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Cytokinetics Inc (NASDAQ:CYTK)
Q1 2020 Earnings Call
May 6, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome, ladies and gentlemen, to Cytokinetics' First Quarter 2020 Conference Call. [Operator Instructions] [Operator Instructions]

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

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

Good afternoon, and thanks for joining us on the call today. Robert Blum, our President and Chief Executive Officer, will kick off the call with an overview of the quarter and the impacts of COVID-19 on certain clinical trials. Then Fady Malik, our EVP of Research and Development, will provide updates on key developments for omecamtiv mecarbil, our cardiac myosin activator, and AMG 594, our cardiac troponin activator, both under our collaboration with Amgen. Next, Stuart Kupfer, our SVP and Chief Medical Officer, will update on recent progress with CK-274, our wholly owned cardiac myosin inhibitor now in Phase II, and CK-271, our additional cardiac myosin inhibitor. Then Robert Wong, our VP and Chief Accounting Officer, will provide a financial overview for the quarter; and Ching Jaw, our SVP and Chief Financial Officer, will discuss corporate development strategies before Robert Blum provides concluding thoughts on the company's outlook including an update on reldesemtiv, our fast skeletal muscle troponin activator as well as expected key milestones for the remainder of the year.

Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements. Examples of such statements include, but are not limited to, statements related to the potential impact of the COVID-19 pandemic on our research and development activities and business operations, including our anticipated cash expenditures during the 2020 calendar year; statements relating to Cytokinetics and its partners' research and development and commercial readiness activities, including the initiation, conduct, design, enrollment, progress, continuation, completion timing and results of clinical trials. 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 in our SEC filings. We undertake no obligation to update any forward-looking statements after this call.

And now I will turn the call over to Robert.

Robert I. Blum -- President and Chief Executive Officer

Thank you, Diane, and thanks again to everyone for joining us on the call today. I want to begin today's call by extending to you and your families our wishes for safety, health and well-being during these unprecedented and uncertain times. Our top priority has been the health, safety and well-being of our employees, clinical trial participants and business and community partners. In accordance with California and Bay Area shelter-in-place orders, our employees have been and continue to work primarily from home. As such, all business travel has been suspended, and we have been participating in medical and investor conferences virtually as many of you have. During this time, we are doing all that we can to ensure that the critical work required to bring our potential medicines to patients continues. Toward that end, on today's call, we'll update you on progress during the quarter and specifically how the COVID-19 pandemic has and has not impacted our business and operations. While we have made the decision to temporarily suspend enrollment in certain of our clinical trials, we are still on track to report top line results from GALACTIC-HF in Q4. Fady will elaborate on that key strategic objective in a moment.

We hit the ground running in 2020 with a busy and productive first quarter. As we previously stated, our primary focus this year is our cardiovascular pipeline, which now includes four drug candidates advancing in all stages of development, the most notable achievements during the quarter centered around GALACTIC-HF, one of the largest Phase III global cardiovascular outcome studies in heart failure, which is being conducted by Amgen under our long-standing collaboration. These recent achievements included: firstly, the publication of the design manuscript for the trial; next are passing through the second and final planned interim analysis of GALACTIC-HF with no changes recommended by the DMC to its conduct; and finally, the virtual presentation of the baseline characteristics and demographics from GALACTIC-HF at ACC 2020. Fady will elaborate on these matters in particular. But suffice it to say, we are pleased to see that the trial enrolled the high-risk patient population intended by the design and protocol. And as the design paper articulates, this clinical trial will include the largest number of cardiovascular events accumulated in a heart failure trial. In the first quarter of this year, we also began REDWOOD-HCM, the Phase II clinical trial of CK-274, our next-in-class cardiac myosin inhibitor for the potential treatment of obstructive hypertrophic cardiomyopathy.

We recently announced the temporary suspension of enrollment in REDWOOD-HCM, but we continue start-up activities with an objective to activate new sites in both North America and Europe. Stuart will elaborate on how those start-up activities are going and our approach to weather the COVID-19 storm. Additionally, in the last quarter, we presented important preclinical data for CK-274, which elaborated on its mechanism of action and properties to modulate cardiac contractility in vitro and in vivo. These data characterized a distinct and selective binding site for CK-274, which we believe could translate to potential opportunities in the clinical setting. We also presented preclinical data for AMG 594, our cardiac troponin activator being developed under our collaboration with Amgen. This represented the first scientific presentation of the mechanism of action for AMG 594, which included evidence suggesting a favorable pharmacodynamic window. Enrollment in the Phase I study of AMG 594 has been temporarily suspended, but we look forward to data from this study when available. Despite the new reality related to the coronavirus, our team has never been more focused nor more motivated to advance our mission to bring novel mechanism medicines to patients suffering from diseases of muscle dysfunction. I continue to be so impressed with the passion and commitment of our employees, and I want to assure you that we're doing all we can to ensure that critical work required to bring our potential medicines to patients continues.

And with that, I'll turn the call over to Fady to elaborate on key developments under our collaboration with Amgen.

