Oct 28, 2010
Executives
Sharon Barbari - EVP, Finance & CFO Robert Blum - President & CEO Andrew Wolff - SVP, Clinical Research and Development, & CMO
Analysts
Joel Sendek - Lazard Capital Market Charles Duncan - JMP Securities Ritu Baral - Canaccord Mark Monane - Needham Greg Wade - Wedbush Larry Smith - DLS Research
Operator
Good afternoon and welcome ladies and gentlemen to the Cytokinetics Third Quarter 2010 Conference Call. At this time I would like to inform you that this call is being recorded and that all participants are in a listen only mode.
At the request of the company we'll open the call for question and answers after the presentation. I will now turn the conference over to Sharon Barbari, Cytokinetics Senior Vice President of Finance and CFO.
Please go ahead.
Sharon Barbari
Good afternoon and thank you for joining the Cytokinetics senior management team on this conference call today. Also present during this call are Robert Blum, our President and Chief Executive Officer and after Dr.
Andrew Wolff, Senior Vice President of Clinical Research and Development and Chief Medical Officer. Following the forward-looking statement disclaimer, Robert will provide an overview of the past quarter along with an update on the advancement of our development pipeline focused on the biology of muscle function.
Andy will then provide highlights and details on the progress of the company's clinical development program. And then I will provide some brief comments with respect to our financials and our investments and research and development activity.
Robert will then conclude the call with additional comments regarding our recent activities and discuss the projected company milestones for remainder of 2010. We will then open the call for a brief question-and-answer session.
The following discussion, including our responses to questions, contains certain statements that constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Including but not limited to statements relating to our financial guidance, the initiation enrolment, design, conduct and result of clinical trial and to other research and development activities.
Our actual results might differ materially from those projected in these forward-looking-statements. Additional information concerning factors that could cause our actual results to differ materially from those in the forward-looking statements is contained in our SEC filings, including our most recent quarterly report on Form 10-Q and our current reports on Form 8-K.
Copies of these documents maybe obtained from the SEC or by visiting the Investor Relations section of our website. These forward-looking statements speak only as of today.
You should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call.
Now I will turn the call over to Robert.
Robert Blum
Thank you Sharon, during the third quarter Cytokinetics continue to advance our pipeline focused to the biology of muscle function. In recent weeks we have conducted reviews of interim data from each of our two Phase IIa “Evidence of Effect clinical trials of CK-2017357 or CK-357.
One in patients with Amyotrophic Lateral Sclerosis or ALS and the other in patients with symptoms of claudication associated with peripheral artery disease. We are pleased with the progression of our skeletal muscle program.
Moreover we are pleased with the interim results relating to the potential tolerability and also pharmacodynamic effects of CK-357 that are now emerging from these two ongoing trials. In a moment Andy will elaborate on our conduct of interim reviews of data for each of these trials.
In addition during the quarter we are ready for the initiation of an Evidence of Effect trial in patients with Myasthenia Gravis which is still further evidence of our commitment to investigating the potential of skeletal muscle activates and in patients afflicted with neuromuscular diseases. Also during the last quarter we announced that Amgen and Cytokinetics have reprioritized the order of planned clinical trials to relating to omecamtiv mecarbil, our novel cardiac myosin activator under joint development for the potential treatment of heart failure.
Together with our partner Amgen, we now plan to initiate a Phase IIb clinical trial of an intravenous formulation of omecamtiv mecarbil in hospitalized patients with acutely decompensated heart failure prior to initiating further clinical trials on oral formulations of omecamtiv mecarbil. This plan which is subject to a further discussions with regulatory authorities is intended to align feedback received from regulatory authorities and is designed to provide a larger placebo controlled experience with omecamtiv mecarbil prior to preceding to clinical trials of oral formulations over omecamtiv mecarbil in outpatients.
I would now like to turn the call over to Andy to elaborate on specific clinical progress achieved during the last quarter in our respective drug development programs and also to provide some insights into our plans for the future.
Andrew Wolff
Thank you, Robert. As Robert just indicated, during the quarter our clinical team was highly involved with multiple activities related to our ongoing and planned clinical trials.
We continue to in our rotations in our two ongoing Phase IIa Evidence of Effect clinical trial. The most advanced of which is our trial on patients with ALS.
To remind you, the primary objective of this early Phase IIa hypothesis generating trial is to evaluate the pharmacodynamic effects of CK-357 on multiple measures of skeletal muscle function or fatigability in patients with ALS at single dozes of each of 250 and 500 milligrams without specifying a single primary endpoint. As we discussed in July during our second quarter earnings call we conducted an interim review of the data from its ongoing trial.
Those results indicated that 357 appeared to be well tolerated in these ALS patients and no serious adverse events were reported. Based on these interim data, we proceeded with the trial as initially designed with no changes to the protocol.
