Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics Second Quarter 2016 conference call. At this time, I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. [Operator Instructions] I will now turn the call over to Diane Weiser, Cytokinetics' Vice President of Corporate Communications and Investor Relations. Please go ahead.

Good afternoon, everyone, and thanks for joining us on the call today. Robert Blum, our President and Chief Executive Officer, will kick us off with highlights from the quarter. Then, Fady Malik, our EVP of Research and Development, will provide an update on the clinical development program for omecamtiv mecarbil. Andy Wolff, 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. Fady, will then rejoin us to share an update on the 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. Sharon Barbari, our EVP of Finance and Chief Financial Officer, will provide a financial overview for the quarter. And Robert 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 future 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 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 this 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 Robert.

Thank you, Diane, and thanks again to everyone for joining us on the call today. As you heard yesterday, we announced that we have expanded our collaboration with Astellas for the 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 activators. If Astellas exercises the option, Cytokinetics will continue to develop and commercialize tirasemtiv in North American and in 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 longstanding 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 when omecamtiv mecarbil and the planned Phase III program in collaboration with Amgen, so I'll get right to that.…

Thank you, Robert. 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 in Amgen, we participated in series of regulatory clinical meeting, designed to finalize details of the protocol, statistical analysis and the conduct of the large Phase III outcome study. These preparations included further interactions, both meetings and written correspondents with FDA and EMA, all designed to achieve consensus with regards to our approach to the planned outcome trials and the overall clinical development program. Specifically we've obtained consensus on protocol designs, target patient population, clinical endpoint, safety monitoring and approach to dosing. Further you may have heard on Amgen's Q2 earnings call yesterday, we have submitted to the FDA our heart failure outcome study protocol for a special protocol assessment or SPA and look forward to finalizing the protocol and additional study specific material, such as chargers to case report forms, fiscal analysis plans and other material required for study start up. Also underway our activities necessary to vet clinical trial sites across the globe, asses 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, Phase II trials omecamtiv mecarbil in Japanese patients with heart failure continues to enroll. And finally, we support a longer term planning both commercial and manufacturing meetings 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'd like to a moment to acknowledge my colleagues at Amgen…

Thanks Fady. I’ll start with an update on screening and enrollment in VITALITY-ALS, our Phase III trial which is designed to assess the 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 in 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 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 in countries so that we can expect a broad distribution of patients in this important international Phase III trial. We have also continue to monitor closely the rate of early terminations in the open label period, prior to patient randomization, as well as their early termination post randomization. We also observed the standard deviation around the SBC measurement. While we remain blinded to investigational study drug assignment, 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 a significant progress finalizing the design and making edits to the protocol and statistical analysis plan for our planned open label extension trial which 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. For this end, we have productive regulatory interactions with FDA and EMA during the quarter and received advice that informed how we finalized the trial design. We are now in the process of preparing for submission to IRBs to enable the study start. We'll 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 preparations for the potential registration of tirasemtiv, including the conduct of manufacturing activities, as well as stability and other studies intended before registration. We also have increased pre-commercialization activities, as you will hear more from Robert. Now I will turn the call back over Fady, to provide an update on CK-2127107, our next generation fast skeletal proponent activator.

Thanks, Andy. 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, that is progressing as we continue activate sites throughout the United States to enroll patients. Robert mentioned, we are behind versus our initial enrollment objective. However, we believe that this lower enrollment is not due to a lack of investigator enthusiasm or eligible patients, instead because adolescents and adults with SMA are eligible for our trial have had few current treatment options and have limited opportunity 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 targeting new territory with our trial and with our clinical fast site. As a consequence, we've encountered certain start up challenges associated with, using a proper equipment to conduct the various assessment. We also have seen more screen failures than we had anticipated given the stringent inclusion and exclusive criteria for the trial. That said, we believe these challenges are now behind us and screening enrollment are picking as we enter the third quarter. Additionally, we made a decision to expand the trials of sites in Canada, which should also help us with catching up with enrollment target. We believe we will complete enrolment over one or few data and progress it forward too by the end of this year, the trial result is still expected in the first half of 2017. We also recently announced the start of the second Phase II trial of CK-107 in patients with COPD. Astellas is conducting this randomized, double blind placebo controls through period cross over clinical trial design to assess the effect of CK-107…

Thanks, Fady. As our press release contains detailed financial results for the second quarter of 2016, I'll 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 an amendment to our collaboration with Astellas is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Activities, we expect to receive $65 million in non-refundable cash which we believe we extend our run rate by nearly another year. Additionally, we expect to receive $30 million in sponsors 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 ALSA. Revenues for the same period in 2015 were 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 program which include 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 our update our financial guidance into 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'll now turn the call back over to Robert.

