Cytokinetics Inc Q3 FY2021 Earnings Call

Good afternoon and welcome ladies and gentlemen to Cytokinetics Third Quarter 2021 Conference Call. At this time, I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. At the company's request we will open the call for questions-and-answers after the presentation, we will allow for up to two questions per participant. I will now turn the call over to Joanna Siegall, Cytokinetics' Senior Manager of Corporate Communications and Investor Relations. Please go ahead.

Good afternoon and thanks for joining us on the call today. Robert Blum, our President and Chief Executive Officer, will begin with an overview of the quarter and recent developments, then Fady Malik, our EVP of Research and Development, will provide an update on omecamtiv mecarbil including recently presented additional analyses from GALACTIC-HF as well as an update on our ongoing next steps with the FDA. Next, Stuart Kupfer, our SVP and Chief Medical Officer, will provide an update on our development program for aficamten by recapping the results from cohorts one and two of REDWOOD-HCM, elaborating on continuing activities in REDWOOD-HCM and reviewing the design of SEQUOIA-HCM, our planned Phase 3 clinical trial of aficamten in patients with obstructive HCM. He will also speak to initial progress in COURAGE-ALS, our ongoing Phase 3 clinical trial of reldesemtiv in patients with ALS. Then, Andrew Callos, our EVP and Chief Commercial Officer, will discuss our go-to-market strategy for omecamtiv mecarbil and our cardiovascular franchise development plans for the commercialization of aficamten. Robert Wong, our VP and Chief Accounting Officer, will provide a financial overview for the past quarter and Ching Jaw, our SVP and Chief Financial Officer, will discuss strategic planning, our financial outlook and corporate development strategies before Robert Blum provides concluding thoughts and expected key milestones for the remainder of 2021. 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. 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 current report regarding our third quarter 2021 financial results filed on Form 8-K today. We undertake no obligation to update any forward-looking statements after this call. Now I will turn the call over to Robert.

Thank you, Joanna. And thanks again to everyone for joining us on the call today. We had a very productive third quarter marked by meaningful progress across all of our later stage programs. Most notably, we shared positive results from our Phase II clinical trial REDWOOD-HCM which demonstrated the efficacy and the safety of aficamten, our next-in-class drug candidate in patients with obstructive hypertrophic cardiomyopathy. As we've said, these results met our high expectations for this trial and we received positive feedback from the physician community. Stuart will elaborate more on these results in a moment. During the third quarter, we are also pleased to complete enrollment in Cohort 3 of REDWOOD-HCM, which as you'll recall enrolled patients also on disopyramide, a medication often prescribed to patients with more severe HCM. We expect to share the results from Cohort 3 in the first quarter of 2022. Following previous interactions with FDA from which we received feedback on our planned trial design, we continue to advance activities in preparation for SEQUOIA-HCM, the Phase 3 clinical trial of aficamten in patients with obstructive HCM, as Stuart will elaborate. This trial was designed to potentially demonstrate a significant improvement in exercise capacity and evaluate safety in a broad population of patients with symptomatic obstructive HCM. We're working with sites around the world, including many who participated in REDWOOD-HCM who are enthusiastic about also participating in SEQUOIA-HCM and we look forward to starting this trial soon. Moving now to our heart failure program, we continued activity supportive of our plans to submit an NDA for omecamtiv mecarbil, and we remain on track towards our goal of submission in this fourth quarter of this year. Fady will have more to say about that in a moment. Additionally, as outlined in our recent Analyst and Investor Day, we're making significant progress in refining and executing our go-to-market strategies for omecamtiv mecarbil across several work streams that Andrew will elaborate on in a moment. These commercial readiness activities represent a tremendous scope of work from our growing commercial organization and supporting our go-to-market strategies as well as our intention to build a cardiovascular business franchise by leveraging common denominators and synergies across our business inclusive of our plans both for the potential launch of omecamtiv mecarbil and a potential future launch of aficamten. As Fady will discuss, in the third quarter we presented additional results from GALACTIC-HF highlighted by an analysis of Black patients enrolled in GALACTIC-HF showing that the treatment effect of omecamtiv mecarbil in Black patients was consistent with the treatment effect in the overall population and also similar to the effect observed in White patients in the trial. This finding is important due to the fact that Black patients tend to have a higher risk of heart failure and often have worse outcomes. Additionally, an analysis of the severe heart failure subgroup in GALACTIC-HF was published in the Journal of the American Medical Association Cardiology illuminating a larger treatment effect when compared to the overall population of patients studied. This important manuscript was accompanied by an editorial suggesting recognition of a new classification for a group of severe heart failure patients whose prevailing high unmet need represents an increasing patient population with heart failure that contributes more and more to the clinical and the economic burden of this disease. Finally, we were pleased in the most recent quarter to begin enrolling patients in COURAGE-ALS, our Phase 3 clinical trial of reldesemtiv in patients with ALS. The results from the Phase 2 clinical trial FORTITUDE-ALS were deemed compelling by investigators and physicians who treat patients with ALS and our advancement to Phase 3 is an exciting and important step forward for this program and is aligned with our dedication to the ALS communities. The ALS communities are more assertively seeking new medicines and the FDA and public policymakers seem to be increasingly responding to these louder calls for action. It is an incredibly important time for our company. We're building our teams and capabilities as we are now on the precipice of a powerful transformation from an R&D company into one that is also a commercial organization. It has always been our strategic vision to ourselves deliver on the promise of our science and we're closer now to that than ever before. These are exciting times to be sure, but how we execute on those plans will matter. Robert Wong will speak to our current financials and Ching will comment on our progress and prospects in continuation of our long-standing practice to diversify our access to capital through both partnering and structured financings as informed by annual strategic planning. With that, I'll turn the call over now to Fady to elaborate on developments related to omecamtiv mecarbil.

