Cytokinetics, Incorporated. (CYTK) CEO Robert Blum on Q3 2018 Results - Earnings Call Transcript

About: Cytokinetics, Incorporated (CYTK)
by: SA Transcripts

Cytokinetics, Incorporated. (NASDAQ:CYTK) Q3 2018 Earnings Conference Call November 2, 2018 4:30 PM ET


Diane Weiser - VP, Corporate Communications, and IR

Robert Blum - President and CEO

Bradley Morgan - SVP, Research and Non-Clinical Development

Fady Malik - EVP, Research and Development

Peter Roddy - SVP and CAO

Ching Jaw - SVP and CFO


Jeffrey Hung - Morgan Stanley

Joseph Pantginis - H.C. Wainwright

Jason Butler - JMP Securities

Pete Stavropoulos - Cantor Fitzgerald

Gill Bloom - Needham & Company


Good afternoon and welcome, ladies and gentlemen, to the Cytokinetics' Third Quarter 2018 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 request of the company, we will open the call for questions and answers after the presentation.

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, everyone, and thank you for joining us today. Robert Blum, our President and Chief Executive officer, will kick-off the call with introductory comments about the current state of our business. Fady Malik, our EVP of Research and Development, will provide updates on our cardiac muscle program focused on the Phase III development of omecamtiv mecarbil; and Brad Morgan, SVP of Research and Non-Clinical Development will discuss progression of AMG 594, the cardiac troponin activator under our collaboration with Amgen and CK 377-3274 or CK 274, our unpartnered cardiac myosin inhibitor.

Andy Wolff, our SVP and Chief Medical Officer, can't be with us today. So Fady will then come back and share updates on our skeletal muscle program focused on the development of reldesemtiv and the next generation [indiscernible] skeletal muscle troponin activator, we’re advancing under our collaboration with Astellas. Peter Roddy, our SVP and Chief Accounting Officer will provide a financial overview for the quarter; and Ching Jaw, our SVP and Chief Financial Officer will discuss our financial outlook before Robert concludes with additional thoughts on the company and upcoming milestones.

Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements. Examples of forward-looking statements may include statements relating to our financial guidance and goals, our strategic initiatives, our collaborations with Amgen and Astellas clinical trials and the potential for eventual regulatory approval of our product candidates.

Our actual results may differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings, including our most recent 10-K, 10-Q, and 8-K. We undertake no obligation to update any forward-looking statements after this call.

And now I will turn the call over to Robert.

Robert Blum

Thank you, Diane, and thanks again to everyone for joining us on the call today. In recent weeks, we were pleased to announce progress in connection with both the extension and the expansion of our pioneering pipeline of drug candidates. We provided rather in-depth updates at our recent R&D Day. So on today’s call we will only highlight some of those key advancements and instead elaborate on how we’re pointing forward with our five investigational medicines in development.

Having recently filed two INDs, one for CK-274 our unpartnered cardiac myosin inhibitor and one for AMG 594 our cardiac troponin activator discovered under our collaboration with Amgen were executing well on a purposeful strategy to augment our cardiac muscle programs and reinforce our demonstrated leadership in drug discovery and development relating to modulating the mechanics of cardiac muscle function focused to the potential treatment of cardiovascular diseases. We expect both of these compounds to be in Phase 1 by year-end.

As you will hear from Fady in a moment, there is still a very large unmet need for the treatment of heart failure and related diseases of cardiac muscle dysfunction as resonated quite loudly at the Heart Failure Society of American Meetings which we attended during the past quarter. Galactic-HF, the Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil continues to enroll well with nearly 6,000 patients now enrolled in approximately 1,000 centers across 35 countries around the world. This trial rates amongst the largest heart failure trials ever conducted and it is encouraging to observe the widespread interest in this first-in-class mechanistic approach to a disease that afflicts so many at the same time morbidity and mortality remains so high,

As we heard loud and clear when we can be in advisory boards of clinicians, payers and patient advocacy groups, there remains a high clinical, economic and societal and burden, and yet so little biopharmaceutical innovation is directed to the global epidemic of heart failure and related diseases of cardiac dysfunction that only grows more prominent with our aging demographics. At Cytokinetics, we're pleased to be pioneering an entirely new pharmacology of cardiac muscle directed drug candidates that now numbers three compounds in development focused to either impaired or excessive cardiac muscle contractility.

