Cytokinetics, Incorporated (CYTK) Q1 2018 Earnings Report, Transcript and Summary

Good afternoon, and welcome, ladies and gentlemen, to the Cytokinetics First Quarter 2018 Conference Call. At this time, I would like to inform you that this call is being recorded. [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 thank you for joining us today. Robert Blum, our President and Chief Executive officer, will kick off the call with a few introductory comments about the current state of our business. Fady Malik, our EVP of Research and Development, will provide updates on our cardiac muscle program focused on the Phase III development program for omecamtiv mecarbil as well as preclinical development of our next-generation cardiac sarcomere activator and our cardiac sarcomere-directed compound. Andy Wolff, our SVP and Chief Medical Officer, will then share updates on our skeletal muscle program focused on the development of reldesemtiv. Peter 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 recap our 2018 financial guidance as well as strategies to extend our cash runway before Robert concludes with additional perspectives on our company outlook and outcoming milestones. Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements may include statements relating to our financial guidance and goals, our strategic initiatives, our collaborations with Amgen and Astellas, clinical trials and the potential for eventual regulatory approval of our product candidates. Our actual results 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-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.

Thanks, Diane, and thanks again for everyone for joining us on the call today. In the first quarter of 2018, we made key progress advancing our muscle biology directed drug candidates now in mid and late stage clinical trials across the spectrum of diseases and conditions of impaired muscle function. We continued protocol development and other readiness activities in collaboration with Amgen for the second Phase III clinical trial of omecamtiv mecarbil in patients with heart failure. We're finalizing preparations to ensure readiness to begin this trial on a timeframe to be agreed soon. As a reminder, this trial will be conducted by Cytokinetics, mostly at Amgen's expense under our collaboration while Amgen continues to conduct GALACTIC-HF, the Phase III cardiovascular outcomes clinical trial. That trial continues to enroll with patients randomized to date having a risk profile consistent with the trial design and Fady will elaborate on that program in a moment. As recently announced, during the quarter, we also completed enrollment of Cohort 2 in our Phase II clinical trial of reldesemtiv in patients with SMA, under our collaboration with Astellas. And now we look forward to reporting data later in this quarter at the Cure SMA Conference. Additionally, we continue to enroll patients in FORTITUDE-ALS and Astellas continue to enroll clinical trials of reldesemtiv in patients with COPD and also in elderly subjects with limited mobility. And he will provide update on that program shortly. In the first quarter, we continue to advance potential drug candidates arising from our research pertaining to both cardiac and skeletal muscle, alone and in collaboration with our partners. We have more to say about the specific mechanisms of these compounds and their potential patient populations that they may serve at an R&D day we're planning for the second half of this year. I continue to be optimistic about Cytokinetics opportunities this year. The result we expect to see from the Phase II clinical trials program of reldesemtiv will shed light on what we believe may be the potential to impact a spectrum of diseases and conditions of impaired muscle function, from rare neuromuscular diseases to diseases associated with aging. Those characterized by muscle weakness that affect the growing population of aging baby boomers. With these data in hand, we and our partner Astellas, can hopefully begin building the path forward towards those Phase III programs and advising key objectives of Cytokinetics Vision 2020. Now, let me turn the call over to Fady so he can first update you on omecamtiv mecarbil.

