Biotech drug makers Cytokinetics Inc. and Amgen Inc. said Wednesday they will partner to work on a class of drugs meant to treat heart failure by causing cardiac muscle to contract.
Shares of Cytokinetics climbed $1.36, or 18.3 percent, to $8.85 in morning trading on the Nasdaq at five times their average volume. The stock has traded between $5.20 and $8 over the past 52 weeks, and reached a new high of $9.50 earlier in the session.
Cytokinetics will get an upfront $42 million from Amgen, which will also purchase about 3.5 million shares of Cytokinetics for $9.47 per share, or for a total of about $33 million.
South San Francisco, Calif.-based Cytokinetics stands to earn up to $600 million in milestone payments not counting royalties for development of the drug candidate CK-1827452 and other products from the collaboration. CK-1827452 is meant to activate cardiac myosin, a protein in that converts chemical energy into mechanical force in heart tissue.
Under the agreement, Cytokinetics will research the compound for two years, and Amgen will have the option to conduct clinical trials for a $50 million payment if certain goals are met in mid-stage clinical trials, which are set to begin early in the year. The compound has already undergone two early stage clinical trials.
Cytokinetics will also have the option of selling the products along with Amgen.
Separately, Amgen reiterated its 2006 outlook of $3.85 to $3.95 in adjusted earnings per share. Analysts surveyed by Thomson Financial expect earnings per share of $3.93.
Shares of Amgen rose 90 cents to $69.22 on the Nasdaq.
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