Cytokinetics, Incorporated (CYTK) Q3 2017 Earnings Report, Transcript and Summary

Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics' Third Quarter 2017 Conference Call. [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 today. On today’s call we’ll be trying a new format which we hope it’ll be more informative for you, instead of primarily recapping accomplishments achieved during the past quarter for which we have already press releases. We are going to include them in the context of our outlook for the company as we continue to advance our late stage pipeline of novel mechanism drug candidates. As we elaborate on development stage programs, we will point to the promise of our advancing research programs as well as refinements of our commercialization plan and preparation for potentially positive data from VITALITY-ALS. We will discuss key milestone and updates that occurred during the call, during the quarter. But our goal is really to make this call more engaging and contextual for you. So, Robert Blum, our President and Chief Executive Officer, will kick off the call with an introductory comment about the state of our business. Then Andy Wolff, our SVP and Chief Medical Officer, will provide updates on the incentive as we prepare for the results of VITALITY-ALS which are expected later this past quarter. Fady Malik, our EVP of Research and Development, will then provide an update on CK-2127107 or CK-107 and the broad clinical trials program underway. Fady will also provide you with an update on the Phase 3 development program for omecamtiv mecarbil as well as provide a glimpse into our future with a brief discussion of our progress in research. Pete Roddy, our SVP and Chief Accounting Officer, will provide a financial overview for the quarter and Ching Jaw, our SVP and Chief Financial Officer, will share insights on strategic planning, before Robert wrap things up with additional perspectives and upcoming corporate milestones then we will 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 approvals of our product candidates. Our actual results may differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings including our most recent 10-Q, 10-K and 8-K. 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 to everyone for joining us on the call today. Last year you may recall we laid out our vision 2020, we articulated strategies to move the company from R&D centric organization forward to more commercially focused one and one OE centered on patients that continues to prioritize innovations. Now with three novel muscle directed programs advancing in late stage clinical trials, a research engine that may serve up as many as 3 next generation muscle biology directed development programs in 2018, very collaborative partnerships contributing substantial non-dilutive capital and reinforced balance sheet that enables us to plan for success, and enables our emerging commercial operations. I’m very pleased to say we are making great strides to realize that vision. As you may know this fourth quarter represents typical [ph] time for our company as we anticipate results from our first phase retrial VITALITY-ALS. We are optimistic about the design, and the conduct, and the results of this child based on what we can know today as well as the mounting evidence regarding the relationships between slow vital capacity or SBC, and disease progression in patients with ALS. Andy will elaborate on these matters in just a moment. Although we are optimistic regarding the results of VITALITY-ALS, we also need to prepare for all possible scenarios. Towards that end Ching, who has just joined the company only a few months ago has already hit the ground running by leading us in our board to a strategic planning process to map forward various scenarios for the company that we will be in 2018, and the associated operational and financial parameters in each case to optimize the opportunities for success and shareholder return. Ching will share some highlights from that process shortly. The prospect for positive results from VITALITY-ALS is exciting and potentially transformative for our company. However you also know that we have purposely built the company that does intimate on any single program. And, as you’ll hear from Fady, the CK107 program is advancing with four mid-stage clinical trials are under collaboration with Astellas and addition GALACTIC-HF for Phase 3 cardiovascular outcomes trial omecamtiv mecarbil is preceding on plan and on timeline in coloration with Amgen. So, these are exciting times for Cytokinetics and I’m optimistic and enthusiastic about our future. Now let me turn the call over to Andy, so he can update you firstly on tirasemtiv.

