patients with SMA?

Yes, yes.

Okay. Yes, so we can give you a sense of the kinds of things we'll be assessing. We will go into more detail will we do initiate enrollment, but suffice it to say that, in this population, we will be doing, like we've done before, a hypothesis generating study. So we will be looking at a multitude of different assessments, both respiratory and otherwise. But maybe I will turn it to Andy, if you want to take that.

I think that's about what we should say at this point. We will provide additional detail when the study is open to enrollment. And we are looking at a variety measures. They're not all pulmonary function measures. Some of them look at what kind of activities the patients can actually do. There is a fairly standard scale called the Hammersmith scale that's used for these patients, which is especially important for the nonambulatory patients. Those who can walk, we can do a six-minute walk test in. So that will give you, I think, an idea. And there will be more detail when we open the study to enrollment.

Yes, to that point, we are -- and as we've communicated already publicly -- we are looking at patients in different cohorts. Those that are both ambulatory and also nonambulatory, and the assessments will vary depending on that.

Got it. Thanks for the answers.

And we have no further questions in queue at this time. And I would like to turn the conference back over to Mr. Blum.

Thank you, operator. So, these are especially important and gratifying times at the Company. Some of these events really have quite significant implications to our forward business. And we are especially grateful for the patients and the caregivers who participate in these studies, and also to our partners Amgen and Astellas in the conduct of these trials. We'd also like to thank all the participants on our teleconference today for your continued support and interest in Cytokinetics. With that, operator, we can conclude the call.

Thank you for your participation. This does conclude today's conference call, and you may now disconnect.