Cytokinetics, Incorporated (CYTK) Q1 2012 Earnings Report, Transcript and Summary

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics’ First Quarter 2012 Conference Call. At this time, I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. At the company’s request, we will open the call for questions and answers after the presentation. I would now like to turn the call over to Sharon Barbari, Cytokinetics’ Executive Vice President of Finance and CFO. Please go ahead

Good afternoon and thank you for joining the Cytokinetics’ senior management team on this conference call today. Also present during this call are Robert Blum, our President and Chief Executive Officer; and Dr. Andrew Wolff, Senior Vice President of Clinical Research and Development and Chief Medical Officer. We are all join together for this call taking position from New Orleans, the site of this years’ Annual Meeting of the American Academy of Neurology Following the forward-looking statement disclaimer, Robert will provide an overview of the past quarter, along with the recent highlights on the advancement of our clinical development pipeline. Andy will then provide details on the progress of the company’s clinical development program, emphasizing our most recent developments and connection with CK-2017357, which we’ll refer to as CK-357. I’ll provide some brief comments with respect to our cash position and our investment and research and developments activities. Robert will then conclude the call with additional comments including our next steps for our development stage programs relating to CK-2017357 and omecamtiv mecarbil. As well as the discussion of the projected company milestones for the remainder of 2011. We will then open the call for a brief question-and-answer session. The following discussion, including our responses to questions, contains statements that constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to our financial guidance; and corporate partnering to the initiation, enrollment, design, conduct and result of clinical trials; and to other research and development activities. Our actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings, including our most recent Annual Report on Form 10-K and our quarterly report 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 Investor Relations section of our website. These forward-looking statements speak only as of today. You should not rely on them as representing our views in the future and we undertake no obligation to update these statements after this call. Now, I’ll turn the call over to Robert.

Thank you, Sharon. In the first quarter, we continue to make progress in advancing both of our Phase II clinical trials programs. With respect to our skeletal muscle activator program, we have made especially significant progress. In March, we received notification that CK-357 our lead drug candidate for the potential treatment of ALS had received orphan medicinal product designation by the European Medicines Agency or EMA. And just last week, we received notification as CK-357 has received fast track designation from U.S. Food and Drug Administration or FDA. These designations along with the orphan drug designation from the FDA that we received in 2011 for CK-357, affords Cytokinetics certain potential advantages, which may improve both the speed and quality of our development program for CK-357 and should facilitate our future interactions with FDA and EMA consistent with our interests to further evaluate the safety and efficacy of CK-357 in patients confronting ALS. Moreover, yesterday here in New Orleans at the American Academy of Neurology Annual Meeting, we announced additional safety and tolerability data regarding CK-357 from 2 recently completed Phase II clinical trials in patients with ALS. The results from these trials inform our plans for potential registration program that we plan to further define to interactions with regulatory authorities over and the remainder of this year. Andy will elaborate on these most recent clinical trials data and the relevance to the potential treatment of ALS in a moment. In parallel with our progressing CK-357, you will also hear from Andy about recent progress in the development of omecamtiv mecarbil our novel cardiac myosin activator for the potential treatment of heart failure. Under our collaboration with Amgen, the first cohort of the phase 2B ATOMIC-AHF clinical trial completed enrollment recently with over 200 patients enrolled. We look forward soon to a decision from the trials data monitoring committee regarding potential dose escalation into the next cohort of this large international trial. Alongside this progress in the last quarter, Amgen also initiated a Phase I safety and tolerability study designed to evaluate multiple oral formulations of omecamtiv mecarbil in healthy volunteers. Andy will also discuss that trial and its goals. And with that introduction, I’ll turn the call over to Andy to elaborate on the specific progress that we’ve achieved in both our clinical development programs since our last teleconference.

