Cytokinetics Rises on Q4 Earnings Beat - Analyst Blog

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Shares of Cytokinetics, Inc. ( CYTK ) surged 26.09% after the company reported fourth quarter 2013 earnings of 21 cents. The fourth quarter earnings compared favorably with the Zacks Consensus Estimate of a loss of 20 cents and year-ago loss of 48 cents per share.

The company's total revenue for the reported quarter was $24.3 million as compared to $2.2 million in the year-ago period. Revenues in the fourth quarter 2013 were boosted by license revenues from partners Amgen Inc. ( AMGN ) and Astellas Pharma, Inc. ( ALPMY ). Revenues were above the Zacks Consensus Estimate of $11 million.

Cytokinetics's full year 2013 loss of $1.24 per share was narrower than the Zacks Consensus Estimate of a loss of $1.67 and the year-ago loss (excluding restructuring cost) of $2.30 per share.

Revenues during the year increased 305.5% to $30.6 million. Revenues beat the Zacks Consensus Estimate of $25 million.

Quarterly Highlights

In the fourth quarter of 2013, research and development (R&D) expenses were $13.8 million, up 40.2% year over year. The high R&D expenses were primarily because of increased investment in pipeline. General and administrative expenses increased 7.3% to $4.1 million, reflecting higher spends on corporate development planning.

Cytokinetics' lead candidate under its skeletal muscle contractility program is tirasemtiv. Cytokinetics completed enrolment of patients for its phase IIb BENEFIT-ALS (Blinded Evaluation of Neuromuscular Effects and Functional Improvement with Tirasemtiv in ALS) study on tirasemtiv during the quarter. The phase IIb study is evaluating the safety, tolerability and efficacy of tirasemtiv in patients suffering from amyotrophic lateral sclerosis (ALS). The company expects to present data from the BENEFIT-ALS study at the American Academy of Neurology annual meeting in Apr 2014.

The company is also working with Astellas (CK-2127107, phase I) and Amgen for omecamtiv mecarbil (phase II study: COSMIC-HF) and CY 1211 (a phase I study planned).

Outlook

Cytokinetics expects cash revenue for 2014 in the range of $19 million to $21 million. The guidance does not include deferred revenues (approximately $10 million), stock compensation expense ($3 million) and potential milestone payments it may receive from partners.

Additionally, the company expects cash R&D expenses and cash G&A expenses in the range of $50-$53 million and $15-$17 million, respectively.

Our Take

We are pleased with the robust earnings and revenue beat in the fourth quarter. We expect investor focus to remain on the upcoming tirasemtiv data, which is scheduled to be released in April.

Cytokinetics, a biopharmaceutical company, currently has a Zacks Rank #3 (Hold).Some better-ranked biopharma stocks include Actelion Ltd. ( ALIOF ). Actelion carries a Zacks Rank #1 (Strong Buy).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ALIOF , ALPMY , AMGN , CYTK

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