Cytokinetics, Incorporated (CYTK) Earnings Call Transcript & Summary

Well, good afternoon, everyone. Welcome to the 4:40 p.m. session here at day 2 of the Goldman Sachs Global Health Care Conference. My name is Graig Suvannavejh, I cover European and U.S. biopharma for the firm. I've got the great pleasure introducing Cytokinetics, welcome Robert Blum to our conference. Robert is the Chief Executive Officer. And we'll spend the next 40 minutes kind of getting to know Cytokinetics, and we'll obviously ask a few questions. But with that said, Robert, welcome. Thank you for joining us.

Thank you, Graig, very nice to be here. Thank you.

Sure. Maybe before we go into kind of detailed questions about what's happening with the company right now, I just maybe want to step back and ask you a question as someone who has been with the company for quite some time, I think people know about the Cytokinetics story for some time. And so with that in mind, my first introduction to the company was about 10, 12 years ago. Maybe could you provide some perspective of the Cytokinetics journey in terms of where it has kind of progressed over the past decade, how much the company has changed or not? And just kind of looking forward, where is Cytokinetics trying to be over the next 3 to 5 years?

Sure. So Cytokinetics is in its 22nd year. I know that because I started the company 22 years ago with leading scientists in 1 area of biology. And we set out then to mine this 1 biology for an entirely novel pharmacology. And importantly do so in a way that could enable the building of a pipeline, a portfolio of novel drug candidates that would be either activating or inhibiting that biology for what would be new medicines in areas that we could afford to compete in, we could afford to pioneer and lead even as we might leverage certain partnerships to do that. So the business plan that we're executing on is the very same one we started the company with, recognizing it takes this long to be able to advance the kind of portfolio. Given where we are today, in 2020, our Vision 2025 has us bringing to market and to patients at least 2, if not 3, of these novel medicines and for what could be the benefit of patients who are impaired in their muscle biology. So our focus has been in muscle biology. We have developed a pipeline of activators or inhibitors of muscle, specifically as we divide them into 2 verticals: cardiac muscle and skeletal muscle. We now have 5 programs in development, 3 of which we think could go-to-market within the next several year period, 1 partnered with Amgen, the other 2 as we would be bringing forward independent of partners. And during that same period, we expect to double our pipeline from 5 today to over 10 in the next several years. So we believe that we're building one of the next great biopharmaceutical companies in a focused area where we think we can lead and dominate.

Thank you very much for that perspective. Maybe let's turn our attention to your lead assets, which probably garners the attention of most investors in terms of what they focus on with Cytokinetics, and that's omecamtiv. And maybe starting there, as you talk about focusing on muscle biology, maybe remind those who have looked at the company for a while but maybe haven't been up to date, remind us and those who are new to the story, what omecamtiv is in terms of the mechanism of action. And beyond that, what are the product attributes that you've been seeing on the efficacy and safety side that make you excited about its prospects?

Sure. So omecamtiv mecarbil is the lead horse in that portfolio I mentioned. It's a specific small molecule activator of cardiac myosin, the enzyme in cardiac cells that drive contractility of the heart, increasing the performance of the heart, not by increasing the velocity but, rather, the duration of cardiac muscle contractility. We and Amgen are developing it for the potential treatment of heart failure in a program that began in 2005 when we started Phase I and then partnered with Amgen in 2006. Since then, together, we've conducted 18 clinical trials and now are underway with 2 Phase III trials, a pivotal study of which is due to read out later this year. Omecamtiv mecarbil may be the first and only medicine that has been developed specifically for heart failure. Today, the armamentarium for the treatment of heart failure, we use medicines that have been around for quite some time, most of which were developed for other purposes and repurposed in the use of heart failure. Heart failure with reduced ejection fraction is fundamentally a disease of impaired cardiac muscle contractility, and we have conducted a very extensive comprehensive clinical trials program in order to assess the potential for omecamtiv mecarbil to enhance cardiac performance and do so in a way that would be complementary to other drugs we currently use as standard of care. And many of the studies that we've conducted to date set the table for now the advancement to the ongoing Phase III clinical trials program. If you would like, I can elaborate on what we're doing in Phase III.