We are also pleased to be soon starting METEORIC-HF, the second Phase 3 clinical trial of omecamtiv mecarbil which will focus on the potential effect of omecamtiv mecarbil on exercise performance in patients with heart failure and systolic dysfunction.

On the skeletal muscle side of our business, Fady will also elaborate on recent progress in our neuromuscular programs focused to the potential treatment of SMA and ALS, as well as provide perspectives on recent meetings we had with SMA Europe, the Umbrella advocacy Organization for SMA across Europe to inform the potential further development of reldesemtiv in patients with SMA.

Fady will also discuss progress towards completion of enrollment in fortitude ALS, the ongoing Phase 2 trial of reldesemtiv in patients with ALS, which remains on track to complete enrollment soon and to enable presentation results in the first half of 2019.

As we look toward with lives ahead in the balance of Q4 and to our prospects for 2019, we're optimized, we're energized and we’re proud that our pioneering work in the discovery of novel drug candidates that modulates sarcomere function has now translated into an ever-expanding pipeline of investigational medicines to potentially treat some of the most devastating diseases of muscle dysfunction and weakness.

Now I will turn the call over to Fady, so he can update you firstly on omecamtiv mecarbil.

Fady Malik

Thanks, Robert. As Robert mentioned, GALACTIC-HF, the Phase 3 cardiovascular outcomes clinical trial being conducted by Amgen under our collaboration continues to progress well. Enrollment has surpassed 70% of its planned 88,000 patients with over 5,800 patients randomized to date, having high risk for cardiovascular mortality and heart failure events as intended by the trial design.

We are pleased to see robust enrollment across all geographies, including Asia and Latin America were patient recruitment is contributing meaningfully to overall enrollment rate. We expect to complete enrolling patients in GALACTIC-HF during the first half of 2019. Additionally, we're on track based on the number of accrued events for the Data Monitoring Committee or DMC to conduct the planned interim analysis for futility in the first half of 2019.

On the second planned interim analysis, which includes an assessment of efficacy will occur in 2020. The DMC is meeting regularly, including again during the recent quarter. DMC reviews the unblinded data from GALACTIC-HF and has continued to recommend no changes to the conduct of the ongoing trial. We have an opportunity to meet with many of our investigators at the Heart Failure Society of America Annual Meeting in September and in that conference the Chair and -- of the Executive Committee for GALACTIC-HF Dr. John [indiscernible] gave a podium presentation on omecamtiv mecarbil and the session focused on leading translational science and clinical research.

This presentation was very well received, especially because it highlighted the comprehensive clinical research and associated peer review presentations and publications that has distinguished the development of omecamtiv mecarbil. We're pleased to hear that this novel mechanism investigational medicine is top of mind among heart failure specialists. We believe that omecamtiv mecarbil stands alone as the most studied drug candidate developed specifically for the treatment of heart failure. And the heart failure community has engaged strongly around this program.

We also recently presented the design of the second Phase 3 clinical trial of omecamtiv mecarbil, plan to be conducted by Cytokinetics in collaboration with Amgen at our R&D Day. This trial is focused on the potential effect of omecamtiv mecarbil to increase exercise performance in patients with heart failure. METEORIC which stands for Multicenter Exercise Tolerance Evaluation of Omecamtiv Mecarbil Related to Increased Contractility in Heart Failure is a Phase 3 randomized placebo-controlled double-blind parallel group multicenter clinical trial designed to evaluate the effect of treatment with omecamtiv mecarbil compared to placebo on exercise capacity as determined by Cardiopulmonary Exercise Testing or CPET, following 20 weeks of treatment.

