A New Approach to Treating a Broken Heart

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A failing heart is a lot like a glass Heinz Ketchup bottle.  Squeezing the bottle isn't very efficient, so you smack that strategically placed '57,' and still no condiment.  So you smack harder, and faster, until you've burned as many calories as you're about to consume.  Such is the natural response of a heart that can't adequately pump blood to the body - it beats harder, and faster, and consumes excess energy and oxygen, leading to further organ damage. 

The American Heart Association estimates that by 2030 the total cost of congestive heart failure (CHF) will increase 120% to $70 billion from $32 billion in 2015.  Beyond age 40, the risk of acquiring CHF during your lifetime is 1 in 5, and with the baby boomers solidly above that threshold age, it's no surprise that the occurrence and cost of CHF are on the rise.  Re-hospitalization after initial diagnosis accounts for a major portion of the costs associated with CHF, primarily because current drugs either do little to treat the underlying condition, or themselves carry a risk of exacerbating the burden on an already taxed heart.  The market for a first-in-class drug that cuts re-hospitalization events would be huge, and would surely be rewarded by Medicare as the cost of continued active intervention is diminished.

Despite the demand for novel CHF therapies, a huge void remains in the market for drugs that directly improve cardiac function without a risk of further strain on the heart.  Cytokinetics' (NASDAQ: CYTK) Omecamtiv Mecarbil (OM) seeks to fill this void.  OM directly targets the contractile machinery of the heart to improve efficiency without the metabolic strains that are a risk of digoxin and other inotropic drugs.  Clinical trials have been slow but rigorous.  Several Phase I trials were conducted to identify effective IV and oral doses, and one trial enrolled 65 patients and showed safety and significant efficacy after short-term treatment.  Phase IIa trials were successful in demonstrating efficacy in patients with stable HF, and safety in patients with ischemic cardiomyopathy.  The third and fourth Phase II trials, ATOMIC-HF (iv) and COSMIC-HF (oral), are wrapping up now, and serve to identify the dose that will be used in large scale Phase III trials.  These results should be released soon, and should provide optimism for the success of late-stage trials.

And the best part: the trials are free!  In 2006 Cytokinetics struck up a partnership with Amgen (NASDAQ: AMGN), who in 2009 exercised its right to OM development and commercialization in exchange for $600 million in future milestone payments, as well as future royalties on commercial sales of OM.  Amgen also reserves the option of increasing these royalties by providing some of the Phase III funding.  This frees up Cytokinetics to spend its $74 million in cash on the development of its promising ALS drug, Tirasemtiv, as well as younger drugs breaking into its pipeline.  Tirasemtiv is currently in Phase IIb trials after several successful Phase IIa trials, and holds potential for treatment of other skeletal muscle diseases in addition to ALS.

Amgen's investment in Cytokinetics and OM highlights its desire to cover its bases.  This week's Q1 results were generally positive, yet the impending patent cliff has all of the large biotechs grasping for new products.  OM is not Amgen's first soiree into the heart failure market (Aranesp recently failed to achieve its primary endpoint in a Phase 3 trial), but it is the first drug aimed at directly reversing the pathology of heart failure.  Partnership with Cytokinetics provides renewed access to this massive market, as its influence in other markets is challenged by generics and biosimilars over the coming years.

Cytokinetics' stock took a beating since its partnership with Amgen in 2006, but the stock is up over 100% YTD in anticipation of exciting Phase II results for both OM and Tirasemtiv to be released mid-2013.  The future of Cytokinetics rests heavily on the success of only two drugs, but if OM continues to exceed expectations it could prove lucrative for stockholders.  Likewise, Tirasemtiv's success could spell yet another profitable partnership for Cytokinetics.  The next few months should be very telling for the long-term growth of Cytokinetics, a company worth keeping an eye on. 

Seth Robey owns shares of Cytokinetics. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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