Q4 2019 Earnings Call

Good afternoon, and welcome ladies and gentlemen, Cytokinetics fourth quarter 2019 conference call.

At this time I'd like to inform you that this call is being recorded and that all participants are any listen only mode.

The company's request, we will open the call for questions and answers after the presentation.

I'll now turn the call ever to Diane Weidner, Cytokinetics, Vice President of corporate Communications and Investor Relations. Please go ahead.

Good afternoon, and thanks for joining us on the call today.

Problem, our president and Chief Executive Officer will kick off the call with key 2019 accomplishment and a review of our vision 2025 cents study Malik our SVP of research and development with <unk> updates on key developments for Omecamtiv Mecarbil, our cardiac myosin activator and AMG fivenine for our.

Cardiac proponent activator, both under our collaboration with Amgen next study will update on recent progress the CK two seven for our wholly own cardiac myosin inhibitor now in phase two and CK 271, or additional cardiac myosin inhibitor.

Andy will our Chief Medical officer for the past 15 years and now senior fellow clinical research and development will provide a brief update relating to rail deceptive our fast skeletal muscles proponent activate.

Robert won our VP and Chief Accounting Officer will then provide a financial overview for the quarter I'm Ching job, our SVP and Chief Financial Officer will discuss corporate development strategies and financial guidance before Robert Blum provides concluding thoughts on the company's outlook unexpected key milestones for the year finally.

You would kupfer, our newly appointed Chief Medical Officer also joins US today, and we'll be well be providing clinical research update on future calls. Please note that portions of the following discussion, including our responses to questions contains statements that relate to future events and performance rather than historical facts and constant.

To forward looking statement, our actual results may differ materially from those projected in these forward looking statement.

Additional information concerning factors that could cause our actual results to differ materially from those in these forward looking statements contained in our FCC filings. We undertake no obligation to update any forward looking statement. After this call and now I will turn the call over to Robert Thank your Diane and thanks again to everyone for joining us.

Call today.

29 gene was a year of strong performance and solid execution against our goals with for drug candidates now dancing in clinical development and another poised to enter the clinic. This year, we're well positioned to realize our vision 2025, which forces are being the leading muscle biology.

Focused biopharmaceutical company that discovers develops and commercializes, new medicines that may meaningfully improve the lives of patients suffering from diseases of impaired muscle function and weakness.

We recently outlined our vision 2025, entitled leading with science delivering for patients and we laid out the key imperatives to enable our continued growth and transformation into a commercial organization over the next five years.

I'd like to recap those imperatives and then provide a brief review of our Complishments. Some 2019 before the team provides more highlights from the quarter as well as updates on what's to come.

Our key tenets revision 2025 include the following.

Achieving regulatory approvals for at least two drugs are rising from our pipeline.

Building commercial capabilities to market and so our medicines reflective of their innovation and value.

Generating sustainable and growing revenues from product sales.

Doubling our development pipeline to include 10 therapeutic programs expanding our discovery platform to include muscle energetics growth and metabolism.

And being that science, driven company people want to join and partner with.

In 2019, we made strides towards achieving those goals.

Through our collaboration with Amgen, we completed enrollment and Galactic HF and pass through the first interim analysis with no changes to the protocol were study conduct.

And last week, we announced that following the second interim analysis of Galactic HF.

The data monitoring committee again recommended continuing the trial with no changes.

We now expect topline results in Q4 of this year and we're already preparing for the conclusion of the trial and the reporting a final results.

We're also gearing up with Amgen for potential regulatory filings that may lead to subsequent commercialization.

Meteoric each of the second phase three clinical trial of Omecamtiv Mecarbil also got started at the beginning of 2019, and we expect to complete enrollment in this second phase three trial of Omecamtiv Mecarbil later this year.

Finally under our collaboration with Amgen, we initiated the phase one study of A.M. GE Fivenine for in 29 team and we expect to complete the sad and Mad study later this year.

In 2019, we have to Amgen planned for the potential next steps in this program with our shared objective to build a sustainable business franchise with new medicines focus to the pharmacology of cardiac muscle activation.

Separate from our collaboration with Amgen in 29 team in connection with our wholly owned independent program focused on hypertrophic cardiomyopathy.

We generated phase one data was CK two seven for and we ready for the start of our phase II clinical trial, Redwood HCM, which began enrolling patients earlier this year.

Also in 2019, we generated encouraging results from fortitude, a less our phase two clinical trial of real deceptive in patients with Aeolus, and we engaged with regulatory authorities Payors and Kato wells in preparation for potential future phase three.

<unk> clinical trial.

I'm also pleased that our research activities continue to bear fruit in 2019, and we now look forward to advancing CK 271, or additional cardiac myosin inhibitor into phase one in the first half of this year.

And to continue I and de enabling studies for CK six so one a next generation fast skeletal muscle tripled and activator, which is also moving towards clinical research.

2020 will be a pivotal year for Cytokinetics as we now expect results from Galactic HF by the end of the year and we're preparing for commercial readiness and co promotion.