Sure. I believe you've got a readout that's expected in the fourth quarter. This is the GALACTIC study, if I'm correct. Maybe if you can talk about that study, the patients and in terms of their baseline characteristics, just details around the study so that we can get a better sense of what you're looking to see, what you're hoping to see and even how that might compare with other Phase III heart failure trials that have been done.

Sure. So omecamtiv mecarbil is being developed in 2 parallel Phase III trials, 1 called GALACTIC which is being conducted by Amgen, the other called METEORIC, which is being conducted by Cytokinetics, both at the expense of Amgen. GALACTIC is the trial that is the pivotal outcome study. It's an over 8,000 patient study being conducted in 35 countries, and it began about 4 years ago. It's a trial that is looking at patients who are at risk of death or readmission into hospitals following a diagnosis in hospitals of acute heart failure. So we're looking at that subgroup within the heart failure population who has the experience in acute exacerbation of their disease, they've been hospitalized. And that's because this is the group at highest risk for clinical events. It's also the group that is perhaps the single largest driver of the Medicare cost burden with heart failure. It represents a very large cohort of patients and we believe that the GALACTIC study is designed in such a way that it can answer the key question, does omecamtiv mecarbil dosed orally as would be overlaid to standard of care results in a reduction in cardiovascular death and heart failure-related events, most of which will be rehospitalizations. The composite of death and heart failure related events is the primary efficacy end point. We believe we have over 99% power to detect a clinically meaningful effect on that primary efficacy end point. And that's because the study was really powered for its first secondary end point, which is time to cardiovascular death by itself. The study was designed to accrue 1,590 cardiovascular deaths with a hazard ratio of 0.8 and a p less than 0.05. So it's powered in a way that we think overcompensates and we believe gives the study a good chance to hit not only its primary efficacy end point, but also its key secondary end points foremost amongst which is time to CV death.

And again, this is a fairly large study, and you've had 2 interim analyses that have read out previously. Can you comment on those interim analyses? And how does that help shape confidence, again, probability of success?

Yes. One of the key questions that we wanted to ask in conducting the first interim analysis is, was this drug, as added to standard of care, contributing to adverse harm. So the Data Monitoring Committee after the study accrued about 1/3 of the target number of cardiovascular deaths reviewed the data as unblinded. Of course, we remain blinded. And they look to see if the hazard ratio north of 1.0 would suggest that there was the potential for adverse risk. They looked at that and they told us to continue the study without change to its study conduct suggesting to us that there was no added risk. Why is that important? It's important because this is a drug that increases cardiac performance. Other drugs that have been approved for the treatment of heart failure called inotropes do increase cardiac performance but by a different mechanism. They increase heart rate and they increase arrhythmias, but they're also associated with increased cardiac output, so they tend to be used as a last resort. This is not an inotrope. In fact, it has a very different categorization. But because this drug is purported to increase cardiac performance, it's reasonable to have asked that question. And the Data Monitoring Committee, after reviewing those data, suggested there does not appear to be adverse harm. So therefore, continue the study as planned. The second interim occurred earlier this year when we had accrued 2/3 the number of 1,590 cardiovascular deaths. There, the Data Monitoring Committee was guided to either stop the study if it looked like it had no chance of succeeding, that would be a definition of futility with a hazard ratio less than 1.0. They did not stop the study. They're also enabled to potentially stop the study if it looked like there were going to be consistency across both primary and secondary end points with a p less than 0.0005. This was the first opportunity to potentially stop the study for what would therefore be called superior efficacy. And they didn't stop the study for that reason either, nor would we have expected them to do so even had we met that threshold because we were accruing events at a rate such that the final data analysis would be in hand only a few months later down the road. And therefore, it's our expectation that they would want to see all end points potentially accrue sufficient data to enable all of the end points to be tested for clinical meaningfulness and statistical significance at a p less than 0.05. And therefore, the study was recommended to continue to its conclusion. We believe the study will accrue its final events over the next several months to enable us to clean and lock the database in order to report results in the fourth quarter.