The trial is designed to enroll approximately 270 patients with heart failure and the reduced ejection fraction. Randomized 2 to 1 omecamtiv mecarbil placebo at sites throughout the U.S., Canada and Europe. Primary endpoint of METEORIC-HF is a change in peak oxygen uptake of CPET from baseline to week 20, The details of this trial design will soon be available on clinical We are working together with Amgen to complete startup activities toward the objective of beginning this clinical trial at the end of the year.

With that I’m going to turn it over to Brad to discuss AMG 594 and CK-274.

Bradley Morgan

Thanks, Fady. Moving to the expansion of our cardiac pipeline, our pioneering expertise in the pharmacology of muscle has recently resulted in two new drug candidates, now proceeding towards clinical trials in Q4. Amgen recently submitted an IND for AMG 594, a novel, first-in-class, selective, oral, small molecular cardiac troponin activator discovered under our joint research program with Amgen. In preclinical models, AMG 594 binds to an [indiscernible] on the cardiac troponin complex and sensitizes the cardiac sarcomere to calcium. This mechanism facilitates more [indiscernible] cross bid formation during each cardiac cycle, thereby resulting in increased myocardial contractility.

Like cardiac myosin activation and unlike traditional inotropic mechanisms, cardiac troponin activation does not change the calcium transient of cardiac myocytes. Based on preclinical data AMG 594 may offer improved efficacy and dose-related convenience relative to omecamtiv mecarbil. We expect Amgen will soon initiate a Phase 1 study to assess the safety and tolerability of AMG 594 and its potential to increase cardiac function.

We are discussing with Amgen the objectives of a potential subsequent Phase 2 development program that may include evaluation of AMG 594 as a potential treatment for patients with heart failure with reduced ejection fraction and other types of heart failure, such as right ventricular failure or genetic cardiomyopathies resulting from impaired cardiac contractility.

At our recent R&D Day, we were pleased also announce that we recently submitted an IND for CK-274, a novel, oral, small molecule cardiac myosin inhibitor for the potential treatment of hypertrophic cardiomyopathy or HCM. CK-274 was discovered by our scientists independent of our collaborations and arose from an extensive chemical optimization program conducted with careful attention to therapeutic index and pharmacokinetic properties. Consequently, we believe CK-274 may translate into a best-in-class approach to the treatment of HCM, a disease characterized by hypercontractility.

In preclinical models, we found that CK-274 reduces myocardialcontractility by binding directly to cardiac myosin at a selective allosteric binding site, thus decreasing the number of myosin motors that enter the force producing state with [indiscernible] In contrast to sarcomere activators like omecamtiv mecarbil or AMG 594. CK-274 reduces the number of active myosin cross bridges during each cardiac cycle and consequently reduces myocardial contractility.

CK-274 may therefore be therapeutically useful in conditions characterized by excessive hyper contractility, such as HCM. In preclinical models of cardiac function CK-274 reduced cardiac contractility in a predictable and dose exposure dependent fashion. In preclinical models disease, cardiac myosin inhibitors reduced cardiac hypertrophy and cardiac fibrosis, two common pathological consequences of HCM.

Finally, the preclinical pharmacodynamic parameters of CK-274 were optimized with the objective to maximize potential ease of use in the clinical setting. We expect to initiate a Phase 1 study before the end of 2018 to assess the safety, tolerability, pharmacokinetics, and effect on cardiac function of CK-274. Subsequently, we're planning a Phase 2 trial, which will examine its potential to reduce left ventricular outflow tract obstruction in patients with HCM.

Left ventricular outflow tract obstruction limits cardiac output and results from excessive hypertrophy and thickening of the cardiac muscle during [indiscernible], particularly in the region of intraventricular septum. Consistent with our industry-leading muscle biology programs, the development program for CK-274 will focus on fully characterizing pharmacokinetic, pharmacodynamic relationships. The program will assess the potential of CK-274 to improve exercise capacity and relieve symptoms in patients with hyperdynamic ventricular contraction and left ventricular outflow tract obstruction due to HCM.

And now, I will turn back over to Fady to provide updates and perspectives on our skeletal muscle program, with a focus on reldesemtiv.