We also expect to advance and expand our pipeline to enable to other programs to potentially advance to late stage trials, while another program. They advance an earlier stage trials.

Two's yardstick about both progress we made in 2019 and the prospects for Twentytwenty.

And with that I'll turn the call over to Foudy to elaborate on key developments in our cardiovascular programs.

Thanks Robert.

Before I dive in I'd like to formally welcome steward comfort to our team as our new Chief Medical Officer.

Stuart earned his undergraduate degree and is empty at the University of Florida, followed by training in Pediatrics at Yale NFL ship and endocrinology at the University of North Carolina.

He began his career in academic medicine at Washington University, but in 1998 transitioned to Biopharma, including Takeda Pharmaceuticals, where he spent 12 years, most recently as vice President and therapeutic area head of cardio metabolic.

His tenure there included experience in heart failure thrombosis hypertension, and diabetes Stuart has worked on half a dozen CV outcomes trials with enormous planning and those and the logistical details they entail.

Stuart along with colleagues in discovery commercial regulatory medical affairs work together to cater to drive the strategy, so metabolic portfolio and the execution of that strategy.

I also want to thank Andy first 15 years of services, our Chief Medical Officer, Andy will now become our first senior fellow clinical research and development and continue as one of our senior Vice President.

Over the years and he's made a significant impact to Cytokinetics and certainly on me personally setting the standard for the thoughtful development of clinical protocols are interaction with the community of investigators the analysis of the results emerging from those trials and subsequently the communication of those results.

As many of you know is recognized within the cardiology and are muscular communities, reflecting on the span of his work over the years.

I look forward Annie's continued contributions to our emissions and plans in the coming years.

It will be playing a key role in facilitating cytokinetics transition towards commercialization.

Moving on to key developments in Q4, and an early Twentytwenty I'll first discuss the recent publication of the design manuscripts for Galactic HF and Jack Heart failure, and then review are even more recent announcement regarding the second and final planned interim analyses of the.

Trial.

As detailed in the design publication the primary efficacy endpoint in Galactic HF is a composite of time to CV death, or first heart failure event whichever occurs first and as we've said before the trial statistically powered based on the hypothesis relating to the first secondary endpoint time.

CV death.

An accrual of 1500 90, CV data provides 90% power to detect a hazard ratio of 0.8 for CV data.

A sample size of 8000 patients was chosen assuming the following.

An annualized rate of CV death of 10% in the first year and 7% thereafter, a 24 month enrollment period.

Total study duration set to 48 months, a three month treatment lag with the treatment effect hazard ratio of 0.8 thereafter.

10% annual rate of study drug discontinuation and 10% of subjects lost the endpoint determination either through non CV data or study discontinuation over the course of the trial.

The overall type one air is 0.05 for two sided testing assuming the rates for experiencing either a heart failure event or CV debt or double those for CV death alone.

And the same other assumptions as for CV death alone. The analysis of the primary composite endpoint is expected to have greater than 99% statistical power.

Turning to the second interim analysis I Hope you all saw we announced last week that following the second and final planned interim analysis of Galactic HF.

The data monitoring committee recommended phase three clinical trial of Omecamtiv Mecarbil continue without changes to its conduct.

The second interim analysis was triggered once two thirds of the 1500 90 cardiovascular death stipulated by the trial protocol had occurred in Galactic HF.

This second interim analysis included analyses to exclude futility and to permit stopping the trial earlier than expected for finding of overwhelming efficacy both at the discretion of the DMC.

The futility analysis allows the DMC to consider stopping galactic HF. If there was a low likelihood of the trial, demonstrating a clinically meaningful and statistically significant benefit from the primary endpoint at the end of the trial in patients receiving Omecamtiv Mecarbil plus standard of care compared to patients receiving.

Placebo plus standard of care.

The superiority analysis allow the DMC to consider stopping the trial early it's both the primary composite endpoint and the first secondary endpoints of CV debt of CV mortality.

We're highly statistically significant.

Additionally, it is important to note the stopping boundaries provide guidance to the DMC and they do not represent binding ruled.

The DMC considers all available evidence and its recommendations regarding trial conduct.

In other considerations may have supported the continuation of Galactic HF, even if numerical superiority boundaries were met in the prior in the plant analysis.

As we've previously stated the continuation of Galactic HF. The full term was his scenario we at Amgen most expected, especially given the proximity the trial to readout at full term as originally planned with topline results expected later this year.

Completion of the trial to run its full course ensures the robustness of data regarding the primary endpoint and all of the secondary endpoints.

In preparation for the potential to stop at the second interim analysis and now given the current timeline to topline results from Galactic HF.

The teams at Cytokinetics, and Amgen have focused on regulatory medical and commercial readiness activities and an accelerated certain works chance to prepare for an earlier potential approval and commercial launch.

In addition, we launched our disease State education campaign at Ha, which focuses on educating healthcare professionals about the role of cardiac contractility and the sarcomere in heart failure.

With results from Galactic HF now expected in Q4, what does that mean for the timing of meteoric HF and our regulatory filing plans.

