Cytokinetics, Inc. (CYTK) Has Not Lost This Bull in the Wake of Phase III Failure

Look out for the Street's bearish stampede today where CYTK shares are crashing 31% in the aftermath of lead drug tirasemtiv's failure.


Cytokinetics, Inc. (NASDAQ:CYTK) investors are running for the hills and weakening shares to the harsh tune of 31% after the drug maker’s amyotrophic lateral sclerosis (ALS) candidate just failed its Phase III study. As such, the CYTK team is putting a halt to development of its asset tirasemtiv, a fast skeletal muscle troponin activator designed to help ALS patients better the very muscle function that they lose in the condition.

Specifically, the company’s lead drug disappointed in never meeting its primary endpoint of change from baseline in slow vital capacity (SVC) in the VITALITY-ALS trial at 24 weeks on the heels of randomization of any of the secondary endpoints for that matter, evaluated at 48 weeks.

Cantor analyst Mara Goldstein has not fled the bullish camp just yet, noting that now the firm’s “pipeline focus” will rest on Omecantiv, CK-2127017.

“Tolerability may have played a role in the failure, given what appeared to be a high drop-out rate and discontinuations, though the primary endpoint and secondary endpoints were not met, even for patients in the mid- and higher dose groups that tolerated the drug,” explains Goldstein, who looks ahead: “Focus in ALS will now move to CK-2127107, which is also in development for a variety of indications such as SMA, COPD and ALS, and is expected to produce data in 2018.”

For that matter, “Omecamtiv mecarbil, the company’s heart failure program partnered with AMGN (not covered) has just begun a large, global Phase III study in heart failure and has not yet been included in our valuation, which we see as mitigating the negative tirasemtiv news,” contends the analyst, reiterating an Overweight rating on CYTK stock with a $21 price target, which represents a nearly 173% increase from where the stock is currently trading. (To watch Goldstein’s track record, click here)

There will be a lot of disappointed bulls in the market today upon hearing the news of the failed VITALITY-ALS trial, considering TipRanks analytics exhibit CYTK as a Strong Buy. Out of 6 analysts polled by TipRanks in the last 3 months, all 6 are bullish on Cytokinetics stock. With a return potential of 193%, the stock’s consensus target price stands at $22.67.

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