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Cytokinetics, Inc. (NASDAQ:CYTK)

Q2 2014 Earnings Conference Call

July 30, 2014 4:30 PM ET

Executives

Robert I. Blum – President and Chief Executive Officer

Sharon A. Barbari – Chief Financial Officer, Executive Vice President – Finance

Fady I. Malik – Senior Vice President – Research and Early Development

Andrew A. Wolff – Senior Vice President – Clinical Research and Development and Chief Medical Officer

Analysts

Charles Duncan – Piper Jaffray

Chad Messer – Needham & Co.

Caroline Palomeque – JMP Securities

George Zavoico – MLV & Co

Deanna Bahel – ROTH Capital Partners

Operator

Good afternoon, and welcome, ladies and gentlemen, to Cytokinetics’ Second Quarter 2014 Conference Call. At this time, I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. At the company’s request, we will open the call for questions and answers after the presentation.

I will now turn the call over to Sharon Barbari, Cytokinetics’ Executive Vice President of Finance and CFO. Please go ahead.

Sharon A. Barbari

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 of Clinical Research and Development and Chief Medical Officer, will comment on our clinical development program for tirasemtiv, which will include a summary of recently reported additional results from BENEFIT-ALS, our completed Phase IIb trial, which evaluated tirasemtiv for the potential treatment of amyotrophic lateral sclerosis or ALS.

Following Dr. Wolff, Fady Malik, our Senior Vice President of Research and Early Development, will provide you with an update on the clinical development of omecamtiv mecarbil for the potential treatment of heart failure as well as an update on the progress of our Phase I clinical program for CK-2127107 or CK-107 in healthy volunteers. I’ll then provide a financial overview for the quarter. Robert will then conclude the call with comments about our future plans and milestones. We’ll then open the call for questions.

Please note that the following discussion, including our responses to questions, contains statements that constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to our financial guidance and collaborations with Amgen and Astellas, to the initiation, enrollment, design, conduct and results of clinical trials and to other research and development activities. 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.

I’ll now turn the call over to Robert.

Robert I. Blum

Thank you, Sharon, and thank you to everyone on the line for joining us for this call today. I’d like to start off the Cytokinetics second quarter conference by providing an update relating to company activities that followed our announcement of the results of BENEFIT-ALS.

In the last few months, we have consulted with expert neuromuscular and pulmonary specialists in order to better understand the respiratory effects related to tirasemtiv and patients enrolled in BENEFIT-ALS and their implications for the further development of tirasemtiv for the potential treatment of ALS.

As should be expected, we learned a good deal from our Phase IIb clinical trial, both regarding our first-in-class skeletal muscle troponin activator as well as appropriate endpoints to be assessed in a potential future Phase III international clinical trial of patients with ALS.

Andy will provide additional detail later in this call. But we believe analysis as well as planned regulatory interactions will enable us to consider potential development path for tirasemtiv. In the second quarter while the organization was engrossed in further analyzing the data from BENEFIT-ALS, we also made considerable progress with respect to our programs for each of omnecamtiv mecarbil, our cardiac myosin activator partnered with Amgen and CK-107 our follow-on of fast skeletal muscle troponin activator partnered with Astellas.

In the quarter, patients continue to enroll at the expansion phase of COSMIC-HF evaluated omnecamtiv mecarbil as a potential oral therapy for patients with heart failure. Fady will elaborate more on this trial later in this call.

Also we are nearing completion of our currently planned Phase I studies of CK-107 as we continue to enroll healthy volunteers in CY-5012 a multiple ascending dose Phase I trial of CK-107. And we initiated and completed enrollment in CY-5013 a Phase I single-dose four-period crossover PK/PD study of CK-107 in healthy volunteers. We continue to believe that developing a pipeline of novel mechanism drug candidates with strategic partners enables the company to manage risk appropriately in the pursuit of innovation.

We are focusing on ensuring that we diligently prosecute our pipeline in a manner that best provides value to both patients and shareholders and as we elaborate in this call today.

Let’s begin with the summary of what learned from additional analysis of data from BENEFIT-ALS. I’ll turn the call over to Andy.