That's helpful to provide that perspective, so thank you. Perhaps, if I could also ask, with this data readout coming, what would look good in terms of data? And how to put that in context with other, again, other trials and other products that are approved in heart failure?

Good question. So there have been 3 other clinical trials, large ones that have read out over the last several years. The first one, Novartis' PARADIGM-HF, which led to the approval of Entresto, more recently, AstraZeneca's DAPA-HF and Merck Bayer evaluating vericiguat in VICTORIA-HF. These studies represent different types of patients with heart failure. We think GALACTIC sits nicely in between a paradigm and the others and where, in particular, GALACTIC was designed to enable use of omecamtiv mecarbil both in hospital and outpatient. In GALACTIC, 25% of patients were randomized while still in the hospital awaiting discharge, the other 75% post discharge. GALACTIC enrolled a large percentage of patients in North America, that was one of the key strategic objectives. It was accomplished. There's very high adherence and compliance with standard of care in GALACTIC. And we enrolled patients who were on average about 3 months from their hospitalization, even taking into account 25% are within the hospital. And that's important because we think these are the patients most at risk and who could most benefit from an additional therapeutic like omecamtiv that could potentially increase cardiac performance and do so safely. So we think we are positioned well with GALACTIC relative to those other studies to capture those patients that are most at need. And also, because this is a trial that enrolled patients within the hospital and outpatient, recognizing that when patients are admitted into a hospital, that's a pivot point where oftentimes a physician may consider a change to that patient's regimen for treatment. We think this trial will translate into omecamtiv mecarbil becoming part of foundational care for the treatment of heart failure patients if it's positive in GALACTIC. We think we need to see effects in GALACTIC that are in the range of 10% to 20% in order to be deemed clinically meaningful. And certainly, clinicians and payers may not necessarily align on what is most important. But we recognize that not only the primary efficacy end point, but also this key secondary of time to CV death, that's important. We'd like to see at least a 10% to 15% effect on CV death to be meaningfully relevant to clinical practice patterns.

You mentioned earlier that there are actually 2 large studies happening and METEORIC-HF is another study. It's not necessarily pivotal in terms of being required for registration and potentially approval. But with that said, how do we think about METEORIC? What does that do from a positioning perspective? What does that do for a label? Why is it important?

Yes. So METEORIC is a second study that would be, if positive, hopefully, supplemental to labeling in an expanded approval that would come with a subsequent filing. METEORIC is assessing the potential for omecamtiv mecarbil on top of standard of care to contribute to increased time to exercise fatigue as measured by cardiopulmonary exercise testing. So in METEORIC, we're looking not so much at outcomes like death and hospital readmission, but we're looking at exercise capacity. Patients generally complain of inability to climb stairs, walk down the driveway, attend to their activities, daily living, and that's where METEORIC may address some of those issues and be very differentiating for omecamtiv mecarbil relative to other therapies, where those other therapies are looking more primarily at outcomes. And we hope that if METEORIC is positive, that will provide further evidence to support omecamtiv mecarbil to be used on top of standard of care that's measuring something very different. The pivotal trial is the GALACTIC trial. If GALACTIC is positive, we and Amgen plan to submit for regulatory approvals based on GALACTIC, even as METEORIC may be still forthcoming. We expect to have METEORIC data next year, possibly in time for potential commercial launch but it wouldn't necessarily be factored into the labeling at time of launch.

Great. And as we're looking ahead and thinking about potential commercial situation where, hopefully we're now headed down that path on, hopefully, positive GALACTIC data, how should we be thinking about the commercial opportunity for a drug like omecamtiv?