Fady I. Malik -- Executive Vice President of Research and Development

Thanks, Robert. As Robert summarized, under our collaboration with Amgen, we accomplished several significant goals during the first quarter, including publication of the design manuscript for GALACTIC-HF in JACC: Heart Failure, passing through the second and final planned interim analysis conducted by the data monitoring committee, and most recently, presenting the baseline characteristics and demographics of patients enrolled in this trial. Since I covered the previous two milestones during our Q4 earnings call, I'll focus today on some key takeaways from the baseline characteristics of GALACTIC-HF as well as how Amgen is proceeding to facilitate continuity of the trial and reporting of top line results in Q4 2020. As intended, patients enrolled in GALACTIC-HF represent a heart failure population at risk for cardiovascular events despite being well treated on standard-of-care therapy. The baseline patient characteristics of this trial describe a balanced representation from countries around the world and from both inpatient and outpatient treatment settings. As you'll recall, all outpatients in GALACTIC-HF were required to have a prior hospitalization within a year. The actual median time from last heart failure hospitalization or ER visit for heart failure in GALACTIC-HF is three months, consistent with the recruitment of a population higher risk for rehospitalization or cardiovascular death.

In addition, as I'll remind you, 25% of the patients were randomized during their index heart failure hospitalization. Accordingly, they represent a somewhat sicker and more symptomatic patient group as reflected by their higher median NT-proBNP as well as their lower blood pressures, estimated glomerular filtration rate and baseline Kansas City Cardiomyopathy Questionnaire scores. The data also show that adherence to standard-of-care background medical therapy in GALACTIC-HF is quite good with 94% of patients on beta blockers, 87% on renin-angiotensin system blockers and 77% on a mineralocorticoid antagonist. Additionally, many of you have been interested in the percent of patients in GALACTIC-HF being treated with Entresto. Nearly 20%, representing over 1,500 patients, are being treated with a standard of care that includes Entresto. So we should have a good assessment of how omecamtiv mecarbil may improve outcomes in patients receiving treatment with Entresto. To put the patient population of GALACTIC-HF in context, it's useful to compare the cardiovascular risk profile of patients in GALACTIC-HF with the populations of other recently reported outcome trials in heart failure.

Overall, in terms of predictors of the risk of future cardiovascular events, in particular, NT-proBNP, the baseline characteristics of the patient population in GALACTIC-HF appear intermediate between the lower-risk patient populations of PARADIGM-HF and DAPA-HF and the Phase III trials of Entresto and Farxiga, respectively, and the higher-risk patient population of VICTORIA, the Phase III clinical trial of vericiguat that was recently presented at ACC 2020. We and Amgen designed GALACTIC-HF to enroll patients at higher risk than those in PARADIGM-HF, in particular, requiring 25% of patients to be randomized from the hospital setting, but still broadly representative of the majority of heart failure patients who remain at risk for cardiovascular events. Patient population of GALACTIC-HF is geographically diverse and very well maintained on standard of care. So we think the trial may provide clinically meaningful evidence of how this new mechanism of cardiac myosin activation may play an important role in the potential treatment of chronic heart failure. Now turning to COVID-19 and the continued conduct of GALACTIC at this time.

We and Amgen are still operating under the planned assumption of locking the database and proceeding to report top line results in Q4 of 2020. Events continue to accrue and are being closely monitored. I'll remind you that back in February, when the DMC conducted the second and final planned interim analysis, that analysis was triggered by the accrual of two-three of the target number of 1,590 CV deaths. In order for that analysis to have been conducted then, the triggering event had to occur in the fourth quarter of 2019, with additional events continuing to accrue up to the time of the interim analysis. This analysis provided an opportunity to collect, clean and analyze a large majority of clinical trial data, and therefore, should facilitate final trial database block later this year. During this coronavirus crisis, many patients do not have the same access to their study centers as they did before. However, Amgen has adapted the conduct of the trial to enable delivery of investigational product to patients' homes and the conduct of study visits remotely for collection of study end points. At this point, none of the main trial end points, including heart failure events, CV death or collection of the Kansas City Cardiomyopathy Questionnaire at week 24 are dependent on patients physically visiting trial sites. Amgen has been doing an enormous amount of logistical planning and work to prepare for a trial closeout. I'm grateful to our collaborators at Amgen, our clinical trial investigators and their personnel, and the patients themselves for all they're doing to adapt in these especially challenging times.

In sum, I believe we are in a fortunate position with GALACTIC-HF, given how advanced we are in the trial's conduct. And as you may have seen, clinicaltrials.gov was recently updated to reflect a study completion date of August 7, which keeps us on track to report top line results in Q4. Regarding the second Phase III trial of this program, METEORIC-HF, we've temporarily suspended its enrollment due to the coronavirus pandemic. We continue to prioritize start-up activities in order to add more active sites once enrollment can resume, in particular, looking to add a substantial number in Europe. Already, there are a number of sites poised to join METEORIC-HF as conditions improve in Europe, and we continue to work toward the objective of adding over 50 new sites throughout North America and Europe. Once clinical research can resume at clinical sites, we may well be positioned to advance screening and enrollment in the coming months. Although we suspended new patient screening, we are ensuring remote monitoring of the patients who had already begun receiving investigational treatment but had not yet completed the trial prior to our suspending enrollment of new patients. If enrollment can be reactivated by the end of Q2 2020, we believe enrollment may be still completed by the end of the year. As we've stated, results from METEORIC-HF are not on the critical path of submitting regulatory filings for the potential approval of omecamtiv mecarbil. And instead, if the findings of METEORIC are supportive, would be included in a supplemental filing following a potential commercial launch predicated on our results from GALACTIC-HF.

