Cytokinetics(CYTK) - 2025 Q2 - Quarterly Report

PART I Item 1. Financial Statements (Unaudited) Cytokinetics reported $68.3 million H1 2025 revenues, a $295.7 million net loss, with $1.04 billion cash and $1.59 billion liabilities Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $74,940 | $94,857 | | Short-term investments | $783,195 | $981,157 | | Total current assets | $886,542 | $1,107,940 | | Total assets | $1,225,635 | $1,401,673 | | Liabilities & Stockholders' Deficit | | | | Total current liabilities | $131,064 | $179,674 | | Term loans, net | $159,058 | $93,227 | | Convertible notes, net | $553,987 | $552,370 | | Liabilities related to revenue participation | $489,503 | $462,192 | | Total liabilities | $1,594,355 | $1,537,045 | | Total stockholders' deficit | ($368,720) | ($135,372) | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $66,769 | $249 | $68,348 | $1,084 | | Research and development | $112,554 | $79,597 | $212,395 | $161,167 | | General and administrative | $65,721 | $50,824 | $123,090 | $96,324 | | Operating loss | ($111,506) | ($130,172) | ($267,137) | ($256,407) | | Net loss | ($134,370) | ($143,318) | ($295,746) | ($278,961) | | Net loss per share | ($1.12) | ($1.31) | ($2.49) | ($2.63) | Condensed Consolidated Statements of Cash Flows Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($259,853) | ($228,820) | | Net cash provided by (used in) investing activities | $158,837 | ($618,907) | | Net cash provided by financing activities | $83,287 | $924,802 | | Net (decrease) increase in cash | ($18,681) | $77,118 | Notes to Condensed Consolidated Financial Statements - The company has an accumulated deficit of approximately $3.0 billion since inception and anticipates future operating losses. However, management believes existing cash, cash equivalents, and investments are sufficient to fund operations for at least the next 12 months[26][29] - In May 2024, the company entered into the 2024 RPI Transactions with Royalty Pharma, which included a $100.0 million loan (RP OM Loan), a revenue participation agreement for CK-586 (RP CK-586 RPA), and amendments to existing agreements. These are accounted for as a debt modification of the 2022 RPI Transactions[37] - Revenue for the six months ended June 30, 2025, was primarily driven by the Bayer License Agreement for aficamten in Japan, recognizing $52.4 million from a technology transfer and $11.8 million in clinical milestone payments[90][198] - In May 2024, the company closed an underwritten public offering and a concurrent private placement with Royalty Pharma, raising gross proceeds of approximately $575.0 million and $50.0 million, respectively[119] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses late-stage biopharmaceutical programs, aficamten's regulatory progress, increased R&D/G&A expenses, and confirmed liquidity for 12 months Research and Development Programs - Aficamten (for HCM): An NDA was submitted to the FDA for obstructive HCM (oHCM) based on positive pivotal Phase 3 SEQUOIA-HCM results. The PDUFA target action date was extended to December 26, 2025, to allow for review of a proposed REMS. An MAA is also under review by the EMA[135][138] - Omecamtiv mecarbil (for HFrEF): Following subgroup analyses from the GALACTIC-HF trial, the company initiated COMET-HF, a new Phase 3 confirmatory trial in patients with severely reduced ejection fraction[150] - CK-586 (for HFpEF): A Phase 2 dose-finding trial, AMBER-HFpEF, is currently enrolling patients with symptomatic HFpEF and an LVEF ≥ 60%[157] - Neuromuscular Program: A Phase 1 study of CK-089, a fast skeletal muscle troponin activator, has been initiated in healthy participants[161] Liquidity and Capital Resources Financial Position (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total cash, cash equivalents, and marketable securities | $1,036,336 | $1,221,069 | | Total borrowings | $861,145 | $780,117 | | Working capital | $755,478 | $928,266 | - The company believes its existing cash, cash equivalents, and investments will be sufficient to meet operating requirements for at least the next 12 months[195] - Future capital needs are significant, driven by commercial readiness for aficamten, ongoing clinical trials for aficamten, omecamtiv mecarbil, and CK-586, and expansion of research programs[191][192] Results of Operations Revenue Breakdown (in thousands) | Revenue Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Collaboration revenues | $3,995 | $1,084 | | License and milestone revenues | $64,353 | $0 | | Total revenues | $68,348 | $1,084 | - Research and development expenses for the six months ended June 30, 2025 increased by $51.2 million compared to the same period in 2024, primarily due to advancing clinical trials, higher personnel costs, and medical affairs activities[203] - General and administrative expenses for the six months ended June 30, 2025 increased by $26.8 million compared to the same period in 2024, mainly due to investments in commercial readiness and higher personnel-related costs[210] Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risk is interest rate sensitivity: a 1% increase impacts investments by $4.9 million, while a 1% decrease affects liabilities by $5.1 million - The company's cash and investments totaled $1.0 billion as of June 30, 2025, and are subject to interest rate risk[224] - A hypothetical 1% increase in interest rates would result in a $4.9 million decline in the value of the company's investments[225] - A hypothetical 1% decrease in discount rates for certain liabilities measured at fair value would result in an increase in their fair value (a loss) of approximately $5.1 million[226] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[227] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[228] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reported no material legal proceedings - None[230] Item 1A. Risk Factors Significant risks include regulatory uncertainty, clinical trial failures, manufacturing reliance, commercial acceptance, financial losses, capital needs, and IP protection - Regulatory Risk: The regulatory approval process is expensive and uncertain. The FDA's extension of the PDUFA date for aficamten to December 26, 2025, and potential disruptions at the FDA, could delay or prevent commercialization[232][235] - Commercial Risk: The commercial success of aficamten is highly dependent on obtaining a favorable label and a less restrictive REMS program compared to its competitor, Camzyos®[261] - Financial Risk: The company has a history of significant losses ($3.0 billion accumulated deficit) and will require substantial additional capital. Its significant indebtedness ($0.9 billion as of June 30, 2025) contains restrictive covenants that could limit operations[194][272][275] - Manufacturing and Supply Chain Risk: The company has no manufacturing capabilities and is entirely dependent on contract manufacturers (CMOs), which poses risks related to quality, quantity, and potential supply chain disruptions or tariffs[253][255] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[306] Item 5. Other Information Two directors adopted Rule 10b5-1 trading arrangements in Q2 2025 for pre-planned sales of company common stock - Robert A. Harrington, M.D., adopted a Rule 10b5-1 trading plan on May 9, 2025, for the sale of up to 4,300 shares[310] - Wendell Wierenga, Ph.D., adopted a Rule 10b5-1 trading plan on May 14, 2025, for the exercise of options and sale of up to 28,407 shares[310] Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including corporate governance documents, debt indentures, and officer certifications