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| CYTK > SEC Filings for CYTK > Form 10-Q on 5-Nov-2009 | All Recent SEC Filings |
5-Nov-2009
Quarterly Report
This discussion and analysis should be read in conjunction with our financial
statements and accompanying notes included elsewhere in this report. Operating
results are not necessarily indicative of results that may occur in future
periods.
This report contains forward-looking statements that are based upon current
expectations within the meaning of the Private Securities Litigation Reform Act
of 1995. We intend that such statements be protected by the safe harbor created
thereby. Forward-looking statements involve risks and uncertainties and our
actual results and the timing of events may differ significantly from the
results discussed in the forward-looking statements. Examples of such
forward-looking statements include, but are not limited to, statements about or
relating to:
guidance concerning revenues, research and development expenses and general
and administrative expenses for 2009;
the sufficiency of existing resources to fund our operations for at least the next 12 months;
our capital requirements and needs for additional financing;
the initiation, design, progress, timing and scope of clinical trials and development activities for our drug candidates and potential drug candidates conducted by ourselves or our partners, including the anticipated timing for initiation of clinical trials and anticipated dates of data becoming available or being announced from clinical trials;
the results from the clinical trials of our drug candidates omecamtiv mecarbil (formerly known as CK-1827452), CK-2017357, ispinesib, SB-743921 and GSK-923295, and the significance of such results;
the advancement of potential drug candidates into and through preclinical studies and clinical trials;
our and our partners' plans or ability to conduct the continued research and development of our drug candidates and potential drug candidates;
our expected roles in research, development or commercialization under our strategic alliances, such as with Amgen Inc. ("Amgen") and GlaxoSmithKline ("GSK");
the properties and potential benefits of, and the potential market opportunities for, our drug candidates and potential drug candidates;
the sufficiency of the clinical trials conducted with our drug candidates to demonstrate that they are safe and efficacious;
our plans or ability to commercialize drugs with or without a partner, including our intention to develop sales and marketing capabilities;
our receipt of milestone payments, royalties, reimbursements and other funds from our partners under strategic alliances, such as with Amgen and GSK;
our ability to continue to identify additional potential drug candidates that may be suitable for clinical development;
the focus, scope and size of our research and development activities and programs;
the issuance of shares of our common stock under our committed equity financing facility entered into with Kingsbridge Capital Limited ("Kingsbridge") in 2007;
our plans and ability to liquidate our auction rate securities ("ARS") investments;
our ability to protect our intellectual property and to avoid infringing the intellectual property rights of others;
expected future sources of revenue and capital;
losses, costs, expenses and expenditures;
future payments under lease obligations and equipment financing lines;
potential competitors and competitive products;
increasing the number of our employees, retaining key personnel and recruiting additional key personnel;
expected future amortization of employee stock-based compensation; and
the potential impact of recent accounting pronouncements on our financial position or results of operations.
Such forward-looking statements involve risks and uncertainties, including,
but not limited to, those risks and uncertainties relating to:
Amgen's and GSK's decisions with respect to the timing, design and conduct
of development activities for omecamtiv mecarbil and GSK-923295,
respectively;
our ability to obtain additional financing;
our receipt of funds under our strategic alliances;
difficulties or delays in the development, testing, production or commercialization of our drug candidates, including decisions by Amgen or GSK to postpone or discontinue research or development activities relating to omecamtiv mecarbil or GSK-923295, respectively;
difficulties or delays in or slower than anticipated patient enrollment in our or our partners' clinical trials;
unexpected adverse side effects or inadequate therapeutic efficacy of our drug candidates that could slow or prevent product approval (including the risk that current and past results of preclinical studies or clinical trials may not be indicative of future clinical trials results);
results from non-clinical studies that may adversely impact the further development of our drug candidates and potential drug candidates;
the possibility that the U.S. Food and Drug Administration ("FDA") or foreign regulatory agencies may delay or limit our or our partners' ability to conduct clinical trials or may delay or withhold approvals for the manufacture and sale of our products;
activities and decisions of, and market conditions affecting, current and future strategic partners;
the conditions in our 2007 committed equity financing facility with Kingsbridge that must be fulfilled before we can require Kingsbridge to purchase our common stock, including the minimum volume-weighted average share price;
our ability to maintain the effectiveness of our registration statement permitting resale of securities to be issued to Kingsbridge by us in connection with our 2007 committed equity financing facility;
changing standards of care and the introduction of products by competitors or alternative therapies for the treatment of indications we target that may make our drug candidates commercially unviable;
the uncertainty of protection for our intellectual property, whether in the form of patents, trade secrets or otherwise; and
potential infringement or misuse by us of the intellectual property rights of third parties.