Meteoric HF will read out following galactic HF.

And potentially after we submit initial regulatory applications for Omecamtiv, Mecarbil, which would be based on Galactic HF put another way meteoric HF is not on the critical path to filing and we now expect that we would submit those results are regulatory authorities at sometime after an initial.

So marketing application as would be supported by positive results from Galactic HF.

Reflecting now in the fourth quarter in November we announced additional results from cosmic HF.

The phase two trials, which showed that in addition to increasing the pumping action of the hard to solid function.

On the captive mccarville did not change in for some measures was consistent with improvement of the hearts diastolic function or ability to relax between heartbeats.

We believe these findings increasing the hearts pumping function without adversely affecting how the heart bills contribute to the therapeutic rationale for Omecamtiv Mecarbil in heart failure.

For AMG Fivenine for cardiac proponent activator discovered under a joint research program with Amgen.

Amgen is continuing to phase one study and we look forward to having the sad and Mad study complete later this year.

Additionally, we've established a collaborative working group, including team members from Amgen Cytokinetics as well as external care wells to consider the path forward for AMG Fivenine for in heart failure with reduced ejection fraction and also potentially another patient populations.

Well have more to say about those potential plans for AMC fivenine for on our future calls.

So now moving to CK two some for our next in class cardiac myosin inhibitor in Q4, we prepared for the initiation of Redwood HCM.

Recall that this is a randomized placebo controlled double blind dose finding phase two clinical trial in patients with symptomatic obstructive HCM or O HCM.

The primary objective of this trial is determined the safety and Tolerability of CK two seven for secondary objectives are to describe the concentration response relationship of CK two some for on the resting and post Bell Silva ventricular outflow track radian as measured by echocardiography during 10.

Weeks of treatment.

Additionally, the trial will evaluate the plasma concentrations of CK two seven for patients with though HCM in relationship to dose.

Exploratory objectives include the effect of CK 274 on N terminal pro hormone of brain Nash Radek peptide or NT, Probeam NP and the New York Heart Association functional classification.

As a reminder, our phase one study showed CK 274 achieved the intended pharmacodynamic effect and exposure response relationship reaching steady state within 14 days, thereby enabling dose titration regimen, the two week intervals.

Redwood HCM is designed to evaluate a flexible dose optimization schedule with CK two some for its therapeutic window and echocardiographic parameters associated with clinical outcome and patients with HCM.

Trial will enroll two sequential cohorts of patients with an option for third cohort within each cohort 18 patients will be randomized two to one two active or placebo treatment, respectively and receive up to three escalating doses of CK 274, or placebo based on echocardiographic guidance.

After two weeks of treatment at five milligrams once daily patients will receive an echocardiogram to to determine whether they will be uptight traded to the next higher dose of 10 milligrams once daily.

After two more weeks of treatments patients will undergo another echocardiogram to determine if they will be titrated up to 15 milligrams once daily the highest dose cohort one.

The doses and co or two will be determined following a review of the data from cohort one.

Overall, the treatment duration will be 10 weeks with an echocardiogram to confirm reversibility of affect two weeks after the last dose.

Redwood HCM is expected to enroll patients and approximately 20 investigative sites in North America in Europe, and we're pleased to report screening and enrolling patients is underway.

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We recently convened our North America.

Investigators meeting for Redwood HCM and I was pleased to see the enthusiasm for our next generation approach to cardiac myosin inhibition, which has the potential to advanced clinical research for the treatment of obstructive hypertrophic cardiomyopathy.

Getting redwood HCM up and running brings us another step closer to the potential availability of a next in class therapy that may optimize treatment of the underlying cause of patients disease, along with relieving the very limiting symptoms that significantly impact overall quality of life in patients with away.

Yes.

We look forward to sharing data from core one in the second half of the year.

Also within our cardiac sarcomere inhibitor program, we recently announced the advancement of CK 271, a second cardiac myosin inhibitor, which we expect to enter phase one during the first half of 2020.

One of the hallmarks of Cytokinetics research and developments approach has been to advanced multiple compounds to enable potential expansion of a drug development program into different indications and patient populations.

K 271 may afford us the opportunity to expand the clinical development program beyond obstructive non obstructive HCM and explore other potential patient populations that may benefit from a cardiac myosin inhibitor.

We'll have more to say about this has the translational research advances and as we generate data in the clinic.

And now I'll turn it over to Andy to provide an update on our fast skeletal muscle activator program focused on rail deceptive.

Thanks, Andy.

With regard to relative centers in parallel with ongoing negotiations with the Stellus regarding a planned amendment to our collaboration agreement.

We're continuing to engage with FDA M&A and health technology assessment organizations to define our potential path forward, including the clinical and reimbursement value potential endpoints for a pivotal trial that we're considering.

In the fourth quarter, we convened type C interactions with FDA to seek feedback on key question and planned statistical analyses.

While we expect still further ft interactions at same time. The team is working to finalize a protocol timeline and budget and these ongoing discussions with external stakeholders. Many of which are planned in the first half of the year, one form our ultimate approach and a decision about how we may advance relevant tempted into.

