Diane Weiser - VP, Corporate Communications and IR Robert Blum - President and CEO Fady Malik - EVP, Research and Development Andy Wolff - SVP and Chief Medical Officer Sharon Barbari - EVP, Finance and CFO.

Joe Pantginis - Roth Capital Partners Ritu Baral - Cowen and Company of Jason Butler - JMP Sarah Weber - Piper Jaffray.

Good afternoon. And welcome, ladies and gentlemen to the Cytokinetics Third Quarter 2016 Conference Call. At this time, I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. At the request of the Company, we will open the floor for questions and answers after the presentation.

I will now turn the call over to Diane Weiser, Cytokinetics’ Vice President of Corporate Communications and Investor Relations. Please go ahead..

Good afternoon, everyone, and thanks for joining us on the call today. Robert Blum, our President and Chief Executive Officer, will kick us off with highlights from the quarter. Then, Fady Malik, our EVP of Research and Development, will provide an update on the Phase 3 development program for omecamtiv mecarbil.

Andy Wolff, our SVP and Chief Medical Officer, will then provide updates on VITALITY-ALS, our ongoing Phase 3 clinical trial tirasemtiv in patients with ALS as well as on VIGOR-ALS, our recently started open label extension trial for patients to complete VITALITY-ALS.

Fady, will then rejoin us to share an update on the CK 2127107 or CK-107, and the ongoing and planned clinical trials.

Sharon Barbari, our EVP of Finance and Chief Financial Officer, will then provide a financial overview for the quarter and updated financial guidance for the remainder of the year, before Robert will wrap things up with additional corporate updates and perspective before we open the call for questions.

Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and future performance rather than historical facts, and constitute forward-looking statements for purposes of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

Examples of forward-looking statements may include statements relating to our financial guidance and goals; our strategic initiatives; our collaborations with Amgen and Astellas; clinical trials and potential for eventual regulatory approval of our product candidate.

Our actual results might differ materially from those projected in these forward-looking statements.

Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained under Risk Factors in our Form 10-Q for the quarter ended June 30, 2016, and our Form 10-Q for the quarter ended September 30, 2016, which we expect to file shortly.

We undertake no obligation to update any forward-looking statements after this call. And now, I will turn the call over to Robert..

Thank you, Diane, and thanks again to everyone for joining us on the call today. This has been a very busy and very productive quarter for us, and I’m delighted with the progress we have made across our portfolio to late stage drug candidates, as well as with each of our partner, Amgen and Astellas.

Specifically, we achieved four key millstones this quarter that we will elaborate on during the call. First and for most, we’re advancing omecamtiv mecarbil into a Phase 3 clinical program in collaboration with Amgen.

And we’re pleased to have agreement from the FDA on key elements of a special protocol assessment or SPA, which we’re currently finalizing with regulators.

We also know that Servier has exercised its option to sublicense the commercial rights for omecamtiv mecarbil in Europe and the commonwealth of independent states including Russia and as such, will co-fund the Phase 3 program with Amgen.

We understand these announcements have been highly anticipated by Wall Street and we’re pleased that the many months of protocol development, statistical analyses, budgeting, regulatory interactions and market research et cetera now enable us to initiate sites for GALACTIC-HF, the pivotal Phase 3 cardiovascular outcomes trial in the fourth quarter of 2016.

Fady will provide an update on this trial as well as additional data emerging from COSMIC-HF. The second key milestone we achieved during the quarter was the completion of enrollment in VITALITY-ALS, our international Phase 3 clinical trial of tirasemtiv in patients with ALS.

VITALITY-ALS enrolled more than 700 patients in approximately 80 centers in 11 countries. Results are expected in the fourth quarter of 2017. More recently, we announced the start a VIGOR-ALS, the open label extension trial of tirasemtiv for patients who have completed their participation in VITALITY-ALS.

