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 <UNK> <UNK>, our EVP of Research and Development, will provide an update on the clinical development program for omecamtiv mecarbil.
<UNK> <UNK>, our SVP and Chief Medical Officer, will then provide updates on tirasemtiv and the ongoing VITALITY-ALS Phase III clinical trial in patients with ALS.
<UNK> will then rejoin us to share an update on CY-5021, the ongoing Phase II clinical trial of CK-2127107 or CK-107 in patients with spinal muscular atrophy, or SMA, as well as another recently started clinical trial of CK-107 in patients with COPD.
<UNK> <UNK>, our EVP of Finance and Chief Financial Officer, will provide a financial overview for the quarter and <UNK> will wrap things up with additional corporate updates 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 fact, 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 candidate.
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 under risk factors in our Form 10-Q for the quarter ended March 31, 2016, and our Form 10-Q for the quarter ended June 30, 2016, which we expect to file shortly.
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.
As you heard yesterday, we announced that we've expanded our collaboration with Astellas in skeletal muscle activators to include ALS.
Through this expansion, we granted Astellas an option right for the development and commercialization of tirasemtiv, our first-in-class skeletal muscle activator.
If Astellas exercises the option, Cytokinetics will continue to develop and commercialize tirasemtiv in North America, Europe, and other select countries and Astellas will develop and commercialize tirasemtiv in other countries.
Additionally, we have agreed to amend our collaboration agreement with Astellas to enable the development of CK-107 for the potential treatment of ALS and also to extend our joint research program focused on the discovery of additional next-generation skeletal muscle activators through 2017.
This is a significant deal for Cytokinetics.
It enables and funds the continued prosecution of clinical development and commercial planning activities for both tirasemtiv and CK-107 and aligns our interest with Astellas as we together seek to build a market-leading franchise in the pharmacology of skeletal muscle activation.
Moreover, this expanded collaboration with Astellas provides further validation to our long-standing corporate development strategy to leverage and expand partnerships to fund continued research, development, and commercial planning of our drug candidates as we mature our Company operations and advance our strategic vision.
Most importantly, however, this deal affords us additional opportunities to further serve patients with ALS and also their caregivers.
Turning to Q2, we had a very productive quarter, advancing clinical, regulatory, and commercial planning activities across our portfolio of muscle biology-directed drug candidates.
I know many of you are interested in an update on omecamtiv mecarbil and the planned Phase III program in collaboration with Amgen, so I'll get right to that.
I am pleased to tell you that we and Amgen continued to make progress in preparations for an international Phase III outcomes trial during the second quarter.
While Amgen has not yet made a formal corporate commitment to proceed to Phase III, we remain optimistic and hopeful that the program will move forward, given the increasing level of operational activities intended to support the initiation of a Phase III trial that are underway.
<UNK> will elaborate on this in a moment, but suffice it to say that from protocol development to regulatory interactions to the vetting of clinical trial sites, all of the wheels are in motion to initiate a Phase III clinical trial by year's end and we expect a final formal decision from Amgen in Q3.
With regard to our skeletal muscle programs, and in particular tirasemtiv, we are especially pleased to report that we expect to complete screening for new patients in VITALITY-ALS at the end of July, with enrollment targeted to close shortly afterwards.
We also made progress this quarter in our planning activities, leading to the intended initiation of an open-label extension trial that is designed to enroll patients who complete VITALITY-ALS.
We expect the open-label extension trial to start in Q4 of this year.
<UNK> will provide an update on our ongoing Phase II clinical trial of CK-107 in patients with Type II, III, or IV SMA.
Admittedly, we are behind on our enrollment timeline in this trial, but we do believe momentum is picking up.
We should be in a position to complete enrollment of cohort one in the second half of the year.
<UNK> will speak to some of the challenges we've encountered and how we are addressing them.
Also regarding CK-107, I hope everyone saw our recent announcement confirming the start of a second Phase II clinical trial of CK-107, this one in patients with COPD.
This trial is being conducted by Astellas and will evaluate the potential of CK-107 to increase measures of exercise performance in time to muscle fatigue in this patient population.
The hypothesis for this trial relates to the fact that people with COPD experience significant limb muscle weakness and metabolic abnormalities.
Because CK-107 increases forced production of muscle and reduces fatigability in fast skeletal muscles, we are interested to evaluate potential effects of CK-107 on exercise tolerance and stamina in these patients.
Let me now turn the call over to <UNK> so he can elaborate initially on progress with omecamtiv mecarbil.