In addition such statements are subject to the risks and uncertainties
discussed in the "Risk Factors" section and elsewhere in this document.
Operating results reported are not necessarily indicative of results that may
occur in future periods.
When used in this report, unless otherwise indicated, "Cytokinetics," "the
Company," "we," "our" and "us" refers to Cytokinetics, Incorporated.
CYTOKINETICS, and our logo used alone and with the mark CYTOKINETICS, are
registered service marks and trademarks of Cytokinetics. Other service marks,
trademarks and trade names referred to in this report are the property of their
respective owners.
Overview
We are a clinical-stage biopharmaceutical company focused on the discovery
and development of novel small molecule therapeutics that modulate muscle
function for the potential treatment of serious diseases and medical conditions.
Our research and development activities are founded on our knowledge and
expertise regarding the cytoskeleton, a complex biological infrastructure that
plays a fundamental role within every human cell. These activities initially
focused on inhibitors of cell division, and are now directed to the biology of
muscle function, and in particular, to small molecule modulators of the
contractility of cardiac, smooth and skeletal muscle. We intend to leverage our
expertise in muscle contractility in order to expand our current pipeline into
new therapeutic areas, and expect to continue to be able to identify additional
potential drug candidates that may be suitable for clinical development.
We have five drug candidates currently in human clinical trials: omecamtiv
mecarbil (formerly known as CK-1827452) is in Phase IIa clinical development for
the potential treatment of heart failure; CK-2071357 is in Phase I clinical
development and may be developed for diseases or medical conditions associated
with muscle weakness or wasting; ispinesib is the subject of a Phase I/II
clinical trial in breast cancer patients; SB-743921 is the subject of a Phase
I/II clinical trial in patients with Hodgkin or non-Hodgkin lymphoma; and
GSK-923295 is the subject of Phase I clinical trial in patients with advanced,
refractory solid tumors. We also have two potential drug candidates currently in
preclinical development: a back-up development compound for CK-2017357 and an
inhibitor of smooth muscle myosin intended for inhaled delivery that may be
useful as a potential treatment of diseases such as pulmonary arterial
hypertension, asthma or chronic obstructive pulmonary disease.
Muscle Contractility Programs
Cardiac Muscle Contractility
Our lead drug candidate, omecamtiv mecarbil, a novel cardiac muscle myosin
activator for the potential treatment of heart failure, is currently in Phase
IIa clinical development to evaluate the safety, tolerability, pharmacodynamics
and pharmacokinetic profile of this drug candidate in both an intravenous and
oral formulation.
In December 2006, we entered into a collaboration and option agreement with
Amgen Inc. to discover, develop and commercialize novel small molecule
therapeutics that activate cardiac muscle contractility for potential
applications in the treatment of heart failure, including omecamtiv mecarbil.
The agreement provided Amgen with a non-exclusive license and access to certain
technology. The agreement also granted Amgen an option to obtain an exclusive
license worldwide, except Japan, to develop and commercialize omecamtiv mecarbil
and other drug candidates arising from the collaboration. In May 2009, Amgen
exercised this option and subsequently paid us an exercise fee of $50.0 million.
Amgen is now responsible for the development and commercialization of omecamtiv
mecarbil and related compounds, at its expense, subject to our development and
commercialization participation rights. The agreement provides for potential
pre-commercialization and commercialization milestone payments of up to
$600.0 million in the aggregate on omecamtiv mecarbil and other potential
products arising from research under the collaboration, and royalties that
escalate based on increasing levels of annual net sales of products
commercialized under the agreement. The agreement also provides for us to
receive increased royalties by co-funding Phase III development costs of drug
candidates under the collaboration. If we elect to co-fund such costs, we would
be entitled to co-promote omecamtiv mecarbil in North America and participate in
agreed commercialization activities in institutional care settings, at Amgen's
expense.
In August 2009, at the Annual Meeting of the European Society of Cardiology
(ESC), and in September at the 2009 Heart Failure Society of America
(HFSA) Annual Meeting, final data from the Phase IIa clinical trial of omecamtiv
mecarbil in stable heart failure patients was presented. The authors concluded
that patients with reduced stroke volumes (< 50 mL) at baseline had generally
greater pharmacodynamic responses to omecamtiv mecarbil than those in patients
with greater stroke volumes at baseline, demonstrating robust pharmacodynamic
activity in this more severely affected sub-population of patients from the
study. Statistically significant increases in systolic ejection time, and in
stroke volume, cardiac output, fractional shortening, and ejection fraction (all
measures of cardiac function), occurred across the patient population in a
concentration-dependent manner. In addition, the data demonstrated statistically
significant correlations between increasing omecamtiv mecarbil plasma
concentration and decreases in left ventricular end-systolic volume, left
ventricular end-diastolic volume and heart rate.
