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Cytokinetics' (CYTK) CEO Robert Blum on Q4 2015 Results - Earnings Call Transcript


Good afternoon and welcome ladies and gentlemen to the Cytokinetics’ Fourth Quarter 2015 Conference Call. At this time, I would like to inform you that this call is being recorded. [Operator Instructions] I will now turn the call over to Diane Weiser, Cytokinetics’ Vice President of Corporate Communications and Investor Relations. Please go ahead.

Diane Weiser

Good afternoon and thank you for joining us on this conference call today. Leading today’s call is Robert Blum, our President and Chief Executive Officer. Following Robert’s initial comments, Andy Wolff, our Senior Vice President and Chief Medical Officer, will provide updates on the clinical development program for omecamtiv mecarbil, our first-in-class cardiac myosin activator, which is being developed for the potential treatment of heart failure and VITALITY-ALS, our ongoing Phase 3 clinical trial of tirasemtiv, our first-in-class fast skeletal muscle troponin activator, which we are developing for the potential treatment of amyotrophic lateral sclerosis, or ALS. Andy will also speak to our recently initiated Phase 2 clinical trial of CK-2127107 or CK-107 in patients with spinal muscular atrophy, or SMA. Andy is doing double duty on today’s call as Fady Malik, our Executive Vice President of Research and Development, is unable to join us today. Sharon Barbari, our Executive Vice President of Finance and Chief Financial Officer, will provide a financial overview for the quarter and year end as well as our financial guidance for 2016. Robert will then provide a corporate update and additional perspective as well as corporate milestones for 2016 before opening the call for questions.

Please note that portions of the following discussions, including our responses to questions contain statements that relate to future events and future performance rather than historical facts and constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements may include statements relating to our financial results and guidance, our strategic initiatives, including Vision 2020, our collaborations with Amgen and Astellas, our and our partners’ research and development activities including the initiation, conduct, design, enrollment, progress, continuation, completion and results of clinical trials were significant in utility of preclinical study and clinical trial results and the properties and potential benefits of our dug candidate. Our actual results might differ materially from those projected in these forward-looking statements.

Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings, including our most recent annual report on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website. These forward-looking statements speak only as of today. You should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call.

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

Robert Blum

Thank you, Diane and thank you to everyone on the line for joining us for this call today. We are pleased to have ended 2015 strong, with a strong fourth quarter that positioned us well now in 2016 as our clinical programs advance in late stage development. This momentum fortifies a foundation for our 5-year strategic initiative, Vision 2020, empowering our future. Vision 2020 is designed first to deepen and expand our pipeline, and second, to advance our portfolio of muscle biology-directed drug candidates towards late stage development and potential commercialization.

The key components of our roadmap for the next 5 years are to progress proprietary research programs focused on muscle contractility, growth and energetics into development under new collaborations; advance next generation skeletal and cardiac muscle activator compounds into clinical development by leveraging existing research collaborations; conduct late stage clinical development of novel first-in-class muscle activators for the potential treatment of ALS, SMA, heart failure and other diseases impacting muscle function; continue to collaborate with patient communities to support the urgent development of new medicines for diseases of impaired muscle function with pressing unmet medical needs; and finally, to mature our company operations to enable development, registration and commercialization of muscle biology drug candidates across North America and Europe.

We made tremendous progress on this strategic roadmap in the fourth quarter, most notably in our clinical development programs. As you may know, a little over a week after our top line announcement of the results from the expansion phase of COSMIC-HF, our Phase 2 clinical trial of omecamtiv mecarbil in patients with heart failure, the trial’s lead investigator, John Teerlink was invited to present the findings at a late breaking clinical trial session at the American Heart Association Meeting. We held a special investor event at the AHA meeting and Andy will elaborate on both the positive results as well as some insightful KOL commentary in a moment.

In the fourth quarter, we also made progress activating North American sites and enrolling patients in VITALITY-ALS, our Phase 3 critical trial of tirasemtiv. Andy will speak to recent progress in VITALITY-ALS and will also comment on a protocol amendment we recently filed, which is intended to increase the trial’s statistical power to detect the change in our primary endpoint as well as in key secondary endpoints, most of which are related to respiratory function.

As we recently announced, we also have started the first Phase 2 clinical trial of CK-107 for the potential treatment of SMA, an orphan hereditary disease most often diagnosed in infants and young children and for which there are no current therapies. There is great interest in the trial within the community and we have received a significant number of inquiries from patients and their caregivers with regard to potential participation in this trial that’s very humbling to us. Andy will provide further details on both the tirasemtiv and CK-107 development programs.

