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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.00pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
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Not scored
Net-tone change vs last year's 10-K.
MD&A
+0.00pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
unpaid+5
limitation+5
declining+2
impairment+1
failure+1
Positive rising
effective+6
gain+3
greater+3
successful+2
improve+2
MD&A (Item 7)
28,908 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis should be read in conjunction with our financial statements and accompanying notes included elsewhere in this report. Operating results are not necessarily indicative of results that may occur in future periods.
Overview
We are a biopharmaceutical company focused on discovering, developing and commercializing novel muscle activators and muscle inhibitors as potential treatments for debilitating diseases in which muscle performance is compromised and/or declining. We have discovered and are developing muscle-directed investigational medicines that may potentially improve the healthspan of people with devastating cardiovascular and neuromuscular diseases of impaired muscle function. Our research and development activities relating to the biology of muscle function have evolved from our knowledge and expertise regarding the cytoskeleton, a complex biological infrastructure that plays a fundamental role within every human cell. As a leader in muscle biology and the mechanics of muscle performance, we are discovering and developing small molecule drug candidates specifically engineered to impact muscle function and contractility with objective to build a sustainable specialty biopharmaceutical business.
Our first commercial product is MYQORZO (aficamten), 5 mg, 10 mg, 15 mg, and 20 mg tablets which the FDA approved in December 2025. MYQORZO has since been approved in both the European Union and China. MYQORZO is an allosteric and reversible inhibitor of cardiac myosin motor activity. The approval of MYQORZO included a risk evaluation and mitigation strategy (REMS) program to ensure the benefits of the drug outweigh the risk of heart due to systolic . In patients with oHCM, myosin inhibition with MYQORZO reduces cardiac contractility and left ventricular outflow tract . MYQORZO became available for prescription to patients on January 27, 2026 in the United States. We expect that MYQORZO will be made available in the European Union (starting with Germany in the second quarter) and China in 2026
For further information regarding our business, refer to Part I, Item 1. Business of this Annual Report on Form 10-K.
Liquidity and Capital Resources
Our cash, cash equivalents, and investments and a summary of our borrowings and working capital as of December 31, 2025 and 2024 are summarized as follows (in millions):
December 31, 2025
December 31, 2024
(In millions)
Financial assets:
Cash and cash equivalents
Short-term investments
Long-term investments
Total cash, cash equivalents, and marketable securities
Borrowings:
Term loans (including related derivative liabilities measured at fair value)
Convertible notes, net
Liabilities related to RPI transactions measured at fair value
Total borrowings
Working capital:
Current assets
Current liabilities
Working capital
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The following table shows a summary of our cash flows for the periods set forth below (in millions):
Years Ended December 31,
(In millions)
Net cash used in operating activities
Net cash (used in) provided by investing activities
Net cash provided by financing activities
Total
Sources and Uses of Cash
We funded our operations and capital expenditures with proceeds primarily from private and public sales of our equity securities, royalty monetization agreements, and revenue interest agreements, strategic alliances, long-term debt, other financings and interest on investments. We have generated significant operating losses since our inception. Our expenditures have historically been primarily related to research and development activities but have recently and will increasingly relate to our commercial readiness activities and general commercialization activities of our drug products. In December 2025, the FDA approved MYQORZO, 5 mg, 10 mg, 15 mg and 20 mg tablets for the treatment of adults with symptomatic oHCM to improve functional capacity and symptoms, with sales of MYQORZO commencing in the first quarter of 2026. Accordingly, we will be increasingly relying on revenues generated from commercial sales of MYQORZO and/or traditional financing activities to fund our operations and cash expenditures.
Cash Flows Used in Operating Activities
Net cash used in operating activities of $510.0 million and $395.9 million for 2025 and 2024, respectively, was largely due to ongoing research and development activities and general and administrative expenses to support research and development as well as commercial readiness. Net loss for 2025 and 2024 included, among other items: stock-based compensation, interest expense on liabilities related to revenue participation right purchase agreements and debt, and/or changes in fair values related to derivative liabilities and liabilities related to RPI Transactions and the debt conversion expense due to 2027 Note repurchase.
Cash Flows Used in Investing Activities
Net cash used in investing activities of $16.7 million for 2025 was primarily due to maturities of investments, offset by purchases of investments and property, plant and equipment.
Net cash used in investing activities of $553.1 million for 2024 was primarily due to purchases of investments, offset by maturities of investments.
Cash Flows Provided by Financing Activities
Net cash provided by financing activities of $524.5 million in 2025 was primarily attributable to the issuance of the 2031 Notes of $750 million, $75.0 million and $100.0 million in proceeds from the drawing on Tranche 4 and Tranche 5 of the RP Multi Tranche Term Loan, respectively, and net proceeds from stock-based award activities partially offset with the 2031 Notes debt issuance costs of $20.4 million and the exchange of $402.5 million of 2027 Notes.
Net cash provided by financing activities of $930.6 million in 2024 was due to $250.0 million in proceeds from the 2024 RPI Transactions, $563.2 million of net proceeds from a public offering of common stock and issuances of common stock of $93.6 million under the Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co, discussed below, and stock-based award activities.
2024 Royalty Pharma Transactions
In May 2024, we entered into a series of financing agreements with affiliates of Royalty Pharma, including the RP OM Loan Agreement, the RP Ulacamten RPA, the 2022 RP Multi Tranche Loan Agreement Amendment, the RP Aficamten RPA Amendment, and the RP Stock Purchase Agreement for a private placement of common stock concurrent with our underwritten public offering of common stock.
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The RP OM Loan Agreement provides for a loan in the principal amount of $100.0 million that was drawn at the closing with no remaining amounts available for disbursement. The loan under the RP OM Loan Agreement matures on the 10 year anniversary of the funding date and is repayable in quarterly installments, the amounts of which will depend on the occurrence of certain events related to the results and timing of COMET-HF and potential regulatory approvals of omecamtiv mecarbil, as follows:
Scenario 1: If the Phase 3 clinical trial of Cytokinetics’ proprietary small molecule cardiac myosin activator known as omecamtiv mecarbil is successful (defined as meeting the composite primary endpoint of the first event, whichever occurs first, comprising of cardiovascular death, heart failure event, LVAD implementation/cardiac transplantation, or stroke, with a hazard ratio (HR) of less than 0.85 and cardiovascular death endpoint HR of less than 1.0) by June 30, 2028 and we receive the marketing approval from the FDA for omecamtiv mecarbil on or prior to December 31, 2029 (“OM Approval Date”), commencing on the calendar quarter during which the FDA approval is obtained, we are required to pay RPDF (x) (i) $75.0 million ten business days after the OM Approval Date and (ii) $25.0 million on the first anniversary of the OM Approval Date and (y) on a quarterly basis an amount equal to 2.0% of the annual worldwide net sales of omecamtiv mecarbil, subject to a minimum floor amount ranging from $5.0 million to $8.0 million during the first 18 calendar quarters (the payment of the 2.0% of the annual worldwide net sales starting from the 19th calendar quarter shall be referred to as the “Royalty Payment”). Our obligation to pay the Royalty Payment will continue after maturity of the Loan;
Scenario 2: If the Phase 3 clinical trial of omecamtiv mecarbil is successful by June 30, 2028 but we have not received the marketing approval from the FDA for omecamtiv mecarbil on or prior to December 31, 2029, we are required to pay RPDF 18 equal quarterly cash payments totaling 237.5% of the principal amount of the loan commencing on March 31, 2030; and
Scenario 3: If the Phase 3 clinical trial of omecamtiv mecarbil is not successful by June 30, 2028, we are required to pay RPDF 22 equal quarterly cash payments totaling 227.5% of the principal amount of the loan commencing on September 30, 2028.
The interest on this loan is included in the scheduled payment amount for each scenario.
Pursuant to the RP Ulacamten RPA, RPI ICAV purchased rights to up to 4.5% of worldwide net sales of drug products containing ulacamten by us, our affiliates or licensees, in exchange for up to $200 million in consideration, $50 million of which was paid upfront and, following the initiation of the first Phase 3 clinical trial (or the Phase 3 portion of the first Phase 2b/3 clinical trial) in HFpEF for ulacamten, at RPI ICAV’s sole discretion, up to in aggregate $150 million to fund 50.0% of the research and development cost of ulacamten. The initial $50 million paid to us entitles RPI ICAV to 1% of worldwide net sales of drug products containing ulacamten by us, our affiliates, or licenses. We will not know for certain whether any additional funding under the RP Ulacamten RPA may be available to us until the conclusion of AMBER-HFpEF, the results of the trial are known, and RPI ICAV has decided to exercise its option to purchase an incremental 3.5% revenue interest on our future annual worldwide net sales of drug products containing ulacamten or not.
2022 Royalty Pharma Transactions
In January 2022, we entered into a series of financing agreements with affiliates of Royalty Pharma, including the RP Multi Tranche Loan Agreement, and the RP Aficamten RPA.
Under the RP Multi Tranche Loan Agreement, we have drawn $275 million as of December 31, 2025. The remaining $175 million tranche 7 loan is also available to us now that the conditions for reimbursement, namely approval of our NDA for aficamten in patients with oHCM on or prior to December 31, 2025, have been met. We expect to draw Tranche 7 unless we are able to meet our financing requirements through more favorable funding sources.
Each term loan under the RP Multi Tranche Loan Agreement matures on the 10 year anniversary of the funding date for such term loan and is repayable in quarterly installments of principal, interest and fees commencing on the last business day of the seventh full calendar quarter following the calendar quarter of the applicable funding date for such term loan, with the aggregate amount payable in respect of each term loan (including interest and other applicable fees) equal to 190% of the principal amount of the tranche 1, tranche 4, tranche 5, tranche 6, and tranche 7 term loans (such amount with respect to each term loan, “Final Payment Amount”). We commenced repayment of the RP Multi Tranche Loans in the fourth quarter of 2023 and will pay approximately $20.2 million in interest and principal on the term loans in 2026.
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RP Aficamten Royalty Purchase Agreement
Under the RP Aficamten RPA, RPI ICAV purchased rights to certain revenue streams from net sales of pharmaceutical products containing aficamten by us, our affiliates and our licensees in exchange for up to $150.0 million in consideration, $50.0 million of which was paid on the closing date, $50.0 million of which was paid to us in March 2022 following the initiation of the first pivotal trial in oHCM for aficamten, and $50.0 million of which was paid to us in September 2023 following the initiation of the first pivotal clinical trial in nHCM for aficamten.
RPI ICAV initially purchased the right to receive a percentage of net sales equal to 4.5% for annual worldwide net sales of pharmaceutical products containing aficamten up to $1 billion and 3.5% for annual worldwide net sales of pharmaceutical products containing aficamten in excess of $1 billion, subject to reduction in certain circumstances. However, in May 2024, we entered into the RP Aficamten RPA Amendment to restructure the royalty so that RPI will now receive 4.5% up to $5.0 billion of worldwide annual net sales of aficamten and 1% above $5.0 billion of worldwide annual net sales. Our liability to RPI ICAV is referred to as the “RP Aficamten Liability”.
We account for the RP Aficamten Liability as a liability primarily because we have significant continuing involvement in generating the related revenue stream from which the liability will be repaid. When aficamten is commercialized and royalties become due, we will recognize the portion of royalties paid to RPI ICAV as a decrease to the RP Aficamten Liability and a corresponding reduction in cash.
The carrying amount of the RP Aficamten Liability is based on our estimate of the future royalties to be paid to RPI ICAV over the life of the arrangement as discounted using an imputed rate of interest. The imputed rate of interest on the carrying value of the RP Aficamten Liability was approximately 22.6% and 23.5% as of December 31, 2025 and 2024, respectively.
2017 RP Omecamtiv Mecarbil Royalty Purchase Agreement
In February 2017, we entered into the RP OM RPA pursuant to which we sold a portion of our right to receive royalties from Amgen on future net sales of omecamtiv mecarbil to RPFT for a one-time payment of $90 million, which is non-refundable even if omecamtiv mecarbil is never commercialized. Concurrently, we entered into a common stock purchase agreement with RPFT through which RPFT purchased 875,656 shares of the Company’s common stock for $10.0 million. We allocated the consideration and issuance costs on a relative fair value basis to our liability to RPFT related to sale of future royalties under the RP OM RPA (the “RP OM Liability”) and the common stock sold to RPFT, which resulted in the RP OM Liability being initially recognized at $92.3 million. The RP OM RPA, as amended, provides for the sale of a royalty to RPFT of 5.5% on worldwide net sales of omecamtiv mecarbil.
We account for the RP OM Liability as a liability primarily because we have significant continuing involvement in generating the related revenue stream from which the liability will be repaid. If and when omecamtiv mecarbil is commercialized and royalties become due, we will recognize the portion of royalties paid to RPFT as a decrease to the RP OM Liability and a corresponding reduction in cash.
The carrying amount of the RP OM Liability is based on our estimate of the future royalties to be paid to RPFT over the life of the arrangement as discounted using an imputed rate of interest. The excess of future estimated royalty payments over the $92.3 million of allocated proceeds, less issuance costs, is recognized as non-cash interest expense using the effective interest method. The imputed rate of interest on the RP OM Liability is reassessed periodically and is not reduced below 0%. The imputed rate of interest on the carrying value of the RP OM Liability was 0.0% and approximately 0.1% as of December 31, 2025 and 2024, respectively.
Convertible Notes
On November 13, 2019, we issued $138.0 million aggregate principal amount of 2026 Notes. On July 6, 2022, we issued $540.0 million aggregate principal amount of 2027 Notes and used approximately $140.3 million of the net proceeds from the offering of 2027 Notes and issued 8,071,343 shares of common stock to repurchase approximately $116.9 million aggregate principal amount of the 2026 Notes pursuant to privately negotiated exchange agreements entered into with certain holders of the 2026 Notes concurrently with the pricing of the offering of the 2027 Notes. As a result of the partial repurchase of the 2026 Notes, we recorded a debt conversion expense of $22.2 million, consisting of the difference between the consideration to the holders pursuant to the exchange agreements and the if-converted value of the 2026 Notes under the original terms.
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On September 19, 2025, we issued $750.0 million aggregate principal amount of 2031 Notes and used approximately $402.5 million of the net proceeds from the offering of 2031 Notes and issued 2,168,806 shares of common stock to repurchase approximately $399.5 million aggregate principal amount of the 2027 Notes pursuant to privately negotiated exchange agreements entered into with certain holders of the 2027 Notes concurrently with the pricing of the offering of the 2031 Notes. This resulted in recording debt conversion expense in the third quarter of 2025 of $121.2 million, consisting of the difference between the consideration to the holders pursuant to the exchange agreements and the if-converted value of the 2027 Notes under the original terms.
