SEC Filing | Cytokinetics, Inc.

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10-Q

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, 2022

☐ 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.

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 2, 2022: 94,631,001

CYTOKINETICS, INCORPORATED

TABLE OF CONTENTS FOR FORM 10-Q

FOR THE three and nine months ended September 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’ (Deficit) Equity	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	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	52

PART II. OTHER INFORMATION	52
Item 1. Legal Proceedings	52
Item 1A. Risk Factors	52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	90
Item 3. Defaults Upon Senior Securities	90
Item 4. Mine Safety Disclosures	90
Item 5. Other Information	90
Item 6. Exhibits	91

SIGNATURES	92

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

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


	September 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	106,238		$	112,666
Short-term investments		761,426			358,972
Accounts receivable		2,294			51,819
Prepaid expenses and other current assets		14,317			12,215
Total current assets		884,275			535,672
Long-term investments		28,544			152,050
Property and equipment, net		80,302			73,271
Operating lease right-of-use assets		75,076			73,138
Other assets		7,764			7,188
Total assets	$	1,075,961		$	841,319
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	14,429		$	21,087
Accrued liabilities		40,229			34,370
Short-term operating lease liabilities		16,056			14,863
Other current liabilities		5,782			1,540
Total current liabilities		76,496			71,860
Term loan, net		63,544			47,367
Convertible notes, net		544,986			95,471
Liabilities related to revenue participation right purchase agreements, net		291,260			179,072
Long-term deferred revenue		—			87,000
Long-term operating lease liabilities		114,405			112,229
Other non-current liabilities		1,247			4,457
Total liabilities		1,091,938			597,456
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value		—			—
Common stock, $0.001 par value		93			84
Additional paid-in capital		1,438,103			1,452,268
Accumulated other comprehensive loss		(5,559	)		(869	)
Accumulated deficit		(1,448,614	)		(1,207,620	)
Total stockholders’ (deficit) equity		(15,977	)		243,863
Total liabilities and stockholders’ (deficit) equity	$	1,075,961		$	841,319

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

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, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Revenues:
Research and development revenues	$	2,515		$	437		$	4,631		$	9,828
Milestone revenues		—			5,000			1,000			5,000
Realization of revenue participation right purchase agreement		—			—			87,000			—
Total revenues		2,515			5,437			92,631			14,828
Operating expenses:
Research and development		62,734			48,436			165,795			116,440
General and administrative		48,222			26,202			124,008			62,997
Total operating expenses		110,956			74,638			289,803			179,437
Operating loss		(108,441	)		(69,201	)		(197,172	)		(164,609	)
Interest expense		(6,804	)		(4,161	)		(12,357	)		(12,222	)
Loss on settlement of debt		(22,246	)		—			(24,939	)		—
Non-cash interest expense on liabilities related to revenue participation right purchase agreements		(8,963	)		(2,955	)		(22,530	)		(8,621	)
Interest and other income, net		4,144			231			5,423			708
Net loss	$	(142,310	)	$	(76,086	)	$	(251,575	)	$	(184,744	)
Net loss per share — basic and diluted	$	(1.52	)	$	(0.95	)	$	(2.85	)	$	(2.48	)
Weighted-average number of shares used in computing net loss per share — basic and diluted		93,758			80,329			88,195			74,460
Other comprehensive loss:
Unrealized loss on available-for-sale securities, net		(1,065	)		(43	)		(4,690	)		(214	)
Comprehensive loss	$	(143,375	)	$	(76,129	)	$	(256,265	)	$	(184,958	)

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

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (Deficit) Equity

(In thousands, except share data) (Unaudited)


	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Loss			Deficit			(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
Exercise of stock options		577,369		—		6,187			—			—			6,187
Induced conversion of convertible notes		8,071,343		8		(3,386	)		—			—			(3,378	)
Exercise of warrants		14,170		—		—			—			—			—
Stock-based compensation		—		—		13,175			—			—			13,175
Other comprehensive loss		—		—		—			(1,065	)		—			(1,065	)
Net loss		—		—		—			—			(142,310	)		(142,310	)
Balance, September 30, 2022		94,578,052	$	93	$	1,438,103		$	(5,559	)	$	(1,448,614	)	$	(15,977	)


	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	)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company