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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 000-50633

 

CYTOKINETICS, INCORPORATED

(Exact name of registrant as specified in its charter)

 

 

Delaware

94-3291317

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

280 East Grand Avenue

South San Francisco, California

94080

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650624-3000

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Common Stock, $0.001 par value

Trading symbol

 

CYTK

Name of each exchange on which registered

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Number of shares of common stock, $0.001 par value, outstanding as of November 1, 2021: 83,882,953

 

 

 

 


Table of Contents

 

 

CYTOKINETICS, INCORPORATED

TABLE OF CONTENTS FOR FORM 10-Q

FOR THE three and nine months ended September 30, 2021

 

 

Page

PART I. FINANCIAL INFORMATION

3

Item 1. Financial Statements (Unaudited)

3

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations and Comprehensive Loss

4

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

5

Condensed Consolidated Statements of Cash Flows

7

Notes to Condensed Consolidated Financial Statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

26

Item 3. Quantitative and Qualitative Disclosures About Market Risk

48

Item 4. Controls and Procedures

48

 

 

PART II. OTHER INFORMATION

48

Item 1. Legal Proceedings

48

Item 1A. Risk Factors

48

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

85

Item 3. Defaults Upon Senior Securities

85

Item 4. Mine Safety Disclosures

85

Item 5. Other Information

85

Item 6. Exhibits

86

 

 

SIGNATURES

87

 

 

 

2


Table of Contents

 

 

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data) (Unaudited)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,562

 

 

$

82,985

 

Short-term investments

 

 

387,074

 

 

 

381,075

 

Accounts receivable

 

 

644

 

 

 

4,420

 

Prepaid expenses and other current assets

 

 

16,661

 

 

 

5,741

 

Total current assets

 

 

494,941

 

 

 

474,221

 

Long-term investments

 

 

191,295

 

 

 

36,954

 

Property and equipment, net

 

 

53,896

 

 

 

13,346

 

Operating lease right-of-use assets

 

 

80,725

 

 

 

2,924

 

Other assets

 

 

6,682

 

 

 

6,358

 

Total assets

 

$

827,539

 

 

$

533,803

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

16,222

 

 

$

8,050

 

Accrued liabilities

 

 

31,772

 

 

 

19,315

 

Current portion of long-term debt

 

 

16,875

 

 

 

 

Short-term lease liabilities

 

 

13,586

 

 

 

2,785

 

Other current liabilities

 

 

2,413

 

 

 

1,049

 

Total current liabilities

 

 

80,868

 

 

 

31,199

 

Term loan, net

 

 

30,203

 

 

 

46,209

 

Convertible notes, net

 

 

93,885

 

 

 

89,504

 

Liability related to the sale of future royalties, net

 

 

174,775

 

 

 

166,068

 

Long-term deferred revenue

 

 

87,000

 

 

 

87,000

 

Long-term lease and other non-current liabilities

 

 

111,788

 

 

 

440

 

Total liabilities

 

 

578,519

 

 

 

420,420

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value

 

 

 

 

 

 

Common stock, $0.001 par value

 

 

84

 

 

 

70

 

Additional paid-in capital

 

 

1,426,051

 

 

 

1,105,470

 

Accumulated other comprehensive (loss) income

 

 

(65

)

 

 

149

 

Accumulated deficit

 

 

(1,177,050

)

 

 

(992,306

)

Total stockholders’ equity

 

 

249,020

 

 

 

113,383

 

Total liabilities and stockholders’ equity

 

$

827,539

 

 

$

533,803

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


Table of Contents

 

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data) (Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

September 30, 2021

 

 

September 30, 2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development revenues

 

$

437

 

 

$

5,187

 

 

$

9,828

 

 

$

12,605

 

License revenues

 

 

 

 

 

36,501

 

 

 

 

 

 

36,501

 

Milestone revenues

 

 

5,000

 

 

 

 

 

 

5,000

 

 

 

 

Total revenues

 

 

5,437

 

 

 

41,688

 

 

 

14,828

 

 

 

49,106

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

48,436

 

 

 

24,202

 

 

 

116,440

 

 

 

67,730

 

General and administrative

 

 

26,202

 

 

 

12,302

 

 

 

62,997

 

 

 

38,912

 

Total operating expenses

 

 

74,638

 

 

 

36,504

 

 

 

179,437

 

 

 

106,642

 

Operating (loss) income

 

 

(69,201

)

 

 

5,184

 

 

 

(164,609

)

 

 

(57,536

)

Interest expense

 

 

(4,161

)

 

 

(3,976

)

 

 

(12,222

)

 

 

(11,945

)

Non-cash interest expense on liability related to the sale of future royalties

 

 

(2,955

)

 

 

(5,461

)

 

 

(8,621

)

 

 

(17,062

)

Interest and other income, net

 

 

231

 

 

 

1,078

 

 

 

708

 

 

 

3,183

 

Net loss

 

$

(76,086

)

 

$

(3,175

)

 

$

(184,744

)

 

$

(83,360

)

Net loss per share — basic and diluted

 

$

(0.95

)

 

$

(0.05

)

 

$

(2.48

)

 

$

(1.34

)

Weighted-average number of shares used in computing net loss per share — basic and diluted

 

 

80,329

 

 

 

68,279

 

 

 

74,460

 

 

 

62,406

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on available-for-sale securities, net