Thanks, Robert. As you mentioned, results from additional analyses of GALACTIC-HF presented during the quarter at the Heart Failure Society of America Annual Scientific Meeting reinforce that outcomes with omecamtiv mecarbil in Black patients enrolled in GALACTIC-HF were consistent with the overall population and like the overall study results were driven primarily by a reduction in heart failure hospitalizations and heart failure events. The treatment effect in Black patients was also similar compared to White patients. GALACTIC-HF enrolled the most Black patients among recent heart failure trials and of patients enrolled in the U.S., 29% were Black, which is important, not only because Black patients have historically been underrepresented in clinical research, but also because they have a higher risk of heart failure and suffer worse outcomes. This disparity in outcomes is complex, but it's encouraging to see that the potential benefit of treatment with omecamtiv mecarbil remains consistent in this group. Expanding on the theme of higher risk patients with heart failure, three weeks ago a manuscript entitled 'Assessment of Omecamtiv Mecarbil for the Treatment of Patients with Severe Heart Failure' was published in JAMA Cardiology. Following on the heels of the initial data presentation in late June at Heart Failure 2021 and the International Congress of the European Society of Cardiology, the analysis by Dr. Michael Felker and co-authors looked at the treatment effect of omecamtiv mecarbil on the primary composite endpoint in patients from GALACTIC-HF classified as having severe heart failure based on modified criteria from the Heart Failure Association of the European Society of Cardiology advanced heart failure physician statement. Patients in this subgroup had NYHA Class III or IV symptoms, ejection fractions of less than or equal to 30% and hospitalization for heart failure within the prior six months. Approximately 30% of patients enrolled in GALACTIC-HF met these criteria and had a win rate through approximately twice those patients without severe heart failure. In this post-hoc analysis, those with severe heart failure who received omecamtiv mecarbil experienced a significant treatment benefit for the primary endpoint with a hazard ratio of 0.80, whereas patients without severe heart failure had no significant treatment benefit with a hazard ratio of 0.99. The results for cardiovascular death were qualitatively similar: patients with severe heart failure experienced a trend towards treatment benefit from omecamtiv mecarbil while patients without severe heart failure did not. Omecamtiv mecarbil was equally well tolerated in patients with and without severe heart failure with no significant changes in blood pressure, renal function or potassium compared to placebo. Accompanying this manuscript was an editorial authored by Dr. Yancy Adrian Hernandez and Gregg Fonarow titled identifying treatments for Stage C2 heart failure in which Stage C2 is proposed as a new addition to the currently defined four stages of heart failure, A through D, and as would encapsulate these severe heart failure patients who may be a priority for additional impactful therapy. This high unmet need was a focus of our panel discussion at our recent Analyst and Investor Day. Despite the availability of and adherence to guideline-directed medical therapy or GDMT, patients with worsening heart failure still have high event rates. As we heard from Drs. Alanna Morris and Tarek Ahmad, who are both specialists in heart failure at major academic medical centers, it can be a challenge to get patients on GDMT because many are unable to tolerate three medications due to side effects. With omecamtiv mecarbil, a potential add-on therapy with a novel mechanism of action that could be used as a complement to and alongside existing therapies without increasing cardiac mortality, physician feedback has indicated that their view is positive towards the clinical utility of omecamtiv mecarbil as an additional therapeutic option with a good safety and tolerability profile and that there is a clear need for therapy like omecamtiv mecarbil to fit into regular practice. Moving on, we completed enrollment in METEORIC-HF at the end of the second quarter and we continued conduct of the trial in the third quarter. This trial will provide insight as to how omecamtiv mecarbil could benefit another key aspect of improving the lives of people with heart failure, which is to improve their exercise capacity. The common concern of patients with heart failure is their inability or difficulty with everyday tasks, but current treatments have little to no impact on exercise capacity and stamina. We expect to complete METEORIC-HF this year and look forward to reporting results in early 2022. Also in the third quarter, we conducted meetings with FDA to support the preparation and submission of our new drug application or NDA for omecamtiv mecarbil. We completed a pre-NDA meeting which confirmed the suitability for submission of content related to chemistry, manufacturing and control, clinical pharmacology and the non-clinical program as well as the format of data sets, the integrated summary of safety and other components of the NDA. We also had a meeting with FDA to discuss the assay for plasma concentrations of omecamtiv mecarbil in terms of its potential need to guide dosing as well as the regulatory pathway for its implementation. In sum, these meetings provided guidance to some of the content of our NDA, which is on track for submission this quarter. As we approach our goal of submitting our NDA to the FDA, we also continued simultaneously growing the scope and reach of our medical affairs activities by hiring therapeutic area lead medical directors and deploying additional field-based medical scientists. We have developed a compliant framework for an investigator-sponsored studies program, which is timely as we've started to receive requests for potential collaborative activities. The team is working on finalizing their scientific platform for omecamtiv mecarbil, which forms the basis for communications with medical professionals. We also initiated vendor selection for the development of a medical contact center to be prepared to respond to requests for medical information or direct questions to the proper personnel for response. With that, I'll turn the call over to Stuart to provide an update on aficamten and reldesemtiv.