Thanks, Robert. The last patient visit in VITALITY-ALS is completed during the third quarter. We are now working to resolve outstanding data for release and finalize the data so we can proceed the lock for trial database, conduct our planned analyses and report results this quarter. The results of VITALITY-ALS have been accepted for presentation by our lead investigator Dr. Jeremy Shefner at the International Symposium on ALS/MND on December 8th at 4:20 p.m. in Boston. We feel confident that we have designed and executed the right clinical trial to evaluate the potential of tirasemtiv to slow a decline in respiratory function and other measures of muscle strength for the following reasons. First, as we have reported the baseline characteristics of patients participating in VITALITY-ALS are consistent with those in BENEFIT-ALS and other recently conducted clinic trials in patients with ALS. Second, the dropout rate during the two week open-label phase was similar to the rate of early termination which was observed during the first two weeks in treatment with tirasemtiv and BENEFIT-ALS. We believe that extending that open label-lead phase period from one week in BENEFIT-ALS to two weeks in VITALITY-ALS may have decreased a percentage in patient who do not tolerate the lowest dose of tirasemtiv from dropping out after randomization because in set they brought out during the open-label phase. One more comment about early withdrawals in trials in ALS in general. These trials are increasingly arduous for these patients as their condition worsens during the course of the year. In fact, we recently conducted a review of early withdrawal rates and other completed trials with patients with ALS. And, on average we found that about 30% to 35% of patients dropout of trials of one year’s duration. To that point, the overall dropout rate in VITALITY-ALS that’s consistent with assumptions we made in designing trial. Third, we are confident of our statistical power to evaluate the primary end point as the standard deviation about the change from baseline in slow vital capacity in the aggregate blinded data is consistent with our expectations. In addition more than 90% of patients who have completed VITALITY-ALS have left into enrolled into VIGOR-ALS to open-label expansion for patient to complete the treatment in VITALITY-ALS. A particular note with this participation in VIGOR-ALS, some patients now has been on tirasemtiv for nearly two years. Finally we want to share some perspective on the growing body of literature supporting the use of slow vital capacity in clinical trial of ALS. It’s correlation with forced vital capacity or FVC, and the apparently equivalent value about as predictors of survival and other respiratory milestones and disease progression in ALS. Recently a paper was published in the journal Amyotrophic Lateral Sclerosis in front temporal next-generation showing that forced vital capacity, and slow vital capacity are strongly correlated in patients that can give both maneuvers and interchangeably function as independent predictors of survival in ALS. This follows the ALS Associations Guidance Document to FDA which calls for vital capacity and other measures of respiratory function to be more readily included in clinical trial design and accepted as an approvable end point by FDA. Finally we expect other peer review publications in the near term that will point to the important prognostic value of slow vital capacity to patients with ALS. Now I will turn the call over to Fady to provide an update on our other R&D programs of Cytokinetics including one for CK-107, our next generation fast skeletal troponin activator as well as an update omecamtiv mecarbil and other programs and research.

Thanks Andy. As Robert mentioned CK-107 is now advancing in four mid stage clinical trials and under our collaboration with Astellas and both Neuromuscular and non-Neuromuscular disease or conditions in which impaired muscle function and weakness play a meaningful role. These include vital muscular atrophy, chronic obstructive, pulmonary disease, and ALS. CK107 has a same mechanism of tirasemtiv, but it was selected and optimized from a distinct chemical series. We found in our Phase 1 clinical trial program, CK-107 may have a more favorable tolerability profile relative to tirasemtiv with regard to like headiness and other potential adverse effects. All four mid stage trials are well underway and we expect an out result from all of them in 2018. Dated from our ongoing Phase 2 clinical trial CK-107 in patients with spinal muscular atrophy or SMA, are expected in Q1 in 2018. Now this trial is near in completion of enrollment and may generate data that we hope will provide the basis for testing in Phase 3 and a population of adolescence in adult patients with SMA. So, despite recent advances of therapists directed that the genetic cause of SMA, we believe patients may still have residual muscle, this function and weakness. We believe maybe uniquely position to provide complementary therapy such as CK-107 which could become a partner of choice with these other treatments. Transitioning to a problem now is far different scale, given the preclinical data showing that CK-107 and other FSTA, increase muscle force, power, and the time muscle fatigue. The mechanism of action may also let itself to treatment in aging population. Despite research and media attention focused on increasing lifespan, we believe there isn’t enough focus on improving functional quality of extended lifespan or we might say prolonging health span. As patient’s age, they often move the ability to perform task of daily living like climbing stairs or doing household chores, it can be partly due to early fatigue ability of skeletal muscle and even the loss of skeletal muscle mass, condition called Sarcopenia. And, CK-107 can improve muscle function, exercise performance, and stamina, maybe it will preserve aging person’s ability to perform tasks and maintain independence. By 2050 America’s population over the age of 65 years old as expected to store 88 million. In addition, the global population people aged 80 and older is expected to more than triple over the next three decades reaching nearly 500 million. We are optimistic about potential of our skeleton troponin activators to address this growing health challenge. And, we look forward to the first glimpses into the potential in 2018 with data from our Phase 3 trial with CK107. Altogether the results of these four trials of CK-107 that are expected in 2018 represent additional [indiscernible] following the results of VITALITY-ALS expected later this quarter. So, you can expect significant news flow from our fast skeleton troponin activator program over the next year. Now I want to move to our cardiac muscle program and provide an update on omecamtiv mecarbil GALACTIC-HF. we recently announced that the first patient in Japan had been dosed in GALACTIC-HF which earns Cytokinetics a $10 million milestone payment from Asian. The trial remain unscheduled with over 500 clinical phase activated and patient enrollment proceeding and accord with our agreed plan. We’re also engaging with clinical investigators and FDA to finalize the protocol for our plan second Phase 3 trials omecamtiv mecarbil which is intuitive evaluates potential increase exercise performance and its potential reverse progress of enlargement of heart patients of heart failure and effect called often reverse modeling. We expect to have more to say about these plans in 2018. Next let me comment on analyses of COSMIC-HF Phase 2 clinical trial of omecamtiv mecarbil, we previously reported on like Dr. John Teerlink recently presented at the Heart Failure Society of America Scientific Meeting. The analyses compared the effective omecamtiv mecarbil in patients with heart failure is a consequence of coronary artery disease or ischemic heart failure, to those who have nonischemic heart failure. The secondary analyses suggested omecamtiv mecarbil produce similar results with regard to cardiac function, heart rate, and biomarkers including troponin as well as adverse events in patients with either ischemic or nonischemic etiology of heart failure. The lack of a difference in ischemic events or in troponin increase between both groups, aposiopesis at the increase in troponin and patients treated with omecamtiv mecarbil is not due to myocardial ischemia. These analyses are also supportive of the rationale from rolling both types of heart failure patients in GALACTIC-HF. Finally in regards to research, this has been especially productive period Cytokinetics and our partners. We are working on several next generation muscle biology directed programs and our enthusiastic about advancing potential drug candidates that may offer advantages relative to drug candidates currently in clinical trials. This advancing programs some within our collaborations and sponsored by our partners maybe to doubling our development pipeline in 2018 as well as new opportunities to expand the clinical footprints of our programs well beyond our current activities. They may also connect to work we are doing now in the specialty disease segments of muscle dysfunction to chronic conditions characterized by muscle weakness and that can lead to new treatments to increase the health span of an aging demographic. So, we look forward to showing more about our exciting progress in R& in 2018. With those updates, I’ll now turn the call over to Pete to provide an update on our financial.

