CYTK
#Good afternoon, everyone, and thanks for joining us on the call today.
<UNK> <UNK>, our President and Chief Executive Officer will kick us off with highlights from the quarter.
Then, Andy <UNK>, our SVP and Chief Medical Officer, will provide updates on VITALITY-ALS and VIGOR-AL<UNK>
<UNK> <UNK>, our EVP of Research and Development, will then provide an update on CK-2127107 or CK-107 and the ongoing and planned clinical trials in this program.
<UNK> will also provide an update on the safety development program for omecamtiv mecarbil.
Pete <UNK>, our new SVP and Chief Accounting Officer, will then provide a financial overview for the quarter; and <UNK> will wrap things up with additional corporate updates, prospectives and upcoming milestones before we open the call for questions.
Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements for purposes of the safe harbor provision of the Private Securities Litigation Reform Act of 1995.
Examples of forward-looking statements may include statements relating to our financial guidance and goals, our strategic initiatives, our collaborations with Amgen and Astellas, clinical trials and the potential for eventual regulatory approval of our product candidates.
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 10-K and 8-Ks.
We undertake no obligation to update any forward-looking statements after this call.
And now I will turn the call over to <UNK>.
Thank you, <UNK>, and thanks again to everyone for joining us on the call today.
This is our first quarterly earnings call since our CFO, Sharon Barbari, announced her plans to retire.
Before I formally introduce Pete <UNK>, I'd like to personally thank Sharon for her partnership with me and her tremendous contributions to the company over the past 12 years.
Sharon has been a key member of our executive team and provided expert leadership and oversight to our finance, IT and facilities groups.
She brought a highly-valued strategic perspective to guide our accounting, budgeting, forecasting, corporate development and R&D activities, and she solidified a sound operating and financial foundation on which we have advanced our R&D activities and emerging commercial development plans.
Under Sharon's stewardship, we have effectively managed our cash and other resources and institutionalized appropriate controls to ensure we are good stewards of investors' risk capital, while we also raised even more capital from strategic partners than we did from equity investors.
We wish Sharon the very best in her upcoming retirement, and we're pleased that she has agreed to consult with us on special projects moving forward.
I'd now like to introduce you to Pete <UNK>.
Pete joined Cytokinetics recently as our Senior Vice President and Chief Accounting Officer.
We're thrilled to have Pete join the team as he brings abundant expertise and experience in biopharmaceutical public company accounting and corporate finance as well as cross-functional R&D operations and commercial planning from his career that spans over 35 years.
Pete joins us most recently from Pain Therapeutics, where he served as Chief Financial Officer for 15 years, and prior to that, he held Senior Accounting Operations and finance positions at COR Therapeutics through its acquisition by Millennium Pharmaceuticals.
We're very pleased to have Pete now join us as a member of our senior executive team.
You'll be hearing from him in just a moment.
Moving now to highlights from the quarter.
We began 2017 in a strong position and ended the quarter even stronger having added to our financial resources while also advancing our multiple muscle biology programs and executing well on our regulatory and commercial readiness plans.
VITALITY-ALS and VIGOR-ALS continue to make good progress.
The last patients enrolled have completed their 24-week visits, and we're proceeding towards last patient, last visit projected to occur in the second half of the year.
Moreover, nearly all patients completing VITALITY-ALS are choosing to continue into the open-label extension trial.
We also advanced our innovative collaboration with Origent Data Sciences, and we look forward to contributing data from VITALITY-ALS to Origent's machine learning model that may ultimately help accelerate future clinical trials in ALS by providing predictive algorithms and potential efficiencies in the conduct of trials.
Andy will have more to say about that.
Notably, we also recently opened Cohort 2 in our Phase II clinical trial of CK-2127107 or CK-107 in adolescent and adult patients with SMA, which we're conducting in collaboration with Astellas.
We anticipate that Cohort 2 will enroll more quickly than Cohort 1, and we remain on track to report results in the second half of 2017.
