Cytokinetics, Incorporated (CYTK) Q4 2020 Earnings Report, Transcript and Summary

Good afternoon, and welcome, ladies and gentlemen, to Cytokinetics' Fourth Quarter 2020 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 Senior Vice President of Corporate Creations and Investor Relations. Please go ahead.

Good afternoon, and thanks for joining us on the call today. Robert Blum, our President and Chief Executive Officer, will kick off the call with an overview of our 2021 priorities considering company performance in 2020. Then Fady Malik, our EVP of Research and Development, will provide a more detailed update on omecamtiv mecarbil, including prospective on recently presented supplemental analyses from GALACTIC-HF, the positive Phase III clinical trial of omecamtiv mecarbil as well as progress on METEORIC-HF, the second Phase III clinical trial of omecamtiv mecarbil. Next, Stuart Kupfer, our SVP and Chief Medical Officer, will update on our cardiac myosin inhibitor program. Then Robert Wong, our VP and Chief Accounting Officer, will provide a financial overview for the past quarter; and Ching Jaw, our SVP and Chief Financial Officer, will discuss 2021 financial guidance and corporate Development strategies before Robert Blum then returns provide concluding thoughts on the year ahead and expected key milestones for 2021. 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. 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 current reports filed on Form 8-K this morning. We under tail 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 to everyone for joining us on the call today. As we begin 2021, I hope you and your families are healthy and well, while we are all still in the throes of the COVID-19 pandemic. Despite the challenges of stay-at-home orders, clinical trial interruptions and restarts and transitioning relating to our longest-standing development and commercialization collaboration. We entered this year at the forefront of muscle biology research and with the most advanced pipeline in our company's history, a strong balance sheet and are now preparing for engagements with FDA towards what may be our first potential NDA filing and as may set the stage for our first-approved medicine. Following the positive Phase III clinical trial results from GALACTIC-HF, our immediate priority is to secure FDA feedback in order to provide clarity for potential regulatory submission of omecamtiv mecarbil in the United States in the second half of 2021.We expect to meet with FDA in the next few weeks, simultaneously, we will complete ongoing work streams focused to product, market and the sales analyses to inform development of our go-to-market strategy and commercial readiness activities in the first half of the year. As we announced at the end of 2020, worldwide development and commercialization rights to omecamtiv mecarbil and CK-136, formerly known as AMG 594, are reverting to Cytokinetics. While this was unexpected, we believe it affords Cytokinetics freedom to operate as we chart our own commercial path forward and lay the groundwork for the cardiovascular franchise plans we unveiled last summer at our Analyst and Investor Day. With this in mind, we also expect to engage in business and corporate development activities this year to seek commercialization partners in Asia, in Europe and possibly for co-promotion in the United States. These activities are already underway as we begin our outreach campaigns and Ching will elaborate on our overall corporate development approach in a moment. Additionally, this year, we will continue to prioritize the development of CK-274 and our next-generation cardiac myosin inhibitor. In December, we announced that we completed an interim analysis of Cohort one of REDWOOD-HCM, our ongoing Phase II clinical trial of CK-274 in patients with symptomatic obstructive hypertrophic cardiomyopathy. That interim analysis informed progression to Cohort 2, which opened to screening in December. And I'm pleased to announce today that we have now fully enrolled Cohort 2, and we expect to have top line results from both cohorts by midyear 2021. As the year progresses, we'll articulate our plans to advance CK-274 potentially into Phase III in the second half of the year. Stuart will provide details on the interim analysis and how we're currently thinking about the continuing development program. Though our priorities in 2021 will be focused to our cardiovascular programs once we have clarity on our go-to-market strategy with omecamtiv mecarbil and progression of CK-274 to Phase III, will then consider opening COURAGE-ALS to enrollment. That is our planned Phase III trial of reldesemtiv in patients with ALS as may further expand our late-stage pipeline. Our research engine continues to be productive despite the challenges posed by the current pandemic. Thanks to the dedication of our scientists, we anticipate advancing additional compounds potential development candidates emerging from research into development in the coming one to two years. We expect to leverage our leadership expertise in muscle contractility to expand into other aspects of muscle function as may extend to the potential treatment of other serious yet adjacent diseases and conditions, and we'll have more to say about that later in the year. 2021 has the potential to be a transformational year for Cytokinetics as we prepare to potentially submit our first NDA that could lead to the commercialization of our first medicine to treat patients with heart failure. And as we've articulated in our Vision 2025, which we introduced early last year, our goal over the next five years is to achieve potential regulatory approvals for at least two drug candidates arising out of our pipeline and to drive towards sustainable product-driven revenues, while we, in parallel, double our pipeline of development programs and also plan to expand our discovery platform beyond muscle contractility. Based on our strong performance in 2020 and momentum already in 2021, we believe we're well on our way. With that, I'll turn the call over to Fady to elaborate on developments related to omecamtiv mecarbil.

