10q10k10q10k.net

What changed in CYTOKINETICS INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of CYTOKINETICS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+340 added−398 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in CYTOKINETICS INC's 2023 10-K

340 paragraphs added · 398 removed · 222 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

76 edited+63 added−85 removed166 unchanged
Biggest changeCompetition for Omecamtiv Mecarbil We believe the principal competition for omecamtiv mecarbil, if ultimately approved for sales and marketing by FDA and/or other regulatory agencies for the treatment of HFrEF includes generic drugs, such as milrinone, dobutamine or digoxin, categories of generic therapies, including beta-blockers, angiotensin-converting enzyme (ACE) inhibitors, angiotensin receptor blockers (ARBs), Mineralocorticoid receptor antagonists (MRAs), and branded drugs such as Corlanor ® (ivabradine), Entresto ® (sacubitril/valsartan) and Verquvo ® (vericiguat). omecamtiv mecarbil could also potentially compete against other novel drug candidates and therapies in development, such as those being developed by, but not limited to, Novartis AG, Merck & Co., Inc., Bayer AG, AstraZeneca PLC and Bristol-Myers Squibb Company. omecamtiv mecarbil may also compete with currently approved drugs, such as in the SGLT2 inhibitor class, that have either expanded or are planning to expand their labels to include treatment of patients with heart failure, including Forxiga ® (dapagliflozin), Invokana ® (canagliflozin), and Jardiance ® (empagliflozin).
Biggest changeCompetition for Omecamtiv Mecarbil We believe the principal competition for omecamtiv mecarbil, if ultimately approved for sales and marketing by FDA and/or other regulatory agencies for the treatment of HFrEF includes generic drugs, such as milrinone, dobutamine or digoxin, categories of generic therapies, including beta-blockers, angiotensin-converting enzyme (ACE) inhibitors, angiotensin receptor blockers (ARBs), Mineralocorticoid receptor antagonists (MRAs), and branded drugs such as Corlanor ® (ivabradine), Entresto ® (sacubitril/valsartan) and Verquvo ® (vericiguat).
Our Cardiac Muscle Program Our cardiac muscle contractility program is focused on the cardiac sarcomere, the basic unit of muscle contraction in the heart. The cardiac sarcomere is a highly ordered cytoskeletal structure composed of cardiac myosin, actin and a set of regulatory proteins. Cardiac myosin is the cytoskeletal motor protein in the cardiac muscle cell.
Cardiac Muscle Program Our cardiac muscle contractility program is focused on the cardiac sarcomere, the basic unit of muscle contraction in the heart. The cardiac sarcomere is a highly ordered cytoskeletal structure composed of cardiac myosin, actin and a set of regulatory proteins. Cardiac myosin is the cytoskeletal motor protein in the cardiac muscle cell.
Our translational research in muscle contractility has enabled us to better understand the potential impact of small molecule compounds that increase skeletal or cardiac muscle contractility and to apply those findings to the further evaluation of our drug candidates in clinical populations.
Our translational research in muscle contractility has enabled us to better understand the potential impact of small molecule compounds that increase cardiac or skeletal muscle contractility and to apply those findings to the further evaluation of our drug candidates in clinical populations.
Strategies toward enhancing our discovery platform into muscle energetics and metabolism include building human and capital resources for mitochondrial and metabolism research capabilities, expanding strategic academic partnerships, engaging the mitochondrial research community, engaging the mitochondrial disease advocacy community, and evaluating therapeutic and technology platforms for potential in-licensing. • Be the science-driven company people want to join and partner with.
Strategies toward enhancing our discovery platform into muscle energetics, regeneration and metabolism include building human and capital resources for mitochondrial and metabolism research capabilities, expanding strategic academic partnerships, engaging the mitochondrial research community, engaging the mitochondrial disease advocacy community, and evaluating therapeutic and technology platforms for potential in-licensing. • Be the science-driven company people want to join and partner with.
In 2020, we articulated our five-year strategic plan, Vision 2025: “Leading with Science, Delivering for Patients,” designed to enable Cytokinetics to become the leading muscle biology biopharmaceutical company that meaningfully improves the lives of patients with diseases of impaired muscle function through access to novel medicines arising from its research.
In 2020, we articulated our five-year strategic plan, Vision 2025: “Leading with Science, Delivering for Patients,” designed to enable Cytokinetics to become the leading muscle biology biopharmaceutical company that meaningfully improves the lives of patients with diseases of impaired muscle function through access to novel medicines arising from our research.
The primary objective of this double-blind, randomized, placebo-controlled multicenter clinical trial is to determine if treatment with omecamtiv mecarbil when added to standard of care is superior to standard of care plus placebo in reducing the risk of cardiovascular death or heart failure events in patients with high risk chronic heart failure and reduced ejection fraction.
The primary objective of this double-blind, randomized, placebo-controlled multicenter clinical trial was to determine if treatment with omecamtiv mecarbil when added to standard of care is superior to standard of care plus placebo in reducing the risk of cardiovascular death or heart failure events in patients with high risk chronic heart failure and reduced ejection fraction.
If our present or future third-party manufacturers or suppliers are not able to comply with these requirements, the FDA or its foreign counterparts may halt our or our partners’ clinical trials, require us to recall a drug from distribution, or withdraw approval of the NDA for that drug. 28 Table of Contents For further details on the risks relating to government regulation of our business, please see the risk factors under Item 1A of this report, including, but not limited to, the risk factor entitled “The regulatory approval process is expensive, time-consuming and uncertain and may prevent our partners or us from obtaining approvals to commercialize some or all of our drug candidates.” Other Healthcare Laws.
If our present or future third-party manufacturers or suppliers are not able to comply with these requirements, the FDA or its foreign counterparts may halt our or our partners’ clinical trials, require us to recall a drug from distribution, or withdraw approval of the NDA for that drug. 27 Table of Contents For further details on the risks relating to government regulation of our business, please see the risk factors under Item 1A of this report, including, but not limited to, the risk factor entitled “The regulatory approval process is expensive, time-consuming and uncertain and may prevent our partners or us from obtaining approvals to commercialize some or all of our drug candidates.” Other Healthcare Laws.
We are going into our third year of implementing a Diversity, Equity, Inclusion and Respect program and are fully committed across all aspects of our organization including recruiting and hiring, development and promotion practices. Employees identifying as ethnic or racial minorities held 43% of director-level and above positions. Employees identifying as women held 44% of director-level and above positions.
We are going into our third year of implementing a Diversity, Equity, Inclusion and Respect program and are fully committed across all aspects of our organization including recruiting and hiring, development and promotion practices. Employees identifying as ethnic or racial minorities held 43% of director-level and above positions. Employees identifying as women held 43% of director-level and above positions.
In contrast, our novel cardiac myosin activators work by a mechanism that directly stimulates the activity of the cardiac myosin motor protein, without increasing the intracellular calcium concentration. They accelerate the rate-limiting step of the myosin enzymatic cycle and shift it in favor of the force-producing state.
Our novel cardiac myosin activators work by a mechanism that directly stimulates the activity of the cardiac myosin motor protein, without increasing the intracellular calcium concentration. They accelerate the rate-limiting step of the myosin enzymatic cycle and shift it in favor of the force-producing state.
Supplemental analyses of this lower ejection fraction subgroup in GALACTIC-HF showed that this potentially greater treatment effect in patients who received omecamtiv mecarbil was consistently observed in patients with characteristics that may indicate advanced heart failure status, such as being hospitalized within the last 3 months (HR 0.83, 95% CI 0.74 – 0.93, p=0.001), having New York Association Class III or IV heart failure (HR 0.80, 95% CI 0.71 – 0.90, p Another analysis assessed the effect of omecamtiv mecarbil on clinical outcomes in relationship to patient baseline ejection fraction by evaluating the effect of patient treatment with omecamtiv mecarbil based on quartiles of baseline EF defined as EF ≤22%, EF 23-28%, EF 29-32% and EF ≥33% as well as considering baseline EF as a continuous variable.
Supplemental analyses of this lower ejection fraction subgroup in GALACTIC-HF showed that this potentially greater treatment effect in patients who received omecamtiv mecarbil was consistently observed in patients with characteristics that may indicate advanced heart failure status, such as being hospitalized within the last 3 months (HR 0.83, 95% CI 0.74 – 0.93, p=0.001), having New York Association Class III or IV heart failure (HR 0.80, 95% CI 0.71 – 0.90, p 17 Table of Contents Another analysis assessed the effect of omecamtiv mecarbil on clinical outcomes in relationship to patient baseline ejection fraction by evaluating the effect of patient treatment with omecamtiv mecarbil based on quartiles of baseline EF defined as EF ≤22%, EF 23-28%, EF 29-32% and EF ≥33% as well as considering baseline EF as a continuous variable.
If any of these drug candidates are approved, then pursuant to federal law, we may apply for an extension of the U.S. patent term for one patent covering the approved drug, which could extend the term of the applicable patent by up to a maximum of five additional years. 24 Table of Contents The degree of future protection of our proprietary rights is uncertain because legal means may not adequately protect our rights or permit us to gain or keep our competitive advantage.
If any of these drug candidates are approved, then pursuant to federal law, we may apply for an extension of the U.S. patent term for one patent covering the approved drug, which could extend the term of the applicable patent by up to a maximum of five additional years. 23 Table of Contents The degree of future protection of our proprietary rights is uncertain because legal means may not adequately protect our rights or permit us to gain or keep our competitive advantage.
The FDA may deny approval of an NDA by issuing a CRL if the applicable regulatory criteria are not satisfied, or it may require additional clinical data, including data in a pediatric population, or an additional Phase 3 clinical trial or impose other conditions that must be met in order to secure final approval for an NDA. 27 Table of Contents Even if such data are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.
The FDA may deny approval of an NDA by issuing a CRL if the applicable regulatory criteria are not satisfied, or it may require additional clinical data, including data in a pediatric population, or an additional Phase 3 clinical trial or impose other conditions that must be met in order to secure final approval for an NDA. 26 Table of Contents Even if such data are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.
Even if we are able to maintain our trade secrets as confidential, our competitors may independently develop information that is equivalent or similar to our trade secrets. 25 Table of Contents We seek to protect our intellectual property by requiring our employees, consultants, contractors and other advisors to execute nondisclosure and invention assignment agreements upon commencement of their employment or engagement, through which we seek to protect our intellectual property.
Even if we are able to maintain our trade secrets as confidential, our competitors may independently develop information that is equivalent or similar to our trade secrets. 24 Table of Contents We seek to protect our intellectual property by requiring our employees, consultants, contractors and other advisors to execute nondisclosure and invention assignment agreements upon commencement of their employment or engagement, through which we seek to protect our intellectual property.
The initial focus of the development program for aficamten will include an extensive characterization of its pharmacokinetics/pharmacodynamic (“PK/PD”) relationship as has been a hallmark of Cytokinetics’ industry-leading development programs in muscle pharmacology. The overall development program will assess the potential of aficamten to improve exercise capacity and relieve symptoms in patients with hyperdynamic ventricular contraction due to HCM.
The initial focus of the development program for aficamten will include an extensive characterization of its pharmacokinetics/pharmacodynamic (“PK/PD”) relationship as has been a hallmark of Cytokinetics’ development programs in muscle pharmacology. The overall development program will assess the potential of aficamten to improve exercise capacity and relieve symptoms in patients with hyperdynamic ventricular contraction due to HCM.
Targeting unmet medical needs may provide us competitive advantages and support our development of a franchises in diseases involving muscle function. In the markets for our potential therapies, we believe that a company with limited resources may be able to compete effectively against larger, more established companies with greater financial and commercial resources.
Targeting unmet medical needs may provide us competitive advantages and support our development of a franchise in diseases involving muscle function. In the markets for our potential therapies, we believe that a company with limited resources may be able to compete effectively against larger, more established companies with greater financial and commercial resources.
We believe this may result in more successful later-stage clinical development activities that may increase the likelihood of achieving regulatory success and deliver effective therapies to patients that can address the needs of people living with devastating diseases of muscle impairment.
We believe this may result in more successful later-stage clinical development activities that may increase the likelihood of achieving regulatory successes and deliver effective therapies to patients that can address the needs of people living with devastating diseases of muscle impairment.
For example: • we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications or issued patents; • we or our licensors might not have been the first to file patent applications for the inventions covered by our pending patent applications or issued patents; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • some or all of our or our licensors’ pending patent applications may not result in issued patents or the claims that issue may be narrow in scope and not provide us with competitive advantages; • our and our licensors’ issued patents may not provide a basis for commercially viable drugs or therapies or may be challenged and invalidated by third parties; • our or our licensors’ patent applications or patents may be subject to interference, post-grant proceedings, opposition or similar legal and administrative proceedings that may result in a reduction in their scope or their loss altogether; • we may not develop additional proprietary technologies or drug candidates that are patentable; or • the patents of others may prevent us or our partners from discovering, developing or commercializing our drug candidates.
For example: • we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications or issued patents; • we or our licensors might not have been the first to file patent applications for the inventions covered by our pending patent applications or issued patents; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • some or all of our or our licensors’ pending patent applications may not result in issued patents or the claims that issue may be narrow in scope and not provide us with competitive advantages; • our and our licensors’ issued patents may not provide a basis for commercially viable drugs or therapies or may be challenged and invalidated by third parties; • our or our licensors’ patent applications or patents may be subject to interference, post-grant proceedings, derivation, reexamination, inter partes review, opposition or similar legal and administrative proceedings that may result in a reduction in their scope or their loss altogether; • we may not develop additional proprietary technologies or drug candidates that are patentable; or • the patents of others may prevent us or our partners from discovering, developing or commercializing our drug candidates.
The FDA, the IRB or their foreign equivalents, or the clinical trial sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk. 26 Table of Contents Clinical Trials.
The FDA, the IRB or their foreign equivalents, or the clinical trial sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk. 25 Table of Contents Clinical Trials.
Royalty Pharma Revenue Interest On January 7, 2022, we entered into a Revenue Participation Right Purchase Agreement, which we refer to as the RP Aficamten RPA, with Royalty Pharma Investments 2019 ICAV, which we refer to as RPI ICAV, pursuant to which RPI ICAV purchased rights to certain revenue streams from net sales of pharmaceutical products containing aficamten by us, our affiliates and our licensees in exchange for up to $150.0 million in consideration, $50.0 million of which was paid on the closing date, $50.0 million of which was paid to us on March 10, 2022 following the initiation of the first pivotal trial in oHCM for aficamten and $50.0 million of which is payable following the initiation of the first pivotal clinical trial in nHCM for aficamten.
Royalty Pharma Revenue Interest On January 7, 2022, we entered into a Revenue Participation Right Purchase Agreement, which we refer to as the RP Aficamten RPA, with Royalty Pharma Investments 2019 ICAV, which we refer to as RPI ICAV, pursuant to which RPI ICAV purchased rights to certain revenue streams from net sales of pharmaceutical products containing aficamten by us, our affiliates and our licensees in exchange for up to $150.0 million in consideration, $50.0 million of which was paid on the closing date, $50.0 million of which was paid to us on March 10, 2022 following the initiation of the first pivotal trial in oHCM for aficamten and $50.0 million of which was paid to us in September 2023 following the initiation of the first pivotal clinical trial in nHCM for aficamten.
FDA’s decision to issue a CRL follows an FDA Cardiovascular and Renal Drugs Advisory Committee’s vote of 8 to 3 in December 2022 that the benefits of omecamtiv mecarbil do not outweigh its risks for the treatment of HFrEF.
FDA’s decision to issue a CRL followed an FDA Cardiovascular and Renal Drugs Advisory Committee’s vote of 8 to 3 in December 2022 that the benefits of omecamtiv mecarbil do not outweigh its risks for the treatment of HFrEF.
Health Care Reform. Additionally, in the United States and some foreign jurisdictions there have been, and continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system in an effort to contain costs, improve quality, and expand access to care.
Additionally, in the United States and some foreign jurisdictions there have been, and continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system in an effort to contain costs, improve quality, and expand access to care.
The primary endpoint is a composite of time to cardiovascular death or first heart failure event, whichever occurs first, with heart failure event defined as hospitalization, emergency room visit, or urgent unscheduled clinic visit for heart failure.
The primary endpoint was a composite of time to cardiovascular death or first heart failure event, whichever occurs first, with heart failure event defined as hospitalization, emergency room visit, or urgent unscheduled clinic visit for heart failure.
Competition for Aficamten If aficamten is approved for sales and marketing by the FDA or other regulatory authorities for the treatment of HCM, we believe it will likely compete with Camzyos tm (mavacamten), a first in class cardiac myosin inhibitor marketed by Bristol Myers Squibb.
Competition for Aficamten If aficamten is approved for sales and marketing by the FDA or other regulatory authorities for the treatment of HCM, we believe it will likely compete with Camzyostm (mavacamten), a first in class cardiac myosin inhibitor marketed by Bristol Myers Squibb.
The primary objective is to assess the effect of aficamten on change in peak oxygen uptake (pVO2) measured by CPET from baseline to week 24.
The primary objective was to assess the effect of aficamten on change in peak oxygen uptake (pVO2) measured by CPET from baseline to week 24.
For these opportunities, we intend to build sales and marketing capabilities in North America and potentially in Europe with the goal of becoming a fully-integrated biopharmaceutical company. • Generate sustainable and growing revenues from product sales.
For these opportunities, we intend to build sales and marketing capabilities in North America and potentially in Europe with the goal of becoming a fully-integrated biopharmaceutical company. 11 Table of Contents • Generate sustainable and growing revenues from product sales.
If our operations are found to be in violation of these laws, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If our operations are found to be in violation of these laws, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. 28 Table of Contents Health Care Reform.