Andy will elaborate on these trials in a moment. Third, as we announced in July, we expanded our collaboration with Astellas relating to skeletal muscle activators to include ALS. More recently, we received Hart-Scott-Rodino clearance, which triggered a $65 million payment from Astellas that was received this month.

As a result of this second expansion of our relationship with Astellas, we granted Astellas an option right for the development and commercialization of tirasemtiv, our first-in-class skeletal muscle activator. Cytokinetics will continue to develop and commercialize tirasemtiv in North America, Europe and other select countries.

If Astellas exercises its option, Astellas will develop and commercialize tirasemtiv in other countries.

Additionally, we agreed to amend our collaboration agreement with Astellas to enable the development of CK-107 for the potential treatment of ALS and to extend our joint research program focused on the discovery of additional next generation skeletal muscle activators through 2017.

Fady will provide an update on each of our ongoing Phase 2 clinical trials of CK-107 in patients with each of SMA and COPD respectively. He will also provide a preview of our planned Phase 2 clinical trial of CK-107 in patients with ALS.

Finally, during the quarter, we announced the initiation of IND-enabling studies for next generation fast skeletal muscle activator under our collaboration with Astellas. That important research milestone triggered a $2 million payment.

I’m very proud of Cytokinetics’ many accomplishments in the third quarter and I’m grateful to everyone in our Company who contributed to make them happen.

Importantly, As Sharon will elaborate with our updated guidance, our pro forma cash position is strong with approximately 18 months of going forward cash and that doesn’t include the milestone payments we expect to receive from Amgen. Sharon will have more to say about that as well.

Let me now turn the call over to Fady, so he can update you on GALACTIC-HF, the Phase 3 heart failure outcomes trial of omecamtiv mecarbil..

Thanks, Robert. Together with Amgen, we are extremely pleased to advance omecamtiv mecarbil into a Phase 3 development program with the start of a large cardiovascular outcome clinical trial expected in the fourth quarter of 2016.

As Robert indicated, the decision to proceed into a Phase 3 development program follows the extensive planning and protocol development, regulatory and partnering interactions and following the results of COSMIC-HF our Phase 2 clinical trial evaluating omecamtiv mecarbil in patients with chronic heart failure.

As you may recall, the data from COSMIC-HF were first presented in a late breaking clinical trial session at the American Heart Association Scientific Session in 2015.

Additional results were presented at Heart Failure 2016, Annual Congress of the Heart Failure Association of the European Society of Cardiology in May and more recently in September at the Heart Failure Society of America Scientific Meeting or HFSA. I’ll address the HFSA data in a moment.

The pivotal cardiovascular outcomes trial has been named GALACTIC-HF, the global approach to lowering adverse cardiac outcomes through improving contractility in heart failure and follows our asset [ph] physical theme from the prior large Phase 2 trials ATOMIC-AHF and COSMIC-HF.

The detailed trial design for GALACTIC-HF is now posted on clinicaltrials.gov. So, I’ll provide overview of the key design details.

The primary objective of this double blind randomize placebo controlled multicenter study is to determine a treatment with omecamtiv mecarbil when added to standard of care, a superior to standard of care in reducing the risk of cardiovascular death or heart failure events in patients with higher risk chronic heart failure and reduced ejection fraction.

The primary outcome measure is time to cardiovascular death or first heart failure event, which is defined as either a hospitalization for heart failure or other urgent treatment for worsening heart failure.

Secondary outcome measures include time to cardiovascular death, time to first heart failure hospitalization or cause [ph] death and patient reported outcomes as measured by the Kansas City Cardiomyopathy Questionnaire total symptom score.

The study will enroll approximately 8,000 patients with the history for symptomatic chronic heart failure or either hospitalized or have had a hospitalization or admission to an emergency room for heart failure within a year prior to screening. Patients also need to have an elevated BNP or NT-proBNP.

They will be class -- NYHA class II to IV, and must have an LVEF less than or equal to 35%. These inclusion criteria define a higher risk populations than the patients we studied in COSMIC-HF but not quite as high risk as a population we studied in ATOMIC-AHF.