Potential phase three clinical trial in patients with they are less.

To be clear this decision will come following results from Galactic HF and the fourth quarter of 2020 with that said, we're encouraged by the feedback that we are receiving which underscores enthusiasm for the mechanism and data underlying relative sensitive and its potential NLS.

Were impressed with the positive feedback we continue to receive from Alice key opinion leaders are advocating for our pressing forward and engaging with us in our planning exercises.

In December at the LS Emend deepening in Perth, we presented subgroup analyses from fortitude LSW, demonstrating that with all active doses combined and compared to placebo relative sensitive had a similar effect on SVC.

Yes, FRS, our and muscle strength by handheld dynamometer at 12 weeks, whether or not patients are being treated with adair iPhone and or really is all the majority of patients receive really is all alone.

56.5%, well only 4.2%, we're receiving adair of own alone.

20.6% were receiving both.

As the treatment landscape evolves and Alice these data demonstrate how we may potentially be able to further slow the decline of disease progression by adding new mechanism therapies like relative centered on top of existing treatment regimens. We also presented data from fortitude LS demonstrating that patient.

Treated with relative sometime during the trial.

Experienced a significant delay to the prescription and agreement to use durable medical equipment, including annual or power wheelchairs gastronomy to noninvasive ventilation and assistive communication devices.

These data together with previously reported results from Fortitude LSW underscore the robustness and consistency of data from that trial that we believe support progression of relative to tempted in patients with Alex.

Finally in December the FDA granted orphan drug designation to rail deceptive for the treatment avail.

As follows our having received orphan drug designations from the FDA and M&A for the treatment.

Spinal muscular atrophy and with that I will turn it over to Robert long, who will provide an update on our financials.

Thanks, Andy I'll first provide an update on cash revenue and spending and then Ching will review, our 2020 financial guidance and corporate development strategy more details on our actual results for the fourth quarter 2019 are included in the press release, which we released earlier this afternoon.

We ended the fourth quarter with approximately 268 million in cash and investment.

Our revenue in Q4 2019 came from our strategic alliances with Amgen and Astellas.

For Amgen, we recognize revenue associated with their reimbursement of our development expenses related to meteoric HF for Stellus, we recognize revenue for reimbursement of our research activities as well as for development expenses incurred related to our closing out of four to two HLS.

Our fourth quarter 2019, R&D expenses decreased to 18.3 million from 23.3 million in the fourth quarter of 2018, primarily due to lower spending related to our neuromuscular development activities offset by increased activity related to meteoric HF and CK two sub.

For.

More than half of our R&D expenses were attributable to our cardiovascular programs as expected given activity for meteoric HF and the cardiac myosin inhibitor program and the remainder of our expenses were attributable triple double primarily to our early research activity.

Our fourth quarter 2019, DNA expenses were 10.6 million up from 7.6 million in Q4, 2018, due primarily to higher personnel related costs, including stock based compensation and higher outside services.

And now Chang will review our guidance for 2020 and highlight our corporate development strategies.

Thanks, Robert Today, we announced our financial guidance for 2020.

The company anticipates cash revenue will be in the range of 18 to 22 million.

Operating expenses will be in the range of 120 to 130 million.

And that cash utilization will be in a range of 105 to 115 million.

Cash of 268 million at the end of 2019, we entered 2020 with more than 24 month of cash runway given our 2020 guidance.

As you'll recall in Q4, we raised 120 and a half million net of underwriter fees and cap call and other transactional expenses.

Through a convertible note offering.

The convertible note carries a 4% coupon rate.

27, the half percent convert premium and matures in November 2026.

The use of proceeds are two funds continued development.

Oh, and commercial readiness activities associated with Omecamtiv Mecarbil.

The ongoing clinical development of CK, 274, and CK 271 indications related to hypertrophic cardiomyopathy and related diseases associate it was diastolic dysfunction, and cardiac fibrosis, including heart failure was preserved ejection fraction.

And the clinical development of route incentive in patients with LSW, including a potential phase three clinical trial.

As well as for working capital and other general corporate purposes.

Also during the quarter, we continue to pursue opportunities for project financing and partnerships to extent expand development of our cardiac sarcomere inhibitor program.

And to further extend our cash runway.

The start of Redwood at CN and the advancement of CK 271 in development are both contributing to forward momentum in these partnering discussions and we remain hopeful that our expanded next generation cardiac myosin inhibitor program may enable our access to.

Further capital.

In addition.

Kinetics is eligible for milestone payments under our collaboration with Amgen during the next years.

We entered 2020 was a strong balance sheet and remain confident in our ability to prudently deploy capital against our prioritize programs to maximize shareholder returns.

And with that I'll turn the call back over to rubber ball.

Thank you cig.

So as you've heard it was a highly productive fourth quarter of 29 team, which positioned us well for what could be a truly transformative year for cytokinetics.

