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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, 2023

☐ 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 November 1, 2023: 98,053,647

CYTOKINETICS, INCORPORATED

TABLE OF CONTENTS FOR FORM 10-Q

FOR THE three and nine months ended September 30, 2023


	Page
Glossary of Terms	3

PART I. FINANCIAL INFORMATION	7
Item 1. Financial Statements (Unaudited)	7
Condensed Consolidated Balance Sheets	7
Condensed Consolidated Statements of Operations and Comprehensive Loss	8
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity	9
Condensed Consolidated Statements of Cash Flows	11
Notes to Condensed Consolidated Financial Statements	12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	45
Item 4. Controls and Procedures	45

PART II. OTHER INFORMATION	46
Item 1. Legal Proceedings	46
Item 1A. Risk Factors	46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3. Defaults Upon Senior Securities	74
Item 4. Mine Safety Disclosures	74
Item 5. Other Information	74
Item 6. Exhibits	75

SIGNATURES	77

Glossary of Terms

Unless the context requires otherwise, references to “Cytokinetics,” “the Company,” “we,” “us” or “our” in this Quarterly Report on Form 10-Q refer to Cytokinetics, Incorporated and its subsidiaries. References to “Notes” in this Form 10-Q are to the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q. We also have used other specific terms in this Form 10-Q, most of which are explained or defined below:


Term/Abbreviation		Definition
2004 Plan		Cytokinetics’ Amended and Restated 2004 Equity Incentive Plan
2020 RTW Transactions		The transactions contemplated by the RTW Royalty Purchase Agreement, Ji Xing Aficamten License Agreement and the Common Stock Purchase Agreements, dated July 14, 2020, by and between Cytokinetics and the RTW Investors
2021 RTW Transactions		The transactions contemplated by the Ji Xing OM License Agreement and the Common Stock Purchase Agreements, dated December 20, 2021 by and between Cytokinetics and the RTW Investors
2022 RPI Transactions		The transactions contemplated by the RP Loan Agreement and the RP Aficamten RPA
2026 Notes		Cytokinetics’ 4% convertible senior notes due 2026
2027 Indenture		Indenture Agreement, dated July 6, 2022, between Cytokinetics and U.S. Bank Trust Company, as trustee
2027 Notes		Cytokinetics’ 3.50% convertible senior notes due 2027
ACA		Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act
ACC		American College of Cardiology
AHA		American Heart Association
ALS		amyotrophic lateral sclerosis (also known as Lou Gehrig’s Disease)
ALSFRS-R		ALS Functional Rating Scale – Revised
Amended ATM Facility		amended and restated Controlled Equity Offering Sales Agreement
Amgen Agreement		Collaboration and Option Agreement, dated December 29, 2006, as amended, between Cytokinetics and Amgen
ARR		absolute risk reductions
Astellas Agreement		License and Collaboration Agreement, dated June 21, 2013, between Cytokinetics and Astellas
Astellas FSRA Agreement		Fast Skeletal Regulatory Activator Agreement, dated April 23, 2020 between Cytokinetics and Astellas
Astellas OSSA Agreement		License and Collaboration Agreement for Other Skeletal Sarcomere Activators, dated April 23, 2020, as amended, between Cytokinetics and Astellas
ASU 2020-06		ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
BTR/W		background therapy reduction/withdrawal
cGMP		current Good Manufacturing Practice
Cantor		Cantor Fitzgerald & Co.
China		People's Republic of China (including the Hong Kong and Macau SARs)
CMC		Chemistry, Manufacturing and Controls
CMO		Contract Manufacturing Organizations
Common Stock		our common stock, par value $0.001 per share
Compensation Committee		Compensation and Talent Committee of Cytokinetics’ Board of Directors
Convertible Notes		2026 Notes and 2027 Notes