Fady Malik

Thanks, Brad. Before I switch gears in our skeletal program, I just want to say it was a very eventful quarter for cardiac franchise and a productive -- productivity of our research group both in collaboration with our partners and for our own programs that are extremely gratifying to us. We are pleased to see that the last few years of effort in research culminated in these two IND filings submitted last month.

Now moving to our skeletal muscle program in collaboration with Astellas, we've been able -- we've been executing against a broad mid-stage clinical development program to characterize the potential safety, pharmacodynamics, pharmacokinetics and efficacy of reldesemtiv and how this novel mechanism may be applied to patients with neuromuscular and non-neuromuscular diseases and conditions of muscle dysfunction.

Last month we provided an update on the program and today I will recap key points with a few additional perspectives. During the quarter, we presented additional data from CY 5021, hypothesis generating Phase 2 study which showed concentration dependent increases versus placebo and changes from baseline in six minute walk distance, a sub maximal exercise test of aerobic capacity and endurance as well as in maximal expiratory pressure or MEP, a measure strength of certain respiratory muscles after eight weeks of treatment with reldesemtiv.

Additional data presented at the Muscle Study Group meeting showed that the increases in six minute walk distance and map observed during the treatment period were sustained for four weeks after discontinuation of study drug. Further, [indiscernible] analysis showed the changes from baseline in the six minute walk distance and 450 milligram twice daily well correlated with changes from baseline in the nine individual domains of the SMA Health Index or SMA HI and the SMA total score to reflect decreasing disease burden as measured by the SMA HI.

This correlation was nominally statistically significant for the nine domain including fatigue and activity participation as well as the SMA HI total score. Of note, decreases in the SMA HI scores reflect reduced disease burden as measured by that patient reported outcomes measure. Therefore the negative correlation coefficient indicated that a six minute walk distance increases disease burden assessed by the SMA HI is reduced.

We share data from CY 5021 at Expert Advisor Meetings in the U.S and Europe during the recent quarter and received constructive feedback as well as recommendations to inform potential next steps. We are encouraged by their level of interest and concurrence that we should pursue a better understanding of the exposure response relationship, particularly at higher doses in future study.

Toward that end, Cytokinetics plans to conduct an additional Phase 1 study of reldesemtiv in healthy volunteers to assess higher dose and were evaluated in the Phase 2 study of SMA patients, and to evaluate exposure related to dose. In addition, we will be engaging FDA in [indiscernible] interactions this year regarding the acceptability of six minute walk distance as an endpoint for the potential registration program of reldesemtiv in patients with SMA.

We are also discussing with Astellas other steps that we may take in 2019. Recently Cytokinetics also engaged meetings in Europe with patient groups, clinical experts and market access representatives regarding the evolving SMA marketplace. Through these discussions, we gained a better understanding of the significant value to patients and their caregivers of a therapy that may improve patients fatigability and function in their daily lives.

In addition, we gained insights to help to find clinical development options and appropriate outcome measures for ambulatory and non-ambulatory SMA patients as well as the value that this potential therapy may have for payers and related reimbursement considerations.

Turning to FORTITUDE-ALS, our Phase 2 clinical trial of reldesemtiv in patients with ALS. We are pleased to report that enrollment rates have increased during the quarter and we're nearing completion of enrollment with more than 400 of the 445 planned patients randomized. We expect to conclude enrollment in this fourth quarter with results from the clinical trial expected in the first half of 2019.

Moving to the non-neuromuscular trials, together with Astellas, we recently announced results of the Phase 2 clinical trial of reldesemtiv in patients with COPD. And the interim analysis of data from the ongoing Phase 1b study of reldesemtiv in elderly adults with limited morbidity or frailty. Unfortunately the trial in patients with COPD not meet the primary endpoint and did not demonstrate a statistically significant treatment difference in any of the secondary endpoints.

Adverse events were similar between groups receiving reldesemtiv and placebo. An interim analysis of the Phase 1b study of reldesemtiv in elderly subjects with frailty was conducted and the Independent Data Monitoring Committee determined that the predefined criteria for futility have been met. As such, Astellas was notified the side investigators to hold for their enrollment in the study and proceed to close out of the study.