Thank you, <UNK>.
As you just heard, we had a productive quarter regarding the development and potential progression of omecamtiv mecarbil into a Phase III clinical program in collaboration with Amgen.
Together with our colleagues at Amgen, we participated in a series of regulatory and clinical meetings designed to finalize details of the protocol, statistical analyses, and the conduct of the large Phase III outcomes study.
These preparations included further interactions, both meetings and written correspondence, with FDA and EMA, all designed to achieve consensus with regards to our approach to the planned outcomes trial and the overall clinical development program.
Specifically, we've obtained consensus on protocol design, targeted patient population, clinical endpoint, safety monitoring, and approach to dosing.
Further, as you may have heard on Amgen's Q2 earnings call yesterday, we have submitted to the FDA our heart failure outcomes study protocol for a special protocol assessment, or SPA, and look forward to finalizing the protocol and additional study-specific materials, such as charters, case report forms, fiscal analysis plans, and other materials required for study startup.
Also underway are activities necessary to vet clinical trial sites across the globe, assess the feasibility of their participation in the trial, as well as to begin to prepare for IRB and country-specific regulatory and ethical submissions later this year.
To facilitate entry of Japan into the Phase III program, the Phase II trial of omecamtiv mecarbil in Japanese patients with heart failure continues to enroll.
And finally, in support of longer-term planning, both commercial and manufacturing meetings are taking place with our colleagues at Amgen.
As I hope you can appreciate, there is a tremendous amount of work involved to get a trial like the one we envision ready to enroll patients.
I would like to take a moment to acknowledge my colleagues at Amgen and Cytokinetics who've worked so hard on preparations as we remain on timeline for a Phase III trial that may start later this year.
Additionally, we know that Servier is in receipt of the information they require from Amgen, including a Phase III trial protocol and budget, to inform their decision regarding an option for European commercial rights to omecamtiv mecarbil.
This is an important factor for Amgen, given that in this scenario Servier would contribute meaningfully to the cost of development, including the conduct of a Phase III program.
Turning to other clinical updates, during the quarter we announced the presentation of additional results from COSMIC-HF at Heart Failure 2016, the annual congress of the Heart Failure Association of the European Society of Cardiology, that took place in Florence, Italy.
The results presented indicated that omecamtiv mecarbil improved left ventricular systolic function over 20 weeks of treatment and the reduction in LV end-diastolic volume and NT-proBNP accumulated over time, adjusting potentially favorable ventricular remodeling and progressive reduction in myocardial wall stress.
We are pleased to share these results, as it marked the first time since we began the development of omecamtiv mecarbil that we observed that increasing cardiac contractility by chronic treatment may result in progressive reduction in ventricular size.
Our potential Phase III program may further inform whether effects on cardiac function are durable over longer treatment and may translate to improved cardiovascular outcomes.
As <UNK> mentioned previously, we anticipate a formal decision on omecamtiv mecarbil potentially proceeding into Phase III in Q3 of this year.
And I will turn it over to <UNK> to provide an update on VITALITY-ALS.
Thanks, <UNK>.
I will start with an update on screening and enrollment in VITALITY-ALS, our Phase III trial, which is designed to assess effects of tirasemtiv versus placebo on slow vital capacity, or SVC, and other measures of skeletal muscle strength in patients with ALS.
The most important recent development is that we are completing screening across our 80 centers and 11 countries in the US, Canada, and Europe and we expect to close enrollment in the next week or two.
Like with many trials, the closing of a trial to enrollment is a very busy time, and we are pleased to see that these last few months have afforded us an opportunity to enroll patients with ALS from additional centers and countries, so that we can expect a broad distribution of patients in this important international Phase III trial.
We have also continued to monitor closely the rate of early terminations in the open-label period prior to patient randomization, as well as the early terminations post randomization.
We also observed a standard deviation around the SVC measurement.
While we remain blinded to investigational study drug assignments, we are encouraged that these data are consistent with or even slightly better than assumptions that we made in designing VITALITY-ALS, including constructing our statistical power calculation.
In the last quarter, we made significant progress finalizing the design and making edits to the protocol and statistical analysis plan for our planned open-label extension trial, which will enroll patients who have completed VITALITY-ALS, with the first among them to enter the open-label extension trial in the fourth quarter of this year.
Toward this end, we had productive regulatory interactions with FDA and EMA during the quarter and received advice that informed how we finalize the trial design.
We are now in the process of preparing for submission to IRBs to enable the study start.