And finally, during the quarter, we made progress on our joint research program with Amgen directed to the discovery of next-generation cardiac sarcomere activators. And in addition, we continue to make progress into our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators.

Let me now turn the call over to Andy so that he can elaborate on the progress with each of our clinical stage programs from this quarter.

Andy Wolff

Thank you, Robert. As Robert mentioned and as I trust you all have seen, during the fourth quarter, we announced the presentation of results from the expansion phase of COSMIC-HF at the American Heart Association Meeting in November. This opportunity came within weeks after our top line results were announced and we believe reflected the enthusiasm with which the results have been received by the cardiology community. I think many of you had the opportunity to attend or listen to the investor meeting and webcast we held to review the data following Dr. John Teerlink’s presentation at the conference, but I will recap some key findings and highlight some of the perspectives offered by the COSMIC-HF executive committee as well as provide you with an update on potential next steps.

As a quick reminder, the expansion phase of COSMIC-HF was designed to evaluate the pharmacokinetics, pharmacodynamics, safety and tolerability of omecamtiv mecarbil administered orally to approximately 450 patients with chronic heart failure and left ventricular systolic dysfunction. Patients were randomized 1:1:1 to receive either placebo or treatment with omecamtiv mecarbil at a fixed dose of 25 milligrams twice daily or in the pharmacokinetics, or PK-guided dose titration group, 25 milligrams twice daily, which could be increased to 50 milligrams twice daily depending on the plasma concentration of omecamtiv mecarbil after 2 weeks of treatment with the 25 milligram twice daily dose.

The primary objective of the expansion phase was to characterize the pharmacokinetics of oral omecamtiv mecarbil during 20 weeks of treatment. Prior to COSMIC-HF, the effects of omecamtiv on cardiac function, has been studied for only up to a week. The secondary objectives included evaluation of safety, tolerability, echocardiographic measures of cardiac function, heart rate and N-terminal-pro-brain natriuretic peptide, or NT-proBNP, which is the biomarker associated with the severity of heart failure during the 20 weeks of treatment. Approximately 100 sites in 13 countries participated in one or both phases of COSMIC-HF.

COSMIC-HF met its primary pharmacokinetic objective in that exposure to omecamtiv mecarbil was in the desired range of plasma concentration at all time points. Approximately 60% of patients in the dose titration group did escalate to 50 milligrams twice daily. Importantly, there were statistically significant improvements in all three specified secondary measures of cardiac function, as well as in heart rate and in NT-proBNP in the PK-guided dose titration group. Systolic ejection time, the pharmacodynamic signature of omecamtiv mecarbil increased and was accompanied by an increase in stroke volume. Both measures reflect an increase in systolic or contractile function of the heart, as was further evidenced by observed increases in fractional shortening and ejection fraction.

What was most important and especially exciting to us were the effects we saw on cardiac dimensions and volumes. As we have reported, there were statistically significant reductions in left ventricular end-systolic and end-diastolic dimensions and volumes in the dose titration group. Essentially, in patients treated with omecamtiv mecarbil, the pumping chamber of the heart, the left ventricle got smaller. As you may know, typically with systolic heart failure, the heart grows larger to compensate for poor contractile function. What we saw in COSMIC-HF was that an improvement in contractile function may have contributed to reversals in this enlargement, referred to as reversed remodeling. So the heart is functioning better, pumping more blood per beat and starting to get smaller. Additionally, we found that heart rate in COSMIC-HF decreased significantly in the dose titration group, as did measured levels of the neurohormone NT-proBNP in both groups receiving omecamtiv mecarbil, something not observed in prior studies of omecamtiv mecarbil that employed shorter term dosing.

Adverse events, including serious adverse events, in patients on omecamtiv mecarbil appeared comparable to those on placebo, a small increase in troponin was seen among patients receiving omecamtiv mecarbil. Increases in troponin were independently adjudicated and none were determined to be due to clinical events of myocardial ischemia or infarction. There was no difference in death and cardiac adverse events were similar between placebo and the active treatment groups. We are very pleased to see the consistency of results across all of these metrics. Observing these changes, sustained over 20 weeks of chronic oral therapy, was extremely gratifying and support of the therapeutic hypotheses that we have pursued for over 15 years in this program, namely that directly and specifically improving cardiac systolic function with the cardiac myosin activator can have potentially favorable pharmacodynamic effects during longer term treatment of patients with systolic heart failure. However, its effects on long-term morbidity and mortality remain unknown and an outcomes trial is necessary to address these key questions.