With today’s release we announced that we recently conducted a second interim review of the data from this trial. The interim look like the first one we did in July suggested pharmacodynamic activity across multiple assessments of patient function and scalable muscle performance.
In addition, this review suggested that single dozes of CK-357 at each of 250 milligrams and 500 milligrams continue to be well tolerated. Two serious adverse events, one of pancreatic cancer and another of pulmonary embolism were reported.
Each was judged by the respective investigator to be unrelated to treatment with CK-357. Patient enrolment in this trial was recently completed.
Our second Phase IIa Evidence of Effect clinical trial is in patients with symptoms of claudication associated with peripheral artery disease. Today, patients in this trial have received in random order, single oral doses of placebo, 375 milligrams and 750 milligrams of CK-357 over the course of three dosing periods.
The primary objective of this Phase IIa hypothesis generating trial is also to evaluate the pharmacodynamic effects of single doses of CK-357 on several measures of skeletal muscle function and fatigability in these patients, again without specifying the single primary endpoint. Recently we conducted an interim review updated from this trial that suggested potential pharmacodynamic activity of CK-357 to increase skeletal muscle performance in these patients.
In addition, the data suggested that single oral doses of CK-357 were generally well tolerated by most patients in this trial. Two patients in the trial experienced series adverse event that were judged to be related to treatment with CK-357 by each respected investigator.
One patient experienced dizziness and mental confusion, and the other experienced dizziness and dyskinesia or abnormal movements. Both were required in-patient observation until their symptoms resolved.
These events were judged by the investigators not to have been life threatening and to have results spontaneously and completely without additional treatment. Following these observations the protocols been amended to lower the 750 milligram dose to 500 milligram.
Additional information about both of these ongoing trials can be found at www.clinicaltrials.gov. As Robert mentioned, during the quarter we also ready to putting initiation of our third Phase IIa Evidence of Effect clinical trial; this one in patients with myasthenia gravis.
This trial follows the award to Cytokinetics of the $2.9 million grant from the National Institute of Neurological Disorders and Stroke or NINDS as part of the American Recovery and Reinvestment Act of 2009. For those of you unfamiliar with myasthenia gravis, it is a chronic autoimmune neuromuscular disease in which patients make antibodies that attack the size of the skeletal muscle cells through which neurons stimulate muscle contraction resulting in generalized weakness and fatigue.
Myasthenia gravis commonly strikes people between the ages of 40 and 70 and affords between 50,000 and 850,000 people in the United States. This trial will examine CK-357 as the potential treatment for symptomatic relief of the fatigue and weakness that affects these patients.
We will provide additional details on the design of this trail upon its initiation which is expected by the end of the year. With that update on our clinical development activities in the third quarter I will turn the call back over to Sharon.
Sharon Barbari
Thank you, Andy. As our press release contains detailed financials results for the third quarter ended September 30, 2010, let me refer you to that public statement.
We ended the third quarter with $77.2 million in cash and cash equivalents and investments excluding restricted cash, which represents between 17 and 18 months of going forward cash burn based on our 2010 financial guidance. Our third quarter 2010 R&D expenditures totaled $9.5 million.
From a program perspective for the third quarter approximately 81% of our R&D expenses were attributable to our skeletal muscle contractility research and development activities, 3% to our cardiac muscle contractility activities, 15% to our other research and non-clinical development activities including our smooth muscle contractility program and 1% to the wind-down activities related to our mitotic kinesin inhibitor development and research activity. For the nine months ended September 30, 2010 our R&D expenditures totaled $28.9 million.
And from a program perspectives for the nine months approximately 78% of our research expenses or attributable to our skeletal muscle contractility activities, 5% to our cardiac muscle contractility activities, 15% to our other research and non-clinical development activities which include our smooth muscle contractility program and 3% to our mitotic kinesin inhibitor development and research activity. As you can see we continue to focus our financial resources largely on skeletal muscle research and development program which together with our cardiovascular development program partnered with Amgen, we believe may provide the nearest term value generation for the company.
We also announced updated financial guidance reflecting more anticipated expenditures for 2010. The company anticipates cash R&D expenses to be in the range of 37 million to $40 million and cash G&A expenses to be in the range of 12 million to $13 million.
This financial guidance is on a cash basis and does not include an estimated 6 million in non-cash operating expenses primarily related to stock compensation expense. This guidance does not reflect the potential revenue from Amgen, NINDS or potential collaboration with other partners.
That concludes the financial portion of today's call and with that I'll now turn the call back over to Robert.
Robert Blum
Thank you, Sharon. What we have accomplished as a company support this year has laid a foundation for what we outlined for our shareholders, a little over a year ago with our first research and development day.