Regarding AMG 594, as Robert mentioned, during the quarter, preclinical data of AMG 594 were presented at the Keystone Symposium on heart failure. We are pleased to share in vitro findings demonstrating that AMG 594 selectively increases the calcium sensitivity of cardiac muscle fibers and increases cardiac contractility, supporting the approach of cardiac troponin activation to potentially treat diseases characterized by reduced systolic function. In vivo results also suggest that the pharmacodynamic window of AMG 594 may be favorable. As previously mentioned, enrollment in the SAD/MAD Phase I study of AMG 594 has been temporarily suspended due to the coronavirus pandemic. However, we look forward to the data from the study that may inform our potential progression to Phase II. To that point, we are working with Amgen to align on a plan for a Phase II program.

And now I'll turn it over to Stuart to provide an update on our cardiac myosin inhibitor program.

Stuart Kupfer -- Senior Vice President and Chief Medical Officer

Thanks, Fady. As you may know, our cardiac myosin inhibitor program includes CK-274 and CK-271. I'll begin with an update on site activation, screening and enrollment in REDWOOD-HCM, the Phase II clinical trial of CK-274 for the potential treatment of obstructive HCM and then provide an update on our preparedness for the Phase I study of CK-271. In response to the coronavirus pandemic, Cytokinetics has created an internal task force specifically for clinical trials and has activated a business continuity plan for ongoing trials. We're in communication with our CROs and other vendors regarding their business continuity plans and have been tracking clinical trial site policies regarding ongoing research and access to the hospital. As with METEORIC-HF, to protect the safety and health of clinical trial participants and healthcare professionals, we've temporarily suspended enrollment in REDWOOD-HCM. However, we've been working with sites to enable provision of investigational product to patients already enrolled in the trial and accommodate remote visits where possible. In the meantime, we're continuing to work internally with our CROs, vendors and sites to activate new sites with the goal of activating over 20 new sites throughout North America and Europe. I'll remind you that for this trial, we will be activating more sites than the number of patients required in each cohort.

So we remain optimistic that data from cohort one may be available by year-end if enrollment in this first cohort can be completed by midyear. As Robert mentioned, preclinical results for CK-274 were presented at the recent Biophysical Society Annual Meeting. These data demonstrated that CK-274 reduces cardiac myosin activity in vitro, and importantly, does not inhibit the activity of smooth muscle myosin, which is supportive of its selectivity for cardiac myosin. The study results also indicated that CK-274 has an allosteric binding site distinct from mavacamten, which may differentiate the pharmacodynamic features of these two promising drug candidates. Moving to CK-271, our additional cardiac myosin inhibitor. We're pleased to announce that our IND was both submitted and accepted during the first quarter, and we've begun to engage in study start-up activities for a Phase I study of CK-271 in healthy volunteers. The primary objective of this first-in-human Phase I study is to assess the safety and tolerability and pharmacokinetics of single ascending oral doses of CK-271 in healthy adult subjects. We remain optimistic we can start this study during the second quarter. But as with our other trials, start of this study will depend on evolving conditions at our study site.

And with that, I'll turn it over to Robert Wong, who will provide an update on our financials.

Robert C. Wong -- Vice President and Chief Accounting Officer

Thanks, Stuart. I'll first provide an update on cash, revenue and spending, and then Ching will review our 2020 financial guidance and corporate development strategy. More details on our actual results for the first quarter 2020 are included in the press release, which was released earlier this afternoon. We ended the first quarter with approximately $237 million in cash and investments. Our revenue in Q1 2020 came from our strategic alliances with Amgen and Astellas. For Amgen, we recognized revenue associated with their reimbursement of our development expenses related to METEORIC-HF. For Astellas, we recognize revenue for the reimbursement of expenses related to our scientists engaged in collaborative research. Our first quarter 2020 R&D expenses decreased to $21.7 million from $23.5 million in the first quarter of 2019, primarily due to lower spending related to our neuromuscular development activity with the completion of FORTITUDE-ALS in 2019, offset by increased activities related to both METEORIC-HF and REDWOOD-HCM in 2020. More than half of our R&D expenses were attributable to our cardiovascular program, as expected, given activity for METEORIC-HF and the cardiac myosin inhibitor program, and the remainder of our expenses were attributable primarily to our early research activity. Our first quarter 2020 G&A expenses were $12.4 million, up from $9.4 million in Q1 2019, due primarily to higher personnel-related costs, including stock-based compensation and higher outside services.

And now Ching will review our guidance for 2020 and highlight our corporate development strategy.

Ching W. Jaw -- Senior Vice President and Chief Financial Officer

Thanks, Robert. The company continues to project cash revenue for 2020 will be in the range of $18 million to $22 million, operating expenses will be in the range of $120 million to $130 million, and net cash utilization for the full year will be between $105 million and $115 million. Given the coronavirus and potential impact to the clinical studies and operations, we are monitoring our spending and may update financial guidance later in the year if it looks like our spending might change. During the quarter, we continue to pursue opportunities for project financing, royalty monetization and partnerships to expand development of our cardiac sarcomere inhibitor program and to further extend our cash runway. Advancement of REDWOOD-HCM and Phase I study of CK-271 provide momentum to these discussions. In addition, we are eligible for approximately $100 million in milestone payments under our collaboration with Amgen over the next 12 to 18 months, assuming positive results from GALACTIC-HF. We are fortunate to be in a strong financial position, especially given the uncertainties in today's equity capital markets. And we continue to make strides to ensure that we prudently deploy capital against our prioritized clinical programs to maximize shareholder returns.

