Cytokinetics, Incorporated
Q4 2015 Earnings Call Transcript

Published:

  • Operator:
    Good afternoon and welcome ladies and gentlemen to the Cytokinetics’ Fourth Quarter 2015 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.
  • Diane Weiser:
    Good afternoon and thank you for joining us on this conference call today. Leading today’s call is Robert Blum, our President and Chief Executive Officer. Following Robert’s initial comments, Andy Wolff, our Senior Vice President and Chief Medical Officer, will provide updates on the clinical development program for omecamtiv mecarbil, our first-in-class cardiac myosin activator, which is being developed for the potential treatment of heart failure and VITALITY-ALS, our ongoing Phase 3 clinical trial of tirasemtiv, our first-in-class fast skeletal muscle troponin activator, which we are developing for the potential treatment of amyotrophic lateral sclerosis, or ALS. Andy will also speak to our recently initiated Phase 2 clinical trial of CK-2127107 or CK-107 in patients with spinal muscular atrophy, or SMA. Andy is doing double duty on today’s call as Fady Malik, our Executive Vice President of Research and Development, is unable to join us today. Sharon Barbari, our Executive Vice President of Finance and Chief Financial Officer, will provide a financial overview for the quarter and year end as well as our financial guidance for 2016. Robert will then provide a corporate update and additional perspective as well as corporate milestones for 2016 before opening the call for questions. Please note that portions of the following discussions, including our responses to questions contain statements that relate to future events and future performance rather than historical facts and constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements may include statements relating to our financial results and guidance, our strategic initiatives, including Vision 2020, our collaborations with Amgen and Astellas, our and our partners’ research and development activities including the initiation, conduct, design, enrollment, progress, continuation, completion and results of clinical trials were significant in utility of preclinical study and clinical trial results and the properties and potential benefits of our dug candidate. Our actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings, including our most recent annual report on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website. These forward-looking statements speak only as of today. You should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. And now, I will turn the call over to Robert.
  • Robert Blum:
    Thank you, Diane and thank you to everyone on the line for joining us for this call today. We are pleased to have ended 2015 strong, with a strong fourth quarter that positioned us well now in 2016 as our clinical programs advance in late stage development. This momentum fortifies a foundation for our 5-year strategic initiative, Vision 2020, empowering our future. Vision 2020 is designed first to deepen and expand our pipeline, and second, to advance our portfolio of muscle biology-directed drug candidates towards late stage development and potential commercialization. The key components of our roadmap for the next 5 years are to progress proprietary research programs focused on muscle contractility, growth and energetics into development under new collaborations; advance next generation skeletal and cardiac muscle activator compounds into clinical development by leveraging existing research collaborations; conduct late stage clinical development of novel first-in-class muscle activators for the potential treatment of ALS, SMA, heart failure and other diseases impacting muscle function; continue to collaborate with patient communities to support the urgent development of new medicines for diseases of impaired muscle function with pressing unmet medical needs; and finally, to mature our company operations to enable development, registration and commercialization of muscle biology drug candidates across North America and Europe. We made tremendous progress on this strategic roadmap in the fourth quarter, most notably in our clinical development programs. As you may know, a little over a week after our top line announcement of the results from the expansion phase of COSMIC-HF, our Phase 2 clinical trial of omecamtiv mecarbil in patients with heart failure, the trial’s lead investigator, John Teerlink was invited to present the findings at a late breaking clinical trial session at the American Heart Association Meeting. We held a special investor event at the AHA meeting and Andy will elaborate on both the positive results as well as some insightful KOL commentary in a moment. In the fourth quarter, we also made progress activating North American sites and enrolling patients in VITALITY-ALS, our Phase 3 critical trial of tirasemtiv. Andy will speak to recent progress in VITALITY-ALS and will also comment on a protocol amendment we recently filed, which is intended to increase the trial’s statistical power to detect the change in our primary endpoint as well as in key secondary endpoints, most of which are related to respiratory function. As we recently announced, we also have started the first Phase 2 clinical trial of CK-107 for the potential treatment of SMA, an orphan hereditary disease most often diagnosed in infants and young children and for which there are no current therapies. There is great interest in the trial within the community and we have received a significant number of inquiries from patients and their caregivers with regard to potential participation in this trial that’s very humbling to us. Andy will provide further details on both the tirasemtiv and CK-107 development programs. And finally, during the quarter, we made progress on our joint research program with Amgen directed to the discovery of next-generation cardiac sarcomere activators. And in addition, we continue to make progress into our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. Let me now turn the call over to Andy so that he can elaborate on the progress with each of our clinical stage programs from this quarter.