Our strategy has been clear, to identify and execute on potential opportunities arising from our advanced and proprietary understandings of the biology of muscle function and to leverage the knowledge we gained through the development of omecamtiv mecarbil. In this last year we gained a great deal of insight into the novel mechanism of action CK-357 from our true Phase I safety pharmacokinetic and pharmacodynamic studies that has informed the design of our two evidence of effect trials both of which are preceding well.
We continue to believe that CK-357 demonstrates promise in ALS patients, then it also may have the potential to demonstrate activity in terms of improved functional status in patients with other nerve muscular diseases. Likewise, should CK-357 demonstrate promise in patients with claudication then it may also have the potential to demonstrate activity in a number of other conditions tied to muscle impairment and loss of muscle function as is increasingly common in the frail elderly.
During the quarter, an anticipation of the initiation of our third evidence of effects clinical trial again by the end of the year, members of our clinical team have the opportunity to meet with key opinion leaders where all trained neurologist specializing in myasthenia gravis. These positions provided our team with valuable insights into how they treat the disease and what potential CK-357 may hold for these patients.
I am pleased to say that these thought leaders expressed a great level of enthusiasm for this novel drug candidate and the feedback mirrors the same level of enthusiasm that we have seen from the heart failure and ALS medical communities when discussing omecamtiv and CK-357 respectively. Now I'd like to review our milestones for the remainder of the year related to each of the programs in clinical development.
For omecamtiv mecarbil, we anticipate that in the first half of 2011 Amgen will initiate to randomize double-blind placebo controlled Phase IIB clinical trial of an intravenous formulation of omecamtiv mecarbil and patients hospitalized for acutely decompensated heart failure due to left ventricular systolic dysfunction. We anticipate that in 2011 Amgen will initiate a multi center open label Phase IIa clinical trial of a modified-release and an immediate release oral formulation of omecamtiv mecarbil in stable heart failure patients.
And also we anticipate that following discussions with the regulatory authorities Amgen will initiate a Phase Ib multi-center, open-label, single-dose safety and pharmacokinetic clinical study of a modified release oral formulation of omecamtiv mecarbil in patients with various degrees of renal dysfunction. Now turning to our skeletal muscle program.
In December, we planned to present data from the ongoing Phase IIa Evidence of Effect clinical trial of CK-357 in patients with ALS. The 21st Annual International Symposium on ALS and other motor neuron diseases to be held in Orlando.
We anticipate that in the first half of 2011 data will also be available from the Phase IIa Evidence of Effect clinical trial of CK-357 in patients with symptoms of claudication associated with peripheral artery disease. And we anticipate that we'll initiate a Phase IIa Evidence of Effect clinical trial a CK-357 in patients with Myasthenia Gravis by the end of this year.
The fourth quarter has already shown to be a busy time for everyone in Cytokinetics. The kind of busy that we drive on, our clinical teams are executing our skills and muscle Phase IIa clinical trials program with two ongoing evidence of effect trials.
Our business development and corporate development teams are busily engaged in partnering, forecasting and strategic planning activities. Our legal and finance teams are preparing contracts to assist us in obtaining additional clinical trial side approvals.
Our manufacturing teams are ready API and drug product supplies for the pending initiation of our clear evidence that effect the trial with CK-357. Our multiple research teams are insuring that backup and follow on candidates that keep stable to our risk mitigation strategies associated with our development pipeline continue to progress.
And off course the many people at Cytokinetics that work with teams at Amgen on a daily basis. The support of the only [Mccargo] program are busily preparing for multiple clinical trials to be initiated in 2011.
With the focus that our organization is brining to there I am confident we can end the year strongly. Operator that concludes the formal portion of our call today.
And I’d now like to open the call up to questions.
Operator
(Operator Instruction). First question comes from Joel Sendek with Lazard Capital Market.
Joel Sendek - Lazard Capital Market
I was just confused on one thing with regard to what Amgen is going to do so if you can just tell where this so for can you commented heart failure they need to run this IV study before starting the oral, but yet they are going to go forward with the overall next year in stable heart failure. I am wondering what, why did they need more IV work in one that not in the other?
Robert Blum
I’ll start and then I’ll turn it over to Andy. But, just to clarify its not that the expectation is that the Phase-IIB study the intravenous form of the drug must be concluded prior to initiating any oral studies, but rather we are submitting the intravenous protocol with a goal of initiating that study first and then based on that dialogue we’ll be in a position to ready for progression of other studies and Andy can speak to what we might learn from the intravenous studies that could benefit oral studies.
Joel Sendek - Lazard Capital Market
And before he answers, if I can just clarify one point which is so, you can effectively start the orals, would you have interim data that you would need from the IV study or could you even start them before that?