Thanks, Fady. During the third quarter, in September we presented the full results from Cohorts 1 and 2 of REDWOOD-HCM, the Phase 2 clinical trial of aficamten at the Heart Failure Society of America Annual Scientific Meeting in Denver. As we've mentioned, the results were positive and support our advancing aficamten to Phase 3, which I'll touch on in a moment. As we previously shared in REDWOOD-HCM, treatment with aficamten for 10 weeks resulted in statistically significant reductions from baseline, compared to placebo, in the average resting left ventricular outflow tract or LVOT pressure gradient and the average post-Valsalva LVOT gradient. The majority of patients treated with aficamten — 79% in Cohort 1 and 93% in Cohort 2 — achieved the target goal of treatment defined as resting gradient less than 30 millimeters of mercury and post-Valsalva gradient less than 50 millimeters of mercury at Week 10 compared to 8% for placebo. These reductions in LVOT gradient were dose-dependent with patients achieving greater reductions of LVOT gradient with increasing doses of aficamten. Reductions in LVOT gradient occurred within two weeks of initiating treatment, were maximized within two to six weeks of the start of dose titration and were sustained until the end of treatment at 10 weeks. Reversibility of LVOT gradient and left ventricular ejection fraction reductions were observed after discontinuation of aficamten with levels returning to baseline at the end of the two-week washout period. Patients also experienced statistically significant reductions in NT-proBNP and treatment with aficamten was associated with an improvement in New York Heart Association functional class with a substantial number of patients improving by at least one class. As previously stated, treatment with aficamten was well tolerated. The incidence of adverse events was similar between treatment arms, and there were no treatment-related serious adverse events. Importantly, there were no treatment interruptions or discontinuations. The Director of Hypertrophic Cardiomyopathy Center at Tufts University School of Medicine, who presented the results of REDWOOD-HCM at HFSA, underscored the potential clinical utility of aficamten based on the elimination of resting LVOT gradients in nearly all patients. Dr. Maron further commented on the substantial improvement in heart failure symptoms, rapid onset and reversibility of effect, the ability to use precise echo-guided titration and the lack of dosing interruptions for low ejection fraction. At the conference, we also received a positive reaction from physicians who manage patients with HCM and expressed their enthusiasm about the results and for a medication that potentially could be used for patients who have symptomatic obstructive HCM and are not responding to current standard of care therapies. Overall, we're very encouraged by the results so far and their potential translation to clinical practice. During the quarter, we also completed enrollment in Cohort 3 of REDWOOD-HCM in which patients with obstructive HCM who are receiving disopyramide as background therapy are treated with aficamten in an open-label manner. This cohort will further inform the potential inclusion of this small but important patient population in our planned Phase 3 trial. In addition, during the third quarter, we continued enrolling patients in REDWOOD-HCM OLE, the open-label extension trial of REDWOOD-HCM. With the positive results in hand from REDWOOD-HCM, we have been actively engaging in startup activities for SEQUOIA-HCM, our planned Phase 3 clinical trial of aficamten in patients with obstructive HCM. At our Analyst and Investor Day meeting in October, we presented the design of the trial, which I'll recap at a high level now. SEQUOIA-HCM is a randomized double-blind placebo-controlled international clinical trial designed to evaluate aficamten in patients with symptomatic obstructive HCM on background medical therapy for 24 weeks. The primary objective is to evaluate the change from baseline to Week 24 in peak oxygen uptake or peak VO2 measured by cardiopulmonary exercise testing or CPET, which is a measure of exercise capacity. Among the secondary objectives, we are investigating the change in Kansas City Cardiomyopathy Questionnaire clinical summary score and New York Heart Association functional class at Week 12 to evaluate a potentially early improvement in heart failure symptoms and again at Week 24. We plan to randomize 270 patients in a one-to-one ratio to aficamten or placebo in addition to standard of care. Each patient will receive up to four escalating doses of aficamten or placebo with dose optimization based on achievement of echocardiographic targets. The starting dose will be 5 milligrams once daily, escalating to 10, 15 or 20 milligrams once daily as needed to achieve target gradients. These four doses were selected based on the results from REDWOOD-HCM to facilitate selection of the optimal dose for each patient and maximize the individual benefit-risk profile. Study startup activities, regulatory filings and IRB submissions are underway, with the first site initiations already completed. Drug product availability in early 2022 will enable the commencement of screening and enrollment of the first patients in this trial. In anticipation of enrolling patients with obstructive HCM from China in SEQUOIA-HCM, we continue to collaborate closely with our partner, Ji Xing Pharmaceuticals. Ji Xing recently completed a Phase 1 study evaluating single and multiple doses of aficamten in healthy Chinese subjects. The pharmacokinetic results were similar to those observed in the Caucasian populations enrolled in our Phase 1 study of aficamten conducted in the U.S. and similarly showed dose-proportional pharmacokinetics with a safety and tolerability profile comparable to placebo. The results of this study support submission of the clinical trial application and enrollment of patients with obstructive HCM in China. On the neuromuscular front, as Robert mentioned, during the third quarter we began enrolling patients in COURAGE-ALS, the Phase 3 clinical trial of reldesemtiv in ALS. COURAGE-ALS will enroll approximately 555 patients with ALS randomized 2:1 to receive reldesemtiv or placebo for 24 weeks, followed by a 24-week period in which all patients will receive reldesemtiv. The primary endpoint is the change from baseline to 24 weeks in ALSFRS-R, a functional rating scale that indicates the progression of ALS. As we designed COURAGE-ALS, we incorporated feedback from patients and caregivers to remove key barriers to clinical trial participation and to help make the patient experience less burdensome. We are also working to provide continued access to reldesemtiv for all patients who complete COURAGE-ALS as well as patients who have previously participated in our ALS trials, reflective of our goal to ensure ethical and equitable access for patients who are in need. With that, I will turn the call over to Andrew to discuss our progress against the go-to-market strategy for omecamtiv mecarbil.