Thanks, Fady. I’ll touch on our cash and our revenue in spending on research and development. Again more details are included in the press release. So, we ended the third quarter with $308 million in cash, cash equivalents and investments represents over 24 months of going for cash burn based on our 2017 financial guidance. A $10 million payment from Amgen stunning from the milestone for the first patient in the world in Japan in GALACTIC-HF is included in our revenue. As well as our R&D contract revenue and accounting for license and totaled $6.2 million for the quarter. As we exercise our option to co-fund to the Phase 3 clinical trials program, thereby increasing potential revenues on future sales of omecamtiv mecarbil. Our revenues are reduced for counting purposes for our co-funding payments. There was payment is $6.3 million per quarter will continue in 2018 until we pay the total $40 million. Our third quarter 2017 R&D expense totaled just under $25 million that 86% is R&D expenses. We’re attributable to our skeletal muscle contractility programs which include both expenses associated with the development and clinical trials with tirasemtiv and CK-107; 10% to our cardiac muscle contractility programs; and 4% to other research activities. These percentages approximate what we have seen in prior quarters. Our 2017 G&A expenses include investments in internal capability and the systems and outside services focused on commercial readiness and increased relative to the prior year. Our guidance for revenue included the $10 million milestone payment we discussed early, accounting for differed revenue from upfront payments overtime as well as R&D contract revenue for reimbursement under our collaboration agreements, the revenue from reimbursements are actually based on our actual expenditures. So, we are now updating our financial guidance for 2017 cash based R&D expenses to $103 million to $107 million, and cash revenue to $60 million to $80 million and we are maintaining our guidance for cash G&A expenses from $30 million to $32 million. With our Q2 financing activity, we’ve increased certain regulatory and commercial readiness activities for tirasemtiv, and once you expect that those activities and the related expenses start this year and may continue into 2018. We believe the cash needs for those activities in 2017 are within the ranges of our guidance now. And, we plan to provide guidance for 2018 with our Q4 earnings. Next Ching will share highlights from our strategic plan process. Ching?