Thank you, Robert. In November of 2020, the results of GALACTIC-HF, our Phase III trial of omecamtiv mecarbil, were presented at the American Heart Association meeting and subsequently published in the New England Journal of Medicine. Since we've reviewed these results in some detail already, I'll start with a recap of additional analyses that the Executive Committee Chair, Dr. John Teerlink, presented at the Global Cardiovascular Clinical Trialist Fourm, or CVCT meeting, in December, and provide some perspective on the patient population and may benefit most from treatment with omecamtiv mecarbil based on these data. As you'll recall, the primary results from GALACTIC-HF demonstrated a statistically significant effect of treatment with omecamtiv mecarbil to reduce the risk of the primary composite end point of time to first heart failure event or cardiovascular death compared to placebo in patients treated with standard of care. While no reduction in the secondary endpoint of time that cardiovascular death was observed in the overall population, the statistically significant primary efficacy endpoint was achieved in the overall trial population, comprising over 8,000 patients, enrolled in 35 countries around the world. The effect of omecamtiv mecarbil was consistent across most prespecified subgroups with potentially greater treatment effect suggested in the over 4,000 patients with a left ventricular ejection fraction of less than or equal to the median of 28%. The supplemental analysis of the slower ejection fraction subgroup presented at CVCT showed that this potentially greater treatment effect in patients who received omecamtiv mecarbil was consistently observed in patients with characteristics that may indicate more advanced heart failure status such as being hospitalized within the last three months, having New York Heart Association Class III or IV heart failure, having higher NT-proBNP levels or having lower blood pressures. And when you look at the absolute risk reductions in these large prespecified subgroups, are quite meaningful, ranging from 5.2% to 8.1%. Additionally, an analysis of the relationship between ejection fraction when it examined as a continuous variable, and the hazard ratio for the primary composite endpoint in GALACTIC-HF suggested a potentially greater treatment effect of omecamtiv mecarbil in patients with increasingly lower ejection fractions. Given the primary effect of omecamtiv mecarbil to increase cardiac function, it stands to reason that patients with lower ejection fractions drive greater benefit. These results are important because they know -- we know that these sicker, more advanced heart failure patients continue to have substantially elevated risk despite receiving standard of care therapy and based on the progressive nature of the disease, they're frequently unable to tolerate guideline directed medical therapy as their disease worse. These are often the most challenging patients to treat, and they can be often hospitalized and rehospitalized. So picture is beginning to emerge that suggest that omecamtiv mecarbil may provide a new treatment option for this critical population of more severely ill heart failure patients. And biologically, it stands to reason these patients with more impaired systolic function may benefit more from this novel mechanism therapy overlaid to the standard of care. Unfortunately, these patients are not on COD and may represent more than half of the three million patients living with heart failure and reduced ejection fraction today. These patients often land in our hospitals, increasingly contributing to both a clinical and economic burden on our system. We have few treatment options available as their disease progresses despite current medical therapy. Since reporting the results of GALACTIC-HF, we've had the opportunity to engage with nearly 200 health care professionals, including leading heart failure opinion leaders, investigators and community cardiologists. The consensus feedback has been positive and supportive of our seeking regulatory approval based on the results of GALACTIC-HF, the safety profile of omecamtiv mecarbil and the unmet need among the more advanced heart failure population. The last quarter also saw significant actions by the FDA within the heart failure arena, and we're encouraged by the recent expansion of the label for Novartis's Entresto and heart failure with preserved ejection fraction as well as the recent FDA approval of vericiguat, or vercuva. We believe these developments reinforce the significant unmet needs in heart failure despite the availability of guideline directed medical therapies. And we believe these developments could augur well for omecamtiv mecarbil, given its novel muscle-directed action and the results from net GALACTIC-HF observed on top of standard of care. As we've indicated, Cytokinetics is committed to advancing omecamtiv mecarbil as a priority in 2021. And along those lines, we are now scheduled to have our first regulatory interaction with the FDA before the end of this quarter. We look forward to providing updates on this and future regulatory interactions as well as to confirm our anticipated timing for a potential NDA submission to FDA in the second half of 2021 as we conduct these regulatory interactions and complete our ongoing transition activities with Amgen. In parallel, we're continuing to conduct METEORIC-HF, which is not on the critical path to NDA submission, and we expect to complete enrollment in the first half of this year. Finally, within our cardiac myosin activator program, we will also regain development and commercialization rights for CK-136, previously referred to as AMG 594, our first-in-class cardiac troponin activator. And follow-up to Amgen's Phase I study, we'll be evaluating what further Phase I studies may be required in order to advance this drug candidate. But as Robert mentioned earlier, omecamtiv mecarbil remains our higher priority for 2021. And with that, I'll turn the call over to Stuart, who'll provide an update on our cardiac myosin inhibitor program.

Thanks, Fady. At the end of last quarter, we progressed REDWOOD-HCM to Cohort 2, following a positive interim analysis. REDWOOD-HCM was designed to evaluate the potential benefits of our next-generation cardiac myosin inhibitor, CK-274, in patients with disruptive HCM and symptomatic heart failure. To remind you of the trial design, patients were randomized in a 2:1 ratio to placebo or CK-274. Once daily doses of 5, 10 or 15 milligrams or placebo were administered in Cohort 1, with those titration individually determined, on the basis of achieving specific echocardiographic targets. Dosing adjustments were made every two weeks over a 6-week period, and the overall treatment duration was 10 weeks. The interim analysis of data from Cohort one showed that patients experienced substantial reductions in the average resting and less ventricular outflow tracked radiants. These clinically relevant decreases in pressured radiants were achieved with only modest decreases in average left ventricular ejection fraction. Importantly, there were no dose interruptions due to ejection fractions falling below 50%, which was a prespecified safety threshold. The pharmacokinetic profile was similar to that observed in Phase I in healthy subjects. In addition, the safety and tolerability data were supportive of continued dose escalation with no serious adverse events attributed to study treatment as reported by the investigators. Based on the December review of interim results from Cohort 1, the Steering Committee and the Data Monitor Committee of REDWOOD-HCM recommended that the trial proceed to Cohort 2, and I'm pleased to announce that we've now completed enrollment in the second cohort. Patients in Cohort two are being treated with escalating doses of 10, 20 or 30 milligrams or placebo once daily. We expect to report top line results from the trial midyear with full data to be presented at an upcoming medical meeting this fall. As we await results from REDWOOD-HCM, we are already preparing for the initiation of a Phase III pivotal trial in patients with obstructive HCM, with the goal of starting this trial before year-end. We recognize the urgency to bring novel medicines to patients with HCM or whom there are no disease-modifying therapies to inhibit the underlying hypercontractility, that is the hallmark of the disease, and to improve quality of life and functional capacity. Upon receipt of the Phase II results, our goal is to conduct end of Phase II meetings with FDA and EMA in the second half of the year to enable the start of Phase III before end of year. Our objective for Phase III is to evaluate the effect of CK-274 on patients' symptoms and function as well as to understand the long-term safety profile of CK-274. Toward that end, we will soon begin enrolling patients from REDWOOD-HCM in an open-label extension trial. First, enrolling patients who have completed participation in Cohort 1, and then rolling over current patients in Cohort 2. Similarly, patients participating in our Phase III pivotal trial will have the opportunity to enroll in the open-label extension trial. The long-term follow-up of patients will not only contribute to our understanding of the efficacy and safety profile of CK-274, but will also facilitate an assessment of the potential effects of CK-274 on reverse remodeling, evaluated by cardiac imaging. Lastly, our collaboration with Ji Xing has made rapid progress towards our shared objective of enabling the potential inclusion of China in a global Phase III clinical trial, CK-274, in patients with obstructive HCM. The IND submitted in China for our Phase I study of CK-274 has been approved, and the study is anticipated to start during the first quarter. As part of the overall cardiac myosin inhibitor development strategy, we also continued to assess CK-271, our additional cardiac myosin inhibitor during the quarter. We now understand the pharmacokinetic profile of CK-271 based on a single ascending dose study in healthy volunteers. While the data are supportive of continued development, we are prioritizing the rapid advancement of CK-274 and expect to have clarity before year-end on Phase II plans in another indication such as nonobstructive HCM or a subgroup of heart failure patients with preserved ejection fraction. In the future, we may consider advancing CK-271 in an alternative indication outside of the scope of CK-274. This is the upside of one of the key hallmarks of our R&D strategy to develop backup, follow-on and next-generation compounds to maximize our options and increase probability of success. And with that, I'll turn it over to Robert Wong, who will provide an update on our financials.