Importantly, the study is powered to detect a clinically meaningful decrease in cardiovascular mortality, the first of the secondary end points. As Robert mentioned, we also have agreement from FDA on key elements of a SPA and we’re working with regulators to finalize the protocol.

GALACTIC-HF will be conducted by Amgen at its and Servier’s expense in many hundreds of investigational sites throughout the world, including Japan. With respect to the expected inclusion of Japan in the global Phase 3 program, our ongoing Phase 2 clinical trial of omecamtiv mecarbil in Japan is proceeding well.

Today all sites have been activated and we expect to complete enrollment by the end of 2016 or early in 2017 with results expected in 2017. This trial in Japan is expected to inform the potential participation of Japanese investigational sites in GALACTIC-HF in 2017.

Furthermore in addition to GALACTIC-HF, Cytokinetics will conduct a second Phase 3 study at Amgen’s expense. The objective of this trial will be to determine the effect of omecamtiv mecarbil compared to placebo and exercise performance in left ventricular remodeling in patients with systematic heart failure.

That Phase 3 trial is still in the planning stages and we should have more to say about its design and timing in 2017.

Turning to other clinical updates, last month at HFSA, we announced the presentation of additional results from COSMIC-HF that shows omecamtiv mecarbil may improve symptoms versus placebo in patients with moderate to severe heart failure symptoms after 20 weeks of double blind treatment, as measured by the Kansas City Cardiomyopathy Questionnaire or KCCQ total symptom score, one of the sub domains of a self-administered questionnaire that measures quality of life in patients with heart failure.

This is good news as it shows an association between self-reported patient symptom improvement alongside the improvements we’ve seen in cardiac structure and function in patients receiving omecamtiv mecarbio versus placebo.

Now, I will turn the call over to Andy to provide an update on tirasemtiv including VITALITY-ALS and its open label extension trial that we recently started..

Thanks Fady. As Robert mentioned, during the quarter, we completed enrollment in VITALITY-ALS, our Phase 3 trial designed assess tirasemtiv versus placebo on slow vital capacity or SVC and other measures of skeletal muscle strength in patients with ALS.

VITALITY-ALS enrolled more than 700 patients across 11 countries in North America and Western Europe. In that regard, we’re very pleased that we exceeded our target and fully 25% of our total enrollment came from our European sites.

With enrollment completed, we believe that we’ll have 90% power to detect the difference between tirasemtiv and placebo of 6 percentage points in the primary endpoint, which is the change from baseline to 24 weeks in slow vital capacity.

We look forward to the presentation of baseline demographic data from VITALITY-ALS at the International Symposium on ALS/MND in Dublin, Ireland in December. Also during the third quarter, we convened a the second Data Monitoring Committee Meeting for VITALITY-ALS to review unblinded, safety and efficacy data.

We’re pleased to report today that after their review, the committee recommended continuing VITALITY-ALS without any modifications or changes to the trial protocol. Moving forward, we recently announced that first patient has been enrolled in VIGOR-ALS which stands for Ventilatory Investigations in Global Open-Label Research on tirasemtiv in ALS.

VIGOR-ALS is our open-label extension trial of tirasemtiv for patients who have completed VITALITY-ALS. The primary objective of the trial is to assess the long-term safety and tolerability of tirasemtiv in patients with ALS. The primary endpoint is the incidence of adverse events in this patient population.

We’ll also be measuring secondary endpoints in VITALITY-ALS similar to those in VITALITY-ALS including time to first use of assisted ventilation or death, time to the first occurrence of respiratory insufficiency or death, decline in the percent predicted slow vital capacity from baseline, decline in the ALSFRS-R score from baseline, the slope of the change from baseline and percent predicted vital capacity and the slope of the change from baseline in ALSFRS.

We believe that VIGOR-ALS may provide supplemental safety data alongside the results from VITALITY-ALS to support potential registration for tirasemtiv for patients with ALS. Now, I’ll turn the call back over to Fady to provide an update on CK-107, our next generation fast skeletal troponin activator..