Thanks, Robert. GALACTIC-HF, the Phase III cardiovascular outcomes clinical trial being conducted by Amgen under our collaboration is proceeding well, with regulatory approvals now complete in 35 countries participating in this trial and all countries and cites in those countries currently enrolling patients. As Robert mentioned, we're pleased to note that the trials are on track and enrollment is proceeding towards 50% completion. The patient randomized to date having a risk profile consistent with the trial design. In collaboration with Amgen, our teams are regularly reviewing patient characteristics and enrollment data by region, as well as accrual of the cardiovascular deaths and heart failure events that comprise our primary composite endpoints. Additionally, the data monitoring committee for GALACTIC-HF has been meeting regularly and reviewing data arising from the trial. There have been no major changes were trial following these reviews. We expect to complete enrolling patients of chronic heart failure in GALACTIC-HF in approximately one year. We also continue protocol development, feasibility assessment, regulatory interactions and other readiness activities for a second Phase III clinical trial of omecamtiv mecarbil that is planned to be conducted by Cytokinetics in collaboration with Amgen. As a reminder, this trial will focus on the potential of effect omecamtiv mecarbil on exercise performance in patients with heart failure, which could distinguish omecamtiv mecarbil from other medicines used for the treatment of heart failure. During the quarter, we convened an advisory board meeting to review the study design and receive positive and constructive feedback. We also conducted proprietary market research to better understand physician perceptions of increased exercise capacity. We found that more than 80% of key opinion leaders and nearly 70% cardiologists view this is highly beneficial and clinically meaningful end point. Further, 67% of internists who increasingly are seeing and treating these patients increased exercise capacity as a potential added benefit of omecamtiv mecarbil addressing a significant unmet need to improve patient quality of life. Our goal is to finalize preparations to ensure readiness to begin this trial in a timeframe to be agreed upon soon. Together with Amgen, we are working on development plan for next generation cardiac muscle activator that we have advanced from our research collaboration. And now I will turn the call over to Andy for updates and perspectives on our skeletal muscle program with the focus on reldesemtiv.

Thanks, Fady. Our clinical operations teams both here and at Astellas were quite productive in the first quarter conducting a broad Phase II clinical trials program for reldesemtiv and neuromuscular and non-neuromuscular diseases characterized by impaired muscle functions. I will first provide an update on progress against the 4 clinical trials underway under our collaboration with Astellas and then touch on our plans to transition patients currently receiving tirasemtiv and VIGOR-ALS, the open label extension trial for patients who completed VITALITY-ALS to manage the access program. As Robert mentioned, and as recently announced, data from our Phase II clinical trial are reldesemtiv in patients with SMA will be presented by Dr. John Day, Professor of Neurology and Pediatrics at Stanford Medical Center and the principal investigator of this study at the 2018 Annual Cure SMA Conference on June 16 in Dallas. The study has enrolled 70 patients, 39 in Cohort 1 and 31 in Cohort 2. As a reminder, enrollment in the study was stopped short of the intended goal of 72 patients after a blinded analysis and variability for the change from baseline of several of the efficacy measures demonstrated at the trial appears to have sufficient statistical power to detect differences versus placebo in the efficacy endpoints. Given the evolving therapeutic landscape in SMA, moving forward expeditiously to understand if there is a potential effect of reldesemtiv on the function of patients with SMA is critical. It is important to remember that this is a Phase II exploratory hypothesis generating trial with no single primary endpoint. The results on form what may be important forward for reldesemtiv in this patient population and we look forward to sharing the data with the SMA community. FORTITUDE-ALS, our Phase II clinical trial of reldesemtiv in patients with ALS continues to enroll more than 150 patients randomized as of April 19. We are adding sites in Australia and Europe with the expectation that they will contribute to overall enrollment. Over the past several months, senior members of her teams have visited nearly every site participating in FORTITUDE-ALS to engage with our investigators, who continue to be optimistic about the potential of reldesemtiv and their ALS patients. Our goal is to complete enrollment this summer and we will remain on track to report data in the second half of this year. Moving to the non-neuromuscular trials, Astellas has nearly completed enrollment in the Phase II clinical trial of reldesemtiv in patients with COPD and more than 20 patients have now been enrolled in the Phase Ib study of reldesemtiv in elderly adults with limited mobility toward a goal to enroll 60 patients. We expect results from the COPD trial in the second half of 2018 and expect Astellas to conduct an interim analysis of data from the Phase Ib study in elderly adults in Q4 2018. Skeletal muscle activation remains an exciting, viable and potentially versatile mechanism to explore across the spectrum of rare neuromuscular diseases as well as an impaired muscle function associated with aging that impacts the growing population of aging baby boomers. We look forward to results from these trials later this year and to advancing a potential Phase III development program in collaboration with Astellas. We are pleased to continue pursuing this novel mechanism with a shared vision. Finally, I'd like to update you on the status of VIGOR-ALS, the open label extension clinical trial of tirasemtiv for patients who completed VITALITY-ALS. During the quarter, we convened an advisory board of ethicists, patient advocates, trial investigators and experts in preapproval access to assess whether and how fast to continue providing tirasemtiv to those people living with ALS currently in VIGOR-ALS. Informed by this advisory board, we decided to close VIGOR-ALS and transition to a managed access program to provide continued access to tirasemtiv for patients still receiving treatment. The managed access program will include only patients still receiving tirasemtiv in VIGOR-ALS and not any other patients with ALS. We are grateful to the advisers, who helped and formed a strategy that we believe is in the best interest of patients in VIGOR-ALS who want to remain on tirasemtiv. And now I will turn the call over to Pete to provide an update on our financials.