Yes. It's a very good question, and there's no perfect comp for omecamtiv. Omecamtiv mecarbil would be a branded drug with an entirely different mechanism, competing with drugs that are both generic and branded but for which what it would purport to do based on goal would be incredibly differentiated, entirely different than the existing drugs. Omecamtiv mecarbil would be hopefully complementary. The only other drug that we can point to that's been approved, branded for the potential treatment of heart failure in recent years, for which we have much in the way of commercial data to point to, is Novartis's Entresto. It came out of the gate a little bit slower than might have been some analyst expectations but it's on track to do $2 billion to $3 billion in annual sales this year. And I think it's on track to meet expectations of as much as $3 billion to $5 billion or $4 billion to $6 billion at peak per year, albeit that peak may come not at 5 years post launch, but maybe 7 or 8 years post launch. So I think Novartis is doing a very good job with the commercialization of Entresto even as it competes largely with generic ACE inhibitors. But it speaks, I think, to the very large commercial opportunity. Heart failure is the #1 reason why people in the United States are hospitalized. It's the #1 reason why people over the age of 65 are hospitalized, and it's a major driver of Medicare cost burden. So new medicines that would be available for the treatment of heart failure should be welcomed, especially if they can be demonstrated to keep people alive and out of the hospital longer, and that's where we hope omecamtiv mecarbil will be positioned. So we would expect that if omecamtiv is approved, it could be meeting that kind of large commercial opportunity.

And we've referenced Amgen a couple of times. I think it's probably important just to highlight again that you've got a significant partnership with Amgen. Can you provide perhaps kind of a summary of kind of what that relationship is like and what it means to Cytokinetics?

Sure. So this is a very long-standing collaboration. As I mentioned, it dates back to 2006. Amgen, at that time, agreed to sponsor us to do Phase I and Phase IIa studies to inform an option that they exercised upon receipt of those data. And since that time, in 2009, we've been conducting clinical trials together, them doing certain studies, us doing other studies. And together, we have been executing in accordance with a joint development plan. As we may look forward with GALACTIC and METEORIC data, hopefully enabling of a commercial launch, we're in a position to earn over $600 million in milestone payments, about $300 million of which are tied to commercial sales. So you can imagine the others are tied to pre-commercial events. We're in a position to earn a royalty on sales worldwide that starts in the high teens and climbs into the low 20s. And therefore, it is approximately a 20% royalty on sales. We provided co-funding, $40 million into the Phase III program and that affords us the right to co-promote omecamtiv mecarbil in North America. On a basis by which we would jointly be executing on a co-promotion plan, Amgen would have salespeople in the field. We would have salespeople in the field. And Amgen would be reimbursing us for certain of our sales force costs, thereby enabling much of the cost of commercialization to be borne by our partner. In effect, they agreed to finance our build of a commercial infrastructure. So most of the cost of sales, including cost of goods and cost of clinical and medical are borne by Amgen. So that royalty on sales would be primarily positive marketing contribution for us. We would expect to be in a position to achieve positive cash flows and profitability on omecamtiv far sooner than would otherwise be the case, if this were a typical co-promotion where we were sharing costs, sharing losses and ultimately sharing profits. That's not the kind of deal architecture. This is a royalty on sales with them bearing most of the cost of sales.

Okay. Very good. And maybe just a final touch point on the Amgen collaboration and partnership. You have another asset that's being developed, it's a cardiac troponin activator, AMG 594. Can you tell us a little bit more about that, and how might it be positioned relative to omecamtiv?

Exactly. So in addition to Amgen and Cytokinetics co-developing omecamtiv mecarbil, we have had a joint research program underway for many years. They sponsored our scientists to optimize compounds that could represent additional cardiac muscle activators from which came AMG 594, which is distinct by mechanism. It's a cardiac troponin activator. It's in Phase I in healthy volunteers. We are convening meetings and discussions around how we might approach Phase II subsequent to the Phase I program. It's different from omecamtiv mecarbil. It has different physiochemical properties, obviously, a different mechanism of action. And the goal here is to potentially extend and maybe even also expand the franchise that we hope to be building with omecamtiv mecarbil. Omecamtiv mecarbil, like any drug, has a patent life. We believe we have at least 10 years of commercial life with omecamtiv mecarbil once it may be approved. But we look to AMG 594 as potentially extending and expanding that franchise in potentially the same indication and also maybe other indications.