Thank you, Robert. Yesterday in an oral presentation at the American Academy of Neurology Annual Meeting Dr. Jeremy Shefner presented data from the second part - second cohort or Part B of CY-4024 our 2 parts Phase IIa randomized double blend placebo-controlled multiple dose, safety, tolerability, pharmacokinetic, and pharmacodynamic on a full trial of CK-357 and patients with ALS. To remind you, in Part A of these trial patients did not receive real result, well in Part B patients received at a reduced dose of 50 milligrams of daily during 14 days of treatment with CK-357 or matching placebo. Part B of the study with otherwise identical in design to Part A. Between Parts A and B at total of 49 patients were randomized to treatment, 13 of whom received a placebo while 12 patients were treated in each of the 3 active treatment arms receiving once daily doses of CK-357 and 125 milligrams, 250 milligrams, or 375 milligrams. In Part B of this trial CK-375 appear to be at least as well tolerated in patients receiving really result as a note who didn’t not receive riluzole in Part A. This is an important observation, suggesting that riluzole as just reduced dose can be safely co-administered with the CK-357 have been observed in previous clinical trials of CK-357 including in Part A of this study light-headedness or dizziness was the most frequently reported adverse events. Again as also observed in the Part A of the study this dizziness was mostly mild it generally began early after the initiation of treatment and result with continued dosing usually within the first few days of continued treatment. No patients in Part B reported severe dizziness and only one on 250 milligrams daily reported moderate dizziness. Furthermore, there were no patients in Part B who discontinued the study prematurely for any reason. In other words all 25 of those patients completed all 14 days of dosing. CY 4024 was too small to have sufficient statistical power to robustly evaluate the effects of CK-357 on the various outcome measures that were frustrating the study. However, we are encouraged by trends that appear dose-related and potentially clinically meaningful in magnitude in the ALS functional rating scale in its revised format or the ALSFRS-R and the maximum voluntary ventilation or MVV. To remind you the ALSFRS-R is a clinically validated instrument designed to measured disease progression and changes in functional status in ALS patients. The average change in the ALSFRS score is approximately minus 0.9 points per month, about a point per month. In this trial, the ALSFRS-R was evaluated twice on days 8 and 15. MVV is the clinical assessment of preliminary function and endurance that measures the maximum volume of air that patients can repeatedly inhale and exhale expressed in units of readers per minute. In this trial MVV was also evaluated on days 8 and 15. I can refer you to Cytokinetics' press release from yesterday, and I’m pleased to say that our investigators were encouraged by the trends for functional improvements in these clinically important efficacy assessments as well as by the magnitude of the potential effect. Importantly there was no evidence for any differences in these outcome measures between patients in Part A who did not receive riluzole and those in Part B who did receive riluzole Given what we know, about the predictable and progressive greater functional decline in ALS patients as measured by the ALSFRS-R and the similarly expected decline in pulmonary function the data increases were observed in these measures in some ALS patients in the trial after only 1 and 2 weeks of treatment with CK-357 gives us reason to be optimistic regarding what we may observe in longer and larger trials. In addition to the data from CY 4024 a poster was presented yesterday at 8 AM that contained data from CY 4025, another randomized double-blind placebo control Phase IIa clinical trial of CK-357 in patients with ALS. In this trial is CK-357 was administered for 21 days and ascending multiple doses of 7 days each using the twice-daily regimen. All these patients also took the reduced dose of 50 milligrams riluzole per day Patients were randomized 3:1 for the twice-daily dose-titration regimen with CK-357 or placebo. The primary objective of CY 4025 was to assess the safety and tolerability of CK-375 when administered using this twice-daily dose-titration regimen to patients with ALS and to determine if the total daily dose of CK-357 could be increased from the 375 milligram once-daily dose evaluated in CY 4024 to a target of 250 milligrams twice-daily or a total daily dose of 500 milligrams in CY 4025. 