And with that, I'll turn the call back over to Robert Blum.

Robert I. Blum -- President and Chief Executive Officer

Thank you, Ching. These are truly extraordinary times, but Cytokinetics has persevered through business challenges in the past. And as we have done before, our employees are rising to the occasion, focusing forward and keeping their health and our mission top of mind. I'm extremely proud of the camaraderie and collaboration we've demonstrated internally and with our business partners. Despite these newer challenges, our commitment to our pioneering science and due patience has not changed, and our dedication has not faltered. We remain optimistic for what may prove to be a transformational year for the company. And we're pleased that our most valuable program, omecamtiv mecarbil, remains on track for top line registration trial results in Q4 later this year. Additionally, I want to provide an update on reldesemtiv and our collaboration with Astellas. Recently, we issued an 8-K related to our entry into agreements, which, taken together, amend and restate our research, development and commercialization collaboration agreement with Astellas. In follow-up to our previously disclosed agreement in principle, these amendments provide Cytokinetics with the exclusive control and responsibility for the development and commercialization of reldesemtiv CK-601 and other fast skeletal regulatory activator compounds.

Astellas agreed to pay certain costs up to $12 million, which may be incurred in connection with Cytokinetics' potential Phase III clinical trial of reldesemtiv in ALS, which we estimate could cost between approximately $30 million to $40 million amortized over several years. Astellas has also agreed to noncash contributions to Cytokinetics, including the transfer of its inventories of active pharmaceutical ingredient of reldesemtiv and CK-601 and the continued conduct of ongoing stability studies at its cost. In return, Cytokinetics would pay Astellas a low to mid-single-digit royalty on sales of reldesemtiv in certain countries if commercialized. Moreover, Astellas extended the joint research program at Cytokinetics through the remainder of this year with a minimum of 15 research FTEs being supported by Astellas and has exclusive rights to co-develop and co-commercialize skeletal sarcomere activators, other than fast skeletal regulatory activator compounds in all indications, subject to certain Cytokinetics development and co-commercialization rights. Cytokinetics may co-promote and conduct certain commercial activities in the U.S., Canada and/or Europe. We're pleased to have finalized these new agreements and look forward to our continuing partnership with Astellas focused to skeletal muscle activation.

Furthermore, regarding reldesemtiv, during Q1, we convened a Type C meeting with FDA, in which FDA provided useful feedback to our proposed Phase III clinical trial design and its end points and statistical plan, feedback which will inform the further development of reldesemtiv. In the meantime, we're continuing to convene additional interactions and meetings with EMA as well as HTAs to further inform the finalization of the potential protocol. As mentioned previously, we do not expect to make any final decisions regarding a potential Phase III trial of reldesemtiv in patients with ALS until we have visibility to the results from GALACTIC-HF and our associated cost of capital expected later in the year. In summing things up, we continue 2020 in a strong operational and financial position, and we look forward to continuing to update you on our advancing pipeline of novel mechanism drug candidates and our further preparations for potential commercialization activities. Now let me recap our expected milestones for 2020.

For omecamtiv mecarbil, we expect top line results from GALACTIC-HF in the fourth quarter, and we believe enrollment may be completed in METEORIC-HF in patients with heart failure in 2020 if we can reactivate enrollment by the end of Q2 2020. For AMG 594, Amgen and Cytokinetics have agreed to suspend enrollment in the Phase I study of AMG 594. For CK-274, we expect data from the first cohort of patients enrolled in REDWOOD-HCM to be available in the second half of 2020 if enrollment in the first cohort can be completed by midyear. For CK-271, we expect to initiate a Phase I study before the end of Q2 2020. And for reldesemtiv, we expect to continue to engage with regulatory and reimbursement authorities in 2020 to prepare for a potential Phase III clinical trial and registration program in patients with ALS. And for ongoing research, we expect to continue research activities directed to the cardiac and skeletal sarcomere and our other muscle biology research programs. And we expect to continue research and collaboration with Astellas directed to the discovery of next-generation skeletal sarcomere muscle activators through 2020.

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

Questions and Answers:

Operator

[Operator Instructions] We will go to our first question from the line of Charles Duncan from Cantor Fitzgerald.

Pete -- Cantor Fitzgerald -- Analyst

Hi. Hello. So it's actually. This is Pete [Phonetic] on for Charles. Congratulations for all that's successfully completed in this quarter, and glad to hear that you reaffirmed GALACTIC-HF on track to report top line data later this year. The question I have is, given the recent approval of Farxiga for heart failure with reduced ejection fraction, just want to get your perspective on the market opportunity and the unmet need. And in addition, regarding omecamtiv, which clearly has a differentiated mechanism of action, how do you believe it will be perceived in the market?

Robert I. Blum -- President and Chief Executive Officer

Very good question. I'll answer and then also ask Fady to elaborate. With regard to that new drug approved for the treatment of heart failure and reduced ejection fraction just yesterday, as you know, it's been available for the treatment of patients with diabetes for a number of years. And it has demonstrated now more recently, activity, impressive activity, for the treatment of heart failure with reduced ejection fraction. We think that it's going to contribute to increased education and awareness of still the very high unmet need in the treatment of heart failure and the importance of new mechanisms to bring down the high morbidity and mortality. Also, we believe it will contribute to illuminate what may be the benefit of enhancing cardiac muscle function with omecamtiv mecarbil as it pertains to potentially complementary therapies. With that, I'll turn it over to Fady to elaborate.