Okay. Very good. We still have a couple of pipeline assets to kind of go through, and I next want to move to CK-274, which you're developing for hypertrophic cardiomyopathies. Can you tell us about that compound? And kind of what are the positive attributes you're seeing that makes you excited about prospects for this particular asset?

Yes. So much like we've been discovering and developing cardiac muscle activators, we are similarly doing that with cardiac muscle inhibitors. CK-274 is a cardiac myosin inhibitor, and there's another one that we have advanced to clinic that follows behind with the same mechanism, that's called CK-271. In this case, despite our having been the pioneer in this biology, we don't expect CK-274 to be first-in-class. In this case, CK-274 is a next-generation drug candidate following behind a compound called mavacamten that's been developed very successfully by MyoKardia. We took part in the launch of MyoKardia, which incubated within our laboratories and from which was optimized compounds that we had discovered and that led to mavacamten licensed to MyoKardia on which we earn a royalty as well as milestone payments. CK-274 was designed as a next-generation compound. We know mavacamten quite well. It's a very good drug, and we believe in its promise. But we think it has potential liabilities around which, like any good specialty cardiology market, a next-generation compound can potentially contribute to expanding the category for the benefit of both the lead compound and others to follow. CK-274 was designed specifically to have a shorter half-life, it's roughly about 3 days. It gets to steady state pharmacokinetics and exposures within about 2 weeks. It also has a flatter PK/PD relationship, thereby, meaning that it affords physicians more ease of use and maybe a more user-friendly dose titration availability. So you can change the exposure without necessarily having large pharmacodynamic effects, either in the positive or the negative direction. And therefore, as a fast follower, we think CK-274 is in a position to build on the clinical research that mavacamten has forged a very nice path. Mavacamten was recently the subject of a very positive Phase III clinical trial called EXPLORER, which led to the conclusion that this mechanism of action translates very nicely to reducing cardiac pressures in patients with hypertrophic cardiomyopathy and improving symptoms and also other end points. We think CK-274, now in Phase II, can potentially amplify on that efficacy and also demonstrate wider therapeutic window to enable not only the potential treatment of patients with obstructive HCM, but also ease the translation of this mechanism to nonobstructive HCM and potentially also to patients subgroups within the heart failure and preserved ejection fraction category. So we foresee CK-274 being, in many ways, a franchise amongst itself, as we look to multiple indications for that compound and also CK-271 and also other compounds advancing from our research. So much like with Amgen, partnered for what could be a cardiac muscle activation franchise in heart failure and other indications, so too are we looking at CK-274 for that same potential. It's in Phase II. We're conducting a trial called REDWOOD-HCM. We hope to be in Phase III next year.

Okay. Before I maybe go into detailed questions or some more questions around REDWOOD and the trial itself, maybe let's go back to the Phase III results from mavacamten from that EXPLORER study. So obviously, as someone who helped develop the product, you're very interested in its success since you've got a financial interest in it. But given what you saw there, how does that inform you, aside from the potential safety liabilities that you might have seen with mavacamten, but how does that Phase III data sets -- and perhaps maybe you want to touch upon exactly what they showed, but how does that then inform you as, obviously, you've got the REDWOOD study going on, but how does that help inform you how you develop 274 going forward?

Sure. I'd rather focus on the positives as opposed to speaking about what could be deemed negatives. But I think the MyoKardia experience with mavacamten and EXPLORER is very positive. They demonstrated that with mavacamten dosed orally over the period of many months, they could -- for patients who came in with high ejection fractions, demonstrate improvements in symptoms as measured by improvement in New York Heart Association Class. They saw about 1/3 of those patients responded positively to their composite end point, thereby demonstrating that this mechanism should be approvable, in my opinion, in light of this data and thereby provide a complement to calcium channel blockers, beta blockers and surgical alternatives. With that said, we believe CK-274 is in a position for patients who may be more at risk to demonstrate a more amplified efficacy enabling getting to target dose sooner, perhaps with a safety profile that could be underscoring the advantages that I spoke to a moment ago. So I think the EXPLORER study is a very good first pivotal trial, but it leaves open the door for potential next-generation compounds to demonstrate what could be amplified safety and efficacy as we may hopefully be in a position to demonstrate.