  • Andy Wolff:
    Thank you, Robert. As Robert mentioned and as I trust you all have seen, during the fourth quarter, we announced the presentation of results from the expansion phase of COSMIC-HF at the American Heart Association Meeting in November. This opportunity came within weeks after our top line results were announced and we believe reflected the enthusiasm with which the results have been received by the cardiology community. I think many of you had the opportunity to attend or listen to the investor meeting and webcast we held to review the data following Dr. John Teerlink’s presentation at the conference, but I will recap some key findings and highlight some of the perspectives offered by the COSMIC-HF executive committee as well as provide you with an update on potential next steps. As a quick reminder, the expansion phase of COSMIC-HF was designed to evaluate the pharmacokinetics, pharmacodynamics, safety and tolerability of omecamtiv mecarbil administered orally to approximately 450 patients with chronic heart failure and left ventricular systolic dysfunction. Patients were randomized 1
  • Sharon Barbari:
    Thank you, Andy. As our press release contains detailed financial results for the fourth quarter of 2015, I will refer you to that public statement for the details on our P&L and balance sheet. We ended the fourth quarter with approximately $111.6 million in cash, cash equivalents and investments, which represents at the end of 2015 over 17 months of going forward net cash burn based on our 2016 revenue and expense guidance that we announced today. Our guidance includes our current estimated cost of VITALITY-ALS for tirasemtiv in 2016 and ‘17. In addition, we also recently announced that we drew down the second $15 million tranche from our growth capital loan with Oxford Financial and Silicon Valley Bank. This additional $15 million gives us approximately 3 to 4 months of additional cash runway in 2016 and ‘17. Revenues for the fourth quarter of 2015 were $9.8 million compared to $21.8 million during the same period in 2014, which included a $15 million milestone payment from Astellas. Revenues for the fourth quarter of 2015 included $5.1 million of license revenues, $4 million of research and development revenues from our collaboration with Astellas, and $0.6 million in research and development revenues from our collaboration with Amgen. Revenues for the same period in 2014 included $2.3 million of license revenues and $3.3 million of research and development revenues and a $15 million in milestone revenues from our collaboration with Astellas, in addition, $1.1 million of research and development revenues from our collaboration with Amgen and $0.1 million in milestone revenues from our collaboration with MyoKardia. Our fourth quarter 2015 R&D expenditures totaled $13.2 million. From a program perspective, for the fourth quarter, approximately 83% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, which include both expenses associated with tirasemtiv and CK-107, 10% to our cardiac muscle contractility activities and 7% to our other research activities. Revenues for the 12 months ended December 31, 2015 was $28.7 million compared to $46.9 million during the same period in 2014. Revenues for the 12 months ended December 31, 2015 included $13.9 million of license revenues, $12.2 million of research and development revenues from our collaboration with Astellas, and $2.5 million in research and development revenues from our collaboration from Amgen. Revenues for the same period in 2014 included $9.8 million of license revenues, $15.4 million of research and development revenue, and $17 million in milestone revenue from our collaboration with Astellas, $4.5 million of research and development revenues from our collaboration with Amgen and $0.1 million in milestone revenue from our collaboration with MyoKardia. For the 12 months ended December 31, 2015, R&D expenditures totaled $46.4 million. From a program perspective, for the 12 months ended December 31, 2015, approximately 78% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, which include both expenses associated with tirasemtiv and CK-107, 12% to our cardiac muscle contractility activities and 10% to our other research activities. Today, we also announced our financial guidance for 2016. The company anticipates cash revenue will be in the range of $13 million to $16 million. Cash R&D expenses will be in the range of $67 million to $70 million. And cash G&A expenses will be in the range of $21 million to $24 million. This cash guidance excludes $20.5 million in license revenue, which was received in 2015 and will be earned and recognized over the remaining term of the Astellas development plans in 2016 under Generally Accepted Accounting Principle as well as any potential milestones that maybe achieved in accordance with our collaboration agreement with our partners, Amgen and Astellas. In addition, this guidance excludes an estimated $4.5 million in non-cash-related operating expenses, primarily related to stock compensation expense. In 2015, we put in place both an ATM and a growth capital loan to provide us with financial flexibility to fund operations through 2016 and prepare for data for VITALITY-ALS next year. That concludes the financial portion of today’s call. With that, I will turn the call back over to Robert.