Thanks, Stuart. During the third quarter we advanced our go-to-market strategy for omecamtiv mecarbil, and we were pleased to present at our recent Analyst and Investor Day. There are a few highlights to the strategy I'd like to review on today's call. First, our go-to-market strategy is based on a gated build with a planned total investment to be titrated over time as de-risking events occur such as NDA submission, filing and approval by the FDA. To illustrate, we have around 10% to 15% of our planned commercial FTEs in place today, but we will have less than one-third of the total number in place post NDA submission; this level of commercial hires are sufficient for launch preparation. As Robert mentioned, we hired a seasoned team to implement this go-to-market strategy and we now have our full leadership team in place as well as our account manager team who call on payers and nearly all of our marketing organization. The go-to-market strategy is based on four key pillars: insights, education, access and support. Insights speaks to having a very deep understanding of who the worsening heart failure patient is, where they are treated and who the cardiologists are who treat them. Education means that if omecamtiv mecarbil is approved, then we need to ensure that cardiologists clearly understand the data supporting our label including the evidence supporting omecamtiv mecarbil's potential benefit for the subset of patients who have worsening heart failure. Access speaks to our plans to have affordable co-pays for most patients as soon as possible after launch. And finally, support entails the programs that we will provide for patients like co-pay support for commercial patients, a patient assistance program and educational services. To support our goal of commercial affordable access, our payer account management team has met with every major payer in the third quarter. We have introduced our team and our company while engaging payers in a mutual understanding of the unmet need in heart failure. To further support access, our health economics and outcomes research colleagues continue events outcomes research with the goal of multiple publications in 2022. These publications are targeted at documenting the value of omecamtiv mecarbil as illustrated by meaningful reductions in resource utilization, intensity and cost. As we prepare for the potential launch of omecamtiv mecarbil, we are simultaneously building our cardiovascular franchise strategy towards our plan for the potential launch of aficamten, keeping in mind our corporate goal of bringing multiple medicines to market in the next several years. This strategy relies on several synergies. First, there's an overlap among cardiologists: about 80% overlap between cardiologists who treat patients with heart failure and HCM. Cost efficiency is another synergy where we will share field medical, shared services and systems across the entire organization. Once we have established relationships and built systems to support the launch of omecamtiv mecarbil, we are well positioned to accelerate and streamline the potential launch of aficamten. It is an incredibly exciting time to be working at Cytokinetics as we continue to grow our team and advance our plans. It remains important for us to remember the driving force behind this motivation: patients and the clear unmet need in both heart failure and HCM. And with that, I'll turn it over to Robert Wong, who will provide an update to our financials.

Thanks, Andrew. I'll provide an update on cash, revenue and spending and then Ching will review our financial outlook and corporate development strategies. More details on our actual results for the third quarter 2021 are included in the press release, which we released earlier this afternoon. We ended the third quarter with approximately $668.9 million in cash and investments. Our revenue in the third quarter of 2021 came primarily from our recognizing a $5 million milestone from Ji Xing Pharmaceuticals in anticipation of the start of SEQUOIA-HCM. Our third quarter 2021 R&D expenses increased to $48.4 million from $24.2 million in the third quarter of 2020 primarily due to increases in spending for our clinical development activities for our cardiac muscle inhibitor programs. In addition, we incurred transition costs related to the termination of our collaboration with Amgen and our purchase from Amgen of approximately $7.3 million of materials including manufactured quantities of the active pharmaceutical ingredients for omecamtiv mecarbil, thereby completing our purchase commitment. More than 70% of our R&D expenses were attributable to our cardiovascular programs as expected given activity related to transitions from our collaborations with Amgen, the purchase of manufactured quantities of active pharmaceutical ingredients, ongoing activities associated with METEORIC-HF and also our cardiac myosin inhibitor programs, including the ongoing activities associated with REDWOOD-HCM and start-up activities related to SEQUOIA-HCM. The remainder of our expenses were attributable to our early research and skeletal muscle program activity. Our third quarter 2021 G&A expenses were $26.2 million, up from $12.3 million in the third quarter of 2020 due primarily to an increase in outside spending in anticipation of our potential commercial launch of omecamtiv mecarbil in 2022, personnel-related costs including stock-based compensation and facilities costs related to our new building. And now Ching will review our financial outlook and corporate development strategies.

Thanks, Robert. As is our annual practice, we recently conducted a comprehensive strategic planning process with subsequent presentation and discussion with our Board. This year the strategic plan focused on prioritizing our expanding clinical pipeline to ensure that we focus on R&D programs that leverage our core competencies and competitive advantages in muscle biology and also address high unmet need opportunities that may offer high return on investment potential. In addition, we pressure-tested plans to enrich our research pipeline with external collaborations that could complement and strengthen our internal innovation. Lastly, we focused in this year's strategic planning process on critically evaluating and reformulating our cardiovascular and neuromuscular business franchise strategy to continually capitalize on lifecycle management of our most advanced drug candidates: omecamtiv mecarbil, aficamten and reldesemtiv. To recap our cash position, we ended the third quarter with approximately $669 million in cash which includes $297 million raised in Q3 through an equity offering net of expenses. Therefore, our pro forma cash at year-end 2021 is expected to be in the range of $600 million to $610 million which represents more than three years of cash runway using our revised net cash utilization guidance of $195 million to $215 million in 2021. With the potential commercial launch of omecamtiv mecarbil and the funding of two Phase 3 clinical trials, SEQUOIA-HCM and COURAGE-ALS, we do expect our 2022 and 2023 cash burn rate to increase relative to 2021 spending and we will provide guidance on this in our fourth quarter earnings call to occur in early 2022. As we have stated, we continue to seek ways to strengthen our balance sheet and in the third quarter, we have advanced partnering and structured financing discussions aligned with our corporate development strategy. During the quarter, we continued our discussions with potential co-development and co-commercialization partners for omecamtiv mecarbil as well as aficamten with priority attention to business development in Asia and other complementary geographies where we don't intend to go-to-market ourselves. Our plan is to preserve North American and potentially European rights for development and commercialization for both omecamtiv mecarbil and aficamten. In parallel, we have also been advancing discussions with multiple entities and funds with shared interest related to structured financings including royalty monetization and other structured deals to further support the commercial launch of omecamtiv mecarbil and our continued and expanded development objectives for aficamten. Our goal is to complete these deals in the fourth quarter which could enable us to end the year with two to three years of forward cash runway, even as we expect the spending in 2022 and 2023 to be higher than our expected spending this year. As you know, we have always built our business on a strong financial foundation and we have an established history of making non-equity dilutive deals to support our continued growth and progress. This transaction is expected to close this quarter. We believe we are positioned financially and strategically to support the potential launch of omecamtiv mecarbil and to continue to advance our pipeline and business franchise strategies. And with that, I will turn the call back over to Robert Blum.