We will have more to say about this trial once the first patient is enrolled later this year, but we believe it can provide supplemental data to support a potential registration program for tirasemtiv.
Also during the quarter, we made other preparations for the potential registration of tirasemtiv, including the conduct of manufacturing activity, as well as stability and other studies intended to support registration.
We also have increased pre-commercialization activities, as you will hear more from <UNK>.
Now I will turn the call back over to <UNK> to provide an update on CK 212-7107, our next-generation fast skeletal troponin activator.
Thanks, <UNK>.
Turning to the development of CK-107, with our partner Astellas, as you know, we are currently conducting a Phase II clinical trial in patients with SMA, called CY-5021, and it's progressing as we continue to activate sites throughout the United States and to enroll patients.
As <UNK> mentioned, we are behind versus our initial enrollment objective; however, we believe that the slower enrollment is not due to a lack of investigator enthusiasm or of eligible patients.
Instead, because adolescents and adults with SMA who are eligible for our trial have had fewer current treatment options and have limited opportunities to participate in clinical trials, there is a great interest in our trial.
Because this population has not been eligible for clinical trials in SMA in the past, we now are charting new territory with our trial and with our clinical trial sites.
As a consequence, we've encountered certain start-up challenges associated with securing proper equipment to conduct the various assessments.
We also have seen more screen failures than we had anticipated, given the stringent inclusion and exclusion criteria for the trial.
As said, we believe these challenges are now behind us, and screening enrollment are picking up as we enter the third quarter.
Additionally, we made a decision to expand the trial to sites in Canada, which should also help us with catching up with enrollment targets.
We believe we will complete enrollment of cohort one with new data and progress to cohort two by the end of this year, with trial results still expected in the first half of 2017.
We also recently announced the start of a second Phase II trial of CK-107 in patients with COPD.
Astellas is conducting this randomized, double-blind, placebo-controlled, two-period crossover clinical trial designed to assess the effect of CK-107 on physical function in patients with COPD.
The trial is expected to enroll approximately 40 patients in the United States and is designed to assess the effect of CK-107 compared to placebo and exercise tolerance.
Additionally, the trial will assess cardiopulmonary and neuromuscular effects of CK-107 relative to placebo and the effect of CK-107 on resting spirometry relative to placebo.
Finally, the safety, tolerability, and pharmacokinetics of CK-107 will be assessed.
This trial should afford us an informative investigation of whether CK-107 may have a positive impact on exercise tolerance and stamina in these patients.
As you know, COPD can be a debilitating disease that limits patients' ability to enjoy the activities of daily living, like climbing a flight of stairs or playing with a grandchild.
And finally, in addition to SMA in COPD, with our recently expanded global collaboration with Astellas for the development of CK-107 in patients with ALS, we've agreed to a development plan in which Cytokinetics will conduct a Phase II clinical trial in patients with ALS in 2017 under Astellas's sponsorship.
Based on the outcome of that trial and assuming a positive scenario, Astellas and Cytokinetics will collaborate in the design and conduct of a potential registration program for CK-107 in ALS.
With that update, I will now turn the call over to <UNK> for an update on our financials.
Thanks, <UNK>.
As our press release contains detailed financial results for the second quarter of 2016, I will refer you to that public statement for the details of our P&L and balance sheet.
We ended the second quarter with approximately $98 million in cash, cash equivalents, and investments, which represents over 12 months of going-forward net cash burn, based on our current 2016 financial guidance.
As you know, yesterday we announced the signing of an amendment to our collaboration with Astellas.
Subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, we expect to receive $65 million in nonrefundable cash, which we believe will extend our runway by nearly another year.
Additionally, we expect to receive $30 million in sponsored research and development through 2017.
Revenues for the second quarter of 2016 were $5.8 million, compared to $6.5 million during the same period in 2015.
Revenues for the second quarter of 2016 included $1.9 million of license revenues and $2.9 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 and $0.3 million in research and development revenues from our collaboration with ALSSA ---+ sorry, ALSA.
Revenues for the same period in 2015 included $3 million in license revenues and $2.9 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 second-quarter 2016 R&D expenditures totaled $9.7 million.
From a program perspective for the second quarter, approximately 68% of our R&D expenses were attributable to our skeletal muscle contractility programs, which includes both expenses associated with tirasemtiv and CK-107 development, 24% of our cardiac muscle contractility program, and 8% to our other research activities.
With the recent expansion of our deal with Astellas, we do not expect to update our financial guidance until our Q3 earnings call.
At that time, we will provide updated guidance, including the impact of this transaction on both a cash and GAAP basis.