Andrew A. Wolff

Thank you, Robert. As you know, BENEFIT-ALS was the Phase IIb multi-national double blind randomized placebo controlled clinical trial designed to evaluate the safety, tolerability, and potential efficacy of tirasemtiv in patients with ALS. BENEFIT-ALS enrolled 711 patients from 73 centers in 8 countries. 605 patients are randomized to double-blind treatment, 302 to placebo, and 303 to tirasemtiv.

The primary outcome measure in BENEFIT-ALS, the ALS functional rating scale in its revised form, or ALSFRS-R, was not statistically different between the treatment groups. Secondary endpoints included measures of respiratory function, specifically slow vital capacity or SVC, maximum voluntary ventilation, and sniff nasal inspiratory pressure, as well as other assessments of skeletal muscle performance, including the Mega-Score muscle strength and hand grip fatigue.

Treatment with tirasemtiv resulted in a statistically significant and potentially clinically meaningful slowing of the rate of decline of SVC versus placebo. In addition, the reduction from baseline in SVC was statistically significantly smaller on tirasemtiv versus placebo at each time point it was assessed.

As Robert mentioned, we have continued to analyze the BENEFIT-ALS data since our initial presentation of the main results from 12 weeks of double-blind treatment in Philadelphia in April at the 66th annual meeting of the American Academy of Neurology.

In June, at the Joint Congress of European Neurology in Istanbul, investigators presented data obtained at one and four weeks after the last dose of double-blind study medication. We found the statistically significantly smaller reduction from baseline in SVC in patients treated with tirasemtiv versus those on placebo persisted for at least four weeks following the last dose of double-blind study medication.

In July, at the 13th International Congress on Neuromuscular Diseases in Nice, France, we presented analysis of the primary and secondary endpoints with increased specified sub groups of the patients enrolled in BENEFIT-ALS. The authors concluded that tirasemtiv reduced the decline in SVC versus placebo by a similar magnitude regardless of age, sex, geographic region, riluzole use, anatomic site of ALS onset, baseline pulmonary function, base line weight, and baseline body mass index.

The reduced decline in SVC versus placebo was statistically significant within each subgroup examined except patients enrolled in Europe those with bulbar onset, and those with a percent predicted SVC less than the median at baseline, although, directionally, those groups still showed a similar magnitude of improvement on tirasemtiv versus placebo.

We believe that tirasemtiv is the first drug candidate to reduce the rate of decline in SVC in ALS patients so consistently regardless of age, sex, geographic region, riluzole use, site of disease onset, baseline pulmonary function and baseline weight and body mass index. We are encouraged by these results as we can consider the potential further development of tirasemtiv in patients with ALS. Our possible next steps in the development of tirasemtiv for the potential treatment of ALS will be informed by our discussions with regulatory authorities planned to occur this year.

I will now turn the call over to Fady for an update on our other muscle contractility programs.

Fady I. Malik

Thank you, Andy. Turning first to the development of omecamtiv mecarbil, in the second quarter, enrollment of patients continued in the expansion phase of COSMIC-HF. To remind you, omecamtiv mecarbil is the first-in-class cardiac myosin activator that we’re developing in collaboration with Amgen for the potential treatment of heart failure.

COSMIC-HF is a Phase II double-blind randomized placebo controlled multi-center clinical trial, designed to assess the pharmacokinetics and tolerability of omecamtiv mecarbil in patients with stable chronic heart failure in left ventricular systolic dysfunction.

Secondary objectives are to assess the changes from baseline and echocardiographic parameters, an N-terminal pro-brain natriuretic peptide, a biomarker associated with the severity of heart failure during 20 weeks of treatment.

The expansion phase of COSMIC-HF conducted by Amgen in collaboration of Cytokinetics has enrolled over 150 or 450 targeted heart failure patients from approximately 95 clinical sites in 13 countries. The patients enrolled in COSMIC-HF are stable outpatients of heart failure and are treated with optimal pharmacologic therapy.