27 patients were treated in CY 4025 all 6 randomized to placebo completed three weeks of dosing. Of the 21 patients randomized to CK-357, 14 were escalated to the highest dose of 250 milligrams twice daily and completed 3 weeks of dosing. The authors concluded that the twice-daily dose titration regimen evaluated in the trial was generally safe, and well-tolerated and that the majority of patients could be titrated successfully to 250 milligrams twice daily. As was observed in CY 4024 dizziness was the most frequently reported adverse event in CY 4025. None of the 6 patients who received placebo CY 4025 reported dizziness, while 12 of 21 patients experienced dizziness during dose titration with CK-357. In 10 of these patients dizziness was mile the other patients experienced moderate dizziness. Like CY 4024, CY 4025 was not towered to evaluate statistically the effects of CK-357 on the various outcome measures that were assessed during the study. Nevertheless the authors concluded that encouraging trends in the ALSFRS-R and MVV were observed on CK-357 relative to placebo that were similar in both direction and magnitude to those we observed in CY 4024. We are very pleased with the data from each of CY 4024 and CY 4025. Data from these 2 trials together with data from earlier trials conducted with CK-357 will help us optimize dosing regimens for CK-357 and ALS patients and set the stage for further interactions with regulatory authorities. As Robert mentioned we recently received Fast Track designation for CK-357 for the potential of ALS. As may know the Fast Track process was designed to facilitate the development and expedite the review of drug candidates intended to treat serious or life-threatening conditions and as demonstrate the potential to address unmet medical needs. A potential drug that receives Fast Track designation is also eligible for accelerated approval and a rolling review as well as possibly a priority review. Importantly Fast Track designation for a potential drug may allow more frequent meetings between the sponsor and FDA to discuss the development plan and ensure collection of appropriate data needed to support approval as well as possibly more frequent written correspondence from FDA about such matters as the suitability of designs for proposed clinical trials. We look forward to engaging FDA in connection with our plans for CK-357 over the next several months. We believe that the Fast Track designation for CK-357 from FDA is important and together with the fact that both FDA and EMA have granted orphan drug designation for CK-357 for the potential treatment of ALS underscores the potential value that regulatory authorities see in our novel mechanism compound for this grievous and ultimately fatal disease. Lastly as we have emphasized our interests for CK-357 are not limited to its potential for the treatment of ALS, as evidenced we continue to enroll patients in our Phase IIa evidence of effect clinical trial of CK-357 in patients with generalized myasthenia gravis. To remind you this is a Phase IIa double blind of randomized placebo control 3-period crossover pharmacokinetic and pharmacodynamic evidence of effect study. Of the 36 patients may be enrolled at approximately 15 study centers in the United States. Patients enrolled in the trial will receive single oral doses of placebo, and the CK-357 at 250 and 500 milligrams in random order. This clinical trial and additional preclinical research related to myasthenia gravis are funded by a $2.8 million grant from the National Institute of Neurological Disorders and Stroke. Turning now to our cardiac muscle contractility program. Together with the Emgen, we made substantial progress in the first quarter for this program as well. I’m pleased to report that we’ve completed to enroll more - enrollment in cohort one with over 200 patients enrolled into our international randomized double-blind placebo-controlled Phase IIb clinical trial of intravenous omecamtiv mecarbil in patients hospitalized of acute heart failure. This trial known as ATOMIC-AHF, which stands for Acute Treatment with Omecamtiv Mecarbil to Increase Contractility in Acute Heart Failure is designed to enroll 3 successive ascending dose cohorts. Each of which will enroll approximately 200 patients randomized 1:1 omecamtiv mecarbil versus placebo. The dose of omecamtiv mecarbil on Cohort 1 targeted a peak plasma concentration of omecamtiv mecarbil of approximately 115 nanograms per ml. Cohort 2 is designed to targeted a peak concentration of approximately 230 nanograms per ml and Cohort 3 to target 310 nanograms per ml. Now let Cohort 1 has completed enrollment an independent data monitoring committee will review the data and determine whether it is appropriate to open the next cohort. Alongside the progress in our Phase IIb trial in the most recent quarter Amgen initiated a Phase I randomized open-label 4-way crossover study design to evaluate multiple formulations of omecamtiv mecarbil in healthy subjects that’s multiple oral formulation. Approximately 60 subjects will be enrolled in this study. Each will receive 2 of the 6 oral formulations included in the study, each administered as a single dose under both fasted and fed conditions. The primary objective of the study is to determine the effective food on the bioavailability of omecamtiv mecarbil when administered in these multiple oral formulations. The secondary objective is to evaluate the bioavailability, safety, tolerability and pharmacokinetic profile of omecamtiv mecarbil when administered in these multiple oral formulations. Results from this clinical trial are expected to guide selection of one or more oral formulations of omecamtiv mecarbil for later stage clinical trials in patients with heart failure. Advancing both intravenous and the oral program in parallel is the priority as we prepare to study them together in a combined regiment of omecamtiv mecarbil for the potential treatment of heart failure. As always additional information about all our Phase II trials can be found at www.clinicaltrials.gov. And with that update on our clinical development activities in the first quarter, I’ll turn the call back over to Sharon.