The study design includes three groups of at least eight participants in single ascending dose cohorts and four groups of at least eight participants in multiple-dose ascending cohorts. A final optional cohort will include eight participants in an open-label, 2-period crossover arm to investigate the effect of food on CK-136.
The study design, as amended, includes five groups of at least eight participants in single ascending dose cohorts and four groups of at least eight participants in multiple-dose ascending cohorts. A final optional cohort will include eight participants in an open-label, 2-period crossover arm to investigate the effect of food on CK-136.
In 2022, employee turnover was 9%, which we believe is a lower attrition rate compared to the industry. We are committed to fostering and maintaining a culture that engenders collaboration and teamwork, inclusion, respect, transparency and candor. We provide our employees with an array of professional development resources and tools to support their learning, growth and development opportunities.
In 2023, employee turnover was 10.6%, which we believe is a lower attrition rate compared to the industry. We are committed to fostering and maintaining a culture that engenders collaboration and teamwork, inclusion, respect, transparency and candor. We provide our employees with an array of professional development resources and tools to support their learning, growth and development opportunities.
Approximately 2 million people in the U.S. are estimated to have an ejection fraction 12 Table of Contents GALACTIC-HF GALACTIC-HF is a Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil which was conducted by Amgen, in collaboration with Cytokinetics.
Approximately 2 million people in the U.S. are estimated to have an ejection fraction GALACTIC-HF GALACTIC-HF was a Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil which was conducted by Amgen, in collaboration with Cytokinetics.
The key components of our five-year Corporate Strategy are: • Achieve regulatory approvals for at least two drugs arising from our pipeline. We are committed to fueling a diverse and expansive pipeline of muscle-directed drug candidates advancing toward regulatory approval.
The key components of our five-year Corporate Strategy are: • Achieve regulatory approvals for drugs arising from our pipeline. We are committed to fueling a diverse and expansive pipeline of muscle-directed drug candidates advancing toward regulatory approvals.
HFrEF is a grievous condition that is estimated to affect more than 32 million people worldwide an estimated half of whom have reduced left ventricular function. It is the leading cause of hospitalization and readmission in people age 65 and older.
Heart failure is a grievous condition that is estimated to affect more than 64 million people worldwide an estimated half of whom have reduced left ventricular function. It is the leading cause of hospitalization and readmission in people age 65 and older.
We segment our research and development activities related to muscle contractility by our cardiac muscle contractility program and our skeletal muscle contractility program. We also conduct research and development on novel treatments for disorders involving muscle function beyond muscle contractility. Our research and development expenses were $240.8 million for 2022, $159.9 million for 2021, and $97.0 million for 2020.
We segment our research and development activities related to muscle contractility by our cardiac muscle contractility program and our skeletal muscle contractility program. We also conduct research and development on novel treatments for disorders involving muscle function beyond muscle contractility. Our research and development expenses were $330.1 million for 2023, $240.8 million for 2022, and $159.9 million for 2021.
As of December 31, 2022, we owned, co-owned or licensed 73 issued U.S. patents, over 650 issued patents in various foreign jurisdictions, and over 430 additional pending U.S. and foreign patent applications. We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.
As of December 31, 2023, we owned, co-owned or licensed 76 issued U.S. patents, over 700 issued patents in various foreign jurisdictions, and over 480 additional pending U.S. and foreign patent applications. We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.
In addition, there are a number of medical devices both marketed and in development for the potential treatment of patients living with heart failure. 22 Table of Contents We believe that our ability to successfully compete will depend on, among other things: • efficacy, safety and reliability of omecamtiv mecarbil, both alone and in combination with other therapies; • the timing and scope of regulatory approval; • our ability to manufacture and sell commercial quantities of omecamtiv mecarbil product to the market; • our ability to successfully commercialize omecamtiv mecarbil and secure coverage and adequate reimbursement with affordable patient copay in approved indications; • product acceptance by physicians and other health care providers; • if required in connection to regulatory approval by FDA and/or other regulatory authorities, the availability of an antibody-based immunoassay to timely and properly perform blood tests for omecamtiv mecarbil concentration levels on patients to whom omecamtiv mecarbil is prescribed; • price competition, particularly of generic products; • protection of our intellectual property, including our ability to enforce our intellectual property rights against potential generic competition; and • the availability of substantial capital resources to fund development and commercialization activities.
In addition, there are a number of medical devices both marketed and in development for the potential treatment of patients living with heart failure. 22 Table of Contents We believe that our ability to successfully compete will depend on, among other things: • efficacy, safety and reliability of omecamtiv mecarbil, both alone and in combination with other therapies; • in the U.S., the ability to fund and successfully complete an additional confirmatory phase 3 clinical trial of omecamtiv mecarbil in HFrEF and resolve to the satisfaction of FDA the other deficiencies stipulated in the CRL we received in response to our initial NDA submission for omecamtiv mecarbil; • in the E.U. and other jurisdictions outside of the U.S., the timing and scope of regulatory approval by EMA and other regulatory bodies; • our ability to manufacture and sell commercial quantities of omecamtiv mecarbil product to the market; • our ability to successfully commercialize omecamtiv mecarbil and secure coverage and adequate reimbursement with affordable patient copay in approved indications; • product acceptance by physicians and other health care providers; • if required in connection to regulatory approval by FDA, EMA and/or other regulatory authorities, the availability of an antibody-based immunoassay to timely and properly perform blood tests for omecamtiv mecarbil concentration levels on patients to whom omecamtiv mecarbil is prescribed; • price competition, particularly of generic products; • protection of our intellectual property, including our ability to enforce our intellectual property rights against potential generic competition; and • the availability of substantial capital resources to fund development and commercialization activities.
Pursuant to the RP OM RPA, as amended, RPFT has a revenue interest entitling it to up to 5.5% of our and our affiliates’ and licensees’ worldwide net sales of omecamtiv mecarbil. If FDA approves omecamtiv mecarbil at any time after June 30, 2023, the royalty rate at which payments are owed to RPFT will be 5.5%.
Pursuant to the RP OM RPA, as amended, RPFT has a revenue interest entitling it to up to 5.5% of our and our affiliates’ and licensees’ worldwide net sales of omecamtiv mecarbil. If FDA or EMA approves omecamtiv mecarbil in the future, the royalty rate at which payments are owed to RPFT will be 5.5%.
Additionally, we strive to ensure sustainable growth of product sales and long-term profitability through lifecycle management strategies. • Double our development pipeline to include ten therapeutic programs.
Additionally, we strive to ensure sustainable growth of product sales and long-term profitability through lifecycle management strategies. • Expand our development pipeline.
Aficamten Aficamten is a novel, oral, small molecule cardiac myosin inhibitor that our company scientists discovered. Aficamten arose from an extensive chemical optimization program conducted with attention to therapeutic index and pharmacokinetic properties that may translate into next-in-class potential in clinical development. Aficamten was purposely designed to reduce the hypercontractility that is associated with HCM.
Aficamten arose from an extensive chemical optimization program conducted with attention to therapeutic index and pharmacokinetic properties that may translate into next-in-class potential in clinical development. Aficamten was purposely designed to reduce the hypercontractility that is associated with HCM.
We believe that our ability to successfully compete will depend on, among other things: • efficacy, safety and reliability of aficamten, both alone and in combination with other therapies; • the timing and scope of regulatory approval; • our ability to complete clinical development and obtain regulatory approval for aficamten; • the imposition by FDA or other regulatory authorities of a REMS program that is less burdensome to healthcare providers and patients than the REMS program that Camzyos tm is subject to; • our ability to manufacture and sell commercial quantities of aficamten product to the market; • our ability to successfully commercialize aficamten and secure coverage and adequate reimbursement in approved indications; • product acceptance by physicians and other health care providers; • protection of our intellectual property, including our ability to enforce our intellectual property rights against potential generic competition; and • the availability of substantial capital resources to fund development and commercialization activities. 23 Table of Contents Competition for Reldesemtiv If reldesemtiv is approved for sales and marketing by the FDA or other regulatory authorities for the treatment of ALS, we believe it will likely compete with Radicava tm (edaravone), marketed by Mitsubishi Tanabe Pharma Corporation, and Relyvrio tm (AMX0035), marketed by Amylyx Pharmaceuticals.
We believe that our ability to successfully compete will depend on, among other things: • efficacy, safety and reliability of aficamten, both alone and in combination with other therapies; • the timing and scope of regulatory approval; • our ability to obtain regulatory approvals and marketing authorizations for aficamten; • the imposition by FDA or other regulatory authorities of a REMS program that is differentiated and less burdensome to healthcare providers, pharmacists and patients than the REMS program to which Camzyos tm is subject; • our ability to manufacture and sell commercial quantities of aficamten product to the market; • our ability to gain market access, successfully commercialize aficamten and secure coverage and adequate reimbursement in approved indications; • product acceptance by physicians and other health care providers; • protection of our intellectual property, including our ability to enforce our intellectual property rights against potential generic competition; and • the availability of substantial capital resources to fund development and commercialization activities.
Pursuing a broad-based clinical development strategy may afford us the opportunity to not be reliant on the outcome of a singular clinical program or clinical trial result, thereby potentially mitigating the risk of clinical development and regulatory hurdles.
Pursuing a broad-based clinical development strategy may afford us the opportunity to not be reliant on the outcome of a singular clinical program or clinical trial result, thereby potentially mitigating the risk of clinical development and regulatory hurdles. • Build commercial capabilities to market and sell our medicines reflective of their innovation and value.
Pursuant to the RP Aficamten RPA, RPI ICAV purchased the right to receive a percentage of net sales equal to 4.5% for annual worldwide net sales of pharmaceutical products containing aficamten up to $1 billion and 3.5% for annual worldwide net sales of pharmaceutical products containing aficamten in excess of $1 billion, subject to reduction in certain circumstances. 18 Table of Contents CK-136 CK-136 is a novel, selective, oral, small molecule cardiac troponin activator.
Pursuant to the RP Aficamten RPA, RPI ICAV purchased the right to receive a percentage of net sales equal to 4.5% for annual worldwide net sales of pharmaceutical products containing aficamten up to $1 billion and 3.5% for annual worldwide net sales of pharmaceutical products containing aficamten in excess of $1 billion, subject to reduction in certain circumstances.
In December 2022, the EMA accepted for review our MAA seeking approval of omecamtiv mecarbil for the treatment of HFrEF in the E.U. and the other states of the EEA, and in November 2022, our partner, Ji Xing announced that the Center for Drug Evaluation of the National Medical Products Administration of the People’s Republic of China had accepted the submission of the NDA for omecamtiv mecarbil for the treatment of HFrEF.
In November 2022, our partner, Ji Xing announced that the Center for Drug Evaluation of the National Medical Products Administration of the People’s Republic of China had accepted the submission of the NDA for omecamtiv mecarbil for the treatment of HFrEF.
Each of our drug candidates has a novel mechanism of action compared to currently marketed drugs, which we believe validates our focus on the cytoskeleton as a productive area for drug discovery and development.
Each of our drug candidates represents a first or next in class molecule compared to currently marketed drugs, which we believe validates our focus on the cytoskeleton as a productive area for drug discovery and development.
Progressing related programs in parallel may afford us an opportunity to build a broader business that could benefit from multiple products that serve related clinical and commercial needs associated with impaired muscle function, muscle weakness and fatigue. In addition, this strategy may enable us to diversify certain technical, financial and operating risks by advancing several drug candidates in parallel.
Progressing related programs in parallel may afford us an opportunity to build a broader business that could benefit from multiple products that serve related clinical and commercial needs associated with impaired muscle function, muscle weakness and fatigue.
In relation to our collaborations, our partners may develop or have developed, solely or with us, intellectual property rights in connection with our drug candidates. Our collaboration agreements generally contain provisions regarding ownership, prosecution and maintenance, assignment and license rights to enable us to protect and benefit from intellectual property rights that are developed with or by our partners.
Our collaboration agreements generally contain provisions regarding ownership, prosecution and maintenance, assignment and license rights to enable us to protect and benefit from intellectual property rights that are developed with or by our partners. Our drug candidates are still in clinical development and have not yet been approved by the FDA.
GALACTIC-HF: Primary Results The results of GALACTIC-HF show that after a median duration of follow-up of 21.8 months, the trial demonstrated a statistically significant effect of treatment with omecamtiv mecarbil to reduce risk of the primary composite endpoint of CV death or heart failure events (heart failure hospitalization and other urgent treatment for heart failure) compared to placebo in patients treated with standard of care.
Secondary endpoints included time to cardiovascular death; patient reported outcomes as measured by the KCCQ Total Symptom Score; time to first heart failure hospitalization; and time to all-cause death. 16 Table of Contents GALACTIC-HF: Primary Results The results of GALACTIC-HF showed that after a median duration of follow-up of 21.8 months, the trial demonstrated a statistically significant effect of treatment with omecamtiv mecarbil to reduce risk of the primary composite endpoint of CV death or heart failure events (heart failure hospitalization and other urgent treatment for heart failure) compared to placebo in patients treated with standard of care.
Rather than increasing the velocity of cardiac contraction, this mechanism instead lengthens the systolic ejection time, which results in increased cardiac function in a potentially more oxygen-efficient manner.
Rather than increasing the velocity of cardiac contraction, this mechanism instead lengthens the systolic ejection time, which results in increased cardiac function in a potentially more oxygen-efficient manner. Aficamten Aficamten is a novel, oral, small molecule cardiac myosin inhibitor that our company scientists discovered.
Secondary objectives include change in KCCQ score from baseline to week 12 and week 24, the proportion of patients with ≥1 class improvement in NYHA Functional Class from baseline to week 12 and week 24, change in post-Valsalva LVOT-G to week 12 and week 24, the proportion of patients with post-Valsalva LVOT-G SEQUOIA-HCM is open for enrollment.
Secondary objectives included change in KCCQ score from baseline to week 12 and week 24, the proportion of patients with ≥1 class improvement in NYHA Functional Class from baseline to week 12 and week 24, change in post-Valsalva LVOT-G to week 12 and week 24, the proportion of patients with post-Valsalva LVOT-G On December 27, 2023, we announced positive topline results of SEQUOIA-HCM.
We will only be able to protect our technologies from unauthorized use by third parties to the extent that valid and enforceable patents cover them or we maintain them as trade secrets.
We will only be able to protect our technologies from unauthorized use by third parties to the extent that valid and enforceable patents cover them or we maintain them as trade secrets. We have a U.S. patent covering aficamten, which expires in 2039 unless extended or otherwise adjusted.
GALACTIC-HF: Further Analyses Since our release of the primary results, we have conducted and announced supplemental and subgroup analyses suggesting that certain subgroups of patients treated with omecamtiv mecarbil in GALACTIC-HF may benefit more than the general patient population in such trial. 13 Table of Contents For example, additional results showed that the effect of omecamtiv mecarbil on the primary composite endpoint in GALACTIC-HF was consistent across most prespecified subgroups and with a potentially greater treatment effect suggested in patients with a lower LVEF (LVEF ≤28%, n=4,456, hazard ratio, 0.84; 95% CI 0.77, 0.92; interaction p=0.003).
For example, additional results showed that the effect of omecamtiv mecarbil on the primary composite endpoint in GALACTIC-HF was consistent across most prespecified subgroups and with a potentially greater treatment effect suggested in patients with a lower LVEF (LVEF ≤28%, n=4,456, hazard ratio, 0.84; 95% CI 0.77, 0.92; interaction p=0.003).
Our compensation and benefit programs are designed to enable us to attract and retain the best employees in a very competitive life science sector and regularly benchmark and survey the market to ensure we maintain competitive programs and ensuring employees receive equal pay for equal work.
We were honored to be recognized as a San Francisco Times Best Place to Work and Great Places to Work in 2023. Our compensation and benefit programs are designed to enable us to attract and retain the best employees in a very competitive life science sector and regularly benchmark and survey the market to ensure we maintain competitive programs.
In addition to Camzyos tm , other companies, including but not limited to Novartis AG, Eli Lilly, Boehringer Ingelheim, Gilead, Edgewise Therapeutics, Imbria and Tenaya Therapeutics, are conducting clinical trials and pre-clinical activities in HCM and could complete with aficamten.
In addition to Camzyostm, other companies, including but not limited to Edgewise Therapeutics, Tenaya Therapeutics, Novartis AG, Eli Lilly, Boehringer Ingelheim, Gilead and Imbria are conducting clinical trials and pre-clinical activities in HCM and could complete with aficamten. As a condition to its FDA approval, Camzyostm is subject to a REMS program that may be slowing its market uptake.
In addition, state data privacy laws that protect the security of health information may differ from each other and may not be preempted by federal law.
For example, states have anti-kickback and false claims laws that may be broader in scope than analogous federal laws and may apply regardless of payor. In addition, state data privacy laws that protect the security of health information may differ from each other and may not be preempted by federal law.
We will not owe Astellas royalties on sales of reldesemtiv in any other country. Ongoing Research in Skeletal Muscle Activators We are conducting translational research in preclinical models of disease and muscle function with FSTAs to explore the potential clinical applications of this novel mechanism in diseases or conditions associated with skeletal muscle dysfunction.
We currently have no clinical stage drug candidates arising from our skeletal muscle contractility program. Ongoing Research in Skeletal Muscle Activators We are conducting translational research in preclinical models of disease and muscle function with FSTAs to explore the potential clinical applications of this novel mechanism in diseases or conditions associated with skeletal muscle dysfunction.
Our Skeletal Muscle Contractility Program Our skeletal muscle contractility program is focused on the activation of the skeletal sarcomere, the basic unit of skeletal muscle contraction. The skeletal sarcomere is a highly ordered cytoskeletal structure composed of skeletal muscle myosin, actin, and a set of regulatory proteins, which include the troponins and tropomyosin.