  • Robert Blum:
    Thank you, Sharon. 2015 was indeed a transformational year for Cytokinetics. And as you have heard, we start 2016 strong with momentum across our three muscle biology-directed development programs. As we recently outlined in our Vision 2020 strategic initiative, over the next 5 years, our goal is to expand our portfolio of novel muscle activators and mature operations to commercial readiness for a multiple first-in-class compound directed to the potential treatment of people living with diseases of impaired muscle function. Ending 2015 strong establishes a firm foundation for our vision and 2016 will be an important and exciting year for of execution against that strategic roadmap. The results from COSMIC-HF exceeded our expectations and provide what we believe as your leading heart failure KOLs with whom we and Amgen have consulted a compelling case to proceed to Phase 3. As mentioned, we are in the midst of ongoing interactions with regulatory authorities. The feedback to-date is encouraging. We expect a decision regarding the potential advancement of omecamtiv mecarbil into a Phase 3 clinical development program in the next few months. And in the meantime, we are making preparations for the start of a Phase 3 program. We are pleased that VITALITY-ALS site activation and enrollment are proceeding well and we look forward to completing enrollment in this Phase 3 trial of tirasemtiv in the first half of 2016. Our increased confidence in the safety and tolerability of tirasemtiv, together with analysis of data regarding SVC and correlation to downstream clinical interventions, both together contributed to our recent decision to file the protocol amendment to increase the targeted enrollment and therefore the statistical power of the trial. On the CK-107 front, I want to commend our clinical operations team for their diligence to initiate our first Phase 2 clinical trial in people with SMA. We have received a significant number of inquiries from people living with SMA and their families who are interested in this clinical trial. Each of these interactions reminds us of how important our work is and how much patients with SMA need new medicines to treat impaired muscle function. Towards that end, we also announced an expanded partnership with Cure SMA to increase education, awareness and fundraising for SMA. As a national gold partner, Cytokinetics lends support to key national and local initiatives to advance the understanding of and research towards potential treatments for SMA. During the recent quarter, we also continued research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activators as well as under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. As previously reported, together with Astellas, we have selected a skeletal muscle activator candidate and anticipate initiating preclinical development in 2016. Additionally, we expect to identify a next-generation cardiac muscle activator with Amgen, which may also move into preclinical development during the current calendar year. And finally, across our several clinical development programs, we remain committed to the urgency to bring new medicines to people battling devastating diseases of impaired muscle function, many of whom will face progressive loss of that muscle function. This quarter, members of our team continued to work closely with our colleagues in the ALS advocacy community to help draft and advance guidelines that may accelerate drug development and regulatory approvals of potential medicines for ALS. And with that, I will now turn to our expected milestones for 2016. For omecamtiv mecarbil, we expect to make a decision regarding the potential advancement to Phase 3 in the next few months. For tirasemtiv, we expect to complete enrollment of VITALITY-ALS in the first half of 2016. For CK-107, we expect to complete enrollment of the Phase 2 clinical trial in patients with SMA in the second half of 2016 and we also expect Astellas will initiate a Phase 2 clinical trial of CK-107 in patients with COPD in the first half of 2016. And for our preclinical research, we expect to continue research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activator and as well under our joint research program with Astellas, directed to the discovery of next-generation skeletal muscle activators. Under our collaboration, we expect to advance two next-generation compounds in preclinical development in 2016. All-in-all, a busy year ahead and one that we hope will again produce significant progress for Cytokinetics and to the benefit of all of our stakeholders. Operator that concludes the formal portion of our call today, I would now like to open the call up to questions, please.
  • Operator:
    [Operator Instructions] Our first question comes from the line of Joe Pantginis with ROTH Capital Partners.
  • Robert Blum:
    Good afternoon Joe.
  • Joe Pantginis:
    Good afternoon. Hi all. Thanks for taking the question and obviously congratulations on all the progress you made in 2015. Regarding the tirasemtiv news today, if increasing enrollment, I guess I will cut to the chase first of what I see is one of the conclusions. Based on Andy’s comments, it doesn’t appear that they are going to be any impact on the timelines, which I think is very encouraging and that you are obviously or at least my opinion, seeing very high demand for enrollment into this study?