Robert Blum
It's not abundantly clear right now. And that’s what the ongoing dialogue is with respect to our regulatory authorities on this matter.
We believe that we’ll be able to initiate the intravenous study and then subsequently be in a position to initiate the oral studies, but whether that may require additional data or not, we don’t yet have a clear sense of that. But Andy can elaborate on what we might learn from the IV that could inform the oral.
Andrew Wolff
Our IV study will be done in hospitalized patients, and so they will be [sicker] than the patients that we have treated previously in that regard we will have a better idea of both the safety and the efficacy of the compound in patients more for the eventual target population that would be treated with a that it rather eventually prudent and that would be through both for treatment of patients with acutely compensated heart failure in the hospital, but also for higher risk patients who are outpatients.
Robert Blum
Does that answer your question Joel.
Joel Sendek - Lazard Capital Market
357 with regard to the side-effects in the claudication study, I don’t think you mentioned that but the drug related SES was that 375 or 750?
Robert Blum
We only know for sure one we make an effort not to un-blind the ongoing trials. So one of them was 750, the other one we presumed was the 750.
Joel Sendek - Lazard Capital Market
And do you have an explanation for the mechanism of that dizziness?
Robert Blum
We believe it to be centrally mediated thing. We seen it even from phase 1 studies and healthy volunteers.
Its unassociated with changes in the hemodynamics there are no faults in blood pressure or heart rate to suggest that its because of hyper tension for example, or (inaudible) cardiac nor do we see anything to suggest that its due to vertigo, true vertigo effect on the middle and the balance systems. So it does appear to us that it is some effect on the central nervous system, but we can’t be more specific than that at this time.
Operator
Your next question comes from Charles Duncan with JMP Securities.
Charles Duncan - JMP Securities
First question is one free price, at seven with the second interim look in ALS. Were there any differences in pharmaco dynamic perimeters that you observe with that second and on from the first one.
Robert Blum
Your saying as between the second interim and first interim were the differences in the pharmaca dynamic assessments. Well certainly we have more patients in the second interim, so we began to uncover where there could be more statistically reliable data than was evidenced under the first and in some respects we had a greater totality of pharmacodynamic effect than I think we observed in the first, but keep in mind that with the first interim that was intended simply for safety purposes and in that regard we were predominantly looking at the data from the standpoint of whether a protocol might need to be modified and we concluded as you know it did not.
Charles Duncan - JMP Securities
With regard to [Peta] also wanted to understand little bit better the AEs. You said that they were centrally mediated.
Can you give me some sense as to first of all how long was the observation period? How long did it take for the resolution to occur in the…
Robert Blum
They were both observed overnight and it will go on to the next day.
Charles Duncan - JMP Securities
Okay, and if there is a backup to three, five, seven, are you seeing different parameters in terms of CNS activity and/or potency?
Robert Blum
As we have reported, we do have ongoing research and development activities occurring with the goal of identifying not only what we consider a backup to CK-357, but also follow on compounds, the distinction being that a backup would come from the same chemical series, but would have different physiochemical properties, a follow on might come from a very different chemical series and even could have a different mechanism of action. And crossing the blood brain barrier is one of several parameters that we are looking at and thinking about advancing backups and follow-ons and we haven't yet commented as to those backup and follow ons, on those specific differences but it is certainly something we are aware of, also underscore that as Andy pointed out we believe it maybe mediated through a CNS effect.
But that’s still something that we are in research looking to elucidate further and we have a lot of ongoing work intended here in this second half of 2010 to try to get a better handle on that.
Charles Duncan - JMP Securities
Now let’s move to new stuff which is interesting to me with regard to further investment in another Evidence of Effect in myasthenia gravis. Can you help us understand what kind of is different with regard to this particular model relative to ALS and claudication in terms of what you hope to take away from this study?
Robert Blum
Well it is a different disease obviously, it is a different mechanism. But in terms of the properties of the compound that we think might be useful more similar off course to ALS than to claudication.
And claudication is our pre-clinical observation and shows that the drug really delays the severity and the time to fatigue that provides and particularly in models that limit (inaudible) that provide the major rationale for looking in claudication. In both ALS and myasthenia gravis, it’s the observation that the compound enhances the response to any given degree of neuronal stimulation that provides the basis for the therapeutic hypothesis.
And there is differences in why that neuronal input is diminished and ALS as you know because the motor neurons are dying and myasthenia gravis is because there is anti-bodies to the motor end plate, but in both cases you have a situation where muscles are being inadequately stimulated and we would hope that the presence of the compound will generate more force from this diminished neuromuscular transmission because the impulses are being transmitted as in myasthenia gravis or it isn’t being received at all in some muscles as in AOS.