Great. And now maybe getting back to REDWOOD, if you could maybe describe more specifically kind of the trial design, the patient population there and kind of an update on where we are and when we can expect to see data, and whether COVID-19 actually had an impact here as well.

So the REDWOOD-HCM study will be conducted in North America and Europe in a sequential cohort design. It's enrolling patients who have obstructive HCM, and they're being randomized to either receive placebo or active drug in the ratio of 1:2. So twice as many patients will get active drug compared to placebo. 18 patients per cohort, so 12 will receive active drug, 6 will receive placebo. And we'll be looking at dose escalating 5 mgs going to 10 mgs, going to 15 mgs QD, looking at reductions in gradients, a pressured gradient. And that first cohort, we expect will complete enrollment to potentially inform data by the end of this year. That will inform the selection of doses for the second cohort. Again, the same design, 18 patients 2:1, there, the doses could be 10, 15, 20, they could be 10, 20, 30. We have to see what the data look like. But between the 2 cohorts, we think we'll traverse from low mid to high on what will be the doses to select for advancement to Phase III. And the goal is with this placebo-controlled study to inform the design of Phase III. We started REDWOOD earlier this year. We did suspend enrollment in REDWOOD even after patients had already been enrolled in order to protect health care workers and the safety of patients. But we are in the process of now reactivating to enable enrollment to begin again. We think, ultimately, we'll have more study sites that we need in each cohort. So we think it will enroll reasonably quickly to enable us even with that interruption to meet our objectives of having data by the end of this year from Cohort 1 to advance to Cohort 2 next year.

And assuming those time lines where you are hoping to have data from Cohort 1 by the end of this year and then, obviously, that kicks into the next phase of the trial, with that said, when do you think you'll be done with REDWOOD? And then how does that then -- as we're trying to sequence the timing of then going into a pivotal and in the context of mavacamten potentially getting on the market, how do we think about time lines and how you can basically shorten the distance between the 2 programs?

So in the U.S., in obstructive HCM, we could foresee that we're between 2 and 3 years behind mavacamten. And that's actually, we think, to the advantage of CK-274, especially as this is a new mechanism, and there's going to need to be a lot of education and awareness ultimately to ensure category expansion. Obstructive HCM is a disease where a majority of the patients who have it may be undiagnosed and asymptomatic. And ultimately, there's going to need to be some heavy lifting in order to be able to enable the adoption of a new innovation therapeutic in this space. We think our coming on board 2 to 3 years subsequently will be to the benefit of the category expansion, especially if we have data that speaks to the matters that I mentioned a moment ago. In other indications and in other geographies, we may not be as far behind. Our goal is to complete REDWOOD by midyear next year to enable the start of Phase III in the second half of next year.

Okay. And this is a proprietary asset, so it's unpartnered. So this is a product that -- is the aspiration for you to launch this on your own? Or is there another construct that you have in mind?

Yes. To answer your question, the aspiration is to launch this on our own, at least in major markets in North America and Europe. We are engaged and have been for some time around some business development and corporate development transactions, that could be enabling of us to broaden this development program to other indications and other geographies. And in that way, we may leverage partnerships for resources, capabilities and capital to enable us to push forward and also to fund the development that would be permitting of us to move into the commercialization space. But again, we would expect to lead and control, we would retain responsibilities for the global development and commercialization at least in major markets of North America and Europe.

Okay. Great. Thank you for that update there on that program. I'd be remiss if we didn't talk about another asset that you've been working on for some time, reldesemtiv for ALS. Clearly, ALS, a very high unmet medical need and, obviously, the concept of attacking muscle biology makes extremely a lot of sense. So with that said, can you maybe provide us an update with kind of that program? I think it's been in the works for some time in terms of how long you spent there. So if you can just bring us up to speed, realizing that you've got other programs that are priority, but I think it would be important just to kind of find out where we are with the ALS opportunity.