Patients must have an ejection fraction of less than 40%, which is confirmed as the core echo laboratories and an elevated N-terminal pro-BNP as well. The trial excludes sicker patients. For example, those with shortness of breath at rest, those hospitalized for any reason within 30 days prior to randomization, and those receiving continuous or intermittent inotropic therapy.

During 20 weeks of treatment, the patients receive omecamtiv mecarbil at doses of either 25 milligrams twice daily or 25 milligrams and then 50 milligrams twice daily if eligible to up titrate based on a trough plasma concentration of two weeks. A full eight-hour pharmacokinetics profile will then be obtained at each patient have their final dose in week 12 at steady stay with additional sampling occurring at week 16 and 20.

COSMIC-HF is the first study to examine the effects of chronic oral administration of omecamtiv mecarbil on cardiac function. To do so, each patient will also have echocardiograms at both weeks 12 and 20 for comparison to the echocardiograms obtained at baseline.

Echocardiography uses ultrasound to image the heart as it beats and for measurement of its physical dimensions, as well as quantification of its pumping function by measuring blood flow using Doppler method. As the conditions of patients with heart failure worsens, the size of the main pumping chamber of the left ventricle gets larger, and its pumping ability becomes diminished.

Important secondary end points in COSMIC-HF include measurements of left ventricular side, in particular the diameter of the ventricle at the beginning and end of a contraction, the left ventricular end-diastolic and end-systolic dimensions respectively, as well as measurements of cardiac functions such as the time and amount of blood ejected during cardiac contraction, the systolic ejection time and the stroke volume.

In prior studies of omecamtiv mecarbil, we employed echocardiography extensively during short-term infusions in patients’ heart failure and found that left ventricular, end-systolic and end-diastolic dimensions decreased, while systolic ejection time and stroke volumes increased.

The echocardiograms obtained in COSMIC-HF following 12 and 20 weeks of therapy will allow us to assess the impact over time of omecamtiv mecarbil on the dimensions of the left ventricle, as well as its pumping function.

Evidence that the heart size could be getting smaller while other functional measures are improving would suggest that omecamtiv mecarbil is having clinically relevant effects on the course of the disease that may also translate into effects on mortality and morbidity. Overall, we believe that COSMIC-HF has the potential to inform the progression of omecamtiv mecarbil into a potential Phase III registration program, and we look forward to the data from this trial.

Also during the second quarter, Cytokinetics initiated dosing of CY 1211, a Phase I, single-center, placebo-controlled double-blind study comparing the pharmacokinetics of omecamtiv mecarbil between healthy Japanese and Caucasian volunteers. CY 1211 is being conducted by Cytokinetics in collaboration with Amgen.

Switching gears, I’ll now provide an update on CK 107, our next-generation skeletal muscle troponin activator partnered with Astellas. This quarter, we’ve been very busy with the clinical development of this drug candidate as part of our Phase II readiness activities.

During the second quarter, we continue to enroll patients in CY 5012, a Phase I double-blind randomized placebo-controlled multiple ascending dose study with the primary objective to assess the safety tolerability and pharmacokinetics of CK-107 in healthy young and elderly volunteers.

CY 5012 consists of two or three ascending dose cohorts of 12 young volunteers ages 18 to 55 and two ascending dose cohorts of 12 elderly volunteers ages 65 to 85, in each case, half men and half women. In each cohort, volunteers will receive CK-107 or placebo in accordance with a 1:2 randomization scheme. And each cohort pharmacokinetic assessments are being performed while in the first dose of CK-107 and throughout the study to day 10.

Also, during the quarter, we initiated and completed enrollment in CY 5013, a Phase I randomized placebo-controlled single dose four-period crossover PK/PD study of CK-107 in healthy male volunteers. CY 5013 was designed to evaluate the force-frequency profile of the tibialis anterior muscle responsible for raising your foot during transcutaneous stimulation of the deep fibular nerve and its relationship to dose and plasma concentrations of CK-107.

A similar translational study was tirasemtiv, our other fast skeletal troponin activator, was recently published in muscle and nerve that demonstrate the translation of this mechanism of action into human.