Next, GALACTIC-HF, the Phase III cardiovascular outcomes clinical trial of omecamtiv mecarbil in high-risk patients with heart failure conducted by Amgen in collaboration with Cytokinetics has proceeded with continued site activation and patient enrollment occurring around the globe.
Things appear to be on track in these early days.
And finally, during the quarter, we sold Royalty Pharma a 4.5% royalty on potential future worldwide sales of omecamtiv mecarbil for $100 million, $90 million in cash and $10 million of which was in Cytokinetics common shares.
We have exercised our option under our collaboration agreement with Amgen to co-invest in the Phase III development program for omecamtiv mecarbil in exchange for an increased royalty of up to 4% on increasing worldwide sales of omecamtiv mecarbil outside Japan.
As we have explained, co-investing at this highest possible level affords Cytokinetics the right to co-promote omecamtiv mecarbil in institutional care settings in North America with reimbursement by Amgen expected for certain sales force activities.
A joint commercial committee will lend oversight to the commercialization program, and a joint commercial operating team would then be responsible for the day-to-day commercial activities relating to omecamtiv mecarbil.
We look forward to working with our colleagues at Amgen to advance commercialization planning.
As you'll hear the team elaborate, momentum continued across our programs, and we're enthusiastic about our progress and prospects for the balance of 2017.
With that, let me now turn the call over to Andy, and he'll update you on tirasemtiv.
Thanks, <UNK>.
As <UNK> mentioned, in the past quarter, we continued conduct of VITALITY-ALS and enrollment of patients into VIGOR-ALS, our open-label extension trial of tirasemtiv for patients who have completed VITALITY-AL<UNK>
We are pleased to report that greater than 90% of patients who complete VITALITY-ALS are choosing to enroll in VIGOR-AL<UNK>
We believe that VIGOR-ALS may complement VITALITY-ALS and generate additional safety and outcomes data to support the potential registration of tirasemtiv for the treatment of patients with AL<UNK>
During the first quarter, the data safety monitoring committee convened to review unblinded safety and efficacy data from VITALITY-AL<UNK>
Afterwards, they recommended we complete the trial without any changes to its conduct.
The last patient now has proceeded through the 24-week visit, which is when the primary endpoint SVC is measured, allowing us now to plan database locked data analysis and reporting.
We expect results from VITALITY-ALS to be reported in the fourth quarter of 2017, hopefully to occur at the ALS/MND Annual Meeting in Boston December 8 through 10.
Additionally, in collaboration with Origent Data Sciences, we announced the advancement of our research collaboration to prospectively validate Origent's machine-based learning model to predict the course of ALS disease progression using baseline data from VITALITY-AL<UNK>
As a reminder, this collaboration is funded by a grant from The ALS Association to Origent and is designed to enable the first prospective validation of their predictive model in a clinical trial for AL<UNK>
Previously, the Origent models, predicting both function and survival of ALS patients, have been validated retrospectively using placebo data from earlier clinical trials, including our Phase II trial BENEFIT-AL<UNK>
In this next phase of the collaboration, Origent will seek to prospectively validate existing predictive models for a variety of measurements, including the ALSFRS-R as well as the respiratory, gross, fine and bulbar subscores, SVC and survival using baseline data from VITALITY-AL<UNK>
Screening and baseline data from placebo patients will be provided to Origent, and their predictions will be made in the absence of access to the subsequent outcomes of these patients.
After Origent's predictions are completed, the outcomes will be given to Origent to enable comparison of actual data as to previously escrowed predictions.
We remain hopeful that the predictive algorithms generated by this collaboration may ultimately accelerate clinical trials in patients with ALS by allowing randomization in many fewer patients to placebo, supplemented by so-called virtual control arms based on these models.
Now I will turn the call over to <UNK> to provide an update on CK-107, our next-generation fast skeletal troponin activator, as well as an update on omecamtiv mecarbil.
Thanks, Andy.
The most significant development relating to CK-107 was the recent start of Cohort 2 of the Phase II clinical trial underway in adolescents and adults with SM<UNK>
As you'll recall, this clinical trial is designed to assess the effect of CK-107 on multiple measures of muscle function in both ambulatory and non-ambulatory patients with SM<UNK>
The decision to proceed to Cohort 2 followed a review of data from the Cohort 1 by the Data Monitoring Committee.