As of December 31, 2025, there remains $21.1 million aggregate principal amount of 2026 Notes outstanding reflected in current liabilities, $140.5 million of aggregate principal amount of 2027 Notes outstanding reflected in long term liabilities, and $750.0 million of aggregate principal amount of 2031 Notes outstanding in long term liabilities. The 2026 Notes and the 2027 Notes are redeemable, in whole or in part (subject to the Partial Redemption Limitation, in the case of the 2027 Notes), at our option at any time, and from time to time, and, in the case of any partial redemption, on or before the 60th scheduled trading day before the applicable maturity date, at a cash redemption price equal to the principal amount of the relevant Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price for the relevant notes on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we may send the related redemption notice; and (2) the trading day immediately before the date we may send such notice. On or after October 6, 2028, the 2031 Notes will be redeemable, in whole or in part (subject to the Partial Redemption Limitation), at our option at any time and from time to time, and, in the case of any partial redemption, on or before the 40th scheduled trading day before the maturity date for the 2031 Notes, at a cash redemption price equal to the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the 2031 Notes are also freely tradable and all accrued and unpaid additional interest, if any, has been paid in full, as of the first interest payment date occurring on or before such redemption notice date, and the last reported sale price per share of our common stock exceeds 130% of the conversion price for the 2031 Notes on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we may send the related redemption notice; and (2) the trading day immediately before the date we may send such notice.
Greater China Out-license for Omecamtiv Mecarbil
In December 2021, we entered into the Corxel OM License Agreement, pursuant to which we granted to Corxel an exclusive license to develop and commercialize omecamtiv mecarbil in China and Taiwan. In December 2024, we entered into a mutual termination agreement with Corxel to terminate the Corxel OM License Agreement. Accordingly, all rights to develop and commercialize omecamtiv mecarbil have reverted to us.
Greater China Out-license for Aficamten
In July 2020, we entered into a license and collaboration agreement with Corxel, pursuant to which we granted to Corxel an exclusive license to develop and commercialize aficamten in China and Taiwan. In December 2024, Corxel assigned its rights and obligations under our license and collaboration agreement to Genzyme Corporation, an affiliate of Sanofi. In 2024, we recognized $15.0 million dollars from Corxel in connection with a modification of the original license prior to the assignment of Corxel's rights under our license and collaboration agreement for the development and commercialization of aficamten to Sanofi, and we may be eligible for another $10.0 million milestone payment from Corxel if certain conditions are met.
In the fourth quarter of 2025, we recognized $15.0 million in aggregate milestone revenues from Sanofi upon approval of MYQORZO in each of the United States and China. We may be eligible to receive future milestone payments from Sanofi totaling up to $135.0 million for the achievement of certain development and commercial milestone events in connection to sales of MYQORZO and development of aficamten in nHCM.
In addition, Sanofi will pay us tiered royalties in the low-to-high teens range on the net sales of pharmaceutical products containing aficamten, including MYQORZO, in China and Taiwan, subject to certain reductions for generic competition, patent expiration and payments for licenses to third party patents. The Sanofi Aficamten License Agreement, unless terminated earlier, will continue on a market-by-market basis until expiration of the relevant royalty term. We expect royalty revenues in 2026 to be immaterial as Sanofi begins initial commercialization activities in China.
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Japan Out-license for Aficamten
In November 2024, we entered into a license and collaboration agreement with Bayer Consumer Care AG, an affiliate of Bayer AG, pursuant to which we granted to Bayer an exclusive license to develop and commercialize aficamten in Japan, subject to certain reserved development rights. Under the terms of the Bayer License Agreement, we received an up-front payment of €50.0 million (equivalent to $52.4 million at the time of payment) which was recorded as deferred revenue at December 31, 2024 and was recognized in 2025 upon completion of certain performance technology transfer obligations. We recognized revenue associated with two clinical milestones totaling €10 million (equivalent to $11.8 million) in 2025. We expect to recognize an additional €10 million milestone payment in the first quarter of 2026 as a result of our first commercial sale of MYQORZO in the United States. We may also be eligible to receive up to an additional €70 million in milestones upon first commercial sale of aficamten in each of oHCM and nHCM in Japan and nHCM in the United States. We are also eligible for an additional €490 million in commercial milestone payments upon the achievement by Bayer of certain sales milestones and tiered royalties on the net sales of pharmaceutical products containing aficamten in Japan ranging from the high teens to the low thirty percents, subject to certain reductions for generic competition, expiration of certain patents and payments for licenses to third-party patents, until the latest of the expiration of certain patents, the expiration of regulatory exclusivity for the Product in Japan, and the end of a minimum specified term.
At-the-Market Sales of Common Stock
On March 1, 2023, we entered into the Amended ATM Facility, with Cantor, under which we may offer and sell, from time to time at our sole discretion, shares of Common Stock having an aggregate offering price of up to $300.0 million through Cantor, as sales agent. The Amended ATM Facility amends, restates and supersedes the Controlled Equity Offering Sales Agreement dated as of March 6, 2019 between the Company and Cantor.
Under the Amended ATM Facility, Cantor sold Common Stock by a method that was deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or any other trading market for Common Stock. Cantor was required to use commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We were required to pay Cantor a commission of up to 3.0% of the aggregate gross sales proceeds of any common stock sold through Cantor under the Amended ATM Facility, and we provided Cantor with customary indemnification rights. In 2023 and 2024, we issued 5,016,170 shares of our common stock for net proceeds of $164.2 million and 1,237,460 shares of our common stock for net proceeds of $93.6 million, respectively, under the Amended ATM Facility.
We exercised our rights to terminate the Amended ATM Facility with Cantor in February 2025.
On February 27, 2025, we entered into an Open Market Sale Agreement SM with Jefferies LLC under which we may offer and sell, from time to time, at our sole discretion, shares of Common Stock in “at the market offerings” pursuant to Rule 415(a)(4) under the Securities Act of 1933 through Jefferies LLC, as sales agent. As of December 31, 2025, we have not sold any shares of Common Stock under the Open Market Sale Agreement SM with Jefferies LLC.
Public Offering of Common Stock and Concurrent Private Offering
On May 28, 2024, we closed an underwritten public offering of 9,803,922 shares of Common Stock at a public offering price of $51.00 per share, which included the exercise in full by the underwriters of their option to purchase up to 1,470,588 shares of Common Stock at the public offering price. The gross proceeds to the Company from the offering were approximately $575 million and net proceeds were approximately $563.2 million, after deducting the applicable underwriting discounts and commissions. Concurrently with the closing of the underwritten public offering, RPI ICAV purchased 980,392 shares of Common Stock pursuant to the RP Stock Purchase Agreement, at a price of $51.00 per share in a concurrent private placement. The gross proceeds from the concurrent private placement were $50 million.
Future Uses of Cash
We expect that general and administrative expenses will significantly increase in 2026. In December 2025, MYQORZO was approved by the FDA, and accordingly, our sales and marketing expenses will increase significantly as we engage in commercialization activities in the United States. In February 2026, the European Commission approved MYQORZO® (aficamten), 5 mg, 10 mg, 15 mg and 20 mg tablets for the treatment of symptomatic (New York Heart Association, NYHA, class II-III) obstructive hypertrophic cardiomyopathy in adult patients, which means that we will significantly increase commercial readiness activities in Europe, initially in Germany, with commercial readiness activities in other major European countries to follow,
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In future periods, we also expect to incur substantial costs as we expand our research programs and continue development activities, including for the conduct of our on-going clinical trials for aficamten, omecamtiv mecarbil, ulacamten and CK-089. We expect to incur significant research and development expenses as we advance the research and development of compounds from our other muscle biology programs through research to candidate selection to clinical development, and we expect to file investigational new drug applications. Cytokinetics and multiple third-party contract development manufacturing organizations entered into various scopes of work with respect to the manufacturing of aficamten.
Our future capital uses and requirements depend on numerous factors. These factors include, but are not limited to, the following:
the initiation, progress, timing, scope and completion of preclinical research, non-clinical development, CMC, and clinical trials for our drug candidates and other compounds;
the time, costs and outcomes of regulatory reviews or other regulatory actions related to our drugs and drug candidates,
the jurisdictions in which we are granted regulatory approvals and thus are able to successfully launch our products for commercial sale;
delays that may be caused by requirements of regulatory agencies;
our level of funding for the development of current or future drugs and drug candidates;
the number of drug candidates we pursue and the stage of development that they are in;
the costs involved in filing and prosecuting patent applications and attacking, enforcing or defending patent claims;
our ability to establish and maintain selected strategic alliances required for the development of drug candidates and commercialization of our drugs and future drugs, if any;
our plans or ability to expand our drug development capabilities, including our capabilities to conduct clinical trials for our drug candidates;
our plans or ability to engage third-party manufacturers for our drugs or drug candidates;
our plans or ability to build or access sales and marketing capabilities, including commercial infrastructure and distribution capabilities, and to achieve market acceptance for MYQORZO and potential future drugs;
the expansion and advancement of our research programs;
the hiring of additional employees and consultants;
the acquisition of technologies, products and other business opportunities that require financial commitments;
our revenues from commercialization of MYQORZO and successful development and commercialization of any other drug candidates;
the cost of additional construction to expand our headquarters in South San Francisco and the cost in relation to expanding our leased office facilities in Radnor, Pennsylvania or other leased office spaces in Europe; and
the payments due for interest on the term loan and convertible debt;
We have incurred an accumulated deficit of approximately $3.5 billion since inception and there can be no assurance that we will attainprofitability. Although we have one approved product at this time, we remain subject to risks common to clinical-stage companies including, but not limited to, development of new drug candidates, dependence on key personnel, and the ability to obtain additional capital as needed to fund our future plans. Our liquidity will be impaired if sufficient additional capital is not available on terms acceptable to us, if at all. Until we achieveprofitable operations, we intend to continue to fund operations through payments from strategic collaborations, additional sales of equity securities, grants and other financings. With the recent FDA approval of MYQORZO in December 2025, we have only recently started generating revenues from the commercial sale of our drugs. Therefore, our success is dependent on our ability to generate substantial revenues from MYQORZO or potentially obtain additional capital by entering into new strategic collaborations and/or through financings, and ultimately on our and our collaborators’ ability to successfully develop and market one or more of our drug candidates. We cannot be certain that sufficient funds will be available from such collaborators or financings when needed or on satisfactory terms, including as a result of economic conditions, general global economic uncertainty, political change, war, the effects of inflationary pressures, including those resulting from tariffs and escalating trade tensions, and other factors including past and potential future bank failures in the United States. Additionally, there can be no assurance that MYQORZO or any of our drug candidates will be accepted in the marketplace or that any future products can be developed or manufactured at an acceptable cost. These factors could have a material adverse effect on our future financial results, financial position and cash flows.
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Based on the current planning assumptions, we believe that our existing cash and cash equivalents, investments and interest earned on investments will be sufficient to meet our projected operating requirements for at least the next 12 months. If, at any time, our prospects for internally financing programs and activities decline, we may decide to reduce expenses across the business. Alternatively, we may raise funds through strategic relationships, public or private financings or other arrangements. There can be no assurance that funding, if needed, will be available on attractive terms, or at all, or in accordance with our planned timelines. Furthermore, financing obtained through future strategic relationships may require us to forego certain commercialization and other rights to our drug candidates. Similarly, any additional equity financing may be dilutive to stockholders and debt financing, if available, may involve restrictive covenants. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategy.
Segment Information
We have one primary business activity and operate in one reportable segment.
Results of Operations
A discussion of our results of operations for the year ended December 31, 2023 and year-to-year comparisons between 2024 and 2023 can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K under the heading "Results of Operations."
Revenues
Our revenues since inception were primarily from our strategic alliances. We did not generate any revenue from commercial product sales prior to the year ended December 31, 2025. With the approval of MYQORZO for adults with symptomatic oHCM by the FDA in December 2025, we expect to start generating product revenue in the first quarter of 2026, and we expect commercial product revenues to increase over time as MYQORZO is accepted by physicians and patients.
Revenues in 2025, 2024, and 2023 were as follows (in millions):
Years Ended December 31,
Change
(In millions)
License and milestone revenues
Collaboration revenues
Total revenues
License and milestone revenues for 2025 were from Bayer and Sanofi. Under the Bayer licensing agreement, we recognized $52.4 million related to the successful completion of the technology transfer and $11.8 million related to certain clinical milestones in 2025. Under the Sanofi License Agreement, we recognized $15.0 million in December 2025 as a result of milestones triggered by approvals of MYQORZO in the United States and China.
Collaboration revenues in 2025 were primarily from Bayer under the Bayer License Agreement related to certain research and development cost reimbursements.
As of December 31, 2025, the receivables balance is primarily comprised of $2.6 million related to Bayer and $15.1 million related to Sanofi.
In November 2024, we entered into a license and collaboration agreement with Bayer Consumer Care AG, an affiliate of Bayer AG, pursuant to which we granted to Bayer an exclusive license to develop and commercialize aficamten in Japan, subject to certain reserved development rights. Under the terms of the Bayer License Agreement, we received an up-front payment of €50.0 million which was initially deferred at December 31, 2024 and was recognized in 2025 upon completion of certain technology transfer performance obligations, as discussed above.
License and milestone revenues recognized in 2024 were attributable to a $15.0 million non-refundable upfront payment from Corxel in the fourth quarter of 2024 in connection with a modification of the original license prior to the assignment of Corxel’s rights under our license and collaboration agreement for the development and commercialization of aficamten in China and Taiwan to Sanofi. The $15.0 million was reflected as a receivable at December 31, 2024.
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Collaboration revenues in 2024 were primarily from Corxel under our collaboration and license agreement with Corxel. As of December 31, 2024 receivables of $1.5 million were recorded related to Corxel.
Research and Development Expenses
We incur research and development expenses associated with both partnered and our own research activities, which we finance from our own cash-on-hand, financing arrangements with third parties, and reimbursement from our collaboration partners.
Research and development expenses for 2025, 2024, and 2023 were as follows (in millions):
Years Ended December 31,
Change
External costs:
(In millions)
Aficamten
Omecamtiv Mecarbil
Other programs
Unallocated
Total external costs
Internal costs:
Employee related
Facilities, lab supplies and other
Total internal costs
Total research and development expenses
Research and development expenses increased to $416.0 million in 2025 from $339.4 million in 2024, primarily due to advancing our clinical trials, higher personnel related costs including stock based compensation and medical affairs related activities.
We continue to develop aficamten to treat both oHCM and nHCM in two additional clinical trials: (i) ACACIA-HCM is a Phase 3 clinical trial for patients with symptomatic nHCM, and (ii) CEDAR-HCM, our placebo-controlled and open-label extension clinical trial to evaluate the efficacy, pharmacokinetics (PK) and safety of aficamten in a pediatric population with symptomatic oHCM. Additionally, we have FOREST-HCM which is an open label extension study designed to assess the long-term safety and tolerability of aficamten in patients with HCM.
We continue to develop omecamtiv mecarbil in COMET-HF, a Phase 3 clinical trial of omecamtiv mecarbil in patients with symptomatic HFrEF with severely reduced ejection fraction. The intention of the $100 million RP OM Loan Agreement was to partially cover the costs of COMET-HF.
We continue to develop ulacamten in AMBER-HFpEF, a Phase 2 clinical trial of ulacamten in patients with symptomatic HFpEF, in which patient enrollment commenced in the first quarter of 2025. The $50 million in proceeds from the RP Ulacamten RPA are intended to offset expenses related to the conduct of AMBER-HFpEF. If the results of AMBER-HFpEF are supportive of continuing the development of ulacamten and commencing a Phase 3 clinical trial, Royalty Pharma has the option to cover potentially 50% of the continued development of ulacamten up to $150 million, subject to Royalty Pharma’s opt-in right to acquire an additional 3.5% revenue interest in our or our licensee’s future worldwide net sales of drug products containing ulacamten.