  • Robert Blum:
    I think you are correct. We are sticking with the timeline for completion of enrollment in the first half of the year, even as we are increasing the target enrollment, somewhat substantially, as Andy outlined. I think what you can draw from that is as we emphasize, it’s partly because we believe that the safety and tolerability of tirasemtiv as evidenced already in this study, appears to favor this design. And based on analyses we have done, we think it’s prudent for us to be increasing the target enrollment in order to be able to enhance the statistical power for the primary efficacy endpoint, as well as secondary endpoints. That’s in part also a function of our increased confidence in our outlook, which is attributed also to our feelings about omecamtiv mecarbil and the potential advancement of omecamtiv mecarbil to Phase 3.
  • Joe Pantginis:
    Sure. And I guess with regard to the amendment, have you received feedback yet. And then also, I guess can you sort of paint a picture of what the drivers were and I think you did a good job in the call, but I wanted to see if you can expand the drivers were to increase the enrollment, obviously you increased the power, as you said, but how much of the PRO-ACT database as well as the data that you described fit into being able to make this decision?
  • Robert Blum:
    So I will start and maybe then turn it over to Andy. Firstly, you asked if we have received feedback and we have communicated these changes to the sites and also to regulatory authorities and the feedback has been positive. We don’t expect that this will be at all an issue. In fact, it’s being embraced. Secondly, you asked about the motivations behind it. Andy can elaborate on the statistical power, but I will say that this was already decisions we are making even before we had conducted the analyses associated with the EMPOWER study.
  • Andy Wolff:
    Yes. I don’t think those analyses really had much bearing on it. I will say, it certainly was encouraging to see the data from that combined database confirm the assumption of 17 percentage points as the standard deviation about the change from baseline to 24 weeks in slow vital capacity. We took that number from BENEFIT-ALS and we had to extrapolate because that study only went out to 12 weeks, of course. So we extrapolated from 12 to 24, came up with 17. And then as you now know, have confirmed it with a much larger database, the three of which are all very consistent one with the other. I think I may turn it back to Robert. I think we would have always liked to have had 90% power, but I think recent developments in other programs made us feel that we could finally now decide to apply the resources to doing that.
  • Robert Blum:
    I think that’s right. I mean, this has always a question of how you invest in programs when you are moving multiple programs forward in parallel. And as this may hopefully serve as a pivotal study for tirasemtiv, better to have 90% power, if that’s something that is affordable. And that’s what we decided in making this recommendation in protocol amendment.
  • Joe Pantginis:
    That’s very helpful. Thank you. And I guess, if I may just quickly with omecamtiv, it was very encouraging to hear that you are already in ongoing discussions with regulatory authorities. I guess would you be able to provide anymore detail regarding what potential outstanding questions or issues might be. And then the broader question that applies to both tirasemtiv and omecamtiv mecarbil would be, would you look to seek breakthrough designation for these drugs since they are very novel from a disease modifying standpoint and can impact patient populations quite significantly if they reach the market?
  • Robert Blum:
    Yes. So we won’t be able to comment on specific discussions and interactions we are having regulatory authorities. Otherwise, we can speak more in general tone, which is to say that when you engage with the FDA at the end of Phase 2 interactions, you post specific questions. Those questions then prompt answers and a dialogue. With regard to EMA, it’s a slightly different process as you may know where you see protocol assistance and scientific advice. With regard to our regulatory interactions, we have in this quarter interactions with FDA, EMA and other regulatory authorities. And we are together with Amgen discussing a plan for a Phase 3 program that contemplates a specific protocol and you get an opportunity to discuss the inclusion and exclusion criteria, the endpoints, as well as other specifics regarding the protocol or protocols as well as other issues around CMC and non-clinical activities. So, it’s different for FDA and EMA in terms of how those conversations go. And what I can reiterate is those are all planned to occur this quarter. Some have already occurred. And as we and Amgen are going through these together, we are encouraged by already by what has transpired. I don’t think I can do much better than that. With regard to breakthrough designation, that’s something that we will contemplate, it’s not something that we have determined.
  • Joe Pantginis:
    Great. Thanks so much for the information.
  • Robert Blum:
    Thank you.
  • Operator:
    Our next question is from the line of Charles Duncan with Piper Jaffray.
  • Robert Blum:
    Hi, Charles.