Thank you, Ching. Within our vision, 2025 that we set forth in 2020 we laid out several goals, including achieving regulatory approvals for at least two drugs arising from our pipeline and expanding our discovery platforms. Over the past quarter, in addition to the clinical, regulatory and commercial progress we made, we also engaged in activities to broaden our research footprint in the years to come. Thinking even beyond 2025, we continue to forge ahead as leaders in muscle biology with focus to populations of high unmet need. In the next year, you'll be hearing more about our activities as we've extended our muscle biology focus from the biomechanics of muscle contractility to the energetics, growth and metabolism of muscle with novel mechanism drug candidates advancing in development. While much of our focus has been on our programs in cardiovascular disease as you heard with our starting COURAGE-ALS, our commitment to the ALS communities remains strong. Along these lines, we also recently donated data from our completed clinical trials in ALS to the PRO-ACT database, which stands for Pooled Resource Open-Access ALS Clinical Trials. PRO-ACT is available to members of the research community and it contains over 10,000 de-identified clinical patient records from multiple completed clinical trials, providing a powerful tool to advance research in the ALS field and also to better understand observations related to disease progression and epidemiologic data. We will be donating data from three completed trials in ALS: BENEFIT-ALS, VITALITY-ALS and FORTITUDE-ALS which represents data from almost 600 patients. We're pleased to be working with the ALS Association, Prize for Life and with the Neurological Clinical Research Institute at Mass General to share these data with the ALS communities to which we are so importantly dedicated. Further demonstrating our commitment to patient communities during the quarter, we renewed our partnership with Cure SMA to increase education, awareness, public policy and fundraising for spinal muscular atrophy and we also announced the 4th Annual Cytokinetics Communications Fellowship Grant program which will award a total of $100,000 in grants to patient advocacy organizations in heart failure, in HCM, in ALS and in SMA to support increased capacity in communications and outreach. As we near the end of 2021, we look back on our very gratifying progress and achievements and we look ahead to what may be a watershed year for our company. We expect to end 2021 with two distinct programs advancing in Phase 3 clinical trials with our first potential medication moving towards a potential approval and commercial launch and all of that happening on the foundation of continued innovations in muscle biology directed to patients who rely upon us and in areas for which our leadership offers hope for diseases associated with muscle dysfunction and weakness. We look forward to providing more updates on our continued progress and we welcome your questions and feedback. Now let me recap our expected milestones for the remainder of 2021. For omecamtiv mecarbil, we expect to submit an NDA to the FDA in this fourth quarter of this year. We also expect to complete the conduct of METEORIC-HF by year-end with results expected in early 2022. For aficamten, we expect to continue with study start up with regulatory filings, IRB submissions and site readiness activities overall for SEQUOIA-HCM and with availability of drug product in early 2022 we anticipate commencement of screening and enrollment of the first patients in that trial. And for reldesemtiv, we expect to complete enrollment of COURAGE-ALS throughout the remainder of this year. And for our ongoing research, we expect to advance new muscle-directed compounds and to conduct IND enabling studies and to potentially advance one to two potential drug candidates into clinical development over the next year. Operator, with that update, we can now open the call up to questions please.

The first question comes from the line of Dane Leone with Raymond James.

Great. Hi, Robert and team. Thank you for taking the questions and congratulations on all the updates. Just two for me if you will. Firstly, can you give us any more color in terms of the scale and scope of the SEQUOIA-HCM study, as we think about modeling expenses and time to run the study. Is it fair to use the EXPLORER-HCM study as a similar proxy in scale and scope for the patients required and enrollment? And then my second question would be just to drill down a little bit more on the submission for omecamtiv. I know it's been asked before, but in terms of updating your communications back and forth with the FDA, any additional color in terms of the scope or scale of the label as it relates to baseline left ventricular ejection fraction. Thank you.

Sure. Good questions. So I'll start and turn it over to Fady. He may also ask Stuart to elaborate. I don't think we're going to provide any specific financial guidance with regard to SEQUOIA; it may be premature to do that until we start dosing patients, but certainly we can give you some things to hold on to with regard to your projections. For instance, what might be our expectations in terms of time for enrollment and duration of the study. I hope that could be helpful and certainly you know already the number of patients we aim to enroll. So why don't I turn it over to Fady first to talk to you about how we think it's going to enroll, the number of sites, the number of countries, things like that. And then most likely once we start dosing — presumably that will be in early 2022 — we'll be in a better position to point to how we think it's going to be affecting our spending, and then we'll come back to your second question.

All right. Thanks, Robert. We plan to enroll approximately 270 patients into SEQUOIA, which is a little bit more than was enrolled in EXPLORER. I think the size and scope are comparable, and certainly the number of sites and things like that are similar. We will probably go to a few more sites than they did in EXPLORER — nearly a dozen countries and well over, north of 80 sites. I think ultimately, when we get the study fully up and going, our plan is to push hard and to enroll this as quickly as possible. But there are certain limitations in terms of study startup and things like that that are hard to press; once we have sites up and going, I think it will actually enroll very rapidly.

So then, your second question related to the NDA and how we're approaching what could be contained within the NDA, the indication statement and otherwise, in particular around ejection fraction. And as we've stated, we do believe that patients with EFs less than 30% are seemingly benefiting a great deal more than other patients in GALACTIC and we do think that it's in the interest of omecamtiv mecarbil that the label should point to where the benefit is concentrated. So we are hopeful that data including graphics could be included in the label ultimately upon potential approval, but that's obviously going to be subject to FDA review. Based on conversations we've been having, and Fady can elaborate, we do feel encouraged that would be supportive and consistent with other things the FDA has done. Fady anything you want to add?