In the fourth quarter of 2024, we announced that the first participants have been dosed in a Phase 1 randomized, double-blind, placebo-controlled, multi-part, single and multiple ascending dose clinical study of CK-089 in healthy human participants. CK-089 is a fast skeletal muscle troponin activator with potential therapeutic application to a specific type of muscular dystrophy and other conditions of impaired muscle function. The primary objective of this Phase 1 randomized, double-blind, placebo-controlled, multi-part single and multiple ascending dose clinical study is to evaluate the safety, tolerability and pharmacokinetics of CK-089 when administered orally as single or multiple doses to healthy participants. The study design includes single ascending dose cohorts and multiple-dose ascending cohorts comprised of 10 participants each. Our clinical development program for CK-089 is subject to a partial clinical hold from FDA that limits our ability to dose patients at doses anticipated to result in plasma exposures higher than certain levels, which may limit the ability of our Phase 1 trial to identify a therapeutic dose for CK-089. We conducted a Phase 1 evaluation, and we are in ongoing discussions with regulatory authorities to inform next steps.
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We expect that research and development expenses will be flat to declining in 2026 relative to 2025 due to the completion of MAPLE in 2025, the expected completion of ACACIA-HCM in the second half of 2026 partially offset by the continuation of COMET-HF,AMBER HFpEF and CEDAR-HCM.
General and Administrative Expenses
General and administrative expenses consist primarily of compensation for employees in executive and administrative functions, including, but not limited to, finance, human resources, legal, business and corporate development and strategic planning. Other significant costs include commercial readiness costs, facilities costs, consulting costs and professional fees for accounting and legal services, including legal services associated with obtaining and maintaining patents and regulatory compliance.
General and administrative expenses by program for 2025, 2024, and 2023 were as follows (in millions):
Years Ended December 31,
Change
(In millions)
Total general and administrative expenses
General and administrative expenses increased to $284.3 million in 2025 from $215.3 million in 2024, primarily due to investments toward commercial readiness including the hiring of our U.S. sales force primarily in the fourth quarter of 2025 and higher non-sales personnel related costs.
We expect sales, general and administrative expenses to increase significantly in 2026. With the approval of MYQORZO in the United States, we expect to incur additional expenses for commercial activities, included, but not limited to, the full year impact of the U.S. sales force, training and education, the implementation of compliance systems, patient support programs, sales and marketing expenses. In addition, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion recommending marketing authorization in the European Union for MYQORZO for the treatment of adults with symptomatic oHCM, (New York Heart Association class II-III), and therefore, we expect to incur similar expenses for commercial readiness activities in Europe but with additional expenses for the establishment of a corporate infrastructure to enable commercialization activities in key European markets, beginning in Germany with other major European markets to follow.
Interest Expense
Interest expense for 2025, 2024, and 2023 were as follows (in millions):
Years Ended December 31,
Change
(In millions)
Term loans
2026 Notes
2027 Notes
2031 Notes
Other
Total interest expense
Term loan interest increased year over year due to drawing on Tranche 4 and Tranche 5 in 2025 and incurring a full year of interest on Tranche 6 of the RP Multi Tranche Loan. In September 2025, we issued the 2031 Notes and used the net proceeds and common stock to partially repurchase the 2027 Notes reducing 2027 Notes interest expense and incurring 2031 Notes interest expense. Interest expense in 2024 includes approximately $4.8 million of financing fees related to the 2024 RPI Transactions.
Interest expense in 2026 is expected to increase further because of the $100 million drawn in October 2025 for Tranche 5 which will be outstanding for the entirety of 2026. Interest expense may increase further if we draw on Tranche 7.
Debt conversion expense
As a result of the partial repurchase of the 2027 Notes in the third quarter of 2025, we recorded $121.2 million in debt conversion expense, consisting of the difference between the consideration paid to the holders pursuant to the exchange agreements and the if-converted value of the 2027 Notes under the original terms.
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Non-cash interest expense on liabilities related to revenue participation right purchase agreements
Non-cash interest expense results from the accretion of our liabilities to RPFT and RP ICAV related to the sale of future royalties under the RP OM RPA and the RP Aficamten RPA, respectively.
Non-cash interest expense on liability related to the RP OM RPA and the RP Aficamten RPA in 2025, 2024, and 2023 were as follows (in millions):
Years Ended December 31,
Change
(In millions)
RP OM Liability
RP Aficamten Liability
Total non-cash interest expense recognized
The carrying amount of the RP Aficamten Liability is based on our estimate of the future royalties to be paid pursuant to RP Aficamten RPA over the life of the arrangement as discounted using an imputed rate of interest. In the second quarter of 2024, we recorded an additional $33.3 million to the carrying value related to the RP Aficamten RPA Amendment entered into May 22, 2024. The imputed rate of interest on the carrying value of the RP Aficamten Liability was approximately 22.6% as of December 31, 2025 and 23.5% as of December 31, 2024. The decline in the imputed rate of interest is due to a continued refinement of our assumptions including market and patient dynamics.
The carrying amount of the RP OM Liability is based on our estimate of the future royalties to be paid pursuant to RP OM RPA over the life of the arrangement as discounted using an imputed rate of interest. The excess of future estimated royalty payments over the $92.3 million of allocated proceeds, less issuance costs, is recognized as non-cash interest expense using the effective interest method. The imputed rate of interest on the carrying value of the RP OM Liability is reassessed periodically and is not reduced below 0%. The imputed rate of interest on the carrying value of the RP OM Liability was 0.0% as of December 31, 2025 and approximately 0.1% as of December 31, 2024.
We review our assumptions on a regular basis and our estimates may change in the future as we refine and reassess our assumptions.
Interest and Other Income, net
Interest and other income, net for 2025, 2024, and 2023 consisted primarily of interest income generated from our cash, cash equivalents and investments.
Change in fair value liabilities related to RPI transactions and derivative liabilities reflected on the Consolidated Statement of Operations.
The change in fair value liabilities related to the RPI transactions (RP OM Loan Agreement and RP Ulacamten RPA) and the derivative liabilities for the RP Multi Tranche Loan Agreement for the 2025 were as follows (in millions):
Year Ended December 31
Change
(In millions)
RP Ulacamten RPA
RP OM Loan
RP Multi Tranche Loan Agreement Derivatives
Total change in fair value liabilities
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The fair values of the liabilities related to RPI transactions (RP OM Loan Agreement and RP Ulacamten RPA) are based on significant unobservable inputs, including the probability of clinical success and regulatory approval based on historical industry success rates for product development specific to cardiovascular products, the estimated date of a product launch, estimates of pricing, sales ramp, variables for the timing of the related events, probability of change of control, and discount rates (which range from 10% to 18% as of December 31, 2025), which are deemed to be Level 3 inputs in the fair value hierarchy. As products containing omecamtiv mecarbil and ulacamten have not yet been commercialized, the estimates are highly subjective. For example, assumed increases in the probability of the clinical success for the programs for omecamtiv mecarbil or ulacamten could increase the value of the liabilities. Similarly, assumed decreases in the discount rates used in the fair value measurements could also increase the value of the liabilities at period end.
The fair values of the derivative liabilities is determined using the probability-weighted expected return method and the “with and without” method. The fair values are based on significant unobservable inputs, including the probability of change of control, the probability of default (less than 10%), discount rates (ranging from 10% to 15% as of December 31, 2025) and other factors.
The total change in the estimated fair value liabilities for 2025, was primarily driven by changes in the discount rates used in the valuation of the 2024 RP OM Loan and the derivatives associated with the RP Multi Tranche Loan Agreement.
Critical Accounting Policies and Significant Estimates
Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. We review our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included in this Annual Report on Form 10-K, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements
Fair Value Liabilities
As permitted under Accounting Standards Codification 825, Financial Instruments, or ASC 825, the Company elected the fair value option for recognition of the liabilities related to 2024 RP OM Loan Agreement and the RP Ulacamten RPA. In accordance with ASC 825, the Company records the liabilities at fair value and remeasures the liabilities at fair value each reporting period with changes in fair value associated with non-credit components are recognized in the consolidated statement of operations and comprehensive loss while the change in fair value associated with credit components is recognized in accumulated other comprehensive loss. The fair value of the liabilities is based on significant unobservable inputs, including the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of pricing, sales ramp, variables for the timing of the related events, probability of change of control, discount rates and other estimates, which are deemed to be Level 3 inputs in the fair value hierarchy. As products containing omecamtiv mecarbil and ulacamten have not yet been commercialized, the estimates are highly subjective. We recognized a loss on the change in the estimated fair value of liabilities of approximately $0.2 million in 2025, primarily due to changes in the discount rates used to measure the 2024 RP OM Loan Agreement and the RP Ulacamten RPA. See Note 3 — "Agreements with Royalty Pharma," to our Consolidated Financial Statements for further detail.
Derivative Liabilities
We recognize liabilities of our embedded derivative instruments related to the RP Multi Tranche Loan at fair value in the consolidated balance sheets. Each period, the fair value of the derivative liabilities are recalculated and resulting gains and losses from the changes in fair value of the derivatives with non-credit components are recognized in income, while the change in fair value associated with credit components is recognized in accumulated other comprehensive loss. Estimating fair values of derivative instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Since derivative instruments are initially and subsequently carried at fair value, the Company’s income will reflect the volatility in these estimate and assumption changes. We recognized a gain on the change in the estimated fair value of the derivative liabilities of approximately $4.2 million in 2025,
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Revenue Participation Right Purchase Agreements
We have entered into certain revenue participation right purchase agreements for omecamtiv mecarbil, aficamten, and ulacamten with affiliates of Royalty Pharma, pursuant to which such affiliates purchased rights to royalties from certain revenue streams. We typically account for such agreements as liabilities to be amortized under the effective interest rate method over the life of the related royalty stream, when we have continuing involvement with the underlying research and development activities. We typically account for such agreements as deferred income to be amortized under the units-of-revenue method, when there is no continuing involvement with the underlying research and development activities. We are required to update our estimates, each reporting period, related to the amount and timing of future royalty payments to be paid to the counterparties of the revenue participation right purchase agreements. The estimates of the future royalty payment determine the measurement of the non-cash interest expense and the carrying value of the liability.
Revenue participation right purchase agreements are measured using significant unobservable inputs. The estimates of future royalties requires the use of several assumptions such as: the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of eligible patient populations, estimates of prescribing behavior and patient behavior, estimates of pricing, payor reimbursement and coverage, and sales ramp. As MYQORZO sales have not commenced and products containing omecamtiv mecarbil and ulacamten have not yet been approved as of December 31, 2025, the estimates are highly subjective.
The carrying amount of the liabilities are based on our estimate of the future royalties to be paid over the life of the arrangements as discounted using an imputed rate of interest. The imputed rate of interest on the RP Aficamten Liability was approximately 22.6% as of December 31, 2025 and 23.5% as of December 31, 2024. The imputed rate of interest on the RP OM Liability is reassessed periodically, and we have adopted an accounting policy to not reduce the effective borrowing rate below 0%. The imputed rate of interest on the RP OM Liability was 0.0% as of December 31, 2025 and approximately 0.1% as of December 31, 2024. We periodically assess the amount and timing of expected royalty payments and account for any changes in such estimates on a prospective basis.
As of December 31, 2025, we have a total carrying value of approximately $520.6 million of liabilities related to revenue participation right purchase agreements.
Accrued Research and Development Expenditures
Clinical trial costs are a component of research and development expense. We accrue and expense clinical trial activities performed by third parties based upon actual work completed in accordance with agreements established with clinical research and manufacturing organizations and clinical sites. We determine the actual costs through monitoring patient enrollment, communications with internal personnel and external service providers regarding the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.
ITEM 7A. QUANTITATIVE AND QUALITA TIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business. These risks primarily include risk related to interest rate sensitivities.
We are exposed to market risk related to changes in interest rates. As of December 31, 2025, our cash and investments totaled $1,217.3 million comprising U.S. Treasury securities, U.S. and non-U.S. government agency bonds, commercial paper, a global portfolio of corporate debt, money market funds, and repurchase agreements backed by U.S. Treasury securities.
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Our investments are subject to interest rate risk and could fall in value if market interest rates increase. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 1% increase in market interest rates would result in a decline in the value of our investments of approximately $6.0 million and $6.1 million as of December 31, 2025 and December 31, 2024, respectively.
In addition, we have elected the fair value option for certain liabilities. The fair value of the liabilities related to 2024 RP OM Loan Agreement, the RP Ulacamten RPA, and the derivatives of the RP Multi Tranche Loan Agreement will increase as market interest rates decrease. In addition, the fair value of the liabilities may fluctuate based upon changes in the Company’s credit rating. Changes in the interest rate environment and the credit rating of the Company could have an effect on our future earnings. For example, a hypothetical 1% decrease in the discount rates used to measure the 2024 RP OM Loan Agreement, the RP Ulacamten RPA, and the derivatives of the RP Multi Tranche Loan Agreement would result in an increase in the fair value, and the recognition of a loss, of approximately $4.3 million as of December 31, 2025. In 2025 and 2024, we recognized a loss on the change in the estimated fair value of liabilities of approximately $0.2 million and $19.6 million, respectively, primarily due to changes in the discount rates used to measure the 2024 RP OM Loan Agreement and the RP Ulacamten RPA. The discount rates ranged from 10% to 18% as of December 31, 2025 and 10% to 18% as of December 31, 2024.
We had $21.1 million under 2026 Notes with a fixed rate of 4.0%, $140.5 million under 2027 Notes with a fixed rate of 3.5% and $750.0 million under 2031 Notes with a fixed rate of 1.8% outstanding as of December 31, 2025. The convertible notes issued at fixed interest rates are exposed to fluctuations in fair value resulting from changes in market price and interest rates. We do not record our convertible debt at fair value but present the fair value for disclosure purposes (See Note 7, "Debt," to our Consolidated Financial Statements for further information). As of December 31, 2025, the fair value of the 2026 Notes, 2027 Notes and 2031 Notes was estimated at $127.8 million, $200.0 million and $919.7 million using quoted market prices.
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ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 42 )
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statements of Stockholders’ Deficit
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
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REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Cytokinetics, Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Cytokinetics, Incorporated (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ deficit equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audits matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Measurement of Revenue Participation Right Purchase Agreements
Description of
the Matter
As of December 31, 2025, the liabilities related to revenue participation right purchase agreements, net were $520.6 million. The Company recognized non-cash interest expense on the liabilities related to revenue participation right purchase agreements of $(58.3) million for the year ended December 31, 2025. As described in Note 3 to the consolidated financial statements, the Company has entered into agreements, pursuant to which counterparties purchased rights to receive royalty streams from the net sales of pharmaceutical products containing MYQORZO TM and Omecamtiv Mecarbil. The cash received by the Company from these royalty purchase agreements was initially recognized as a liability related to revenue participation right purchase agreements. The Company is required to update its estimate, each reporting period, related to the amount and timing of future royalty payments to be paid to the counterparties of the revenue participation right purchase agreements. The estimates of the future royalty payment determine the measurement of the non-cash interest expense and the carrying value of the liability.
Auditing the Company’s measurement of the revenue participation right purchase agreements was complex due to the significant estimation uncertainty in projecting future royalty payments to be paid to the counterparties of the revenue participation right purchase agreements. The estimates of future royalties requires the use of several assumptions such as: the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of eligible patient populations, estimates of prescribing behavior and patient behavior, estimates of pricing and payor reimbursement and coverage, and sales ramp. As MYQORZO sales have not commenced and products containing Omecamtiv Mecarbil have not yet been approved as of December 31, 2025, the estimates are highly subjective.