As <UNK> mentioned, we expect this cohort to enroll more quickly than did Cohort 1 since investigator sites are now up and running and we have since added sites in Canada.
We also have had support from Cure SMA as well as the Muscular Dystrophy Association getting the word out through their constituents' communication channels.
We look forward to reporting results in the second half of the year and if this hypothesis-generating trial generates positive data, potentially to advancing CK-107 to a Phase III clinical trial in patients with SMA under our collaboration with Astellas.
We are encouraged by the enthusiasm within the SMA community for nusinersen or SPINRAZA and believe potential treatment with CK-107 could allow SMA patients to live a longer and more functional life, thereby, amplifying muscle force, power and stamina despite residual muscle weakness and dysfunction.
Since CK-107 has a different mechanism of action, we believe it may prove complementary to SPINRAZA and potentially further improve muscle function and physical performance in these older patients still confronting an unmet need.
Of note, we recently presented a poster containing preclinical data regarding CK-107 at the MDA Scientific Conference in Arlington, showing that it improves muscle function in mouse models of SMA similar to types 2, 3 and 4.
These mouse models exhibit significant nerve dysfunction and muscle atrophy as well as a decrease in maximum muscle force production.
In 2 different mouse models, CK-107 increased skeletal muscle force production relative to placebo in response to neuronal stimulation at low- to mid-range stimulation frequencies, indicating a calcium-sensitizing effect of CK-107 in the skeletal muscles of these mice and suggesting that CK-107 may be a viable drug candidate to improve muscle function in patients with SM<UNK>
Moving to the other clinical trials under our collaboration with Astellas.
Astellas continued to enroll patients in COPD in a Phase II clinical trial of CK-107 during the quarter and progressed plans to conduct a Phase Ib clinical trial to assess the effects of CK-107 in elderly adults with limited mobility.
We anticipate dosing for this trial to begin in this second quarter of the year.
Finally, during the last quarter, we continued plans to initiate a fourth clinical trial of CK-107, this one in patients with ALS, which we will conduct at Astellas's expense under our collaboration.
We'll have more to say about this trial as we get closer to the study start in mid-2017.
Switching to our cardiac muscle program.
Amgen continued to work around the world to activate centers and enroll patients into GALACTIC-HF, the Phase III cardiovascular outcomes clinical trial of omecamtiv mecarbil.
Currently, start-up activities are well underway with regulatory approvals obtained in the great majority of countries where the trial will be conducted and its enrollment as planned.
At our first Investigators Meeting at the American College of Cardiology or ACC last month, we were pleased to see great enthusiasm for the trial among its investigators, and we continued to hear statements regarding the urgent need for new approaches to treat patients with heart failure with systolic dysfunction from the podium during several scientific presentations.
Also at ACC, additional results from COSMIC-HF were presented in a poster by Tor Biering-Sorensen from the Brigham & Women's Hospital.
The results represent the first direct echocardiographic evidence in humans that increases in the contractility of cardiac muscle underlie the improvements in overall cardiac function observed in COSMIC-HF.
Specifically, this analysis showed that omecamtiv mecarbil improved myocardial deformation, which is a measure of myocardial contractility that has been positively related to cardiovascular outcome.
In addition to other results previously reported, these findings from COSMIC-HF represent another positive signal of improvement in cardiac function potentially related to improved overall cardiovascular outcome.
We look forward to extending this finding in the second Phase III clinical trial we plan to conduct in parallel with GALACTIC-HF, which will examine the effect of omecamtiv mecarbil on exercise tolerance and cardiac function.
This clinical trial will be conducted by Cytokinetics in collaboration with and primarily funded by Amgen.
We are engaged in clinical trial planning activities and will have more to say about that trial later this year.
Finally, we remain on track to report results of the ongoing Phase II clinical trial of omecamtiv mecarbil in Japan in Q3.
