Cytokinetics Downgraded On Data Delay

Biopharma Cytokinetics Inc. CYTK announced a delay in drug studies during its earnings call Thursday, prompting a downgrade by Morgan Stanley. 

The Analysts

Morgan Stanley's Matthew Harrison downgraded Cytokinetics from Overweight to Equal-Weight and lowered the price target from $18 to $9.

The Thesis

Morgan Stanley's valuation for Cytokinetics is partly driven by the base value in omecamtiv mecarbil, the company’s cardiac myosin activator, which is being studied for heart failure, Harrison said. (See the analyst's track record here.) 

Key data for this treatment is unlikely for a few years.

Cytokinetics additionally announced that data for reldesemtiv in the large ALS study will be delayed, with data expected in early 2019.

This delay is due to the patient availability and uptake of Radicava, an ALS treatment, according to the biotech. 

The main catalysts for Cytokinetics are near-term, and the stock is ikely to trade evenly with the market until advancements are nearer, Harrison said. 

In the midst of the delays, Galactic-HF, an omecamtiv mecarbil program in heart failure, is on track with over 50-percent enrollment and 4,000 patients, according to Morgan Stanley. 

"We remain positive on the Amgen, Inc. AMGN-partnered program and believe the study is likely to succeed," Harrison said. 

Price Action

Cytokinetics shares were losing 9.18 percent and trading at $6.68 off the open Wednesday.

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