Thank you, Andy. As our press release contains detail financial results. For the first quarter of 2012, I'll refer you to public statement for the detail on our P&L and balance sheets. We ended the first quarter with approximately $43.1 million in cash, cash equivalent and investment excluding restricted cash, which representatives approximately 13 months of going forward net cash burn based on our 2012 financial guidance. Our first quarter 2012 R&D expenditures totaled $8.7 million. From a program perspective for the first quarter approximately 67% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, 13% to our cardiac muscle contractility activities, 9% to our smooth muscle contractility activities and the 11% to our other research activities. We continue to focus our financial resources largely on the progression of our skeletal muscle contractility research and development program. We believe that this program together with our cardiac muscle contractility program is partner - which partnered Emgen represents opportunities for the nearest term value generation for the company, which Robert will outline in a moment with the milestones for the remainder of 2012. In the first quarter of 2012, we continued to close corporate partnering transactions that we believe can contribute to an extension of our cash resources. In recent weeks, we extended our collaboration with Global Blood Therapeutics a Third Rock Ventures company. This transaction affords the sponsor research through the reminder of the year, moreover together with previously announced continuation of our joint research program with Amgen in which they also are supporting scientist at Cytokinetics. We are moving as closer to our objective of having a significant portion of our research expenses sponsored by third parties at a time when our expenses and development are expected to increase. We believe that our taking these creative steps forward ensures that we can be both financially prudent and strategically thoughtful about how we mature our R&D organization and retain the expertise and now how that has contributed to our uncommon excellence in R&D. That concludes the financial portion of today’s call. With that I’ll now turn the call over to Robert.