Thank you, Sharon. So as you've heard, we had a very busy and highly productive second quarter and our continuing that momentum across the pipeline as we move into the second half of the year. As we look forward, we believe these transformational times for the company. We are reminded everyday of the urgent need to bring our novel person class muscle activators to patients living with devastating diseases of impaired muscle function and weakness and we're working relentlessly to make that a tangible realty for them. Just last month, we met patients caregivers and clinicians at the Cure SMA Conference and we heard their enthusiasm for what we are doing in our Phase 2 clinical program with a 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 are 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 new few years, based on our vision 2020, we're taking steps to increase our commitments to compliance, towards that end, I am pleased to report that we appointed Caryn McDowell, our General Council 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 can consistently operate with the highest ethical professional standards and all of our interactions with key constituencies and stakeholders. This is especially important because we're dialing up or pre-commercialization activities in support of potential registration and marketing…

[Operator Instructions] And our first question comes from the line of Joe Pantginis with ROTH Capital Partners.

Good afternoon, Joe.

Good afternoon. Hi, everyone. Getting a nice feeling of déjà vu here. So, first, question on Amgen and then question on SMA, if you don’t mind. So Amgen is a two parter, maybe first for Sharon, can you remind us any of the potential milestones surrounding, you know, the decision to move into Phase III or start of Phase III. And the second part maybe for Fady, can you provide any guidance about the size of the study, I know you were looking at the potential to have a size, study potentially smaller than PARADIGM-HF?

So I'll answer the first question. So we can't specifically tell you what the milestones, one trigger is nor the dollar amount related any Amgen milestones that we might receive. All we have probably communicated though so is that, in the next year or so we will have $25 million to $50 million in milestones payments in combination from Amgen and Astellas and not the only thing that we've communicated.

That’s helpful.

And just to get to your second question Joe, I think the study size, we can't be precise about it, yet we'll certainly give far more details when we announce the beginning of the study. But I would assume that it is a study that we're intending to be able to definitively look at – at heart failure, hospitalizations, CV mortality and it will be in the neighborhood of several thousands patients. So I think you will find it to be comparable to PARADIGM end of the day.

I understand. Thanks. And then Fady, can you provide just maybe a little more color on the SMA study, specifically with regard to the point about equipment aspects?

Yes, so the – it’s interesting because these sites have done studies through an SMA, but they've all been an infant, and very young children. So many of the scales are also applied in adult, or some of the scales that are used in young children, applied in adults. But, size it makes the difference here. So when you adult for example you can't use the same exam table that use for infants and find them with a 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, as adults, that you need to get to the site. So the sites probably do see these patients and when they get older they key in less frequently and they asses them – they are on assessment in a same way because they are – while they are functionally – certainly functionally affected that it can not progress very rapidly. They've gotten to a stead state. And so it’s really is enabling them to make those types of assessment now in older population.

Understand. Thanks a lot guys.

You're welcome. Thank you, Joe.

Your next question comes from Jason Butler with JMP Securities.

Hi, Jason.

Hi, Robert. Thanks for taking the questions. Just wondering if you could give us any more color on the rationale for requesting an FDA for the outcome study or specifically if there any points of debate you think with FDA that need clarification before starting study?

Maybe I'll start and turn it over to Fady. So I think its not surprising to anybody, I hope that we are with Amgen pursuing a SPA, one would naturally I think do that, when you're committing the kinds of dollars and time and other resources toward such a very expensive large international Phase III study. And in particular in the light of the fact that there are already drugs approved in heart failure and where there are validated endpoints, I think its stand to reason that you'd want to make certain that you're in 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.