Fady I. Malik -- Executive Vice President of Research and Development

Yes. I think DAPA-HF I mean dapaglifozin, Farxiga, represents an advance in heart failure. But even in that trial where patients were well treated in other standard of care and it represented a lower-risk population potentially, you still had event rates for CV death, a mortality that is of 7% to 8% per year. For perspective, that's three times higher than the event rate that you see in large atherosclerosis trials and so forth. And we expect if you look in the trial like VICTORIA, which was reported recently in a sicker population, the event rates for the primary outcome were in the 30% range. So as we begin to develop and we see new approvals for medicines in heart failure, the clinical need is still overwhelming in this area. It represents an enormous financial burden to our society and is one of the most common conditions in people that are in middle age or above. So we think omecamtiv will become, if GALACTIC-HF reads out in a positive way, has the potential to become part of this foundation for heart failure. And one of the challenges, I think, in evolving heart failure care will be to determine the sequencing of how these medicines will be used. But we like the fact that omecamtiv, like dapaglifozin, has a very good profile in terms of it doesn't affect blood pressure, it doesn't affect adversely affect kidney function and other things. It's relatively easy to use, which is, I think, why people are interested in dapaglifozin.

Pete -- Cantor Fitzgerald -- Analyst

All right. Very informative. Congratulations again on the quarter.

Robert I. Blum -- President and Chief Executive Officer

Thank you.

Fady I. Malik -- Executive Vice President of Research and Development

Thank you.

Operator

And we do have another question on the line. This question comes from the line of Salim Syed from Mizuho.

Dennis -- Mizuho -- Analyst

Hello. Felipe pick. Hey guys, this is associate Dennis [Phonetic] on for Salim. Congrats on the process on the progress so far. I have a couple of questions. First off, on GALACTIC-HF, how are you guys thinking about what's a clinically meaningful improvement on the primary end point as well as CV death.

Robert I. Blum -- President and Chief Executive Officer

It's a very good question. Thank you. Again, I'll start and turn it over to Fady and Stuart, if he also wants to elaborate. What I'll say about GALACTIC-HF is now that we have recent trials relating to Entresto and vericiguat and DAPA, we have an opportunity to compare and contrast reductions in CV death as well as other end points, but it really is an apples-and-oranges comparison, in some respects, given that these trials enrolled at different times and different populations with different risk criteria. With that said, I think it's reasonable to assume that an event rate reduction in the neighborhood of 10% to 20% is meaningfully important and clinically significant. And the more that is weighted to the higher end of that range with respect to CV death, the more it gets even significantly high visibility among the clinical community. We're not going to handicap that to any specifics other than that, other than to say that GALACTIC-HF was designed very much to accrue a large number of events and a large number of CV deaths with a high medium duration of treatment and with patients that are at risk, given that they have recently been hospitalized for acute heart failure, but still with BMPs in a range that suggest that they are still salvageable, if you will. And with that in mind, it's reasonable to expect that the GALACTIC-HF criteria represent a large cross-section of patients with heart failure and reduced ejection fraction, and importantly, those that contribute meaningfully to not only high clinical burden, but high economic burden. With that, I'll turn it over to Fady and see how he wants to also add to that.

Fady I. Malik -- Executive Vice President of Research and Development

I think the threshold for what people consider clinically meaningful in terms of mortality is not that dissimilar no matter what the indication is. 10% or more is often viewed as positive effect on mortality in a trial like GALACTIC where the number of events is so large, a difference like that would still be relatively statistically significant. And so you have at least good certainty in terms of the veracity of that finding. And from the combination of the 2, I think, again, they're in 15% to 20% or better. You look at the other heart failure therapies, it's sometimes not a question of what's clinically meaningful, but how you benchmark against the other therapies that have come before you. Stuart, I don't know if you have anything to add there?

Stuart Kupfer -- Senior Vice President and Chief Medical Officer

Thanks, Fady. The only thing I will add is to your point that GALACTIC-HF enrolled a very high-risk population. So while it's important to focus on the relative risk reduction, the absolute risk reduction is also important. And so it's really the total disease burden. Reducing that absolute risk reduction is also important to consider.

Dennis -- Mizuho -- Analyst

Got it.

Operator

And we do have another question on the line. This is from the line of Joe Pantginis from H.C. Wainwright.

Robert I. Blum -- President and Chief Executive Officer

Hello, Joe.

Joe Pantginis -- H.C. Wainwright -- Analyst

Hi everyone, good afternoon. Hope you and all your families are doing well. I think my question, I think, also has to do with the good opportunity to remind us about the CK-274 program. You're going to have a significant boost in visibility with the upcoming results from the EXPLORE study for mavacamten. So two things. First, can you remind us, you do have potential financial benefit from the mavacamten program. You do get a royalty, I believe. Can you just remind us some of the details? And then number two, I don't believe it's really a black-and-white outcome, the EXPLORER study, how it might impact your study or your program going forward for 274. So if EXPLORER were to fail, there might be some, obviously, temporary read-through on CK-274, but I'd like you maybe to discuss why that negative read-through might not necessarily be necessitated because of the different therapeutic profile.