It is important to note that the purpose of these studies in non-neuromuscular conditions was for future development of next generation FSTAs and not reldesemtiv. Although frailty study still needs to be completed and its data fully analyzed, both studies will help elaborate on the translatability of the mechanism of action and guide development towards optimal patient populations.

Finally, under our collaboration with Astellas, we're advancing CK-601, a next generation FSTA into IND enabling studies. This potential drug candidate was designed to have different physiochemical properties in reldesemtiv and may be developed for the treatment of diseases and conditions associated with neuromuscular or non-neuromuscular etiology and pathogenesis. We are also continuing our joint research program with Astellas providing sponsorship to Cytokinetics scientific activities through 2019.

And now I will turn the call over to Pete to provide an update on our financials.

Peter Roddy

Thank you, Fady. Once I touch on our cash, our revenue and our spending, Ching will review our financial strategies for the balance of 2018 and the outlook for 2019. More details our actual results are included in the press release itself.

We ended the third quarter with over $210 million in cash, cash equivalents and investments. Our cash includes $10 million from our draw down of debt following data from the Phase 2 data for reldesemtiv in spinal muscle atrophy and as specified in our loan agreement.

Our revenue in Q3 2018 came primarily from our strategic alliance with Astellas and includes both cash and non-cash revenue recognized under ASC 606, the new accounting rules for revenue.

Moving to expenses, we reduced our third quarter 2018 R&D expenses to $21.4 million from $24.9 million in Q3 2017. About 45% of our R&D expenses were attributable to our skeletal muscle contractility programs, primarily for development and clinical trials for reldesemtiv. 33% to our cardiac muscle contractility programs and 22% to our other research activities.

These changes reflect as expected increases for spending on our recently announced cardiac myosin inhibitor program, the initial spending including expenses that will be reimbursed by Amgen for METEORIC-HF and spending for reldesemtiv reimbursed by Astellas that were more than offset by proper decreases for tirasemtiv.

Our third quarter 2018 G&A expenses fell to $7.2 million from $9.7 million in Q3 2017. Our spending in Q3 2017 included support for pre-commercial work for tirasemtiv.

Ching will take it from here to bridge from our results for Q3 to our financial outlook for the future.

Ching Jaw

Thanks, Pete. We recently reviewed our strategic plan with our Board, providing an operational and financial roadmap for Cytokinetics over the next three years, contemplating different scenarios based on potential clinical trial outcomes during the next year.

As we have previously stated, our financial strategy remains to manage our cash through the readout of results from GALACTIC-HF without relying on dilutive financing. In addition to judiciously managing our cash and reducing our costs, we are seeking to raise non-dilutive capital through a potential collaboration relating to our currently on partner cardiac myosin inhibitor program, which we expect to advance to Phase 1 later this year.

We also are eligible to receive collaboration milestone payments over the next several years. While we have not yet provided formal guidance for 2019, we expect our spending in 2019 to be less than that in 2018 even was approximately 30% of the cost to be related to the conduct of Phase 1 and Phase 2 studies for CK-274.

We are not responsible for expenses related to AMG 594 and the majority of the cost associated with the conduct of METEORIC-HF and FORTITUDE-ALS, are covered under our collaborations with Amgen and Astellas, respectively.

Our current cash balance as well as our expected cash at the end of 2018 should represent over 24 months of forward cash burn even with Cytokinetics funding one of the two new programs entering clinical trials.

And with that, I will now turn the call back over to Robert.

Robert Blum

Thank you, Ching. So as we highlighted a few weeks ago at our R&D Day, we're turning the page on to a new chapter in Cytokinetics corporate development as we approach the final months of our 20th year of operations. A chapter filled with new investigational medicines entering Phase 1 studies, at the same time our later stage potential medicines advancing clinical development toward potentially meaningful results in 2019 and beyond.

Our leading muscle pharmacology pipeline is now comprised of five compounds in development. The continued productivity of our research engine is a testament to our pioneering leadership in cytoskeletal and muscle biology. The continuity of our senior management team, our unrivaled experience in clinical research directed to the pharmacology of muscle, and our demonstrated track record to monetize that expertise and multiply it in the form of landmark deals. We look forward to continuing to leverage our learnings across our growing and advancing pipeline and we remain optimistic about our future.