Thank you, Andy. After I provide updates on our cash, our revenue and a little on the impact of the new accounting rules on revenue recognition for strategic alliances with Amgen and Astellas, spending R&D and G&A. Ching will review our guidance for 2018 and related financial strategies. More details on the financial results are included in the press release itself. We ended the first quarter with $255.5 million in cash, cash equivalents and short-term and long-term investments. Regarding revenue from our strategic alliance with Amgen, as you'll recall, we exercise our option to fully coinvest $40 million in the Phase III development program of omecamtiv mecarbil in exchange for a total incremental royalty from Amgen of up to 4% on increasing worldwide sales of omecamtiv mecarbil outside Japan. Payments we made to fund that option in 2016 and 2017 reduced research and development revenues for those years. Under the new accounting guidance, these payments no longer reduced our revenue. We recognized a so-called contract liability as of January 1 along with the corresponding adjustment to our retained earnings. As of March 31, we had 2 more payments of $6.3 million in Q2 and Q3, and then will have paid all $40 million of our coinvestment commitment. Once we initiate the second Phase III clinical trial with omecamtiv mecarbil, which Cytokinetics will conduct, we'll see R&D from Amgen reimbursement of the related expenses. All of our revenue in the first quarter 2018 came from our strategic alliance with Astellas. First, we recognized R&D services of $3.6 million and license revenues of $1.7 million from the ongoing development activities in ALS and SMA. Our first quarter 2018 R&D expenses were reduced to $22 million from $26 million in the fourth quarter of 2017. About 78% of our R&D expenses were attributable to our skeletal muscle contractility programs, which include both expenses associated with development and clinical trials for reldesemtiv and tirasemtiv. 9% to our cardiac muscle contractility programs and 13% to our other research activities. These percentages approximate what we've seen in prior quarters with as expected increases for reldesemtiv that are reimbursed by Astellas and appropriate decreases in spending for tirasemtiv. Our first quarter 2018 G&A expenses fell to $9 million from $10 million in Q4 '17. As expenses that we incurred in 2017 for commercial readiness for tirasemtiv were reduced. As mentioned in our last call, our commercial planning colleagues went to great lengths to where possible make planning commitments contingent upon potential positive results of VITALITY-ALS. I'll stop there and Ching will share an update on our financial strategies.

Thanks, Pete. I would like to reiterate our financial guidance for 2018 and remind you of our strategy to extend our cash run rate through GALACTIC-HF, what we believe to be most valued catalyst for the company. The company anticipates cash revenue for 2018 will be in the range of $17 million to $23 million, operating expenses will be in the range of $105 million to $115 million and net cash utilization will be approximately $100 million. This guidance is unchanged from the 1 we gave in February as Q1 spending is in line with our internal expectations. With the current cash of $255.5 million, this represents over 24 months of cash runway given our 2018 guidance. As we have stated, our goal is to manage our cash through the GALACTIC-HF results without relying on diluted financing. In addition to judiciously manage our spending, we will look for opportunities to raise nondilutive capital through potential collaboration deals for our unpartnered cardiac sarcomere directed program, which we expect to advance to Phase I later this year. We also are eligible to receive collaboration milestone payments over this time. We are proud to have raised an equivalent amount of capital from collaborative partners and capital markets throughout our company's history. As always, we will take a strategic and risk mitigated approach to our financials and we are confident that we will continue to maintain a strong cash position while we advance our pipeline. With that summary, I will now turn the call back over to Robert.