Robert I. Blum -- President and Chief Executive Officer

Thank you, Joe. So I'll talk about it in a couple of ways and then turn it over to Fady. Firstly, as we hope EXPLORER is positive, we believe it can be positive and we think this would be very important for patients, especially in validating this mechanism through to this potential indication. With that said, we are developing CK-274. And much as we have already, we intend to be good students of the data arising from EXPLORER in ways that would enable us to advance the field for the benefit of both, we hope, mavacamten and CK-274 ultimately serving patients. You're right in that we do receive, upon commercialization, a royalty on mavacamten. To be clear, low single-digit royalty, but it's still appropriate in light of our participation in the launch of that company and our contribution to the synthesis of mavacamten. With that said, we do believe CK-274, like any good next-generation drug candidate, was designed to have differentiating features that may afford it certain next-generation properties and to advance the clinical research and potentially the commercialization. With that, I'll turn it over to Fady to elaborate more specifically.

Fady I. Malik -- Executive Vice President of Research and Development

Yes. Joe, I think the data will they are potentially going to be complex. We're optimistic about how the mechanism of action will be helpful to these patients and improve their function. And I think in looking at the data, it will inform us in terms of any changes we might consider in our development program, whether they're revisions to the primary end point we might want to consider and as well as to understand what the pharmacokinetic and pharmacodynamic properties of 274, how they might play out in the context of what mavacamten is doing in these patients. So it's a very valuable experiment that's being.

Joe Pantginis -- H.C. Wainwright -- Analyst

Are you guys still there? I think we lost Fady.

Robert I. Blum -- President and Chief Executive Officer

We lost Fady's audio.

Joe Pantginis -- H.C. Wainwright -- Analyst

Okay. Either way, that was very helpful. I really appreciate it.

Robert I. Blum -- President and Chief Executive Officer

Sure. Thank you, Joe.

Fady I. Malik -- Executive Vice President of Research and Development

Can you guys hear me?

Robert I. Blum -- President and Chief Executive Officer

We can hear you now, Fady.

Operator

We do now have more questions on the line from the line of Jason. This is next question comes from the line of Jason Butler from JMP Securities.

Jason Butler -- JMP Securities -- Analyst

Hi, thanks for taking the question. One on REDWOOD. Can you give us a sense of how far are you going.

Robert I. Blum -- President and Chief Executive Officer

It sounds like you broke up a little bit there. But Jason, I think you said how far did we get with REDWOOD? I'm not hearing you but I'll stick to that question.

Jason Butler -- JMP Securities -- Analyst

I'm fine. Seems to have muted.

Robert I. Blum -- President and Chief Executive Officer

Okay. So with regard to REDWOOD, we did start the trial in Q1. We were in the midst of enrolling patients, so we do have patients enrolled in REDWOOD-HCM. But admittedly, we're at the beginning of that first cohort. That first cohort is designed to enroll a total of 18 patients. And we expect, by the end of Q2, we may have activated more than that number of sites. So in light of that, we do believe that we can meet our goal as stipulated in our milestones for 2020 that we should be in a position, if we can complete enrollment by midyear, that we would have data from that first cohort in the second half of the year.

Operator

Excuse me, speaker, it seems our questioner again has muted. And so I'll just go to the next question. Next question is from the line of Chad Messer from Needham & Company.

Chad Messer -- Needham & Company -- Analyst

Great, thanks. I'll proceed and hope we're all connected all right. Joe asked an interesting question about the mavacamten data that's upcoming. I actually wanted to circle back and get your guys' opinion on something else that happened with mavacamten, and that was the MAVERICK data in non-obstructive HCM. The last time we talked about it, I know we were looking forward to seeing how that data came out in terms of coloring your own thoughts about a non-obstructive program for 274. That data is out, it came out initially last year but was presented in March at the virtual ACC. Just wondering your thoughts on that and how it colors how you feel about your chances in running a non-obstructive HCM study?

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

We're having a problem with Robert's audio.

Operator

I was just about to say something. It seems Robert's audio is not coming through. His line is marked live. One second.

[Technical Issues]

Okay. This is the operator. All the speakers' lines are still marked as open on my end, but it seems Robert's line may have cut out on his end. I'm not sure if we can get him back right now. One moment, just still looking into this. I do apologize for the delay.

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

It looks like Robert's trying to dial back in.

Operator

One moment. I'll see if I can grab his line myself. I do not see his line dialing back in at this time, but I'm still keeping an eye out on it.

Stuart Kupfer -- Senior Vice President and Chief Medical Officer

This is Stuart. Can you hear me?

Operator

Yes, sir. We can hear you. Your line is open.

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

Yes, Stuart.

Stuart Kupfer -- Senior Vice President and Chief Medical Officer

Right. Yes. So in response to Chad's question about MAVERICK, we're, of course, aware of the MAVERICK data. And certainly, it was a good proof-of-concept study to support utilization of a cardiac sarcomere inhibitor in a non-obstructive HCM population. And it does support our strategy for considering use of a cardiac sarcomere inhibitor in that population. So it's part of an overall strategy that we're planning. And it's a matter of we're still considering sort of the precise strategy and timing of when we proceed to study that population. But we thought the results were encouraging and it's a good proof of concept.

Chad Messer -- Needham & Company -- Analyst

Okay. Great. I did have just one more, I'll put it out there, and it's more of a strategic question. It may relate to some of your Vision 2025 goals. Of course, as you were all aware, your deal with Amgen had an option that you've exercised to co-promote and that gives you the right to field a hospital-based field sales force. It's a pretty specific sales force, but just wondering how having that kind of gets into your long-term strategic goals.

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

So I can take that while Robert and Fady are trying to get back in.

