US group Cytokinetics has entered into an alliance with biotechnology giant Amgen to develop drugs for heart failure.
Under the partnership, the groups will initially work on developing CK-1827452, which works by activating myosin to induce the heart muscle to contract. Cytokinetics will evaluate the drug for two years and, if predetermined goals are met, Amgen has the option of carrying out later clinical trials for an extra fee of $50 million.
In a deal worth up to a total of $725 million, Amgen will pay Cytokinetics an upfront fee of $42 million and plans to spend about $33 million on around 3.5 million of the group’s shares. Furthermore, Cytokinetics could earn $600 million from milestone payments, excluding royalties on any products that make it to market.
Investors were clearly pleased by the news, which fuelled a 27% rise in Cytokinetics’ share price during heavy trading yesterday, although the stock eventually settled up just over 11% at $8.34 by close of play.