No, I mean, I think we've had those discussions with FDA. Obviously what ends up in the label will be the outcome of the negotiations at the time that we negotiate the label. But in general, I think they are supportive of the concept that the label should indicate where the benefit of the drug is concentrated and that provides physicians with the information needed to best use the drug. And in that context, ejection fraction is obviously an important indicator.

And not only the label. I might suspect that could ultimately inform how omecamtiv mecarbil could be incorporated into guidelines also and you get a sense of that from some of the publications that Fady referred to in his statements.

Excellent. Thank you very much and congratulations.

Your next question comes from the line of Joe Pantginis with H.C. Wainwright.

Hi, everybody, good afternoon. Thanks for taking the questions. I wanted to focus my first question on the concept that you guys are really in an important execution and logistics time for the company. So with that said, I'll even go off of Stuart's comments, and Robert you said it too about drug availability for early next year and executing COURAGE as well. Do you feel you've had to plan anything above and beyond for these studies, no matter what it is, including drug availability based on any anticipated issues around the global supply chain problems that we're seeing right now?

Very good question, and I think that might be the first time on one of these earnings calls that we really did get a question about the supply chain. It's an area of intense focus for us right now, as we're not only embarking on these large Phase III studies, but we're readying for the supply of omecamtiv into the marketplace and obviously had, while we were partnered with Amgen, that would be something we'd have relied on them for, but now it's our responsibility. We are executing well on contracts as well as conversion of drug substance to drug product and the like, and the study startup activities for SEQUOIA are proceeding nicely. We moved very swiftly from having completed Cohorts 1 and 2, reading out those results, having meetings with FDA and readying to start SEQUOIA, all of that occurring in a relatively short timeframe. So it seems like things are going well both in support of clinical trials and also commercialization. But we are building the supply chains at the same time we're executing on how the delivery of drug product into clinical trials is occurring. So it's something that I think is going to continue to be a focus for senior management as that is enabling of our success. To this point, the good news is we're working with some of the same contract manufacturing organizations with whom we have long-standing relationships. And there may also be opportunities to consolidate programs amongst them so that we're working with them for more than one program. We're focused on small molecule drug candidates, and in that way it's not like we're dealing with an incredibly novel way of approaching supply, but at the same time, we have to ensure capacity and deliverable timelines and that's what we're focused on. Fady, anything you want to add to that?

No, I think you summed it up, but I think we've been able to continue to advance drug supplies for our studies and things like that. I think the real major constraints have to do with the spare capacity in the supply chain. There is just a lot that has been squeezed out, so you have to be careful about how you plan things.

And what I might also say is Andrew and his team are very focused on the hand off between the manufacturers and then the logistics associated with distribution and all of the activities in connection with ensuring patients get reliable sources of drug as well, and that speaks to potential patient hub services and other things like that. Over time, I expect you'll hear more about that from Andrew too.

That's very, very helpful. Thank you. And then I guess two smaller questions. One maybe for Ching on the financial side. On the $7.3 million cost to pay Amgen for drug product for omecamtiv — just curious, what might still be outstanding going into the future or if that expense is essentially done? And then second, if I heard Fady correct when he was discussing the future for omecamtiv as well, I could have sworn I heard him say potential ISTs, so that sounded interesting. I'm curious what kind of studies you might be looking at. Thank you.

Thanks. In regards to the payment that we paid Amgen, the $7.3 million this quarter is the last of those payments. As we stated in our press release for the nine months ended September 30, 2021, we have paid them $46 million. So that was the total amount, and the $7.3 million this quarter was the last of the payments.

And I think just in regards to investigator-sponsored, investigator-initiated studies, we've begun to receive proposals. Obviously we'll review them and decide which ones we can support. They fall under a fairly broad range of interest. Some of them are outside of the heart failure population that we studied in GALACTIC, some of them are within, but I think we'll elaborate more on those as we begin to see them through.

Sure. Understood. Thank you very much.

Your next question comes from the line of Yasmeen Rahimi with Piper Sandler.

Hi, Robert. Thank you so much for taking my questions. I have two questions. Maybe the first place to start is, a lot of our investors have been surprised by FDA actions recently and that has created some nervousness. So my question is, especially over the last few months as you've been interacting with the FDA, what has been their tone and body language toward you? Could you elaborate on how discussions have gone? I think that could be really important. And then I have a follow-up question.

Sure. So what I'll say is oftentimes in these situations biotech companies talk about having a pre-NDA meeting, they submit an NDA, it gets filed or doesn't get filed, and then they await approval. In our case, over the last year, we've had many interactions with FDA both in-person before COVID shut that down and then subsequently by remote interactions and through written exchange of documents. I found FDA to be very accessible and very interactive with us, providing guidance that informs both the formatting and the content of our planned NDA submission. So I'm very encouraged by the level of engagement and I believe it supports our submission in a way that could align with the agency's interests for approval. We've had our questions satisfactorily answered in order to provide for us now to go through the final mechanics of an NDA submission in order to get that done this quarter.

Thank you, Robert. Maybe a follow-up: When you speak with cardiologists, whether in private practice or at hospitals, what's their level of appreciation for omecamtiv as a novel mechanism of action? Does it click right away when they learn it's the first myotrope able to improve cardiac contractility? How important is the novelty of its mode of action for driving adoption and enthusiasm beyond the data?

So it's a little too early to talk about adoption since the product is not approved, but based on ad boards and interactions with key opinion leaders driven by medical affairs and market research, we're getting very positive feedback about how the novelty of the mechanism may translate into potential future adoption. I'll turn it over to Fady and Andrew to add color.

Yasmeen, the physician community certainly understands where this could play a role. Finding a drug that can improve cardiac function safely and have benefit for patients has been a longstanding goal. If you listened to our Investor Day presentation, you'd hear enthusiasm echoed by many ad boards we conducted in the U.S. and Europe. The mechanism is novel, but it's also rational and physicians understand why you might use it.