Thanks, Stuart. I'll first provide an update on cash, revenue and spending, and then Ching will review our financial and corporate development strategies looking forward. Details on our actual results for the fourth quarter 2020 and are included in the press release, which we released earlier this afternoon. We ended the fourth quarter with approximately $501 million in cash and investment. This balance includes $85 million, which was received in connection with the closing of our sale of a royalty on mavacamten to RTW Royalty Holdings Designated Activity Company. Our revenue in Q4 2020 came primarily from our strategic alliances with Amgen and Astellas and also from an earned milestone payment. Our fourth quarter 2020 R&D expenses increased to $29.2 million from $18.3 million in the fourth quarter of 2019, primarily due to higher spending for our activities associated with REDWOOD-HCM and readiness activities for a potential Phase III trial of reldesemtiv. More than 50% of our R&D expenses were attributable to our cardiovascular programs, as expected, given activity for METEORIC-HF and the cardiac myosin inhibitor program, and the remainder of our expenses were attributable primarily to our early research activities. Our fourth quarter 2020 G&A expenses were $13.9 million, up from $10.6 million in Q4 2019 due to higher personnel-related costs, including stock-based compensation and higher commercial readiness spending. And now Ching will review our 2021 financial guidance and corporate development strategy.

Thanks, Robert. Today, we announced our financial guidance for 2021. The company anticipates 2021 revenue will be in the range of $23 million to $28 million. Operating expenses will be in the range of $195 million to $205 million, and net cash utilization will be approximately $160 million to $170 million. Our current cash balance of $501 million represents more than two years of forward cash based on our projected operating expenses and this net cash utilization range. Our net cash utilization range includes approximately $35 million of nonrecurring building construction and related capital expenditures. It also includes potential receipt of $45 million from RTW Royalty Holdings Designated Activity Company in exchange for a low single-digit royalty on CK-274 in connection with the funding agreement signed in July 2020, subject to conditions for payment being fulfilled. Should we not exercise our option to receive the $45 million, we expect our net cash utilization range will be increased. We may revise this guidance later in the year once we finalize our strategy and potential commercial launch plan for omecamtiv mecarbil. Significant additional expenses and net cash utilization may arise from our executing on those strategies and plans that are not included in the guidance. Examples of such additional expenses include, but are not limited to, the purchase of drug substance related to omecamtiv mecarbil from Amgen and other costs associated with transitions from Amgen, funding of the development and regulatory activities associated with the immuno assay used in GALACTIC-HF and METEORIC-HF to determine the dose levels of omecantiv mecarbil as well as other potential commercial planning and readiness activities. Our goal is to end 2021 with more than two years of forward cash. As we prepare for potential commercialization of omecamtiv mecarbil and advance the clinical development of CK-274, we have already begun to execute on our corporate development strategy. The strategy is twofold: first, to seek a development and commercialization partner for omecamtiv mecarbil and CK-274 in Japan and other geographies; and second, to see potential royalty monetization and/or structured financing deals to support the commercial launch of omecamtiv mecarbil. As we advance commercialization plans for omecamtiv mecarbil, which we believe will importantly lay a strong foundation for commercialization of CK-274 and the expansion of our cardiovascular franchise, we are studying comparable company best practices and building a fit-for-purpose commercial organization. As our target product profile comes into focus, we will be putting together pricing models, forecast and profitability assessments to inform our U.S. and European go-to-market strategies, including investment and partnering or co-promotion plans. As always, we expect to navigate our key corporate development decisions through the lens of maximizing potential values to our shareholders. And with that, I'll turn the call back over to Robert Blum.