COURAGE-ALS		Clinical Outcomes Using Reldesemtiv on ALSFRS-R in a Global Evaluation in ALS
CPET		cardiopulmonary exercise testing
CRL		Complete Response Letter
CRO		Contract Research Organization
CV		cardiovascular
DMC		Data Monitoring Committee
E.U. or EU		European Union
EEA		European Economic Area
eGFR		estimated glomerular filtration rate
EMA		European Medicines Agency
ESPP		employee stock purchase plan
Exchange Act		Securities Exchange Act of 1934, as amended
FDA		U.S. Food and Drug Administration
Final Payment Amount		As defined in Part I, Item 2 (Management’s Discussion and Analysis of Financial Conditions and Results of Operations) of this Quarterly Report on Form 10-Q – Sources and Uses of Cash, 2022 Royalty Pharma Transactions
FOREST-HCM		Five-Year, Open-Label, Research Evaluation of Sustained Treatment with Aficamten in HCM
FORTITUDE-ALS		Functional Outcomes in a Randomized Trial of Investigational Treatment with CK-2127107 to Understand Decline in Endpoints – in ALS
FSRA		fast skeletal regulatory activator
FSTA		fast skeletal muscle troponin activator
Fundamental Change		As defined in the 2027 Indenture
GAAP		Generally Accepted Accounting Principles in the U.S.
GALACTIC-HF		Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure
GCP		Good Clinical Practice
GDPR		General Data Protection Regulation ((EU) 2016/679)
HCM		hypertrophic cardiomyopathy
HFpEF		heart failure with preserved ejection fraction
HFrEF		heart failure with reduced ejection fraction
HFSA		Heart Failure Society of America
HHS		U.S. Department of Health and Human Services
HIPAA		The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act
ICER		Institute for Clinical and Economic Review
IND		Investigational New Drug
IRA		Inflation Reduction Act of 2022
IRB		Institutional Review Board
Ji Xing		Ji Xing Pharmaceuticals Limited and/or its affiliates, including Ji Xing Pharmaceuticals Hong Kong Limited
Ji Xing Aficamten License Agreement		License and Collaboration Agreement, dated July 14, 2020, by and between Cytokinetics and Ji Xing Pharmaceuticals Limited
Ji Xing Agreements		Ji Xing Aficamten License Agreement and Ji Xing OM License Agreement
Ji Xing OM License Agreement		License and Collaboration Agreement, dated December 20, 2021, by and between Cytokinetics and Ji Xing Pharmaceuticals Limited


KCCQ		Kansas City Cardiomyopathy Questionnaire
KCCQ-OSS		KCCQ Overall Summary Score
Lenders		Silicon Valley Bank and Oxford Finance LLC
LSM		least square mean
LVEF		left ventricular ejection fraction
LVOT		left ventricular outflow tract
LVOT-G		left ventricular outflow tract gradient
MAA		Marketing Authorization Application
MAPLE-HCM		Metoprolol vs Aficamten in Patients with LVOT Obstruction on Exercise Endpoints Capacity in HCM
Mavacamten Royalty		certain payments on the net sales of products containing the compound mavacamten pursuant to the Research Collaboration Agreement, dated August 24, 2012, between Cytokinetics and MyoKardia, Inc.
NDA		New Drug Application
nHCM		non-obstructive HCM
NOLs		net operating loss carryforward
NYHA		New York Heart Association
oHCM		obstructive HCM
OLE		Open-Label Extension
Ownership Change		As defined in Part II, Item 1A (Risk Factors) of this Quarterly Report on Form 10-Q, General Risks
Oxford		Oxford Finance LLC
Oyster Point Lease		Lease, dated July 24, 2019, by and between Cytokinetics and KR Oyster Point 1, LLC, as amended
Partial Redemption Limitation		As defined in the 2027 Indenture
PSU		Performance Stock Unit
Radnor Lease		As defined in Part I, Item 1 (Financial Statements (Unaudited)), Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q - Note 9 (Commitments and Contingencies) – Operating Leases
REDWOOD-HCM		Randomized Evaluation of Dosing With CK-274 in Obstructive Outflow Disease in HCM
REDWOOD-HCM OLE		Randomized Evaluation of Dosing With CK-274 in Obstructive Outflow Disease in HCM Open Label Extension
REMS		Risk Evaluation and Mitigation Strategy
RP Aficamten Liability		As defined in Part I, Item 2 (Management’s Discussion and Analysis of Financial Conditions and Results of Operations) of this Quarterly Report on Form 10-Q – Results of Operations, Non-cash interest expense on liabilities related to revenue participation right purchase agreements
RP Aficamten RPA		Revenue Participation Right Purchase Agreement, dated January 7, 2022, by and between Cytokinetics and Royalty Pharma Investments 2019 ICAV
RP Loan Agreement		Development Funding Loan Agreement, dated January 7, 2022, by and among Royalty Pharma Development Funding, LLC and Cytokinetics
RP OM Liability		As defined in Part I, Item 1 (Financial Statements (Unaudited)), Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q - Note 6 (Agreements with Royalty Pharma) – 2017 RP Omecamtiv Mecarbil Royalty Purchase Agreement