  • Charles Duncan:
    Hi, guys. Thanks for taking the question and congrats on the progress in the last year. I think maybe you have answered my questions, but I want to take a stab at it anyway. I know that you have ongoing discussions regarding omecamtiv, but you mentioned explicitly being encouraged by the way things were going. And can you point to any one thing or group of things such as the size of the trial that’s being contemplated in terms of sample size or the duration of dosing or endpoints that you find encouraging at this point?
  • Robert Blum:
    Yes. We have already discussed publicly how we are looking at a potential Phase 3 program that would enroll thousands of patients and which would be event driven and which would be pivoting around a primary endpoint that could include that in hospital readmission with secondary endpoints that would flow from there. And as such, while we can’t speak specifically about our own plans together with Amgen, what we have been able to do is share with you and others that we believe that studies like the PARADIGM-HF study, the other study are ones that create some markers or bookends around which we and Amgen are discussing with regulatory authorities, possibilities that maybe appropriate for omecamtiv mecarbil. So, I think that’s still the best information I could provide. Certainly, we have our own feeling that we are discussing with regulatory authorities about where we may lie in that space and that’s what in particular the meetings are set up to discuss.
  • Charles Duncan:
    And with the completion of the meetings, would you be able to articulate a plan in terms of the protocol and do you anticipate that happening by say the middle of this year?
  • Robert Blum:
    Yes, I think that seems reasonable. I expect that we will be making a decision following the conclusion of these regular interactions, that’s something that we and Amgen would be making together and that would proceed the plan to still hopefully begin a Phase 3 program before the end of the year.
  • Charles Duncan:
    Okay. And then just one question on tirasemtiv, I like expanding the size of the trial, because it does feel or seem like there is less risk. But I guess I am wondering is there any new variable, I think you kind of answered this with Joe’s question, but was it primarily driven by your ability to invest in this program or some new clinical observation or analyses that were done and why is this different than when you initially started the study?
  • Robert Blum:
    So, I will turn it to Andy to answer in part, but I will start by saying it was partially a function of our ability to invest in the program and do so with more confidence. That’s something we always would have wanted to do. Now, we go from 80% power to 90% power and that’s informed by other analyses, but it’s also informed by feedback we are receiving from the size and in particular with regard to enrollment rate and the design of the study, the study design seemingly to meet expectations in terms of being able to hopefully elucidate and improve safety and tolerability profile.
  • Andy Wolff:
    Yes, I mean, I think there is no particular analysis that was done. It would always have been better to have had 90% power for the primary endpoint of a Phase 3 study. And again, I think this maybe the third time one of us has said it, we always would have preferred that, but we didn’t feel that we really could make the investment of those resources until more recently. And well, I wouldn’t say it was necessarily part of our thinking, I do think that seeing far fewer post-randomization premature terminations with this design than we have this benefit is also encouraging and supports enlarging the trial without taking a risk of missing timelines.
  • Charles Duncan:
    Okay, that’s helpful. Thanks for the added color.
  • Operator:
    Our next question is from the line of Jason Butler with JMP Securities.
  • Jason Butler:
    Hi, thanks for taking the question and let me add my congratulations on the progress. Just wanted to I guess ask same question in a different way Andy’s last comment there. You said that the essentially the dropout rate in the early stages of the trial has been much lower than you saw in BENEFIT-ALS. Is it in line with what you predicted when you designed the trial?
  • Andy Wolff:
    Well, when we designed the trial, we very conservatively assumed that the longer open label treatment period, the slower dose titration and targeting three different dose levels, not trying to get everybody up to 500 would have no effect on the dropout rate. That’s not what we believed. We thought it would and it proves to have had a good effect on the dropout rate. But just in terms of the assumptions we made, we assumed that there would be no improvement, because that was the most conservative thing we can do. But in fact, as the trial has progressed, we are seeing I think meaningfully fewer dropouts post-randomization. It’s important to know though that with patients now supposed to be in the study for over a year that just the length of the trial alone is going to probably cause dropouts to pickup a bit as we get further and further into the trial.
  • Robert Blum:
    As a function of disease progression.
  • Jason Butler:
    Okay. And then just thinking it’s likely too early to make any comments around the standard deviation you are seeing around the primary endpoint. But do you have an opportunity at any point during the trial to make a further protocol amendment based on, for example, futility analysis?