Thank you, Ching. We've entered what could be a transformational year for Cytokinetics in 2021 as we prepare for the potential marketing authorization and commercialization of our first medicine and concurrently advancing multiple drug candidates in various stages of clinical development. This is all consistent with our Vision 2025 outlined at the start of last year, which articulates ambitious, but we believe achievable goals to commercialize at least two new medicines, establish sustainable product-generated revenues and both expand our discovery platform and double our number of development programs to 10 by 2025. As we've said today, engaging with regulatory authorities and preparing for the potential commercialization of omecamtiv mecarbil is the first step towards achieving that vision. We have teams executing against multiple work streams to refine the target product profile and determine the appropriate sizing, structure and territory alignment of our sales organization to optimize customer engagement in a post-COVID world. We're using a combination of applied analytics and learnings from recent cardiovascular launches to determine the manner in which we should engage with physicians in either face-to-face or digital dialogue or both. Importantly, we're planning for a sales force to target the high-volume heart failure hospitals and their adjacent specialty cardiology group clinics as well as to provide for key market access activities to reach the advanced heart failure patients in the United States, and as may be complemented by a copromotional partner outside of our focused market segment. Additionally, given the synergy between high-volume heart failure in HCM centers, that investment will be amortized across our cardiovascular franchise and lay a strong foundation for future cross-promotion of CK-274. We're also executing a comprehensive health economics and outcomes research strategy in collaboration with leading academic institutions and health care networks to illuminate the burden on the health care system associated with the advanced heart failure patients and how omecamtiv mecarbil may provide, not only clinical, but economic relief to reduce the cost of rehospitalizations. This will no doubt be of interest to payers as hospital administrators manage against penalties for rehospitalization within 30, 60 and 90 days post-discharge with a diagnosis of heart failure. With results from REDWOOD-HCM expected midyear, we plan to rapidly advance CK-274 into Phase III in obstructive HCM by year-end and also to determine next steps to initiate a potential clinical trial in either nonobstructive HCM or a patient population with HFpEF as they begin in 2022. We believe our executing on these activities are essential to balance out our company plans and to inform our cost of capital and the enterprise risk-benefit going forward. We also recognize our place in the urgency to help patients with ALS, and we remain optimistic that we'll begin our Phase III clinical trial of reldesemtiv in patients with ALS later this year. However, once we have regulatory clarity on the path forward for omecamtiv mecarbil as well as visibility on results from REDWOOD-HCM and our associated cost of capital. And finally, we recently welcomed Nancy Wysenski and Muna Bhanji to our Board of Directors, both of whom bring deep experience and expertise in commercial strategy, market access and especially specialty sales through their leadership roles at Vertex and Merck, respectively, as well as amongst other companies. Their recent and relevant experience navigating the evolving landscape of access and other issues for patients with high unmet needs will prove invaluable, we're quite sure, as our pipeline advances towards marketing authorization and commercialization. We look forward to providing updates on our progress this year as our leadership and the mechanics of muscle and contractuality may translate into new medicines, and medicines that may help patients with devastating diseases of impaired muscle function and improve their health spend. Now let me recap our expected milestones for 2021. For omecamtiv mecarbil, we expect to meet with FDA to discuss GALACTIC-HF in this first quarter of 2021. We also expect to develop our go-to-market strategy and potential commercial launch plans in the first half of 2021, and we expect enrollment of patients with heart failure in METEORIC-HF to be completed in the first half of 2021. For CK-136, we expect to analyze Phase I data to determine the next steps in the development strategy in 2021. For CK-274, we expect a Phase I study of CK-274 in China, conducted under the license and collaboration agreement between Cytokinetics and Ji Xing Pharmaceuticals Limited to get started in this first quarter of 2021. We expect to begin an open-label extension study for patients who complete REDWOOD-HCM in the second quarter of 2021. We expect to announce results from both cohorts in REDWOOD-HCM by midyear 2021. We plan to engage regulatory authorities regarding a potential registration path in the second half of 2021, and we expect to begin a potential Phase III clinical trial of CK-274 by the end of 2021. For CK-271, we expect to continue evaluating the potential to further develop CK-271 in connection with our plans to conduct a broad development program for our cardiac myosin inhibitors in HCM and potentially other indications. For reldesemtiv, we expect to conduct start-up activities for COURAGE-ALS in 2021 and May open the trial to enrollment in the second half of 2021, subject again to our plans relating to advancing omecamtiv mecarbil towards commercialization and CK-274 and to a potential Phase III clinical trial in patients with obstructive HCM. For our ongoing research, we expect to advance programs and conduct IND-enabling studies to potentially advance one to two potential drug candidates into development in 2022. And operator, with that, we can now please open up the call to questions.

[Operator Instructions] Your first question will come from Dane Leone with Raymond James. Please proceed.

Hi, hello. How are you?

Good.

Thank you for taking my questions. Congratulations on the progress. I guess I'll focus my question on just what you're looking for from this FDA interaction for omecamtiv to give you kind of the decision-making information you need to move one way with that program? I think maybe if you could put that into context of the broader investor discussion, the questions we get in. You mentioned in your remarks, thinking about other launches in the cardiovascular space, I think rightly or wrongly, there are some concerns about how difficult it can be to launch into that space. Some people could say that the recent launch of bempedoic acid as one of those examples. Do you at this point? Or is this still TBD post your discussion with the FDA, have an internal model where you have an idea about what peak sales could be for this launch of omecamtiv? How long did it take you to get there? And then how long it takes into what year of the launch, you would actually have a positive margin on that commercial product? Thank you.

Sure. So Dane, that's quite a lot to ask in one question. I'll try to tackle it and ask my colleagues maybe to join in. Some of that I can answer. Some of it, obviously, it's premature. With regard to this upcoming FDA meeting, this will be to review the results of GALACTIC and not otherwise serve as a pre-NDA meeting. We actually expect there'll be a series of regulatory interactions starting in this first quarter and continuing in the second quarter that ultimately will be informing our potential filing of an NDA in the second half of the year. But at this first meeting, we want to talk about GALACTIC and understand whether they believe it would be sufficient and suitable to stand-alone in support of a potential NDA filing and a potential marketing authorization. So we'll review the data with them as we are prepared to do in its comprehensive form. And that should be hopefully informing whether this is going to be pre then supportive of what would could be second and third meetings that we might expect as we go forward in the second quarter. So that's the objective for this meeting. Fady, anything you want to add to that before I might pick up on the other points.

No, I think you covered it fine, Robert. Thanks.

