Cytokinetics, Inc. (CYTK) PT Lowered After Disappointing Drug Results

Cytokinetics, Inc. (CYTK) PT Lowered After Disappointing Drug Results

Cytokinetics, Inc. (NASDAQ:CYTK) recently reported that the results of the phase 2 clinical trial of its experimental drug for patients suffering from Amyotrophic Lateral Sclerosis (ALS) (commonly called Lou Gehrig’s disease) failed to meet the required primary efficacy point.

Following the disappointing clinical trial results, Canaccord Genuity analyst, Ritu Baral lowered his price target for the shares of Cytokinetics, Inc. (NASDAQ:CYTK) from $22 to $9, but maintained his Buy rating for the stock.

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The analyst explained that the $9 pNPV-based target was “driven by reduced potential of the CK357 in ALS and an increased discount rate.

In a note to investors, Baral wrote, “Our revised $9 target price is based on an unchanged 40% probability of success for the AMGN-partnered omecamtiv, a downward revision to 10% from 30% probability of success for tirasemtiv for ALS pending review of AAN conference data and the elimination of myasthenia gravis from the valuation, another application of tirasemtiv.”

Future still unclear

The analyst estimated that the discount rate rose from 25% to 30% based on increased skepticism among investors on the program. Baral noted that the future of the BENEFIT-ALS treatment is unclear given the fact that its top line primary end point data was below the level of meaningfulness and its secondary endpoint data was mixed. According to him, it is unlikely for Cytokinetics, Inc. (NASDAQ:CYTK) to provide details regarding its path forward until after the AAN conference and discussion with regulators.

Additional results

Today, Cytokinetics, Inc. (NASDAQ:CYTK) announced additional results from BENEFIT-ALS. bio-pharmaceutical company said the “treatment with tirasemtiv resulted in a statistically significant and potentially clinically meaningful reduction in the decline of Slow Vital Capacity (SVC), a measure of the strength of the skeletal muscles responsible for breathing that has been shown to be an important predictor of disease progression and survival in prior trials of patients with ALS.”

The Muscle Strength Mega-Score declined more slowly on tirasemtiv versus placebo, but no differences at any time point that reached statistical significance. The rate of decline for Sniff Nasal Inspiratory Pressure (SNIP) was insignificant, but SNIP decreased more on tirasemtiv than placebo. In terms of Maximum Voluntary Ventilation and Hand Grip Fatigue, the results showed no difference between tirasemtiv and placebo.

“While this clinical trial did not meet its primary efficacy endpoint, it is the first clinical trial in patients with ALS to demonstrate a positive and potentially clinically meaningful effect on Slow Vital Capacity, an important measure of disease progression and predictor of survival.  In addition, muscle strength appeared to decline more slowly on tirasemtiv versus placebo.  The results of BENEFIT-ALS support continued investigation into the role tirasemtiv may play in the treatment of patients with ALS,” said, Jeremy M. Shefner, M.D., Ph.D., Professor and Chair, Department of Neurology, Upstate Medical University, State University of New York and the Lead Investigator for BENEFIT-ALS

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