With that update on our cardiac and skeletal sarcomere activators, I’ll turn the call over to Sharon with an update on our financials.

Sharon A. Barbari

Thank you, Fady. As our press release contains detailed financial results for the second quarter of 2014. I’ll refer you to that public statement for the details on our P&L and balance sheet. We ended the second quarter with approximately $92 million in cash, cash equivalents and investments, which represents approximately 20 to 22 months of going-forward cash burn based on our current 2014 financial guidance.

Revenues for the second quarter 2014 were $7.8 million. These revenues included $2.7 million in license revenue and $4.2 million of research and development revenues from our collaboration with Astellas, as well as $0.8 million of research and development revenues from our collaboration with Amgen.

Our second quarter 2014 research expenditures totaled $11.7 million. From a program perspective for the second quarter, approximately 79% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities and 13% to our cardiac muscle contractility activities and 8% to our other research activities.

For the six months ended September 30, 2014, our R&D expenditures totaled $24.7 million. From a program perspective for those six months, approximately 81% of our R&D expenses were attributable to our skeletal muscle contractility activities, and 11% to our cardiac muscle contractility program and 8% to our other research activities.

Once we more fully understand the implications of the BENEFIT-ALS data on the potential future development of tirasemtiv, we will provide updated financial guidance. We believe that we have sufficient financial resources to enable us to focus on determining the development path for tirasemtiv as well as to advance our other research and development programs.

That concludes the financial portion of today’s call. And with that, I’ll now turn the call back over to Robert.

Robert I. Blum

Thank you, Sharon. As I mentioned earlier in this call, Cytokinetics is committed to a portfolio approach to research and development. For tirasemtiv, our next steps will be defined by our data analyses, by our interactions with regulatory authorities and by the interest of our potential partners against a backdrop of how we see the rest of the portfolio advancing in 2014 and 2015, including the potential for milestone payments to be earned from Astellas and Amgen.

We continue to consult with experts in neurology and pulmonology regarding the data from BENEFIT-ALS. Their feedback to date provides support and underscores our belief that the effects of tirasemtiv on pulmonary function observed in BENEFIT-ALS are robust and potentially clinically meaningful.

We are currently investigating whether this endpoint in patients with ALS is sufficient to form the basis for our registration program. And lastly, we’re investigating how we might approach funding of potential next trial and could that be done with a partner. That of course will depend on several factors that include scope and timing and costs associated with that other trial.

We’ll continue to update you as we obtain clarity and make key decisions regarding a potential development path for tirasemtiv. Rest assured, we intend to do right by patients who may benefit from medicines like tirasemtiv as well as our other first-in-class compounds that we believe are also uniquely positioned to push forward.

We are also optimistic about the potential of omecamtiv mecarbil to address unmet needs in the treatment of heart failure. We believe that this drug candidate may represent a significant innovation for both acutely decompensated and chronically ill heart failure patients. And as you also heard today, we’re making considerable progress with the development of CK-107. We have now completed three Phase I trials and a fourth trial is ongoing. We are executing well on Phase II readiness activities in accordance with agreed plans under the joint oversight of Cytokinetics and Astellas.

Together, we are preparing for the potential investigation of CK-107 in non-neuromuscular diseases. We believe CK-107 could address the high unmet medical need in an array of syndromes and conditions associated with muscle fatigue and weakness.

We look forward to sharing future updates throughout this year. Now, let me turn back to our expected milestones for the remainder of 2014. For tirasemtiv, Cytokinetics expects to interact with regulatory authorities regarded a potential development path for tirasemtiv in the second half of 2014. For CK-107, Cytokinetics expects to conduct additional Phase I studies and also certain Phase II readiness activities for CK-107 in 2014, pursuant to our collaboration agreement with Astellas. And for omecamtiv mecarbil, Cytokinetics expects both the enrollment of patients in the expansion phase of COSMIC-HF and the conduct of CY 1211 to be conducted in 2014.

In conclusion, we are pleased with Cytokinetics’ progress and execution of the last quarter and further analyzing data from BENEFIT-ALS and in advancing the development programs for omecamtiv mecarbil and CK-107. As a company, we are on strong footing with approximately $92 million in cash and we are committed to prosecuting multiple paths to our potential successes for our development programs.