Charles Duncan - JMP Securities
And Andy with regard to the scope of the study, is it similar and in terms of size and then with regard to design is it a single dose or a multiple dose study?
Andrew Wolff
We haven't spoken about the specific trial designs, but I think it’s fair to say that we have adopted a model with these evidence of effect studies in each of ALS and claudication and we are going to purse the same model, the specifics will be elaborated on once we initiate dosing later this year.
Charles Duncan - JMP Securities
And Robert, would you anticipate data by the end of 2011 onto that study?
Robert Blum
It’s hard to say until we see the rate of enrolment, but I certainly think that’s possible.
Charles Duncan - JMP Securities
I know you haven't done your yearend kind of budgeting or maybe you have, but you haven't been talked about it, but could we anticipate a similar level of R&D spend to this year or would you expect to see that ramp in 2011?
Sharon Barbari
Right now we are not anticipating, if we look at the goal, the going forward number of months of cash, we are assuming that our burn is going to be similar to what we have this year, but we'll update on our fourth quarter call at the beginning of February with the specifics once we finished our budgeting process.
Operator
Your next question comes from the Ritu Baral with Canaccord.
Ritu Baral - Canaccord
I have some follow-up questions on the side effects seen with the claudication trial. How soon after dosing do these side effects up here, I'm trying to figure out if they were sort of concurrent to when you might expect to see clinical benefit.
And did they occur on the first doze of drug or the second doze?
Andrew Wolff
It is a single doze study so they only, I mean then you get treated three separate times correct of that, a week apart and one of them is placebo. But these episodes that are primarily characterized by dizziness occur within hours after dozing and then they do resolve spontaneously but they can’t take several hours to resolve.
As I mentioned earlier at least in one of the two cases we are certain it was after the 750 milligram doze and the other one we would suspect that it was but we didn’t unblind, there was not a reason to, it wasn’t going to change the treatment or anything. But they are consistent with the time courses to rise and fall plasma levels.
Ritu Baral - Canaccord
Quick question back to that the patient who definitely got the 750. What I am trying to figure out is if that was the first or possibly second time that the patient received active drug?
Andrew Wolff
I am not certain.
Ritu Baral - Canaccord
Okay. And what was the grade of the dizziness and the other side effects scene.
Andrew Wolff
They were moderately severe, I believe. I am not certain actually right off hand if they were classified as severe or moderate, they viewed as sufficiently problematic that the patient couldn’t really go home and so they were kept for in-patient observation.
Most of the dizziness that we've seen across the two trials and the healthy volunteers has been characterized as my olden has needed no additional observation or intervention. So this was clearly worse than that.
Ritu Baral - Canaccord
Okay. And the description of the dyskinesia seen, did that resemble spasticity, were there other characteristics in that patient?
Andrew Wolff
There were other adverse events in the patient besides the two that were deemed to be serious on requiring in-patient observation. I don’t have a list of them right in front of me right now but they were things that we have been seeing that sort of go along, I don’t want to name specifics because I don’t remember what's specifically one had than the other but I am sure that in each of those two patients there were two adverse events that were judged by that and thus cater to be serious when others that were present they are not serious.
Ritu Baral - Canaccord
And a classification of dyskinesia would be separate than a classification of spasticity then you are saying?
Andrew Wolff
If they would have, sorts of patients has spasticity, but we would used a different term. Dyskinesia is an abnormal movement, not spasticity.
Ritu Baral - Canaccord
And have you conducted efficacy analysis yet for three, five, seven in the ALS trial and if so when might we see top-line versus the data at the December conference?
Andrew Wolff
The final data set, no maybe not their reanalysis that will ever do on it but the data that we present in December in Orlando will be final data.
Ritu Baral - Canaccord
And will we get top-line before that?
Andrew Wolff
I don’t think so.
Robert Blum
That’s something that until we have conducted the analysis and review is difficult to know whether or not we are going to be able to that in time prior to the actual meeting in Orlando. So we're just being silent as to whether or not there will be a top-line.
It really is going to come down to the wire.
Andrew Wolff
And also many meetings will bump you from presenting if you say anything before you make the presentation at their meeting.
Ritu Baral - Canaccord
And last question and then I'll hop back in the queue. What are some of the other Evidence of Effect trials that could be planned?
Robert you had mentioned some other neuromuscular disorders. I guess Andy what's on your wish list?
Robert Blum
I will start and then Andy can certainly add. Under Andy’s supervision our clinical scientists and clinical research team have put together a neuromuscular development plan which starts with ALS and goes to myasthenia gravis.
The other things that we've talked about publicly that we might also consider and include a Spinal Muscular Atrophy Lambert-Eaton syndrome and still others. And obviously this is part and partial to how much it might cost and whether that could be our source funded or together with the partner.