Fady I. Malik -- Executive Vice President of Research and Development

Diane, can you hear me?

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

Oh, Fady, yes, do you want to take that? Because I was going to jump in, but go for it.

Fady I. Malik -- Executive Vice President of Research and Development

I'll give it a shot. But usually, Robert's better in answering those questions. So I think our strategy there really is looking at an institutional sales force that is able to interact with the major providers, major thought leaders, major medical centers, kind of leading institutions in heart failure. That sales force is, as we've said in the past, enabled by Amgen. They it's paid for by Amgen. It gives us a head start in developing a field-based sales force, which, obviously, at the time if 274 is successful, would give us a head start in terms of its commercialization. So we're very pleased the way the deal was have been as part of our strategy in terms of negotiating the original deal and other subsequent deals to enable Cytokinetics' growth of the company into that functionality. That fits well with our strategy of developing a cardiovascular presence really from research due to commercialization.

Robert I. Blum -- President and Chief Executive Officer

This is Robert. I can now hopefully be heard. I think Fady is absolutely correct. And what I'll say is, this is part of a long-standing corporate development strategy at the company, where we leverage our partnerships in order to enable us access to capabilities and financials to move to the next level in our maturation as a business. And as we think about potentially co-commercializing omecamtiv mecarbil, it's part of a franchise strategy directed to institutional care, specialty cardiology segments where our sales force, alongside of that of Amgen, would be co-promoting omecamtiv in North America. And on a basis by which Amgen is reimbursing certain of our costs, that should be enabling of us to get to positive marketing contribution far sooner than is typical following the first commercial launch of our company. And that's also going to be enabling of us to be in those centers where we would expect CK-274 and others of our cardiovascular products to also be commercialized. So this is hand-in-hand R&D strategy together with business development and corporate development strategy.

Chad Messer -- Needham & Company -- Analyst

Okay. I hope you all continue to stay healthy and safe and are not plagued by any more technical difficulties.

Robert I. Blum -- President and Chief Executive Officer

Thank you, Chad.

Operator

And it does seem I mean, now we do have our speakers back online, so I'll move to our next question. The next question is from the line of Ted Tenthoff from Piper Sandler.

Robert I. Blum -- President and Chief Executive Officer

Hello, Ted.

Ted Tenthoff -- Piper Sandler -- Analyst

Hi, everybody. How are you doing all good good. I mean, pleased to hear that. Thanks so much for taking my question. Lots of good updates there. We're all getting excited for GALACTIC data, particularly, appreciated the context you provided there. My question has to do with reldesemtiv and the new Astellas partnership. And I wanted to kind of get a sense from you guys what you need to see either through additional data cuts or from conversations in terms of what you're hoping to achieve with the FDA to really decide whether that would be a worthwhile investment. And with the return of 601 to you guys, is that a more potent compound that might even may be a better candidate to take forward?

Robert I. Blum -- President and Chief Executive Officer

Very good questions. I'll start and turn it over to Fady again. So with regard to your first question, I think with regard to other data cuts, we have already, both with prespecified and some admittedly post-talk analyses, seen data that we consider to be compelling for the potential of reldesemtiv in the treatment of ALS. But with that said, we still need to ensure that we can conduct a proper clinical trial and one that would be both statistically and clinically relevant upon completion, but also generating results that could be meaningfully valuable to payers and reimbursement authorities. And we're in the midst of those discussions. We're doing this in an admittedly painstakingly thoughtful way. It's taking time, but we think that's time well spent in order to ensure that we have dotted all the Is and crossed all the relevant Ts. We're encouraged by the feedback we've already received from FDA and EMA and as we're engaging reimbursement authorities and payers, but we're not done yet. And we are purposefully ensuring that those time lines line up with our ability to start a clinical trial in the fourth quarter if the GALACTIC-HF results are enabling of us and our cost of capital is such that we think this is the right thing to do by our science and by our shareholders. So all that said is meant to indicate that we are very optimistic, and we are very encouraged already by the interactions that we've been having. Fady, anything you want to elaborate on that?

Fady I. Malik -- Executive Vice President of Research and Development

No, I think you said it well. I mean, I think we are preparing by seeking all the regulatory and HTA feedback you mentioned and also considering how we may finalize the protocol. So we do want to be ready to consider starting that trial after we understand how GALACTIC reads out.

Robert I. Blum -- President and Chief Executive Officer

And Ted, the other part of your question related to CK-601. So like all of our programs, CK-601 is a backup and follow-on to the predecessor compounds. And we think that CK-601 has some properties that may render it suitable for advancement, potentially even in other indications, you could imagine, for instance, reldesemtiv going forward in ALS and rare neuromuscular diseases. You can imagine CK-601 going forward either in those same indications or potentially even non-neuromuscular indications. For instance, as we contemplate expanding our skeletal muscle franchise to non-neuromuscular indications and there are some indications that also could even overlap between our cardiac and skeletal muscle programs. So in keeping with our strategy to be a pioneer and leader in muscle biology, this is part of that strategy and CK-601 represents another vector, if you will, for value creation.

Ted Tenthoff -- Piper Sandler -- Analyst

Great. That makes a lot of sense. I haven't thought about it that way. And just a real quick one for Ching, if I may. G&A was a little bit higher. I think even in the press release you noted stock-based comp, which, obviously, with the nice share price performance, is probably part of that. Is there anything in there that's going into kind of pre-commercial opportunities? And I kind of look at sort of where you are for the first quarter. And if we annualize that, it's actually a little bit above your the high end of your opex guidance. I'm just trying to get a sense for maybe what the kinetics of expenses might look like for the rest of the year.