Okay. Dane, then you asked a lot of questions about the go-to-market strategy and when we might expect to be able to give visibility to profitability and things like that. Obviously, we do have models, and we are refining them. And in fact, we're in the midst right now of moving from some of the earlier qualitative market research on a series of target product profiles based on the GALACTIC data to more quantitative market research that will inform forecasting, price sensitivities, et cetera. Ultimately, to get to your question, we have to understand what the infrastructure needed to support of commercialization would look like. And I would argue that there are no other launches that resemble what we have in mind, even as there are other cardiovascular launches. And I take your point that some of those launches have underperformed and therefore, we need to learn lessons from them. But the way we're approaching this, and many of us have direct relevant experience in these types of commercialization activities. The way we're approaching this is, we believe, as could be enabling omecamtiv mecarbil to be complementary to existing drugs, but for patients where there are no other good alternatives and our goal then would be to point to both safety, efficacy and economic value in connection with that as would be a very concentrated tractable commercial market where those patients present the most burden, that being in the institutional care setting where those patients then tend to be treated adjacent by specialty cardiologists who focus to advanced heart failure. So one doesn't need many hundreds, certainly not thousands, of reps to be able to reach those patients and those physicians and especially understanding where one can see high-yield returns. With AI and digital marketing, we expect to build a fit-for-purpose organization that's suitable to a post-COVID world. And we do believe that there are go-to-market strategies that should be affordable to us and provide prompt visibility to profitability. How soon? Is really going to be a function of some things that I really shouldn't speculate on at this time. But we do expect to lay out a go-to-market strategy midyear this year in support of our plans for omecamtiv mecarbil, and I expect we can provide more clarifying information at that time.

Thank you very much.

Thanks, Dane.

Your next question will come from Jason Butler with JMP Securities. Please proceed.

Hi. Thanks for taking the questions. A couple on 274. Just now that you have -- you're past the first cohort in the Phase II study. Can you maybe give some thoughts on the different trial design considerations for Phase III? Obviously, you need to wait for the full data, but just what are the pushes and pulls you're thinking about? And maybe compare it to the EXPLORE trial for mavacamten? And then just what are your considerations when determining next steps for an additional indication for 274, be it nonobstructive HCM, HFpEF or something similar? What are the key factors there that you're still analyzing? Thanks.

Sure. Good question. So I'll ask Fady and Stuart to address them, but before I do, I'll just highlight. So I think the rapid enrollment of Cohort two in REDWOOD-HCM speaks to the significant enthusiasm on the part of this mechanism and CK-274, both in U.S. and ex U.S. institutions that are enrolling patients in REDWOOD-HCM and from which we'd be expanding in a potential Phase III program. So with that, I'll turn it over to Fady and Stuart as they can highlight how that Phase III program may take shape. Some things we'll be able to speak to now. Other things, obviously, we're going to keep confidential for now, but then also how we're thinking about other indications. Fady?

Yes. I'll address the first part of the question, Jason. I think with regards to Phase III, one of the things we want to take advantage of is the easier type tradability of CK-274, to be able to craft endpoints that speak to earlier symptom resolution and improved exercise performance, ease of titration, things like that. So really the data from REDWOOD will give us a sense of how to tune some of those the timing of those assessment of those things and the design of Phase III as well as tune some of the escalation criteria and so forth. But as Robert said, I think we're in the midst of designing this. We have some interesting good ideas. And probably when we launch a trial, we'll try and make sure that people understand the differences between our Phase III trial and the way EXPLORER was conducted. I'll turn it over to Stuart to talk a little bit about how we're thinking about NHCM or HFpEF.

Well, yes. I was just going to comment that certainly, the obstructive HCM study design will depend on the results from REDWOOD-HCM. And well, as Fady said, maximize, take advantage of the opportunity to try to differentiate from mavacamten. But I'm just sort of introducing my comment that way because REDWOOD-HCM will also inform -- help inform our strategy with nondisruptive HCM or HFpEF. And we discussed previously about some of the features of nonobstructive HCM that may inform benefit in a subgroup of patients with HFpEF. So I think a lot of this decision-making is contingent upon the results of REDWOOD-HCM and where we see the best opportunity.

Okay, great. That’s very helpful. Thanks for taking the questions.

Thank you, Jason.

Your next question will come from Joe Pantginis with H.C. Wainwright. Please proceed.

Hi, Joe.

Hey, everyone. Thanks for taking the question. I want to focus on BD since that's factored largely in your discussions today in your prepared comments. So maybe starting with the continuum or the evolution of your discussions. Maybe first, how soon did any potential discussions start after Amgen returned the asset? And then sort of fast-forwarding to now, is it -- it just seems that it's important with regard to timeliness for a potential partner to maybe want to be in the co-pilot seat, if you will, with regard to commercialization and moving forward in other geographies or even copromoting in the U.S. as you look -- as the NDA is really not that far off?

Yes. So very good questions. I'll start and then see if Ching wants to add anything as well. So we began these discussions promptly after we received the notice from Amgen, albeit all caveat by saying there are certain things we cannot be sharing in as much as our collaboration with Amgen is winding down and will be officially ending in May of this year. So there are confidential materials that cannot be shared in that interim period. And there are non-confidential materials that can be shared ahead of that, albeit that relates to omecamtiv mecarbil. And as we think about business development and corporate development, they go hand-in-hand, our interest are to prioritize partnering as may enable a combining of omecamtiv mecarbil and CK-274, for which we have no similar restrictions, and with focus to Japan and Europe before co-promotion in the U.S. So we've got a very clear-minded view as to what we're interested in. And you're right, a potential partner may have an interest in copiloting certain of those activities, but we also know that we're the lead here, and we're in a position to inform a potential partnership on terms that we would find acceptable by pushing forward on these initiatives. And in this case, we want to make certain that we have our go-to-market strategy clarifying we do know what the regulatory feedback is in order to be able to identify the best potential partner on the right terms. The fact also doesn't limit us from having conversations on matters pertaining to royalty monetization and structure deals. And with that, I'll turn it over maybe to Ching to see if he wants to elaborate on some of those ongoing discussions.

Yes. Thanks, Robert. So we have begun discussions with various parties on both fronts, both in terms of potential business development deals and/or royalty monetization or structured financing deals. I would just say that you might be able to look at the deals that we've done in the past with companies like royalty pharma and others to get a -- in RTW to get a sense of the type of deal structure we might be pursuing for the royalty monetization and structure financing. I'll just stop there.

No. That's really helpful. I appreciate that color. And then, obviously, a lot depends on omecamtiv, but I was just curious if you could provide a little more color on the gating factors about pushing reldesemtiv forward?