How We
Addressed the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s processes for estimating the amount and timing of future royalty payments.
To test the amount and timing of future royalty payments to be paid to the counterparties of the revenue participation right purchase agreements, our audit procedures included, among others, evaluating the reasonableness of significant assumptions used by management . Evaluating the reasonableness of management’s assumptions included consideration of (i) relevant industry forecasts and data, (ii) consistency with observable data for competitor products, and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.
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Fair Value Liabilities
Description of
the Matter
In May 2025, the Company entered into the 2025 RPI transactions including the 2025 RP OM Loan Agreement, the RP Ulacamten RPA, and the 2022 RP Multi Tranche Loan Agreement Amendment. The Company elected the fair value option for recognition of the liabilities related to 2025 RP OM Loan Agreement and the RP Ulacamten RPA and remeasures the liabilities at fair value each reporting period. In addition, the RP Multi Tranche Loan Agreement has embedded derivatives which are remeasured to fair value each reporting period. As of December 31, 2025, the carrying value of liabilities related to RPI transactions measured at fair value were $ 137.2 million and the derivative liabilities measured at fair value were $ 31.1 million. For the year ended December 31, 2025, the Company recognized a change in fair value of liabilities related to RPI Transactions of $(0.2) million and a change in fair value of derivative liabilities of $4.2 million. As described in Note 3 to the consolidated financial statements, the fair values of the liabilities for the RP OM Loan Agreement and Ulacamten RPA are based on significant unobservable inputs, including the probability of clinical success and regulatory approval based on historical industry success rates for product development specific to cardiovascular products, the estimated date of a product launch, estimates of pricing, sales ramp, variables for the timing of the related events, probability of change of control, and discount rates. The fair values of the embedded derivatives are based on significant unobservable inputs, including the probability of change of control and the probability of default.
Auditing the Company’s measurement of the fair value of the 2025 RPI transactions and the ongoing measurement of the fair value liabilities and derivative liabilities was complex due to the significant estimation uncertainty.
How We
Addressed the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s processes for estimating the fair value of the fair value liabilities and derivative liabilities.
To test the measurement of the fair value liabilities and derivative liabilities, our audit procedures included, among others, a review of the valuation methods, key valuation assumptions, preparation of corroborative valuations, and testing the cash proceeds from the financing.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2018.
San Jose, California
February 26, 2026
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CYTOKINETICS, INCORPORATED
CONSOLIDATED B ALANCE SHEETS
(In thousands, except share and per share data)
December 31,
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable
Prepaid expenses and other current assets
Total current assets
Long-term investments
Property and equipment, net
Operating lease right-of-use assets
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable
Accrued liabilities
Short-term operating lease liabilities
Current portion of convertible and long-term debt
Derivative liabilities measured at fair value
Deferred revenue
Other current liabilities
Total current liabilities
Term loans, net
Convertible notes, net
Liabilities related to revenue participation right purchase agreements, net
Long-term operating lease liabilities
Liabilities related to RPI Transactions measured at fair value
Total liabilities
Commitments and contingencies
Stockholders' deficit
Preferred stock, $ 0.001 par value:
Authorized: 10,000,000 shares; Issued and outstanding: none
Common stock, $ 0.001 par value:
Authorized: 326,000,000 shares
Issued and outstanding: 122,943,172 shares at December 31, 2025
and 118,209,139 shares at December 31, 2024
Additional paid-in capital
Accumulated other comprehensive income
Accumulated deficit
Total stockholders' deficit
Total liabilities and stockholders' deficit
The accompanying notes are an integral part of these consolidated financial statements.
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CYTOKINETICS, INCORPORATED
CONSOLIDATED STATEMENTS OF OPER ATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
Years Ended December 31,
Revenues:
Collaboration revenues
License and milestone revenues
Total revenues
Operating expenses:
Research and development
General and administrative
Total operating expenses
Operating loss
Interest expense
Non-cash interest expense on liabilities related to revenue participation right purchase agreements
Interest and other income, net
Change in fair value of derivative liabilities
Change in fair value of liabilities related to RPI Transactions
Debt conversion expense
Net loss
Net loss per share — basic and diluted
Weighted-average number of shares used in computing net loss per share — basic and diluted
Other comprehensive (loss) gain:
Unrealized (loss) gain on available-for-sale securities, net
Foreign currency translation adjustments
Comprehensive loss
The accompanying notes are an integral part of these consolidated financial statements.
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CYTOKINETICS, INCORPORATED
CONSOLIDATED STATEMENTS OF ST OCKHOLDERS’ DEFICIT
(In thousands, except shares)
Common Stock
Additional
Paid-In
Accumulated
Other
Comprehensive
Accumulated
Total
Stockholders’
Shares
Amount
Capital
Income (Loss)
Deficit
Deficit
Balance, December 31, 2022
Exercise of stock options
Vesting of restricted stock units
Shares withheld related to net share settlement of equity awards
Issuance of common stock under
Employee Stock Purchase Plan
Issuance of common stock under at-the-market offering, net of issuance costs
Stock-based compensation
Unrealized gain on available-for-sale securities, net
Foreign currency translation adjustments
Net loss
Balance, December 31, 2023
Exercise of stock options
Vesting of restricted stock units
Shares withheld related to net share settlement of equity awards
Issuance of common stock under Employee Stock Purchase Plan
Issuance of common stock under at-the-market offering, net of issuance costs
Issuance of common stock in public offering, net of issuance costs
Issuance of common stock in private placement, net of issuance costs
Exercise of warrants, net
Conversion of 2026 Notes
Stock-based compensation
Unrealized gain on available-for-sale securities, net
Foreign currency translation adjustments
Net loss
Balance, December 31, 2024
Exercise of stock options
Vesting of restricted stock units
Shares withheld related to net share settlement of equity awards
Issuance of common stock under Employee Stock Purchase Plan
Induced conversion of convertible notes
Stock-based compensation
Unrealized loss on available-for-sale securities, net
Foreign currency translation adjustments
Net loss
Balance, December 31, 2025
The accompanying notes are an integral part of these consolidated financial statements.
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CYTOKINETICS, INCORPORATED
CONSOLIDATED STATEM ENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense on liabilities related to revenue participation right purchase agreement
Stock-based compensation expense
Non-cash lease expense
Loss on disposition of property and equipment
Depreciation of property and equipment
Change in fair value of derivative liabilities
Change in fair value of liabilities related to RPI Transactions
Realized (loss) gain on investment, net
Interest receivable and amortization on investments
Non-cash interest expense related to debt
Debt conversion expense
Changes in operating assets and liabilities:
Accounts receivable
Prepaid and other assets
Accounts payable
Deferred revenue
Accrued and other liabilities
Operating lease liabilities
Other non-current liabilities
Net cash used in operating activities
Cash flows from investing activities:
Purchases of investments
Investment in non-marketable equity security
Maturities of investments
Sales of investments
Purchases of property and equipment
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Repayment of finance lease liabilities
Repayment of term loans
Repayment of convertible debt
Proceeds from issuance of convertible debt, net
Proceeds from draw on RPI Multi Tranche Loan
Proceeds from issuance of common stock related to at-the-market offering, net of issuance costs
Proceeds from issuance of common stock related to public offering, net of issuance costs
Proceeds from issuance of common stock related to private placement, net of issuance costs
Proceeds from issuance of common stock under equity incentive and stock purchase plans
Taxes paid related to net share settlement of equity awards
Net cash provided by financing activities
Effect of exchange rate changes
Net (decrease) increase in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of period
Cash, cash equivalents, and restricted cash, end of period
Supplemental cash flow disclosures:
Cash paid for interest
Non-cash investing and financing activities:
Right-of-use assets recognized in exchange for operating lease obligations
Amounts unpaid for purchases of property and equipment
Issuance of common stock in connection with repurchase of convertible note
The accompanying notes are an integral part of these consolidated financial statements.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Organization and Accounting Policies
Organization
Cytokinetics, Incorporated (the “Company”, “we” or “our”) was incorporated under the laws of the state of Delaware on August 5, 1997. We are a biopharmaceutical company focused on discovering, developing and commercializing novel muscle activators and muscle inhibitors as potential treatments for debilitating diseases in which muscle performance is compromised and/or declining. Our flagship commercial product is MYQORZO (aficamten), 5 mg, 10 mg, 15 mg, and 20 mg tablets for the treatment of adults with oHCM to improve functional capacity and symptoms, which the FDA approved in December 2025 and which first became available for prescription to patients on or around January 27, 2026
Our financial statements contemplate the conduct of our operations in the normal course of business. We have incurred an accumulated deficit of approximately $ 3.5 billion since inception and there can be no assurance that we will attainprofitability. We had a net loss of $ 785.0 million and net cash used in operations of $ 510.0 million for the year ended December 31, 2025. Cash, cash equivalents, and investments was $ 1.2 billion as of December 31, 2025. We anticipate that we will have operating losses and net cash outflows in future periods.
We are subject to risks common to biopharmaceutical companies including, but not limited to, development of new drug candidates, dependence on key personnel, commercialization of our drugs and the ability to obtain additional capital as needed to fund our future plans. Our liquidity will be impaired if sufficient additional capital is not available on terms acceptable to us. To date, we have funded operations primarily through sales of our common stock, contract payments under our collaboration agreements, sales of future revenues and royalties, debt financing arrangements, and interest income, but we will increasingly rely on revenues generated from the commercial sales of MYQORZO to fund our operations and cash expenditures. We expect to commence commercial sales in the first quarter of 2026, but there can be no assurance as to the timing or level of revenues from such sales. Until we achieveprofitable operations, we intend to continue to fund operations through payments from strategic collaborations, additional sales of equity securities, grants and debt financings in addition to our commercial sales revenue.
Our success is dependent on our ability to obtain additional capital by entering into financings or new strategic collaborations, and ultimately on our and our collaborators’ ability to successfully develop and market our drugs and drug candidates. We cannot be certain that sufficient funds will be available from financings or such collaborators when needed or on satisfactory terms. Additionally, there can be no assurance that MYQORZO or any of our drug candidates will be accepted in the marketplace or that any future products can be developed or manufactured at an acceptable cost. These factors could have a material adverse effect on our future financial results, financial position and cash flows.
Based on the current status of our research and development and commercialization activities, we believe that our existing cash, cash equivalents and investments will be sufficient to fund cash requirements for at least the next 12 months after the issuance of these consolidated financial statements. If, at any time, our prospects for financing our research and development programs decline, we may decide to reduce research and development expenses by delaying, discontinuing or reducing our funding of one or more of our research or development programs. Alternatively, we might raise funds through strategic collaborations, public or private financings or other arrangements. Such funding, if needed, may not be available on favorable terms, or at all. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our estimates on an ongoing basis. We base our estimates on our historical experience and also on assumptions that we believe are reasonable; however, actual results could significantly differ from those estimates.
Basis of Presentation
The consolidated financial statements include the accounts of Cytokinetics, Incorporated and its wholly-owned subsidiaries and have been prepared in accordance with GAAP. Intercompany transactions and balances have been eliminated in consolidation.
Segment Information
We have one primary business activity and operate in one reportable segment.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Our chief operating decision maker (“CODM”) is our Chief Executive Officer ("CEO") who evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. The measures of profitability and the significant segment expenses reviewed by the CODM are consistent with these financial statements and footnotes.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that potentially subject us to concentrations of risk consist principally of cash, cash equivalents, restricted cash, investments, and accounts receivable.i
Our cash, cash equivalents, restricted cash, and investments held with large financial institutions in the United States and deposits may exceed the Federal Deposit Insurance Corporation’s insurance limit.
Cash, Cash Equivalents, and Restricted Cash
We consider all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.
A reconciliation of cash, cash equivalents, and restricted cash reported in our consolidated balance sheets to the amount reported within our consolidated statements of cash flows was as follows (in thousands):
December 31,
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents, and restricted cash as reported within our consolidated statement of cash flows
As of December 31, 2025, our restricted cash balance of $ 3.1 million , recorded in other assets, is used to collateralize certain credit instruments.
Investments
Our investments consist of U.S. Treasury securities, U.S. government agency securities, commercial paper, corporate obligations, and money market funds. We designate all investments as available-for-sale and report them at fair value, based on quoted market prices, with unrealized gains and losses recorded in accumulated other comprehensive loss. The cost of securities sold is based on the specific-identification method. Investments with original maturities greater than three months and remaining maturities of one year or less are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments.
All of our available-for-sale investments are subject to a periodic impairment review. For each available-for-sale investment whose fair value is below its amortized cost, we determine if the impairment is a result of a credit-related loss or other factors using both quantitative and qualitative factors. If the impairment is a result of a credit-related loss, we recognize an allowance for credit losses. If the impairment is not a result of a credit loss, we recognize the loss in other comprehensive loss.
Investment in non-marketable equity security
In the first quarter of 2025, we made an equity investment of $ 5.0 million that does not have a readily determinable fair value. We elected the measurement alternative under which we measure the investment at cost, less any impairment. If we observe price changes in orderly transactions for identical or similar securities of the same issuer, we will remeasure the investment at fair value as of the date of the observable transaction. As of December 31, 2025 , the investment has a carrying value of $ 5.0 million and is classified as “Other assets” on the condensed consolidated balance sheet.
Property and Equipment, net
Property and equipment are stated at cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives of the related assets, which are generally three years for computer equipment and software, five years for laboratory equipment and office equipment, and seven years for furniture and fixtures. Amortization of leasehold improvements and finance lease right-of-use assets are computed using the straight-line method over the shorter of the remaining lease term or the estimated useful life of the related assets, typically ranging from three to twelve years .
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Impairment of Long-lived Assets
We review long-lived assets, including property, equipment and right-of-use assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Impairment is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. We would recognize an impairmentloss when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount.
Leases
We determine if the arrangement contains a lease at inception based on whether the contract conveys the right to control the use of an identified asset. The lease classification is determined at lease commencement, which is the date the underlying asset is available for use by the Company, and preliminary based on whether the arrangement is effectively a financed purchase of the underlying asset (finance lease) or not (operating lease). We determined the lease term at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise. In addition to the fixed minimum lease payments required under the lease arrangements, certain leases include payments of operating expenses that may be revised based on the landlord’s estimate. These variable payments are excluded from the lease payments used to determine the right-of-use asset and lease liability and are recognized when the associated activity occurs.
We recognize right-of-use assets and short-term and long-term lease liabilities on our consolidated balance sheets for operating leases. The right-of-use asset and short-term and long-term lease liabilities for finance leases are recognized in property and equipment, other current liabilities, and other non-current liabilities, respectively, on the consolidated balance sheets.
In determining the present value of lease payments, we estimated our incremental borrowing rate based on information available upon commencement. We base the lease liabilities on the present value of remaining lease payments over the remaining terms of the leases using an estimated rate of interest that we would pay to borrow equivalent funds on a collateralized basis at the lease commencement date. The initial right-of-use asset, for both operating and finance leases, is measured based on the lease liability adjusted for any initial direct costs, lease prepayments, and lease incentives.
We recognize rent expense for operating leases on a straight-line basis over the lease term in operating expenses on the consolidated statements of operations. Finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the expected useful life or the lease term, and the carrying amount of the lease liability is adjusted to reflect interest, which is recorded in interest expense.