Sure. I'll be a bit more brief because our focus really is on our cardiovascular programs, especially in 2020. But we have advanced reldesemtiv. It's a fast twitch skeletal muscle troponin activator or a FSTA for short. It's a next-generation compound following behind a compound called tirasemtiv that we had developed over many years previously. And reldesemtiv addresses some of the liabilities of tirasemtiv. We believe that a fast skeletal troponin activator can amplify muscle response to nerve input and extend time to muscle fatigue and also increase muscle force and power and thereby slow the disease progression for diseases such as ALS, which are severe neuromuscular diseases. In the case of ALS, you've got a disease which is brought about by the etiology of nerve death. That nerve death leads to muscle weakness and ultimately, muscle dysfunction. These patients die of respiratory failure, typically within 3 to 4 years of a diagnosis. We had a Phase II study called FORTITUDE-ALS readout last year. It provided some encouraging data even as admittedly it missed on its p less than 0.05. It had a 0.11 on its primary efficacy end point. But we definitely saw trends that demonstrated that all 3 doses, low, medium and high were doing better than standard of care or placebo numerically on efficacy end points, both of respiratory function and also the ALSFRS, which is the functional rating scale, which is an approvable end point in the United States. So we have been getting ready to start a Phase III trial. We have been meeting with regulatory authorities, FDA and EMA. We've been meeting with payers, including HTAs in Europe. We have a protocol, a statistical plan. We've been meeting with key opinion leaders and investigators, and we're going to be ready to go to start a potential Phase III trial in Q4 of this year, a trial that might take 1 to 2 years to enroll and have data within 2 to 3 years. But we have purposefully chosen not to start that trial yet because we want to see what is our cost of capital. We want to make sure we can finish something we might start. And given our priority is our cardiovascular pipeline, we want to see the GALACTIC data readout in Q4, informed thereby whether we can, in fact, expect milestone payments from Amgen and other cash flows that would be enabling of us to extend our cash runway so that we might then be in a position to conduct that trial. We've negotiated with Astellas that they would contribute about 1/3 of the cost, around $30 million to $40 million of that Phase III trial, in exchange for a low single-digit royalty. So we think that this is practical and affordable, but we still want to make sure we understand the complexion of the company from a financial standpoint before we might commit to that trial, and we think we'll make that decision later this year.

Great. And just maybe a last question on ALS. Clearly, unmet -- continues to be a high unmet medical need. I think Radicava was the last drug that was approved. I'm not quite sure that the product attributes there are very compelling for patients and payers and subscribers as well. I know that there's a lot of interest in looking at so-called disease-modifying therapies for ALS and perhaps going after more genetic targets. Does that in any way, if there is progress on, again, these disease modifiers, does that in any way impact how you think about the commercial opportunity for reldesemtiv, if you were to continue forward with that?

No. I'm encouraged by some of those gene-directed strategies in ALS. And frankly, also in SMA, where in both cases, reldesemtiv should be hopefully complementary by being a muscle-directed therapy and with oral administration should hopefully be complementary to any of those gene-directed strategies. In ALS, roughly only 10% of patients have a gene that's identified to be causal to their ALS familial forms of the disease. 90% of patients are having what's thought to be a sporadic disease. And therefore, we don't understand a lot about the etiology or the pathophysiology of ALS. I'd say the majority of patients don't have a gene strategy that would be applicable. And therefore, I would expect an oral therapy like reldesemtiv would be welcomed by both those with and without, maybe, the gene imprint.

We've got about 5 minutes left. And so with that said, maybe we can talk about -- you did touch upon business developments. And perhaps what are the near-term or longer-term goals from a business development perspective as you find the company may be close to an inflection point?

