10-Q
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Table of Contents

 

 

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 June 30, 2022

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.)

 

 

350 Oyster Point Blvd.

South San Francisco, California

94080

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 624-3000

 

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 August 2, 2022: 94,144,097

 

 

 


Table of Contents

 

CYTOKINETICS, INCORPORATED

TABLE OF CONTENTS FOR FORM 10-Q

FOR THE three and six months ended June 30, 2022

 

 

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

5

Condensed Consolidated Statements of Cash Flows

6

Notes to Condensed Consolidated Financial Statements

7

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

24

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

86

Item 3. Defaults Upon Senior Securities

86

Item 4. Mine Safety Disclosures

86

Item 5. Other Information

86

Item 6. Exhibits

87

 

 

SIGNATURES

88

 

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)

 

 

 

June 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

93,631

 

 

$

112,666

 

Short-term investments

 

 

492,395

 

 

 

358,972

 

Accounts receivable

 

 

1,973

 

 

 

51,819

 

Prepaid expenses and other current assets

 

 

14,251

 

 

 

12,215

 

Total current assets

 

 

602,250

 

 

 

535,672

 

Long-term investments

 

 

10,668

 

 

 

152,050

 

Property and equipment, net

 

 

78,586

 

 

 

73,271

 

Operating lease right-of-use assets

 

 

72,161

 

 

 

73,138

 

Other assets

 

 

8,052

 

 

 

7,188

 

Total assets

 

$

771,717

 

 

$

841,319

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

14,078

 

 

$

21,087

 

Accrued liabilities

 

 

36,702

 

 

 

34,370

 

Short-term operating lease liabilities

 

 

14,303

 

 

 

14,863

 

Other current liabilities

 

 

1,760

 

 

 

1,540

 

Total current liabilities

 

 

66,843

 

 

 

71,860

 

Term loan, net

 

 

62,344

 

 

 

47,367

 

Convertible notes, net

 

 

134,674

 

 

 

95,471

 

Liabilities related to revenue participation right purchase agreements, net

 

 

282,266

 

 

 

179,072

 

Long-term deferred revenue

 

 

 

 

 

87,000

 

Long-term operating lease liabilities

 

 

112,732

 

 

 

112,229

 

Other non-current liabilities

 

 

1,444

 

 

 

4,457

 

Total liabilities

 

 

660,303

 

 

 

597,456

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value

 

 

 

 

 

 

Common stock, $0.001 par value

 

 

85

 

 

 

84

 

Additional paid-in capital

 

 

1,422,127

 

 

 

1,452,268

 

Accumulated other comprehensive loss

 

 

(4,494

)

 

 

(869

)

Accumulated deficit

 

 

(1,306,304

)

 

 

(1,207,620

)

Total stockholders’ equity

 

 

111,414

 

 

 

243,863

 

Total liabilities and stockholders’ equity

 

$

771,717

 

 

$

841,319

 

 

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

 

 

Six Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

June 30, 2022

 

 

June 30, 2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development revenues

 

$

968

 

 

$

2,843

 

 

$

2,116

 

 

$

9,391

 

Milestone revenues

 

 

1,000

 

 

 

 

 

 

1,000

 

 

 

 

Realization of revenue participation right purchase agreement

 

 

87,000

 

 

 

 

 

 

87,000

 

 

 

 

Total revenues

 

 

88,968

 

 

 

2,843

 

 

 

90,116

 

 

 

9,391

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

57,126

 

 

 

36,443

 

 

 

103,061

 

 

 

68,004

 

General and administrative

 

 

42,716

 

 

 

21,197

 

 

 

75,786

 

 

 

36,795

 

Total operating expenses

 

 

99,842

 

 

 

57,640

 

 

 

178,847

 

 

 

104,799

 

Operating loss

 

 

(10,874

)

 

 

(54,797

)

 

 

(88,731

)

 

 

(95,408

)

Interest expense

 

 

(2,807

)

 

 

(4,073

)

 

 

(5,553

)

 

 

(8,061

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(2,693

)

 

 

 

Non-cash interest expense on liabilities related to revenue participation right purchase agreements

 

 

(7,003

)