A final note about our commitment to the patient communities we serve. During the past quarter, we granted the ALS Association Golden West Chapter the inaugural Cytokinetics Communications Fellowship Grant. The purpose of this grant program is to support increased capacity and community engagement for nonprofit organizations to help fund additional communication resources to educate their community, provide additional support and services and create connections among patients caregivers and critical advocacy resources.

We look forward to extending this program to other organizations in the years to come. I mentioned this because this newer program is but one example of our leadership in the ALS, the SMA, and the Heart Failure Communities that have afforded us a meaningful seat at the table to understand the needs of patients and caregivers to elevate their voice and to learn how our leading muscle directed drug candidates may ultimately play a meaningful role alongside other treatments for patients in desperate need.

We take these responsibilities quite seriously and we listen to the communities we aim to serve. As an example, we recently convened an Advocacy Summit with organizations in the neuromuscular area and I am encouraged that there is a meaningful opportunity for reldesemtiv in SMA and ALS that we hope to address.

Now let me recap our expected milestones for the balance of 2018 and into 2019. For omecamtiv mecarbil, we expect to complete enrollment of patients with chronic heart failure in GALACTIC-HF during the first half of 2019. And we are working toward the objective of initiating METEORIC-HF, the second Phase 3 trial of omecamtiv mecarbil which is intended to evaluate its effect on exercise performance in patients with heart failure, that to occur we hope by the end of 2018.

For CK-274, we expect to initiate Phase 1 studies by the end of 2018. For AMG 594, we expect that Amgen will initiate Phase 1 studies by the end of 2018. For reldesemtiv, we expect to complete enrollment of patients in FORTITUDE-ALS in this fourth quarter 2018, so that results may be available in the first half of 2019.

And for our preclinical research, we expect to advance CK-601 in continued IND enabling studies as well as continued research activities under our joint research program with Astellas directed to the discovery of next generation skeletal muscle activators.

We also expect to continue our other muscle biology focused research, including the expansion of our research activities beyond the contractility of muscle towards the energetics of muscle.

Operator, with that, we can now open-up the call please to questions.

Question-and-Answer Session


[Operator Instructions] Your first question is from Jeff Hung from Morgan Stanley.

Robert Blum

Hi, Jeff.

Jeffrey Hung

Thanks for taking the questions. For the additional Phase 1 that you plan to conduct in higher doses and Phase 2 of the SMA, with the plan be that you complete the study before conducting any future pivotal studies in SMA? And do you see as the timeline for the Phase 1 study?

Robert Blum

So that is correct. I'll turn it over to Fady to elaborate.

Fady Malik

Yes, I think our plan is to initiate that Phase 1 study early next year and complete it to enable design of a potential study that will be conducted in SMA. So it's a relatively short study to conduct because it's conducted in healthy volunteers at a Phase 1 unit and hopefully early in the year next year, we will have those results to guide us to next steps.

Jeffrey Hung

Great. And then earlier this week, myocardium [ph] announced their second HCM and DCM programs. So given that AMG 594 could be used in DCM and CK-274 has been developed for HCM, how do you view the potential market opportunities? Do you view these as big enough for multiple players or theoretically different agents for HCM and DCM act more complementary to each other, or would they be used more sequentially or is there even any reason to think that they could be combined? Just curious how you view these basis? Thanks.