As mentioned, we convened an investor meeting during the AHA Scientific session, including members from the COSMIC-HF executive committee. They were asked to comment on the predictive value of these pharmacodynamic markers on clinical outcomes. What we heard was that the consistency of results we observed has been rarely seen in Phase 2 clinical trials in heart failure and that the impact of omecamtiv mecarbil on cardiac function, in particular the reduction in cardiac volumes and drop in the NT-proBNP has been associated with improved outcomes in studies of other drugs and devices in patients with heart failure. They felt these findings were supportive of studying omecamtiv mecarbil in a Phase 3 outcomes trial.

Towards that end, we worked closely with Amgen during the fourth quarter on a number of collaborative activities in the areas of clinical development, regulatory affairs, manufacturing and market research. On the clinical front, we recently conducted another Phase 1 study in Japan and are moving swiftly to start a Phase 2 trial of omecamtiv mecarbil in Japan so that we can hopefully include Japan in a potential Phase 3 clinical program. In addition, we have finalized key elements of the draft Phase 3 protocol to support ongoing regulatory interactions. We are now in the midst of those end of Phase 2 meetings, which have been scheduled to occur with the FDA, EMA and other regulatory authorities in this first quarter of 2016. Preliminary feedback has been positive and supportive of our potentially advancing to Phase 3 later this year. We anticipate making a decision together with Amgen regarding the potential advancement of omecamtiv mecarbil to Phase 3, following consideration of regulatory feedback in the next few months.

With that update on our cardiac program, I will turn to an update on our skeletal muscle activator programs. During the quarter, we made progress on North American clinical trial site activations and patient enrollments into VITALITY-ALS, our Phase 3 clinical trial designed to assess the effects of tirasemtiv versus placebo on slow vital capacity or SVC and other measures of skeletal muscle strength including other measures of respiratory function in patients with ALS. We now have activated more than half of all planned sites and will now be focusing attention this quarter on activating our remaining sites. With over 200 patients currently enrolled, we remain on track to complete enrollment in the first half of 2016 with data anticipated in the third quarter of 2017.

Importantly, we believe the increase in the duration of the open label phase from one week in BENEFIT-ALS to two weeks in VITALITY-ALS, along with a longer, slower, dose titration steps following randomization to one of the three target dose levels of tirasemtiv in VITALITY-ALS, have together served to reduce the number of post-randomization dropouts in VITALITY-ALS compared to the number of early terminations we observed in BENEFIT-ALS. Also, we recently amended the protocol for VITALITY-ALS to increase the number of enrolled patients from approximately 445 to approximately 600. The increased number of patients enrolled will increase our statistical power from 80% to 90%, to detect a difference between tirasemtiv and placebo of six percentage points in the primary endpoint, which is the change from baseline to 24 weeks in SVC.

You may recall that 6 percentage points was the magnitude of effect seen in BENEFIT-ALS after only 12 weeks of double blind treatment. In addition, you may recall that the curves describing the decline over time in SVC on tirasemtiv versus placebo continued to diverge throughout the 12 weeks of double-blind treatment in BENEFIT-ALS. Consequently, in VITALITY-ALS, these curves may continue to diverge from 12 weeks to 24 weeks, which could result in a difference between tirasemtiv and placebo in the change in SVC from baseline to 24 weeks of approximately 12 percentage points. By implementing the protocol amendment, VITALITY-ALS will have well over 90% power to detect the treatment difference of that magnitude. Finally, regarding tirasemtiv, at the sixth annual California ALS Research Summit, Cytokinetics in collaboration with Knopp Biosciences, presented exploratory analyses of data from patients with ALS complying from three different sources; First, the placebo data from MPower, the Phase 3 clinical trial of dexpramipexole in patients with ALS. Second, the placebo data from Cytokinetics Phase 2b study of tirasemtiv in patients with ALS BENEFIT-ALS.

And finally, the Open Assess Pro Access database, this combined database included multiple observations of SVC over time from well over 900 patients with ALS. The average rate of decline of SVC was remarkably consistent across, the three databases and over time, declining linearly at approximately 0.9 percentage points per day for up to 68 weeks. Also, in this combined database, the standard deviation about the change from baseline to 24 weeks in SVC was 17 percentage points, which is exactly the value we assumed when we calculated the sample sites for VITALITY-ALS. Finally, our analyses of this combined database demonstrated that a reduction in this average rate of decline in SVC from 0.09 to 0.04 percentage points per day, which is consistent with the reduction in the average rate of decline in SVC that we observed over 12 weeks of treatment with tirasemtiv in BENEFIT-ALS, predicts a reduction in the risk of clinically meaningful events, including a 19% reduction in the risk of a decline in any one of the three respiratory questions of the ALSFRS-R, as well as a 22% reduction in the risk, in the time, the first occurrence...