Thanks, Pete. As Robert mentioned as this far as the call, we recently completed our annual strategic planning process to layout operational and financial strategies based on scenarios related to the results from VITALITY-ALS at the end of this year and our ongoing Phase 2 clinical trials of CK-107 in 2018. As you may know we are building two business verticals at Cytokinetics, one is skeletal muscle and the other in cardiac muscle, both have potential to generate near-term and longer-term growth in shareholder value, as we may move from clinical trial result to potential commercial returns in meaningfully large and growing specially care markets. Over the next 14 months, we expect results from five clinical trials and the company could look very different depending on the outcome of each of these trials. For example should result from VITALITY-ALS be positive, we are prepared to move expeditiously to build a commercial organization in North America and Europe. If results from VITALITY-ALS are negative or mixed, we will conserve the resources until regulatory pass forward [ph] may become more clear following MDA meeting with FDA in Q1 of 2018. Looking further into the future in the best case scenario by the end of 2018 we could be preparing for the commercial launch of tirasemtiv as well as starting of Phase 3 clinical trials in one or more indications with CK-107. In the worst case scenario, show all trials with our skeletal muscle activators fail which we believe it is unlikely we may focus more resources on [indiscernible]. Of course it is also possible that the ultimate outcome could be one of the multiple scenarios between the best and the worst cases. As you heard, we are also executing plans advance potential drug candidates from research that factor importantly into our business objectives for the company. Lastly, we are giving serious attention to how enlighten thing and the acquisition of other programs may complement the business enterprise in each potential scenario. We’re keeping a micro eye on our current cash and considering how we can leverage our existing and new partnerships for additional capital. Our future cash burn rates will vary depending on the scenario in which we would find ourselves by in all cases we have a plan to secure necessary working capital through primarily non-diluted measures. For example we expect to earn additional milestone payments from Amgen and Astellas in the near-term, medium-term and longer-term and are eligible for over $1 billion in potential milestone payments going forward. We are also positioned well to do new deals much like we did earlier this year with royalty pharma to monetize potential royalty payments or to partner a currently un-partner program that is advancing to development. With that summary, I will now turn the call back to Robert.

Thank you, Cheng. So, as you heard we’ve got a lot going on at the company as we prepare for the result from VITALITY-ALS and as we plan for our future. I want to thank our teams who are working so diligently to help prepare for the results from this our first Phase 3 trials and the results in potential regulatory filings that we follow and the potential commercialization of our first product. This is all happening as we are also advancing CK-107 into a broad clinical development program and preparing for a second Phase 3 clinical trial of omecamtiv mecarbil. And, of course all that’s happening while we prepare to advance independent and collaborative research programs into our development pipeline. So, as you heard on the research front, we expect to nominate at least two development candidates from research from programs either partnered or un-partnered by year end 2017, and potentially double the size of our development pipeline by 2018. How we do all this and also maintain focus, discipline, and strategic upside is no simple task, but we believe that we have the talent know how to resolve and the resources to make it all happen. We continue to stay close to the people for whom we are fighting. Our employees participated in a number of disease awareness and fundraising activities during the past quarter. We have teams working right in SMA and ALS events, we held a candle lighting ceremony in support of SMA patients who have lost their battle and we hosted in our trustable fundraiser in support of ALS association every dropouts of campaign. Through all of these activities, Cytokinetics employees stand together with the people fighting these devastating diseases of impaired muscle function. And, we stay focused on why we all do, what we do every day. Assuming positive results from VITALITY-ALS, we are engaging discussions regarding the possibility of an early access program to support tirasemtiv. We recognize that a positive results or maybe significant interest among physicians and patients to have access to tirasemtiv before potential commercial availability in collaboration with outside consultant in this area. We are considering our options going very seriously, the regulatory, the ethical, the practical, and other key factors that we know we must consider it to enable potential support for an early access program. As we move closer to what we hope transformative event in our company’s history. We are optimistic about our novel R&D pipeline and we look forward to updating you later this quarter on the results from VITALITY-ALS. Now with that, let me recap our expected milestones for the rest of the calendar year. For tirasemtiv we expect results from VITALITY-ALS in this fourth quarter of 2017, and we expect to continue to treat patients who completed VITALITY-ALS and rolled into its open-label extension VIGOR-ALS throughout 2017 and afterwards. For CK-107, we expect to complete enrollment cohort 2 of our Phase 2 clinical trial in patients with SMA in 2017. We expect data from phase 2 clinical trial in patients with SMA in the first quarter of 2018. We expect Astellas to continue enrollment in Phase 2 clinical trial of CK-107 in patients with COPD and the Phase Ib clinical trials of CK-107 in elderly patients with limited mobility throughout 2017. And we expect to continued enrollment in our Phase 2 clinical trial of CK-107 in patients with ALS, look forward to ALS study in 2017. For omecamtiv mecarbil, we expect continued enrollment of patients with chronic heart failure in Galactic-HF throughout 2017 and for our preclinical research throughout 2017 we expect to continue research activities under our joint research program with Amgen directed to discovery of next-generation cardiac muscle activators, and also under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. And, as mentioned we expect to nominate at least two potential drug candidates from ongoing research programs in 2017. So, with all of that, now we can open up the call to questions please.

[Operator Instructions] Our first question is from the line of Joe Pantginis from H.C. Wainwright.

Hi Joe.

Hey guys, hey Robert. Thanks for taking the call. Couple of questions, first with regards to your cash balance now, obviously you have a strong cash balance especially with the recent raise, and one of the things you had mentioned Robert, I wanted to see if this is still in play was to maybe have or run a couple extra say Phase I studies to support the drug say, either omecamtiv or tirasemtiv or 107 with regard to say like drug interaction studies or studies like that, do you have anything like that planned?