With that, I will now turn the call back over to <UNK>.
Thank you, <UNK>.
So as you've heard, we had a very busy and highly productive second quarter and are continuing that momentum across the pipeline as we move into the second half of the year.
As we peer forward, we believe these are transformational times for the Company.
We are reminded every day of the urgent need to bring our novel first-in-class muscle activators to patients living with devastating diseases of impaired muscle function and weakness and we are working relentlessly to make that a tangible reality for them.
Just last month, we met with patients, caregivers, and clinicians at the Cure SMA conference and we heard their enthusiasm for what we're doing in our Phase II clinical program for the significant number of SMA patients for whom there are no options today.
During the second quarter, we rang the closing bell at NASDAQ to kick off ALS awareness month, alongside representatives from the ALS Association, as well as the inspiring people living with ALS and their families.
We were also honored to recently receive the commitment to a cure award from the Golden West chapter of the ALS Association.
From a corporate perspective, as we continue to mature the Company and prepare for commercialization over the next few years, based on our Vision 2020, we are taking steps to increase our commitment to compliance.
Toward that end, I am pleased to report that we appointed Caryn McDowell, our General Counsel, as Chief Compliance Officer.
Our management team and Board will be working closely with Caryn to implement a full-scale compliance program to ensure we consistently operate with the highest ethical and professional standards in all of our interactions with key constituencies and stakeholders.
This is especially important because we are dialing up our pre-commercialization activities in support of potential registration and marketing authorization of tirasemtiv in North America and Europe.
During the second quarter, we conducted commercial planning activities to further evaluate the unmet need and potential value proposition of tirasemtiv from the perspective of payers.
Toward that end, we are conducting a series of market research initiatives and pricing analyses to inform commercial strategies, and we are engaging with representatives of payer organizations, government agencies, and health technology assessment, or HTA, organizations in Europe, who will be instrumental in ensuring ALS patients have market access to tirasemtiv following potential regulatory approvals.
Our deal announced yesterday aligns our interest with Astellas with regard to tirasemtiv and CK-107.
As we prepare for potential registration, marketing authorization, pricing, reimbursement, and market access, we are encouraged now knowing that the investments we are making to inform strategies for tirasemtiv and the capabilities that we are building to support this first-in-class fast skeletal troponin activator in both North America and Europe can be further leveraged to support activities for CK-107.
Our extended and expanded deal with Astellas, like our deal with Amgen that has also been extended and expanded over several years, provides further validation that our leading position in muscle biology in both R&D affords us multiple advantages, multiple opportunities, and multiple benefits for patients and all our stakeholders.
Now let me recap our expected milestones this quarter and for the remainder of the year.
For omecamtiv mecarbil, we expect to communicate a decision regarding potential advancement to Phase III in the third quarter.
For tirasemtiv, we expect to conclude patient enrollment in VITALITY-ALS in this third quarter and begin an open-label extension trial of VITALITY-ALS in the fourth quarter of 2016.
And for CK-107, we expect to complete enrollment of cohort one in CY-5021, the ongoing Phase II clinical trial in patients with SMA, that to occur in the second half of 2016.
For preclinical research, we expect to continue research activities under our joint research programs with each of Amgen, directed to the discovery of next-generation cardiac muscle activators, and with Astellas under our joint research program, directed to the discovery of next-generation skeletal muscle activators.
Under our collaborations, we expect to advance at least one of the next-generation potential drug candidates into preclinical development in 2016.
Operator, with that, we can now open up the call, please, to questions.
I will answer the first question.
We can't specifically tell you what the milestone one trigger is, nor the dollar amount related to any Amgen milestones that we might receive.
All we have publicly communicated, though, is that in the next year or so we will have $25 million to $50 million in milestone payments in combination from Amgen and Astellas, and that's the only thing that we have communicated.
And just to get to your second question, I think the study size, we can't be precise about it yet.
We will certainly give a lot more details when we announce the beginning of the study, but I would assume that it is a study that we are intending to be able to definitively look at, at heart failure or hospitalization CV mortality, and it will be in the neighborhood of several thousand patients.
So I think you will find it to be comparable to PARADIGM at the end of the day.
Yes, so the ---+ it's interesting because these sites have done studies with SMA.
But they've all been in infants and very young children, so many of the scales are also applied in adults, or some of the scales that are used in young children apply in adults.
But size makes a difference here.