In August 2009, at the Annual Meeting of the ESC, and in September at the
2009 HFSA Annual Meeting, final data from the Phase IIa clinical trial of
omecamtiv mecarbil in patients with ischemic cardiomyopathy and angina was
presented. The authors concluded that in these patients, who theoretically could
be most vulnerable to the possible deleterious consequences of systolic ejection
time prolongation, treatment with omecamtiv mecarbil, at plasma concentrations
previously demonstrated in other Phase IIa trials to increase cardiac function,
did not adversely affect a broad range of safety assessments in the setting of
exercise.
During the third quarter of 2009, the Phase IIa clinical trial designed to
evaluate the pharmacokinetics of both modified and immediate release oral
formulations of omecamtiv mecarbil in patients with stable heart failure
continued to enroll patients.
In July 2009, Cytokinetics and Amgen announced the discontinuation of the
Phase IIa clinical trial evaluating an intravenous formulation of omecamtiv
mecarbil in patients with stable heart failure undergoing clinically indicated
coronary angiography in the cardiac catheterization laboratory. This decision,
made jointly by the companies, was due to the challenges of the current trial
design and the constraints on enrolling eligible and consenting patients. The
companies may revisit the objectives of this trial in the context of the overall
clinical development program for omecamtiv mecarbil.
Cytokinetics and Amgen have agreed on next steps relating to the further
development of omecamtiv mecarbil. The companies are planning a clinical trial
designed to further assess the pharmacokinetics of both modified and immediate
release oral formulations of omecamtiv mecarbil in patients with stable heart
failure, using active pharmaceutical ingredient and drug product manufactured by
Amgen. In addition, the companies are planning to conduct another
pharmacokinetic trial to evaluate omecamtiv mecarbil in patients with renal
dysfunction, along with additional pre-clinical activities. Cytokinetics and
Amgen anticipate the initiation of the Phase IIb clinical trials program to
occur in 2011, but the companies are discussing if and how the timeline
potentially could be accelerated into 2010.
The clinical trials program for omecamtiv mecarbil may proceed for several
years, and we will not be in a position to generate any revenues or material net
cash flows from sales of this drug candidate until the program is successfully
completed, regulatory approval is achieved, and the drug is commercialized.
Omecamtiv mecarbil is at too early a stage of development for us to predict when
or if this may occur. We funded all research and development costs associated
with this program prior to Amgen's option exercise. We recorded research and
development expenses for activities relating to our cardiac muscle contractility
program of approximately $9.1 million and $15.7 million in the nine months ended
September 30, 2009 and 2008, respectively. We anticipate that our expenditures
relating to the research and development of compounds in our cardiac muscle
contractility program will increase if we participate in the future advancement
of omecamtiv mecarbil through clinical development. Our expenditures will also
increase if Amgen terminates development of omecamtiv mecarbil or related
compounds and we elect to develop them independently or if we elect to co-fund
later-stage development of omecamtiv mecarbil or other compounds in our cardiac
muscle contractility program under our collaboration and option agreement with
Amgen.
Skeletal Muscle Contractility
In April 2008, we announced that we had selected CK-2017357 as the lead
potential drug candidate from our skeletal sarcomere activator program. In
January 2009, we announced that we had selected another compound from this
program as a backup development compound to CK-2017357. CK-2017357 and its
backup development compound are structurally distinct small molecule activators
of the skeletal sarcomere. These compounds act on fast skeletal muscle troponin.
Activation of troponin increases its sensitivity to calcium, leading to an
increase in skeletal muscle contractility. This mechanism of action has
demonstrated encouraging pharmacological activity in preclinical models. We are
evaluating the potential indications for which CK-2017357 may be useful. These
may include diseases and medical conditions associated with skeletal muscle
weakness or wasting, such as amyotrophic lateral sclerosis, also known as ALS or
Lou Gehrig's disease, claudication, cachexia in connection with heart failure or
cancer, sarcopenia, post-surgical rehabilitation and general frailty associated
with aging.
