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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-50633

 

CYTOKINETICS, INCORPORATED

(Exact name of registrant as specified in its charter)

 

 

Delaware

94-3291317

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

350 Oyster Point Blvd.

South San Francisco, California

94080

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 624-3000

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Common Stock, $0.001 par value

Trading symbol

 

CYTK

Name of each exchange on which registered

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Number of shares of common stock, $0.001 par value, outstanding as of November 2, 2022: 94,631,001

 

 

 


Table of Contents

 

CYTOKINETICS, INCORPORATED

TABLE OF CONTENTS FOR FORM 10-Q

FOR THE three and nine months ended September 30, 2022

 

 

Page

PART I. FINANCIAL INFORMATION

3

Item 1. Financial Statements (Unaudited)

3

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations and Comprehensive Loss

4

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity

5

Condensed Consolidated Statements of Cash Flows

7

Notes to Condensed Consolidated Financial Statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3. Quantitative and Qualitative Disclosures About Market Risk

52

Item 4. Controls and Procedures

52

 

 

PART II. OTHER INFORMATION

52

Item 1. Legal Proceedings

52

Item 1A. Risk Factors

52

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

90

Item 3. Defaults Upon Senior Securities

90

Item 4. Mine Safety Disclosures

90

Item 5. Other Information

90

Item 6. Exhibits

91

 

 

SIGNATURES

92

 

2


Table of Contents

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data) (Unaudited)

 

 

 

September 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

106,238

 

 

$

112,666

 

Short-term investments

 

 

761,426

 

 

 

358,972

 

Accounts receivable

 

 

2,294

 

 

 

51,819

 

Prepaid expenses and other current assets

 

 

14,317

 

 

 

12,215

 

Total current assets

 

 

884,275

 

 

 

535,672

 

Long-term investments

 

 

28,544

 

 

 

152,050

 

Property and equipment, net

 

 

80,302

 

 

 

73,271

 

Operating lease right-of-use assets

 

 

75,076

 

 

 

73,138

 

Other assets

 

 

7,764

 

 

 

7,188

 

Total assets

 

$

1,075,961

 

 

$

841,319

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

14,429

 

 

$

21,087

 

Accrued liabilities

 

 

40,229

 

 

 

34,370

 

Short-term operating lease liabilities

 

 

16,056

 

 

 

14,863

 

Other current liabilities

 

 

5,782

 

 

 

1,540

 

Total current liabilities

 

 

76,496

 

 

 

71,860

 

Term loan, net

 

 

63,544

 

 

 

47,367

 

Convertible notes, net

 

 

544,986

 

 

 

95,471

 

Liabilities related to revenue participation right purchase agreements, net

 

 

291,260

 

 

 

179,072

 

Long-term deferred revenue

 

 

 

 

 

87,000

 

Long-term operating lease liabilities

 

 

114,405

 

 

 

112,229

 

Other non-current liabilities

 

 

1,247

 

 

 

4,457

 

Total liabilities

 

 

1,091,938

 

 

 

597,456

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value

 

 

 

 

 

 

Common stock, $0.001 par value

 

 

93

 

 

 

84

 

Additional paid-in capital

 

 

1,438,103

 

 

 

1,452,268

 

Accumulated other comprehensive loss

 

 

(5,559

)

 

 

(869

)

Accumulated deficit

 

 

(1,448,614

)

 

 

(1,207,620

)

Total stockholders’ (deficit) equity

 

 

(15,977

)

 

 

243,863

 

Total liabilities and stockholders’ (deficit) equity

 

$

1,075,961

 

 

$

841,319

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


Table of Contents

 

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data) (Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

 

September 30, 2022

 

 

September 30, 2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development revenues

 

$

2,515

 

 

$

437

 

 

$

4,631

 

 

$

9,828

 

Milestone revenues

 

 

 

 

 

5,000

 

 

 

1,000

 

 

 

5,000

 

Realization of revenue participation right purchase agreement

 

 

 

 

 

 

 

 

87,000

 

 

 

 

Total revenues

 

 

2,515

 

 

 

5,437

 

 

 

92,631

 

 

 

14,828

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

62,734

 

 

 

48,436

 

 

 

165,795

 

 

 

116,440

 

General and administrative

 

 

48,222

 

 

 

26,202

 

 

 

124,008

 

 

 

62,997

 

Total operating expenses

 

 

110,956

 

 

 

74,638

 

 

 

289,803

 

 

 

179,437

 

Operating loss

 

 

(108,441

)

 

 

(69,201

)

 

 

(197,172

)

 

 

(164,609

)

Interest expense

 

 

(6,804

)

 

 

(4,161

)

 

 

(12,357

)

 

 

(12,222

)

Loss on settlement of debt

 

 

(22,246

)

 

 

 

 

 