Im, particularly enthusiastic about the momentum within our cardiovascular vertical with the advancement of a second cardiac myosin inhibitor and the various readiness workstreams underway and supportive potential commercialization of Omecamtiv mecarbil.

In addition to what fatty outlined we're also working diligently with our colleagues at Amgen to plan for the commercial launch of Omecamtiv, Mecarbil, which may come in 2021.

We're working and coordination of pre launch activities and we expect to align on a co promotion plan that will govern the deployment of our respective sales forces and the subsequent coordination of their field level activities.

Under our collaboration we have the right to commercialize Omecamtiv mecarbil in the hospital setting in coordination with Amgen and as Amgen would be reimbursing certain of our sales force costs.

As we designed and scale our sales organization will be looking to optimize our go to market strategies and future selling activities leveraging the intersection of high volume treatment centers focused on heart failure with centers of excellence focus to the treatment of hypertrophic cardiomyopathy.

Further as we previously reported we've begun to scale, our medical scientific leaders and team and we look forward to further expanding that group also in Twentytwenty.

We also have teams concentrating on health economics in heart failure outcomes research to develop models to support our market access strategies and future discussions with payers.

This year in collaboration with Amgen and in partnership with academic institutions and healthcare networks, we expect to generate and publish important data related to the real world burden of managing heart failure patients and highlighting the potential opportunity of new therapies to address the high unmet need and the increasing economic.

Burden.

For context, the economic burden of caring for heart failure patients approximates about $31 billion in the United States loan and that is projected to increase to over 70 billion by 2030.

As the prevalence and burden of heart failure continues to grow we believe that new therapies that can have a positive effect on clinical outcomes as well as favourably impact health care budgets will be warmly welcomed by clinicians administrators and payers.

Turning now to AMG Fivenine for CK, 274, and CK 271, Cytokinetics is mean meaningfully expanding and extending our position in cardiovascular drug development.

We're fortunate in that position to leverage over 15 years of clinical research with Omecamtiv Mecarbil to design clinical trials for these newer drug candidates and to consider how best to architect franchise building strategies around our programs directed to cardiac muscle activation and into.

In addition strategies that can hopefully benefit more patients and generate better returns.

We remain extremely mindful of the unmet needs facing heart failure, HCM Aeolus and estimate patients today, and we remain motivated to continue to execute well against our vision to bring novel mechanism medicines to them.

In that context, we also must remain prudent to how we operate our business and stay attentive to our cost of capital we need to consider how we may best diversify our access to capital to build out our pipeline, while leveraging partnerships towards our goal of generating sustainable cash flows.

For quite some time, we've looked to Omecamtiv mecarbil as a key fulcrum to building our company and we're pleased that in this calendar year, we'll have pivotal trial results from Galactic HF to best in for our path forward.

Such we'll look to those results to guide our strategies with regard to real deceptive in a less.

That's the benefit of our having established ourselves as one of the leaders in muscle biology, and having a broad portfolio of promising drug candidates. One program informs our outlook for the others and our underlying cost of capital.

We'll continue to prepare for the start of a phase three trial of rail deceptive, but we'll await results of Galactic HF before potentially starting that trial. We also expect to finalize ongoing discussions with the stimulus in this first quarter relating to amending our collaboration which should inform.

Matters relating to technology transfer drug supply co funding royalty is et cetera, and we look forward to updating you on our plans during the year.

Now, let me recap our expected milestones for Twentytwenty.

For Omecamtiv Mecarbil, we expect topline results from Galactic HF in the fourth quarter.

I expect to complete enrollment immediate couric HF in patients with heart failure in Twentytwenty.

For AMG Fivenine for we expected Amgen, we'll complete the phase one of the sad Mad study in the second half of Twentytwenty.

For CK 274, we expect data from the first cohort of patients enrolled in Redwood HCM to be available in the second half of Twentytwenty and for CK 271, we expect to file Tonight, Andy and initiate a phase one study in the first half of Twentytwenty for real.

Deceptive, we expect to engage with regulatory and reimbursement authorities in 2020 to prepare for a potential phase three clinical trial and registration program in patients with less and for our ongoing research. We expect to continue research activities directed to the cardiac.

And skeletal sarcomere and our other muscle biology research programs and we expect to continue research in collaboration with the Stellus directed to the discovery of next generation skeletal muscle activators through twentytwenty subject to current negotiations.

Operator with that we can now open up the call pleased to questions.

Ladies and gentlemen, just as a reminder.

Ask a question. Please press Star then number one on your telephone keypad.

Once again SAR and the number one.

Your first question comes from the line of Jason Butler JPM Securities.

Good afternoon, Jason Hi, Robert Thanks for taking the questions and congrats on all the progress.

Well on Omecamtiv and then a quick question on them.

On to some floor so.

Just in terms of yeah, but what fatty laid out from the.

The powering assumptions can you talk about how you think about.

The potential treatment effect over time do you expect it to be consistent or it could it increase or decrease so from the first year. When you expect the highest event rate and then second question. There is on reimbursement can you maybe just talk about your strategy to work with payers given that when we're thinking about the.