This trial, which is mostly focused on safety and pharmacokinetics, is expected to inform the potential participation of Japanese investigational sites in GALACTIC-HF later this year.
So with those updates, I'll now turn the call over to Pete to provide an update on our financials.
Thanks, <UNK>.
As our press release contains detailed financial results for the first quarter of 2017, I'll refer you to that public statement for the details on our P&L and balance sheet.
I'll touch here on our cash, some details regarding our revenues and our spending on R&D.
<UNK> commented earlier that we added $100 million to our balance sheet during the first quarter from the Royalty Pharma transaction.
That deal generated $90 million in cash and $10 million from the sale of common stock.
We ended the quarter with $257.2 million in cash, cash equivalents and investments, which represents over 24 months of going forward cash burn based on our 2017 financial guidance.
Revenues for the first quarter of 2017 were $4.2 million compared to $8.4 million during the same period in 2016.
These revenues included $1.4 million of license revenues and $2.7 million of research and development revenues from our collaboration with Astellas, $0.9 million from our collaboration with Amgen and $0.3 million in research and development revenues from our collaboration with The ALS Association.
We paid Amgen $1.3 million out of the $40 million we will co-fund in the Phase III development program of omecamtiv mecarbil.
That $1.3 million payment offsets research and development revenue in the statement of operations.
Revenues for the same period in 2016 were comprised of $4 million of license revenues and $3.7 million of research and development revenues from our collaboration with Astellas and $0.6 million of research and development revenues from our collaboration with Amgen.
Our first quarter 2017 R&D expenditures totaled $19.3 million.
From a program perspective, for the first quarter, approximately 84% of our R&D expenses were attributable to our skeletal muscle contractility programs, which include both expenses associated with tirasemtiv and CK-107, 12% to our cardiac muscle contractility program and 4% to other research activities.
Finally, our G&A expenses include both traditional administrative expenses as well as internal and outside services focused on commercial readiness.
And with that, I'll turn the call back over to <UNK>.
Thank you, Pete.
I'd like to close with additional updates regarding our commercial readiness and research activities.
During the quarter, we continued our readiness activities in preparation for positive data from VITALITY-ALS and potential filing approval and commercialization of tirasemtiv, both in the U.<UNK> and Europe.
Firstly, we met with market asset specialists representing Germany, France, Italy, Spain, and the U.K. to gain insights into the elements required in an orphan drug value proposition to support health technology assessments and potential payer reimbursement.
Similarly, we continued market research with payers to benchmark reimbursement approaches to novel mechanism orphan therapeutics.
We also conducted market research with patients to inform packaging decisions and recently initiated a process to secure distribution and potential early access partners.
As you may imagine, there are multiple work streams proceeding in parallel to ensure we are readying for commercial launch pending positive results and marketing authorizations.
We're also planning for success with CK-107 in adult and adolescent patients with SM<UNK>
While SMA treatment is rapidly changing with the recent approval of SPINRAZA, we believe there will still be a prevailing unmet need to improve muscle function, power and stamina in these patients.
As such, we're conducting market research with patients, payers and specialty pharmacies to explore potential commercial formulation options for CK-107 in SM<UNK>
And as we prepare for commercialization of our lead drug candidates, we also have exciting research underway, and we're looking at potential next-generation muscle activator approaches in partnership with Amgen and Astellas as well as also independently.
We anticipate having more to say about these ongoing research programs potentially proceeding towards development later in the year.
In summary, our activities across the breadth of the company continued to advance well during the first quarter of 2017.
We remain optimistic about our prospects for the balance of the year, across our diverse portfolio of novel mechanism muscle biology directed drug candidates.
As always, our focus continues to be on the patients who desperately need new therapies to treat their severe and devastating diseases of impaired muscle function and weakness.
Now let me recap our expected milestones for the remainder of 2017.
For tirasemtiv, we expect results from VITALITY-ALS in the fourth quarter of 2017, and we expect to continue to enroll patients who complete VITALITY-ALS into VIGOR-ALS, our open-label extension trial, throughout 2017.