And as you know we are talking to partners about what they might have themselves be interested in our doing. And also I think will a come a time when we wouldn't necessarily need to do an Evidence of Effects like design in each indication.
Once we start to see these types of pharmacodynamic data sets which were intended to generate hypothesis, we could also determine that the Evidence of Effect design no longer serves our purposes and we might just go straight into proof of concept like trial designs with multiple dozing. In 2011 as we put together our budgets, we are contemplating a number of different scenarios.
Operator
Your next question comes from Mark Monane with Needham.
Mark Monane - Needham
Good afternoon thanks for taking my questions. [Green] to New York City, temperature 73 degrees but a rapid change in the weather as expected, we're getting cooler here, which brings me to two change questions from the call.
One on finances and one on the dose change. Actually lets me start with the dose change.
Would you be kind enough to comment please on the doses that you are testing in the 357 trial in claudicatoin and PAD. We know about 500 and 750, are there any other doses which are being tested.
Andrew Wolff
In the ALS study it was 250 and 500. The claudication study began with each of those two doses up by 50% so the 375 and 750.
And now with the amended protocol in the claudication study we will continue at 375 but now will be 500 as the higher dose.
Mark Monane - Needham
And did you see evidence of increased skeletal muscle performance at 375 as well as 750.
Andrew Wolff
We haven't commented with that level of granularity but I think what I can say is that we saw sufficient evidence of increased skeletal muscle performance that we are comfortable. And also when you weigh in the data from the ALS study where we are looking at 250 and 500 and seeing much better tolerability that we felt it was reasonable to continue the study at 500 instead of 750 without sacrificing the pharmacodynamic effects that were suggested by this early analysis.
Mark Monane - Needham
And does the pharmacokinetic profile today suggest that this might be able to be given as a twice a day drug and maybe you can each dose be lower rather than giving a bowl with if I might get the macro effect that might be less than optimal.
Andrew Wolff
I mean as we understand the more the concentrations that need to be maintained in order to achieve an effect. We are looking at probably once a day or twice a day.
But I couldn’t imagine it would need to be given more frequently even with our current fairly simple immediate release formulation more frequently than twice day. And it could well be that once a day we’ll suffice even with what we have now.
Robert Blum
The [marker] point is a very valid one in that, it may be ultimately that we would chose to start with lower doses and titrate up. This is all things that we need to determine as we will embark on multiple dose studies and strategies.
This single dose cross over design evidence effect study was not intended to optimize dosing schedule but rather to generate those pharmacodynamic signals that tells us how best to think about this drug on a going forward basis. And then we will do that in the context of multiple dosing.
Mark Monane - Needham
That is very helpful and then in question on the finance is shown given your excellent CFO skills. I was surprised to see that you are decreasing guidance in terms of expenses.
Is that because you were excellent in negotiation skills or if fewer people at the Cytokinetics or are the programs progressing at a rate maybe not as fast as you originally expected.
Sharon Barbari
I think there is probably two things that feed into that. One is with the change that we are making with the claudication trial.
Some of the expenses that were previously related to that study are going to low into 2011 as we revive this protocol and then begin dosing at the 500 milligram dosing schedule. So that is part of it and then others are just really minor shift because if you notice we didn’t move the guidance that much, minor shifts and expenses of sense that maybe didn’t occur when we thought they would roll into 2011.
Mark Monane - Needham
And then finally how many people now decided had decided to manage them. What's the optimal number going forward?
Sharon Barbari
We have currently about 108 employees at the company and I think that the optimal number is maybe a little bit higher than that, we use consultants to fill gaps where we have a critical need but I think overall we look somewhere around 114 to 119 employees.
Operator
The next question comes from Greg Wade with the Wedbush.
Greg Wade - Wedbush
With respect to the two studies, and are you getting bloods on folks and do you have any senses to whether doses creating well with exposure and you are giving a good exposure PV relationship? And then secondly, qualitatively there is respect to disease in both ALS and claudication.
Are you seeing good levels of efficacy across all patients? And then if you could just comment on whether the opportunity in this situation G is the drug, mutations and having service zero controls is that proving to be helpful in these studies?
Thanks.
Robert Blum
We crossover studied designs in this kind of trial or is very, very helpful. You get more statistical power and I also think you get more meaningful experience when each patient is exposed at the very least once to after treatment and as you know in this case its after treatment in two different dose levels.
Its too early in the data are fused to go through things of this sort of responder, non-responder analysis to say that everybody is benefiting, the most patients are benefiting but I don’t think we would be willing to make the statements that we have made about pharmacodynamic effects if they want. Sufficiently persuasive across the very limited data that we do have to go forward with something like that.
