Cytokinetics, Royalty Pharma Expand Collaboration for Launch of Aficamten

Cytokinetics, Royalty Pharma expand collaboration to support commercial launch of aficamten and to advance R&D pipeline

Overview

Cytokinetics, Inc, a late-stage, specialty cardiovascular biopharmaceutical company focused on discovering, developing and commercializing first-in-class muscle activators and next-in-class muscle inhibitors as potential treatments for debilitating diseases, announced a collaboration with Royalty Pharma for a strategic funding for providing capital to support the commercialization of aficamten and advance the company’s expanding cardiovascular pipeline while diversifying access to capital as the company advances its muscle biology-directed specialty cardiology business.

Words from CEO: Cytokinetics

• “We have enjoyed a longstanding relationship with Royalty Pharma and this expanded strategic collaboration reinforces our shared conviction in the value of our cardiac myosin focused pipeline of drug candidates,” said Robert I. Blum, Cytokinetics’ president and chief executive officer. 
• “This diversified access to capital from a trusted partner supports our launch of aficamten while also fortifying our capital structure and lowering our cost of capital as we become a sustainable company. We believe this deal delivers on stated objectives of advancing our later-stage portfolio of potential medicines alongside our goal of increasing shareholder value.”

Words from CEO: Royalty Pharma

• “We are excited to support Cytokinetics as the company advances towards commercialization of aficamten,” said Pablo Legorreta, Royalty Pharma’s founder and chief executive officer. 
• “This is our third transaction with Cytokinetics and highlights our ability to structure creative, win-win funding solutions and underscores the breadth of our funding capabilities. Aficamten has demonstrated an impressive clinical profile in its pivotal phase 3 study, and we believe it has the potential to significantly improve the lives of patients with HCM, if approved by the US FDA.”

From Cytokinetic’s R & D team

• “Both omecamtiv mecarbil and CK-586 represent strategic opportunities to expand our specialty cardiology pipeline in adjacent cardiovascular indications and help underserved patients,” said Fady I. Malik, Cytokinetics’ executive vice president of research & development. 
• “Building on feedback from the FDA and EMA, we have designed a confirmatory phase 3 clinical trial intended to replicate treatment effects previously observed with omecamtiv mecarbil among higher risk patients with heart failure with reduced ejection fraction. In addition, we look forward to advancing CK-586 to phase 2 to further assess the pharmacology of cardiac myosin inhibition in sicker patients with heart failure with preserved ejection fraction.”

Details on Transaction

The transaction includes funding for planned commercialization, development funding, royalty restructuring and revenue sharing and the purchase of Cytokinetics equity, together, affording Cytokinetics $250 million on closing and up to a total of $575 million to support the company’s further maturation and corporate development.

The key components of this strategic funding collaboration include:

• Commercial launch funding: Cytokinetics to receive $50 million and is eligible to draw an additional $175 million within 12 months of approval of aficamten in oHCM; the capital will be repayable over 10 years in quarterly installments (totaling 1.9x).
• Royalty restructuring: Royalty Pharma’s royalty on aficamten was restructured so that Royalty Pharma will now receive 4.5% up to $5.0 billion of annual net sales of aficamten and 1% above $5.0 billion of annual net sales compared to the prior 4.5% up to $1.0 billion of annual net sales and 3.5% above $1.0 billion of annual net sales.
• Development funding: Cytokinetics will receive $100 million in upfront capital to fund a confirmatory Phase 3 clinical trial of omecamtiv mecarbil in patients with heart failure and reduced ejection fraction. 

- If the phase 3 clinical trial is positive and FDA approval is received within specified time frames, Royalty Pharma will receive fixed payments totaling $100 million following approval, as well as an incremental 2.0% royalty on annual net sales and/or fixed quarterly payments. 
- If the phase 3 trial is not successful or does not lead to FDA approval, Cytokinetics will repay Royalty Pharma up to $237.5 million over eighteen or twenty-two quarters, in fixed quarterly payments.

- Development funding: Cytokinetics to receive $50 million in upfront capital to fund a proof-of-concept phase 2 clinical trial for CK-586 in patients with heart failure and preserved ejection fraction and Royalty Pharma will have an option to invest up to an additional $150 million to fund phase 3 development of CK-586, for which it would be eligible to receive a $150 million milestone payment upon FDA approval and a 4.5% royalty on annual net sales of CK-586.

If Royalty Pharma does not opt-in to fund phase 3 development, Royalty Pharma will receive a 1.0% royalty on annual net sales of CK-586.
 

• Equity Purchase: Royalty Pharma will purchase $50 million of Cytokinetics’ common stock in a private placement that will be concurrent with the underwritten public offering that Cytokinetics plans to launch today. 

- From these transactions, Cytokinetics anticipates receipt of up to $250 million in nearer-term funding. 
- Together with its proforma cash at the end of the first quarter of 2024, this funding from Royalty Pharma enables Cytokinetics extended cash runway based on expected 2024 expenditures, inclusive of planned commercialization activities and expanded pipeline development programmes.

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