It has been about a month since the last earnings report for Cytokinetics (CYTK). Shares have lost about 9.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cytokinetics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cytokinetics Q3 Loss Wider Than Expected, Pipeline in Focus
Cytokinetics reported a net loss of $1.36 per share in the third quarter of 2024, wider than the Zacks Consensus Estimate of a loss of $1.27. In the year-ago quarter, the company reported a net loss of $1.35 per share.
Cytokinetics is a late-stage, specialty cardiovascular biopharmaceutical company focused on discovering, developing and commercializing muscle biology-directed drug candidates as potential treatments for debilitating diseases in which cardiac muscle performance is compromised.
Since the company does not have any approved product in its portfolio yet, it does not generate drug sales.
Total revenues for the third quarter were $0.5 million, up from $0.4 million in the year-ago quarter.
Quarter in Detail
R&D expenses amounted to $84.6 million, up 2.5% year over year driven by higher personnel related expenses to progress our pipeline partially offset by the completion of clinical trials.
General and administrative expenses surged 41.2% to $56.7 million, driven by investments toward commercial readiness and personnel related expenses.
Cash Balance Increase
As of Sept. 30, 2024, Cytokinetics had approximately $1.3 billion in cash, cash equivalents and investments, down from $1.4 billion as of Jun. 31, 2024.
During the second quarter, Cytokinetics completed a public offering of 11.27 million shares of its common stock, raising approximately $563.2 million in net proceeds.
In May 2024, Cytokinetics entered into a strategic funding collaboration (worth $575 million) with Royalty Pharma to support the commercialization of late-stage candidate aficamten and advance the company’s expanding cardiovascular pipeline.
Pipeline Updates
Cytokinetics completed the rolling submission of the new drug application (NDA) for aficamten and submitted the NDA for the treatment of obstructive hypertrophic cardiomyopathy (HCM).
Results from the phase III SEQUOIA-HCM study in obstructive HCM showed that treatment with aficamten in SEQUOIA-HCM was associated with improvements in cardiac structure and function, heart failure symptoms, cardiac biomarkers, and multiple assessments of clinical significance to cardiologists.
Additionally, an analysis from FOREST-HCM, the open label extension clinical study of aficamten in patients with HCM, demonstrated that patients who attempted withdrawal of standard of care medications did not experience negative impacts on the efficacy or safety of aficamten.
A marketing authorization application for aficamten in the EU is planned for the fourth quarter.
Corxel (formerly Ji Xing Pharmaceuticals) completed submission of the NDA for aficamten to treat obstructive HCM. The Center for Drug Evaluation of the National Medical Products Administration in China accepted the NDA.
Aficamten is also currently being evaluated in MAPLE-HCM, a phase III study of aficamten as monotherapy compared to metoprolol as monotherapy in patients with obstructive HCM (enrollment completed) and ACACIA-HCM, a phase III study of aficamten in patients with non-obstructive HCM (enrolment ongoing.
Other studies include CEDAR-HCM, a clinical trial of aficamten in a pediatric population with obstructive HCM. Enrollment is ongoing in CEDAR-HCM.
Other pipeline candidates include omecamtiv mecarbil, a cardiac muscle activator, in patients with heart failure. Cytokinetics conducted start-up activities for COMET-HF, a confirmatory phase III multi-center, double-blind, randomized, placebo-controlled trial to assess the efficacy and safety of omecamtiv mecarbil in patients with symptomatic heart failure with severely reduced ejection fraction, expected to start shortly.
Additionally, Cytokinetics is developing CK-586, a cardiac myosin inhibitor with a mechanism of action distinct from aficamten for the potential treatment of heart failure with preserved ejection fraction (HFpEF). Data from the phase I study support progression to a phase IIa study in patients with HFpEF (initiation expected in the fourth quarter).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Cytokinetics has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cytokinetics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cytokinetics belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Insmed (INSM), has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Insmed reported revenues of $93.43 million in the last reported quarter, representing a year-over-year change of +18.2%. EPS of -$1.27 for the same period compares with -$1.10 a year ago.
For the current quarter, Insmed is expected to post a loss of $1.17 per share, indicating a change of +8.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Insmed. Also, the stock has a VGM Score of F.
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