And it's been trust, so that had higher than expected reimbursement hurdles in the first couple of years on the market. Thanks.

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

Yes, Hi, Jason So I think the answer to your first question is that.

What we assumed is that there would be little treatment effect for the first three months and the rationale for that was that.

We started a starting dose and it takes.

Few weeks to get to the target dose.

And and maybe it would take some time to see benefits accrue that's a conservative assessment because it it significantly effects the powering assumptions.

That said I think when you look at most.

Outcomes trials and look at their Kaplan Meier curves often the benefit begins to accrue fairly early interest and continues to accrue over.

Over the course of of the study.

In a more or less continuous fashion so.

I think we.

Powered the assumptions under which we designed the study were conservative.

And meant to take into account the possibility there maybe a treatment lag.

With regard to your second question I'd say, we and Amgen have been especially proactive about these issues already working a couple of years in collaboration in preparations for discussions with reimbursement authorities and payers, both with regard to understanding the landscape and working.

With select healthcare systems.

In order to mine their data such that they can best understand what could be their current economic burden associated with how they're currently managing heart failure, but we're also dependent on galactic results, we might expect there to be budget savings as well as potential pharmacoeconomic benefit.

So were I'd say good students of what has been the history in this space and certainly I do.

Reflect on the comment you made regarding interested what had been some initial challenges, which I would argue I think they've overcome in large part they forged a path around which I think we may walk in their footsteps in some respects.

Cardiovascular clinics and heart failure hospitals are much better prepared now for newer medicines in large part because they have experience working with reimbursement authorities in order to consider new innovations I think we're going to be in a position for having invested substantially in.

This.

Perry launch period in order to be able to work with them. Our hope is that to enable a smoother first launch, especially as it relates to payers understanding what could be the benefit of the new therapy in this space.

Great. That's helpful. Thanks, Robert and then just real quickly can you.

Compare and contrast, the PK PD profile.

We've seen preclinically for 271 to 274.

We haven't talked a lot about that and probably won't do so.

Until such time as we see the phase one data and we can speak more.

Thoroughly about how we might foresee CK 271 going forward in parallel with CK two seven for clearly these are compounds that have differences or else. We would have advanced CK 271 forward, but in the interests of wanting to make sure. We're data driven in terms of how we talk about it better.

I think to defer that conversation until we have the phase one data.

Okay, great. Thanks for taking questions. Thank you.

Your next question comes from the allow line of Joe opinion is flat H.C. Wainwright.

Hi, Joe Hi, everyone. Good afternoon.

First question on collective Galactic up more of logistical question just curious in your discussions with Amgen what the communication strategy is going to be do you know if both you are planning to announced at the final event is hit or are we going to get just the.

Now it's meant that the of the final data.

Yes, so I wouldn't expect us to be announcing when we've accrued that final CV death.

Sure. So I would expect that you should anticipate the next joint announcement would be one that contained the topline results.

Okay Thats helpful. Thanks, and then and I guess this is somewhat of a rhetorical question, but just.

Just just curious here because it's such a herculean amount of data or an immense amount of data that the confidence that you and amgen have that you're able to hit the for Fourq Eutwenty data read outs being able to compile the patient files from 8200 patients et cetera.

Yes, I know it's always a.

You know a herculean task to bring all those things together.

I would say fourth quarter is right now our best estimate when we made that estimate there was no corona virus problems around the world and all kinds of other things, but I think we're on comfortably within the fourth quarter and expect to be able to deliver on that one thing to consider is that in.

In conducting a second planned interim analysis, what has to clean data and bring that data forward for what amounts to a large portion of the.

Data that would be inclusive in a final analysis also so you can imagine we're already I shouldn't say, we and Amgen together collaboration already.

Well down that path with regard to those events that have already been accrued and collecting and cleaning that data.

So I do think that Amgen and cytokinetics have been.

Especially.

Focused to these timelines and I think that it's reasonable to expect what it is that we've reported which is we anticipate Q4 results.

Fantastic. Thank you and then just quickly on 274.

Im sorry, Rell deceptive.

You guys. Obviously, you had a type C. As you just announced than you have in my impression here a lot of.

Feedback from the regulatory agencies and a lot of information that I think has giving you the opportunity to guide what you want to do pending the galactic outcome I guess I would ask the question. This way what do you feel is outstanding that you still need answered say from the FDA to have finalized protocol before galactic reads out.

Sure very good question I'll start and then maybe turn it over to Andy I think in part one of the things we want to.

Ensures were aligned between FDA and M- and HTS in terms of how best to approach the design and conduct of the phase three study.

In the.

Environment against a backdrop, where there's fluidity, where new medicines are being evaluated and tested where.

Adair voters approved in the us, but not Europe, and where we want to make sure. If we go forward that we have endpoints that meaningfully translate into value as determined by reimbursement authorities, especially in Europe.

Yes, I don't think I have a whole lot to add I'd, just maybe emphasized that when you get feedback from these different authorities M&A FDA health technology, such as it's not always.

