What happened Shares of Cytokinetics (NASDAQ: CYTK), a clinical-stage biopharmaceutical company, tumbled after the company announced a $100 million convertible-debt offering. Concern about the potential dilution that will happen if the company can't repay its debt before the notes convert in 2026 pressured the stock, which fell by 19.4% as of 3:55 p.m. EST on Thursday. So what After losing $91.1 million during the first nine months of 2019, Cytokinetics finished September with just $166 million in cash and short-term investments. Without any products to sell, the company's going to need more cash to support the continuing development of its clinical-stage pipeline. Image source: Getty Images. In partnership with Amgen, Cytokinetics is running the pivotal 8,200-patient Galactic study with its lead candidate, a heart-failure drug called omecamtiv mecarbil. Cytokinetics will also begin a midstage trial with a wholly owned new drug candidate, CK-274, before the end of 2019. Investors aren't too thrilled with the company's plan to raise up to $100 million through a convertible debt offering that matures in 2026 because the company's ability to repay that debt before it's converted into new shares is questionable, at best. Now what Cytokinetics already has a $45 million term loan that matures in 2023, and the potential approval of omecamtiv mecarbil won't help much. In 2017, the company monetized future royalties from Amgen for $90 million, and as of Sept. 30, that liability has swelled to $137.7 million. The Galactic study isn't exactly a slam dunk, either. While omecamtiv mecarbil lowered heart tissue deformation in a midstage study, the pivotal Galactic trial is measuring the time to cardiovascular death or a heart-failure event. If the Galactic study isn't a rousing success, Cytokinetics will be on the hook for a heap of convertible debt with no cash flow to pay for any of it. It's probably a good idea to steer clear of this risky biotech stock until it has significant amounts of revenue to work with. 10 stocks we like better than CytokineticsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Cytokinetics wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Cory Renauer has no position in any of the stocks mentioned. The Motley Fool recommends Amgen. The Motley Fool has a disclosure policy.Source