Thanks, Andy. As Robert previously mentioned, another key milestone we achieved during the third quarter was the expansion of our global collaboration with Astellas to provide for the development of CK-107 in patients with ALS.

Under our expanded collaboration, we and Astellas have agreed on the development plan under which Cytokinetics will conduct a Phase 2 clinical trial of CK-107 in patients with ALS in 2017 at the expense of Astellas.

Afterwards Astellas and Cytokinectics may then collaborate on the design and conduct of a potential global registration program for CK-107 in ALS.

We’re excited to explore another skeletal muscle activator for the potential treatment of ALS because CK-107 may offer a broader therapeutic index compared to tirasemtiv, given that it is structurally distinct and was designed not to cross the blood brain barrier to the same extent of tirasemtiv.

In Phase 1 clinical studies, CK-107 did not appear to be associated as frequently with lightheadedness and dizziness as we observed with tirasemtiv.

Turning now to our ongoing Phase 2 clinical trials with CK-107, we have recently intensified our enrollment activities at sights participating in CY 5021, our ongoing Phase 2 trial of CK-107 in adolescent and adult patients with SMA.

Enrollment increased during the quarter and we are seeing a good balance of ambulatory and non-ambulatory patients enrolled. As we mentioned in our Q2 earnings call, additional sites in Canada are being activated with the first site expected this quarter.

We believe we will complete enrollment in Cohort 1 in the fourth quarter of 2016 and expect data from Cohort 1 and Cohort 2 by mid-2017. Our second Phase 2 clinical trial of CK-107 in patients with COPD also continues to enroll.

Astellas is conducting this randomized double-blind placebo-controlled two period crossover trial designed to assess the effect of CK-107 on physical function in approximately 40 patients with COPD, all enrolled in the United States.

Lastly, I’m pleased to share that we have plans to start another Phase 2 clinical trial of CK-107 in yet another patient population in 2017 and we’ll have more to say about this in our Q4 earnings call.

As I hope is evident within the next year or two, we hope to generate abundant data elucidating the safety, tolerability, pharmacokinetics and pharmacodynamic effect of CK-107 on multiple measures of physical function in an array of different populations which will clearly inform the development path forward.

We are pleased that Astellas shares our vision for a broad development program for these multiple skeletal muscle activators. And with that update, I’ll now turn the call over to Sharon for an update on our financials..

Thank you, Fady. As our press release contains detailed financial results for the third quarter of 2016, I’ll refer you to that public statement for the details of our P&L and balance sheet.

We ended the third quarter with approximately $86 million in cash, cash equivalents and investments, which represent approximately 18 months of going forward net cash burn based on our revised 2016 financial guidance, which we announced today and I will cover in more detail in a moment.

The cash balance at the end of the third quarter does not include the $65 million related to the expansion of our collaboration with Astellas which we received in October, but it is included in our guidance for the year. Revenues for the third quarter of 2016 were $59 million compared to $7.9 million during the same period in 2015.

Revenues for the third quarter of 2016 included $53 million of license revenues, $3 million of research and development revenues, and $2 million of milestone payments from our collaboration with Astellas, $0.6 million in research and development revenues from our collaboration with Amgen and $0.3 million in research and development revenues from our collaboration with ALSA and 0.2 million in milestone revenue from our collaboration with MyoKardia.

Revenues for the same period in 2015 were comprised of $4.1 million of license revenues and $3.2 million of research and development revenues from our collaboration with Astellas, and $0.6 million of research and development revenues from our collaboration with Amgen. Our third quarter 2016 R&D expenditures totaled $19.3 million.

From a program’s perspective for the third quarter approximately 88% of our R&D expenses were attributable to our skeletal muscles contractility program which include both expenses attributed to tirasemtiv and CK-107 development, 9% to our cardiac muscle contractility program and 3% to our other research activities.