This is Andrew. The only thing I would add is that when we talk with physicians, they are excited by the mechanism, but the mechanism alone is not enough — it must be supported by evidence. When they look at the mechanism, the evidence and the unmet need, it aligns well. They are running out of options when patients can't tolerate guideline-directed medical therapy. They are interested in an add-on that is neutral on kidney function and blood pressure and that works in these patients. When you talk about the add-on and that type of effect, they get very enthusiastic. So we're getting a lot of enthusiasm for a very specific subset of patients relative to the product.

Thank you for the answer.

Your next question comes from the line of Jeff Hung with Morgan Stanley.

Hi, Robert. Thanks for taking the questions. Previously you indicated that meetings with payers on omecamtiv mecarbil have been largely introductory; just curious if you have any updates that you can provide on payer feedback?

Sure. We've interacted with the major payers and it's been largely introductory: who is Cytokinetics, what is our strategy, and aligning on how they think about heart failure and their challenges. Many of our account managers have existing relationships with major payers. The next phase is the pre-approval information exchange, which we will begin in the coming weeks per FDA regulations. The feedback so far is that payers like that we can clearly identify patients relative to benefit by ejection fraction, which could indicate where they would target prior authorization, and that is acceptable to us because it gives access to a specific population that would benefit from omecamtiv.

The other thing to add is there will be more forthcoming published literature in 2022 that underscores the economic burden of heart failure, especially for those with worsening heart failure, and where there could be opportunity for a new mechanism therapy like omecamtiv mecarbil, based on results from GALACTIC, to reduce events like hospitalizations. Payers are aware of the economic burden, especially given Medicare penalties tied to readmissions, so a therapy that reduces heart failure-related events would catch their attention, and that's something we'll continue to investigate and develop as part of our value proposition.

Great, thanks. And I may have misheard, but did you say that you expect enrollment of COURAGE to be completed this year? Otherwise, any updates on timing or when you might be better able to gauge the pace of enrollment to estimate that time. Thanks.

What I meant to say was enrollment continues through this year and into next year. We expect that we will enroll patients sufficient to enable a first interim analysis next year, the timing of which is still to be defined. If it were to pass that interim analysis, hopefully it will, the study would continue through next year. So no, it's not intended to complete enrollment this year.

Your next question comes from the line of Akash Tewari with Jefferies.

Hi, Robert. Thanks so much for taking my questions. Can you talk about what drove your decision to look at exercise capacity as a primary endpoint and not the composite endpoints? Why may exercise capacity be a more useful endpoint, both for the agency and clinicians? Additionally, have you heard any feedback from either the FDA or KOLs on the need for long-term outcomes data post-approval for aficamten? Thank you.

Why don't we turn first to Stuart to address the first question and then Fady and Stuart can address the second question.

Thank you, Robert. We focused on evaluating functional improvement in patients with obstructive HCM comparing aficamten versus placebo. These patients have very poor exercise tolerance, and we focused on one of the most rigorous objective measurements of exercise capacity, peak VO2 using cardiopulmonary exercise testing. Rather than combining this with a more subjective component of a composite endpoint, we wanted to zero in on the most critical and quantitative objective measurement of exercise capacity. We will be evaluating other endpoints as secondary endpoints that assess symptomatic improvements such as the Kansas City Cardiomyopathy Questionnaire, New York Heart Association functional class, etc. So those more traditional endpoints will be evaluated in SEQUOIA.

And have you heard feedback from FDA or KOLs on the need for outcomes data post-approval?

Outcomes data are recognized as important, but regulators and KOLs understand that outcomes data are hard to come by in a symptomatic but relatively low-mortality patient population. These patients, unlike traditional heart failure patients, don't get hospitalized often and their mortality rates are usually quite low, well under 5% per year, so you can't really do outcomes-based trials easily. That said, there is recognition that this therapy is likely to be lifelong, so understanding long-term safety is important. That's why we're conducting the open-label extension with planned at least five years of follow-up for patients enrolled in REDWOOD and SEQUOIA to better characterize the long-term course of patients treated with aficamten.

I think the advent of new pharmaceuticals will drive better awareness of outcomes associated with HCM and how they could be modified with therapies like aficamten or mavacamten, and you'll see more publications arising out of registries that speak to real-world evidence. This will play into adoption of the category, but regulators are not likely to push for broad outcomes trials as a condition of approval from what we've heard from FDA.

That is super helpful. If I may just follow up, can you talk about the importance of showing to the FDA that patients are able to be stabilized on to a safe dose from this class of drugs? Is that something the agency is focused on from a regulatory perspective? Thanks so much.

It’s certainly something that we think is possible and achievable with aficamten, and we hope to be able to demonstrate that with SEQUOIA. If your question is whether FDA is explicitly pushing that requirement, because of their review of another product, that would not be appropriate for the agency to signal to us directly.

Your next question comes from the line of Salim Syed with Mizuho.

Good afternoon, Robert and team. Congrats on all the progress. Just a couple from me, one on aficamten and one on reldesemtiv. On aficamten, it looks like the thesis has gotten a lot more comfortable for many investors. I'm curious what the gating factors are that are stopping you from ramping up development more aggressively across larger indications like obstructive HCM expansion or non-obstructive HCM. And on reldesemtiv, as you start to dig into COURAGE design, you are enrolling patients with ALSFRS-R total score up to 44. In the Phase 2 data, the slow progressors (score about 41) didn't show much difference between drug and placebo. So how are you thinking about ensuring you enroll enough medium or fast progressors to detect a benefit in COURAGE? Are you limiting slow progressors or otherwise enriching for faster progressors?

Both very good questions. On aficamten, we've spent considerable time since seeing REDWOOD results considering next steps beyond SEQUOIA-HCM. Fady, Stuart, Steve and others are considering multiple trial designs for expanding development into non-obstructive HCM and other pathways. It's premature to elaborate on them today, but expect in 2022 to hear more about our parallel plans. We're planning resources in 2022 accordingly. On COURAGE-ALS and enrichment strategies, Stuart and Fady can address how we are enriching for medium and fast progressors.

