Before the market opened last Tuesday, Cytokinetics (CYTK -1.39%) and Amgen (AMGN -0.21%) scrambled to spin the results of their Phase 2 ATOMIC-AHF trial for heart failure drug omecamtiv mecarbil. The results were presented for the first time at the European Society of Cardiology Congress in Amsterdam.  After failing to accomplish its primary endpoint, Cytokinetics assembled its team for an investor event that almost resembled the spin room after a presidential debate. Their goal was to assuage the fears of investors who were bombarded by news of a trial failure and sent shares of Cytokinetics down as much as 29% in pre-market trading.  Digging deeper into the data, let's see if the true value of the company actually dropped by a quarter, or if management's damage control had some merits.

A new drug for heart failure
In chronic heart failure, the heart is unable to adequately pump blood throughout the body resulting in a sustained neuronal and hormonal response to increase cardiac function. However, these responses can actually further impair a taxed heart over time. Drugs like ACE inhibitors or beta-blockers have shown important effects on clinical outcome over prolonged treatment, but there remains no real treatment for acute, worsening heart failure.

Omecamtiv mecarbil was specifically designed for this indication by directly targeting the contractile machinery of heart muscle. By skipping the biochemical pathways that can further exasperate a sick heart, omecamtiv mecarbil offers the opportunity for immediate improvements in cardiac function that allow for long-term improvements to cardiac health.  With IV and oral formulations, the ultimate goal is to treat patients with acutely decompensated heart failure in the hospital and send them home with an oral medication to improve mortality and rehospitalization probability.

Investors have shown excitement surrounding the drug, as the stock soared 160% this year.  Most of that excitement was speculative, as Amgen increased its stake in Cytokinetics with equity investments and international license expansion.

Explosive trial results?
Hardly. The results were fairly middle of the road, with several interesting trends but no statistical significance where it really counts.

The trial was designed to examine the dose-dependent safety and efficacy of intravenous omecamtiv mecarbil for two days in patients with heart failure and acute hospitalization for dyspnea, or shortness of breath. The primary endpoint was an improvement in dyspnea over the time treated with the drug. To this end, the trial did fail to find a statistically significant effect of the drug on its primary endpoint. There was, however, a significant dose-dependent trend in dyspnea relief that culminated in an insignificant improvement of 51% in the highest dose, compared to 41% in pooled placebo data.

Like the efficacy data, the safety data was underwhelming as well.  There was a slight increase in the number of heart attacks in patients treated with omecamtiv mecarbil, but a biomarker for cardiac muscle damage did not show any dose-dependent changes.  Regardless, Cytokinetics and Amgen will now include heart attacks as an identified risk in use of the drug.

Where's the value?
The results of the ATOMIC trial aren't a huge surprise, as management had been dampening expectations and focused more on the real goal of the trial in recent conference calls.  That goal was reinforced in last week's investor meeting.  Namely, the trial provided short-term efficacy and safety data at multiple doses to guide the design of a phase 3 trial with more clinically relevant longitudinal outcomes.  In addition, the study reinforced data from phase 1 trials demonstrating a beneficial effect on both heart rate and blood pressure.

With that in mind, I find it hard to believe that a primary endpoint miss is justification for a 25% decline in the value of the company.  Upcoming results from the COSMIC trial -- a detailed look at the safety and efficacy of three oral formulations of omecamtiv mecarbil -- should provide more insight into the utility of the drug in improving cardiac function over longer treatment periods. The science behind omecamtiv mecarbil remains sound, and only with a better designed Phase III trial will its value to patients and shareholders be properly determined.

As a shareholder myself, I plan to hold shares of Cytokinetics through this hiccup despite concerns that unsteady revenue streams may hurt the company's financial standing. With no debt, a cash burn rate that can support operations through COSMIC conclusion, and full support from Amgen for omecamtiv mecarbil development, I'm content to wait for results.