Today we also updated our financial guidance for 2016, our guidance is on a cash basis. And as we announced last month, the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1996 or HSR Act, in connection with the expansion of our collaboration with Astellas.

With this clearance the related $65 million upfront payment was due within 30 days of the effective date and we received it earlier this week. The Company anticipates cash revenue will be in the range of $84 million to $87 million.

Cash R&D expenses will be in the range of $65 million to $67 million, and cash G&A expenses will be in the range of $23 million to $26 million.

Our revenue guidance includes the $65 million in cash received from the expansion of our collaboration with Astellas or ALS, under Generally Accepted Accounting Principles $50 million with recognized in September and the remaining 15 million for the option on tirasemtiv will be recognized upon the exercise of their option for a license to tirasemtiv for ALS.

The guidance also includes a $2 million milestone payment from Astellas trigged by the initiation of IND-enabling studies for a next generation fast skeletal muscle activator in September. This guidance does not include a milestone payment of $27 million relating to the start of GALACTIC-HF, which we expect to be paid in Q4 2016.

The decrease in R&D expenditures for 2016 reflects the estimated timing of cost associated with VITAITY-ALS and VIGOR-ALS in 2016.

The increase in G&A expenses include additional costs associated primarily with commercial readiness activities for tirasemtiv and increased outsource cost associated with the recent expansion of our Astellas collaboration.

This guidance excludes approximately $13.5 million in unearned revenue from the 2014 amendment of our collaboration with Astellas, which will be recognized in 2016 for the Astellas SMA development plan under Generally Accepted Accounting Principles.

And lastly, this guidance excludes an estimated $7.2 million in non-cash related operating expenses, primarily related to stock compensation expanse. With that, I will now turn the call back over to Robert..

Thank you, Sharon. As I said at the outset of the call, it has been a very productive third quarter, and I’m pleased with the collective achievements of our collogues here at Cytokinetics and in collaboration with our partners.

As we look ahead to 2017, it’s rewarding to see Cytokinetics continue to mature as a late stage biopharmaceutical Company, soon to have to large scale Phase 3 programs underway, a board Phase 2 trials program in progress and still robust, preclinical research initiatives, some undertaken by ourselves and others in collaboration with our partners Amgen and Astellas.

We are executing well against our strategy to leverage partnerships to fund continued research, development and potential commercialization of our drug candidates, as we mature our Company operations in advance of our strategic vision.

We believe we’re striking a good balance between advancing our first generation novel mechanism programs towards potential registration while ensuring we also continue to pursue next generation programs as contingencies and franchise builders and doing both in a fiscally prudent way, primarily leveraging non-dilutive capital.

We also look forward to the start of GALACTIC-HF, our hopefully definitive heart failure outcomes trial of omecamtiv mecarbil to be funded by Amgen and Servier. As you may recall, Cytokinetics has an option to co-fund certain costs associated with the Phase 3 program in exchange for increased royalties.

We are in discussions with potential financial partners, and we hope to secure non-dilutive capital to make this investment to a potential royalty monetization deal, which we may anticipate closing in the coming months.

Our recently extended and expanded deal with Astellas further validates our leadership in muscle biology and reflects our collective commitment to bring multiple novel skeletal muscle activators to patients suffering from demonstrating diseases of impaired muscle function and muscle weakness.

As you heard, we and Astellas have very ambitious plans to study several skeletal muscle activators across an array of patient populations.

At a time when our industry faces intensifying criticism on a relative value of medicines that have been available for decades, we are proud of our strategy to innovate and hopefully bring forward first in class potential therapies that may meaningfully impact the patient lives.

As further testament to our values and our commitment to patients and in support of patients with ALS and patients with SMA and their loved ones, we have recently scaled up our partnership with the ALS Association on both the national and the local levels.

Our employees were busy this quarter supporting a variety of awareness, education and fund raising activities in connection with ALS as well as others in support of SMA including local walks, bike rides and similar activities.