Yes. Let me expand a little bit Jason, I think in the case heart failure there is been a lot trials conducted, a lot of outcomes trials conducted and a lot of reviews, obviously a therapeutics in heart failure that have been conducted by the FDA. And so, maybe you are asking as opposed to ALS, where that’s not the case. The FDA has a far better idea of what they are looking for in terms of case report forms, and in terms of endpoint definitions, really specific and helpful advice that we thought we could get with reasonably quick feed, some of these things have even been published and so its – while the definitions are clearly defined, the devil is a little bit in the details. And so we had selected to placebo response case to get some of that feedback.

Okay, that’s great. And then you said that you think a formal business decisions from Amgen's likely in Q3, obviously you've been through a very careful process with Amgen and designing with Phase III program, is there something that gives you conviction now that that’s the likely timeframe. For example is there a time gating or gating item like the SGA [ph] that you are waiting for?

We do expect that we'll have feedback on the SPA very soon, but I think in light of the fact that we're actually feeding on timeline to start to study by the end of the year you have to imagine that that’s speak to formal commitment in Q3 and we and Amgen have discussed what's required in order to make that decision and yes, we think we're comfortable indicating that it will occur in the third quarter.

Great. And then just last question, obviously we heard last night Amgen's commitment and enthusiastic to the program still, so can you speak to any discussions that you have with Servier about their involvement in the Phase III program or their – how they are currently doing the program?

Firstly, I'll comment on your first statement, I thought it was interesting that following Amgen's earnings call, we had a couple of analysts notes that indicated they thought that Amgen had already committed to start of the Phase III program, I want to be clear that, that’s 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've had our own direct dialogue with Servier as part of helping Servier form their decision regarding the exercise of an option on omecamtiv mecarbil. But our role is really secondary and that Amgen has a direct double license to Servier and we participated in some of the conversations with Servier to facilitate their due diligence. I shouldn’t 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.

Okay. Great. Thanks for taking my questions.

Thank you.

Your next question comes from Ritu Baral with Cowen.

Hi, Ritu.

Hi. Thanks for taking the question. Just past to the FDA for a second, Fady, if you had to pick sort of one angle of the protocol that you have in mind that is most innovative I guess maybe something that we haven’t seen before, if there is one thing you hand pick, what do you think it would be versus previous heart failure trial?

I think using a dose optimization method of delivering drug to patient, really the most innovative thing that we're doing. So most heart failure trials is basically dose the patient intolerant, dose the drug up as high as they can, so they reach on either the top dose they are going administer or [indiscernible] tolerated higher dose and then they move on. In this case, you know, we've done a lot of careful work in Phase II to define the dose response, the concentration response and in this case using a guided dose optimization personalized medicines how ever you want to describe it, way of delivering omecamtiv mecarbil to these patients. So that aspect is a protocol I think is the most novel compared to all of the study. There are other aspects that are – that will be a little unique the way we define the primarily endpoints will be a novel other things I think you know, we'll be a little different, but I wouldn’t call them revolutionary or game changers.

Got it. And what has regulatory feedback on this sort of dose optimization angle been? Is that sort of like a one of the focuses of the FDA discussion?

No, not really. We sort of pass through that already. I think the – in their prior meeting. So I think we have agreed dosing optimization with protocol with them now. And it will be similar to what we employed in COSMIC, the only change is really are to enable more patients to reach then 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 announce this new study.

Got it. And the geographical distribution of site, or the study is that is this going to be – I am assuming its going to be global study, but will there be aspects to geographical distribution that are unique as well?

I think you'll find that that’s the –its 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 and be very – a very highly globalize study

Got it. And then last question about SMA enrollment, you mentioned its been slows in part due to a higher than expected level of screen failures, is there one particular reason or criteria driving the higher than expected screen failure rate as you see it?

Yes, I mean, there is an entry criteria that is related to patients function, right. So we use scale called hammer smith scale and that you are at the low end, your function is really poor and if you are at the high end than your function is close to normal. So we try to exclude people at the very, very low end because we just felt their position would be too severe if they really responded the drug and we excluded people at the highest end, a the highest end of the scale because there would be room for them to respond. And that’s really where you're finding. I think the sites don’t normally perform hammer smith scale assessment in these patients and as they are doing them, I think they're now getting a better sense of what patients hammer smith score will be before they bring them into screen them. We're hoping to avoid more screen failures that way by as a side tip use to sort of gauging their patients before they bring them in.

Got it. And then sorry last question on COPD, you mentioned exercise tolerances in endpoint, what perfect measures are you using for exercise tolerance?