Sure. So the trial that we have laid out for reldesemtiv called COURAGE-ALS is one that has design features that enable it to be stopped or adapted to interim analyses. And as such, if we aren't seeing what we expect to see in that trial, then we could pull the plug or we can actually dial up some of the patient enrollment as well. That's for a study that we have fully costed and for which a significant percentage of the cost would be borne by our partner, Astellas, in exchange for a low single digit royalty. So we believe that this is a trial that is affordable. But at the same time, we recognize that our priorities need to be focused to omecamtiv and CK-274, especially as those will be more cost-intensive and also inform our cost of capital. So we want to have all of the information in place when we make a decision to start that trial. And in the meantime, we can be conducting start-up activities that would be enabling when we do start-up that trial that it is ending on relatively the same time frame. So we believe that this is prudent investment in the balanced way we're approaching our portfolio, recognizing priority number one is omecamtiv, priority number two is CK-274, priority number three is reldesemtiv. But we do expect that we should be advancing all three during the second half of the year.

Got it. Thanks a lot guys.

Thank you.

Our next question will come from Salim Syed with Mizuho. Please proceed.

Hi, Salim.

Hey, Robert. How are you doing?

Good.

Few for me, if I can, probably for maybe Fady or Stuart. On CK-274 guide, I noticed you mentioned similar to PK data, and You've Talked about substantial reductions in LVOT gradient. I'm just kind of curious, are you guys already where you want to be with Cohort 1? Or is this something where you think you'll need Cohort two here? Because you're already talking about running pivotals. So I'm just kind of curious how you're thinking about the data set, given you've already seen substantial reductions at four to six weeks? My second question is also in 274. The data that we'll be getting top line in the middle of the year, can you just perhaps describe to us what you plan on putting in the press release? Is it going to be more of a placeholder type press release? Or will we get any thing of substance here that investors can use? And then just an unrelated one on 136, my read is just -- it seems like you guys are a bit hesitant in moving this troponin activator forward. You want to do potentially other Phase I studies, and I'm kind of curious what you're seeing there? I would think with omecamtiv, where it is that you would want to perhaps move a troponin activator quicker in the pipeline?

Yes. So let me start, and then I'll turn it over to Fady and Stuart. I'm probably going to go in a reverse order of your questions. So with regard to CK-136, we're in the midst of these transition discussions with Amgen and we still need to assess that data and whether anything else might need to be done in accordance with further development in Phase I before committing to how we might do Phase II. And I suspect there are going to be other activities that will need to be done in order to be prepared for Phase 2. However, don't take that to mean that we're any less enthusiastic about its potential because that's not true. The fact of the matter is we have a bit of an embarrassment of riches in terms of our ability to fund and prioritize everything at the same time. And I do believe that we'll find a way to make happen a plan for CK-136, but in priority order relative to the other programs we've mentioned. Also with regard to how we will report results from REDWOOD when we do? It's hard to answer that question until we have the data, but expect it will be somewhere in between just simply a top line announcement, and that which would be reserved for the presentation itself, enough to be able to communicate will be the results in order to be able to set the table for what would be the presentation. It won't be in its full detail to jeopardize the presentation but enough so that it will hopefully inform us and shareholders about why that may be supportive of movement into Phase III and distinguishable as well from the first-generation product. And with that, I'll turn it over to Fady to answer your question about Cohort one and anything else he wants to add.

Hi, Salim. I think the answer to your question is that both Cohort one and Cohort two [Technical Dificulty] final dose selection for Phase III. Cohort 1, clearly, it was very -- a set of very active doses, but not every single patient had a full treatment response. And so that is the rationale for exploring some higher doses in Cohort two increase the percentage of patients who meet the treatment response. And the combination of the two will inform both starting dose and the high dose we select. So I think the -- they're not -- they're on track in order to enable us to design and begin Phase III by the end of this year.

Okay. Thanks so much. I appreciate the color.

Thank you.

Your next question will come from Charles Duncan with Cantor Fitzgerald. Please proceed.

Hey, Charles.

Yeah. Thank you. Hey, Robert and team. Thanks for taking my questions. Lots of good one asked, but I'll give it a shot for a couple of others. First of all, regarding the upcoming FDA meeting in the next few weeks, I assume that you'll wait for the actual minutes? Or do you think that the questions that you're asking are not sufficiently, call it, complicated that you'll be able to talk about that even yet this quarter?

So we'll certainly want to see the minutes, but I also don't know that, that meeting will it sell, prompt any further disclosure as much as a continuing set of activities. And therefore, we'll have to assess the outcome after the meeting. But what we aren't intending to do is provide a play-by-play on every regulatory interaction and every activity in accordance with transitions from Amgen because all of this factors into a gestalt that will communicate as we think is appropriately informative, but as those things materialize materially. I hope that's helpful.

Yes. That is. So it seems like there is no particular question around clinical strategy, i.e., perhaps waiting for medioric or additional clinical work, it's really in terms of what to include in an NDA?

No, not at this meeting. At this first meeting, it really is to discuss GALACTIC and whether it is supportive of proceeding towards what would likely be next, further interactions in a pre-NDA meeting. So we're expecting a series of these meetings over the course of the next several months. If we learned that GALACTIC by itself was not sufficient to support a filing or if there's something that definitive, we might then feel obligated to communicate that because that would be a surprise. But our expectation is we'll get advice that will be likely needing to be elaborated in further interactions.

Okay, okay. That's helpful. And then my second question is regarding commercialization. I'm assuming all of that goes well with agency and omi is ultimately approved, I guess I'm wondering if -- I think Fady mentioned that you've gotten great feedback from KOLs and others. Any feedback from payers at this point? And what is the key, call it, pharmacoeconomic consideration, one or two of them that you think differentiates omi in terms of its ability to create value for patients and payers?