Greg Wade - Wedbush
And there was a rationale in the claudication study was going with the higher dose, preclinically is there something that you are seeing with respect to an effect on stamina that suggested that a higher level of exposure is necessary and are you still as confident that type of achievement benefit can be demonstrated and thanks for taking my questions.
Andrew Wolff
There is no reason, to go with the higher doses on the claudication per se, there are couple of miles and I will elaborate. The first one logistrate of pragmatic we were further along in the progression through our Phase I first time in human study when we came to design the claudication study.
We prioritize getting the ALS study in the clinic first until we have the benefit of additional dose escalation in healthy volunteers and when we came to the claudication trial and felt that we had good reason to believe that 375 and 750 should be well tolerated. Secondly, there was some information from our pre-clinical safety studies that is ingested that possibly women might have higher plasma levels that female animals did have some what higher levels than the male animals.
And since we were more likely to have women in the ALS study than in the claudication study which is a disease preponderantly not exclusively but far more preponderantly in men. We felt a little more comfortable and I will say by the way that our examination of the plasma data to date from the clinical studies doesn’t really show any difference between men and women and that’s often the case that you see these differences between the sectors in the animal species that don’t really come to be present in humans once you get into human testing.
And then finally there was a potential for drug driving interaction with (inaudible) which is another drug that’s used to treat ALS and we are still looking into that but that was another reason to be a little more gingerly on the dose (Inaudible) as compared to claudication.
Operator
And next question comes from Larry Smith with DLS Research
Larry Smith - DLS Research
I have a follow up to Joe’s question which started off the Q&A, and actually I will say that in a meeting and I had an occasion to talk Dr. Roger Perlmutter in a brief hallway discussion, so through some trepidation make any comments because it was not a conversation where you could follow up and I may have misunderstood some of the points he was making, but I asked him pretty much the same question that Joe why the sale IV study and I think hospitalized setting.
And what my take away from it was that he felt that systolic dysfunction will be gating factor, this is my interpretation of this remark, that he feels that systolic dysfunction is the gating factor before Amgen really plunges in and he wanted to look at the thick population in a carefully controlled studying like the hospital to really get a firm fix on the degree of systolic the effect of systolic function what that prelates is the question would be one: if you are feeling that this is why they are doing study and it’s a case we will be getting information along the way that will allow his questions to be answered. And let me guess, and I guess also was there any kind of signal either from regulatory or clinical that will cause him to perhaps put more emphasis on systolic function than might have been the case perhaps a year or two ago?
Robert Blum
So again I’ll lead and then ask Andy to elaborate, but I’ll remind you Larry that it has originally expected that we would proceed initially with an intravenous form of the drug into Phase IIB. Has oral forms of the drug when cytokinetics was developing this and still awaiting news from Amgen as to whether it was going to be exercising its option.
We saw [America] taking that approach and I think Amgen is also sees merit in that approach now and it is part and parcel to the points that I think you are you inferred from Rogers’s comments back to you. But also because we believe that we are continuing to optimize the oral forms of the drug and this will provide some information that could be helpful in terms of picking an oral form of the drug and also addressing the correlation between the Cytokinetic dynamic responses we saw in Phase 2A and what would be deemed clinical benefit as can be seen now in proceeding to phase 2B.
As specifically this systolic dysfunction and more severely ill patients I’ll ask Andy to comment on that.
Andrew Wolff
Well all the patients that we enroll in the trials whether they are in patients or out patients or IV or oral have to have historic dysfunction for the therapeutic hypothesis to be valid, so non-deem present for your wholly conversation with Roger and understanding exactly what you asked him and exactly what he answered I don't know that I could, I am not sure exactly what he was intending to convey because everyone that we've enrolled that has heart failure, has heart failure due to systolic dysfunction. And everybody that we would intend to study going forward.
Robert Blum
But maybe you are getting at the fact that in the case of the Phase IIa population they were deemed stable and the case of the Phase IIb they are going to be truly de-compensated so we would expect that those acute exacerbations of the heart failure maybe informative to us with this mechanism of actions.
Larry Smith - DLS Research
I guess I am not trying to imply anything negative and Andy you are quite right there was a very brief conversation and I could have easily misinterpreted it, but what I am trying to figure out the best that I can try to ask a question is, is it just that he really wants to nail down the systolic dysfunction category in a very meaningful population group, the sector population group. And well that seems to what he is doing but is it just based upon caution or making sure that you really lay a good foundation for the Phase III trial and I suspect that is the case as opposed to some kind of signal either from clinical data or from the regulatory agencies.