Yes, I will say that as we did conduct fundraise earlier this year as we did generate capital from the Royalty Pharma deal, we did commit to doing also a number of other phase I studies to support the ultimate, we hope the regulatory filings for tirasemtiv, those are studies that are underway, we haven’t commented on what those are, those are fairly standard for completing a regulatory package much like we’re also doing other CMC activities. So, yes, to answer your question, those studies are being conducted now.

Got it, got it. And, then I guess this is a little more, I mean, sort of forward looking, but obviously you have December 8th presentation of the data. And, I guess my question is depending on when you have database lock and press the button for the analysis and get your answer, is there potential that you could put up a press release first what you just announced without any numbers the top line data since its material?

So, I’ll answer your question, but first let me say this. To be clear we are still in the process of resolving queries and moving towards database lock. And, as Andy pointed out, we did have last patient last visit, but I want to be clear that we have not yet database locked. When we do that, there is a well orchestrated process by which Fady and Andy and others will become sequestered and reviewing the analysis long before they'll bring me over the wall and I'll be part of that conversation about what we've seen. But only after that will we even be in a position where we could potentially topline the data before we might then present it on December 8th. We expect we will present it on December 8th, but that process takes weeks and it could be just a few days before December 8th if at all when we have a topline announcement. Given that if we do have data that we believe to be unequivocal, we'll report on that in a topline release and whether that contains numbers or not that ultimately depends on the results themselves and we want to make sure we don’t do anything to jeopardize the presentation at the ALM/MND meeting. So, I don’t think I can answer your question to your full satisfaction given that.

And our next question is in the line of Matthew Harrison from Morgan Stanley.

Hey, Matthew.

Hello, this is Ishmael calling in for Matthew. Thank you, for taking our question. So, one from me. Could you comment on your updated views on the key regulatory hurdles given that we've seen a potentially more lack FDA? How should we think about the need for a secondary endpoint to hit statistical significance versus the trend? Thank you.

So, your first question was with regard to the regulatory environment in which we're going to be operating. So, it's not for me to comment on the FDA review of other sponsors applications. But what I can say with regard to our interactions with the FDA is we have good dialogue in conversation about what should matter with respect to our application. I think we've mentioned in the past that we have had multiple interactions face to face and through writing with the FDA with respect to this program including recently. I should also underscore that we believe that we are aligned with regard to what should be an interpretation of results coming out of VITALITY-ALS based on the fact that we submitted a statistical analysis plan. We received comments on that plan. We incorporated those comments into an amended plan and resubmitted that to FDA. So, I think with regard to our application, I suffice it to say that I think that we're on the same page and only when we have results, while we have something more that we can talk about with FDA. Your next question, could you repeat your next question?

So, just how should we think about the need for a secondary endpoint that has statistical significance, given the FDA's behavior?

Yes. I'll talk to this just briefly and then I'll turn it over to Andy to reflect on that too. We said all along that we believe that this trial has intended is designed to confirm and extend what we saw in the benefit ALS trial. In the benefit ALS study albeit it was a prespecified secondary endpoint. We did see a clinically meaningful change in baseline from SDC and that was highly statistically significant. So, hence we have designed VITALITY-ALS to confirm that albeit at now a later time point and we've indicated that we felt it was important based on conversations with FDA and EMA to extend that finding so as to corroborate with hopefully other secondary endpoints. And I'll turn to Andy now to address how we're thinking about those secondary end points.

So, we in the event of a positive effect on the primary endpoint and we can set those secondary endpoint in a way that allows them to be viewed as it's positive as well, something that can be included in the label on about which we can make claim. We recently amended the protocol to alleviate two of those secondary endpoints higher in the hierarchy of testing, one looking at the change from baseline in the aggregate of the three respiratory items of the ALS FRS-R which has to may not or has to do with dyspnea or shortness of breath or apnea or the inability of like last breathe comfortably and the use of mechanical ventilation. We know that in a trial as long as VITALITY-ALS just by monitoring the pointed data we're seeing a number of declines in those scores of those items. And so, we should have reasonable statistical power to see those effected positively by tirasemtiv. I can also say that we have had a lot of time to use the data from the placebo patients from the empowered study of death from Taxol and we know that in that database if we look at a slower decliners in vital capacity versus the faster one, those that decline more quickly also have larger declines in those respiratory sub scores and those that decline more slowly had smaller declines in the difference tended to be very statistically significant. So, the primary and therapeutic hypothesis of VITALITY-ALS being that we think we will see the decline in muscles in vital capacity being significantly slowed by tirasemtiv, we would expect certainly at least the trend favorable trends with respect to those respiratory items in the ALS FRS-R. And I think even if they are not statistically significant, that would put us in good position.

Did that answer your question?

Yes, thank you. That was very helpful.

