Good morning, readers! Today, I’m taking over for Ed Silverman and bringing you the latest news from Brooklyn. Instead of sipping on flavored coffee, we’ll be enjoying Barry’s tea. And yes, we will also be featuring some adorable cats. Don’t worry, though, we’ve got some exciting news lined up for you. Though we can’t wait to welcome back Pharmalot, let’s dive in.
Cytokinetics recently struck a deal with Royalty Pharma, a biotech company known for its success in acquiring small shares of other companies’ drugs. This deal secures Cytokinetics up to $575 million in funding, as reported by STAT. Unfortunately, investors are not happy about this news and the stock has dropped by 14% in early trading. Stockholders were hoping for a larger company to acquire Cytokinetics, especially with its nearly approved heart drug aficamten in the pipeline. However, this deal makes that scenario less likely.
According to my colleague Adam Feuerstein’s STAT column, Cytokinetics is also planning another trial for its heart failure drug omecamtiv mecarbil which has previously failed. The terms of this trial heavily favor Royalty Pharma. If the drug succeeds, Royalty Pharma stands to gain $100 million and a 2% royalty but if it fails then Cytokinetics will have to pay Royalty Pharma $275 million. Adam suggests that this deal may not work out in Cytokinetics favor potentially placing CEO Robert Blum on his list of potential worst CEOs for the year
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