Andrew Wolff
Again if you are asking us to comment on what was going through Roger’s mind at the time I hope you’ll understand that we cannot, I can speak for what the joint development committee is interested in learning and how we have agreed together with Amgen to proceed and that’s to answer your question, informed both by discussions we’ve had with regulatory authorities as well as together with our key opinion leaders and there is a general consensus that we ought to go with what we know for the product in its intravenous form having more predictable PKPD relationships, it only seems prudent to proceed next into Phase IIb with that form of the drug and while we will dialog with regulatory authorities about how best to do that, that will instruct how then to approach those same regulatory authorities with respect to the study that would be comparing oral forms of the drug and getting dose levels in plasma concentrations appropriately. So I hope that’s an answer to your question.
I am not exactly sure.
Operator
Your final question is a follow-up from Ritu Baral.
Ritu Baral - Canaccord Adams
Just looking at the two trials, the ALS trial and the claudication trial. Can you sort of compare and contrast who or which patient population of the two would you see as more frail and less patients are notoriously frail, but you are going after older I believe claudication patients in this trial.
Just trying to figure out how that may contribute to what we are seeing as far as the side effects.
Robert Blum
The ALS patients are perhaps more debilitated overall in terms of their physical functioning, claudication patients are definitely much older and are more concomitant therapies.
Ritu Baral - Canaccord Adams
But, would you expect the ALS patients to sort of manifested a dyskinesia before the claudication or actually, I'm just trying to figure out what the mechanism might be in one population versus another?
Andrew Wolff
I think these types of adverse events that were seeing the dizziness to dyskinesian that kind of thing are not related, I don’t think, and we don’t really know for sure. But I don’t think they were on target effects, not related to the mechanism to the drop there, something unattended that occurs for some reason that we're trying hard to elucidate once the gervais enter the center central nervous system.
So I can't speculate that there are relevant differences in the brains of patients with claudication or those with ALS that would make them more or less susceptible to these things, and I really think it was just a matter of the higher doze in the claudication study being not as well tolerated as 500 is in patients with ALS in the ALS study. But I suspect that had we been studying 750 in ALS you wouldn’t had similar issues.
Ritu Baral - Canaccord Adams
Got it. So do you guys think that the promise of the drug in claudication is basically similar to what you saw before you started this trial as opposed to less promising?
Andrew Wolff
So we're at the stage with our first look at the data for the claudication study as we were a couple of months ago with our first look at the data from ALS. In each case those first looks were based on relatively few patients and they were remotely about ensuring that we were comfortable continuing the study at the current doses, and basically because they were tolerable.
And in the ALS study with 250 to 500 milligrams, we were not seeing any reason to introduce those doses. And in the claudication study we felt we did need to reduce the higher dose.
But it’s too soon to really comment much relative to the potential efficacy in the two different diseases cause we are having really very good data right now to look at in that regards some claudication. So it comes to down, when you got something that’s not particularly well tolerated you can pretty well figure that out when even as the other two patients stop tolerate, something particular with well you got to need to see it over and over again before you can conclude that’s enough you better give lower doses.
And determining that something that was really effective you need to have amazingly clear data with the number of patients that we look at and claudication does include any of that I think would have factored or effect. So while we could be comfortable that it was appropriate to reduce the dose I don’t see anything now we are together about, we have an enhanced or diminished view of the potential for the compound of claudication.
Robert Blum
Yes I’ll be with that, we very carefully are communicating today that we are encouraged by their pharmacodynamic effects in both studies ranking them one relative to the other is I think impractical given designs here but I think what you are hearing Andy and Cytokinetics speaks publicly today it is in each study the drug appears to be well tolerated and also we are seeing encouraging pharmacodynamic effects. However, we have said the caveat being in the claudication studies, many fewer patients suffered.
And presented right now for an interim review and we believe that we should be lowering the dose in recognition of these SAEs.
Ritu Baral - Canaccord Adams
And Robert you mentioned supply. Can you have these status of supply and how much drug do you have on hand and who is making it for you?
Robert Blum
I certainly can't speak to who is making in for us, at least not publicly that something that we deem to be on proprietary, I will tell you that we are making supply for what could be advancement into our later stage studies so we are approaching our budgeting with the understanding that as we conclude these studies, we were in the world position to go to the next level.
Ritu Baral - Canaccord Adams
And your current supplier has the capacity to provide you with all the supply that you need going forward?
Robert Blum
Certainly yes.
Ritu Baral - Canaccord Adams
So, not looking at a transition in the near future?
Robert Blum
No. Not at all, thank you, that’s a good question but no that would not be a risk.
Operator
And there are no further questions. I'll turn the conference back over to Robert Blum.
Robert Blum
Thank you so much. And also thank you to all the participants on our teleconference today.
We very much appreciate your continued interest in Cytokinetics. And with that operator, we can conclude the call.
Wishing everybody a good day.
Operator
This does conclude the conference, you may now disconnect.