Thank you, Sharon. This has been an exciting week for Cytokinetics, and it punctuates a similarly very exciting quarter. The data presented this week here AAN relating CK-357 represents the combination of hard work and has set the stage for our potential progression into registration studies. In addition enrollment in the ATOMIC-AHF trial has steadily increased and we look forward to the safety data review by the independent data monitoring committee, which may enable that clinical trial to progress to the next stage. It is nice to see both of these novel mechanism muscle biology programs maturing in such a way as can provide meaningful hope to ALS and heart failure patients respectively. All has it well documented both populations are in need of new therapies to address unacceptably high morbidities and mortality. In the last quarter we also continued to demonstrate that our continued commitment ongoing research at Cytokinetics could deliver important returns on investment and that we could monetize that commitment in transactions that offset certain costs and affords a fiscally prudent path forward. As evidence of the value of our persistent dedication to muscle biology research, our scientists presented important preclinical data yesterday at each of the American Academy of Neurology and Experimental Biology Meetings. At AAN Cytokinetics scientist presented a poster containing data from a preclinical study designed to examine the effects of CK-357 in SOD1 mutant transgenic mice, a model of ALS in humans. The authors concluded that mice treated with CK-357 maintained hindlimb grip strength during disease progression and that CK-357 increased muscle strength of a nerve-muscle pair in situ. In addition, the results evidenced the delay in the time to a pre-specified humane endpoint in the CK-357 treated mice compared to the age-matched control SOD1. At the experimental biology meeting Cytokinetics scientists presented results from a preclinical study designed to assess the effects of CK-357 in 2 models of running fatigue, one aerobic and the other anaerobic. The authors concluded that skeletal muscle troponin activators such as CK-357 improved performance in an endurance type fatigue assay and in an assay that tests motor coordination under moderately fatiguing and increasingly difficult conditions. These data suggest a role for CK-357 and other skeletal muscle troponin activators in reducing muscle related fatigue that may have utility and disease conditions in which muscle-related fatigue may lead to disability. I believe our determined commitment to ongoing translational research at Cytokinetics is informing potential clinical development strategies for CK-357 and also may benefit our potential partnering strategies. Now with respect to partnering strategies, I'm often asked to comment on potential progress in connection with the partnering of our skeletal muscle program. Obviously I must be careful as most of the relevant details of our ongoing discussions remain highly confidential. What I can say is this now we continue to explore the possibility of partnering but to be clear on terms that we believe are important to ensure that CK-357 is developed intelligently and swiftly for ALS patients and their families. Recent clinical and pre-clinical data support Cytokinetics' views towards potential deal terms. As mentioned previously, we have made it a corporate priority to ensure that any deal we may do is one that we can confidently believe aligns with the urgency and quality of the drug development program and is consistent with the progress we ourselves demonstrated to date. Can we do a deal in those terms? Yes we believe that we can, if not however we may explore other ways to ensure that our program can be funded even as we may require our taking another look at cost structures, other revenue possibilities and other strategic and financing possibilities. We will remain open to an array of these options to ensure we can continue to execute on what we believe to be the best path forward for these programs and for Cytokinetics. Now let me turn to the milestones for the remainder of 2012. Turning firstly to our skeletal muscle contractility program, for CK-357 in the second half of 2012 we anticipate that data will be available from our ongoing Phase IIa Evidence of Effect, clinical trial of CK-357 in patients with generalized myasthenia gravis. In 2012, we anticipate interactions with regulatory authorities to discuss the development of CK-357 as a potential treatment for patients with ALS including potential registration strategies. And for CK-20127107 or CK-107 by the end of 2012, we anticipate filling an IND for this potential drug candidate CK-107. Next turning to omecamtiv mecarbil. In the second quarter of 2012, we anticipate a decision regarding the potential progression to the second cohort of the ATOMIC-AHF clinical trial. Following review of data from Cohort 1 by the independent data monitoring committee. Also in the second half of 2012, we anticipate that safety, tolerability in pharmacokinetic data from the ongoing Phase I clinical trial of oral formulations of omecamtiv mecarbil in healthy volunteers will be evaluated. These data are expected to enable selection of one or more of those oral formulations to be evaluated in potential studies to follow in stable heart failure patients. As you can see we expect continued progress in our leading clinical stage muscle biology programs through the reminder of the year. And I look forward to providing future updates. And with that operator, that concludes the formal portion of our call today and now I’d like to open up the call for questions.