Thank you, Ching. So as you've heard, we made good progress in the first quarter of 2018, advancing our pipeline of muscle biology directed drug candidates. With 5 potential therapies moving through various stages of development, Cytokinetics continues to demonstrate leadership in areas of science and biology. We are powering innovation in diseases like SMA and ALS and also have opportunities to bring a meaningful new approaches to the treatment of heart failure, COPD and frailty. In Q1, we were thrilled to welcome Dr. Rob Caleb to our Board of Directors. I have known Rob for many years and I'm quite gratified and excited to have him join our board. His expertise in cardiology and global clinical research will no doubt strengthen our overall ability to execute against our Vision 2020. His advice will be especially valuable regarding omecamtiv mecarbil in our Phase III clinical trials program in collaboration with Amgen as well as our preclinical compounds directed towards other severe cardiac diseases. As always, we celebrated acknowledged the brave people for whom we do all of this. This quarter, we joined the global rare disease day initiative and international campaign led by the European Organization for Rare Diseases and the National Organization for Rare Disorders and shining light on the innovative research powering therapeutic advances for people living with rare diseases. Now, let me recap our expected milestones for 2018. For omecamtiv mecarbil, we expect to complete enrollment of patients with chronic heart failure in GALACTIC-HF in approximately one year. And we expect to finalize preparations for the second Phase III trial of omecamtiv mecarbil in 2018, which is intended to evaluate its effect on exercise performance in patients with heart failure. For reldesemtiv, we expect results from a Phase II clinical study of reldesemtiv in patients with SMA in Q2 2018. We expect results from a Phase II clinical trial of reldesemtiv in patients with ALS in Q4 of 2018. We expect results from a Phase II clinical trial of reldesemtiv in patients with COPD in the second half of this year, and we expect Astellas to conduct an interim analysis of data arising from a Phase Ib clinical trial of reldesemtiv in adults with limited mobility by the end of the year. For preclinical research, we expect to advance 1 development compound under our collaborations with Amgen and Astellas to Phase I in 2018. We also expect to advance in unpartnered cardiac sarcomere directed compound through IND-enabling studies in 2018 to enable initiation of Phase I also in 2018. And we expect to continue research activities under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. Operator, with that, we can now open the call up to questions, please.

[Operator Instructions]. And our first question is from the line of Matthew Harrison with Morgan Stanley.

This is for Matthew. Can you just walk us through how you'll be comparing the SMA data you'll generate with the data of from SPINRAZA and are there any specific endpoints or markers that you think are more relevant than others? And secondly, we understand enrollment is on track for ALS and data set for this year, however, are there any scenarios where the read out could be pushed to 1Q '19? Also any comment regarding tolerability on a regular basis or patients on the higher dose will be highly appreciated?

Sure. Lots of good questions. Let me try to start and then I may turn it to my colleagues. With regards to reldesemtiv and SMA, clearly this is a different mechanism of action than is nusinersen and we calm the literature, we think that the preclinical data with regards to nusinersen speak more to less functional protein expansion and less to functional measures that will be evaluating in our program so it's difficult to make a comparative statement in any like models. In this Phase II study, as you know, we're looking at patients receiving both low-dose and higher dose versus placebo and within each of those groups, cohorts are divided ambulatory and non-ambulatory and within each 2 to 1 drug versus placebo. So with regards to the assessments we're making, they really are functional assessments as I'll ask my colleagues to elaborate you in a moment. And in that way, I don't think you can make a comparative statement with regards to nusinersen in the patients in our study to be clear are not receiving nusinersen. Our study began referring nusinersen was approved. And maybe I'll ask Andy and Fady to speak to what are those functional assessments and what we might expect from the study.

