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Cytokinetics, Incorporated Message Board

  • huntw3 huntw3 Apr 27, 2011 5:29 PM Flag

    1st quarter earnings call

    A few takeaways from the Q1 earnings conference call:

    1. The company has 12-16 months of runway ($59.9 million at end of March plus the $20.1 million from Deerfield minus expenses in April)

    2. No mention was made of an Amgen milestone payment in connection with the start of the Phase 2B trial.

    3. Blum was unable to give any details related to the Phase 2B trial, other than to say, or admit really, that no data will be forthcoming until all three of the ascending doses have been administered and analyzed. This puts the event horizon for this trial pretty far into the future.

    4. The "advanced partnership discussions" for the skeletal muscle program that he spoke of in Feb/March are now "discussions [that] are underway." Blum asserted that CYTK did not need Phase 2B data to close a deal; however, the fact that the analyst even asked the question is troubling.

    5. The results of the claudification trial will be announced at a scientific meeting later in Q2.

    It's possible that, since the Amgen milestone payment is a Q2 event (i.e. since the trial just started), that is why it wasn't mentioned. Or, that the milestone is triggered by the first dosing of patients, which hasn't yet occurred. OR, THERE COULD BE NO MILESTONE PAYMENT until the trial concludes.

    From the downbeat, "no news" tone of the Q1 call, I conclude that the Deerfield investment bought the company time to negotiate a skeletal muscle deal.

    I'm relatively new to CYTK, but Blum is beginning to sound like the boy who cried wolf.

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    • Have been a holder for several years and have listened to every presentation a number of times listening for changes in language or progress on several potential catalysts.This was a dud.They have been talking about their goals to partner CK 357 as far back as Nov 09 and the discussion about the deal with Amgen has been verbatim for a long time.The equity deal suggests to me a partnership may not be as close as hoped and a milestone payment is not either.

    • Hunter….I certainly appreciate the back and forth exchange of information. Personally, I don’t hang on every word a CEO says or his voice inflection. We both know that, especially with biotechs, they are always looking for and talking about prospective big pharma deals.

      Here is my take on it all. Are they in talks ? I have no reason not to think differently. Can they cut a deal? Given they closed a deal with AMGN , the answer has to be yes. Will they and in what timeframe? That’s purely speculation and I’ll leave it at that.

      I focus on the bigger picture and what the market is offering from a value proposition. CYTK currently has $80 million in operating cash. The current market cap is $99 million. Simple math says the market is currently placing a value on CYTK’s pipeline at $19 million. The AMGN deal, worth over 600 million in milestones and double digit royalties, is enough to recognize how undervalued CYTK is. Add in the patents (122 of them ) and the rest of their pipeline and its easy to see how far the market is off on this one.

    • Fellow investors, our impatience is understandable but clinical trials can't be rushed or they will be rejected by the FDA. The somewhat subjective nature of these muscle ailments also slows the process of data collection/analysis. Blum can't keep hyping the outcome without a letdown so it seems reasonable to me that he goes hot/cold on the subject.

      What bothers me is the black-box Amgen deal. Is it better or worse than we imagine? No way of knowing with the stonewall confidentiality agreement.

      As for other deals in progress, if there were one coming, I wouldn't expect Blum to advertise it. The poker-face projection seems appropriate; we can't know until it's done.

    • And the thing that happened since then is the Deerfield investment at $1.50 per share, with a bunch of warrants priced not much higher...

      And a Q1 earnings call where Blum was much less bullish about a skeletal muscle deal than at Cowen and Needham, and basically had nothing to say except, "Gee, isn't it great that the mechanism of action for our heart drug got published in Science?"

      Connect the dots.

      I like CYTK long-term. The AMGN deal is great for 2013. Short-term I am much less confident about management. They are running a clinical trials program as though they were a unit of a big pharma company, not a development-stage biotech.

    • Hunt,
      I agree with you. I didn't hear anything to make me feel good about this investment.
      BTW...bought CYTK in 2009...long and underwater.

    • I listened to the Needham presentation.

      This was your comment: 1. The CEO used the term "in advanced discussions" to characterize the likelihood of a skeletal muscle partnership at the Roth conference 2 weeks ago. At Needham he says "we go into the 2nd quarter very confident" that a deal will be done.

      This was my comment: The CEO claimed that CYTK is in advanced discussions regarding a new partner ( which I always take with a grain of salt ) but still, its out there.

      At no time did he give any guidance regarding the timing of a deal and most certainly made no promise of one being made by a certain date.

    • Check also my posting from March 8 on the Cowen presentation - it gives the specific times where Blum makes the representations, so you don't have to listen to the whole thing. Hopefully it's still available online.

    • MrCoop, if you want details listen to the presentation Blum gave at the Needham conference and read my postings related to it. He was also bullish at the Roth conference IIRC. I don't mind a CEO being bullish, in fact it's essential to keeping investors interested in the stock. But Blum has been inconsistent.

    • If you are refering to a different presentation I would appreciate a link to prove your statement.

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