 

 

(43

)

 

 

(379

)

 

 

(214

)

 

 

279

 

Comprehensive loss

 

$

(76,129

)

 

$

(3,554

)

 

$

(184,958

)

 

$

(83,081

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


Table of Contents

 

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ Equity (Deficit)

(In thousands, except share data) (Unaudited)

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2020

 

 

71,015,183

 

 

$

70

 

 

$

1,105,470

 

 

$

149

 

 

$

(992,306

)

 

$

113,383

 

Exercise of stock options

 

 

187,807

 

 

 

1

 

 

 

1,271

 

 

 

 

 

 

 

 

 

1,272

 

Vesting of restricted stock units,

   net of taxes withheld

 

 

360,050

 

 

 

 

 

 

(4,449

)

 

 

 

 

 

 

 

 

(4,449

)

Net share settlement

 

 

 

 

 

 

 

 

(418

)

 

 

 

 

 

 

 

 

(418

)

Stock-based compensation

 

 

 

 

 

 

 

 

5,261

 

 

 

 

 

 

 

 

 

5,261

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(99

)

 

 

 

 

 

(99

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47,104

)

 

 

(47,104

)

Balance, March 31, 2021

 

 

71,563,040

 

 

$

71

 

 

$

1,107,135

 

 

$

50

 

 

$

(1,039,410

)

 

$

67,846

 

Exercise of stock options

 

 

276,790

 

 

 

1

 

 

 

2,206

 

 

 

 

 

 

 

 

 

2,207

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,093

 

 

 

 

 

 

 

 

 

7,093

 

Issuance of common stock under

   Employee Stock Purchase Plan

 

 

64,975

 

 

 

 

 

 

969

 

 

 

 

 

 

 

 

 

969

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(72

)

 

 

 

 

 

(72

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(61,554

)

 

 

(61,554

)

Balance, June 30, 2021

 

 

71,904,805

 

 

$

72

 

 

$

1,117,403

 

 

$

(22

)

 

$

(1,100,964

)

 

$

16,489

 

Exercise of stock options

 

 

421,110

 

 

 

1

 

 

 

3,987

 

 

 

 

 

 

 

 

 

3,988

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,767

 

 

 

 

 

 

 

 

 

7,767

 

Underwritten public offering of

   common stock, net of discounts,

   commissions and offering cost

 

 

11,500,000

 

 

 

11

 

 

 

296,894

 

 

 

 

 

 

 

 

 

296,905

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(43

)

 

 

 

 

 

(43

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(76,086

)

 

 

(76,086

)

Balance, September 30, 2021

 

 

83,825,915

 

 

$

84

 

 

$

1,426,051

 

 

$

(65

)

 

$

(1,177,050

)

 

$

249,020

 

 

5


Table of Contents

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity (Deficit)

 

Balance, December 31, 2019

 

 

59,172,124

 

 

$

59

 

 

$

853,341

 

 

$

679

 

 

$

(865,016

)

 

$

(10,937

)

Exercise of stock options

 

 

12,165

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

 

93

 

Vesting of restricted stock units,

   net of taxes withheld

 

 

274,563

 

 

 

 

 

 

(2,255

)

 

 

 

 

 

 

 

 

(2,255

)

Claims settlement under Section 16(b)

 

 

 

 

 

 

 

 

2,151

 

 

 

 

 

 

 

 

 

2,151

 

Issuance of warrants

 

 

 

 

 

 

 

 

184

 

 

 

 

 

 

 

 

 

184

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,524

 

 

 

 

 

 

 

 

 

3,524

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

934

 

 

 

 

 

 

934

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39,405

)

 

 

(39,405

)

Balance, March 31, 2020

 

 

59,458,852

 

 

$

59

 

 

$

857,038

 

 

$

1,613

 

 

$

(904,421

)

 

$

(45,711

)

Exercise of stock options

 

 

396,379

 

 

 

1

 

 

 

3,333

 

 

 

 

 

 

 

 

 

3,334

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,527

 

 

 

 

 

 

 

 

 

4,527

 

Issuance of common stock under

   Employee Stock Purchase Plan

 

 

86,839

 

 

 

 

 

 

826

 

 

 

 

 

 

 

 

 

826

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(276

)

 

 

 

 

 

(276

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40,780

)

 

 

(40,780

)

Balance, June 30, 2020

 

 

59,942,070

 

 

$

60

 

 

$

865,724

 

 

$

1,337

 

 

$

(945,201

)

 

$

(78,080

)

Exercise of stock options

 

 

171,363

 

 

 

 

 

 

1,227

 

 

 

 

 

 

 

 

 

1,227

 

Exercise of warrants

 

 

95,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,692

 

 

 

 

 

 

 

 

 

4,692

 

Underwritten public offering of

   common stock, net of discounts,

   commissions and offering cost

 

 

8,385,417

 

 

 

8

 

 

 

188,875

 

 

 

 

 

 

 

 

 

188,883

 

Issuance of common stock upon

   private placement

 

 

2,000,000

 

 

 

2

 

 

 

36,435

 

 

 

 

 

 

 

 

 

36,437

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(379

)

 

 

 

 

 

(379

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,175

)

 

 

(3,175

)

Balance, September 30, 2020

 

 

70,594,782

 

 

$

70

 

 

$

1,096,953

 

 

$