[Operator Instructions] Our first question comes from the line of Charles Duncan with JMP Securities.

Thanks for taking the question. Just one quick question, I wonder if you could discuss possibly some of the options that you see for a capital efficient approach to further development of 357 in ALS? We noted that the survival trials in the past is generally gone over a year?

That’s a very good question and I’ll start and see if Andy has anything he wants to add. To be clear based on conversations, we’ve had with regularity authorities we don’t assume that we are going to need to demonstrate a survival advantage although that will certainly be something that will be assessed over time in order to be getting a first approval for CK-357. We do believe that already data from multiple clinical trials of CK-357 in ALS patients are demonstrating improvements in functional status parameters even after the first dose and continuing now over 2 and 3 weeks evaluated and if we see a persistence of improved functional status or even a change in the rate of decline of functional status as measured by validated instruments like ALSFRS-R that we believe that would warrant a potential registration approval. So we think that will be a more capital efficient approach regarding registration for CK-357.

Our next question comes from the line of Mike King with Rodman & Renshaw.

Thanks for taking the question. I you know, a little bit frustrated because I hate if your stock react so badly to what otherwise looks like very good news today. And, just wondering if you might speak to - well a couple of aspects of the 357 results. Andy, can you just help us understand a little bit better that it seem like prognostic factors were skewed against 357 in the various patient cohorts, I’m just wonder how one can take that into account when considering even beyond the numbers, and we say - as I say number in the context of the underlying patient characteristics rather than just sort of treated versus placebo, is that makes sense?

I’m not quite sure if I’m clear on what you’re asking. You know these are 2 small studies, so you don’t really have a whole lot of data to ensure a balanced distribution across treatment groups, but I mean really in the 40.4 study where the patients received 2 weeks of dosing without titration, and the MVV was significantly higher in patients on placebo.

Right.

I dont' know that that necessarily skewed things against 357, actually you could argue - it might have done other way that the 357 patients having lower maximum voluntary ventilation had more room to improve than the placebo patients, and yet still the improvements more better on 357 the non-placebo in that study, as well as in other trials. I think they're too small - don't try to read too much into them - I think the bottom line is think there are certainly winding up in the right direction, and they’re doing it about the same magnitude sort of every time we do it even though there are different groups of patients and the doses may be little different and so forth.

Okay. And then just return the topic of dizziness for a bit. I am just wondering your thoughts about for some kind of a pharmacologic point of view as well as a clinical point of view, so from pharmacologic, is it a - do you understand is it PK, is it Tmax, Zmax or some other metric related to that or and then from clinical standpoint how important do you believe it is to reduce or eliminate the dizziness in order to prevent on blinding in registration trials.

So we have not completed a full pharmaco of kinetic-pharmacodynamic analysis of these trials that we just presented yesterday, but in the past, what we have seen is that so likely we had a dizziness does appear be related to higher Zmaxes and shorter Tmaxes. And that’s why we went to the twice-daily dosing regimen and the study that we did do. And it’s to reduce the Tmax and also raise the trough, you raise an interesting point that we’ve discussed before about the dizziness being potentially unblinded - unblending, I don’t know that there is too much we can do it, but I would point out that not every patient gets dizzy, and in fact, I think we did achieve our goal in the dose-titration study have actually reducing the overall occurrence of dizziness even as we got to our higher total daily dose. So it was only to all the 21 who got dizzy at all and of those trials 6 of them really had very trend in episodes of dizziness. So in the end I don’t know how particularly unblending it will be it is true that we almost never see that on placebo and we see it only on 357 but we are now in sort of point where are sort of seeing it really on a prolonged sustained basis, really even only in the minority 357 patients.

Maybe Mike just to add to that and also to your point about the stock price. I can’t comment on the stock price but what I can say is that here in New Orleans amongst the investigators who shared in the presentation of the data and then afterwards I think there is a general consensus that we hopefully put that issue to bed in terms of light-headedness or dizziness that while it is reported as the most common, most frequently cited AE. It is mostly mild and even when not it tends to abate with multiple dosing. So that was a key question coming out of a study that we conducted about a year ago. And now with these 2 studies one fixed oral-dose the other ascending dose-titration oral-dose. I think it’s fair to say that we’ve asked and answered that question, and we’ve demonstrated with these data in these patients in these studies that the drug seems safe and well tolerated.

Okay. Maybe just not press the point, but it is possible to start low and go slow, I mean you’ve started a lower dose and increased the dose over some period of time whether it days or week give that that also might help?

Well, what we did in 4025, we started at 125 milligrams twice a day. And - week there and then a week at 125 in the morning and 250 in the afternoon and then the third week it 250 in the morning and 250 in the evening and as I say among the patients who received that regimen only little over 1/2of them compliant a dizziness, again I don’t know that, I want to start much lower and go too much slower, because we do want to get therapeutic concentrations in a reassemble period of time.

Yes.

But it did - it certainly did decrease the occurrence of dizziness and in most of the results.

And it shouldn’t be lost in this conversation that by doing that by splitting the dose and dose titrating. We got the majority of patients to and even higher dosing level than we had ever achieved before on single oral doses, but now on multiple oral doses. So you would expect that we’re getting to even higher plasma concentrations and more patients are above the threshold plasma concentrations that we targeted. So I think that’s also very good news.