Well, there are numerous functional assessments. The Hammersmith scale is probably the most commonly used in several trials of patients with SMA and that's the one we're using in addition to revise upper limb modular assessing upper limb function. Is probably one of the most standard measures of pulmonary function including expiratory pressure, inspiratory pressure and vital capacity. I think those are the ones that ones that are probably most easily recognizable. Also we're looking at respiratory function as well. But I think one of the key differentiators between the data that have emerged with SPINRAZA is primarily an SMA type 1. The use has been in patient, young children in the early years of their condition. And this trial we've been studying patient 12 years and older that are generally have stable disease and we're looking for a functional improvement rather than trying to ameliorate the decline in their function as treatment with SPINRAZA does in the earlier patient group.

Clearly the commercial availability of nusinersen is the watershed moment of the treatment of SMA and it's abundantly clear that that approach as well as other gene directed approach like that of the gene therapy offer great promise, but we truly do see that this world drug candidate may afford a compliment for those patients living longer with impaired muscle function and weakness. So that's truly the therapeutic hypothesis that we'll looking to understand with these data from this hypothesis generating study. Your next question related to reldesemtiv and ALS and I think you asked the question what's the possibility that this may get pushed out. And I think based on having attended an investigators meeting yesterday at the AAN, I can say that there is a good deal of enthusiasm around this study. There aren't a lot of other competing studies right now for ALS and I think with enrollment now proceeding well in over 50 centers across North America and soon also in other countries, we think we're on track to see data by the end of the year. We're still enrolling the study and therefore the possibility does exist that we would see that it gets pushed into 2019, but that's not our expectation right now based on where we stand. And your last question related to tolerability and while we remain blinded, we are as you know looking at blinded data and I think we are encouraged by the fact that the tolerability of reldesemtiv continues to hold for what we believe to be a better tolerated compound relative to tirasemtiv should be expected given that it was designed specifically to engineer way some of the liabilities of tirasemtiv we know for it crossing the blood brain barrier. So far so good based on what we can tell from blinded data and I will look forward to seeing those unblinded data later this year. I think that covered off on your questions. Operator, we can now go to the next one.

Our next question is from the line of Chad Messer with Needham & Company.

I was wondering if you could maybe discuss a little bit more the objectives of the omecamtiv exercise, tolerance Phase III that you want to run and how you're going to use that to differentiate versus other heart failure treatments. Is it the case that other heart failure treatments don't help exercise tolerance or just that they haven't measured it? You know any sort of examples of what kind of endpoints would be positive to measure in a heart failure population for exercise tolerance? Can any kind of examples of what might be possible, that would be very helpful.

Sure, I can speak in some generalities and later this year will speak more specifically about what the study will be designed to do. But your first question really is whether current therapies have demonstrated or have they even studied in terms of their effects on exercise, tolerance and indeed they have. Beta-blockers for instance have been studies and data published on several different papers that don't improve exercise tolerance in these in heart failure patients. Beta-blockers have kind of a negative effect on skeletal muscle mass function directly obviously over the time they have very positive effect on cardiac function and so the overall effect is relatively neutral. The ACE inhibitors have also been examined in this way a long time ago and in fact ACE inhibitors, one of the ACE inhibitors is the only heart failure drug that has a labeled claim and for exercise -- improvement of exercise tolerance. The MRAs haven't really been looked at in the rigorous fashion and other therapies probably the most key one is our device therapies such as cardiac synchronization therapy. There exercise improvement was the basis of approval of the first device the first cardiac resynchronization device in heart failure. So I'd say that the data, the effect of exercise is mix across different heart failure therapies. There are different ways of measuring exercise tolerance that has been employed, 6-minute walk time is one mechanism for measuring exercise tolerance and has its challenges, cardiopulmonary exercise testing is a quantitative way of looking at exercise tolerance. It has positives and negatives as well. There are also newer ways of looking at activity a.k.a. and Apple Watch or some sort of device that measured steps or how often people are active and moving around as a way to look at activity over several days in a row rather than just a specific instance of testing someone. And so you'll see I think as we articulate the details of the protocol, we'll have solid ways of assessing exercise, quantitative ways of assessing exercise performance will employ some of these newer measures and will also be looking at patient symptoms in heart failures as related to the improvement in exercise performance. Is that?

Yes, that's was very helpful and I appreciate that you actually prompted me to check my own Apple Watch and see how [indiscernible] so I appreciate that.

So that we could be of service check.