You're welcome.

And our next question is from the line of Mara Goldstein from Cantor Fitzgerald.

Hi, Mara.

Hi, how are you? God, I never heard before. I mean I said last things and not that one but that's okay. I just had a question, I know at the last quarter we talked a bit about 107 and the delay and readout given the screening failures and cohort too in the even world or rather have more sides up and running. But I'm wondering since that time now, not just because you have more sides and role but has there been any change in that and any just for the thoughts on this screening criteria in general for SMA as you go forward?

Yes. I mean I think we eternally been working with the sites to help them identify bring in patients. We have seen an increase in the number of patients they've identified as potential subjects for screening and that has translated to an increase in enrollment. So, I think we're proceeding on track. I would still say the screening rate rather the failure rate is still the failure rate it's whether we're screening more patients or not, it's we're still seeing about the same screen fill rate which does make it challengingly continue to enroll. But I think we're on track to complete the study in the timeframe we outlined.

Okay, alright, thank you.

[Operator Instructions] Our next question is from Jason Butler from JMP Securities.

Hi, Jason.

Hi, Robert. Thanks for taking the questions. Just the first one, you talked about the growing body of literature supporting SEC and the correlation without the respected end points. Do you believe or does your dialogue with FDA suggest that they are well versed in that literature as well?

I think it's pretty mature right now because some of that is pending publication. I do believe that the ALS guidance document that has been submitted to FDA the draft guidance document I should say cause this out as do other publications including one that is also in draft mode for guidelines in the conduct of clinical trials. So, I'd say this is still an evolving picture but the evidence is mounting and some of that is coming from registries, some of that is coming from expert advisory groups. I'd say that's a work in process.

Okay, great. And then just a follow-up and a comment you made before. You said I think if the data, if you got the data before the A's and they were unequivocal, you would disclose. I just want to check what you actually mean by unequivocal. Can we assume that if you have the data substantially more than a couple of days before December 8th that you would disclose the primary endpoint results whether they were positive or negative?

Yes. I think you could assume that.

Okay, great. And then just last question. In terms of timelines to NDA submission post data, what are the key gating items or any of the CMC type drug interaction type studies, long duration or is there anything other than the usual putting the body of the submission together that could impact timelines to submission?

It's a very good question. And to our knowledge right now the answer is no, that none of those things are critical path to the filing timelines that would have us filing with the in the United States by midyear and Europe just afterwards. So, the goal would be to get to those as rapidly as possible. Now, that's gated by when we would have our pre-NDA meeting with FDA and an equivalent meeting with EMA, that's not under our control. But as to the things that are under our control to the point that you mentioned Phase 1 studies and CMC activities. We think all of those are in hand so that while they are still continuing they should not be rate limiting.

Okay, great. And then if I could just squeeze one more. And the expanded access program, any initial thoughts on what the cost of that program could be or if you have readily access to drug availability to support that program?

So, I'd say it's really premature to get into that. We're doing very preliminary planning right now. There's a whole lot of more advanced planning that has to occur once we understand what we're dealing with and that can only be best informed by having the VITALITY-ALS that results. But as pertains to drug supply and as pertains to distribution matters and understanding precedence both in ALS and in other rare diseases, I'd say that's the focus of our attentions right now. The cause that you'd like to know more about and so frankly would we in time, we don’t yet have a handle on that.

Okay, great. Thanks for taking the questions. And obviously you're looking forward to the next few weeks.

Thank you, very much.

And our next question is from the line of Chad Messer from Needham & Company.

Hi, Chad.

Hi, thanks for taking my question. I think like everyone else, I'm real excited for December. But a couple of things you said about some of your next generation program you expect to put in the clinic next year, that kind of caught my attention and I was hoping maybe there is a few more incremental things you could share with us. I got it in your comments you want to save a lot of the details and until next year. But you called you used the term next generation which you know often means taking some biology or mechanism you understand well and then kind of solving for a problem making some better, much in the way you've got 107 which sort of a superior different backbone in superior PK to tirasemtiv. I was just wondering what kind of if you can even discuss what kind of improvements on existing mechanisms or biology's that you're studying we might expect out of those programs. Is it similar to 107 tirasemtiv or are there other kinds of ways in which you can improve these drugs and I think specifically you said about potentially being able to target more chronic conditions. So, just wondering is any you can share about how you may improve chemistry to address something like that?

Yes, I'll start but I suspect you won't be entirely satisfied by the answer. It is much of what you're probably interested in is going to be showcased at an R&D Day, we expect sometime next year. But I'll turn to Fady and maybe he can elaborate a little bit more than we were able to do in the prepared comments.