  • Andy Wolff:
    Not for that reason, but it’s always possible without taking an alpha penalty to look at the aggregate standard deviation and we generally do that. So, if we had found that we had seriously mis-underestimated the actual standard deviation, there is always an opportunity to address that. I don’t think – I am optimistic that will not happen, however.
  • Robert Blum:
    Yes, I will also remind you that also in the interest of being conservative, we estimated an effect size at 24 weeks, which was no different than the one we observed in BENEFIT-ALS at 12 weeks, 6 percentage points in the change from baseline in SVC, even though the effect size was growing from week 4 to week 8 to week 12 in BENEFIT-ALS. So, we may now have well over 90% power to detect that difference at 24 weeks if the standard deviation holds true to what we estimated.
  • Jason Butler:
    Great, helpful. And then just a quick question on CK-107 and the trial you are going to start in COPD, can you give us any more color you had around trial design and what measures of success will be for that study?
  • Robert Blum:
    Much like the SMA study, this is hypothesis generating. And in fact, there is quite a lot of detail available on the clinicaltrials.gov website pertaining to CK-107. Being that that study has not yet started, we have chosen not to elaborate on this earnings call, but that information is out there.
  • Jason Butler:
    Great. Thanks for taking my questions.
  • Robert Blum:
    Thank you.
  • Operator:
    Our next question is from the line of Ritu Baral from Cowen.
  • Robert Blum:
    Hi Ritu.
  • Operator:
    Ritu, your line is open.
  • Ritu Baral:
    Thank you for taking the question. Just going back to the omecamtiv mecarbil Phase 3 program again, I know you mentioned that there are good precedents out there for Phase 3 heart failure programs, but given the unique mechanism of omecamtiv, is there any I guess subtleties to either see outcomes endpoints or particular secondary endpoints that might be part of the trial, especially ones that could have importance for commercial aspects of the drug?
  • Robert Blum:
    It’s a good question, but unfortunately Ritu maybe a bit premature for us to respond to that. I think that may have to wait until we have finalized a study design that we then can communicate publicly.
  • Ritu Baral:
    Got it. And did I hear correctly, you are going to be doing a Japanese Phase 2 for omecamtiv?
  • Robert Blum:
    Yes. So recently, Amgen in collaboration with Cytokinetics conducted another Phase 2 study of omecamtiv mecarbil in Japan, in Japanese patients and now we are moving swiftly to begin a Phase 2 study of omecamtiv again in Japan in Japanese patients, with the goal of having that completed in such a way that Japan could be included in the potential global Phase 3 program.
  • Ritu Baral:
    So not something along the lines of ATOMIC or COSMIC?
  • Robert Blum:
    Correct. I mean it’s similar and that it will be in heart failure patients, but not something of that magnitude nor would it be expected to be rate limiting to the potential start of a Phase 3 program.
  • Ritu Baral:
    Got it. Okay, that’s helpful. And I have one follow-up just as far as 107 and SMA, given how noisy I guess the early Phase 1, Phase 2 data from tirasemtiv and ALS was when it was first emerging years ago, how should we be looking at the Phase 2 data as it emerges in SMA, the compounds are related, do you expect sort of similar variability or do you think it could be cleaner or less clean because of the disease in question?
  • Andy Wolff:
    Well, it’s really hard to know when you going into a new population what you are going to find. But I will point out that this is a study of eight weeks duration. And you may recall, the first Phase 2 in ALS was actually a single dose study. So there will be multiple evaluations of these various functional endpoints over time. So I would hope that this study will yield reasonably robust results and inform whether or not we should further develop a drug for young adults and older children with SMA.
  • Robert Blum:
    Another way to think about this Ritu is that this is a population of adolescents and adults with SMA, who may not be progressing as rapidly as ALS patients do and therefore it’s conceivable that we may potentially identify endpoints that could even point to the potential to improve muscle function, as well as potentially slow the decline in muscle function. And that’s things that we will be monitoring over the course of this two-month duration treatment.
  • Andy Wolff:
    Yes. I think that’s an extremely important point that Robert just made. The fact that we have a much more stable disease platform in SMA because they just don’t progress monthly, as we saw and that alone makes it difficult to see drug effects in ALS because the best anybody has ever been able to do it to keep them from getting worse a little bit more slowly, I didn’t say that right, but you can only make them get worse more slowly, no one has been really able to improve them whereas in SMA we actually might be able to see some improvements from baseline.