The skeletal sarcomere is a highly ordered cytoskeletal structure composed of skeletal muscle myosin, actin, and a set of regulatory proteins, which include the troponins and tropomyosin. This program leverages our expertise developed in our ongoing discovery and development of cardiac sarcomere activators.
We expect to successfully commercialize at least two of our drug candidates in the U.S. and potentially in Europe and achieve growing profitability. Through prudent investment spending fueled by commercial returns alongside other potential strategic partnerships and royalty monetization deals, we seek to provide investor returns while continuing to conduct proprietary research to support future commercial programs.
Through prudent investment spending fueled by commercial returns alongside other potential strategic partnerships and structured finance and royalty monetization deals, we seek to provide investor returns while continuing to conduct proprietary research to support future research, development and commercial programs.
Treatment-emergent serious adverse events occurred more frequently in patients randomized during hospitalization but did not differ significantly between the treatment groups. 14 Table of Contents New Drug Application/Regulatory On February 28, 2023, we announced that we received a CRL from the FDA’s Division of Cardiology and Nephrology regarding our NDA for omecamtiv mecarbil for the treatment of HFrEF.
New Drug Application/Regulatory On February 28, 2023, we announced that we received a CRL from the FDA’s Division of Cardiology and Nephrology regarding our NDA for omecamtiv mecarbil for the treatment of HFrEF.
Secondary endpoints include change in NYHA class, KCCQ, N-terminal prohormone brain natriuretic peptide (NT-proBNP), and measures of structural remodeling.
The primary endpoint is change in peak oxygen uptake (pVO2), assessed by CPET from baseline to Week 24. Secondary endpoints include change in NYHA class, KCCQ, N-terminal prohormone brain natriuretic peptide (NT-proBNP), and measures of structural remodeling.
Competition There are many companies focused on the development of small molecules for the treatment HFrEF, HCM, ALS and other diseases that our drugs are intended to treat. Our competitors and potential competitors include major pharmaceutical and biotechnology companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing research activities similar to ours.
Our competitors and potential competitors include major pharmaceutical and biotechnology companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing research activities similar to ours.
This program leverages our expertise developed in our ongoing discovery and development of cardiac sarcomere activators. We believe that our skeletal sarcomere activators may lead to new therapeutic options for diseases and medical conditions associated with neuromuscular dysfunction and potentially also conditions associated with aging and muscle weakness and wasting.
We believe that our skeletal sarcomere activators may lead to new therapeutic options for diseases and medical conditions associated with neuromuscular dysfunction and potentially also conditions associated with aging and muscle weakness and wasting. The clinical effects of muscle weakness and wasting, fatigue and loss of mobility can range from decreased quality of life to, in some instances, life-threatening complications.
Ji Xing Collaboration for Greater China On July 14, 2020, we entered into the Ji Xing Aficamten License Agreement, pursuant to which we granted to Ji Xing an exclusive license to develop and commercialize aficamten in China and Taiwan.
During the titration period, there had been no treatment-related instances of left ventricular ejection fraction (LVEF) FOREST-HCM continues to enroll patients. 15 Table of Contents Ji Xing Collaboration for Greater China On July 14, 2020, we entered into the Ji Xing Aficamten License Agreement, pursuant to which we granted to Ji Xing an exclusive license to develop and commercialize aficamten in China and Taiwan.
We also have issued patents in various foreign jurisdictions and additional U.S. and foreign patent applications pending for these drug candidates. It is not known or determinable whether other patents will issue from any of our other pending applications or what the expiration dates would be for any other patents that do issue.
It is not known or determinable whether other patents will issue from any of our other pending applications or what the expiration dates would be for any other patents that do issue. In relation to our collaborations, our partners may develop or have developed, solely or with us, intellectual property rights in connection with our drug candidates.
The data showed that treatment with aficamten was associated with substantial reductions in the average resting LVOT-G (mean change from baseline (SD) = -32.6 (28) mmHg, p 17 Table of Contents On September 30, 2022, we announced new data on the reduction and withdrawal of background standard of care medical therapy in patients treated with aficamten in FOREST-HCM.
Specifically, we announced that new data through 48 weeks of treatment showed that aficamten was associated with significant reductions in the average resting LVOT-G (mean change from baseline (SD) = -32 (28) mmHg, p On October 19, 2023, we announced new long-term efficacy and safety data from FOREST-HCM.
We have contract manufacturing arrangements in place with leading contract manufacturers for the development and supply of the active pharmaceutical ingredient and finished drug product for aficamten and reldesemtiv for use in our clinical trials, including SEQUOIA-HCM and COURAGE-ALS.
We have contract manufacturing arrangements in place with leading contract manufacturers for the development and supply of the active pharmaceutical ingredient and finished drug product for aficamten for use in our clinical trials. 21 Table of Contents Competition There are many companies focused on the development of small molecules for the treatment HCM, HFrEF and other diseases that our drug candidates are intended to treat.
We are leveraging our current understandings of muscle biology to investigate new ways of modulating these other aspects of muscle function for other potential therapeutic applications. 21 Table of Contents Manufacturing Resources and Product Supply Our drug candidates require precise high-quality manufacturing that is compliant with good manufacturing processes (or foreign equivalent) and other applicable laws.
Manufacturing Resources and Product Supply Our drug candidates require precise high-quality manufacturing that is compliant with good manufacturing processes (or foreign equivalent) and other applicable laws.
Further, coverage policies and third party reimbursement rates may change at any time. 29 Table of Contents Cytokinetics Human Capital As of December 31, 2022, we had 409 employees and 167 consultants. 28 of those employees have more than 10 years tenure with us and 78 have over 5 years of service.
Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical products, will apply to companion diagnostics. 29 Table of Contents Cytokinetics Human Capital As of December 31, 2023, we had 423 employees and 141 consultants. 28 of those employees have more than 10 years tenure with us and 75 have over 5 years of service.
At screening, patients must have a LVEF of ≥60%, an elevated NT-proBNP >300 pg/mL, and must not have resting or post-Valsalva LVOT gradients ( SEQUOIA-HCM SEQUOIA-HCM is a Phase 3 randomized, placebo-controlled, double-blind, multi-center clinical trial designed to evaluate aficamten in patients with symptomatic oHCM on background medical therapy for 24 weeks.
FDA has granted aficamten orphan drug designation for the treatment of symptomatic HCM and Breakthrough Therapy Designation for aficamten for the treatment of oHCM. SEQUOIA-HCM SEQUOIA-HCM was a Phase 3 randomized, placebo-controlled, double-blind, multi-center clinical trial designed to evaluate aficamten in patients with symptomatic oHCM on background medical therapy for 24 weeks.
It is directly responsible for converting chemical energy into the mechanical force, resulting in cardiac muscle contraction. Our most advanced cardiac program is based on the hypothesis that activators of cardiac myosin may address certain adverse properties of existing positive inotropic agents.
It is directly responsible for converting chemical energy into the mechanical force, resulting in cardiac muscle contraction. Our most advanced cardiac program is based on the hypothesis that inhibitors of hyperdynamic contraction and obstruction of left ventricular blood flow may counteract the pathologic effects of mutations in the sarcomere that lead to hypertrophic cardiomyopathies.
MAPLE-HCM is a Phase 3, multi-center, randomized, double-blind, active-comparator trial in patients with symptomatic oHCM and elevated LVOT gradient. It is expected to enroll approximately 170 patients. The primary endpoint is change in peak oxygen uptake (pVO2), assessed by CPET from baseline to Week 24.
MAPLE-HCM MAPLE-HCM (Metoprolol vs Aficamten in Patients with LVOT Obstruction on Exercise Endpoints in HCM) is our second Phase 3 clinical trial of aficamten as monotherapy in patients with oHCM. It is a Phase 3, multi-center, randomized, double-blind, active-comparator trial in patients with symptomatic oHCM and elevated LVOT gradient, which is expected to enroll approximately 170 patients.
We expect to request a meeting with FDA in order to understand FDA’s views regarding the CRL and what may be required to support potential approval of omecamtiv mecarbil in the United States. However, we have no plans to conduct an additional clinical trial of omecamtiv mecarbil.
In 2023, we participated in a Type A meeting with FDA in order to understand FDA’s views regarding the CRL and what may be required to support potential approval of omecamtiv mecarbil in the United States, and subsequently submitted a formal dispute resolution request to FDA, with the objective to appeal the FDA's conclusion, as stated in the CRL, that substantial evidence of effectiveness had not been established to support approval of omecamtiv mecarbil.
Many states have similar laws and regulations that may differ from each other and federal law in significant ways, thus complicating compliance efforts. For example, states have anti-kickback and false claims laws that may be broader in scope than analogous federal laws and may apply regardless of payer.
Payments made to physicians and research institutions for clinical trials are included within the ambit of this law. Many states have similar laws and regulations that may differ from each other and federal law in significant ways, thus complicating compliance efforts.
As a patient-centric organization, we rely on an approach where clinical outcomes, patient experiences and patients’ goals for care intersect.
As a patient-centric organization, we rely on an approach where clinical outcomes, patient experiences and patients’ goals for care intersect. We value our partnerships with industry, professional societies, advocacy organizations, vendors and academic institutions and aim to solicit ongoing feedback to ensure interests are aligned and collaborations are successful.
In both hospitalized patients and outpatients, the initiation of omecamtiv mecarbil was safe and well tolerated.
In both hospitalized patients and outpatients, the initiation of omecamtiv mecarbil was safe and well tolerated. Treatment-emergent serious adverse events occurred more frequently in patients randomized during hospitalization but did not differ significantly between the treatment groups.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is www.sec.gov.
Investor Information We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13 or 15(d) of the Exchange Act. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Our earlier stage cardiac program is based on the hypothesis that inhibitors of hyperdynamic contraction and obstruction of left ventricular blood flow may counteract the pathologic effects of mutations in the sarcomere that lead to hypertrophic cardiomyopathies. A targeted oral therapy addressing this disease etiology may improve symptoms, exercise capacity and potentially slow disease progression.
A targeted oral therapy addressing this disease etiology may improve symptoms, exercise capacity and potentially slow disease progression. We also have a late stage program based on the hypothesis that activators of cardiac myosin may address certain adverse properties of existing positive inotropic agents.
This ultimately limits the heart’s pumping function, resulting in symptoms including chest pain, dizziness, shortness of breath, or fainting during physical activity.
This ultimately limits the heart’s pumping function, resulting in symptoms including chest pain, dizziness, shortness of breath, or fainting during physical activity. 13 Table of Contents HCM is the most common monogenic inherited cardiovascular disorder, with approximately 280,000 patients diagnosed in the U.S., however, there are an estimated 400,000-800,000 additional patients who remain undiagnosed, a rate that is growing at the same rate as the population.
We value our partnerships with industry, professional societies, advocacy organizations, vendors and academic institutions and aim to solicit ongoing feedback to ensure interests are aligned and collaborations are successful. 11 Table of Contents Research and Development Programs Our long-standing interest in the cytoskeleton has led us to focus our research and development activities on the biology of muscle function and, in particular, small molecule modulation of muscle contractility.
We aim to achieve commercial returns from our franchise business strategies as would be enabled by experienced sales representatives who bring established rapport with their potential customers and appropriately couple their selling activities with high touch customer support services designed to benefit prescribers and patients alike. 12 Table of Contents Research and Development Programs Our long-standing interest in the cytoskeleton has led us to focus our research and development activities on the biology of muscle function and, in particular, small molecule modulation of muscle contractility.
Removed
We or our partners have been conducting extensive clinical trials for our most advanced drug candidates and we believe that three drug candidates may be poised to achieve potential regulatory approval by 2025 and we strive to develop compelling scientific, clinical and value-driven rationales that may lead to regulatory approvals. 10 Table of Contents • Build commercial capabilities to market and sell our medicines reflective of their innovation and value.
Added
In addition, this strategy may enable us to diversify certain technical, financial and operating risks by advancing several drug candidates in parallel. • Expand our discovery platform to muscle energetics, growth and metabolism.
Removed
In 2020 we advanced five potential drug candidates through various stages of clinical development. As part of our five-year Corporate Strategy, we intend to expand our research discovery platform beyond muscle contractility to support doubling our pipeline to ten therapeutic programs. • Expand our discovery platform to muscle energetics, growth and metabolism.
Added
Building a Specialty Cardiology Franchise We believe that we are well positioned to build a specialty cardiology business franchise anchored by our late-stage development program for aficamten, complemented by earlier stage drug candidates that have arisen from our industry leading research and leadership in muscle biology and the mechanics of contractility.

… 144 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

94 edited+28 added−52 removed329 unchanged
Biggest changeNo assurance can be given that we will be able to address any of the deficiencies noted in the CRL and/or obtain FDA approval of our NDA for omecamtiv mecarbil.
Biggest changeNo assurance can be given that we will be able to address any of the deficiencies noted in the CRL and/or obtain FDA approval of our NDA for omecamtiv mecarbil. 31 Table of Contents In 2023, we participated in a Type A meeting with FDA in order to understand FDA’s views regarding the CRL and what may be required to support potential approval of omecamtiv mecarbil in the United States, and subsequently submitted a formal dispute resolution request to FDA, with the objective to appeal the FDA's conclusion, as stated in the CRL, that substantial evidence of effectiveness had not been established to support approval of omecamtiv mecarbil.
Whilst not binding on Medicare, Medicaid, VA, DoD, TriCare, and other commercial payors, or indicative of the net health benefits, ICER could conclude for aficamten a similar conclusion that could adversely impact our ability to obtain favorable pricing. The commercial success of our products depends on the availability and sufficiency of third‑party payor coverage and reimbursement.
Whilst not binding on Medicare, Medicaid, VA, DoD, TriCare, and other commercial payors, or indicative of the net health benefits, ICER could conclude for aficamten a similar conclusion that could adversely impact our ability to obtain favorable pricing and/or reimbursement. The commercial success of our products depends on the availability and sufficiency of third‑party payor coverage and reimbursement.
The commencement and completion of our or our partners’ clinical trials could be delayed or prevented by many factors, including, but not limited to: • delays in obtaining, or inability to obtain, regulatory or other approvals to commence and conduct clinical trials in the manner we or our partners deem necessary for the appropriate and timely development of our drug candidates and commercialization of any resulting drugs; • delays in identifying and reaching agreement, or inability to identify and reach agreement, on acceptable terms, with prospective clinical trial sites and other entities involved in the conduct of our or our partners’ clinical trials; • delays or additional costs in developing, or inability to develop, appropriate formulations of our drug candidates for clinical trial use; • slower than expected rates of patient recruitment and enrollment; • for those drug candidates that are the subject of a strategic alliance, delays in reaching agreement with our partner as to appropriate development strategies; • a regulatory authority may require changes to a protocol for a clinical trial that then may require approval from regulatory agencies in other jurisdictions where the trial is being conducted; • a regulatory authority in one jurisdiction may not accept a clinical trial design that is acceptable in another jurisdiction; • an IRB or its foreign equivalent may require changes to a protocol that then require approval from regulatory agencies and other IRBs and their foreign equivalents, or regulatory authorities may require changes to a protocol that then require approval from the IRBs or their foreign equivalents; • for clinical trials conducted in foreign countries, the time and resources required to identify, interpret and comply with foreign regulatory requirements or changes in those requirements, and political instability or natural disasters occurring in those countries; • lack of effectiveness of our drug candidates during clinical trials; • unforeseen safety issues; • inadequate supply, or delays in the manufacture or supply, of clinical trial materials; • uncertain dosing issues; • failure by us, our partners, or clinical research organizations, investigators or site personnel engaged by us or our partners to comply with good clinical practices and other applicable laws and regulations, including those concerning informed consent; 34 Table of Contents • inability or unwillingness of investigators or their staffs to follow clinical protocols; • failure by our clinical research organizations, clinical manufacturing organizations and other third parties supporting our or our partners’ clinical trials to fulfill their obligations; • inability to monitor patients adequately during or after treatment; • introduction of new therapies or changes in standards of practice or regulatory guidance that render our drug candidates or their clinical trial endpoints obsolete; and • results from non-clinical studies that may adversely impact the timing or further development of our drug candidates.
The commencement and completion of our or our partners’ clinical trials could be delayed or prevented by many factors, including, but not limited to: • delays in obtaining, or inability to obtain, regulatory or other approvals to commence and conduct clinical trials in the manner we or our partners deem necessary for the appropriate and timely development of our drug candidates and commercialization of any resulting drugs; 33 Table of Contents • delays in identifying and reaching agreement, or inability to identify and reach agreement, on acceptable terms, with prospective clinical trial sites and other entities involved in the conduct of our or our partners’ clinical trials; • delays or additional costs in developing, or inability to develop, appropriate formulations of our drug candidates for clinical trial use; • slower than expected rates of patient recruitment and enrollment; • for those drug candidates that are the subject of a strategic alliance, delays in reaching agreement with our partner as to appropriate development strategies; • a regulatory authority may require changes to a protocol for a clinical trial that then may require approval from regulatory agencies in other jurisdictions where the trial is being conducted; • a regulatory authority in one jurisdiction may not accept a clinical trial design that is acceptable in another jurisdiction; • an IRB or its foreign equivalent may require changes to a protocol that then require approval from regulatory agencies and other IRBs and their foreign equivalents, or regulatory authorities may require changes to a protocol that then require approval from the IRBs or their foreign equivalents; • for clinical trials conducted in foreign countries, the time and resources required to identify, interpret and comply with foreign regulatory requirements or changes in those requirements, and political instability or natural disasters occurring in those countries; • lack of effectiveness of our drug candidates during clinical trials; • unforeseen safety issues; • inadequate supply, or delays in the manufacture or supply, of clinical trial materials; • uncertain dosing issues; • failure by us, our partners, or clinical research organizations, investigators or site personnel engaged by us or our partners to comply with good clinical practices and other applicable laws and regulations, including those concerning informed consent; • inability or unwillingness of investigators or their staffs to follow clinical protocols; • failure by our clinical research organizations, clinical manufacturing organizations and other third parties supporting our or our partners’ clinical trials to fulfill their obligations; • inability to monitor patients adequately during or after treatment; • introduction of new therapies or changes in standards of practice or regulatory guidance that render our drug candidates or their clinical trial endpoints obsolete; and • results from non-clinical studies that may adversely impact the timing or further development of our drug candidates.