Thanks, Robert. I guess what I'll say is that you know we've developed a platform of trying to develop drugs that target muscle contractility and we obviously worked in the heart and skeletal muscle to develop some agents as you know the ones that are in the clinic now but it still needs a lot of room for thinking of other mechanisms, other muscle type and other indications potentially to pursue with drugs that are designed for those sorts of indication. So, I might as leave it at that. We taken to continuing to exploit our expertise in muscle contractility and muscle biology to develop these new agents coming down the road.

Alright. Well, thank you. I certainly appreciate the task of continuing to do that kind of R&D even as everyone helped us, myself included much more focused on your later stage programs.

Thank you, chad.

[Operator Instructions] Our next question is from the line of Charles Duncan from Piper Jaffray.

Hi, Charles.

Hi, this is actually Sarah on for Charles.

Hi, Sarah.

Congratulations on a good quarter progress. Two quick questions from me. First one on SMA. So, as I recall, this trials looking at a broad set of exploratory end points and a couple of different types of patient. Do your remind us the type of results that will be shared in a topline release in the first quarter and in addition what kind of things will you install it be looking forward toad advance further in this indication?

Yes, most definitely. I'll remind you it maybe inherent in your question. This is hypothesis generating. So, we did not prespecify any one of these endpoints but as Fady can speak to, we're measuring quite a number of things in this our first study in patients with SMA.

And so in doing our first study in SMA, we obviously wanted to look broadly at different things that might reflect true mix in muscle function in these patients. Some of whom are ambulatory, meaning they can walk and so we can catch things like the time to get out of a chair, six minute walk and those sorts of things in patients that can still walk. But also we have a strata in the study of patients that are not able to walk and those cases we are in all cases really what who can walk or not walk, we're looking at standardized scales that’s used often in SMA called Hammersmith Scale. We're looking at breathing function as reflected by vital capacity and also looking at other measures of upper limb function that can reflect fatigability if you will in the upper limbs as they use them. So, there's a range of elements there, many of them are detailed on clinicaltrials.gov that if you're interested in some more of the specifics.

Okay, great, thanks. And what kind of changes for unit cost be looking for to make now or go decision?

I think it's going to look at the totality to date and just to what would I think compel us to move forward is that there is a convincing effect on a measure muscle function. We can't be certain as to which muscle function maybe sensitive to the drug in its population. No one's ever studied a drug like this in these sorts of patients. But like with vital capacity in ALS where a very strong signal emerged after conducting a study in ALS patients and then we elected to follow it up now in vitality. Similarly we hope to see something emerge out of the SMA study that is strong and compelling and would be enough evidence for us to continue to move forward.

We're also keeping a close eye on the landscape in which we're developing CK-107 and clearly there is a lot to be excited about with respect to other gene directed therapies or patients with SMA. But it's our assertion that still these are patients who are going to live longer but with residual muscle dysfunction and weakness and we want to better understand what could be that unmet need and where the regulatory authorities may see that as representing a potential registration cap. So, at the same time who'll be generating data to a CK-107 will be looking to experts and regulatory authorities to guide us in terms of what could be a pathway to approval.

Definitely. And just one last question. Can you provide some color on fortitude side enunciation and involvement progress and is it possible with the results and not studied by the as of 2018?

Yes. I think we are expecting to see results from that by the end of 2018 and we're making progress I think consistent with that now. These sites have been working very hard and helping and so is VITALITY in parallel with starting up fortitude. And so, we're trying to make sure we treat them respectfully and ask them to do what they can. But we've been getting sites initiated, we see in the beginning of patient enrollment said is consistent with our expectation and then will have more to say about it as time goes on.

Yes. The nice thing about being a leader in this franchise area of muscle biology is as we have engaged these sites now for years in the development of tirasemtiv, it's not like falling out of bed but it's certainly more south side and to now engage them in the development of CK-107 in as much as we're looking at similar trial design and end points assessment. So, we already have relationships with these sites, they're well trained, we're in the process right now. This is their first trimester if you will of the clinical trial in terms of study startup and side activations. But we are on timeline with regard to enrollment to and probably with the next earnings call we'll be in a better position with most of our sites activated we would expect to be able to project enrollment and when enrollment might complete. But right now we do believe we're on timeline to complete enrollment and read out the results in 2018.

And our next question is from the line of Vernon Bernardino from Seaport Global.

Hi, Vernon.

Guys, thanks for taking my question at the end. And a early congrats I guess on perhaps being right at the end of the tunnel in vitality. I just wondered if you could just make some comments on the to the sense of commercial readiness activities you mentioned in the press release. You already mentioned a few. Perhaps, I was just wondering if you could elaborate especially like what kind of market research are you doing. And then regarding the results presented on December 8th, assuming you don’t make a announcement before that, how comprehensive will the results be. I mean, is it going to pre up for presentation with slides and everything like that or is it going to be a poster or what will the format be? And then regarding our vigor, the number of patients expected in the completion of a VIGOR, how many patients do you expect VIGOR will be upon its completion?