 

 

(2,871

)

 

 

(13,567

)

 

 

(5,666

)

Interest and other income, net

 

 

864

 

 

 

187

 

 

 

1,279

 

 

 

477

 

Net loss

 

$

(19,820

)

 

$

(61,554

)

 

$

(109,265

)

 

$

(108,658

)

Net loss per share — basic and diluted

 

$

(0.23

)

 

$

(0.86

)

 

$

(1.28

)

 

$

(1.52

)

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

 

 

85,731

 

 

 

71,754

 

 

 

85,366

 

 

 

71,476

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities, net

 

 

(905

)

 

 

(72

)

 

 

(3,625

)

 

 

(171

)

Comprehensive loss

 

$

(20,725

)

 

$

(61,626

)

 

$

(112,890

)

 

$

(108,829

)

 

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

(In thousands, except share data) (Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2021

 

 

84,799,542

 

 

$

84

 

 

$

1,452,268

 

 

$

(869

)

 

$

(1,207,620

)

 

$

243,863

 

ASU 2020-06 adoption

 

 

 

 

 

 

 

 

(49,476

)

 

 

 

 

 

10,581

 

 

 

(38,895

)

Exercise of stock options

 

 

374,242

 

 

 

1

 

 

 

4,074

 

 

 

 

 

 

 

 

 

4,075

 

Vesting of restricted stock units,
   net of taxes withheld

 

 

403,169

 

 

 

 

 

 

(9,602

)

 

 

 

 

 

 

 

 

(9,602

)

Stock-based compensation

 

 

 

 

 

 

 

 

8,985

 

 

 

 

 

 

 

 

 

8,985

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(2,720

)

 

 

 

 

 

(2,720

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(89,445

)

 

 

(89,445

)

Balance, March 31, 2022

 

 

85,576,953

 

 

$

85

 

 

$

1,406,249

 

 

$

(3,589

)

 

$

(1,286,484

)

 

$

116,261

 

Exercise of stock options

 

 

233,365

 

 

 

 

 

 

2,143

 

 

 

 

 

 

 

 

 

2,143

 

Vesting of restricted stock units,
   net of taxes withheld

 

 

41,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under
   Employee Stock Purchase Plan

 

 

49,088

 

 

 

 

 

 

1,540

 

 

 

 

 

 

 

 

 

1,540

 

Exercise of warrants

 

 

14,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

12,195

 

 

 

 

 

 

 

 

 

12,195

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(905

)

 

 

 

 

 

(905

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,820

)

 

 

(19,820

)

Balance, June 30, 2022

 

 

85,915,170

 

 

$

85

 

 

$

1,422,127

 

 

$

(4,494

)

 

$

(1,306,304

)

 

$

111,414

 

 

 

 

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

 

Issuance of common stock under
   Employee Stock Purchase Plan

 

 

64,975

 

 

 

 

 

 

969

 

 

 

 

 

 

 

 

 

969

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,093

 

 

 

 

 

 

 

 

 

7,093

 

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

 

 

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

5


Table of Contents

 

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(109,265

)

 

$

(108,658

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Non-cash interest expense on liabilities related to revenue participation right purchase agreements

 

 

13,623

 

 

 

5,722

 

Stock-based compensation expense

 

 

21,180

 

 

 

12,354

 

Non-cash lease expense

 

 

822

 

 

 

3,126

 

Depreciation and amortization of property and equipment

 

 

2,748

 

 

 

1,080

 

Interest receivable and amortization on investments

 

 

1,546

 

 

 

2,016

 

Non-cash interest expense related to debt

 

 

2,642

 

 

 

3,425

 

Loss on extinguishment of debt

 

 

2,693

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

54,846

 

 

 

1,719

 

Prepaid and other assets

 

 

(8,033

)

 

 

(5,581

)

Accounts payable

 

 

(11,930

)

 

 

(2,380

)

Accrued and other liabilities

 

 

2,557

 

 

 

3,034

 

Operating lease liabilities

 

 

(57

)

 

 

21,470

 

Other non-current liabilities

 

 

(3,658

)

 

 

3,658

 

Deferred revenue

 

 

(87,000

)