In particular: • we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications or issued patents; • we or our licensors might not have been the first to file patent applications for the inventions covered by our pending patent applications or issued patents; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • some or all of our or our licensors’ pending patent applications may not result in issued patents or the claims that issue may be narrow in scope and not provide us with competitive advantages; • our and our licensors’ issued patents may not provide a basis for commercially viable drugs or therapies or may be challenged and invalidated by third parties; • our or our licensors’ patent applications or patents may be subject to interference, post-grant proceedings, derivation, reexamination, inter partes review, opposition or similar legal and administrative proceedings that may result in a reduction in their scope or their loss altogether; • we may not develop additional proprietary technologies or drug candidates that are patentable; or • the patents of others may prevent us or our partners from discovering, developing or commercializing our drug candidates. 44 Table of Contents We may not be able to protect our intellectual property rights throughout the world.
In particular: • we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications or issued patents; • we or our licensors might not have been the first to file patent applications for the inventions covered by our pending patent applications or issued patents; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • some or all of our or our licensors’ pending patent applications may not result in issued patents or the claims that issue may be narrow in scope and not provide us with competitive advantages; • our and our licensors’ issued patents may not provide a basis for commercially viable drugs or therapies or may be challenged and invalidated by third parties; • our or our licensors’ patent applications or patents may be subject to interference, post-grant proceedings, derivation, reexamination, inter partes review, opposition or similar legal and administrative proceedings that may result in a reduction in their scope or their loss altogether; • we may not develop additional proprietary technologies or drug candidates that are patentable; or • the patents of others may prevent us or our partners from discovering, developing or commercializing our drug candidates. 43 Table of Contents We may not be able to protect our intellectual property rights throughout the world.
Among other things, these provisions: • establish a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • eliminate cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • establish the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • prohibit removal of directors without cause; • authorize our board of directors to issue preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; 59 Table of Contents • authorize our board of directors to alter our bylaws without obtaining stockholder approval; • require the approval of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • prohibit stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • require that a special meeting of stockholders be called only by the chairman of the board of directors, the chief executive officer, the president or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • provide for advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, these provisions: • establish a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • eliminate cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • establish the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • prohibit removal of directors without cause; • authorize our board of directors to issue preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • authorize our board of directors to alter our bylaws without obtaining stockholder approval; • require the approval of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • prohibit stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • require that a special meeting of stockholders be called only by the chairman of the board of directors, the chief executive officer, the president or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • provide for advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
In the future, we may not complete our execution of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may result in additional material misstatements in our consolidated financial statements and may adversely affect investor confidence in our company and, as a result, the value of our common stock.
In the future, we may not complete our execution of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may result in material misstatements in our consolidated financial statements and may adversely affect investor confidence in our company and, as a result, the value of our common stock.
If we are not able to defend the patent or trade secret protection position of our technologies and drug candidates, then we will not be able to exclude competitors from developing or marketing competing drugs, and we may not generate enough revenue from product sales to justify the cost of development of our drugs or to achieve or maintain profitability. 46 Table of Contents If we are sued for infringing third-party intellectual property rights, it will be costly and time-consuming, and an unfavorable outcome could have a significant adverse effect on our business.
If we are not able to defend the patent or trade secret protection position of our technologies and drug candidates, then we will not be able to exclude competitors from developing or marketing competing drugs, and we may not generate enough revenue from product sales to justify the cost of development of our drugs or to achieve or maintain profitability. 45 Table of Contents If we are sued for infringing third-party intellectual property rights, it will be costly and time-consuming, and an unfavorable outcome could have a significant adverse effect on our business.
If we fail to become and remain profitable, or if we are unable to fund our continuing losses, you could lose part or all of your investment. We will need substantial additional capital in the future to sufficiently fund our operations.
If we fail to become and remain profitable, or if we are unable to fund our continuing losses, you could lose part or all of your investment. We will need substantial additional capital in the future to sufficiently fund and maintain our operations.
If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full. 49 Table of Contents Covenants in the RP Loan Agreement, the RP Aficamten RPA, the RP OM RPA, and the indentures related to our Convertible Notes restrict our business and operations in many ways and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected.
If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full. 48 Table of Contents Covenants in the RP Loan Agreement, the RP Aficamten RPA, the RP OM RPA, and the indentures related to our Convertible Notes restrict our business and operations in many ways and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected.
Publications by our research collaborators and clinical investigators relating to our research and development programs, either with or without our consent, could benefit our current or potential competitors and may impair our ability to obtain patent protection or protect our proprietary information, which could significantly harm our business. 47 Table of Contents We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that we or our employees have wrongfully used or disclosed trade secrets of their former employers.
Publications by our research collaborators and clinical investigators relating to our research and development programs, either with or without our consent, could benefit our current or potential competitors and may impair our ability to obtain patent protection or protect our proprietary information, which could significantly harm our business. 46 Table of Contents We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that we or our employees have wrongfully used or disclosed trade secrets of their former employers.
Our competitors may: • develop drug candidates and market drugs that are less expensive or more effective than our future drugs; • commercialize competing drugs before we or our partners can launch any drugs developed from our drug candidates; • hold or obtain proprietary rights that could prevent us from commercializing our products; • initiate or withstand substantial price competition more successfully than we can; 39 Table of Contents • more successfully recruit skilled scientific workers and management from the limited pool of available talent; • more effectively negotiate third-party licenses and strategic alliances; • take advantage of acquisition or other opportunities more readily than we can; • develop drug candidates and market drugs that increase the levels of safety or efficacy that our drug candidates will need to show in order to obtain regulatory approval; or • introduce therapies or market drugs that render the market opportunity for our potential drugs obsolete.
Our competitors may: • develop drug candidates and market drugs that are less expensive or more effective than our future drugs; • commercialize competing drugs before we or our partners can launch any drugs developed from our drug candidates; • hold or obtain proprietary rights that could prevent us from commercializing our products; • initiate or withstand substantial price competition more successfully than we can; • more successfully recruit skilled scientific workers and management from the limited pool of available talent; • more effectively negotiate third-party licenses and strategic alliances; • take advantage of acquisition or other opportunities more readily than we can; • develop drug candidates and market drugs that increase the levels of safety or efficacy that our drug candidates will need to show in order to obtain regulatory approval; or • introduce therapies or market drugs that render the market opportunity for our potential drugs obsolete.
Factors that could cause volatility in the market price of our common stock include, but are not limited to: • announcements concerning any of the clinical trials for our drug candidates (including, but not limited to, the timing of initiation or completion of such trials and the results of such trials, and delays or discontinuations of such trials, including delays resulting from slower than expected or suspended patient enrollment or discontinuations resulting from a failure to meet pre-defined clinical end points); • announcements concerning our strategic alliances; • failure or delays in entering additional drug candidates into clinical trials; • failure or discontinuation of any of our research programs; • issuance of new or changed securities analysts’ reports or recommendations; • failure or delay in establishing new strategic alliances, or the terms of those alliances; • market conditions in the pharmaceutical, biotechnology and other healthcare-related sectors; • actual or anticipated fluctuations in our quarterly financial and operating results; • developments or disputes concerning our intellectual property or other proprietary rights; • introduction of technological innovations or new products by us or our competitors; • issues in manufacturing, packaging, labeling and distribution of our drug candidates or drugs; • market acceptance of our drugs; • third-party healthcare coverage and reimbursement policies; • FDA or other U.S. or foreign regulatory actions affecting us or our industry; • litigation or public concern about the safety of our drug candidates or drugs; • additions or departures of key personnel; • substantial sales of our common stock by our existing stockholders, whether or not related to our performance; • automated trading activity by algorithmic and high-frequency trading programs; • volatility in the stock prices of other companies in our industry or in the stock market generally; and • other factors described in this “Risk Factors” section.
Factors that have caused and could cause in the future volatility in the market price of our common stock include, but are not limited to: • announcements concerning any of the clinical trials for our drug candidates (including, but not limited to, the timing of initiation or completion of such trials and the results of such trials, and delays or discontinuations of such trials, including delays resulting from slower than expected or suspended patient enrollment or discontinuations resulting from a failure to meet pre-defined clinical end points); • announcements concerning our strategic alliances; • failure or delays in entering additional drug candidates into clinical trials; 57 Table of Contents • failure or discontinuation of any of our research programs; • issuance of new or changed securities analysts’ reports or recommendations; • failure or delay in establishing new strategic alliances, or the terms of those alliances; • market conditions in the pharmaceutical, biotechnology and other healthcare-related sectors; • actual or anticipated fluctuations in our quarterly financial and operating results; • developments or disputes concerning our intellectual property or other proprietary rights; • introduction of technological innovations or new products by us or our competitors; • issues in manufacturing, packaging, labeling and distribution of our drug candidates or drugs; • market acceptance of our drugs; • third-party healthcare coverage and reimbursement policies; • FDA or other U.S. or foreign regulatory actions affecting us or our industry; • litigation or public concern about the safety of our drug candidates or drugs; • additions or departures of key personnel; • substantial sales of our common stock by our existing stockholders, whether or not related to our performance; • automated trading activity by algorithmic and high-frequency trading programs; • volatility in the stock prices of other companies in our industry or in the stock market generally; and • other factors described in this “Risk Factors” section.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 45 Table of Contents We are a party to license agreements and may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our drug candidates and future drug candidates we may identify and pursue.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 44 Table of Contents We are a party to license agreements and may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our drug candidates and future drug candidates we may identify and pursue.
If our drugs fail to achieve market acceptance, we may not be able to generate significant revenue and our business would suffer. 43 Table of Contents Risks Specific to our Company in connection with our Intellectual Property Our success depends substantially upon our ability to obtain and maintain intellectual property protection relating to our drug candidates, compounds and research technologies.
If our drugs fail to achieve market acceptance, we may not be able to generate significant revenue and our business would suffer. 42 Table of Contents Risks Specific to our Company in connection with our Intellectual Property Our success depends substantially upon our ability to obtain and maintain intellectual property protection relating to our drug candidates, compounds and research technologies.
For example, in November 2021, ICER published its final evidence report and policy recommendations related to Camzyos tm (mavacamten), a small molecule myosin inhibitor being developed by Bristol-Myers Squibb Company (formerly by MyoKardia, Inc.) that has a similar mechanism of action to aficamten.
For example, in November 2021, ICER published its final evidence report and policy recommendations related to Camzyos tm (mavacamten), a small molecule myosin inhibitor developed formerly by MyoKardia, Inc. and commercialized by Bristol-Myers Squibb Company that has a similar mechanism of action to aficamten.
The FDA and foreign regulatory agencies can delay, limit or deny approval of a drug candidate for many reasons, including, but not limited to: • they might determine that a drug candidate is not safe or effective; • they might not find the data from non-clinical testing and clinical trials sufficient and could request that additional trials be performed; 33 Table of Contents • they might not approve our, our partner’s or the contract manufacturer’s processes or facilities; or • they might change their approval policies or adopt new regulations.
The FDA and foreign regulatory agencies can delay, limit or deny approval of a drug candidate for many reasons, including, but not limited to: • they might determine that a drug candidate is not safe or effective; • they might not find the data from non-clinical testing and clinical trials sufficient and could request that additional trials be performed; • they might not approve our, our partner’s or the contract manufacturer’s processes or facilities; or • they might change their approval policies or adopt new regulations.
FDA’s decision to issue a CRL follows an FDA Cardiovascular and Renal Drugs Advisory Committee’s vote of 8 to 3 in December 2022 that the benefits of omecamtiv mecarbil do not outweigh its risks for the treatment of HFrEF.
FDA’s decision to issue a CRL followed an FDA Cardiovascular and Renal Drugs Advisory Committee’s vote of 8 to 3 in December 2022 that the benefits of omecamtiv mecarbil do not outweigh its risks for the treatment of HFrEF.
This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013, and, due to subsequent legislative amendments, will remain in effect until 2031 unless additional Congressional action is taken.
This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013, and, due to subsequent legislative amendments, will remain in effect until 2032 unless additional Congressional action is taken.
As a result of these and other factors, we do not know whether additional financing will be available when needed, or that, if available, such financing would be on terms favorable to our stockholders or us, and if we cannot raise the funds we need to operate our business, we will need to delay or discontinue certain research and development activities, and our stock price may be negatively affected. 48 Table of Contents We have never generated, and may never generate, revenues from commercial sales of our drugs and we may not have drugs to market for at least several years, if ever.
As a result of these and other factors, we do not know whether additional financing will be available when needed, or that, if available, such financing would be on terms favorable to our stockholders or us, and if we cannot raise the funds we need to operate our business, we will need to delay or discontinue certain research and development activities, and our stock price may be negatively affected. 47 Table of Contents We have never generated, and may never generate, revenues from commercial sales of our drugs and we may not have drugs to commercialize for at least several years, if ever.
These and other external factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock.
These and other external factors have caused and may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock.
Furthermore, while planned interim analyses in clinical trials can enable early terminations for futility or for overwhelming efficacy, the timing, which can be based on accrual of events, enrollment or other factors, and the results of such analyses, is unpredictable. 32 Table of Contents Administering any of our drug candidates or potential drug candidates may produce undesirable side effects, also known as adverse events.
Furthermore, while planned interim analyses in clinical trials can enable early terminations for futility or for overwhelming efficacy, the timing, which can be based on accrual of events, enrollment or other factors, and the results of such analyses, is unpredictable. Administering any of our drug candidates or potential drug candidates may produce undesirable side effects, also known as adverse events.
If third parties that have agreed to indemnify us against damages and other liabilities arising from their activities do not fulfill their obligations, then we may be held responsible for those damages and other liabilities. 55 Table of Contents European data collection is governed by restrictive regulations governing the collection, use, processing and cross-border transfer of personal information.
If third parties that have agreed to indemnify us against damages and other liabilities arising from their activities do not fulfill their obligations, then we may be held responsible for those damages and other liabilities. European data collection is governed by restrictive regulations governing the collection, use, processing and cross-border transfer of personal information.
In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that: • we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that: 59 Table of Contents • we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
We have no manufacturing capacity and depend on contract manufacturers to produce our clinical trial materials, including our drug candidates, and will have continued reliance on contract manufacturers for the development and commercialization of our potential drugs.
We have no manufacturing capabilities and depend on contract manufacturers to produce our clinical trial materials, including our drug candidates, and will have continued reliance on contract manufacturers for the development and commercialization of our potential drugs.
Our competitors may also have significantly greater experience in: • developing drug candidates; • undertaking preclinical testing and clinical trials; • building relationships with key customers and opinion-leading physicians; • obtaining and maintaining FDA and other regulatory approvals of drug candidates; • formulating and manufacturing drugs; and • launching, marketing and selling drugs.
Our competitors may also have significantly greater experience in: • developing drug candidates; • undertaking preclinical testing and clinical trials; • building relationships with key customers and opinion-leading physicians; 38 Table of Contents • obtaining and maintaining FDA and other regulatory approvals of drug candidates; • formulating and manufacturing drugs; and • launching, marketing and selling drugs.
Neither we nor our partners are permitted to market our potential drugs in the United States until we receive approval of an NDA from the FDA. Neither we nor our partners have received NDA or other marketing approval for any of our drug candidates. Obtaining NDA approval is a lengthy, expensive and uncertain process.
Neither we nor our partners are permitted to market our potential drugs in the United States until we receive approval of an NDA from the FDA. Neither we nor our partners have ever received NDA or other marketing approval for any of our drug candidates. 30 Table of Contents Obtaining NDA approval is a lengthy, expensive and uncertain process.
The government and qui tam relators have brought False Claims Act actions against pharmaceutical companies on the theory that their practices have caused false claims to be submitted to the government. 54 Table of Contents • HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program.
The government and qui tam relators have brought False Claims Act actions against pharmaceutical companies on the theory that their practices have caused false claims to be submitted to the government. • HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program.
Moreover, clinical trials of reldesemtiv and aficamten enroll patients who typically suffer from serious diseases which put them at increased risk of death. These patients may die while receiving our drug candidates.
Moreover, clinical trials of our drug candidates enroll patients who typically suffer from serious diseases which put them at increased risk of death. These patients may die while receiving our drug candidates.
Clinical trials may fail to demonstrate the desired safety and efficacy of our drug candidates, including aficamten and reldesemtiv, which could prevent or significantly delay completion of clinical development and regulatory approval.
Clinical trials may fail to demonstrate the desired safety and efficacy of our drug candidates, which could prevent or significantly delay completion of clinical development and regulatory approval.
If we encounter difficulties enrolling patients in our clinical trials, including COURAGE-ALS and SEQUOIA-HCM, our clinical development activities could be delayed or otherwise adversely affected. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion.
If we encounter difficulties enrolling patients in our clinical trials, including FOREST-HCM, MAPLE-HCM and ACACIA-HCM, our clinical development activities could be delayed or otherwise adversely affected. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion.