RP OM RPA		Royalty Purchase Agreement, dated February 1, 2017, by and between the Cytokinetics and RPI Finance Trust, as amended by Amendment No. 1, dated January 7, 2022
RPDF		Royalty Pharma Development Funding, LLC
RPFT		RPI Finance Trust
RPI ICAV		Royalty Pharma Investments 2019 ICAV
RSU		Restricted Stock Unit
RTW ICAV		RTW Investments ICAV for RTW Fund 1
RTW Investors		RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd. and RTW Venture Fund Limited
RTW Royalty Holdings		RTW Royalty Holdings Designated Activity Company
RTW Royalty Purchase Agreement		Royalty Purchase Agreement, dated July 14, 2020, between Cytokinetics and RTW Royalty Holdings
SAM		systolic anterior motion
Section 382		Section 382 of the Internal Revenue Code
Securities Act		Securities Act of 1933, as amended
SEQUOIA-HCM		Safety, Efficacy, and Quantitative Understanding of Obstruction Impact of Aficamten in HCM
SGLT2		sodium-glucose cotransporter-2
SMA		spinal muscular atrophy
SPA		Special Protocol Assessment
SVC		slow vital capacity
Tax Act		Tax Cuts and Jobs Act
Term Loan Agreement		Loan and Security Agreement, dated as of October 19, 2015, by and among Cytokinetics, Oxford Finance LLC and Silicon Valley Bank and Loan and Security Agreement, dated as of May 17, 2019, by and among Cytokinetics, Oxford Finance LLC and Silicon Valley Bank
U.S. or US		United States

This Form 10-Q includes discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data. In addition, clinical trial data are subject to differing interpretations, and, even when we view data as sufficient to support the safety and/or effectiveness of a product candidate or a new indication for an in-line product, regulatory authorities may not share our views and may require additional data or may deny approval altogether.

CYTOKINETICS and our C-shaped logo are registered trademarks of Cytokinetics in the U.S. and certain other countries. Other service marks, trademarks and trade names referred to in this report are the property of their respective owners.

The information contained on our website, our Facebook, Instagram, YouTube and LinkedIn pages or our Twitter accounts, or any third-party website, is not incorporated by reference into this Form 10-Q.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

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


	September 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	99,692		$	65,582
Short-term investments		439,547			716,995
Accounts receivable		2,499			147
Prepaid expenses and other current assets		19,678			12,462
Total current assets		561,416			795,186
Long-term investments		15,468			46,708
Property and equipment, net		75,614			80,453
Operating lease right-of-use assets		79,929			82,737
Other assets		8,187			9,691
Total assets	$	740,614		$	1,014,775
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	13,796		$	25,611
Accrued liabilities		32,954			44,096
Short-term operating lease liabilities		17,236			12,829
Other current liabilities		13,737			2,081
Total current liabilities		77,723			84,617
Term loan, net		60,885			63,810
Convertible notes, net		548,134			545,808
Liabilities related to revenue participation right purchase agreements, net		370,049			300,501
Long-term operating lease liabilities		122,216			126,895
Other non-current liabilities		408			1,044
Total liabilities		1,179,415			1,122,675
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, $0.001 par value		—			—
Common stock, $0.001 par value		94			94
Additional paid-in capital		1,537,321			1,481,590
Accumulated other comprehensive loss		(874	)		(3,590	)
Accumulated deficit		(1,975,342	)		(1,585,994	)
Total stockholders’ deficit		(438,801	)		(107,900	)
Total liabilities and stockholders’ deficit	$	740,614		$	1,014,775