Yes. So business development and R&D have always gone hand-in-hand at Cytokinetics. And I think we've done better than most biopharma companies to leverage business development transactions in order to generate nondilutive capital to advance our business and portfolio. In addition to the Amgen and Astellas deals I mentioned, in 2017, we sold 4.5% royalty of omecamtiv to Royalty Pharma for $100 million. And that type of transaction, we think, not only provides capital but also validation for some of the things we're doing. In total, we've raised already over -- well over $500 million in capital from nondilutive sources in order to advance our business. And going forward, I think we will do, if omecamtiv is successful, substantially more than that in milestone payments and royalties to fund additional investments in our pipeline. And the same goes true going forward. We think we're in a good position to leverage our expertise and leadership in muscle biology in other deals. So we will want to prioritize and rely principally on business development transactions to monetize our progress in research and development and to expand our footprint and occasionally may rely on equity financings, but that as a secondary strategy. So right now, we ended Q1 with about $240 million on our balance sheet. Given our guidance for 2020, that's over 2 years of cash. We could be ending 2020 with at least that same amount of runway, if not substantially more based on business development deals we're working on right now as well as other cash inflows from deals we already negotiated that may come next year. So we are looking to always maintain at least 2 to 3 years of forward cash on our balance sheet and rely principally on business development to get that done.

Okay. Great. Maybe a question on capital allocation. Obviously, as a research and development-intensive company and, obviously, you've got nondilutive financing and with partnerships, but as a long-standing CEO, every year you go through this process of capital allocation, where -- how are you thinking about capital allocation now from where Cytokinetics is today? And how do you foresee that in the future? What are the priorities going to be?

Yes. So we revisit our strategic plan every year and look out 3 to 5 years and question our critical assumptions. And I think we are on the precipice of what could be a pivot point for the company as we move to commercialization. Given the way in which we structured our collaboration with Amgen, we're in a position where commercialization doesn't have to steal from R&D, like it does for so many other companies, and instead can augment and provide cash flows that would be supportive of an expansion of our R&D pipeline. And hence, this transition is something that we plan for quite a long time ago. If we're wrong and omecamtiv mecarbil isn't successful in GALACTIC, and we have to revisit our commercialization plans, we have contingencies for that, too. And hence, our partnering of some of the other programs this year that would afford us a backstop or a safety net in those downside scenarios. So when you look at capital allocation as we intend to expand our footprint in muscle biology, we're the leader as it relates to contractility of muscle, but we're extending that leadership to include energetics and growth and metabolism of muscle so that we can continue that leadership as muscle biology takes its rightful place alongside of bone health and other metabolic disease areas where we think this has legs in order to be able to transform new medical treatments. We think there are lots of other opportunities in muscle biology that fit within both our cardiac and our neuromuscular verticals and as can inform pipeline expansion and sustainable revenues and cash flows to follow.

Great. We've got maybe just 1 minute left. And so I'll ask you kind of the requisite kind of -- and we talked about it during the course of our fireside chat. But basically, if you lay out the next 6 to 12 months in terms of important milestones for the company and potential value inflection points for shareholders, what does that picture look like for Cytokinetics?

Unquestionably, the most important milestone we have this year, and frankly, have had over many years, will be the readout of GALACTIC in Q4 this year. We're optimistic and hopeful, and we're ready for commercialization that could occur as soon as next year, pending GALACTIC results later this year. So GALACTIC is a key transformational pivot point for the company. In addition, we hope to be in a position to conclude enrollment in METEORIC to enable data next year. We expect Cohort 1 data from REDWOOD by the end of this year, and we expect also to be advancing AMG 594 as well as CK-271 in Phase I studies. With regard to reldesemtiv, we may, as I mentioned, start a Phase III trial by the end of the year, pending results from GALACTIC. So those are the most important milestones. And from a financial standpoint, as I mentioned, we'd like to be in a position where we end this year with at least as much cash runway, if not substantially more than we started this year by, again, leveraging potential business development and corporate development transactions.

Great. Fantastic. Well, I enjoyed this fireside chat with you, Robert. Thank you very much for joining and for providing that comprehensive update on Cytokinetics. I also want to thank the audience for joining us. Good luck with your upcoming milestones and potential catalysts and wishing you best on success.

Thanks. Appreciate your time and your interest today. Thanks to Goldman Sachs for inviting us.

Thank you very much. Thanks all.