In addition, if a contract manufacturer fails to perform as agreed, our ability to collect damages may be contractually limited. Our drug candidates require precise high-quality manufacturing.
In addition, if a contract manufacturer fails to perform as agreed, our ability to collect damages may be contractually limited. 40 Table of Contents Our drug candidates require precise high-quality manufacturing.
Payments made to physicians and research institutions for clinical trials are included within the ambit of this law. • Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures and state and local laws that require the registration of sales representatives.
Payments made to physicians and research institutions for clinical trials are included within the ambit of this law. • Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures and state and local laws that require the registration of sales representatives. 54 Table of Contents Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
As a result of FDA's CRL in response to our NDA for omecamtiv mecarbil, we do not expect to satisfy the conditions for the availability of disbursement of the $50 million tranche 2 and $25 million tranche 3 term loans under the RP Loan Agreement.
For example, as a result of FDA's CRL in response to our NDA for omecamtiv mecarbil, we have not satisfied the conditions for the availability of disbursement of the $50 million tranche 2 and $25 million tranche 3 term loans under the RP Loan Agreement.
If our drug candidates that are granted orphan status were to lose their status as orphan drugs or the marketing exclusivity provided for them in the U.S. or the E.U., our business and results of operations could be materially adversely affected.
We are not guaranteed to be granted orphan designation in the E.U. for aficamten by the EMA. If our drug candidates that are granted orphan status were to lose their status as orphan drugs or the marketing exclusivity provided for them in the U.S. or the E.U., our business and results of operations could be materially adversely affected.
In addition, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit.
In addition, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert our management’s time and attention.
We have been granted orphan drug designation in the U.S. by the FDA for reldesemtiv for the potential treatment of ALS and for aficamten for the potential treatment of symptomatic HCM.
We have been granted orphan drug designation in the U.S. by the FDA for aficamten for the treatment of symptomatic HCM.
We do not currently have any commitments for future funding other than through loans under the RP Loan Agreement with RPDF, potential additional revenue interest sale proceeds under the RP Aficamten RPA, and reimbursements, milestone and royalty payments that we may receive under our agreements with Ji Xing. We may not receive any further funds under any of these agreements.
We do not currently have any commitments for future funding other than through loans under the RP Loan Agreement with RPDF and reimbursements, milestone and royalty payments that we may receive under our agreements with Ji Xing. We may not receive any further funds under any of these agreements.
In connection with our NDA for omecamtiv mecarbil, FDA may as a condition to approval require that patients treated with omecamtiv mecarbil have their blood monitored during titration for concentrations of the drug in order to ensure optimized dosing that maximizes benefits without undue increased risk.
In connection with our NDA and our MAA for omecamtiv mecarbil, FDA and/or EMA may require that patients treated with omecamtiv mecarbil have their blood monitored during titration for concentrations of the drug in order to ensure optimized dosing that maximizes benefits without undue increased risk.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies or clinical trials, including any new drugs that may be approved for the indications we are investigating or clinical trial results; • the ability to obtain and maintain patient consents; • the risk that patients enrolled in clinical trials will drop out of the trials before completion; • the effects of the COVID-19 pandemic, including governmental responses and restrictions on movement and the ability of patients to visit clinical trial sites and practicability and/or availability of virtual and/or home healthcare visits.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; 34 Table of Contents • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies or clinical trials, including any new drugs that may be approved for the indications we are investigating or clinical trial results; • the ability to obtain and maintain patient consents; • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
We may not be entitled to obtain additional loan disbursements under the RP Loan Agreement or the RP Aficamten RPA. On January 7, 2022, we announced that we had entered into the RP Loan Agreement and the RP Aficamten RPA with each of RPDF and RPI ICAV respectively, each such entity being affiliated with Royalty Pharma International plc.
We may not be entitled to obtain additional loan disbursements under the RP Loan Agreement. On January 7, 2022, we announced that we had entered into the RP Loan Agreement with RPDF, such entity being affiliated with Royalty Pharma International plc.
Although we may have drug candidates that may obtain orphan drug exclusivity in Europe, the orphan approval and associated exclusivity period may be modified for several reasons, including a significant change to the orphan medicinal product designations or approval criteria after-market authorization of the orphan product (e.g., product profitability exceeds the criteria for orphan drug designation), problems with the production or supply of the orphan drug or a competitor drug, although similar, is safer, more effective or otherwise clinically superior than the initial orphan drug.
Although we may have drug candidates that may obtain orphan drug exclusivity in Europe, the orphan approval and associated exclusivity period may be modified for several reasons, including a significant change to the orphan medicinal product designations or approval criteria after-market authorization of the orphan product (e.g., product profitability exceeds the criteria for orphan drug designation), problems with the production or supply of the orphan drug or a competitor drug, although similar, is safer, more effective or otherwise clinically superior than the initial orphan drug. 36 Table of Contents We are not guaranteed to maintain orphan status from the FDA for aficamten or to receive orphan status for aficamten for any other indication or for any of our other drug candidates for any indication.
Moreover, ICER’s final report concluded that modeling short-term clinical benefits of Camzyos tm (mavacamten) over a longer time period produces a health-benefit price benchmark index for Camzyos tm (mavacamten) between $12,000-$15,000 per year, significantly lower than the $94,870 annual list price at launch that Bristol-Myers Squibb Company has indicated.
Moreover, ICER’s final report concluded that modeling short-term clinical benefits of Camzyos tm (mavacamten) over a longer time period produces a health-benefit price benchmark index for Camzyos tm (mavacamten) between $12,000-$15,000 per year, significantly lower than Bristol-Myers Squibb Company's current annual list price in the U.S.
If we are unable to assert that our internal control over financial reporting is effective in the future, or if our independent registered public accounting firm is unable to express an opinion or expresses an adverse opinion on the effectiveness of our internal controls in the future, investor confidence in the accuracy and completeness of our financial reports could be further eroded, which would have a material adverse effect on the price of our common stock. 52 Table of Contents Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S.
If we are unable to assert that our internal control over financial reporting is effective in the future, or if our independent registered public accounting firm is unable to express an opinion or expresses an adverse opinion on the effectiveness of our internal controls in the future, investor confidence in the accuracy and completeness of our financial reports could be further eroded, which would have a material adverse effect on the price of our common stock.
We prepare our financial statements in conformity with accounting principles generally accepted in the U.S. These accounting principles are subject to interpretation by the FASB and the SEC.
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S. We prepare our financial statements in conformity with accounting principles generally accepted in the U.S. These accounting principles are subject to interpretation by the FASB and the SEC.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
Currently, our clinical-stage drug candidates include omecamtiv mecarbil for the potential treatment of heart failure, reldesemtiv for the potential treatment of ALS and potentially other indications associated with muscle weakness, and aficamten for the potential treatment of HCM and potentially other indications.
Currently, our late clinical-stage drug candidates include omecamtiv mecarbil for the potential treatment of heart failure, and aficamten for the potential treatment of HCM and potentially other indications.
Specifically in relation to omecamtiv mecarbil, even if such drug candidate is ultimately approved by the FDA or other regulatory authorities for commercialization, it may not become a guideline-directed medical therapy for heart failure or it may not reach such status in a timely manner upon commercialization, which may adversely impact its sales prospects.
Specifically in relation to aficamten and omecamtiv mecarbil, even if such drug candidates are ultimately approved by the FDA or other regulatory authorities for commercialization, they may not become a guideline-directed medical therapy for oHCM or HFrEF respectively or they may not reach such status in a timely manner upon commercialization, which may adversely impact its sales prospects.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.
Any failure or significant delay in completing preclinical studies or clinical trials for our drug candidates, or in receiving and maintaining regulatory approval for the sale of any resulting drugs, may significantly harm our business and negatively affect our stock price.
Any failure or significant delay in completing preclinical studies or clinical trials for our drug candidates, or in receiving and maintaining regulatory approval for the sale of any resulting drugs, may significantly harm our business and negatively affect our stock price. Our clinical trials, including FOREST-HCM, MAPLE-HCM and ACACIA-HCM, are expensive, time-consuming and may be subject to delay.
HIPAA also imposes criminal liability for knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. • The federal Physician Payments Sunshine Act requires manufacturers of drugs, devices, biologics and medical supplies to report to the HHS information related to payments and other transfers of value made to or at the request of physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.
HIPAA also imposes criminal liability for knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. • In addition, HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. • The federal Physician Payments Sunshine Act requires manufacturers of drugs, devices, biologics and medical supplies to report to the HHS information related to payments and other transfers of value made to or at the request of physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.
To date, our drug candidates have been manufactured in quantities adequate for preclinical studies and early through late-stage clinical trials. In order to conduct large scale clinical trials for a drug candidate and for commercialization of the resulting drug if that drug candidate is approved for sale, we will need to manufacture some drug candidates in larger quantities.
In order to conduct large scale clinical trials for a drug candidate and for commercialization of the resulting drug if that drug candidate is approved for sale, we will need to manufacture some drug candidates in larger quantities.
It may be difficult or impossible to transfer certain elements of a manufacturing process to a new manufacturer or for us to find a replacement manufacturer on acceptable terms quickly, or at all, either of which would delay or prevent our ability to develop drug candidates and commercialize any resulting drugs. 42 Table of Contents We may not be able to successfully manufacture our drug candidates in sufficient quality and quantity, which would delay or prevent us from developing our drug candidates and commercializing resulting approved drugs, if any.
It may be difficult or impossible to transfer certain elements of a manufacturing process to a new manufacturer or for us to find a replacement manufacturer on acceptable terms quickly, or at all, either of which would delay or prevent our ability to develop drug candidates and commercialize any resulting drugs.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. Regardless of accuracy, unfavorable interpretations of our financial information and other public disclosures could have a negative impact on our stock price.
Compliance with environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production activities. 56 Table of Contents General Risk Factors Our failure to attract and retain skilled personnel could impair our drug development, commercialization and financial reporting activities.
Compliance with environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production activities. General Risk Factors Our failure to attract and retain skilled personnel could impair our drug development, commercialization and financial reporting activities. Our business depends on the performance of our senior management and key scientific, commercial and technical personnel.
In addition, the rebate levels we may have to offer to pharmacy benefit managers and payors to be included in their formularies may also impact the profitability of omecamtiv mecarbil. 40 Table of Contents Moreover, pricing of our drug candidates, if approved by the FDA or other regulatory authorities for commercialization, may be impacted by cost-effectiveness and economic analyses by a Health Technology Assessment organization such as the Institute for Clinical and Economic Review, or ICER, an independent non-profit research institute that produces reports analyzing the evidence underlying the effectiveness and value of drugs and other medicinal services.
Moreover, pricing of our drug candidates, if approved by the FDA or other regulatory authorities for commercialization, may be impacted by cost-effectiveness and economic analyses by a Health Technology Assessment organization such as the Institute for Clinical and Economic Review, or ICER, an independent non-profit research institute that produces reports analyzing the evidence underlying the effectiveness and value of drugs and other medicinal services.
Even if we obtain coverage for a given drug product, the timeframe from approval to coverage could be lengthy, inadequate, and/or the associated reimbursement rate may not be adequate to cover our costs, including research, development, intellectual property, manufacture, sale and distribution expenses, or may require co‑payments that patients find unacceptably high.
Even if we obtain coverage for a given drug product, the timeframe from approval to coverage could be lengthy, inadequate, and/or the associated reimbursement rate may not be adequate to cover our costs, including research, development, intellectual property, manufacture, sale and distribution expenses, or may require co‑payments that patients find unacceptably high. 39 Table of Contents Coverage and reimbursement policies for drug products can differ significantly from payor to payor as there is no uniform policy of coverage and reimbursement for drug products among third‑party payors in the United States.
Should we not satisfy such conditions by the applicable deadlines, or in the event we fail to meet our obligations or default under these agreements, the actual amount of additional loan disbursements and/or sale proceeds could be substantially less than the maximum amounts available thereunder.
Should we not satisfy such condition for tranche 5 by March 31, 2025, or in the event we fail to meet our obligations or default under the agreement, the actual amount of additional loan disbursements could be substantially less than the maximum amounts available thereunder.
Our CROs’ failure to carry out development activities on our behalf as agreed and in accordance with our and the FDA’s or other regulatory agencies’ requirements and applicable U.S. and foreign laws, or our failure to properly coordinate and manage these activities, could increase the cost of our operations and delay or prevent the development, approval and commercialization of our drug candidates.
Outside of the United States, we are particularly dependent on our CROs’ expertise in communicating with clinical trial sites and regulatory authorities and ensuring that our clinical trials and related activities and regulatory filings comply with applicable laws. 35 Table of Contents Our CROs’ failure to carry out development activities on our behalf as agreed and in accordance with our and the FDA’s or other regulatory agencies’ requirements and applicable U.S. and foreign laws, or our failure to properly coordinate and manage these activities, could increase the cost of our operations and delay or prevent the development, approval and commercialization of our drug candidates.
If a drug candidate is intended for the treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet medical needs for this condition, the drug candidate sponsor may apply for Fast Track Designation. 38 Table of Contents Fast Track Designation is an FDA process designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need.
If a drug candidate is intended for the treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet medical needs for this condition, the drug candidate sponsor may apply for Fast Track Designation.
In addition, data demonstrating the stability of both drug substance and drug product, using the commercial manufacturing process and at commercial scale, are required for marketing applications. Failure to produce drug substance and drug products in a timely manner and obtain stability data could result in delay of submission of marketing applications.
In addition, data demonstrating the stability of both drug substance and drug product, using the commercial manufacturing process and at commercial scale, are required for marketing applications.
Failure to comply with the requirements of the GDPR and related national data protection laws of the member states of the E.U. may result in substantial fines, other administrative penalties and civil claims being brought against us, which could have a material adverse effect on our business, financial condition and results of operations.
Failure to comply with the requirements of the GDPR and related national data protection laws of the member states of the E.U. may result in substantial fines, other administrative penalties and civil claims being brought against us, which could have a material adverse effect on our business, financial condition and results of operations. 55 Table of Contents European data protection laws, including the GDPR, generally restrict the transfer of personal information from Europe, including the EEA, United Kingdom and Switzerland, to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information.
Furthermore, the increased emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in the E.U. will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. Furthermore, the increased emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in the E.U. will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales.
These pressures can arise from rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical reimbursement policies and pricing in general. We cannot predict the likelihood, nature, or extent of health reform initiatives that may arise from future legislation or administrative action.
These pressures can arise from rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical reimbursement policies and pricing in general.
The failure to successfully develop, validate and obtain regulatory clearance or approval of an antibody-based immunoassay for plasma concentrations of omecamtiv mecarbil could harm our development and commercialization strategy for omecamtiv mecarbil in the United States.
The failure to successfully develop, manufacture and obtain regulatory clearance or approval of an antibody-based immunoassay for blood concentrations of omecamtiv mecarbil by Microgenics Corporation, a subsidiary of Thermo Fisher, could harm our development and commercialization strategy for omecamtiv mecarbil in key markets.
Any material limitation or expiration of our NOLs and tax credit carryforwards may harm our future net income by effectively increasing our future effective tax rate, which could result in a reduction in the market price of our common stock.
Any material limitation or expiration of our NOLs and tax credit carryforwards may harm our future net income by effectively increasing our future effective tax rate, which could result in a reduction in the market price of our common stock. 50 Table of Contents Comprehensive U.S. tax reform legislation could increase the tax burden on our orphan drug programs and adversely affect our business and financial condition.
The regulatory approval process is expensive, time-consuming and uncertain and may prevent our partners or us from obtaining approvals to commercialize some or all of our drug candidates.
Risks Specific to our Company in connection with our Research and Development Activities The regulatory approval and marketing authorization process is expensive, time-consuming and uncertain and may prevent our partners or us from obtaining approvals to commercialize some or all of our drug candidates, including aficamten and omecamtiv mecarbil.
If we or our partners receive regulatory approval for our drug candidates, we or they will be subject to ongoing obligations to and continued regulatory review by the FDA and foreign regulatory agencies, and may be subject to additional post-marketing obligations, all of which may result in significant expense and limit commercialization of our potential drugs.
Failure to produce drug substance and drug products in a timely manner and obtain stability data could result in delay of submission of marketing applications. 41 Table of Contents If we or our partners receive regulatory approval for our drug candidates, we or they will be subject to ongoing obligations to and continued regulatory review by the FDA and foreign regulatory agencies, and may be subject to additional post-marketing obligations such as an ETASU or other form of REMS, all of which may result in significant expense and limit commercialization of our potential drugs.
Risks Specific to our Company in connection with our Research and Development Activities We recently received a CRL from FDA in response to our NDA for omecamtiv mecarbil. The CRL stated that results from an additional clinical trial of omecamtiv mecarbil are required to establish substantial evidence of effectiveness for the treatment of HFrEF, with benefits that outweigh the risks.
The CRL stated that results from an additional clinical trial of omecamtiv mecarbil are required to establish substantial evidence of effectiveness for the treatment of HFrEF, with benefits that outweigh the risks.
If we or our partners fail to receive and maintain regulatory approval for the sale of any drugs resulting from our drug candidates, it would significantly harm our business and negatively affect our stock price. Our clinical trials are expensive, time-consuming and may be subject to delay.
If we or our partners fail to receive and maintain regulatory approval for the sale of any drugs resulting from our drug candidates, it would significantly harm our business and negatively affect our stock price. We received a CRL from FDA in response to our NDA for omecamtiv mecarbil.