Specifically, we participated in Every Drop Adds Up, the ALS Association’s new campaign that evolved from the Ice Bucket Challenge.

We take our commitment to the patient communities we serve very seriously and we are gratified to participate in critical initiatives as we work in parallel with the advocacy community to advance our muscle biology directed drug candidates that they so desperately need.

Now, let me recap our expected milestones this quarter and for the remainder of the year. For omecamtiv mecarbil, we expect to initiate sites for GALACTIC-HF in the fourth quarter. For tirasemtiv, we expect data from VITALITY-ALS in the fourth quarter of 2017.

And for CK-107, we expect to complete enrollment of Cohort 1 in CY 5021, the Phase 2 clinical trial with patients with SMA in the fourth quarter.

And for pre-clinical research, we expect to continue research activities under our joint research program with Amgen directed to the discovery of next generation cardiac muscle activators and also under our joint research program with Astellas directed to the discovery of next generation skeletal muscle activators.

And operator with that we can now open up the call please to questions..

[Operator Instruction] Our first question is from the line of Joe Pantginis with Roth Capital Partners..

Hi Joe.

Joe, are you with us?.

I am sorry.

Can you hear me now?.

Yes, we can..

Sorry. I guess my wire was loose, I apologize for that. Couple of logistical questions first.

Can you remind us with regard to the Astellas collaboration -- or I am sorry option for tirasemtiv, what the time line is or that they have to respond within?.

Good question. So, there is no specific timeline under which they are required to exercise their option. They can exercise their option at different time points. And depending on when they exercise their option, they may be responsible for different payments and a different proportion of going forward to cost. .

Okay, that’s helpful. And then, if I can just switch to GALACTIC. First, I would say can you elaborate on the primary endpoint in the term of the defining of heart failure event? It seems a little different than previous trials say PARADIGM..

Good question. It is different and purposely so, I’ll turn it over to Faddy to answer your question..

The traditional endpoint that’s been used is time to first cardiovascular death or first heart failure hospitalization. And we use the term heart failure event to describe slightly wider set of events than just the hospitalization.

This is to include patients that make urgent visits to an emergency room for instance, require intervenes therapy or they might be admitted into an observation unit because of the need for intensification of therapy, in particular intervenes therapy. Those sorts of events are frankly not going to be the majority.

The majority of events will still be traditional heart failure hospitalizations.

But as we go forward into the future especially in United States, we are going to see physicians and hospitals develop and implement strategies to keep patients out of the hospital when they have their heart failure exacerbations and the endpoint was designed to hopefully capture those events as well rather than to lose them.

And in particular, looking -- PARADIGM looked at this; there was a presentation at AHA last year, and those patients had subsequent events that were just as morbidity [ph] those that were actually hospitalized in fact..

Understood. Thank you for that. And then, just one little I guess nitpicky thing about GALACTIC, if you could discuss it with regard to the statistical plan. Are there pre-specified groups with regard to the class because it’s -- II to IV is pretty wide ranging with regard to say patient activity and severity.

So, are there pre-specified groups?.

Yes, there are certainly pre-specified sub-groups at the time which the analysis will be conducted. I can’t remember if we’d specify individual heart failure classes, I don’t think we do actually but I don’t think that that is that significant, most don’t subdivide patients that way when they do their analyses..

Our next question is from the line of Ritu Baral with Cowen and Company..

Can we just focused on VITALITY and VIGOR.

How has study conduct and growth that way in VITALITY gone; how has sort of general compliance and tolerability gone?.

Good question. So, I hope I will be able to answer to your satisfaction. I’ll start by making a few comments and then turn it over to Andy to see if he wants to elaborate. But firstly, as we did mentioned on this call the DMC recently convened a meeting and as you know they have access to the unblinded data.

And in reviewing that data they recommended we proceed without making any changes to the protocol. So that’s their second meeting associated with review of these data,.

Otherwise, we’re blinded as you may know to these data, and we really don’t have a glimpse into what may be tolerability or otherwise early terminations beyond what we see as the superficial and headline level. So, I don’t think we really have ability to comment on what you’re asking, Andy.

