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Expert Financial Analysis and Reporting

Cytokinetics: Top Line Results for Omecamtiv in GALACTIC-HF Trial Are Perplexing (CYTK, $15.46)

Cytokinetics reported that the results of GALACTIC-HF show that treatment with omecamtiv mecarbil achieved the primary composite efficacy endpoint and demonstrated a statistically significant effect to reduce cardiovascular (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 (HR: 0.92; 95% CI: 0.86, 0.99, p=0.0252). However, there was no reduction in the secondary endpoint of time to cardiovascular death observed. Since there was no reduction in time to cardiovascular death, it means that achievement of the primary endpoint was driven by very positive results in reducing hospitalization and other urgent treatment for heart failure. This should be of great value in treating congestive heart failure from both a medical and cost standpoint.

Cytokinetics reported that adverse events, including major ischemic cardiac events, were balanced between treatment arms. Hence omecamtiv appears to have no safety issues.

Cytokinetics said that additional analyses of data are underway and results from GALACTIC-HF will be presented at the American Heart Association (AHA) Scientific Sessions 2020, in a virtual Late Breaking Clinical Trial session on Friday, November 13, 2020 from 10:35-10.45 a.m. CDT. It will be important to understand the outcomes on secondary endpoints which are as follows:

Secondary Outcome Measures :

  1. Measure time to cardiovascular death. Based on  the annoucement, we know that this endpoint was not reached.
  2. Measure changes in patient reported outcomes using Kansas City Cardiomyopathy Questionnaire Total Symptom Score.
  3. Evaluate effect of treatment with omecamtiv mecarbil on changes in patient reported outcomes.
  4. Measure time to first heart failure hospitalization. This should be very positive.

Based on current information, I can’t really explain these somewhat perplexing results. They show that omecamtiv does reduce the time to hospitalization and other urgent treatment for heart failure. This is a significant medical and cost benefit and there appears to be no safety issues. I am at a loss at this point to explain why there was no reduction in time to cardiovascular death.

The stock reacted sharply to the release of this news. The initial reaction seems to reflect a belief that the trial failed or that the benefit to risk ratio won’t support approval or if approved the commercial potential is limited. This remains to be seen. My initial reaction is that this a significant over reaction and that this data will support approval and that omecamtiv could become part of standard of care. However, I must emphasize that there is not enough information to really make a firm judgment. I look forward to hearing what key opinion leaders have to say and to seeing the results for secondary outcome measures.

I own the stock and I am not considering selling my position, but I can’t tell you with high confidence (yet) that this is a buying opportunity. I do think that prospect for of Cryokinetic’s second drug CK-274 in hypertrophic cardiomyopathy supports much of the current valuation of about $1 billion given that Bristol-Myers Squibb is willing to pay $13.1 billion for MyoKardia based primarily on prospects for mavacamten. CK-274 is a fast follower to mavacamten. The latter could be approved in 2021 and CK-274 is about two years behind.

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