We exclude from our consolidated balance sheets recognition of leases having a term of 12 months or less (short-term leases). We account for lease and non-lease components as a single component for our operating leases.
Revenue Recognition
We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration for those goods or services.
At contract inception, we assess the goods or services promised within each contract and assess whether each promised good or service is distinct and determine those that are performance obligations. For example, a license to our intellectual property is determined to be distinct from other performance obligations if licensee is able to use and benefit from the license on its own.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We enter into collaborative arrangements with partners that typically include payment to us for one of more of the following: (i) up-front license fees; (ii) milestone payments related to the achievement of developmental, regulatory, or commercial goals; (iii) royalties on net sales of licensed products; and (iv) research and development cost reimbursements. Up-front license fees are included in the transaction price. Development and regulatory milestone payments are included in the transaction price using the most likely amount method, if we conclude it is probable that a significant revenue reversal would not occur. For contracts that include sales-based royalties or sales-based milestones, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty or sales-based milestone has been allocated has been satisfied. For collaborative agreements that have a performance obligation where the counterparty is a customer for the unit of account, we apply ASC 606, Revenue Recognition , to the unit of account and the revenue is classified as License and milestone revenue in our consolidated statement of operations. For other transactions in collaborative arrangements, consisting of research and development cost reimbursements, we recognize the research and development cost reimbursements as collaboration revenues in our consolidated statement of operations.
When a collaborative agreement has more than one performance obligation, we must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligations. The stand-alone selling price may include such items as, forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, to determine the transaction price to allocate to each performance obligation.
For performance obligations that consist of the delivery of an intellectual property license, the revenue is recognized at the point in time that the license is delivered.
Accrued Research and Development Expenditures
Clinical trial costs are a component of research and development expense. We accrue and expense clinical trial activities performed by third parties based upon actual work completed in accordance with agreements established with clinical research and manufacturing organizations and clinical sites. We determine the actual costs through monitoring patient enrollment, discussions with internal personnel and external service providers regarding the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.
Revenue Participation Right Purchase Agreements
We have entered into certain revenue participation right purchase agreements with RPI ICAV, pursuant to which such investors purchased rights to royalties from aficamten and omecamtiv mecarbil revenue streams in exchange for consideration. We account for such agreements as liabilities to be amortized under the effective interest rate method over the life of the related royalty stream, when we have continuing involvement with the underlying R&D. We are required to update our estimates, at each reporting period, related to the amount and timing of future royalty payments to be paid to the counterparties of the revenue participation right purchase agreements. We have adopted an accounting policy to not reduce the effective borrowing rate below 0 %. The estimates of the future royalty payment determine the measurement of the non-cash interest expense and the carrying value of the liability.
Revenue participation right purchase agreements are measured using significant unobservable inputs. The estimates of future royalties requires the use of several assumptions such as: the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of eligible patient populations, estimates of prescribing behavior and patient compliance behavior, estimates of pricing, payor reimbursement and coverage, and sales ramp. In December 2025, the FDA approved MYQORZO, 5 mg, 10 mg, 15 mg, and 20 mg tablets for the treatment of adults with oHCM to improve functional capacity and symptoms. As MYQORZO sales have not commenced and products containing omecamtiv mecarbil and ulacamten have not yet been approved as of December 31, 2025, the estimates are highly subjective.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Fair Value of 2024 RPI transactions
In May 2024, the Company entered into 2024 RPI transactions including the 2024 RP OM Loan Agreement, the RP Ulacamten RPA, the RP Stock Purchase Agreement, the 2022 RP Multi Tranche Loan Agreement Amendment and the RP Aficamten RPA Amendment. As permitted under Accounting Standards Codification 825 , Financial Instruments, or ASC 825, the Company elected the fair value option for recognition of the liabilities related to 2024 RP OM Loan Agreement and the RP Ulacamten RPA. In accordance with ASC 825, the Company records the liabilities at fair value and remeasures the liabilities at fair value each reporting period with changes in fair value associated with non-credit components are recognized in Other income (expense), net, while the change in fair value associated with credit components is recognized in accumulated other comprehensive loss. The fair value of the liabilities is based on significant unobservable inputs, including the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of pricing, sales ramp, variables for the timing of the related events, probability of change of control, discount rates and other estimates, which are deemed to be Level 3 inputs in the fair value hierarchy. As products containing omecamtiv mecarbil and ulacamten have not yet been commercialized, the estimates are highly subjective.
Derivative Liabilities
We recognize liabilities of our embedded derivative instruments related to the RP Multi Tranche Loan at fair value in the consolidated balance sheets. Each period, the fair value of the derivative liabilities are recalculated and resulting gains and losses from the changes in fair value of the derivatives with non-credit components are recognized in income, while the change in fair value associated with credit components is recognized in accumulated other comprehensive loss. Estimating fair values of derivative instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Since derivative instruments are initially and subsequently carried at fair value, the Company’s income will reflect the volatility in these estimate and assumption changes.
Research and Development Expenditures
Research and development costs are charged to operations as incurred. Research and development expenses consist primarily of clinical trial costs, clinical manufacturing costs, preclinical study expenses, technical operations, inventory manufactured before FDA approval, consulting and other third-party cos ts, employee compensation, supplies and materials, allocation of overhead and occupancy costs, facilities costs and depreciation of equipment.
Income Taxes
We account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.
We recognize uncertain tax positions taken or expected to be taken on a tax return. Tax positions are initially recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense.
Stock-Based Compensation
We maintain equity incentive plans under which incentive stock options may be granted to employees and nonqualified stock options, restricted stock awards, performance-based stock units and stock appreciation rights may be granted to employees, directors, consultants and advisors. In addition, we maintain an ESPP under which employees may purchase shares of our common stock through payroll deductions.
Stock-based compensation expense related to stock options granted to employees and directors is recognized based on the grant date estimated fair values using the Black Scholes option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Stock-based compensation expense related to performance-based stock units granted to employees is recognized based on the grant-date fair value of each award and recorded as expense over the vesting period using the ratable method when the underlying performance conditions are deemed probable.
Stock-based compensation expense related to the ESPP is recognized based on the fair value of each award estimated on the first day of the offering period using the Black Scholes option pricing model and recorded as expense over the service period using the straight-line method.
Note 2 — Net Loss Per Share
Basic net loss per share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common shares, including outstanding stock options, unvested restricted stock, warrants, convertible preferred stock and shares issuable under our ESPP, during the period using the treasury stock method and convertible notes using the if-converted method.
The following instruments were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been antidilutive (in thousands):
Years Ended December 31,
Options to purchase common stock
Warrants to purchase common stock
Restricted stock and performance units
Shares issuable related to the ESPP
Shares issuable upon conversion of 2026 Notes
Shares issuable upon conversion of 2027 Notes
Shares issuable upon conversion of 2031 Notes
Total shares
Note 3 — Agreements with Royalty Pharma
On January 7, 2022, we entered into the 2022 RPI Transactions with affiliates of Royalty Pharma International plc. Pursuant to the 2022 RPI Transactions, the RP Multi Tranche Loan Agreement and the RP Aficamten RPA described below, are determined to be debt instruments subsequently measured at amortized cost and were entered into with parties that were at the time of our entry into the 2022 RPI Transactions affiliated and in contemplation of one another. We used the relative fair value method and made separate estimates of the fair value of each freestanding financial instrument and then allocated the proceeds in proportion to those fair value amounts. Arrangement consideration for the RP Multi Tranche Loan Agreement and the RP Aficamten RPA totaled $ 150 million, consisting of the two $ 50 million up front payments for the signing of the RP Multi Tranche Loan Agreement and the RP Aficamten RPA and milestone of $ 50 million for the initiation of the first pivotal trial in oHCM for aficamten that was deemed probable at the signing of the agreements.
On May 22, 2024, we entered into the 2024 RPI Transactions with affiliates of Royalty Pharma International plc, which included an amendment to the RP Aficamten RPA, a component of the 2022 RPI Transactions. The 2024 RPI Transactions include the 2024 RP OM Loan Agreement, the RP Ulacamten RPA, the RP Stock Purchase Agreement, the RP Multi Tranche Loan Agreement Amendment and the RP Aficamten RPA Amendment, as described below, are accounted for as a debt modification of the 2022 RPI Transactions.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Under the 2024 RPI Transactions, the consideration of $ 200.0 million received was allocated as follows (in thousands):
Allocation
Units of Accounting:
RP Aficamten RPA
Tranche 6 of RP Multi Tranche Loan Agreement
Tranche 6 of RP Multi Tranche Loan Agreement - Embedded Derivatives
Tranche 4 of RP Multi Tranche Loan Agreement - Embedded Derivatives
RP Ulacamten RPA
RP OM Loan Agreement
Total consideration
Liabilities Related to RPI Transactions Measured at Fair Value
As permitted under ASC 825, we elected the fair value option for recognizing the liabilities related to the 2024 RP OM Loan Agreement and the RP Ulacamten RPA. The fair value option was elected because these liabilities included embedded derivatives which would have otherwise required separate recognition and measurement. The Company elected the fair value option as it is believed to be more practical for each liability as a single unit of account at fair value. Under the fair value option, debt issuance costs are expensed as incurred and the Company is required to record the fair value option elected arrangements at their fair value on the date of issuance and at each balance sheet thereafter. Changes in the estimated fair value of the arrangements are recognized as changes in fair value of liabilities related to RPI Transactions in the consolidated statement of operations and comprehensive loss.
RP OM Loan
The RP OM Loan Agreement provides for a loan in a principal amount of $ 100.0 million that was drawn at the closing.
The loan under the RP OM Loan Agreement matures on the 10 year anniversary of the funding date and is repayable in quarterly installments as follows:
Scenario 1: If the Phase 3 clinical trial of Cytokinetics’ proprietary small molecule cardiac myosin activator known as omecamtiv mecarbil is successful (defined as meeting the composite primary endpoint of the first event, whichever occurs first, comprising of cardiovascular death, heart failure event, LVAD implementation/cardiac transplantation, or stroke, with a hazard ratio (HR) of less than 0.85 and cardiovascular death endpoint HR of less than 1.0) by June 30, 2028 and we receive the marketing approval from the FDA for omecamtiv mecarbil on or prior to December 31, 2029 (“OM Approval Date”), commencing on the calendar quarter during which the FDA approval is obtained, we are required to pay RPDF (x) (i) $ 75.0 million ten business days after the OM Approval Date and (ii) $ 25.0 million on the first anniversary of the OM Approval Date and (y) on a quarterly basis an amount equal to 2.0 % of the annual worldwide net sales of omecamtiv mecarbil, subject to a minimum floor amount ranging from $ 5.0 million to $ 8.0 million during the first 18 calendar quarters (the payment of the 2.0 % of the annual worldwide net sales starting from the 19th calendar quarter shall be referred to as the “Royalty Payment”). Our obligation to pay the Royalty Payment will continue after maturity of the Loan;
Scenario 2: If the Phase 3 clinical trial of omecamtiv mecarbil is successful by June 30, 2028 but we have not received the marketing approval from the FDA for omecamtiv mecarbil on or prior to December 31, 2029, we are required to pay RPDF 18 equal quarterly cash payments totaling 237.5 % of the principal amount of the loan commencing on March 31, 2030 ; and
Scenario 3: If the Phase 3 clinical trial of omecamtiv mecarbil is not successful by June 30, 2028, we are required to pay RPDF 22 equal quarterly cash payments totaling 227.5 % of the principal amount of the loan commencing on September 30, 2028 ;
(the aggregate amount to be paid by us with respect to each scenario is referred to as the “Scheduled Payment Amount”).
The interest of the loan is included in the Scheduled Payment Amount for each scenario. In each scenario, we may prepay the loan in full (but not in part) at any time at its option by paying an amount equal to the unpaid portion of Scheduled Payment Amount for the outstanding loan; provided that, in scenario 1, we would be required to continue to pay the Royalty Payment after such prepayment.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In addition, upon the occurrence of a change of control of the Company, the loan is repayable in full at the option of either the Company or the lender in an amount equal to (x) depending on when such change of control occurs, 150.0 % to 237.5 % of the principal amount of the loan minus (y) the then paid Scheduled Payment Amount. The RP OM Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on dispositions, mergers, indebtedness, encumbrances, distributions, stock repurchases, investments and transactions with affiliates.
The RP OM Loan Agreement also includes customary events of default, including but not limited to the nonpayment of principal or interest, violations of covenants, material adverse changes, attachment, levy, restraint on business, cross-defaults on material indebtedness, bankruptcy, delisting, material judgments, misrepresentations, governmental approvals, payment defaults under other royalty purchase agreements and development funding agreements with RPDF or RPI ICAV. Upon an event of default or simultaneously with payment in full of the term loans in the RP OM Loan Agreement, the lenders may, among other things, accelerate the loan (with the amount payable between 227.5 % and 237.5 % of the principal amount (less amounts previously paid) in the case of other events of default).
Upon execution of the RP OM Loan Agreement in the second quarter of 2024, we recorded liabilities of $ 104.7 million using the probability-weighted expected return method and the fair value inputs are classified as Level 3 in the fair value hierarchy.
The following table demonstrates the future minimum payments for our RP OM Loan under Scenario 3, based on 227.5 % of the principal amount with repayment expected to start in 2028 as defined above, as of December 31, 2025 (in thousands):
Years ending December 31:
Thereafter
Future minimum payments
The minimum repayment schedule under Scenario 2 would be 237.5 % of the principal amount with quarterly payments starting in 2030. The minimum repayment schedule under Scenario 1 would be a total of 124.0 % of the principal amount and the royalty payment with quarterly payments starting in 2028. In addition, under Scenario 1 we would be obligated to make the royalty payment each quarter, and such amounts are not determinable at this time.
RP Ulacamten RPA
Pursuant to the RP Ulacamten RPA, RPI ICAV purchased the right to receive 1 % of annual net sales of ulacamten by us, our affiliates or licensees, in exchange for $ 50 million which was paid up-front.
Following the initiation of the first Phase 3 clinical trial (or the Phase 3 portion of the first Phase 2b/3 clinical trial) in heart failure with preserved ejection fraction in humans for ulacamten, at RPI ICAV’s sole option and discretion, it may invest up to in aggregate $ 150 million in quarterly payments to fund 50.0 % of the research and development cost for a potential Phase 3 clinical trial of ulacamten in exchange for an incremental 3.5 % for annual net sales of ulacamten (depending on the aggregate amounts funded by RPI ICAV), subject to reduction in certain circumstances. RPI ICAV will also be entitled to a milestone payment equal to 75 % of its aggregate investment in ulacamten upon market approval by the FDA, or if market approval of ulacamten by the European Medicines Agency is obtained prior to market approval by the FDA, a 37.5 % milestone payment of its aggregate investment in ulacamten for such obtained approval and an additional 37.5 % milestone payment for its aggregate investment in ulacamten upon subsequent market approval by the FDA.