We continue to dose healthy volunteers in a Phase I, first-time-in-humans,
ascending, single-dose, double-blind, placebo-controlled clinical trial of
CK-2017357 designed to assess the safety, tolerability and pharmacokinetic
profile of this drug candidate and to determine its maximum tolerated dose and
plasma concentration. Although the trial is still ongoing and thus remains
blinded, to date, no adverse events have been observed in trial participants to
indicate that an intolerable dose has been administered. Consequently,
the maximum tolerated dose has not yet been determined. However, doses that
produced CK-2017357 blood levels associated with increased skeletal muscle
function in preclinical models have been tolerated by the healthy volunteers in
this study.
We anticipate initiating a Phase I multi-dose study of CK-2017357 in healthy
volunteers in 2009. We are scheduled to present non-clinical data from
CK-2017357 at the Society on Cachexia and Wasting Disorders' 5th Annual Cachexia
Conference in Barcelona, Spain in December 2009.
CK-2017357 is at too early a stage of development for us to predict if or
when we will be in a position to generate any revenues or material net cash
flows from its commercialization. We currently fund all research and development
costs associated with this program. We recorded research and development
expenses for activities relating to our skeletal muscle contractility program of
approximately $10.6 million and $7.5 million in the nine months ended
September 30, 2009 and 2008, respectively. We anticipate that our expenditures
relating to the research and development of compounds in our skeletal muscle
contractility program will increase significantly if and as we advance
CK-2017357, its back-up compound or other compounds from this program into and
through development.
Smooth Muscle Contractility
In January 2009, we announced that we had selected a lead potential drug
candidate from this program for advancement. This compound is a small molecule
direct inhibitor of smooth muscle myosin. By inhibiting the function of the
myosin motor central to the contraction of smooth muscle, this small molecule
directly leads to the relaxation of contracted smooth muscle. Specifically
intended for inhaled delivery applications, this potential drug candidate has
demonstrated encouraging pharmacological activity in preclinical models as a
novel mechanism vasodilator and bronchodilator. This data suggests that it may
be useful as a potential treatment of diseases such as pulmonary arterial
hypertension, asthma or chronic obstructive pulmonary disease. This potential
drug candidate is currently in investigational new drug application
("IND")-enabling studies, and we are continuing to conduct non-clinical
development of other smooth muscle myosin inhibitors.
We are scheduled to present non-clinical data from our smooth muscle myosin
inhibitor program at the 2009 Scientific Sessions of the American Heart
Association in Orlando, Florida in November 2009.
This potential drug candidate is at too early a stage of development for us
to predict if or when we will be in a position to generate any revenues or
material net cash flows from its commercialization. We currently fund all
research and development costs associated with this program. We recorded
research and development expenses for activities relating to our smooth muscle
contractility program of approximately $4.3 million and $5.8 million in the nine
months ended September 30, 2009 and 2008, respectively. We anticipate that our
expenditures relating to the research and development of compounds in our smooth
muscle contractility program will increase significantly if and as we advance
this smooth muscle myosin inhibitor or other compounds from this program into
and through development.
Oncology Program: Mitotic Kinesin Inhibitors
We currently have three drug candidates in clinical trials for the potential
treatment of cancer: ispinesib, SB-743921 and GSK-923295. All of these arose
from our earlier research activities directed to the role of the cytoskeleton in
cell division and progressed under our strategic alliance with GSK. This
strategic alliance was established in 2001 to discover, develop and
commercialize novel small molecule therapeutics targeting mitotic kinesins for
applications in the treatment of cancer and other diseases. Mitotic kinesins are
a family of cytoskeletal motor proteins involved in the process of cell
division, or mitosis. Under that strategic alliance, we focused primarily on two
mitotic kinesins: kinesin spindle protein ("KSP") and centromere-associated
protein E ("CENP-E"). In November 2006, we amended the agreement and assumed
responsibility, at our expense, for the continued research, development and
commercialization of inhibitors of KSP, including ispinesib and SB-743921, and
other mitotic kinesins, other than CENP-E. GSK retained an option to resume
responsibility for the development and commercialization of either or both of
ispinesib and SB-743921. This option expired at the end of 2008. Accordingly, we
retain all rights to both ispinesib and SB-743921, subject to certain royalty
obligations to GSK. In each of June 2006, 2007 and 2008, we amended the
agreement to extend the research term of the GSK strategic alliance for an
additional year to continue joint research directed to CENP-E. This research
term expired in June 2009. However, collaborative translational research
continues as part of the development program for GSK-923295.