So when you have adults, for example, you can't use the same exam table that you use for infants and supplying them with the proper exam tables, there is a calibration tool that you need to measure bone length in the forearm that you can't use the same tool in young kids and adults that you need to get to the site.
So the sites, while they do see these patients when they get older, they see them less frequently and they assess them ---+ they don't assess them in the same way because they are ---+ while they are functionally ---+ certainly functionally affected, they tend to not progress very rapidly.
They've gotten to a steady state.
And so, it really is enabling them to make those kinds of assessments now in an older population.
Maybe I will start and turn it over to <UNK>.
So I think it's not surprising to anybody.
I hope that we are, with Amgen, pursuing a spot.
One would naturally, I think, do that when you are committing the kinds of dollars and time and other resources towards such a very expensive, large, international Phase III study.
And in particular, in light of the fact that there are already drugs approved in heart failure and where there are validated endpoints, I think it stands to reason that you would want to make certain that you are on the same page with respect to all of the assumptions included in the trial design and conduct and the statistical plan that would accompany that.
So, I think this was very much always the intention and is hopefully further affirmation of the fact that we are leaning forward here.
Let me expand a little bit, <UNK>.
I think in the case of heart failure, there has been a lot of trials conducted, a lot of outcomes trials conducted, and a lot of reviews, obviously therapeutics and heart failure that have been conducted by the FDA.
And so, maybe you're asking as opposed to ALS, where that is not the case, the FDA has a far better idea of what they are looking for in terms of case report forums, in terms of endpoint definitions, really specific and helpful advice that we thought we could get with reasonably quick speed.
Some of these things have even been published.
So while the definitions are clearly defined, the devil is a little bit in the details, and so we had selected to proceed with SPA in this case to get some of that feedback.
We do expect that we will have feedback on the SPA very soon.
But I think in light of the fact that we are executing on a timeline to start the study by the end of the year, you have to imagine that that speaks to a formal commitment in Q3.
We and Amgen have discussed what's required in order to make that decision, and yes, we think we are comfortable indicating that it will occur in the third quarter.
Firstly, I will comment on your first statement.
I thought it was interesting that following Amgen's earnings call I read a couple of analyst notes that indicated they thought that Amgen had already committed to the start of the Phase III program.
And I want to be clear that that is not the case, that despite I think optimistic comments on the part of both companies and our belief that omecamtiv in the COSMIC study was very positive, a formal decision is still forthcoming.
That said, I am aware of Amgen having interactions with Servier.
And yes, we have had our own direct dialogue with Servier as part of helping Servier inform their decision regarding the exercise of an option on omecamtiv mecarbil.
But our role is really secondary in that Amgen has a direct sublicense to Servier and we participated in some of the conversations with Servier to facilitate their due diligence.
I should not comment, it's not really my business to do so, regarding how Servier is leaning or not.
That's really for Amgen to comment on.
I think using a dose optimization method of delivering drug to patients is really the most innovative thing that we are doing.
So most heart failure trials just basically dose the patient intolerant and they dose the drug up as high as they can until they reach even the top dose they can administer or the patients don't tolerate a higher dose, and then they move on.
And in this case, as you know, we've done a lot of careful work in Phase II to define the dose response, concentration response, and in this case we're using a guided dose optimization, personalized medicine, however you want to describe it, way of delivering omecamtiv mecarbil to these patients.
So, that aspect of the protocol, I think, is the most novel compared to all other studies.
There are other aspects that are ---+ that will be a little unique.
The way we define a primary endpoint will be a little novel.
Other things I think will be a little different, but I wouldn't call them revolutionary or game changers.
No, not really.
We've sort of passed through that already.
I think the ---+ in their prior meeting.
So, I think we have an agreed dosing optimization protocol with them now.
And it will be very similar to what we employed in COSMIC.
The only changes really are to enable more patients to reach what we think is the target range of concentrations that we want to achieve than we were able to achieve in COSMIC.
So, we can elaborate on that when we ---+ at the beginning of our study.
I think you'll find that it's going to be quite broadly conducted around the world, on all continents, probably, and well north of 40 countries, 40 to 50 countries.
So, it's going to be conducted in places that have done heart failure research before and be very ---+ a very highly globalized study.
Yes, there is an entry criterion that is related to patient function, so we use a scale called the Hammersmith scale, and if you are at the low end, your function is really poor.
And if you are at the high end, then your function is close to normal.
So we have tried to exclude people at the very, very low end because we just felt their condition would be too severe to really respond to the drug.
And we excluded people at the highest end of the scale because there would be no room for them to respond.