  • Ritu Baral:
    Got it. And one last question, if I may. As you and Amgen look at second generation omecamtiv candidates, what are you looking to improve or what is the most important part of the therapeutic profile to improve in the second-gen program?
  • Robert Blum:
    So I first might add that we are talking about next-generation cardiac sarcomere activators, but not necessarily operating by the same mechanism of action of cardiac myosin activation as does omecamtiv mecarbil. And then secondly, certainly as we have learned about omecamtiv mecarbil, there could be an opportunity to affect systolic ejection time in such a way that it may not impinge on diastolic filling to the same degree or with the same therapeutic window, so those are the kinds of things that you always look for in the next-generation compound whether it’s the same mechanism or not.
  • Ritu Baral:
    Great. Thanks for taking my questions guys.
  • Robert Blum:
    Thank you.
  • Operator:
    Our next question is from the line of Vernon Bernardino from FBR.
  • Robert Blum:
    Hi Vernon.
  • Thomas Yip:
    Hello everyone. Hi Rob, this is actually Thomas Yip asking couple of questions for Vernon. Vernon sends his regards. Perhaps I will continue the dialogue for 107. We already see the challenges on clinicaltrials.gov and I do see a different dosing scheme for your COPD trial compared to SMA trial, can you perhaps talk a little bit about what is dosing rationale for the COPD trial?
  • Andy Wolff:
    The COPD patients are a little older and more functional than SMA patients and so we didn’t feel it was necessary to study first the lower dose level and then a higher dose level, but could just go in with the single dose level in the study.
  • Thomas Yip:
    Sure. And I do see so as dosing for 14 days and then watch out 14 days and then switch to either placebo or drug for 14 days, so is this designed does this mirror another trial or what exactly are the rationale?
  • Andy Wolff:
    Well, the rationale is that the drug has acute effects on fast skeletal muscle performance. We have seen this with tirasemtiv as well. It doesn’t take time for it to build up. I mean, the effects happen immediately. So if there is an improvement in the skeletal muscles of these patients with COPD and I am going to come back to that in a second, it ought to be discernible within a relatively short treatment period. And then again, they also have a very stable platform of disease, so it’s not likely that patients who received placebo first and then drug second are going to be very different when they get the drug and vice versa. They are pretty stable over time. So the other question you haven’t asked, but I will answer anyway because I anticipate someone may is, this is not about improving respiratory performance in these patients, the disease is associated with significant limb muscle abnormalities, metabolic abnormalities and weakness, and also something that’s sort of fortunate for this particular compound, a switch from slow to fast fiber predominance. And there is a lot of literature you can find that shows that the exercise intolerance with COPD patients is at least as much, if not more so, related to their limb muscle dysfunction than it is to their respiratory insufficiency. So that’s the rationale for going into that population.
  • Thomas Yip:
    Great. Thanks for added color. I guess just one final follow-up perhaps for Sharon, does COPD trial trigger any milestones from Astellas?
  • Sharon Barbari:
    We can’t. We don’t comment on what the triggers are related to milestones. We do anticipate milestones from both Amgen and Astellas in the coming year, but I can’t tell you what the triggers are.
  • Thomas Yip:
    Okay, got it. Thank you for taking my questions. Again and looking forward to another great quarter.
  • Robert Blum:
    Thank you very much.
  • Operator:
    And our next question is from the line of George Zavoico with JonesTrading.
  • Robert Blum:
    Hi George.
  • George Zavoico:
    Hi Robert. Hi everyone. Good quarter, good progress. Thank you for defining it all on your call. I have a couple of fairly quick questions. You are talking about the increased number of patients in VITALITY. What is going to be, if you could comment on it, what is going to be the increased cost and what was the original cost or the smaller drop?
  • Sharon Barbari:
    We typically don’t provide guidance with respect to the specific cost of the trial. We can tell you that this would be in the range of $5 million to $10 million from an increased standpoint of adding the additional patients.
  • George Zavoico:
    Okay, thanks for that. And it sounds like you are saying that you always wanted the 90%. It sounds like based on your very conservative estimates, Andy, that you were talking about the assumptions for what, how you first calculated the powering. It sounds like at 80%, was that kind of conservative powering you were already fairly confident in a successful outcome. Now, this is sort of a super powering in a way, isn’t it?