Our next question is from the line of Jason Butler with JMP Securities.

Just two on the SMA study. Could you just a clarification start with first resume should not expect to see a top line press release before the conference in the middle of June?

Yes. It's a good question. Based on the fact that this is a hypothesis generating study, not hypothesis testing study. Our current view absent having seen the data is that it may not rise to the level of materiality prompting the need to disclose the top line data and having a look at all of these different endpoints and not knowing obviously the totality of those data, it's difficult to understand how we might summarize it strictly by top line announcement. That said, until we see the data, it's hard to know for sure and based on where we think we are relative to last patient, last visit database log and data analysis, it's going to be tough coming up right against the Cure SMA meeting. So currently we're not anticipating that there would be a top line release in the days to weeks leading into that meeting, but that could change if we feel prompted based on the data themselves as we now prepare to see it.

Okay, that's helpful. And then can you just walk us through your -- the selection what drove the selection for the first 2 cohorts? Whether you think that there's an opportunity to go to higher doses and when you look at the blind tolerability, to those data support going to the potential to go to high doses?

Well, it does as we are selected based on the Phase I study you might remember where we stimulated fibular nerve of healthy volunteers and down to concentrations that were clearly associated with increases in skeletal muscle force production in those volunteers. It does appear to be well-tolerated to look at the blended data and I wouldn't rollout the possibility that we make use to grow higher, but that will based not only on tolerability, but what we see in terms of efficacy when we have blinded study.

At some point, we get to limits one what we can practically deliver in the way of drug, but we do have what we think is a considerably more well tolerated fast skeletal troponin activator and that seems to be born out by these data albeit still blinded. So we do think that we're within the pharmacodynamic range of what was evaluated in Phase I healthy volunteers and therefore we do believe that we're getting proper exposures in order to be able to see a signal of activity here across these different endpoints.

Our next question is from the line of Charles Duncan with Piper Jaffray.

I had a couple actually on omecamtiv and then reldesemtiv. So just quickly, kind of going back to an early set of questions regarding new Phase III that you guys will be conducting, I'm really intrigued with that in terms of if you can provide any more color on potential timeframes, would you anticipate being able to be in the clinic with that study this year and is it possible that that data could or that study could actually read out before the GALACTIC-HF study?

Charles, good questions. With regard to timing, as we mentioned, it really is something that still needs to be agreed and there are couple of things that are factoring into that timeline to agreement. One is just understanding from some ongoing regulatory interactions that we've got a final protocol and we understand from the standpoint of feasibility of the study, what's going to be required in order to make it happen. And then we have to just sort to a couple of practical issues with Amgen in order to ensure that we're well coordinated and integrated with respect to drug supply systems, safety reporting and all of those kind of things that are getting ironed out. So I do think that there's a possibility that this could start later this year and therefore we are readying for that possibility, but there still needs to be some of these things to get finalized in order for that to occur. In terms of the timeframe, the study is going to be substantially smaller than the GALACTIC study, but we have conducted feasibility assessments and working together with CROs, we understand sort of what to expect in terms of enrollment rates, number of centers, et cetera and the goal is to while starting this study later than GALACTIC ensure that its finishing before or at least concurrent with GALACTIC so that we have data from both studies the same general timeframe and that's going to enable us to be in a position where both studies could hopefully form the basis of regulatory submissions. That's the intention.

Okay, and that's really helpful. And then when you consider the patient operation, I know that you are still finalizing this, but could you characterize at all the types of patients that you would anticipate being able to enroll in that study?

Yes, I mean these are going to be patients that will be similar to those that were studying in GALACTIC with a couple important exceptions. One is, we obviously don't want patients that have been hospitalized in the recent past to when they are randomized because hospitalization changes your exercise tolerance. We're looking for patient population where they have a more stable baseline. They'll have reduced ejection fraction like patients in GALACTIC and they're also need to demonstrate reduced exercise tolerance prior to being enrolled.