Upon execution of the RP Ulacamten RPA in the second quarter of 2024, we recorded a liability of $ 12.7 million using a combination of the discounted cash flow method and the probability-weighted expected return method. The fair value inputs are classified as Level 3 in the fair value hierarchy. We account for the RP Ulacamten RPA as a liability because, among other reasons, we have significant continuing involvement in generating the related revenue stream from which the liability will be repaid.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accounting for RPI Transactions Measured at Fair Value
The fair values of the liabilities for the RP OM Loan Agreement and RP Ulacamten RPA are based on significant unobservable inputs, including the probability of clinical success and regulatory approval based on historical industry success rates for product development specific to cardiovascular products, the estimated date of a product launch, estimates of pricing, sales ramp, variables for the timing of the related events, probability of change of control, and discount rates (which range from 10 % to 18 % as of December 31, 2025 and 2024), which are deemed to be Level 3 inputs in the fair value hierarchy. As products containing omecamtiv mecarbil and ulacamten have not yet been commercialized, the estimates are highly subjective. For example, assumed increases in the probability of the clinical success for the omecamtiv mecarbil or ulacamten programs could increase the value of the liabilities. Similarly, assumed decreases in the discount rates used in the fair value measurements could also increase the value of the liabilities at period end.
The Company recorded a loss of $ 0.2 million in 2025 and a loss of $ 19.6 million for 2024 , associated with the change in fair value of the liabilities related to 2024 RP OM Loan Agreement and the RP Ulacamten RPA. The change in the fair value has been recognized in the consolidated statement of operations and comprehensive loss.
The following tables summarize the changes of the fair value of t he RP Ulacamten RPA and RP OM Loan (in thousands):
RP Ulacamten RPA
RP OM Loan
RP Ulacamten RPA
RP OM Loan
Beginning balance, January 1
Initial recognition
Change in fair value
Ending balance, December 31
Liabilities Related to Revenue Participation Right Purchase Agreements
RP Aficamten Royalty Purchase Agreement
On January 7, 2022, we entered into the RP Aficamten RPA with RPI ICAV, pursuant to which RPI ICAV purchased rights to certain revenue streams from net sales of pharmaceutical products containing aficamten by us, our affiliates and our licensees in exchange for up to $ 150.0 million in consideration, $ 50.0 million of which was paid on the closing date, $ 50.0 million of which was paid to us in March 2022 following the initiation of the first pivotal trial in oHCM for aficamten, and $ 50.0 million of which was paid to us in September 2023 following the initiation of the first pivotal clinical trial in nHCM for aficamten. Th e RP Aficamten RPA also provides that the parties will negotiate terms for additional funding if we achieve proof of concept results in certain other indications for aficamten, with a reduction in the applicable royalty if we and RPI ICAV fail to agree on such terms in certain circumstances.
Pursuant to the RP Aficamten RPA, RPI ICAV purchased the right to receive a percentage of net sales equal to 4.5 % for annual worldwide net sales of pharmaceutical products containing aficamten up to $ 1 billion and 3.5 % for annual worldwide net sales of pharmaceutical products containing aficamten in excess of $ 1 billion, subject to reduction in certain circumstances. On May 22, 2024, we entered into the RP Aficamten RPA Amendment to restructure the royalty so that RPI will now be entitled to receive 4.5 % of the first $ 5.0 billion of worldwide annual net sales of aficamten and 1 % of any incremental annual worldwide net sales of aficamten by us and our licensees. Our liability to RPI ICAV is referred to as the “RP Aficamten Liability”.
We account for the RP Aficamten Liability as a liability primarily because we have significant continuing involvement in generating the related revenue stream from which the liability will be repaid. If and when aficamten is commercialized and royalties become due, we will recognize the portion of royalties paid to RPI ICAV as a decrease to the RP Aficamten Liability and a corresponding reduction in cash.
The carrying amount of the RP Aficamten Liability is based on our estimate of the future royalties to be paid to RPI ICAV over the life of the arrangement as discounted using an imputed rate of interest. In the second quarter of 2024, we recorded an additional $ 33.3 million to the carrying value related to the 2024 RPI Transactions entered into May 22, 2024. The imputed rate of interest on the carrying value of the RP Aficamten Liability was approximately 22.6 % and 23.5 % as of December 31, 2025 and 2024, respectively.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In 2025, we updated our analysis of the RP Aficamten RPA to reflect our revised assumptions resulting from ongoing global market research and to reflect other adjustments in connection with our anticipated commercialization. Our estimates regarding the amount of future royalty payments under the RP Aficamten RPA changed from 2024 due to changes in management’s estimates of unobservable inputs related to market and patient dynamics and timing to include projections of future royalty payments. The adjustment is accounted for on a prospective basis in our liability calculation and resulted in changes in our imputed interest rate. In 2025, the change in estimate decreased our non-cash interest expense by $ 3.6 million and net loss per share by $ 0.03 .
2017 RP Omecamtiv Mecarbil Royalty Purchase Agreement
In February 2017, we entered into the RP OM RPA pursuant to which we sold a portion of our right to receive royalties from Amgen on future net sales of omecamtiv mecarbil to RPFT for a one-time payment of $ 90 million, which is non-refundable even if omecamtiv mecarbil is never commercialized. Concurrently, we entered into a common stock purchase agreement with RPFT through which RPFT purchased 875,656 shares of the Company’s common stock for $ 10.0 million. We allocated the consideration and issuance costs on a relative fair value basis to our liability to RPFT related to sale of future royalties under the RP OM RPA (the “RP OM Liability”) and the common stock sold to RPFT, which resulted in the RP OM Liability being initially recognized at $ 92.3 million. The RP OM RPA, as amended, provides for the sale of a royalty to RPFT of 5.5 % on worldwide net sales of omecamtiv mecarbil.
We account for the RP OM Liability as a liability primarily because we have significant continuing involvement in generating the related revenue stream from which the liability will be repaid. If and when omecamtiv mecarbil is commercialized and royalties become due, we will recognize the portion of royalties paid to RPFT as a decrease to the RP OM Liability and a corresponding reduction in cash.
The carrying amount of the RP OM Liability is based on our estimate of the future royalties to be paid to RPFT over the life of the arrangement as discounted using an impu ted rate of interest. The excess of future estimated royalty payments over the $ 92.3 million of allocated proceeds, less issuance costs, is recognized as non-cash interest expense using the effective interest method . The imputed rate of interest on the RP OM Liability is reassessed periodically and is not reduced below 0%. The imputed rate of interest on the carrying value of the RP OM Liability was 0.0 % and approximately 0.1 % as of December 31, 2025 and 2024, respectively.
Accounting for Revenue Participation Right Purchase Agreements
We periodically assess the amount and timing of expected royalty payments using a combination of internal projections and forecasts from external sources. The RP OM Liability and the RP Aficamten Liability are measured using the effective interest method based on estimates of future royalty payments over the life of the arrangements. To the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than its original estimates, we will prospectively adjust the amortization of the RP OM Liability and the RP Aficamten Liability and the effective interest rate. A significant change to unobservable inputs could also result in a material increase or decrease to the effective interest rate of the liabilities. Note, for the RP OM Liability, the effective interest rate is reassessed periodically and will not be reduced below 0%.
There are a number of factors that could materially affect the amount and timing of royalty payments, a number of which are not within our control. The RP OM Liability and the RP Aficamten Liability are recognized using significant unobservable inputs. The estimates of future royalties require the use of several assumptions such as: the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of eligible patient populations, estimates of prescribing behavior and patient compliance behavior, estimates of pricing, payor reimbursement and coverage, and sales ramp. A significant change in unobservable inputs could result in a material increase or decrease to the effective interest rate of the RP OM Liability and the RP Aficamten Liability.
We recorded $ 50.0 million of additional carrying value associated with the 2022 RP Aficamten Royalty Purchase Agreement upon receipt of the cash in the third quarter of 2023. In the second quarter of 2024, we recorded an additional $ 33.3 million to the carrying value related to the 2024 RPI Transactions entered on May 22, 2024.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We review our assumptions on a regular basis and our estimates may change in the future as we refine and reassess our assumptions. Changes to the RP Aficamten Liability and the RP OM Liability are as follows (in thousands):
RP Aficamten Liability
RP OM Liability
Beginning balance, January 1
Additional consideration
Modification in the 2024 RPI Transactions
Interest accretion
Amortization of issuance costs
Ending balance, December 31
RP Multi Tranche Term Loan
On May 22, 2024, we entered into the RP Multi Tranche Loan Agreement Amendment which provides for two additional tranches (6 & 7) as follows:
$ 50.0 million tranche 6 term loan, which was drawn on May 22, 2024; and
$ 175.0 million tranche 7 term loan drawable at Cytokinetics’ discretion within one year of FDA approval of aficamten in oHCM.
In December 2023, we announced positive topline results from SEQUOIA-HCM, the Phase 3 trial for aficamten. This entitled us to draw $ 75.0 million under tranche 4 at any time prior to April 3, 2025. In April 2025, $ 75.0 million was disbursed to us under tranche 4 of the RP Multi Tranche Loan Agreement.
In November 2024, we announced that FDA accepted our NDA for aficamten. This entitled us to draw $ 100.0 million under tranche 5 at any time prior to November 25, 2025. In October 2025, $ 100.0 million was disbursed to us under tranche 5 of the RP Multi Tranche Loan agreement.
Each term loan under the RP Multi Tranche Loan Agreement matures on the 10 year anniversary of the funding date for such term loan and is repayable in quarterly installments of principal, interest and fees commencing on the last business day of the seventh full calendar quarter following the calendar quarter of the applicable funding date for such term loan, with the aggregate amount payable in respect of each term loan (including interest and other applicable fees) equal to 190 % of the principal amount of the term loan for the tranche 1, tranche 4, tranche 5, tranche 6, and tranche 7 term loans (such amount with respect to each term loan, “Final Payment Amount”). We account for amounts drawn under the RP Multi Tranche Loan Agreement using the effective interest method.
The RP Multi Tranche Loan Agreement and amendment contains embedded derivative features. The fair values of the embedded derivatives are based on significant unobservable inputs, including the probability of change of control, the probability of default, discount rates and other factors. We have bifurcated and recognized the embedded derivatives as Derivative Liabilities Measured at Fair Value as discussed below.
We may prepay the term loans in full (but not in part) at any time at our option by paying an amount equal to the unpaid portion of Final Payment Amount for the outstanding term loans under the RP Multi Tranche Loan Agreement. In addition, the term loans under the RP Multi Tranche Loan Agreement are repayable in full at the option of either us or the lender in an amount equal to the unpaid portion of Final Payment Amount for the outstanding term loans upon a change of control of Cytokinetics.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Future minimum payments under the existing borrowing under Tranche 1, Tranche 4, Tranche 5, and Tranche 6 of the RP Multi Tranche Loan are (in th ousands):
Years ending December 31:
Thereafter
Future minimum payments
Less: Unamortized interest and loan costs
Term Loan, net
The weighted-average effective rate of interest on the RP Multi Tranche Loan was approximately 13.0 % and 11.8 % as of December 31, 2025 and 2024, respectively.
As of December 31, 2025, the estimated fair value of the Tranche 1, Tranche 4, Tranche 5, and Tranche 6 term loans was $ 278.8 million . The fair value was estimated based on Level 3 inputs.
Derivative Liabilities Measured at Fair Value
We have bifurcated and recognized the embedded derivatives in the RP Multi Tranche Loan Agreement. These embedded derivatives include repayment features based upon a change in control. During the year ended December 31, 2025, we recognized $ 27.9 million of additional embedded derivatives related to the change of control repayment features of Tranche 4 and Tranche 5. In addition, a previously bifurcated embedded derivative related to the mandatory draw was settled in connection with the drawing on Tranche 4 and was reclassified into the carrying value of the associated term loan.
We recognize the derivative liabilities at fair value in the consolidated balance sheets. Each period, the fair value of the derivative liabilities will be recalculated and resulting gains and losses from the changes in fair value of the derivatives with non-credit components are recognized in income, while the change in fair value associated with credit components is recognized in accumulated other comprehensive loss. Estimating fair values of derivative instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.
The fair values of the derivative liabilities is determined using the probability-weighted expected return method and the “with and without” meth od. The fair values are based on significant unobservable inputs, including the probability of change of control, the probability of default (less than 10 %), discount rates (ranging from 10 % to 15 % for 2025 and 10 % to 16 % for 2024) and other factors.
The Company recorded a gain of $ 4.2 million in 2025 and $ 1.3 million in 2024 associated with the change in fair value of the derivative liabilities. The amounts have been recorded in the consolidated statement of operations and comprehensive loss.
The following table summarizes the changes of the fair value of the derivative liabilities for the RP Multi Tranche Loan Agreement (in thousands):
RP Multi Tranche Loan Agreement Derivatives
Beginning balance, January 1
Initial recognition
Settlement
Change in fair value
Ending balance, December 31
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
RP Stock Purchase Agreement
Concurrently with the closing of our underwritten public offering on May 28, 2024, RPI ICAV purchased 980,392 shares of Common Stock in a private placement transaction at a price of $ 51.00 per share. The proceeds from this private placement were $ 50 million .
Note 4 — Research and Development Arrangements
Collaboration for Commercialization of Aficamten in Greater China
On July 14, 2020, we entered into the Corxel Aficamten License Agreement, pursuant to which we granted to Corxel an exclusive license to develop and commercialize aficamten in China and Taiwan. On December 17, 2024, Corxel assigned all of its rights under our license and collaboration agreement to Sanofi. As a result of the Corxel assignment transaction with Sanofi, we received a $ 15.0 million non-refundable payment in connection with a modification of the original license prior to the assignment of Corxel’s rights under our license and collaboration agreement for the development and commercialization of aficamten in China to Sanofi.
In the fourth quarter of 2024, we entered into an agreement to modify the Corxel Aficamten License Agreement. The $ 15.0 million up-front payment was recognized upon execution of the modification as all performance obligations were satisfied at December 31, 2024. In the fourth quarter of 2025, under the Sanofi License Agreement for MYQORZO, a $ 15.0 million regulatory milestone payment was triggered upon receipt of marketing approvals from the NMPA and the FDA. The $ 15.0 million was recognized as revenue in 2025 upon satisfaction of all related conditions and we expect payment in the first quarter of 2026.
Effective December 17, 2024, Sanofi has an exclusive license to develop and commercialize aficamten in China and Taiwan (the "Sanofi License Agreement"). T he total maximum development and commercial milestone payments achievable for development and commercial milestone events in the field of oHCM and nHCM are $ 160.0 million, of which we have already earned $ 10.0 million as of December 31, 2024 as described above, and $ 15.0 million as of December 31, 2025, following regulatory approval of MYQORZO by the National Medical Products Administration (NMPA) in China and the FDA in the United States. We are also entitled to receive tiered royalties in the low-to-high teens range on the net sales of pharmaceutical products containing aficamten in China and Taiwan, subject to certain reductions for generic competition, patent expiration and payments for licenses to third party patents.
The Sanofi License Agreement will, unless terminated earlier, continue on a market-by-market basis until expiration of the relevant royalty term.
Collaboration revenues for China for 2025, 2024, and 2023 were $ 0.6 million , $ 3.3 million , and $ 1.3 million , respectively, related to certain development cost reimbursements. Accounts receivable was $ 15.1 million as of December 31, 2025 from Sanofi and was $ 16.5 million from Corxel as of December 31, 2024.
Collaboration for Commercialization of Aficamten in Japan
On November 19, 2024, we announced that we had entered into a collaboration and license agreement with Bayer Consumer Care AG, an affiliate of Bayer AG, for the exclusive development and commercialization of aficamten in Japan, subject to certain reserved development rights of Cytokinetics to continue to conduct certain clinical trials (the "Bayer License Agreement").