For CK-107, we expect data from a Phase II clinical trial in patients with SMA during the second half of 2017.
We expect Astellas to continue enrollment in a Phase II clinical trial of CK-107 in patients with COPD in 2017.
We expect Astellas to begin a Phase Ib clinical trial of CK-107 in elderly patients with limited mobility during the second quarter, and we expect to begin a Phase II clinical trial of CK-107 in patients with ALS in mid-year 2017.
For omecamtiv mecarbil, we expect continued enrollment of patients with chronic heart failure in GALACTIC-HF, our Phase III clinical trial of omecamtiv mecarbil throughout 2017, and we expect data from a Phase II clinical trial of omecamtiv mecarbil in Japanese patients with chronic heart failure, that to occur in Q3 2017.
And lastly, for preclinical research, we expect to continue our research activities under joint research programs with each of Amgen directed to the discovery of next-generation cardiac muscle activators and with Astellas directed to the discovery of next-generation skeletal muscle activators as well as we expect to advance our own proprietary programs.
And operator, with that, we're now open to ---+ the call to questions.
Sure.
So I'll start.
I'll turn it over to Andy and then also to <UNK>.
With regard to your first question, we haven't commented on the early termination rate other than that which we said occurred during the open-label period, which mirrored what we saw during the first 2 weeks of BENEFIT-AL<UNK>
So we're pretty encouraged by that.
Otherwise, we haven't yet commented on that, and we will do so after we have more of a grasp of this study through to last patient, last visit.
With respect to your second question, CK-107 in ALS, yes, I think your assumption is a good one.
As we've stated already, this will be a study of roughly the same timeframe duration as was the BENEFIT-ALS study and will be primarily focused on respiratory function, inasmuch as we think over a shorter duration study like that, that's the most sensitive measure of this mechanism of action, and over longer periods of time, as we might then proceed in Phase III, we'd be able to assess for other parameters of muscle strength and muscle function.
So Andy, I'll just turn to you.
Is there anything more that you'd add to that.
I don't think I would, no.
Okay.
So that's an answer, I think, to questions 1 and 2, and maybe I'll turn it over to you, <UNK>, for an answer to question 3 about the kinds of endpoints we'll look at with regard to elderly subjects with limited mobility.
Yes.
So on that study, we'll be looking at muscle strength and fatigue ability by sort of repetitive leg extensions, so essentially looking at the amount of work that the patient can do in a fatiguing exercise.
But we'll also be looking at other things such as walking time, stair climb tests and some scales of physical function that have been used in this population for quite some time.
It's a good question.
We are increasingly going to be sharing updates on some of the things we're doing from the standpoint of commercial readiness as I think it's especially important that investors know that we're preparing for success not only with respect to some of the market access and market research I spoke to but yes, also with regard to manufacturing.
There are still certain things that we need to be doing that we haven't yet done, but through the second half of this year, we expect to be conducting those activities, making those registration batches and having everything up on stability so that we could be enabled to proceed through to potential NDA and MAA filings in the 2018 timeframe to support potential commercialization as would follow.
I'll turn to you, <UNK>, to see if there's anything else you want to elaborate with regard to that.
I think just the main point I'll make is that we've been manufacturing this at the scale that we would manufacture it commercially to support our clinical trial.
So the transition of commercial delivery of API would primarily be focused on just doing more batches at the same scale.
But as <UNK> mentioned, we still have work to do there in order to get through the ---+ what are the required regulatory steps for commercial API manufacturing.
We're engaging with regulatory authorities regarding what should be expected from a conventional CMC type of dialogue at this stage.
And we're trying to ensure that we're maximally ready, so we can proceed, on the basis of potential positive data to VITALITY-ALS, promptly in 2018.
And again, there are certain things we still need to do, but I think the good news is this is a small-molecule manufacturing.
And we are looking at conventional cost of goods.
We're looking at conventional scales with validated manufacturing parties with whom we have quite ample experience, and we're preparing for what could be a standard set of filings in that regard.
Yes.
The other ---+ we are doing echoes in these patients, but one has to recognize it's a much smaller study than COSMIC.