The same and you want to make sure that you can harmonize it to the extent possible. Yes also mentioned that being that this is.

Movement from what would be into phase two two phase three we also want to make sure. We understand all that is required for registration program not just the phase three trial. So are there other clinical pharmacology studies are there nonclinical activities that also need to be.

Planned for and conducted in order to meet the threshold and.

If you're going to do a phase three study you also want to best understand that you are aligned on statistical methodologies for the analysis of those results all that has to be tucked in as well so that requires extra special attention and care multiple regulatory interactions with different.

Regulatory authorities in different jurisdictions.

Great all very helpful. Thank you very much guys. Thank you Joe.

Your next question comes from the line of CAD Metzler with Needham.

Jets.

Hi, good good evening. Thanks for taking my question and very excited to be on a quarterly call with Youre talking about omecamtiv pivotal data this year.

So just thinking through the high quality problem of Galactic reading out.

Early understand completely from your prepared remarks in our past discussions. This is not part of the critical path for.

Filing but.

Important R&D meteoric data for other things specifically for like payer discussions and your your market access plan.

I think the meteoric data are additive to what we will see in galactic, but.

They they aren't.

I would say critical to the value case that would be made for omecamtiv mecarbil thats going to really rest on on mortality benefits.

Re hospitalization benefit.

In terms of symptom relief and exercise.

Functional improvement those are things that are obviously very important to patients and physicians.

And helped drive the rationale for the use of Omecamtiv mecarbil.

And so we do things to date are important, but but aren't necessarily.

Their timing isn't necessarily a critical to the launch of Omecamtiv Mecarbil, yes, I concur with Saudi and that what ultimately will matter most to whether Omecamtiv. Mecarbil is included in the guidelines and how payers view it will be what comes out of collections.

Definitely in terms of positioning relative to other potential therapies and also.

Lastly.

And for adherence and compliance on the part of patients to the extent that meteoric also reads out positively I think that will be supplemental.

And helped fuel some of the adoption, we hopefully we'll have in commercial traction.

Yes, I just think for all right back to almost none of the other heart failure drugs have.

Evidence of a.

Functional improvement based and exercise so.

Okay.

That's helpful. And then you just a quick one on on the five nine core.

Really you mentioned and it's also in your press release that sad and Mad cohorts.

As one we'll complete in second half 20, just just wondering should we expect.

As part of the investment community to to recede that data and so when.

Good question so.

We're particularly excited about fivenine for because it does have a different pharmacology and could enable us to build out a franchise beyond that which we would be doing with omecamtiv mecarbil.

The sad Mad study data.

We might have by the end of this year, but we and Amgen haven't.

Spoken to whether that will be data available I suspect that we will have a lot to do with whether there's additional phase one data that needs to be generated and what will be our phase two plans all of that still forthcoming in conversation between us and Amgen. So we're explicitly not guiding to data later this year, but rather.

The completion of that said Mad study.

Alright, great I understood. Thank you.

Thank you.

Your next question comes from the line of Charles Duncan with Cantor Fitzgerald.

Hi, Charles.

Hi, This is Marianne coffee on for Charles Thank you for taking the question and congratulations on a very productive year.

Somewhat mentioned this in answering an earlier question, but just to get some more clarity what type of disruptions caused the kind of iris cause for the global Galactic trials being as you up sites in Asia and could you remind us as meteoric is only enrolling at USA.

Sure.

I meant that in some ways just as a maybe a little bit of a flip comment, but the corona virus, obviously is affecting many countries not just in Asia, but you see.

Meetings being canceled in European countries that we obviously have issues in the United States and so.

You know its say something that we need to consider but the.

I think there that I don't anticipate it having any any.

Impact on trial conduct are finishing.

Yeah, I think that it's a good question, but I think it's premature for cytokinetics or for that matter any company really to answer a question like that we are talking about it and were calibrating, where we have country close out and other things that need to occur but to this point, we're not aware of any effect that it could have to do.

For up to our timelines with respect to your questions pertaining to meteoric and where that study is being conducted its currently being conducted throughout the United States and will also be expanding to include.

Europe as well.

And in that way, we are also aware that.

Things like the Corona buyers could have effect to our timelines, but were I think fairly confident that given where we are in enrollment right. Now we can meet the guidance that we set up for today.

Absolutely. Thank you for and sales and my second question had to do with.

Let's move to conclude this sponsorship of research activities.

2019, I know you mentioned that you have ongoing discussions that will conclude this quarter, but I was wondering does the financial guidance that you provided assume that you will fully take over finding responsibility from a sales moving forward.

So the assumption for 2020 is SLS will continue to support our research ft as part of that the agreement.

So that's included in the financial guidance.

Okay. Thank you thats.

Thank you.

Your next question comes from the line of Caf <unk> with Morgan Stanley.

Good afternoon, Jeff.

And thanks for taking the questions.

Based on Fridays prepared remarks of developing 271 beyond HCM does that mean that to seven one will be exclusively outside HCM.

I think it's premature to be that explicit but certainly we foresee that the inclusion of CK 271 in development permits the expansion beyond HCM.