Is there anything more that I should additional?.

No, I don’t think so..

Got it. And then on the open label extension figure, so, Andy, you went through what you were going to be monitoring from adverse event all the way down to percentage that you [ph] see in ALSFRS, is the frequency at which you’re measuring these any different than in VITALITY..

Well, if those titration needs to be the same as in VITALITY, we wouldn’t want to change that, some patients who will be coming on to treatment and VIGOR-ALS will never have tirasemtiv other than the two weeks of open label treatment that they had before they were randomized into VITALITY-ALS.

So, they’ll need to go through the same dose titration schedule with the opportunity to titrate in VITALITY-ALS. And that means some more frequent visits toward the beginning, but then after that we do space them out. So that it’s not so burdensome on the patient and they don’t have to come back so frequently..

So, like every six months, or every three months or that’s monthly?.

It’s three..

Our next question is from the line of Jason Butler with JMP..

Just first on omecamtiv, can you provide any details around the dose and titration schedule and PK monitoring related to the dose titration for the study?.

Yes, indeed, as you may be able to see it from the posting on clinicaltrials.gov, it’s similar but not the same as how we perform those dosing and escalations in PK in the COSMIC-HF study. So, I’ll ask Fady to elaborate on that and point out the differences..

So, in COSMIC, we employed a dose titration. All patients started at 25 milligrams twice a day; at two weeks, they had a trough type of sample that was measured for omecamtiv mecarbil concentration. And if their level was below 200, then they would escalate to 50 milligram twice a day. And if the level was above 200, they would stay at 25.

In COSMIC, we ended up with about 60%-65% of the patients getting to the 50 milligram twice a day and about 35% of the patients staying at 25 milligrams twice a day. In GALACTIC, we employed basically a very similar strategy except we have included a intermediate dose of 37.5 milligram.

So, at two -- everyone starts at 25, at two weeks they have this plasma concentration drawn and then subsequently, they’re uptitrated based on that single concentration. And in this case, they are either uptitrated to 50, if they are under 200 or if they’re above 200 but below another cutoff, then they’re titrated up to 37.5.

And so, the goal there was to get more patients up into same range, sort of the better equalized exposure between the patients at 25, 37.5 and 50.

And the strategy then is one other adjustment and that another plasma concentration is checked at about 8 weeks or 6 weeks rather and if there is any further adjustment, downwards is required, it’s performed at that point and that’s basically it. There is some monitoring over the course of the trial but no further adjustments are then expected..

And then just for CK-107 as you’re thinking about development plans in ALS, are there any specific trial design differences that you think about? You’ve spoken about the differences between 107 and omecamtiv, does that lend itself to any trial design differences or patient population differences when you look to starting trials there?.

So, it’s a good question. I think we’re good students of the clinical research that we ourselves have performed with tirasemtiv. And the benefit ALS study of tirasemtiv teaches us some things that we want to put into practice in a Phase 2 study of CK-107.

So, we did learn that the ALSFRS, while a very important measure of disease progression is perhaps not the best primary endpoint for what would be a study of shorter term duration, like we might anticipate in the Phase 2 study of CK-107.

So, while we should measure it, it’s unlikely going to be the primary endpoint, more likely we will look at vital capacity as measured by slow vital capacity in large part because of what we have learned from our own experience with tirasemtiv.

We also will have obviously different dosing approaches, given that this is a different compound that is enabling a different approach than was the case with tirasemtiv, and maybe I’ll turn to you Andy and you Fady to see if there is anything I might should also mention..

I think specifically what our experience with CK-107 to-date suggests that the tolerability is sufficiently better than that of tirasemtiv that there won’t be a requirement to titrate patients to their incented dose, and we can just start them on whatever dose to which they are randomized.

And I think that alone is a significant simplification of the design and improves the packaging of the drug and makes it easier for the sites that means that we don’t need to bring the patients back maybe quite so frequently at the beginning. So, there may be other minor differences, I think that’s the big one..