Okay. And then I appreciate that Fady. And then moving on to reldesemtiv. Yes, what's going on in SMA was that AAN sorry missed you Robert, clearly very exciting times for that area, but it did seem like there's a complete lack of kind of work with I'll call it later stage patients or older patients and, I guess, I'm wondering when you think about the evolving treatment paradigm there and you mentioned that your study started before nusinersen was actually approved. How do you think about the opportunity. I know this is really a study meant to generate on hypothesis, but right now, could you see yourselves moving forward in SMA given the feedback that you've gotten with KOLs?

So the answer to that question is yes. We at Astellas are looking at these data as hopefully being therefore informing the path to Phase III. And regulatory submissions that would lend support for movement to Phase III based on these data. Our expectation is that with nusinersen as well as gene therapy and other SMA directed therapies that there is going to be an increasingly large population of patients living longer with SMA, but with residual weakness. And this mechanism should hopefully based on the therapeutic hypothesis address those limitations if not for them improvements and increases in function over time. And it should be quite complimentary both regard to mode of administration, but also mechanism of action. So we're quite optimistic and I know Astellas shares that same alignment with us that this could be quite promising for a new approach to the treatment of these patients expecting that this population grows over time as well.

Last question and I appreciate you taking all the questions is on reldesemtiv potential in ALS. Our diligence had suggested that frankly investigators were really quite disappointed. And I guess, I'm trying to gauge whether or not that's because of the paucity of really interesting innovation within ALS or if it's really driven by mechanisms. So you've said that you met with people, you felt good about the enrollment and interest in the trial. Do you have any further learnings from VITALITY and can you give us any insights on why there is continued interest in reldesemtiv within the ALS community?

Yes, I'll start and then ask Andy as well to join in. When you said folks were disappointed, I am assuming with regard to results from VITALITY-ALS, surely we were disappointed as well. But a couple of things to note about that trial and now that we've had some time and distance from that trial while why we read more optimistically for reldesemtiv. We've been pouring over a lot of additional analysis, some prespecified and others post hock analysis with respect to that trial. And there are couple of things that stand out. One is clearly the tolerability issues with tirasemtiv confounded the interpretation of those results when looked at on an intent to treat basis, we had only a modest treatment effect observed with tirasemtiv versus placebo and that was clearly disappointing and not sufficient for submission to regulatory authorities, but at least encouraging enough that there was some activity there that bore further investigation. When you look at the as treated population and recognizing about 1/3 of the patients, we're not able to continue their treatment and dropped out based on mostly mild tolerability issues, but still sufficiently a nuisance that they dropped out. When you look at the as treated population, we saw a borderline statistically significant effect that was durable over time. And that suggest to us that there is a biologic activity for this mechanism of action and as we've talked to investigators in between me, Fady and Andy and others here at the company, we visited over 50 different clinical centers participating in FORTITUDE-ALS in this first quarter. And as we had conversation after conversation, it was extremely encouraging that mechanistically the sites see benefit in merit to the approach we're taking with reldesemtiv recognizing that it should be more well tolerated and also potentially more potent. And as such, I think there is enthusiasm because this is a compound for which mechanistically there is over 1,000 patients that have been studied in ALS and we've seen consistent effects that bore out for this approach. That's uncommon in ALS and as much as generally speaking in clinical trials we've known very little about the mechanism and how it may translate to a therapeutic effect given how little we know about the etiology of this disease. So given all of that, I'd say relative to other clinical trials, there is more support, more interest, more enthusiasm for this trial than is the case otherwise and we're hopefully going to be in a position to enroll adequate numbers of patients. This will be a roughly 450 patients study that by itself is larger than most Phase III studies in neuromuscular diseases and this Phase II trial really should inform what we hope will be support for movement into Phase III. The other thing to mention is in our VITALITY-ALS trial, we had a slower than expected decline in those patients who received standard of care in placebo, and that's something that we're still trying to get our arms around. Some data were presented today at AAN from another sponsor baring out that the placebo event rate in studies with ALS is different in 2018 than perhaps it was in 2015 and 2016. The good news is, we believe we have even as that may be the case in the FORTITUDE study, adequate to power to bear out the expectations and the therapeutic hypothesis, but it's a dynamic space that we are staying very close to and as such, I think the FORTITUDE-ALS study is amongst the clinical researchers, the most important study that should read out this year.

