Novartis is closing in on a takeover of Cytokinetics, the Wall Street Journal reported Monday. CYTK stock soared in afternoon action.
The deal follows positive results last month from Cytokinetics' drug, aficamten, in patients with a progressive disease that can results in heart failure. Shares rocketed more than 82% on Dec. 27 and have continued to climb since then.
On today's stock market, CYTK stock surged another 15.3% to 108.06. Novartis, which already announced the buyout of privately held Calypso Biotech on Monday, saw its shares rise a fraction to 107.08.
Representatives of the two companies declined to comment to Investor's Business Daily.
Rivaling Bristol Myers Squibb
Cytokinetics compared aficamten to a placebo in patients with obstructive hypertrophic cardiomyopathy, or HCM. Patients who received aficamten for 24 weeks showed a statistically significant improvement in their ability to exercise. They also showed improvements on 10 secondary measures.
The results "establish aficamten as (the) future standard of care for HCM," Needham analyst Serge Belanger said in a report on Dec. 27.
Aficamten is going up against Bristol Myers Squibb's Camzyos. In the September quarter, Camzyos generated $68 million in worldwide sales. It's expected to become a blockbuster in 2026, topping $1.16 billion, according to FactSet.
Cytokinetics Chief Executive Robert Blum says there are key ways aficamten can improve on Camzyos. Aficamten has a shorter half-life than Camzyos, he said. This means the drug leaves the patient's body faster. Physicians can increase the dosage rapidly and relieve symptoms sooner.
The Food and Drug Administration requires patients taking Camzyos to receive echocardiograms while their dosage is being increased, and then every three months throughout treatment. Due to this, just 3% to 5% of patients with symptomatic HCM use Camzyos, he estimated.
"These assessments render it logistically complicated for physicians" to prescribe Camzyos, he said in a December interview with IBD.
CYTK Stock Claws Back
Analysts have been bullish on CYTK stock following the results in December.
Leerink Partners analyst Roanna Ruiz noted just 3.5% of patients in Cytokinetics' Sequoia study reported low ventricular ejection fraction, or LVEF. And none of them dropped out. LVEF occurs when some of the heart isn't pumping enough blood, according to the American Heart Association.
"All in all, we think the data could provide a path for higher clinical uptake than we previously expected, including (an) incrementally raised possibility of aficamten receiving a less restrictive (risk evaluation and mitigation strategies plan) relative to Camzyos," she said in a Dec. 27 report.
Ruiz kept her outperform rating on CYTK stock.
Cytokinetics faced numerous setbacks in 2023. The FDA refused to approve its potential treatment for heart failure, and Cytokinetics scrapped testing an experimental drug for amyotrophic lateral sclerosis, or ALS. The latter showed no impact in a study announced last month.
But, after falling precipitously from late September through the end of the year, CYTK stock has climbed 105% as of Friday's close, following the Dec. 27 results in HCM. Shares now have a perfect IBD Digital Relative Strength Rating of 99, which puts their 12-month performance in the leading 1% of all stocks regardless industry group.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