Operator that concludes the formal portion of our call today, I’d now like to open up the call to questions, please?

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) And our first question comes from the line of Charles Duncan with Piper Jaffray.

Robert I. Blum

Hi, Charles.

Charles Duncan – Piper Jaffray

Hi, guys. Hi. It’s actually Roy in for Charles. Just a quick question though, I think COSMIC started enrolling extension phase about the end of March and it looks like you guys or Amgen is about a third enrolled now. How do you guys get to the end of this year, are they trending up, accelerating? My math would put it about 2Q next year. Thanks.

Robert I. Blum

Yeah. So, definitely, in the most recent quarter, we saw the addition of sites to whether we are now at nearly all sites enrolling. And that’s, again, approximately 95 centers in U.S., Canada and in Europe. And with those additional sites, we are seeing increased screening, and that should translate into increased enrollment. We expect that the study can complete enrollment this year and therefore, we’re looking forward to seeing data next year recognizing that the last patient has to be on investigational drug for 20 weeks.

Charles Duncan – Piper Jaffray

Okay. Great. Thank you.

Operator

And your next question is from the line of Chad Messer with Needham & Co.

Robert I. Blum

Hi, Chad.

Chad Messer – Needham & Co.

Hi. Thanks for taking my question. Obviously, we have to hear what the regulatory authorities have to say. That’s a key conversation. But you guys have had a little bit of time here and, I’m sure, have sort of gathered the troupes and the top experts around to kind of look at this BENEFIT data.

Sounds like Slow Vital Capacity from what I’m hearing is one potential endpoint to propose as a way forward. I was just wondering if you could give a little more detail on what you’re hearing, what you’re thinking about this as a possible endpoint for further studies. It seems like to me the most likely path.

Robert I. Blum

Yeah. So, I’ll start and then I’ll turn it over to Andy. What I’ll tell you is we have conducted an extensive series of conversations not only with neuromuscular specialists but also with their counterpart, pulmonary consults, and it’s important to hear from their perspective as well on the measure of respiratory function, in particular Slow Vital Capacity.

So, we’ve gone around both in the U.S. and in Europe, and we’ve asked investigators and non-investigators to look at the data and provide commentary on what they thought was meaningful regarding what we observed in BENEFIT-ALS.

And to this point, at least in the conversations I’ve been, and there is unanimous support for these data, meaning everyone with whom I’ve engaged in conversation around these data is indicating that they believe that these effects are real robust and could be predictive of clinical benefit and therefore should be the subject of further study in Phase III.

I’ll turn it over to Andy for his color, commentary as well.

Andrew A. Wolff

I don’t know that I can add much to that, honestly. I would agree with this, though, that the response has been really universally positive, both in terms of finding the results credible and internally robust and clinically meaningful and potentially supportive of an approval. But that said, we really need to hear that from the regulatory authorities, not from the thought leaders.

Chad Messer – Needham & Co.

All right. Great. And thanks for that additional detail. I guess we’ll have to wait and see. Just real quickly, one more on omecamtiv. So, we’ll have data at some point in the first part of 2015. Can you just walk me through what the process is with Amgen, exactly what would trigger a milestone, what you expect to hear back from them following the data?

Robert I. Blum

So, again, here, I’ll start and I’ll turn it over to Fady to comment. With regard to this study, it will be not unlike what we did together with Amgen in connection with the ATOMIC study last year. These are data that will be reviewed by both Cytokinetics and Amgen, and then after joint review and consideration together with investigators, we’ll be communicating them publicly.

Our expectation is that that will occur at a medical meeting. And whether that can occur in advance by top line press release will be determined by the materiality of that data. But in this particular case, COSMIC, as I think we’ve mentioned before, doesn’t have a pre-specified primary endpoint at least not a single endpoint that we’ll be looking at, rather we’ll be looking at the totality of data in order to understand whether oral omecamtiv mecarbil may be supportive of progression into Phase III.

