Cytokinetics: 2 Catalysts Make It Worth A Look (NASDAQ:CYTK)

Cytokinetics (NASDAQ:CYTK) is a great speculative biotech play to look into. The reason why I state that is because there are a few catalysts on the way that could greatly change the value of the company. Before the end of 2022, the FDA has scheduled an advisory committee for Cytokinetics to review omecamtiv mecarbil for patients with heart failure with reduced ejection fraction (HFrEF). That’s because it was able to achieve the primary composite endpoint in a phase 3 study known as GALACTIC-HF. The FDA advisory committee is expected to review omecamtiv mecarbil specifically on December 13, 2022. Hopefully the committee review will go well, but regardless the FDA has set the PDUFA date to be February 28, 2023.

Besides these catalysts, there are several data readouts expected from other studies in 2023 as well. These catalysts pertain to the use of aficamten, which is being explored in patients with hypertrophic cardiomyopathy (HCM). The main pivotal study being explored for this indication is known as SEQUOIA-HCM and results from it are expected in the 2nd half of 2023. However, a prior phase 2 proof of concept study for HCM patients, known as REDWOOD-HCM, is expected to have results released for cohort 4 in the 1st half of 2023. One thing to note is that this is going to deal with non-obstructive HCM patients. A near-term catalyst to consider is that Cytokinetics is expected to start a second phase 3 study for obstructive HCM in Q4 of 2022. With proof of concept established with omecamtiv mecarbil for heart failure, plus several catalysts expected within a year, these are the reasons why I believe that Cytokinetics is a great speculative biotech play to look into.

Omecamtiv Mecarbil Holds Great Potential With A Few Catalysts

The main drug in the pipeline for Cytokinetics would be omecamtiv mecarbil. That’s because not only has it established proof of concept by meeting the primary composite endpoint for the phase 3 GALACTIC-HF study, but it now has two catalysts on the way which traders/investors can focus on. Before going over these catalysts though, it’s important to highlight why the biotech was able to move on to file a New Drug Application (NDA) to the FDA. The reason again is because of the impressive results it was able to obtain from the late-stage GALACTIC-HF study. There was a total of 8,256 patients who were recruited that were at risk of hospitalization or death, despite still receiving ongoing standard of care (SOC) therapy. It was noted that omecamtiv mecarbil met on the primary composite endpoint compared to placebo. That is, treatment with Omecamtiv mecarbil reduced the risk of cardiovascular death or heart failure events compared to placebo (patients who received standard of care). With this primary composite endpoint being met, it now provides Cytokinetics the avenue to move towards possible FDA approval. It has already met with the FDA and because additional data was sent to the agency, it needed additional time to review it. Thus, one major catalyst which investors can look forward to would be the PDUFA date established for omecamtiv mecarbil for the treatment of heart failure patients, which is set for February 28, 2023. That’s not the only catalyst which investors have to look forward to either. Before this FDA final decision for omecamtiv, the FDA advisory panel committee is going to review the drug first on December 13, 2022. If the advisory committee review goes well, plus the FDA chooses to ultimately approve it for marketing of this heart failure indication, then the expected launch would happen in Q1 of 2023.

Aficamten Provides Different Mechanism Of Action For Different Patient Population

I went over omecamtiv mecarbil above, which is a cardiac myosin activator. Well, it also has another drug in its pipeline known as aficamten, but it is a cardiac myosin inhibitor instead. This particular drug is being explored in an ongoing phase 3 study treating patients with obstructive hypertrophic cardiomyopathy (HCM), which is known as SEQUOIA-HCM. HCM is a devastating disease, because the heart muscle becomes thickened. In turn, this makes it more difficult for the heart to pump blood. This phase 3 study is expected to enroll 270 symptomatic obstructive HCM patients who will be randomized on a 1:1 basis to receive either aficamten or placebo. Both of these drugs will be given in addition to standard of care (SOC) treatment for a total of 24 weeks. The primary endpoint is going to be peak oxygen uptake (pVO2) from baseline to week 24 using cardiopulmonary exercise testing (CPET). What is CPET? CPET is a specialized test that measures a patient’s exercise ability. Information about the heart, including lungs, is collected to see if the stress response to exercise is normal or abnormal. Thus, the goal of this study is to determine pVO2 during CPET in the 24-week period, between aficamten and placebo. Hopefully, those who take aficamten achieve statistical significance with respect to this primary endpoint compared to placebo. Results from this late-stage SEQUOIA-HCM study are expected to be released in the 2nd half of 2023.