Sure. So, we'll take those one at a time.

Thank you.

I'll start with your first question and your prime move to that question was the end of the tunnel. Frankly I'll respond firstly by saying I hope this is not the end of the tunnel but rather I hope this is a new beginning for patients who are suffering with ALS and with your assumptive may provide meaningful clinical benefit. But your question about commercialization, we've been very anxious in this area both in the U.S. and Canada but also in Europe, as we are doing market research market access related activities trying to understand the environment which we're operating from a payer standpoint participating in pilot projects with HTAs in Europe also engaging. We have HTAs to best understand how they think country by country about what should be important in the health economics outcomes research work that we do and ultimately in the dossier we might submit or reimbursement assistance and authority. We are looking at best practices and various companies that are proceeded us to better understand from patient hub services and other things what's doable what's compliant what should be our thoughts about how best to approach that. And from a business intelligence and market analytic standpoint we're making sure we are equipped with data warehousing and all the things we need to do to best equip our sales and marketing people in order to be most effective in the jobs that they do. You asked about market research in particular and much about we've been doing to this point is it falls into the category of attitudinal, so we're understanding what the unmet needs are, how they view, existing therapies not all of those are pharmaco therapies, we're also trying to understand what might be the attitudes with regard to new innovations in this area and where they view vital capacity and it's predictive and prognostic value to other outcomes, how they view muscle strength, so that we can best understand how our results can fit within the algorithm of care. Ultimately a lot of this research has to be then performed with the results in hand and that's when we'll start to do the more refined qualitative and quantitative market research in the first half of 2018 we expect. So, that's hopefully a good answer to your question about our market preparedness and market access, market research work. Your next question I think related to the format in which the data will be presented in what kind of completeness, maybe I'll turn to Fady to answer that question.

And so, Vernon our presentation will be a platform presentation at ALS/MND. You know, some of these breakers like presented in the same session I think it's actually already posted on the ALS/MND website need to go look at. So, it will be a presentation, I'm not sure they have question and answer period afterward and they're usually relatively short. The other question you had -- but before you go to the other question I'll just say so it's an oral podium presentation at that 4:20 PM in Boston on that December 8 and afterwards we would expect that we would have a symposium a program with the investor audience there in attendance, meaning that for analysts and investors that are there we would gather a presentation that would go into detail with these results. The results that are expected to be presented from the podium by Jeremy Shefner include both the primary and the secondary efficacy endpoints as well as key safety findings. So, I think the data and its full picture will be available to all of you on that afternoon.

Okay.

Your third question related to VIGOR and what numbers of patients and maybe I'll turn back to Fady for that.

And I think it's hard to predict what number of patients will finish VIGOR as we plan VIGOR now to run or at least three years and as you know these patients progress with their disease over that period of time quite substantially. So, I don’t know really what will end up with but it's I would be surprised if we end up with more than few dozens of patients left in trial at that point.

And then one follow-up if I could. What is the ultimate intention of VIGOR? Is it something perhaps of the become a registry or perhaps a failure to registry?

Registry per se but VIGOR provides us with a extended look at the safety and tolerability of tirasemtiv. We have patients on extended treatment. It also provides us some experience in starting the drug in patients that are more advanced in their disease. When they take it because of placebo patients in VITALITY will just be you starting it for the in VIGOR and at the point where their diseases a year further advanced and when they entered vitality. We will be able to look for instance in patients that were on placebo in VITALITY to see how their course changes. For example, how does decline in their vital capacity change once they are initiated on tirasemtiv. That provides I think supportive evidence of this section might be in vitality. We can compare how the group in VIGOR that had been on tirasemtiv and vitality, so had relatively uninterrupted, treatment with tirasemtiv compares to the group that didn’t get tirasemtiv for the first year and then subsequently got put on tirasemtiv and see how the outcomes are different in those two group. So, I think it provides supportive data but obviously the most important data was that the assumption of placebo controlled trial is vitality.

Thanks. That will be exciting to see as will be dated on December 8th. Congrats, and looking forward to it.

Thank you, Vernon.

Thank you, Vernon.

And at this time I'm showing we have no further questions. Presenters I turn it back to you.

Thank you, operator. And thanks to everyone for joining us on this call today. These are very exciting times for Cytokinetics. We’re optimistic for our future. We look forward to sharing with you the results and the VITALITY ALS study later this quarter. And with that, we thank you for your continued support and your interest in our company. Operator, we can now conclude the call.

Ladies and gentlemen. Thank you for joining us for the Cytokinetics third quarter 2017 earnings call. You may now disconnect.