The Company received an upfront payment of € 50.0 million (equivalent to $ 52.4 million) and was, at the time, eligible to receive up to an additional € 90.0 million upon the achievement of development and commercial milestones (we have since earned € 10.0 million in the first quarter of 2026 and remain eligible to receipt up to an additional € 70.0 million). The Company is also eligible to receive up to an additional € 490.0 million in commercial milestone payments upon the achievement of certain sales milestones, and tiered royalties on net sales of aficamten in Japan.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accounting for the License and Collaboration Agreement in Japan
In the fourth quarter of 2024, we assessed the Bayer License Agreement under ASC 606 and concluded that there was one performance obligation, for which the counterparty is a customer for the unit of account, relating to the license of functional intellectual property. The € 50.0 million (equivalent to $ 52.4 million) up-front payment received under this agreement was recorded as deferred revenue in the fourth quarter of 2024, as the technology transfer related to the license of functional intellectual property had not yet been satisfied. The agreement also includes additional milestone payments, including future milestone payments totaling up to an additional € 90.0 millio n (€ 10.0 million of which was earned as of December 31, 2025) upon achievement of development and commercial milestones. These payments are constrained due to uncertainties related to regulatory and development progress and will be recognized as revenue only when it becomes probable that a significant revenue reversal will not occur. In addition, we are eligible to receive up to € 490.0 million in commercial milestone payments based on the achievement of specific sales thresholds in addition to tiered royalties on net sales of aficamten in Japan. The sales-based milestone payments, including royalties, will be recognized when the related sales occur under the sales and usage-based royalty exception of ASC 606 as these amounts have been determined to relate predominantly to the lice nse.
License and milestone revenues from Bayer were $ 64.3 million in 2025 , including $ 52.4 million related to the successful completion of the technology transfer that was recorded as deferred revenue as of December 31, 2024, and certain clinical milestone achievements. The license and milestone revenues included two € 5.0 million milestones (equivalent to $ 5.9 million eac h) recognized in connection with the achievement of the first dose of aficamten to the first patient in Japan in a Phase 3 clinical trial in nHCM and in a Phase 3 clinical trial in oHCM during the second quarter of 2025. The first dose of aficamten in Japan in a Phase 3 clinical trial in nHCM occurred in June 2025 and the first dose of aficamten in Japan in a Phase 3 clinical trial in oHCM occurred in August 2025. There are no outstanding receivable related to license and milestone revenues from Bayer as of December 31, 2025.
Collaboration revenues from Bayer were $ 8.1 million and $ 0.1 million in 2025 and 2024, respectively, related to certain research and development cost reimbursements. We had accounts receivable from Bayer of $ 2.6 million as of December 31, 2025 and accounts receivable was immaterial at December 31, 2024.
We re-evaluate the probability of achievement of development milestones and any related constraints each reporting period. We will include consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.
Research Collaboration
In May 2025, we entered into a research collaboration where we will reimburse our collaborative research partner for their research expenses. The reimbursement of research expenses was $ 4.4 million in 2025 which is recorded as research and development. Subject to the terms of the agreement, our collaborative research partner may receive potential research, development and commercial milestone and royalty payments from us and we may develop and commercialize development candidates.
Note 5 — Fair Value Measurements
We value our financial assets and liabilities at fair value, defined as the price that would be received for assets when sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable.
We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information reasonably available. Accordingly, we use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider the security issuers’ and the third-party issuers’ credit risk in our assessment of fair value.
We classify fair value based on the observability of those inputs using a hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement):
Level 1 — Observable inputs, such as quoted prices in active markets for identical assets or liabilities;
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or through corroboration with observable market data; and
Level 3 — Unobservable inputs, for which there is little or no market data for the assets or liabilities, such as internally-developed valuation models.
Fair Value of Financial Assets:
The following tables set forth the fair value of our financial assets, which consists of cash equivalents and investments classified as available-for-sale securities, that were measured on a recurring basis (in thousands):
December 31, 2025
Fair Value Hierarchy Level
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Money market funds
Level 1
U.S. Treasury securities
Level 1
U.S. Government agency securities
Level 2
Commercial paper
Level 2
Asset-backed securities
Level 2
Corporate obligations
Level 2
December 31, 2024
Fair Value Hierarchy Level
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Money market funds
Level 1
U.S. Treasury securities
Level 1
U.S. Government agency securities
Level 2
Commercial paper
Level 2
Asset-backed securities
Level 2
Corporate obligations
Level 2
Investments in corporate debt securities, commercial paper, asset-backed securities and U.S. Government agency securities are classified as Level 2 as they are valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data.
No credit losses on debt securities were recognized in the periods presented. In its evaluation to determine expected credit losses, management considered all available historical and current information, expectations of future economic conditions, the type of security, the credit rating of the security, and the size of the loss position, as well as other relevant information. The unrealized losses as of December 31, 2025 are attributed to market interest rate changes and are not attributed to credit. The Company does not intend to sell any of these available-for-sale investments before their effective maturity or market price recovery.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 6 — Balance Sheet Components
Property and equipment consisted of (in thousands):
December 31,
Property and equipment, net:
Laboratory equipment
Computer equipment and software
Office equipment, furniture and fixtures
Leasehold improvements
Construction in progress
Right-of-use assets, finance lease
Total property and equipment
Less: Accumulated depreciation
Total property and equipment, net
Depreciation expense was $ 10.1 million , $ 9.5 million , and $ 11.9 million for 2025, 2024, and 2023, respectively.
Accrued liabilities were as follows (in thousands):
December 31,
Accrued liabilities:
Clinical and preclinical costs
Compensation related
Other accrued expenses
Total accrued liabilities
We sponsor a 401(k) defined contribution plan covering all employees and contributed $ 3.6 million , $ 2.7 million , and $ 2.5 million to this plan in 2025, 2024, and 2023 , respectively.
Note 7 — Debt
Convertible Notes
On November 13, 2019, we issued $ 138.0 million aggregate principal amount of 2026 Notes. On July 6, 2022, we issued $ 540.0 million aggregate principal amount of 2027 Notes and used approximately $ 140.3 million of the net proceeds from the offering of 2027 Notes and issued 8,071,343 shares of common stock to repurchase approximately $ 116.9 million aggregate principal amount of the 2026 Notes pursuant to privately negotiated exchange agreements entered into with certain holders of the 2026 Notes concurrently with the pricing of the offering of the 2027 Notes.
On September 19, 2025, we issued $ 750.0 million aggregate principal amount of 2031 Notes and used approximately $ 402.5 million of the net proceeds from the offering of 2031 Notes and issued 2,168,806 shares of common stock to repurchase approximately $ 399.5 million aggregate principal amount of the 2027 Notes pursuant to privately negotiated exchange agreements entered into with certain holders of the 2027 Notes concurrently with the pricing of the offering of the 2031 Notes. This resulted in recording a debt conversion expense in the third quarter of 2025 of $ 121.2 million, consisting of the difference between the consideration provided to the holders pursuant to the exchange agreements and the if-converted value of the 2027 Notes under the original terms.
As of December 31, 2025, there remains $ 21.1 million aggregate principal amount of 2026 Notes outstanding and reflected as current in the consolidated balance sheet, $ 140.5 million of aggregate principal amount of 2027 Notes outstanding, and $ 750.0 million of aggregate principal amount of 2031 Notes outstanding.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2031 Notes
The 2031 Notes are our senior unsecured obligations and shares equal in right of payment with our other indebtedness, including the 2026 Notes and 2027 Notes. The 2031 Notes bear interest at a rate of 1.75 % per year, payable semiannually in arrears on April 1 and October 1 of each year, beginning April 1, 2026. The 2031 Notes will mature on October 1, 2031 , unless earlier converted, redeemed, or repurchased. Holders of the 2031 Notes may convert their 2031 Notes, under certain circumstances, into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on an initial conversion rate of 14.6156 shares per $ 1,000 principal amount, which is equivalent to an initial conversion price of approximately $ 68.42 per share.
As of December 31, 2025 , the holders of the 2031 Notes have the option to convert their 2031 Notes only in the following circumstances: (i) if the last reported sale price per share of our common stock exceeds 130 % of the conversion price for at least 20 trading days within a 30 -day period starting from the last trading day of the preceding quarter after December 31, 2025; (ii) within 5 consecutive business days following any 10 consecutive trading day period if the trading price per $ 1,000 principal amount of 2031 Notes during such period falls below 98 % of the product of the last reported sale price per share of our common stock and the conversion rate; (iii) upon certain corporate events or distributions on our common stock outlined in the 2031 Indenture; (iv) upon our call for redemption of the 2031 Notes; and (v) from July 1, 2031, until the second scheduled trading day immediately preceding the maturity date. We may not redeem the 2031 Notes at our option at any time before October 6, 2028. In 2025, the conditions allowing holders of the 2031 Notes to convert were not met. As a result, the 2031 Notes are not convertible as of December 31, 2025 at the option of the holders thereof.
The 2031 Notes are not redeemable prior to October 6, 2028 by the Company. On or after October 6, 2028, the 2031 Notes will be redeemable, in whole or in part (subject to the Partial Redemption Limitation), at our option at any time and from time to time, and, in the case of any partial redemption, on or before the 40th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the 2031 Notes are freely tradable and all accrued and unpaid additional interest, if any, has been paid in full, as of the first interest payment date occurring on or before such redemption notice date, and the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we may send the related redemption notice; and (ii) the trading day immediately before the date we may send such notice.
The conversion rate for the 2031 Notes, 2027 Notes, and 2026 Notes will be subject to adjustment upon the occurrence of certain specified events. In addition, upon the occurrence of a make-whole fundamental change (as defined in the each respective indenture for the 2026 Notes, 2027 Notes and 2031 Notes), we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change.
The following table presents the total amo unt of interest cost recognized relating to the 2031 Notes (in thousands):
Contractual interest expense
Amortization of debt issuance costs
Total interest expense recognized
The effective interest rate of the 2031 Notes was 2.23 % as of December 31, 2025. As of December 31, 2025, the unamortized debt issuance cost for the 2031 Notes was $ 19.6 million and will be amortized over approximately 5.8 years.
2027 Notes
As of December 31, 2025, the 2027 Notes aggregate principal balance was $ 140.5 million . The 2027 Notes are our senior unsecured obligations and shares equal in right of payment with our other indebtedness, including the 2026 Notes and the 2031 Notes. The 2027 Notes bear interest at a rate of 3.50 % per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2023. The 2027 Notes will mature on July 1, 2027 , unless earlier converted, redeemed or repurchased. The 2027 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on the applicable conversion rate(s). The initial conversion rate for the 2027 Notes is 19.5783 shares of our common stock per $ 1,000 principal amount of such Notes, which is equivalent to an initial conversion price of approximately $ 51.08 per share.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of December 31, 2025 , the holders of the 2027 Notes have the option to convert their convertible 2027 Notes only in the following circumstances: (i) if the last reported sale price per share of our common stock exceeds 130 % of the conversion price for at least 20 trading days within a 30 -day period starting from the last trading day of the preceding quarter after September 30, 2022; (ii) within 5 consecutive business days following any 10 consecutive trading day period if the trading price per $ 1,000 principal amount of 2027 Notes during such period falls below 98 % of the product of the last reported sale price per share of our common stock and the conversion rate; (iii) upon certain corporate events or distributions on our common stock outlined in the 2027 Indenture; (iv) upon our call for redemption of the 2027 Notes; and (v) from March 1, 2027, until the scheduled trading day immediately preceding the maturity date. In 2025, the conditions allowing holders of the 2027 Notes to convert were not met. As a result, the 2027 Notes are not convertible as of December 31, 2025 at the option of the holders thereof.
The 2027 Notes are redeemable, in whole or in part (subject to the Partial Redemption Limitation), at our option at any time, and from time to time, and, in the case of any partial redemption, on or before the 60th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we may send the related redemption notice; and (ii) the trading day immediately before the date we may send such notice.
The following table presents the total amo unt of interest cost recognized relating to the 2027 Notes (in thousands):
Contractual interest expense
Amortization of debt issuance costs
Total interest expense recognized
The effective interest rate of the 2027 Notes was 4.2 % as of December 31, 2025, 2024 and 2023. As of December 31, 2025, the unamortized debt issuance cost for the 2027 Notes was $ 1.4 million and will be amortized over approximately 1.5 years. In 2025, the conditions allowing holders of the Notes to convert were not met. As a result, the 2027 Notes are not convertible as of December 31, 2025.
2026 Notes
As of December 31, 2025, the 2026 Notes aggregate principal balance was $ 21.1 million and is presented as a current liability as of December 31, 2025. The 2026 Notes are senior unsecured obligations and bear interest at an annual rate of 4.0 % per year, payable semi-annually on May 15 and December 15 of each year, beginning May 15, 2020. The 2026 Notes will mature on November 15, 2026 , unless earlier repurchased or redeemed by us or converted at the option of the holders. We may redeem the 2026 Notes prior to the maturity date but we are not required to and no sinking fund is provided for the 2026 Notes. The 2026 Notes may be converted, under certain circumstances, based on an initial conversion rate of 94.7811 shares of common stock per $ 1,000 principal amount (which represents an initial conversion price of $ 10.55 per share).
As of December 31, 2025 , the holders of the 2026 Notes have the option to convert their 2026 Notes only in the following circumstances: (i) if the last reported sale price per share of our common stock exceeds 130 % of the conversion price for at least 20 trading days within a 30 -day period; (ii) within 5 consecutive business days following any 10 consecutive trading day period if the trading price per $ 1,000 principal amount of 2026 Notes during such period falls below 98 % of the product of the last reported sale price per share of our common stock and the conversion rate; (iii) upon certain corporate events or distributions on our common stock outlined in the 2026 Indenture; (iv) upon our call for redemption of the 2026 Notes; and (v) from July 15, 2026, until the scheduled trading day immediately preceding the maturity date. In 2025, the sale price condition was met. As a result, the 2026 Notes are convertible as of December 31, 2025 at the option of the holders thereof.
The 2026 Notes are redeemable by the Company, in whole or in part, at our option at any time, and from time to time, and, in the case of any partial redemption, on or before the 60th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we may send the related redemption notice; and (ii) the trading day immediately before the date we may send such notice.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table presents the total amount of interest cost recognized relating to the 2026 Notes (in thousands):
Years Ended December 31,
Contractual interest expense
Amortization of debt issuance costs
Total interest expense recognized
The effective interest rate of the 2026 Notes was 4.6 % as of December 31, 2025, 2024, and 2023. As of December 31, 2025, the unamortized debt issuance cost for the 2026 Notes was $ 0.1 million and will be amortized over approximately 0.9 years. The 2026 Notes are convertible at December 31, 2025 at the option of the holder.
Future minimum payments under the 2031 Notes, 2027 Notes and 2026 Notes are (in thousands):
Years ending December 31:
2031 Notes
2027 Notes
2026 Notes
Total
Thereafter
Future minimum payments
Less: Interest
Convertible notes, principal amount
Less: Unamortized debt issuance costs on the convertible notes
Net carrying amount of the convertible notes
As of December 31, 2025, the estimated fair value of the 2031 Notes, 2027 Notes, and 2026 Notes was $ 919.7 million , $ 200.0 million and $ 127.8 million , respectively, and was based upon observable, Level 2 inputs, including pricing information from recent trades of the Convertible Notes .