We may have enrolled more patients with ALS into clinical trials than nearly any if not all companies and therefore, we’ll circle with our clinical investigative sites to see what else they might recommend. There may be an opportunity to pilot some other potential endpoints related to muscle strength.

These are things that we’ll seek their advice on before we may choose finalize a protocol, perhaps later this year or early next year. Our goal would be under the collaboration with Astellas to get this study started sometime by mid 2017..

Okay, great. And then just one last question, and I understand that there is not a lot of details you can give here. But you mentioned the royalty monetization transaction you are considering.

Can you just help us understand what the potential range of terms that you would view as viable or feasible to move forward with this?.

Yes. It’s probably prematurity go too much into detail as you suspected, but I’ll tell you what we are doing is we are engaging with a number of different types of funds, both those that are classically focused to royalties only as well as other funds. And we favor transactions that will pivot more or along the lines of the incremental royalty.

So that’s what we’ll be discussing. And it’s still somewhat early days in this process but our hope is that we are in a position to proceed forward with a transaction that would be predominantly, if not solely, non-diluted.

That said, this would be a conversation that we as a management team have with our Board and move that multiple different summaries of terms. This is something that we haven’t decided to do, this is something that we are considering as we take a pulse of the market and will consider this over the course of these next several months.

And we should have hopefully more to say about this towards the end of this year, next year as we maybe in a better position to pinpoint what kinds of deals are available to us and what might meet with our interest..

We do have a question from a line of Charles Duncan with Piper Jaffray..

Hi. This is actually Sarah on for Charles..

Hi Sarah coming on for Charles..

Two quick questions.

So, I think you mentioned Amgen will be running a second Phase 3 in heart failure and just curious if you can share any more details and if that’s getting stepped in terms of submitting an NDA in the U.S.?.

Yes, just to clarify, the second Phase 3 study that’s currently contemplated is one we expect that Cytokinetics would conduct, but at the expense of our partners Amgen and also Servier. And therefore, this is a study that we are still discussing.

We obviously will need to have further conversations with Amgen and potentially also with regulatory authorities.

But in concept, the goal is to potentially do another trial that would be smaller, it would likely be in hundreds of patients, not thousands, and it would be a study that would be aimed towards answering questions about the potential for reverse remodeling with chronic treatment of omecamtiv mecarbil in heart failure patients.

And therefore, we saw in COSMIC-HF results that were extremely encouraging about that opportunity in that potential but ultimately that has to be addressed in a controlled clinical trial aimed at that specific high process. And we would expect that that’s a study that would starts later than GALACTIC-HF.

It may impact finish earlier and that’s a study that we would likely operationalize but at the expense of our partner. And therefore, that’s something that still needs to be fully vetted, discussed and agreed..

Okay, thank you.

And then, sorry if I missed this, but it seems like your R&D is at good amount quarter-over-quarter, what’s behind that, can we expect [indiscernible] to remain at these levels?.

Just to repeat the question.

You said that our R&D expense is going up, what’s behind that?.

Yes. So that really has to do with the cost of the vitality ALS clinical trial.

So, the trial is now fully enrolled and we anticipate that now that our patients are all on drug, and obviously you are going to get a little bit of a curve on this but you are going to have cost going up and then as more and more patients start to roll off, the cost of VITALITY will go down but we won’t really see the impact of that until next year..

[Operator Instructions] And we have no questions in queue at this time, sir..

Okay. Thank you, operator. So, to repeat, the third quarter was indeed a productive one for Cytokinectics. And as you heard to today, we look forward to several key milestones in the near-term as well as through 2017.

These are promising times for our Company and also our pipeline both, as are both well-served by our stronger financial position and prospects. Thank you to all the participants on our teleconference today for your continued support and interest in our Company. And operator with that we can conclude the call..

This does conclude today’s conference call. Ladies and gentlemen, you may now disconnect..