Very good question. So we've engaged already well over 150 key opinion leaders, and we've gotten very consistent consensus feedback that they believe that omecamtiv mecarbil in GALACTIC generated data that would distinguish it from other medicines currently available for the treatment of heart failure and especially, as it augments cardiac performance and in GALACTIC demonstrated activity, safety and efficacy on top of standard of care, well maintained patients on adherent standard of care. So we see that as very encouraging. But to your question, that's not the entirety of the story. We have been engaging payers, and we will continue to do that through the period of this Q1 and Q2. We're getting good feedback that a new medicine that could keep people alive and out of the hospital and especially reduced costs associated with heart failure would be a welcome addition. And as you know from the results from GALACTIC, the predominant effect we saw with omecamtiv mecarbil added to standard of care was a reduction in hospitalizations and rehospitalizations, and that was on top of standard of care. And that affect size seems to be more meaningfully large as you get into more advanced heart failure patients based on secondary analyses. That's very interesting and compelling, and that informs a lot of the value proposition and what could be the pharmacoeconomic rationale for omecamtiv mecarbil is commercialized. And we believe that this is potentially ripe for the times, given that these heart failure hospitals are increasingly under the penalty of readmissions, as was first 30 days and now increasingly with initiatives in public policy looking like it could move to 60 and 90 days, meaning any rehospitalization during that period would be at the cost of the index hospital. And therefore, adding omecamtiv mecarbil upon discharging and with the expectation it could reduce the number of those rehospitalizations, should be not only clinically advantageous but also could be economically advantageous. So we see the value proposition being particularly important, especially knowing that heart failure is the number one discharge diagnosis for patients admitted into hospitals on Medicare, and it's only looking to get worse with the aging demographics. So we foresee that this is increasingly a significant portion of the story as it's unfolding with additional analyses and research still to be done.

That's helpful, Robert. Thank you. And appreciate the thoughtful answer. Last question is perhaps for Ching. Ching, you said several things, one of which caught my -- well, actually, all of which caught my attention, but one thing that I remember is on the immunoassay, it makes sense that you're expense guidance can't really be well informed until you decide on a path forward in terms of commercialization and other things with regard to omecamtiv in the pipeline. But you mentioned the immunoassay, and I'm trying to understand that more. And what is the potential expense with that?

Charles, there, I'm referring to the existing relationship between Amgen and Thermal Fisher in the development of the in vitro diagnostics that will be used for dose titration of omecamtiv mecarbil. And as the Amgen steps out of that relationship, the assumption is we will have to step in, and we have just begun discussion with Thermo Fisher on the path forward. So that's what the immuneassay comment was meant to, referred.

Got it. So more later, okay. Thanks for taking my questions.

Thank you.

Your next question will come from Jeff Hung with Morgan Stanley. Please proceed.

Thanks for taking the questions. With the focus for omecamtiv mecarbil on patients with ejection fractions below 30%, I guess, what are your current thoughts on how to more effectively reach this group of patients once omecamtiv is on the market? And then I have a follow-up.

So these are very identifiable patients, as you might remember from -- hearing from Mike Felker at our panel presentation after the results from GALACTIC were presented at AHA, these are patients that tend to be treated, not just by cardiologists, more often, it's the specialty heart failure cardiologists who are called upon for these frequent flyers in U.S. hospitals. So these patients are not difficult to identify and very often are well known. In fact, as we've been engaging with opinion leaders, it's that patient phenotype that is top of mind for many of them because they don't have anything in their toolbox right now as could be helpful to those patients who are already bottomed out on their blood pressure or kidney function and potassium levels. And therefore, that's where the profile of omecamtiv may be especially suitable. Fady, anything you want to add to that?

Yes. I think just the main point is that these patients, as we talked about earlier, are often in and out of the hospital. And so they're readily identified based on the fact that require a higher level of care. And the physicians take care of them are often positioned to have hospital-based practices and other things that lend themselves to being approached and engaged in terms of what alternatives are available to them.

Great. And then I heard the question, but I missed the answer on the next one. So sorry, if I missed it. Could you just repeat the answer? For the REDWOOD data, what endpoints should we expect to see with the top line data? And I guess what do you need to see to consider the study success? Thank you.

Well, I think, Jeff, the answer to that the data that we have are similar to what we announced in Cohort one release, but level of scale will be greater than what you saw there. So the we're looking at are related to echocardiographic response, pharmacokinetics and safety. And I think those are the key things that we will be emphasizing and in our reporting of the study.

Just to be clear, so when you say reported -- but do you mean in the -- sorry, I was referring to the top line, data for like in the press release, you'll cover all those aspects? Or...

Yes, I'm sure we'll cover all those aspects. I can say right now to what level of detail. We haven't written the press release, obviously. So...

Okay. Thank you.

Thanks, Jeff.

Your next question will come from Ted Tentoff with Piper Sandler. Please proceed.

Hey, Ted. Thank you.

Hey, guys. Thanks so much for the updates all the time. I guess my only question really have to do with the current study, and I don't know if there's anything you can, just in terms of design or sort of what you're thinking there? Thank you.

Sure. So we published a poster in December relating to the design of COURAGE-ALS, but maybe I'll ask Fady to kind of highlight its main features.

Perfect. Thank you. Yes. So COURAGE-ALS is a study that would enroll patients, randomize them to active versus placebo treatment for six months. At which point, the patients on placebo would cross over to active treatment. So the last six months of treatment, 12 full months, would be -- all patients would be on active treatment. Study stayed blinded for the entire time period. The primary endpoints assessed at six months is the ALSFRS, which is the ALS functional rating scale, that has been used was a secondary endpoint in Fortitude Phase II study. And I think the other key feature is that there are a couple of analyses that enable us to either study per futility at an earlier stage of its conduct or to assess it for to upsize it should it need to be upside for powering. But maybe just in interest of time, I'll leave it at that.

Your next question will come from Greg Suvannavejh with Goldman Sachs. Please proceed.

Hi, Greg. Greg, you there?