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, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Revenues:
Research and development revenues	$	378		$	2,515		$	3,358		$	4,631
Milestone revenues		—			—			2,500			1,000
Realization of revenue participation right purchase agreement		—			—			—			87,000
Total revenues		378			2,515			5,858			92,631
Operating expenses:
Research and development		82,532			62,734			245,147			165,795
General and administrative		40,111			48,222			129,498			124,008
Total operating expenses		122,643			110,956			374,645			289,803
Operating loss		(122,265	)		(108,441	)		(368,787	)		(197,172	)
Interest expense		(7,136	)		(6,804	)		(21,142	)		(12,357	)
Loss on extinguishment of debt		—			(22,246	)		—			(24,939	)
Non-cash interest expense on liabilities related to revenue participation right purchase agreements		(6,860	)		(8,963	)		(19,462	)		(22,530	)
Interest and other income, net		6,839			4,144			20,043			5,423
Net loss	$	(129,422	)	$	(142,310	)	$	(389,348	)	$	(251,575	)
Net loss per share — basic and diluted	$	(1.35	)	$	(1.52	)	$	(4.07	)	$	(2.85	)
Weighted-average number of shares used in computing net loss per share — basic and diluted		96,071			93,758			95,666			88,195
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities, net		584			(1,065	)		2,716			(4,690	)
Comprehensive loss	$	(128,838	)	$	(143,375	)	$	(386,632	)	$	(256,265	)

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) Income			Deficit			Deficit
Balance, December 31, 2022		94,833,975		$	94	$	1,481,590		$	(3,590	)	$	(1,585,994	)	$	(107,900	)
Exercise of stock options		369,298			—		3,547			—			—			3,547
Vesting of restricted stock units		668,835			—		—			—			—			—
Shares withheld related to net share settlement of equity awards		(262,829	)		—		(10,517	)		—			—			(10,517	)
Stock-based compensation		—			—		15,194			—			—			15,194
Other comprehensive income		—			—		—			1,945			—			1,945
Net loss		—			—		—			—			(131,289	)		(131,289	)
Balance, March 31, 2023		95,609,279			94		1,489,814			(1,645	)		(1,717,283	)		(229,020	)
Exercise of stock options		206,605			—		3,286			—			—			3,286
Vesting of restricted stock units		46,989			—		—			—			—			—
Issuance of common stock under Employee Stock Purchase Plan		74,937			—		2,401			—			—			2,401
Stock-based compensation		—			—		18,668			—			—			18,668
Other comprehensive income		—			—		—			187			—			187
Net loss		—			—		—			—			(128,637	)		(128,637	)
Balance, June 30, 2023		95,937,810			94		1,514,169			(1,458	)		(1,845,920	)		(333,115	)
Exercise of stock options		273,149			—		3,124			—			—			3,124
Vesting of restricted stock units		2,454			—		—			—			—			—
Issuance of common stock under at-the-market offering, net of issuance costs		38,431			—		1,312			—			—			1,312
Stock-based compensation		—			—		18,716			—			—			18,716
Other comprehensive income		—			—		—			584			—			584
Net loss		—			—		—			—			(129,422	)		(129,422	)
Balance, September 30, 2023		96,251,844		$	94	$	1,537,321		$	(874	)	$	(1,975,342	)	$	(438,801	)


	Common Stock					Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount		Capital			Loss			Deficit			Equity (Deficit)
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		663,341			—		—			—			—			—
Shares withheld related to net share settlement of equity awards		(260,172	)		—		(9,602	)		—			—			(9,602	)
Stock-based compensation		—					8,985			—			—			8,985
Other comprehensive loss		—			—		—			(2,720	)		—			(2,720	)
Net loss		—			—		—			—			(89,445	)

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