Robert Blum

Yes, I will start and maybe Fady if you want to add up towards. Certainly the fact that our pioneer in leadership of this space has invited other companies to also participate is suggestive of the fact that there's a substantial opportunity. I do believe, that there's an opportunity that could be satisfying to multiple companies recognizing that heart failure is the number one reason why people in the United States are hospitalized, people over age 65 are hospitalized, you’re talking about millions of patients. But with respect to your specific question, we haven't guided to specific indications for AMG 594, and while you mentioned one, I think that's one of several we may consider and ultimately we see that there are dozens of potential indications that could relate to various aspects of cardiac dysfunction such that a novel mechanism activator could ultimately play a role in quite a number of different types of indications for what would be a broad development strategy. We and Amgen are still considering how we might approach AMG 594 in concert with the further development of omecamtiv mecarbil and that’s something that will shed light on more over time. But I think the bottom line to your question is that with regard to omecamtiv mecarbil which is most certainly the leading cardiac muscle activator have been studied in many thousands of patients, we see that there is an opportunity to advance both CK-274 and AMG 594 without potentially cannibalizing the business that we should be building.

Jeffrey Hung

Great. Thank you.


And your next question is from Joe Pantginis from H.C. Wainwright.

Robert Blum

Hi, Joe.

Joseph Pantginis

Hi, Joe.

Joseph Pantginis

Hi, everyone. good afternoon. Robert, I don’t know if this is an over nuanced question, but when you look at the details that you gave today for GALACTIC-HF, I think this is the first time you're defining the population a little better by saying that they’re in the high risk group. So I was just curious if maybe you can provide more color on this population, and when you label this cardiovascular population as high risk, does that lend to the potential for accelerated events and any impact on potential timelines? Thanks.

Robert Blum

Yes, so it's not new that we referred to the patients enrolled in GALACTIC as at high risk of morbidities and mortality. In that way its consistent, but I do think your question is still a valid one. Let me break it down a little bit. Heart failure as you know representing about 5 million to 6 million people in the U.S alone breaks out roughly 50-50 into those with systolic dysfunction and those with diastolic dysfunction. And we with GALACTIC in this program over many years, over 10 years, have been focused to those patients with heart failure and systolic dysfunction where their cardiac performance has been compromised. But even within that subset, the GALACTIC study is intending to enroll patients who are at high risk of death and other heart failure related events, you may recall, at one time we did a study called, atomic, another time a study called cosmic. Atomic represented one end of the spectrum in terms of symptomatic acutely ill, hospitalized heart failure patients, Cosmic more chronic, asymptomatic out patients. And GALACTIC really falls in between as I will now ask Fady may be to elaborate and he can go deeper you’re your question.

Fady Malik

Yes, I think the -- we've always pointed out that the study design was meant to enroll a high-risk population. And as we’ve -- I think presented at our recent R&D Day some characteristics of that population, it's quite consistent with the intent of the study design. The ejection fraction on average is less than 30%. Patients who have been hospitalized within the last four months, their NT PRO BMPS are over 2,000 and as --this was intended by the study design, about 25% of them were enrolled from the inpatient setting since the study is enrolling both inpatients and outpatients. All of those characteristics speak to a population that is at high risk and the event rates that we estimated for the study were based on achieving those characteristics. So I would necessarily expect the event rates to accrue faster than we expected. I think we’re on track with what our initial assumptions were.

Joseph Pantginis

That's great. Thanks for the added color as we get closer to enrollment of this great study. Thanks a lot.

Fady Malik

Thank you.

Robert Blum

Thanks, Joe.


And your next question comes from Jason Butler from JMP Securities.

Robert Blum

Hi, Jason.

Jason Butler

Hi. Hi, Robert. Thanks for taking the question. Just thinking about the R&D Day, couple of the experts you had thus spoke in support of six minute walk test or distance test as a key endpoint to focus on moving forward in SMA. When you think about the meetings that you had with stakeholders in Europe, is there similar support for the six minute walk distance endpoint? And then also just following on what other endpoints did that -- you get from the feedback in Europe in terms of both positive and negative?

Robert Blum

Yes, so we have received very consistent feedback both in the U.S and now in Europe with regard to the meaningfulness of six minute walk distance as a good proxy measure of fatigability in adults with SMA. As we presented at the R&D Day, it's an assessment for which there's high test retest reliability or fidelity and that’s been echoed by not only the clinical advisors, but the patient advocacy organizations and that’s been a unanimous set of feedback we received. What we’ve been able to do with these additional ad boards that we've conducted is ask them what other kinds of assessments might correlate or corroborate an effect on six minute walk distance, and in particular with respect to things that could be measuring fatigability, upper limb assessments. And that's where we've received some very good feedback about what kinds of things matter to patients, what matters to clinicians, and how we might be able to ensure good robustness in those assessments for purposes of conducting a clinical trial. I would say we're still vetting through some of that feedback. I don't think we yet have enough clarity to be able to point to that. But we are seeking to understand what could be if six minute walk distance may be a primary endpoint, what could be the confirmatory secondary endpoints that we might also include in further study.