It's - I can't remember the name of the machine, but it's more than just the treadmill, yes it's a constant work rate exercise protocol. Thank you.

Got it. On it using a treadmill. Okay, great. Thanks for taking all the questions.

Its bicycler ergometer, I was struggling with.

Got you, okay. Thank you.

Your next question comes from Charles Duncan with Piper Jaffray.

Hi guys, this is Sarah, on for Charles.

Hi, Sarah.

Hi. Following up on Ritu's question, depending how SMA trial enrolment continues to progress, I mean could you see changing any of the inclusion criteria or any other elements of the trial design? And then I have one more after this.

So we've given thought to it. We've talked about it. I think we're more likely inclined to see if we can meet the enrolment targets we have with the expansion of the number of sites, but it's not off the table.

Okay.

We have considered - we have actually amended the protocol to make it easier to their patients that are - we have ambulatory and non-ambulatory patients. There was a little gap in between the way the definition was laid out that ended up excluding some patients. And so we sort of tighten that up. There was a couple of screen failures we had. But I think the functional criteria kind of need to stay the same at least for now just given the desired outcome and the effect on functional scale is one of the thoughts.

Okay. It makes sense. And then on the [indiscernible] I understand the rating around Amgen, but can you comment a little bit on – or desired level or involvement either financial or execution wise in that Phase III program?

I'm sorry Sarah, can you repeat or what level?

Desired level of involvement, I guess both on the financial and or execution and for Phase III program?

I think you said our desired level of involvement. So, we’re 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 desired to do that and that would occur such that certain cost associated with our involvement would be reimbursed by our partner at Amgen. And the secondly, you may be referring to the fact that we have an option to co-fund Phase III in order 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 dollars increments invest some 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 were we to invest along side of Amgen in that Phase III program. So that is something that we are anticipating doing as we may proceed to Phase III.

Great. Thank you so much. And congratulations on the progress.

Thank you.

Your next question is from Vernon Bernardino with FBR and Company.

Hi, Vernon.

Hi, Robert and everyone thanks for taking my question, most of them has actually been asked already, just a few more, regarding Amgen’s, I think let’s they decided to go into Phase III, do you think they will do - outperform all of the [indiscernible] or do you think there is a contract CRO or a mix above?

I’m sorry it was a little mumble, I think that you said do you think that they will tell you.

Leave all the activities and so…

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, its probably not for us to comment beyond that.

Okay. And then as you know, one of the considerations when do you request a SPA and that set is the FDA in the end the sponsor need to satisfy perhaps their clinical trial design applicability and according to any changes thus far as the standard of care is concerned, as well as the time. First question there, do you think given ENTRESTO is now recommended, and as far as heart failure treatment is concerned, were the competitor on most likely include ENTRESTO in just about - years of ENTRESTO in just about every patient?

I think it all just stipulate that the patient needs to be on standard of care. And that I will be increasingly including ENTRESTO. But I don't think we'll be mandating that the patients be on ENTRESTO. They need to be on an ACE inhibitor and or in ARB and they can be on ENTRESTO. And then the study will be omecamtiv mecarbil versus placebo of over that background than standard of care.

Thanks. And then my last question is obviously associated a role on this, some of complicated things at least from the Amgen side. Can you please just provide us some details as far as what Amgen needs to consider regarding the options that we have?

Sure. To the best that I can, because, I'm 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're buying into the right to commercialize the drug were 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 participation, but certainly the IQ of the program is increased by having Servier involvements. So my understanding is that Servier were to exercise its option would 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've got a plan and budget, I assume that Servier and Amgen are having conversations about that plan and budget, we're participating in some of the due diligence as I mentioned, but for the most part the conversations are occurring between Amgen and Servier.

And since you're where I involved in those discussions, do you know if some of the thinking actually involved the performance CORLANOR, which does not perform very well and got it very limited label?

Yeah, 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-à-vis omecamtiv mecarbil.

Perfect. That’s all I have now. Looking forward to some great news soon. Thank you. A – Robert Blum: Thank you very much.

And we have no other questions in queue at this time.

Thank you, operator. And thank to all the participants for joining us on this call today. It’s 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're very optimistic about how things are shaping up and hopeful as we expect it continue deliver on key milestones across our pipeline and we thank you for your interest and also your support. With that operator we can conclude the call.

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