Okay. Appreciate the color. Do you think you’ve got, I mean you satisfy now that you’ve got the right Phase II dose with 357?

I want to look at the plasma concentration data in more detail. We haven’t have the opportunity to do that yet, but my gut tells me that we wouldn’t be well advised toward to push too much higher than where we got to 250 twice a day. I do think we can probably be more successful in getting most patients up there. I think we found that in Part B of 4024 there were a couple of patients who had a very minimal dose interruption one, one day and another 2 days do adverse events that may not have been due to the drug, but they then were able to go back on to treatment and complete the study normally.

Yes.

So I mean, I think with a few additional strategies like that allowing day or 2 at a time of dose interruption if necessary and maybe suggesting or even having a protocol return to require that. And be at least the second attempt to up titrate in the event of a first failure. I’ll, bet you we’ll do better than getting 2/3 of the patient to that dose. I mean can I prove it yet, no. But I believe that we can probably be more successful on elevating almost all the patients to that dose and how then stay there.

Our next question comes from the line of Brian Klein with Lazard Capital Markets.

So couple of questions here. Andy, maybe let me understand in the lowest dose in both trials just the data suggest the patients did worse than placebo?

No, I don’t, I don’t think it could really say that.

Because you’re seeing at least in the ALSFRS scores that it continues to go negative as opposed to turning positive. So I’m just trying to understand what the significance of that is?

So, I mean that would you're probably looking at data from the combination of Part A and B of 4024?

Yes.

So I don’t see that. If you look at the scatter plot that presented yesterday, the biggest decreases in the study in ALSFRS on placebo no patient on 125 had a decrease that was as big as well as absorbed on placebo, and 250 the largest decrease was even less than on 125 and certainly less than on 250. So I mean, I think there is a fairly clear dose-related trend to seeing the ALSFRS are go up, what I would say is, I just don’t think 125 milligrams a day is probably enough to really do anything, so it’s probably, essentially like placebo. But I don’t see any suggestions it's making anybody any worse really.

Okay. Tell me on that what, would you anticipate would be primary endpoint for your Phase III trial would it be looking at the reduction or - demonstrating that the decline at ALSFRS is reduced with your treatment or you’re looking at an absolute benefit?

I don’t think we would need to show an absolute benefit in other words to say that at the end of the study patients on average are actually better than they were at base line that would be a wonderful outcome, but more optimistic then I think we even need, to hope for what we really need to show this just the ALSFRS-R score is higher than in patients treated with placebo. And as long as it is statistically significantly higher after however long we rung the study, I think that will be received very favorably.

Okay, so I would assume that you would power that based on the historical rate of decline which you mentioned was 0.9 per month...

That’s right, I’m sorry I interrupted. I mean basically people will generally tend to accept somewhere in the range of 20% reduction in the decline. So I mean if you ran a study for 3 months and you said the patients were likely to have had a decline of on average 2.7 points on placebo, 20% of that is not have a lot. So a difference from placebo on the order of 0.5 to 0.6 points would be in that range and the studies that we contemplate would be powered to this account to the difference.

Great. How many patients do you think is ultimate role for that kind of trial?

It does depend on how many groups in so forth and so on, but I would say that in each treatment group that you wanted the study, okay would probably around at least to 150 patients, it’s depend on how much power you want to have and so forth. But the next study that we will do this time be hundreds of patients not dozens of patients.

Got it. And do you also plan to treat for longer period of time?

Certainly longer, how much longer, is still an item of very active discussions at Cytokinetics, longer would be better, we’re very aware of that, but it also comes down to under what scenario and what we can afford if we’re doing it on our own.

Got it. And then maybe just the question for Sharon. Your guidance at the end of the fourth quarter looking at 2012 revenue was somewhere in the range between $4 million to $5 million. I think you’re almost happy there. Just wondering if you could give us some insight into your expectations for Amgen reimbursement and whether that got into changed?