Note 8 — Stockholders’ Equity
Public Offering of Common Stock and Concurrent Private Placement
On May 28, 2024, the Company closed an underwritten public offering of 9,803,922 shares of Common Stock at a public offering price of $ 51.00 per share, which included the exercise in full by the underwriters of their option to purchase up to 1,470,588 shares of Common Stock at the public offering price. The gross proceeds to the Company from the offering were approximately $ 575.0 million and net proceeds were approximately $ 563.2 million, after deducting the applicable underwriting discounts and commissions. Concurrently with the closing of the underwritten public offering, RPI ICAV purchased 980,392 shares of Common Stock pursuant to the RP Common Stock Purchase Agreement at a price of $ 51.00 per share in a concurrent private placement. The proceeds from the concurrent private placement were $ 50.0 million.
Common Stock
In May 2025, our stockh olders further approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock available for issuance by the Company from 163.0 million to 326.0 million shares.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Equity Incentive Plan
Our 2004 Plan provides for us to grant incentive stock options, non-statutory stock options, restricted stock, stock appreciation rights, restricted stock units, performance shares and performance units to employees, directors, and consultants. We may grant options for terms of up to ten years at prices not lower than 100 % of the fair market value of our common stock on the date of grant. Options granted to new employees generally vest 25 % after one year and monthly thereafter over a period of four years . Options granted to existing employees generally vest monthly over a period of four years .
In February 2023, our board of directors approved an amendment to the 2004 Plan to increase the number of authorized shares reserved for issuance under the 2004 Plan by an additional 1.0 million shares for inducement grants to new employees. In May 2025, our stockholders approved an amendment to the 2004 Plan to increase the number of authorized shares reserved for issuance under the 2004 Plan by an additional 5.0 million shares.
As of December 31, 2025, the total authorized shares under the 2004 Plan available for grant was 6.1 million .
Stock option activity in 2025, 2024, and 2023 was as follows:
Stock Options
Outstanding
Weighted
Average Exercise
Price per Share
Weighted
Average
Remaining
Contractual Life
(in years)
Aggregate
Intrinsic Value
(in millions)
Balance at December 31, 2022
Granted
Exercised
Forfeited
Balance at December 31, 2023
Granted
Exercised
Forfeited
Balance at December 31, 2024
Granted
Exercised
Forfeited
Balance at December 31, 2025
Exercisable at December 31, 2025
We have elected to account for forfeitures as they occur. The intrinsic value of stock options exercised, calculated based on the difference between the market value at the date of exercise and the exercise price, was $ 51.7 million for 2025, $ 112.6 million for 2024, and $ 33.8 million for 2023. The weighted-average grant date fair value of options to purchase common stock granted was $ 29.21 , $ 40.65 , and $ 24.67 per share in the years ended December 31, 2025, 2024, and 2023, respectively. The total grant-date fair value of options to purchase common stock vested was $ 69.3 million , $ 57.5 million and $ 51.1 million in the year ended December 31, 2025, 2024, and 2023, respectively.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
RSU, including PSU, activity in 2025, 2024, and 2023 was as follows:
Number of
Restricted
Stock Units
Weighted
Average Award
Date Fair Value
per Share
Balance at December 31, 2022
Granted
Exercised
Forfeited
Balance at December 31, 2023
Granted
Exercised
Forfeited
Balance at December 31, 2024
Granted
Exercised
Forfeited
Balance at December 31, 2025
RSUs generally vest annually over two to three years .
The fair value of vested RSUs, including PSUs, calculated based on the units vested multiplied by the closing price of our common stock on the date of vesting, was $ 40.7 million for 2025, $ 52.6 million for 2024, and $ 28.6 million for 2023.
Performance Stock Units
During 2024 through the first quarter of 2025, the Compensation Committee granted a total of 467,804 performance stock units ("PSUs") to certain employees with a grant date fair value ranging from $ 44.36 to $ 63.75 per unit. The fair value of the PSUs was determined on the grant date based on the fair value of the Company’s common stock at such time. The PSU awards are subject to performance goals and will be earned as to a pre-determined fixed number of shares subject to the certification by the Compensation and Talent Committee of the Company’s Board of Directors (the “Compensation Committee”) that the Company has achieved one or more of the relevant performance goals, in each case vesting as to 50 % of the earned shares on applicable Compensation Committee certification date and as to the remaining 50 % of the earned shares following the one-year anniversary of the applicable Compensation Committee certification date.
The Company recognized expense for the PSUs of $ 1.5 million and $ 7.6 million in 2025 and 2024, respectively. The decrease year over year was due to our Prescription Drug User Fee Act ("PDUFA") target action date for NDA for aficamten in oHCM was extended to December 2025. This resulted in a revision of the PSU assumptions. The PSU attainment was finalized as of December 31, 2025 and there was $ 0.6 million of unamortized stock-based compensation related to the portion of PSUs vesting that is deemed probable.
Employee Stock Purchase Plan
Under our ESPP, employees may purchase common stock up to a specified maximum amount at a price equal to 85 % of the fair market value at certain plan-defined dates.
We issued 182,639 shares at an average price of $ 26.43 per share during 2025, 140,703 shares at an average price of $ 32.76 per share in 2024, and 136,065 shares at an average price of $ 30.43 per share in 2023 pursuant to the ESPP. At December 31, 2025, we have 80,480 shares of common stock reserved for issuance under the ESPP.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Stock-Based Compensation Expense
We use the Black-Scholes option pricing model to determine the fair value of stock option grants to employees and directors and employee stock purchase plan shares. The fair value of share-based payments was estimated on the date of grant based on the following assumptions:
Year Ended December
Year Ended December
Year Ended December
Options
ESPP
Options
ESPP
Options
ESPP
Risk-free interest rate
Volatility
Expected term in years
Expected dividend yield
We use U.S. Treasury zero-coupon issues with remaining terms similar to the expected terms of the options for the risk-free interest rate. We use our own volatility history based on our stock trading history and our own historical exercise to estimate expected term for option grants. We do not anticipate paying dividends in the foreseeable future and use an expected dividend yield of zero. We do not estimate forfeitures in our stock-based compensation.
We measure compensation expense for restricted stock units at fair value on the date of grant and recognize the expense over the expected vesting period. We recognize stock-based compensation expense on a ratable basis over the requisite service period, generally the vesting period of the award for share-based awards.
Stock-based compensation expense for 2025, 2024, and 2023 was as follows (in thousands):
Years Ended December 31,
Research and development
General and administrative
As of December 31, 2025, we expect to recognize $ 108.6 million of unrecognized compensation cost related to unvested stock options over a weighted-average period of 2.5 years, and $ 78.5 million of unrecognized compensation cost related to unvested restricted stock over a weighted-average period of 1.9 years.
Controlled Equity Offering Sales Agreement
On February 27, 2025, we entered into an Open Market Sale Agreement SM with Jefferies LLC under which we may offer and sell, from time to time, at our sole discretion, shares of common stock in “at the market offerings” pursuant to Rule 415(a)(4) under the Securities Act of 1933 through Jefferies LLC, as sales agent. As of December 31, 2025, we have not sold any shares of common stock under the Open Market Sale Agreement SM with Jefferies LLC.
Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co.
On March 1, 2023, we entered into the Amended ATM Facility, with Cantor, under which we may offer and sell, from time to time at our sole discretion, shares of the Common Stock having an aggregate offering price of up to $ 300.0 million through Cantor, as sales agent. Cantor may sell the Common Stock by any method that is deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or any other trading market for our common stock. Cantor will use commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay Cantor a commission of up to 3.0 % of the aggregate gross sales proceeds of any common stock sold through Cantor under the Amended ATM Facility, and also have provided Cantor with customary indemnification rights.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In 2023, we issued 5,016,170 shares of our common stock for net proceeds of $ 164.2 million under the Amended ATM Facility . We issued 1,237,460 shares of our common stock for net proceeds of $ 93.6 million under the Amended ATM Facility in 2024. This facility expired upon execution of the Jefferies LLC Open Market Sale Agreement described above.
Warrants
As of December 31, 2025, we had no warrants outstanding.
Note 9 — Commitments and Contingencies
Operating Leases
In July 2019, we entered into the Oyster Point Lease of office and laboratory space at a facility located in South San Francisco, California, and we entered into amendments to the Oyster Point Lease in 2020 through 2024. The Oyster Point Lease commenced on March 31, 2021 and has an expiration date of October 31, 2033 .
In January 2022, we entered into a series of lease agreements with the sub-landlord and landlord and leased an office space at a facility located in Radnor, Pennsylvania (the "Radnor Lease") . The Radnor Lease commenced in September 2022 , when the leasehold improvements were substantially completed, and we gained control over the use of the underlying assets. The Radnor Lease had an original expiration date of July 31, 2027 with one five-year option to extend the lease . In February 2025 , the Company amended the Radnor Lease to include additional office space and to extend the lease term for both the existing and the newly leased spaces through July 2029 , with one five-year renewal option . As a result of the lease modification for the existing office space, the Company remeasured and increased its operating lease right-of-use asset and lease liability by $ 1.1 million. Upon commencement of the lease for the additional office space, the Company recognized a right-of-use asset and lease liability of $ 2.4 million, using a discount rate of 8.9 %.
In August 2025, we entered into a new operating lease for office space located in Zug, Switzerland (the "Zug Lease"). The lease has an initial term of approximately five years , with an option to extend for an additional five years that is not reasonably certain to be exercised as of the commencement date. Upon lease commencement in August 2025 , the Company recognized a right-of-use asset and lease liability of approximately $ 2.6 million, using a discount rate of 9.0 %.
The weighted-average remaining lease term of the operating leases was 7.6 years, 8.7 years, and 9.7 years as of December 31, 2025, 2024, and 2023, respectively. The weighted-average discount rate used to determine the related operating lease liabilities was 8.7 % as of December 31, 2025, 2024, and 2023.
Cash paid for operating leases for the years ended December 31, 2025, 2024, and 2023 was $ 28.9 million , $ 26.1 million , and $ 17.8 million , respectively, and was included in net cash used in operating activities in our consolidated statements of cash flows.
Finance Leases
During the third quarter of 2021, we entered into a master lease agreement for laboratory equipment leases that commenced in the fourth quarter of 2021. The leases commenced through the second quarter of 2022, with the lease term ending in the fourth quarter of 2026. The master lease agreement provides a purchase option with a bargain purchase price, which we expect to exercise at the end of the term. The Company classified the leases as finance leases.
Finance leases are accounted for on the consolidated balance sheets with right-of-use assets and lease liabilities recognized in property and equipment, other current liabilities, and other non-current liabilities, respectively. The finance lease cost is recognized as a combination of the amortization expense for the right-of-use assets calculated on a straight-line basis over the five-year estimated useful life for laboratory equipment and interest expense for the outstanding lease liabilities using the determined discount rates.
As of December 31, 2025, the weighted average remaining lease term for the finance leases is 1.0 year. The weighted average discount rate used to determine the finance lease liabilities is 9.5 % .
The cash paid for finance lease for the years ended December 31, 2025, 2024, and 2023 was $ 0.2 million , $ 0.9 million , and $ 0.9 million , respectively, which was included in financing activities in our consolidated statement of cash flows.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Future minimum lease payments under non-cancellable operating leases as of December 31, 2025 is as follows (in thousands):
Years ending December 31:
Operating
Leases
Thereafter
Total future minimum lease payments
Less: Imputed interest
Total lease liability
There was no future minimum lease payments for finance leases as of December 31, 2025.
Rent expense for operating and finance leases was $ 25.4 million , $ 19.4 million , and $ 22.1 million for 2025, 2024, and 2023, respectively.
Legal Proceedings
The Company recognizes accruals for legal actions to the extent that it concludes that a loss is both probable and reasonably estimable. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 10 — Income Taxes
We did no t record an income tax provision in 2025, 2024, and 2023 because we had net taxable losses. Our significant jurisdictions are the United States and California.
Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate
Below is a tabular rate reconciliation for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Years Ended December 31,
Amount
Amount
Amount
Tax at federal statutory tax rate
State and local income taxes, net of federal benefit
Foreign tax effects
Tax credits:
R&D Tax Credit
Orphan Drug Credit
Change in valuation allowance
Non-taxable or non-deductible items:
Section 162(m) Limitation
Stock Compensation Expense
Convertible Notes Due 2027
Expiration of Attributes
Other
Changes in Unrecognized Tax Benefits
Income tax expense
Income Tax Payments
The Company did no t pay any income taxes by jurisdiction for the years ended December 31, 2025, 2024, and 2023.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Tax Assets
Deferred tax assets, net, reflecting the net tax effect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes, were as follows (in thousands):
As of December 31,
Deferred tax assets:
Net operating loss carryforwards
Tax credits
Liability related to sale of future royalties
Reserves and accruals
Capitalized R&D
Long-term lease liability
Total noncurrent deferred tax assets
Deferred tax liabilities:
Depreciation and amortization
Operating lease right-of-use assets
Unrealized Loss
Total noncurrent deferred tax liabilities
Less: Valuation allowance
Net deferred tax assets
Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain.
Based upon the weight of available evidence, which includes our historical operating performance, reported cumulative net losses
since inception, expected future losses, and difficulty in accurately forecasting our future results and an assessment of both positive
and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable, we maintained a full valuation allowance on the net deferred tax assets as of December 31, 2025 and 2024. The valuation allowance increased by $ 146.0 million in 2025 and increased by $ 140.4 million in 2024.
At December 31, 2025 federal NOL carryforwards were $ 2,210.0 million , apportioned state NOL carryforwards before federal
benefits were $ 443.9 million , and foreign NOL carryforwards were $ 20.3 million . If not utilized, federal and state net operating loss
carryforwards incurred prior to 2018 will expire in various amounts beginning 2026 and 2028 , respectively, and the foreign net
operating loss carryforwards will begin to expire in 2030 .
At December 31, 2025, tax credits of $ 177.6 million and $ 32.6 million for federal and California income tax purposes,
respectively consisted of Research and Development Credits and Orphan Drug Credits. If not utilized, the federal carryforwards will
expire in various amounts beginning in 2026 . California based credit carryforwards do not expire.
In general, under Section 382, a corporation that undergoes an ‘ownership change’ is subject to limitations on its ability to
utilize its pre-change net operating losses and tax credits to offset future taxable income. We do not believe the Company has experienced an ownership change since 2006, however, a portion of its NOLs and tax credits prior to 2007 will be subject to limitations under Section 382.
On July 4, 2025, H.R. 1, commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”), was enacted. The OBBBA legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic research and development expenditures, reinstatement of 100 % bonus depreciation, and more favorable rules for determining the limitation on business interest expense. These changes are reflected in the income tax provision for the period ended December 31, 2025. The Company does not expect this law to have a significant effect on the Company's financial statements due to the full valuation allowance against deferred
tax.
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CYTOKINETICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Activity related to our gross unrecognized tax benefits were (in thousands):
Years Ended December 31,
Balance at the beginning of the year
Increase related to prior year tax positions
Decrease related to prior year tax positions
Increase related to current year tax positions
Balance at the end of the year
We are subject to federal and various state & local and foreign inc ome tax examinations for all fiscal years with unutilized NOLs and tax credit carryforwards.
Note 11 — Subsequent Events
Our first commercial sale of MYQORZO occurred in the first quarter of 2026 and we invoiced Bayer for € 10.0 million in accordance with the licensing agreement .
