Cytokinetics Hopes to Emulate Vertex's Market Success, Share Price Gains

Company is aiming to become leading provider of specialty heart treatments

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Jun 23, 2022
Summary
  • Shares of San Francisco-based biopharma near 52-week high.
  • Analysts unanimously rate the stock a buy.
  • Key drug now in FDA review with another in phase 3 trials.
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If Cytokinetics Inc. (

CYTK, Financial) can come anywhere close to achieving its lofty ambition of becoming the Vertex Pharmaceuticals Inc. (VRTX, Financial) of specialty cardiovascular drugs, shares of the San Francisco-based biopharma are a bargain at $45, even though that is pushing the company’s 52-week high.

The stock of Boston-based Vertex has climbed 44% in the past year, giving the 23-year-old biotech a market value of $71.5 billion, dwarfing Cytokinetics’ valuation of under $4 billion. Another big difference is that Vertex is making money, earning $3.52 per share in the first quarter on sales of $2.1 billion. The former fell short of the Zacks consensus estimate, while the revenue number beat it.

Meanwhile, Cytokinetics lost $1.02 in the first quarter on sales of $1.15 million, both measures below Zacks' expectations. But those disappointments have not cooled analysts’ ardor for the stock. Of eight providing opinions, seven rate it a buy and one as a strong buy with a median estimate of more than $61, reported Yahoo Finance.

Vertex is a favorite of Wall Street, too. Of a total of 27 analysts, 22 have the stock as a buy or strong buy with a median estimate just above the current share price of $280.50. The company has flourished on the strength of its singular focus on cystic fibrosis treatments. It is estimated the company has 97% of the market, which was projected to be $6.36 billion in 2020 and is expected to grow rapidly in the next several years.

To follow in Vertex’s footsteps, Cytokinetics is banking on earning the Food and Drug Administration's approval for both the heart failure drug omecamtiv and the company’s next important asset, aficamten, which is currently in phase 3 clinical testing. The former has a bit of a sketchy history. Two years ago, Amgen Inc. (

AMGN, Financial) abandoned the partnership on the drug, but that has not waylaid Cytokinetics’ plans. Evaluate reported the company believes it has found a niche it can chase alone, at least in the U.S., and it has even bigger long-term plans.

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Of course, that is if the treatment gets green-lighted by the FDA. That has become more problematic given the regulatory agency blindsided the company and investors by saying it is planning an advisory committee for the drug, where it will be scrutinized by outside experts. However, that does not appear to concern Cytokinetics CEO Robert Blum, who told Evaluate there is nothing to indicate the FDA has any issues with the drug.

Even if it does get approved, sell-side analysts think it will generate sales of only $326 million by 2028. That is why they are looking ahead to aficamten, which they think could be a blockbuster six years down the line.

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I am/we currently own positions in the stocks mentioned, and have NO plans to sell some or all of the positions in the stocks mentioned over the next 72 hours. Click for the complete disclosure
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