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Expert Financial Analysis and Reporting

Cytokinetics Is Planning for a Phase 3 Trial in 2015 for Tirasemtiv in ALS (CYTK, $3.26, Buy)

Cytokinetics (CYTK) has announced   that it is planning a phase 3 trial for tirasemtiv using sustained vital capacity-SVC- as a primary endpoint. The new trial could begin in 2015, but the gating factor almost certainly will be whether the FDA agrees to a Special Protocol Assessment- SPA- in which the agency agrees that SVC could be an acceptable endpoint for registration. If the FDA does not agree to an SPA, I think that Cytokinetics will abandon tirasemtiv. Financing of a phase 3 will require capital and I think that the Company will either have to find a partner or raise meaningful amounts of cash to conduct a phase 3. With an SPA, finding a partner to help finance the trial might not be that difficult.

I think that this announcement could cause a modest positive reaction for the stock. However, most investors will wait for the SPA agreement before committing more aggressively. I think that in the mid $3.00s, there is very little in the stock reflecting possible approval of tirasemtiv in ALS and I would buy the stock on this news at this level. I would expect a stronger move to perhaps $4.50+ if an SPA is obtained. I think that the stock could be limited even then by skepticism that management is stubbornly clinging to a drug which it should abandon and concerns about financing a phase 3 trial. As the financing plans for the trial are completed and the phase 3 trial begins, the stock might then move meaningfully higher.

In the phase 2b BENEFIT-ALS trial, tirasemtiv failed to hit the primary endpoint of improvement in the ALSFRS-r scale, but it did succeed on a secondary endpoint of improvement in sustained vital capacity with a powerful p value of 0.006. Investors have essentially written off tirasemtiv, but this could bring the stock back into investor focus. With SVC as an endpoint, there is very good reason to believe that the phase 3 trial would be successful and that tirasemtiv would be approved for ALS

The ALS community-patients, doctors and caregivers- is desperate for a new drug. I think and I believe that most investors would agree that there would be a rapid uptake of tirasemtiv upon approval even if it just improves quality of life. SVC is a key determinant of respiratory function and there is the hope that improvement in this measure could prolong life as most ALS patients die of respiratory failure, but this is pure conjecture at this point.

I have been anticipating that Cytokinetics would plan for a phase 3 trial using SVC as an endpoint and wrote about this in an extensive report on August 6 called Cytokinetics: More Thoughts on the Potential for a Phase 3 Trial of Tirasemtiv in ALS. This report provided an extensive analysis on the overall results of the BENEFIT-ALS trial and the possibity that SVC could be the basis on a phase 3 trial. I would urge readers who are looking for an in-depth understanding to read that article.

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  1. The big question is why is CUR falling like a rock. What are your thoughts? Thank you.


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