Ispinesib
A broad Phase II clinical trials program has been conducted for ispinesib
across multiple tumor types. To date, we believe clinical activity for ispinesib
has been observed in non-small cell lung, ovarian and breast cancers, with the
most robust clinical activity observed in a Phase II clinical trial evaluating
ispinesib in the treatment of patients with locally advanced or metastatic
breast cancer that had failed treatment with taxanes and anthracyclines. In
addition, preclinical and Phase Ib clinical data relating to ispinesib indicate
that it may have an additive effect when combined with certain existing
chemotherapeutic agents.
We continue to treat a patient in the Phase I portion of a Phase I/II
clinical trial for ispinesib in chemotherapy-naοve locally advanced or
metastatic breast cancer patients using a more dose-dense schedule than was
previously evaluated. This clinical trial is intended to determine if the
overall response to ispinesib can be increased while maintaining its existing
safety profile and to further define its clinical activity profile. In
June 2009, at the Annual Meeting of the American Society of Clinical Oncology
("ASCO"), a poster
containing interim data from the Phase I portion of this trial was presented.
This poster highlighted the safety and tolerability of ispinesib and tumor
reductions of at least 30 percent in 3 patients in this trial. Ispinesib
appeared to demonstrate anti-cancer activity with a similar toxicity profile
when compared with prior clinical trials conducted with a once every 21 days
dosing schedule. We are seeking a strategic partner for the future development
and commercialization of ispinesib.
SB-743921
We continue to conduct the Phase I portion of a Phase I/II clinical trial
evaluating SB-743921's safety, tolerability and pharmacokinetics in patients
with Hodgkin or non-Hodgkin lymphoma using a more dose-dense schedule than was
previously evaluated. This clinical trial is intended to determine if the
overall response to SB-743921 can be increased while maintaining its existing
safety profile. At the ASCO Annual Meeting in May 2009, a poster containing
interim data from the Phase I portion of this trial was presented. A preliminary
potential efficacy signal in the form of partial responses has been observed at
doses at or above 6 mg/m2 in four patients with Hodgkin lymphoma and indolent
non-Hodgkin lymphoma. The poster highlighted data indicating an objective
partial response rate of 30 percent (3 of 10 patients) in the last two dosing
levels of 8 mg/m2 and 9 mg/ m2. The main toxicity of SB-743921 observed has been
myelosuppression, predominantly neutropenia. Grade 3 or 4 toxicities other than
myelosuppression are infrequent; in particular, there has been no evidence of
neuropathy or alopecia greater than Grade 1. We are scheduled to present data
from the Phase I portion of this trial at the Annual Meeting of the American
Society of Hematology in New Orleans, Louisiana in December 2009.
We intend to complete the Phase I portion of this trial and are seeking a
strategic partner for the future development and commercialization of SB-743921.
GSK-923295
Under our strategic alliance, GSK is responsible, at its expense, for the
development of and commercialization of GSK-923295. GSK continues to enroll and
dose-escalate patients in a Phase I first-in-humans clinical trial evaluating
GSK-923295 in patients with advanced, refractory solid tumors.
GSK is scheduled to present pharmacogenomic and drug combination data
evaluating GSK-923295 with a MEK inhibitor in preclinical models at the
AACR-NCI-EORTC International Conference: Molecular Targets and Cancer
Therapeutics in Boston, Massachusetts in November 2009.
We will receive royalties from GSK's sales of any drugs developed under the
strategic alliance. For those drug candidates that GSK develops under the
strategic alliance, we can elect to co-fund certain later-stage development
activities which would increase our potential royalty rates on sales of
resulting drugs and provide us with the option to secure co-promotion rights in
North America. If we elect to co-fund later-stage development, we expect that
the royalties to be paid on future sales of GSK-923295 could potentially
increase based on increasing product sales and our anticipated level of
co-funding. If we exercise our co-promotion option, then we are entitled to
receive reimbursement from GSK for certain sales force costs we incur in support
of our commercialization activities.
The clinical trials program for each of ispinesib, SB-743921 and GSK-923295
may proceed for several years, and we will not be in a position to generate any
revenues or material net cash flows from sales of any of these drug candidates
until its clinical trials program is successfully completed, regulatory approval
is achieved and the drug is commercialized. Each of these drug candidates is at
too early a stage of development for us to predict when or if this may occur. We
currently fund all research and development costs associated with ispinesib and
SB-743921. If we continue to conduct our Phase I/II clinical trials for either
or both of ispinesib and SB-743921, our expenditures relating to research and
development of these drug candidate will increase significantly. We recorded
research and development expenses for activities relating to our mitotic kinesin
. . .
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