Yes, it's essentially an enrichment strategy. The entry criteria are designed to enrich for medium and faster progressors. We can also monitor this during the trial because you can calculate early progression rates in blinded data and ensure you're enrolling the right patients.

Salim, you're referring to the post-hoc analyses in FORTITUDE-ALS. We observed greater magnitudes of benefit in medium and fast progressors. We mapped that progression rate to critical entry criteria — particularly a maximum ALSFRS-R of 44 and time from symptom onset of two years. Applying those two main criteria enriches for faster progressing patients, while not excluding slow progressors, resulting in a larger proportion of medium and faster progressing patients. With that strategy, we anticipate increased sensitivity to detect a beneficial treatment effect with reldesemtiv.

Okay, got it. So this is more that you can do it based on entry criteria rather than having to calculate during the trial based on blinded data?

That's correct. Exactly.

Thank you, Salim.

Your next question comes from the line of Jason Butler with JMP Securities.

Hi Robert. Thanks for taking the questions. Wondering if you could talk a little bit more about the path for aficamten in China. Is there data needed beyond the completed PK study to open up SEQUOIA to China? What proportion of patients in SEQUOIA do you think could come from China? And could SEQUOIA as a standalone support registration in China or would you need additional data or trials beyond that?

Very good questions. We're still learning what's required, but our intention is to be in a position to start SEQUOIA in China and to enroll Chinese patients into the same study based on the Phase 1 data. We intend for that trial to be supportive of registration in China as well as outside China. This is subject to regulatory interactions that are ongoing, and our partner Ji Xing is actively managing that work. Stuart, anything to add?

No, you've summarized it well. We rely on Ji Xing for guidance given their regulatory expertise in China. The Phase 1 data support enrollment of patients in China in SEQUOIA-HCM and we expect that trial to support registration in China.

Great. Thanks for taking the questions.

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

Hello, Robert and team. Congratulations on a good year of progress. Thanks for taking my question. I had a couple on omecamtiv and reldesemtiv. With regard to the omecamtiv NDA filing, are you planning on press releasing the submission or acceptance for review or filing? And just to clarify something, would you be filing for a broad label claim with data pointing to the cohort that had the greatest benefit, or would you limit the filing claim to that cohort?

I'll take those and Fady may want to elaborate. With regard to communications and press releases, we expect to be submitting an NDA this quarter and we probably would not be communicating anything until such time as we have a read on its fileability — whether it's filed or not filed by FDA. Regarding the label, I'll ask Fady to speak to how we might approach the indication statement and where information about patients who benefited most could appear.

If you look at different indication statements, there are different approaches and they generally reflect the patient population studied. You can see examples where a label includes additional statements indicating where the benefit was concentrated, for instance in patients with below-normal ejection fraction. It may be that we end up with a modifying statement in the indication. You certainly will have data in the clinical trial section that show pre-specified subgroups, one of which was ejection fraction, and that showed benefit in the lower ejection fraction group, NYHA 3-4 group, and others. There are different places in the label where that information may be contained and ultimately it's hard to predict until those discussions occur with the agency.

Okay. That's helpful. Regarding METEORIC, I think you mentioned you'd complete the conduct of it this year. Can you give some sense on timing to data? Could that be in the first quarter? And can you confirm whether that data would be submitted to the agency and have any potential for impacting the review? It seems like it could be early in the review cycle, so likely not.

We probably aren't going to give specific guidance on first quarter or timing. METEORIC will wrap up late in the quarter and it is a complicated study because CPET evaluations involve a lot of central lab work. The datasets are complex to integrate, so database lock may not be swift. Regarding impact on review, having the results in hand early will be useful; the safety data could be part of an update during review, but we do not expect it to materially change the primary review course.

Okay. And then on reldesemtiv, just one quick question regarding conduct of that trial. I think you mentioned you're enriching for faster progressing patients. Are you explicitly seeking more bulbar onset versus limb onset patients consistent with that, given the under-two-years since symptom presentation criteria?

We're not restricting enrollment by onset type. We're enrolling patients in both categories. The main criteria to enrich for faster progressing patients are baseline ALSFRS-R and time since symptom onset, which will result in a larger proportion of medium and faster progressing patients.

Okay. Thanks for taking the questions.

Your next question comes from the line of Rohit Bhasin with Needham and Company.

Hi. Thanks for taking my question. Can you talk a bit about how the METEORIC-HF trial fits with the go-to-market strategy for omecamtiv? Do you expect a label expansion or better payer reimbursement if METEORIC is positive?

I'll ask Fady to speak to that and Andrew may add color as well.

If METEORIC is positive we would at some point submit a supplemental NDA filing to expand the label to include the results of METEORIC. Improving exercise capacity is important to patients and would be worth having in the label, but that would come after the primary approval of omecamtiv mecarbil. Improving exercise capacity is rarely shown with drugs that improve heart function and would be a unique feature of omecamtiv mecarbil if positive.

From an access perspective, we'll be negotiating pre- and post-approval with payers largely using the GALACTIC data. If METEORIC is positive, it will enhance our value argument, particularly around improving capacity and productivity. It could enhance our value proposition, but I wouldn't expect it to dramatically change our overall access strategy or access levels.

Great. Thank you.

There are no further questions in queue at this time. Robert, your closing remarks please.

Thank you. Thanks very much to all the participants on our teleconference today. Thanks for your continued support and your interest in Cytokinetics. We're pleased to be able to provide you updates with respect to our progress as well as our prospects. Obviously, a lot is going on at our company and we're looking forward to continuing to execute well on our key milestones through the remainder of this year. Peering into next year, it could be quite a transformational year in 2022. We look forward to sharing with you all of those updates. And with that operator we can conclude the call.

Thank you. This does conclude today's conference call. You may now disconnect.