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Cytokinetics and Amgen expand collaboration

NEW YORK (AP) -- Cytokinetics Inc. and Amgen Inc. said Wednesday that they are expanding their collaboration on a drug to treat heart failure in a deal worth at least $25 million.

The development and marketing agreement now includes Japan, meaning it covers all countries. Cytokinetics said Amgen will make an upfront payment of $15 million and has agreed to buy $10 million in Cytokinetics stock, or 8.4 million shares for $1.19 per share. Cytokinetics said it could also receive $50 million in payments based on development of omecamtiv mecarbil as well as royalties on sales, if the drug is approved in Japan.

The South San Francisco, Calif., company said it will run an early-stage clinical trial of the drug, and Amgen will reimburse it for the costs of that study.

The companies have been working together since 2006, and omecamtiv mecarbil is the most advanced drug they have developed.

Shares of Cytokinetics rose 3 cents, or 2.4 percent, to $1.30 in afternoon trading. Earlier they reached a two-year high of $1.49.

Amgen, of Thousand Oaks, Calif., is the world's largest biotechnology company. Its shares fell $1.17 to $96.76.

Cowen & Co. analyst Simos Simeonidis said the new agreement is a vote of confidence in Cytokinetics and will make late-stage development of omecamtiv mecarbil run more smoothly. He said Amgen will own a 7.3-percent stake in Cytokinetics, and according to FactSet that would make Amgen the seventh-largest holder of Cytokinetics stock.

Simeonidis rates Cytokinetics shares "Outperform."