Jason Butler

Great. Helpful. And then in terms of the PK study, can you just talk about -- you obviously learn some -- you got some information out of the SMA trial that spoke to exposure levels, was there anything that you learn from the frailty or COPD studies that either reinforced or added to your learnings from exposures in the SMA trial?

Robert Blum

I will ask Fady to comment on that.

Fady Malik

Yes, I think the exposures in those trials were also little lower than we expected. And so I think in general, the change in formulation as we move from healthy volunteers, the initial healthy volunteers in the Phase 2 may have resulted in less exposures. So there's a bit of a theme here and what we want to go back is to look at the higher doses that we might then test going forward.

Jason Butler

Okay, great. Helpful. Thanks for taking the questions.

Robert Blum

Thank you, Jason.


And your next question is from Charles Duncan from Cantor Fitzgerald.

Robert Blum

Hi, Charles.

Pete Stavropoulos

Hi. This is Pete on for Charles. [Indiscernible].

Robert Blum

Hey, Pete.

Pete Stavropoulos

Hi. So my question is [indiscernible] on the PK data that you presented for the Phase 2 SMA in June as everybody -- as you discussed basically how little exposure levels than anticipated in healthy volunteers. The question is, do you believe the dosing for the ALS study is sufficient enough to reach exposure levels where you will see signal in the ALS patients?

Robert Blum

Yes, so we can elaborate on that. Certainly we believe that with the doses that we are evaluating in FORTITUDE-ALS that they may point to exposures below where we had initially intended. We still believe that they’re consistent with exposures that demonstrated good dose dependent effects and pharmacodynamic response that were clinically meaningful in prior clinical trials with tirasemtiv. So we still think we’re in that same range. We may not be as high as we had anticipated, but we still think we're in the pharmacodynamic range that should show clinical effect. And as we are doing in SMA with this additional Phase 1 study, we would potentially be able to move even higher with additional doses and exposures where we need to continue in the further development of reldesemtiv in ALS.

Pete Stavropoulos

Thank you.


And your next question comes from Gill Bloom from Needham & Company.

Robert Blum

Hi, Gill.

Gill Bloom

Hey, Robert. Thank you for taking my question. This is about the new program CK-601. So it seems like you already have a pretty impressive therapeutic window for reldesemtiv. Are you thinking of going into new indications with this next gen molecule?

Fady Malik

Yes, one of the reason for developing a next-generation molecule was to be able to consider it in other indications, in particular non-neuromuscular indications. But -- so I think the CK-601 brings the possibility of developing this module separately from reldesemtiv in indistinct groups either as defined by neuromuscular or non-neuromuscular or even rare disease versus not rare disease type of indications.

Gill Bloom

Okay. Thank you for clarifying that.

Fady Malik


Robert Blum

Thank you.


And we have no more questions in queue.

Robert Blum

Okay. Thank you, operator, and thanks to everybody for your participation in this call today. Clearly, we had a very productive past quarter and it was showcased in our recent R&D Day. We are really pleased that so many folks were able to come out for that R&D Day and also dial into the webcast. If you have had a chance to do that, it's still available on our Web site and archived and I think it does underscore quite nicely the -- not only expansion of our clinical development pipeline with new drug candidates entering clinical trials, but also the extension as we move in 2018 toward some key data readouts in 2019 and beyond. So, both operationally and financially, but well -- as well programmatically, I think things are firing on all cylinders here and we’re really pleased with that. We look forward to providing further updates with the next quarterly call. And with that, operator, we can conclude this call. Thank you very much.


And this does conclude today's conference call. You may now disconnect.