Expert Financial Analysis and Reporting

The FDA approval of Merck’s new heart failure drug, vericiguat, has meaningful implications for whether it will approve omecamtiv. Vericiguat’s approval meaningfully increases my already strong confidence that the FDA will also approve omecamtiv. The vericiguat trial enrolled 5,050 patients with ejection fractions less than 45. The data underlying its approval is quite similar to that for omecamtiv. The primary efficacy endpoint was reducing the risk in the composite endpoint of heart failure hospitalization or cardiovascular death. It showed a hazard ratio of 0.90 (95% CI 0.82-0.98) indicating a 10% reduction in risk with a p-value of 0.019. It did not reach statistical significance on the key secondary endpoint of cardiovascular death.

The GALACTIC-HF trial of omecamtiv enrolled 8,500 heart failure patients with ejection fractions less than 35. The study successfully reached the primary endpoint of time to cardiovascular death or first heart failure event with a p-value of 0.025 and a hazard ratio of 0.92; (95% CI: 0.86, 0.99). This was a comparable endpoint to the vericiguat trial. The risk reduction was 8%. Like vericiguat, omecamtiv did not achieve statistical significance on the key secondary endpoint of cardiovascular death.

The FDA accepted the NDA of vericiguat on July 19, 2020 and assigned a priority review with a PDUFA date of January 20, 2021 and it was approved on its PDUFA date. This was a period of six months. CYTK hasn’t guided as to when it will submit its NDA, but I am guessing 3Q or 4Q, 2021. The FDA has two months to determine if the filing is complete and to accept it for review. If it receives the same type of review as vericiguat, it would gain approval in approximately 8 months from the time it was submitted. I am guessing that the NDA will be submitted in 3Q or 4Q of 2021 so approval might come in 2Q or 3Q of 2022.

Street expectations for vericiguat are modest with estimated peak sales of $300 to $500 million. I suspect this is low, but we shall see. In the context of Cytokinetics which has a $1.4 billion market capitalization, this level of sales would be a significant positive. My guess at this point is that omecamtiv will reach peak sales of $1 billion. However, CYTK will likely collaborate with a larger company for marketing and will share profits. Foe more detail, I would urge you to read my report of January 19, 2021,  Cytokinetics: A Deep Dive into the Potential for Omecamtiv.

Cytokinetics: A Deep Dive into the Potential for Omecamtiv (CYTK, Buy, $19.86)