We cannot predict if and to what extent various states will conform to the Tax Act, as modified by additional tax legislation enacted in 2020. 51 Table of Contents In addition, generally, if one or more stockholders or groups of stockholders who owns at least 5% of our stock increases its ownership by more than 50% over its lowest ownership percentage within a three-year testing period, an ownership change occurs (an “Ownership Change”).
In addition, generally, if one or more stockholders or groups of stockholders who owns at least 5% of our stock increases its ownership by more than 50% over its lowest ownership percentage within a three-year testing period, an ownership change occurs (an “Ownership Change”).
We have limited experience in drug formulation and manufacturing, and we lack the resources and the capabilities to manufacture any of our drug candidates on a clinical or commercial scale. 41 Table of Contents In addition, under the Ji Xing Agreements, we have committed to providing Ji Xing with supply of aficamten and omecamtiv mecarbil for development and commercialization of aficamten and omecamtiv mecarbil in China and Taiwan, which we will have to source from our contract manufacturers.
In addition, under the Ji Xing Agreements, we have committed to providing Ji Xing with supply of aficamten and omecamtiv mecarbil for development and commercialization of aficamten and omecamtiv mecarbil in China and Taiwan, which we will have to source from our contract manufacturers.
For example, if a competitor's drug candidate having a similar mechanism of action as any of our own drug candidates is shown in clinical trials to give rise to serious safety concerns or have poor efficacy when administered to the target patient population, the FDA or other regulatory bodies may subject our drug candidates to increased scrutiny, leading to additional delays in development and potentially decreasing the chance of ultimate approval of our own drug candidates. 37 Table of Contents We have been granted orphan designation by the FDA and EMA for reldesemtiv for the potential treatment ALS and orphan designation by the FDA for aficamten for the potential treatment of symptomatic HCM; however, there can be no guarantee that we will receive orphan approval for reldesemtiv or aficamten, nor that we will be able to prevent third parties from developing and commercializing products that are competitive to reldesemtiv or aficamten.
For example, if a competitor's drug candidate having a similar mechanism of action as any of our own drug candidates is shown in clinical trials to give rise to serious safety concerns or have poor efficacy when administered to the target patient population, the FDA or other regulatory bodies may subject our drug candidates to increased scrutiny, leading to additional delays in development and potentially decreasing the chance of ultimate approval of our own drug candidates.
Furthermore, in view of the uncertainties inherent in drug development, such clinical trials may not be designed with focus on indications, patient populations, dosing regimens, endpoints, safety, efficacy or pharmacokinetic parameters or other variables that will provide the necessary safety or efficacy data to support regulatory approval to commercialize the resulting drugs.
If information gained during the conduct of the trial shows these estimates to be inaccurate, we may elect to adjust the enrollment accordingly, which may cause delays in completing the trial, additional expense or a statistical penalty to apply to the evaluation of the trial results. 32 Table of Contents Furthermore, in view of the uncertainties inherent in drug development, such clinical trials may not be designed with focus on indications, patient populations, dosing regimens, endpoints, safety, efficacy or pharmacokinetic parameters or other variables that will provide the necessary safety or efficacy data to support regulatory approval to commercialize the resulting drugs.
We depend on CROs to conduct our clinical trials and have limited control over their performance.
We depend on CROs to conduct our clinical trials as well as other third parties to manufacture drug candidates for use in clinical trials and we have limited control over their performance.
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
In addition, the terms of existing or any future debts may preclude us from paying these dividends. 58 Table of Contents Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our and our partners’ ability to advance the development of product candidates. 35 Table of Contents The COVID-19 pandemic continues to adversely impact our business and could materially and adversely affect our operations, as well as the businesses or operations of our or our partners, manufacturers, CROs or other third parties with whom we or our partners conduct business.
Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our and our partners’ ability to advance the development of product candidates.
Comprehensive U.S. tax reform legislation could increase the tax burden on our orphan drug programs and adversely affect our business and financial condition. In 2017, the U.S. government enacted the Tax Act that includes significant changes to the taxation of business entities, which was modified by additional federal tax legislation in 2020.
In 2017, the U.S. government enacted the Tax Act that includes significant changes to the taxation of business entities, which was modified by additional federal tax legislation in 2020. The comprehensive tax legislation, among other things, reduces the orphan drug tax credit from 50% to 25% of qualifying expenditures.
In addition, the Part D drug benefit caps beneficiary spending at $2,000, eliminates the coverage gap for patients, and modifies, beginning in 2025, liabilities for drug manufacturers by replacing the 70% discount in the Coverage gap with a 10% discount in the Initial Coverage phase and a 20% discount in the Catastrophic phase. 53 Table of Contents There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
In addition, the Part D drug benefit caps beneficiary spending at $2,000, eliminates the coverage gap for patients, and modifies, beginning in 2025, liabilities for drug manufacturers by replacing the 70% discount in the Coverage gap with a 10% discount in the Initial Coverage phase and a 20% discount in the Catastrophic phase.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.
If we are unable to maintain any existing Breakthrough Therapy Designation or Fast Track Designation or fail to secure such designation for any additional product candidates, this would have an adverse impact on our development timelines and our ability to obtain approval for and commercialize our product candidates. 37 Table of Contents Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.
Any such breaches of security and inappropriate access could disrupt our operations, harm our reputation or otherwise have a material adverse effect on our business, financial condition and results of operations. 57 Table of Contents Our facilities in California are located near an earthquake fault, and an earthquake or other types of natural disasters, catastrophic events or resource shortages could disrupt our operations and adversely affect our results.
Our facilities in California are located near an earthquake fault, and an earthquake or other types of natural disasters, catastrophic events or resource shortages could disrupt our operations and adversely affect our results.

… 94 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeLEGAL PROCEEDINGS We are not currently subject to any material legal proceedings. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 61 Table of Contents PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 62 Table of Contents PART II
ITEM 2. P ROPERTIES Our material facilities consist of 234,892 square feet of leased office and laboratory space at 350 Oyster Point, South San Francisco, California. Our lease over this property expires in 2033. We believe that these facilities are suitable and adequate for our current needs. ITEM 3.
ITEM 2. PROPERTIES Our material facilities consist of 234,892 square feet of leased office and laboratory space at 350 Oyster Point, South San Francisco, California. Our lease over this property expires in 2033. We believe that these facilities are suitable and adequate for our current needs. ITEM 3. LEGAL PROCEEDINGS We are not currently subject to any material legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−3 removed4 unchanged
Biggest changeThe number of holders of record is based upon the actual number of holders registered as of such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities in security position listings maintained by depositories.
Biggest changeThe number of holders of record is based upon the actual number of holders registered as of such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities in security position listings maintained by depositories. 63 Table of Contents Dividends We have never declared or paid, and do not anticipate declaring or paying in the foreseeable future, any cash dividends on our capital stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information for common stock Our common stock is listed on the Nasdaq Global Select Market under the symbol “CYTK.” On February 27, 2023, the last reported sale price for our common stock was $42.98 per share.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information for common stock Our common stock is listed on the Nasdaq Global Select Market under the symbol “CYTK.” On February 27, 2024, the last reported sale price for our common stock was $80.99 per share.
The graph assumes (a) $100 was invested on December 31, 2017 in each of our common stock, the stocks comprising the NASDAQ Composite Index and the stocks comprising the NASDAQ Biotechnology Index, and (b) the reinvestment of dividends into shares of common stock; however, no dividends have been declared on our common stock to date. $100 investment in stock or index 12/31/2017 12/31/2018 12/31/2019 12/30/2020 12/31/2021 12/31/2022 Cytokinetics, Inc. $ 100.00 $ 77.55 $ 130.18 $ 254.97 $ 559.26 $ 562.21 Nasdaq Composite Index 100.00 96.12 129.97 186.69 226.63 151.61 Nasdaq Biotechnology Index 100.00 90.68 112.81 141.78 140.88 125.52 62 Table of Contents Holders of Record As of February 27, 2023, we had 47 holders of record of common stock.
The graph assumes (a) $100 was invested on December 31, 2018 in each of our common stock, the stocks comprising the NASDAQ Composite Index and the stocks comprising the NASDAQ Biotechnology Index, and (b) the reinvestment of dividends into shares of common stock; however, no dividends have been declared on our common stock to date. $100 investment in stock or index 12/31/2018 12/31/2019 12/30/2020 12/30/2021 12/31/2022 12/31/2023 Cytokinetics, Inc. $ 100.00 $ 167.88 $ 328.80 $ 721.20 $ 725.00 $ 1,321.04 Nasdaq Composite Index 100.00 135.23 194.24 235.78 157.74 226.24 Nasdaq Biotechnology Index 100.00 124.41 156.36 155.37 138.42 143.60 Holders of Record As of February 27, 2024, we had 45 holders of record of common stock.
Removed
We currently expect to retain future earnings, if any, for use in the operation and expansion of our business and have not paid and do not in the foreseeable future anticipate paying any cash dividends.
Removed
Dividends We have never declared or paid, and do not anticipate declaring or paying in the foreseeable future, any cash dividends on our capital stock.
Removed
ITEM 6. [ RESERVED] 63 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

43 edited+27 added−33 removed34 unchanged
Biggest changeCash Flows Provided by Financing Activities Net cash provided by financing activities of $516.2 million in 2022 was primarily due to $540.0 million of proceeds related to 2027 Notes, the proceeds related to the RP Aficamten RPA and the RP Loan Agreement, offset by the repayment of amounts owed under our Term Loan Agreement and 2026 Notes, and stock-based activities. 70 Table of Contents Net cash provided by financing activities of $320.0 million in 2021 was primarily due to $296.9 million of proceeds related to issuance of common stock in an underwritten public offering and stock-based activities. 2022 Royalty Pharma Transactions On January 7, 2022, we announced that we had entered into that certain RP Loan Agreement and the RP Aficamten RPA with RPDF and RPI ICAV respectively, each of which were at the time of our entry into such agreements affiliated with Royalty Pharma International plc.
Biggest changeRoyalty Pharma Transactions On January 7, 2022, we announced that we had entered into that certain RP Loan Agreement and the RP Aficamten RPA with RPDF and RPI ICAV respectively, each of which were at the time of our entry into such agreements affiliated with Royalty Pharma International plc.
We typically account for such agreements as debt to be amortized under the effective interest rate method over the life of the related royalty stream, when we have continuing involvement with the underlying R&D. We typically account for such agreements as deferred income to be amortized under the units-of-revenue method, when there is no continuing involvement with the underlying R&D.
We typically account for such agreements as liabilities to be amortized under the effective interest rate method over the life of the related royalty stream, when we have continuing involvement with the underlying R&D. We typically account for such agreements as deferred income to be amortized under the units-of-revenue method, when there is no continuing involvement with the underlying R&D.
Under the RP Loan Agreement, we are entitled to receive up to $300.0 million in term loans, $50.0 million of which was disbursed to us on closing and the remaining $250.0 million available to us upon our satisfaction of customary disbursement conditions and certain development conditions by specific deadlines, as follows: • $50.0 million of tranche 2 term loans during the one year period following the receipt on or prior to March 31, 2023 of marketing approval from FDA of omecamtiv mecarbil; • $25.0 million of tranche 3 term loans during the one year period following the commercial availability of a diagnostic test measuring levels of omecamtiv mecarbil to support the final FDA label language applicable to such drug, subject to such commercial availability and the conditions to the tranche 2 term loans having occurred on or prior to March 31, 2023; • $75.0 million of tranche 4 term loans during the one year period following the receipt on or prior to September 30, 2024 of positive results from SEQUOIA-HCM, the Phase 3 trial for aficamten; and • $100.0 million of tranche 5 term loans during the one year period following the acceptance by the FDA on or prior to March 31, 2025 of an NDA for aficamten, subject to the conditions to the tranche 4 term loans having occurred on or prior to September 30, 2024.
Under the RP Loan Agreement, we were initially entitled to receive up to $300.0 million in term loans, $50.0 million of which was disbursed to us on closing and the remaining $250.0 million scheduled to have been available to us upon our satisfaction of customary disbursement conditions and certain development conditions by specific deadlines, as follows: • $50.0 million of tranche 2 term loans during the one year period following the receipt on or prior to March 31, 2023 of marketing approval from FDA of omecamtiv mecarbil; • $25.0 million of tranche 3 term loans during the one year period following the commercial availability of a diagnostic test measuring levels of omecamtiv mecarbil to support the final FDA label language applicable to such drug, subject to such commercial availability and the conditions to the tranche 2 term loans having occurred on or prior to March 31, 2023; • $75.0 million of tranche 4 term loans during the one year period following the receipt on or prior to September 30, 2024 of positive results from SEQUOIA-HCM, the Phase 3 trial for aficamten; and • $100.0 million of tranche 5 term loans during the one year period following the acceptance by the FDA on or prior to March 31, 2025 of an NDA for aficamten, subject to the conditions to the tranche 4 term loans having occurred on or prior to September 30, 2024.
These factors could have a material adverse effect on our future financial results, financial position and cash flows. Based on the current status of our development plans, we believe that our existing cash and cash equivalents, investments and interest earned on investments will be sufficient to meet our projected operating requirements for at least the next 12 months.
These factors could have a material adverse effect on our future financial results, financial position and cash flows. 73 Table of Contents Based on the current status of our development plans, we believe that our existing cash and cash equivalents, investments and interest earned on investments will be sufficient to meet our projected operating requirements for at least the next 12 months.
Non-cash interest expense on liabilities related to revenue participation right purchase agreements Non-cash interest expense results from the accretion of our liabilities to RPFT and RP ICAV related to the sale of future royalties under the RP OM RPA and the RP Aficamten RPA, respectively. 68 Table of Contents On January 7, 2022, we entered into the RP Aficamten RPA with RPI ICAV.
Non-cash interest expense on liabilities related to revenue participation right purchase agreements Non-cash interest expense results from the accretion of our liabilities to RPFT and RP ICAV related to the sale of future royalties under the RP OM RPA and the RP Aficamten RPA, respectively. On January 7, 2022, we entered into the RP Aficamten RPA with RPI ICAV.
These factors include, but are not limited to, the following: • the initiation, progress, timing, scope and completion of preclinical research, non-clinical development, CMC, and clinical trials for our drug candidates and other compounds; • the time and costs involved in obtaining regulatory approvals; • the jurisdictions in which we are granted regulatory approvals and thus are able to successfully launch our products for commercial sale; • delays that may be caused by requirements of regulatory agencies; • our level of funding for the development of current or future drug candidates; • the number of drug candidates we pursue and the stage of development that they are in; • the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims; • our ability to establish and maintain selected strategic alliances required for the development of drug candidates and commercialization of our potential drugs; • our plans or ability to expand our drug development capabilities, including our capabilities to conduct clinical trials for our drug candidates; • our plans or ability to engage third-party manufacturers for our drug candidates and potential drugs; • our plans or ability to build or access sales and marketing capabilities and to achieve market acceptance for potential drugs; • the expansion and advancement of our research programs; • the hiring of additional employees and consultants; 72 Table of Contents • the acquisition of technologies, products and other business opportunities that require financial commitments; • our revenues, if any, from successful development of our drug candidates and commercialization of potential drugs; and • the cost of additional construction to expand our headquarters in South San Francisco and in relation to our newly leased office facilities in Radnor, Pennsylvania; We have incurred an accumulated deficit of approximately $1.6 billion since inception and there can be no assurance that we will attain profitability.
These factors include, but are not limited to, the following: • the initiation, progress, timing, scope and completion of preclinical research, non-clinical development, CMC, and clinical trials for our drug candidates and other compounds; • the time and costs involved in obtaining regulatory approvals; • the jurisdictions in which we are granted regulatory approvals and thus are able to successfully launch our products for commercial sale; • delays that may be caused by requirements of regulatory agencies; • our level of funding for the development of current or future drug candidates; • the number of drug candidates we pursue and the stage of development that they are in; • the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims; • our ability to establish and maintain selected strategic alliances required for the development of drug candidates and commercialization of our potential drugs; • our plans or ability to expand our drug development capabilities, including our capabilities to conduct clinical trials for our drug candidates; • our plans or ability to engage third-party manufacturers for our drug candidates and potential drugs; • our plans or ability to build or access sales and marketing capabilities and to achieve market acceptance for potential drugs; • the expansion and advancement of our research programs; • the hiring of additional employees and consultants; • the acquisition of technologies, products and other business opportunities that require financial commitments; • our revenues, if any, from successful development of our drug candidates and commercialization of potential drugs; • the cost of additional construction to expand our headquarters in South San Francisco and in relation to our leased office facilities in Radnor, Pennsylvania; and • the payments due for interest on the term loan and convertible debt; We have incurred an accumulated deficit of approximately $2.1 billion since inception and there can be no assurance that we will attain profitability.
We expect that general and administrative expenses will fluctuate in the future, depending in part on the timing of and investments in commercial readiness.
We expect that general and administrative expenses will increase in the future, depending in part on the timing of and investments in commercial readiness.
We have generated significant operating losses since our inception. Our expenditures are primarily related to research and development activities. Cash Flows Used in Operating Activities Net cash used in operating activities of $299.5 million and $142.5 million for 2022 and 2021, respectively, was largely due to ongoing research and development activities and general and administrative expenses to support those activities.
We have generated significant operating losses since our inception. Our expenditures are primarily related to research and development activities. Cash Flows Used in Operating Activities Net cash used in operating activities of $414.3 million and $299.5 million for 2023 and 2022, respectively, was largely due to ongoing research and development activities and general and administrative expenses to support those activities.