And that's really where you're finding ---+ I think the sites don't normally perform Hammersmith scale assessments in these patients.
And as they are doing them, I think they are now getting a better sense of what a patient's Hammersmith score will be before they bring them into screen them.
So, we are hoping to avoid more screen failures that way by ---+ as the sites get used to gauging their patients before they bring them in.
It's ---+ I can't remember the name of the machine, but it's more than just a treadmill.
It's a constant work rate exercise protocol.
It's a bicycle ergometer.
That's what I was struggling with.
So we've given thought to it; we've talked about it.
I think we are more likely inclined to see if we can meet the criteria ---+ meet the enrollment targets we have with the expansion of the number of sites, but it's not off the table.
We have considered ---+ we have actually amended the protocol to make it easier to ---+ there are patients that are ---+ we have ambulatory and nonambulatory patients.
There was a little gap in between in the way the definition was laid out that ended up excluding some patients, so we sort of tightened that up.
That was a couple screen failures we had.
But I think the functional criteria kind of needed to stay the same, at least for now, just given the desired outcome in effect on the functional scale.
That's one of the desired outcomes.
I'm sorry, Sarah, can you repeat.
Our what level.
I think you said our desired level of involvement, so we are certainly expecting to proceed to Phase III, and we would very much want to be doing so and participating in that program.
We have two different rights.
One is the right to participate in the conduct of a Phase III program, and as we may move into Phase III, we would very much desire to do that.
That would occur such that certain costs associated with our involvement would be reimbursed by our partner at Amgen.
And then, secondly, you may be referring to the fact that we have an option to co-fund Phase III in order to buy up our royalties, and that is something that we would expect to do.
We have the opportunity to take some of the milestone payments, or, for that matter, any other capital, and deploy it for that purpose and in fixed-dollar increments invest in risk capital in the Phase III program in order to buy up our potential royalties on sales.
We've done the calculations associated with the potential return on investment and we think that could be quite positive for Cytokinetics where we to invest alongside of Amgen in that Phase III program.
So that is something that we are anticipating doing as we may proceed to Phase III.
I'm sorry, it was a little bit mumbled.
I think you said do we think that they will (multiple speakers)
They'll use CROs or will they do all the activities themselves.
I think as a general rule Amgen does engage with outside clinical research organizations for the conduct of certain activities associated with their clinical trials, like do most pharma companies.
It's probably not for us to comment beyond that.
I think it will just stipulate that the patient needs to be on standard of care and that will be increasingly including Entresto.
But I don't think we will be mandating that the patients be on Entresto.
They need to be on an ACE inhibitor and/or an ARB.
They can be on Entresto, and then the study will be omecamtiv mecarbil versus placebo over that background of standard of care.
Sure, to the best that I can, because I am not privy to all of the details of the agreement between Amgen and Servier, but my understanding is that in exchange for Amgen receiving a license to develop and commercialize Corlanor in the United States, Amgen with our consent granted Servier an option with respect to the commercial rights of omecamtiv mecarbil in Europe.
We saw that and why we gave consent is we saw that as a big positive.
Servier, as you know, is the leading company in Europe in the area of heart failure.
And as I understand the option, it affords the right for Servier to participate in certain development meetings and regulatory conversations.
But for the most part, they are buying into the right to commercialize the drug were it to be approved.
And as such, they would be responsible for paying milestones and royalties to Amgen and Cytokinetics.
So our economics are not affected by Servier's participation.
But certainly the IQ of the program is increased by having Servier's involvement.
So, my understanding is that Servier were to exercise its option we'd be responsible for paying a percentage of the Phase III costs in exchange for these commercial rights.
So I don't know what that number is, but I suspect it's a meaningful percentage of the total.
And as we now have a protocol and we have got a plan and budget, I assume that Servier and Amgen are having conversations about that plan and budget.
We are participating in some of the due diligence, as I mentioned.
But for the most part, the conversations are occurring between Amgen and Servier.
I don't think that is all a part to this, not that I've heard anyway.
I don't think that's influencing the decision or in any way affects the ultimate decision that will be made vis-a-vis omecamtiv mecarbil.
Thank you, Operator, and thanks to all the participants for joining us on this call today.
It has been an extremely busy and productive time at the Company, as we highlighted for you, capped off by our recent announcement of our expanded collaboration with Astellas.
Going into the second half of the year, we are very optimistic about how things are shaping up and hopeful as we expect to continue to deliver on key milestones across our pipeline.
We thank you for your interest and also your support.
With that, operator, we can conclude the call.