And we’ll be looking in particular at some of these echocardiographic parameters that Fady mentioned.

The decision to go into Phase III again is a joint decision made by Amgen and Cytokinetics through the mechanism of our joint development committee. That occurs obviously subsequent to having this data in hand and also will require end of Phase II interactions since that we would hope that kind of decision would come promptly following the data but undo course through these intermediate steps.

So as far as what triggers on milestone payment, I think you were also asking that, I’m sorry, I can’t really comment on the triggers for milestone payments. You’ll have to do your best guess in terms of modeling when those might occur. I’m not sure I can do much more than other what I’ve done before in terms of the totality of milestone payments.

Fady, is there anything else you want to add about the process to review and analyze data?

Fady I. Malik

Yeah. I think only that COSMIC represents the last of the Phase II program and so we will – together with Amgen we’ll be looking at that data and on both sides if the data are supportive. We want to proceed forward as quickly as possible. So – but we both anticipate that COSMIC will be the last step to that process.

Robert I. Blum

Yeah. That’s a good point. I mean, to go into an end of Phase II meeting, obviously, you have to have the study reports and all of the data relating to the non-clinical and other clinical studies. All of that is being assembled and readied, as well as other preparation activities are being conducted now with the assumption that we could proceed into Phase III, so that we’re best poise to make that happen.

Chad Messer – Needham & Co.

Great. Thanks. And best of luck. Look forward to getting updates when they’re available.

Robert I. Blum

Thank you.

Operator

And your next question comes from the line Jason Butler with JMP Securities.

Robert I. Blum

Hi, Jason.

Caroline Palomeque – JMP Securities

Hi. This is Caroline, dialing in for Jason. Just a couple of quick questions. On the COSMIC-CF Phase II study, it seems like enrollment is progressing as planned. But I’m just wondering if you had any issues. Have you seen any sort of dropouts or any kind of issues in enrollment?

And then just as a follow-up question on the other study – I’m sorry. Just a question about, now you’ve done studies on the SVC, just wondering if you could elaborate more on what analysis you’re going to do on the BENEFIT-ALS? If you’re discussing that, or do you know what you’re going to do next as far as analyzing that data? Those are my two questions.

Robert I. Blum

So why don’t we start first with your question relating to COSMIC and enrollment dropouts and if we’re seeing anything unexpected. I’ll turn to Fady to answer that.

Fady I. Malik

Yeah. So far, obviously, the trial is blinded but the conduct of the trial is continuing as we expect. Dropouts don’t appear to be an issue. And it’s hard to comment beyond that. I can go back short-term therapy in ATOMIC, which was the acute heart failure study. The drug was very well-tolerated. And in fact, termination of the drug was identical to the termination rate on placebo and was approximately 5% in each arm. So, we hope similarly low dropout rates will be found in the chronic study as well.

Robert I. Blum

With regard to your question BENEFIT-ALS, you asked what additional analyses are we contemplating. Certainly, as we’ve already mentioned with regard to SVC, we’ve looked at that from many different perspectives, including as pre-specified during that period after double-blind treatment. And in the follow-up of 28 days, those data having been presented and also by all of the pre-specified subgroups.

I think we’re very confident that the effects on Slow Vital Capacity, having looked at it from all of these different angles, are real. But yet we are still going through the analyses that were pre-specified and contained within our statistical analysis plan submitted to FDA. And I’ll turn to Andy to comment on what types of other analyses are pre-specified, included in that plan and may shed other light on data from BENEFIT-ALS.

Andrew A. Wolff

I think the major question that people would ask are probably answered with what we’ve presented so far. There are many analyses of robustness of the initial results that are related to the study drug assignment error where we look at all the patients that were specified to be in the primary analysis, which as you will recall, eliminated all of the 58 affected patients as well as any other patient that were randomized in the same block with them.

Now, we’re analyzing all the primary and secondary endpoints in various permutations that include all of the nation’s back-end, whether or not they were affected by the error, or the patients that were randomized with those that were affected by the error, but not the patients in the error, affected by the error, so forth and so on.