Interest Expense Interest expense for 2022, 2021, and 2020 were as follows (in thousands): Years Ended December 31, Change 2022 2021 2020 2022-2021 2021-2020 (In millions) Term loan $ 4.8 $ 4.8 $ 4.9 $ — $ (0.1 ) 2026 Notes 3.6 11.5 10.8 (7.9 ) 0.7 2027 Notes 10.7 — — 10.7 — Warrants — — 0.2 — (0.2 ) Other 0.3 0.1 0.1 0.2 — Total interest expense $ 19.4 $ 16.4 $ 16.0 $ 3.0 $ 0.4 Interest expense in 2022 consists of interest expense related to the RP Loan Agreement between us and RPDF, interest expense related to the 2026 Notes and 2027 Notes, and interest expense related to the finance leases.
Interest Expense Interest expense for 2023, 2022, and 2021 were as follows (in thousands): Years Ended December 31, Change 2023 2022 2021 2023-2022 2022-2021 (In millions) Term loan $ 5.1 $ 4.8 $ 4.8 $ 0.3 $ — 2026 Notes 1.0 3.6 11.5 (2.6 ) (7.9 ) 2027 Notes 22.0 10.7 — 11.3 10.7 Other 0.2 0.3 0.1 (0.1 ) 0.2 Total interest expense $ 28.3 $ 19.4 $ 16.4 $ 8.9 $ 3.0 Interest expense in 2023 consists primarily of interest expense related to the RP Loan Agreement between us and RPDF and interest expense related to the 2026 Notes and 2027 Notes.
As a leader in muscle biology and the mechanics of muscle performance, we are developing small molecule drug candidates specifically engineered to impact muscle function and contractility. Our clinical-stage drug candidates are: omecamtiv mecarbil, a novel cardiac myosin activator, CK-136, a novel cardiac troponin activator, reldesemtiv, a novel FSTA and aficamten, a novel cardiac myosin inhibitor.
As a leader in muscle biology and the mechanics of muscle performance, we are developing small molecule drug candidates specifically engineered to impact muscle function and contractility. Our clinical-stage drug candidates are: aficamten, a next-in-class cardiac myosin inhibitor, omecamtiv mecarbil, a novel cardiac myosin activator, CK-586, an additional cardiac myosin inhibitor.and CK-136, a novel cardiac troponin activator.
Non-cash interest expense on liability related to the RP OM RPA and the RP Aficamten RPA for 2022, 2021, and 2020 were as follows (in thousands): Years Ended December 31, Change 2022 2021 2020 2022-2021 2021-2020 (In millions) RP OM Liability $ 16.2 $ 12.9 $ 22.7 $ 3.3 $ (9.8 ) RP Aficamten Liability 15.5 — — 15.5 — Total non-cash interest expense recognized $ 31.7 $ 12.9 $ 22.7 $ 18.8 $ (9.8 ) Interest and Other Income, net Interest and other income, net for 2022, 2021, and 2020 consisted primarily of interest income generated from our cash, cash equivalents and investments. 69 Table of Contents Liquidity and Capital Resources Our cash, cash equivalents, and investments and a summary of our borrowings and working capital is summarized as follows: December 31, 2022 December 31, 2021 (In millions) Financial assets: Cash and cash equivalents $ 65.6 $ 112.7 Short-term investments 717.0 359.0 Long-term investments 46.7 152.1 Total cash, cash equivalents, and marketable securities $ 829.3 $ 623.8 Borrowings: Term loan, net $ 63.8 $ 47.4 2026 Notes, net $ 20.7 $ 95.5 2027 Notes, net 525.1 — Total borrowings $ 609.6 $ 142.9 Working capital: Current assets $ 795.2 $ 535.7 Current liabilities 84.6 71.9 Working capital $ 710.6 $ 463.8 The following table shows a summary of our cash flows for the periods set forth below: Years Ended December 31, 2022 2021 2020 (In millions) Net cash (used in) provided by operating activities $ (299.5 ) $ (142.5 ) $ 8.9 Net cash used in investing activities (262.1 ) (147.8 ) (196.5 ) Net cash provided by financing activities 516.2 320.0 234.1 Net (decrease) increase in cash, cash equivalents, and restricted cash equivalents $ (45.4 ) $ 29.7 $ 46.5 Sources and Uses of Cash We have funded our operations and capital expenditures with proceeds primarily from private and public sales of our equity securities, a royalty monetization agreement, strategic alliances, long-term debt, other financings and interest on investments.
Non-cash interest expense on liability related to the RP OM RPA and the RP Aficamten RPA for 2023, 2022, and 2021 were as follows (in thousands): Years Ended December 31, Change 2023 2022 2021 2023-2022 2022-2021 (In millions) RP OM Liability $ 3.9 $ 16.2 $ 12.9 $ (12.3 ) $ 3.3 RP Aficamten Liability 25.5 15.5 — 10.0 15.5 Total non-cash interest expense recognized $ 29.4 $ 31.7 $ 12.9 $ (2.3 ) $ 18.8 Interest and Other Income, net Interest and other income, net for 2023, 2022, and 2021 consisted primarily of interest income generated from our cash, cash equivalents and investments. 69 Table of Contents Liquidity and Capital Resources Our cash, cash equivalents, and investments and a summary of our borrowings and working capital is summarized as follows: December 31, 2023 December 31, 2022 (In millions) Financial assets: Cash and cash equivalents $ 113.0 $ 65.6 Short-term investments 501.8 717.0 Long-term investments 40.5 46.7 Total cash, cash equivalents, and marketable securities $ 655.3 $ 829.3 Borrowings: Term loan, net $ 58.4 $ 63.8 2026 Notes, net 20.8 20.7 2027 Notes, net 528.2 525.1 Total borrowings $ 607.4 $ 609.6 Working capital: Current assets $ 628.1 $ 795.2 Current liabilities 102.7 84.6 Working capital $ 525.4 $ 710.6 The following table shows a summary of our cash flows for the periods set forth below: Years Ended December 31, 2023 2022 2021 (In millions) Net cash used in operating activities $ (414.3 ) $ (299.5 ) $ (142.5 ) Net cash provided by (used in) investing activities 239.3 (262.1 ) (147.8 ) Net cash provided by financing activities 221.3 516.2 320.0 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 46.3 $ (45.4 ) $ 29.7 Sources and Uses of Cash We have funded our operations and capital expenditures with proceeds primarily from private and public sales of our equity securities, a royalty monetization agreement, strategic alliances, long-term debt, other financings and interest on investments.
Commensurate with our entry into the RP Loan Agreement, we terminated the Term Loan Agreement with Silicon Valley Bank and Oxford Finance LLC and repaid all amounts outstanding thereunder in January 2022. The RP Loan Agreement effectively replaced the Term Loan Agreement, and the interest expense is reflected as such above.
Commensurate with our entry into the RP Loan Agreement, we terminated the Term Loan Agreement with Silicon Valley Bank and Oxford Finance LLC and repaid all amounts outstanding thereunder in January 2022. The RP Loan Agreement effectively replaced the Term Loan Agreement.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report. Revenues Our revenues since inception were primarily from our strategic alliances. We have not generated any revenue from commercial product sales to date.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K under the heading "Results of Operations." Revenues Our revenues since inception were primarily from our strategic alliances. We have not generated any revenue from commercial product sales to date.
The carrying amount of the RP Aficamten Liability is based on our estimate of the future royalties to be paid to RPI ICAV over the life of the arrangement as discounted using an imputed rate of interest. The imputed rate of interest on the unamortized portion of the RP Aficamten Liability was approximately 22.4% as of December 31, 2022.
The carrying amount of the RP Aficamten Liability is based on our estimate of the future royalties to be paid to RPI ICAV over the life of the arrangement as discounted using an imputed rate of interest.
Our estimates regarding the amount of future royalty payments under the RP Aficamten RPA increased due to changes in management’s estimates of unobservable inputs related to market conditions and timing.
Our estimates regarding the amount of future royalty payments under the RP Aficamten RPA changed from the fourth quarter of 2022 due to changes in management’s estimates of unobservable inputs related to market conditions and timing to include projections of future royalty payments.
Under the Astellas FSRA Agreement, Astellas agreed to pay one-third of the out-of-pocket clinical development costs which may be incurred in connection with our Phase 3 clinical trial of reldesemtiv in ALS, up to a maximum contribution by Astellas of $12.0 million.
In 2022, research and development revenues were primarily from Astellas for reimbursements under the Astellas FSRA Agreement. Under the Astellas FSRA Agreement, Astellas agreed to pay one-third of the out-of-pocket clinical development costs which may be incurred in connection with the Company’s Phase 3 clinical trial of reldesemtiv in ALS, up to a maximum contribution by Astellas of $12 million.
Cash Flows Used in Investing Activities Net cash used in investing activities of $262.1 million and $147.8 million for 2022 and 2021, respectively, was primarily due to purchases of investments and property and equipment offset by proceeds from maturity of investments.
Cash Flows Used in Investing Activities Net cash provided by investing activities of $239.3 million for 2023 was primarily due to sales and maturities of investments offset by purchases of investments. Net cash used in investing activities of $262.1 million for 2022 was primarily due to purchases of investments and property and equipment offset by proceeds from maturity of investments.
Revenues in 2022, 2021, and 2020 were as follows (in thousands): Years Ended December 31, Change 2022 2021 2020 2022-2021 2021-2020 (In millions) Research and development revenues $ 6.6 $ 10.6 $ 16.5 $ (4.0 ) $ (5.9 ) License revenues — 54.9 36.5 (54.9 ) 18.4 Milestone revenues 1.0 5.0 2.8 (4.0 ) 2.2 Realization of revenue participation right purchase agreement 87.0 — — 87.0 — Total revenues $ 94.6 $ 70.5 $ 55.8 $ 24.1 $ 14.6 Research and development revenues in 2022 were primarily from Astellas for reimbursements under the Astellas FSRA Agreement and in 2021 were from Astellas and Amgen, under collaboration agreements we had in place with each.
Revenues in 2023, 2022, and 2021 were as follows (in thousands): Years Ended December 31, Change 2023 2022 2021 2023-2022 2022-2021 (In millions) Research and development revenues $ 4.0 $ 6.6 $ 10.6 $ (2.6 ) $ (4.0 ) License revenues — — 54.9 0.0 (54.9 ) Milestone revenues 3.5 1.0 5.0 2.5 (4.0 ) Realization of revenue participation right purchase agreement — 87.0 — (87.0 ) 87.0 Total revenues $ 7.5 $ 94.6 $ 70.4 $ (87.1 ) $ 24.2 Research and development revenues in 2023 were primarily from Astellas for reimbursements under the Astellas FSRA Agreement and from Ji Xing under the Ji Xing Agreements.
Research and development expenses by program for 2022, 2021, and 2020 were as follows (in thousands): Years Ended December 31, Change 2022 2021 2020 2022-2021 2021-2020 (In millions) Cardiac muscle contractility $ 125.6 $ 102.5 $ 53.0 $ 23.1 $ 49.5 Skeletal muscle contractility 67.1 27.9 17.1 39.2 10.8 All other research programs 48.1 29.5 26.9 18.6 2.6 Total research and development expenses $ 240.8 $ 159.9 $ 97.0 $ 80.9 $ 62.9 Research and development expenses increased to $240.8 million in 2022 from $159.9 million in 2021, primarily due to higher expenses for our clinical development activities for COURAGE-ALS, for our cardiac muscle inhibitor programs, and for early research activities.
Research and development expenses by program for 2023, 2022, and 2021 were as follows (in thousands): Years Ended December 31, Change 2023 2022 2021 2023-2022 2022-2021 (In millions) Cardiac muscle contractility $ 231.9 $ 125.6 $ 102.5 $ 106.3 $ 23.1 Skeletal muscle contractility 52.4 67.1 27.9 (14.7 ) 39.2 All other research programs 45.8 48.1 29.5 (2.3 ) 18.6 Total research and development expenses $ 330.1 $ 240.8 $ 159.9 $ 89.3 $ 80.9 Research and development expenses increased to $330.1 million in 2023 from $240.8 million in 2022, primarily due to higher expenses for our clinical development activities for our cardiac muscle contractility (i.e.SEQUOIA-HCM) and skeletal muscle contractility (i.e.
In addition, on January 7, 2022, we entered into the RP Aficamten RPA with RPI ICAV, pursuant to which RPI ICAV purchased rights to certain revenue streams from net sales of pharmaceutical products containing aficamten by us, our affiliates and our licensees in exchange for up to $150.0 million in consideration, $50.0 million of which was paid on the closing date, $50.0 million of which was paid to us on March 10, 2022 following the initiation of the first pivotal trial in oHCM for aficamten, and $50.0 million of which is payable following the initiation of the first pivotal clinical trial in nHCM for aficamten.
In addition, on January 7, 2022, we entered into the RP Aficamten RPA with RPI ICAV, pursuant to which RPI ICAV purchased rights to certain revenue streams from net sales of pharmaceutical products containing aficamten by us, our affiliates and our licensees in exchange for up to $150.0 million in consideration, $50.0 million of which was paid on the closing date, $50.0 million of which was paid to us in March 2022 following the initiation of the first pivotal trial in oHCM for aficamten, and $50.0 million of which was paid to us in September 2023 following the initiation of the first pivotal clinical trial in nHCM for aficamten. 71 Table of Contents The RP Aficamten RPA also provides that the parties will negotiate terms for additional funding if we achieve proof of concept results in certain other indications for aficamten, with a reduction in the applicable royalty if we and RPI ICAV fail to agree on such terms in certain circumstances.
The adjustment is accounted for on a prospective basis in our liability calculation and resulted in changes in our imputed interest rate from 11.7% in the second quarter of 2022 to 22.4% in the fourth quarter of 2022. We recognized $15.5 million of non-cash interest expense in 2022 related to the RP Aficamten RPA.
The adjustment is accounted for on a prospective basis in our liability calculation and resulted in changes in our imputed interest rate and non-cash interest expense from 22.4% and $5.2 million in the fourth quarter of 2022, 22.4% and $5.4 million in the first quarter of 2023, 19.0% and $4.9 million in the second quarter of 2023, 18.0% and $5.4 million in the third quarter of 2023, to 24.8% and $9.8 million in the fourth quarter of 2023.
As a result of our receipt of a CRL in connection to our NDA for omecamtiv mecarbil, we do not expect to satisfy the conditions to the availability of the tranche 2 and tranche 3 loans under the RP Loan Agreement.
As a result of our receipt of a CRL in connection to our NDA for omecamtiv mecarbil, we have not satisfied the conditions to the availability of the tranche 2 and tranche 3 loans under the RP Loan Agreement. In December 2023, we announced positive topline results from SEQUOIA-HCM, the Phase 3 trial for aficamten.
Net loss for 2022 and 2021 included, among other items: non-cash stock-based compensation, non-cash interest expense on liabilities related to revenue participation right purchase agreements, and non-cash interest expense related to debt. Net loss for 2022 also included loss on settlement of debt.
In 2022, the net cash used in operating activities was offset by collection of receivables primarily from our 2021 RTW Transactions. Net loss for 2023 and 2022 included, among other items: non-cash stock-based compensation, non-cash interest expense on liabilities related to revenue participation right purchase agreements, and non-cash interest expense related to debt.
During the third and fourth quarter of 2022, we updated our analyses of the RP Aficamten RPA to reflect our current assumptions resulting from ongoing global market research and to reflect other adjustments in connection with our anticipated commercialization.
In 2023, we updated our analyses of the RP OM RPA to reflect our current assumptions resulting from ongoing global market research and to reflect other adjustments in connection with our anticipated commercialization, including the result of our receipt of a CRL in connection to our NDA for omecamtiv mecarbil.
In 2021, we recognized a $5.0 million in milestone revenue from Ji Xing under the Ji Xing Aficamten License Agreement for having achieved initiation of a phase 3 clinical trial for aficamten in oHCM. In 2022, we recognized revenues of $87.0 million related to the 2020 RTW Royalty Purchase Agreement.
Milestone revenues for 2023 consist primarily of a $2.5 mllion milestone payment from Ji Xing for the initiation of our Phase 3 clinical trial of aficamten in patients with nHCM (ACACIA-HCM). In 2022, we recognized revenues of $87.0 million related to the RTW Royalty Purchase Agreement.
FDA stated that results from an additional clinical trial of omecamtiv mecarbil are required to establish substantial evidence of effectiveness for the treatment of HFrEF, with benefits that outweigh the risks. We expect to request a meeting with FDA in order to understand FDA’s views regarding the CRL and what may be required to support potential approval of omecamtiv mecarbil.
FDA stated that results from an additional clinical trial of omecamtiv mecarbil are required to establish substantial evidence of effectiveness for the treatment of HFrEF, with benefits that outweigh the risks.
Clinical development timelines, the likelihood of success and total completion costs vary significantly for each drug candidate and are difficult to estimate.
Under our strategic alliances with Ji Xing, Ji Xing is responsible for the development of aficamten and omecamtiv mecarbil in China and Taiwan. Clinical development timelines, the likelihood of success and total completion costs vary significantly for each drug candidate and are difficult to estimate.
Any failure by us to obtain and maintain, or any delay in obtaining, regulatory approvals could cause our research and development expenditures to increase and, in turn, could have a material adverse effect on our results of operations.
Any failure by us to obtain and maintain, or any delay in obtaining, regulatory approvals could cause our research and development expenditures to increase and, in turn, could have a material adverse effect on our results of operations. 67 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of compensation for employees in executive and administrative functions, including, but not limited to, finance, human resources, legal, business and commercial development and strategic planning.
We will periodically assess the amount and timing of expected royalty payments and account for any changes in such estimates on a prospective basis. Results of Operations A discussion of our results of operations for the year ended December 31, 2020 and year-to-year comparisons between 2021 and 2020 can be found in Item 7.
Results of Operations A discussion of our results of operations for the year ended December 31, 2021 and year-to-year comparisons between 2022 and 2021 can be found in Item 7.
