Heart Disease-Focused Cytokinetics Operations Are On Track Despite Acquisition Uncertainty, Analysts Observe

On Wednesday, Royalty Pharma plc RPRX and Cytokinetics Incorporated CYTK entered into a strategic funding collaboration providing capital to support the commercialization of aficamten and advance the company’s expanding cardiovascular pipeline.

The transaction includes funding for planned commercialization, development funding, royalty restructuring, revenue sharing, and the purchase of Cytokinetics equity. 

Together, these provide Cytokinetics with $250 million on closing and up to a total of $575 million to support the company’s further maturation and corporate development.

Cytokinetics also priced a public offering of 9.8 million shares at $51/share, with gross proceeds of approximately $500 million.

Also Read: Cytokinetics’ Heart Drug Is A Multi-Billion Dollar Opportunity By 2032 Despite Novartis Setback: Analyst.

HC Wainwright writes, “The transactions send a clear message that all operations at Cytokinetics, led by aficamten, are full speed ahead regardless of any potential business development plans.”

The analyst notes that there might be increased uncertainty in the stock due to past rumors suggesting that a merger or acquisition was possible. However, despite the potential for acquisition, Cytokinetics remains focused. Recent transactions indicate a strong commitment and focus, which is expected to be positively received by investors.

HC Wainwright analyst writes, “We believe there may be added volatility with the shares as some may interpret that M&A is now off the table following several prior rumors and speculation.”

The analyst has updated the price target from $94 to $90, with a Buy rating.

Needham writes, “The new funding, and omecamtiv’s rebirth, will surely disappoint investors who were anticipating a CYTK acquisition.”

The analyst maintains a Buy rating based on valuation and expectations that aficamten has potential for a differentiated product label, but cut the price target from $108 to $72, reflecting lowered near-term M&A expectations and the lack of major value-driving catalysts until 2025.

Price Action: CYTK shares are down 17.20% at $49.04 at the last check on Thursday.