So we're not powered to see the same kinds of changes that we saw in COSMIC, but we'll be mostly looking for changes in injection time, which was our most sensitive measure.
So they see all the data, and they see all of it in an unblinded fashion.
There is not a formal interim analysis for either overwhelming success nor for futility, but they do have the ability to recommend, for example, that the study be terminated if they felt it needed to be for 1 of the 2 reasons.
They just said continue on.
When you say progression, you mean progression to milestones relating to the outcomes.
Yes.
So the fact of the matter is, with regard to the conduct of studies with ALS, we have quite abundant data to look at where the baseline characteristics across many studies tend to be more alike than different.
And based on public databases and placebo groups in those studies ---+ and sadly the difference between the placebo group and the treatment group in those studies is not very notable given that, historically, so many things have failed in AL<UNK>
We can learn a lot about what to anticipate from the standpoint of progression of different assessments and map that into our planning and design for VITALITY-ALS, which we did.
We are still blinded, as you know, with respect to who received drug and who received placebo, but I think it's fair to say that we are seeing in the aggregate blinded data the kinds of outcomes that we would expect to see for a study of this duration.
And if anything, maybe fewer certain endpoints, which could be meaningless or could be encouraging.
Yes.
Good questions.
So both at the AAN but I'll also comment on learnings from our attending a Cure SMA organized workshop, a patient-centered drug development workshop with FDA that occurred in the week prior.
Clearly, we're very impressed with the uptake of SPINRAZA, and it looks like it's making a meaningful impact around the globe, both for patients who are paying for it and in the early access program in those other countries.
But as we are learning, it is still primarily being used in certain centers and for mostly type 1 infants and children.
What we learned in particular at the Cure SMA organized meeting with FDA from investigators, patients and caregivers is there remains still a very significant unmet need and interest with respect to potential drugs that would have effects in muscle strength and alleviate some of the dysfunction associated with muscle weakness.
That was perhaps the most pronounced thing that we heard over and over from patient and caregiver testimonies, and I think the FDA heard that very loudly and clearly.
That was echoed by comments we received at our Investigators Meeting at AA<UNK>
And I think there is still a very profound need that we hope we may address with CK-107 as we'll start to learn from this hypothesis-generating study with CK-107 hopefully with results due later this year.
So we continue to believe that CK-107 would play a meaningful role alongside of both SPINRAZA but also other approaches that are being pursued by AveXis and Roche and where none of those approaches would have the ability with this being an oral therapy to potentially impact muscle weakness the way we hope CK-107 will.
Certainly, we can speculate about what might be correlations between vital capacity and other endpoints that we will be assessing also in this trial.
Obviously, that's speculation given we're still blinded to the data.
But maybe, Andy, I'll turn it to you and then, <UNK>, if you want to add afterwards.
Well, I think if we can see a similar slowing in the decline in vital capacity that we did in BENEFIT-ALS but that continues for a much longer period of time, 4x as long, because recall BENEFIT-ALS was 12 weeks long, and VITALITY-ALS is 48 weeks long, then I think there is the opportunity to see what BENEFIT-ALS was too short to show, and that is there may also be concurrent slowing of the decline of respiratory scores on the final 3 questions of the ALS functional rating scale that assess shortness of breath or dyspnea; orthopnea or the inability to lay flat and breathe comfortably; and respiratory insufficiency, which involves the institution of assisted ventilation from noninvasive to invasive.
So those are all things that we are intending to look at as secondary endpoints and one would imagine should be affected by slowing in the rate of decline of SVC and as we published actually and may have more to say about these explorations later.
When we've looked at the placebo data from the EMPOWER Phase III study of dexpramipexole, it's very clear that those with a slower decline in vital capacity take longer to reach certain critical outcomes like the use of assisted ventilation.
Wonderful.
Thank you, operator, and also thank you to all of our participants who joined us on the teleconference today.
Thank you for your continued support and for your interest in Cytokinetics.
Operator, with that, we can now conclude the call.
Thanks very much.