I wouldn’t expect the results of those analyses which are specified and need to be done to bring forward anything unexpected or new. I think they’re going to be confirmatory of the overall results that you’ve already heard, but it’s a matter or just chugging through them. There are quite a lot of them.

Caroline Palomeque – JMP Securities

Great. That’s helpful. Thanks.

Andrew A. Wolff

Thank you.

Operator

And your next question comes from the line of George Zavoico with MLV & Co.

Robert I. Blum

Hi, George.

George Zavoico – MLV & Co

Yeah. Hey, Robert, Sharon, Fady, Andy. Good afternoon. It seems to me that you’re going through a tremendous amount of data from this trial, from BENEFIT-ALS. And I wanted to try to get a little bit of understanding of SVC in light of some of the other respiratory parameters.

It would seem to me that breathing better would – you’d see improvement in not just SVC, but perhaps other parameters. And I understand that these measurements measure things differently in terms of how someone breathes fast or slow or forced or just plain involuntary breathing.

Is it unusual in a study such as this to see – to have SVC standout apart from some others in terms of just being the one that improves the most?

Robert I. Blum

So, I’ll start and then ask Andy to comment. It’s unusual in that it’s never happened before than anyone has seen an effect on SVC like we’ve observed in BENEFIT-ALS. So for this population, what we demonstrated with tirasemtiv we believe to be unprecedented. That said, your question is might we have seen other effects on pulmonary function that tracked with slow vital capacity is one of the things that we’ve been looking at very carefully to understand why SVC and not also others.

And one of the things that I’ve come to appreciate looking deeply into these data these last several months is that SVC is so routinely measured that there’s a great deal less variability of the assessment.

It’s not subject to some of the same issues in terms of assessment error and training variability that oftentimes can render clinical trials to be less informative. In this case, we believe the SVC findings are rather reproducible and tight and robust. But also, for instance, the fact that there are three questions in one of the domains relating to ALSFRS tied to breathing, you might ask why did we maybe not see some of the same effects evidenced there.

And I think what we’ve come to look at reviewing those data is that we had a ceiling effect. This was a study of patients relatively early in their disease onset. It was a study of an investigational product over 12 week’s duration.

And there’s not much that can be gleaned from the data from other breathing function assessments tied to the ALSFRS in large part because there wasn’t much of a change either in placebo or tirasemtiv-treated patients from baseline to week 12 relating to those data. With that said, we did measure MVC and SNIP, I think Andy is in a better position maybe to comment on those assessments in this trial.

Andrew A. Wolff

We do – we’re initially somewhat surprised that we would see such clear and internally robust effect on slow vital capacity and then not on the other pulmonary measures. But as we’ve discussed them with pulmonologists especially those that are particularly focused on respiratory function, in ALS, they don’t pay attention, for example, to the sniff nasal inspiratory pressure.

It’s not as commonly done. There are many methodology issues, maybe training issues, because people aren’t quite as familiar with it as they are with vital capacity. One of them said at one point, for example, if you have done a study, where you showed me the data on vital capacity, it didn’t measure sniff nasal inspiratory pressure at all, I would never ask you why it didn’t measure sniff nasal inspiratory pressure.

If you have done a study with sniff nasal inspiratory pressure and it didn’t give me the vital capacity data, I would ask what happen to vital capacity. That’s why I really care about.

So, we remain – to some extent, a bit of puzzled that we didn’t see the effects so uniformly. But there are very different maneuvers that are performed differently and set different groups of muscle and I think, bottom line, I’m convinced is the community of experts is very convinced that the vital capacity is the most important of any of the measures we could have made and did make and that we should just take that to the bank.

George Zavoico – MLV & Co

Andy, do I remember correctly that you’re saying that SVC is also a surrogate for survival? It can be consider that way or not? Can it be considered that way or not?

Andrew A. Wolff

I suppose some may. I’m trying to avoid using the S-word for S-surrugate because our view is that it is a measure onto itself that is clinically meaningful. And appropriate for a potential approval, but it has been demonstrated to be – the rate of decline in SVC and even the absolute value of SVC is diagnosis has been shown to be predictive of the amount of time a patient has left.