So the Amgen reimbursements were included in our original guidance what was not included in our original guidance and is a very recent development for us is the extension of the global blood therapeutic transactions. So that doesn’t have as much associated with it. So right now the range that we’ve provided for guidance is fully understood.

Your next question comes from the line George Zavoico with NLV & Co.

I have a quick question regarding the parallel development omecamtiv regarding the oral and the IV. And you’ve done a lot more studies in the IV then you’ve got the oral. So the orals are little bit behind, I guess. First of all Andy is that a fair assessment, and...

Yes, I think that’s a fair assessment. IV is a travel of around 600 patients of acutely ill always done with the oral today is well compensated patients with heart failure and clear evidences systolic dysfunction, but not decompensated in symptomatic at the time.

So my question is, I mean, I imagine this is essentially the same molecule. You can see I imagine and use lot of 15 tolerability data to move the oral formulation through maybe a little bit faster for have a catch-up, what’s your strategy then in getting the oral to catch-up to the IV and one, I believe you still the overall strategy optimal is to go hospital to home IV or sort of a smooth transition?

I will start with that George. The strategy really is to with the intravenous form of the drug demonstrate whether we can translate pharma to dynamic benefits as measured by echocardiographic parameters and as you have already scene those data to potential clinical benefit in a population of equally hard to tell you patients. With the oral, we may end up ultimately targeting different plasma concentrations in the chronic patient health patient setting, so much of what will be doing in phase two is not so much intended to assess for potential efficacy, but to ensure that the oral can be safely administrated to those patients over weeks to months of therapy and in that way being a position to do in phase III of rigorous assessment of IV coupled with oral against clinically meaningful endpoints like deaf and hospital readmission. Otherwise you’d be doing in phase II with an oral form what ultimately you need to do in a phase III study and there is no point in reproducing that. So the goal is to get into phase III where we can properly interrogate that possibility.

So is part of the strategy to seek approvals for the IV formulation independent of the oral formulation is that?

That’s not next step strategy known in fact that may ultimately prove to be a path forward, but that’s not the primary strategy. The primary strategy as we and Amgen have talked repeatedly is that we think that there is a best opportunity to demonstrate potential clinical benefit by coupling IV and all as part of a regimen. And that’s what I expect our base case will look like.

I don’t think that strategy had changed.

And our next question comes from the line of Mike King with Rodman & Renshaw.

I just wondered if you guys can comment about what are you looking for in the oral forms of omecamtiv what are you looking for exactly the same profile as the IV or you looking for something a little bit different. And if you can say it’s different, what is it that difference as you are looking for?

Well, I mean, it can’t be the same as the IV. Absorption will necessarily be slower and we’re going to be able to maintain our concentration sort of that at continuous rated steady state like you can do with an idea of fusion. Although we don’t get the steady state even with the IV over the 48 hours of treatment in an ATOMIC-AHF but I think what we’re looking for in particular is consistency of plasma concentration at a given dose. So that’s another way in which the oral is never going to be like the IV, the IV is always going to be far more predictable in the concentration that you generate because it’s a 100% bio available all of it goes in whereas it’s the oral to a greater or a less degree. And to some extent dependent upon the formulation, there will be heritage in AD how much of compound is absorbed in (inaudible). And I think more than anything else what we like to do is try to find the formulation that a most predictable in terms of the plasma concentration that it generate and produces the least variability from patient to patient.

You might remember that we had evaluated previously prior to even Amgen exercising its option to oral forms when which we refer to as a median release TID and the other modified release BID and the goal in evaluating certain of these modified release technologies is to see if we can blend the more rapid absorption and bring peak and trough ratios closer together to has Andy points out have therefore a more predictable pharmacokinetic profile.

Okay. See you on slow uptake stay concentration and then gradual declines.

I think that’s right.

And there are no further questions in queue at this time.

Okay. Thank you, operator. And thank you to all of the participants on our teleconference today. We really do appreciate your continued support and your persistent interest. With that, operator we can conclude the call.

Thank you. Ladies and gentlemen, that does conclude today’s conference call. You may now disconnect.