And Thats something Thats still has to be determined based on additional translational research we're doing additional.

Phase one data that we hope to be generating and twentytwenty as well as what might be the fate of our partnering discussions on how that may ultimately play out having CK 271 in clinical development affords us more latitudes in how we might develop this program, but it's premature to.

As committed as maybe your question is alluding.

All right, Thanks, and then.

How are you thinking about Omecamtiv, mecarbil and AMG fivenine for within a potentially changing heart failure landscape with SGN LTE to inhibitors and bear cigarettes.

Yes, I think.

On the captive Mccarville is obviously years ahead of Fivenine for.

And the development of Fivenine for is going to be informed by.

Where we see what we see from Galactic.

You can imagine fivenine for being developed as a follow up to Omecamtiv mecarbil.

With the hopes of showing even greater efficacy, obviously that depends on what we see from Galactic, but you can also mentioned that there are other types of heart failure that we haven't addressed with omecamtiv mecarbil that might be uniquely suited to properties of AMG fivenine for so I think there.

Okay.

Potential to develop both.

The drug both in half breath, but also another unique indications that that have not yet been addressed by on the captive.

And with regard to the other part of your question as guilty to inhibitors and very sick what.

This is an exciting time for new heart failure therapies, and I think all of these have the potential to be complementary but.

Andy likes to say the way we've positioned in developed Omecamtiv mecarbil.

Hopefully can become foundational to standard of care in light of the fact that.

It is acting directly on cardiac muscle and may have direct effect to enhance cardiac function and performance and in that way. It's designed frankly to be partnered and complementary to these other mechanism drugs that have clear benefit as well, but also offer something different.

In the treatment of heart failure.

Great and maybe one last question for Galactica, what are the variable aspects that might influence or impact whether the data are more likely to come out in the early part of Fourq.

Versus the latter part.

I can't really comment on that I think there there are the event rate, obviously will determine when the trial finishes and then how long it takes us to close sites out and all those sorts of things. So it's.

As as those alluded too early it's an extremely.

Complicated and herculean task to bring in a trial and 35 countries around the world and I think.

The toll too early to come in with precision on exactly when it'll come in.

Okay, great. Thanks.

Thank you Jeff.

Your last question comes from Ted Tenthoff with hyper standby.

Good afternoon to Great Hey, guys. Congrats on another great upgrade up.

We are really exciting year.

Two questions if I had been.

I want to make sure I heard that correctly with the gross proceeds or ticket there from the convert.

And then secondly.

Look too and the anticipated and hope for positive data from correct.

What are some of the steps that are being taken with respect to our commercial as they some crop what would be settled to network.

The expense required.

So first we will turn to your first question pertaining to the gross proceeds in the convert deal.

So Ted this change here. The gross proceed from convert deal was a 138 million.

And after deducting the transactional fees as well as the expenses per cap call. We're left with a net of 120 in half million dollars.

Understood great. Thank you.

And with respect your second question, yes.

If I got it right your.

A question pertains to maybe more specifics around that which were collaborating on with Amgen. This is where I'd say, we're especially.

I'm pleased that Amgen and Cytokinetics are working so effectively together.

Along the lines of many work streams, we have.

Joint commercial operating teams working closely with joint commercial committees working closely with joint Development Committee is reporting to a joint steering Committee. All of these committees have their own charters and Workstreams. There are literally hundreds of activities that are going on between our companies in close coordination.

We at Cytokinetics, obviously can't match Amgen.

Person to person, but we have functional team leaders working closely with their counterparts at Amgen certain activities are being performed by Cytokinetics.

Others by Amgen and as we are now within what could be launch readiness mode. We're looking at launch preparation plans region by region, and we're doing market research and working closely with things as diverse as selecting.

Brand names and the disease state education, the positioning the logos the icons color scheme as we're talking about.

As I mentioned before health economics and outcomes research.

Working closely with Amgen, even as it pertains to targeting key accounts and where that might ultimately.

Involve amgen personnel or cytokinetics personnel or both.

Say, it's far more than I could.

Reasonably capture in an earnings call like this suffice it to say.

We've had a long time to get ready for the potential commercialization of Omecamtiv Mecarbil. We've had a long time to think about what needs to happen to be proactive and we and Amgen or I think we're doing a very good job to ready for what could be a big opportunity for a new medicine in this disease area.

Okay. Thank them I really appreciate that.

Update thank you thank you to.

And there are no further questions at this time.

So I want to thank all the participants on the teleconference. Today, both for your continued support and your continued interest in Cytokinetics, we've laid out what was.

A very solid year in 2019 for execution against our goals and objectives and setting up our vision 2025 and were Twentytwenty figures. So importantly in that process. We're looking forward to in Twentytwenty, what could be major milestones that could potentially be.

Transformative for our company and also for our mission in connection with advancing our science to the potential benefit of patients. We look forward to keeping you updated and with that operator, we can conclude the call.

Ladies and gentlemen, thank you for your participation today. This does conclude today's conference call you may now disconnect.

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