Ching W. Jaw -- Senior Vice President and Chief Financial Officer

Thanks, Ted. Good question. So the first quarter burn rate of $30 million, you're correct. If you were to annualize that, it would be higher than the guidance we've given. But part of it is driven by the fact that we ended 2019 with a slightly higher-than-normal accounts payable balance. So the fact that the first order cash burn is higher than normal is was anticipated and incorporated into our guidance.

Ted Tenthoff -- Piper Sandler -- Analyst

Great, thank you so much. Several everybody.

Ching W. Jaw -- Senior Vice President and Chief Financial Officer

Thank you.

Operator

We do have one last question on the line. This is from the line of Jeff Hung from Morgan Stanley.

Robert I. Blum -- President and Chief Executive Officer

Hello, Jeff.

Jeff Hung -- Morgan Stanley -- Analyst

Hey, thanks for taking the questions. So GALACTIC, to the extent that you have visibility into it, can you talk about how the rate of events have been since the second interim analysis? And once the targeted number of events have occurred, can you remind us that timing that you think you'll need for aspects like data cleanup and analysis?

Robert I. Blum -- President and Chief Executive Officer

Sure. Good questions. Fady, do you want to take that?

Fady I. Malik -- Executive Vice President of Research and Development

Yes, I can take that. I think I can't really comment specifically on how event rates have changed. I mean, in generally the macro level, as you know, people are not coming to the hospital with the same frequency that they have for many conditions and including cardiovascular conditions. That said, I think our trial is driven by cardiovascular death at the end of the trial. And that event rate, I think, has not been substantially affected over the last little bit. Still early to tell. Some of these things lag. We're only a few months into this. But that said, the as you saw on clinicaltrials.gov, Amgen recently updated the timing for last patient last visit to August 7. And while that's an estimation at this point, I think it gives you a sense of where we think that event will occur. Following the last event necessary to trigger the end of the trial, there is it's a big trial. There's a lot of data cleanup and event adjudication that has to occur. You need to gather documents from 35 countries potentially where the events may have occurred. There are several logistical aspects to that, that are and planning that's being put in place now to help facilitate the rapid acquisition of those events and the adjudication data. And I think we would be on time to read that out in the fourth quarter, but I'm not going to be able to get more specific than that. Sorry to say, Jeff.

Jeff Hung -- Morgan Stanley -- Analyst

All right. No problem. And then, I guess, any updates on the commercial preparations for omecamtiv ahead of the GALACTIC readout?

Robert I. Blum -- President and Chief Executive Officer

Yes. So we are very, very busy together in collaboration with Amgen, on those matters. And some of the increased spending that Ching and Robert were highlighting relates to increased G&A spending pertaining to commercial readiness. We and Amgen are mapping out and having launch readiness activity meetings associated with a potential commercial launch in the second half of 2021, and that means we are in that peri-launch period. With that said, we have to be refining our positioning. We have to be locking down on a lot of our strategies even as it relates to contracting and payers, even as it pertains to the potential co-promotion. And in light of that, we are intending to negotiate with Amgen an agreement this year that affords us the rights and responsibilities in connection with that co-promotion and clarity for both companies as to what would be our role, what would be their role and how would those be aligned and where those folks would be working together. All of that needs to occur this year in order to ensure we're poised maximally for readiness for a commercialization program next year. Both companies have dialed up resources, hiring and otherwise, in order to be able to make that happen. And I'm pretty pleased that we're getting high visibility and high commitment at both companies.

Jeff Hung -- Morgan Stanley -- Analyst

Great, thanks.

Robert I. Blum -- President and Chief Executive Officer

Thank you.

Operator

And again, that was our last question.

Robert I. Blum -- President and Chief Executive Officer

Excellent. Well, with apologies for falling off the call and not being able to hear some of those questions, I'm glad that our team members were able to address them. And for any folks on the call who didn't get their questions answered, please follow up with us. These are truly extraordinary times. We recognize that. And hopefully, you can see that Cytokinetics is focused forward and delivering on the key strategic objectives for 2020 and that we're financially and operationally moving forward in a solid position and way. And at the same time, we're recognizing we're moving to a new normal. And with that new normal, we want to be as agile and adapting as we can be in order to deliver on the promise of our science. With that, we look forward to keeping you updated on our progress through the remainder of the year. We thank all of the participants on the teleconference today for your continued support and interest in Cytokinetics. Operator, we can now conclude the call. Thank you.

Operator

[Operator Closing Remarks].

Duration: 64 minutes

Call participants:

Diane Weiser -- Senior Vice President of Corporate Communications and Investor Relations

Robert I. Blum -- President and Chief Executive Officer

Fady I. Malik -- Executive Vice President of Research and Development

Stuart Kupfer -- Senior Vice President and Chief Medical Officer

Robert C. Wong -- Vice President and Chief Accounting Officer

Ching W. Jaw -- Senior Vice President and Chief Financial Officer

Pete -- Cantor Fitzgerald -- Analyst

Dennis -- Mizuho -- Analyst

Joe Pantginis -- H.C. Wainwright -- Analyst

Jason Butler -- JMP Securities -- Analyst

Chad Messer -- Needham & Company -- Analyst

Ted Tenthoff -- Piper Sandler -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

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