Dueling Analysts on Cytokinetics: ALS Drug is 'Finished' or a 'Ray of Sunshine'

Two sell-side analysts with very different views Tuesday on Cytokinetics and its experimental ALS drug tirasemtiv:

Cowen analyst Simos Simeonidis titled his research note: "It's (Unfortunately) Over: Tirasemtiv also Fails 4 out of 5 Secondary Endpoints"

Simeonidis:

Cytokinetics has just released additional data from the Phase IIb BENEFIT-ALS of tirasemtiv. These data confirm the worst case scenario for the drug, in our view. The trial not only failed to meet the primary endpoint of change in ALSFRS, but also failed in four of its five secondary endpoints. The only positive secondary endpoint in the trial was the reduction in SVC decline (Slow Vital Capacity), in which there was a statistically significant difference between the two arms at 12 weeks (-8.66 vs. -3.12, p<0.0001) and at each time point assessed. Even though it appears that the drug is having an impact in this one endpoint, we don't view it as significant enough to overcome the fact that tirasemtiv had minimal impacts on the remainder of the endpoints, including the primary endpoint, MVV and SNIP. Barring any additional convincing data presented tonight or down the line (very unlikely), we consider tirasemtiv essentially finished in ALS, especially given that its side effect profile appears to also be a considerable issue (SAE's of 9% vs. 5.4% for placebo), leading to among other issues, three times more discontinuations (99 vs. 33 on placebo), and statistically significant weight loss (-1.70kg vs. -0.79kg on placebo, p=0.006). [Emphasis added.]

Then there's Roth Capital analyst Joe Pantginis, who also published a note Tuesday. His headline reads quite differently: "CYTK: Rays of Sunshine on Tirasemtiv and KOL Excitement; Maintain Buy"

Pantginis:

The new data are exciting to us and we believe that the primary focus should be on investigator enthusiasm for the data as investors try regain confidence in the data and potential for tirasemtiv. Cytokinetics is now (discussed below) looking at potential next steps for the drug based on the positive data in BENEFITALS.  We are encouraged by the statistically significant reduction in the decline of SVC, a measure of strength of the skeletal muscles involved in breathing. The important takeaway, in our belief, is that ALS patients are benefiting in a significant fashion for an endpoint, which has never shown improvement in previous ALS studies. KOL feedback indicates that SVC is the most predictive variable for ALS patients in predicting clinical benefit and potential survival. SVC was a pre-specified secondary endpoint, and today's data show that tirasemtiv led to a reduced decline in SVC at every assessment time point.  BENEFIT-ALS is the first trial to show a positive effect on SVC and muscle strength in ALS patients. [Emphasis added.]

It's worth noting that both analysts still have the buy ratings on Cytokinetics, despite their opposing views of tirasemtiv.

The market has taken a dimmer view:

CYTK Chart
CYTK data by YCharts

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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