Yes. Sorry about that. Thanks for taking my question and for the updatges. I've got two questions, please. My first, maybe it's actually for Ching, just on the guidance. So I realize that the guidance is the guidance, but clearly, there's some determinations of the path forward for omecamtiv mecarbil. So I'm just trying to get a sense of what magnitude of swing could we possibly see once you get your strategy as we look at our models? I'm just trying to get a sense of how much of your current thoughts around omecamtiv mecarbil are already contemplated into that. $160 million to $170 million net cash utilization? And could it be meaningfully different once you figure out your plans on the go forward? So that's my first question. And then my second question has to do around comments that, obviously, you're going to meet with the FDA in the next little bit to find out if indeed, the agency does view that the data that you've generated is supportive of a filing on a go-forward basis. And obviously, I think we'd all hope that. But any preliminary thoughts as to if that's not the case, what other trials you would contemplate doing in order to take it across the finish line? Or is there another then strategic decision as to like what to do with the program going forward? Thanks.

Sure. I'll let Ching answer your first question, and then I'll answer the second.

So with regard to the first question, Greg, I think it's a little bit early to give you specifics due to the fact that we are, as we said earlier, seeking potential partners and depending on the economics and cost share with those potential partners, our cost picture might change. And I could tell you that I anticipate significant increase in 2021 spending if we have a path forward with omecamtiv mecarbil recordable in terms of commercialization. But that is not going to be -- given the fact that by the time we could build our sales force it will have been late in the year. So as you think about 2021 change versus the potential 2022 increase. I think majority of the increase you'll be seeing will be in 2022. I hope that helps.

I think that's the operative point. While we may provide a change in guidance midyear as relates to 2021 spending, depending on what you might think to be significant or meaningful, it's unlikely going to have the kind of effect that you might be worried about in 2021 as much as it might have effect to our cash runway extending through 2022 and into 2023. And therefore, it's not enough to be coming up with a go-to-market strategy if we can't also fund and finance it. And that's where business development and corporate development go hand-in-hand. With all of that, so our aim is to keep that adjustment within a reasonable range, and I can't put a percentage on it right now, but I trust you understand that there's a lot of things that will affect that in many moving parts right now. Your other question related to FDA, and if we get definitive feedback at this upcoming meeting that GALACTIC by itself is alone insufficient to inform potential progression to an NDA filing, firstly, I think we'll be surprised. But secondly, we do have an ongoing second Phase III trial, METEORIC. As we mentioned, it will complete enrollment in the first half of this year, and that could very well serve as a second pivotal if that would be required. We've got an over 8,000-patient study with a p less than 0.05. So we don't foresee that, that should be necessary, but that could be the second Phase III trial that might be then required. And if not that one, then we would expect that another trial could be conducted in this population that we think was the most responsive omecamtiv mecarbil in GALACTIC. But obviously, that's a whole other ballgame, and that would take additional resources and time, and that's not currently what we are expecting.

Understood. Thank you so much.

Thank you.

And we do have one final question in queue coming from Carter Gould with Barclays. Please proceed.

Hey, Carter.

Hey, guys. Good evening. Long time listener, first time caller. I guess coming back to some of your commentary on 274 versus 271, I guess what I'm hearing is, in the near term, just clear prioritization on 274, but I guess things are still -- all options are on the table as you think then around either divvying up indications, I guess. Is that a correct interpretation? Have you made any decisions around not pursuing overlapping indications with these assets, I guess, in the near term? And then maybe just as a follow-up, Robert, you talked about potentially co-promotion options for omecamtiv. At the same time, you talked about all the potential leveraging of commercial infrastructure and synergies towards a budding CV franchise. So I guess just trying to understand what are the -- thinking about that decision process around a copromote, what would maybe drive you to that decision versus not? Thank you.

Sure. So firstly, we haven't made any decisions regarding not overlapping indications, but we're looking at CK-274 in obstructive HCM. And as you know, it's following behind very good work that Myokardia did with mavacamten now in the hands of BMS. And we have a lot to learn about where as a next-generation compound, we can advance the field. And as a fast follower, there's upside in being good students of how this category evolves. So as you might have noted, BMS made some announcements about its interest in nonobstructive HCM and also in HEpEF. And we think that as they go forward with mavacamten in those indications, it will be informative of how we might choose to go forward with CK-274 and CK-271. We can't afford to do everything at the same time, so we've got to prioritize things, and we're looking at nonobstructive disease, and we're looking at hfpef with an eye on how might we, with a molecule like CK-274 or CK 271 or frankly, we also have other compounds arising out of research, how might we be -- if not the first to market, how might we be a potential best-in-class? And that's where we want to make certain that we're being smart about our pipeline of cardiac myosin inhibitors. I hope that's helpful. With regard to partnering in co-promotion, I'll just mention that we're looking at where we could be building our business, but recognizing we can't build everything we want. Some things we have to rent as we then establish positive marketing contribution and positive cash flows in order to funnel them back into an expansion and scale-up of our commercialization. I don't expect that we will be going into Europe by ourselves. I expect that, that will be built together with a co-promotion partner. In the U.S., I want to make certain that we are leading in the area where we think we can make the most impact with the highest yield, and that's in the institutional care segment. But as we might scale our commercial organization beyond those hospitals and those integrated networks into the community, there are those clinics that are more adjacent and more likely treating the advanced heart failure patients, and there are those that are more distal and we might see benefit to having a co-promotion partner in some of those activities as we might ultimately build our commercial business. And again, this all has to be factored in together with what are we doing from a digital standpoint, recognizing that we can be a leader in that space as it relates to heart failure. So these are all things that factor into how we think about co-promotion and franchise building. But what we do want to do is know that we've got a presence with feet on the ground in those high-volume heart failure hospitals that are also those high-volume HCM centers, and that's going to be essential as a nucleus to our strategy. Is that okay?

Thank you.

Thank you, Carter.

And we have reached the end of our question-and-answer session. I would now like to turn the call back over to Robert for closing remarks.

Thank you, operator. Thank you to my colleagues, and thank you to all of you on this call for these discussions. I think we've laid out for you why we think 2021 can be a transformational year for Cytokinetics. We're very excited about it. We're optimistic about what this means, not only for omecamtiv mecarbil, but for other drug candidates in our pipeline and for our company, and we look forward to updating you on our progress. With that, operator, we can bring this call to a close.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.