(24,939

)

 

 

 

Non-cash interest expense on liabilities related to revenue participation right purchase agreements

 

 

(8,963

)

 

 

(2,955

)

 

 

(22,530

)

 

 

(8,621

)

Interest and other income, net

 

 

4,144

 

 

 

231

 

 

 

5,423

 

 

 

708

 

Net loss

 

$

(142,310

)

 

$

(76,086

)

 

$

(251,575

)

 

$

(184,744

)

Net loss per share — basic and diluted

 

$

(1.52

)

 

$

(0.95

)

 

$

(2.85

)

 

$

(2.48

)

Weighted-average number of shares used in computing net loss per share — basic and diluted

 

 

93,758

 

 

 

80,329

 

 

 

88,195

 

 

 

74,460

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities, net

 

 

(1,065

)

 

 

(43

)

 

 

(4,690

)

 

 

(214

)

Comprehensive loss

 

$

(143,375

)

 

$

(76,129

)

 

$

(256,265

)

 

$

(184,958

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


Table of Contents

 

CYTOKINETICS, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (Deficit) Equity

(In thousands, except share data) (Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

(Deficit) Equity

 

Balance, December 31, 2021

 

 

84,799,542

 

 

$

84

 

 

$

1,452,268

 

 

$

(869

)

 

$

(1,207,620

)

 

$

243,863

 

ASU 2020-06 adoption

 

 

 

 

 

 

 

 

(49,476

)

 

 

 

 

 

10,581

 

 

 

(38,895

)

Exercise of stock options

 

 

374,242

 

 

 

1

 

 

 

4,074

 

 

 

 

 

 

 

 

 

4,075

 

Vesting of restricted stock units,
   net of taxes withheld

 

 

403,169

 

 

 

 

 

 

(9,602

)

 

 

 

 

 

 

 

 

(9,602

)

Stock-based compensation

 

 

 

 

 

 

 

 

8,985

 

 

 

 

 

 

 

 

 

8,985

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(2,720

)

 

 

 

 

 

(2,720

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(89,445

)

 

 

(89,445

)

Balance, March 31, 2022

 

 

85,576,953

 

 

 

85

 

 

 

1,406,249

 

 

 

(3,589

)

 

 

(1,286,484

)

 

 

116,261

 

Exercise of stock options

 

 

233,365

 

 

 

 

 

 

2,143

 

 

 

 

 

 

 

 

 

2,143

 

Vesting of restricted stock units,
   net of taxes withheld

 

 

41,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under
   Employee Stock Purchase Plan

 

 

49,088

 

 

 

 

 

 

1,540

 

 

 

 

 

 

 

 

 

1,540

 

Exercise of warrants

 

 

14,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

12,195

 

 

 

 

 

 

 

 

 

12,195

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(905

)

 

 

 

 

 

(905

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,820

)

 

 

(19,820

)

Balance, June 30, 2022

 

 

85,915,170

 

 

 

85

 

 

 

1,422,127

 

 

 

(4,494

)

 

 

(1,306,304

)

 

 

111,414

 

Exercise of stock options

 

 

577,369

 

 

 

 

 

 

6,187

 

 

 

 

 

 

 

 

 

6,187

 

Induced conversion of convertible notes

 

 

8,071,343

 

 

 

8

 

 

 

(3,386

)

 

 

 

 

 

 

 

 

(3,378

)

Exercise of warrants

 

 

14,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

13,175

 

 

 

 

 

 

 

 

 

13,175

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(1,065

)

 

 

 

 

 

(1,065

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(142,310

)

 

 

(142,310

)

Balance, September 30, 2022

 

 

94,578,052

 

 

$

93

 

 

$

1,438,103

 

 

$

(5,559

)

 

$

(1,448,614

)

 

$

(15,977

)

 

5


Table of Contents

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2020

 

 

71,015,183

 

 

$

70

 

 

$

1,105,470

 

 

$

149

 

 

$

(992,306

)

 

$

113,383

 

Exercise of stock options

 

 

187,807

 

 

 

1

 

 

 

1,271

 

 

 

 

 

 

 

 

 

1,272

 

Vesting of restricted stock units,
   net of taxes withheld

 

 

360,050

 

 

 

 

 

 

(4,449

)

 

 

 

 

 

 

 

 

(4,449

)

Net share settlement

 

 

 

 

 

 

 

 

(418

)

 

 

 

 

 

 

 

 

(418

)

Stock-based compensation

 

 

 

 

 

 

 

 

5,261

 

 

 

 

 

 

 

 

 

5,261

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(99

)

 

 

 

 

 

(99

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47,104

)

 

 

(47,104

)

Balance, March 31, 2021

 

 

71,563,040

 

 

 

71

 

 

 

1,107,135

 

 

 

50

 

 

 

(