George Zavoico – MLV & Co

Okay. Thank you. And finally, one last question this is a big trial, exclusion criteria were pretty broad, you had a lot of pre specified subsets and subgroups that you looked at. Did you see any evidence of others potential subgroups maybe disease progression? How far along they were with ALS that might help you preselect patients in the next trial by biomarkers perhaps as well that you may have looked at?

Andrew A. Wolff

Honestly not really, what’s remarkable is that as we mentioned during the call the effect that we will probably take forward the slowing and the rate of decline in SVC was present across really all subgroups that I mentioned. There were a few were it wasn’t statistically significant but even there the relative magnitude of the improvement versus placebo is pretty similar. It’s just the matter for example. It wasn’t significant within the bolder onset group of patients because there were only 50 of them. So, it’s just a matter of small numbers.

I haven’t really seen anything yet in terms of responses that would cause me to change the inclusion and exclusion criteria much for a subsequent study. I always feel like once you’ve gotten an effect, you should, as much as you really can, try to duplicate the population where you saw that effect in your first study.

The one thing where we probably will do things a bit differently, however, is we probably won’t measure handgrip fatigue in another study. It’s cumbersome. The patients don’t like it. The sites don’t like it and it didn’t really show much of an effect. So, having an entry criterion where the patient had to have measurable but diminished grip strength in one hand, I think, is not relevant anymore.

And then it actually cost us a fair number of exclusions because you have patients that have excellent function elsewhere and have no grip strength, and you have patients that have their disease affecting them outside of their upper limbs and have perfect grip strength. And we lost all of those types of patients. And so I don’t see a reason to do that again, especially when we’re going to be focusing on respiratory measures.

George Zavoico – MLV & Co

And finally, can you just mention a little bit on the titrating end because you lost a lot of patients dropping out because they have the dizziness and how you might...

Andrew A. Wolff

We did see that the majority of those who terminated prematurely from the study did so within the first few weeks of the trial when they were being up-titrated. And then after about four weeks, the dropout curves were basically parallel between tirasemtiv and placebo. So, in an upcoming trial, we would probably – well, almost certainly – do more, if not all, of the dose titration in an open-label setting before the patients are randomized. And then we’ll probably go up more gradually, too.

So, whether or not increasing the dose more gradually will improve the tolerability, I don’t know. But I do know that doing more of the titration prior to randomization should certainly keep us from having patients drop out or should reduce the amount of patients who drop out after randomization. If they’re not going to tolerate the drug at a dose that we think is probably effective, at least let’s find that out before we randomize them.

George Zavoico – MLV & Co

Okay. Great. Good luck. Thank you very much.

Andrew A. Wolff

Thank you.

Robert I. Blum

Thank you, George.

Operator

And our final question comes from the line of Deanna Bahel with ROTH Capital Partners.

Robert I. Blum

Hi, Deanna.

Deanna Bahel – ROTH Capital Partners

Hi, guys. Thanks for the update. Just wondering whether you’re expecting the Amgen restructuring plan and layoffs that were announced yesterday to have any impact on the omecamtiv mecarbil program.

Robert I. Blum

It’s a very good question and one for which we don’t have an answer. We were alerted to that at the same time the rest of you were, and it’s something that we don’t foresee would have an impact on our program, but we don’t have any other insights into that.

The omecamtiv development program has been something that Amgen has been contemplating for quite some time, and there are under way a number of readiness activities geared towards making that happen and proceeding to Phase III, we don’t have any evidence that Amgen is giving other thought to that other than preparing to proceed forward.

Deanna Bahel – ROTH Capital Partners

Great. That’s helpful. Thank you.

Robert I. Blum

Thank you.

Operator

And we have no other questions in queue at this time. And I would like to turn the call back over to Mr. Blum.

Robert I. Blum

Thank you, operator, and thank you also to all of the participants who joined us on our teleconference today. Thank you for your continued support and your continued interest in Cytokinetics. Operator with that, we can now conclude the call.

Operator

Thank you. And this does conclude today’s conference call, and you may now disconnect.

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