This doesn’t mean that there aren’t any near-term catalysts for investors to look forward to. It is expected that Cytokinetics will initiate a second phase 3 study using aficamten for the treatment of obstructive HCM patients in Q4 of 2022 any day now. The basis for beginning the phase 3 program of aficamten for this patient population was on the basis of positive results from a prior phase 2 study known as REDWOOD-HCM. The REDWOOD-HCM study established some proof of mechanism of action of aficamten in treating obstructive HCM patients. This drug was given to these patients in this phase 2 study for many weeks and it resulted in reductions from baseline compared to placebo in the average resting left ventricular outflow tract pressure gradient (LVOT-G) and the average post-Valsalva LVOT-G. All of this was achieved without any treatment related serious adverse events. There is another shot on goal from this same phase 2 REDWOOD-HCM study, but this involves cohort 4 which is treating patients with non-obstructive HCM. These particular results are expected in the 1st half of 2023.

Financials

Cytokinetics expects that it will end 2022 with more than $800 million in cash. This, despite the fact that it expects that its operating expenses for all of 2022 to end up being in the range of $375 to $385 million. There is a reason for the extension of cash and that has to do with the pushing up of the PDUFA date. I noted above that the PDUFA date for omecamtiv mecarbil for heart failure was moved up to February 28, 2023, thus with this three-month delay of this PDUFA date, because of additional data being sent, Cytokinetics postponed the hiring and commercial activities planning for this drug to 2023. With having more than $800 million in cash by the end of 2022, it believes it has enough to fund its operations for about two to three years.

Risks To Business

There are several risks that investors should be aware of before investing in this biotech. The first risk to consider would be with respect to the FDA advisory Committee panel that will be set to review omecamtiv mecarbil for the treatment of patients with heart failure on December 13, 2022. Hopefully it gets a positive note from each of the committee members on that date, but that remains to be seen. Another risk to consider would then be the FDA review of this particular drug for this patient population. The FDA has the final decision on whether or not omecamtiv mecarbil should be approved for this particular indication. There is no guarantee or assurance that the FDA will approve the drug for marketing. Again, the PDUFA date has been established for February 28, 2023. Despite the company stating it has about two to three years’ worth of cash on hand, that doesn’t mean that it won’t choose to raise cash again. I believe that if the FDA approves omecamtiv mecarbil for the treatment of patients with heart-failure, then it might sway the company to raise cash much earlier than expected.

Conclusion

The final conclusion is that Cytokinetics is a great speculative biotech play to look into. That’s because it has a few catalysts on the way, which I believe could provide substantial value for shareholders. The two major catalysts would be the FDA advisory committee panel review of omecamtiv mecarbil for heart failure patients expected December 13, 2022 and then the FDA PDUFA date for this drug for this patient population again on February 28, 2023.

The GALACTIC-HF study met on the primary composite endpoint established so there is a good chance for regulatory approval. The only thing I believe would be a risk for shareholders would be the pharmacokinetic analyses needed to be done by the FDA. There are a few other catalysts which investors can look forward to as well with respect to the aficamten drug being developed. Again, this drug is being explored in an ongoing phase 3 study known as SEQUOIA, which is treating patients with obstructive HCM. Results from this late-stage study are expected in the 2nd half of 2023.

There is also a second phase 3 study which is expected to be initiated for obstructive HCM in Q4 of 2022 any day now. Lastly, there will be an update on data in the 1st half of 2023 from the prior phase 2 REDWOOD-HCM study, dealing with cohort 4 for non-obstructive HCM patients. There is another shot on goal from this biotech, which involves the ongoing phase 3 COURAGE-ALS study, which is using the drug Reldesemtiv for the treatment of patient with amyotrophic lateral sclerosis (ALS). Things are going well for this particular program so far, because the first futility interim analysis was already conducted. The Data Monitoring Committee (DMC) concluded that this late-stage study should continue based on unblinded data it reviewed.

With two major catalysts coming up for omecamtiv mecarbil for heart failure (FDA advisory committee and FDA PDUFA date), plus many other catalysts for investors to look forward to in the coming year, these are the reasons why I believe that Cytokinetics is a great speculative biotech play to look into.