The adjustments are accounted for on a prospective basis in our liability calculation and resulted in changes in our imputed interest rate and non-cash interest expense from 10.0% and $12.9 million in 2021 to 8.5% and $16.2 million in 2022, respectively. In 2022, the change in estimate had no impact on revenue and reduced the net loss by $1.8 million.
The adjustment is accounted for on a prospective basis in our liability calculation and resulted in changes in our imputed interest rate and non-cash interest expense from 8.5% and $4.0 million in the fourth quarter of 2022, 1.9% and $0.9 million in the first quarter of 2023, 2.9% and $1.4 million in the second and third quarter of 2023, and to 0.1% and $0.1 million in the fourth quarter of 2023, respectively.
In July 2020, we sold our right to receive Mavacamten Royalty , under the Research Collaboration Agreement, dated August 24, 2012, between us and MyoKardia, Inc. The RTW Royalty Purchase Agreement transaction closed on November 13, 2020. On March 31, 2021, RTW Royalty Holdings assigned its rights and obligations under the RTW Royalty Purchase Agreement to its affiliate, RTW ICAV.
On July 14, 2020, we entered the RTW Royalty Purchase Agreement with RTW Royalty Holdings, pursuant to which we sold our Mavacamten Royalty under the Research Collaboration Agreement, dated August 24, 2012, between us and MyoKardia, Inc. to RTW Royalty Holdings for a one-time payment of $85.0 million. The RTW Royalty Purchase Agreement transaction closed on November 13, 2020.
We determine the actual costs through monitoring patient enrollment, discussions with internal personnel and external service providers regarding the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. 65 Table of Contents Revenue Participation Right Purchase Agreements We have entered into certain revenue participation right purchase agreements for omecamtiv mecarbil and aficamten with affiliates of Royalty Pharma, pursuant to which such affiliates purchased rights to royalties from certain revenue streams in exchange for consideration.
Revenue Participation Right Purchase Agreements We have entered into certain revenue participation right purchase agreements for omecamtiv mecarbil and aficamten with affiliates of Royalty Pharma, pursuant to which such affiliates purchased rights to royalties from certain revenue streams in exchange for consideration.
Other significant costs include facilities costs, consulting costs and professional fees for accounting and legal services, including legal services associated with obtaining and maintaining patents and regulatory compliance. 67 Table of Contents General and administrative expenses for 2022, 2021, and 2020 were as follows (in thousands): Years Ended December 31, Change 2022 2021 2020 2022-2021 2021-2020 (In millions) Total general and administrative expenses $ 178.0 $ 96.8 $ 52.8 $ 81.2 $ 44.0 General and administrative expenses increased to $178.0 million in 2022 from $96.8 million in 2021, primarily due to higher outside service spend in anticipation of the potential commercial launch of omecamtiv mecarbil and an increase in personnel related costs including stock-based compensation recorded in 2022.
General and administrative expenses by program for 2023, 2022, and 2021 were as follows (in thousands): Years Ended December 31, Change 2023 2022 2021 2023-2022 2022-2021 (In millions) Total general and administrative expenses $ 173.6 $ 178.0 $ 96.8 $ (4.4 ) $ 81.2 General and administrative expenses decreased to $173.6 million in 2023 from $178.0 million in 2022, primarily due to lower outside service spend related to commercial activities, offset by an increase in personnel related costs including stock-based compensation recorded in 2023.
We continue to develop reldesemtiv to treat ALS. We continue to develop aficamten to treat both oHCM and nHCM. On February 28, 2023, we received a CRL from FDA in connection with our NDA for omecamtiv mecarbil for the treatment of HFrEF.
Additionally we have FOREST-HCM which is an open label extension study designed to assess the long term safety and tolerability of aficamten in patients with symptomatic oHCM. On February 28, 2023, we received a CRL from FDA in connection with our NDA for omecamtiv mecarbil for the treatment of HFrEF.
In July 2022, we issued the 2027 Notes and used the net proceeds and common stock to partially repurchase the 2026 Notes. Interest expense in 2021 consists of interest expense related to the Term Loan Agreement and respective warrants by and among us, Oxford and Silicon Valley Bank and interest expense related to the 2026 Notes.
In July 2022, we issued the 2027 Notes and used the net proceeds and common stock to partially repurchase the 2026 Notes.
The Ji Xing OM License Agreement, unless terminated earlier, will continue on a market-by-market basis until expiration of the relevant royalty term.
The Ji Xing OM License Agreement, unless terminated earlier, will continue on a market-by-market basis until expiration of the relevant royalty term. We recognized a $2.5 million milestone from Ji Xing in 2023 for the initiation of a phase 3 clinical trial for aficamten in nHCM, which was collected in the fourth quarter of 2023.
Future Uses of Cash In future periods, we expect to incur substantial costs as we continue to expand our research programs and related research and development activities.
In 2023, we issued 5,016,170 shares of our common stock for net proceeds of $164.2 million pursuant to the Amended ATM Facility. 72 Table of Contents Future Uses of Cash In future periods, we expect to incur substantial costs as we continue to expand our research programs and related research and development activities.
As a consequence of our receipt of the CRL from FDA, any approval of omecamtiv mecarbil in the United States would likely only occur after June 30, 2023, the date at which the royalty rate under the RP OM RPA will increase to no more than 5.5%. and the resulting forecast will decrease due to push out of the potential commercialization date.
As a consequence of our receipt of the CRL from FDA, the royalty rate under the RP OM RPA will increase to no more than 5.5%. The resulting sales forecast for omecamtiv mecarbil has decreased year over year because commercialization and sales of omecamtiv mecarbil will be delayed.
In 2022, the change in estimate had no impact on revenue and increased the net loss by $5.3 million. The change in accounting estimate increased the net loss per share by $0.06 in 2022.
The non-cash interest expense was $25.5 million and $15.5 million in 2023 and 2022, respectively. In 2023, the change in estimate increased our non-cash interest expense and net loss by $2.0 million. The change in accounting estimate increased the net loss per share by $0.02 in 2023.
Commensurate with our entry into the RP Loan Agreement and the RP Aficamten RPA, we terminated the Term Loan Agreement with the Lenders and repaid all amounts outstanding thereunder. Convertible Notes 71 Table of Contents On November 13, 2019, we issued $138.0 million aggregate principal amount of 2026 Notes.
Convertible Notes On November 13, 2019, we issued $138.0 million aggregate principal amount of 2026 Notes.
As of December 31, 2022, there remains $21.1 million aggregate principal amount of 2026 Notes outstanding and $540.0 million of aggregate principal amount of 2027 Notes outstanding. 2021 Ji Xing and RTW Transactions On December 20, 2021, we entered into the Ji Xing OM License Agreement, pursuant to which we granted to Ji Xing an exclusive license to develop and commercialize omecamtiv mecarbil in China and Taiwan.
As of December 31, 2023, there remains $21.1 million aggregate principal amount of 2026 Notes outstanding and $540.0 million of aggregate principal amount of 2027 Notes outstanding.
The change in accounting estimate reduced the net loss per share by $0.02 in 2022.
The non-cash interest expense was $3.9 million, $16.2 million, and $12.9 million in 2023, 2022, and 2021, respectively. In 2023, the change in estimate decreased our non-cash interest expense and net loss by $12.8 million. The change in accounting estimate reduced the net loss per share by $0.13 in 2023.
License revenue was $54.9 million and consisted of the residual allocation of consideration from the 2021 RTW Transactions. Research and Development Expenses We incur research and development expenses associated with both partnered and our own research activities.
As a result of the full extinguishment of the Mavacamten Royalty, we recognized revenue of $87.0 million in 2022. 66 Table of Contents Research and Development Expenses We incur research and development expenses associated with both partnered and our own research activities.
Removed
Revenue Recognition We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration for those goods or services.
Added
We determine the actual costs through monitoring patient enrollment, communications with internal personnel and external service providers regarding the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.
Removed
To recognize revenue from a contract with a customer, we: (i) identify our contracts with our customers; (ii) identify our distinct performance obligations in each contract; (iii) determine the transaction price of each contract; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue as we satisfy our performance obligations.
Added
We are required to update our estimates, each reporting period, related to the amount and timing of future royalty payments to be paid to the counterparties of the revenue participation right purchase agreements. The estimates of the future royalty payment determine the measurement of the non-cash interest expense and the carrying value of the liability.
Removed
At contract inception, we assess the goods or services promised within each contract and assess whether each promised good or service is distinct and determine those that are performance obligations. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Added
Revenue participation right purchase agreements are measured using significant unobservable inputs.
Removed
Collaborative Arrangements We enter into collaborative arrangements with partners that typically include payment to us for one of more of the following: (i) license fees; (ii) milestone payments related to the achievement of developmental, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products and (iv) research and development cost reimbursement.
Added
The estimates of future royalties requires the use of several assumptions such as: the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of eligible patient populations, estimates of prescribing behavior and patient behavior, estimates of pricing, payor reimbursement and coverage, and sales ramp.
Removed
Each of these payments results in collaboration or other revenues.
Added
As products containing aficamten and omecamtiv mecarbil have not yet been commercialized, the estimates are highly subjective. 65 Table of Contents The carrying amount of the liabilities are based on our estimate of the future royalties to be paid over the life of the arrangements as discounted using an imputed rate of interest.
Removed
Where a portion of non-refundable up-front fees or other payments received are allocated to continuing performance obligations under the terms of a collaborative arrangement, they are recorded as deferred revenue and recognized as revenue when (or as) the underlying performance obligation is satisfied. 64 Table of Contents As part of the accounting for these arrangements, we must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligation.
Added
The imputed rate of interest on the RP Aficamten Liability was approximately 24.8% as of December 31, 2023 and 22.4% as of December 31, 2022. In 2023, the change in estimate increased our non-cash interest expense and net loss by $2.0 million.
Removed
The stand-alone selling price may include such items as, forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, to determine the transaction price to allocate to each performance obligation.
Added
The imputed rate of interest on the RP OM Liability was approximately 0.2% as of December 31, 2023 and 8.5% as of December 31, 2022. In 2023, the change in estimate decreased our non-cash interest expense and net loss by $12.8 million.
Removed
For our collaboration agreements that include more than one performance obligation, such as a license and/or milestones combined with a commitment to perform research and development services, we make judgments to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.
Added
We periodically assess the amount and timing of expected royalty payments and account for any changes in such estimates on a prospective basis. As of December 31, 2023, we have a total carrying value of approximately $380.0 million of liabilities related to revenue participation right purchase agreements.
Removed
We evaluate our progress each reporting period and, if necessary, adjust the measure of a performance obligation and related revenue recognition.
Added
On March 31, 2023, we announced that we would be discontinuing COURAGE-ALS, our Phase 3 clinical trial of reldesemtiv in patients with ALS, and COURAGE-ALS OLE. As of December 31, 2023 we have billed and collected from Astellas up to the maximum contribution of $12.0 million, and no further revenue is expected under this arrangement.
Removed
License Fees : If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.
Added
On March 31, 2021, RTW Royalty Holdings assigned its rights and obligations under the RTW Royalty Purchase Agreement to its affiliate, RTW ICAV.
Removed
For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front license fees.
Added
COURAGE-ALS) and for early research activities. On March 31, 2023, we announced that we would be discontinuing COURAGE-ALS and COURAGE-ALS OLE. Research and development expenses for COURAGE-ALS and COURAGE-ALS OLE was $42.9 million in 2023. We expect the related expenses will decrease in 2024.
Removed
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Milestone Payments : We use judgement to determine whether a milestone is considered probable of being reached.
Added
We continue to develop aficamten to treat both oHCM and nHCM in two phase 3 clinical trials. MAPLE-HCM is our Phase 3 clinical trial of aficamten as a monotherapy for patients with oHCM and ACACIA-HCM is a Phase 3 clinical trial for patients with symptomatic nHCM.
Removed
Using the most likely amount method, we include the value of a milestone payment in the consideration for a contract at inception if we then conclude achieving the milestone is more likely than not.
Added
In 2023, we participated in a Type A meeting with FDA in order to understand FDA’s views regarding the CRL and what may be required to support potential approval of omecamtiv mecarbil in the United States, and subsequently submitted a formal dispute resolution request to FDA, with the objective to appeal the FDA's conclusion, as stated in the CRL, that substantial evidence of effectiveness had not been established to support approval of omecamtiv mecarbil.
Removed
Otherwise, we exclude the value of a milestone payment from contract consideration at inception and recognize revenue for a milestone at a later date, when we judge that it is more likely than not that the milestone will be achieved.
Added
FDA subsequently denied our appeal in November 2023 and reaffirmed its decision in the CRL that GALACTIC-HF is not sufficiently persuasive to establish substantial evidence of effectiveness for reducing the risk of heart failure events and cardiovascular death in adults with chronic heart failure with HFrEF, in lieu of evidence from at least two adequate and well-controlled clinical investigations.
Removed
If we conclude it is probable that a significant revenue reversal would not occur, the associated milestone is included in the transaction price. We then allocate the transaction price to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied.
Added
Other significant costs include facilities costs, consulting costs and professional fees for accounting and legal services, including legal services associated with obtaining and maintaining patents and regulatory compliance.
Removed
At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in the period of adjustment.
Added
The imputed rate of interest on the unamortized portion of the RP Aficamten Liability was approximately 24.8% as of December 31, 2023. 68 Table of Contents In 2023, we updated our analyses of the RP Aficamten RPA to reflect our assumptions resulting from ongoing global market research and to reflect other adjustments in connection with our anticipated commercialization, including the additional consideration of $50.0 million which was paid to us in September 2023 following the initiation of the first pivotal clinical trial in nHCM for aficamten.
Removed
Royalties : For contracts that include sales-based royalties, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied. To date, we have not recognized any royalty revenues resulting from contracts.
Added
The resulting sales forecast for aficamten has increased year over year mainly due to the receipt of positive topline results from SEQUOIA-HCM, the Phase 3 trial for aficamten, in December 2023.
Removed
Research and Development Cost Reimbursements : Our joint programs with Astellas under the Astellas OSSA Agreement, and with Amgen under the Amgen Agreement (both of the Astellas OSSA Agreement and the Amgen Agreement having now been terminated), included promises of research and development services. We also entered into the Astellas FSRA Agreement on April 23, 2020.
Added
Cash Flows Provided by Financing Activities Net cash provided by financing activities of $221.3 million in 2023 was due to proceeds from public offerings of common stock of $164.2 million under the Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co discussed below and $50.0 million of additional consideration associated with the 2022 RP Aficamten Royalty Purchase Agreement which was paid to us in September 2023 and stock-based award activities. 70 Table of Contents Net cash provided by financing activities of $516.2 million in 2022 was primarily due to proceeds related to RP Aficamten RPA and the RP Loan Agreement and offset by the repayment of amounts owed under our Term Loan Agreement and stock-based award activities.
Removed
We determined that these services collectively were distinct from any licenses provided to Astellas and Amgen under such agreements, and as such, these services were accounted for as a separate performance obligation recorded over time. We recognized revenue for these services as the performance obligations are satisfied, which we estimated using internal research and development costs incurred.

… 23 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−3 removed3 unchanged
Biggest changeThe convertible notes issued at fixed interest rates are exposed to fluctuations in fair value resulting from changes in market price and interest rates. We do not record our convertible debt at fair value but present the fair value for disclosure purposes (see Note 7 to our Consolidated Financial Statements).
Biggest changeWe do not record our convertible debt at fair value but present the fair value for disclosure purposes (see Note 7 to our Consolidated Financial Statements). As of December 31, 2022, the fair value of the 2026 Notes and 2027 Notes was estimated at $168.4 million and $990.4 million using quoted market prices. 74 Table of Contents
As of December 31, 2022, we had cash and investments of $829.3 million, which consist of U.S. Treasury securities, U.S. and non-U.S. government agency bonds, commercial paper, global portfolio of corporate debt, money market fund, and repurchase agreements backed by U.S. Treasury securities.
As of December 31, 2023, we had cash and investments of $655.4 million, which consist of U.S. Treasury securities, U.S. and non-U.S. government agency bonds, commercial paper, global portfolio of corporate debt, money market fund, and repurchase agreements backed by U.S. Treasury securities.
We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.
We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A 1% increase or decrease in current interest rates would not have a material effect on our financial results.
A 10% increase or decrease increase or decrease in current interest rates would not have a material effect on our financial results. 73 Table of Contents We had $21.1 million under 2026 Notes with a fixed rate of 4.00% and $540.0 million under 2027 Notes with a fixed rate of 3.50% outstanding as of December 31, 2022.
We had $21.1 million under 2026 Notes with a fixed rate of 4.0% and $540.0 million under 2027 Notes with a fixed rate of 3.5% outstanding as of December 31, 2023. The convertible notes issued at fixed interest rates are exposed to fluctuations in fair value resulting from changes in market price and interest rates.
Removed
As of December 31, 2022, the fair value of the 2026 Notes and 2027 Notes was estimated at $94.8 million and $620.3 million using quoted market prices. Foreign Currency Risk The majority of our transactions occur in U.S. dollars.
Removed
However, we do have certain transactions that are denominated in currencies other than the U.S. dollar, primarily Euro and GBP and we, therefore, are subject to foreign currency exchange risk. The fluctuation in the value of the U.S. dollar against other currencies affects the reported amounts of expenses, assets and liabilities primarily associated with a limited number of operating activities.
Removed
Foreign currency transaction gains and losses have not been material to our financial statements for the year ended December 31, 2022. A 10% increase or decrease in current exchange rates would not have a material effect on our financial results. 74 Table of Contents

Other CYTK 10-K year-over-year comparisons