That's helpful, Robert. One last question regarding that event rate. Do you think that that is kind of typical thing that you see with more intensive therapy and perhaps even better awareness often attributed to being involved in a clinical trial or do you think there is some organic shift in terms of how patients are reacting to current standard of care in ALS?

I don't know what it is, but I don't think it's just due to being a clinical trial because these patients are progressing at a rate that is different from other patients in clinical trials that are fairly recent and that is very similar criteria that produce very similar baseline characteristics. Despite the similar baseline characteristics, our patients went on to progress meaningfully more slowly than patient in recent but earlier trial. So there does appear to be something different in the population. It may be just that ALS care in general has become better, but it's difficult for us to actually put our finger on anyone saying that would support that view.

Next question is from the line of Vernon Bernardino with Seaport Global.

Regarding the VIGOR-ALS study, it's good that some of these patients and want to remain are going to be able to continue receiving tirasemtiv. How long have the longest patients now been on tirasemtiv? And what are the long-term expectations if there are any as far as these patients that may provide you insight into tirasemtiv as well as reldesemtiv?

Well, so I think the answer to the first part of the question. How long has they have been on, some of them have been as long as 2.5 years is to remind you VITALITY-ALS included about a little over a year of exposure and then we certainly started VITALITY-ALS because about a year to enroll that trial. So I do not have any calender in front of me, I'd say we have about 2.5 years' worth of continuous exposure in some patients. We are not expecting necessarily to get any data out of them per se as we transition them to a managed access program. Obviously, as we conclude VIGOR, we will look to see if there are any interesting findings in the open label extension, but I think the main thing that we get out of it is mechanism of action appears to be very safe, well-tolerated for a long, long time in this patient population and we know that now having conducted VIGOR and VITALITY.

So there are approximately 90 to 100 of these patients that are still receiving tirasemtiv and VIGOR who appear interested in converting over to a managed access program and to be clear, we have indicated that we've suspended the development of tirasemtiv. This is not with the goal of resurrecting the development of tirasemtiv as much as to do the right thing by these patients who believe that tirasemtiv is serving them well and as much as they have committed to clinical research, we want to reciprocate by reading tirasemtiv available to them for as along as they want to stay on it. And I do think this affords us insights into the long-term tolerability for this mechanism, but that was less of concern to us. We believe that for those patients who did tolerate tirasemtiv and VITALITY-ALS as I mentioned before, they appeared to have benefited from it and want to stay on it. And I think that is most important because from our standpoint, that reads positively on what we might expect from reldesemtiv in FORTITUDE-ALS.

Part of my thought is mechanistically, reldesemtiv is different, but you also have some follow-on compounds I was just wondering if it also informs you as far as structures that may be similar to tirasemtiv that have improved tolerability or is it just really very hard to stop here.

Yes, I think we've continued to develop additional compounds with the same mechanism of action find in the same place, but they don't have any structural relationship necessarily to tirasemtiv.

We understand the SAR around this pretty well with different lead series having advanced, but with the goal with reldesemtiv and others to ensure that they don't cross the blood brain barrier. Why we had these tolerability issues with tirasemtiv is not a mystery. We believe we do have an understanding as to what mechanistically is contributing to the off target effect and we believe we've successfully engineered that away with reldesemtiv and also the follow-on compounds as your question suggests.

Yes. Perfect. The only for the questions I have is regarding omecamtiv mecarbil. So as you know I often ask you about interest to an Novartis plans for that. At this point, it's just one more Phase III study that we have planned for omecamtiv?

That's correct. We at Amgen have agreed on these 2 studies, GALACTIC and this other one, that's not to say that in the future there might not be others that we might also agree on, but these are the ones that we're pointing to today.

And there are no other questions in queue. I'll turn it back over to management for any closing remarks.

Thank you, operator. And thank you to everybody who participated in this call today. Q1 was obviously a very important quarter for us. We continue to be enthusiastic about our prospects for this year and afterwards and with that, will conclude the call. We appreciate your continued support and interest in our company. Operator, with that, let's close the call, please.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation. You may now disconnect.