  • Andy Wolff:
    I wouldn’t disagree with that. I mean, I think the likelihood is, but we just can’t know until we have the data that those curves that we have showed you so many times for the changes over time in slow vital capacity on tirasemtiv versus placebo are going to continue to diverge over time and it was a very conservative assumption that the 6 percentage points difference that evolves over 12 weeks of treatment in benefit would not evolve further. So yes, we maybe highly overpowered to see the primary endpoint, but that’s not a bad thing.
  • George Zavoico:
    It’s definitely not a bad thing considering recent Phase 3 failures mainly in other areas of course, but with that extra $5 million to $10 million, that’s certainly worth getting that added confidence I think. Actually, you are talking about the next-gen compounds in the cardiac phase it’s interesting if it’s a different mechanism, have you considered perhaps being able to use the next-gen compound in combination with the first gen compound to get a synergistic effect?
  • Robert Blum:
    So, I am not sure that those necessarily produced a synergistic effect, but those are the kinds of things that we have talked about and resource limitations being what they are that’s not currently in the cards.
  • George Zavoico:
    Okay. Just thinking further along in the future, regarding MPower, you mentioned that the data came mainly from the placebo arm, did you also look at the changes in SVC in the Dex arm and was there anything there that you might have learned if you look there?
  • Andy Wolff:
    We didn’t have access to the Dex arm, but they were willing to share the placebo data with us and I think that maybe is more relevant anyway, because what we are really trying to do is obtain a natural history exercise, if you will, to confirm that the extrapolations we made regarding our primary endpoint and other respiratory endpoints from the limited amount of treatment duration we had in BENEFIT-ALS appear to be consistent over time and similar across database. I think I will emphasize that first characteristic, because I mentioned during the call, but I didn’t say too much about it. I think it’s very reassuring to have data that goes out to 68 weeks on these patients and see that the decline in slow vital capacity is highly linear over that entire period of time. It’s not as though you get 6 months out or something like that and then they start to decline more rapidly. Certainly, there are patients that will do that and these are mean data based on 900 plus patients, but on average, the decline is highly linear and predictable over time, so that really does bode well for us being able to demonstrate what we hope to be able to demonstrate in VITALITY-ALS.
  • George Zavoico:
    Especially considering what your initial assumptions where. And finally quick question on COSMIC, you mentioned all the cardiac functional parameters, first part one of the question is now muscle translated in some quality-of-life improvements, can you comment on that or is that going to come later?
  • Andy Wolff:
    I can’t comment on that yet.
  • George Zavoico:
    Okay.
  • Robert Blum:
    Well, I will just say that there will be other analyses of COSMIC that will be forthcoming and presented at the proper scientific sessions.
  • George Zavoico:
    Okay. Which brings me to the second part of the question, in this area sort of precision medicine in choosing patients that more likely to respond to an experimental drug, you probably can’t say, but just tell me if you are doing it, you are looking at subgroups like who has got diabetes, blood pressure ranges, lipid levels, is that all going to be part of the subgroup analysis?
  • Andy Wolff:
    Yes, those things are all being looked at. And in fact, I will just remind you what you haven’t seen so far from COSMIC, one is a fairly compressive analyses of effects in different subgroups and the other is the relationships between the pharmacodynamic effects we observed in the omecamtiv mecarbil concentrations. So, there are many upcoming cardiology meetings where we can present additional types of data from COSMIC and ACC was a little too close, but starting with European heart failure meetings and following on from there, I would expect you will see new data. I mean, the main results are out there they are not going to change, but some of the questions that you have asked I think you will start seeing some results like those.
  • Robert Blum:
    And to your point, yes, those will be factoring into design elements for a potential Phase 3 program.
  • George Zavoico:
    Okay, thank you very much. Looking forward to the upcoming results as you mentioned it in those heart failure meetings. Thank you very much.
  • Robert Blum:
    Thank you.
  • Operator:
    And sir, there are no further questions in queue.
  • Robert Blum:
    Okay. Well, thank you. Thank you, operator. Thank you to all the participants on our teleconference today. We are very pleased with how 2015 ended on a positive note leading into strong momentum as we now proceed in 2016. We look forward to keeping you updated on our progress. We appreciate your continued support and your interest in Cytokinetics. Operator, with that, we can conclude the call.
  • Operator:
    Ladies and gentlemen, this does conclude today’s conference call. You may now disconnect.